Everyman
2003-08-29 19:33:19 UTC
Two on a personal level.
=========
I know Don Stacey fairly well from correspondence over the years. Yet I
disagree about the course to take.
Those who counsel to get out of debt and buy gold -- are thinking in the
terms of the very system that brought us to ruin.
We must forget individual sheltering from the blow that will crush everyone
else!
We need to defend by becoming intensly political and determined that the
same madmen shysters do not pilot us through this disaster as piloted us
through all past disasters and also piloted us into them as well.
World repudiation of debt that was accured through international currency
manipulation and central-bank malfeasance.
Big FInance must be made to hang for this.
Billionaires and trillionaires must loose their billions and trillions.
Millionaires is all this planet can afford right now.
Do you expect to buy gold from the people who have been getting it from
Greenspan on the cheap all this time -- who sell now that the panic of
economic catastrophe (for the masses, that is -- the financial elite are
experienceing a bonanza of buying control of foreclosed properties and
assets cheap etc.)
We need a worldwide populist "New Deal" (referring to a new deal of
cards -- not Frankin Roosevelt's phony "new deal" -- the false
redistribution that people stupidly bought from the rich president instead
of getting the real thing from a man of the people -- Huey P. Long (whom
they shot anyway).
You are not used to real politics -- real politics of popular power and
force directed to putting things right -- better to buy gold so you can
surive while the "less fortunate" "the less shrewd" lose everything and
die.
In an economic catastrophe made by the financial elites, money and assets
are not destroyed, they merely change hands. We have to put an authority of
justice over the billionaires and trillionaires who keep up with these
massive scams (wars, depressions, cold wars, wars on terror, homeland
security) -- I see through them, I know others who see through them, and I
know that people can be shown what is happening if intelligent people with
understanding can get their attention and talk to them (get them away from
the web of deceit spun they the great chisellers.
I say hell no.
What do you say?
Dick Eastman
----- Original Message -----
From: Tom Ascher
To: APB
Sent: Thursday, August 28, 2003 5:23 PM
Subject: FW: Tough times ahead
-----Original Message-----
From: Dstacey [mailto:***@comcast.net]
Sent: Thursday, August 28, 2003 8:46 AM
To: Undisclosed-Recipient:;
Subject: Tough times ahead
The dollar is on a bad course and tough times lie ahead for Americans. We
can't muddle through this problem. Eventually we have to take the bitter
medicine that is required to cure the ills caused by irresponsible behavior
as a nation. Our nation has lived beyond its means for far too long. We
can't expect to be able to do so much longer.
Mr. Dyer explains what is looming in our future as the world turns away from
the U S dollar. It will result in our standard of living falling
substantially.
What can you do to protect yourself? It is of prime importance that you pay
any debt, including your mortgage. Be debt free! Build your savings but do
not invest in stocks(except precious metals companies) or US treasury bonds.
Buy gold and silver(and stocks of gold and silver mining companies). If you
can sell your real estate(house included), do so. House prices are going to
fall precipitously, I fear.
Remember: in deflationary times, as we will soon experience, cash is king.
Be as solvent as possible.
Don Stacey
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
This article is posted at www.lemetropolecafe.com
The Almighty Dollar ?
by Bruce Dyer
In the face of the underlying weakness of the American economy, there is a
growing sense of inevitability that sooner or later the dollar will be
forced to depreciate, an event that will have significant repercussions for
the USA and the world economy. The US dollar accounts for almost 70% of
global currency reserves - the money that nations use to finance
international trade and hold to protect their own currencies against
financial speculators. Because it is so dominant any marked shift in its
value would inevitably have major repercussions around the world.
The global demand for dollars has enabled the US to pay for considerably
more than it earns from its domestic production with 1991 being the only
year in the past 20 in which the US supplied more goods and services to the
rest of the world than it took in. In the other 19 years, the US has run a
deficit on its import-export account to the point where it has become the
leading debtor nation with a mind boggling $6.3 trillion dollar deficit (60%
of GDP).
Other structural imbalances in the US's economy include the recent return to
annual budget deficits in the hundreds of billions due to unaffordable 2001
tax cuts, unsustainable credit expansion, corporate accounting abuses, near
zero personal savings, record personal indebtedness, and reliance on and
over consumption of Middle Eastern oil. i
These together with the build-up of military spending, the Iraq war and the
new Bush doctrine of pre-emptive attacks on any country deemed to threaten
the US's future national security, have led global investors and currency
speculators to unload dollars and US assets which in turn, has contributed
to a rapid deterioration in the US's financial position. ii
According to William Grieder, the national editor of The Rolling Stone, the
US's ambitions to run the world, are heavily mortgaged. Fifteen years ago,
its net foreign indebtedness was zero. Before the US's net balance of
foreign assets turned negative in 1988, it was a creditor nation itself,
investing and lending vast capital to others, always more than it borrowed.
Now Greider sees the trend line as most alarming. "Like any debtor who
borrows more year after year with no plausible way to reverse the trend, a
nation sinking deeper into debt enters into an adverse power relationship
with its creditors - greater and greater dependency." iii
The Euro meanwhile, is moving closer to being a competing world currency. It
suffers from none of the major underlying crises afflicting the US economy
and has appreciated by one third against the dollar since early 2002, when
it traded at 84 cents. This is remarkable in view of the fact that the
European Union's economy is neither booming nor absorbing huge investment
funds from around the world. Moreover when next year the European Union
acquires 10 new members, its GDP will be roughly the same as that of the US,
and its population 60% bigger. If adopted by all the members of the union,
the Euro will begin to look like a more stable and more attractive
investment than the dollar. iv
Despite these developments Japan holds more than 90% of its reserves, and
China the bulk of her reserves in US dollars. While agreeing with the need
for the dollar to depreciate, Brendan O'Donovan chief economist with Westpac
in New Zealand expects that because the US remains the powerhouse of the
world economy and Asia's main trade is with the US, the US dollar will
maintain its importance as a reserve currency.
An article in the Financial Times on the 30th July 2003 by Chen Zhao notes
that China and Hong Kong have been buying more US Treasury securities than
any other creditor nation, with combined annual purchases of $290bn. Also
bigger than with any other country, is the US's bilateral trade deficit with
China which has reached $110bn.
With their reserves accumulating rapidly, buying dollars is helping the
Chinese keep their own currency steady. It has also allowed US interest
rates to remain low, which in turn has encouraged American consumers to buy
more Chinese goods.
While this game serves the purposes of Chinese and US policy makers alike,
Zhao believes it also creates economic and financial distortions that are
both self-limiting and self-defeating. With a collapse in interest rates
fuelling consumer spending, it is conceivable that the US current account
deficit will increase rapidly. Zhao warns that "there is no magic number the
current account deficit must reach to signal an impending crisis - but there
has never been a nation that has been able to increase its reliance on
foreign savings without eventually hitting a brick wall". (Emphasis added.)
In response to his question "When will the game playing come to an end?" he
says "When the Chinese have had enough." v
Some economists are concerned that a collapse in US living standards might
be imminent because they believe the US current account deficit is reaching
unsustainable levels. In 1999, Professor Catherine L. Mann of Vanderbilt
University, investigated iv previous current account corrections in
industrialised countries in the past twenty years. She concluded that a
current account deficit of over 4.2% was unsustainable and that a correction
in the US was likely in two or three years.
"The US cannot live beyond its long-term means forever, nor will US assets
always be so favoured by global investors" Mann wrote in an article vii 'Is
the US Current Account Deficit Sustainable?' published by the IMF in March
2000. "When a change in investor sentiment comes, it could be dramatic. Were
the dollar to be depreciated by a significant amount of say 25 percent, she
believes "US consumers would shift from buying imported goods and services
to buying those made domestically and US labour markets would tighten
further. The combination of rising wages and a falling dollar likely would
drive up prices." Then, she believes, the Federal Reserve would try to choke
the developing inflation by raising interest rates, thus disrupting
financial markets around the world. Caroline Freund of the Federal Reserve
researched the same ground as Mann and also found that the US deficit was
unsustainable except that she reckoned that the markets normally bring about
these corrections when the deficit rises above 5% of GDP rather than
4.2%.viii With US deficit being expected to exceed 5% by the end of 2002,
Mann and Freund's work led economists employed by stockbrokers and merchant
banks to alert their clients to the dollar's potential fall. Morgan Stanley
is one of the world's leading financial investor firms. Steven Roach, Morgan
Stanley's chief economist,
warned ix several times early in 2002 of 'a US balance of payments crisis by
2003' and 'America's looming current-account adjustment' while his
colleague, Eric Chaney, talked x of 'a massive devaluation'. Their
predictions will certainly help bring about the crisis they warn of since
they will be used by Morgan Stanley's 61,000 employees around the world to
encourage clients to switch out of the dollar into sterling or the euro. In
short, the present system of world money creation is clearly unstable.
Roach again - "Can a saving-short US economy continue to finance an
ever-widening expansion of its military superiority? My answer is a
resounding 'no.'" What will therefore happen? The prices of
dollar-denominated assets compared to those of non-dollar-denominated
assets" must fall, and fall drastically soon. Roach estimates: "a 20% drop
in real exchange rates and nearly double that in nominal terms, higher real
interest rates, reduced growth in domestic demand, and faster growth
overseas." ixOpposition to US policies growing
Unprecedented global demonstrations
On 15 February 2003 in an unprecedented display of solidarity more than 10
million people in 600 places around the world delivered a clear NO! to the
impending attack on Iraq by the US and UK. Writing in the UK's Guardian,
George Monbiot has called for those opposing the US to switch to Euro as a
means of curbing American power. xiiBrand-power starting to sinkA report
completed in late July by the New York consulting firm RoperASW, has shown
that the value of America's favourite brands has slipped. Based on hour-long
interviews with 30,000 consumers in 30 major economies around the world, the
report saw only one of the top 10 global US-based firms increase its
brand-power compared with a year earlier. This is the 5th year that the
survey has been carried out and the first time that American companies have
seen their brand-power start to sink.
Professor John Quelch, dean of the Harvard Business School believes that
"Never before have global concerns about American foreign policy so
threatened to change consumer behaviour. We are not speaking here of the
frivolous grandstanding associated with temporary boycotts by a student
minority. We are witnessing the emergence of a consumer lifestyle with broad
international appeal that is grounded in a rejection of American capitalism,
American foreign policy and Brand America." xiii
While the survey was not about the standing of the dollar, given the decline
in the brand-power of US-based firms, the prospect of a dramatic decline in
the value of the dollar as the brand that underpins them all, will come as
no surprise. Warning signals coming from within the American
establishment.Writing in Morgan Stanley's Global Economic Forum, Stephen
Roach asserts that a "US-centric world" is unsustainable for the
world-economy and bad in particular for the United States. He argues that
the US will be unable to remake the world in its image and that the attempt
to do so is distinctly negative from the point of view of large US
investors. He believes the global economy is lopsided and "a weaker dollar
may be the only way out." xiv
The likely outcome. Immanuel Wallerstein, one of America's foremost scholars
expects the dollar's collapse and everything to change geopolitically. "The
U.S. will no longer be able to live far beyond its means, to consume at the
rest of the world's expense. Americans may begin to feel what countries in
the Third World feel when faced by IMF-imposed structural readjustment - a
sharp downward thrust of their standard of living. xv
The rest of the globe could topple the United States from its hegemonic
status whenever they so choose with a concerted abandonment of the dollar
standard. This is America's pre-eminent, inescapable Achilles Heel for now
and the foreseeable future. At the same time because Asian countries - the
US's main creditors - are so heavily invested in the US and while the US
remains dependent on their investments, the dollar's reserve currency
standing is unlikely to be superseded in the near future.
In theory, the problems facing the US economy might still be corrected, but
only in theory, because it is impossible to imagine such a dramatic policy
reversal from Washington without some great crisis to provoke it. According
to Greider, American leadership has instead become blind to the adverse
balance of power accumulating against it.
References.
i) The Real Reasons for the Upcoming War With Iraq - A Macroeconomic and
Geostrategic Analysis of the Unspoken Truth by W. Clark 6 March 2003
www.indymedia.org
ii) Iraq, The Dollar and the Euro by Hazel Henderson April 2003
http://www.hazelhenderson.com/Iraq,%20the%20Dollar%20and%20the%20Euro.htm
iii) The End of Empire by William Greider
http://www.thenation.com/doc.mhtml?i=20020923&s=greider
iv) The bottom dollar - There is only one way to check American power and
that is to support the euro
George Monbiot, Monday April 21 2003, The Guardian
v) The Fed is in a Dangerous Game with China by Chen Zhao
Financial Times, July 30, 2003
vi) Is the US Trade Deficit Sustainable? Institute for International
Economics, Washington DC, 1999.
vii) See Finance & Development, Vol. 37, No. 1, March 2000. Can be
downloaded from www.imf.org/external/pubs/ft/fandd/2000/03/mann.htm
viii) 'Current Account Adjustment in Industrialized Countries, '
International Finance Discussion Paper No. 692, Board of Governors, Federal
Reserve Board, Washington DC, December 2000. Available at
http://www.federalreserve.gov/pubs/ifdp/2000/692/ifdp692.pdf
ix) 'When the Tide Goes Out', European Investment Perspectives, Morgan
Stanley, 13th February 2002. Also 'Global Decoupling' Global Economic Forum,
Morgan Stanley, 30th January, 2002.
x) Europe Economics: Global Decoupling: Chaotic or Orderly?, Global Strategy
Bulletin, Morgan Stanley, 17 February, 2002.
xi) Empire and the Capitalists by Immanuel Wallerstein May 15, 2003
http://fbc.binghamton.edu/113en.htm
xii) The bottom dollar - There is only one way to check American power and
that is to support the Euro
George Monbiot, Monday April 21 2003, The Guardian
xiii) BRAND AMERICA: IRAQ'S CORPORATE COLLATERAL DAMAGE
THE AGRIBUSINESS EXAMINER July 21, 2003, Issue #271
xiv) Empire and the Capitalists by Immanuel Wallerstein
xv) ibid
====================================
I T E M # 2:
confession
by dick eastman
boom bust harvest sowing
I see tens millions of people slaving in telephone boiler rooms seeking
customers for credit cards -- "consolidate all you debt into one payment --
no interest the first three months -- then (unspoken) the 18 percent --
--for example, a few days abo my wife told me -- as I was about to
refinance the house to get a better mortgage rate that two years before she,
without telling me, "consolidated our debt" at the behest of a telephone
soliciter -- she was tired of figuring which bill to pay while her husband
was neglecting the household economics and her and our children, to blabber
autistically in front of a computer screen delusionally thinking he is
saving the world etc. -- that I could not refinance because she had, after
doing her consolidation on one card, had then proceeded to run up 24
thousand-dollars in credit-card debt on that one card -- at 18 percent --
so that now it is far too late for me refinance at the lower mortgage rate,
with our meager incomes (I've never made more thatn $21,000 any year of my
life despite two masters degrees and credits toward a doctorate in economics
for Texas A & M.) -- because we are, as any mortgage account executive can
see (and as I cannot blame her for seeing) we are too irresponsible with
credit to be good risks on a renewed mortgage. And she tells me this just
as we are about to have a foreign-exchange student from Germany come an live
with us for the beginning academic year! To keep my house and my library
(my collection -- it is the mind that selects the books that makes a
library significant, not its size or dollar value) for this I am forced to
quit what I have been doing on these lists and newsgroups -- in order to
even keep my computer -- this afternoon I interview for a job as a
telemarketing sales rep. -- by the way, my wife went to Michigan in early
July (on the credit card that just maxed) and so she resorted to writing
checks -- 23 checks bounced at $20.00 apiece in handling fees for each
check -- some on checks for $5.OO as I usually never carry currency. (If I
wear clothes off the rack at Good Will -- where did these thousands go?
we'll my brat middle daughter has convinced mother that she needs designer
clothes, AND my wife started taking counseling without telling me. (You
see, the people who call me a "moron" and a "fuckwit" have been right all
along!!!!!!!!!!!!!!!!!!!!!!)
THis of course is not what I intended to write (and what will follow
below) -- who else can a man who has made himself public and transparent and
honest with no secrets talk to -- the kids at Blockbuster I work with?
the shelves and toilets I clean?
Now where was I before my personal life slopped in here?
Questions about the attack on the Pentagon and about the means of this war
economy of paying, when we no longer manufacture anything, our insanely
mounting war indebtedness to the billionaires of the world who belong to no
country and to whom all countries are merely killing fields for economic
killings, these questions are easier to get quashed by backstairs influence
than to get answered.
In graduate school I became interested in what is called Business Cycle
Theory -- an idea that was supposed to have been made obsolete by the
economics of Paul Samuelson of MIT, misnamed Keynesian economics.
It was not until I had already prepared for and begun teaching a course in
Money and Banking at a small four-year college in Washington State that I
learned the truth. Economic booms and bust, tight money and loose money,
the publics "good times"and bad "times" are planned events, the alternate
deliberate and contrived sowing and harvesting seasons of money
manipulators, of Big Finance.
Do you remember how, under FED chairmen Burns and Miller during the Ford and
Clinton years there was amazing inflation -- inflation that defied the
phony doctrines of Samuelson, in that it was "stagflation" -- inflation
without many of the more pleasant immediate benefits associtated with the
word "Boom" -- this was a time of leveraged buyouts, of downsizing, of
ripped-off pension plans, of a middle-class stripped of its assets and
future and relegated to the "lean and mean" economy of long hours, no
benefits, overcrowded life-boat office-politics, de-industrialization --
the service economy -- the "booming" service economy of "burger flippers,
telephone soliciters, and investment banking, investment brokerage and
trading, commodities and derivatives brokerage, tatoos, nail-polishing
establishments and hair dressing -- you know -- the "new economy" that
bi-partisan Congress and Presidents take credit for.
We must not let them get through another shearing season, another milking
system when we need the wool to survive the coming winter and the milk for
our own crying children. They are dominant, they are the aggressive pit
bulls, bred for aggression and dominance -- us for docility and doffing our
hats in their presence and kissing their asses as we clean their stables and
pull their weeds -- but we have to topple them -- we have to let the
captured worth of humanity free from these narrow grasping awful evil minds
of the parasite "ruling class" pounding down our bodies and our spirits and
making our sons and daughters murderers in far off lands to satisfy their
lusts and cover (with oil revenues) their ruining of the greatest economy of
a free people the world has ever seen.
We are the beasts of burden, harnessed under the feet of the tiny ruling
elite -- the empire built by Baruch and Rockefeller and Morgan and today run
by Perle, Wolfowitz, Kissinger and another generation of Rockefellers,
Morgans, Harrimans, etc. (the Bushes are the agents of the Harrimans' btw.)
We don't know all the names -- maybe not even the biggest names of the
Anglo-American power elite -- but we know enough to understand the sociology
and the process. (Did I say "we,?" I meant of course, "I" -- you ( all of
you) never tell me what YOU think (except John Kaminski, Boudewijn Wegerif,
Joost van Steenis whom you know and two dozen individuals I Bcc this letter
to) who understand the power of speaking the truth in love and without fear
to anyone anywhere in trust that it is for the best, that it is the best
thing we can do in a world characterized by deceit from the top.)
Only one thing keeps us (me) from being crushed under the rolls and swells
of evil -- that fact that I see all around me, in the darkest corners of
ruin, something remaining of the Good working imprisoned, working, as I have
been, toward deliverance and triumph over the selfishness and
will-to-dominate -- over imbecility and Machiavellianism, that now rules
over brotherhood and the inner impulse of man to serve and delight others.
Actually, this is not what I started to say -- which I have forgotten in my
stress and frustration -- but it is a ramble that I think some will feel
less alone in the common trap, and a little wiser and more inclined to own
that they agree with the outcasts who seek to unite them.
Dick Eastman
Yakima, Washington
=========
Diagram of global powers that be:
http://utangente.free.fr/2003/world%20gov3.pdf
=========
Mr. Dyer explains what is looming in our future as the world turns away
from the U S dollar. It will result in our standard of living falling
substantially.from the U S dollar. It will result in our standard of living falling
What can you do to protect yourself? It is of prime importance that you
payany debt, including your mortgage. Be debt free! Build your savings but do
not invest in stocks(except precious metals companies) or US treasury
bonds. Buy gold and silver(and stocks of gold and silver mining
companies).not invest in stocks(except precious metals companies) or US treasury
bonds. Buy gold and silver(and stocks of gold and silver mining
If you can sell your real estate(house included), do so. House prices are
going to fall precipitously, I fear.
reply:going to fall precipitously, I fear.
I know Don Stacey fairly well from correspondence over the years. Yet I
disagree about the course to take.
Those who counsel to get out of debt and buy gold -- are thinking in the
terms of the very system that brought us to ruin.
We must forget individual sheltering from the blow that will crush everyone
else!
We need to defend by becoming intensly political and determined that the
same madmen shysters do not pilot us through this disaster as piloted us
through all past disasters and also piloted us into them as well.
World repudiation of debt that was accured through international currency
manipulation and central-bank malfeasance.
Big FInance must be made to hang for this.
Billionaires and trillionaires must loose their billions and trillions.
Millionaires is all this planet can afford right now.
Do you expect to buy gold from the people who have been getting it from
Greenspan on the cheap all this time -- who sell now that the panic of
economic catastrophe (for the masses, that is -- the financial elite are
experienceing a bonanza of buying control of foreclosed properties and
assets cheap etc.)
We need a worldwide populist "New Deal" (referring to a new deal of
cards -- not Frankin Roosevelt's phony "new deal" -- the false
redistribution that people stupidly bought from the rich president instead
of getting the real thing from a man of the people -- Huey P. Long (whom
they shot anyway).
You are not used to real politics -- real politics of popular power and
force directed to putting things right -- better to buy gold so you can
surive while the "less fortunate" "the less shrewd" lose everything and
die.
In an economic catastrophe made by the financial elites, money and assets
are not destroyed, they merely change hands. We have to put an authority of
justice over the billionaires and trillionaires who keep up with these
massive scams (wars, depressions, cold wars, wars on terror, homeland
security) -- I see through them, I know others who see through them, and I
know that people can be shown what is happening if intelligent people with
understanding can get their attention and talk to them (get them away from
the web of deceit spun they the great chisellers.
I say hell no.
What do you say?
Dick Eastman
----- Original Message -----
From: Tom Ascher
To: APB
Sent: Thursday, August 28, 2003 5:23 PM
Subject: FW: Tough times ahead
-----Original Message-----
From: Dstacey [mailto:***@comcast.net]
Sent: Thursday, August 28, 2003 8:46 AM
To: Undisclosed-Recipient:;
Subject: Tough times ahead
The dollar is on a bad course and tough times lie ahead for Americans. We
can't muddle through this problem. Eventually we have to take the bitter
medicine that is required to cure the ills caused by irresponsible behavior
as a nation. Our nation has lived beyond its means for far too long. We
can't expect to be able to do so much longer.
Mr. Dyer explains what is looming in our future as the world turns away from
the U S dollar. It will result in our standard of living falling
substantially.
What can you do to protect yourself? It is of prime importance that you pay
any debt, including your mortgage. Be debt free! Build your savings but do
not invest in stocks(except precious metals companies) or US treasury bonds.
Buy gold and silver(and stocks of gold and silver mining companies). If you
can sell your real estate(house included), do so. House prices are going to
fall precipitously, I fear.
Remember: in deflationary times, as we will soon experience, cash is king.
Be as solvent as possible.
Don Stacey
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
This article is posted at www.lemetropolecafe.com
The Almighty Dollar ?
by Bruce Dyer
In the face of the underlying weakness of the American economy, there is a
growing sense of inevitability that sooner or later the dollar will be
forced to depreciate, an event that will have significant repercussions for
the USA and the world economy. The US dollar accounts for almost 70% of
global currency reserves - the money that nations use to finance
international trade and hold to protect their own currencies against
financial speculators. Because it is so dominant any marked shift in its
value would inevitably have major repercussions around the world.
The global demand for dollars has enabled the US to pay for considerably
more than it earns from its domestic production with 1991 being the only
year in the past 20 in which the US supplied more goods and services to the
rest of the world than it took in. In the other 19 years, the US has run a
deficit on its import-export account to the point where it has become the
leading debtor nation with a mind boggling $6.3 trillion dollar deficit (60%
of GDP).
Other structural imbalances in the US's economy include the recent return to
annual budget deficits in the hundreds of billions due to unaffordable 2001
tax cuts, unsustainable credit expansion, corporate accounting abuses, near
zero personal savings, record personal indebtedness, and reliance on and
over consumption of Middle Eastern oil. i
These together with the build-up of military spending, the Iraq war and the
new Bush doctrine of pre-emptive attacks on any country deemed to threaten
the US's future national security, have led global investors and currency
speculators to unload dollars and US assets which in turn, has contributed
to a rapid deterioration in the US's financial position. ii
According to William Grieder, the national editor of The Rolling Stone, the
US's ambitions to run the world, are heavily mortgaged. Fifteen years ago,
its net foreign indebtedness was zero. Before the US's net balance of
foreign assets turned negative in 1988, it was a creditor nation itself,
investing and lending vast capital to others, always more than it borrowed.
Now Greider sees the trend line as most alarming. "Like any debtor who
borrows more year after year with no plausible way to reverse the trend, a
nation sinking deeper into debt enters into an adverse power relationship
with its creditors - greater and greater dependency." iii
The Euro meanwhile, is moving closer to being a competing world currency. It
suffers from none of the major underlying crises afflicting the US economy
and has appreciated by one third against the dollar since early 2002, when
it traded at 84 cents. This is remarkable in view of the fact that the
European Union's economy is neither booming nor absorbing huge investment
funds from around the world. Moreover when next year the European Union
acquires 10 new members, its GDP will be roughly the same as that of the US,
and its population 60% bigger. If adopted by all the members of the union,
the Euro will begin to look like a more stable and more attractive
investment than the dollar. iv
Despite these developments Japan holds more than 90% of its reserves, and
China the bulk of her reserves in US dollars. While agreeing with the need
for the dollar to depreciate, Brendan O'Donovan chief economist with Westpac
in New Zealand expects that because the US remains the powerhouse of the
world economy and Asia's main trade is with the US, the US dollar will
maintain its importance as a reserve currency.
An article in the Financial Times on the 30th July 2003 by Chen Zhao notes
that China and Hong Kong have been buying more US Treasury securities than
any other creditor nation, with combined annual purchases of $290bn. Also
bigger than with any other country, is the US's bilateral trade deficit with
China which has reached $110bn.
With their reserves accumulating rapidly, buying dollars is helping the
Chinese keep their own currency steady. It has also allowed US interest
rates to remain low, which in turn has encouraged American consumers to buy
more Chinese goods.
While this game serves the purposes of Chinese and US policy makers alike,
Zhao believes it also creates economic and financial distortions that are
both self-limiting and self-defeating. With a collapse in interest rates
fuelling consumer spending, it is conceivable that the US current account
deficit will increase rapidly. Zhao warns that "there is no magic number the
current account deficit must reach to signal an impending crisis - but there
has never been a nation that has been able to increase its reliance on
foreign savings without eventually hitting a brick wall". (Emphasis added.)
In response to his question "When will the game playing come to an end?" he
says "When the Chinese have had enough." v
Some economists are concerned that a collapse in US living standards might
be imminent because they believe the US current account deficit is reaching
unsustainable levels. In 1999, Professor Catherine L. Mann of Vanderbilt
University, investigated iv previous current account corrections in
industrialised countries in the past twenty years. She concluded that a
current account deficit of over 4.2% was unsustainable and that a correction
in the US was likely in two or three years.
"The US cannot live beyond its long-term means forever, nor will US assets
always be so favoured by global investors" Mann wrote in an article vii 'Is
the US Current Account Deficit Sustainable?' published by the IMF in March
2000. "When a change in investor sentiment comes, it could be dramatic. Were
the dollar to be depreciated by a significant amount of say 25 percent, she
believes "US consumers would shift from buying imported goods and services
to buying those made domestically and US labour markets would tighten
further. The combination of rising wages and a falling dollar likely would
drive up prices." Then, she believes, the Federal Reserve would try to choke
the developing inflation by raising interest rates, thus disrupting
financial markets around the world. Caroline Freund of the Federal Reserve
researched the same ground as Mann and also found that the US deficit was
unsustainable except that she reckoned that the markets normally bring about
these corrections when the deficit rises above 5% of GDP rather than
4.2%.viii With US deficit being expected to exceed 5% by the end of 2002,
Mann and Freund's work led economists employed by stockbrokers and merchant
banks to alert their clients to the dollar's potential fall. Morgan Stanley
is one of the world's leading financial investor firms. Steven Roach, Morgan
Stanley's chief economist,
warned ix several times early in 2002 of 'a US balance of payments crisis by
2003' and 'America's looming current-account adjustment' while his
colleague, Eric Chaney, talked x of 'a massive devaluation'. Their
predictions will certainly help bring about the crisis they warn of since
they will be used by Morgan Stanley's 61,000 employees around the world to
encourage clients to switch out of the dollar into sterling or the euro. In
short, the present system of world money creation is clearly unstable.
Roach again - "Can a saving-short US economy continue to finance an
ever-widening expansion of its military superiority? My answer is a
resounding 'no.'" What will therefore happen? The prices of
dollar-denominated assets compared to those of non-dollar-denominated
assets" must fall, and fall drastically soon. Roach estimates: "a 20% drop
in real exchange rates and nearly double that in nominal terms, higher real
interest rates, reduced growth in domestic demand, and faster growth
overseas." ixOpposition to US policies growing
Unprecedented global demonstrations
On 15 February 2003 in an unprecedented display of solidarity more than 10
million people in 600 places around the world delivered a clear NO! to the
impending attack on Iraq by the US and UK. Writing in the UK's Guardian,
George Monbiot has called for those opposing the US to switch to Euro as a
means of curbing American power. xiiBrand-power starting to sinkA report
completed in late July by the New York consulting firm RoperASW, has shown
that the value of America's favourite brands has slipped. Based on hour-long
interviews with 30,000 consumers in 30 major economies around the world, the
report saw only one of the top 10 global US-based firms increase its
brand-power compared with a year earlier. This is the 5th year that the
survey has been carried out and the first time that American companies have
seen their brand-power start to sink.
Professor John Quelch, dean of the Harvard Business School believes that
"Never before have global concerns about American foreign policy so
threatened to change consumer behaviour. We are not speaking here of the
frivolous grandstanding associated with temporary boycotts by a student
minority. We are witnessing the emergence of a consumer lifestyle with broad
international appeal that is grounded in a rejection of American capitalism,
American foreign policy and Brand America." xiii
While the survey was not about the standing of the dollar, given the decline
in the brand-power of US-based firms, the prospect of a dramatic decline in
the value of the dollar as the brand that underpins them all, will come as
no surprise. Warning signals coming from within the American
establishment.Writing in Morgan Stanley's Global Economic Forum, Stephen
Roach asserts that a "US-centric world" is unsustainable for the
world-economy and bad in particular for the United States. He argues that
the US will be unable to remake the world in its image and that the attempt
to do so is distinctly negative from the point of view of large US
investors. He believes the global economy is lopsided and "a weaker dollar
may be the only way out." xiv
The likely outcome. Immanuel Wallerstein, one of America's foremost scholars
expects the dollar's collapse and everything to change geopolitically. "The
U.S. will no longer be able to live far beyond its means, to consume at the
rest of the world's expense. Americans may begin to feel what countries in
the Third World feel when faced by IMF-imposed structural readjustment - a
sharp downward thrust of their standard of living. xv
The rest of the globe could topple the United States from its hegemonic
status whenever they so choose with a concerted abandonment of the dollar
standard. This is America's pre-eminent, inescapable Achilles Heel for now
and the foreseeable future. At the same time because Asian countries - the
US's main creditors - are so heavily invested in the US and while the US
remains dependent on their investments, the dollar's reserve currency
standing is unlikely to be superseded in the near future.
In theory, the problems facing the US economy might still be corrected, but
only in theory, because it is impossible to imagine such a dramatic policy
reversal from Washington without some great crisis to provoke it. According
to Greider, American leadership has instead become blind to the adverse
balance of power accumulating against it.
References.
i) The Real Reasons for the Upcoming War With Iraq - A Macroeconomic and
Geostrategic Analysis of the Unspoken Truth by W. Clark 6 March 2003
www.indymedia.org
ii) Iraq, The Dollar and the Euro by Hazel Henderson April 2003
http://www.hazelhenderson.com/Iraq,%20the%20Dollar%20and%20the%20Euro.htm
iii) The End of Empire by William Greider
http://www.thenation.com/doc.mhtml?i=20020923&s=greider
iv) The bottom dollar - There is only one way to check American power and
that is to support the euro
George Monbiot, Monday April 21 2003, The Guardian
v) The Fed is in a Dangerous Game with China by Chen Zhao
Financial Times, July 30, 2003
vi) Is the US Trade Deficit Sustainable? Institute for International
Economics, Washington DC, 1999.
vii) See Finance & Development, Vol. 37, No. 1, March 2000. Can be
downloaded from www.imf.org/external/pubs/ft/fandd/2000/03/mann.htm
viii) 'Current Account Adjustment in Industrialized Countries, '
International Finance Discussion Paper No. 692, Board of Governors, Federal
Reserve Board, Washington DC, December 2000. Available at
http://www.federalreserve.gov/pubs/ifdp/2000/692/ifdp692.pdf
ix) 'When the Tide Goes Out', European Investment Perspectives, Morgan
Stanley, 13th February 2002. Also 'Global Decoupling' Global Economic Forum,
Morgan Stanley, 30th January, 2002.
x) Europe Economics: Global Decoupling: Chaotic or Orderly?, Global Strategy
Bulletin, Morgan Stanley, 17 February, 2002.
xi) Empire and the Capitalists by Immanuel Wallerstein May 15, 2003
http://fbc.binghamton.edu/113en.htm
xii) The bottom dollar - There is only one way to check American power and
that is to support the Euro
George Monbiot, Monday April 21 2003, The Guardian
xiii) BRAND AMERICA: IRAQ'S CORPORATE COLLATERAL DAMAGE
THE AGRIBUSINESS EXAMINER July 21, 2003, Issue #271
xiv) Empire and the Capitalists by Immanuel Wallerstein
xv) ibid
====================================
I T E M # 2:
confession
by dick eastman
boom bust harvest sowing
I see tens millions of people slaving in telephone boiler rooms seeking
customers for credit cards -- "consolidate all you debt into one payment --
no interest the first three months -- then (unspoken) the 18 percent --
--for example, a few days abo my wife told me -- as I was about to
refinance the house to get a better mortgage rate that two years before she,
without telling me, "consolidated our debt" at the behest of a telephone
soliciter -- she was tired of figuring which bill to pay while her husband
was neglecting the household economics and her and our children, to blabber
autistically in front of a computer screen delusionally thinking he is
saving the world etc. -- that I could not refinance because she had, after
doing her consolidation on one card, had then proceeded to run up 24
thousand-dollars in credit-card debt on that one card -- at 18 percent --
so that now it is far too late for me refinance at the lower mortgage rate,
with our meager incomes (I've never made more thatn $21,000 any year of my
life despite two masters degrees and credits toward a doctorate in economics
for Texas A & M.) -- because we are, as any mortgage account executive can
see (and as I cannot blame her for seeing) we are too irresponsible with
credit to be good risks on a renewed mortgage. And she tells me this just
as we are about to have a foreign-exchange student from Germany come an live
with us for the beginning academic year! To keep my house and my library
(my collection -- it is the mind that selects the books that makes a
library significant, not its size or dollar value) for this I am forced to
quit what I have been doing on these lists and newsgroups -- in order to
even keep my computer -- this afternoon I interview for a job as a
telemarketing sales rep. -- by the way, my wife went to Michigan in early
July (on the credit card that just maxed) and so she resorted to writing
checks -- 23 checks bounced at $20.00 apiece in handling fees for each
check -- some on checks for $5.OO as I usually never carry currency. (If I
wear clothes off the rack at Good Will -- where did these thousands go?
we'll my brat middle daughter has convinced mother that she needs designer
clothes, AND my wife started taking counseling without telling me. (You
see, the people who call me a "moron" and a "fuckwit" have been right all
along!!!!!!!!!!!!!!!!!!!!!!)
THis of course is not what I intended to write (and what will follow
below) -- who else can a man who has made himself public and transparent and
honest with no secrets talk to -- the kids at Blockbuster I work with?
the shelves and toilets I clean?
Now where was I before my personal life slopped in here?
Questions about the attack on the Pentagon and about the means of this war
economy of paying, when we no longer manufacture anything, our insanely
mounting war indebtedness to the billionaires of the world who belong to no
country and to whom all countries are merely killing fields for economic
killings, these questions are easier to get quashed by backstairs influence
than to get answered.
In graduate school I became interested in what is called Business Cycle
Theory -- an idea that was supposed to have been made obsolete by the
economics of Paul Samuelson of MIT, misnamed Keynesian economics.
It was not until I had already prepared for and begun teaching a course in
Money and Banking at a small four-year college in Washington State that I
learned the truth. Economic booms and bust, tight money and loose money,
the publics "good times"and bad "times" are planned events, the alternate
deliberate and contrived sowing and harvesting seasons of money
manipulators, of Big Finance.
Do you remember how, under FED chairmen Burns and Miller during the Ford and
Clinton years there was amazing inflation -- inflation that defied the
phony doctrines of Samuelson, in that it was "stagflation" -- inflation
without many of the more pleasant immediate benefits associtated with the
word "Boom" -- this was a time of leveraged buyouts, of downsizing, of
ripped-off pension plans, of a middle-class stripped of its assets and
future and relegated to the "lean and mean" economy of long hours, no
benefits, overcrowded life-boat office-politics, de-industrialization --
the service economy -- the "booming" service economy of "burger flippers,
telephone soliciters, and investment banking, investment brokerage and
trading, commodities and derivatives brokerage, tatoos, nail-polishing
establishments and hair dressing -- you know -- the "new economy" that
bi-partisan Congress and Presidents take credit for.
We must not let them get through another shearing season, another milking
system when we need the wool to survive the coming winter and the milk for
our own crying children. They are dominant, they are the aggressive pit
bulls, bred for aggression and dominance -- us for docility and doffing our
hats in their presence and kissing their asses as we clean their stables and
pull their weeds -- but we have to topple them -- we have to let the
captured worth of humanity free from these narrow grasping awful evil minds
of the parasite "ruling class" pounding down our bodies and our spirits and
making our sons and daughters murderers in far off lands to satisfy their
lusts and cover (with oil revenues) their ruining of the greatest economy of
a free people the world has ever seen.
We are the beasts of burden, harnessed under the feet of the tiny ruling
elite -- the empire built by Baruch and Rockefeller and Morgan and today run
by Perle, Wolfowitz, Kissinger and another generation of Rockefellers,
Morgans, Harrimans, etc. (the Bushes are the agents of the Harrimans' btw.)
We don't know all the names -- maybe not even the biggest names of the
Anglo-American power elite -- but we know enough to understand the sociology
and the process. (Did I say "we,?" I meant of course, "I" -- you ( all of
you) never tell me what YOU think (except John Kaminski, Boudewijn Wegerif,
Joost van Steenis whom you know and two dozen individuals I Bcc this letter
to) who understand the power of speaking the truth in love and without fear
to anyone anywhere in trust that it is for the best, that it is the best
thing we can do in a world characterized by deceit from the top.)
Only one thing keeps us (me) from being crushed under the rolls and swells
of evil -- that fact that I see all around me, in the darkest corners of
ruin, something remaining of the Good working imprisoned, working, as I have
been, toward deliverance and triumph over the selfishness and
will-to-dominate -- over imbecility and Machiavellianism, that now rules
over brotherhood and the inner impulse of man to serve and delight others.
Actually, this is not what I started to say -- which I have forgotten in my
stress and frustration -- but it is a ramble that I think some will feel
less alone in the common trap, and a little wiser and more inclined to own
that they agree with the outcasts who seek to unite them.
Dick Eastman
Yakima, Washington
=========
Diagram of global powers that be:
http://utangente.free.fr/2003/world%20gov3.pdf