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Archive for October, 2010

QE2 is not just some opaque econo-speak that is of no consequence to the common men and women of Earth. It is about as serious a force to be reckoned with as a nuclear weapon. I don’t have the math at hand but my instincts tell me that if someone were to calculate the potential energy of a multi-trillion US dollar injection of liquidity into the world economy it would measure up to an impressive amount of megatonage.

From The Telegraph:

Currency wars are necessary if all else fails

By Ambrose Evans-Pritchard

Asian investment in plant has run ahead of Western ability to consume. The debt-strapped households of Middle America, or Britain and Spain, can no longer hold up the dysfunctional edifice. Asians must take over, or it will come down on their own heads.

The countries actively intervening in exchange markets to suppress their currencies – China, Japan, Korea, Thailand, even Switzerland, to name a few – are all too often the same ones that have the biggest trade surpluses with the US.

They are taking active steps to prevent America extricating itself from the worst unemployment since the Great Depression, now 17.1pc on the latest U6 index and rising again. Each country is doing so for understandable reasons: Japan to avoid a deflationary crisis, China to hold together a political order that is more fragile than it looks. In both these cases they are trapped because they clung too long to a mercantilist export strategy, failing to wean themselves off American demand when the going was good.

Yet this is an intolerable situation for the US. It should be no surprise that Washington has begun to retaliate in earnest, and not just by passing the Reform for Fair Trade Act in the House (not yet the Senate), clearing the way for punitive tariffs against currency manipulators.

The atomic bomb, of course, is quantitative easing by the Federal Reserve. America has in effect issued an ultimatum to China and G20: either you stop this predatory behaviour and agree to some formula for global rebalancing, or we will deploy QE2 `a l’outrance’ to flood your economies with excess liquidity. We will cause you to overheat and drive up your wage costs. We will impose a de facto currency revaluation by more brutal and disruptive means, and there is little you can do to stop it. Pick your poison.

Read the whole article HERE

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Being Canadian I’m obviously left-leaning but only to the extent that I believe the State has a role in leveling the playing field.. I think most Americans would be shocked to know that in Canada “have” provinces, the ones that have a surplus, transfer some of that surplus to the “have-not” provinces through the federal taxation system. This money is supposed to help the have-not provinces provide an equality of services, especially when it comes to our infamous Universal Health Care. Of course there is much political maneuvering that centers on this but I’m just mentioning it here to underline the extent to which Canadians, of all political stripes, consider the distribution of wealth as morally normal. Of course the U.S. has influenced our politics and the current Conservative government is desperately trying to convince Canadians that Government is bad. But our National motto is Peace, Order and Good Government.. And for the most part that is what we get. We trust that our Parliament has the Nation’s interests at heart. Canadians have long been suspicious of people who tout their success and expect to be treated differently because of it which is very unlike the American way. When Americans succeed, they rub it in peoples’ faces and make the losers feel well, like losers. It is no surprise then that the U.S. political and economic culture has evolved to become obsessed with making everyone feel like a winner.. To render losing the ultimate crime against the State. How else can a country incarcerate so many of its own? How else can a Nation with so much wealth make Justice and Health Care so difficult to access for so many?

But to make the cornerstone of “No Loser Left Behind” the capacity for anyone and everyone to not only get a mortgage, but a mortgage on a poorly built McMansion with no money down and teaser rates and all the rest was an unbelievably cynical and downright stupid thing to do. And then to have done it with so little regard to procedure and established law? In a country that won’t shut up about the value of Justice and how great and free its people are? Give me a break.

Not to be inflammatory or anything but I think that only The Holocaust can be held up as more tragic example of so many people at all levels of society being so stupid and so blind as to what was going on. So the next time an American asks how the Germans could be so oblivious to what their State and its offices were up to a simple look in the mirror should be the first place he or she looks for an answer. Let’s hope that America can get its act together before the pathological narcissism that is gnawing away at it’s core is unleashed in a wave of collective madness.

And it’s not like I think Canada is a paragon of virtue. My country is populated by smug, free-riding opportunists. My fellow countrymen are being quite complacent about how much of the shit that is going through the U.S. fan is going to land on our faces. We are not prepared and will suffer the consequences.

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“For a considerable length of time the normality of the normal world is the most efficient protection against disclosure of totalitarian mass crimes,” … “Normal men don’t know that everything is possible, refuse to believe their eyes and ears in the face of the monstrous. … The reason why the totalitarian regimes can get so far toward realizing a fictitious, topsy-turvy world is that the outside non-totalitarian world, which always comprises a great part of the population of the totalitarian country itself, indulges in wishful thinking and shirks reality in the face of real insanity. …” — Hannah Arendt “The Origins of Totalitarianism.”

Quoted in a piece by Chris Hedges on www.truthout.org

How Democracy Dies: Lessons From a Master

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A Detailed Look At Global Wealth Distribution

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From the NY Times:

Looking to a Sneaker for a Band’s Big Break

My 2 cents:

This stinks more than a teenager’s 9 month-old pair of Converses! Selling out used to mean allowing your music to be used to advertise brands but to have the brands themselves pay for the recording is beyond cynical. It’s great that artist’s will get to own the rights to the music but how exactly are the bands who apply online going to be chosen by the Nike/Converse marketing department? No doubt a band’s potential, based on demos, their website and so forth will have an influence and thus bands will get to learn what \”works\” for Converse and what doesn’t. A demo full of anti-corporate, anti-sweatshop content would likely be looked over. So the Converse label is not likely to produce the next iteration of The Clash. While one would like to think that this could backfire I’m afraid that is wishful thinking reserved for the over-30 set. The horrible truth is that with job prospects worse than ever for young people a favored fantasy for them all is a \”career\” in music by whatever means necessary. Gone are the days where rock and pop was edgy, which is to say it offended the established adult order. Who takes music seriously anymore as a vector for transgressive political or philosophical thought? The social value of music as an agent of change has been debased and thanks to QE2 the USD is next. Can a citizenry that no longer produces anything physical get by on simply selling empty dreams to each other? Methinks we are about to find out.

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Groin stretches: Marks & Spencer makes men ‘2 sizes bigger’

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http://bit.ly/99bdwz

America’s political-economic system is a cesspool of corruption. Anyone still think this isn’t a Depression?

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It is slowly coming into range ready to destroy the USD’s reserve currency status with its QE death ray.

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Commercial Real Estate and it ain’t gonna be pretty.

http://bit.ly/8XZlfh

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Don’t be happy. Worry. How much longer can a country so far into debt with a dying currency and with such a blatant disregard for procedure and law remain in one piece? There is NO GOOD NEWS coming out of the U.S. NONE. It’s a cesspool of corruption. A full on Banana Republic. When it slides into chaos which will require some form of martial law to restore a modicum of order you can be damned sure that all hell will break loose elsewhere on the planet. A “cluster fuck” indeed.

I strongly recommend the comments section as well.

Rule of Law Versus Bank Profits: Mortgage Fraud Edition – From Naked Capitalism

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