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Tidbits and notes posted on FB and Twitter. Part 213

Note: I take notes of books I read and comment on events and edit sentences that fit my style. I pa attention to researched documentaries and serious links I receive. The page is long and growing like crazy, and the sections I post contains a month-old events that are worth refreshing your memory

The best approach to explain the succession of civilizations and Empires in the Fertile Crescent (in Lebanon, Palestine and Syria or Phoenicia, Canaan, Aram) that raided and conquered the Near East civilizations is the analogy of survival among the lions and lionesses empires or warlike empires versus settled and wealthy empires.

Alan Greenspan, Chairman of the Federal Reserve from 1987 to 2006, stated at the annual Dinner of Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research on December 5, 1996:

“Augmenting concerns about the Federal Reserve is the perception that we are a secretive organization, operating behind closed doors, not always in the interests of the nation as a whole. This is regrettable, and we continuously strive to alter this mis-perception.”

Quinoa, drought-resistant crop, contains a toxic compound called saponins, a bitter component that’s used by the plant to ward off predators. It isn’t actually a grain (it’s part of the goosefoot family, related to spinach and beets. Protein content of quinoa is 18% versus 8% in rice

Toxic compound called saponins in Quinoa needs to be removed before consumption, which can be accomplished by polishing or washing the grain, which makes processing it expensive. (The polishing process also reduces the fiber of the grain, lowering its protein, vitamin, and mineral levels).

“The Peter principle” applies to all public institutions when any employee in a hierarchy rises to the level of his or her own incompetence.

Ca ne vaut rien d’insister pour que quelqu’un voit la realite’ en face: l’important est d’avoir un sourire serain aux levres

Si notre imagination est puissante de se souvenir des bons moments, les mauvais ne formeront que de reperes et contrastes

Je passe le plus clair de mon temps a l’obscurcir

Quand on se prend pour quelqu’un, on oublit qu’on fond on est plusieurs.

Keef mouhemmet al majless badha tetghayyar, wa Nabih Berry 3ala ra2ssa? 60 naayeb ra7 ye fel, wa 60 naayeb jaayeen 3ala al akeed, baynaathom wlaad al “zou3ama”.

3am befteker bi yalli ra7ou: kaanou shabab bi waktha

Al khetyaar bi shouf jhannam: fa2ad al amal bil ta3afi

Spend billions, get trillions: Fixed Fortune of big Corporations

Between 2007 and 2012, over 200 of America’s most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions.

A year-long analysis by the Sunlight Foundation suggests that what they gave pales compared to what those same corporations got: $4.4 trillion in federal business and support.

and  investigations this Nov. 17, 2014

Fixed Fortunes: Biggest corporate political interests spend billions, get trillions

The $4.3 trillion the federal government paid the nation’s 50 million Social Security recipients over the same period, is the result of an unprecedented effort to quantify the less-examined side of the campaign finance equation: Do political donors get something in return for what they give?

Four years ago, the U.S. Supreme Court suggested the answer to that question was NO

Corporate spending to influence federal elections would Not “give rise to corruption or the appearance of corruption,” the majority wrote in the landmark Citizens United v. Federal Election Commission decision.

Sunlight decided to test that premise by examining influence and its potential results on federal decision makers over 6 years, three before the 2010 Citizens United decision and three after.

We focused on the records of 200 for-profit corporations, all of which had active political action committees and lobbyists in the 2008, 2010 and 2012 election cycles — and were among the top donors to campaign committees registered with the Federal Election Commission.

Their investment in politics was enormous. There were 20,500 paying lobbying clients over the six years we examined.

The 200 companies we tracked accounted for a whopping 26% of the total spent. On average, their PACs, employees and their family members made campaign contributions to 144 sitting members of Congress each cycle.

On average, 144 sitting members of Congress received money from the Fixed Fortune 200 each cycle. Graphic credit: The Sunlight Foundation

After examining 14 million records, including data on campaign contributions, lobbying expenditures, federal budget allocations and spending, we found that, on average, for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government.

The $4.4 trillion total represents two-thirds of the $6.5 trillion that individual taxpayers paid into the federal treasury.

Welcome to the world of “Fixed Fortunes,” a seemingly closed universe where the most persistent and savvy political players not so mysteriously have the ability to attract federal dollars regardless of who is running Washington.

Political change, permanent interests

During the six years we studied, newly elected Democratic majorities took control in the House and Senate.

Two years later, the White House shifted from Republican to Democratic control, and two years after that the GOP came back to take the House.

The collapse of the housing bubble in 2007 led to massive bailout efforts by the Treasury Department and the Federal Reserve Board, two massive stimulus bills and the loss of more than eight million jobs.

Congress passed laws that overhauled health care insurance and financial industry regulation. Troops surged in Afghanistan and withdrew from Iraq. There were 16 separate “continuing resolutions” to fund the government, a debt ceiling standoff that caused a downgrade in the nation’s credit rating and a “super committee” to wrestle with the federal budget. As middle class Americans lost ground, the Fixed Fortune 200 got what they needed.

What they needed included loans that helped automakers and banks survive the recent recession while many homeowners went under.

It included full funding and expansion of federal programs started in the 1930s that, year after year, decade after decade, help prop up prices for agribusinesses and secure trade deals for our biggest manufacturers.

It included budget busting emergency measures that funneled extra dollars to everything from defense contractors to public utility companies to financial industry giants. The record suggests that the money corporations spend on political campaigns and Washington lobbying firms is not an unwise investment.

The Fixed Fortune 200 come from a wide range of industries. There are a host of familiar names among them, like Ford Motor Company, McDonald’s and Bank of America, as well as some less famous, like MacAndrews & Forbes, the Carlyle Group and Cerberus Capital Management.

(For the complete list, including what they gave and what they got, click here.)

There are retailers and investment banks, construction and telecommunications firms, health insurers and gun makers, entertainment conglomerates, banks and pharmaceutical manufacturers, among others.

Out of 20,500 paying lobbying clients, the Fixed Fortune 200 accounted for a whopping 26 percent of the total spent. Graphic credit: The Sunlight Foundation

Overall, the Fixed Fortune 200’s PACs, employees and their family members gave $597 million to political committees and disclosed spending $5.2 billion on lobbying. They make this enormous investment in politics in large part because their businesses are inextricably entwined with government decisions — including spending decisions.

Government as business partner

For example, the federal government issued contracts to purchase goods and services that totaled a little more that $3 trillion during the period.

Companies among the top 200 corporate political givers won $1 trillion of that, a third of the total. The Treasury Department managed $410 billion in loans and other assistance issued under the Troubled Asset Relief Program, created by Congress to cope with the 2008 financial crisis; of that amount, $298 million, about 73%, went to 16 firms among the Fixed Fortune 200.

When the Federal Reserve took extraordinary measures in the wake of the 2008 financial crisis, it funneled nearly $2.8 trillion through 29 Fixed Fortune firms.

The companies that participated the most in politics got huge returns.

Of the 200 corporations we examined, we could sum the financial rewards for 179.

Of those, 138 received more from the federal government than they spent on politics, 102 of them received more than 10 times what they spent on politics, and 29 received 1,000 times or more from the federal government than they invested in lobbyists or contributed to political committees via their employees, their family members and their PACs.

As for the other 21 companies on our list, while we could not quantify the financial benefits that some received, we were able to identify them. Some examples:

  • Arch Coal lists the Tennessee Valley Authority (TVA), the government corporation that’s the largest public electricity producer, as one of its three biggest customers. TVA does not release data on its coal purchases.
  • Forest City Enterprises does not appear as a landlord in the Government Services Agency’s database of federal rental agreements, though its annual report notes that the U.S. government is the third-biggest customer for its pricey New York City office space.
  • Occidental Petroleum has leases on federal land to extract natural gas, but the government does not release information on how much that gas is withdrawn or how much it is worth.
  • And while the government has so far refused to release information on what retailers get the most purchases via food stamps, Wal-Mart went so far as to acknowledge in a filing with the Securities and Exchange Commission that reductions in the now $78 billion-a-year Supplemental Nutrition Assistance Program — or food stamps — could have a significant impact on the company’s earnings, which totaled $476 billion in its most recent fiscal year.

Of the 200 companies analyzed for Fixed Fortunes, 28 are in what the money in politics research organization the Center for Responsive Politics classifies as the communications and electronics sector, 21 in healthcare, 13 in defense and aerospace, 13 agribusinesses, 11 in energy and natural resources, and 7 in transportation.

The biggest sector, accounting for 48 of the 200, was finance, insurance and real estate, which is consistently the largest source of campaign funds for politicians cycle after cycle.

Congress and the executive branch have paid particular attention to the industry, approving hundreds of billions in aid to help it weather the financial crisis. Meanwhile, the Federal Reserve advanced trillions in credit, which the nation’s central bank hoped would trickle down through the rest of the economy.

Companies with the biggest returns on their political investments include three foreign financial service and banking firms, UBS and Credit Suisse Group from Switzerland, and Deutsche Bank of Germany, all of which benefited from the Treasury Department’s taxpayer-financed rescue of American International Group.

Investment banks Goldman Sachs and Morgan Stanley as well as commercial banks like JPMorgan Chase & Co., Citigroup, Wells Fargo and Bank of America also received far more from government than they put into politics: They benefited from the bailouts of the financial industry undertaken by Treasury and the Federal Reserve.

Weapons manufacturers like Boeing and Lockheed Martin, both of which disclosed spending more than $10 million each year on lobbying, also made the list.

So did McKesson, a pharmaceutical wholesaler that is the biggest vendor for Veterans Affairs, and the Carlyle Group, a wealth management firm started by former government insiders who invest in firms that have significant involvement with government, such as defense, telecommunications and health care.

A range of returns

To catalogue the money flowing to and from the Fixed Fortune 200, we examined data on campaign contributions and lobbying expenditures. We compiled and queried a host of government spending records, including spending approved through the normal budgeting process.

We also looked at additional spending measures — extra-budgetary spending on the Global War on Terror, renamed Overseas Contingency Operations in 2009, and emergency or one-time measures like the Emergency Economic Stabilization Act of 2008 and the American Recovery and Reinvestment Act of 2009. And because the Federal Reserve made use of its power to advance credit to private firms in extraordinary circumstances, we also examined its interventions in the economy.

For every dollar spent influencing politics, the Fixed Fortune 200 received $760 from the government. Graphic credit: The Sunlight Foundation

See our methodology for a complete explanation of how we arrived at these numbers and more.

Some of the gets are harder to quantify. While corporate interests disclose lobbying on federal spending — the budget and appropriations process — more than any other issue, they also seek to influence trade agreements, labor rules, environmental regulation and the Internal Revenue Code.

Blue Cross and Blue Shield has its own provision in the tax code, section 833, that saves its companies an estimated $1 billion a year.

Life insurance companies like New York Life and Pacific Mutual, and their customers, are eligible for tax breaks that save the industry $30 billion a year, with about $3 billion going to the companies and the balance going to their policyholders.

The corporate tax code is full of loopholes and subsidies that companies lobby for to help their bottom lines; Citizens for Tax Justice researched the Securities and Exchange Commission disclosures filed by publicly traded corporations in an effort to determine their effective tax rates; its analysis included 89 members of the group Sunlight examined.

The average effective tax rate of those companies was 17% between 2008 and 2012. Federal law, meanwhile, sets the corporate tax rate at 35 percent.

As far as we can tell, one thing the Fixed Fortune 200 did not do, for the most part, was take advantage of the new opportunities to spend on politics that the Citizens United decision afforded them.

The 200 corporate donors gave just $3 million to super PACs, with the bulk of that amount a single $2.5 million donation from Chevron to the Congressional Leadership PAC, a super PAC that’s been linked to House Speaker John Boehner.

It’s important to note that contributions by these companies to politically active nonprofits (a category that includes the Chamber of Commerce) are impossible to track because of tax laws that allow those entities to shield donors.

Though beyond the scope of our study, which focused on the federal government, it is worth noting that 174 of the 200 corporations won subsidies from state and local governments, according to Good Jobs First, an organization that tracks economic development programs. The Citizens United decision also applies to state election laws, giving corporations the right to speak at the state and local levels as well.

Nonetheless, opinion polls show that majorities of Americans generally trust governments in their city halls, township boards and state capitals. That doesn’t compare well to the mere 19% of Americans who trust their federal government. Frustration with Washington runs high for any number of reasons, but consider:

  • Two-thirds of Americans believe corporations pay too little in taxes and that they should pay more, but tax reform stalls in Congress year after year;
  • Prominent politicians from both parties have criticized corporate welfare programs that benefit big business for more than two decades, but not one of those programs has been repealed;
  • The president and Congress ended a reduction in payroll taxes that benefited wage earners in January 2013 but extended business tax breaks for insurers, energy companies and other corporations;
  • Federal bailouts returned financial industry firms that started the crisis to profitability, while middle class income and net worth of the middle class fell.

More than 7 years after Washington passed the first measures to stimulate the economy as the housing bubble started to burst, more and more Americans are living on less and less, without as much savings and other assets to fall back on in hard times.

Washington policies that have restored corporate profits and made the stock market boom have left much of the country behind. Perhaps that’s why a whole host of polls, from networks and news organizations and nonprofit groups, show large majorities of Americans, year after year, saying that the country is on the wrong track.

In its Citizens United decision, the court took for granted that “favoritism and influence” are inherent in electoral democracy and that “democracy is premised on responsiveness” of politicians to those who support them. We found ample evidence of that.

“The appearance of influence or access,” the court said, “will not cause the electorate to lose faith in our democracy.”

It appears that the electorate — who stayed away from the polls this year in droves — might not agree.

The Lesser Depression? Who is Paul Krugman?

“You do not know, my son, with how little wisdom the world is governed.”

Paul Krugman published an article on July 21, 2011 in The New York Times.  Krugman is a Nobel laureate in economics and has been frequently explaining the current world financial problems.  I will exhibit a few extracts with my own editing style, and develop my comments.

“These are interesting times, in the worst way. We are currently looking at not one, but two looming crises, either of which could produce a global disaster. In the United States, right-wing fanatics in Congress may block a necessary rise in the debt ceiling, potentially wreaking havoc in world financial markets. Meanwhile, if the plan just agreed to by European heads of State fails to calm markets, we could see falling dominoes all across southern Europe — which would also wreak havoc in world financial markets.”

“We can only hope that the politicians, huddled in Washington and Brussels, succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse.

“In fact, policy makers seem determined to perpetuate what I’ve taken to calling the Lesser Depression, the prolonged era of high unemployment that began with the Great Recession of 2007-2009 and continues to this day, more than two years after the recession supposedly ended. Why our economies are (still) so depressed.

The great housing bubble of the last decade, which was both an American and a European phenomenon, was accompanied by a huge rise in household debt. When the bubble burst, home construction plunged, and so did consumer spending as debt-burdened families cut back.

Everything might still have been bearable if other major economic players had stepped up their spending, filling the gap left by the housing plunge and the consumer pullback. But nobody did. In particular, cash-rich corporations see no reason to invest that cash in the face of weak consumer demand.

Nor did governments do much to help. Some governments — those of weaker nations in Europe, and State and local governments here — were actually forced to slash spending in the face of falling revenues. And the modest efforts of stronger governments — including the Obama stimulus plan — were, at best, barely enough to offset this forced austerity.  So we have depressed economies. What are policy makers proposing to do about it? Less than nothing.

The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It’s not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remains near historic lows.

Yet the conversations in Washington and Brussels are all about spending cuts (and maybe tax increases, I mean revisions). That’s obviously true about the various proposals being floated to resolve the debt-ceiling crisis here. But it’s equally true in Europe.

On Thursday, the “heads of State or governments of the euro area and the E.U. institutions” — that mouthful tells you, all by itself, how messy European governance has become — issued their big statement. It wasn’t reassuring.  For one thing, it’s hard to believe that the “Rube Goldberg statement” can really resolve the Greek crisis, let alone the wider European crisis.

But, even if it does, then what? The statement calls for sharp deficit reductions “in all countries except those under a program” to take place “by 2013 at the latest.” Since those countries “under a program” are being forced into drastic fiscal austerity, this amounts to a plan to have all of Europe slash spending at the same time. And there is nothing in the European data suggesting that the private sector will be ready to take up the slack in less than two years.

For those who know their 1930s history, this is all too familiar. If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937:  The premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last, until World War II finally provided the boost the economy needed.  The European Central Bank  seems determined to make things even worse by raising interest rates.

The lack of wisdom is on full display, as policy elites on both sides of the Atlantic bungle the response to economic trauma, ignoring all the lessons of history. And the Lesser Depression goes on.” (End of quote)

I am wondering: What if Congress agrees to raise the ceiling of the debt?  How the US government used to pay off, in the first place, the nominal portion of its dept?  It is not through the surplus of its economic activities, or the savings of the citizens, or the slashing of military spending…

The US has been borrowing heavily by encouraging foreign State governments, which managed to save money, into purchasing US Treasury Bills and bonds.  Currently, this mechanism of relying on foreign savings is not working, and the Federal Reserve has been manufacturing money and lending it to the US government to cover short-term and urgent immediate deficit.

The dollar has been effectively being devalued consistently by 10% per year since 1945, and this rate in devaluation is increasing rapidly since 2007.

Do you realize what a deficit amounting to 14 trillion means?  It is more than the total worth of France, if sold stock, lock, and land.  Imagine thousand of years of  labor by millions of “French people” to sustaining a country, who could not accumulate enough wealth to pay off the US public deficit!

All these economic and financial decisions are meant to buy short-term leverage, before the inevitable global crisis fall on our head, very shortly.  How can the US people pay-off this huge deficit if not by “creating a preemptive global war”, as were the cases in 1914 and 1939?

The US has nothing much to offer economically for stabilizing world economy and finances.  What Europe needs from the US are two things:

First, releasing the huge ammunition reserves for resuming the small-scale preemptive wars in Libya and the potential unstable regimes around the Mediterranean Sea and parts of Africa.  It is the abundance of the US military hardware and ammunition that is making NATO organization an acceptable agreement to the EU.

Second, the EU hopes that the dollar will maintain its global status for a couple of years before a basket of currencies is agreed upon. What else the US can be of any help for the time being?

These spring uprising of youth movements around the world have a common denominator: “We want to have a direct say in public decisions”

Four years later:  World Financial and economic conditions deteriorating

In 2010, the US witnessed economic growth of 3.2% , customer consumption growth of 4.4%, and a doping increase of export of 8%.  Normally, the US should have paid this monetary creation with hyper-inflation, worse than what Germany experienced in 1920.  Chairman Ben Bernarke declared this year, 2011: “The US economic growth is deteriorating”.  What is happening?

In 2011, the world is experiencing unbriddled speculations that madly increased the prices of basic food ingredients, industrial interests sacrificed in Europe, and the Arab world witnessing massive upheavals.  The people in Spain, Portugal, and Greece are emulating the Arab tactics for non-violent sit ins in main locations and demanding reforms in the priority of budget cuts:  Shifting the focus from benefiting the rich classes to the common people.

The rest of the world has decided to counter-attack constructively to US monetary policies of dumping worthless dollars.

Since the dollar is still the world currency reserve, it is the rest of the planet that is subjected to inflation.  Edouard Tetreau, an ex-financial analyst consultant, wrote an essay “As the dollar kills us” affirming that the dollar is currently the main enemy.  The French Edouard said: “In order to relaunch its economy, without paying the price, or tightening its budget cuts, or fighting inflation, the USA managed to export all the problems to the rest of the world.”

If the US can sustain a budget hole of $1.4 trillion in 2010, quickly reaching two trillion in 2012, the Federal Reserve (US central bank) was conducting a ludicrous monetary policy:  It loans to banks at real negative interest rate and keeps the money press in full work.  The FED has surpassed China in February as the number one holder of US Treasury Bonds.

The International Monetary Fund (IMF) is admitting: “Four years after the financial crisis, confidence in the stability of world banking system still need to be entirely restored.”  What Ben Bernarke qualified as as “the worst financial crisis in world history” did not generate any penal sanctions to Goldman Sachs, Morgan Stanley, JP Morgan.  Actually, these falty financial institutions received bonuses for the crisis.

Three years of G20 meetings and reunions conserved intact the flammable system.  Andrew Cheng, first counselor of the Chinese Commission on banking regulation said:  “it is a case of the financial institutions capturing and dominating the political systems in the developed States.”

China decided to react constructively of the worthless dollar by focusing its growth in its internal market: Agricultural lands, infrastructure, ports, mining, social development…

Edouard Tetreau suggest that the rest of the G18, excluding US and China, that weight twice heavier economically and financially counter with the following remedies:

One: Delocalization and reforming the market of essential prime agricultural and energetic products, which are actually based in New York and Chicago.

Two: Assuming the instoration of financial and commercial protectionism to challenge the dumping of US dollars and Chinese social dumping.

Three: Delocalization, outside the US, of the World Bank and the IMF.

Four: Replacing the dollar with a real world currency.

Note:  Edouard Tetreau published “20,000 billion dollars” in 2010.

The greatest illusionists; (September 13, 2009)

The Federal Reserve, the World Bank, the International Monetary Fund, the European Central Bank, The Central Bank of France, and the Central Bank of Germany are spreading false data of economic recovery and financial system improvements, with the main target of cheating the public in order to regain “confidence” on the archaic liberal capitalist system.

For a year now, no substantive regulations on liberal capitalism have been instituted.  The Chairman of the Federal Reserve Ben Bernanke is at it again; he said lately “We should not attempt to impose on credit lenders heavy restrictions that might prevent the development of new financial products and services in the future. We all know that the improvement of easier access to credit has reduced costs and widened the range of choices.”  Are not the liberal new financial gimmicks for easier credit that brought on the crash of 2008 and the several crashes before it?

What “confidence” is these great illusionists trying to resurrect from the tomb without a clear alternative financial system?  So far, bonuses are extended to the financial acrobats crossing dry rivers while employees are sinking in troubled water and not finding decent jobs.

The USA is experiencing an official rate of unemployment of 10%  (the actual rate is hovering around 15%) and the European States are witnessing even higher rates of unemployment, especially in Greece, Spain, Ireland, and Portugal. For 2010, the International Organization of Labor (IOL) is expecting an additional 60 millions of unemployed and an additional 200 millions of people earning below two dollars a day.

The States of California, Illinois, and New Jersey have declared bankruptcy; they lost over 30% of their assets during the financial crash.  These States refused to increase taxes for decades and they are no longer able to increase taxes because of their restricting legislative structures. The Security and Exchange Commission (SEC) is allocated a mere budget of one billion dollars to spend on 3,500 employees. The same SEC that failed to uncover Madoff’s practices for over 30 years and even asked for his expertise many times! There is this joke in the financial circle of Shadock maxim “The more frequently you fail, the higher the odds for success in the future”.

There are several economic time bombs strewn around; they may blast one after another or all together. Among these time bombs we can explain the following: Obligatory Crash, Effective increase of interest rates, Refinancing of public dept, Monetary over valuation, and Newer and botoxed up (lifting) exotic financial derivatives.

The public debts of the USA, France, and Britain are expected to reach 90% of the GNP in a couple of years; Japan will hit the 200% mark. Obligatory Crash is more imminent than forecasted previously. The real values of the treasury bills of these nations designed to refinance the public dept will collapse abruptly.  Chinese households have been saving for two decades and accumulated three folds savings during the last 7 years; these savings are re-invested in purchasing treasury bills of the developed States.

Pretty soon, the citizens of the developed nations will start bypassing their State middlemen and purchase directly Chinese treasury bills for higher returns; especially that the Chinese currency is endemically undervalued and cannot but goes up. Then, what will happen?  Would the USA declare the Chinese treasury bills illegal or not marketable in the US market?  The USA did that previously with other less powerful nations, but antagonizing China is a different ball game.

Effective increase of interest rates has been eating up any economic improvement in the indebted nations. The price of obligations has been decreasing. Let us say if an obligation returned $30 on the thousand and it is re-purchased at half the price for the same return, then the State is effectively paying $60 for the thousand. Thus, with the doubling of the interest rate, States will not find takers for new issues of obligations but by offering the higher interest rate.

When allowed, central banks of States may refinance public debts by purchasing titles on the open market and, thus sustain the prevalent interest rate.  This process is in fact creating new money printing and devaluing the currency value.

The developed nations have  over valuated currencies because they are unable to compete in other emerging markets like China, India, and Brazil. The exterior balance of commerce is thus in deficit and the currency keeps over valuating; it is a vicious cycle unless the developed nations reduce drastically the price of their products to be able to compete.  China is able to keep its currency under valued simply because it can afford to sell at competitive prices.

Before WWI, the economic principle was “Demands carry the economy”.  Then this principle was upturned; it now states “Offers carry the economy” which means “We produce and then we find ways to encourage consumers to purchase.  We entice the consumers by promotional gimmicks, by much lower prices, by creating new trends of standards of living, and by lavishing plenty of credits.”

It worked for a while until what is being produced is getting too expensive, of lower quality, and basically not that essential in tight financial downturns.  How about educating the consumers of what is essential for resuming a decent life without the faked propaganda of what constitute a “high standard of living”?

Note: I read lately that 48 States in the US are bankrupt and the real deficit is 56 trillion instead of the official 13 trillion.


adonis49

adonis49

adonis49

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