sunnsea

As the Dollar Rises and Gold Falls, Should We Get Ready for Fed Rate Hikes?

As I and many other posters continue to say, without manufacturing high quality products suitable for the many global export markets we will not be getting out of this any time soon. Our economy also has to be protected from products made in low wage countries and stop the race to the bottom that we have been engaged in since 1981. Americans are going to have to put all of their right wing/libertarian talk radio sound bites to the test and work their way out of this, not financially trade their way out. You remember what real work is, don't you?

Another Crisis Looms Right Around the Corner

One thing that Japan has that we no longer have is a great industrial base from which to operate. That is why our "recovery" will not last. Two mistakes that Japan made: 1) not letting the big banks fail and 2) putting more money into infrastructure in a country which already had an excellent physical infrastructure, so it came down to make-work projects (kind of like our "defense" budgets) such as bridges to no where, high speed rail lines in thinly populated parts of northern Japan, etc.. Many Japanese I speak to feel that in retrospect the social and health infrastructure should have been upgraded instead and there would have been much more benefit and money circulating in the real economy.


On Nov 25 12:33 PM woollyB wrote:

> What scares the perma bears is that the debt bubble that we are (not)
> dealing with right now is far greater than the one that caused the
> Great Depression. Notwithstanding his claims of Depression "scholarship,"
> Bernanke & Co. are following the same patterns that were followed
> back then, and repeating all the mistakes that Japan made.
>
> This isn't the end of the world. We will come through it. But not
> without a depression, no matter how hard we try to fight it off.
> The time to avoid a depression was years ago.

Another Crisis Looms Right Around the Corner

Good post. Thanks for the link to globalresearch.ca. Leave it to a Canadian to provide a good history which pretty much sums up the past 40 years. It does take a look back that far to see how all this got started and developed. It also shows how much we have lost in many different ways and that really there is no economy left, only printing money. I especially like the part about Nixon, China and the banks. This part of the 70s is often overlooked and is at the root of the Great American De-industrialization, an act of national suicide by a 1000 cuts.
Only quibble is about FDR and the GD. The common US folk wisdom is that WWII got us out the GD and not the New Deal.. However, I take a different view. When FDR took office unemployment was at 25% and by 1936 it was down to 14% or an 11% drop in the rate, so some people were going back to work. This employment growth coincided with annual growth rates of from 8 to 9.5% from 1934 to 1937, like China now. (We are far, far from this type of growth rate now). The economy was definitely recovering. But the mistake FDR made was in not continuing his recovery policies forcefully after 1936 thinking that they were not fully necessary. However, the recovery from the GD was too fragile in 1937 and without cotinued jobs programs and direct stumulus, it could not be sustained. There was stagnation from 1937 to 1941. If you think about it, the huge increase in public spending and manpower utilization of WWII shows just how much stimulus and direct spending was needed to pull the US out of the Depression. Same as now except we do not have the industrial base any longer and essentially have to start over from scratch, an immense effort that would require a unified nation in a common cause of rebuilding, like China now. But, sapped as we are from endless cable TV and a fraudulent financial sector, we have neither the will nor the ambition for any large undertakings anymore that are not in some way connected to violence. We prefer to bash each other calling each other names on cable-TV and have the upper class get richer from better ratings.


On Nov 25 08:24 AM SusanGrisanti wrote:

> You are right on. For a 40 year amazing look also see globalresearch.ca/...

10 Reasons to Believe That We're in a Depression

It would have been better, in retrospect, to have Palin as President and Gramm as Treasury Sec so that the Depression would occur full bore without any dancing around and full pain for everyone, not just the middle class. Then from the true wreckage of a false and fraudulent financial services economy and its limo-driver two political parties,a strong progressive leader would emerge with programs ready to be put in place on Day One in 2012: re-institute Glass-Steagall, restart manufacturing via machine tools, increase tariffs on goods from low-wage countries (EU, Japan, South Korea, Taiwan: no tariffs), end corporate tax exemptions on profits earned on foreign operations, large banks broken up, phase out the Federal Reserve, increase funding for creating worker-owned enterprises, institute a single-payer health care system.

Unfortunately, Obama was elected in the wrong place and time. (It's still only 1930 on the year-to-year comparison with the GD, so instead of Palin/Hoover, we have Carter/Obama) So we will have to live through at least 2016 before the final collapse occurs and then the true progressive era can begin, assuming he does not get re-elected.


On Nov 20 08:57 AM Tom B wrote:

> AND Obama has to show SOME positive improvement in the economy by
> next November or he could lose seats in the House and Senate-- nevermind
> the whole deprsesion is "W's" fault; people have short memories.
> So far, we have lots of stim, money spent with NO really obvious
> results--employment still sucks and that's the biggest number in
> people's consciousness.

Nouriel Roubini, One on One: More Doom and Gloom

Since 1968 you have had essentially two political choices: 1) The Government run by the U.S. Chamber of Commerce (popularly known as the Republicans) or 2) Government run by Goldman Sachs (neo-liberal Democrats). What both 1) and 2) have in common is they both stand for low wages for Americans due to cutting all tariffs, especially from low wage countries. The difference between them is their disposition toward the displaced American workers. Number 1) does nothing and while 2) gives "tax credits" to people who have lowered income and indirect "stimulus" packages. Neither one of these poor alternatives should be allowed to continue. To put it another way, Number 1) is for low wages and low welfare and 2) is for low wages and high welfare. I am for a complete New Deal revivial as currently embodied in Germany and Japan (ironically), that is high wages and low welfare. Revival of manufacturing through employee-owned high-tech factories exporting high quality products world-wide and high tariffs on products from countries that exploit workers. It's about raising the global standards on everything from wages to environment and not lowering them to satisfy the egos of the American predator class or "shareholder value."


On Oct 24 10:15 AM TeresaE wrote:

> The lost wages are directly attributed to cheap foreign labor, both
> imported and outsourced.
>
> Want better pay? Quit buying your stuff at the WalMart and start
> buying AMERICAN.
>
> Anything else will just price MORE jobs out of the country.
>
> It really is that simple. Too simple for this entertainment based
> generation to understand.
>
> The days of family-supporting wages are over. Soon black market jobs
> and government dole will be the only way the average American can
> afford to buy their Chinese-made Sam's Choice foodstuffs & socks.
>

Nouriel Roubini, One on One: More Doom and Gloom

Yes. And the American form of toxic, predatory capitalism is dead. That is our great hope. The next step in the process is accelerated movement toward democracy in the workplace via employee owned firms so American workers can begin to recoup the losses they have suffered in lowered wages over the past 35 to 40 years.


On Oct 23 10:37 AM rcstocks wrote:

> "There is a global recovery." No there isn't. There is global coordinated
> government spending, e.g., cash for clunkers. We truly are all socialists
> now that economic commentators accept this as a recovery. Marx has
> won.

Three Asset Classes that Can Actually Outpace Coming Inflationary Price Increases

You should also mention that the 11% cut in the 1995 Canadian budget also led to the rationing of health services that you on the right like to use as criticism of a "public option." As far as Ontario is concerned, the job losses are part of the overall extreme downturn in the global demand, i.e., U.S. demand for cars and trucks. Prior to in 2006 that GM for example moved engine production from Detroit across the river to Ontario mainly because they have a single-payer health insurance system at lower cost to GM.


On Oct 19 09:34 PM derryl wrote:

> E Nuff Said:
> Good point about turning around a "hopeless" fiscal situation. <br/>
>
> In 1995 Finance Minister Paul Martin balanced Canada's federal budget
> by cutting the federal health and social transfer to the Provinces
> by $11B. Scaled up 10X to the US economy that would equal a $110B
> reduction in annual transfers from Washington to the states. Canada's
> provinces use the health and social transfer mainly to fund health
> care and education, which are provincial responsibilities under Canada's
> constitution. The provinces all squealed but responded by rebalancing
> their own budgets and cutting whatever they could from the 2 big
> ticket provincial budget items, health and education. So if there
> was 'pain' it was dispersed as widely as possible by Martin's budget
> balancing move. And now Canada leads the OECD in fiscal (and banking)
> health.
>
> In 1993 Alberta Premier Ralph Klein and Treasurer Jim Dinning attacked
> Alberta's deficit spending, that began with the oil collapse and
> depression (in Alberta) of 1982. They required ALL gov't departments
> to find 5% cuts, which actually happened. Alberta had a 25 year plan
> to pay off its net debt, but after oil began rising in 1998 and natural
> gas took off the debt was paid out in full 10 years early. Alberta
> now has no net debt (some debts are longer term and can't actually
> be paid out until they come due, but Alberta has set money aside
> to pay these). This year due to the collapse in natural gas, Alberta's
> major royalty cash cow, Alberta is running an $8B deficit. But over
> the past few fat years the province has saved $17B in a sustainability
> fund, so no new borrowing will be required to fund the deficit. Gas
> royalties are still low but tarsands construction is starting up
> again so Alberta should endure the present recession quite well.
>
>
> Most other Cdn provinces have been behaving as fiscally responsibly
> as Alberta (and some are doing even better which is why political
> change is in the Alberta air), with the exception of Canada's biggest
> province--Ontario. Ontario's socialist premier is determined to 'go
> green'. Admittedly, Ontario has suffered fully 1/2 of all Cdn manufacturing
> job losses as steel and autos are way down, but if you want to see
> what Obama's greenonomics might do to America just have a look at
> Ontario.

How Low Can the Dollar Go?

you forgot Blackberries, small jet liners, Bombardier transit cars....and now the relocation of a Toyota plant from California to BC. See what a single payer national health insurance system will get you? Instead of paying extortion money to private health insurance you can take the savings and put it to useful manufacturing.

On Sep 12 04:43 PM Mad Hedge Fund Trader wrote:

> iivn Hedge fund longs have been bunching up in the Canadian dollar
> for the past two months. Canada makes what everyone wants and doesn’t
> have enough people to consume it, making them a major exporter of
> everything hot. I bet you didn’t know that the frozen wasteland to
> the North is our largest foreign oil supplier. Most people guess
> Saudi Arabia. The Canadian supply is slated to double over the next
> 20 years, thanks to the environmental atrocity of oil sands. The
> land of Mike Myers, Jim Carey, and Pamela Anderson (note gratuitous
> photo below) is also a big supplier of gold, silver, lead, grain,
> uranium, wood, and other hard things. As for mosquitoes, they’ve
> got a lock on the market. Use dip to accumulate the loony. If you
> catch me singing “O Canada” in the shower, you’ll understand why.

11 Months After the Oil Bubble Burst

We have a lot of SUVs and 4 X 4s on the road that have been dumped on the market a very low prices over the past 11 months. It will take 10 years or more to get of these monsters off the road and out of service, finally replaced by smaller, more efficient vehicles.