March 02, 2006
UPDATE on Don Keyser Sentencing
Donald W. Keyser (Don Keyser) former number two under Colin Powell will now be sentenced on March 24 (9 am at the US Federal Courthouse Eastern District in Alexandria, VA). Not familiar with the case? Read up here and look below for the post on it.
If Anybody knows what's going on with the delay (I assume the delay is just defense lawyer tactic to put as much time between the act(s), guilty plea, and ultimate payback as possible) please email me as I'm following the case.
If Anybody knows what's going on with the delay (I assume the delay is just defense lawyer tactic to put as much time between the act(s), guilty plea, and ultimate payback as possible) please email me as I'm following the case.
March 01, 2006
1980
That's how far back you have to go to remember year 'round double digit inflation in the USA. I can still remember my poor mother freaking out as gas climbed toward a dollar a gallon even in South Carolina! And me watching in horror as my beloved Pepsi cola almost doubled in price. It seems a South Carolina senator, Lindsey Graham, wants to bring it all back to us. He denied rumours that he was willing to table a vote on his and Charles Schumer's (D-NY) "Stupid Bipartisanship" (to quote the late great politcal economist Jude Wanniski) bill to impose huge tarifs on imports from China.
Perhaps this is why --per BushCo decree-- the US government will no longer report M3 statistics starting next week. M3 represents the growth of the money supply. Without M3 figures the official inflation rate becomes even more deliberately understated. And maybe this is why the Fed this week asked Wall Street to create NewBank in case there is a financial crisis and the two big banks that clear a trillion plus dollars a day for the Treasury Department can't handle things?
Don't forget the new oil bourse -- quoted in Euros -- set up Iran the other day.
Perhaps this is why --per BushCo decree-- the US government will no longer report M3 statistics starting next week. M3 represents the growth of the money supply. Without M3 figures the official inflation rate becomes even more deliberately understated. And maybe this is why the Fed this week asked Wall Street to create NewBank in case there is a financial crisis and the two big banks that clear a trillion plus dollars a day for the Treasury Department can't handle things?
Don't forget the new oil bourse -- quoted in Euros -- set up Iran the other day.
Meanwhile Nigeria Falls To China
Not much attention paid to this report about Nigeria turning to China for defense of its oil fields but it sounds important.
February 24, 2006
America's Pacific Empire Smolders
Geopolitical Tradeoffs
Great comments today from Morgan Stanley chief economist Stephen Roach on the whole Dubai-China-America political whining. As Roach puts it America entered negative savings rate terriory last year for the first time since the lowest year of the Great Depression and can't afford to make political hay with our creditors.
Roach explains: "Thank to China, America actually got a rather extraordinary deal for its trade deficit dollar in 2005 -- a net balance of some $200 billion of low-cost, high-quality Chinese goods that expanded the purchasing power of US consumers. If, however, Washington politicians now choose to close down trade with China by imposing high tariffs or forcing a major Chinese currency revaluation -- precisely the tact of a bipartisan coalition headed up by Senators Schumer (D-NY) and Graham (R-SC) -- those actions could well backfire. Absent the China supply line, the trade deficit for a saving-short US economy wouldn’t shrink as the politicians seem to imply. Instead, due to America’s outsize external funding needs, the trade deficit would remain large and merely gravitate to a higher-cost producer -- imposing the functional equivalent of a tax on the American consumer. Similarly, if Washington were to kill the bid by Dubai Ports World, another source of capital inflows would be required to fill the external funding gap. But maybe the next investor would ask for tougher financing terms."
More to the point:
" But who is really to blame in all this? At the end of the day, America’s saving shortfall -- the origin of destabilizing capital and trade flows -- is a by-product of conscious choices made by the US body politic. The Federal budget deficit, which has accounted for the bulk of the plunge in national saving over the past six years, is made in Washington -- not in Beijing. The negative personal saving rate is an outgrowth of pro-consumption tax policies -- again made in Washington. US politicians are the source of resistance to tax reforms, such as a consumption tax, that might address the deficiencies of private saving. Of course, politicians never want to admit that they are the problem. Instead, they prefer to pin the blame on others -- in this case, China and Dubai. "
Read the whole post at the MS Global Economic Forum.
Roach explains: "Thank to China, America actually got a rather extraordinary deal for its trade deficit dollar in 2005 -- a net balance of some $200 billion of low-cost, high-quality Chinese goods that expanded the purchasing power of US consumers. If, however, Washington politicians now choose to close down trade with China by imposing high tariffs or forcing a major Chinese currency revaluation -- precisely the tact of a bipartisan coalition headed up by Senators Schumer (D-NY) and Graham (R-SC) -- those actions could well backfire. Absent the China supply line, the trade deficit for a saving-short US economy wouldn’t shrink as the politicians seem to imply. Instead, due to America’s outsize external funding needs, the trade deficit would remain large and merely gravitate to a higher-cost producer -- imposing the functional equivalent of a tax on the American consumer. Similarly, if Washington were to kill the bid by Dubai Ports World, another source of capital inflows would be required to fill the external funding gap. But maybe the next investor would ask for tougher financing terms."
More to the point:
" But who is really to blame in all this? At the end of the day, America’s saving shortfall -- the origin of destabilizing capital and trade flows -- is a by-product of conscious choices made by the US body politic. The Federal budget deficit, which has accounted for the bulk of the plunge in national saving over the past six years, is made in Washington -- not in Beijing. The negative personal saving rate is an outgrowth of pro-consumption tax policies -- again made in Washington. US politicians are the source of resistance to tax reforms, such as a consumption tax, that might address the deficiencies of private saving. Of course, politicians never want to admit that they are the problem. Instead, they prefer to pin the blame on others -- in this case, China and Dubai. "
Read the whole post at the MS Global Economic Forum.
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