Elaine Meinel Supkis
The political/economic nexus continues unabated as Japan gleefully joins the USA in attacking the strengthening yuan while the yen gets even weaker! In addition, the Japanese finance minister threatens the USA, saying he will not buy our bonds if we don't obey Miz Japan. The Chinese are meeting with us again next week to discuss reality which has been China, not Japan, as the major buyer of bonds. And China threatens us with 30% inflation if they cease all trade.
China's yuan had the biggest gain since the end of a dollar link in July 2005 as the U.S. Treasury Department prepares to release a report that may increase pressure for faster appreciation.U.S. lawmakers plan to unveil legislation tomorrow to push China to loosen controls on the yuan, hours after the Treasury publishes a semiannual evaluation of exchange-rate manipulation. Treasury Secretary Henry Paulson failed to win any pledge on the currency during trade talks in Washington last month.
Beggars can't be choosers. The way the neocon economic philosophers and professors have viewed the world, they decided the 1914 British model for international trade is the correct way to run things. Back then, the British government wanted all the provinces to pour all their output into the Empire's center so they had 0% tariffs. This also lowered prices so everyone felt richer at home but it forced the government to run on red ink because there were not enough revenues to support the huge navy that was 5X bigger than the next biggest navy being built by Germany.
The problem with the British system was it let in a flood of German imports and so the British government was worried that this was making Germany's industrial base stronger while their own was growing weaker. This lead to WWI. Fighting this war and defeating Germany didn't save the British Empire at all. Even when it limped along for a while, this was very temporary as all other nations jumped on the increasingly weak and financially ruined empire.
From Bloomberg:
China reiterated today that it does not manipulate its currency. ``Whether the renminbi is too high or low, this has to be determined by the markets and not any one person or agency,'' Qin Gang, China's foreign ministry spokesman, said in a regular briefing in Beijing.Schumer's plan underscores growing impatience with the pace of yuan appreciation. The currency's gains have stalled since the May 23 talks between Chinese Vice Premier Wu Yi and Paulson.
The Treasury Department's semiannual report hasn't labeled any nation as manipulating exchange rates since 1994.
I find this very infuriating. Indeed, if the Treasury economic neocons can't see the noses on their silly faces they should look at the charts and graphs the namely civil servants produce! If these infants can't understand how currencies can be manipulated in an increasingly sophisticated system of restrictions and interest manipulations then maybe we should haul these clowns out and throw them into the Sea of Japan.
It is painfully obvious that the yen, which was trading at 86 to the dollar in 1994, is now at 121 and FALLING even as every indication of economic power for Japan is shooting higher and higher...this is manipulation that is obvious! This is due entirely to the Bank of Japan keeping interest rates ridiculously low and the excuse they use is the idea that Japan, alone of all industrial nations on earth, has no inflation. This is impossible.
Of course, Japan has achieved this by strangling all domestic spending, private and public as well as depressing wages so the average Japanese is much poorer today than 15 years ago. They gain absolutely nothing by saving and since the only way they can save is to send all their money overseas, they buy euros and dollars and this makes these currencies stronger and the yen weaker which pleases the industrialists who run the world's biggest PROFIT magins in world trade!
The focus on the absolute trade amounts of China hides this real money-making by Japan. And even as Senator Stabenow of Michigan demands our government force Japan to raise interest rates, this makes nearly no news in the USA and this is because Japan supports Israel and this is a top priority item for American politicians.
From Bloomberg:
Any attempt to levy a tariff on Chinese exports would be ``a rash move that leads only to a global trade war,'' said Guan Anping, Beijing-based trade lawyer and former adviser to Vice Premier Wu. Tariffs will ``hurt U.S. consumers, raising their cost of living by 20 percent to 30 percent.''
This isn't a threat, it is simply stating the truth. For Europe, Japan and the USA all use China as their way of giving themselves super-cheap loans. They need the Chinese masses to clear up all the inflation they are creating with printing presses. Once that dries up, there will be problems. The Chinese peasantry are different from many other poor peasants in the world: they are extremely industrious.
In the 19th century, whenever Chinese peasants were brought in to do horrific work no one else would do, other workers would riot because the standards set by the Chinese were incredible. The most difficult part of the first railroad to be built across America was tunnelled and bridged by Chinese laborers on the West Coast. Most of the Panama Canal was built by Chinese peasants. Their reward was to be massacred.
China and the United States will hold their fourth round of strategic dialogue in Washington from June 20 to 21, Chinese Foreign Ministry spokesman Qin Gang announced here Tuesday.
This round will be most interesting. The USA plan to kill the dollar and thus stop trade has failed despite the yuan rising and the Chinese will probably be most frank and explain reality which will be greeted by the American neocon negotiators with hands over the ears and yelling, 'La-la-la-I can't hear you!'
This stupid process will continue until we have a trade war and Japan will then demand our navy cease hanging around the Gulf and come over to them so we can spend half a trillion protecting them from a very angry China. And in addition, our auto industry will still continue dying and China won't buy any more American aircraft and all will spiral down to WWIII. Isn't that a nice ending.
Hiroshi Watanabe, vice-finance minister for international affairs, told reporters Friday that he did not think “the yen carry trade has any immediate risk of unwinding.”
Japan is determined to keep us all on this path to destruction. They have settled quite accidentally on this system and it is working in their favor so they want it to continue. This week's obvious data showing they have, next to China, the world's fastest GNP growth rate and the fake depression is obvious to all, they are set in their ways. This system set up after they probably deliberately tanked the currencies of the smaller Asian nations, is great for them and a disaster for us. But we must change it, we can't expect them to do this.
From the FT:
The yen weakened Friday slightly to Y121.26 to the dollar from Y120.93 the previous day, suggesting that any flows back into Japan were more than offset by investors seeking better returns abroad. The Nikkei index of leading shares followed Wall Street down, shedding 1.5 per cent to Y17,779.Analysts said that, if anything, the recent rise in US rates – 10-year yields have risen from 4.44 per cent two months ago to 5.08 per cent – would encourage outflows from Japan, driving the yen down further.
“It seems like excess liquidity in world markets still exists, so volatility will not increase,” said Tohru Sasaki, chief foreign exchange strategist for JPMorgan Chase Bank in Tokyo. “Retail investors are still interested in foreign assets and June is when they receive their summer bonuses, so more outflows can be expected.”
Mr Sasaki said that a steadily falling yen posed few political problems for Tokyo. US manufacturers, especially carmakers, are pressuring Congress to label Japan a currency manipulator and to force corrective action. But Mr Sasaki said there was no basis to their arguments since Japan had not intervened in the currency markets since 2004.
Note how this dovetails with the other articles and comments. Namely, the cheeky Japanese who sneer behind our backs pull a straight face and join our neoconmen in declaring that they don't manipulate their currency! This is due to the flaws in monetarist dogma. Namely, there are more ways of skinning a monkey than straightforward 'manipulation' of a currency. Having fake interest rates due to either deliberately misstating inflation or by cruelly crushing prices by crushing wages, is to my mind, manipulating currencies.
Both the USA and Japan are doing this! Only the USA is also running a huge trade deficit and budget deficit while Japan has the reverse. And this is due to the USA having open free trade while Japan is very much a closed system. And on top of this, Japan uses American taxpayers to run its own security system just as Europe, who runs a huge trade surplus also with the USA, won't protect themselves from Russia even as they poke at Russia mercilessly just as Japan pokes at China. Indeed, we are responsible for protecting everyone from everything which is what England did back in 1914-1945.
If we keep this system running the way it is, we will be in a military confrontation with both China, Russia and the Muslim world in no time flat.
Besides, he said, if Washington pressured Japan to intervene by buying yen, Tokyo would need to sell US treasuries. “US interest rates are already going higher. Let’s say next week, the US put on pressure [to intervene] and Japan said 'Yes'. What would happen to the US treasury market?”
This is a double edged sword: a threat and a lie. Namely, Japan still pretends they are buying our bonds and protecting our financial health and they will KILL us if we dare try to stop this mad system. And this is a lie since it is China that has been buying bonds sold by Japan. The fact that Japan's finance minister is threatening us should make us very angry and we should retaliate only our stupid negotiators who have negotiated America into the world's deepest debt hole won't do this, they will bow and scrape before Japan and crawl on their knees after this obvious insult! And lose face. This is highly important!
From Englehardt at Antiwar.com:
As always, a significant part of the defense bill is eaten up by these big-ticket items. According to the reputable Center for Arms Control and Nonproliferation, there are at least 28 pricey weapons systems that, just by themselves, will rack up a whopping $44 billion in 2008. The projected cost of these 28 systems – which include fighter jets, the B-2 bomber, the V-22 Osprey, various advanced naval vessels, cruise-missile systems, and the ultra-expensive aircraft carriers the Navy always demands – will, in the end, be more than $1 trillion. And that's not even including the Star Wars missile-defense system, which at the moment soaks up about $11 billion a year.By one count, U.S. defense spending in 2008 will amount to 29 times the combined military spending of all six so-called rogue states: Cuba, Iran, Libya, North Korea, Sudan, and Syria. The United States accounts for almost half – approximately 48 percent – of the entire world's spending on what we like to call "defense." Again, according to the Center for Arms Control and Nonproliferation, U.S. defense spending this year amounts to exactly twice the combined military spending of the next six biggest military powers: China, Russia, the UK, France, Japan, and Germany.
The Democrats are doing their usual guns 'n butter game. The Republicans are doing their usual treason game and between them, they are bankrupting this empire. The USA has zero reason to protect the flotilla of ships sailing from Asia to here. Since these ships return pretty much empty and are bankrupting our nation and destroying our industrial base, why are we protecting them for free? And the oil ships moving from the Middle East to Asia: why are we destroying ourselves, protecting them? Whatever benefits we gain are destroyed by the high cost, diplomatic as well as financial.
Why are we expanding our military into Eastern Europe? They are all leeches on our systems and eat up huge sums, not as huge as the biggest leech, Israel, but still significant. And it brings us zero benefits. We gain nothing at all except the need to go to China for more IOUs which means we can't control our own currency.
A nation that loses control of its own currency is no sovereign nation but is a slave state. And the propaganda used by owners of our media, many of whom are either foreigners or hold Israel's interests over the USA's interests, are eager to mislead the voters and to corral them into continuing this role of protecting our trade rivals.
If we took our military budget and then divided it up and had each trading partner who runs a trade surplus to pay their fair share, we will see a balanced budget instantly and the trade benefits Japan and Europe enjoys today would be more reasonable if not gone.
The draft policy also fails to take any steps toward creating a new target for financial reform. The current goal is to achieve a primary balance surplus in fiscal 2011. In short, this means Japan will be able to pay for all of its spending, apart from paying interest on government bonds, solely from tax revenue.The sustained economic recovery has led to a great increase in tax revenue, so it is becoming likely that the council's goal will be achieved. To remain alert, it is necessary to set the next goal as soon as possible.
But Japan is crushing their own people. They are cutting their budget as ours grows. And their plans are working just great. The sufferings of their own people are meaningless although the downside is now troubling the ruling elites there, what with the collapse of baby production as people live in small homes and have no hope for the future and the need for wives to work increases.
The Japanese worker has been destroyed. They have no more will left. Unlike the increasingly agitated, energetic workers in China, the Japanese working class has been annihilated. They have zero political power and the loss of vitality is obvious. More and more young men are simply opting out and hiding in their rooms today, refusing to go out at all, ever. Meanwhile, Chinese youth riot at the drop of a pin! They are storming all over the place, full of life and energy, contesting their own government. The workers are investing their money in the stock markets and other schemes as they seek greater returns even as Japanese workers listlessly put their money in accounts that give them nearly nothing in return.
This is similar to the USA: the workers are weak because they have no more faith in the future. They just want to go home and die. This is why no plant closings lead to riots. And why cities like Detroit are simply being abandoned, silently, as workers shuffle away, mostly heading south, seeking work in former slave states at lower and lower wages.
And the neocons running America think this is a great thing. They wanted the Confederation to win the war, after all.
Culture of Life News Main Page
It was with a distinct sense of deja-vu that I waded in to the latest article above.
Luckily I soon discovered that I could speed-scan it, as you've been posting this same article for months now. The words-'n'-phrases are slightly different but you still hit all your favorite themes.
And while it may no longer be quite as compelling as it was last year when it was realtively fresh, it does cut down the time required to absorb your latest deathless prose.
Posted by: JSmith | June 12, 2007 at 10:26 AM
Last year, Japan wasn't threatening us. This is NEW NEWS Smith not that you are capable of understanding what it means. I did predict they would do this, of course.
Yeah for me.
Posted by: Elaine Meinel Supkis | June 12, 2007 at 02:40 PM