MARKET MELTDOWN APPROACHES. GET OUT OF THE DOLLAR SAID PETER SCHIFF
Peter Schiff calls fed chair Ben Bernanke a liar
http://www.youtube.com/watch?v=KIgGix2jmSw&feature=player_embedded
WATCH ALSO:
http://www.youtube.com/watch?v=dNyrYwZrZ8I&NR=1
=====================
ANOTHER VERSION THE BEST!!
BERNANKE EASY MONEY: TO BE CONTINUED
http://finance.yahoo.com/blogs/breakout/bernanke-lying-bet-against-fed-dollar-peter-schiff-152631496.html
GDP is falling, unemployment is rising, inflation is up and the dollar is down -- and Ben Bernanke is talking his way through it in a way that history has not previously allowed.
Longtime Fed critic and financial doomsayer Peter Schiff is known for a lot of things, but one thing he's not known for is mincing words. And when the CEO of Euro Pacific Capital appeared on Breakout this morning, he didn't disappoint as he launched into a caustic critique of our capital markets and all dollar-denominated investments.
In a rant that was eerily similar to one I posted yesterday on Twitter, Schiff went right for the jugular.Noting that a Bloomberg article called Wednesday's Bernanke press conference a "success," Schiff said that, "As the Fed chairman spoke, the dollar was getting crushed, gold surged to a new high. How do you call that a success? That's like saying the Titanic had a successful crossing just because some passengers happened to make it to New York."
"[Bernanke is] lying," Schiff continued. "The more the Fed insists that inflation is transitory, the more its reputation becomes transitory."
So when King Macke anointed Schiff the new head of the Fed and pressed for him for an action plan, he offered a three-pronged reply: Admit mistakes made in the past, raise rates and stop buying U.S. Treasurys.
"If the Federal Reserve simply had some discipline and raised interest rates," Schiff said, "that would force Congress to cut spending because they'd have no way to cut these bonds."
So how do you put your money to work in this environment?
"My investment strategy is based on the Fed continuously doing the wrong thing," Schiff said. "What you have to do is avoid U.S.-dollar denominated investments. People need to own precious metals like gold and silver, they need to own commodities, they need to own foreign bonds, foreign stocks."
By now, Schiff-watchers are well-acquainted with his anthem mortis, but for those who are unfamiliar with his outlook and philosophy, you're in for an ear-scorching diatribe of doom.
Let us know what you think. Write to us at Breakoutcrew@yahoo.com, or comment below.
EURO PACIFIC
ww.europacnet
jueves, 28 de abril de 2011
BOMBING LIBYA WITH DRONES IS HORRIBLE WAR-CRIME
NATO's BOMBING OF LIBYA
3 VIDEOS
Posted April 27, 2011
COMPARED WITH OBAM-NAZI PUTIN IS A SAINT
READ THIS and LISTEN THE VIDEOS http://www.informationclearinghouse.info/article27982.htm
The Russian Prime Minister says he's alarmed by NATO's approach towards bombing Libya.
At a news conference following Russian-Swedish talks, Putin said the coalition is quick to act no matter the cost. Putin says: "It's well-known that I used to serve in the KGB. At that time, the Soviet Union was waging a war in Afghanistan. Many of my friends served in Afghanistan. One of them was the head of the advisors group on the security bodies in Herat. One day, he went on leave, and I asked him, 'Listen Sasha, how's the situation there?' And at that time, our country had a very patriotic spirit. We believed that we were doing a very good thing having this war in Afghanistan. His reply came back unexpectedly:
'You know, without my signature no single missile or bomb attack can be fired.' 'So what?' said I. 'I assess my success and my achievements by the number of orders that I don't sign.' For me, it sounded just shocking. Can you imagine hearing that from a KGB officer at that time? I asked, why? He said, 'Do you know how many peaceful civilians perish because of these missile attacks, no matter what reasons are behind them?'
Sometimes I contemplate how easily decisions on using force are made today in international affairs, and it leaves me gobsmacked. And that happens against the background of all the fuss around human rights and humanism which the modern civilized world seemingly practices. Don't you see a significant contradiction here between theory, the words and deeds, the practice of international affairs? And we should do our utmost to eliminate this imbalance
SO WE HAVE A NEW SAINT: SAN PUTIN
AFTER LESTEN THE 1ST VIDEO http://www.informationclearinghouse.info/article27982.htm
GO TO THE 2ND WITH PEPE ESCOBAR AND THE 3RD ONE WITH OBAMA :
http://www.informationclearinghouse.info/article27982.htm
3 VIDEOS
Posted April 27, 2011
COMPARED WITH OBAM-NAZI PUTIN IS A SAINT
READ THIS and LISTEN THE VIDEOS http://www.informationclearinghouse.info/article27982.htm
The Russian Prime Minister says he's alarmed by NATO's approach towards bombing Libya.
At a news conference following Russian-Swedish talks, Putin said the coalition is quick to act no matter the cost. Putin says: "It's well-known that I used to serve in the KGB. At that time, the Soviet Union was waging a war in Afghanistan. Many of my friends served in Afghanistan. One of them was the head of the advisors group on the security bodies in Herat. One day, he went on leave, and I asked him, 'Listen Sasha, how's the situation there?' And at that time, our country had a very patriotic spirit. We believed that we were doing a very good thing having this war in Afghanistan. His reply came back unexpectedly:
'You know, without my signature no single missile or bomb attack can be fired.' 'So what?' said I. 'I assess my success and my achievements by the number of orders that I don't sign.' For me, it sounded just shocking. Can you imagine hearing that from a KGB officer at that time? I asked, why? He said, 'Do you know how many peaceful civilians perish because of these missile attacks, no matter what reasons are behind them?'
Sometimes I contemplate how easily decisions on using force are made today in international affairs, and it leaves me gobsmacked. And that happens against the background of all the fuss around human rights and humanism which the modern civilized world seemingly practices. Don't you see a significant contradiction here between theory, the words and deeds, the practice of international affairs? And we should do our utmost to eliminate this imbalance
SO WE HAVE A NEW SAINT: SAN PUTIN
AFTER LESTEN THE 1ST VIDEO http://www.informationclearinghouse.info/article27982.htm
GO TO THE 2ND WITH PEPE ESCOBAR AND THE 3RD ONE WITH OBAMA :
http://www.informationclearinghouse.info/article27982.htm
miércoles, 27 de abril de 2011
WAKING UP TO ECONOMIC REALITIES
Waking Up To Economic Realities
Ron Paul. Thursday, 28 April 2011
Financialsense: http://www.financialsense.com/contributors/ron-paul/waking-up-to-economic-realities
http://futurefastforward.com/feature-articles/5395-waking-up-to-economic-realities-by-ron-paul-28411
Last week the financial markets were roiled by Standard & Poor’s announcement that they will change their outlook on the fiscal health of the United States over the next two years from “stable” to “negative”. The administration decried this decision as political.
However, it seems the only political thing about this decision is the fact that it took so long. The Washington Post recently reported that the White House and the Treasury Department put tremendous pressure on S&P not to do this. However, if S&P made its ratings based on political pressures rather than economic reality, it would cease to have any relevance to the business community. Even if S&P delayed its announcement that U.S. government bond market would be downgraded, at some point it would become obvious that the finances of this country are out of control and our leadership is out of touch. All credibility would be lost if S&P simply continued to assign U.S. debt a AAA rating.
S&P noted in its announcement that negotiations among leaders in Washington to address deficit concerns did not sound promising, and expressed skepticism that politicians could agree to any viable budget compromise. Of course this has been obvious for years but in the midst of the current debate over raising the debt limit it is perhaps the wake-up call that Washington needs. For decades politicians and government officials have been able to maintain their denial about our real financial situation, patching the system together by passing emergency and supplemental funding bills, issuing more debt, and allowing the Federal Reserve and foreign creditors to paper over deficits with more monetary expansion. I’ve said many times the real day of reckoning comes when fiscal and monetary tricks no longer work and there are no buyers for our debt.
Even the most conservative budget that has been proposed by Republican leadership requires raising the debt ceiling by an additional $9 trillion by 2021. This demonstrates absolutely that no one in power right now has any real intention of addressing our spending problems or paying down the debt. They simply expect to continue to borrow and run up more debt forever, without limit. Yet they always imagine our dollar will have value no matter how many we print. This expectation is foolish and naïve. I guarantee that those buying our debt are not foolish and naïve enough to go along with this charade forever.
The S&P announcement may just be the harbinger of economic realities acting as a restraint on government expansion. Government is not anxious to cap its own growth, in spite of misnomers like “debt limit” or “deficit reduction”. [THE US] Government will continue to grow like a cancer, sapping our country of its wealth and freedom until the laws of economics no longer can be ignored.
======================
READ ALSO :
QE2 and the Fate of the U.S. Economy
By David Galland04/26/2011
http://www.financialsense.com/contributors/david-galland/qe2-and-the-fate-of-the-us-economy
Extract:
The politicians and their friends down at the Fed can pretend, as they do, that the overhang on the economy of some $14 trillion in debt, and another $50 trillion or so in longer-term entitlements, is much ado about nothing. This view of theirs is confirmed by the current budget discussions that talk of slashing $4 trillion out of federal spending over the next 12 years – but ignore that this slashing still anticipates annual deficits on the order of $1 trillion. There are facts and fictions in this universe of ours, and it’s a fact that the notion of spending our way to better days is a fiction.
And so, in my mind, there is no question that the Fed will ultimately be forced to unleash QE3, and that will be followed by QE4, QE5 and so on through QE15 – or whatever number is in force at the time of the dollar’s collapse.
OPEN: http://www.financialsense.com/contributors/david-galland/qe2-and-the-fate-of-the-us-economy
==============
OR, READ THIS IF YOU HAVE SOME BACKGROUND ON ECONOMICS:
Monetary Policy in 3-D
By John Hussman PhD. 04/27/2011
http://www.financialsense.com/contributors/john-hussman/monetary-policy-in-3d%20
Extract:
I am so adamant that quantitative easing is an irresponsible policy - we know how these variables are related. Specifically, it will be nearly impossible to normalize interest rates, even slightly, without a massive contraction in the Fed's balance sheet. Likewise, as we approach 17 cents of monetary base per dollar of nominal GDP, even the slightest exogenous interest rate pressure will imply the need for massive reversals in the monetary base in order to avoid steep inflationary pressures. [..]
So while the Fed might have the latitude to pay another 0.25% of interest on reserves, every extension of its present policy course, be it more quantitative easing, or paying interest on existing bank reserves, substantially increases its already untenable level of balance sheet leverage, and the likelihood that the public will quietly need to subsidize that balance sheet.
OPEN: http://www.financialsense.com/contributors/john-hussman/monetary-policy-in-3d%20
Ron Paul. Thursday, 28 April 2011
Financialsense: http://www.financialsense.com/contributors/ron-paul/waking-up-to-economic-realities
http://futurefastforward.com/feature-articles/5395-waking-up-to-economic-realities-by-ron-paul-28411
Last week the financial markets were roiled by Standard & Poor’s announcement that they will change their outlook on the fiscal health of the United States over the next two years from “stable” to “negative”. The administration decried this decision as political.
However, it seems the only political thing about this decision is the fact that it took so long. The Washington Post recently reported that the White House and the Treasury Department put tremendous pressure on S&P not to do this. However, if S&P made its ratings based on political pressures rather than economic reality, it would cease to have any relevance to the business community. Even if S&P delayed its announcement that U.S. government bond market would be downgraded, at some point it would become obvious that the finances of this country are out of control and our leadership is out of touch. All credibility would be lost if S&P simply continued to assign U.S. debt a AAA rating.
S&P noted in its announcement that negotiations among leaders in Washington to address deficit concerns did not sound promising, and expressed skepticism that politicians could agree to any viable budget compromise. Of course this has been obvious for years but in the midst of the current debate over raising the debt limit it is perhaps the wake-up call that Washington needs. For decades politicians and government officials have been able to maintain their denial about our real financial situation, patching the system together by passing emergency and supplemental funding bills, issuing more debt, and allowing the Federal Reserve and foreign creditors to paper over deficits with more monetary expansion. I’ve said many times the real day of reckoning comes when fiscal and monetary tricks no longer work and there are no buyers for our debt.
Even the most conservative budget that has been proposed by Republican leadership requires raising the debt ceiling by an additional $9 trillion by 2021. This demonstrates absolutely that no one in power right now has any real intention of addressing our spending problems or paying down the debt. They simply expect to continue to borrow and run up more debt forever, without limit. Yet they always imagine our dollar will have value no matter how many we print. This expectation is foolish and naïve. I guarantee that those buying our debt are not foolish and naïve enough to go along with this charade forever.
The S&P announcement may just be the harbinger of economic realities acting as a restraint on government expansion. Government is not anxious to cap its own growth, in spite of misnomers like “debt limit” or “deficit reduction”. [THE US] Government will continue to grow like a cancer, sapping our country of its wealth and freedom until the laws of economics no longer can be ignored.
======================
READ ALSO :
QE2 and the Fate of the U.S. Economy
By David Galland04/26/2011
http://www.financialsense.com/contributors/david-galland/qe2-and-the-fate-of-the-us-economy
Extract:
The politicians and their friends down at the Fed can pretend, as they do, that the overhang on the economy of some $14 trillion in debt, and another $50 trillion or so in longer-term entitlements, is much ado about nothing. This view of theirs is confirmed by the current budget discussions that talk of slashing $4 trillion out of federal spending over the next 12 years – but ignore that this slashing still anticipates annual deficits on the order of $1 trillion. There are facts and fictions in this universe of ours, and it’s a fact that the notion of spending our way to better days is a fiction.
And so, in my mind, there is no question that the Fed will ultimately be forced to unleash QE3, and that will be followed by QE4, QE5 and so on through QE15 – or whatever number is in force at the time of the dollar’s collapse.
OPEN: http://www.financialsense.com/contributors/david-galland/qe2-and-the-fate-of-the-us-economy
==============
OR, READ THIS IF YOU HAVE SOME BACKGROUND ON ECONOMICS:
Monetary Policy in 3-D
By John Hussman PhD. 04/27/2011
http://www.financialsense.com/contributors/john-hussman/monetary-policy-in-3d%20
Extract:
I am so adamant that quantitative easing is an irresponsible policy - we know how these variables are related. Specifically, it will be nearly impossible to normalize interest rates, even slightly, without a massive contraction in the Fed's balance sheet. Likewise, as we approach 17 cents of monetary base per dollar of nominal GDP, even the slightest exogenous interest rate pressure will imply the need for massive reversals in the monetary base in order to avoid steep inflationary pressures. [..]
So while the Fed might have the latitude to pay another 0.25% of interest on reserves, every extension of its present policy course, be it more quantitative easing, or paying interest on existing bank reserves, substantially increases its already untenable level of balance sheet leverage, and the likelihood that the public will quietly need to subsidize that balance sheet.
OPEN: http://www.financialsense.com/contributors/john-hussman/monetary-policy-in-3d%20
WASHIGNTON EN EL BARRANCO
Washington embarrancado
Un imperio de autócratas, aristócratas y matones uniformados comienza a tambalearse
Alfred W. McCoy y Brett Reilly. Tom Dispatch. ABRIL 27, 2011
http://www.rebelion.org/noticia.php?id=127207
Introducción del editor de Tom Dispatch
Las potencias imperiales se protegen de los riesgos. El ejemplo reciente más impresionante es Egipto. Mientras el Pentágono inyectaba dinero en las fuerzas armadas egipcias (aproximadamente 40.000 millones de dólares desde 1979), gracias a WikiLeaks sabemos que el gobierno entregaba montos mucho más pequeños (millones, no miles de millones) a diversas “organizaciones financiadas por el gobierno de EE.UU.” con ciertas relaciones con el Congreso o con los partidos demócrata y republicano. Parte de ese dinero, a su vez, se invertía en “campañas de construcción de la democracia” orientadas a enseñar a jóvenes activistas egipcios cómo organizar un movimiento contra su gobernante autocrático, cómo hacer mejor uso de las redes sociales, etc.
En otras palabras, en Egipto (y en otros sitios de Medio Oriente) Washington financiaba tanto a los autócratas como a los jóvenes activistas que se les oponían y quienes jugaron un papel crucial en Egipto en el movimiento de la Plaza Tahrir que derrocó al presidente Hosni Mubarak. Como dijo al New York Times uno de los activistas: “Aunque apreciamos el entrenamiento que recibimos a través de las ONG patrocinadas por el gobierno de EE.UU., y nos ayudaron en nuestras luchas, somos conscientes de que el mismo gobierno también entrenó al servicio de investigación de seguridad del Estado, responsable del acoso y encarcelamiento de muchos de nosotros”.
Mientras tanto, gracias a otros documentos del Departamento de Estado publicados recientemente por WikiLeaks, sabemos que, por lo menos en un país de Medio Oriente donde Washington no apoyó con entusiasmo al autócrata local –Siria– el Departamento de Estado canalizó cantidades importantes de dinero hacia el “financiamiento secreto de… grupos políticos opositores y proyectos relacionados, incluido un canal de televisión satelital que transmite programación antigubernamental al el país”. Preparaba, en otras palabras, una nueva elite para un futuro “cambio de régimen”.
Es una especie de grotesca ironía que una parte significativa del alto comando militar egipcio haya estado a finales de enero en Virginia del Norte, asistiendo a una reunión anual del Comité de Cooperación Militar Egipto-EE.UU., cuando se armó la grande en la Plaza Tahrir, gracias a esos activistas egipcios, algunos entrenados con dinero de Washington. La creación o apoyo de elites, como escriben Alfred McCoy y Brett Reilly, siempre ha sido crucial en el manejo de los imperios globales. E incluso las elites clientes es uno de los temas a los que pocas veces se dedica mucha atención, a pesar de que Gran Bretaña, por ejemplo, gobernó durante interminables décadas el Raj Indio con eficiencia impresionante, aunque opresora, con una cantidad sorprendentemente pequeña de personal de Inglaterra. ¿De qué otra manera, después de todo, podía seguir existiendo un imperio global?
Y sin embargo, a medida que decrece la fuerza y la influencia de la gran potencia, esas apuestas –como la que Washington hizo en Egipto– comienzan a salir mal, desde un punto de vista imperial. Si McCoy, colaborador regular de TomDispatch y autor reciente de Policing America’s Empire, y Reilly tienen razón, el toque de Washington cuando se trata de mantener en línea a elites locales puede ciertamente haberse embarrancado. Tom
Read: Washington embarrancado, in: http://www.rebelion.org/noticia.php?id=127207
Un imperio de autócratas, aristócratas y matones uniformados comienza a tambalearse
Alfred W. McCoy y Brett Reilly. Tom Dispatch. ABRIL 27, 2011
http://www.rebelion.org/noticia.php?id=127207
Introducción del editor de Tom Dispatch
Las potencias imperiales se protegen de los riesgos. El ejemplo reciente más impresionante es Egipto. Mientras el Pentágono inyectaba dinero en las fuerzas armadas egipcias (aproximadamente 40.000 millones de dólares desde 1979), gracias a WikiLeaks sabemos que el gobierno entregaba montos mucho más pequeños (millones, no miles de millones) a diversas “organizaciones financiadas por el gobierno de EE.UU.” con ciertas relaciones con el Congreso o con los partidos demócrata y republicano. Parte de ese dinero, a su vez, se invertía en “campañas de construcción de la democracia” orientadas a enseñar a jóvenes activistas egipcios cómo organizar un movimiento contra su gobernante autocrático, cómo hacer mejor uso de las redes sociales, etc.
En otras palabras, en Egipto (y en otros sitios de Medio Oriente) Washington financiaba tanto a los autócratas como a los jóvenes activistas que se les oponían y quienes jugaron un papel crucial en Egipto en el movimiento de la Plaza Tahrir que derrocó al presidente Hosni Mubarak. Como dijo al New York Times uno de los activistas: “Aunque apreciamos el entrenamiento que recibimos a través de las ONG patrocinadas por el gobierno de EE.UU., y nos ayudaron en nuestras luchas, somos conscientes de que el mismo gobierno también entrenó al servicio de investigación de seguridad del Estado, responsable del acoso y encarcelamiento de muchos de nosotros”.
Mientras tanto, gracias a otros documentos del Departamento de Estado publicados recientemente por WikiLeaks, sabemos que, por lo menos en un país de Medio Oriente donde Washington no apoyó con entusiasmo al autócrata local –Siria– el Departamento de Estado canalizó cantidades importantes de dinero hacia el “financiamiento secreto de… grupos políticos opositores y proyectos relacionados, incluido un canal de televisión satelital que transmite programación antigubernamental al el país”. Preparaba, en otras palabras, una nueva elite para un futuro “cambio de régimen”.
Es una especie de grotesca ironía que una parte significativa del alto comando militar egipcio haya estado a finales de enero en Virginia del Norte, asistiendo a una reunión anual del Comité de Cooperación Militar Egipto-EE.UU., cuando se armó la grande en la Plaza Tahrir, gracias a esos activistas egipcios, algunos entrenados con dinero de Washington. La creación o apoyo de elites, como escriben Alfred McCoy y Brett Reilly, siempre ha sido crucial en el manejo de los imperios globales. E incluso las elites clientes es uno de los temas a los que pocas veces se dedica mucha atención, a pesar de que Gran Bretaña, por ejemplo, gobernó durante interminables décadas el Raj Indio con eficiencia impresionante, aunque opresora, con una cantidad sorprendentemente pequeña de personal de Inglaterra. ¿De qué otra manera, después de todo, podía seguir existiendo un imperio global?
Y sin embargo, a medida que decrece la fuerza y la influencia de la gran potencia, esas apuestas –como la que Washington hizo en Egipto– comienzan a salir mal, desde un punto de vista imperial. Si McCoy, colaborador regular de TomDispatch y autor reciente de Policing America’s Empire, y Reilly tienen razón, el toque de Washington cuando se trata de mantener en línea a elites locales puede ciertamente haberse embarrancado. Tom
Read: Washington embarrancado, in: http://www.rebelion.org/noticia.php?id=127207
THERE WILL BE SOMETHING SIMILAR TO A QE3
Plummeting Dollar: A New Wave of Treasuries and Toxic Waste
by Bob Chapman, Global Research, April 27, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24515
We believe there will be something similar to a QE3 by another name and the Fed will probably have to create some $2.5 trillion to buy Treasuries, Agencies, and toxic waste and perhaps inject funds into the economy. Japan certainly won’t be a buyer and probably will be a seller. China has indicated that they won’t be purchasers in the future either. The question also arises concerning the continued purchase of these securities by countries in the oil producing Gulf States, which are in turmoil. The three countries make up 45% of Treasury purchases. As we pointed out in previous issues the second half of 2011 should be monstrous. Even if the fed buys all the Treasury and Agency bonds they’ll still have to deal with a lower dollar and high inflation. Then there is high unemployment and raging gold and silver prices. There is also the question of US debt, federal, state and municipal debt, along with wars in the Middle East and North Africa.
How many US Treasuries will Japan have to sell and how deeply will its slowdown effect American industry? As you can see America has much to contemplate.
The creation of monetary inflation will last at least two more years. Its end will only come when the Fed takes its foot off of the pedal. Like almost zero interest rates this policy cannot be allowed to stop. The system cannot function without it. The whole concept of throwing money at a problem simply doesn’t work and the elitists know this only too well.
Monetary and fiscal creations are not the only mistakes being made by the Fed and our Congress. US and world markets are being subjected to non-stop manipulation. This corruption has destroyed all free markets. Stock and bond markets are supported and gold, silver and commodities attacked. Fortunately markets now recognize what the elitists are up too and each time they interfere they lose a little more power. It points up that a criminal syndicate is running our country. These tactics are used to extend the looting period allowing further harvesting of elicit profits. The US and many other nations have been allowed to live beyond their means for many years and that condition is being brought to a conclusion. This, of course, is very true of the US due to the dollar being the world’s reserve currency. That is changing, as nations want this unfair advantage ended, especially in view of the fact that the American government and financial community have so abused their privilege.
The profits of the military industrial complex continue to flourish as we have war after war. We notice that both parties are willing to cut spending on Social Security and Medicare, but they refuse to cut military spending, the most expensive item on the budget at 26%. Our government has billions for Fannie Mae, Freddie Mac, Ginnie Mae, the FHA, the FICA and the worthless SEC and CFTC, but no cuts for the average American.
As zero interest rates rule one form or another of money and credit creation continues as it has for the past 11 years. The game is the same, it is just the name has changed. The process of wealth destruction is still in progress and only the select few get to keep their ill-begotten riches. The Fed’s balance sheet over the next 1-1/2 years should reach over $5 trillion.
On this process real interest rates will creep higher, toxic securitized mortgage bonds will fall lower, as the housing market sinks to new lows not able to break out of its death spiral.
We find it of great interest but not surprising that the $5 trillion mortgage bond fraud, after three years, has no prosecutions, or even a civil suit. This smacks of evidence that the Fed made some kind of sub-rosa deal with bond buyers, particularly in Europe, to cover their losses. In addition, we believe the Treasury and the SEC were in on the criminal fraud.
We see: Warren Buffett is doing the same thing that the Chinese are doing and that is dumping US dollars. He has been going to Asia and India to buy companies. This is how they both bet against the dollar. Buffett even says, “I would recommend against buying long-term fixed-dollar investments.” He says over the next 20 years the dollar will lose its value. This is also what we have been preaching over the past 11 years, and that the preferred investment should be gold and silver coins, bullion and shares. Professionals are concerned about the trade deficit and the balance of payment’s deficit, along with the continual creation of money and credit by the Fed. Then there is the horrible budget deficit and the rampant inflation the government continues to lie about.
Even PIMCO, as we all now know, has sold US Treasuries and even shorted them in anticipation of higher real interest rates. Bill Gross, CEO, calls the US a serial abuser of finance deficits with a ridiculous budget. He, like many others, has lost faith in the Fed and the government to run a proper government fiscal and monetary policy. Bill called it the new normal. We call it the road to fiscal and monetary perdition. Confidence is gone and well it should be. We lost confidence in 1960; it obviously takes others longer.
In our minds there is no question the dollar is going lower, perhaps 40% or 50% lower versus other currencies in general. In just the last 15 years it is 50% lower. In the last 40 years it is 98% lower. At this juncture it is our opinion that the Treasury and the Fed want the dollar lower in order to become more competitive. If they are going to do that they had best end their 60% plus reliance on foreign oil and start pumping America’s vast oil and gas reserves. They will also have to end free trade, globalization, offshoring and outsourcing in order to bring those 430,000 firms that have moved to foreign countries.
As the dollar falls against other currencies, all currencies continue to fall versus gold and silver. Over the past 11 years, annually, nine major currencies have fallen more than 20% on average versus gold and silver. If the dollar over the next several years were to lose its status a world reserve currency costs for foreign goods would rise exponentially. The only reason the dollar isn’t lower is that many other currencies have the same problems the dollar has in varying degrees. The dollar is very weak versus the euro at $1.46. Yet, the eurozone countries are exploding in debt and six of their members are candidates for insolvency. Japan, the UK, and parts of Europe have the same problems the US has - a hangover from using the Keynesian economic model. As a result of this misguided policy in ten years federal debt will be close to $20 trillion, up 75% from today. Is that anyway to fiscally run a country? The answer is obviously not. This is why the Fed has to buy 80% of Treasury and Agencies and it is why there is no end in sight to America’s fiscal and monetary problems. Just about everything is being done incorrectly, which tells us again this has been done deliberately in order to bring the US, UK and Europe to their knees economically in order to force the people in these countries to accept World Government. The experiment again is not going to work and chaos and war will again envelop the world. You had best be prepared.
How can investors be positive about dollar denominated investments, when S&P warns government that they had best get their financial house in order or they will lose their AAA rating. They placed the US outlook as negative. The US has to address medium and long-term budgetary problems over the next two years and if they don’t the rating will fall and the US will no longer be the world’s reserve currency. Monetary policy cannot continue to augment, aid and abet such a profligate fiscal policy, which can easily be changed by cutting military spending by 50% to 13% of the budget. That is not easy to do with the military-industrial complex, Wall Street and banking running the country. Their greed knows no end.
We just saw over the past three years a credit crisis and a crisis of confidence for both the government and private debt sectors, which still hasn’t been permanently addressed. Many major financial firms are still insolvent and carrying two sets of books. If you did that you would end up in jail.
The Fed has become a liability in its quest to protect its owners, the banks, and not the overall economy. It is instrumental in destroying debt quality and continues to destabilize the monetary base. There is no effort to cut military spending only Social Security and Medicare, which retirees and future retirees paid for, but those funds were stolen over the years.
How does any Fed call allowing mortgage debt to expand by $8 trillion or by 115% over six years? They the banks and brokerage houses knew exactly what they were doing and what the consequences would be. Banks employed leverage of 70 to 1 when 9 to 1 was normal and it is still 40 to 1. Obviously the bankers have learned nothing from their failures. In addition, besides us, how could rating agencies and professionals not recognize a Ponzi scheme? That is because S&P, Moody’s and Fitch were part of the criminal enterprise. How could a credit system double debt, most of it was of very poor quality and expect that there would be no fall out? They knew the consequences and did it anyway. In the aftermath there has been no civil litigation and no criminal prosecutions. Why is this? It is because these criminals have bought most of Congress and the court system.
In this environment how can any analyst or economist expect better than 2-1/4% growth this year with QE2 and stimulus. Worse yet, how can any sane professional project 6% growth over the next two years? That is utterly impossible.
The economy remains lopsided. Corporate profits are lower, as is unemployment. The inflation factor is cutting profits and the improvement in unemployment is minuscule. At least $1.8 trillion has been spent on QE2 and stimulus 2 and the experts are talking about 1.5% first quarter growth. The rest of the year should be worse even with zero interest rates. At the same time Congress wants to cut paid in benefits of Social Security and Medicare and pay for expanded wars. Their priorities reflect the interests of those who pay them off.
Global Research Articles by Bob Chapman
by Bob Chapman, Global Research, April 27, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24515
We believe there will be something similar to a QE3 by another name and the Fed will probably have to create some $2.5 trillion to buy Treasuries, Agencies, and toxic waste and perhaps inject funds into the economy. Japan certainly won’t be a buyer and probably will be a seller. China has indicated that they won’t be purchasers in the future either. The question also arises concerning the continued purchase of these securities by countries in the oil producing Gulf States, which are in turmoil. The three countries make up 45% of Treasury purchases. As we pointed out in previous issues the second half of 2011 should be monstrous. Even if the fed buys all the Treasury and Agency bonds they’ll still have to deal with a lower dollar and high inflation. Then there is high unemployment and raging gold and silver prices. There is also the question of US debt, federal, state and municipal debt, along with wars in the Middle East and North Africa.
How many US Treasuries will Japan have to sell and how deeply will its slowdown effect American industry? As you can see America has much to contemplate.
The creation of monetary inflation will last at least two more years. Its end will only come when the Fed takes its foot off of the pedal. Like almost zero interest rates this policy cannot be allowed to stop. The system cannot function without it. The whole concept of throwing money at a problem simply doesn’t work and the elitists know this only too well.
Monetary and fiscal creations are not the only mistakes being made by the Fed and our Congress. US and world markets are being subjected to non-stop manipulation. This corruption has destroyed all free markets. Stock and bond markets are supported and gold, silver and commodities attacked. Fortunately markets now recognize what the elitists are up too and each time they interfere they lose a little more power. It points up that a criminal syndicate is running our country. These tactics are used to extend the looting period allowing further harvesting of elicit profits. The US and many other nations have been allowed to live beyond their means for many years and that condition is being brought to a conclusion. This, of course, is very true of the US due to the dollar being the world’s reserve currency. That is changing, as nations want this unfair advantage ended, especially in view of the fact that the American government and financial community have so abused their privilege.
The profits of the military industrial complex continue to flourish as we have war after war. We notice that both parties are willing to cut spending on Social Security and Medicare, but they refuse to cut military spending, the most expensive item on the budget at 26%. Our government has billions for Fannie Mae, Freddie Mac, Ginnie Mae, the FHA, the FICA and the worthless SEC and CFTC, but no cuts for the average American.
As zero interest rates rule one form or another of money and credit creation continues as it has for the past 11 years. The game is the same, it is just the name has changed. The process of wealth destruction is still in progress and only the select few get to keep their ill-begotten riches. The Fed’s balance sheet over the next 1-1/2 years should reach over $5 trillion.
On this process real interest rates will creep higher, toxic securitized mortgage bonds will fall lower, as the housing market sinks to new lows not able to break out of its death spiral.
We find it of great interest but not surprising that the $5 trillion mortgage bond fraud, after three years, has no prosecutions, or even a civil suit. This smacks of evidence that the Fed made some kind of sub-rosa deal with bond buyers, particularly in Europe, to cover their losses. In addition, we believe the Treasury and the SEC were in on the criminal fraud.
We see: Warren Buffett is doing the same thing that the Chinese are doing and that is dumping US dollars. He has been going to Asia and India to buy companies. This is how they both bet against the dollar. Buffett even says, “I would recommend against buying long-term fixed-dollar investments.” He says over the next 20 years the dollar will lose its value. This is also what we have been preaching over the past 11 years, and that the preferred investment should be gold and silver coins, bullion and shares. Professionals are concerned about the trade deficit and the balance of payment’s deficit, along with the continual creation of money and credit by the Fed. Then there is the horrible budget deficit and the rampant inflation the government continues to lie about.
Even PIMCO, as we all now know, has sold US Treasuries and even shorted them in anticipation of higher real interest rates. Bill Gross, CEO, calls the US a serial abuser of finance deficits with a ridiculous budget. He, like many others, has lost faith in the Fed and the government to run a proper government fiscal and monetary policy. Bill called it the new normal. We call it the road to fiscal and monetary perdition. Confidence is gone and well it should be. We lost confidence in 1960; it obviously takes others longer.
In our minds there is no question the dollar is going lower, perhaps 40% or 50% lower versus other currencies in general. In just the last 15 years it is 50% lower. In the last 40 years it is 98% lower. At this juncture it is our opinion that the Treasury and the Fed want the dollar lower in order to become more competitive. If they are going to do that they had best end their 60% plus reliance on foreign oil and start pumping America’s vast oil and gas reserves. They will also have to end free trade, globalization, offshoring and outsourcing in order to bring those 430,000 firms that have moved to foreign countries.
As the dollar falls against other currencies, all currencies continue to fall versus gold and silver. Over the past 11 years, annually, nine major currencies have fallen more than 20% on average versus gold and silver. If the dollar over the next several years were to lose its status a world reserve currency costs for foreign goods would rise exponentially. The only reason the dollar isn’t lower is that many other currencies have the same problems the dollar has in varying degrees. The dollar is very weak versus the euro at $1.46. Yet, the eurozone countries are exploding in debt and six of their members are candidates for insolvency. Japan, the UK, and parts of Europe have the same problems the US has - a hangover from using the Keynesian economic model. As a result of this misguided policy in ten years federal debt will be close to $20 trillion, up 75% from today. Is that anyway to fiscally run a country? The answer is obviously not. This is why the Fed has to buy 80% of Treasury and Agencies and it is why there is no end in sight to America’s fiscal and monetary problems. Just about everything is being done incorrectly, which tells us again this has been done deliberately in order to bring the US, UK and Europe to their knees economically in order to force the people in these countries to accept World Government. The experiment again is not going to work and chaos and war will again envelop the world. You had best be prepared.
How can investors be positive about dollar denominated investments, when S&P warns government that they had best get their financial house in order or they will lose their AAA rating. They placed the US outlook as negative. The US has to address medium and long-term budgetary problems over the next two years and if they don’t the rating will fall and the US will no longer be the world’s reserve currency. Monetary policy cannot continue to augment, aid and abet such a profligate fiscal policy, which can easily be changed by cutting military spending by 50% to 13% of the budget. That is not easy to do with the military-industrial complex, Wall Street and banking running the country. Their greed knows no end.
We just saw over the past three years a credit crisis and a crisis of confidence for both the government and private debt sectors, which still hasn’t been permanently addressed. Many major financial firms are still insolvent and carrying two sets of books. If you did that you would end up in jail.
The Fed has become a liability in its quest to protect its owners, the banks, and not the overall economy. It is instrumental in destroying debt quality and continues to destabilize the monetary base. There is no effort to cut military spending only Social Security and Medicare, which retirees and future retirees paid for, but those funds were stolen over the years.
How does any Fed call allowing mortgage debt to expand by $8 trillion or by 115% over six years? They the banks and brokerage houses knew exactly what they were doing and what the consequences would be. Banks employed leverage of 70 to 1 when 9 to 1 was normal and it is still 40 to 1. Obviously the bankers have learned nothing from their failures. In addition, besides us, how could rating agencies and professionals not recognize a Ponzi scheme? That is because S&P, Moody’s and Fitch were part of the criminal enterprise. How could a credit system double debt, most of it was of very poor quality and expect that there would be no fall out? They knew the consequences and did it anyway. In the aftermath there has been no civil litigation and no criminal prosecutions. Why is this? It is because these criminals have bought most of Congress and the court system.
In this environment how can any analyst or economist expect better than 2-1/4% growth this year with QE2 and stimulus. Worse yet, how can any sane professional project 6% growth over the next two years? That is utterly impossible.
The economy remains lopsided. Corporate profits are lower, as is unemployment. The inflation factor is cutting profits and the improvement in unemployment is minuscule. At least $1.8 trillion has been spent on QE2 and stimulus 2 and the experts are talking about 1.5% first quarter growth. The rest of the year should be worse even with zero interest rates. At the same time Congress wants to cut paid in benefits of Social Security and Medicare and pay for expanded wars. Their priorities reflect the interests of those who pay them off.
Global Research Articles by Bob Chapman
domingo, 24 de abril de 2011
IS THE DOLLAR IN BIG TROUBLE? : HERE SOME ALERTS
Final Red Alert On The Dollar
By Matthias Chang
Saturday, 23 April 2011
http://futurefastforward.com/feature-articles/5374-by-matthias-chang
Get out of all dollar assets NOW!
Dump any dollar holdings NOW!
I cannot say for sure that the DIVE will happen tomorrow, or the next few days or
in the next week, but the dollar is going to create a big hole in your pocket if
you are still hanging to dollar.
In my email Red Alert way, way back in November of 2010, I had warned that the
final phase of the Global Financial Tsunami would rear its ugly head at the
earliest, at the end of the first quarter of 2011.
I did not say at the latest – repeat at the “earliest”.
While the tsunami has not hit the “financial shores” as yet, the force swirling deep
beneath the waves is gathering momentum.
When it finally hits us, the pictures you saw of the recent Japanese tsunami will
be tame in comparison. This is because the financial tsunami will be more
destructive, more severe than the first financial tsunami in 2008.
For the reasons in support of this Red Alert, please read all my previous postings
in 2010, as I have no wish to repeat myself or to justify my findings.
Do your own research, if you doubt this Red Alert.
========================
Why Is Anyone Still Waiting To Sell The Dollar? -
By Chris Martenson (25/4/11)
http://futurefastforward.com/images/stories/featurearticles/AxelMerkWhyIsAnyoneWaitingToSellTheDollar.pdf
By Chris Martenson - Financialsense
The Fed faces destroying the dollar or ushering in a new Depression
The Fed faces destroying the dollar or ushering in a new Depression
By the time the Fed realizes the damage it has created, it will be quite late to undo this it and it is going to be very, very expensive and painful to address
Below is the transcript for Axel Merk: Why Is Anyone Still Waiting to Sell the Dollar? [1]
Chris Martenson: Today we are speaking to Axel Merk, president, chief investment officer and founder of Merk Investments. Axel is a noted expert on world currencies and manages several mutual funds that manage currency risks for investors. For years he has been an outspoken critic of US monetary policy, warning investors that the current course risks seriously devaluating the dollar. The past few years have proven his warnings to be accurate. He is also the author of Sustainable Wealth, a very readable guide to understanding our macro economic environment, the risks today.s investors face, and how they can mange their finances to achieve financial stability - very important in today.s world. Axel, thanks so much for making the time to join us today.
Axel Merk: Hi, good to be with you Chris.
Chris Martenson: Let us jump right into, it, the US dollar is trading at its lowest level since the carnage in 2008 and there are many voices, yours and mine included warning it could go a lot lower. So if you could recap for our listener.s right here and now how we got here and what is your outlook for the dollar?
Axel Merk: Well the dollar has really been on a very, very long term decline for decades and sometimes it puzzles me when people say ¡°Oh, I will sell the dollar and get out of it if and when it does come down¡±. I do not know what they are waiting for. And that trend has obviously had some ups and downs and has been accelerating in recent years. In recent times, we have had this major challenge that we are trying to grow at just about any cost, whereas our consumers they would like to really have a break. And it is not just now after the financial crisis, after the tech bubble burst after 9/11, we decided to keep America rolling and what happened was that we were just going out on an all-out spending spree in an effort to get this economy rolling. But when consumers in particular do not really like to spend, what happens is you are throwing a lot of good money after bad and that money really does not stick where it is supposed to be. Consumers like to downsize in the current environment, if they were left up to their own they
would downsize in their homes, of course that means foreclosures and bankruptcies which our policymakers do not like so they throw a lot of money at the problem. Consumers do not want it and so the money goes where you have the greatest monetary sensitivity - that is gold, that is outside of the dollar into Australian dollar and other regions in the world, and we are just better at spending money than the rest of the world is and it is a trend that has been intensifying in recent years.
Chris Martenson: Well part of that trend is supported by being the world.s reserve currency that is an exorbitant privilege, perhaps one that has been abused lately. So in my perspective every single recession we have had to this point, de-leveraging has been part of that process. This time it seems like the fiscal authorities in Washington DC and the monetary authorities at the Fed, they seem bent on making sure that we do not de-leverage this time, what is driving that?
Axel Merk: Well if we allowed market forces to play out, we would have the adjustment that from a purist point of view would be the appropriate thing: that the folks that made wrong decisions would need to declare bankruptcy. The problem is many, many people made wrong decisions. Millions of homeowners are underwater in their mortgage, we would have a depression and that is something that our policymakers do not want. And now we have Ben Bernanke who says he is a student of the great depression and he thinks he has all the recipes on how to not redo all the mistakes that we have. Think about the types of things Bernanke has said including testifying in congress: he has said going off the gold standard during the great depression helped the US recover faster from the great depression than other countries. Meaning if you debase your currency, you can get faster growth.
If I take away half your money as far a purchasing power is concerned, you have a greater incentive to work. He has said a weakened dollar is historically not inflationary, we disagree but that is his viewpoint. On top of that, he is buying government bonds. So when you buy government bonds, those securities are intentionally over-priced signaling to investors they should rather go overseas where there are less manipulated returns. So both in word and in action he wants to debase the dollar as one method to spur economic growth and he needs that because we want to have consumers that spend, and consumers that are underwater in their mortgage are not going to spend. Now businesses have been much healthier, they have gotten on their feet doing the right things much faster. But consumers want to de-leverage and we do not want them to de-leverage because we have seen in any other country in the world that has had a hosing bust, we have economic stagnation for many many years. Now we have the same thing but we are trying not to have it and are throwing a lot of money at the problem except that all these theories that Bernanke has unfortunately do not work quite as well in practice.
That is why we have inflation coming in, that is why we have the dollar weakening and the only response we get is .we.ll throw more money at the
problem. because it just cannot be the way that the market wants it to be. It has to be the way the federal government wants it to be.
Chris Martenson: I have been concerned that yes you are exactly right that Bernanke had a theory, a thesis developed at Princeton. A lot of intellectual thought went into it; I am not sure how much real world applicable practice went into it given his career track. But let.s assume he was right in his thesis, he had a good one. I am concerned that he is engaged in what I would call thesis drift where he came in and said ¡°Listen, if we just throw a whole bunch of money at this, it will pick itself up and carry on¡± and that has not worked. So the response was ¡°Well, let.s do QE2¡± and even there we can say this is questionable in terms of its actual response to the overall economy and it seems like he is ready, wiling, and able to do anything necessary to prove his thesis right where it might not be correct. It might be that the conditions in the 30.s were very different from the conditions today and all sorts of measures: being a net export nation, being a net creditor, being energy independent, etc and so forth. There are so many differences that it is almost impossible to catalog them all. Where do you think we are in terms of the Feds position right now? I know that you happen to have access to a former Fed official - if you can talk about that - and I am wondering if you have any insights for us as to what the Fed is up to and where they are going from here?
Axel Merk: The one thing I have learned over the years that our policymakers are quite predictable be that on the fiscal or on the monetary side and I do think that Bernanke is pretty much following his playbook. One of the things he has said is that one of the great mistakes during the great depression was to tighten too early, and as a result we deepened then the great depression or had the second leg downward and so he does not want to do that and he wants to err on the side of inflation. Right now, I have been arguing that the Fed can get away with murder. And what I mean by that is that because this money does not really stick anywhere. All this money printing . yes, it shows up in the excess reserves in the banking system but not all of it causes significant inflation. We see it in food and in energy but it takes a while for it to trickle through. The big concern I have is: let these policies work and we get substantial economic growth but what are we going to do then? If the Fed were indeed to mop all this liquidity, Bernanke has argued, he can raise interest rates in 15 minutes, where are we going to be then? The challenge is we have too much leverage in the economy, consumers are far more interest rate sensitive than they have been in the past and as a result we will plunge right back down. So in the best of cases we have a very volatile policy, and by the way before I talk about our own former Fed President who is our Senior Economic Advisor - contrast that with Europe where consumers stopped spending a decade ago. They were told a decade ago that there was not money for your pension; in the US they were told the same thing - except in the US they took out the credit card; in Europe, they stopped spending. And now the Europeans can raise rates and they do not derail their economic recovery just because rates are a little bit higher. We simply cannot raise rates like Volcker did in the early 80.s to contain inflation. If it needed to be, we would have a revolution if we were to raise rates to 20%, it simply does not work. Now you mentioned in house we do have Bill Poole as our Senior Economic Advisor. He is the former President of the St. Louis Federal Reserve. He is the one who voted against the emergency rate cut in January of 2008. He also was the one federal official who argued about bailing out Long Term Capital Management. He is now a senior fellow of the Cato Institute; he is very much a free market thinker. He is also a very pure monetary economist, he has obviously been around for some of the Greenspan policies but he has a very straightforward way of thinking and he makes for amazing discussions and in particular, what he is very valuable for us for, he helps us understand how the Federal Reserve is thinking, how the dynamics may play out. While he has an opinion on the dollar, he does not tell us what the dollar will do, but he helps us understand how central bankers are thinking. I think that is one way that we are a little different from other folks is while we criticize policies just as much as the others might do, we actually try to slip into their shoes sometimes and understand how they are thinking. Because ultimately it does not really matter what I think, it matters what the Fed thinks and what the Fed may do, and so as a result, I think it is very helpful to try to understand their thinking and how these dynamics may play out.
HERE ONLY EXTRACTS. OPEN THIS WEB SITE TO SEE THE REST:
http://futurefastforward.com/images/stories/featurearticles/AxelMerkWhyIsAnyoneWaitingToSellTheDollar.pdf
By Matthias Chang
Saturday, 23 April 2011
http://futurefastforward.com/feature-articles/5374-by-matthias-chang
Get out of all dollar assets NOW!
Dump any dollar holdings NOW!
I cannot say for sure that the DIVE will happen tomorrow, or the next few days or
in the next week, but the dollar is going to create a big hole in your pocket if
you are still hanging to dollar.
In my email Red Alert way, way back in November of 2010, I had warned that the
final phase of the Global Financial Tsunami would rear its ugly head at the
earliest, at the end of the first quarter of 2011.
I did not say at the latest – repeat at the “earliest”.
While the tsunami has not hit the “financial shores” as yet, the force swirling deep
beneath the waves is gathering momentum.
When it finally hits us, the pictures you saw of the recent Japanese tsunami will
be tame in comparison. This is because the financial tsunami will be more
destructive, more severe than the first financial tsunami in 2008.
For the reasons in support of this Red Alert, please read all my previous postings
in 2010, as I have no wish to repeat myself or to justify my findings.
Do your own research, if you doubt this Red Alert.
========================
Why Is Anyone Still Waiting To Sell The Dollar? -
By Chris Martenson (25/4/11)
http://futurefastforward.com/images/stories/featurearticles/AxelMerkWhyIsAnyoneWaitingToSellTheDollar.pdf
By Chris Martenson - Financialsense
The Fed faces destroying the dollar or ushering in a new Depression
The Fed faces destroying the dollar or ushering in a new Depression
By the time the Fed realizes the damage it has created, it will be quite late to undo this it and it is going to be very, very expensive and painful to address
Below is the transcript for Axel Merk: Why Is Anyone Still Waiting to Sell the Dollar? [1]
Chris Martenson: Today we are speaking to Axel Merk, president, chief investment officer and founder of Merk Investments. Axel is a noted expert on world currencies and manages several mutual funds that manage currency risks for investors. For years he has been an outspoken critic of US monetary policy, warning investors that the current course risks seriously devaluating the dollar. The past few years have proven his warnings to be accurate. He is also the author of Sustainable Wealth, a very readable guide to understanding our macro economic environment, the risks today.s investors face, and how they can mange their finances to achieve financial stability - very important in today.s world. Axel, thanks so much for making the time to join us today.
Axel Merk: Hi, good to be with you Chris.
Chris Martenson: Let us jump right into, it, the US dollar is trading at its lowest level since the carnage in 2008 and there are many voices, yours and mine included warning it could go a lot lower. So if you could recap for our listener.s right here and now how we got here and what is your outlook for the dollar?
Axel Merk: Well the dollar has really been on a very, very long term decline for decades and sometimes it puzzles me when people say ¡°Oh, I will sell the dollar and get out of it if and when it does come down¡±. I do not know what they are waiting for. And that trend has obviously had some ups and downs and has been accelerating in recent years. In recent times, we have had this major challenge that we are trying to grow at just about any cost, whereas our consumers they would like to really have a break. And it is not just now after the financial crisis, after the tech bubble burst after 9/11, we decided to keep America rolling and what happened was that we were just going out on an all-out spending spree in an effort to get this economy rolling. But when consumers in particular do not really like to spend, what happens is you are throwing a lot of good money after bad and that money really does not stick where it is supposed to be. Consumers like to downsize in the current environment, if they were left up to their own they
would downsize in their homes, of course that means foreclosures and bankruptcies which our policymakers do not like so they throw a lot of money at the problem. Consumers do not want it and so the money goes where you have the greatest monetary sensitivity - that is gold, that is outside of the dollar into Australian dollar and other regions in the world, and we are just better at spending money than the rest of the world is and it is a trend that has been intensifying in recent years.
Chris Martenson: Well part of that trend is supported by being the world.s reserve currency that is an exorbitant privilege, perhaps one that has been abused lately. So in my perspective every single recession we have had to this point, de-leveraging has been part of that process. This time it seems like the fiscal authorities in Washington DC and the monetary authorities at the Fed, they seem bent on making sure that we do not de-leverage this time, what is driving that?
Axel Merk: Well if we allowed market forces to play out, we would have the adjustment that from a purist point of view would be the appropriate thing: that the folks that made wrong decisions would need to declare bankruptcy. The problem is many, many people made wrong decisions. Millions of homeowners are underwater in their mortgage, we would have a depression and that is something that our policymakers do not want. And now we have Ben Bernanke who says he is a student of the great depression and he thinks he has all the recipes on how to not redo all the mistakes that we have. Think about the types of things Bernanke has said including testifying in congress: he has said going off the gold standard during the great depression helped the US recover faster from the great depression than other countries. Meaning if you debase your currency, you can get faster growth.
If I take away half your money as far a purchasing power is concerned, you have a greater incentive to work. He has said a weakened dollar is historically not inflationary, we disagree but that is his viewpoint. On top of that, he is buying government bonds. So when you buy government bonds, those securities are intentionally over-priced signaling to investors they should rather go overseas where there are less manipulated returns. So both in word and in action he wants to debase the dollar as one method to spur economic growth and he needs that because we want to have consumers that spend, and consumers that are underwater in their mortgage are not going to spend. Now businesses have been much healthier, they have gotten on their feet doing the right things much faster. But consumers want to de-leverage and we do not want them to de-leverage because we have seen in any other country in the world that has had a hosing bust, we have economic stagnation for many many years. Now we have the same thing but we are trying not to have it and are throwing a lot of money at the problem except that all these theories that Bernanke has unfortunately do not work quite as well in practice.
That is why we have inflation coming in, that is why we have the dollar weakening and the only response we get is .we.ll throw more money at the
problem. because it just cannot be the way that the market wants it to be. It has to be the way the federal government wants it to be.
Chris Martenson: I have been concerned that yes you are exactly right that Bernanke had a theory, a thesis developed at Princeton. A lot of intellectual thought went into it; I am not sure how much real world applicable practice went into it given his career track. But let.s assume he was right in his thesis, he had a good one. I am concerned that he is engaged in what I would call thesis drift where he came in and said ¡°Listen, if we just throw a whole bunch of money at this, it will pick itself up and carry on¡± and that has not worked. So the response was ¡°Well, let.s do QE2¡± and even there we can say this is questionable in terms of its actual response to the overall economy and it seems like he is ready, wiling, and able to do anything necessary to prove his thesis right where it might not be correct. It might be that the conditions in the 30.s were very different from the conditions today and all sorts of measures: being a net export nation, being a net creditor, being energy independent, etc and so forth. There are so many differences that it is almost impossible to catalog them all. Where do you think we are in terms of the Feds position right now? I know that you happen to have access to a former Fed official - if you can talk about that - and I am wondering if you have any insights for us as to what the Fed is up to and where they are going from here?
Axel Merk: The one thing I have learned over the years that our policymakers are quite predictable be that on the fiscal or on the monetary side and I do think that Bernanke is pretty much following his playbook. One of the things he has said is that one of the great mistakes during the great depression was to tighten too early, and as a result we deepened then the great depression or had the second leg downward and so he does not want to do that and he wants to err on the side of inflation. Right now, I have been arguing that the Fed can get away with murder. And what I mean by that is that because this money does not really stick anywhere. All this money printing . yes, it shows up in the excess reserves in the banking system but not all of it causes significant inflation. We see it in food and in energy but it takes a while for it to trickle through. The big concern I have is: let these policies work and we get substantial economic growth but what are we going to do then? If the Fed were indeed to mop all this liquidity, Bernanke has argued, he can raise interest rates in 15 minutes, where are we going to be then? The challenge is we have too much leverage in the economy, consumers are far more interest rate sensitive than they have been in the past and as a result we will plunge right back down. So in the best of cases we have a very volatile policy, and by the way before I talk about our own former Fed President who is our Senior Economic Advisor - contrast that with Europe where consumers stopped spending a decade ago. They were told a decade ago that there was not money for your pension; in the US they were told the same thing - except in the US they took out the credit card; in Europe, they stopped spending. And now the Europeans can raise rates and they do not derail their economic recovery just because rates are a little bit higher. We simply cannot raise rates like Volcker did in the early 80.s to contain inflation. If it needed to be, we would have a revolution if we were to raise rates to 20%, it simply does not work. Now you mentioned in house we do have Bill Poole as our Senior Economic Advisor. He is the former President of the St. Louis Federal Reserve. He is the one who voted against the emergency rate cut in January of 2008. He also was the one federal official who argued about bailing out Long Term Capital Management. He is now a senior fellow of the Cato Institute; he is very much a free market thinker. He is also a very pure monetary economist, he has obviously been around for some of the Greenspan policies but he has a very straightforward way of thinking and he makes for amazing discussions and in particular, what he is very valuable for us for, he helps us understand how the Federal Reserve is thinking, how the dynamics may play out. While he has an opinion on the dollar, he does not tell us what the dollar will do, but he helps us understand how central bankers are thinking. I think that is one way that we are a little different from other folks is while we criticize policies just as much as the others might do, we actually try to slip into their shoes sometimes and understand how they are thinking. Because ultimately it does not really matter what I think, it matters what the Fed thinks and what the Fed may do, and so as a result, I think it is very helpful to try to understand their thinking and how these dynamics may play out.
HERE ONLY EXTRACTS. OPEN THIS WEB SITE TO SEE THE REST:
http://futurefastforward.com/images/stories/featurearticles/AxelMerkWhyIsAnyoneWaitingToSellTheDollar.pdf
THE US ECONOMY AL BORDE DEL PRECIPICIO
Hudson and Wolff on the new class warriors
a good video to watch on the US Economy
http://richardbrenneman.wordpress.com/2011/04/24/hudson-and-wolff-on-the-new-class-warriors/
also in:
10 Million Foreclosures Matter
April 24, 2011
By Michael Hudson
http://michael-hudson.com/2011/04/10-million-foreclosures-matter/
READ THIS ARTICLE SUGGESTING THAT A NEW QE COULD COME:
IF QE3 COMES THE LATINO AMERICAN ECONOMIES WILL BE HIT AGAIN
Bernanke Strikes Again; QE2 sends margin debt soaring to new highs
By Mike Whitney , april 21. [[EXTRACTS]]
http://www.informationclearinghouse.info/article27939.htm
April 21, 2011 "Information Clearing House" -- -Interest rates are the Fed's main tool for implementing policy, but when interest rates are already at zero and activity is still weak, then the Fed may try other unconventional strategies to rev up the economy. Quantitative Easing (QE) is one such strategy. In practice, it works like this; the Fed purchases some type of financial asset (stocks, bonds, mortgage-backed securities) which adds to the money supply thereby creating (in effect) negative interest rates. The Fed believes that this "monetary easing" can stimulate the economy.
The Fed is currently in the process of purchasing $600 billion in US Treasuries from the big banks while at the same time recycling the proceeds of $300 billion from maturing mortgage-backed securities (that the Fed already has on its balance sheet) into reserves at the banks. This may sound complicated, but it's really not. In essence, the Fed is reducing the supply of financial assets and, thus, pushing more liquidity into riskier assets, like stocks. As a result, the S&P 500 and the Dow Jones Industrials have climbed roughly 11 and 12 percent respectively since the program began.
So, is the Fed mainly responsible for the recent uptick in stock prices?
In large part, yes. Here's how Nomura's global macro strategist Bob Janjuah puts it:
"I strongly believe QE2 added over 250 points to the S&P based on where it closed the year....We think QE1 and QE2 have failed the real economy in the US at the expense of pushing up asset prices in financial markets. (eg house prices vs. stocks) Most American families own a home, but most Americans do not own a meaningful amount of stocks. Bernanke’s solution seems to rely on the US public buying into another round of bubble blowing and on the idea of trickledown economics.
...We think QE3 will be both unavoidable and a grave policy mistake in the hard landing outcome. We think it (QE3) is unavoidable because under this outcome, where we expect a significant slowdown in global growth in H2, driven by an EM (Emerging Market) slowdown and an end to the global super-cycle in manufacturing, it is the only "stimulative‟ policy option left, and Bernanke and Obama both seem fixated with stimulus, at any cost it seems….("Bob Janjuah – told you so America", Ft Alphaville)
So, Janjuah lays out the basic case against QE2, which is, that while it pushes stock and commodities prices up, it provides very little relief for underlying economy. In other words, Bernanke is just blowing bubbles instead of addressing the fundamental lack of demand.
QE has been the most controversial policy in the Fed's history, and for good reason. The policy is seen as a direct intervention into the markets. Bernanke denies this, but at the same time, he boasts that QE2 has raised stock prices and strengthened the recovery. So, which is it; either the Fed is meddling in the markets or it is not?
Also, Bernanke continues to say that the economy is close to a "self sustaining recovery". But if that's true then why are interest rates still below the rate of inflation (which provides a subsidy to the banks for borrowing from the Fed), and why has the Fed announced that it will not end QE2 on schedule (at the end of June) but will continue to recycle funds from maturing bonds into the purchase of more Treasuries? Here's the scoop from Bloomberg:
"Federal Reserve Chairman Ben S. Bernanke may keep reinvesting maturing debt into Treasuries to maintain record stimulus even after making good on a pledge to complete $600 billion in bond purchases by the end of June.
The Fed chief’s top two lieutenants said this month the economy and inflation are too weak to warrant the start of a monetary-policy reversal. Investors and economists including David Kelly at JPMorgan Funds see that as a signal the Fed will keep its balance sheet at current levels by replacing about $17 billion a month in maturing mortgage debt with Treasuries.
Ending the reinvestment policy and the $600 billion program at the same time would be like quitting stimulus “cold turkey,” said Kelly, who is based in New York and helps oversee $400 billion as chief market strategist at JPMorgan." ("Bernanke May Sustain Stimulus to Avoid ‘Cold Turkey’ End to Aid", Bloomberg)
This shocking policy reversal by the Fed suggests that the economy is still so weak, that the ventilator and feeding-tubes must remain in place to forestall another disaster.
a good video to watch on the US Economy
http://richardbrenneman.wordpress.com/2011/04/24/hudson-and-wolff-on-the-new-class-warriors/
also in:
10 Million Foreclosures Matter
April 24, 2011
By Michael Hudson
http://michael-hudson.com/2011/04/10-million-foreclosures-matter/
READ THIS ARTICLE SUGGESTING THAT A NEW QE COULD COME:
IF QE3 COMES THE LATINO AMERICAN ECONOMIES WILL BE HIT AGAIN
Bernanke Strikes Again; QE2 sends margin debt soaring to new highs
By Mike Whitney , april 21. [[EXTRACTS]]
http://www.informationclearinghouse.info/article27939.htm
April 21, 2011 "Information Clearing House" -- -Interest rates are the Fed's main tool for implementing policy, but when interest rates are already at zero and activity is still weak, then the Fed may try other unconventional strategies to rev up the economy. Quantitative Easing (QE) is one such strategy. In practice, it works like this; the Fed purchases some type of financial asset (stocks, bonds, mortgage-backed securities) which adds to the money supply thereby creating (in effect) negative interest rates. The Fed believes that this "monetary easing" can stimulate the economy.
The Fed is currently in the process of purchasing $600 billion in US Treasuries from the big banks while at the same time recycling the proceeds of $300 billion from maturing mortgage-backed securities (that the Fed already has on its balance sheet) into reserves at the banks. This may sound complicated, but it's really not. In essence, the Fed is reducing the supply of financial assets and, thus, pushing more liquidity into riskier assets, like stocks. As a result, the S&P 500 and the Dow Jones Industrials have climbed roughly 11 and 12 percent respectively since the program began.
So, is the Fed mainly responsible for the recent uptick in stock prices?
In large part, yes. Here's how Nomura's global macro strategist Bob Janjuah puts it:
"I strongly believe QE2 added over 250 points to the S&P based on where it closed the year....We think QE1 and QE2 have failed the real economy in the US at the expense of pushing up asset prices in financial markets. (eg house prices vs. stocks) Most American families own a home, but most Americans do not own a meaningful amount of stocks. Bernanke’s solution seems to rely on the US public buying into another round of bubble blowing and on the idea of trickledown economics.
...We think QE3 will be both unavoidable and a grave policy mistake in the hard landing outcome. We think it (QE3) is unavoidable because under this outcome, where we expect a significant slowdown in global growth in H2, driven by an EM (Emerging Market) slowdown and an end to the global super-cycle in manufacturing, it is the only "stimulative‟ policy option left, and Bernanke and Obama both seem fixated with stimulus, at any cost it seems….("Bob Janjuah – told you so America", Ft Alphaville)
So, Janjuah lays out the basic case against QE2, which is, that while it pushes stock and commodities prices up, it provides very little relief for underlying economy. In other words, Bernanke is just blowing bubbles instead of addressing the fundamental lack of demand.
QE has been the most controversial policy in the Fed's history, and for good reason. The policy is seen as a direct intervention into the markets. Bernanke denies this, but at the same time, he boasts that QE2 has raised stock prices and strengthened the recovery. So, which is it; either the Fed is meddling in the markets or it is not?
Also, Bernanke continues to say that the economy is close to a "self sustaining recovery". But if that's true then why are interest rates still below the rate of inflation (which provides a subsidy to the banks for borrowing from the Fed), and why has the Fed announced that it will not end QE2 on schedule (at the end of June) but will continue to recycle funds from maturing bonds into the purchase of more Treasuries? Here's the scoop from Bloomberg:
"Federal Reserve Chairman Ben S. Bernanke may keep reinvesting maturing debt into Treasuries to maintain record stimulus even after making good on a pledge to complete $600 billion in bond purchases by the end of June.
The Fed chief’s top two lieutenants said this month the economy and inflation are too weak to warrant the start of a monetary-policy reversal. Investors and economists including David Kelly at JPMorgan Funds see that as a signal the Fed will keep its balance sheet at current levels by replacing about $17 billion a month in maturing mortgage debt with Treasuries.
Ending the reinvestment policy and the $600 billion program at the same time would be like quitting stimulus “cold turkey,” said Kelly, who is based in New York and helps oversee $400 billion as chief market strategist at JPMorgan." ("Bernanke May Sustain Stimulus to Avoid ‘Cold Turkey’ End to Aid", Bloomberg)
This shocking policy reversal by the Fed suggests that the economy is still so weak, that the ventilator and feeding-tubes must remain in place to forestall another disaster.
lunes, 18 de abril de 2011
PERU AL BORDE DEL PRECIPICIO
PERU AL BORDE DEL PRECIPICIO
Hugo Adan. Abril 18, 2011
http://nd-hugoadan.blogspot.com/
I- INTRODUCCION
Recientes observaciones del panorama político-economico de Peru describen dos dilemas:
a. continuismo neoliberal vs. sacar los pies del modelo económico actual, y
b. fracaso de Garcia = fracaso del modelo crecimiento sin desarrollo vs. manipulacion oligárquica a favor del continuismo y la alianza Fujimori-PPK que se avecina.
Tales observaciones son correctas pero comparten una premisa erronea: “con viento a favor” es posible seguir reduciendo la pobreza que -según Mirko Lauer- cayo un 14% en 7 anios, cifra oficial que no concuerda con data reciente. Lo erroneo es hablar de “viento a favor” en un modelo ultra volátil -la crisis del 2009 lo indica asi- y lo cierto es que el “modelo peruano” pertenece a un sistema que esta al borde del precipicio, el modelo imperial americano.
Aquí subscribimos la tesis de que el continuismo económico se agoto en Peru como ya ocurrio en otros paises del sur. Las eleciones del 10 de abril lo indicaron asi en Peru y el ir contra esta corriente podría generar violencia politico-social. No seria la 1ra vez que Las aguas mansas del rio amazonas esconden la fuerza de su torrente interno.
NUBES NEGRAS en CIELO SERENO
Ya no se puede ocultar lo que se dice en el norte: que en el contexto internacional se avecina otro asalto a las economías del sur similar a la del 2009: el QE3. Y es que la deuda externa y la inflación en los EU aflije cada vez mas a la nacion y varios economistas (M Hudson, M Chang) indican que el Federal de EU estaria preparando otro QE quantitative easy (el QE3 = sunami de dollars para seguir transfiriendo la crisis del norte hacia el sur) lo que esta vez impulsaría la huida brusca del dollar como fuente de reserva y de intercambio mundial, lo acaba de indicar J Stiglitz. (http://futurefastforward.com/feature-articles/5330-by-russia-today). Esto provocaría otro otro shock financiero que agravaria caos mundial y del que solo los países del BRIC podrían salvarse si solidifican su base productiva y si articulan mejor sus alianzas. De forma que en lugar de “viento a favor” lo que tenemos son nubes oscuras que amenazan con otra tempestad o recaida de la crisis económica.
“YA ES HORA” DE ACABAR CON EL MODELO
En este contexto, el reciente no al continuismo en las elecciones de Peru indica que esta nación –con un tercio de poblacion analfabeta y otro tercio de subordinados a lo que la prensa corporativa les des-informe sobre realidad economica en el pais y el mundo, poblacion pobre que vive real des-empleo (con 2 o mas tiempos parciales) y que como eventuales les evaden pago de beneficios sociales y no les dejan tiempo que no sea reponer energias y seguir trabajando- aun asi esta nacion posee un sexto sentido político que le permite advertir peligros que acechan su futuro inmediato. En otras palabras: Hay actitud popular a favor del cambio y hay experiencias en el sur latino (como advierte H Campodonico en “YA ES HORA”) que podrían servir para dar luz al túnel y enfrentar el temporal. Lo que no hay es claridad sobre como derrotar el continuismo electoral. Se me ocurre que la alianza mas certera de Ollanta es con el pueblo al que hay que organizarlo y movilizarlo contra el fraude electoral que ya esta montado, lo explicare luego. Antes de entrar a este tema quiero que observen cifras economicas que indican el fracaso del modelo actual. Solo presento algunas tablas estadísticas de mi paper original. Vere como publicarlas en my web (http://nd-hugoadan.blogspot.com) bajo el titulo: Crecimiento sin desarrollo: el desastre económico que dejo Garcia en su 2do gobierno.
II- EL DESASTRE ECONOMICO QUE DEJA GARCIA
He aqui el nalysis comparativo realizado por Hugo Adan Zegarra en abril 14 del 2011 y basado en recientes fuentes de datos, entre ellas LABER y ECLAC. Se reproducen aqui 3 de las 6 tablas estadisticas del paper original. Este paper ademas contiene las 27 notas y las otras fuentes usadas para el analysis y puede ser solicitado a Hugo Adan: hueo@pitt.edu, previo pago de su envio.
Disculpen: esta copia no reproduce las tablas estadisticas originales en el paper, pero si las 3 tablas pertinentes que sumarize de LABER y mi respectivo comentario.
Table 1. GDP GROWTH, 2000-2011. (Percentage change)
PAIS 2006 2007 2008 2009 2010 2011
Peru 7.7 8.9 9.8 0.8 6.7 4.5
Chile 4.6 4.7 3.2 -1.8 4.3 6.0
Colombia 6.9 7.5 2.4 0.3 3.7 3.0
Venezuela 9.9 8.2 4.8 -2.3 -3.0 2.5
SOURCE: ECLAC, 2009-2010 Economic Survey of Latin America and the Caribbean
COMENTARIO: Peru heredo un porcentaje de crecimiento de 7.7 y Garcia nos deja con un % 4.5 (el indice del 2011 es una proyeccion antojadisa). Chile partio de 4.6 % y logra un crecimiento de 6.0%. Chile fue el que mejor quedo despues de la crisis del 2009.
Table 2. Exports, Imports and Current Account Balance, 2006-2009 (Millions of US dollars)
2006 2009
PAIS Exports Imports C/Account Exports Imports C/Account
Peru 26,490 18,241 2,854 30,538 25,776 247
Chile 66,510 44,362 7,154 62,242 49.335 4,217
Colombia 28,558 30,355 -2,983 38,217 38, 337 -5,146
Venezuela 66,782 38,503 27,149 59,600 48,064 8,561
SOURCE:: ECLAC, Economic Survey of Latin America and the Caribbean 2009-20101 Includes only those countries which have complete data for the four years. Exports and Imports Include both goods (FOB) and services
COMENTARIO: Garcia heredo una buena balanza commercial pero el mendigo de la silla de oro, termino en el suelo. Quien le robo la silla?. Garcia dira: pague la deuda externa y quede bien con mis amos. Que se recorte el gasto en servicios publicos a los peruanosl (salud, educacion, etc) o que se los privatize, es la orden. Habra que investigarlo (pedir que se les anule el secreto bancario), dada la explosion de corrupcion en palacio de gobierno.
Table 3. HUMAN DEVELOPMENT or SOCIAL ENVIRONMENT, 2010
Illiterate GDP p/c Income HDI Popul Urban
Pop % Grouth inequali world rank in unempl
Age 15+ 1990-07 Gini index 2007 poverty rate %
PAIS 1999-2007 2007 2007 2007 2008 2009
Peru 10.4 2.7 49.6 78 36.2 8.3
Chile 3.5 3.7 52.0 44 13.7-2006 9.8
Colombia 7.3 1.2 54.4 77 46.8-2005 13.0
Venezuela 4.8 -0.2 43.4 58 27.6 8.0
SOURCES: UNDP, Human Development Report 2009A; ECLAC, Statistical Yearbook for Latin America and the Caribbean 2009
Illiteracy: Data refer to national illiteracy estimates from censuses or surveys conducted between 1995 and 2007, unless otherwise specified.
GDP per capita (Purchasing Power Parity in $U.S.). 1 PPP dollar has the same purchasing power in the domestic economy as 1 U.S. dollar has in the U.S. economy
The Gini index measures inequality over the entire distribution of income or consumption. A value of 0 represents perfect equality, and a value of 100 perfect inequality
The Human Development Index (HDI) measures a country's achievements in three aspects of human development: longevity (life expectancy at birth), knowledge (combination of literacy rate, school enrollment and standard of living (GDP per capita - PPP in $U.S.).
Percent of urban population in poverty
COMMENTARIO: Esta tabla sobre desarrollo economico es la que mejor describe el desastre del regimen de Garcia.
1. Illiteracy: Tenemos el mas alto indice de analfabetismo en el sur (otro factor que explica la debacle educativa: con padres analfabetos el estudiante carece de apoyo familiar).
2. GDP p/c. El Producto Bruto interno -medido por la capacidad de compra por persona y en dolares durante 17 anios (1990-2007)- nos coloca por debajo de Chile.
3. Income inequality: La cifra sobre desigualdad interna en terminos de ingreso y medida por el gini index (a mas alta cifra mayor desigualdad) no es desalentadora en relacion a Chile y Colombia, solo que los Gini index se construyen a partir de promedios nacionales en los que se mescla el super-ingreso de un rico con el misero salario de un informal. Si se comparasen los deciles altos con los bajos, la historia seria differente. De otro lado, si el indice de desigualdad se asocia con el de conflictividad politico-social (lo que esta fuente de datos no considera)la conclusion tambien seria diferente. Aqui se sugiere que los peruanos somos relativamente mas estables. Lo cierto es que hay mas conflictos socio-politicos en Peru que en Chile (asi lo indican otras fuentes) y ademas, cuando las rebeliones estallan en Peru se diria que son tan explosivas como las de Colombia.
4. El HDI: El indice de desarrollo humano (HDI) nos da el triste previlegio de ser los mas sub-desarrollados del grupo de 4 bajo la lupa. Esto indica que si hay crecimiento (circulacion y acumulacion de dinero en pocas manos) pero sin desarrollo humano (abajo doy mas detalles sobre este punto).
5. En cuanto a pobreza, un tercio de la poblacion total (36 personas de 100) vive en condiciones de pobreza (el concepto de pobreza y el criterio para medirla aun esta en debate, se assume que es pobre en el sur una familia de 3 miembros que gana menos de $3 dolares al dia.
6. Desempleo urbano. La fuente usada indica que tenemos solo el 8.3% de desempleo urbano y que estariamos mejor que Chile y Colombia, pero Peru tiene una poblacion rural mas grande que es donde mas desempleados y migrantes existen.Es possible que Peru tenga una burocracia estatal mas densa que otros paises, pero me temo que a veces algunas fuentes de datos de UK y US lo que hacen es manipular datos para otorgar credito a los paises clientes que mejor les sirven. Aun asi les es dificil mentir.
III- LA CAIDA ECONOMICA EN LA PARTE FINAL DEL 2010
En el 2010 ocurrio el otro milagro de Varguitas (similar al Uchurajay: el milagro de creerle su cuento de que fueron los campesinos y no los militares quienes asesinaron a los 8 periodistas, como sugirio Vargas, el Presidente de esa Comision de la Verdad. Tal milagro no duro mucho pues la Corte de Ayacucho le abrio juicio por haber mentido a la nacion. Admitio Vargas que mintio para salvar la democracia. El juicio continuo y tuvo que huir a Espana, nacionalizarse alli para evadir la ley peruana). Esta vez Vargas se sumo al concierto "milagro economico en el 2010", pero lo derivo hacia la politica y sugirio que lo inverso al milagro seria el suicidio si el pueblo elige a Ollanta. Y el pueblo eligio a Ollanta. Su “arte de mentir” no le funciono ni ayer (1990) ni hoy (abril 10, 2011).
En el 2010, la economia peruana se levanto como Lazaro del sepulcro, luego del criminal golpe financiero del 2009, pero solo por un rato, pues luego volvio a caer. Los economistas del imperio hablaron de "milagro" de por la recuperacion tan pronta de Peru. El Gbno hablo de 9% de crecimiento. Sorprendente! dijeron los milagreros, no ocurrio eso en pais latino alguno ni en ningun pais del mundo afectado por el QE2 del imperio. El cadaver tiene color de rosa, ESTA VIVO! dijo Varguitas, pero hay que evitar que se suicide, que es lo que pasaria si Ollanta llega al poder, sugirio. Sin duda, su amor por la democracia oligarquica lleva aun signos que mesclan terror y porno (necrofilico: intense amor por los muertos) que es como se incio como novelista. Una deficiencia mental que le impidio crear genero literario propio.
Quienes palidecieron con este “milagro” economico del 2010 fueron los banqueros. El Intelligence Unit de El Economist publico recientemente el articulo titulado “Peru banks creeping uncertainty” y alli se indica que en el 4to final del 2010 “el muerto siguio muriendo”. Leamos:
“Banks stumbled in the fourth quarter of 2010, muting what was otherwise a spectacular year. Year on year, quarterly profits for the sector were up by only about 6% in the fourth quarter, with the most visible local institutions—BCP and Interbank—missing market expectations. The stumble was not severe enough to impact the sector’s robust overall health, as return on equity (ROE) surpasses 20% at many lenders. It did, however, highlight concerns over the possibility that the government’s efforts to tackle inflation and combat “hot money” inflows could impact the banking sector’s bottom line”.
Los ataques cardiacos que sufre el modelo economico indica que estamos muy cerca de su deceso. De otro lado, no hubo base para el crecimiento del 9% como indicaron figurines del Gbno de Garcia, este solo fue del 6% y ni modo de tomarlo para la proyeccion del 2011. Lo peor, con la caida del 4to final del 2010, quedo amenazada la posibilidad de combatir la inflation y de enfrentar el atentado financiero imperial y su sunami de dolares -“hot money” le llaman aqui- lo que mina las bases del sistema bancario peruano. Por supuesto los Brits del Economist no hablan de QE2 ni del QE3 que se avecina, son socios de EU en el crimen financiero organizado por los banqueros de arriba y por esto bondadosos con el Gbno corrupto de Garcia. Si se les levanta “el secreto bancario” se sabria cuantos se enriquecieron con la debacle del 2009, y cuantos altos funcionarios del Estado irian a la carcel. "En el dolor hermanos", diria entonces Garcia, ademas de todos los corruptos del Ministerio de Economia y Fiananzas y los del Banca Central.
“Since June 2010, Peru’s central bank has raised reserve requirements six times—the latest 25-basis-point hike takes effect on March 1st—both for counter-cyclical reasons and to slow the appreciation of the nuevo sol against the US dollar”.
Cubrir con bandages la cuchillada imperial ... Vaya trabajo el de los economistas de Estado, covertidos en enfermeritas o curanderas de un sistema ya absoleto.
“The Economist Intelligence Unit expects the central bank to continue to tighten its monetary stance, boosting its policy rate to 4% by the year-end”, indico esta fuente en marzo del 2011.
El articulo concluye con un grafico que indica no solo la volatidad del modelo economico sino tambien la performance del regimen de Garcia en estos cinco anios de desgobierno.
COMENTARIO AL GRAFICO.
Los bancos de Peru empezaron con balances positivos de apx 15% el 2006, es lo que heredo Garcia, y terminaron el 2010 en lo mismo. En tiempo de vacas gordas, el 2007 y 2008, hubo evasión de impuestos por “windfall profits” empezando por los grandes mineros del oro. On top, el 2009, la minera USA Doerun de Cerro de Pasco decidio corromper al gobierno y chantajear la nación (y a los mineros con cerrar la empresa) si la Banca nacional no les daba un bailout o salvataje dada la crisis del 2009, esa crisis que su país de origen transfirió a Peru. La banca y la oligarquía de Peru en el Gbno peruana son unia y mugre, eso también tiene que cambiar. Si llueve, que sea para todos y que todas las plantas crezcan y si hay tormenta, cerrar la carpa y proteger a todos.
IV- LO QUE HAY QUE CAMBIAR: EL CRECIMIENTO SIN DESARRLLO EN PERU
El problema central del Peru es el crecimiento sin desarrollo y es porque esta realidad ha ingresado y se gravado en la conciencia nacional que estamos frente a la posible ruptura frontal de un mito, el mito de que el crecimiento precede al desarrollo. Tal mito es una falsedad, lo advirtieron varios economistas y hoy Peru es contundente evidencia al respecto. Tenemos altos niveles de crecimiento y estamos en vísperas de una explosión social. Empecemos por la ruptura del mito.
Crecimiento vs. desarrollo.
Para que el crecimiento genere desarrollo se requiere que este vaya asociado por lo menos a 7 variables, lo dicen muchos economistas:
a. Desarrollo agro-industrial sostenible (basado en tecnologia de punta que permitan valor agregado y competitividad dentro del mercado interno, regiónal y mundial). El mercado interno (poder adquisitivo y consumo) ha decrecido en Peru. La industria y el agro-nacional han sido destruidos. Cifras oficiales no pueden ocultarlo la composicion y déficit en la balanza comercial lo prueban. El boom del oro y la exportación de otras materias primas no benefician a la nación ni a las regiones de donde se las extraen. El costo de este crecimiento sin desarrollo lo pagaraon lideres ambientalistas y religiosos que denunciaron abusos de grandes corporaciones , varios lideres de base fueron asesinados y hay religiosos expulsados del país por apoyar la protesta ciudadana. Esto viene desde los tiempos de Fujimori y se agravo con Garcia en el poder.
b. Full empleo. La cifra oficial encubre el desempleo real. La mayoría de los peruanos vive de dos o mas empleos parciales y temporales que evaden el pago de beneficios sociales y quiebran a la familia (la desatención a la educación de los hijos es factor clave en la debacle del sistema educativo). Los derechos laborales del trabajador a tiempo completo han sido vilmente atropellados. El informal es perseguido, no el especulador de la bolsa de Lima. La evasión de impuestos en toda transacion financiera es considerada legal dentro de un modelo que sirve al truhán especulador.
c. Equidad en la distribución del ingreso. Lo que hay es explosiva concentración del ingreso en pocas manos. A mayor concentración del ingreso, mayores los índices de delincuencia e inseguridad publica, lo indicaron varios analistas. Enfrentar al ejercito contra la policía o a ambos contra los pobres del país dejo de ser funcional desde el terrorismo Estatal en Bagua (june 2009). Carlos Ordonez Velasquez, mayor general de la FAP indico que es la corrupción y los crímenes de Garcia lo que agravo la inequidad en la distribución del ingreo y lo que origino el fracaso del APRA como opción política.
d. Eficiencia en la cobertura de servicios públicos básicos como salud, educación, techo, sanidad publica y servicios de electricidad y telefonía. La educacion y la salud están en ruinas; la vivienda y el servicio de agua, desague, electricidad, teléfono y gas son cada vez mas caros. Los índices de desarrollo humano del Peru en toda la región y a nivel mundial esta entre los peores.
e. Re-negociacion de la deuda externa. La mayor deuda de Peru es con los EU. Cuando EU presta a Peru lo que en verdad hace es vendernos su deuda sin los beneficios que si da a otros países con similar ubicación stretegica en terminos geo-politicos (Israel entre otros). A los especuladores del norte les basta con corromper a funcionarios de la Banca Nacional, manipular la paridad con el dolar y los términos de intercambio para seguir cobrando tributos. Peru tiene que producir y ganar su ingreso en moneda local y luego cambiar estos ingresos a dólares para conseguir mas dólares, pagar la deuda, y pagar la importación de bienes que se requieren del extranjero. La urgente renegociacion de la deuda es un punto que hay que agregar al “YA ES HORA” de Campodonico, sobre todo ahora con la invasión de los QE que no vienen para inversión productiva sino para especulación y compra a precio de banana todo lo que los vende-patria quieran regalarles.
f. Reduccion de la disparidades regionales internas. La única razón a favor del centralismo político es que ello permite un fondo de equalizacion de las disparidades internas. Real decentralizacion no existe en Peru y el centralismo solo ha servido para el saqueo interno de los recursos regionales desde Lima. La sierra ha sido abandonada y la selva saqueada de la forma desvergonzada (PPK regalo parte de la selva como swap por deuda). El campesino ha sido desposeído y luego desciudanizado cuando migro a Lima o las ciudades de costa. Al nativo de la selva Garcia tuvo el atrevimiento de decirles que no son ciudadanos ni de 1ra ni 2da clase, y que por tanto sus tierras pueden ser expropiadas y sus aguas envenenadas con mercurio u otros deslaves además de los derrames en la exploración de petróleo y gas. Este es un modelo de crecimiento sin desarrollo que “YA ES HORA” debe acabarlo.
g. Seguridad publica. La miseria que crea el modelo y los explosivos indices de desigualdad son las mayores causas de la delincuencia y el crimen organizado. Este tipo de violencia anarquica no ha llegado aun a Peru de la forma como existe en Mejico o Colombia (y ahora a centro America) pero pronto podria ocurrir si no se solucionan los problemas anteriores y/o no se destina a gasto social un porcentje equivalente al doble de lo que se destina al pago de la deuda externa. De lo contrario vamos a gastar en mas policias y mas militares para proteger bancos y las residencies de los ricos y el circulo vicioso de la deuda devendra imparable. Ya hubo voces de altos mandos de las FFAA en contra de Garcia por querer enfrentarlos contra la nacion o contra la misma policia. Si de verdad queremos evitar este conflicto y reducir el gasto militar y policial, empecemos por re-negociar la deuda externa, transferir los millones de dolares del enriquecimiento ilicito al tesoro publico y sancionar a corruptores y corruptos del pais como se hizo con Fujimori. Recordemos que la violencia social es un negocio para el norte, no es su solucion. [23]
CONCLUSION
El crecimiento sin desarrollo ha empeorado la situación socio-economica de las mayorías nacionales. El modelo neoliberal ha fracasado en el Peru. De allí el anti-sistema expresado en el voto por Ollanta. Demasiado ha ido al bolsillo de los ricos y mucha pena y rabia se ha acumulado en los pobres. El estallido social es inevitable si se asalta la voluntad popular con el sistema electoral pro-fraude que existe en Peru.
V- EL SISTEMA ELECTORAL PERUANO FAVORECE EL FRAUDE
Las cifras en estudios sobre actitudes políticas de los peruanos han variado. Lo que las mayorías no aceptan es el modelo neoliberal por corrupto y corruptor. Es un modelo destinado a favorecer a los mas hábiles en tal arte. El elector peruano no lo acepta porque hay una reserva de decencia humana en ellos. Y son mayoría nacional si se suma los votos anti-sistema pro-ollanta, el ausentismo y el voto en blanco. Esta es la reserva social que podria ser movilizada luego del asalto de la derecha-unida contra la voluntad popular.
El sistema electoral peruano es absoleto porque viabiliza el fraude.
Es fraudulenta toda actitud electoral que mina, vulnera o ataca directamente el ejercicio de la voluntad popular. Esta ley electoral facilita el asalto a la voluntad popular (el voto mayoritario) lo que es reemplazada por conciliábulos secretos y corruptas negociaciones en el reparto del poder entre jerarcas de los “partidos” derrotados en 1ra vuelta. En los EU se cuestiona severamente estos partos montunos en Estados llamados “swing” y se exige que la diferencia rebase el 3% para aclamar al vencedor en la contienda electoral. De lo contrario se exige la revisión total de los votos emitidos. Esto es lo mas avanzado en lo que muchos consideran la democracia mas corrupta del universo. Ambos sectores de opinión coinciden en que el 3% en la diferencia electoral entre los dos partidos despeja dudas sobre fraude y otros atentados contra voluntad popular. La oligarquia no permite esto en Peru.
Las diferencia entre Ollanta Humala y Keiko Fujimori (quien defendió la impunidad y hoy quiere sacar de la cárcel a su padre quien cometio crímenes de lesa humanidad) sobrepasa el 3%. Al 95% de votos computados por la ONPE la diferencia entre Ollanta y Keiko era del 8%. Por decencia humana y ética política esta dama debiera retirarse de la contienda pero la ley electoral peruana le permite asaltar el poder en contubernio con otros grupos oligárquicos.
Detrás de esta alianza no solo se oculta el afán de vulnerar la ley penal y liberar al reo en prisión, esto es, favorecer la impunidad. Se oculta PPK, el martillero de Wall Street, el mismo que regalo parte de la selva peruana al imperio y facilito los abusos de las trasnacionales contra poblaciones peruanas expropiadas de sus tierras y aguas. Este ya anuncio su alianza con la dama Fujimori al rechazar todo conversado con Ollanta. Se trata de un asalto abierto al poder por parte de la oligarquía mas cavernaria, vende-patria y corrupta del país.
Este sistema electoral no es democrático, es lo contrario, un sistema diseñado para facilitar atentados contra la voluntad popular y para el fraude electrónico. Basta indicar que los mismos personajes que facilitaron el fraude anterior -denunciado por el vocero del Partido de derecha que lidero Lourdes Flores en las elecciones del 2006- sigue aun a cargo del proceso electoral en esta 2da vuelta. Es evidente la posibilidad de fraude electoral en Peru.
TABLAS ESTADISTICAS
NOTES
SOURCES and BIBLIOGRAPHY
===========================
LO QUE VIENE ES NOTA INCOMPLETA, NO ENVIADA A PERU. ALGO QUE SE QUEDO EN EL TINTERO
VI – FRAUDE A LA VISTA
Por 1ra vez en 2 decadas de crecimiento sin desarrollo la oligarquía tuvo el descaro de presentar como candidato al economista y millonario de Wall Street, Pedro Pablo Kucsynski Goddard, quien fuera autor y actor directo del modelo neoliberal que se implemento durante dos decadas en Peru, modelo que definitivamente ha fracasado. No hemos logrado recuperar las cifras de desarrollo que se lograron durante el regimen de Velasco Alvarado. Los recursos del pais han sido vendidos a precio de banana, el agro y la industria estan en ruinas. Seguimos exportando materias primas sin valor agregado, expropiando tierras de peruanos, polucionando sus aguas y rios, y lo peor, destruyendo la selva amazonica -el pulmon del mundo- a un ritmo imprecedente. Aun mas, es evidente que no estamos preparados para resistir el saqueo financiero de los QE del imperio. Al contrario, se pretende facilitar ese ataque con la presencia de PPK en el poder. Este sujeto ha sido derrotado en la 1ra vuelta de estas elecciones pero ahora esta detras de Keiko Fujimori. Sin duda PPK confundio Peru con EU y aun cree que aquí el dinero decide en política.
La oligarquía peruana se saco la mascara y se revelo una vez mas como vende-patria al presentar a PPK como candidato. Esta martillero de Wall Street en Peru acaba de rechazar todo intento de dialogo con Ollanta (lo que es un rechazo a la nación peruana pues -quiera o no- Ollanta representa la voluntad popular en este momento) lo que significa que apoya la candidatura de Keiko Fujimori para la 2da vuelta. Para PPK, Peru es un estado ya anexado a los EU y de hecho lo es -en términos económicos- pero no lo es en terminos políticos.
Los inversores de EU en la "democracia" de Peru intentaron anteriormente imponer a su candidato en las elecciones de 1990, con Vargas Llosa, a quien forraron de dolares. Les salio el tiro por la culata, la memoria colectiva estaba muy fresca para que se olvide que Vargas Llosa fue complice de los crímenes de lesa humanidad cometidos en Uchurajay, donde 8 periodistas fueron asesinados por las FFAA. Vargas Llosa, el Pdte de la Comision de la Verdad, acuso a las victimas, a los campesinos de tal masacre. La Corte de Ayacucho le abrió juicio y Vargas admitió que había mentido para salvar la democracia en Peru. Huyo del país y se nacionalizo español para eludir la justicia peruana. Aun sigue queriendo salvar la democracia y habría querido que PPK sea Pdte del Peru.
Esta vez invirtieron en 3 candidatos (PPK, Toledo y Keiko), pero otra vez les salio el tiro por la culata. Los millones de dólares que invirtieron en PPK, el favorito de las grandes corporaciones del norte, no sirvieron para comprar ni la 5ta parte del voto nacional, mientras que Ollanta gano las elecciones y sin los dólares del norte logro mas del 8% de diferencia en relación a su mas próximo contendor, la dama Keiko Fujimori. Como le duele a Vargas la derrota del martillero de Wall Street, Mr PPK, y por cierto seguirá mintiendo para favorecer la unión de toda la oligarquía a favor de Keiko para la 2da vuelta. Se tapara las narices para ahacerlo -como dijo anteriormente la oligarquia cuando apoyo el fraude electoral de Garcia contra Ollanta.
Pero el país ha cambiado, jamas fue tan fuerte el antimperialismo en Peru. Lo revelan asi los levantamientos populares en Piura y Cajamarca, en Tacna y Arequipa, en la selva peruna -caso Bagua- y nuevamente en Arequipa. El pueblo esta dispuesto al combate y al menor asomo de fraude estalla la rebelion. De forma que aun si la oligarquia con Keiko y PPK ganan en 2da vuelta (tienen el Jurado electoral consigo y los millones de dolares que les viene del norte), el país tampoco será el mismo. Habra reacción y no solo contra el modelo económico absoleto, la oligarquia y sus figurines politicos, también contra la impunidad.
Hugo Adan. Abril 18, 2011
http://nd-hugoadan.blogspot.com/
I- INTRODUCCION
Recientes observaciones del panorama político-economico de Peru describen dos dilemas:
a. continuismo neoliberal vs. sacar los pies del modelo económico actual, y
b. fracaso de Garcia = fracaso del modelo crecimiento sin desarrollo vs. manipulacion oligárquica a favor del continuismo y la alianza Fujimori-PPK que se avecina.
Tales observaciones son correctas pero comparten una premisa erronea: “con viento a favor” es posible seguir reduciendo la pobreza que -según Mirko Lauer- cayo un 14% en 7 anios, cifra oficial que no concuerda con data reciente. Lo erroneo es hablar de “viento a favor” en un modelo ultra volátil -la crisis del 2009 lo indica asi- y lo cierto es que el “modelo peruano” pertenece a un sistema que esta al borde del precipicio, el modelo imperial americano.
Aquí subscribimos la tesis de que el continuismo económico se agoto en Peru como ya ocurrio en otros paises del sur. Las eleciones del 10 de abril lo indicaron asi en Peru y el ir contra esta corriente podría generar violencia politico-social. No seria la 1ra vez que Las aguas mansas del rio amazonas esconden la fuerza de su torrente interno.
NUBES NEGRAS en CIELO SERENO
Ya no se puede ocultar lo que se dice en el norte: que en el contexto internacional se avecina otro asalto a las economías del sur similar a la del 2009: el QE3. Y es que la deuda externa y la inflación en los EU aflije cada vez mas a la nacion y varios economistas (M Hudson, M Chang) indican que el Federal de EU estaria preparando otro QE quantitative easy (el QE3 = sunami de dollars para seguir transfiriendo la crisis del norte hacia el sur) lo que esta vez impulsaría la huida brusca del dollar como fuente de reserva y de intercambio mundial, lo acaba de indicar J Stiglitz. (http://futurefastforward.com/feature-articles/5330-by-russia-today). Esto provocaría otro otro shock financiero que agravaria caos mundial y del que solo los países del BRIC podrían salvarse si solidifican su base productiva y si articulan mejor sus alianzas. De forma que en lugar de “viento a favor” lo que tenemos son nubes oscuras que amenazan con otra tempestad o recaida de la crisis económica.
“YA ES HORA” DE ACABAR CON EL MODELO
En este contexto, el reciente no al continuismo en las elecciones de Peru indica que esta nación –con un tercio de poblacion analfabeta y otro tercio de subordinados a lo que la prensa corporativa les des-informe sobre realidad economica en el pais y el mundo, poblacion pobre que vive real des-empleo (con 2 o mas tiempos parciales) y que como eventuales les evaden pago de beneficios sociales y no les dejan tiempo que no sea reponer energias y seguir trabajando- aun asi esta nacion posee un sexto sentido político que le permite advertir peligros que acechan su futuro inmediato. En otras palabras: Hay actitud popular a favor del cambio y hay experiencias en el sur latino (como advierte H Campodonico en “YA ES HORA”) que podrían servir para dar luz al túnel y enfrentar el temporal. Lo que no hay es claridad sobre como derrotar el continuismo electoral. Se me ocurre que la alianza mas certera de Ollanta es con el pueblo al que hay que organizarlo y movilizarlo contra el fraude electoral que ya esta montado, lo explicare luego. Antes de entrar a este tema quiero que observen cifras economicas que indican el fracaso del modelo actual. Solo presento algunas tablas estadísticas de mi paper original. Vere como publicarlas en my web (http://nd-hugoadan.blogspot.com) bajo el titulo: Crecimiento sin desarrollo: el desastre económico que dejo Garcia en su 2do gobierno.
II- EL DESASTRE ECONOMICO QUE DEJA GARCIA
He aqui el nalysis comparativo realizado por Hugo Adan Zegarra en abril 14 del 2011 y basado en recientes fuentes de datos, entre ellas LABER y ECLAC. Se reproducen aqui 3 de las 6 tablas estadisticas del paper original. Este paper ademas contiene las 27 notas y las otras fuentes usadas para el analysis y puede ser solicitado a Hugo Adan: hueo@pitt.edu, previo pago de su envio.
Disculpen: esta copia no reproduce las tablas estadisticas originales en el paper, pero si las 3 tablas pertinentes que sumarize de LABER y mi respectivo comentario.
Table 1. GDP GROWTH, 2000-2011. (Percentage change)
PAIS 2006 2007 2008 2009 2010 2011
Peru 7.7 8.9 9.8 0.8 6.7 4.5
Chile 4.6 4.7 3.2 -1.8 4.3 6.0
Colombia 6.9 7.5 2.4 0.3 3.7 3.0
Venezuela 9.9 8.2 4.8 -2.3 -3.0 2.5
SOURCE: ECLAC, 2009-2010 Economic Survey of Latin America and the Caribbean
COMENTARIO: Peru heredo un porcentaje de crecimiento de 7.7 y Garcia nos deja con un % 4.5 (el indice del 2011 es una proyeccion antojadisa). Chile partio de 4.6 % y logra un crecimiento de 6.0%. Chile fue el que mejor quedo despues de la crisis del 2009.
Table 2. Exports, Imports and Current Account Balance, 2006-2009 (Millions of US dollars)
2006 2009
PAIS Exports Imports C/Account Exports Imports C/Account
Peru 26,490 18,241 2,854 30,538 25,776 247
Chile 66,510 44,362 7,154 62,242 49.335 4,217
Colombia 28,558 30,355 -2,983 38,217 38, 337 -5,146
Venezuela 66,782 38,503 27,149 59,600 48,064 8,561
SOURCE:: ECLAC, Economic Survey of Latin America and the Caribbean 2009-20101 Includes only those countries which have complete data for the four years. Exports and Imports Include both goods (FOB) and services
COMENTARIO: Garcia heredo una buena balanza commercial pero el mendigo de la silla de oro, termino en el suelo. Quien le robo la silla?. Garcia dira: pague la deuda externa y quede bien con mis amos. Que se recorte el gasto en servicios publicos a los peruanosl (salud, educacion, etc) o que se los privatize, es la orden. Habra que investigarlo (pedir que se les anule el secreto bancario), dada la explosion de corrupcion en palacio de gobierno.
Table 3. HUMAN DEVELOPMENT or SOCIAL ENVIRONMENT, 2010
Illiterate GDP p/c Income HDI Popul Urban
Pop % Grouth inequali world rank in unempl
Age 15+ 1990-07 Gini index 2007 poverty rate %
PAIS 1999-2007 2007 2007 2007 2008 2009
Peru 10.4 2.7 49.6 78 36.2 8.3
Chile 3.5 3.7 52.0 44 13.7-2006 9.8
Colombia 7.3 1.2 54.4 77 46.8-2005 13.0
Venezuela 4.8 -0.2 43.4 58 27.6 8.0
SOURCES: UNDP, Human Development Report 2009A; ECLAC, Statistical Yearbook for Latin America and the Caribbean 2009
Illiteracy: Data refer to national illiteracy estimates from censuses or surveys conducted between 1995 and 2007, unless otherwise specified.
GDP per capita (Purchasing Power Parity in $U.S.). 1 PPP dollar has the same purchasing power in the domestic economy as 1 U.S. dollar has in the U.S. economy
The Gini index measures inequality over the entire distribution of income or consumption. A value of 0 represents perfect equality, and a value of 100 perfect inequality
The Human Development Index (HDI) measures a country's achievements in three aspects of human development: longevity (life expectancy at birth), knowledge (combination of literacy rate, school enrollment and standard of living (GDP per capita - PPP in $U.S.).
Percent of urban population in poverty
COMMENTARIO: Esta tabla sobre desarrollo economico es la que mejor describe el desastre del regimen de Garcia.
1. Illiteracy: Tenemos el mas alto indice de analfabetismo en el sur (otro factor que explica la debacle educativa: con padres analfabetos el estudiante carece de apoyo familiar).
2. GDP p/c. El Producto Bruto interno -medido por la capacidad de compra por persona y en dolares durante 17 anios (1990-2007)- nos coloca por debajo de Chile.
3. Income inequality: La cifra sobre desigualdad interna en terminos de ingreso y medida por el gini index (a mas alta cifra mayor desigualdad) no es desalentadora en relacion a Chile y Colombia, solo que los Gini index se construyen a partir de promedios nacionales en los que se mescla el super-ingreso de un rico con el misero salario de un informal. Si se comparasen los deciles altos con los bajos, la historia seria differente. De otro lado, si el indice de desigualdad se asocia con el de conflictividad politico-social (lo que esta fuente de datos no considera)la conclusion tambien seria diferente. Aqui se sugiere que los peruanos somos relativamente mas estables. Lo cierto es que hay mas conflictos socio-politicos en Peru que en Chile (asi lo indican otras fuentes) y ademas, cuando las rebeliones estallan en Peru se diria que son tan explosivas como las de Colombia.
4. El HDI: El indice de desarrollo humano (HDI) nos da el triste previlegio de ser los mas sub-desarrollados del grupo de 4 bajo la lupa. Esto indica que si hay crecimiento (circulacion y acumulacion de dinero en pocas manos) pero sin desarrollo humano (abajo doy mas detalles sobre este punto).
5. En cuanto a pobreza, un tercio de la poblacion total (36 personas de 100) vive en condiciones de pobreza (el concepto de pobreza y el criterio para medirla aun esta en debate, se assume que es pobre en el sur una familia de 3 miembros que gana menos de $3 dolares al dia.
6. Desempleo urbano. La fuente usada indica que tenemos solo el 8.3% de desempleo urbano y que estariamos mejor que Chile y Colombia, pero Peru tiene una poblacion rural mas grande que es donde mas desempleados y migrantes existen.Es possible que Peru tenga una burocracia estatal mas densa que otros paises, pero me temo que a veces algunas fuentes de datos de UK y US lo que hacen es manipular datos para otorgar credito a los paises clientes que mejor les sirven. Aun asi les es dificil mentir.
III- LA CAIDA ECONOMICA EN LA PARTE FINAL DEL 2010
En el 2010 ocurrio el otro milagro de Varguitas (similar al Uchurajay: el milagro de creerle su cuento de que fueron los campesinos y no los militares quienes asesinaron a los 8 periodistas, como sugirio Vargas, el Presidente de esa Comision de la Verdad. Tal milagro no duro mucho pues la Corte de Ayacucho le abrio juicio por haber mentido a la nacion. Admitio Vargas que mintio para salvar la democracia. El juicio continuo y tuvo que huir a Espana, nacionalizarse alli para evadir la ley peruana). Esta vez Vargas se sumo al concierto "milagro economico en el 2010", pero lo derivo hacia la politica y sugirio que lo inverso al milagro seria el suicidio si el pueblo elige a Ollanta. Y el pueblo eligio a Ollanta. Su “arte de mentir” no le funciono ni ayer (1990) ni hoy (abril 10, 2011).
En el 2010, la economia peruana se levanto como Lazaro del sepulcro, luego del criminal golpe financiero del 2009, pero solo por un rato, pues luego volvio a caer. Los economistas del imperio hablaron de "milagro" de por la recuperacion tan pronta de Peru. El Gbno hablo de 9% de crecimiento. Sorprendente! dijeron los milagreros, no ocurrio eso en pais latino alguno ni en ningun pais del mundo afectado por el QE2 del imperio. El cadaver tiene color de rosa, ESTA VIVO! dijo Varguitas, pero hay que evitar que se suicide, que es lo que pasaria si Ollanta llega al poder, sugirio. Sin duda, su amor por la democracia oligarquica lleva aun signos que mesclan terror y porno (necrofilico: intense amor por los muertos) que es como se incio como novelista. Una deficiencia mental que le impidio crear genero literario propio.
Quienes palidecieron con este “milagro” economico del 2010 fueron los banqueros. El Intelligence Unit de El Economist publico recientemente el articulo titulado “Peru banks creeping uncertainty” y alli se indica que en el 4to final del 2010 “el muerto siguio muriendo”. Leamos:
“Banks stumbled in the fourth quarter of 2010, muting what was otherwise a spectacular year. Year on year, quarterly profits for the sector were up by only about 6% in the fourth quarter, with the most visible local institutions—BCP and Interbank—missing market expectations. The stumble was not severe enough to impact the sector’s robust overall health, as return on equity (ROE) surpasses 20% at many lenders. It did, however, highlight concerns over the possibility that the government’s efforts to tackle inflation and combat “hot money” inflows could impact the banking sector’s bottom line”.
Los ataques cardiacos que sufre el modelo economico indica que estamos muy cerca de su deceso. De otro lado, no hubo base para el crecimiento del 9% como indicaron figurines del Gbno de Garcia, este solo fue del 6% y ni modo de tomarlo para la proyeccion del 2011. Lo peor, con la caida del 4to final del 2010, quedo amenazada la posibilidad de combatir la inflation y de enfrentar el atentado financiero imperial y su sunami de dolares -“hot money” le llaman aqui- lo que mina las bases del sistema bancario peruano. Por supuesto los Brits del Economist no hablan de QE2 ni del QE3 que se avecina, son socios de EU en el crimen financiero organizado por los banqueros de arriba y por esto bondadosos con el Gbno corrupto de Garcia. Si se les levanta “el secreto bancario” se sabria cuantos se enriquecieron con la debacle del 2009, y cuantos altos funcionarios del Estado irian a la carcel. "En el dolor hermanos", diria entonces Garcia, ademas de todos los corruptos del Ministerio de Economia y Fiananzas y los del Banca Central.
“Since June 2010, Peru’s central bank has raised reserve requirements six times—the latest 25-basis-point hike takes effect on March 1st—both for counter-cyclical reasons and to slow the appreciation of the nuevo sol against the US dollar”.
Cubrir con bandages la cuchillada imperial ... Vaya trabajo el de los economistas de Estado, covertidos en enfermeritas o curanderas de un sistema ya absoleto.
“The Economist Intelligence Unit expects the central bank to continue to tighten its monetary stance, boosting its policy rate to 4% by the year-end”, indico esta fuente en marzo del 2011.
El articulo concluye con un grafico que indica no solo la volatidad del modelo economico sino tambien la performance del regimen de Garcia en estos cinco anios de desgobierno.
COMENTARIO AL GRAFICO.
Los bancos de Peru empezaron con balances positivos de apx 15% el 2006, es lo que heredo Garcia, y terminaron el 2010 en lo mismo. En tiempo de vacas gordas, el 2007 y 2008, hubo evasión de impuestos por “windfall profits” empezando por los grandes mineros del oro. On top, el 2009, la minera USA Doerun de Cerro de Pasco decidio corromper al gobierno y chantajear la nación (y a los mineros con cerrar la empresa) si la Banca nacional no les daba un bailout o salvataje dada la crisis del 2009, esa crisis que su país de origen transfirió a Peru. La banca y la oligarquía de Peru en el Gbno peruana son unia y mugre, eso también tiene que cambiar. Si llueve, que sea para todos y que todas las plantas crezcan y si hay tormenta, cerrar la carpa y proteger a todos.
IV- LO QUE HAY QUE CAMBIAR: EL CRECIMIENTO SIN DESARRLLO EN PERU
El problema central del Peru es el crecimiento sin desarrollo y es porque esta realidad ha ingresado y se gravado en la conciencia nacional que estamos frente a la posible ruptura frontal de un mito, el mito de que el crecimiento precede al desarrollo. Tal mito es una falsedad, lo advirtieron varios economistas y hoy Peru es contundente evidencia al respecto. Tenemos altos niveles de crecimiento y estamos en vísperas de una explosión social. Empecemos por la ruptura del mito.
Crecimiento vs. desarrollo.
Para que el crecimiento genere desarrollo se requiere que este vaya asociado por lo menos a 7 variables, lo dicen muchos economistas:
a. Desarrollo agro-industrial sostenible (basado en tecnologia de punta que permitan valor agregado y competitividad dentro del mercado interno, regiónal y mundial). El mercado interno (poder adquisitivo y consumo) ha decrecido en Peru. La industria y el agro-nacional han sido destruidos. Cifras oficiales no pueden ocultarlo la composicion y déficit en la balanza comercial lo prueban. El boom del oro y la exportación de otras materias primas no benefician a la nación ni a las regiones de donde se las extraen. El costo de este crecimiento sin desarrollo lo pagaraon lideres ambientalistas y religiosos que denunciaron abusos de grandes corporaciones , varios lideres de base fueron asesinados y hay religiosos expulsados del país por apoyar la protesta ciudadana. Esto viene desde los tiempos de Fujimori y se agravo con Garcia en el poder.
b. Full empleo. La cifra oficial encubre el desempleo real. La mayoría de los peruanos vive de dos o mas empleos parciales y temporales que evaden el pago de beneficios sociales y quiebran a la familia (la desatención a la educación de los hijos es factor clave en la debacle del sistema educativo). Los derechos laborales del trabajador a tiempo completo han sido vilmente atropellados. El informal es perseguido, no el especulador de la bolsa de Lima. La evasión de impuestos en toda transacion financiera es considerada legal dentro de un modelo que sirve al truhán especulador.
c. Equidad en la distribución del ingreso. Lo que hay es explosiva concentración del ingreso en pocas manos. A mayor concentración del ingreso, mayores los índices de delincuencia e inseguridad publica, lo indicaron varios analistas. Enfrentar al ejercito contra la policía o a ambos contra los pobres del país dejo de ser funcional desde el terrorismo Estatal en Bagua (june 2009). Carlos Ordonez Velasquez, mayor general de la FAP indico que es la corrupción y los crímenes de Garcia lo que agravo la inequidad en la distribución del ingreo y lo que origino el fracaso del APRA como opción política.
d. Eficiencia en la cobertura de servicios públicos básicos como salud, educación, techo, sanidad publica y servicios de electricidad y telefonía. La educacion y la salud están en ruinas; la vivienda y el servicio de agua, desague, electricidad, teléfono y gas son cada vez mas caros. Los índices de desarrollo humano del Peru en toda la región y a nivel mundial esta entre los peores.
e. Re-negociacion de la deuda externa. La mayor deuda de Peru es con los EU. Cuando EU presta a Peru lo que en verdad hace es vendernos su deuda sin los beneficios que si da a otros países con similar ubicación stretegica en terminos geo-politicos (Israel entre otros). A los especuladores del norte les basta con corromper a funcionarios de la Banca Nacional, manipular la paridad con el dolar y los términos de intercambio para seguir cobrando tributos. Peru tiene que producir y ganar su ingreso en moneda local y luego cambiar estos ingresos a dólares para conseguir mas dólares, pagar la deuda, y pagar la importación de bienes que se requieren del extranjero. La urgente renegociacion de la deuda es un punto que hay que agregar al “YA ES HORA” de Campodonico, sobre todo ahora con la invasión de los QE que no vienen para inversión productiva sino para especulación y compra a precio de banana todo lo que los vende-patria quieran regalarles.
f. Reduccion de la disparidades regionales internas. La única razón a favor del centralismo político es que ello permite un fondo de equalizacion de las disparidades internas. Real decentralizacion no existe en Peru y el centralismo solo ha servido para el saqueo interno de los recursos regionales desde Lima. La sierra ha sido abandonada y la selva saqueada de la forma desvergonzada (PPK regalo parte de la selva como swap por deuda). El campesino ha sido desposeído y luego desciudanizado cuando migro a Lima o las ciudades de costa. Al nativo de la selva Garcia tuvo el atrevimiento de decirles que no son ciudadanos ni de 1ra ni 2da clase, y que por tanto sus tierras pueden ser expropiadas y sus aguas envenenadas con mercurio u otros deslaves además de los derrames en la exploración de petróleo y gas. Este es un modelo de crecimiento sin desarrollo que “YA ES HORA” debe acabarlo.
g. Seguridad publica. La miseria que crea el modelo y los explosivos indices de desigualdad son las mayores causas de la delincuencia y el crimen organizado. Este tipo de violencia anarquica no ha llegado aun a Peru de la forma como existe en Mejico o Colombia (y ahora a centro America) pero pronto podria ocurrir si no se solucionan los problemas anteriores y/o no se destina a gasto social un porcentje equivalente al doble de lo que se destina al pago de la deuda externa. De lo contrario vamos a gastar en mas policias y mas militares para proteger bancos y las residencies de los ricos y el circulo vicioso de la deuda devendra imparable. Ya hubo voces de altos mandos de las FFAA en contra de Garcia por querer enfrentarlos contra la nacion o contra la misma policia. Si de verdad queremos evitar este conflicto y reducir el gasto militar y policial, empecemos por re-negociar la deuda externa, transferir los millones de dolares del enriquecimiento ilicito al tesoro publico y sancionar a corruptores y corruptos del pais como se hizo con Fujimori. Recordemos que la violencia social es un negocio para el norte, no es su solucion. [23]
CONCLUSION
El crecimiento sin desarrollo ha empeorado la situación socio-economica de las mayorías nacionales. El modelo neoliberal ha fracasado en el Peru. De allí el anti-sistema expresado en el voto por Ollanta. Demasiado ha ido al bolsillo de los ricos y mucha pena y rabia se ha acumulado en los pobres. El estallido social es inevitable si se asalta la voluntad popular con el sistema electoral pro-fraude que existe en Peru.
V- EL SISTEMA ELECTORAL PERUANO FAVORECE EL FRAUDE
Las cifras en estudios sobre actitudes políticas de los peruanos han variado. Lo que las mayorías no aceptan es el modelo neoliberal por corrupto y corruptor. Es un modelo destinado a favorecer a los mas hábiles en tal arte. El elector peruano no lo acepta porque hay una reserva de decencia humana en ellos. Y son mayoría nacional si se suma los votos anti-sistema pro-ollanta, el ausentismo y el voto en blanco. Esta es la reserva social que podria ser movilizada luego del asalto de la derecha-unida contra la voluntad popular.
El sistema electoral peruano es absoleto porque viabiliza el fraude.
Es fraudulenta toda actitud electoral que mina, vulnera o ataca directamente el ejercicio de la voluntad popular. Esta ley electoral facilita el asalto a la voluntad popular (el voto mayoritario) lo que es reemplazada por conciliábulos secretos y corruptas negociaciones en el reparto del poder entre jerarcas de los “partidos” derrotados en 1ra vuelta. En los EU se cuestiona severamente estos partos montunos en Estados llamados “swing” y se exige que la diferencia rebase el 3% para aclamar al vencedor en la contienda electoral. De lo contrario se exige la revisión total de los votos emitidos. Esto es lo mas avanzado en lo que muchos consideran la democracia mas corrupta del universo. Ambos sectores de opinión coinciden en que el 3% en la diferencia electoral entre los dos partidos despeja dudas sobre fraude y otros atentados contra voluntad popular. La oligarquia no permite esto en Peru.
Las diferencia entre Ollanta Humala y Keiko Fujimori (quien defendió la impunidad y hoy quiere sacar de la cárcel a su padre quien cometio crímenes de lesa humanidad) sobrepasa el 3%. Al 95% de votos computados por la ONPE la diferencia entre Ollanta y Keiko era del 8%. Por decencia humana y ética política esta dama debiera retirarse de la contienda pero la ley electoral peruana le permite asaltar el poder en contubernio con otros grupos oligárquicos.
Detrás de esta alianza no solo se oculta el afán de vulnerar la ley penal y liberar al reo en prisión, esto es, favorecer la impunidad. Se oculta PPK, el martillero de Wall Street, el mismo que regalo parte de la selva peruana al imperio y facilito los abusos de las trasnacionales contra poblaciones peruanas expropiadas de sus tierras y aguas. Este ya anuncio su alianza con la dama Fujimori al rechazar todo conversado con Ollanta. Se trata de un asalto abierto al poder por parte de la oligarquía mas cavernaria, vende-patria y corrupta del país.
Este sistema electoral no es democrático, es lo contrario, un sistema diseñado para facilitar atentados contra la voluntad popular y para el fraude electrónico. Basta indicar que los mismos personajes que facilitaron el fraude anterior -denunciado por el vocero del Partido de derecha que lidero Lourdes Flores en las elecciones del 2006- sigue aun a cargo del proceso electoral en esta 2da vuelta. Es evidente la posibilidad de fraude electoral en Peru.
TABLAS ESTADISTICAS
NOTES
SOURCES and BIBLIOGRAPHY
===========================
LO QUE VIENE ES NOTA INCOMPLETA, NO ENVIADA A PERU. ALGO QUE SE QUEDO EN EL TINTERO
VI – FRAUDE A LA VISTA
Por 1ra vez en 2 decadas de crecimiento sin desarrollo la oligarquía tuvo el descaro de presentar como candidato al economista y millonario de Wall Street, Pedro Pablo Kucsynski Goddard, quien fuera autor y actor directo del modelo neoliberal que se implemento durante dos decadas en Peru, modelo que definitivamente ha fracasado. No hemos logrado recuperar las cifras de desarrollo que se lograron durante el regimen de Velasco Alvarado. Los recursos del pais han sido vendidos a precio de banana, el agro y la industria estan en ruinas. Seguimos exportando materias primas sin valor agregado, expropiando tierras de peruanos, polucionando sus aguas y rios, y lo peor, destruyendo la selva amazonica -el pulmon del mundo- a un ritmo imprecedente. Aun mas, es evidente que no estamos preparados para resistir el saqueo financiero de los QE del imperio. Al contrario, se pretende facilitar ese ataque con la presencia de PPK en el poder. Este sujeto ha sido derrotado en la 1ra vuelta de estas elecciones pero ahora esta detras de Keiko Fujimori. Sin duda PPK confundio Peru con EU y aun cree que aquí el dinero decide en política.
La oligarquía peruana se saco la mascara y se revelo una vez mas como vende-patria al presentar a PPK como candidato. Esta martillero de Wall Street en Peru acaba de rechazar todo intento de dialogo con Ollanta (lo que es un rechazo a la nación peruana pues -quiera o no- Ollanta representa la voluntad popular en este momento) lo que significa que apoya la candidatura de Keiko Fujimori para la 2da vuelta. Para PPK, Peru es un estado ya anexado a los EU y de hecho lo es -en términos económicos- pero no lo es en terminos políticos.
Los inversores de EU en la "democracia" de Peru intentaron anteriormente imponer a su candidato en las elecciones de 1990, con Vargas Llosa, a quien forraron de dolares. Les salio el tiro por la culata, la memoria colectiva estaba muy fresca para que se olvide que Vargas Llosa fue complice de los crímenes de lesa humanidad cometidos en Uchurajay, donde 8 periodistas fueron asesinados por las FFAA. Vargas Llosa, el Pdte de la Comision de la Verdad, acuso a las victimas, a los campesinos de tal masacre. La Corte de Ayacucho le abrió juicio y Vargas admitió que había mentido para salvar la democracia en Peru. Huyo del país y se nacionalizo español para eludir la justicia peruana. Aun sigue queriendo salvar la democracia y habría querido que PPK sea Pdte del Peru.
Esta vez invirtieron en 3 candidatos (PPK, Toledo y Keiko), pero otra vez les salio el tiro por la culata. Los millones de dólares que invirtieron en PPK, el favorito de las grandes corporaciones del norte, no sirvieron para comprar ni la 5ta parte del voto nacional, mientras que Ollanta gano las elecciones y sin los dólares del norte logro mas del 8% de diferencia en relación a su mas próximo contendor, la dama Keiko Fujimori. Como le duele a Vargas la derrota del martillero de Wall Street, Mr PPK, y por cierto seguirá mintiendo para favorecer la unión de toda la oligarquía a favor de Keiko para la 2da vuelta. Se tapara las narices para ahacerlo -como dijo anteriormente la oligarquia cuando apoyo el fraude electoral de Garcia contra Ollanta.
Pero el país ha cambiado, jamas fue tan fuerte el antimperialismo en Peru. Lo revelan asi los levantamientos populares en Piura y Cajamarca, en Tacna y Arequipa, en la selva peruna -caso Bagua- y nuevamente en Arequipa. El pueblo esta dispuesto al combate y al menor asomo de fraude estalla la rebelion. De forma que aun si la oligarquia con Keiko y PPK ganan en 2da vuelta (tienen el Jurado electoral consigo y los millones de dolares que les viene del norte), el país tampoco será el mismo. Habra reacción y no solo contra el modelo económico absoleto, la oligarquia y sus figurines politicos, también contra la impunidad.
domingo, 17 de abril de 2011
WAR LOBBY WON $700 BILLION BUDGET BOOST WHEN COLLAPSE LOOMS
War Lobby Won $700 Billion Budget Boost, Wants MORE as Collapse Looms'
By RT - Interview with Chris Hedges
http://www.informationclearinghouse.info/article27909.htm
This year's planned military spending is $700 billion, while other areas including healthcare, education, and infrastructure are on the chopping block. The decision came after a long struggle between lawmakers and the Pentagon saying military cuts will threaten national security. Journalist Chris Hedges says the decision was made under severe pressure from some lobbying circles.
Posted April 16, 2011
By RT - Interview with Chris Hedges
http://www.informationclearinghouse.info/article27909.htm
This year's planned military spending is $700 billion, while other areas including healthcare, education, and infrastructure are on the chopping block. The decision came after a long struggle between lawmakers and the Pentagon saying military cuts will threaten national security. Journalist Chris Hedges says the decision was made under severe pressure from some lobbying circles.
Posted April 16, 2011
THE TRUTH ABOUT THE ECONOMY by Robert REICH
The Truth About The Economy
That Nobody In Washington Or On Wall Street Will Admit -
Robert Reich
Tuesday, 05 April 2011 09:18
http://futurefastforward.com/financial-analysis/5267-the-truth-about-the-economy-that-nobody-in-washington-or-on-wall-street-will-admit-by-robert-reich-5411
Why aren’t Americans being told the truth about the economy? We’re heading in the direction of a double dip – but you’d never know it if you listened to the upbeat messages coming out of Wall Street and Washington.
Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It’s weaker today on average than at the lowest point of the Great Recession.
The Reuters/University of Michigan survey shows a 10 point decline in March – the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board’s index of consumer confidence, just released, shows consumer confidence at a five-month low — and a large part is due to expectations of fewer jobs and lower wages in the months ahead.
Pessimistic consumers buy less. And fewer sales spells economic trouble ahead.
What about the 192,000 jobs added in February? (We’ll know more Friday about how many jobs were added in March.) It’s peanuts compared to what’s needed. Remember, 125,000 new jobs are necessary just to keep up with a growing number of Americans eligible for employment. And the nation has lost so many jobs over the last three years that even at a rate of 200,000 a month we wouldn’t get back to 6 percent unemployment until 2016.
But isn’t the economy growing again – by an estimated 2.5 to 2.9 percent this year? Yes, but that’s even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point in the so-called recovery we’d expect growth of 4 to 6 percent.
Consider that back in 1934, when it was emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent.
Add two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop. Hourly wages are falling because with unemployment so high, most people have no bargaining power and will take whatever they can get. Housing is dropping because of the ever-larger number of homes people have walked away from because they can’t pay their mortgages. But because homes the biggest asset most Americans own, as home prices drop most Americans feel even poorer.
There’s no possibility government will make up for the coming shortfall in consumer spending. To the contrary, government is worsening the situation. State and local governments are slashing their budgets by roughly $110 billion this year. The federal stimulus is ending, and the federal government will end up cutting some $30 billion from this year’s budget.
In other words: Watch out. We may avoid a double dip but the economy is slowing ominously, and the booster rockets are disappearing.
So why aren’t we getting the truth about the economy? For one thing, Wall Street is buoyant – and most financial news you hear comes from the Street. Wall Street profits soared to $426.5 billion last quarter, according to the Commerce Department. (That gain more than offset a drop in the profits of non-financial domestic companies.) Anyone who believes the Dodd-Frank financial reform bill put a stop to the Street’s creativity hasn’t been watching.
To the extent non-financial companies are doing well, they’re making most of their money abroad. Since 1992, for example, G.E.’s offshore profits have risen $92 billion, from $15 billion (which is one reason it pays no U.S. taxes). In fact, the only group that’s optimistic about the future are CEOs of big American companies. The Business Roundtable’s economic outlook index, which surveys 142 CEOs, is now at its highest point since it began in 2002.
Washington, meanwhile, doesn’t want to sound the economic alarm. The White House and most Democrats want Americans to believe the economy is on an upswing.
Republicans, for their part, worry that if they tell it like it is Americans will want government to do more rather than less. They’d rather not talk about jobs and wages, and put the focus instead on deficit reduction (or spread the lie that by reducing the deficit we’ll get more jobs and higher wages).
I’m sorry to have to deliver the bad news, but it’s better you know.
That Nobody In Washington Or On Wall Street Will Admit -
Robert Reich
Tuesday, 05 April 2011 09:18
http://futurefastforward.com/financial-analysis/5267-the-truth-about-the-economy-that-nobody-in-washington-or-on-wall-street-will-admit-by-robert-reich-5411
Why aren’t Americans being told the truth about the economy? We’re heading in the direction of a double dip – but you’d never know it if you listened to the upbeat messages coming out of Wall Street and Washington.
Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It’s weaker today on average than at the lowest point of the Great Recession.
The Reuters/University of Michigan survey shows a 10 point decline in March – the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board’s index of consumer confidence, just released, shows consumer confidence at a five-month low — and a large part is due to expectations of fewer jobs and lower wages in the months ahead.
Pessimistic consumers buy less. And fewer sales spells economic trouble ahead.
What about the 192,000 jobs added in February? (We’ll know more Friday about how many jobs were added in March.) It’s peanuts compared to what’s needed. Remember, 125,000 new jobs are necessary just to keep up with a growing number of Americans eligible for employment. And the nation has lost so many jobs over the last three years that even at a rate of 200,000 a month we wouldn’t get back to 6 percent unemployment until 2016.
But isn’t the economy growing again – by an estimated 2.5 to 2.9 percent this year? Yes, but that’s even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point in the so-called recovery we’d expect growth of 4 to 6 percent.
Consider that back in 1934, when it was emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent.
Add two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop. Hourly wages are falling because with unemployment so high, most people have no bargaining power and will take whatever they can get. Housing is dropping because of the ever-larger number of homes people have walked away from because they can’t pay their mortgages. But because homes the biggest asset most Americans own, as home prices drop most Americans feel even poorer.
There’s no possibility government will make up for the coming shortfall in consumer spending. To the contrary, government is worsening the situation. State and local governments are slashing their budgets by roughly $110 billion this year. The federal stimulus is ending, and the federal government will end up cutting some $30 billion from this year’s budget.
In other words: Watch out. We may avoid a double dip but the economy is slowing ominously, and the booster rockets are disappearing.
So why aren’t we getting the truth about the economy? For one thing, Wall Street is buoyant – and most financial news you hear comes from the Street. Wall Street profits soared to $426.5 billion last quarter, according to the Commerce Department. (That gain more than offset a drop in the profits of non-financial domestic companies.) Anyone who believes the Dodd-Frank financial reform bill put a stop to the Street’s creativity hasn’t been watching.
To the extent non-financial companies are doing well, they’re making most of their money abroad. Since 1992, for example, G.E.’s offshore profits have risen $92 billion, from $15 billion (which is one reason it pays no U.S. taxes). In fact, the only group that’s optimistic about the future are CEOs of big American companies. The Business Roundtable’s economic outlook index, which surveys 142 CEOs, is now at its highest point since it began in 2002.
Washington, meanwhile, doesn’t want to sound the economic alarm. The White House and most Democrats want Americans to believe the economy is on an upswing.
Republicans, for their part, worry that if they tell it like it is Americans will want government to do more rather than less. They’d rather not talk about jobs and wages, and put the focus instead on deficit reduction (or spread the lie that by reducing the deficit we’ll get more jobs and higher wages).
I’m sorry to have to deliver the bad news, but it’s better you know.
12 WARNING SIGNS OF US HYPERINFLATION
For those who missed
12 Warning Signs Of U.S. Hyperinflation -
By National Inflation Association (NIA) (28/3/11)
Monday, 28 March 2011
http://futurefastforward.com/images/stories/financial/12WarningSignsOfUSHyperinflation.pdf
In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015. Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.
Here are NIA's top 12 warning signs that hyperinflation is about to occur:
1) The Federal Reserve is Buying 70% of U.S. Treasuries. The Federal Reserve has been buying 70% of all new U.S. treasury debt. Up until this year, the U.S. has been successful at exporting most of its inflation to the rest of the world, which is hoarding huge amounts of U.S. dollar reserves due to the U.S. dollar's status as the world's reserve currency. In recent months, foreign central bank purchases of U.S. treasuries have declined from 50% down to 30%, and Federal Reserve purchases have increased from 10% up to 70%. This means U.S. government deficit spending is now directly leading to U.S. inflation that will destroy the standard of living for all Americans.
2) The Private Sector Has Stopped Purchasing U.S. Treasuries. The U.S. private sector was previously a buyer of 30% of U.S. government bonds sold. Today, the U.S. private sector has stopped buying U.S. treasuries and is dumping government debt. The Pimco Total Return Fund was recently the single largest private sector owner of U.S. government bonds, but has just reduced its U.S. treasury holdings down to zero. Although during the financial panic of 2008, investors purchased government bonds as a safe haven, during all future panics we believe precious metals will be the new safe haven.
3) China Moving Away from U.S. Dollar as Reserve Currency. The U.S. dollar became the world's reserve currency because it was backed by gold and the U.S. had the world's largest manufacturing base. Today, the U.S. dollar is no longer backed by gold and China has the world's largest manufacturing base. There is no reason for the world to continue to transact products and commodities in U.S. dollars, when most of everything the world consumes is now produced in China. China has been taking steps to position the yuan to be the world's new reserve currency.
The People's Bank of China stated earlier this month, in a story that went largely unreported by the mainstream media, that it would respond to overseas demand for the yuan to be used as a reserve currency and allow the yuan to flow back into China more easily. China hopes to allow all exporters and importers to settle their cross border transactions in yuan by the end of 2011, as part of their plan to increase the yuan's international role. NIA believes if China really wants to become the world's next superpower and see to it that the U.S. simultaneously becomes the world's next Zimbabwe, all China needs to do is use their $1.15 trillion in U.S. dollar reserves to accumulate gold and use that gold to back the yuan.
4) Japan to Begin Dumping U.S. Treasuries. Japan is the second largest holder of U.S. treasury securities with $885.9 billion in U.S. dollar reserves. Although China has reduced their U.S. treasury holdings for three straight months, Japan has increased their U.S. treasury holdings seven months in a row. Japan is the country that has been the most consistent at buying our debt for the past year, but that is about the change. Japan is likely going to have to spend $300 billion over the next year to rebuild parts of their country that were destroyed by the recent earthquake, tsunami, and nuclear disaster, and NIA believes their U.S. dollar reserves will be the most likely source of this funding. This will come at the worst possible time for the U.S., which needs Japan to increase their purchases of U.S. treasuries in order to fund our record budget deficits.
5) The Fed Funds Rate Remains Near Zero. The Federal Reserve has held the Fed Funds Rate at 0.00-0.25% since December 16th, 2008, a period of over 27 months. This is unprecedented and NIA believes the world is now flooded with excess liquidity of U.S. dollars.
When the nuclear reactors in Japan began overheating two weeks ago after their cooling systems failed due to a lack of electricity, TEPCO was forced to open relief valves to release radioactive steam into the air in order to avoid an explosion. The U.S. stock market is currently acting as a relief valve for all of the excess liquidity of U.S. dollars. The U.S. economy for all intents and purposes should currently be in a massive and extremely steep recession, but because of the Fed's money printing, stock prices are rising because people don't know what else to do with their dollars.
NIA believes gold, and especially silver, are much better hedges against inflation than U.S. equities, which is why for the past couple of years we have been predicting large declines in both the Dow/Gold and Gold/Silver ratios. These two ratios have been in free fall exactly like NIA projected.
The Dow/Gold ratio is the single most important chart all investors need to closely follow, but way too few actually do. The Dow Jones Industrial Average
(DJIA) itself is meaningless because it averages together the dollar based movements of 30 U.S. stocks. With just the DJIA, it is impossible to determine whether stocks are rising due to improving fundamentals and real growing investor demand, or if prices are rising simply because the money supply is expanding.
The Dow/Gold ratio illustrates the cyclical nature of the battle between paper assets like stocks and real hard assets like gold. The Dow/Gold ratio trends upward when an economy sees real economic growth and begins to trend downward when the growth phase ends and everybody becomes concerned about preserving wealth. With interest rates at 0%, the U.S. economy is on life support and wealth preservation is the focus of most investors. NIA believes the Dow/Gold ratio will decline to 1 before the hyperinflationary crisis is over and until the Dow/Gold ratio does decline to 1, investors should keep buying precious metals.
6) Year-Over-Year CPI Growth Has Increased 92% in Three Months. In November of 2010, the Bureau of Labor and Statistics (BLS)'s consumer price index (CPI) grew by 1.1% over November of 2009. In February of 2011, the BLS's CPI grew by 2.11% over February of 2010, above the Fed's informal inflation target of 1.5% to 2%. An increase in year-over-year CPI growth from 1.1% in November of last year to 2.11% in February of this year means that the CPI's growth rate increased by approximately 92% over a period of just three months. Imagine if the year-over-year CPI growth rate continues to increase by 92% every three months. In 9 to 12 months from now we could be looking at a price inflation rate of over 15%. Even if the BLS manages to artificially hold the CPI down around 5% or 6%, NIA believes the real rate of price inflation will still rise into the double-digits within the next year.
7) Mainstream Media Denying Fed's Target Passed. You would think that year-over-year CPI growth rising from 1.1% to 2.11% over a period of three months for an increase of 92% would generate a lot of media attention, especially considering that it has now surpassed the Fed's informal inflation target of 1.5% to 2%. Instead of acknowledging that inflation is beginning to spiral out of control and encouraging Americans to prepare for hyperinflation like NIA has been doing for years, the media decided to conveniently change the way it defines the Fed's informal target.
The media is now claiming that the Fed's informal inflation target of 1.5% to 2% is based off of year-over-year changes in the BLS's core-CPI figures. Core-CPI, as most of you already know, is a meaningless number that excludes food and energy prices. Its sole purpose is to be used to mislead the public in situations like this. We guarantee that if core-CPI had just surpassed 2% and the normal CPI was still below 2%, the media would be focusing on the normal CPI number, claiming that it remains below the Fed's target and therefore inflation is low and not a problem.
The fact of the matter is, food and energy are the two most important things Americans need to live and survive. If the BLS was going to exclude something from the CPI, you would think they would exclude goods that Americans don't consume on a daily basis. The BLS claims food and energy prices are excluded because they are most volatile. However, by excluding food and energy, core-CPI numbers are primarily driven by rents. Considering that we just came out of the largest Real Estate bubble in world history, there is a glut of homes available to rent on the market. NIA has been saying for years that being a landlord will be the worst business to be in during hyperinflation, because it will be impossible for landlords to increase rents at the same rate as overall price inflation. Food and energy prices will always increase at a much faster rate than rents.
8) Record U.S. Budget Deficit in February of $222.5 Billion. The U.S. government just reported a record budget deficit for the month of February of $222.5 billion. February's budget deficit was more than the entire fiscal year of 2007. In fact, February's deficit on an annualized basis was $2.67 trillion. NIA believes this is just a preview of future annual budget deficits, and we will see annual budget deficits surpass $2.67 trillion within the next several years.
9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1993 and it is higher than Bolivia's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985. The only way a country can survive with such a large deficit as a percentage of expenditures and not have hyperinflation, is if foreigners are lending enough money to pay for the bulk of their deficit spending. Hyperinflation broke out in Brazil and Bolivia when foreigners stopped lending and central banks began monetizing the bulk of their deficit spending, and that is exactly what is taking place today in the U.S.
10) Obama Lies About Foreign Policy. President Obama campaigned as an anti-war President who would get our troops out of Iraq. NIA believes that many Libertarian voters actually voted for Obama in 2008 over John McCain because they felt Obama was more likely to end our wars that are adding greatly to our budget deficits and making the U.S. a lot less safe as a result. Obama may have reduced troop levels in Iraq, but he increased troops levels in Afghanistan, and is now sending troops into Libya for no reason.
The U.S. is now beginning to occupy Libya, when Libya didn't do anything to the U.S. and they are no threat to the U.S. Obama has increased our overall overseas troop levels since becoming President and the U.S. is now spending $1 trillion annually on military expenses, which includes the costs to maintain over 700 military bases in 135 countries around the world. There is no way that we
can continue on with our overseas military presence without seeing hyperinflation.
11) Obama Changes Definition of Balanced Budget. In the White House's budget projections for the next 10 years, they don't project that the U.S. will ever come close to achieving a real balanced budget. In fact, after projecting declining budget deficits up until the year 2015 (NIA believes we are unlikely to see any major dip in our budget deficits due to rising interest payments on our national debt), the White House projects our budget deficits to begin increasing again up until the year 2021. Obama recently signed an executive order to create the "National Commission on Fiscal Responsibility and Reform", with a mission to "propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015". Obama is redefining a balanced budget to exclude interest payments on our national debt, because he knows interest payments are about to explode and it will be impossible to truly balance the budget.
12) U.S. Faces Largest Ever Interest Payment Increases. With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields. Not only that, but within the next couple of years, NIA believes the Federal Reserve will be forced to raise the Fed Funds Rate in a last-ditch effort to prevent hyperinflation. When both short and long-term interest rates start to rise, so will the interest payments on our national debt. With the public portion of our national debt now exceeding $10 trillion, we could see interest payments on our debt reach $500 billion within the next year or two, and over $1 trillion somewhere around mid-decade. When interest payments reach $1 trillion, they will likely be around 30% to 40% of government tax receipts, up from interest payments being only 9% of tax receipts today. No country has ever seen interest payments on their debt reach 40% of tax receipts without hyperinflation occurring in the years to come.
12 Warning Signs Of U.S. Hyperinflation -
By National Inflation Association (NIA) (28/3/11)
Monday, 28 March 2011
http://futurefastforward.com/images/stories/financial/12WarningSignsOfUSHyperinflation.pdf
In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015. Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.
Here are NIA's top 12 warning signs that hyperinflation is about to occur:
1) The Federal Reserve is Buying 70% of U.S. Treasuries. The Federal Reserve has been buying 70% of all new U.S. treasury debt. Up until this year, the U.S. has been successful at exporting most of its inflation to the rest of the world, which is hoarding huge amounts of U.S. dollar reserves due to the U.S. dollar's status as the world's reserve currency. In recent months, foreign central bank purchases of U.S. treasuries have declined from 50% down to 30%, and Federal Reserve purchases have increased from 10% up to 70%. This means U.S. government deficit spending is now directly leading to U.S. inflation that will destroy the standard of living for all Americans.
2) The Private Sector Has Stopped Purchasing U.S. Treasuries. The U.S. private sector was previously a buyer of 30% of U.S. government bonds sold. Today, the U.S. private sector has stopped buying U.S. treasuries and is dumping government debt. The Pimco Total Return Fund was recently the single largest private sector owner of U.S. government bonds, but has just reduced its U.S. treasury holdings down to zero. Although during the financial panic of 2008, investors purchased government bonds as a safe haven, during all future panics we believe precious metals will be the new safe haven.
3) China Moving Away from U.S. Dollar as Reserve Currency. The U.S. dollar became the world's reserve currency because it was backed by gold and the U.S. had the world's largest manufacturing base. Today, the U.S. dollar is no longer backed by gold and China has the world's largest manufacturing base. There is no reason for the world to continue to transact products and commodities in U.S. dollars, when most of everything the world consumes is now produced in China. China has been taking steps to position the yuan to be the world's new reserve currency.
The People's Bank of China stated earlier this month, in a story that went largely unreported by the mainstream media, that it would respond to overseas demand for the yuan to be used as a reserve currency and allow the yuan to flow back into China more easily. China hopes to allow all exporters and importers to settle their cross border transactions in yuan by the end of 2011, as part of their plan to increase the yuan's international role. NIA believes if China really wants to become the world's next superpower and see to it that the U.S. simultaneously becomes the world's next Zimbabwe, all China needs to do is use their $1.15 trillion in U.S. dollar reserves to accumulate gold and use that gold to back the yuan.
4) Japan to Begin Dumping U.S. Treasuries. Japan is the second largest holder of U.S. treasury securities with $885.9 billion in U.S. dollar reserves. Although China has reduced their U.S. treasury holdings for three straight months, Japan has increased their U.S. treasury holdings seven months in a row. Japan is the country that has been the most consistent at buying our debt for the past year, but that is about the change. Japan is likely going to have to spend $300 billion over the next year to rebuild parts of their country that were destroyed by the recent earthquake, tsunami, and nuclear disaster, and NIA believes their U.S. dollar reserves will be the most likely source of this funding. This will come at the worst possible time for the U.S., which needs Japan to increase their purchases of U.S. treasuries in order to fund our record budget deficits.
5) The Fed Funds Rate Remains Near Zero. The Federal Reserve has held the Fed Funds Rate at 0.00-0.25% since December 16th, 2008, a period of over 27 months. This is unprecedented and NIA believes the world is now flooded with excess liquidity of U.S. dollars.
When the nuclear reactors in Japan began overheating two weeks ago after their cooling systems failed due to a lack of electricity, TEPCO was forced to open relief valves to release radioactive steam into the air in order to avoid an explosion. The U.S. stock market is currently acting as a relief valve for all of the excess liquidity of U.S. dollars. The U.S. economy for all intents and purposes should currently be in a massive and extremely steep recession, but because of the Fed's money printing, stock prices are rising because people don't know what else to do with their dollars.
NIA believes gold, and especially silver, are much better hedges against inflation than U.S. equities, which is why for the past couple of years we have been predicting large declines in both the Dow/Gold and Gold/Silver ratios. These two ratios have been in free fall exactly like NIA projected.
The Dow/Gold ratio is the single most important chart all investors need to closely follow, but way too few actually do. The Dow Jones Industrial Average
(DJIA) itself is meaningless because it averages together the dollar based movements of 30 U.S. stocks. With just the DJIA, it is impossible to determine whether stocks are rising due to improving fundamentals and real growing investor demand, or if prices are rising simply because the money supply is expanding.
The Dow/Gold ratio illustrates the cyclical nature of the battle between paper assets like stocks and real hard assets like gold. The Dow/Gold ratio trends upward when an economy sees real economic growth and begins to trend downward when the growth phase ends and everybody becomes concerned about preserving wealth. With interest rates at 0%, the U.S. economy is on life support and wealth preservation is the focus of most investors. NIA believes the Dow/Gold ratio will decline to 1 before the hyperinflationary crisis is over and until the Dow/Gold ratio does decline to 1, investors should keep buying precious metals.
6) Year-Over-Year CPI Growth Has Increased 92% in Three Months. In November of 2010, the Bureau of Labor and Statistics (BLS)'s consumer price index (CPI) grew by 1.1% over November of 2009. In February of 2011, the BLS's CPI grew by 2.11% over February of 2010, above the Fed's informal inflation target of 1.5% to 2%. An increase in year-over-year CPI growth from 1.1% in November of last year to 2.11% in February of this year means that the CPI's growth rate increased by approximately 92% over a period of just three months. Imagine if the year-over-year CPI growth rate continues to increase by 92% every three months. In 9 to 12 months from now we could be looking at a price inflation rate of over 15%. Even if the BLS manages to artificially hold the CPI down around 5% or 6%, NIA believes the real rate of price inflation will still rise into the double-digits within the next year.
7) Mainstream Media Denying Fed's Target Passed. You would think that year-over-year CPI growth rising from 1.1% to 2.11% over a period of three months for an increase of 92% would generate a lot of media attention, especially considering that it has now surpassed the Fed's informal inflation target of 1.5% to 2%. Instead of acknowledging that inflation is beginning to spiral out of control and encouraging Americans to prepare for hyperinflation like NIA has been doing for years, the media decided to conveniently change the way it defines the Fed's informal target.
The media is now claiming that the Fed's informal inflation target of 1.5% to 2% is based off of year-over-year changes in the BLS's core-CPI figures. Core-CPI, as most of you already know, is a meaningless number that excludes food and energy prices. Its sole purpose is to be used to mislead the public in situations like this. We guarantee that if core-CPI had just surpassed 2% and the normal CPI was still below 2%, the media would be focusing on the normal CPI number, claiming that it remains below the Fed's target and therefore inflation is low and not a problem.
The fact of the matter is, food and energy are the two most important things Americans need to live and survive. If the BLS was going to exclude something from the CPI, you would think they would exclude goods that Americans don't consume on a daily basis. The BLS claims food and energy prices are excluded because they are most volatile. However, by excluding food and energy, core-CPI numbers are primarily driven by rents. Considering that we just came out of the largest Real Estate bubble in world history, there is a glut of homes available to rent on the market. NIA has been saying for years that being a landlord will be the worst business to be in during hyperinflation, because it will be impossible for landlords to increase rents at the same rate as overall price inflation. Food and energy prices will always increase at a much faster rate than rents.
8) Record U.S. Budget Deficit in February of $222.5 Billion. The U.S. government just reported a record budget deficit for the month of February of $222.5 billion. February's budget deficit was more than the entire fiscal year of 2007. In fact, February's deficit on an annualized basis was $2.67 trillion. NIA believes this is just a preview of future annual budget deficits, and we will see annual budget deficits surpass $2.67 trillion within the next several years.
9) High Budget Deficit as Percentage of Expenditures. The projected U.S. budget deficit for fiscal year 2011 of $1.645 trillion is 43% of total projected government expenditures in 2011 of $3.819 trillion. That is almost exactly the same level of Brazil's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1993 and it is higher than Bolivia's budget deficit as a percentage of expenditures right before they experienced hyperinflation in 1985. The only way a country can survive with such a large deficit as a percentage of expenditures and not have hyperinflation, is if foreigners are lending enough money to pay for the bulk of their deficit spending. Hyperinflation broke out in Brazil and Bolivia when foreigners stopped lending and central banks began monetizing the bulk of their deficit spending, and that is exactly what is taking place today in the U.S.
10) Obama Lies About Foreign Policy. President Obama campaigned as an anti-war President who would get our troops out of Iraq. NIA believes that many Libertarian voters actually voted for Obama in 2008 over John McCain because they felt Obama was more likely to end our wars that are adding greatly to our budget deficits and making the U.S. a lot less safe as a result. Obama may have reduced troop levels in Iraq, but he increased troops levels in Afghanistan, and is now sending troops into Libya for no reason.
The U.S. is now beginning to occupy Libya, when Libya didn't do anything to the U.S. and they are no threat to the U.S. Obama has increased our overall overseas troop levels since becoming President and the U.S. is now spending $1 trillion annually on military expenses, which includes the costs to maintain over 700 military bases in 135 countries around the world. There is no way that we
can continue on with our overseas military presence without seeing hyperinflation.
11) Obama Changes Definition of Balanced Budget. In the White House's budget projections for the next 10 years, they don't project that the U.S. will ever come close to achieving a real balanced budget. In fact, after projecting declining budget deficits up until the year 2015 (NIA believes we are unlikely to see any major dip in our budget deficits due to rising interest payments on our national debt), the White House projects our budget deficits to begin increasing again up until the year 2021. Obama recently signed an executive order to create the "National Commission on Fiscal Responsibility and Reform", with a mission to "propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015". Obama is redefining a balanced budget to exclude interest payments on our national debt, because he knows interest payments are about to explode and it will be impossible to truly balance the budget.
12) U.S. Faces Largest Ever Interest Payment Increases. With U.S. inflation beginning to spiral out of control, NIA believes it is 100% guaranteed that we will soon see a large spike in long-term bond yields. Not only that, but within the next couple of years, NIA believes the Federal Reserve will be forced to raise the Fed Funds Rate in a last-ditch effort to prevent hyperinflation. When both short and long-term interest rates start to rise, so will the interest payments on our national debt. With the public portion of our national debt now exceeding $10 trillion, we could see interest payments on our debt reach $500 billion within the next year or two, and over $1 trillion somewhere around mid-decade. When interest payments reach $1 trillion, they will likely be around 30% to 40% of government tax receipts, up from interest payments being only 9% of tax receipts today. No country has ever seen interest payments on their debt reach 40% of tax receipts without hyperinflation occurring in the years to come.
viernes, 15 de abril de 2011
US Military Expansion Funded by Foreign Central Banks
America's Military Expansion Funded by Foreign Central Banksby Michael Hudson. Global Research, April 12, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24267
Here some EXTRACTS
Large amounts of surplus dollars are pouring into the rest of the world.Central banks have recycled these dollar inflows towards the purchase of U.S. Treasury bonds, which serve to finance the federal U.S. budget deficit. Underlying this process is the military character of the U.S. payments deficit and the domestic federal budget deficit. Strange as it may seem and irrational as it would be in a more logical system of world diplomacy, the "dollar glut" is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire: effective "taxation without representation".
Keeping international reserves in "dollars" means recycling their dollar inflows to buy U.S. Treasury bills, namely, U.S. government debt issued largely to finance the military.
To date, countries have been as powerless to defend themselves against the fact that this compulsory financing of U.S. military spending is built into the global financial system. Neoliberal economists applaud this as "equilibrium", as if it is part of economic nature and "free markets" rather than bare-knuckle diplomacy wielded with increasing aggressiveness by U.S. officials. The mass media chime in, pretending that recycling the dollar glut to finance U.S. military spending is showing their faith in U.S. economic strength by sending "their" dollars here to "invest". It is as if a choice is involved, not financial and diplomatic compulsion to choose merely between "Yes" (from China, reluctantly), "Yes, please" (from Japan and the European Union) and "Yes, thank you" (from Britain, Georgia and Australia).
It is not "foreign faith in the U.S. economy" that leads foreigners to "put their money here". This is a silly anthropomorphic picture of a more sinister dynamic. The "foreigners" in question are not consumers buying U.S. exports, nor are they private-sector "investors" buying U.S. stocks and bonds. The largest and most important foreign entities putting "their money" here are central banks, and it is not "their money" at all. They are sending back the dollars that foreign exporters and other recipients turn over to their central banks for domestic currency.
When the U.S. payments deficit pumps dollars into foreign economies, these banks are being given little option except to buy U.S. Treasury bills and bonds which the Treasury spends on financing an enormous, hostile military build-up to encircle the major dollar-recyclers: China, Japan and Arab OPEC oil producers. Yet these governments are forced to recycle dollar inflows in a way that funds U.S. military policies in which they have no say in formulating, and which threaten them more and more belligerently. That is why China and Russia took the lead in forming the Shanghai Cooperation Organization (SCO) a few years ago.
In Europe there is a clear awareness that the U.S. payments deficit is much larger than just the trade deficit. The deficit does not stem merely from consumers buying more imports than the United States exports as the financial sector de-industrializes its economy. U.S. imports are now plunging as the economy shrinks and consumers are finding themselves obliged to pay down the debts they have taken on.
Congress has told foreign investors in the largest dollar holder, China, not to buy anything except perhaps used-car dealerships and maybe more packaged mortgages and Fannie Mae stock. This is the equivalent of Japanese investors being steered into spending one billion dollars for the Rockefeller Center, on which they subsequently took a one hundred percent loss, and Saudi investment in Citigroup. That’s the kind of "international equilibrium" that U.S. officials love to see. "CNOOK go home" is the motto when it comes to serious attempts by foreign governments and their sovereign wealth funds (central bank departments trying to figure out what to do with their dollar glut) to make direct investments in American industry.
So we are left with the extent to which the U.S. payments deficit stems from military spending. The problem is not only the war in Iraq, now being extended to Afghanistan and Pakistan. It is the expensive build-up of U.S. military bases in Asian, European, post-Soviet and Third World countries. The Obama administration has promised to make the actual amount of this military spending more transparent. That presumably means publishing a revised set of balance of payments figures as well as domestic federal budget statistics.
The military overhead is much like a debt overhead, extracting revenue from the economy. In this case it is to pay the military-industrial complex, not merely Wall Street banks and other financial institutions. The domestic federal budget deficit does not stem only from "priming the pump" to give away enormous sums to create a new financial oligarchy; it contains an enormous and rapidly growing military component.
So Europeans and Asians see U.S. companies pumping more and more dollars into their economies, not only to buy their exports in excess of providing them with goods and services in return, and not only to buy their companies and "commanding heights" of privatized public enterprises without giving them reciprocal rights to buy important U.S. companies (remember the U.S. turn-down of China’s attempt to buy into the U.S. oil distribution business), and not only to buy foreign stocks, bonds and real estate.
The U.S. media somehow neglects to mention that the U.S. Government is spending hundreds of billions of dollars abroad, not only in the Near East for direct combat, but to build enormous military bases to encircle the rest of the world, to install radar systems, guided missile systems and other forms of military coercion, including the "color revolutions" that have been funded and are still being funded all around the former Soviet Union. Pallets of shrink-wrapped hundred-dollar bills, adding up to tens of millions of dollars at a time, have become familiar "visuals" on some TV broadcasts, but the link is not made with U.S. military and diplomatic spending and foreign central-bank dollar holdings, which are reported simply as "wonderful faith in the U.S. economic recovery" and presumably the "monetary magic" being worked by Wall Street’s Tim Geithner at Treasury and "Helicopter Ben" Bernanke at the Federal Reserve.
Here’s the problem: the Coca-Cola Company recently tried to buy China’s largest fruit-juice producer and distributor. China already holds nearly two trillion dollars in U.S. securities, way more than it needs or can use, inasmuch as the United States government refuses to let it buy meaningful U.S. companies. If the U.S. buyout would have been permitted to go through, this would have confronted China with a dilemma:
Choice #1 would be to let the sale go through and accept payment in dollars, reinvesting them in what the U.S. Treasury tells it to do. With U.S. Treasury bonds yielding about one percent, China would take a capital loss on these when U.S. interest rates rise or when the dollar declines, as the United States alone is pursuing expansionary Keynesian policies in an attempt to enable the U.S. economy to carry its debt overhead.
Choice #2 is not to recycle the dollar inflows. This would lead the Renminbi to rise against the dollar, thereby eroding China’s export competitiveness in world markets. So China chose a third way, which brought U.S. protests. It turned the sale of its tangible company for merely "paper" U.S. dollars, which went with the "choice" to fund further U.S. military encirclement of the SCO.
So we are confronted with the fact that the U.S. Treasury prefers foreign central banks to keep on funding its domestic budget deficit, which means financing the cost of America’s war in the Near East and encirclement of foreign countries with rings of military bases. The more "capital outflows" U.S. investors spend to buy up foreign economies’ most profitable sectors, where the new U.S. owners can extract the highest monopoly rents, the more funds end up in foreign central banks to support America’s global military build-up. No textbook on political theory or international relations has suggested axioms to explain how nations act in a way so adverse to their own political, military and economic interests. Yet this is just what has been happening for the past generation.
Read more of the chapter by Michael Hudson in the latest book by Global Research, "The Global Economic Crisis: The Great Depression of the XXI Century."
http://www.globalresearch.ca/index.php?context=va&aid=24267
Here some EXTRACTS
Large amounts of surplus dollars are pouring into the rest of the world.Central banks have recycled these dollar inflows towards the purchase of U.S. Treasury bonds, which serve to finance the federal U.S. budget deficit. Underlying this process is the military character of the U.S. payments deficit and the domestic federal budget deficit. Strange as it may seem and irrational as it would be in a more logical system of world diplomacy, the "dollar glut" is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire: effective "taxation without representation".
Keeping international reserves in "dollars" means recycling their dollar inflows to buy U.S. Treasury bills, namely, U.S. government debt issued largely to finance the military.
To date, countries have been as powerless to defend themselves against the fact that this compulsory financing of U.S. military spending is built into the global financial system. Neoliberal economists applaud this as "equilibrium", as if it is part of economic nature and "free markets" rather than bare-knuckle diplomacy wielded with increasing aggressiveness by U.S. officials. The mass media chime in, pretending that recycling the dollar glut to finance U.S. military spending is showing their faith in U.S. economic strength by sending "their" dollars here to "invest". It is as if a choice is involved, not financial and diplomatic compulsion to choose merely between "Yes" (from China, reluctantly), "Yes, please" (from Japan and the European Union) and "Yes, thank you" (from Britain, Georgia and Australia).
It is not "foreign faith in the U.S. economy" that leads foreigners to "put their money here". This is a silly anthropomorphic picture of a more sinister dynamic. The "foreigners" in question are not consumers buying U.S. exports, nor are they private-sector "investors" buying U.S. stocks and bonds. The largest and most important foreign entities putting "their money" here are central banks, and it is not "their money" at all. They are sending back the dollars that foreign exporters and other recipients turn over to their central banks for domestic currency.
When the U.S. payments deficit pumps dollars into foreign economies, these banks are being given little option except to buy U.S. Treasury bills and bonds which the Treasury spends on financing an enormous, hostile military build-up to encircle the major dollar-recyclers: China, Japan and Arab OPEC oil producers. Yet these governments are forced to recycle dollar inflows in a way that funds U.S. military policies in which they have no say in formulating, and which threaten them more and more belligerently. That is why China and Russia took the lead in forming the Shanghai Cooperation Organization (SCO) a few years ago.
In Europe there is a clear awareness that the U.S. payments deficit is much larger than just the trade deficit. The deficit does not stem merely from consumers buying more imports than the United States exports as the financial sector de-industrializes its economy. U.S. imports are now plunging as the economy shrinks and consumers are finding themselves obliged to pay down the debts they have taken on.
Congress has told foreign investors in the largest dollar holder, China, not to buy anything except perhaps used-car dealerships and maybe more packaged mortgages and Fannie Mae stock. This is the equivalent of Japanese investors being steered into spending one billion dollars for the Rockefeller Center, on which they subsequently took a one hundred percent loss, and Saudi investment in Citigroup. That’s the kind of "international equilibrium" that U.S. officials love to see. "CNOOK go home" is the motto when it comes to serious attempts by foreign governments and their sovereign wealth funds (central bank departments trying to figure out what to do with their dollar glut) to make direct investments in American industry.
So we are left with the extent to which the U.S. payments deficit stems from military spending. The problem is not only the war in Iraq, now being extended to Afghanistan and Pakistan. It is the expensive build-up of U.S. military bases in Asian, European, post-Soviet and Third World countries. The Obama administration has promised to make the actual amount of this military spending more transparent. That presumably means publishing a revised set of balance of payments figures as well as domestic federal budget statistics.
The military overhead is much like a debt overhead, extracting revenue from the economy. In this case it is to pay the military-industrial complex, not merely Wall Street banks and other financial institutions. The domestic federal budget deficit does not stem only from "priming the pump" to give away enormous sums to create a new financial oligarchy; it contains an enormous and rapidly growing military component.
So Europeans and Asians see U.S. companies pumping more and more dollars into their economies, not only to buy their exports in excess of providing them with goods and services in return, and not only to buy their companies and "commanding heights" of privatized public enterprises without giving them reciprocal rights to buy important U.S. companies (remember the U.S. turn-down of China’s attempt to buy into the U.S. oil distribution business), and not only to buy foreign stocks, bonds and real estate.
The U.S. media somehow neglects to mention that the U.S. Government is spending hundreds of billions of dollars abroad, not only in the Near East for direct combat, but to build enormous military bases to encircle the rest of the world, to install radar systems, guided missile systems and other forms of military coercion, including the "color revolutions" that have been funded and are still being funded all around the former Soviet Union. Pallets of shrink-wrapped hundred-dollar bills, adding up to tens of millions of dollars at a time, have become familiar "visuals" on some TV broadcasts, but the link is not made with U.S. military and diplomatic spending and foreign central-bank dollar holdings, which are reported simply as "wonderful faith in the U.S. economic recovery" and presumably the "monetary magic" being worked by Wall Street’s Tim Geithner at Treasury and "Helicopter Ben" Bernanke at the Federal Reserve.
Here’s the problem: the Coca-Cola Company recently tried to buy China’s largest fruit-juice producer and distributor. China already holds nearly two trillion dollars in U.S. securities, way more than it needs or can use, inasmuch as the United States government refuses to let it buy meaningful U.S. companies. If the U.S. buyout would have been permitted to go through, this would have confronted China with a dilemma:
Choice #1 would be to let the sale go through and accept payment in dollars, reinvesting them in what the U.S. Treasury tells it to do. With U.S. Treasury bonds yielding about one percent, China would take a capital loss on these when U.S. interest rates rise or when the dollar declines, as the United States alone is pursuing expansionary Keynesian policies in an attempt to enable the U.S. economy to carry its debt overhead.
Choice #2 is not to recycle the dollar inflows. This would lead the Renminbi to rise against the dollar, thereby eroding China’s export competitiveness in world markets. So China chose a third way, which brought U.S. protests. It turned the sale of its tangible company for merely "paper" U.S. dollars, which went with the "choice" to fund further U.S. military encirclement of the SCO.
So we are confronted with the fact that the U.S. Treasury prefers foreign central banks to keep on funding its domestic budget deficit, which means financing the cost of America’s war in the Near East and encirclement of foreign countries with rings of military bases. The more "capital outflows" U.S. investors spend to buy up foreign economies’ most profitable sectors, where the new U.S. owners can extract the highest monopoly rents, the more funds end up in foreign central banks to support America’s global military build-up. No textbook on political theory or international relations has suggested axioms to explain how nations act in a way so adverse to their own political, military and economic interests. Yet this is just what has been happening for the past generation.
Read more of the chapter by Michael Hudson in the latest book by Global Research, "The Global Economic Crisis: The Great Depression of the XXI Century."
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