Slow Motion Replay - How China Won the Upper Hand in Global Economics

... and got American and Europe on the ropes of debt.

The couple-page analysis  HERE  is about as good a summary of China's successful economic strategy as I've ever seen.  Well worth your time to read and digest. The conclusions about what we must do to avoid the dustbin of history are right the to the point.

The Debt Ceiling is a total red herring.  So are the "plans" by the political parties to deal with our debt.  The story is the debt itself, how we got to where we are, and what we must do, if bitterly, to correct it.  Few will be spared - my parents grew up in the Depression and remembered it vividly.  Most sacrificed to one degree or another.

Oh, I and I wouldn't be looking for a replay of WWII to 'save' us.  The war is already well advanced, and it is  ECONOMIC, not military.   China used asymmetry to its great advantage in gaining the economic upper hand.  Time for us to wake up, generate a viable strategy and action plan, and work like hell to execute it.

 

Yep. It's all the Baby Boomers' Fault.

Eisenhower called out the biggest power & corruption game going when he left office.  FWIW, E's advisors strongly advised him to redact the "congressional" part of his cautionary parting speech about the military-industrial-congressional complex.  Make no mistake about the wacko, debt-debauched, over-militaried, over-entitled world we find ourselves in - it was already GAME ON in a big way, long before the boomers were created as post-war celebrations.  Could it be that even the Greatest Generation had a hand in it?  No, it was all the Boomers.  It was us dastardly 5 year-olds Ike was warning about in his parting address.  The same boomers who protested Vietnam and were called unpatriotic for it.  We dared flout the M-I-C complex because probably, we just didn't know what we were up against.

Yep, it's all the boomers' fault.   At the least, I hope that makes everyone else feel comfortable about their role in our current "interesting times".  Hah.  Does anyone really believe all the world's problems will be solved just because the Boomers pass away???   Dream on.  Better yet, start fighting for common cause with like-minded members of all generations.

The End of Magic as We Know It?

The Harry Potter decade comes to a close July 15, 2011.  We will have to look elsewhere for our magical fantasies as the epic good v. evil saga draws to it's cinematographic conclusion.

I wonder sometimes about synchronicities and the closing of the book on 'arr-ee 'awht-ah makes me think about all the financial shenanigans that have been accelerating during the time of Potter.  They, too, appear to be reaching a sort of unsustainable climax.  European debt debacles are going to continue and worsen.  China has horrendous problems with both inflation and bad debt, not covered by what passes for media these days.  Here in the good ol' USA, the Fed is in hyperdrive monetizing debt and effecting the greatest transfer of "risk" aka bad debt from the private sector - your friends at Goldman Sachs, JP Morgan, BofA, et al to US taxpayers.  And our government is cooking the books on the ultra-convection setting - spitting out spurious jobs data and inflation measures, downplaying the seriousness of our structural deficit and, let's call it what it is (thank you Ron Paul for saying it as an elected official) insolvency.

I see evidence that more and more people are not buying the stories they're being fed.  More are finding alternative sources of information and analysis, like www.zerohedge.com.  When the audience stops buying the story, guess what happens to the "magic"?  Uh-huh, show's over, folks.  The magic is exposed for the fraud it is and stops working.  Then there's just the aftermath.  Until the next era of magic is invented.

I'll miss the distraction that was Harry Potter... but look forward to a return to basic values and common sense on the political - economic front.

Stop Blaming John Maynard Keynes

It took years for mainstream media to catch on that deficit spending in a deflationary bust isn't a panacea.  Oops... is there a problem in our r-e-c-o-v-e-r-y???  The only context of recovery I might go along with is that of an addict taking a break from the original addiction.   But let's be fair.  Let's not blame John Maynard Keynes.  Yes, QE1, QE2 and QE to the X were and will be unproductive at best and accelerate our Depression at worst.  But it's not JMK's fault. Really.

If you have ever worked in the software business you'll see a strong parallel to the old curse of RTFM.  Most user calls for technical support arise because the user won't invest any time in learning about how the application works.  So, when it doesn't work, they blame the application and make an irate call to technical support.  After the polite technical support staff have answered the question and pointed said user in the right direction, they hang up and curse at each other, RTFM! (Read the F****** Manual!).

Our economic leaders and soothsayers are just like those misguided software users.  RTFM, boyz and girlz!   It's time to stop blaming Keynes for your own incompetence and chicanery.  One of the core precepts from Keynes (it was right there in his "Getting Started" section) was the assumption that deficit spending to accelerate prosperity would be undertaken by a CREDITOR nation.   All our fool leaders who are jacking up the deficit spend may not have noticed that we aren't exactly a creditor nation... more like a deadbeat-to-be.

So stop blaming Keynes.  Everyone back to your favorite survival strategies.  Leadership elites, back to your plundering and burning of civilization.

Max Keiser in Ireland, Part Two

It can't happen here.

Never.

That settles it.

Sleep well.

What Can Ireland Tell Us?

Plenty.  Check out the Max Keiser video.

Anything in this piece sound familiar?  Change the names of the government entities and "bailout" actions that have systematically socialized bad debts incurred by speculators (just give it to the middle class, they won't mind) and banks while privatizing profits.  In Ireland the evildoers get enriched further for "managing" the growing national debt burden.  In the US, the banksters get free money from the Bernank to keep on gamblin' and fleecin'.

Shucks.  I was looking for something fun to post on.   As they say in baseball, there's always next year.

Another Good Econ 101 Cartoon - Inflation

Check it!  http://www.youtube.com/watch?v=VL7V9BnJXO8

I love how this guy boils it down.  If you aren't one of the Gods of Greenwich you will probably both cry and laugh at this.  If you are a saver, get extra kleenex.

The Federal Reserve experiment is almost 100, but the wheels didn't really come off (for regular folks) until Nixon eliminated the gold-backed dollar.  The Clinton era sealed the deal by undoing the Glass-Stegall Act that kept banks and brokerages separate, which allowed the "financialization" of EVERYTHING, with a huge increase in systemic risk as a natural consequence.   Our whole focus shifted from production to finance.  Gee, what a great idea; go eat some derivatives.

Now we have insolvent too-big-to-fail banks, insolvent governments and a lot of misleading statistics and spin emanating from centers of power telling us everything is fine/good/recovering/no inflation, etc.   What a load. Stay tuned for $5 gas this summer.  Even Walmart has run out of tricks to keep shelf prices from going up.  But please, do take comfort, our politicians and banksters say no inflation and all under control.  Kind of like Fukushima?   The charade may play out a while longer as Ben the Bernank keeps monetizing treasury debt and providing interest-free loans to the TBTFs to put into the stock market.  Buuuuuut.....

History is not on Benny+Washington+WallStreet side.  Every time wealth has been concentrated so much, and so much debt has been piled on to an underlying productive economy, a collapse of one sort or another (hyperinflation or deflation) has followed.  We are on that doorstep.  There is no soft landing in the real economic world, it is just another crazy dream that economists hold onto because it "could happen".  Sure.  Have a great week.