Monday, November 08, 2010

The Grim Reaper Is Returning To The Global Economy – Emerging Market Countries Criticize Fed Decision

It’s very common in today’s world of polarization that people jump on any alternative position without understanding the entirety of the issue.  Without framing the issue properly.  Or without considering all of the alternatives and what appropriate solutions are.   I believe part of the crisis behind this dynamic is the breakdown of the press.  Fox News, MSNBC and others are simply twenty four hours of endless ideological opinion and propaganda.  Investigative journalism and fact-checking have almost disappeared as money becomes the driving force behind the pablum we call news.  Or as President Kennedy said, 

And that is why our press is protected by the First Amendments. The only business in America specifically protected by the Constitution. Not primarily to amuse and entertain. Not to emphasize the trivial and the sentimental. Not to simply give the public what it wants. But to inform. To arouse. To reflect. To state our dangers and our opportunities. To indicate our crises and our choices. To lead, mold, educate and sometimes even anger public opinion......And it means finally that government at all levels must meet its obligation to provide you with the fullest possible obligation..........

How prescient his words were.  We see this herd mentality of jumping on bandwagons everywhere.   The political idiots try to frame issues such that if you voted for a Democrat and didn’t like that person’s policies, that you should vote for a Republican.  Umm, no you should vote for whomever represents your positions on issues.  Most likely in a reasoned analysis, that would be neither party for most Americans.  Then there is the monetary issue.  You appreciate the corruption of the status quo, so the alternative is to follow the gold crowd because their ideological motto is honest money.  Yet have any of these people actually written in extensive detail about how a sustainable monetary system backed by gold would work?  And how that would benefit democracy?  Umm, no gold backing of the currency will not solve this crisis or end the corruption in the United States.  It will more than likely create a depression as far as the eye can see.   And then we have the issue of currency markets.  This ranks right up there with the left-right paradigm as an absolutely ridiculous narrative of nonsense.  People see that the Federal Reserve’s policies are weakening the dollar so they side with China, as an example, in the war on which country’s policies are honest.   There are quite a few gold bugs who immediately jump on this bandwagon without having any idea what they are talking about.  And then a whole counterculture herd moves along with them.   We wrote on here five years  ago that currency devaluation solves nothing.  The whole paradigm needs to change.   Is the world going to be a better place when everyone’s currency is zero?

Emerging markets, including China have endlessly manipulated their currencies.  Endlessly.  In fact, they have benefited substantially from this dynamic.  In the end, they are the cause of their own nonsense.  The United States didn’t cause anyone else’s problems.  The corruption in their own countries is the cause of their own problems.  It’s been ages since we have made this statement on here, but countries like China love globalization because it allows them to maintain the status quo of corruption and statist authority over its people while benefiting financially without giving up power through domestic reform.  All emerging markets loved neoliberal economics as long as the game was in their favor.   China, as an example, devalued its currency overnight by 40% not too many years ago.   Can you imagine the squawking from China today if the U.S. would wake up one day and devalue its currency by 40%?    The global tensions would be palpable.  And the mob would howl.  China continues to devalue its currency every single day since by manipulating the yuan downward against the dollar.   South Korea, Germany, Brazil, Russia and more are all master players in the con game.   That emerging markets now don’t want to play this game anymore when it doesn’t benefit them is no surprise.  It puts the spotlight back on the shortcomings in their domestic statist policies and domestic corruption.   Global volatility will soon be in  full play again.  All courtesy of the state.  

Unregulated capital and the corruption surrounding it is something that we have mentioned on here for a long time.   The world of global finance is one of tremendous corruption.  Not only state-based corruption but mafia money, drug money, terrorists money and all sorts of illegal activity.  In an economy in which the vast majority of transactions are done electronically, such as the United States, a large pickup in the currency component of our money supply is anecdotal evidence of a massive element of corruption and illegal activities.  Of course, this all fits quite nicely into the neoliberal’s view of the world of anarchy often called  free markets enabled by the dismantling of the rule of law aka deregulation.   

The only thing keeping the emerging market Ponzi Scheme going is the Fed’s quantitative easing.  Capital controls, which are absolutely necessary for any type of economic sustainability, will kill the global beast.  And with it will go the needed money supply growth in the U.S. needed to keep us from a deepening crisis.  The con game is again running out of steam.  And the grim reaper is preparing his return.  

Globalization is dead

posted by TimingLogic at 8:13 AM

Links to this post:

Create a Link

<< Home