from STRATFOR
website Provides 24/7...
* Objective facts and non-partisan analysis
* Maps, podcasts & interactive features
* Coverage around the world
Click Here Now - Free Trial
Be Stratfor's Guest for 7 days.
Access our Intelligence services.
FREE seven-day trial of Stratfor.com
Internal Divisions and the Chinese Stimulus Plan
February 23, 2009
Graphic for Geopolitical Intelligence Report
By Rodger Baker and Jennifer Richmond
Related Special Topic Page
* China’s Economic Imbalance
Due in large part to fears of dire consequences if nothing were done to tackle the economic crisis, China rushed through a 4 trillion yuan (US$586 billion) economic stimulus package in November 2008. The plan cobbled together existing and new initiatives focused on massive infrastructure development projects (designed, among other things, to soak up surplus steel, cement and labor capacity), tax cuts, green energy programs, and rural development.
Ever since the package was passed in November, Beijing has recited the mantra of the need to shift China’s economy from its heavy dependence on exports to one more driven by domestic consumption. But now that the sense of immediate crisis has passed, the stimulus policies are being rethought — and in an unusual development for China, they are being vigorously debated in the Chinese media.
Debating the Stimulus Package
In a country where media restrictions are tightening and private commentary on government officials and actions in blogs and online forums is being curtailed, it is quite remarkable that major Chinese newspaper editorials are taking the lead in questioning aspects of the stimulus package.
The question of stimulating rural consumption versus focusing the stimulus on the more economically active coastal regions has been the subject of particularly fierce debate. Some editorials have argued that encouraging rural consumption at a time of higher unemployment is building a bigger problem for the future. This argument maintains that rural laborers — particularly migrant workers — earn only a small amount of money, and that while having them spend their meager savings now might keep gross domestic product up in the short term, it will drain the laborers’ reserves and create a bigger social problem down the road. Others argue that the migrant and rural populations are underdeveloped and incapable of sustained spending, and that pumping stimulus yuan into the countryside is a misallocation of mo ney that could be better spent supporting the urban middle class, in theory creating jobs through increased middle-class consumption of services.
The lack of restrictions on these types of discussions suggests that the debate is occurring with government approval, in a reflection of debates within the Communist Party of China (CPC) and the government itself. Despite debate in the Chinese press, Beijing continues to present a unified public face on the handling of the economic crisis, regardless of internal factional debates. Maintaining Party control remains the primary goal of Party officials; even if they disagree over policies, they recognize the importance of showing that the Party remains in charge.
But, as the dueling editorial pages reveal, the Party is not unified in its assessment of the economic crisis or the recovery program. The show of unity masks a power struggle raging between competing interests within the Party. In many ways, this is not a new struggle; there are always officials jockeying for power for themselves and for their protégés. But the depth of the economic crisis in China and the rising fears of social unrest — not only from the migrant laborers, but also from militants or separatists in Tibet and Xinjiang and from “hostile forces” like the Falun Gong, pro-Democracy advocates and foreign intelligence services — have added urgency to long-standing debates over economic and social policies.
In China, decision-making falls to the president and the premier, currently Hu Jintao and Wen Jiabao respectively. They do not wield the power of past leaders like Mao Zedong or Deng Xiaoping, however, and instead are much more reliant on balancing competing interests than on dictating policy.
Party and Government Factions
Hu and Wen face numerous factions among the Chinese elite. Many officials are considered parts of several different factional affiliations based on age, background, education or family heritage. Boiled down, the struggle over the stimulus plan pits two competing views of the core of the Chinese economy. One sees economic strength and social stability centered on China’s massive rural population, while another sees China’s strength and future in the coastal urban areas, in manufacturing and global trade.
Two key figures in the Standing Committee of the Politburo (the center of political power in China), Vice President Xi Jinping and Vice Premier Li Keqiang, highlight this struggle. These two are considered the core of the fifth-generation leadership, and have been tapped to succeed Hu and Wen as China’s next leaders. They also represent radically different backgrounds.
Li is a protege of Hu and rose from the China Youth League, where Hu has built a strong support base. Li represents a newer generation of Chinese leaders, educated in economics and trained in less-developed provinces. (Li held key positions in Henan and Liaoning provinces.) Xi, on the other hand, is a “princeling.” The son of a former vice premier, he trained as an engineer and served primarily in the coastal export-oriented areas, including Hebei, Fujian and Zhejiang provinces and Shanghai.
In a way, Li and Xi represent different proposals for China’s economic recovery and future. Li is a stronger supporter of the recentralization of economic control sought by Hu, a weakening of the regional economic power bases, and a focus on consolidating Chinese industry in a centrally planned manner while spending government money on rural development and urbanization of China’s interior. Xi represents the view followed by former President Jiang Zemin and descended from the policies of Deng. Under that view, economic activity and growth should be encouraged and largely freed from central direction, and if the coastal provinces grow first and faster, that is just fine; eventually the money, technology and employment will move inland.
Inland vs. the Coast
In many ways, these two views reflect long-standing economic arguments in China — namely, the constant struggle to balance the coastal trade-based economy and the interior agriculture-dominated economy. The former is smaller but wealthier, with stronger ties abroad — and therefore more political power to lobby for preferential treatment. The latter is much larger, but more isolated from the international community — and in Chinese history, frequently the source of instability and revolt in times of stress. These tensions have contributed to the decline of dynasties in centuries past, opening the space for foreign interference in Chinese internal politics. China’s leaders are well aware of the constant stresses between rural and coastal China, but maintaining a balance has been an ongoing struggle.
Throughout Chinese history, there is a repeating pattern of dynastic rise and decline. Dynasties start strong and powerful, usually through conquest. They then consolidate power and exert strong control from the center. But due to the sheer size of China’s territory and population, maintaining central control requires the steady expansion of a bureaucracy that spreads from the center through the various administrative divisions down to the local villages. Over time, the bureaucracy itself begins to usurp power, as its serves as the collector of taxes, distributor of government funds and local arbiter of policy and rights. And as the bureaucracy grows stronger, the center weakens.
Regional differences in population, tax base and economic models start to fragment the bureaucracy, leading to economic (and at times military) fiefdoms. This triggers a strong response from the center as it tries to regain control. Following a period of instability, which often involves foreign interference and/or intervention, a new center is formed, once again exerting strong centralized authority.
This cycle played out in the mid-1600s, as the Ming Dynasty fell into decline and the Manchus (who took on the moniker Qing) swept in to create a new centralized authority. It played out again as the Qing Dynasty declined in the latter half of the 1800s and ultimately was replaced — after an extended period of instability — by the CPC in 1949, ushering in another period of strong centralized control. Once again, a more powerful regional bureaucracy is testing that centralized control.
The economic reforms initiated by Deng Xiaoping at the end of the 1970s led to a three-decade decline of central authority, as economic decision-making and power devolved to the regional and local leadership and the export-oriented coastal provinces became the center of economic activity and power in China. Attempts by the central government to regain some authority over the direction of coastal authorities were repeatedly ignored (or worse), but so long as there was growth in China and relative social stability, this was tolerated.
With Hu’s rise to power, however, there was a new push from the center to rein in the worst of excesses by the coastal leaders and business interests and refocus attention on China’s rural population, which was growing increasingly disenfranchised due to the widening urban-rural economic gap. In 2007 and early 2008, Hu finally gained traction with his economic policies. The Chinese government subsequently sought to slow an overheating economy while focusing on the consolidation of industry and the establishment of “superministries” at the center to coordinate economic activity. It also intended to put inland rural interests on par with — if not above — coastal urban interests. When the superministries were formed in 2008, however, it became apparent that Hu was not omnipotent. Resistance to his plans was abundantly evident, illustrating the power of the entrenched bureaucratic interests.
Economic Crisis and the Stimulus Plan
The economic program of recentralization and the attempt to slow the overheating economy came to a screeching halt in July 2008, as skyrocketing commodity prices fueled inflation and strained government budgets. The first victim was China’s yuan policy. The steady, relatively predictable appreciation of the yuan came to a stop. Its value stagnated, and there is now pressure for a slight depreciation to encourage exports. But as Beijing began shaping its economic stimulus package, it became clear that the program would be a mix of policies, representing differing factions seeking to secure their own interests in the recovery plan.
The emerging program, then, revealed conflicting interests and policies. Money and incentives were offered to feed the low-skill export industry (located primarily in the southeastern coastal provinces) as well as to encourage a shift in production from the coast to the interior. A drive was initiated to reduce redundancies, particularly in heavy industries, and at the same time funding was increased to keep those often-bloated industrial sectors afloat. Overall, the stimulus represents a collection of competing initiatives, reflecting the differences among the factions. Entrenched princelings simply want to keep money moving and employment levels up in anticipation of a resurgence in global consumption and the revitalization of the export-based economic growth path. Meanwhile, the rur al faction seeks to accelerate economic restructuring, reduce dependence on the export-oriented coastal provinces, and move economic activity and attention to the vastly underdeveloped interior.
Higher unemployment among the rural labor force is “proving” each faction’s case. To the princelings, it shows the importance of the export sector in maintaining social stability and economic growth. To the rural faction, it emphasizes the dangers of overreliance on a thin coastal strip of cheap, low-skill labor and a widening wealth gap.
Fighting it Out in the Media
With conflicting paths now running in tandem, competing Party officials are seeking traction and support for their programs without showing division within the core Party apparatus by turning to a traditional method: the media and editorials. During the Cultural Revolution, which itself was a violent debate about the fundamental economic policies of the People’s Republic of China, the Party core appeared united, despite major divisions. The debate played out not in the halls of the National People’s Congress or in press statements, but instead in big-character posters plastered around Beijing and other cities, promoting competing policies and criticizing others.
In modern China, big posters are a thing of the past, replaced by newspaper editorials. While the Party center appears united in this time of economic crisis, the divisions are seen more acutely in the competing editorials published in state and local newspapers and on influential blogs and Web discussion forums. It is here that the depth of competition and debate so well hidden among the members of the Politburo can be seen, and it is here that it becomes clear the Chinese are no more united in their policy approach than the leaders of more democratic countries, where policy debates are more public.
The current political crisis has certainly not reached the levels of the Cultural Revolution, and China no longer has a Mao — or even a Deng — to serve as a single pole around which to wage factional struggles. The current leadership is much more attuned to the need to cooperate and compromise — and even Mao’s methods would often include opportunities for “wayward” officials to come around and cooperate with Mao’s plans. But a recognition of the need to cooperate, and an agreement that the first priority is maintenance of the Party as the sole core of Chinese power (followed closely by the need to maintain social stability to ensure the primary goal), doesn’t guarantee that things can’t get out of control.
The sudden halt to various economic initiatives in July 2008 showed just how critical the emerging crisis was. If commodity prices had not started slacking off a month later, the political crisis in Beijing might have gotten much more intense. Despite competition, the various factions want the Party to remain in power as the sole authority, but their disagreements on how to do this become much clearer during a crisis. Currently, it is the question of China’s migrant labor force and the potential for social unrest that is both keeping the Party center united and causing the most confrontation over the best-path policies to be pur sued. If the economic stimulus package fails to do its job, or if external factors leave China lagging and social problems rising, the internal party fighting could once again grow intense.
At present, there is a sense among China’s leaders that this crisis is manageable. If their attitude once again shifts to abject fear, the question may be less about how to compromise on economic strategy than how to stop a competing faction from bringing ruin to Party and country through ill-thought-out policies. Compromise is acceptable when it means the survival of the Party, but if one faction views the actions of another as fundamentally detrimental to the authority and strength of the Party, then a more active and decisive struggle becomes the ideal choice. After all, it is better to remove a gangrenous limb than to allow the infection to spread and kill the whole organism.
That crisis is not now upon China’s leaders, but things nearly reached that level last summer. There were numerous rumors from Beijing that Wen, who is responsible for China’s economic policies, was going to be sacked — an extreme move given his popularity with the common Chinese. This was staved off or delayed by the fortuitous timing of the rest of the global economic contraction, which brought commodity prices down. For now, China’s leaders will continue issuing competing and occasionally contradictory policies, and just as vigorously debating them through the nation’s editorials. The government is struggling with resolving the current economic crisis, as well as with the fundamental question of just what a new Chinese economy will look like. And that question goes deeper than money: It goes to the very role of the CPC in China’s system.
Tell Stratfor What You Think
This report may be forwarded or republished on your website with attribution to www.stratfor.com
Please feel free to distribute this Intelligence Report to friends or repost to your Web site linking to www.stratfor.com.
This analysis was just a fraction of what our Members enjoy, to start your Free Membership Trial Today!
If a friend forwarded this email to you, click here to join our mailing list for FREE intelligence and other special offers.
Tuesday, February 24, 2009
Sunday, February 22, 2009
Russia Sinks Chinese Ship Bound For US With Nuclear Warhead
http://www.whatdoesitmean.com/index1209.htm
February 19 2009
Russia Sinks Chinese Ship Bound For US With Nuclear Warhead
By: Sorcha Faal, and as reported to her Western Subscribers (Traducción al Español abajo)
Russian Military Analysts are reporting today that Russian Coast Guard and Naval forces were 'forced' to sink the Chinese registered cargo ship New Star bound for US Port of Seattle after it refused orders to stop and be boarded over fears it was carrying a 'missing' nuclear warhead from a Russian Topol-M intercontinental ballistics missile.
Just released video http://video.novostivl.ru/video/view/?id=v86298329be of the warnings given to the New Star to halt clearly show its violations of International Law giving Russian Naval forces no choice but to sink the vessel, and the battle of which can read:
"The Global Times said the New Star was sequestered in Nakhodka for 'alleged smuggling,' a charged rejected by J-Rui. The newspaper said a Russian Coast Guard cruiser fired at least 500 rounds on the ship and 'forced it to sail back toward the port in force-6 winds.'
The ship began to sink on the way back to port and one of the two lifeboats was engulfed by high waves, the newspaper said. It said three of the eight missing crew were Chinese and the rest were Indonesian.
China's Foreign Ministry gave different numbers for the crew and missing, saying three of the 10 Chinese crew on board were rescued and seven were missing."
Most disturbing about these reports are them stating that the New Star is owned by the J Rui Lucky Shipping Co Ltd. which is a private limited company registered in Hong Kong and has long been known by Russian FSB Analysts to be an International shipping carrier of US Military and CIA cargo to support their Global War on Terror under contract with the American giant services company KBR whose former leader was US Vice President Cheney.
These reports further state that President Obama and the Globalist elite he represents are now 'desperate' in their attempts to stage a 9/11 type false flag operation in order to complete the subjugation of their citizens prior to the expected outbreak of massive social unrest they state will be occurring during the coming summer months as their economy continues to implode.
To the fears being felt by the American and European Globalists we can read as reported by German experts:
"The global financial crisis could lead to an economic meltdown - and to instable democratic structures in the western world. Because governments spend more billions than they possess, the outcome will probably be a massive inflation connected with millions of lost jobs - or even the total collapse. That's why President Barack Obama needed an astronomic 3B-stimulus. But the Big Bailout will probably end as Big Bang: With no changes on the more-growth-more-capital-more financial market power mentality there will be no escape from the crisis. A global monetary reform seems to be the last exit from chaos and before social unrests will inevitably start."
These German fears were further confirmed yesterday by the former head of the US Federal Reserve, and as we can also read:
"Former U.S. Federal Reserve Chairman Alan Greenspan said on Tuesday the current global recession will "surely be the longest and deepest" since the 1930s and more government rescue funds are needed to stabilize the U.S. financial system."
Virtually unknown to the American people is that their government has long planned for their subjugation and of the massive concentration camps planned for them we can read:
"There over 800 prison camps in the United States, all fully operational and ready to receive prisoners. They are all staffed and even surrounded by full-time guards, but they are all empty. These camps are to be operated by FEMA (Federal Emergency Management Agency) should Martial Law need to be implemented in the United States and all it would take is a presidential signature on a proclamation and the attorney general's signature on a warrant to which a list of names is attached."
Most surprising of all of these events, is that even though these American people have lost more of their wealth than even their ancestors did during the Great Depression, and as their new President Obama continues vigorously perusing the Globalist agenda fully implemented by the nearly 25 year US rule by the Bush and Clinton Families, they continue to remain ignorant of the many catastrophic events to come that this latest incident shows the mad bloodlust of these monsters has no bounds whatsoever.
© February 19, 2009 EU and US all rights reserved
[Ed. Note: The United States government actively seeks to find, and silence, any and all opinions about the United States except those coming from authorized government and/or affiliated sources, of which we are not one. No interviews are granted and very little personal information is given about our contributors, or their sources, to protect their safety.] .
Translation to Spanish by: Sister Maru Barraza, Mazatlán, Mexico
February 19 2009
Russia Sinks Chinese Ship Bound For US With Nuclear Warhead
By: Sorcha Faal, and as reported to her Western Subscribers (Traducción al Español abajo)
Russian Military Analysts are reporting today that Russian Coast Guard and Naval forces were 'forced' to sink the Chinese registered cargo ship New Star bound for US Port of Seattle after it refused orders to stop and be boarded over fears it was carrying a 'missing' nuclear warhead from a Russian Topol-M intercontinental ballistics missile.
Just released video http://video.novostivl.ru/video/view/?id=v86298329be of the warnings given to the New Star to halt clearly show its violations of International Law giving Russian Naval forces no choice but to sink the vessel, and the battle of which can read:
"The Global Times said the New Star was sequestered in Nakhodka for 'alleged smuggling,' a charged rejected by J-Rui. The newspaper said a Russian Coast Guard cruiser fired at least 500 rounds on the ship and 'forced it to sail back toward the port in force-6 winds.'
The ship began to sink on the way back to port and one of the two lifeboats was engulfed by high waves, the newspaper said. It said three of the eight missing crew were Chinese and the rest were Indonesian.
China's Foreign Ministry gave different numbers for the crew and missing, saying three of the 10 Chinese crew on board were rescued and seven were missing."
Most disturbing about these reports are them stating that the New Star is owned by the J Rui Lucky Shipping Co Ltd. which is a private limited company registered in Hong Kong and has long been known by Russian FSB Analysts to be an International shipping carrier of US Military and CIA cargo to support their Global War on Terror under contract with the American giant services company KBR whose former leader was US Vice President Cheney.
These reports further state that President Obama and the Globalist elite he represents are now 'desperate' in their attempts to stage a 9/11 type false flag operation in order to complete the subjugation of their citizens prior to the expected outbreak of massive social unrest they state will be occurring during the coming summer months as their economy continues to implode.
To the fears being felt by the American and European Globalists we can read as reported by German experts:
"The global financial crisis could lead to an economic meltdown - and to instable democratic structures in the western world. Because governments spend more billions than they possess, the outcome will probably be a massive inflation connected with millions of lost jobs - or even the total collapse. That's why President Barack Obama needed an astronomic 3B-stimulus. But the Big Bailout will probably end as Big Bang: With no changes on the more-growth-more-capital-more financial market power mentality there will be no escape from the crisis. A global monetary reform seems to be the last exit from chaos and before social unrests will inevitably start."
These German fears were further confirmed yesterday by the former head of the US Federal Reserve, and as we can also read:
"Former U.S. Federal Reserve Chairman Alan Greenspan said on Tuesday the current global recession will "surely be the longest and deepest" since the 1930s and more government rescue funds are needed to stabilize the U.S. financial system."
Virtually unknown to the American people is that their government has long planned for their subjugation and of the massive concentration camps planned for them we can read:
"There over 800 prison camps in the United States, all fully operational and ready to receive prisoners. They are all staffed and even surrounded by full-time guards, but they are all empty. These camps are to be operated by FEMA (Federal Emergency Management Agency) should Martial Law need to be implemented in the United States and all it would take is a presidential signature on a proclamation and the attorney general's signature on a warrant to which a list of names is attached."
Most surprising of all of these events, is that even though these American people have lost more of their wealth than even their ancestors did during the Great Depression, and as their new President Obama continues vigorously perusing the Globalist agenda fully implemented by the nearly 25 year US rule by the Bush and Clinton Families, they continue to remain ignorant of the many catastrophic events to come that this latest incident shows the mad bloodlust of these monsters has no bounds whatsoever.
© February 19, 2009 EU and US all rights reserved
[Ed. Note: The United States government actively seeks to find, and silence, any and all opinions about the United States except those coming from authorized government and/or affiliated sources, of which we are not one. No interviews are granted and very little personal information is given about our contributors, or their sources, to protect their safety.] .
Translation to Spanish by: Sister Maru Barraza, Mazatlán, Mexico
The Hijacking of America
http://www.321gold.com/editorials/mccoach/mccoach021909.html
The Hijacking of America
Greg McCoach
Feb 19, 2009
Watching the perverted circus of corrupt politicians and administrators in Washington and New York the last six months is enough to make anyone with a brain want to shout a primal scream of disgust and anger. I use the word "brain" because it is becoming increasingly apparent that many Americans unfortunately are no longer using the gray matter that exists between their ears with regards to what is going on in our country. The rapidly accelerating chain of events moving us faster and faster towards economic oblivion is beyond shocking. It is happening much quicker than I anticipated.
The numbers these stooges in Washington and New York are throwing around for the bailouts and economic stimulus package are simply too big for the average person to comprehend. This is one of the reasons why they can get away with it, because they know the average citizen can't understand it. The old adage "if you can't convince them, then confuse them" comes to mind and the politicians certainly have become very adept at doing that lately. (But why we let them get away with this is another story in and of itself for another time).
At some point large numbers simply become figures on the page, well beyond human scale and intuitive understanding. And yet as discussion about the economy and the gargantuan numbers that come along with it continue to dominate the news, it may be more important than ever to try to understand what these numbers actually represent. The politician's figure as long as they can keep you in the dark, you won't demand any accountability from them. And accountability to a politician is what a heart attack means to your average 55 year old.
So before I go any further let's do a quick study of what a trillion dollars represents in order to understand why the U.S. Government is completely out of control at this point and soon on its way to utter collapse.
With the economic stimulus package estimated to cost around one trillion dollars, and Obama stating on January 7th that "he is admitting to trillion dollar budget deficits for years to come" here are some analogies that express the absurdity of the current situation in the United States.
First - the math:
• 1 (one)
• 10 (ten)
100 (one hundred) 1,000 (one thousand) 10,000 (ten thousand) 100,000 (hundred thousand) 1,000,000 (one million) 10,000,000 (ten million) 100,000,000 (hundred million) 1,000,000,000 (one billion) 10,000,000,000 (ten billion) 100,000,000,000 (hundred billion) 1,000,000,000,000 (one trillion)
Now the analogies:
First analogy: If someone spent one million dollars per day each and every day since Jesus was born, it would take another 731 years (beyond today) before one trillion dollars was spent.
• $1,000,000,000,000 / $1,000,000 per day = one million days
• one million days / 365 = 2740 years
2740 - 2009 = 731 (years remaining)
Second analogy looks at a million, a billion, and a trillion in terms of seconds. One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years!
The third analogy puts dollar bills end to end. If you laid one dollar bills end to end, one trillion dollars would stretch nearly from the earth to the sun. It would take a military jet flying at the speed of sound, reeling out a roll of dollar bills behind it, 14 years before it reeled out one trillion dollar bills!
But the last analogy is the one that absolutely blows my mind. If you took freshly minted brand new $1,000 dollar bills and starting stacking them one on top of another, it would take a stack over 68 miles high to reach one trillion dollars!
It's become almost surreal, like we are in a bad dream or something!
It is clear that Obama's Keynesian (another word for head up your back end) economic
advisors are telling him that they don't know what to do other than continue the Bush policy of create more money out of thin air in a desperate attempt to stimulate the economy. This is akin to a fireman trying to put out a massive blaze by pumping gasoline through the hose instead of water.
Richard Maybury of the "Early Warning Report" had a great quote this month related to this when he said the following:
"Expecting your life to be improved by politicians is to believe in one of the most unlikely events imaginable."
I couldn't agree more with his observation. But we seem to have a large portion of America that is in complete denial of what is actually happening to our country. Watching educated, but uninformed Americans put so much trust and hope in government is flabbergasting to me.
Listening to those who take sides and want to blame the "other party" shows just how out- of-touch the average citizen in America has become. It is not about Republicans and Democrats anymore. We are way beyond that now. Forget about trying to assign blame to one party of the other because this mess got started back in the 70's and both parties are guilty, guilty, and guilty.
Looking at the dismal record of fiat currencies throughout history, no country that has disconnected their currency from a gold or silver standard has ever made it past the 40 year mark before inflationary panic and disaster unfolded. The United States is now in the 37th year of its fiat currency experiment since Nixon took us off the gold standard in 1972.
Obama has already stated he plans on trillion dollar budget deficits for years to come. This is completely unsustainable! My take is we would be lucky to make it another eighteen months before the whole enchilada blows sky high.
The latest so called "economic stimulus package" is nothing more and nothing less than creating money out of thin air. It absolutely guarantees hyperinflation within eighteen months time frame, possibly much less which provides us colossal opportunities to profit in non-dollar assets such as the precious metals.
And what we were originally told about the stimulus package, is suddenly no longer the case. As always, what we the people were led to believe in the beginning with the bailouts and now the economic stimulus is totally changed. The economic stimulus is mostly pork barrel spending and socialism on a grand scale with little in the way of infrastructure job creation which was how this was originally billed. It is very conceivable that the first year budget deficit of Obama's administration will exceed $3 trillion dollars. This is absolutely unsustainable by any definition you want to use.
As Jim Sinclair recently said, "There is no longer any means of reversal of the final terminal phase of the downward spiral now solidly set in motion."
It is coming whether you or I want it to or not. All you can do is take the positive approach and prepare for it, and profit from the debacle. The time to do so however is rapidly running out. The million dollar question remains, how much time do we really have before the system implodes?
For me I wouldn't be surprised to see the next shoe drop at any moment as the "Obama Hope Rally" quickly fades into the next wave of financial panic. This next wave down is going to be a whopper because it will involve the popping of the commercial real estate bubble and its associated derivatives. Again, the PTB (Powers That Be) don't want you to understand what these derivatives are and how they are affecting the financial system. The government media complex keeps providing disinformation to prevent you from understanding the true nature of this derivative liability that exists worldwide. What the exact amount of this liability represents is not exactly known [MM: Estimated at $700 TRILLION!!!], but what we do know is that what we have seen thus far is only the tip of the iceberg.
In these kinds of volatile environments, things can go from looking good to sheer panic at the drop of a hat. The Fed is working feverishly at the moment to avoid deflationary panic, but their only solution is to throw money, lots of money at the problem. This in the end will only prove disastrous as hyperinflationary forces take over. The reason for this is because of the sheer number of new dollars that are being created and thrown into the system. The exact timing of when this hyperinflation will show up taking "Cash is King" to "Cash is Trash" will depend mostly on what is called the velocity of money as I have explained before.
If the newly created money starts to change hands quickly as people begin to buy whatever they can of value before there money buys even less, then you can expect the hyper-inflation to show up sooner than eighteen months, possibly much sooner. If however the velocity is slower and the newly created money does not change hands very quickly then we may get the full eighteen months before things really begin to unwind. Personally, my take is we will be lucky to make it through the end of the year without a major financial catastrophe.
So get prepared as quickly as possible for disruptions to the distribution network typical in periods of hyper-inflation.
1. Get a food storage and emergency supplies in place. (Including at least a three month supply of prescription drugs).
2. Own physical gold, silver and the quality precious metals mining shares [MM: Bad Idea..."mining shares" will become simply additional, non-redeemable paper trash during an economic crash!!!]. Start thinking and taking short-term profits with the shares with every opportunity you get. Make sure you own the American Eagle silver coins if you live in U.S., or Canadian silver Maples if you live in Canada.
3. Keep some $1's, $5's, $10's and $20's safely in your home (at least a couple thousand dollars worth), I'm not recommending stuffing your mattresses, just some cash in case of "Bank Holidays" that seem sure to happen.
4. Consider buying or having a safe haven place at least two hours away from a major city.
5. Take a global perspective with regards to protecting your hard earned dollars. In other words, don't have so much U.S. Dollar exposure. Transfer accounts to countries or
6. currencies better than the U.S. dollar. Currencies of choice that come to mind are the Canadian Dollar, the Singapore Dollar, and the Hong Kong Dollar. [MM: Bad Idea...more paper trash!!!]
7. Continue to educate yourself and others about the realities of what is happening. Don't believe the hype and outright lies that come from the [private Zionist-owned and -operated] Fed or U.S. Government.
8. Read the Constitution for yourself and help others read it so the public can know how we get back on track to liberty, prosperity, and abundance once more.
We are witnessing the undoing of what our founding fathers worked so hard to provide for us. They created a republic but were worried we would be able to keep it. See if the quotes below from our founding fathers don't ring true to you and really hit the nail on the head.
Yes, we did produce a near perfect republic, but will they be able to keep it? Or will they in their enjoyment of plenty, lose memory of their freedom. Material abundance without character is the surest way to destruction. Thomas Jefferson
Benjamin Franklin's admonition as he left the final meeting of the Constitutional convention to his wife who asked what the new government would be. Franklin replied:
"A republic madam, if you can keep it".
The people of the United States are the rightful masters of both the Congress and the Courts, not to overthrow the Constitution but to overthrow those who pervert the Constitution. Abraham Lincoln
The bottom line is we are losing the country the founding fathers so diligently worked and strived for. The enemy is power-seeking politicians on both sides of the isle and the unbelievably greedy stock holders of the [private]Federal Reserve who have now hijacked America from the people. They are the very perverts that Abraham Lincoln warned us of. [Zionists]
Are you willing to fight to save the country from those who desire to pervert the Constitution? This will be the ultimate decision that all of us will be faced with if the country is to be saved. Some say it is already too late. I believe there still is a chance. [MM: Only if the private Zionist "Federal Reserve" System is abolished!!!]
A very well written piece by Richard Maybury best describes how we the people can get ourselves out of the mess that we now find ourselves. I think Richard Maybury is one of the brightest minds that we have available to us today on topics of liberty, economics and
freedom. I would highly recommend you subscribe to his newsletter which you can access at www.richardmaybury.com.
The following paragraphs in italics are excerpts from Richard's February 2009 newsletter:
Why I am Optimistic , Long-Term
The timing of the economic crisis is a historic stroke of good luck. The disaster began under republican leadership, and is virtually certain to grow worse under democratic leadership.
So, most Americans will soon see that both major parties are failing them catastrophically.
Everyone therefore, is awakening to the fact that they must seek an alternative. And there, in all the libraries and on the internet, is the Constitution, waiting to be discovered.
At bottom, the present crisis is... more than anything else, a demonstration of the fact that he who expects peace, liberty, and abundance to endure, in a country with statist schools, is expecting what never was and never will be.
I remember the Vietnam War, what enraged young people the most was the betrayal. They had been taught all their lives to trust government, and now it was sending them to die for a pack of lies. They began to doubt everything, and to hate "the establishment," which meant anyone with any kind of power. Result: riots
Searching for an alternative to the conservative trust-the-government faith they had been taught, they veered sharply left. This is another stroke of luck for us today. The centerpiece of socialism was the empire of the Union of Soviet Socialist Republics. On the day the Berlin Wall came down in 1989, the credibility of socialism and everything that resembles it was smashed. Every person could now see that state control of the economy means slavery, and poverty for all but the ruling class.
So today the credibility of both the left and right of the mainstream political spectrum has been demolished, and over the next few years, as conditions worsen, millions will be looking for something that is not main-stream. A window of opportunity will open. Those who believe in what was known in 1776 as the "system of liberty" - that is, the system enshrined in the Constitution---will finally have audiences so desperate they will not be only receptive but eager to give the system a try.
America is one of the few countries to have been founded on a set of ideas, as opposed to simple loyalty to a ruler or piece of real estate.
These ideas are clearly stated in the Declaration of Independence and Constitution, especially the 9th and 10th amendments to the Bill of Rights. These two amendments say the
federal government is allowed to do to us only what the Constitution says it can, which isn't much. For instance, Washington is not authorized to establish the Federal Reserve, inflate the money supply, manipulate interest rates, sanction subprime mortgages, give military aid to foreign tyrants, or spend $190 million on a bridge to nowhere.
The Constitution is not perfect, but it is close enough. And, it enjoys a wonderful prestige.
This isn't to say many have read it or know what it is. But they have heard good things about it, and some can read well enough to understand its high school level language. (The reason government does not want you to discover the Constitution is, the founders did not write it in legal-ease; any ordinary person can understand it and see where it is being violated. Is this why so few Americans today have been taught to read well?)
To most the Constitution will always be just a symbol, like the Liberty Bell and the Statue of Liberty. But as long as they are desperate enough to give it a try, this will start the country back in the direction of peace, liberty, and abundance.
In short, and this is another key point in the realm of economics, there's no other ideology left to try. Fascism and its variations went down in flames in the 1940's. Socialism and its variations followed in the 1980's and 90's. Now thanks to Bush and Obama, conservatism is on the ash heap and liberalism isn't far behind.
This isn't to say power holders won't try a lot of crazy schemes. But what they do will be all tactics and no strategy. There will be no model, no ideology, just euphemisms for print money!
From all the panicky fire fighting incidents, we will experience forms of chaos never seen before. In a few years people will realize Obama's "plan" was the same as Bush's: pour all the conflicting suggestions from my advisors into a blender and hit the "muddle" button.
People will long for some sort of coherent, logical system in which they can have faith.
They won't go to the system of liberty because they like it or because they understand it; they'll go because it's the only thing left. In a few years, John Q. Citizen will regard both major parties as his enemy, and he will be so desperate he will be ready to try anything, even freedom.
I leave this with you in the hopes that we all find our way back to what made America great in the first place. In the meantime it looks like we are about to find out just how deep the consequences for decades of abuse of our system of credit and Constitutional values will be.
The opportunities for profit in the coming economic meltdown will be amazing. While many will be losing most of their wealth and suffering in many untold ways, the few who were prepared will be able to come through the storm financially, physically and emotionally intact.
The time to prepare is coming to a close. Please be advised.
Feb 15, 2009
Greg McCoach
email: amerigold@msn.com
website: The Mining Speculator -- END
The Hijacking of America
Greg McCoach
Feb 19, 2009
Watching the perverted circus of corrupt politicians and administrators in Washington and New York the last six months is enough to make anyone with a brain want to shout a primal scream of disgust and anger. I use the word "brain" because it is becoming increasingly apparent that many Americans unfortunately are no longer using the gray matter that exists between their ears with regards to what is going on in our country. The rapidly accelerating chain of events moving us faster and faster towards economic oblivion is beyond shocking. It is happening much quicker than I anticipated.
The numbers these stooges in Washington and New York are throwing around for the bailouts and economic stimulus package are simply too big for the average person to comprehend. This is one of the reasons why they can get away with it, because they know the average citizen can't understand it. The old adage "if you can't convince them, then confuse them" comes to mind and the politicians certainly have become very adept at doing that lately. (But why we let them get away with this is another story in and of itself for another time).
At some point large numbers simply become figures on the page, well beyond human scale and intuitive understanding. And yet as discussion about the economy and the gargantuan numbers that come along with it continue to dominate the news, it may be more important than ever to try to understand what these numbers actually represent. The politician's figure as long as they can keep you in the dark, you won't demand any accountability from them. And accountability to a politician is what a heart attack means to your average 55 year old.
So before I go any further let's do a quick study of what a trillion dollars represents in order to understand why the U.S. Government is completely out of control at this point and soon on its way to utter collapse.
With the economic stimulus package estimated to cost around one trillion dollars, and Obama stating on January 7th that "he is admitting to trillion dollar budget deficits for years to come" here are some analogies that express the absurdity of the current situation in the United States.
First - the math:
• 1 (one)
• 10 (ten)
100 (one hundred) 1,000 (one thousand) 10,000 (ten thousand) 100,000 (hundred thousand) 1,000,000 (one million) 10,000,000 (ten million) 100,000,000 (hundred million) 1,000,000,000 (one billion) 10,000,000,000 (ten billion) 100,000,000,000 (hundred billion) 1,000,000,000,000 (one trillion)
Now the analogies:
First analogy: If someone spent one million dollars per day each and every day since Jesus was born, it would take another 731 years (beyond today) before one trillion dollars was spent.
• $1,000,000,000,000 / $1,000,000 per day = one million days
• one million days / 365 = 2740 years
2740 - 2009 = 731 (years remaining)
Second analogy looks at a million, a billion, and a trillion in terms of seconds. One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years!
The third analogy puts dollar bills end to end. If you laid one dollar bills end to end, one trillion dollars would stretch nearly from the earth to the sun. It would take a military jet flying at the speed of sound, reeling out a roll of dollar bills behind it, 14 years before it reeled out one trillion dollar bills!
But the last analogy is the one that absolutely blows my mind. If you took freshly minted brand new $1,000 dollar bills and starting stacking them one on top of another, it would take a stack over 68 miles high to reach one trillion dollars!
It's become almost surreal, like we are in a bad dream or something!
It is clear that Obama's Keynesian (another word for head up your back end) economic
advisors are telling him that they don't know what to do other than continue the Bush policy of create more money out of thin air in a desperate attempt to stimulate the economy. This is akin to a fireman trying to put out a massive blaze by pumping gasoline through the hose instead of water.
Richard Maybury of the "Early Warning Report" had a great quote this month related to this when he said the following:
"Expecting your life to be improved by politicians is to believe in one of the most unlikely events imaginable."
I couldn't agree more with his observation. But we seem to have a large portion of America that is in complete denial of what is actually happening to our country. Watching educated, but uninformed Americans put so much trust and hope in government is flabbergasting to me.
Listening to those who take sides and want to blame the "other party" shows just how out- of-touch the average citizen in America has become. It is not about Republicans and Democrats anymore. We are way beyond that now. Forget about trying to assign blame to one party of the other because this mess got started back in the 70's and both parties are guilty, guilty, and guilty.
Looking at the dismal record of fiat currencies throughout history, no country that has disconnected their currency from a gold or silver standard has ever made it past the 40 year mark before inflationary panic and disaster unfolded. The United States is now in the 37th year of its fiat currency experiment since Nixon took us off the gold standard in 1972.
Obama has already stated he plans on trillion dollar budget deficits for years to come. This is completely unsustainable! My take is we would be lucky to make it another eighteen months before the whole enchilada blows sky high.
The latest so called "economic stimulus package" is nothing more and nothing less than creating money out of thin air. It absolutely guarantees hyperinflation within eighteen months time frame, possibly much less which provides us colossal opportunities to profit in non-dollar assets such as the precious metals.
And what we were originally told about the stimulus package, is suddenly no longer the case. As always, what we the people were led to believe in the beginning with the bailouts and now the economic stimulus is totally changed. The economic stimulus is mostly pork barrel spending and socialism on a grand scale with little in the way of infrastructure job creation which was how this was originally billed. It is very conceivable that the first year budget deficit of Obama's administration will exceed $3 trillion dollars. This is absolutely unsustainable by any definition you want to use.
As Jim Sinclair recently said, "There is no longer any means of reversal of the final terminal phase of the downward spiral now solidly set in motion."
It is coming whether you or I want it to or not. All you can do is take the positive approach and prepare for it, and profit from the debacle. The time to do so however is rapidly running out. The million dollar question remains, how much time do we really have before the system implodes?
For me I wouldn't be surprised to see the next shoe drop at any moment as the "Obama Hope Rally" quickly fades into the next wave of financial panic. This next wave down is going to be a whopper because it will involve the popping of the commercial real estate bubble and its associated derivatives. Again, the PTB (Powers That Be) don't want you to understand what these derivatives are and how they are affecting the financial system. The government media complex keeps providing disinformation to prevent you from understanding the true nature of this derivative liability that exists worldwide. What the exact amount of this liability represents is not exactly known [MM: Estimated at $700 TRILLION!!!], but what we do know is that what we have seen thus far is only the tip of the iceberg.
In these kinds of volatile environments, things can go from looking good to sheer panic at the drop of a hat. The Fed is working feverishly at the moment to avoid deflationary panic, but their only solution is to throw money, lots of money at the problem. This in the end will only prove disastrous as hyperinflationary forces take over. The reason for this is because of the sheer number of new dollars that are being created and thrown into the system. The exact timing of when this hyperinflation will show up taking "Cash is King" to "Cash is Trash" will depend mostly on what is called the velocity of money as I have explained before.
If the newly created money starts to change hands quickly as people begin to buy whatever they can of value before there money buys even less, then you can expect the hyper-inflation to show up sooner than eighteen months, possibly much sooner. If however the velocity is slower and the newly created money does not change hands very quickly then we may get the full eighteen months before things really begin to unwind. Personally, my take is we will be lucky to make it through the end of the year without a major financial catastrophe.
So get prepared as quickly as possible for disruptions to the distribution network typical in periods of hyper-inflation.
1. Get a food storage and emergency supplies in place. (Including at least a three month supply of prescription drugs).
2. Own physical gold, silver and the quality precious metals mining shares [MM: Bad Idea..."mining shares" will become simply additional, non-redeemable paper trash during an economic crash!!!]. Start thinking and taking short-term profits with the shares with every opportunity you get. Make sure you own the American Eagle silver coins if you live in U.S., or Canadian silver Maples if you live in Canada.
3. Keep some $1's, $5's, $10's and $20's safely in your home (at least a couple thousand dollars worth), I'm not recommending stuffing your mattresses, just some cash in case of "Bank Holidays" that seem sure to happen.
4. Consider buying or having a safe haven place at least two hours away from a major city.
5. Take a global perspective with regards to protecting your hard earned dollars. In other words, don't have so much U.S. Dollar exposure. Transfer accounts to countries or
6. currencies better than the U.S. dollar. Currencies of choice that come to mind are the Canadian Dollar, the Singapore Dollar, and the Hong Kong Dollar. [MM: Bad Idea...more paper trash!!!]
7. Continue to educate yourself and others about the realities of what is happening. Don't believe the hype and outright lies that come from the [private Zionist-owned and -operated] Fed or U.S. Government.
8. Read the Constitution for yourself and help others read it so the public can know how we get back on track to liberty, prosperity, and abundance once more.
We are witnessing the undoing of what our founding fathers worked so hard to provide for us. They created a republic but were worried we would be able to keep it. See if the quotes below from our founding fathers don't ring true to you and really hit the nail on the head.
Yes, we did produce a near perfect republic, but will they be able to keep it? Or will they in their enjoyment of plenty, lose memory of their freedom. Material abundance without character is the surest way to destruction. Thomas Jefferson
Benjamin Franklin's admonition as he left the final meeting of the Constitutional convention to his wife who asked what the new government would be. Franklin replied:
"A republic madam, if you can keep it".
The people of the United States are the rightful masters of both the Congress and the Courts, not to overthrow the Constitution but to overthrow those who pervert the Constitution. Abraham Lincoln
The bottom line is we are losing the country the founding fathers so diligently worked and strived for. The enemy is power-seeking politicians on both sides of the isle and the unbelievably greedy stock holders of the [private]Federal Reserve who have now hijacked America from the people. They are the very perverts that Abraham Lincoln warned us of. [Zionists]
Are you willing to fight to save the country from those who desire to pervert the Constitution? This will be the ultimate decision that all of us will be faced with if the country is to be saved. Some say it is already too late. I believe there still is a chance. [MM: Only if the private Zionist "Federal Reserve" System is abolished!!!]
A very well written piece by Richard Maybury best describes how we the people can get ourselves out of the mess that we now find ourselves. I think Richard Maybury is one of the brightest minds that we have available to us today on topics of liberty, economics and
freedom. I would highly recommend you subscribe to his newsletter which you can access at www.richardmaybury.com.
The following paragraphs in italics are excerpts from Richard's February 2009 newsletter:
Why I am Optimistic , Long-Term
The timing of the economic crisis is a historic stroke of good luck. The disaster began under republican leadership, and is virtually certain to grow worse under democratic leadership.
So, most Americans will soon see that both major parties are failing them catastrophically.
Everyone therefore, is awakening to the fact that they must seek an alternative. And there, in all the libraries and on the internet, is the Constitution, waiting to be discovered.
At bottom, the present crisis is... more than anything else, a demonstration of the fact that he who expects peace, liberty, and abundance to endure, in a country with statist schools, is expecting what never was and never will be.
I remember the Vietnam War, what enraged young people the most was the betrayal. They had been taught all their lives to trust government, and now it was sending them to die for a pack of lies. They began to doubt everything, and to hate "the establishment," which meant anyone with any kind of power. Result: riots
Searching for an alternative to the conservative trust-the-government faith they had been taught, they veered sharply left. This is another stroke of luck for us today. The centerpiece of socialism was the empire of the Union of Soviet Socialist Republics. On the day the Berlin Wall came down in 1989, the credibility of socialism and everything that resembles it was smashed. Every person could now see that state control of the economy means slavery, and poverty for all but the ruling class.
So today the credibility of both the left and right of the mainstream political spectrum has been demolished, and over the next few years, as conditions worsen, millions will be looking for something that is not main-stream. A window of opportunity will open. Those who believe in what was known in 1776 as the "system of liberty" - that is, the system enshrined in the Constitution---will finally have audiences so desperate they will not be only receptive but eager to give the system a try.
America is one of the few countries to have been founded on a set of ideas, as opposed to simple loyalty to a ruler or piece of real estate.
These ideas are clearly stated in the Declaration of Independence and Constitution, especially the 9th and 10th amendments to the Bill of Rights. These two amendments say the
federal government is allowed to do to us only what the Constitution says it can, which isn't much. For instance, Washington is not authorized to establish the Federal Reserve, inflate the money supply, manipulate interest rates, sanction subprime mortgages, give military aid to foreign tyrants, or spend $190 million on a bridge to nowhere.
The Constitution is not perfect, but it is close enough. And, it enjoys a wonderful prestige.
This isn't to say many have read it or know what it is. But they have heard good things about it, and some can read well enough to understand its high school level language. (The reason government does not want you to discover the Constitution is, the founders did not write it in legal-ease; any ordinary person can understand it and see where it is being violated. Is this why so few Americans today have been taught to read well?)
To most the Constitution will always be just a symbol, like the Liberty Bell and the Statue of Liberty. But as long as they are desperate enough to give it a try, this will start the country back in the direction of peace, liberty, and abundance.
In short, and this is another key point in the realm of economics, there's no other ideology left to try. Fascism and its variations went down in flames in the 1940's. Socialism and its variations followed in the 1980's and 90's. Now thanks to Bush and Obama, conservatism is on the ash heap and liberalism isn't far behind.
This isn't to say power holders won't try a lot of crazy schemes. But what they do will be all tactics and no strategy. There will be no model, no ideology, just euphemisms for print money!
From all the panicky fire fighting incidents, we will experience forms of chaos never seen before. In a few years people will realize Obama's "plan" was the same as Bush's: pour all the conflicting suggestions from my advisors into a blender and hit the "muddle" button.
People will long for some sort of coherent, logical system in which they can have faith.
They won't go to the system of liberty because they like it or because they understand it; they'll go because it's the only thing left. In a few years, John Q. Citizen will regard both major parties as his enemy, and he will be so desperate he will be ready to try anything, even freedom.
I leave this with you in the hopes that we all find our way back to what made America great in the first place. In the meantime it looks like we are about to find out just how deep the consequences for decades of abuse of our system of credit and Constitutional values will be.
The opportunities for profit in the coming economic meltdown will be amazing. While many will be losing most of their wealth and suffering in many untold ways, the few who were prepared will be able to come through the storm financially, physically and emotionally intact.
The time to prepare is coming to a close. Please be advised.
Feb 15, 2009
Greg McCoach
email: amerigold@msn.com
website: The Mining Speculator -- END
Biden Says Bush Helped al-Qaida Recruiting
Certain circles in Washington and the media have always stressed this.
Biden Says Bush Helped al-Qaida Recruiting
Friday, February 20, 2009 2:44 PM
Vice President Joe Biden said Thursday that the Bush administrations detention and interrogation policies gave al-Qaida a powerful recruiting tool, according to a report in the New York Times.
Biden made the statement while visiting the Central Intelligence Agency to swear in Leon E. Panetta as the agencys new director.
At the venue, Biden noted that under the new leadership of President Barack Obama, the C.I.A. was now required to use only the same non-coercive interrogation methods as the military.
Biden added that the latest Obama executive orders reverse the policies that in my view and the view of many in this agency caused America to fall short of its founding principles and which gave al-Qaida a powerful recruiting tool.
Speaking to a warm and cheering crowd of CIA employees and officers, Biden lauded the work of the nations premier intelligence gatherer.
This agency remains Americas premier national security agency, and we deeply appreciate the risks and the sacrifices that so many in the past and in the present continue to take for this country, Biden said.
Panetta, a former White House chief of staff and intelligence community novice, made an oblique reference to the Saddam Hussein-Iraq WMD debacle saying the agency would provide the very best intelligence, independent judgments, not influenced by the politics of the situation but truly real, objective information that can be presented to the president and the policy makers of this country.
Biden Says Bush Helped al-Qaida Recruiting
Friday, February 20, 2009 2:44 PM
Vice President Joe Biden said Thursday that the Bush administrations detention and interrogation policies gave al-Qaida a powerful recruiting tool, according to a report in the New York Times.
Biden made the statement while visiting the Central Intelligence Agency to swear in Leon E. Panetta as the agencys new director.
At the venue, Biden noted that under the new leadership of President Barack Obama, the C.I.A. was now required to use only the same non-coercive interrogation methods as the military.
Biden added that the latest Obama executive orders reverse the policies that in my view and the view of many in this agency caused America to fall short of its founding principles and which gave al-Qaida a powerful recruiting tool.
Speaking to a warm and cheering crowd of CIA employees and officers, Biden lauded the work of the nations premier intelligence gatherer.
This agency remains Americas premier national security agency, and we deeply appreciate the risks and the sacrifices that so many in the past and in the present continue to take for this country, Biden said.
Panetta, a former White House chief of staff and intelligence community novice, made an oblique reference to the Saddam Hussein-Iraq WMD debacle saying the agency would provide the very best intelligence, independent judgments, not influenced by the politics of the situation but truly real, objective information that can be presented to the president and the policy makers of this country.
Get ready for a wave of bank failures
http://money.cnn.com/2009/02/20/news/companies/bank_failures/?postversion=2009022022
Get ready for a wave of bank failures
In less than two months, regulators have seized 14 banks. Experts think many more banks will collapse before the financial crisis is over.
By David Ellis, CNNMoney.com staff writer
Last Updated: February 20, 2009: 10:12 PM ET
NEW YORK (CNNMoney.com) -- If it's Friday, there must be a bank failing somewhere across the country.
For six consecutive weeks, industry regulators have seized control of a bank after the market closed on Friday, bringing the total number of failed banks so far this year to 14.
To put that into perspective, 25 banks failed in 2008, suggesting that the rate of failures is quickening as the economic crisis deepens.
"We'll have a banner year [of failures] this year," said Stuart Greenbaum, retired dean and professor emeritus at the Olin Business School at Washington University in St. Louis.
At the current rate, nearly 100 institutions -- with a combined $50 billion in assets -- will collapse by year's end.
The latest is Oregon's Silver Falls Bank, which was closed by U.S. regulators Friday.
With more consumers and businesses likely to default on loans as the recession drags on, some industry observers think the pace of bank failures could accelerate further.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, upped his expectations for bank failures earlier this month, warning that he anticipates 1000 institutions could fail over the next three to five years.
"The sooner the bank regulators can shut down the troubled banks, the faster the industry will get back on its feet, in our view," he wrote.
A different era
Still, the current crop of bank failures hardly comes close to what happened during the savings & loan crisis two decades ago.
More than 1,900 financial institutions went under during 1987-1991, peaking with the failure of 534 banks in 1989.
And many experts are quick to draw distinctions between the two eras.
During the last crisis, many savings and loans were coping with an inability to adapt to higher interest rates, while many banks were significantly undercapitalized to deal with losses.
"That is not our problem here," noted Ann Graham, a professor of law at Texas Tech who spent part of her career as a litigator for the FDIC and Texas' Department of Banking during the 1980s.
Instead, she said the main problem now is that banks have been stuck with assets in their loan and investment portfolios that have quickly soured.
It's also worth remembering that when banks fail, they don't close down for good. The Federal Deposit Insurance Corp. guarantees deposits up to $250,000 in single accounts. Also, the FDIC often is able to find a willing buyer for the failed bank immediately, which means little, if any, disruption for the failed bank's customers.
Still, regulators face a crisis of significantly larger proportions today that promises to keep the nation's banking industry strained for some time.
Even though the overwhelming majority of the banks that have gone under since the beginning of 2008 are smaller community banks, there have been two notable big bank failures.
Last year, the California-based mortgage lender IndyMac failed. That was followed by the collapse of savings and loan Washington Mutual, the largest bank failure in history. The FDIC seized WaMu and immediately sold its banking operations to JPMorgan Chase (JPM, Fortune 500).
Several experts fear the potential for another large bank failure. While the U.S. government has repeatedly said it will not allow major institutions to fail, namely Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500), some embattled regional banking giants may be too far gone to save.
"Conceivably, we'll see some larger names fail as we go forward," said Frank Barkocy, director of research with Mendon Capital Advisors, a money management firm that invests primarily in financial stocks.
Bracing for tough times
Regulators have indicated they are gearing up for tougher times. In addition to requesting an increase in its borrowing authority from the Treasury, the FDIC has maintained that it expects its deposit insurance fund to suffer $40 billion in losses through 2013. Last summer's collapse of IndyMac wiped out $8.9 billion from the fund.
Fearful of drawing down the fund any further, banking authorities may attempt to broker more assisted acquisitions like JPMorgan Chase's purchase of Washington Mutual, where the purchaser acquires the deposits and a portion of the failed bank's bad assets.
"The [FDIC's] incentive is not to have a bank failure at all," said Jack Murphy, a long-time partner at the law firm Cleary Gottlieb Steen & Hamilton, who previously served as general counsel for the agency. "If it is possible to have a private market solution, that is ideal."
Next week, regulators are expected to provide a better glimpse of the health of the banking sector, when the FDIC presents its quarterly banking profile for the fourth quarter of 2008.
One highlight of the report will be the agency's so-called "problem bank" list. That number is expected to climb from 171, where it stood at the end of the third quarter.
Some have charged that the list is hardly reliable, given that only a fraction of the banks that are included ever actually reach the point of collapse.
Nevertheless, a big jump in the number of banks on the problem list could serve as an indicator that there will many more Friday failures to come this year. To top of page
First Published: February 20, 2009: 12:50 PM ET
Get ready for a wave of bank failures
In less than two months, regulators have seized 14 banks. Experts think many more banks will collapse before the financial crisis is over.
By David Ellis, CNNMoney.com staff writer
Last Updated: February 20, 2009: 10:12 PM ET
NEW YORK (CNNMoney.com) -- If it's Friday, there must be a bank failing somewhere across the country.
For six consecutive weeks, industry regulators have seized control of a bank after the market closed on Friday, bringing the total number of failed banks so far this year to 14.
To put that into perspective, 25 banks failed in 2008, suggesting that the rate of failures is quickening as the economic crisis deepens.
"We'll have a banner year [of failures] this year," said Stuart Greenbaum, retired dean and professor emeritus at the Olin Business School at Washington University in St. Louis.
At the current rate, nearly 100 institutions -- with a combined $50 billion in assets -- will collapse by year's end.
The latest is Oregon's Silver Falls Bank, which was closed by U.S. regulators Friday.
With more consumers and businesses likely to default on loans as the recession drags on, some industry observers think the pace of bank failures could accelerate further.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, upped his expectations for bank failures earlier this month, warning that he anticipates 1000 institutions could fail over the next three to five years.
"The sooner the bank regulators can shut down the troubled banks, the faster the industry will get back on its feet, in our view," he wrote.
A different era
Still, the current crop of bank failures hardly comes close to what happened during the savings & loan crisis two decades ago.
More than 1,900 financial institutions went under during 1987-1991, peaking with the failure of 534 banks in 1989.
And many experts are quick to draw distinctions between the two eras.
During the last crisis, many savings and loans were coping with an inability to adapt to higher interest rates, while many banks were significantly undercapitalized to deal with losses.
"That is not our problem here," noted Ann Graham, a professor of law at Texas Tech who spent part of her career as a litigator for the FDIC and Texas' Department of Banking during the 1980s.
Instead, she said the main problem now is that banks have been stuck with assets in their loan and investment portfolios that have quickly soured.
It's also worth remembering that when banks fail, they don't close down for good. The Federal Deposit Insurance Corp. guarantees deposits up to $250,000 in single accounts. Also, the FDIC often is able to find a willing buyer for the failed bank immediately, which means little, if any, disruption for the failed bank's customers.
Still, regulators face a crisis of significantly larger proportions today that promises to keep the nation's banking industry strained for some time.
Even though the overwhelming majority of the banks that have gone under since the beginning of 2008 are smaller community banks, there have been two notable big bank failures.
Last year, the California-based mortgage lender IndyMac failed. That was followed by the collapse of savings and loan Washington Mutual, the largest bank failure in history. The FDIC seized WaMu and immediately sold its banking operations to JPMorgan Chase (JPM, Fortune 500).
Several experts fear the potential for another large bank failure. While the U.S. government has repeatedly said it will not allow major institutions to fail, namely Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500), some embattled regional banking giants may be too far gone to save.
"Conceivably, we'll see some larger names fail as we go forward," said Frank Barkocy, director of research with Mendon Capital Advisors, a money management firm that invests primarily in financial stocks.
Bracing for tough times
Regulators have indicated they are gearing up for tougher times. In addition to requesting an increase in its borrowing authority from the Treasury, the FDIC has maintained that it expects its deposit insurance fund to suffer $40 billion in losses through 2013. Last summer's collapse of IndyMac wiped out $8.9 billion from the fund.
Fearful of drawing down the fund any further, banking authorities may attempt to broker more assisted acquisitions like JPMorgan Chase's purchase of Washington Mutual, where the purchaser acquires the deposits and a portion of the failed bank's bad assets.
"The [FDIC's] incentive is not to have a bank failure at all," said Jack Murphy, a long-time partner at the law firm Cleary Gottlieb Steen & Hamilton, who previously served as general counsel for the agency. "If it is possible to have a private market solution, that is ideal."
Next week, regulators are expected to provide a better glimpse of the health of the banking sector, when the FDIC presents its quarterly banking profile for the fourth quarter of 2008.
One highlight of the report will be the agency's so-called "problem bank" list. That number is expected to climb from 171, where it stood at the end of the third quarter.
Some have charged that the list is hardly reliable, given that only a fraction of the banks that are included ever actually reach the point of collapse.
Nevertheless, a big jump in the number of banks on the problem list could serve as an indicator that there will many more Friday failures to come this year. To top of page
First Published: February 20, 2009: 12:50 PM ET
Saturday, February 21, 2009
OBAMA'S CLIMATE PLAN MAY TRIGGER TRADE WAR WITH CHINA, INDIA
[ It is nice that Union's are good for something. But on reading this
it seems they actually serve a very useful purpose. The Eco-idiots can waste their resource pushing for this nonsense that CO2 is harmful
and then the labor unions can use their power to convince congress that
anything that moves jobs away is harmful and must not be allowed.
Jack ]
OBAMA'S CLIMATE PLAN MAY TRIGGER TRADE WAR WITH CHINA, INDIA
Bloomberg, 20 February 2009 http://www.bloomberg.com/apps/news?pid=20601082&sid=aHscSU9C.1F8&refer=c
anada
By Mark Drajem and Catherine Dodge
Feb. 20 (Bloomberg) -- President Barack Obama's plans to limit
greenhouse-gas emissions may be stymied by the specter of an
international trade war.
U.S. Steel Corp., American Electric Power Co. and the AFL- CIO, the
largest U.S. federation of labor unions, are all pressing lawmakers for
protection against imports from countries that won't have to bear the
costs of any new measures to curb global warming.
The companies say fees might be needed to prevent price- undercutting by
manufacturers in countries that won't match U.S. climate-change
standards. Lobbying groups for exporters such as Microsoft Corp. counter
that imposing penalties on imports may violate World Trade Organization
rules and spark retaliation by China and other nations.
"Climate change is going to be the big issue of the next year, and no
one has really grappled with the trade aspects," said Jake Colvin, vice
president at the Washington-based National Foreign Trade Council, whose
members include Caterpillar Inc., Exxon Mobil Corp. and Microsoft. The
idea of assessing fees on imports is "alarming," he said.
Obama says he wants to cut carbon-dioxide emissions, which contribute to
global warming, by 80 percent from 1990 levels by 2050. "This is a
worldwide issue that we are going to have to confront," Obama said in
Ottawa yesterday.
The cap-and-trade program favored by the president would set limits on
greenhouse-gas emissions and let companies trade pollution allowances on
a market.
Kyoto Protocol
The international trade implications may trip up efforts to pass
legislation this year, just as they helped scuttle U.S. acceptance of
the Kyoto accord on global warming, said Kevin Dempsey, a lawyer at
Dewey & LeBoeuf LLP in Washington. "This is the heart of the debate that stopped the Kyoto Protocol,"
Dempsey said in an interview. Even if Congress decides it wants to
impose import fees, figuring out how to calculate them would be
complicated, he said.
The U.S. didn't join the Kyoto Protocol, the only international
agreement to stem climate change, after the Senate in 1997 unanimously
passed a resolution expressing opposition because it didn't include
requirements on developing countries.
China and India so far have resisted international limits, as did the
U.S. under President George W. Bush. If China and India don't agree to
pollution-reduction targets, their companies would have a pricing
advantage over U.S. manufacturers that take on the added costs of
emissions targets, said Tom Conway, vice president of the United
Steelworkers union.
'Huge' Issue
New greenhouse-gas limits might also prompt U.S. manufacturers to move
operations to China and continue emitting pollution, hurting the
American economy and "undermining the purpose of the legislation," he
said.
Without levying fees on carbon-intensive imports, the U.S. might lose 1
million factory jobs, said John Surma, chief executive officer of
Pittsburgh-based U.S. Steel.
"The issue of global competition is huge," Surma told the Congressional
Steel Caucus on Feb. 4. "If you don't take care of the international
aspect, you put us out of business."
Dan DiMicco, CEO of Charlotte, North Carolina-based steelmaker Nucor
Corp., told the same panel that his company had planned to build a $3
billion iron-making plant in Louisiana. The weak U.S. economy and
potential limits on greenhouse-gas emissions "put that investment in
doubt," DiMicco said.
The U.S. Chamber of Commerce, the largest lobbying group for American
business, says charges on imports, termed border adjustments, may hurt
U.S. producers by raising the price for foreign-made components and
creating a backlash against American exports.
'Border Adjustments'
"We're skeptical," said Christopher Wenk, the top trade lobbyist for the
chamber. "There is a domino effect here; it will have an impact on
importers and exporters."
Meeting the demands of U.S. steelmakers and unions may prompt objections
from the European Union and Canada, which lobbied against a "Buy
American" provision in the stimulus legislation that says U.S. goods
must be used for infrastructure projects.
"I don't see border adjustments or tariffs as one of the things we
should be contemplating," said John Bruton, the European Commission's
ambassador to the U.S.
Ten Democratic senators sent a letter to Majority Leader Harry Reid of
Nevada last year citing the need to protect U.S. manufacturers among
their concerns with climate-change legislation that was then under
consideration.
"The cost of cleaning up the environment can't be borne only by
Americans and have the Chinese not have to bear those costs," Senator
Sherrod Brown of Ohio, who signed the letter, said in an interview. "If
there's not a border adjustment, I don't know how we pass climate
change."
Incentive for Limits
Climate-change legislation sponsored last year by Senator Joe Lieberman,
a Connecticut independent, and former Senator John Warner, a Virginia
Republican, included a provision that required importers of
carbon-intensive products made in countries without similar regulations
to buy allowances at the border after a period of negotiations. The bill
failed in the full Senate.
In addition to protecting U.S. industry, such provisions are designed to
use access to the American market, the world's largest, as an incentive
for other countries to limit emissions, said Andrew Shoyer, a lawyer at
Sidley Austin LLP in Washington.
Democrat Mike Doyle of Pennsylvania, a member of the House Energy and
Commerce Committee, told steelmakers this month that he would set up
private meetings with that panel's chairman, Democrat Henry Waxman of
California, to make sure climate legislation doesn't harm them.
"If the actions we take simply transfer manufacturing to Brazil and
China, then we haven't accomplished much," Doyle said.
Copyright 2009, Bloomberg
Jack Perrine | Athena Programming | 626-798-6574
-----------------| 1175 N Altadena Dr | ---------------
Jack@Minerva.com | Pasadena CA 91107 |
it seems they actually serve a very useful purpose. The Eco-idiots can waste their resource pushing for this nonsense that CO2 is harmful
and then the labor unions can use their power to convince congress that
anything that moves jobs away is harmful and must not be allowed.
Jack ]
OBAMA'S CLIMATE PLAN MAY TRIGGER TRADE WAR WITH CHINA, INDIA
Bloomberg, 20 February 2009 http://www.bloomberg.com/apps/news?pid=20601082&sid=aHscSU9C.1F8&refer=c
anada
By Mark Drajem and Catherine Dodge
Feb. 20 (Bloomberg) -- President Barack Obama's plans to limit
greenhouse-gas emissions may be stymied by the specter of an
international trade war.
U.S. Steel Corp., American Electric Power Co. and the AFL- CIO, the
largest U.S. federation of labor unions, are all pressing lawmakers for
protection against imports from countries that won't have to bear the
costs of any new measures to curb global warming.
The companies say fees might be needed to prevent price- undercutting by
manufacturers in countries that won't match U.S. climate-change
standards. Lobbying groups for exporters such as Microsoft Corp. counter
that imposing penalties on imports may violate World Trade Organization
rules and spark retaliation by China and other nations.
"Climate change is going to be the big issue of the next year, and no
one has really grappled with the trade aspects," said Jake Colvin, vice
president at the Washington-based National Foreign Trade Council, whose
members include Caterpillar Inc., Exxon Mobil Corp. and Microsoft. The
idea of assessing fees on imports is "alarming," he said.
Obama says he wants to cut carbon-dioxide emissions, which contribute to
global warming, by 80 percent from 1990 levels by 2050. "This is a
worldwide issue that we are going to have to confront," Obama said in
Ottawa yesterday.
The cap-and-trade program favored by the president would set limits on
greenhouse-gas emissions and let companies trade pollution allowances on
a market.
Kyoto Protocol
The international trade implications may trip up efforts to pass
legislation this year, just as they helped scuttle U.S. acceptance of
the Kyoto accord on global warming, said Kevin Dempsey, a lawyer at
Dewey & LeBoeuf LLP in Washington. "This is the heart of the debate that stopped the Kyoto Protocol,"
Dempsey said in an interview. Even if Congress decides it wants to
impose import fees, figuring out how to calculate them would be
complicated, he said.
The U.S. didn't join the Kyoto Protocol, the only international
agreement to stem climate change, after the Senate in 1997 unanimously
passed a resolution expressing opposition because it didn't include
requirements on developing countries.
China and India so far have resisted international limits, as did the
U.S. under President George W. Bush. If China and India don't agree to
pollution-reduction targets, their companies would have a pricing
advantage over U.S. manufacturers that take on the added costs of
emissions targets, said Tom Conway, vice president of the United
Steelworkers union.
'Huge' Issue
New greenhouse-gas limits might also prompt U.S. manufacturers to move
operations to China and continue emitting pollution, hurting the
American economy and "undermining the purpose of the legislation," he
said.
Without levying fees on carbon-intensive imports, the U.S. might lose 1
million factory jobs, said John Surma, chief executive officer of
Pittsburgh-based U.S. Steel.
"The issue of global competition is huge," Surma told the Congressional
Steel Caucus on Feb. 4. "If you don't take care of the international
aspect, you put us out of business."
Dan DiMicco, CEO of Charlotte, North Carolina-based steelmaker Nucor
Corp., told the same panel that his company had planned to build a $3
billion iron-making plant in Louisiana. The weak U.S. economy and
potential limits on greenhouse-gas emissions "put that investment in
doubt," DiMicco said.
The U.S. Chamber of Commerce, the largest lobbying group for American
business, says charges on imports, termed border adjustments, may hurt
U.S. producers by raising the price for foreign-made components and
creating a backlash against American exports.
'Border Adjustments'
"We're skeptical," said Christopher Wenk, the top trade lobbyist for the
chamber. "There is a domino effect here; it will have an impact on
importers and exporters."
Meeting the demands of U.S. steelmakers and unions may prompt objections
from the European Union and Canada, which lobbied against a "Buy
American" provision in the stimulus legislation that says U.S. goods
must be used for infrastructure projects.
"I don't see border adjustments or tariffs as one of the things we
should be contemplating," said John Bruton, the European Commission's
ambassador to the U.S.
Ten Democratic senators sent a letter to Majority Leader Harry Reid of
Nevada last year citing the need to protect U.S. manufacturers among
their concerns with climate-change legislation that was then under
consideration.
"The cost of cleaning up the environment can't be borne only by
Americans and have the Chinese not have to bear those costs," Senator
Sherrod Brown of Ohio, who signed the letter, said in an interview. "If
there's not a border adjustment, I don't know how we pass climate
change."
Incentive for Limits
Climate-change legislation sponsored last year by Senator Joe Lieberman,
a Connecticut independent, and former Senator John Warner, a Virginia
Republican, included a provision that required importers of
carbon-intensive products made in countries without similar regulations
to buy allowances at the border after a period of negotiations. The bill
failed in the full Senate.
In addition to protecting U.S. industry, such provisions are designed to
use access to the American market, the world's largest, as an incentive
for other countries to limit emissions, said Andrew Shoyer, a lawyer at
Sidley Austin LLP in Washington.
Democrat Mike Doyle of Pennsylvania, a member of the House Energy and
Commerce Committee, told steelmakers this month that he would set up
private meetings with that panel's chairman, Democrat Henry Waxman of
California, to make sure climate legislation doesn't harm them.
"If the actions we take simply transfer manufacturing to Brazil and
China, then we haven't accomplished much," Doyle said.
Copyright 2009, Bloomberg
Jack Perrine | Athena Programming | 626-798-6574
-----------------| 1175 N Altadena Dr | ---------------
Jack@Minerva.com | Pasadena CA 91107 |
[ It is nice that Union's are good for something. But on reading this
[ It is nice that Union's are good for something. But on reading this
it seems they actually serve a very useful purpose. The Eco-idiots can waste their resource pushing for this nonsense that CO2 is harmful
and then the labor unions can use their power to convince congress that
anything that moves jobs away is harmful and must not be allowed.
Jack ]
OBAMA'S CLIMATE PLAN MAY TRIGGER TRADE WAR WITH CHINA, INDIA
Bloomberg, 20 February 2009 http://www.bloomberg.com/apps/news?pid=20601082&sid=aHscSU9C.1F8&refer=c
anada
By Mark Drajem and Catherine Dodge
Feb. 20 (Bloomberg) -- President Barack Obama's plans to limit
greenhouse-gas emissions may be stymied by the specter of an
international trade war.
U.S. Steel Corp., American Electric Power Co. and the AFL- CIO, the
largest U.S. federation of labor unions, are all pressing lawmakers for
protection against imports from countries that won't have to bear the
costs of any new measures to curb global warming.
The companies say fees might be needed to prevent price- undercutting by
manufacturers in countries that won't match U.S. climate-change
standards. Lobbying groups for exporters such as Microsoft Corp. counter
that imposing penalties on imports may violate World Trade Organization
rules and spark retaliation by China and other nations.
"Climate change is going to be the big issue of the next year, and no
one has really grappled with the trade aspects," said Jake Colvin, vice
president at the Washington-based National Foreign Trade Council, whose
members include Caterpillar Inc., Exxon Mobil Corp. and Microsoft. The
idea of assessing fees on imports is "alarming," he said.
Obama says he wants to cut carbon-dioxide emissions, which contribute to
global warming, by 80 percent from 1990 levels by 2050. "This is a
worldwide issue that we are going to have to confront," Obama said in
Ottawa yesterday.
The cap-and-trade program favored by the president would set limits on
greenhouse-gas emissions and let companies trade pollution allowances on
a market.
Kyoto Protocol
The international trade implications may trip up efforts to pass
legislation this year, just as they helped scuttle U.S. acceptance of
the Kyoto accord on global warming, said Kevin Dempsey, a lawyer at
Dewey & LeBoeuf LLP in Washington. "This is the heart of the debate that stopped the Kyoto Protocol,"
Dempsey said in an interview. Even if Congress decides it wants to
impose import fees, figuring out how to calculate them would be
complicated, he said.
The U.S. didn't join the Kyoto Protocol, the only international
agreement to stem climate change, after the Senate in 1997 unanimously
passed a resolution expressing opposition because it didn't include
requirements on developing countries.
China and India so far have resisted international limits, as did the
U.S. under President George W. Bush. If China and India don't agree to
pollution-reduction targets, their companies would have a pricing
advantage over U.S. manufacturers that take on the added costs of
emissions targets, said Tom Conway, vice president of the United
Steelworkers union.
'Huge' Issue
New greenhouse-gas limits might also prompt U.S. manufacturers to move
operations to China and continue emitting pollution, hurting the
American economy and "undermining the purpose of the legislation," he
said.
Without levying fees on carbon-intensive imports, the U.S. might lose 1
million factory jobs, said John Surma, chief executive officer of
Pittsburgh-based U.S. Steel.
"The issue of global competition is huge," Surma told the Congressional
Steel Caucus on Feb. 4. "If you don't take care of the international
aspect, you put us out of business."
Dan DiMicco, CEO of Charlotte, North Carolina-based steelmaker Nucor
Corp., told the same panel that his company had planned to build a $3
billion iron-making plant in Louisiana. The weak U.S. economy and
potential limits on greenhouse-gas emissions "put that investment in
doubt," DiMicco said.
The U.S. Chamber of Commerce, the largest lobbying group for American
business, says charges on imports, termed border adjustments, may hurt
U.S. producers by raising the price for foreign-made components and
creating a backlash against American exports.
'Border Adjustments'
"We're skeptical," said Christopher Wenk, the top trade lobbyist for the
chamber. "There is a domino effect here; it will have an impact on
importers and exporters."
Meeting the demands of U.S. steelmakers and unions may prompt objections
from the European Union and Canada, which lobbied against a "Buy
American" provision in the stimulus legislation that says U.S. goods
must be used for infrastructure projects.
"I don't see border adjustments or tariffs as one of the things we
should be contemplating," said John Bruton, the European Commission's
ambassador to the U.S.
Ten Democratic senators sent a letter to Majority Leader Harry Reid of
Nevada last year citing the need to protect U.S. manufacturers among
their concerns with climate-change legislation that was then under
consideration.
"The cost of cleaning up the environment can't be borne only by
Americans and have the Chinese not have to bear those costs," Senator
Sherrod Brown of Ohio, who signed the letter, said in an interview. "If
there's not a border adjustment, I don't know how we pass climate
change."
Incentive for Limits
Climate-change legislation sponsored last year by Senator Joe Lieberman,
a Connecticut independent, and former Senator John Warner, a Virginia
Republican, included a provision that required importers of
carbon-intensive products made in countries without similar regulations
to buy allowances at the border after a period of negotiations. The bill
failed in the full Senate.
In addition to protecting U.S. industry, such provisions are designed to
use access to the American market, the world's largest, as an incentive
for other countries to limit emissions, said Andrew Shoyer, a lawyer at
Sidley Austin LLP in Washington.
Democrat Mike Doyle of Pennsylvania, a member of the House Energy and
Commerce Committee, told steelmakers this month that he would set up
private meetings with that panel's chairman, Democrat Henry Waxman of
California, to make sure climate legislation doesn't harm them.
"If the actions we take simply transfer manufacturing to Brazil and
China, then we haven't accomplished much," Doyle said.
Copyright 2009, Bloomberg
Jack Perrine | Athena Programming | 626-798-6574
-----------------| 1175 N Altadena Dr | ---------------
Jack@Minerva.com | Pasadena CA 91107 |
it seems they actually serve a very useful purpose. The Eco-idiots can waste their resource pushing for this nonsense that CO2 is harmful
and then the labor unions can use their power to convince congress that
anything that moves jobs away is harmful and must not be allowed.
Jack ]
OBAMA'S CLIMATE PLAN MAY TRIGGER TRADE WAR WITH CHINA, INDIA
Bloomberg, 20 February 2009 http://www.bloomberg.com/apps/news?pid=20601082&sid=aHscSU9C.1F8&refer=c
anada
By Mark Drajem and Catherine Dodge
Feb. 20 (Bloomberg) -- President Barack Obama's plans to limit
greenhouse-gas emissions may be stymied by the specter of an
international trade war.
U.S. Steel Corp., American Electric Power Co. and the AFL- CIO, the
largest U.S. federation of labor unions, are all pressing lawmakers for
protection against imports from countries that won't have to bear the
costs of any new measures to curb global warming.
The companies say fees might be needed to prevent price- undercutting by
manufacturers in countries that won't match U.S. climate-change
standards. Lobbying groups for exporters such as Microsoft Corp. counter
that imposing penalties on imports may violate World Trade Organization
rules and spark retaliation by China and other nations.
"Climate change is going to be the big issue of the next year, and no
one has really grappled with the trade aspects," said Jake Colvin, vice
president at the Washington-based National Foreign Trade Council, whose
members include Caterpillar Inc., Exxon Mobil Corp. and Microsoft. The
idea of assessing fees on imports is "alarming," he said.
Obama says he wants to cut carbon-dioxide emissions, which contribute to
global warming, by 80 percent from 1990 levels by 2050. "This is a
worldwide issue that we are going to have to confront," Obama said in
Ottawa yesterday.
The cap-and-trade program favored by the president would set limits on
greenhouse-gas emissions and let companies trade pollution allowances on
a market.
Kyoto Protocol
The international trade implications may trip up efforts to pass
legislation this year, just as they helped scuttle U.S. acceptance of
the Kyoto accord on global warming, said Kevin Dempsey, a lawyer at
Dewey & LeBoeuf LLP in Washington. "This is the heart of the debate that stopped the Kyoto Protocol,"
Dempsey said in an interview. Even if Congress decides it wants to
impose import fees, figuring out how to calculate them would be
complicated, he said.
The U.S. didn't join the Kyoto Protocol, the only international
agreement to stem climate change, after the Senate in 1997 unanimously
passed a resolution expressing opposition because it didn't include
requirements on developing countries.
China and India so far have resisted international limits, as did the
U.S. under President George W. Bush. If China and India don't agree to
pollution-reduction targets, their companies would have a pricing
advantage over U.S. manufacturers that take on the added costs of
emissions targets, said Tom Conway, vice president of the United
Steelworkers union.
'Huge' Issue
New greenhouse-gas limits might also prompt U.S. manufacturers to move
operations to China and continue emitting pollution, hurting the
American economy and "undermining the purpose of the legislation," he
said.
Without levying fees on carbon-intensive imports, the U.S. might lose 1
million factory jobs, said John Surma, chief executive officer of
Pittsburgh-based U.S. Steel.
"The issue of global competition is huge," Surma told the Congressional
Steel Caucus on Feb. 4. "If you don't take care of the international
aspect, you put us out of business."
Dan DiMicco, CEO of Charlotte, North Carolina-based steelmaker Nucor
Corp., told the same panel that his company had planned to build a $3
billion iron-making plant in Louisiana. The weak U.S. economy and
potential limits on greenhouse-gas emissions "put that investment in
doubt," DiMicco said.
The U.S. Chamber of Commerce, the largest lobbying group for American
business, says charges on imports, termed border adjustments, may hurt
U.S. producers by raising the price for foreign-made components and
creating a backlash against American exports.
'Border Adjustments'
"We're skeptical," said Christopher Wenk, the top trade lobbyist for the
chamber. "There is a domino effect here; it will have an impact on
importers and exporters."
Meeting the demands of U.S. steelmakers and unions may prompt objections
from the European Union and Canada, which lobbied against a "Buy
American" provision in the stimulus legislation that says U.S. goods
must be used for infrastructure projects.
"I don't see border adjustments or tariffs as one of the things we
should be contemplating," said John Bruton, the European Commission's
ambassador to the U.S.
Ten Democratic senators sent a letter to Majority Leader Harry Reid of
Nevada last year citing the need to protect U.S. manufacturers among
their concerns with climate-change legislation that was then under
consideration.
"The cost of cleaning up the environment can't be borne only by
Americans and have the Chinese not have to bear those costs," Senator
Sherrod Brown of Ohio, who signed the letter, said in an interview. "If
there's not a border adjustment, I don't know how we pass climate
change."
Incentive for Limits
Climate-change legislation sponsored last year by Senator Joe Lieberman,
a Connecticut independent, and former Senator John Warner, a Virginia
Republican, included a provision that required importers of
carbon-intensive products made in countries without similar regulations
to buy allowances at the border after a period of negotiations. The bill
failed in the full Senate.
In addition to protecting U.S. industry, such provisions are designed to
use access to the American market, the world's largest, as an incentive
for other countries to limit emissions, said Andrew Shoyer, a lawyer at
Sidley Austin LLP in Washington.
Democrat Mike Doyle of Pennsylvania, a member of the House Energy and
Commerce Committee, told steelmakers this month that he would set up
private meetings with that panel's chairman, Democrat Henry Waxman of
California, to make sure climate legislation doesn't harm them.
"If the actions we take simply transfer manufacturing to Brazil and
China, then we haven't accomplished much," Doyle said.
Copyright 2009, Bloomberg
Jack Perrine | Athena Programming | 626-798-6574
-----------------| 1175 N Altadena Dr | ---------------
Jack@Minerva.com | Pasadena CA 91107 |
Subscribe to:
Posts (Atom)