by Len Hart, The Existentialist Cowboy
Albert Einstein said: "the men who possess real power in this country have no intention of ending the cold war." It is one of the most incredible 'coincidences' in history that as the Berlin Wall fell and communism ceased to be the global threat we had been told it was, a new 'bogey man' would arise, as if on cue, to take its place. World terrorism', like a good steward, is now on the job, keeping the crooks on K-street and the Pentagon in firm control of one of the largest, most dangerous empires since Rome. Like the U.S. today, the Roman economy was 'militarized', the empire over-extended, the battles fought by mercenaries. The currency might get you into the Coliseum for the 'games' but little else. Thus --bread and circuses were popular. When the Praetorian Guard auctioned the Roman Empire to Didius Julianus the sale was completed in Greek Drachmas --not worthless Roman Sesterces.
The U. S. is routinely pimped on K-Street and, like Rome's sesterces and denarius, the dollar is all but worthless; China boasts the Worlds largest POSITIVE current account balance; the US the largest trade deficit. China props up the US dollar but only because it has to. This Faustian bargain was first cut by Bush Sr who paved the way for Nixon's famous trip to China's Forbidden City.
Some two decades ago, it was decided by the global financial elites that the framework for the global economy shall consist of:1) A global derivative-based financial system, controlled by the US Federal Reserve Bank and its associate global banks in the developed countries. 2) The re-location from the West to the East in the production of goods, principally to China and India to “feed” the developed economies.The entire system was built on a simple principle, that of a FED-controlled global reserve currency which will be the engine for growth for the global economy. It is essentially an imperialist economic principle. Once we grasp this fundamental truth, Bernanke’s boast that the “US can produce as many US dollars as it wishes at no cost” takes on a different dimension.
I have talked to so many economists and when asked what is the crux of the present financial problem, they all respond in unison, “it is the global imbalances… the West consumes too much while the East saves too much and consumes not enough”. This is exemplified by the huge US trade deficits on the one part and China’s massive surpluses on the other.--Red Alert: The Second Wave of The Financial Tsunami
In December 2008 Lawrence Summers, soon to become the administration’s highest-ranking economist, called for decisive action. “Many experts,” he warned, “believe that unemployment could reach 10 percent by the end of next year.” In the face of that prospect, he continued, “doing too little poses a greater threat than doing too much.”Ten months later unemployment reached 10.2 percent, suggesting that despite his warning the administration hadn’t done enough to create jobs. You might have expected, then, a determination to do more.--Paul Krugman, The Phantom MenaceSome have said that the stiumli were not enough, in other words, 'too small'. It was not that the stimuli were too small but that those getting the stimuli were the banksters who had created this mess to begin with. Alas --nothing is learned from the lessons of history.
Most economists agree: the West consumes too much and the East, primarily China does not consume enough. Compounding the problem --China props up the dollar but only because it had to dump cheap product upon the American market via Wal-Mart, it's retail 'arm' in the U.S.
Source: The Existentialist Cowboy