“I prefer dangerous freedom over peaceful slavery.” -Thomas Jefferson
Trade war is an old movie
NEW HAVEN, Conn. (Project Syndicate) — “When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade.” So said President Ronald Reagan, commenting on Japan after the Plaza Accord was concluded in September 1985.
Today resembles, in many respects, a remake of this 1980s movie, but with a reality-television star replacing a Hollywood film star in the presidential leading role — and with a new villain in place of Japan.
Back in the 1980s, Japan was portrayed as America’s greatest economic threat — not only because of allegations of intellectual-property theft, but also because of concerns about currency manipulation, state-sponsored industrial policy, a hollowing out of U.S. manufacturing, and an outsize bilateral trade deficit.
In its standoff with the U.S., Japan ultimately blinked, but it paid a steep price for doing so — nearly three “lost” decades of economic stagnation and deflation. Today, the same plot features China.
Notwithstanding both countries’ objectionable mercantilism, Japan and China had something else in common: They became victims of America’s unfortunate habit of making others the scapegoat for its own economic problems.
Like Japan bashing in the 1980s, China bashing today is an outgrowth of America’s increasingly insidious macroeconomic imbalances. In both cases, a dramatic shortfall in U.S. domestic saving spawned large current-account and trade deficits, setting the stage for battles, 30 years apart, with Asia’s two economic giants.
Deficits made in America
When Reagan took office in January 1981, the net domestic saving rate stood at 7.8% of national income, and the current account was basically balanced. Within two and a half years, courtesy of Reagan’s wildly popular tax cuts, the domestic saving rate had plunged to 3.7%, and the current account and the merchandise trade balances swung into perpetual deficit.
In this important respect, America’s so-called trade problem was very much of its own making. Yet the Reagan administration was in denial. There was little or no appreciation of the link between saving and trade imbalances. Instead, the blame was pinned on Japan, which accounted for 42% of U.S. goods trade deficits in the first half of the 1980s.
Japan bashing then took on a life of its own with a wide range of grievances over unfair and illegal trade practices. Leading the charge back then was a young deputy U.S. trade representative named Robert Lighthizer. Fast-forward some 30 years and the similarities are painfully evident.
Predictable decline in savings
Unlike Reagan, President Donald Trump did not inherit a U.S. economy with an ample reservoir of saving. When Trump took office in January 2017, the net domestic saving rate was just 3%, well below half the rate at the onset of the Reagan era. But, like his predecessor, who waxed eloquently of a new “morning in America,” Trump also opted for large tax cuts — this time to “make America great again.”
The U.S. national savings rate has fallen from 7.8% of GDP when Reagan took office to just 2.8% today. The result was a predictable widening of the federal budget deficit, which more than offset the cyclical surge in private saving that normally accompanies a maturing economic expansion. As a result, the net domestic saving rate actually edged down to 2.8% of national income by late 2018, keeping America’s international balances deep in the red — with the current-account deficit at 2.6% of gross domestic product and the merchandise trade gap at 4.5% in late 2018.
And that’s where China assumes the role that Japan played in the 1980s. On the surface, the threat seems more dire.
After all, China accounted for 48% of the U.S. merchandise trade deficit in 2018, compared to Japan’s 42% share in the first half of the 1980s. But the comparison is distorted by global supply chains, which basically didn’t exist in the 1980s.
Data from the OECD and the World Trade Organization suggest that about 35%-40% of the bilateral U.S.-China trade deficit reflects inputs made outside of China but assembled and shipped to the U.S. from China. That means the made-in-China portion of today’s U.S. trade deficit is actually smaller than Japan’s share of the 1980s.
Like the Japan bashing of the 1980s, today’s outbreak of China bashing has been conveniently excised from America’s broader macroeconomic context. That is a serious mistake. Without raising national saving — highly unlikely under the current U.S. budget trajectory — trade will simply be shifted away from China to America’s other trading partners.
With this trade diversion likely to migrate to higher-cost platforms around the world, American consumers will be hit with the functional equivalent of a tax hike.
Lighthizer as clueless today as he was then
Ironically, Trump has summoned the same Robert Lighthizer, veteran of the Japan trade battles of the 1980s, to lead the charge against China. Unfortunately, Lighthizer seems as clueless about the macro argument today as he was back then.
In both episodes, the U.S. was in denial, bordering on delusion.
Basking in the warm glow of untested supply-side economics — especially the theory that tax cuts would be self-financing — the Reagan administration failed to appreciate the links between mounting budget and trade deficits.
Today, the seductive power of low interest rates, coupled with the latest strain of voodoo economics — Modern Monetary Theory — is equally alluring for the Trump administration and a bipartisan consensus of China bashers in the Congress.
The tough macroeconomic constraints facing a saving-short U.S. economy are ignored for good reason: there is no U.S. political constituency for reducing trade deficits by cutting budget deficits and thereby boosting domestic saving.
America wants to have its cake and eat it, with a health-care system that swallows 18% of its GDP, defense spending that exceeds the combined sum of the world’s next seven largest military budgets, and tax cuts that have reduced federal government revenue to 16.5% of GDP, well below the 17.4% average of the past 50 years.
This remake of an old movie is disconcerting, to say the least. Once again, the U.S. has found it far easier to bash others — Japan then, China now — than to live within its means. This time, however, the movie might have a very different ending.
The real problem with the West is that Capitalism has mutated from the efficient transfer of value, necessary for markets to function, to the manufacture of money as the end goal. The problem is that money is a contract, with one side an asset and the other a debt, not a commodity, that can simply be stored. For example, in the body, blood is the medium and fat is the store.
Fuck the System plan...
1. Buy a home for cash in the Florida panhandle in the 50-75k range. This will ensure low property taxes. Do a stealth remodel of the inside only. No permits, high end finishes and fixtures. Have a chain link fence surround the property, be in the county with zero restrictions, The more mobile homes in the area the better. Do not mow except for a strip directly around the house. Have several large dogs roam freely inside the fenced area. several "no trespassing" and "vote Obama" yard signs. Park old cars in several locations around the property when they no longer run. Put bars on the windows and doors and build a closed in front porch so anybody who knocks on the door must do so from outside the porch. No stranger, law enforcement, etc is ever allowed inside the home. All public business is done on the front porch with anybody who enters my property. Have a camera system up and running so you never open the door without knowing who and how many are outside.
2. Buy cars for cash only, drive a 6-15 year old car at all times. Never wash the outside. Have a good yard mechanic that I can pay cash to keep in good running order.
3. Structure my reportable income so that I make about 25,000 per year. This allows me to get the maximum obamacare welfare tax credit and free healthcare. It also means I pay almost zero state and federal taxes.
4. Deal in cash as much as possible.
5. Hunt, fish, and garden to my hearts content.
6. Never watch "news" again.
7. Sign up for every free shit program I can find.
8. Work for cash only, side flips, etc to raise tax free fun money...
Definition of MMT (Modern Monitory Theory): if the govt can tax its citizens than that currency is in demand , hence that allows the govt to print its own money
Think about that for a moment. It is a fucken joke
they want to justify their stupidity and craziness, just like this stupid fancy word Quantitative easing (fuck you call it let me print to death)
My dad once told me my generation read books ans comics than the TV was invented and his generation called it the Idiot Box
the choice is not between poverty under the Chavistas and prosperity under the AngloZionists. This is how the agents of the Empire (whether paid or simply stupid) want to frame the discussions. The real issue at stake here is the rule of law. The rule of law inside Venezuela, of course, and the rule of law internationally.
First year law students are often taught that the purpose of the law is not “justice” per se, but to provide a mechanism to solve disputes. That mechanism is, admittedly, a highly imperfect one, but it is understood by civilized people as being preferable to the alternative. The alternative, by the way, is what happens in every time a so-called “humanitarian intervention” is launched: a humanitarian disaster.
Yet, this is the typical modus operandi of the Neocons (and of all imperialists, really). First, chose a country for destabilization, then use your control of the international financial markets and trade to trigger an economic crisis; then, send your “democracy promoting” spooks and agents of influence to foment protests or, even better, violent disorders; then send some “unidentified snipers” if the legitimate government does not use enough violence to quell the protests, then denounce the leader you want replaced as “monster” “animal” or even “new Hitler” and threaten to overthrow him. After that, declare urbi et orbi that it is “highly likely” that the “new Hitler” will massacre his own people, add a false flag op if needed, and then declare a “coalition of the willing” composed of “friends” of the country you want to occupy who will take action due to the “ineffectiveness of the UN”, ditch any thoughts about international law and only speak of “rules-based order“. Check out how Russian Foreign Minister Lavrov explains the meaning of
how this system works. There are forward markets for currencies, stocks and bonds. The Federal Reserve can offer to buy a stock in three months at, say, 10% over the current price. Speculators will by the stock, bidding up the price, so as to take advantage of “the market’s” promise to buy the stock. So by the time three months have passed, the price will have risen. That is largely how the U.S. “Plunge Protection Team” has supported the U.S. stock market.
The system works in reverse to hold down gold prices. The central banks holding gold can get together and offer to sell gold at a low price in three months. “The market” will realize that with low-priced gold being sold, there’s no point in buying more gold and bidding its price up. So the forward-settlement market shapes today’s market.
Real estate is a commodity play. Commodities rise and fall with interest rates. Real estate is interest rate sensitive as is a bond. Real estate is very similar to bonds, rising in value as rates fall (1980 to 2019), but real estate crashes when bank lending tightens as it did in 2008. Paid for real estate, can't go wrong. Leveraged real estate, can go wrong big time.
Uncle Shmuel (the Neocon’s version of Uncle Sam).The Real Uncle Sam is long Dead
A military, any military, is always the product of the society which produces it
"There will be NO jubilee...count on it!"
~House of Rothschild
"Remember, the equity and bond markets exist only to remove fiat from circulation!"
~House of Rothschild
Archived Rothschild Q&A
In the USA, business is the be-all and end-all. And business lives or dies by sales and marketing. Which depend critically upon *perception*.
So naturally the USA has evolved a culture in which perception is the only thing that matters. If you are trying to out-sell competitors, that may well be a good thing. I don't know - I learned as a teenager that I am not cut out to be a salesman!
In American politics too, perception is all. But when politics meets warfare, a granite wall awaits in the shape of reality. As the great 20th century US journalist I. F. Stone warned long ago,
"All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out".
In fact, they call to mind the truism that wars take place when the government tells you who the enemy is, while revolutions take place when you work it out for yourself."
Blackrock, Vanguard and State Street are the true masters of Wall street & Globalists. They are largely the top three largest major shareholders in most of S&P 500 companies. Its highly likely even Goldman Sachs, JP Morgan, Apple and Berkshire follow their lead.
Whatever game they are playing, common folks like us will end up losing.
Why should anybody outside the Unaccountable States of America bother whether US luncacy and US hubris are sold to the USAmerican public under an altright or a neoliberal label? Policies are simply the same. War mongering is the same. Ignorance is the same. Inaccountability is the same.
At the core of US policies has always been the claim to grab resources and assets globally and to profit nationally. George Kennan, who possessed - unlike the recent horror cabinet of US politicians - at least the quality of self-reflection acknowledged already in the aftermath of WW2 that the prime goal of US foreign policies has always been to remain in the position to consume an overdue amount of the world's prosperity.
Thus as globalism is at its core US elitist nationalism, US nationalism is directed at global robbery. It's the same phenomenon - only looked at under different labels.
Thus I would highly greet an impeachment, as then the split of the US public, who refuse to see that they are sold one and the same policy under two contrasting labels, could lead to a civil war. And all aggressions USAmericans direct against each other rob them the energy to continue murdering others.
However, Kennan likewise explained as early as 1954 US collective psychology, which still works today exactly the way it has always worked:
"There is, let me assure you, nothing in nature more egocentrical than
the embattled democracy. It soon becomes the victim of its own war
propaganda. It then tends to attach to its own cause an absolute value
which distorts everything else. Its enemy becomes the embodiment of all evil. Its
own side, on the other hand, is the center of all virtue. The contest
comes to be viewed as having a final, apocalyptic quality. If we
lose, all is lost; life will no longer be worth living; there will be
nothing to be salvaged. If we win, then everything will be possible;
all our problems will become soluble; the one great source of evil--our
enemy--will have been crushed; the forces of good will then sweep
forward unimpeded; all worthy aspirations will be satisfied."
Lecture at Princeton University, Princeton, New Jersey (March 1954); published in “The Two Planes of International Reality” in Realities of American Foreign Policy (1954), p. 4
And the following quotation shows that Kennan at least would have ben able to avoid the foolish escalation of US desires, current polticians seem unable to:
"A foreign policy aimed at the achievement of total security is the
one thing I can think of that is entirely capable of bringing this
country to a point where it will have no security at all."
Small wonder that the population of most countries stated as early as 2014 according to the Gallup poll that they saw the US as largest threat to global peace.
That $21 trillion national debt for the USA is the tip of the iceberg. There is at least another $20 trillion in off-the books debt hid in places like HUD, debt which covers "black budget" items and outright thievery like the "Brady Gold Bond" scandal. You remember the Brady bonds (named after former Treasury Secretary Nicholas Brady), issued through Cantor-Fitzgerald, who had offices on the 106th floor of One World Trade Center. Staffers there knew all about these Brady bonds. Army auditors at the Pentagon were investigating these Brady bonds as well, until 9/11. Both the bond issuing office at Cantor-Fitzgerald and the auditing office at the Pentagon were destroyed on 9/11. Remember, what one person calls a rip-off is someone else's family fortune.
One of the more impressive feats of US propaganda is how many Americans have been convinced that their country is simultaneously (A) an unstoppable superpower that should be in charge of the world and (B) a poor widdle victim bullied by Russians, North Koreans and terrorists." Caitlin Johnstone
None are more hopelessly enslaved than those who falsely believe that they are free."
- Johann Wolfgang von Goethe
would re-cast Russia’s preparations, as noted in this article:
When Greece’s ‘rebellious’ political party Syriza threatened to ‘haircut’ Western (DeutscheBank) loans, Greek economist Yanis Varoufakis noted that the nation could not succeed in facing-down the banksters without an in-place currency alternative to the Euro and an in-place financial-processing system indigenous to Greece. And so it turned out. The banksters were able to cut off funds, thwart transactions, and generally bully/terrify the public into submission…
Russia’s ‘preparations’ could be seen within the above lens. The article sees these preparations as ‘defensive’; weathering an outside storm. Alternatively, it could easily be that Russian leaders learned from Greece and Varoufakis. They are preparing for an ‘offensive’; a preparatory stance to changing their financial system.
The current Russian financial system was put in place by western capitalists during the ‘turbulent years’. Some have noted that this system might be more beholden to western bankster interests than the good of the Russian people. If so, any fundamental changes to this system would be expected to be ‘vigorously’ pushed-back against by the banksters. Hence, the need for the two in-place systems mentioned by Varoufakis.
In my eyes, Russia is slowly and thoughtfully preparing for an ‘offensive’ to take back its financial sovereignty, whatever the exact details may turn out to be…
Refined Oil Exports by Country June 3, 2018
Those countries that posted declines in the international sale of refined petroleum oils were led by: India (down -64%), Belgium (down -47.6%), Russia (down -46.8%), Netherlands (down -42.1%) and Canada (down -38.6%).
With Gold reserves as of November 2017, 1828.6 (in metric tons), and a decline in the international sale of refined petroleum oils down -46.8%, it is imperative for Russia to be Prepared for a “Perfect Storm” in the Global Economy. Hope for the best, but prepare for the Worst.
The western-eccentric economies are on the road to nowhere since the whole system is kept going by a Ponzi scheme. That is to say that debt – private and sovereign – continues to growth faster than national income. In short the apparent cure for debt is more debt. Sovereign debt in the US is now 105% of GDP. Normally this wouldn’t matter since a stimulus would enable the US to grow its way out of debt. However, what we are witnessing is the return of David Ricardo’s dreaded symptom of diminishing returns to scale. This means that each additional input of stimulus results in smaller and smaller outputs. US GDP stands at $20 trillion, unfortunately the sovereign debt stands at $21 trillion. Add in private, household and corporate debt, in addition to unfunded future liabilities and you have a very big problem. Moreover this debt is not necessary productive. Much of it goes on consumption rather than productive investment and what investment which does take place is in financial instruments – stock buy backs and mergers and acquisitions. The trend line of debt to GDP is very worrying getting wider by the year and shows no sign of reversing.
This is clearly not a viable business model and the whole thing will hit the rocks sooner or later.
Trump is a near perfect reflection of the American herd.... he simply doesn't know WTF has really been going on and why. He's done his thing, worked the system, used bankruptcy court often when that became the new standard... He doesn't know about the dollar empire, he just takes it for granted. He knows not what he does... which is why the SG find him so useful in their current engineered script of 'Out with their OWO, in with their NWO'.
the Romans could finance their armies by levying taxes on the growing trade of their empire, the U.S. is not able to do so as it does not actually govern the nations it dominates. However, the worldwide use of the U.S. dollar does allow America to gather the wealth needed to fund its military in a manner reminiscent of the tribute payments commonly paid by nations dominated by the ancient Near Eastern empires of the Assyrians, Babylonians and Persians.
As other nations need U.S. dollars to buy oil and other imports, they also need to hold U.S. dollars as foreign currency reserves. The simplest way to acquire dollars is to sell goods and services to the U.S. while accepting dollars (which will never be used to purchase American goods) in payment. Looking at the flow of goods and services, we can easily detect a pattern of tributary states sending treasure to the imperial power. Oil from the Middle East, electronics and apparel from East Asia, minerals from Africa, tropical fruits from Latin America and automobiles and automobile parts from Canada, Mexico and the E.U. all flow into the U.S. from around the world in exchange for dollars which will henceforth be used only outside the U.S. As I wrote in a previous column, the U.S. is the only country in the world able to write cheques (issue dollars) which will never be cashed (used to purchase American goods and services).
Looked at as a whole, the system works. The U.S. provides security and a common currency to the world and in return the world, made prosperous by American protection and financial integration, provides the U.S. with goods and services.
However, when examined through the lens of national accounts these flows of goods and services are identified as trade deficits. To Trump and many of his supporters, these persistent trade deficits have caused the de-industrialization of America and the elimination of millions of American manufacturing jobs. To bring these jobs back, Trump is determined to renegotiate America’s trade deals to try to bring America’s trade accounts back into balance.
As an imperial power and as the issuer of the world’s reserve currency, though, America can never have a balanced trade account. This dilemma was first noted by the Belgian economist Robert Triffin in the 1960s. If America’s trade account was in balance, foreigners would not be able to access the additional dollars needed to purchase imports from one another and to hold as reserves. Without reliable access to dollars, global trade would become very difficult as 80% of global payments are made in dollars. Were global trade to collapse, so too would global prosperity. Finally, without the tribute payments represented by its persistent trade deficits, how could America continue to fund its military commitments?
As wise man once instructed Giant Meteor many moons ago, there are two eternities in every mans lifetime. One is called yesterday, the other, tomorrow, and those two eternities can, and will, drive men insane ..
Live in the day .. and stay sane, even, and especially when, other's all around you, are losing their minds.
The only thing necessary for the triumph of evil is for good men to do nothing. (Edmund Burke).
It is difficult to free fools from the chains they revere. (Voltaire).
Oh for Christ's sake, the US is running up it's debt over a trillion a year with 21 trillion already on the books and promises to it's retiree's and social security recipients of another 200 trillion. Who the fuck thinks that is getting paid without MASSIVE printing and IF they decide NOT to print, the whole fucking charade comes tumbling down anyway. What fucking moron hasn't gotten the message on this after all these years of the Tylers covering it? It isn't "IF", it's "When".
1-Duck Rule: If it walks like a duck, squawks like a duck and has feathers, it probably is a duck.
2–Sherlock’s Rule: When considering a problem, remove everything from consideration which seems untrue. What is left is probably the truth.
3-Occam’s Razor: In considering a complex phenomenon with many factors and a variety of explanations, remember that the simplest explanation that accounts for the factors is probably correct.
4- The KISS principal” “Keep it Simple, Stupid.” (Army Rule)
and dont you forget it BITCHEZ
"What the American public doesn't know...is what makes them the American public."
If you're emotionally invested in the outcome of a ball game in which you have nothing at stake, you're living in serious delusion.
“If voting made any difference, they wouldn’t let us do it.” -Mark Twain
Stalin: “It does not matter who votes, it matters only who counts”.
Cryptos are not a mortal threat to fiat currencies. They are symbiotic. Crypto enthusiasts talk about how much they've made in fiat. Cryptos are proxies for fiat, for which they can be exchanged. Cryptos are vehicles for moving fiat to circumvent capital controls. But imagine if fiat went to zero. Gold and silver would be used in commerce. How much gold or silver do you think cryptos would buy in such a circumstance?
Question:Dad, why do I have to go to school?
Answer: So you can be molded into a state approved homogeneous drone that cannot think outside the prescribed consensus. You will learn to repeat information instead of thinking for yourself so that you do not become a threat to the status quo. When you graduate you will get a job and pay taxes in order to perpetuate the corporate system of indentured servitude for your political overlords.
Again, what is the "petrodollar". The idea was championed by Henry Kissinger in 1973 as a way to create ongoing demand for US dollars by maintaining the pricing of crude oil in dollars only. The effects of this were two-fold: To create constant demand for dollars...dollars which were now completely unhinged from any gold backing...and this demand would soak up any excess supply of new currency being printed in the US for military and social purposes. To force oil-exporting nations to keep their foreign currency reserves in dollars, thus creating an ongoing demand for US treasury bonds. This constant demand for bonds would help to keep interest rates...and thus the US debt service cost...unnaturally low. As a result, any threat to this system, whether it has come from Iran, Iraq or Libya has been squashed either politically or militarily over the past 40+ years
We now live in a nation where doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals, and our banks destroy the economy.
The days of "MOAR" are numbered Better to be prepared for a problem that doesn't happen than to be un-prepared for one that does.
It's a big club and you ain't in it BITCHEZ
“The world says: 'You have needs— satisfy them. You have as much right to it as the rich and the mighty. Do not hesitate to satisfy your needs; indeed, expand your needs and demand more.' This is the worldly doctrine of today. And they believe that this is freedom. The result for the rich is isolation and suicide, and for the poor, envy and murder.”
Domesticated animals are intelligent but certainly not as smart as the wild variant.
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” ~Ludwig Von Mises~
“Paper money eventually returns to its intrinsic value-zero” -Voltaire