Thursday, June 30, 2005

GAMBLING DENS

f
by Elaine Meinel Supkis

All cultures go through gambling hysteria phases. None last more than 50 years because it destroys everything in its path while it rages. Like drug abuses or any body/environmental abuses, it can't grow forever because it is so utterly destructive, living organisms fail due to it for it is an addiction as well as a parasitical entity.

The most destructive part is how it undermines the will to work creatively and the desire to sacrifice for tomorrow.

Any observer of America today can clearly see how gambling has spread like a cancer and how it is weakening our empire and making us choose badly. In the 1950's, Las Vegas was frowned upon even as people snuck in there. All other gambling attempts were shut down by the police. Parents raised their children to fear gambling. During WWII, like in all wars, soldiers gambled informally. The connection between gambling and soldiers is very strong because of all people, they must heed or call upon Lady Luck for She rules their fates! This sense of impending doom is relieved by gambling. This is also why governments suppress gambling particularily after great conflicts.

Religions that are sensible all try to squelch gambling for the similar reasons, namely, Lady Luck is a very ancient goddess and one of the most powerful, her throne is next to Mother Nature's. Both goddesses threaten the masculine gods that dominate our pantheons this world cycle, the Piscean Age. Both goddesses, by the way, are indifferent about our worship. They operate without human input in the end. Both punish us for ignoring them, of course. Mother Nature by using her most feared tool: the changing environment kills and even eliminates life forms.

The NYT said last month they are going to appeal to "religious" people, meaning right wing Christians, and so they got to work with various articles intended to be a sop to these folk. Today's entry is from the NYT:
A Church-State Solution
By NOAH FELDMAN
Published: July 3, 2005

For roughly 1,400 years, from the time the Roman Empire became Christian to the American Revolution, the question of church and state in the West always began with a simple assumption: the official religion of the state was the religion of its ruler. Sometimes the king fought the church for control of religious institutions; other times, the church claimed power over the state by asserting religious authority over the sovereign himself. But the central idea, formally enshrined at Westphalia in 1648 by the treaty that ended the wars of religion in Europe, was that each region would have its own religion, namely that of the sovereign. The rulers, meanwhile, manipulated religion to serve their own ends. Writing just before the American Revolution, the British historian Edward Gibbon opined that the people believed, the philosophers doubted and the magistrates exploited. Gibbon's nominal subject was ancient Rome, but his readers understood that he was talking about their world too.
Wrong! My family had to leave Europe. We had to leave "Christian" places because of the witch hysteria. We are an odd clan with a rather strange reputation which was so strong that when I went to prove this to my fiancee, I picked up a random book from the 19th Century in a historic book store, looked my family's name up in the index, flipped to the story and it said, "The Steeles are a strange family. They have a reputation with thunderstorms..." We didn't settle in Boston, that is certain! We lurked on various frontiers, always moving West until hitting the Pacific Ocean. We fought in the Revolution and we fought to stop churches from ruling us. The fear of churches ran deep in the veins of the American Revolutionaries. For good reason. When the church and state are one it is terrible.
This model called for a new understanding of church and state, and the framers of the American Constitution rose to the occasion. They designed a national government that, for the first time in Western history, had no established religion at all. The Articles of Confederation, which were drawn up during the Revolutionary War, had been silent on religion -- itself something of an innovation. But the Constitution went further by prohibiting any religious test for holding office. And the first words of the First Amendment stated that ''Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.'' If the people were to be sovereign, and belonged to different religions, the state religion would be no religion at all. Otherwise, the reasoning went, too many religious denominations would be in competition to make theirs the official choice, and none could prevail without coercing dissenters to support a church other than their own -- a violation of the liberty of conscience that Americans had come to believe was a God-given right. Establishment of religion at the national level was prohibited. Religious diversity had ensured it. The experiment had begun.
Ben Franklin was so worried about religions (George Washington was not a standard Christian, either, one of my ancestors belonged to his Masonic Lodge and did the surveying of Washingon, DC, incorporating the astronomical aspects of this organization within the design of DC, ie, aligning things with certain star systems!) that he insisted on the addition of admendments to the new Constitution before it was even affirmed and this is the one he fought hard to include and so it was the first and remains the most important. That and freedom of speech for the two are deeply entwined. Very deeply.

All cultures that force a mono-religion upon their people must curb free speech!
What all values evangelicals have in common is the goal of evangelizing for values: promoting a strong set of ideas about the best way to live your life and urging the government to adopt those values and encourage them wherever possible. To them, the best way to hold the United States together as a nation, not just a country, is for us to know what values we really hold and to stand up for them. As Ralph Reed recently told an audience at Harvard, ''While we are sometimes divided on issues, there remains a broad national consensus on core values and principles.''
OK. One can stop reading this boiler-plate article at this point.

Ralph Reed is a dirty gambling con man. They don't mention this so the rest of the article is, like the Republican right wing in toto, garbage. Lott is in deep trouble now. Why? Well, we have a problem in River City and it isn't just a mere pool hall, and no Music Man can fix it with 76 trombones! As Lott's gambling connections that intertwine with lobbying efforts run by a very religious Jewish man, Abramoff, old Ralphie Reed is also one of the gambling cons too. From the Rutland Herald:
Ralph Reed has said repeatedly that he had no direct knowledge of who financed his consulting work against gambling in Alabama, Texas and elsewhere, and that he would never knowingly take money from gambling interests.

But the truth is not in him.

E-mails released last week by the Senate Indian Affairs Committee make it clear that Reed knew the millions of dollars coming his way were being paid by Indian tribes who wanted to shut down potential competition to their casinos. In one series of e-mails between Reed and lobbyist Jack Abramoff, who was running the operation from Washington, the men discuss how Reed will be compensated for his expenses.

The subject heading for that discussion? "Disbursement on behalf of Choctaw Indians."

If that doesn't convince you, try this: In another series of e-mails, Reed tells Abramoff he's going to need another $867,511 for TV and radio ads, phone banks and direct mailings to conservative evangelicals.

OK, Abramoff says to Reed, which nonprofit groups should we use to launder the money to you?

Reed suggests three possibilities, but over the next few days, Abramoff reports that two of the groups aren't structured to handle such transactions. Together, they settle on using Americans for Tax Reform, a group run by their good friend, Republican activist Grover Norquist.

In other words, Reed was far from a passive, unknowing recipient of Indian money. Quite to the contrary, he actively participated in designing and operating the money-laundering process.
Note how these con men use various cover organizations, the top one being churches themselves. The Catholic Church, to raise money, began to agitate for church social gambling events and bingo playing. Many other churches joined in the effort to pass laws exempting them from gambling prohibitions. I joked about this years ago, "The least you can do is erect a statue to blindfolded Lady Luck, sister of Justice."

From CNN:
Wait. This is Vegas, den of sin, where what happens here stays here, right?

Absolutely, but inside the Sunday Gospel Brunch, not too far from the clinking slot machines and ticking roulette wheel, tourists and locals are raising their hands, tapping their feet and singing about Jesus.

This may always be Sin City, but that doesn't mean tourists can't heal their soul a bit while they're here. Two Roman Catholic churches are just a step away from the Strip, and there's always a walking preacher, warning sinners to embrace their savior.
Full circle. Now the gambling dens are opening churches! Who would have thunk! This isn't because they are reforming themselves, they are merely sucking in the last remnants of the counter religions that forbade gambling.

The church goers all get excited. "Jesus will save ME! Jesus loves ME! Jesus will forgive ME!" they chant. Indeed, this forgiveness game is connected with the gambling. When the churches dragged the gambling camel's nose into our tent, they said, it was for the children, the church! It won't move in and besides, Jesus will forgive them this crime because they are only doing it to help Him! See?

So as evangelism spreads so does gambling for the two are nearly identical and joined at the hip. Both are con games that appeal to primitive emotions. From the BBC:
Partygaming, the internet poker company that floated on the London Stock Exchange this week, is believed to have a worth greater than many blue chip companies - but US law-makers are adamant that it breaks the law.

Online gambling is banned in America, so Partygaming which was set up by an American is based in Gibraltar with no assets in the US.

Its prospectus concedes: "In many countries, including the United States, the group's activities are considered to be illegal by the relevant authorities."

But, it adds the crucial clause: "Partygaming and its directors rely on the apparent unwillingness or inability of regulators generally to bring actions against businesses with no physical presence in the country concerned".
Gambling has now broken free of all moorings to funding schools, the elderly, alternative to open taxes, Indian rights, churches, it is now in full bloom by itself. Like when red algae suddenly goes out of control causing red tides and kills all the fishes, so we are now in the final stages of internationalizing and institutionalizing the worse aspects of gambling. It is now officially totally out of control and sucking down vast amounts of time and money while destroying the work ethic.
It's estimated that nine out of every 10 of its dollars last year came from the US.

At $600m those revenues are hefty and generated a profit of $350m in 2004.
Um, look who is the real winner here. The "bank" wins over half the funds spent. Sounds like the owners are not gamblers, they have a sure game going here.
Every estimate now predicts that growth will be phenomenal, perhaps from an annual billion dollars spent globally today to 10 times that amount in five years.

American poker players go online regardless of US law Much will turn on the law in its biggest market, the United States.

The Interstate Wireline Act was passed nearly 50 years ago in an effort to stop organised crime rigging gambling. Under it, "wire communication" of bets was outlawed on "sporting events or contests".
WWII ended sixty years ago and right after the Korean War, the government, as per usual, stepped in to squelch gambling. During the Vietnam war, gambling spread again but this time the government had a nifty idea, thanks to the churches: tax gambling via lotteries. At first, the lotteries were only for good things we needed. But then, they took over. Now mega lotteries run like crazy, the ads showing winners laughing and living at ease after spending a lucky dollar spread all over kingdom come. Bennett, the right wing fascist who yells about morals and hard work all the time is a rank gambling addict who lost every penny he earned on his moral bombasts gambling naked in Vegas. He then declared that gambling isn't a sin, it is a value neutral matter. Well, he should oppose it for economic reasons.

All economic bubbles ride on the gambling mania. Period. The two are intertwined. Utterly. Everyone likes to think they will be millionaires without sweat or creating capital or anything, just gamble with property or stocks or incorporated schemes or outright gambling.

Recently there have been a spate of stories of kids neglecting their college educations to play poker and some are planning to become gambler/con men because it is so lucrative.From the Princetonian, the student newspaper:
Talking about gambling with an avid Princeton player can be a confusing experience: The student's nonchalant demeanor becomes suddenly animated, with fervent enthusiasm and cryptic lingo. The complete novice, like me, is immediately lost among talk of "rockets," "bitches" and "savannahs," "limit" versus "no limit" and "hold'em." Atlantic City is, of course, "AC" and poker, as opposed to blackjack or roulette, is a skill game where the best players always win in the long run.

Gambling takes many forms on campus: Whereas only a few students bet on sports or take trips to Atlantic City regularly, online gambling is on the rise and almost every eating club and residential college has a regular poker game.
Even elite students with high intelligence want to be part of the plague of locuses. All the places that permitted gambling casinos/boats have a very high bankruptcy rate...in good times. When we hit bad times, the bankruptcy rate will cause our banking system to collapse. This is always the end result of all gambling/investment bubbles.

To return to homepage click here

Tuesday, June 28, 2005

CHINA WILL NOW DESTROY DETROIT

f
World's biggest container ship built in South Korea and heading towards the USA.

As our native auto industry sinks in the ocean of oil woes, weighted down by high labor costs/poor gas mileage dinosaurs, just as I have predicted, China steps into the world auto market, delivering the final blow. The Japanese, despite their leader trying to poke China repeatedly in the eye, is heavily investing in automobile factories in China.

From the NYT:
A line of Chinese-made cars began rolling onto a ship here Friday, bound for Europe. The cars, made at a gleaming new Honda factory on the outskirts of this sprawling city near Hong Kong, signal the latest move by China to follow Japan and South Korea in building itself into a global competitor in one of the cornerstones of the industrial economy.

China's debut as an auto exporter, small as it may be for now, foretells a broader challenge to a half-century of American economic and political ascendance. The nation's manufacturing companies are building wealth at a remarkable rate, using some of that money to buy assets abroad. And China has been scouring the world to acquire energy resources, with the bid to buy an American oil company only the latest overture.


f
From the NYT article, note the white gloves the worker is wearing, and the impeccable factory floor.

Notice how, not only are the Japanese auto makers making cars in China, they are already shipping them out...to the USA. And the sticker price will be the exact same as the ones assembled here in America by nonunion, cheaper labor in the south, content with being underlings to Japanese businesses. This represents pure profit for the Japanese. They will probably even take a hit, financially, on their American factories which are pure sop thrown to us to keep us quiescent. Gradually, over time, more and more cars made in China will come here in pursuit of profits. They have to do this. The Americans won't object or the Japanese with threaten us, quietly, behind the scenes, with closing the factories built in GOP strongholds.

This is one boat our politicians won't rock.
The resulting bilateral corporate tango - in contrast to the confrontations reminiscent of the 1980's and early 1990's when Japanese capital poured into the United States - means that China has many American corporate comrades, who have a stake in helping generate its growth.

China, economists and Asia experts say, does not face some of the inherent limitations that ultimately stymied Japan and led to economic stagnation there over the last 14 years. With its giant population, China is developing a large and diverse economy, creating an almost Darwinian competition for a domestic market that has extremely low-cost companies ready to export inexpensive goods around the globe.
The Chinese found a way around the Japanese problem: provincialism. The Japanese consider themselves one big family which is why they don't allow much immigration or intermarriages. They used to protect each other which meant keeping all the jobs at home as much as possible while exporting like crazy.

Now they are letting go of this policy and the Japanese workers are in such deep despair, the suicide rate is skyrocketting and a deep depression has settled upon their land yet they run huge trade deficits with everyone...except China.

Caught in their own trap! They need the cheap Chinese labor which is much smarter and much cheaper than robots.
To be sure, China is still at an earlier stage of development than was Japan when its economic rise became a national obsession in the United States. In the 1980's and early 1990's, Japanese companies claimed a sizable chunk of the American car market and purchased Rockefeller Center and the Pebble Beach golf course.

The bid by the China National Offshore Oil Corporation for Unocal has raised worries among some politicians in Washington. That $18.5 billion bid comes as America's trade deficit with China is ratcheting ever higher and the dollar is getting support from rising inflows of Chinese capital, which also helps support low interest rates.
The Japanese went on a foolish tourist's buying binge because they found nothing to invest in when they wanted to buy American so they bought junk. Which depreciated badly.

The labor costs of Japan were way too high for them to exploit our dying factories by dismantling them and shipping them off. The Chinese concentrate on this because it pays off for them, labor is ridiculously cheap in China. Worse, the Japanese government assumes the Americans will be their mercenary soldiers doing their bidding in Asia forever whereas the Chinese oppose us on nearly every political front so they have no incentive to strengthen the American/military/industrial complex. They intend to destroy it.
More disconcerting to others in Washington is China's growing ability to finance any political and military ambitions. China has missiles with nuclear weapons that intelligence experts describe as already able to hit not just Hawaii but probably California. Beijing also remains chilly toward American entreaties to put more pressure on North Korea to abandon its nuclear weapons program.

In contrast, Japan's military dependence on the United States made it more willing to accept a steep appreciation in the yen in 1985 that hobbled Japanese exporters. So far, China has put off Bush administration demands to let its yuan appreciate.
This is so funny, actually. Japan is a province we occupy. They, in turn, control us in a million ways. They suck us dry even as we bully boy around Asia. When Bretton Woods II happened, the deal was, the Japanese would let their currency float and in return, they would get really rich, quick, off of cheap American dollars.

So they went shopping here! Buying our realestate was a cinch! This graph shows clearly how the Japanese exploited Bretton Woods II...only, having no plans, they bought very stupidly indeed.

f
Note how the spending shot up for three years after Bretton Woods II until the money was all used up from that windfall. Note also, the Japanese then started to buy American bonds to keep our deficits afloat, foreign purchases of our gov. bonds shot up from 1986 to today whereby foreign governments buy over 85% of these bonds!

The yen no longer floats against the dollar. When we were heroically trying to depress the dollar, the euro shot up but the yen stayed exactly pegged at the 105-110 range it has sat at for the last 15 years despite everything. We have now given up on trying to ditch the Chinese via depressing the dollar and are back at threatening them. Yet are silent about the Japanese.

Both Koizumi and Bush will try to whip up anti Chinese fervor when the cars for Japanese companies built in China flood into America. Another thing to note in this graph is what China is buying: companies that matter, cutting edge ones in energy and computers. Not impressionistic paintings.

Workers in white uniforms and gray caps complete the rest of the welds, working as quickly as workers in American factories - but earning roughly $1.50 an hour in wages and benefits, compared with $55 an hour for General Motors and Ford factories in the United States.
In the end, the Japanese find it much easier dealing with fellow Asians than with Americans. Pictures of Japanese factories in America shows workers dressed in whatever, no white gloves, most of the workers on the obese side of the scale. Even though the article in the NYT tries to flatter us, saying we are the same, we are not.

Slower moving due to greater fat levels and easily overheated thanks to the same, older and often in poorer health for many reasons especially dietary, the American worker is not seen as some great prize to win in Asia. This is why every American should understand, the automobile factories in America are charity! not due to us being a fabulous work force. The Japanese grit their teeth as they deal with us, gingerly. They won't say in our faces what they feel but if you watch Japanese TV like I do, trust me.

We are a joke to them.
"Our export activities are based on the synergy of China's competitive advantage and Honda's global network," said Atsuyoshi Hyogo, the chairman of the Honda subsidiary here.

As G.M. and Ford struggle with high health care costs for unionized work forces with an average age of nearly 50 in the United States, most of the Honda workers here appear to be in their 20's. They are unlikely to go to the doctor very often and when they do, doctors here charge less than $5 for an office visit and administering a few stitches.
Why doesn't our industrial owners, our rulers, want public health care? Not to mention, healthy food? Why? Industrial America has perfected some of the worst possible foods to eat and this is destroying the work force and they persist and even increase this destructive force. Why?

I, personally, view them as traitors. They want to destroy us because they want our country emptied out so it can be a theme park for them and their very spoiled youth. Otherwise, it is just sheer insanity.

The Japanese and Chinese know from experience that all the politicians and rich guys in America will outbid each other in a race to sell us all away to the highest bidder. But what we have to sell is less and less each year. Once all our cars are made in China, what will we do?

Even keeping those few Potemkin factories running in Trent Lott's state won't help anymore.

To return to main page click here

Friday, June 24, 2005

SABRE RATTLING IN ASIA

f

Ever since Condi's "diplomatic" mission in Asia a mere few weeks ago, the sabre rattling there has been pretty loud and getting louder by the minute. Aside from Koizumi's seemingly daily visits to the war criminal shrine in Japan, contention over fishing rights and uninhabited islands is growing.

From "From the Wilderness.com"
Tokyo's worsening relations with its Asian neighbours suffered a further blow yesterday when Taiwan sent a warship to claim jurisdiction over a group of islands claimed by Japan as well as China.

Tokyo's defence minister Yoshinori Ohno appealed for 'calm' after his Taiwanese counterpart Lee Jye boarded a warship with fifteen senior politicians and sailed for the resource-rich Tiaoyutai Islands in a symbolic show of support for Taiwan's fishermen, who have repeatedly clashed with the Japanese Coast Guard.

The 4,200-ton frigate sailed close to the islands - dubbed Senkaku in Japan -- in the East China Sea before returning to Taiwan, where the government has come under heavy fire for not standing up to what one legislator called Japan's "expansionary policies" in the region.

The makeup of the expedition, which included legislators from the three major Taiwanese parties, indicated the move enjoyed widespread popular support.

Wang Jin-pyng, a politician on board the warship, said the aim was to "safeguard Taiwan's sovereignty and to protect Taiwanese fishermen that have been expelled from the area by the Japan Coast Guard."

Tadashi Ikeda, the de-facto Japanese ambassador to Taipei, called the decision to send the warship to the islands "inappropriate."
You see, if Japan was smart and not stupid, they would be peeling away potential allies of China, not alienating them and driving them to China for an alliance. Taiwan should be easy pickings for Japan but instead, nationalist sentiment on the right is driving Japan into conflict with Taiwan, forcing Taiwan into an alliance with China. The South Koreans have been having riots over the Japanese refusal to return the ashes of dead Koreans kept in the shrine.

Fishing rights, sovereignty issues, trade issues, all have to be resolved via diplomacy. For some reason, no mystery to readers here, Japan has chosen the might makes right route. Obviously, Bush made a secret deal with Japan that we will back them, our major purchaser of our debt, in any conflict with our other trade partners. Normally, this could be useful especially since we seem to be disinclined to pay our own taxes, but this is really acting like a mercenary nation, letting our "allies" use our military for their own reasons, sort of like our relationship with Israel.

The Japanese might get some satisfaction out of the hammering in public ladled out to the Chinese over currency and trade matters but increasingly, Americans are noticing that Japan has been boring away underground, causing as much damage as the others we are bellowing about. A sign of American weakness and loss of patriotic spirit is shown in the craven courting of foreign companies like Toyota to assemble parts in this country so that we don't worry about foreign entities owning companies here even as no American corporate interest dare own any factories in Japan.

This one way flow of profits is another weakness. We may think we are very clever, getting jobs from the Japanese, but every single Japanese assembly facility in America pays no taxes. So we get some inferior paying jobs compared to unionized jobs and we don't get to tax profits that much which leave the country and we get no infrastructure support, this coming only from the lower working class workers who must foot the tax bill for everyone.

American companies have demanded and gotten the no taxes promises, too. This is the result of the race to the bottom Americans waged against each other. States that gave businesses all the breaks got the jobs, not that this lifted our country out of poverty into wealth, it was purely stealing from Paul to pay Peter and then sticking Paul with the tax burden.

The Chinese recently told the Japanese they can't play that game with them. They are intent on competing with the Japanese, not being their servants. The feeling of patriotism is very high in China and rising as they reassemble their former empire. The espirit de corps in America is collapsing as we lose ground on every front. Our lassitude from servitude shows clearly in the increasing refusal to die for American corporate interests in the Middle East.

Meanwhile, American businesses continue to contract. From the BBC:
The US group said 6,500 staff would go over the next year as part of a cost-cutting drive, following 1,800 redundancies earlier this year.

Alcoa said the restructuring would result in costs of $245m to $275m, but would lead to annual savings of $195m. Alcoa added it expected its profits for the second quarter of the year to come in at $219m after tax.

The company has been battling against a downturn in trade from automotive, packaging and European markets, as well as higher costs overall in recent years.
History shows us clearly that when economic opportunity contracts, conflicts become increasingly violent. This is why big depressions create bigger wars. Right now, we are seeing small conflicts bubbling just below the surface but this is a symptom of greater forces at work. The angry rhetoric coming from DC is a symptom, too.

We are at conflict with each other and the world and things are supposedly going just great. We aren't in a depression yet, we are merely feeling the early chill of one. This is why every country including the USA are driving down their currencies and interest rates while simultaneously printing money at a mad rate. They remove money from circulation various ways, drug dealing and wars at the top. Even though America has managed to blow through $300 billion dollars in two years in a futile war, there is still another half a trillion sloshing around the world that would collapse our currency if it came home to roost or was used in commerce.

Instead, it gets sponged up by the Japanese who are getting pretty loud with their sabre rattling.

FRIEDMAN CELEBRATES JOB LOSSES

f

My, having a secure job that won't be outsourced certainly is fun. One can happily poke a hot poker into the ribs of fellow Americans while utterly protected. The cold blooded antipatriotism of writers like Friedman astonishes me. Do the owners of the NYT view our country this way? One wonders and one suspects. Seems many in Congress think this way, too. Certainly, most of our business owners are like this. They hate America.

From the NYT:
Ah, those French. How silly can they be? The European Union wants to consolidate its integration and France, trying to protect its own 35-hour workweek and other welfare benefits, rejects the E.U. constitution. What a bunch of antiglobalist Gaullist Luddites! Yo, Jacques, what world do you think you're livin' in, pal? Get with the program! It's called Anglo-American capitalism, mon ami.

Lordy, it is fun poking fun at France. But wait ...wait ... what is that noise I hear coming from the U.S. Congress? Is that ... is that members of the U.S. Congress - many of them Democrats - threatening to reject Cafta, the Central American Free Trade Agreement? Is that members of the U.S. Congress afraid to endorse a free-trade agreement, signed over a year ago, with El Salvador, Costa Rica, Guatemala, Honduras, Nicaragua and the Dominican Republic? Mon Dieu! I am afraid it is. And for many of the same reasons France has resisted more integration: a protectionist fear of competition in a world without walls.
I will spare you all the horror of reading anymore of this tripe. This wealthy, pampered pet of the ruling class, sub group, pro-fascist Israel, thinks a 35 hr week and welfare benefits are silly Frenchie things, non? I would love to park this guy in a mud hut somewhere like in the middle of Gaza and let him fend for himself but this will not happen. So this lapdog doth yap at us mere chattel for wanting simple protections so we won't all end up in mud huts, too.

Also in the NYT:
Even as it proceeds with layoffs of up to 13,000 workers in Europe and the United States, I.B.M. plans to increase its payroll in India this year by more than 14,000 workers, according to an internal company document.

Those numbers are telling evidence of the continuing globalization of work and the migration of some skilled jobs to low-wage countries like India. And I.B.M., the world's largest information technology company, is something of a corporate laboratory that highlights the trend. Its actions inform the worries and policy debate that surround the rise of a global labor force in science, engineering and other fields that require advanced education.

To critics, I.B.M. is a leading example of the corporate strategy of shopping the globe for the cheapest labor in a single-minded pursuit of profits, to the detriment of wages, benefits and job security here and in other developed countries. The company announced last month that it would cut 10,000 to 13,000 jobs, about a quarter of them in the United States and the bulk of the rest in Western Europe.

"I.B.M. is really pushing this offshore outsourcing to relentlessly cut costs and to export skilled jobs abroad," said Marcus Courtney, president of the Washington Alliance of Technology Workers, or WashTech, a group that seeks to unionize such workers. "The winners are the richest corporations in the world, and American workers lose."
Well, it seems an angry patriot inside IBM has finally had it! This report isn't IBM coming clean with Americans, it is IBM being a sneaky thief in the night, pretending to be patriotic, giving money to the politicians so they will OK this sort of vile anti-American activity. IBM is so ashamed of their perfidy, they keep silent about it, hoping no one will notice despite anti-American crowing from Friedman, boasting about how our corporate masters are betraying us all.

Meanwhile, the mouthpieces of our rulers continue to jerk us all around. From Xinhua news:
Senior US officials have warned that imposing punitive trade sanctions against China won't protect U.S. jobs.

US Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow have warned that imposing punitive trade sanctions against China may slow the drive to persuade China to adopt a more flexible currency and won't protect U.S. jobs.

Greenspan said that a policy to dismantle the global trading system is in a misguided effort to protect jobs from competition and would redound to the eventual detriment of all U.S. job-seekers, as well as millions of American consumers.

Both agreed that it would be futile to try to force Beijing to do so through trade sanctions.
You know, we pay these clowns. They take our money, though I admit we pay them less than their real owners slip under the table, to serve us. You know, Americans.

Instead, they seem more interested in servicing other people. Why does China has to have "a more flexible currency"? Japan doesn't have one. Seldom does the yen budge from the magic 105-109 yen per dollar set in stone after Bretton Woods II. We have a huge trade deficit with them. So why would "freeing" the Chinese yuan do anything at all? Note how Greenspan considers any measures to protect American jobe "futile" and "misguided"? Can I have his job? I could use the money and power. It would make my life much easier and certainly do more to help my fellow Americans facing economic annihilation. Heck, my good old father-in-law, formerly a staunch Republican, he could do tons better. In fact, any patriot would do.

Why do we suffer to allow these traitors to run our nation? When all those real estate/home building jobs melt away when the present bubble bursts as it is doomed to burst, what on earth are all those millions of people going to do? Move to India?

Wednesday, June 22, 2005

CORPORATE CENSORS

f
Bill Gates: "Only I get free speech, everyone else follows orders."

The big news is, China's government censors what people read and write online. The internet, unlike here in America, isn't a free floating forum filled with blogs and alternate news services in China. How does the Chinese government do this?

Simple. They ask corporate America to censor the Chinese. Corporate America says, "Absolutely!" From USA Today:
Part of the Internet's magic is the freedom it bestows to travel as far as your mind can take you. But not if you're in China, where the totalitarian government is leery of the Internet and hostile to the merest mention of such ideas as freedom.
No surprise there. What is a shock is that several huge U.S. companies are helping China muzzle free expression.

Software giant Microsoft has agreed to block certain words — democracy, freedom and human rights among them — by users on parts of its new Chinese Internet portal. According to news reports, the words trigger this message: "This item should not contain forbidden speech, such as profanity."

Freedom, profane?

What's actually profane is a company that built its fortune on the freedom provided by the American system helping a repressive regime censor such ideas. Sadder still is that Microsoft has company among other U.S. tech concerns that should know better:

• Yahoo China signed a pledge of "self-discipline" in 2002, vowing to refrain from posting "pernicious information that may jeopardize state security."

• Google launched a news search engine in China last year, but searchers in China get a different list of news links than someone doing a similar search in the USA. Missing links include the BBC and Voice of America, which carry reports not to China's liking.
What is really funny is, Voice of America now comes out of communist China's large city, Hong Kong! The fact that American coporate interests are actively assisting China in muzzling people while at the same time, at home, yelling with Bush about spreading democracy and freedom, is sad. And revealing. They would dearly love to impose this sort of control here at home. China is a great experiment for them. The coding tools used to muzzle the Chinese can easily be imposed here in America. The fact that Bill Gates OKed this and Yahoo smiled and did it says volumes about their true goals and desires.

Google, now that it is on the stock register, happily altered their search engines to cut out huge swaths of the internet. So if you google "freedom and democracy for China" in China, you get "Big Google is Watching You!".
The importance of this should not be underestimated. The Internet and capitalism were supposed to jump-start democracy in former communist regimes. These actions suggest a different future: One in which companies and dictators share benefits in suppressing democratic communications.

The companies offer terse explanations.

A Google spokesman says it has removed sources that wouldn't be accessible to users in China anyway to create "the best possible news search experience." Microsoft and Yahoo spokesmen say companies must obey laws and regulations of the countries where they do business.
I salute the editorial writers for USA Today. They are spot on! Wow. Microsoft and Yahoo and Google could tell the Chinese overlords to take a hike. Then they don't make any money, maybe, but they should be willing to make sacrifices for freedom and democracy! This is what is supposed to make us noble and great, guys! But then, Ford and other companies happily did business with Nazi Germany right up until Pearl Harbor. The Bushes continued even after Germany declared war on America.

From the Channel Register, an obscure source:
Microsoft wasted no time after tying up the acquisition of email security firm Sybari Software on Wednesday before axing sales of the latter's line of anti-virus products for Unix and Linux servers.
Post acquisition, Syabri becomes a Microsoft subsidiary focusing on marketing anti-virus and anti-spam protection for Microsoft messaging and collaboration servers. It will continue to market Sybari's Lotus Domino products but will not sell Antigen versions for Unix and Linux. Microsoft said it plans to continue to support Sybari products under existing pricing and licensing terms and support existing users on non-Windows platforms.
Near monopoly, Microsoft, now proud part owner of the American government, has been on the rampage trying to make life miserable for people who have escaped Microsoft's miserable little monoworld. Craftily, they buy up companies serving other systems and then let it rot or openly strangle them. This is to reduce choice for Microsoft's bottom line won't grow effortlessly if they actually have to compete with other, better systems. No one is stopping this force and eventually, the plan is to make us all use one system that then works with whoever the dictator of America is, to prevent us from using the internet and our computers to evade government scrutiny, control and information flows.

They repeatedly have talked about how to control us bloggers. You can bet, they are very anxious to set this system up.

Friday, June 17, 2005

SNOW BLINDNESS

a
Our Treasury Secretary is off to Europe to chat about how splendidly things are going. At the same time, the European Union's negotiations for a budget have collapsed. The heady days of frantically asorbing all of the former Soviet satellite states is now a poofed souffle. Someone forgot to warn the Europeans about hasty growth. If a tree or a tomato plant or a child grows too fast they have health problems.

Forming an integrated economic/political unit is tedious and slow, if you want success. Now the overheated, over expanded EU has to either break up entirely or retrench, shedding all those post-Soviet states. The ideal would have been for the Warsaw pact states to form their own union and then cleave into the EU over time but each one wanted to go their own way, a bad sign.

Bretton Woods has collapsed. The dire side effects are dawning. Anyone with a brain who can remember the previous collapse can see all the warning signs. Evidently, within our government, there aren't much in the way of memory or brains.

No wonder the finance corporations want Big Bird and Bert to talk about finances, they are more mature and well spoken. The childish level of chat our top ministers indulge in would be funny if they weren't so deluded.
All the key industrial economies need to concentrate on reforms and on creating an investment climate that spurs capital flows and economic growth, U.S. Treasury Secretary John Snow said on Thursday. "I think you want to encourage capital flows. You want to encourage capital formation and then flows," Snow said during a news conference in Frankfurt as he wrapped up a week-long tour of five European nations. Snow said he was convinced that key European trade partners of the United States understood the need to act urgently to spur economic growth through structural reforms.
"You want to encourage capital formation and then flows"---sigh. Much of the world's "capital" is "flowing" here in a very odd and quite suspicious way. The investement money being attracted by China is classic capital-formation whereby an investment triggers industry that then does value-added processes by mixing the money with labor and physical materials. Then there is a net gain in wealth.

The other system for increasing wealth, buying land and then charging rent (mortgages) on it, is not capital producing in the classic capitalist way. It is medieval wealth formation. This wealth grows very slowly except in peculiar cases such as we see today, a long history of bubbles when people speculated wildly on land has always a grim ending.
"The world economy depends on Europe, on the U.S. doing our part...to keep the economy growing, expanding," Snow said, sounding a theme that he has repeated throughout his trip.
Is our economy expanding? Friedman, this last week, said he wanted Toyota to take over our entire auto industry. Because it is collapsing. I suppose next week, he will call for China to take over everything else...oops, they are. If we are "expanding," I see no sign of this. For the last thirty years, hiring in the manufacturing sector has collapsed. At first, they pretended this was due to automation. But we don't see lots of robot run factories being built, are we?
He declined a direct answer when asked about a comment by a member of Germany's ruling Social Democrats (SPD) that giant hedge funds, many of them U.S.-owned, were behaving like "locusts" when they swoop in on struggling corporations.

"I don't think of capital in those terms," Snow said. "We in the U.S. pride ourselves...on showing respect for investors."
Hedge funds are scary. They are a tool of the ruling class so they can make a buck playing money moving games within various systems and exploit time/space glitches and it is a game played successfully only by insiders. This started rather harmlessly right after Bretton Woods I collapsed. Now it is a money monster, swollen in size to gigantic proportions. Readers of what went wrong in the 1920's get a familiar wiff of rot when contemplating hedging. It is suspiciously similar to the trusts and fake Wall Street conglamorations of money movers that accelerated the collapse.

Sec. Snow's la-de-dah attitude is particularily troubling. The locusts are swooping in on one of our greatest manufacturers, General Motors. I understand the GOP hates union workers. I believe they are overjoyed at the idea that another union, like the airlines unions, is going to die and workers will be driven to earn much less leaving more money for "U.S. pride in investors."
He did not specify that any particular country, especially China, needed to focus on currency flexibility, although the United States has been pressing Beijing to move swiftly to free its yuan currency from its decade-old peg to the dollar.
The obligatory kick aimed at Chinese shins here. It is interesting watching Europe suffer the effects of the Bretton Woods collapse. The euro became a sub-primere currency without the powers of being that and this is causing Europe to loose financial power. Bush deliberately drove down the dollar to shake off the Chinese. He failed but he did succeed in wrecking the economies of our allies. An interesting development no country should engage in if they want world power.

Meanwhiile, back home, things aren't looking so hot, are they?
"(About the deficit) At this rate the 2005 deficit will be $780 billion and overwhelm the $668 billion record established in 2004," said Peter Morici, a business professor at the University of Maryland.
The American attempt at shaking off all the Asian currencies has failed. The Europeans are being forced to deflate the euro and cut trade and reduce economic activity because all world currencies have deflated to keep up with the American maniacal currency manipulations. The fact that interest rates no longer function as a prod for savings is a danger sign. Everyone is spending all they have and many think this is because of clever investments.

It is not.

The value added of a billion Chinese suddenly entering the capitalist system meant there was a huge pool of human labor to be tapped and this rich wealth has made everyone else wealthy in return but the exploitation of labor is now entering a new phase in China---workers now will struggle to wrest back some of this wealth.

Meanwhile, back on the home range, the American property bubble grows apace
"How could you have a housing crash?" asks Ted Aronson, managing partner at Aronson Johnson Ortiz, a Philadelphia money manager. "We all just sell our houses and move into a trailer park?"

Houses are also much more expensive to sell. Mr. Greenspan says commission and other transaction costs approach 10% of the price of a home. By contrast, Mr. Aronson says big institutions typically incur transaction costs of 1% to 2% on their stock purchases.

The cost of moving is why homes change hands much less than stocks. Sales of new and existing homes in the U.S. in 2003 were equal to about 6% of total housing units in the U.S. By contrast, annual turnover on the New York Stock Exchange is about 100% of all shares outstanding. A home normally sits on the market for several weeks before selling; a stock usually sells in seconds.
What happens when you have a massive housing crash? And stocks crash too, as they always do when currencies collapse. What happens when the banking system goes belly up along with all the other systems? When the pound wobbled and fell apart due to the inability of England to recover from WWI, all other currencies were sucked in, the US dollar last of all. The resulting depression lasted a long time. You could buy a house only with cash, for the most part. What did people do?

Well, masses of people tried to emigrate or move elsewhere. This was the "Grapes of Wrath" people. No one wanted these refugees. All nations tried to close their borders and internally, the fight for survival became very vicious. Some countries launched attacks on neighbors. Germany stripped on quarter of the citizens their citizenship, their homes and businesses and then exterminated the ones who couldn't flee. Then it became a fireball of destruction. Bombs rained down, extermination camps dotted the landscape as "excess" humans were ruthlessly murdered and when it all ended, 30+ million humans were dead and whole cities wiped off the face of the earth!

I would say, economic collapses have very dire effects. When this happens, people don't sit in their homes. Just to be obvious, think! Your home cost you $200,000. You have paid off a tiny part of that and now it is worth suddenly only $75,000. If you lose your job and there are no more jobs that pay remotely the same, you have to move, you can't sell. You have to declare bankruptcy. The bank can take up to 10% bankruptcies and then they go belly up. They have sidestepped this by shovelling all mortgages into Freddy Mac and Fannie Mae and other instruments working as quasi-hedge funds but if these go belly up, the money machine stops working and industry and trade collapses which causes people to lose jobs and so on, a very vicious circle in hell.

People have and can become homeless. They have and can lose everything. And the cure usually is war. Is this what we want?

Thursday, June 16, 2005

HARPOONING BOEING

f
Moby Dick America

Last month, Boeing was boasting about landing more Chinese contracts. The trade deficit was declared much lower thanks to this and the news was trumpeted far and wide as if the Apocalypse Angels were blowing away. I was more dour and noted that the contracts can be easily cancelled and the problem here is the Chinese will eventually refuse to pay for Americans building what they should be building and the end game will be for them to demand Boeing build factories in China.

Well, as usual, I was right! The campaign to force Boeing to build the factories in China is now commencing!
n the CEO's office at Xiamen Airlines, one of Boeing's most loyal customers sits beside a photo of a 737 cockpit and describes the humiliation he felt trying to enter the United States last year.

Wu Rongnan runs the only domestic carrier in China that still has an all-Boeing fleet. As he takes a long draw on an English 555-brand cigarette, however, the 62-year-old Wu says the affronts he experienced on his way to Seattle in December were "a bitter pill."

To obtain a visa, he spent three hours in line at the American consulate in far-off Guangzhou and was fingerprinted, something he considers suitable only for criminals. Then, at the immigration counter in Los Angeles, he was treated rudely and escorted to a room for questioning, despite the invitation from Boeing in his hand.

"It must be that America is so rich that they don't want our money," he said. Wu's reaction is a symptom of problems that have compounded to erode Boeing's longtime dominance in China, handing the advantage to European rival Airbus in the world's most promising growth market.

Some of the problems are beyond Boeing's control. But others stem from the company's own mistakes, according to interviews with a range of Chinese airline executives, government officials, former Boeing employees and others.

After its longtime China manager left the company unhappily, a revolving door of executives were dispatched for short-term stints in China.
Translation: doing business in America is unpleasant and annoying. Homeland security means disrespecting Chinese businessmen. The lack of courtesy and calm is difficult to live with and besides, the food is terrible and there is a pea under the mattress. Boeing can't please them except one way: to build a factory in China.

This always was the long range plan of both the Central Committee and the businessmen themselves. Their own country pleases them sufficiently that they no longer lust going to America for whatever. All the consumer goods and pleasures can be had at home. So the incentive to travel is relaxing.
Since most were unfamiliar with the language and culture, it was harder for them to build strong relationships. As Boeing management focused on keeping costs down and pushing sales, it missed opportunities suggested by its own employees to foster goodwill. And some customers felt Boeing fell short in training and support after they bought its planes.

One manager at China Southern Airlines, China's largest domestic airline, invokes a Chinese proverb to describe Boeing's behavior: "Pick up a sesame seed, lose sight of a watermelon."

In other words, Boeing lost sight of the big picture.

"They've been rather dense in their dealings with China," said Sidney Rittenberg, a noted China expert and business consultant. "People they've had working with China were not that good at reading cross-cultural issues and dealing with the Chinese. The Airbus people have made a science of it."
The American government wants to sell high powered aircraft to China but keep a tight grip on Boeing which supplies our military. So Boeing can't just move the civilian operations over to China all that easily. Europe has a much less powerful military/industrial machine so they can build the factories in China even as American scream at them to stop doing business with the Chinese yet we are tempted to do the same so, since the Chinese have a noose around our necks, they will reel in Boeing now or destroy Boeing by swamping them with jets made with the Europeans.

Everyone in Asia buys American aircraft as a sop to America so we won't interfere with them flooding us with goods. But China is utterly and totally committed to dominating and controlling the aerospace industry, the very first person they asked for when they opened up relations with America in the seventies was for my dad to come over and revive their training of students in physics and space technology! The American auto industry bellies up and sinks, shot in the hull by the successful Japanese, the Chinese move in to sink the Japanese auto industry but this doesn't interest the Central Committee nearly as much as the aerospace industry which they have had their eyes on for the last thirty years. This is the big kahuna, the whale they want to harpoon.

And to make our trade deficit look good, we have to assist them in this project. We are both Ahab and the Great White Whale. We hunted ourselves down and harpooned our own industry.
Recent evidence suggests Boeing may be pulling itself out of its decade-long downturn in China. It hired a veteran China executive to head its Beijing office and improve relations with government leaders It bounced back strongly this year with the sale of 60 of its new 787 jets to Chinese airlines.

While these are promising signs for Boeing, regaining its dominant role in China may require corporate leadership that is more nimble, humble and ethnically diverse.
Well, just call me Ishmael Wong! So, relations "improved" with the Central Committee when Boeing wised up and hired a Chinese pro to run things. Obviously, his "smoozing" with the leaders landed some plums! Hahahahaha. Way to go, China!

Well, time to return to my Mandarin lessons.

FREE TRADE/PEASANT PERILS

g
Chinese peasants strike back again, driving off capitalist running dogs (heh, had to say that!)

Before WWII, America jealously guarded its own markets. Because of this, internal innovation flourished. Because our country had vast open farmlands wrest from the stoneage natives, the farming techniques and tools morphed very rapidly to exploit this. One thing that fueled a huge native industry was the need to make farm equipment to cut down on labor since there was a severe labor shortage in the new farmlands. Unlike Europe which had and still has fairly small farms with a long history of ownership restrictions, literally hedged in everywhere, American farms were open and expansive. The noble roots of the Republican party came from peasant riots and insurrection in the Albany area of New York, "Anti-rent Wars" as the van Rensselaer reproduction of peasant leasing collapsed after the American Revolution.

Yet the land was anything but free. Most land was owned by wealthy aristocrats, descended from those who had been given grants in colonial times. In the South, even many of our Founding Fathers (e.g. Washington and Jefferson) held large plantations which were worked by slave labor. In the Hudson Valley, the feudal manors persisted.

What?! Feudalism in Free America?! But wasn't feudalism a European thing? And hadn't it died a long time before America came into being?

Yes, yes, and yes.

Even though feudalism had died in England and Netherlands, the Dutch reinstituted it here in New Netherlands. In order to settle the Hudson River Valley, the Dutch West India Company granted land--and full government of it--to anyone who would bring 50 families to settle that land.
My ancestors were here before the van Rensselaer, indeed, the first van Rensselaer lived with the Steeles before building their own home.

Defusing this rebellion meant giving land to the agitated farmers who eked a poor living off of rocky hillocks like the one I am presently living on. If you look at a map of the USA, you will see all the names of all the towns across NY state repeating themselves across the Midwest for whole towns would colonize various plots. The Democrats didn't want to have the government handing out this farmland and as each area was settled rapidly, they would join the USA as a state and earn voting rights in the Senate and the slave states had to colonize, too, and this led to Kansas and John Brown and the Civil War.

Chinese Peasants Attacked in Land Dispute
Hundreds of men armed with shotguns, clubs and pipes on Saturday attacked a group of farmers who were resisting official demands to surrender land to a state-owned power plant, witnesses said. Six farmers were killed and as many as 100 others were seriously injured in one of China's deadliest incidents of rural unrest in years.

The farmers, who had pitched tents and dug foxholes and trenches on the disputed land to prevent the authorities from seizing it, said they suspected the assailants were hired by corrupt local officials. They said scores of villagers were beaten or stabbed and several were shot in the back while fleeing.

Shengyou residents collected some of the weapons abandoned by hundreds of men who attacked them in an attempt to force them off disputed land sought by a state-owned power plant. Niu Zhanzong, 50, right, recorded a portion of the clash with a digital video camera before he was attacked. (Photos By Philip P. Pan -- The Washington Post)

A farmer in Shengyou, China, videotaped hundreds of armed men attacking a group of local farmers. According to witness accounts, the group was resisting government demands to surrender land to a state-owned power plant.

Reached by telephone, a spokesman for the provincial government said he could not confirm or discuss the incident. "So far, we've been ordered not to issue any information about it," he said.

Large contingents of police have been posted around Shengyou, about 100 miles southwest of Beijing, but bruised and bandaged residents smuggled a reporter into the village Monday and led him to a vast field littered with abandoned weapons, spent shell casings and bloody rags. They also provided footage of the melee made with a digital video camera.

Despite the attack, the farmers remained defiant and in control of the disputed land. They also occupied the local headquarters of the ruling Communist Party, where they placed the bodies of six of their slain compatriots. A crowd of emotional mourners filled the courtyard outside; hanging over the front gate was a white flag with a word scrawled in black ink: "Injustice."
Last month, my blog talked about the surprising peasant uprising that successfully drove off similar invaders, overturning their cars and burning them. The peasants of China are a sleeping dragon that is waking up. Not because they are getting poorer but because they are getting richer!

All revolutions happen when there is hope. Demoralized, depraved, sad people don't revolt. Instead, like a horse "feeling its oats", peasants who feel better about themselves tend to be feisty. The children of many peasant families are sending them money from the factories so they have the ability to buy more land or improve the land they presently own. Now they have something to fight for!

The Chinese government is troubled by this. I am supposing the fermentation of activity from the land will refresh the whole system as the children working in factories there get feisty, too. Just like in America, the farm children filling the factories, becoming radicalized. They wrest the middle class lifestyle for themselves via strong union building. This art has been lost as the American small farmhold has disappeared. Today, most farms are huge corporate entities often owned by absentee landlords who import peasants from depressed societies. They subsist on government hand outs which is why I laugh when reading how Wolfowitz is planning to ask our government to stop doing this. Good old IMF! Can't wait for them to put us under their tender care so we too can have anti-IMF riots!

This ties in with peasant anger south of our borders. It is all part of nativist American anger about illegal aliens who are displaced peasants from the third world. If or rather when American "farmers" are cut out of the federal welfare queen system we will see some pretty explosive anger in the Heartlands. Voting for silly issues that don't really matter in the end will end if this vast system of welfare dependency ends. Gay marriage will fade as an issue and fetuses won't seem quite so romantic. For the devolution of American politics is directly related to the dependency of these same states on Federal money, giving them great leisure for fun projects.

The distress of the peasant is directly tied to free trade. The backbone of peasant economics is local. Small farmers can't compete with huge conglomerates who use large scale processing to make profits. For example, all small farmers raised some pigs and some sheep for sale to packing houses which were many and frequent. Herding the animals over to the auctioneer who sold them to the processors has ended when all of them were conglomerated or driven out of business by the huge operations which now can be numbered on one hand. They, in turn, stopped attending the auctions and made deals directly, probably on golf courses, with fellow mega-millionaire absentee landowners who set up huge pig factories to have a sweetheart deal where both parties profit by both hiring displaced illegal alien peasants....and so it goes, the exploitation of labor kills American free farmers who can't sell their stock anymore to anyone and the quality of food declines in value as it is puffed up.

In a Knight/Ridder article published in China: "Bewildered, Americans question free trade" says the headlines. Heh. This bewilderment is carefully cultivated by nearly everyone running or writing or doing things concerning our economy. The support for free trade is monolitic...at the top!
For 60 years the United States has promoted free trade as a powerful way to generate prosperity at home and abroad. Trade tripled over the past 40 years as a proportion of the U.S. economy, thanks in part to eight successive global negotiations that opened markets by lowering trade barriers. Now, efforts to expand free trade rules are stalling from Congress to Europe and in an ongoing round of global negotiations.

U.S. policy assumes that free trade benefits all who engage in it. The assumption dates back to 1817, when classical economist David Ricardo defined his doctrine of comparative advantage - that when nations specialize in what they do best and most efficiently, each will win by trading with the others.

Today, that concept is being questioned as never before. China's rapid rise is feeding a common fear: that developing nations led by China and India may out-compete the world for high-tech jobs and keep the low-skill, labor-intensive manufacturing jobs they won already. China already is the world's biggest exporter of electronics.

The fear is that China, so foreign and large, might soon gain advantages of labor, capital and even technology that will allow it to dominate the world economy - and the strategic advantages that go along.
Well, China, in classic Marxist fashion, understands that the basis of wealth and power lies in the working class. So by tapping the accumulated wealth of the working class, ie, managing their hours and energy and translating it into value-added merchandise, China gets richer and more powerful. Meanwhile, the USA, seeking to purchase things as cheaply as possible and to increase wealth by accumulating things, runs a huge trade deficit with Asia who is interested in selling and lending money. We can see this is a bad thing for the USA.
Charlene Barshefsky, who was U.S. trade representative from 1996-2001, believes it's both. Over time, she said, China will evolve from merely adapting technologies from others to developing its own innovations, which will affect the world.

"There is no historic precedent to the rise of a country this vast and this rapid, changing trade and investment flows around the world, with China the hub of Asian manufacture," she said in an interview.
Excuse me, can brain dead people like her be sent to a farm to be rehabilitated? There is plenty of historical examples like our own freaking history! We went from a rather poor colony that couldn't even pay a small tea tax to being the banker/rescuer of the entire British empire in less than 120 years. By the end of WWI, we displaced the entire British empire economically on nearly every front. We displaced them politically by WWII.

Now we are seeing the same process at work yet again.

The real tragedy here is the loss of American "inventiveness". During the 19th Century, agricultural universities were launched everywhere, every state getting at least two of them, for training and educating the children of farmers and they in turn invented or created a host of things. In farming, the invention of equipment starting with the cotton gin, revolutionized farming across the planet. Tractors and tillers, pumps and processors, freezers and cookers, transportation systems and tools, all broiled out of the farming/educational/financing dynamo of America. We were truly, number One.

This culture is lost. I watched it disappear in my own lifetime. I wrote about this in Small Farmer's Journal years ago. Chicken breeds came from the Victorian energy to not only have good layers/cookers but to make them beautiful to the eye for the sheer pleasure of watching the birds. This is connected with bird watching in general. The desire for beauty as well and functionality characterized the American farmer, once upon a time. To travel the Midwest or the East farmlands now is to become very depressed at how ugly it has all become. A rural slum.
Author Ted Fishman recently documented the challenge in his book "China Inc." He believes China soon will have two distinct economic platforms that will rival the United States. One is low-wage manufacturing. The second will be a high-tech industry that matches the West's in sophistication, and that will drive down wages in other nations as they try to compete.

"It's everything from Christmas ornaments to aerospace. Other economies don't come at us this way," Fishman said in an interview. "That's kind of a unique set of problems. The world has to find an `out.' We have to figure out how everyone can prosper along with China."

Barshefsky made the same point: "China's rise is not a function of pervasive unfair trade - although trade disputes must be addressed. But resting concerns on claims of unfair trade as the basis of China's rise obscures the real challenge facing the U.S., and that is the utter absence of any focus on our own longer-term competitiveness, formulating and implementing policy measures - from the fiscal, to education, to the state of our scientific infrastructure to business incentives - that answer the challenge of an emergent, vibrant, smart Asia, with China at its center."
This article is a must read. The writer is good. He interviews many people. Here is one person who hits the nail right on the head. He is correct. As I explained above.

Our peasants are depressed and woeful and are snapping back at inappropriate targets like urban gays or liberated women or alien peasants displacing them. They don't yet understand their own peril and by falling for fascistic fantasies, are driving themselves to a dangerous impass.

Just like in Germany many years ago.

Wednesday, June 15, 2005

PRECARIOUS BALANCE ACT

b

If we don't have a series of utterly devastating earthquakes on the West Coast, at least not in the next three months, there will be other forces at work, shaking the world's economies.

The G 8 just "forgave" I think, $22 billion in old loans to Africa. Now isn't that kindly of them! Of course, the key nation, the USA, is giving something it doesn't have: credit. When a debtor nation gives another debtor nation money this simply takes more out of the world pool of debt money avilable, no? The nice thing with money is, the value attached is imaginary so one can do whatever one wants until people become suspicious and demand the money be translated into hard, physical objects. This is called a "bank run". One sign of incipient bank runs is the price of hard goods like property and gold and art shoots way up as investors park their denominations in a physical space that retains some value somehow if all fails.

Today's news: oil up.
July-dated crude futures topped $56 a barrel Wednesday on the New York Mercantile Exchange after the Energy Department said U.S. crude supplies fell 1.8 million barrels in the week ended June 10. The Energy Department also said gasoline supplies declined 900,000 barrels, but distillate stocks rose 2.5 million barrels. July crude was last at $56.05, up $1.05.

OPEC keeps telling us they will up the amount of oil being pumped. Saudi Arabia boasts they have endless oil and can pump more but over the last year, it can't budge above 9.5 million barrels per day. So speculators seem to have come to a consensus that this is the Hubbert Oil Peak and are betting accordingly.
Stocks trade lower as oil prices jump
Oil tops $56 a barrel after drop in weekly crude supplies


Investors cheered a consumer price report showing inflationary pressures in the economy remained subdued.
says the CNBC Marketwatch. For years, I said, stocks go up when oil prices go down and all the economic "experts" bent every straw to prove this was false. Yet the headlines this year back me up. All of them see the obvious connection.

The other obvious connection is, inflation is 100% tied to the value of labor only if that labor is outside the currency of the USA dollar which is the world's teetering benchmark currency. Cheap labor at home doesn't help much but overseas it works like a wonder because any money printed up is removed from the benchmark currency's bloodstream and isolated and transformed overseas into loans that return here as debt.

Which ends with our bankruptcy. There is no eternal Moebius strip of currency flow that is open ended. No matter how you twist it, the system, if out of whack, whacks back.

Right now, China is the nation to watch.
China's macroeconomy can no longer be properly described as "overheating," as the country's economic growth peaks and gradually slows, the latest report from the Morgan Chase Company said Tuesday.

"We'd rather use 'moderate' to describe the growing trend of China's macroeconomy," Morgan Chase economist Ben Simpfendorfer was quoted as saying by the Beijing-based First Finance Daily Tuesday.

A decline in the investment of fixed assets has been attributed to the moderate trend, said the newspaper.

The cement industry, for instance, has seen a reduced production capacity. Nearly 2,000 of the country's 5,700 manufacturers have either reduced or halted their production this year amidst a sluggish market demand and rising production costs spurred by increasing raw material prices, said the report.

According to previous figures released by the National Bureau of Statistics, the country's combined investment in fixed assets between January and April decreased 1.9 percentage points to 25.7 percent from the same period last year.

Meanwhile, the growth rate of financial institutes' balance for loans slowed 2 percentage points from the end of last year to 12.5percent in April. The deposit balance of companies grew at 13.2 percent, about 3.6 percentage points less than the end of last year.
My long slog online, explaining how the Chinese economy interacts with our own, tracking the money flow, explaining how China and Japan are using us, is finally bearing some delayed fruit. Of course, understanding the end game still eludes most people but that is understandable. No one likes to think about becoming dead, either.

The Chinese recently had a very bad flood. Many little school children died. Around 100, latest count. Look at American news and see how concerned we are, the loud calls for aid and sympathy and love. Eh? What? If I were Chinese, I would be rather steamed about this. If 100 Israeli school children or British kids were to be swept away, it would be huge news here, no?
f
Crushed school children at Aberfan, Wales I still remember the poor children at school in Wales who died suddenly when a mine slurry collapsed on their school, entombing them. This is an identical tragedy in size and pain. They are still tracking the Welsh kids who survived, giving them treatment for this trauma. So why are we so indifferent to the Chinese children? Hmm?

From the always good Calculated Risk:

"And in a related story, the Port of Long Beach hosted the "Peak Season Forecast Conference" on Tuesday.
At the Pulse of the Ports conference, the experts forecast 2005 cargo gains of 10 to 15 percent. In preparation for this year's increase, they said they have added workers and equipment, and cargo has been moving smoothly.

"We may see two-to-three-day delays," during the peak season, said Frank Baragona of CMA CGM.

"We had one-week delays last year and that's not going to happen this year," said Doug Tilden of Marine Terminals.

This shipping data probably indicates near record imports from China. My very preliminary guess is that US imports from China will be over $19 Billion NSA for May compared to $18.12B for April 2005."

Imports from China are still rising. The Chinese are already complaining that high energy/raw materials prices are cutting into their profits but they will slog on through thick and thin simply because they have a vested interest in keeping the vital industrial base firmly planted in their home empire for the obvious reason that this is how you win a struggle for domination vis a vis another empire.

Unlike the USA which pretended to not be an empire even as we relentlessly expanded our borders and our reach, the Chinese have considered themselves to be an empire for nearly as long as Iraq has thought of itself as a civilization, namely, for at least two+ thousand years!

I am predicting this waiting game will continue. America will continue to bleed in Iraq, fatally. And we will continue to suck up all world credit for ourselves even managing to do this as we "forgive" African debts, mostly by asorbing it into our own debt, and the Chinese will continue to expand their industrial base and all this will continue until it crashes as it will crash. This isn't an "if" but "when."

My personal opinion is, the breaking point will be when the Great California/Oregon/Washington Earthquake flattens a major city.

Thursday, June 09, 2005

WHO'S AFRAID Of Virginia Wolfowitz?"

f
BBC article about anti world bank demonstrators

The Washington Post tries to explain the World Bank in cute terms, describing how very very smart and well educated the staff is and how they love humanity and can't understand why millions of people are screaming at them, all they do is give loans to people to stop poverty! Boo hoo!

From "The World's Loan Rangers"
Even now, after the demonstrators shouting and the finance ministers whizzing around in their limousines, after all the fussing about Iraq war architect Paul Wolfowitz taking over last week, who really knows what the World Bank does?

You can't cash a check there. You can't get a loan, unless your name is, maybe, Mali.
The pretense that demonstrators across the entire planet can't figure out what the World Bank is....is hilarious. Geeze, ain't they clueless? Why are they so angry? This musing by the mouthpiece of the ruling class is amusing because of course, the WP won't tell the truth about anything at all, that isn't their job!
"People think we can give a wicked home equity line," says Keith Hansen, native Minnesotan, who directs the bank's AIDS campaign in Africa. And people think of the World Bank as a gold-plated compound of endless perks and tax breaks and luxurious surroundings, hardly in keeping with the mission of raising the wretched of the Earth out of their poverty.
These loans are a wicked home equity line! When the money does little to help a nation but ends up buying American war planes or building soda pop plants, when the bills come due, people literally lose their homes, access to water, forests and minerals as all this is siezed to pay the bankers off. Thus the screaming crowds that dog every meeting of these bankers.
Developmental economics, it's called, and hundreds of World Bankers have PhDs in it. The idea is simple and noble: The world is very rich and very poor, and this disparity is both morally wrong and, in practical terms, dangerously destabilizing. But how to lift up 1.2 billion people living on a dollar a day?

This is what World Bankers think about. In a city obsessed with political maneuvering, real estate values, traffic congestion, baseball, summer humidity, maybe all in the same hour, the World Bankers are a tribe apart.
Yes, they are a tribe apart! And their solutions for the gap between the rich and poor has some awfully fishy solutions, don't they? Ask the screaming crowds of demonstrators about that!
"There is always a sense of urgency," says Anne B. Thomas, a manager in the bank's internal conflict resolution system, "because our clients are dying literally every day."
I am speechless here. Duh! This is what those crowds besieging this bank scream about all the time. But for an urgent mission organization, they are awfully...slllloooooow.
They are intimidatingly smart. It is nearly impossible to get a job at the bank without speaking at least two languages fluently and holding at least a master's degree. Multiple advanced degrees are better yet, preferably from Harvard, Princeton, the University of Chicago, SAIS or LSE. (That would be, respectively, the School of Advanced International Studies of Johns Hopkins or the London School of Economics, but if you have to ask . . . .) Professional staffers don't even bother to trade on this, the way other Washingtonians do, because they're all elite.

"You know the Type A personality?" asks Lennart Dimberg, who heads occupational health at the bank. "Well, the people here are triple-A. They drive themselves. They push deadlines. They push the people around them. They were recruited to be achievers."
Yes, they push aptly named "dead lines"---like if your bank sends you a notice to pay up or be thrown into the streets! As for their education: four schools, some of which endorse amazingly brutal forms of "capitalism" and monetary policies designed to funnel as much money and power to the ruling class who run these schools!

When President Bush nominated Wolfowitz, then deputy defense secretary, to succeed James Wolfensohn as bank president, the staff association set up a Web-based confidential comment line. It logged 1,300 e-mails in 48 hours. About 87 percent of the e-mails were adamantly opposed to the appointment.
Hahaha. I sent an e-mail. Adamantly opposed? Gads. This is a political disaster.

This monster who destroyed Iraq is going to save the world. Right-o. In a rat's ass!

The rest of the article isn't worth looking at. We just have to accept the fact that our rulers want to do these things and we will have to continue to scream and yell at them and start riots and other amusing reactions. They will remain clueless, of course. They are insulated and trained to be heartless and cruel.

You see, this is how they win.

Tuesday, June 07, 2005

ANIMAL FARCE

f
Hallmark's "Animal Farm"
A thoughtful piece about the euro in the Guardian:
Europe is down but by no means out. It faces a formidable test of statesmanship after the French and Dutch referendums, and it is not entirely clear who will be the statesmen - or women - to sort the mess out.
One way or another, however, Chancellor Gerhard Schröder of Germany, President Jacques Chirac of France and Prime Ministers Silvio Berlusconi of Italy and Tony Blair of the UK are perceived as being on their way out. In the past week I have heard this phrase used by observers high and low about these leaders, and they have always been bracketed together.
Nothing much is happening in the world yet country after country is badly unstable, the population divided, tension rising, a great deal of domestic anger is building. My grandfather told me years ago, "Look at the ground. If you suddenly seem to see ants scrurrying all over the place, this means a thunderstorm will come later in the day."

The ants are scurrying madly about these days.
Great efforts are being made in London to suggest Mr Blair may be the man to sort out the mess, but I am not sure these sentiments are echoed in Berlin or Paris. It is not difficult to see why.
Fifty years ago this spring, the Messina conference in Sicily secured the agreement that led to the treaty of Rome and the formation of the common market. Yet throughout that time Britain has been considered a suspicious outsider.
No soon did the mighty British empire collapse into dust did they annex themselves firmly and totally to the mighty American empire. The pound continued to be the major world currency all the way up to 1948! Astonishing, no? Even though all business was calculated via dollars after WWI. This is why the American dollar imploded last when the world banking system collapsed.
The biggest shock comes from the fact that it is the French themselves - the prime movers behind the EU from its inception and the nation of its founding father Jean Monnet - who have decisively rejected the treaty.

The second shock is that, although there was not much speculation about such a reaction beforehand, the future of the euro itself has come into question.

I myself found no sign, during a week in Italy, of a great desire to bring back the lira. On the contrary, the call that was publicised was from a rightwing minister whose party, I believe, would like to detach the north of Italy from the south.

The report that Germany's Bundesbank may have been considering what to do if the eurozone breaks up should surprise no one: the Bundesbank was always against the euro. Indeed, one of the eurozone's problems is that the German central bank insisted on a very deflationary brief for the European Central Bank.
Germans are very allergic to inflation thanks to the massive Weimar Republik currency debacle. To this day, the Italians found inflation to be perfectly fine which is why the Lira which was once worth a great deal, had become a joke. The Italians don't mind being annexed to the German currency controls, this takes temptation out of their hands. The Germans are like the Horse in Orwell's "Animal Farm," faithful and doggedly toiling away trying to make everything work. But it is collapsing.

Meanwhile, Napoleon the Pig, aka Greenspan, tries to explain why four loans are better than two bank savings accounts:

Speaking at an American Bankers Association conference in Beijing, Greenspan said the decline of long-term interest rates over the past year despite the Fed's steady tightening cycle remains a conundrum.

"I think he's saying the economy is not going to weaken and he's not going to halt raising interest rates -- that's an indication to me that the Fed feels very strongly about a solid economic performance," said Peter Cardillo, chief market analyst and strategist at S.W. Bach.

That, Cardillo said, "is giving a bit of a green light here."
More free loans, squeal all the pigs at the table! A little bit of green light, eh? The green light at the end of the debt tunnel?

It is an oncoming train, the Iron Rooster of China.

This announcement from our Brave New World Order chiefs promising everyone a solid economic performance is undercut by the dreadful news that 25,000 well paid union workers are going to be terminated! Like the melting glaciers thanks to global warming, dropping off whole ice shelves into the sea, this giant hunk of humanity means another 5% of our industrial workforce will disappear forever. It is already low as it can go and still call this nation a first world industrial nation, no?
Twenty-nine of the Dow's 30 components were moving higher in the early going led by gains in General Motors Corp. and Home Depot Inc. . Only McDonald's Corp. printed red.
Home Depot is up because they are handing out loans like candy to home owners who are up to their eyeballs in debt. Exxonmobile oil crowed that they sold over 50,000 debt instruments this last month. What a...huh? They are a bank now?

Everyone is a bank now and not a soul is saving in a bank. This is very odd not to mention disasterous if indeed, a historic nightmare can even begin to describe the disaster this represents.
"We've never run into anything like this before," Greenspan said at an American Bankers Association conference in Beijing Tuesday.

In his remarks, Greenspan dismissed the four leading Wall Street theories of why global long-term interest rates are so low.

"The economic and financial world is changing in ways that we still do not fully comprehend," Greenspan said.
Sigh. And people listen to Greenspan/Napoleon the Pig. The economic world has not changed in theory, namely, all the previous models we have seen in history in the last 500 years are not suspended or changed at all. They are there, easy to read and obvious to any alarmed observer who has any inkling about these matters.

Every empire has gone down this road before us and the signs are not only obvious but in great volume, too. There is no excuse not being able to read them unless Greenspan is an illiterate buffoon.
But Greenspan said that this argument didn't hold water because "periodic signs of buoyancy in some areas of the global economy have not arrested the fall in rates."

Other analysts have argued that the low rates are a function of an aging global population and the investment behavior of pension funds and insurance companies struggling with under-funded retirement plans.
The Japanese are aging fast and declining as a nation into dotage. They will have to call in all their chips really soon unless they cement their control of American currency/military in Asia, locking the bigger empire into a death grip so they can milk us by making us fund them forever as they draw down their savings.
Another popular theory has been that foreign central banks, in particular China, have been heavy buyers of U.S. Treasuries, thus driving down rates.

Greenspan said these purchases have lowered rates, but said Fed staff studies have estimated the effect has only been "modest."

"Furthermore, such purchases seem an implausible explanation of why yields on long-term non-U.S sovereign debt instruments are so low," he said.

Finally, some economists have pointed to globalization as having a disinflationary effect on the economy with new low-cost producers in China and India and the breakup of the Soviet Union.

The Fed chairman said this might explain some of the lower inflation-premiums in long-term rates over the past decade, but doesn't address the decline over the past year.
Note that Napoleon the Pig won't mention huge budget deficits of the imperial American nation nor does this very clever pig mention the trillion dollars the world spent on arms this year, half of that being American spending.

Half a trillion dollars flowing into the American economy, every penny of which was printed up for nearly nothing by Uncle Sam's printing presses is the cause of this anomaly. This money hasn't inflated America like a balloon because it is "cleaned up" by circulating it first through Europe, Iraq, China and Japan. They either absorb it or blow it up, at least the Iraqis are blowing it all up.

This same toxic money stream was tapped from 1964 to 1974 in Vietnam. We know what happened next only this time it won't be a small political oil delivery interruption but the Great Destruction of the Hubbert Oil Peak.
Greenspan repeated his misgivings about hedge funds, saying that much of the easy profits from the sophisticated trading strategies from market inefficiencies may be over.

"For the time being, most of the low-hanging fruit of readily available profits has already been picked by the managers of the massive influx of hedge fund capital," he said.

As a result, hedge funds may stray into more risky investments as they strive to seek above-average returns.

"Significant numbers of trading strategies are already destined to prove disappointing, a point that recent data on the distribution of hedge fund returns seem to be confirming," he said.

"Consequently, after its recent very rapid advance, the hedge fund industry could temporarily shrink, and many wealthy fund managers and investors could become less wealthy," Greenspan said.

But governments should not rush to restrict the hedge fund industry, he said. Overall, the funds and their innovative strategies have increased economic flexibility by spreading risk.
What a bland way to talk about the coming Great Depression! Anyone who has read any books about the launching of the previous Great Depression knows all the warning signs, all of which are code red now. The whole effort to feed Social Security money in the money stream is because all the "low lying fruit" (ie, chumps outside of the people with the know) have been plucked like a Sunday chicken and the bones have been gnawed bare.

Zhao, the Chinese banking minister, controlled his face as he stood next to Greenspan. We are lucky he didn't burst out laughing outright like he did last week.

Sunday, June 05, 2005

BRETTON FOREST FIRE

f
As the Bretton Woods II accord forest fire rages the economic experts try to explain all of this while evading telling the truth. They have to do this because understanding things means accepting WWIII. Namely, the logic of the present economic situation can be resolved only violently.

If the USA was a sane society this would have never happened but alas, the biggest trading partner in the world has gone off the cliff.
From 1996 to 2004, the American current account deficit - which includes the trade deficit as well as net interest and dividend payments - grew to $666 billion from $120 billion, swelling the nation's demand for foreign financing by $546 billion.

The cash has come mostly from what the International Monetary Fund defines as emerging markets or developing countries - nations that have piled up mountains of cash even though most of their citizens are poor. High on the list is China, whose per-capita gross domestic product of $1,300 last year was a thirtieth that of the United States. Others are Russia, where G.D.P. per head was $4,100, and India, where it barely topped $600.

The current accounts of developing countries swung from a deficit of $88 billion in 1996 to a surplus of $336 billion last year - a $424 billion change that has covered some four-fifths of the increase in the deficit of the United States.
Comparing statistics of various countries is futile when one set of countries has many peasants and the other has the remains of what used to be a significant social support system. More realistic numbers would compare relative values, namely, how many people live comfortable middle class lives and how much debt do they carry which shows how much more they can move forward, economically? If one includes debt statistics and subtracts this from the wealth statistics, the USA looks absolutely terrible now. We are so deeply into collective debt, it is staggering to consider. This is why we have a housing bubble! It is the only mechanism that can infuse more debt into the system!
There's nothing inherently wrong with taking money from poor places - it's not as if the United States is stealing it. Developing countries are providing the funds willingly.

But it is rather odd. Conventional economic thought suggests that funds should flow the other way. Capital-rich industrial nations like the United States, where workers already have a large stock of capital goods to work with - like high-tech factories and advanced information technology networks - should be sending money to places rich in labor but with a meager capital stock.

Developing countries, of course, use this money to grow out of poverty, investing in their own factories and schools. And precisely because capital is scarce and labor abundant, money invested in these countries should achieve a higher return.
Heh. Classic Marxian analysis, NYT! I salute you for pointing out the obvious. There is a further lesson here: what these "developing" countries are doing is attracting investment in capitalist enterprises! The money going there is productive money, the money being lent to the USA is tagged for only nonproductive purposes except for the military complex which is swelling in investment costs but producing an inferior product. Namely, thanks to an inability to understand the task at hand and application of the wrong investments, the USA is now significantly weaker, militarily, on nearly every level. An astonishing achievement which has numerous precedents because nearly all empires take this fatal path.
Last year alone, according to the Institute of International Finance, a lobby group of big banks, international reserves of developing countries grew nearly $400 billion.

The good news for the United States is that these forces are unlikely to change direction imminently. In an interconnected world, where investors can move billions across oceans at the touch of a button, these countries have little reason to shift strategies.
These paragraphs prove my point that the USA will start WWIII out of sheer desperation. The monetarist philosophy made up this model of the world that is based on a militarily triumphant USA dictating Bretton Woods agreements every time we slip into the pit of fiscal destruction. In the past, we were dealing with people we defeated in WWII who were scared of America and eager to please America even as they stealthily worked to suck out all and any industry they could from the host nation.

The American attitude that we can suck up all world produce and resources and finances is identical to all other empires who thought they could do the same. We have now made the mistake of pretending that China is a satellite state we can push around which is why Rummy was sent to Asia to scold them and demand they disarm so we can bully them further and note that they pushed back, basically telling Rummy to shut up or put up. Meanwhile, our industrial base rots further and the Chinese base flourishes further.

And the game of pushing down the value of currencies to keep America addicted to cheap money continues.
It was an idea that could barely be whispered inside Europe's corridors of power - might the European Union lose its appetite for the euro?

Launched amid much fanfare in 1999, the single currency was a symbol of European unity, a sign of the continent's re-emergence on the world stage and a challenge to the hegemony of the US dollar.

Six years on, with slow growth and high unemployment bedeviling the economies of some of the euro's most powerful supporters, the whispers of doubt are beginning to grow louder.

Leading politicians in Berlin have expressed concern that the tight rules governing the euro are strangling Germany's economy, by far the biggest in the 12-nation eurozone.

The country's finance minister and central bank president reportedly attended a meeting where the "collapse" of European Monetary Union was discussed.
The ungainly financial system built in Europe is falling apart because they can't game the collapse of Bretton Woods II. All of Europe rejected the older philosophical systems for describing economic powers and latched onto the American monetarist system and got caught in a trap of their own making. Namely, they foolishly allowed their currency to become detached from their social systems and float freely which meant all other governments, gaming the system, drove up the value of the euro until trade with America became nearly impossible. Now desperate governments look for some tool to use to change things and find out they have nothing at all.
The European Central Bank decided to keep rates on hold at 2% for the 24th month running on Thursday, but many economists believe Germany's economy needs a level closer to 1%.
Interest rates in the old days were supposed to give a return on savings that was slightly better than the inflation rate. You can bet, the inflation rate in Europe for essentials is like it is in America: shooting through the roof.

In Europe, much of this is state run so it appears in the form of rising taxes. Rising taxes means less money for savings and the savings situation in Europe is collapsing like it already has in the USA. What is it here? Last I read, below 1%. This is ridiculous and no healthy government should allow this to happen but to "stimulate the economy," all other systems are lowering interest rates to nonexistence levels starting with the number one monetary manipulator in the world: Japan.

For political reasons, Japan's stellar and central role in all this mess is never mentioned. Relative new comers, China, is talked about all the time because they are communists who took the capitalist tools and used it pretty niftily. The use of interest rates to boost economic sectors at will, detached from other currency concerns, is bad fiscal policy. This is putting the cart before the horse. If ladling out money to spend is the sole purpose of interest rates, why charge any at all? Indeed, this seems to be the ultimate goal! Even as credit card companies charge an arm and a leg in interest and fees, national industries and banks feast on negative interest rates below the rate of inflation.

This situation can't continue onwards. Look at the chart here: it shows how things are literally exploding apart. No government should allow this to happen. It is their job to prevent this from happening, not assisting it or worsening it.

But no one listens to me, eh? Heh.