By The Last Boy In Line
Saturday, May 30, 2020
Dear America:
Sincerely,
Saturday, May 30, 2020
Thursday, May 28, 2020
Dear Minneapolis
Dear Minneapolis
By The Last Boy In Line
Thursday, May 28, 2020
Dear Minneapolis:
Sincerely,
By The Last Boy In Line
Thursday, May 28, 2020
Dear Minneapolis:
Sincerely,
Wednesday, May 27, 2020
We Pity The USA
We Pity The USA
The World has loved, hated and envied the US. Now, for the first
time, we pity it. — Fintan O'Toole, The Irish Times
By Fintan O'Toole
Adbusters
May 27, 2020
US president Donald Trump has claimed he was being sarcastic
and testing the media when he raised the idea that injecting
disinfectant or irradiating the body with ultraviolet light might
kill coronavirus.
Over more than two centuries, the United States has stirred a very
wide range of feelings in the rest of the world: love and hatred,
fear and hope, envy and contempt, awe and anger.
But there is one emotion that has never been directed towards
the US until now: Pity.
However bad things are for most other rich democracies, it is
hard not to feel sorry for Americans.
Most of them did not vote for Donald Trump in 2016.
Yet they are locked down with a malignant narcissist who instead
of protecting his people from Covid-19, has amplified its lethality.
The country Trump promised to make, "Great Again" has never
in its history seemed so, "Pitiful."
Will American prestige ever recover from this shameful episode?
The US went into the coronavirus crisis with immense advantages.
Precious weeks of warning about what was coming, the world’s best
concentration of medical and scientific expertise, effectively
limitless financial resources, a military complex with stunning
logistical capacity and most of the world’s leading technology
corporations.
Yet it managed to make itself the global epicentre of the
pandemic.
As the American writer George Packer puts it in the current edition
of the Atlantic, “The United States reacted ... like Pakistan
or Belarus – like a country with shoddy infrastructure and a
dysfunctional government whose leaders were too corrupt or stupid
to head off mass suffering.”
It is one thing to be powerless in the face of a natural disaster,
quite another to watch vast power being squandered in real
time – wilfully, malevolently, vindictively.
It is one thing for governments to fail (as, in one degree or another,
most governments did), quite another to watch a ruler and his
supporters actively spread a deadly virus.
Trump, his party and Rupert Murdoch’s Fox News became vectors
of the pestilence.
The grotesque spectacle of the president openly inciting people
(some of them armed) to take to the streets to oppose the
restrictions that save lives is the manifestation of a political
death wish.
What are supposed to be daily briefings on the crisis, demonstrative
of national unity in the face of a shared challenge, have been used
by Trump merely to sow confusion and division.
They provide a recurring horror show in which all the neuroses
that haunt the American psyche dance naked on live TV.
If the plague is a test, its ruling political nexus ensured that
the US would fail it at a terrible cost in human lives.
In the process, the idea of the US as the world’s leading nation,
an idea that has shaped the past century, has all but evaporated.
Who, other than the Trump impersonator Jair Bolsonaro in Brazil,
is now looking to the US as the exemplar of anything other than
what not to do?
How many people in Düsseldorf or Dublin are wishing they lived
in Detroit or Dallas?
It is hard to remember now but, even in 2017, when Trump took
office, the conventional wisdom in the US was that the Republican
Party and the broader framework of US political institutions would
prevent him from doing too much damage.
This was always a delusion, but the pandemic has exposed it in
the most savage ways.
https://www.adbusters.org/articles-coded/now-for-the-first-time-
we-pity-us
The World has loved, hated and envied the US. Now, for the first
time, we pity it. — Fintan O'Toole, The Irish Times
By Fintan O'Toole
Adbusters
May 27, 2020
US president Donald Trump has claimed he was being sarcastic
and testing the media when he raised the idea that injecting
disinfectant or irradiating the body with ultraviolet light might
kill coronavirus.
Over more than two centuries, the United States has stirred a very
wide range of feelings in the rest of the world: love and hatred,
fear and hope, envy and contempt, awe and anger.
But there is one emotion that has never been directed towards
the US until now: Pity.
However bad things are for most other rich democracies, it is
hard not to feel sorry for Americans.
Most of them did not vote for Donald Trump in 2016.
Yet they are locked down with a malignant narcissist who instead
of protecting his people from Covid-19, has amplified its lethality.
The country Trump promised to make, "Great Again" has never
in its history seemed so, "Pitiful."
Will American prestige ever recover from this shameful episode?
The US went into the coronavirus crisis with immense advantages.
Precious weeks of warning about what was coming, the world’s best
concentration of medical and scientific expertise, effectively
limitless financial resources, a military complex with stunning
logistical capacity and most of the world’s leading technology
corporations.
Yet it managed to make itself the global epicentre of the
pandemic.
As the American writer George Packer puts it in the current edition
of the Atlantic, “The United States reacted ... like Pakistan
or Belarus – like a country with shoddy infrastructure and a
dysfunctional government whose leaders were too corrupt or stupid
to head off mass suffering.”
It is one thing to be powerless in the face of a natural disaster,
quite another to watch vast power being squandered in real
time – wilfully, malevolently, vindictively.
It is one thing for governments to fail (as, in one degree or another,
most governments did), quite another to watch a ruler and his
supporters actively spread a deadly virus.
Trump, his party and Rupert Murdoch’s Fox News became vectors
of the pestilence.
The grotesque spectacle of the president openly inciting people
(some of them armed) to take to the streets to oppose the
restrictions that save lives is the manifestation of a political
death wish.
What are supposed to be daily briefings on the crisis, demonstrative
of national unity in the face of a shared challenge, have been used
by Trump merely to sow confusion and division.
They provide a recurring horror show in which all the neuroses
that haunt the American psyche dance naked on live TV.
If the plague is a test, its ruling political nexus ensured that
the US would fail it at a terrible cost in human lives.
In the process, the idea of the US as the world’s leading nation,
an idea that has shaped the past century, has all but evaporated.
Who, other than the Trump impersonator Jair Bolsonaro in Brazil,
is now looking to the US as the exemplar of anything other than
what not to do?
How many people in Düsseldorf or Dublin are wishing they lived
in Detroit or Dallas?
It is hard to remember now but, even in 2017, when Trump took
office, the conventional wisdom in the US was that the Republican
Party and the broader framework of US political institutions would
prevent him from doing too much damage.
This was always a delusion, but the pandemic has exposed it in
the most savage ways.
https://www.adbusters.org/articles-coded/now-for-the-first-time-
we-pity-us
Monday, May 25, 2020
Dear Memorial Day
Dear Memorial Day
By The Last Boy In Line
Monday, May 25, 2020
Dear Memorial Day:
Sincerely,
By The Last Boy In Line
Monday, May 25, 2020
Dear Memorial Day:
Sincerely,
Thursday, May 21, 2020
China’s New Crypto-Currency: First Step To Full Dedollarization
China’s New Crypto-Currency: First Step To Full Dedollarization
By Peter Koenig
Dissident Voice
May 21, 2020
"We’ll cut off the whole relationship" Donald Trump threatened
China in a recent Fox-Business interview, suggesting he may cut
diplomatic relations with China and thereby saving the US $500
billion dollars.
He didn’t say how, though.
Mr. Trump’s anger referred to what he calls China’s
“mismanagement” of the corona crisis.
This is consistent with the new China bashing hard
line being pushed by his administration.
“I’m very disappointed in China,” Trump said during the same Fox
interview. “We asked to go over and they said no,” he continued,
referring to the Centers for Disease Control and Prevention’s (CDC)
February offer of assistance to the virus-stricken city of Wuhan.
“They didn’t want our help. And I figured that was OK because
they must know what they are doing. So, it was either stupidity,
incompetence or deliberate.”
These are strong and unsubstantiated words since there has
never been a clearly documented accusation against China in
how precisely China mismanaged the COVID-19 outbreak and
is supposedly responsible for the COVID crisis in the US where
real mismanagement, corruption, conflict of interest, and
particularly pharma-interests, competing private vaccine
company interests are written all over the walls, the walls
of shame, falsifying corona statistics, by falsifying death
certificates, paying hospitals for declaring any patient a
COVID-patient, even if many of them aren’t, and for using
ventilators, though it is widely known that ventilators are
causing death in 60% to 80% of patients.
It is almost certain that the virus was created in a US bio-weapons
lab from where it escaped deliberately or by accident and that
patient zero was in the US and that the virus was brought to China
in one way or another.
President Trump knows it.
He also knows about the real mismanagement of the crisis in his
country, the United States.
But he has always been good at self-promoting propaganda and
slandering perceived enemies, as long as he thinks it may help
him being re-elected.
It is obvious that the US China bashing has nothing to do with
China’s “mismanagement” of the corona epidemic, but rather with
China’s bold move a step further away from the dollar-economy,
by:
First, using the yuan and local currencies boosting trade among the
ASEAN+3 countries (Association of Southeast Asian Nations – Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand, and Vietnam; plus 3 = Japan, South Korea and
China).
Monetary transactions will use the CIPS (Cross-Border Interbank
Payment System), avoiding the dollar controlled SWIFT payment
scheme.
This is mostly to prevent US interference in international monetary
transactions and also in response to the United States’ threat of
cutting off Chinese supply chains.
The cutting off supply chains is, of course, sheer bluff, as literally
80 percent-plus of US industries depend in one way or another on
supplies from China.
This dependence is particularly significant in medical supplies,
where the US depends for 80% to 90% on China.
But China is China, and President Xi acted fast calling the bluff
and the US may suddenly stand there with an empty cup, since
such supply chains are not replaced overnight.
In the first quarter 2020, ASEAN countries have become China’s
largest trading partner with 15.1 %, outpacing the European Union
(EU). Trade with South Korea and Japan amounted to another
13.7%, bringing the total close to 30%. Adding China’s trade with
Russia, another at least 15%, is getting close to a 50% tipping point
of China’s closest partners abandoning commercial transactions
in US-dollars.
Second, by launching a new People’s Bank of China (PBC = China’s
Central Bank) controlled crypto-currency for international trade,
thereby further circumventing the US-dollar and SWIFT controlled
international money transfer system which makes all transactions
vulnerable to US interference and sanctions.
China’s new cyber-money, e-RMB (Ren Min Bi, meaning People’s
Money), or Yuan, is currently being tested in several Chinese cities,
including Shenzhen, Suzhou, Chengdu, and Xiong’an.
In these cities it has almost universal acceptance; i.e., for salary
payments, public transportation, food and most retail shopping.
The use of digital money is nothing new in China.
Today about 90% of all monetary transactions are electronic for
example, through WeChat and AliPay, but they do not replace
the existing cash currency.
Commodity pricing today, mostly dollarized, will be priced by
China in yuan and traded in crypto-yuan.
Yuan pricing for commodities, such as gold, crude oil and iron ore,
has already started.
As China is recovering from the pandemic more quickly than the
rest of the world, relatively high-returning yuan-denominated
investments and commodity assets will become more attractive.
The non-interference factor of a Chinese Central Bank backed
crypto-currency is an additional security element that will further
boost the Chinese Yuan as a reserve currency.
Already now countries around the globe are sick and tired of US
meddling in their international transactions and especially with
US sanctions – that may come at a whim – every time a country
demonstrates her sovereignty or disobedience to US dictates.
This leads many countries that may not speak out publicly for fear
of sanctions to gradually and quietly divesting their dollar holdings
into Chinese yuan.
A tipping point may be reached when about 50% of world trade
and world reserves are denominated in yuan.
At this point it would be likely that the worldwide dollar hegemony
will be no more, as it may be displaced by the yuan.
Several leaders of countries were killed for attempting to replace
the dollar for trading with other currencies.
For example, Saddam Hussein, for his intent to use the euro for
trading Iraq’s hydrocarbon riches, and Libya’s Gadhafi, when he
wanted to introduce the Gold-Dinar as a Pan-African trading
currency, thereby freeing Africa from western monetary slavehood.
As we all recall, he was literally lynched by NATO on October 20,
2011 at the initiative of Hillary Clinton with the strong support
of then French President Sarkozy.
By the way, this western monetary stranglehold on Africa prevails
as of this day – a new-old kind of colonization, nobody in the
western mainstream reports on.
Once the new e-RMB (yuan) has been successfully tested locally
it will be launched internationally.
While China’s new PBC-backed cyber-currency’s
internationalization will make the yuan even more attractive among
trading partners, and also as a reserve currency, China may
simultaneously divest its huge reserves of US Treasury bonds (about
US$1.2 trillion) into purchasing assets abroad paid in US-dollars.
The Belt and Road investments maybe a suitable vehicle to reduce
dollar holdings at home.
In the current high corona debt-crisis around the world, especially
the Global South, China may also consider a program of Debt
Jubilee (debt forgiveness) to the poorest partner countries which
may be already, or potentially be, future Belt and Road associates.
At present and since October 2016, the Renminbi (Chinese yuan) is
part of a 5-currency basket at the IMF that constitutes the Special
Drawing Rights (SDR), the world’s ultimate virtual reserve currency.
The SDR share distribution is US-dollar 41.73%, euro 30.93%,
Chinese yuan 10.92%, Japanese yen 8.33% and the British pound
8.09%.
This currency allocation to the SDR is disproportionate with regard
to the economic strength of the respective countries, especially
China, the world’s second largest economy, rapidly moving towards
first place.
China may want to vigorously renegotiate with the IMF her currency
proportion in the SDR, as well as reviewing country quotas which by
now are out-of-line with member countries’ economic weight.
An IMF capital increase is overdue.
The IMF capital base today is SDR 477 billion (US$ 677 billion).
In addition, there is the temporary New Arrangement to Borrow
(NAB) which in January 2020 has been doubled to SDR365 billion
(US$ 475 billion), a total resource-base of about US$ 1.15 trillion.
Yet, the IMF already today foresees US$ 1 trillion for additional
corona debt lending and debt forgiveness. Since the NAB is only
a temporary arrangement, a quota increase and review; i.e., a
proper adjustment for China’s economy is more than overdue.
A quota adjustment in favor of China and the corresponding
adjustment of the yuan’s proportion in the SDR basket would
further enhance China’s currency vis-à-vis the rest of the world.
This coupled with an incorruptible cryptocurrency controlled
by China’s Central Bank and possibly backed by gold would be
a formidable reserve currency that most countries would like
as their chief reserve asset.
This, of course, is what Washington is afraid of.
It would clearly endanger and probably crush the global US-dollar
hegemony.
The world would be a better place for it.
Therefore, the current China bashing and attributing guilt for
spreading and mismanaging the corona virus is a sheer farce,
a treachery of the world, a deviation of the real reason behind
Trump’s attempt to demolish China’s reputation around
the globe, namely by doing so, hoping to destroy the rise of
China and the appreciation of the Chinese yuan, and thereby
the yuan’s attractiveness as an investment currency for most
of the rest of the world.
This is pretty similar to the real reason for the 2018-2019 US-China
trade war, initiated by President Trump, had the objective of
ruining the yuan’s reputation in the world arena.
To no avail.
Washington eventually, quietly, and unceremoniously,
lost the conflict over trade.
Despite Trump’s loud declarations to the contrary,
the US needs China much more than vice-versa.
Just look at the Chinese supply chain which the west in particular
the US, cannot replace from one day to the other.
Under President Xi Jinping’s leadership, China has switched gears
rather fast.
Preparations to orient towards Asian markets are in full swing.
China is enhancing relations with Asian markets; i.e., the ASEAN
countries, plus Japan and South Korea.
Members of the SCO (Shanghai Cooperation Organization) are also
a trading market China is already engaged in and may further strengthen it.
The SCO, in addition to China and most of the Central Asian
countries, include also Russia, India and Pakistan – and Iran
is waiting for imminent admission. There's, like Malaysia and
Mongolia are in observer status and also slanted to become
SCO members in due course.
The combination of SCO, ASEAN-plus 3, amounts to more than half
the world population and accounts for more than a third of the
world’s economic output.
This is a formidable global “market share” and will likely increase
with every atrocity – military and economic – Washington is
committing around the globe.
With her new crypto-currency, which eventually will be
internationalized, China is well on her way to fully dedollarize,
with the cyber-yuan replacing the US-dollar as the key trading
and main reserve currency and to displace the United States
as the world’s financial and economic hegemon.
The current China bashing does not prevent China from forging
ahead with her economic activities – trade – and especially the
unstoppable Belt and Road Initiative (BRI) via maritime and land
routes, already counting on 160 partners (about 120 countries
and some 40 multinational organizations) on four continents.
This revolutionary global development scheme will require
trillions of yuans and dollars for investments.
It will also be generating trillions in revenues over time, shared
with BRI partners. All towards a common future for mankind – a
world moving towards an equilibrium with justice, harmony, and
peace.
https://dissidentvoice.org/2020/05/chinas-new-crypto-currency-
first-step-to-full-dedollarization
By Peter Koenig
Dissident Voice
May 21, 2020
"We’ll cut off the whole relationship" Donald Trump threatened
China in a recent Fox-Business interview, suggesting he may cut
diplomatic relations with China and thereby saving the US $500
billion dollars.
He didn’t say how, though.
Mr. Trump’s anger referred to what he calls China’s
“mismanagement” of the corona crisis.
This is consistent with the new China bashing hard
line being pushed by his administration.
“I’m very disappointed in China,” Trump said during the same Fox
interview. “We asked to go over and they said no,” he continued,
referring to the Centers for Disease Control and Prevention’s (CDC)
February offer of assistance to the virus-stricken city of Wuhan.
“They didn’t want our help. And I figured that was OK because
they must know what they are doing. So, it was either stupidity,
incompetence or deliberate.”
These are strong and unsubstantiated words since there has
never been a clearly documented accusation against China in
how precisely China mismanaged the COVID-19 outbreak and
is supposedly responsible for the COVID crisis in the US where
real mismanagement, corruption, conflict of interest, and
particularly pharma-interests, competing private vaccine
company interests are written all over the walls, the walls
of shame, falsifying corona statistics, by falsifying death
certificates, paying hospitals for declaring any patient a
COVID-patient, even if many of them aren’t, and for using
ventilators, though it is widely known that ventilators are
causing death in 60% to 80% of patients.
It is almost certain that the virus was created in a US bio-weapons
lab from where it escaped deliberately or by accident and that
patient zero was in the US and that the virus was brought to China
in one way or another.
President Trump knows it.
He also knows about the real mismanagement of the crisis in his
country, the United States.
But he has always been good at self-promoting propaganda and
slandering perceived enemies, as long as he thinks it may help
him being re-elected.
It is obvious that the US China bashing has nothing to do with
China’s “mismanagement” of the corona epidemic, but rather with
China’s bold move a step further away from the dollar-economy,
by:
First, using the yuan and local currencies boosting trade among the
ASEAN+3 countries (Association of Southeast Asian Nations – Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand, and Vietnam; plus 3 = Japan, South Korea and
China).
Monetary transactions will use the CIPS (Cross-Border Interbank
Payment System), avoiding the dollar controlled SWIFT payment
scheme.
This is mostly to prevent US interference in international monetary
transactions and also in response to the United States’ threat of
cutting off Chinese supply chains.
The cutting off supply chains is, of course, sheer bluff, as literally
80 percent-plus of US industries depend in one way or another on
supplies from China.
This dependence is particularly significant in medical supplies,
where the US depends for 80% to 90% on China.
But China is China, and President Xi acted fast calling the bluff
and the US may suddenly stand there with an empty cup, since
such supply chains are not replaced overnight.
In the first quarter 2020, ASEAN countries have become China’s
largest trading partner with 15.1 %, outpacing the European Union
(EU). Trade with South Korea and Japan amounted to another
13.7%, bringing the total close to 30%. Adding China’s trade with
Russia, another at least 15%, is getting close to a 50% tipping point
of China’s closest partners abandoning commercial transactions
in US-dollars.
Second, by launching a new People’s Bank of China (PBC = China’s
Central Bank) controlled crypto-currency for international trade,
thereby further circumventing the US-dollar and SWIFT controlled
international money transfer system which makes all transactions
vulnerable to US interference and sanctions.
China’s new cyber-money, e-RMB (Ren Min Bi, meaning People’s
Money), or Yuan, is currently being tested in several Chinese cities,
including Shenzhen, Suzhou, Chengdu, and Xiong’an.
In these cities it has almost universal acceptance; i.e., for salary
payments, public transportation, food and most retail shopping.
The use of digital money is nothing new in China.
Today about 90% of all monetary transactions are electronic for
example, through WeChat and AliPay, but they do not replace
the existing cash currency.
Commodity pricing today, mostly dollarized, will be priced by
China in yuan and traded in crypto-yuan.
Yuan pricing for commodities, such as gold, crude oil and iron ore,
has already started.
As China is recovering from the pandemic more quickly than the
rest of the world, relatively high-returning yuan-denominated
investments and commodity assets will become more attractive.
The non-interference factor of a Chinese Central Bank backed
crypto-currency is an additional security element that will further
boost the Chinese Yuan as a reserve currency.
Already now countries around the globe are sick and tired of US
meddling in their international transactions and especially with
US sanctions – that may come at a whim – every time a country
demonstrates her sovereignty or disobedience to US dictates.
This leads many countries that may not speak out publicly for fear
of sanctions to gradually and quietly divesting their dollar holdings
into Chinese yuan.
A tipping point may be reached when about 50% of world trade
and world reserves are denominated in yuan.
At this point it would be likely that the worldwide dollar hegemony
will be no more, as it may be displaced by the yuan.
Several leaders of countries were killed for attempting to replace
the dollar for trading with other currencies.
For example, Saddam Hussein, for his intent to use the euro for
trading Iraq’s hydrocarbon riches, and Libya’s Gadhafi, when he
wanted to introduce the Gold-Dinar as a Pan-African trading
currency, thereby freeing Africa from western monetary slavehood.
As we all recall, he was literally lynched by NATO on October 20,
2011 at the initiative of Hillary Clinton with the strong support
of then French President Sarkozy.
By the way, this western monetary stranglehold on Africa prevails
as of this day – a new-old kind of colonization, nobody in the
western mainstream reports on.
Once the new e-RMB (yuan) has been successfully tested locally
it will be launched internationally.
While China’s new PBC-backed cyber-currency’s
internationalization will make the yuan even more attractive among
trading partners, and also as a reserve currency, China may
simultaneously divest its huge reserves of US Treasury bonds (about
US$1.2 trillion) into purchasing assets abroad paid in US-dollars.
The Belt and Road investments maybe a suitable vehicle to reduce
dollar holdings at home.
In the current high corona debt-crisis around the world, especially
the Global South, China may also consider a program of Debt
Jubilee (debt forgiveness) to the poorest partner countries which
may be already, or potentially be, future Belt and Road associates.
At present and since October 2016, the Renminbi (Chinese yuan) is
part of a 5-currency basket at the IMF that constitutes the Special
Drawing Rights (SDR), the world’s ultimate virtual reserve currency.
The SDR share distribution is US-dollar 41.73%, euro 30.93%,
Chinese yuan 10.92%, Japanese yen 8.33% and the British pound
8.09%.
This currency allocation to the SDR is disproportionate with regard
to the economic strength of the respective countries, especially
China, the world’s second largest economy, rapidly moving towards
first place.
China may want to vigorously renegotiate with the IMF her currency
proportion in the SDR, as well as reviewing country quotas which by
now are out-of-line with member countries’ economic weight.
An IMF capital increase is overdue.
The IMF capital base today is SDR 477 billion (US$ 677 billion).
In addition, there is the temporary New Arrangement to Borrow
(NAB) which in January 2020 has been doubled to SDR365 billion
(US$ 475 billion), a total resource-base of about US$ 1.15 trillion.
Yet, the IMF already today foresees US$ 1 trillion for additional
corona debt lending and debt forgiveness. Since the NAB is only
a temporary arrangement, a quota increase and review; i.e., a
proper adjustment for China’s economy is more than overdue.
A quota adjustment in favor of China and the corresponding
adjustment of the yuan’s proportion in the SDR basket would
further enhance China’s currency vis-à-vis the rest of the world.
This coupled with an incorruptible cryptocurrency controlled
by China’s Central Bank and possibly backed by gold would be
a formidable reserve currency that most countries would like
as their chief reserve asset.
This, of course, is what Washington is afraid of.
It would clearly endanger and probably crush the global US-dollar
hegemony.
The world would be a better place for it.
Therefore, the current China bashing and attributing guilt for
spreading and mismanaging the corona virus is a sheer farce,
a treachery of the world, a deviation of the real reason behind
Trump’s attempt to demolish China’s reputation around
the globe, namely by doing so, hoping to destroy the rise of
China and the appreciation of the Chinese yuan, and thereby
the yuan’s attractiveness as an investment currency for most
of the rest of the world.
This is pretty similar to the real reason for the 2018-2019 US-China
trade war, initiated by President Trump, had the objective of
ruining the yuan’s reputation in the world arena.
To no avail.
Washington eventually, quietly, and unceremoniously,
lost the conflict over trade.
Despite Trump’s loud declarations to the contrary,
the US needs China much more than vice-versa.
Just look at the Chinese supply chain which the west in particular
the US, cannot replace from one day to the other.
Under President Xi Jinping’s leadership, China has switched gears
rather fast.
Preparations to orient towards Asian markets are in full swing.
China is enhancing relations with Asian markets; i.e., the ASEAN
countries, plus Japan and South Korea.
Members of the SCO (Shanghai Cooperation Organization) are also
a trading market China is already engaged in and may further strengthen it.
The SCO, in addition to China and most of the Central Asian
countries, include also Russia, India and Pakistan – and Iran
is waiting for imminent admission. There's, like Malaysia and
Mongolia are in observer status and also slanted to become
SCO members in due course.
The combination of SCO, ASEAN-plus 3, amounts to more than half
the world population and accounts for more than a third of the
world’s economic output.
This is a formidable global “market share” and will likely increase
with every atrocity – military and economic – Washington is
committing around the globe.
With her new crypto-currency, which eventually will be
internationalized, China is well on her way to fully dedollarize,
with the cyber-yuan replacing the US-dollar as the key trading
and main reserve currency and to displace the United States
as the world’s financial and economic hegemon.
The current China bashing does not prevent China from forging
ahead with her economic activities – trade – and especially the
unstoppable Belt and Road Initiative (BRI) via maritime and land
routes, already counting on 160 partners (about 120 countries
and some 40 multinational organizations) on four continents.
This revolutionary global development scheme will require
trillions of yuans and dollars for investments.
It will also be generating trillions in revenues over time, shared
with BRI partners. All towards a common future for mankind – a
world moving towards an equilibrium with justice, harmony, and
peace.
https://dissidentvoice.org/2020/05/chinas-new-crypto-currency-
first-step-to-full-dedollarization
Tuesday, May 19, 2020
This Is How The Coronavirus Will Destroy The Economy
This Is How The Coronavirus Will Destroy The Economy
By Ruchir Sharma
The New York Times
May 19, 2020
Though the Federal Reserve moved over the weekend to slash rates
and buy treasuries, markets around the world fell on Monday
anyway.
The coronavirus threatens to set off financial contagion in a world
economy with very different vulnerabilities than on the eve of the
global financial crisis, 12 years ago.
In key ways the world is now as or more deeply in debt as it was
when the last big crisis hit.
But the largest and most risky pools of debt have shifted — from
households and banks in the United States, which were restrained
by regulators after the crisis, to corporations all over the world.
As businesses deal with the prospect of a sudden stop in their
cash flows, the most exposed are a relatively new generation
of companies that already struggle to pay their loans.
This class includes the “zombies”— companies that earn too little
even to make interest payments on their debt, and survive only by
issuing new debt.
The dystopian reality of deserted airports, empty trains and thinly
occupied restaurants is already badly hurting economic activity.
The longer the pandemic lasts the greater the risk that the sharp
downturn morphs into a financial crisis with zombie companies
starting a chain of defaults just like subprime mortgages did in
2008.
Over the last century, recessions have almost always been started
by a sustained period of higher interest rates.
Never a virus: The damage such contagions inflicted on the world
economy typically lasted no more than three months.
Now this once-in-a-century pandemic is hitting a world economy
saddled with record levels of debt.
Central banks around the world are waking up to the prospect
that the cash crunch can beget a financial crisis, as in 2008.
That’s why the Federal Reserve took aggressive easing measures
on Sunday that were straight out of the 2008 crisis playbook.
While it is unclear whether the actions of the Fed will be enough
to prevent the markets from panicking further, it’s worth asking:
Why does the financial system feel so vulnerable again?
Around 1980, the world’s debts started rising fast as interest rates
began falling and financial deregulation made it easier to lend.
Debt tripled to a historic peak of more than three times the size
of the global economy on the eve of 2008 crisis.
Debt fell that year, but record low interest rates soon fueled
a new run of borrowing.
The easy money policies pursued by the Federal Reserve, and
matched by central banks around the world, were designed to
keep economies growing and to stimulate recovery from the crisis.
Instead, much of that money went into the financial economy,
including stocks, bonds and cheap credit to unprofitable companies.
As the economic expansion continued, year after year, lenders
grew increasingly lax, extending cheap loans to companies with
questionable finances.
Today the global debt burden is again at an all-time high.
The level of debt in America’s corporate sector amounts to
75 percent of the country’s gross domestic product, breaking
the previous record set in 2008.
Among large American companies, debt burdens are precariously
high in the auto, hospitality and transportation sectors — industries
taking a direct hit from the coronavirus.
Hidden within the $16 trillion corporate debt market are many
potential troublemakers, including the zombies.
They are the natural spawn of a long period of record low interest
rates, which has sent investors on a restless hunt for debt products
that offer higher reward, with higher risk.
Zombies now account for 16 percent of all the publicly traded
companies in the United States, and more than 10 percent in
Europe, according to the Bank for International Settlements,
the bank for central banks.
A look at the data reveals that zombies are especially prevalent
in commodity industries like mining, coal and oil, which may spell
upheavals to come for the shale oil industry, now a critical driver
of the American economy.
Zombies are not the only potential source of trouble.
To avoid regulations imposed on public companies since 2008 many
have gone private in deals that typically saddle the company with
huge debts.
The average American company owned by a private equity firm
has debts equal to six times its annual earnings, a level twice
what ratings agencies consider “junk.”
Signs of debt stress are now multiplying in industries impacted by
the coronavirus, including transportation and leisure, auto and,
perhaps worst of all, oil.
Slammed on one side by fear that the coronavirus will collapse
demand, and on the other by fears of a supply glut, oil prices
have fallen to below $35 a barrel — far too low for many oil
companies to meet their debt and interest payments.
Though investors always demand higher returns to buy bonds issued
by financially shaky companies, the premium they demand on U.S.
junk debt has nearly doubled since mid-February.
By last week the premium they demand on the junk debt
of oil companies was nearing levels seen in a recession.
Though the world has yet to see a virus-induced recession,
this is now a rare pandemic.
The direct effect on economic activity will be magnified not only
by its impact on balky debtors, but also by the impact of failing
companies on the bloated financial markets.
When markets fall, millions of investors feel less wealthy
and cut back on spending.
The economy slows.
The bigger markets get, relative to the economy,
the larger this negative “wealth effect.”
And thanks again to seemingly endless promises of easy money,
markets have never been bigger.
Since 1980 the global financial markets (mainly stocks and bonds)
have quadrupled to four times the size of the global economy,
above the previous record highs set in 2008.
On Wall Street, bulls still hold out hope that the worst can pass
quickly and point to the encouraging developments in China.
The first cases were reported there on Dec. 31, and the rate of
growth in new cases peaked on Feb. 13, just seven weeks later.
After early losses, China’s stock market bounced back
and the economy seemed to do the same.
But the latest data, released today on retail sales and fixed
investment, suggest the Chinese economy is set to contract
this quarter.
While China is no longer center stage as the virus spreads
worldwide, there are renewed fears that the crisis could
circle back to its shores by hurting demand for exports.
Over the last decade China’s corporate debt swelled fourfold
to over $20 trillion — the biggest binge in the world.
The International Monetary Fund estimates that one-tenth of this
debt is in zombie firms, which rely on government-directed lending
to stay alive.
In other parts of the world, including the United States, calls
are growing for policymakers to offer similar state support to
the fragile corporate sector.
No matter what the policymakers do, the outcome is now up
to, "The Coronavirus" and how soon its spread starts to slow.
The longer the coronavirus continues to spread at its current pace,
the more likely it is that zombies begin to die, further depressing
the markets — and increasing the risk of wider financial contagin.
https://www.nytimes.com/2020/03/16/opinion/coronavirus-
economy-debt.html
By Ruchir Sharma
The New York Times
May 19, 2020
Though the Federal Reserve moved over the weekend to slash rates
and buy treasuries, markets around the world fell on Monday
anyway.
The coronavirus threatens to set off financial contagion in a world
economy with very different vulnerabilities than on the eve of the
global financial crisis, 12 years ago.
In key ways the world is now as or more deeply in debt as it was
when the last big crisis hit.
But the largest and most risky pools of debt have shifted — from
households and banks in the United States, which were restrained
by regulators after the crisis, to corporations all over the world.
As businesses deal with the prospect of a sudden stop in their
cash flows, the most exposed are a relatively new generation
of companies that already struggle to pay their loans.
This class includes the “zombies”— companies that earn too little
even to make interest payments on their debt, and survive only by
issuing new debt.
The dystopian reality of deserted airports, empty trains and thinly
occupied restaurants is already badly hurting economic activity.
The longer the pandemic lasts the greater the risk that the sharp
downturn morphs into a financial crisis with zombie companies
starting a chain of defaults just like subprime mortgages did in
2008.
Over the last century, recessions have almost always been started
by a sustained period of higher interest rates.
Never a virus: The damage such contagions inflicted on the world
economy typically lasted no more than three months.
Now this once-in-a-century pandemic is hitting a world economy
saddled with record levels of debt.
Central banks around the world are waking up to the prospect
that the cash crunch can beget a financial crisis, as in 2008.
That’s why the Federal Reserve took aggressive easing measures
on Sunday that were straight out of the 2008 crisis playbook.
While it is unclear whether the actions of the Fed will be enough
to prevent the markets from panicking further, it’s worth asking:
Why does the financial system feel so vulnerable again?
Around 1980, the world’s debts started rising fast as interest rates
began falling and financial deregulation made it easier to lend.
Debt tripled to a historic peak of more than three times the size
of the global economy on the eve of 2008 crisis.
Debt fell that year, but record low interest rates soon fueled
a new run of borrowing.
The easy money policies pursued by the Federal Reserve, and
matched by central banks around the world, were designed to
keep economies growing and to stimulate recovery from the crisis.
Instead, much of that money went into the financial economy,
including stocks, bonds and cheap credit to unprofitable companies.
As the economic expansion continued, year after year, lenders
grew increasingly lax, extending cheap loans to companies with
questionable finances.
Today the global debt burden is again at an all-time high.
The level of debt in America’s corporate sector amounts to
75 percent of the country’s gross domestic product, breaking
the previous record set in 2008.
Among large American companies, debt burdens are precariously
high in the auto, hospitality and transportation sectors — industries
taking a direct hit from the coronavirus.
Hidden within the $16 trillion corporate debt market are many
potential troublemakers, including the zombies.
They are the natural spawn of a long period of record low interest
rates, which has sent investors on a restless hunt for debt products
that offer higher reward, with higher risk.
Zombies now account for 16 percent of all the publicly traded
companies in the United States, and more than 10 percent in
Europe, according to the Bank for International Settlements,
the bank for central banks.
A look at the data reveals that zombies are especially prevalent
in commodity industries like mining, coal and oil, which may spell
upheavals to come for the shale oil industry, now a critical driver
of the American economy.
Zombies are not the only potential source of trouble.
To avoid regulations imposed on public companies since 2008 many
have gone private in deals that typically saddle the company with
huge debts.
The average American company owned by a private equity firm
has debts equal to six times its annual earnings, a level twice
what ratings agencies consider “junk.”
Signs of debt stress are now multiplying in industries impacted by
the coronavirus, including transportation and leisure, auto and,
perhaps worst of all, oil.
Slammed on one side by fear that the coronavirus will collapse
demand, and on the other by fears of a supply glut, oil prices
have fallen to below $35 a barrel — far too low for many oil
companies to meet their debt and interest payments.
Though investors always demand higher returns to buy bonds issued
by financially shaky companies, the premium they demand on U.S.
junk debt has nearly doubled since mid-February.
By last week the premium they demand on the junk debt
of oil companies was nearing levels seen in a recession.
Though the world has yet to see a virus-induced recession,
this is now a rare pandemic.
The direct effect on economic activity will be magnified not only
by its impact on balky debtors, but also by the impact of failing
companies on the bloated financial markets.
When markets fall, millions of investors feel less wealthy
and cut back on spending.
The economy slows.
The bigger markets get, relative to the economy,
the larger this negative “wealth effect.”
And thanks again to seemingly endless promises of easy money,
markets have never been bigger.
Since 1980 the global financial markets (mainly stocks and bonds)
have quadrupled to four times the size of the global economy,
above the previous record highs set in 2008.
On Wall Street, bulls still hold out hope that the worst can pass
quickly and point to the encouraging developments in China.
The first cases were reported there on Dec. 31, and the rate of
growth in new cases peaked on Feb. 13, just seven weeks later.
After early losses, China’s stock market bounced back
and the economy seemed to do the same.
But the latest data, released today on retail sales and fixed
investment, suggest the Chinese economy is set to contract
this quarter.
While China is no longer center stage as the virus spreads
worldwide, there are renewed fears that the crisis could
circle back to its shores by hurting demand for exports.
Over the last decade China’s corporate debt swelled fourfold
to over $20 trillion — the biggest binge in the world.
The International Monetary Fund estimates that one-tenth of this
debt is in zombie firms, which rely on government-directed lending
to stay alive.
In other parts of the world, including the United States, calls
are growing for policymakers to offer similar state support to
the fragile corporate sector.
No matter what the policymakers do, the outcome is now up
to, "The Coronavirus" and how soon its spread starts to slow.
The longer the coronavirus continues to spread at its current pace,
the more likely it is that zombies begin to die, further depressing
the markets — and increasing the risk of wider financial contagin.
https://www.nytimes.com/2020/03/16/opinion/coronavirus-
economy-debt.html
Sunday, May 17, 2020
Dear Barack Hussein Obama
Dear Barack Hussein Obama
By The Last Boy In Line
Sunday, May 17, 2020
Dear Barack Hussein Obama:
Sincerely,
By The Last Boy In Line
Sunday, May 17, 2020
Dear Barack Hussein Obama:
Sincerely,
Friday, May 15, 2020
America The Victim
America The Victim
Are Enemies Lining Up For Revenge In The Wake Of The Coronavirus?
By Philip Giraldi
Information Clearing House
May 15, 2020
When in trouble politically, governments have traditionally
conjured up a foreign enemy to explain why things are going
wrong.
Whatever one chooses to believe about the coronavirus the fact
is that it has resulted in considerable political backlash against
a number of governments whose behavior has been perceived as
either too extreme or too dilatory.
Donald Trump’s White House has taken shots from both directions
and the response to the disease has also been pilloried due to
repeated gaffes by the president himself.
The latest mis-spoke now being framed by Trump’s press secretary
as, "sarcasm" involved a presidential suggestion that one might
consider injecting or imbibing disinfectant to treat the disease,
either of which could easily prove lethal.
So the administration is desperate to change the narrative and has
decided to hit on the old expedient, namely seeking out a foreign
enemy to distract from what is going on in the nation’s hospitals.
The tale of malevolent foreigners has been picked up by a number
of mainstream media outlets and has proven especially titillating
because there is not just one bad guy, but instead at least four:
China, Russia, North Korea and Iran.
The accepted narrative is that America’s enemies are now taking
advantage of a moment of weakness due to the lockdown response
to the coronavirus and have stepped up their attacks, both physical
and metaphorical on the, "Exceptional Nation Under God."
The most recent claim that the United States is being targeted
involves an incident in mid-April during which a swarm of Iranian
gunboats allegedly harassed a group of American warships
conducting a training exercise in the Persian Gulf by crossing
the bows and sterns of the U.S. vessels at close range.
The maneuvers were described by the Navy as, “unsafe and
unprofessional” but the tiny speedboats in no way threatened
the much larger warships.
Donald Trump characteristically responded to the incident with a
tweet last Wednesday: “I have instructed the United States Navy to
shoot down and destroy any and all Iranian gunboats if they harass
our ships at sea.”
Although no context was provided, the president commands
the armed forces and the tweet essentially defined the rules
of engagement, meaning that it would be up to the ships’
commanders to determine whether or not they are being
harassed.
If so they would be able to open fire and destroy the Iranian boats.
Of course there might be a physical problem in, “shooting down”
a gunboat that is in the water rather than in the air.
In the Mediterranean the threat against the U.S. consisted of
two Russian jet fighters flying close to a Navy P8-A submarine
surveillance plane.
The Russian fighters were scrambled from Hmeymim air base
in Syria after the U.S. aircraft approached Syrian airspace and
Russian military facilities.
One of the fighters, a SU-35 carried out an “unsafe” maneuver
when it flew upside down at high-speed 25 feet in front of the
Navy plane.
Also in mid-April, North Korea meanwhile fired cruise missiles into
the Sea of Japan amidst rumors that its head of state Kim Jong Un
might be dead or dying after major surgery.
President Trump was unconcerned about the missiles and also
commented that he had received a, “nice note” from the North
Korean leader.
Wars and rumors of wars notwithstanding, China continues to
be the principal target for Democrats and Republicans alike on
Capitol Hill.
GOP congressmen are reportedly urging sanctions against China
while there are already a number of coronavirus lawsuits targeting
Chinese assets in U.S. courts, at least one of which has a trillion
dollar price tag.
Theories about the deliberate weaponization of the Wuhan virus
abound and they are also mixed in with stories of how Beijing
unleashed the weapons and is now engaged in Russia style social
media intervention to promote the notion that the United States
has proven incapable of handling what has become a major medical
emergency.
However those who are pushing the idea that the Chinese
communist party has declared war by other means fail to explain
why the government in Beijing is so keen on destroying its largest
export market.
If the U.S. economy goes down a large part of the Chinese economy
will go with it, particularly if China’s second largest export market
Europe is also suffering.
The craziness of what is going on in the context of the disruption
caused by the coronavirus has apparently increased the normal
paranoia level at the top levels of the U.S. government.
Pentagon plans to fight a war with Russia and China simultaneously,
first mooted in 2018, are still a work in progress in spite of the fact
that Washington has fewer cards to play currently than it did two
years ago.
The economy is down and prospects for recovery are speculative
at best, but the war machine rolls on.
Many Americans tired of the perpetual warfare are hoping that the
virus aftermath will include demands for a genuine national health
system that will perforce gut the Pentagon budget, leading to an
eventual withdrawal from empire.
In spite of the hysteria, it is important to note that no Americans
have been killed or injured as a result of recent Iranian, Russian,
Chinese and North Korean actions.
When you station ships and planes close to or even on the borders
of countries that you have labeled as enemies it would be
reasonable to expect that there will be pushback.
And as for taking advantage of the virus, it is the United States that
has suggested that it would do so in the cases of Iran and Venezuela
exerting, “maximum pressure” on both countries in their times of
troubles to bring about regime change.
If those countries that are accustomed to being regularly targeted
by the United States are taking advantage of an opportunity to
diminish America’s ability to intervene globally, no one should be
surprised, but it is a fantasy to make the hysterical claim that the
United States has now become the victim of some kind of vast
international conspiracy.
http://www.informationclearinghouse.info/55132.htm
Are Enemies Lining Up For Revenge In The Wake Of The Coronavirus?
By Philip Giraldi
Information Clearing House
May 15, 2020
When in trouble politically, governments have traditionally
conjured up a foreign enemy to explain why things are going
wrong.
Whatever one chooses to believe about the coronavirus the fact
is that it has resulted in considerable political backlash against
a number of governments whose behavior has been perceived as
either too extreme or too dilatory.
Donald Trump’s White House has taken shots from both directions
and the response to the disease has also been pilloried due to
repeated gaffes by the president himself.
The latest mis-spoke now being framed by Trump’s press secretary
as, "sarcasm" involved a presidential suggestion that one might
consider injecting or imbibing disinfectant to treat the disease,
either of which could easily prove lethal.
So the administration is desperate to change the narrative and has
decided to hit on the old expedient, namely seeking out a foreign
enemy to distract from what is going on in the nation’s hospitals.
The tale of malevolent foreigners has been picked up by a number
of mainstream media outlets and has proven especially titillating
because there is not just one bad guy, but instead at least four:
China, Russia, North Korea and Iran.
The accepted narrative is that America’s enemies are now taking
advantage of a moment of weakness due to the lockdown response
to the coronavirus and have stepped up their attacks, both physical
and metaphorical on the, "Exceptional Nation Under God."
The most recent claim that the United States is being targeted
involves an incident in mid-April during which a swarm of Iranian
gunboats allegedly harassed a group of American warships
conducting a training exercise in the Persian Gulf by crossing
the bows and sterns of the U.S. vessels at close range.
The maneuvers were described by the Navy as, “unsafe and
unprofessional” but the tiny speedboats in no way threatened
the much larger warships.
Donald Trump characteristically responded to the incident with a
tweet last Wednesday: “I have instructed the United States Navy to
shoot down and destroy any and all Iranian gunboats if they harass
our ships at sea.”
Although no context was provided, the president commands
the armed forces and the tweet essentially defined the rules
of engagement, meaning that it would be up to the ships’
commanders to determine whether or not they are being
harassed.
If so they would be able to open fire and destroy the Iranian boats.
Of course there might be a physical problem in, “shooting down”
a gunboat that is in the water rather than in the air.
In the Mediterranean the threat against the U.S. consisted of
two Russian jet fighters flying close to a Navy P8-A submarine
surveillance plane.
The Russian fighters were scrambled from Hmeymim air base
in Syria after the U.S. aircraft approached Syrian airspace and
Russian military facilities.
One of the fighters, a SU-35 carried out an “unsafe” maneuver
when it flew upside down at high-speed 25 feet in front of the
Navy plane.
Also in mid-April, North Korea meanwhile fired cruise missiles into
the Sea of Japan amidst rumors that its head of state Kim Jong Un
might be dead or dying after major surgery.
President Trump was unconcerned about the missiles and also
commented that he had received a, “nice note” from the North
Korean leader.
Wars and rumors of wars notwithstanding, China continues to
be the principal target for Democrats and Republicans alike on
Capitol Hill.
GOP congressmen are reportedly urging sanctions against China
while there are already a number of coronavirus lawsuits targeting
Chinese assets in U.S. courts, at least one of which has a trillion
dollar price tag.
Theories about the deliberate weaponization of the Wuhan virus
abound and they are also mixed in with stories of how Beijing
unleashed the weapons and is now engaged in Russia style social
media intervention to promote the notion that the United States
has proven incapable of handling what has become a major medical
emergency.
However those who are pushing the idea that the Chinese
communist party has declared war by other means fail to explain
why the government in Beijing is so keen on destroying its largest
export market.
If the U.S. economy goes down a large part of the Chinese economy
will go with it, particularly if China’s second largest export market
Europe is also suffering.
The craziness of what is going on in the context of the disruption
caused by the coronavirus has apparently increased the normal
paranoia level at the top levels of the U.S. government.
Pentagon plans to fight a war with Russia and China simultaneously,
first mooted in 2018, are still a work in progress in spite of the fact
that Washington has fewer cards to play currently than it did two
years ago.
The economy is down and prospects for recovery are speculative
at best, but the war machine rolls on.
Many Americans tired of the perpetual warfare are hoping that the
virus aftermath will include demands for a genuine national health
system that will perforce gut the Pentagon budget, leading to an
eventual withdrawal from empire.
In spite of the hysteria, it is important to note that no Americans
have been killed or injured as a result of recent Iranian, Russian,
Chinese and North Korean actions.
When you station ships and planes close to or even on the borders
of countries that you have labeled as enemies it would be
reasonable to expect that there will be pushback.
And as for taking advantage of the virus, it is the United States that
has suggested that it would do so in the cases of Iran and Venezuela
exerting, “maximum pressure” on both countries in their times of
troubles to bring about regime change.
If those countries that are accustomed to being regularly targeted
by the United States are taking advantage of an opportunity to
diminish America’s ability to intervene globally, no one should be
surprised, but it is a fantasy to make the hysterical claim that the
United States has now become the victim of some kind of vast
international conspiracy.
http://www.informationclearinghouse.info/55132.htm
Tuesday, May 12, 2020
The Coming Greater Depression of The 2020s
The Coming Greater Depression of The 2020s
While there is never a good time for a pandemic, the COVID-19
crisis has arrived at a particularly bad moment for the global
economy.
The world has long been drifting into a perfect storm of financial,
political, socioeconomic, and environmental risks, all of which are
now growing even more acute.
By Nouriel Roubini
Information Clearing House
May 12, 2020
After the 2007-09 financial crisis, the imbalances and risks
pervading the global economy were exacerbated by policy
mistakes.
So, rather than address the structural problems that the financial
collapse and ensuing recession revealed, governments mostly
kicked the can down the road, creating major downside risks that
made another crisis inevitable.
And now that it has arrived, the risks are growing even more acute.
Unfortunately, even if the Greater Recession leads to a lackluster
U-shaped recovery this year, an L-shaped “Greater Depression” will
follow later in this decade, owing to ten ominous and risky trends.
The first trend concerns deficits and their corollary risks:
debts and defaults.
The policy response to the COVID-19 crisis entails a massive
increase in fiscal deficits – on the order of 10% of GDP or
more at a time when public debt levels in many countries
were already high, if not unsustainable.
Worse, the loss of income for many households and firms means
that private-sector debt levels will become unsustainable, too,
potentially leading to mass defaults and bankruptcies.
Together with soaring levels of public debt, this all but ensures
a more anemic recovery than the one that followed the Great
Recession a decade ago.
A second factor is the demographic time bomb in advanced
economies.
The COVID-19 crisis shows that much more public spending must
be allocated to health systems, and that universal health care
and other relevant public goods are necessities, not luxuries.
Yet, because most developed countries have aging societies,
funding such outlays in the future will make the implicit debts
from today’s unfunded health-care and social-security systems
even larger.
A third issue is the growing risk of deflation.
In addition to causing a deep recession, the crisis is also creating
a massive slack in goods (unused machines and capacity) and labor
markets (mass unemployment), as well as driving a price collapse
in commodities such as oil and industrial metals.
That makes debt deflation likely, increasing the risk of insolvency.
A fourth (related) factor will be currency debasement.
As central banks try to fight deflation and head off the risk of
surging interest rates (following from the massive debt build-up),
monetary policies will become even more unconventional and
far-reaching.
In the short run, governments will need to run monetized
fiscal deficits to avoid depression and deflation.
Yet, over time, the permanent negative supply shocks from
accelerated de-globalization and renewed protectionism
will make stagflation all but inevitable.
A fifth issue is the broader digital disruption of the economy.
With millions of people losing their jobs or working and earning
less, the income and wealth gaps of the twenty-first-century
economy will widen further.
To guard against future supply-chain shocks, companies in advanced
economies will re-shore production from low-cost regions to higher-
cost domestic markets.
But rather than helping workers at home, this trend will accelerate
the pace of automation, putting downward pressure on wages
and further fanning the flames of populism, nationalism, and
xenophobia.
This points to the sixth major factor: de-globalization.
The pandemic is accelerating trends toward balkanization
and fragmentation that were already well underway.
The United States and China will decouple faster, and most
countries will respond by adopting still more protectionist policies
to shield domestic firms and workers from global disruptions.
The post-pandemic world will be marked by tighter restrictions on
the movement of goods, services, capital, labor, technology, data,
and information.
This is already happening in the pharmaceutical, medical
equipment, and food sectors, where governments are imposing
export restrictions and other protectionist measures in response
to the crisis.
The backlash against democracy will reinforce this trend.
Populist leaders often benefit from economic weakness,
mass unemployment, and rising inequality.
Under conditions of heightened economic insecurity, there
will be a strong impulse to scapegoat foreigners for the crisis.
Blue-collar workers and broad cohorts of the middle class will
become more susceptible to populist rhetoric, particularly
proposals to restrict migration and trade.
This points to an eighth factor: the geostrategic standoff between
the US and China.
With the Trump administration making every effort to blame China
for the pandemic, Chinese President Xi Jinping’s regime will double
down on its claim that the US is conspiring to prevent China’s
peaceful rise.
The Sino-American decoupling in trade, technology, investment,
data, and monetary arrangements will intensify.
Worse, this diplomatic breakup will set the stage for a new cold
war between the US and its rivals – not just China, but also Russia,
Iran, and North Korea.
With a US presidential election approaching, there is every reason
to expect an upsurge in clandestine cyber warfare, potentially
leading even to conventional military clashes.
And because technology is the key weapon in the fight for control
of the industries of the future and in combating pandemics, the
US private tech sector will become increasingly integrated into
the national-security-industrial complex.
A final risk that cannot be ignored is environmental disruption,
which, as the COVID-19 crisis has shown, can wreak far more
economic havoc than a financial crisis.
Recurring epidemics (HIV since the 1980s, SARS in 2003, H1N1
in 2009, MERS in 2011, Ebola in 2014-16) are, like climate change,
essentially man-made disasters, born of poor health and sanitary
standards, the abuse of natural systems, and the growing
interconnectivity of a globalized world.
Pandemics and the many morbid symptoms of climate change will
become more frequent, severe, and costly in the years ahead.
These ten risks, already looming large before COVID-19 struck,
now threaten to fuel a perfect storm that sweeps the entire
global economy into a decade of despair.
By the 2030s, technology and more competent political leadership
may be able to reduce, resolve, or minimize many of these
problems, giving rise to a more inclusive, cooperative, and stable
international order.
But any happy ending assumes that we find a way to survive the
coming Greater Depression.
http://www.informationclearinghouse.info/55117.htm
While there is never a good time for a pandemic, the COVID-19
crisis has arrived at a particularly bad moment for the global
economy.
The world has long been drifting into a perfect storm of financial,
political, socioeconomic, and environmental risks, all of which are
now growing even more acute.
By Nouriel Roubini
Information Clearing House
May 12, 2020
After the 2007-09 financial crisis, the imbalances and risks
pervading the global economy were exacerbated by policy
mistakes.
So, rather than address the structural problems that the financial
collapse and ensuing recession revealed, governments mostly
kicked the can down the road, creating major downside risks that
made another crisis inevitable.
And now that it has arrived, the risks are growing even more acute.
Unfortunately, even if the Greater Recession leads to a lackluster
U-shaped recovery this year, an L-shaped “Greater Depression” will
follow later in this decade, owing to ten ominous and risky trends.
The first trend concerns deficits and their corollary risks:
debts and defaults.
The policy response to the COVID-19 crisis entails a massive
increase in fiscal deficits – on the order of 10% of GDP or
more at a time when public debt levels in many countries
were already high, if not unsustainable.
Worse, the loss of income for many households and firms means
that private-sector debt levels will become unsustainable, too,
potentially leading to mass defaults and bankruptcies.
Together with soaring levels of public debt, this all but ensures
a more anemic recovery than the one that followed the Great
Recession a decade ago.
A second factor is the demographic time bomb in advanced
economies.
The COVID-19 crisis shows that much more public spending must
be allocated to health systems, and that universal health care
and other relevant public goods are necessities, not luxuries.
Yet, because most developed countries have aging societies,
funding such outlays in the future will make the implicit debts
from today’s unfunded health-care and social-security systems
even larger.
A third issue is the growing risk of deflation.
In addition to causing a deep recession, the crisis is also creating
a massive slack in goods (unused machines and capacity) and labor
markets (mass unemployment), as well as driving a price collapse
in commodities such as oil and industrial metals.
That makes debt deflation likely, increasing the risk of insolvency.
A fourth (related) factor will be currency debasement.
As central banks try to fight deflation and head off the risk of
surging interest rates (following from the massive debt build-up),
monetary policies will become even more unconventional and
far-reaching.
In the short run, governments will need to run monetized
fiscal deficits to avoid depression and deflation.
Yet, over time, the permanent negative supply shocks from
accelerated de-globalization and renewed protectionism
will make stagflation all but inevitable.
A fifth issue is the broader digital disruption of the economy.
With millions of people losing their jobs or working and earning
less, the income and wealth gaps of the twenty-first-century
economy will widen further.
To guard against future supply-chain shocks, companies in advanced
economies will re-shore production from low-cost regions to higher-
cost domestic markets.
But rather than helping workers at home, this trend will accelerate
the pace of automation, putting downward pressure on wages
and further fanning the flames of populism, nationalism, and
xenophobia.
This points to the sixth major factor: de-globalization.
The pandemic is accelerating trends toward balkanization
and fragmentation that were already well underway.
The United States and China will decouple faster, and most
countries will respond by adopting still more protectionist policies
to shield domestic firms and workers from global disruptions.
The post-pandemic world will be marked by tighter restrictions on
the movement of goods, services, capital, labor, technology, data,
and information.
This is already happening in the pharmaceutical, medical
equipment, and food sectors, where governments are imposing
export restrictions and other protectionist measures in response
to the crisis.
The backlash against democracy will reinforce this trend.
Populist leaders often benefit from economic weakness,
mass unemployment, and rising inequality.
Under conditions of heightened economic insecurity, there
will be a strong impulse to scapegoat foreigners for the crisis.
Blue-collar workers and broad cohorts of the middle class will
become more susceptible to populist rhetoric, particularly
proposals to restrict migration and trade.
This points to an eighth factor: the geostrategic standoff between
the US and China.
With the Trump administration making every effort to blame China
for the pandemic, Chinese President Xi Jinping’s regime will double
down on its claim that the US is conspiring to prevent China’s
peaceful rise.
The Sino-American decoupling in trade, technology, investment,
data, and monetary arrangements will intensify.
Worse, this diplomatic breakup will set the stage for a new cold
war between the US and its rivals – not just China, but also Russia,
Iran, and North Korea.
With a US presidential election approaching, there is every reason
to expect an upsurge in clandestine cyber warfare, potentially
leading even to conventional military clashes.
And because technology is the key weapon in the fight for control
of the industries of the future and in combating pandemics, the
US private tech sector will become increasingly integrated into
the national-security-industrial complex.
A final risk that cannot be ignored is environmental disruption,
which, as the COVID-19 crisis has shown, can wreak far more
economic havoc than a financial crisis.
Recurring epidemics (HIV since the 1980s, SARS in 2003, H1N1
in 2009, MERS in 2011, Ebola in 2014-16) are, like climate change,
essentially man-made disasters, born of poor health and sanitary
standards, the abuse of natural systems, and the growing
interconnectivity of a globalized world.
Pandemics and the many morbid symptoms of climate change will
become more frequent, severe, and costly in the years ahead.
These ten risks, already looming large before COVID-19 struck,
now threaten to fuel a perfect storm that sweeps the entire
global economy into a decade of despair.
By the 2030s, technology and more competent political leadership
may be able to reduce, resolve, or minimize many of these
problems, giving rise to a more inclusive, cooperative, and stable
international order.
But any happy ending assumes that we find a way to survive the
coming Greater Depression.
http://www.informationclearinghouse.info/55117.htm
Sunday, May 10, 2020
Dear Mother's Day
Dear Mother's Day
By The Last Boy In Line
Sunday, May 10, 2020
Dear Mother's Day:
Sincerely,
By The Last Boy In Line
Sunday, May 10, 2020
Dear Mother's Day:
Sincerely,
