CHINA CONFIDENTIAL
Saturday, October 11, 2008
On Rebuilding the American Economy
Dateline USA....
Where is the voice for rebuilding the American economy through re-industrialization?
America's fundamental problem is that the economy is fundamentally unsound. it is hollowed out--a consumer economy that depends on persuading people to buy stuff they don't need with money they don't have.
That's a cruel scam, not an economy.
In other words, stabilizing the markets and solving the unprecedented liquidity crisis is only the first step. Long-term, what is needed is a plan to seriously incentivise American companies to manufacture, mine, and drill in America.
What is needed is a plan to reverse the dash to cash--and bring American capital home.
A nation's strength depends on its productive capacity. Incredibly, America fooled itself into believing that financial instruments, fast food, and films could substitute for factories, oil wells, refineries and power plants.
Who's to blame? Everyone--meaning, Republicans and Democrats. The former raced to the bottom in search of cheap labor; the latter embraced environmental extremism to block industrial growth and expansion. Both parties put Main Street last and Wall Street first by backing globalization.
Neither Presidential candidate seems to get it: the financial crisis is actually a symptom of an economic crisis. In order to solve the crisis, the country will have to reach back ... all the way back ... to the 1950s ... when the American economy was the strongest in the world.
Memo to the McCain campaign: rebuilding--and re-drilling--America should have been your issue. But you blew it. You muzzled your Presidential candidate and tied his hands while giving your Vice Presidential pick some space to speak out against the manmade global warming zealotry that threatens to drive the country into the ground for decades to come. What were you thinking?
POSTSCRIPT: The silver lining in the current crisis for American consumers and homeowners is that sub-$3 gasoline is returning, and the Northeast, with winter approaching, is dodging a bullet in terms of home heating oil and propane prices. Peak oil? It could be a decade before that hoax again rears its ugly head.
Friday, October 10, 2008
Panic Selling Spreads Across Asia and Europe
UPDATE: Panic Selling Persists
The cascading crash continued across Asia and Europe today. Panic selling spread despite efforts by central bankers and government officials to calm the markets.
For the first time in memory, analysts are recommending both cash and gold--including physical gold and shares in undervalued gold-producing companies--as the only truly conservative investments.
The good news is that crude oil is falling along with stocks and bonds because of fears of a prolonged global recession or full-blown depression. (Environmental extremists and global warming zealots see lower fuel prices as a bad thing. But that's another story.)
Reuters:Europe and Asia saw panic selling of stocks on Friday, knocking the benchmark world equity index to a 5-year trough, while oil fell to a one-year low as fears grew policymakers are not making enough efforts to contain the financial crisis.
Government bonds in Japan and the euro zone -- usually safer assets which outperform in times of risk aversion -- fell as investors dashed to cash in any assets they have to gain access to capital.
Equity trading in Russia, Iceland, Romania, Ukraine and Indonesia has been halted while nearly half the stocks in Milan are suspended for excessive losses, just hours before finance chiefs from Group of Seven rich nations meet in Washington.
So far, measures from the United States, Britain and other countries to fight the worst financial crisis in 80 years -- even this week's coordinated interest rate cuts -- have failed to calm credit and money markets and quell investor fears.
Click here to continue reading.
The Market Oracle writes:Gold may not have surged as much as some had expected in recent weeks due to massive liquidation in all other markets due to leveraged losses and a flight to cash. This is particularly the case with hedge funds and other traders and speculators with short term horizons.
But gold increasingly resembles a submerged beach ball--a submerged beach ball can only be pushed only so far under water prior to leaping out of the water and this is what will happen to gold prices in the coming weeks when the extremely bullish supply demand fundamentals eventually kick in.US Ready to Capitulate to North Korea?
Reuters reports:North Korea and the United States are near a deal on verifying Pyongyang's claims about its nuclear program that would prompt Washington to soon remove the state from its terrorism blacklist, South Korean media said on Friday.
The Washington Post reported on Thursday that the Bush administration looks set to provisionally remove the North from the State Department's terrorism blacklist, as early as Friday.
U.S. nuclear envoy Christopher Hill, who went to Pyongyang last week to save a crumbling disarmament deal, reached a fresh verification proposal there that the U.S. administration has finished reviewing, a South Korean news report quoted government sources as saying.
"North Korea's resumption of nuclear disablement and U.S. removal of North Korea from its state terrorism sponsors list can all happen this month," the Chosun Ilbo newspaper quoted a key government official as saying.
The move is aimed at keeping the disarmament-for-aid deal North Korea struck with five regional powers from falling apart, it quoted sources familiar with the deal as saying.
The South Korean daily Dong-a Ilbo reported diplomatic sources as saying the North has agreed to allow nuclear inspectors into the secretive country for incremental checks.
South Korean officials declined to confirm the reports but said Washington and regional powers involved in the disarmament efforts are reviewing the results of Hill's visit to Pyongyang which could potentially lead to the end of the North's terrorism blacklisting.
The disarmament deal appeared to be in peril after Pyongyang, angry at not being removed from the terrorism list, vowed last month to rebuild the aging nuclear plant.
The reports come as North Korea deployed more than 10 missiles on its west coast for what appears to be an imminent launch and barred U.N. monitoring throughout its Yongbyon nuclear complex on Thursday.
On Tuesday, the North fired two short-range missiles into the Yellow Sea in a move seen as consistent with its tendency at times of political tension to display it is ready to take a hard and defiant line.
Saturday, 11 October 2008
The Stalinist regime's provocations (scroll down) seem to be paying off.
Posts
