Ripping Apart The October Federal Reserve Report

November 24, 2007

Elaine Meinel Supkis

For the first time, the goofy gang at the Federal Reserve decided to show us their minutes to their meeting in October. Time to read it and weep or laugh or go punch someone in the nose in Washington, DC. Everyone is trying to understand how our economy can keep on going despite all the terrible news, the terrible inflation, the terrible housing collapse, etc. It is simple. We simply ignore the laws of gravity and run off the cliff and then don't look down. Like Wiley E. Coyote.

Economy May Defy Past and Disregard Housing

THE Federal Reserve Board forecast this week that there will be no recession in the United States in the foreseeable future. It says the gross domestic product will grow by as little as 1.6 percent in 2008, but is confident that growth will accelerate after that.
*snip*
Since the early 1960s, when the data became available, there have only been three previous cycles when starts fell by at least a third over two years. By the first month with such a decline in each of those cycles — January 1974, March 1980 and January 1991 — a recession was under way.

There have been recessions without such a large impact on housing, most notably the 2001 downturn. But the housing market has never done this poorly without a recession starting.

This is a very queer economic time. If one stupidly gazes only at certain data and blocks out 90% of reality, things can appear to be 'floating on air'. As I showed in one cartoon of a crazed woman rushing off a cliff with her shopping cart which was suspended by a balloon that was losing air or perhaps the legendary Wiley E. Coyote cartwheeling off a cliff and pausing in midair to amaze at the fact that he was stationary while obviously not standing on ground anymore, the US pauses this holiday season. We glance downwards and can see the Abyss yawning below. But we are not dropping, are we?

Or are we? When one falls from a great height, the felling of falling is momentarily not all that great if one's eyes are closed. But as one falls, the pull of gravity is felt more and more as one's stomach is pressed against the spine. If one holds out one's arms or is wearing a coat, one can slow down the fall a tad and this gives a sensation of floating even though one is still falling.

The USA has been falling for many years. If one ignores all the obvious signs of falling, one can pretend all is well. But anyone examining the landscape into which we are falling via the use of charts, graphs, numbers and of course, history, can see clearly the end of the US empire and the bankruptcy of our nation. The only question is, what is the exact date of our collapse? And will we just go 'splat' or will we destroy the whole planet with a mega-nuclear war?

Even as the obvious signs that the entire US-led alliance just passed into and NOT out of a gigantic banking crisis of such gravity, the entire system seized up and nearly collapsed, many commentators and ruling elites still gravely announce, all is well! They point to this or that and say, 'See, the banking system collapse that nearly destroyed us was no big deal.'

To this day, even as the signs accumulate showing the global rise in oil prices are hammering all systems, these same Wiley E.s claim that rising oil prices have nothing to do with either inflation or recessions or anything, for that matter. To prove this, they very cleverly removed oil and food or anything that oil prices influence directly, from inflation statistics. I could prove the moon is the sun if I redefine 'star'.

I often talk about magic and money. Both are intimately connected in human minds. This is probably because the value of any 'money' is denominated by numbers and numbers are, by their innermost intellectual natures, like words, magical. Using numbers and words, one can create anything. This works only if it conforms to harsh reality. Pretending we can float on air doesn't work in the long run. This is why I take a harsh view of things. I am attempting to understand and describe reality, not pretend things.

So in this example, if everyone is filled with wonder as to why the economy seems utterly unaffected by a collapse in the housing sector which is the worst I have ever seen in my life just as this banking collapse is the worst in my life, it is time to examine why this is so.

What is happening? It is easy to see, sitting here on my mountain. Unlike the Federal Reserve or the Treasury or the talking heads on TV or reporters in the media, I have nothing to lose if I tell the truth. In this case, the truth is very simple: the Fed is creating money out of thin air at an amazing pace and using it to artificially drop interest rates on loans and the M0 and M3 rates are shooting higher and higher and this is causing the dollar to collapse overseas. And this is causing the price of oil to shoot up which is killing the economy here, relentlessly. Eventually, the inflation caused by the Fed making money out of thin air coupled with already crippling debt levels will finally give up the chase and cease to pump up the economy which will then have a very spectacular swan dive into the Abyss.

This idiotic action on the part of the Federal Reserve has a historic precedent. We did this before. While losing the Vietnam War, we over spent like crazy, the price of oil began to rise, the US began to import oil, there was a war in the Middle East and the US had oil shortages. And we had...INFLATON. Caused by the Fed trying to hide all this by printing money. The inflation of US dollars caused the dollar to drop from 4DM to 2DM. This is a huge drop.

We are nearly there today with the euro. Fixing that mess was very, very painful for America and the choices made back in 1970 have never been rectified. Indeed, they have all been made worse and worse.

Banks Gone Wild
By PAUL KRUGMAN

In a direct sense, the carnage on Wall Street is all about the great housing slump.

This slump was both predictable and predicted. “These days,” I wrote in August 2005, “Americans make a living selling each other houses, paid for with money borrowed from the Chinese. Somehow, that doesn’t seem like a sustainable lifestyle.” It wasn’t.
*snip*
In fact, according to Fortune, Merrill Lynch made its biggest purchases of bad debt in the first half of this year — after the subprime crisis had already become public knowledge.

Now the bill is coming due, and almost everyone — that is, almost everyone except the people responsible — is having to pay.

Every banking collapse, some executives are punished for obvious crimes. But never, ever are the real criminals punished. They are politicians and the people running the Treasury and the Federal Reserve. Ever since the Vietnam War, our Treasury has lost much of our gold hoard. Our Federal Reserve's have stagnated and we have bought virtually no currencies of other nations that are ravaging us in the import trade business. All things that fell off the cliff in 1970 are not only still falling off the cliff, they are accelerating.

There are slight pauses in our fall. For example, if we have a grinding recession in America, imports will slow down enough to give us some slight hope. Only it never falls below 75% of the previous rise. Each time, our leaders announce that the days of wine and roses are back for we are exporting, our imports shoot up the minute we can get our hands on more loans. So the graph for imports basically goes straight up. From $0 in 1968 to the yawning chasm of -$800 billion this last year. If it drops to 'only' -$500 billion, this isn't good news. It just means we opened our coat and caught the wind as we plummet into the abyss.

Of all the mainstream commentators, Krugman is at least sane. He can't understand the total picture only because he is too involved in the status quo to step back and see the bigger picture. He assumes, for example, that China has fed our housing bubble.

China had nothing to do with it. There is an Asian country that has been feeding this frenzy like a geisha feeding koi pieces of rice cake: Japan. China's monetary growth has been far smaller than either Japan or the European Union. And the US. The four legs of the financial chair that has held up the US economy has been Europe, England, the US Federal Reserve and Japan. Proof of this is simple: these four have 60%+ of global money making growth this last 10 years! Not China. Japan's growth, during what is supposed to be a grinding depression, is more than double China's growth and China's domestic economy is rapidly growing. So they have good reason to see their money grow and they, unlike the Japanese, can admit to inflation.

Japan's money grew and LEFT Japan. And we see it here. They needed to loan us lots of money so we could buy Japanese goods which flow here steadily. Our goods do not go to Japan. Japan has locked us out via either sales taxes, depressing wages, bureaucratic snarls, bad faith negotiations and cultural refusal to buy our goods. But they love to sell us LOANS. They are also the biggest holder of US government debts, too. More than double other countries. This Japanese loan business is seldom mentioned in US news to the point, I would suggest it is like a ninja, standing in the open but blending in with the cherry trees so we ignore it even as it draws a sword on us

The Japanese don't want to kill us, by the way, they just want to exploit their relationship with us. But their actions end up killing us all the same so we have to resist and understand how this works and stop the Chinese and Europeans from copying the Japanese. It is our duty to protect ourselves, not their duty. They are doing a thing we call 'capitalist competition.' We must do it, too. We can't be babies about this.

Minutes of the Fed Open Market Meeting.

I think it is time to examine the craziest economic examination in history. The Federal Reserve had a meeting a month ago right in the middle of the evolving banking collapse that they and Europe tried to end via creating hundreds of billions of dollars in new money, boosting the M0 and M3 rates to a remarkable degree. One would imagine they would all be in a panic, wondering if maybe their thinking in the past has some problems and maybe their reliance on the new way of calculating inflation is very flawed and the lack of oversight in creating bubbles is bad.

But this didn't happen. I submit some excerpts from this strange, demented analysis:

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Due to lying about inflation, these people can sit there and pretend there is little inflation. One example of this deliberate misunderstanding of how oil-driven inflation works is to refuse to break up market sales and look at what it all means, individually, and then seeing the picture clearly. For example, I bought an energy-efficient little car 2 1/2 years ago. It was $9000, cash. My daughter wanted one, too. She went shopping last week and found the price was now $15,000 for the same car! Why is that?

If the Fed tracked all gas miser cars on a separate scale, they could clearly see, there is HUGE inflation in the value of cars that don't guzzle gas. 5 years ago, the big automakers made the biggest profits off of gas guzzlers so they marketed those aggressively while slighting the energy-efficient cars. So the efficient cars were cheap. Today, they are not. When there is oil inflation, everyone rushes out to buy various things related to this hike in prices. They buy new windows and doors or more efficient heating systems. They buy smaller cars so car sales always shoot up at the beginning of a major oil inflation cycle. This hides the bad news that is lurking in the future statistics. Once everyone has cut back or changed systems due to high energy prices, they hunker down and buying slows down dramatically. This is why there isn't a sudden transition into 'not buying' when oil shoots up in price.

Another example from my own life: our old 'on demand' heating system ate up too much propane gas. Now that prices doubled and then doubled again, we got frantic so we spent over $1,000 retrofitting our system. We kept the older system for just in case the new one breaks down, why bother removing it? We just added more plumping, an easy thing. But we did this out of desperation. We can't do this forever, of course. At this point, my house is nearly done as far as passive solar and positive heating is concerned. After this, there will be no more 'savings' and I will be hammered again by rising fuel prices.

So it is with the nation. Everyone buying energy-related systems will be done with this soon. Then all the people who cannot afford to buy better systems will be hammered mercilessly by inflation. The elderly are already under extreme fire thanks to the monsters at the Federal Reserve refusing to properly track inflation. The government under Bush is refusing to raise the funding for Home Heating Relief. He, like the Fed, wants to pretend there is no inflation. So this fund is languishing and buys less than 50% of what it handed out just 10 years ago. People will die because of this. And they don't care. As that one newsletter, the Kiplinger Report boasted, '20% of the nation spends 60% of the money.' And starving, freezing elderly aren't the top 20% so they will end up spending nearly 0% if this inflation that hammers them in particular, continues.

The Fed has an OBLIGATION to talk about this! They have the ABILITY to examine this and understand this. They have a MANDATE to take care of this nation, not the top 20% but ALL OF US.

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In this section, the Fed discusses the huge banking crisis, the worst I have ever seen in my life, as if it were some slight bump in the road. This section is pure insanity. I hope it isn't due to them going insane but rather was them playing typical wizard tricks. Chanting spells and hoping this fools everyone and thus, fixes the mess that has us falling into the Abyss. Of course, this is utterly childish! And since THEY are responsible for this mess, this is also fraud. And criminal. If Ron Paul is serious about breaking apart the Federal Reserve, then god bless him.

I want them ARRESTED. Either taken to Gitmo and waterboarded until they tell the truth or they can be put in a secure insane asylum where they can do less harm. How on earth could these men and a handful of women, sit around and tell such idiotic tales to each other? And how dare they ignore reality that is beating on all our doors. The howls of the wolves are so loud, they probably had to shout to each other to assure each other, there are no wolves at the door and the house of straw won't be blown down by a thousand hungry wolves. Oink, oink.

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This chart says it all: the Fed thinks we will cartwheel in space and not fall. We won't grow, of course, everything will stagnate. This takes me to the final matter here. In 2000, all the indicators were better than today and if we take into account even the FAKE inflation figures, stocks in 2007 are well below those in 2000 and if we use real inflation which is about double the fake, the numbers are worse. Housing is also not at the same peak it reached in 2000. Everything that went 'well' in the last 7 years were FAKE. This was FALSE prosperity build on increasingly false prosperity data previous to 2000. This very fake prosperity of the last 7 years was due to:

1. Massive government debt fueled by a last lunge at imperial rule of the planet.

2. Irresponsible tax cuts that greatly increased national debt by $5 trillion, the fastest growth in our history.

3. The Federal Reserve, right on the heels of huge tax cuts and war spending, dropped interest rates to an amazing level of 1%.

3. Lax lending standards for consumer and corporate debts, deliberately done in order to give a dying economy a big boost.

4. A loss of savings due to interest rates below the rate of inflation forcing savers to be wild investors seeking to gain more than the official rate by taking on riskier and riskier bonds and stocks.

5. Free trade coupled with importing most of our oil.

6. A collapse of government oversight.

All these policies gave us a feeling of wealth when all we were doing was digging our own graves. The false sense of wealth continues. The stock market goes wild whenever there are rate cuts below the rate of inflation. The Fed is rewarded when they do this.

Yen Rises This Week as Investors Flee Higher Yield Assets

The yen gained 0.08 percent to 108.35 against the dollar at 4:48 p.m. in New York and has risen 2.5 percent this week. It earlier climbed to 107.55 per dollar. The yen also rose 0.2 percent to 160.69 per euro. Japan's currency touched 221.31 yen per pound, the strongest since Aug. 17. The yen will trade at 105 against the dollar before year-end, according to Yanagihara.

The Swiss franc, also used as a funding currency, gained against 14 of the 16 major currencies this week. It rose to a record 1.0890 versus the dollar today, and strengthened to a three-month high of 1.63 against the euro. In carry trades, investors sell currencies in countries with low borrowing costs and buy higher-yielding assets elsewhere, profiting from the difference.

If the Fed has a secret plan to kill the carry trade run by Japan, they are succeeding. If they have a secret plan to destroy the Japanese trade surplus, they are succeeding. Only, they either are liars or they don't have any plans. In their own documents above, they talk about the mysterious condition of the dollar. They know perfectly well, the dollar was artificially inflated by Japan and China both of whom did this via the simple mechanism of holding dollars in FOREX reserves. The US has virtually no FOREX reserves. A totally insane approach in this modern world. We just make up money. And spread it around. The problem is, the longer we do this, the more we lose control of our own currency. And the Fed is TOTALLY responsible for this. They are not responsible for PRICES but for CURRENCY VALUES. And if they imagine they are driving the US economic car deftly, I say, they drove us off a cliff! They are playing the wrong game. Our opponents in trade are playing a different and very dangerous game. And the US Federal Reserve is supposed to struggle to understand this alternate game and devise some sort of alternate plan and then ADVISE CONGRESS and whoever is our dictator, to change course and failing this, telling the US public so we can stage some sort of wrestling match with these traitors.

The U.S. Dollar Index traded on ICE Futures in New York touched 74.484, the lowest since the gauge started trading in 1973. The index tracks the value of the dollar against six major currencies, including euro and yen.

This is a really awful piece of news. The date, 1973 is very significant. This is when we first threw in the towel as our empire fell apart as we lost the Vietnam War. This signaled the need for the famous Bretton Woods II meeting where we demanded Germany and Japan raise the value of their currencies. Today, we have 'free trade' in currencies so we can't do this. So the dollar will simply decline not just against them but against EVERYONE.

The statistics I pulled out of the Fed PDF shows us that the Fed wants to lock us in a status quo that Asia will break. At their leisure. We can't run our economy as if this is a nursery classroom or Mr. Kangaroo or Sesame Street. We have to face the truth. Here is some more Asian news we must look at:

Capital Spending Seen Growing 11% In FY07 On Shipping, Real Estate

TOKYO (Nikkei)--Japanese companies plan to spend an average of 11.0% more on capital investment in fiscal 2007 than they did a year earlier, according to data compiled by Nikkei Inc.
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DISPATCHES: Japan Must Not Repeat Mistakes Of 10 Years Ago

TOKYO (Nikkei)--The economy continues to expand, albeit without much energy, but dark clouds loom over the financial markets. Despite the rather lethargic growth, fiscal consolidation is becoming a hot topic, and much political talk is focusing on cutting government spending and raising the consumption tax.
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Japan's queer depression continues. The US Federal Reserve, our trade officials and the Treasury all are utterly incurious about this. Many top economics writers and professors who even profess to understand the hazards of our situation are incapable of seeing Japan at work. The Japanese ruling elites are playing a very dangerous game. They are banking on the collapsing birth rate allowing them to oppress young Japanese people due to their lack of physical numbers while keeping the elderly semi-happy so they will support a status quo that allows the big giant corporations to thrive on exports and the carry trade. The biggest international players using Japan as their home base are roaring ahead...at 11% per annum! Amazing, isn't this?

Also, they are going to prevent a repeat bubble by constricting SALES IN JAPAN. They will keep this down, cut wages, restrict lives further, give less and less hope to the present generation that is leaving school right now. And they hope, this way, to elude the onrushing oil inflation crisis. This should be examined by our own bankers who want to pile debt on us all. Note how the US media is all in hysterics. Americans are still able to buy stuff [made in Asia]! We are happy! Hooray! This is of highest importance. I wish the Fed would allow me to make a presentation at their December 11th meeting. But they won't, they can't, they dare not.

For this would lead to a confrontation. We might even throw punches or at least, I will take the punch bowl the Fed is giving the US consumers and speculators and throw it at them. After all, the Fed was supposed to take the punch bowl away when bubbles formed. Instead, they are pouring bubbly champagne in the punch bowl.

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Comments

[blues]

Well, Elaine, it should come as no shock that military/media complex is not telling us about these realities. My grandmother always used to tell us that the great depression was never announced at all. Instead, She said that, in the very early thirties, the people simply started waking up to the reality that surrounded them. The radio and newspapers never mentioned that anything might be amiss; it just fed them the big puzzle one little piece at a time.

Interestingly, the essential production system remained, but with the workers simply locked out. It looked like the management had gone on a "reverse-strike." Now, I would guess that about 90% of the essential production system itself has been exported. I think cities and towns should be empowered to build, own, and run new production plants. Maybe we can build this from the ground up to be energy efficient and minimally polluting. And with minimal worker commuting! It sounds like communism, but I say, who gives a shit. At least it's a plan. At least a (democratically governed) city or town would find it hard to sell off its golden gooses to foreign usurpers, as out "capitalists" have. And essential products would get manufactured.

[DeVaul]

Wow, Blues, that is a really interesting story about your grandmother. I often wondered if the people living during that time knew what was going on because it was stretched out over 5-6 years. Now it seems they were just kept in the dark like we are.

I think the media understands that if they just feed us one little bit of bad news at a time, here and there, they will avoid a general panic or uprising against the system that is destroying us.

Later, they can then say they "told the truth", but that means nothing if it was scattered around amongst thousands of stories about movies, sports, politics, celebrities, and "feel good" news like a needle in haystack.

I am always amazed at all the devious contrivances the human mind is capable of as well as how much time is devoted to them.

[big]

Paul Krugman has an interesting link on his blog to a BusinessWeek article about the finance companies buying hospital debt and charging exorbitant fees and interest rates.

The article says that nonprofit tax exempt hospitals more often use this technique, replacing the historical practice of zero or low interest repayment plans.

http://businessweek.com/bwdaily/dnflash/content/nov2007/db20071120_397008.htm

Pretty soon I think the concept of a debtors prison, or just debtors execution will come back.

Sad state of affairs.

[big]

Complete Link:
http://businessweek.com/bwdaily/dnflash/content/nov2007/
db20071120_397008.htm

[Big Hearts Come Later]

And now the entire U.S. economy is supposed to stay in a holding pattern until after Christmas. Why does the shopping season matter to US manufacturers ?

Ever tried to just buy US made products for gifts? -- Last year I tried, and failed. I was able to buy only 30% U.S. made products. The rest of my hard earned cash went to China, and to those business owners more loyal to foreign workers then they are to their U.S. brethren.

This year I will try harder - might have to resort to used gifts though.

Everyone is awaiting numbers on Monday for the Black Friday sales. Here's a preview:

"According to a national Maritz Poll of about 1,000 people, which predicts consumers will spend on average $637 this season, down 10 percent, those three retail chains will do the most business, with customers spending an average of $165 at Wal-Mart, $120 at Target and $139 at Best Buy."

http://www.chron.com/disp/story.mpl/headline/biz/5325321.html

The following scene was no doubt repeated 100s of times over yesterday. Fellow US citizens, with our defeated manufacturing base and economic ills, still are wild with hunger for foreign goods, with price points to match our deteriorating spending capacity:

http://www.liveleak.com/view?i=748_1175643819

90% of everything those people bought wasn't made here, and I'm probably being generous.

Blues: Thanks for the great insight into the last big depression. I spoke with my wife's grandfather, born in 1922, at length this weekend - he spent his youth growing up in the depression. I keep telling him that this time wasn't forgotten, and is a major topic among my friends and clued-in coworkers.

Happy going-into-hock season to all,

- Big hearts

[blues]

Never forget. Never forgive.

I gotta tell ya, folks, I just gotta tell ya.

I was once called by the courts to be a juror. That is ordinarily a very good thing, but life has a nasty habit of getting in the way of such good things. So what did I tell the court?

Well you see, I had just been through a very hellacious experience with the "worker's comp" deal. Plus I had multiple side-issues, okay? The lawyers all told me to let go of the past, just move on.

So what did I tell the court? So fucking simple! I told them that (drum roll); if some crime has been committed, we should all just move on. Why bother to prosecute people and imprison them for things that, after all, have happened in the PAST?

Let me tell ya folks, the couple of lawyers present were not not at all ready for such a response. I really believed that frickin lawyers would be ready for just about anything. But they were just not prepared for that particular argument.

They just "dismissed" me without any further comment. How peculiar!

[Elaine Supkis]

As usual, Blues has very good comments. About the Great Depression: people INSIDE of it knew damn well about what was going on. My former father in law was part of the 'rescue team' set up by Roosevelt when he was governor of NY in 1930.

They were frantic to do something, anything. The best and brightest minds from the NY university system, most of them under 30 years old, bent their minds to figuring how to do something, anything.

Joe was a math genius and this is before computers so they all sat around a huge table with lots of papers and pencils and slide rules. 'We need more information!' was the battle cry. They had to expand data collection. Joe taught me that when NYC went nearly bankrupt and I had to deal with the mess.

So I learned how to do canvassing for information, how to collate streams of data and how to draw conclusions from this stuff.

[Big Hearts Come Later]

Your determination for writing about and digging for this information is a benefit to us all. Please keep it up.

Although I have little hope that our country's slow motion train wreck will end well, I'm thankful to those who at least have recognized it ahead of time, and have done whatever they could to educate and prevent it.

Happy Thanksgiving weekend - the turkey looked great!

- - -

PS: There was one thing your article (yesterday) about the Kitty Hawk / Hong Kong left out: http://www.estripes.com/article.asp?section=104&article=50485

China, a number of hours later, relented, and said they could dock at their port... The Kitty Hawk and their crew were already pretty far out to sea and in bad weather, and was on their way to Japan (seems like they had Thanksgiving on the ship instead of with their families... a very depressing letdown)

Someone else may have already commented on this.

[Roberto]

Thanksgiving to Elaine for doing some fine journalistic work, for not giving up on america, for bringing a rich bouquet of relevant life experiences to bear in framing a fine perspective on a supposedly difficult field (macroeconomics and their geopolitical implications couched in the rich bed of history) and making it palatable for the "common" man. Thanksgiving we all still have a free venue for such endeavors (the relatively untainted web)... and hoping it will last a bit longer anyway.

[notgonnatellya]

the last major manufacturing done in the US was homes, even though the big developers tried to "insource" a lot of the work to unskilled and illegal aliens...the exact same thing as shipping jobs offshore, except for the added drag on social services...

but anyways, now those home "manufacturing" jobs will be gone as the market gluts with overproduced housing units. with those jobs go about a gazillion support jobs, everything from local lumberyards to the big box stores (Lowes, Home Depot), to the interstate trucking of all the pieces and parts it takes to make a modern home...

so...all you CEO's with your inflated salaries and perks and benefits...that was one hell of a gamble you took with our money, and we were fools to let you. and now the game is over. who won?

all you home flippers, all you TV people who produced the shows about how easy it is to get rich quick by doing cosmetic makeovers, all you speculators who "bought" homes with imaginary money and drove the market ever higher, speculators speculating on speculation...what's the *real* cost of what you've been doing, hmmmm?

a rising tide lifts all boats, eh? well i got news for you: if you're at the end of the rope and you can't raise anchor, a rising tide will sink you.

guess what situation you've put your country in?

and you have the nerve, the gall, to question *our* patriotism??

well, to borrow a phrase..."Ah, damn you! God damn you all to hell!"

[Elaine Supkis]

I did mention the Chinese changed their minds. I didn't mention the ship being too far away. That must be from yet another, later story.

And we just ate the last of our turkey left overs. I happen to like Thanksgivin left overs. Now I have to work them all off again. Time to hike around!

[shargash]

Japan has got itself between a rock and a hard place. They import a lot of oil, and a weak yen is going to kill them. But a strong yen is going to kill them even quicker. I think Japan is toast.

We already know we're toast. And Britain is toast too. They may go down even faster than we do. This is going to be ugly.

the last major manufacturing done in the US was homes

We make bombs and other instruments of war. If I remember correctly, military spending accounts for around 1/4 of our GDP, with finance around another quarter. As the financial sectors collapse, I expect we'll try to expand military spending. We're going to be at war for a long time.

[notgonnatellya]

seems to me that i've read stories recently about a lot of munitions actually being made elsewhere and only assembled in the US...

[Frank]

Interesting point, notgonnatellya. I've heard the same thing. Seems to also be true of U.S. commercial aircraft "production":

Boeing looks to expand supplier contract linked to the 787 Dreamliner

Boeing is in talks with Toray Industries to expand a $6 billion contract to supply carbon-fiber sheets for the 787 Dreamliner, the U.S. planemaker's fastest-selling passenger jet.

Weaponry, commercial aircraft, and all of "our" movies now seem to be filmed in either Canada or New Zealand ... is there anything still manufactured in the United States?

[Frank]

Oops, I mucked up the link. Here it is:

Boeing looks to expand supplier contract linked to the 787 Dreamliner