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This Is Why The US Just Lost Its Superpower Status According To Larry Summers
If Larry Summers were a country, he would have joined the Asian Infrastructure Investment Bank. With a backpedalling Washington now completely isolated in its opposition to the China-led venture and with support and enthusiasm running so high that even Beijing itself is apparently surprised, none other than “the hawk” that was almost, kind of considered for the chairmanship of the Fed is out with a sharp rebuke of the US stance calling March “the moment the United States lost its role as the underwriter of the global economic system.” Of course we’ve been persistent in our contention that the AIIB represents much more than an attempt on China’s part to provide an alternative source of infrastructure financing to fill the gaps left by the ADB, and as is made abundantly clear by the following, the “secret” is certainly out...
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Time US Leadership Woke Up To New Economic Era, by Larry Summers
This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system. True, there have been any number of periods of frustration for the US before, and times when American behaviour was hardly multilateralist, such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the US to persuade dozens of its traditional allies, starting with Britain, to stay out of it.
This failure of strategy and tactics was a long time coming, and it should lead to a comprehensive review of the US approach to global economics. With China’s economic size rivalling America’s and emerging markets accounting for at least half of world output, the global economic architecture needs substantial adjustment. Political pressures from all sides in the US have rendered it increasingly dysfunctional.
Largely because of resistance from the right, the US stands alone in the world in failing to approve the International Monetary Fund governance reforms that Washington itself pushed for in 2009. By supplementing IMF resources, this change would have bolstered confidence in the global economy. More important, it would come closer to giving countries such as China and India a share of IMF votes commensurate with their new economic heft.
Meanwhile, pressures from the left have led to pervasive restrictions on infrastructure projects financed through existing development banks, which consequently have receded as funders, even as many developing countries now see infrastructure finance as their principle external funding need.
With US commitments unhonoured and US-backed policies blocking the kinds of finance other countries want to provide or receive through the existing institutions, the way was clear for China to establish the Asian Infrastructure Investment Bank. There is room for argument about the tactical approach that should have been taken once the initiative was put forward. But the larger question now is one of strategy. Here are three precepts that US leaders should keep in mind.
First, American leadership must have a bipartisan foundation at home, be free from gross hypocrisy and be restrained in the pursuit of self-interest. As long as one of our major parties is opposed to essentially all trade agreements, and the other is resistant to funding international organisations, the US will not be in a position to shape the global economic system.
Other countries are legitimately frustrated when US officials ask them to adjust their policies — then insist that American state regulators, independent agencies and far-reaching judicial actions are beyond their control. This is especially true when many foreign businesses assert that US actions raise real rule of law problems.
The legitimacy of US leadership depends on our resisting the temptation to abuse it in pursuit of parochial interest, even when that interest appears compelling. We cannot expect to maintain the dollar’s primary role in the international system if we are too aggressive about limiting its use in pursuit of particular security objectives.
Second, in global as well as domestic politics, the middle class counts the most. It sometimes seems that the prevailing global agenda combines elite concerns about matters such as intellectual property, investment protection and regulatory harmonisation with moral concerns about global poverty and posterity, while offering little to those in the middle. Approaches that do not serve the working class in industrial countries (and rising urban populations in developing ones) are unlikely to work out well in the long run.
Third, we may be headed into a world where capital is abundant and deflationary pressures are substantial. Demand could be in short supply for some time. In no big industrialised country do markets expect real interest rates to be much above zero in 2020 or inflation targets to be achieved. In the future, the priority must be promoting investment, not imposing austerity. The present system places the onus of adjustment on “borrowing” countries. The world now requires a symmetric system, with pressure also placed on “surplus” countries.
These precepts are just a beginning, and many questions remain. There are questions about global public goods, about acting with the speed and clarity that the current era requires, about co-operation between governmental and non-governmental actors, and much more. What is crucial is that the events of the past month will be seen by future historians not as the end of an era, but as a salutary wake up call.
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By many metrics, Summers is a member of the Liberal Elite. People like Summers cannot have it both ways, for in a different context on a different day, he would not disagree when is his elite cohorts call shame down on the US for being a super power that only does evil in the world. Maybe what Summers is lamenting is how his guy Obama, is a good distance down the road towards ruining the power-game that liberals (oops, now called "progressives") have played and will soon suffer from a massive Utopia Fail, and be rejected by the voters.
It's called euphemistically "situational ethics" and characteristic of the neo-liberal/conservative crowd. Also known in plainer Anglo-Saxon English as "no ethics."
When China forgives a loan, the money supply is no longer credit. Composition of supply becomes more floating money and less Credit.
Why? The former credit no longer has a debt instrument. Said instrument was torn up. Therefore, the former credit is released from its debt obligation.
China has four large state banks. State Banks have debts on the people just like private banks. However, State Banks can more easily jubilee debts or issue debt money in alignment with industrial policy.
Remember, U.S. used to lead in photovoltaic...the U.S. invented it.
China targeted this industry with industrial loans. Once the inventors and U.S. base is absorbed, then Yuan loans are forgiven. But, the knowledge and industry now has transplanted, and once beyond infancy it goes out to compete in international markets.
Laggard performers are also pruned, and they are allowed to die, and often their loans are forgiven.
I cannot say it in any stronger language. When you forgive a loan, it is the same thing as printing debt free currency.
The currency is no longer ear-marked for destruction.
China uses credit loans to channel into industry they want. This is one of the key features of money - channeling. They also adjust its type, turning credit into floating money.
Economists out there....get it through your thick heads: money has attributes: volume, type, channels.
Our Jewish friends know this about money, it is part of their Babylonian secret knowledge passed down in their temples. They will also use occultic methods, character assasination, and murder.
That the Chinese have figured things out is either dangerous, or the Chinese are in on the game.
www.sovereignmoney.eu
"Remember, U.S. used to lead in photovoltaic...the U.S. invented it.
China targeted this industry with industrial loans. Once the inventors and U.S. base is absorbed, then Yuan loans are forgiven. But, the knowledge and industry now has transplanted, and once beyond infancy it goes out to compete in international markets."
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I will look into the yuan issue you mention and recall Evergreen Solar.
http://www.wsj.com/articles/SB10001424052702304450004577277632600824356
Also follow UPC Renewables. Summers is Involved.
Larry, with war, in the not so distant future, the concerns you feel today, will seem irrelevant.
trust me
Fuck you Larry...
http://greencorruption.blogspot.com/2015/01/two-big-white-house-green-cr...
back a few years ago...
http://www.whiteoutpress.com/articles/q12012/obama-contributors-and-the-...
Yeah. Thats right. Fuck all the Larrys. I'm tired of hearing about the Larrys of the world... talking shit.
It is wrong to take advice of any type from a man who lost a billion in toxic derivatives for his employer, and looks like a banana slug.
http://news.ucsc.edu/2011/06/banana-slug-25th-anniversary.html
Note the discordance :
*ZH title :
"This Is Why The US Just Lost Its Superpower Status According To Larry Summers"*Conclusion by Summers :
"What is crucial is that the events of the past month will be seen by future historians not as the end of an era, but as a salutary wake up call."
Endless Summers ECONOMY DECEMBER 2009Throughout his dazzling but controversial career—top World Bank economist, Treasury secretary, Harvard University president, and now head of the White House National Economic Council—Larry Summers has been his own worst enemy. As friends, colleagues, and Summers himself try to explain his reputation for arrogance, bullying, and insensitivity, the author learns about his more private battles, and why many believe he’s still the M.V.P. in any financial crisis.
http://www.vanityfair.com/news/2009/12/summers-200912
People say a lot of shit most of it not true.
I raise you an aircraft carrier and a armor regiment.
The Rothchilds are behind it. lolol
We shouldn't celebrate any government involvement in banking; it's fascism. But it's nice to see the IMF being sidelined. Oh, and fuck Larry Summers.
and then there is this:
http://rt.com/business/247145-ruble-winner-gains-economy/
Any comparison between nation-state GDPs, specifically the U. S, GDP to China GDP, should be cognizant of the boost to China's GDP by the U. S.'s export of demand via FED credit booms. Absent China's low-labor costs, U. S. credit-led booms, fueled by FED low interest rates, fueled inflationary price and wage growth spirals in both the U. S. and Europe. Structural similarities in the U. S. and European commodity costs, consumer price hikes, and consumer-price hike-based labor-wage hikes embedded in labor contracts, acted effectively as negative feedback to the FED's interest rate control model.
As CPI increases the op amp reduces the interest rate by the ratio determined by
(Feedback Operator Value / Feedback Operator Ratio Value)
The Feedback Operators may be real or complex numbers.
(I have no ready op amp graphic available to paste in here.)
When the U. S. and European Union opened their markets to Chinese, and other Asian emerging mercantilist nation manufactured, exports, the U. S. credit-led demand fueled imports of Chinese manufactured goods. But Chinese labor costs of no more than 10% of U. S. and European labor costs resulted in consumer price deflation for those CPI inputs represented by Chinese products.
What I'm getting at, is that China's GDP is based on a the massive U. S. dollar-based Ponzi credit bubble engineered by the FED. When that Jupiter-sized Ponzi credit bubble bursts, as it inevitably must, the effects on China may be worse than catastrophic. China's leadership will hardly look kindly on the U. S., courtesy of the FED.