09.15.09
Posted in Banking, Culture, Industry, Nationalization, china, politics, trade at 6:27 pm by Administrator
By Martin Hutchinson, Contributing Editor – Money Morning
When U.S. President Barack Obama late Friday (Sept. 11) signed an order that imposed an additional duty of 35% on tires imported from China, it set up the potential for an old-fashioned trade war.
Currently, global trade is down only 20%. During normal times, worldwide commerce would recover on its own. But as most investors understand all too well, these aren’t normal times.
Global trade fell by 35% after last September’s financial crash. And it plunged 65% between 1929 and 1932 as a result of the Great Depression. With the worldwide economy already in a weakened state, a bare-fisted trade war between the world’s two most important trading partners – the United States and China – would be devastating.
Call it “Great Depression II: The Sequel.”
Courting Trouble
When it comes to trade wars, there are two factors that are important to understand. First, once a trade war starts, everyone tends to join in. And second, once this happens, there’s no percentage in being the only free-trading country left in a totally protectionist world.
That’s what President Obama is risking. The 35% tariff he imposed is in addition to an existing 4% import duty. His action should be met with loud protests – not just from China, but from here in the United States and from Europe, too. We must stop the dreadful downward momentum from building.
The Chinese government has replied by accusing the United States of blatant protectionism as part of a World Trade Organization (WTO) complaint. And China is also threatening to retaliate against imports of U.S. poultry and vehicles. This all sounds arcane, but it isn’t. This escalating tiff over tire tariffs has the potential to damage the global economy much more than the banking crisis ever did.
President Obama’s action comes as a result of an “anti-dumping” investigation by the International Trade Commission (ITC) of the U.S. Department of Commerce. Competitors tip off the ITC about foreign imports that are allegedly being “dumped” – that is, sold below their full costs of production. Why U.S. voters should care about dumping is an interesting question. Dumped products are effectively being subsidized by China.
However, even if dumping mattered, the ITC is an inadequate body to investigate the alleged trade infraction. The commission has no subpoena powers in China. And it is subject to intense lobbying from advocates on only one side of the controversy.
Not surprisingly, the World Trade Organization (the proper judge of such claims) does not regard unilateral anti-dumping claims as an acceptable excuse for randomly imposing extra tariffs on imports. The whole purpose of trade agreements – several of which the United States promoted and signed – is to prevent that kind of thing.
During the 2008 presidential campaign, there was considerable debate about whether then-U.S. Sen. Obama was a protectionist.
Candidate Obama cheered union audiences by announcing that he wanted to renegotiate the North American Free Trade Agreement (NAFTA). But then his economic spokesman, Austan D. Goolsbee, was accused of holding a meeting with the Canadian embassy, and saying Obama wasn’t serious. The tough talk about NAFTA was only campaign rhetoric, Goolsbee allegedly confided to his Canadian audience. Then Obama’s campaign people said that no such meeting occurred.
Now that he’s in the White House, the fog obscuring President Obama’s views on trade is beginning to clear. In Group of 20 (G20) meetings, he’s paid lip service to free trade. But his actions contradict his statements.
President Obama has done nothing to advance the South Korea and Colombia free trade agreements, stuck in Congress since 2007. He has also done nothing to revive the stalled Doha round of trade talks, though his global prestige is so high he could easily have done so. That would be no small achievement. The World Bank estimates that a deal would add $100 billion a year to global trade.
Worst of all, however, is that President Obama now appears to be doing nothing to enhance trade with China, the country that will be our most important trading partner for generations to come. In the past two weeks alone, he’s twice imposed anti-dumping duties on China. On Sept. 9, the administration said it imposed a 23% duty on $2.6 billion worth of steel pipe from China.
President Obama owes a lot to union support, and it’s pretty clear that he is prepared to go along with Big Labor’s protectionist agenda. But the two cases are very different and one has to question whether the gains will be worth the very real costs.
In terms of the actual dollar value – as well as indirect economic costs – experts say the steel-dumping case may be the biggest case in years to be brought before the nation’s trade-dispute system. It demonstrates that there’s a deep-and-growing concern that Beijing’s industrial subsidies are translating into lost U.S. jobs.
The tire case may be a different story, however. It involves the “low-grade” tire market. The profit margins in that slice of the tire market are virtually non-existent. In fact, U.S. tire manufacturers did not join in the complaint. The reason: They actually lose money in the low-end market. Most had already abandoned it to China-based rivals, reports Irwin M. Stelzer, a columnist and director of economic policy studies at the Hudson Institute.
The One Sequel That Shouldn’t Be Made
None of this would matter much if the global economy were sailing serenely along, as it did before the financial crisis struck. For the 20-year stretch that ended in 2007, world trade advanced at a pace that was slightly faster than global economic growth in general. Against such a relatively healthy backdrop, minor disputes on tires or metal pipes would be of interest only to the tire and metal-pipe industries. And perhaps to the poultry or other industries against which China chose to retaliate.
But the global financial crisis changed the game. For a couple of months immediately following last September’s near-meltdown of the world’s financial system, global trade plunged by an astonishing 35% from its normal levels. That wasn’t really a surprise. U.S. consumption was way down. And the near-freeze-up in the banking system made trade financing very difficult to get.
That 35% drop was not as bad as the 65% plunge in world trade that came during the first four years we during the Great Depression between 1929 and 1933. But let’s face it, a stretch that’s half as bad as the Great Depression – even a relatively short one – is still pretty serious.
Global trade has since recovered somewhat, as trade finance has once again become available. As of July, it appears to be down about 20% on the previous year. However, that’s still a lot: Economic activity on a worldwide basis is down about 5%.
Even U.S. retail sales are down only around 8%. The U.S. consumer is being more careful than before, but still is spending at a pretty rapid clip.
By comparing all these numbers, we can come to only one conclusion: Global trade is still ailing as a result of the financial crisis.
Lower global trade affects all of us. Thanks to a concept called “comparative advantage,” the whole point of trade is that it allows each item to be manufactured in the place that’s most efficient. So if trade is blocked, as it was in the 1930s, the whole world economy becomes less efficient, output declines, and we enter a Great Depression (in which U.S. GDP nose-dived 25%).
There’s no reason a Great Depression has to follow a banking crisis. After all, the world has had lots of banking crises, both before and after 1930. And virtually every one has been followed by only a medium-sized recession.
The one banking crisis that set off a really serious downturn was that of 1837, after U.S. President Andrew Jackson abolished the Second Bank of the United States. The Second Bank’s notes were the main mechanism for financing trade between different parts of this still-young country. So President Jackson’s action effectively wiped out about 25% of the U.S. money supply. Not surprisingly, things got very tough for several years.
As tough as that period was, a 67% freefall in world trade would clearly plunge us into a much more dire period. In fact, were world trade to decline by two thirds, there would be no way of avoiding “Great Depression II – the Sequel.”
And this is one sequel everyone is certain to hate.
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09.14.09
Posted in Banking, Culture, Nationalization, North American Union, politics at 4:19 pm by Administrator
ONE-WORLD CURRENCY
U.N. calls for replacement of U.S. dollar
Joins Russia, China and G20 in call for IMF to step forward
Jerome Corsi, WorldNetDaily.com
Increasingly, world organizations including the United Nations, are openly calling for the creation of a one-world currency to replace the dollar.
That calls to create a one-world currency are increasing indicates the Obama administration trillion-dollar deficits are serving as a trigger.
A United Nations report recommended that a new one-world currency should be created to replace the dollar as the standard for foreign-exchange holdings in international trade.
If the plan succeeds, the United Nations would effectively end up replacing the United States as the issuer of the one-world international currency used as the standard of foreign exchange to settle international trade transactions.
The move would obviate the need for any nation state in the future to be the arbiter of world trade, marking yet another blow to national sovereignty on the path to one-world government.
The report, released by the United Nations Conference on Trade and Development, or UNCTAD, endorsed a proposal that Special Drawing Rights, or SDRs, issued by the International Monetary Fund, or IMF, “could be used to settle international payments.”
Red Alert has previously reported that Russia and China championed the idea to use the IMF’s Special Drawing Rights as a new international currency as a proposal that was adopted by the G-20 meeting held in London last April.
That G20 summit meeting took an important step to create a new one-world currency through the International Monetary Fund that is designed to replace the dollar as the world’s foreign exchange reserve currency of choice.
Point 19 of the final communiqué from the G20 summit in London on April 2 specified that, “We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity,” taking the first steps forward to implement China’s proposal that Special Drawing Rights at the International Monetary Fund should be created as a foreign-exchange currency to replace the dollar.
The IMF created SDRs in 1969 to support the Bretton Woods fixed exchange rate system.
“The international supply of two key reserve assets – gold and the U.S. dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place,” a document on the IMF website explains. “Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF.”
When the Bretton Woods fixed rate system collapse, major world currencies, including the dollar, shifted to a floating exchange rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.
Until the current global economic crisis, SDRs issued by the IMF have been used by IMF member nation states primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.
The discussion of using SDRs at the IMF as an international reserve payment system is further evidence that the momentum to create a one-world currency is gaining among not only among academic economists, but also among and professional economists holding prominent government positions.
Red Alert previously reported that strong support for the idea of a one-world currency has recently come from Canadian economist Robert Mundell, who won a Nobel-prize in 1999, for his work formulating the intellectual basis for creating the euro.
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09.01.09
Posted in Banking, Culture, Nationalization, North American Union, politics at 8:10 pm by Administrator
Doomsday author says Obama is doing nothing to forestall disintegration
By Paul Joseph Watson, Prison Planet.com
Russian Professor Igor Panarin says that events are continuing to confirm his doomsday prediction first made over 10 years ago, that the United States will completely collapse like the Soviet Union before the end of 2010, and warns that the chaos could begin to unfold in as little as two months.
Panarin, doctor of political sciences and professor of the Russian Diplomatic Academy Ministry of Foreign Affairs, told journalists during the unveiling of his new book yesterday that President Obama has done nothing to forestall the fast approaching crisis and that it could begin to properly unfold in November.
“Obama is “the president of hope”, but in a year there won’t be any hope,” said Panarin. “He’s practically another Gorbachev – he likes to talk but hasn’t really managed to do anything. Gorbachev at least had been a secretary of a regional communist party administration, whereas Obama was just a social worker. His mentality is totally different. He’s a nice person and talks nicely – but he’s not a leader and will take America to a crash. When Americans understand that – it will be like a bomb explosion.”
Since 1998, Panarin has been warning of a future disintegration of the United States and the collapse of the dollar. The recent election victory for Japan’s Democratic Party is another sign that the economic collapse of the U.S. is imminent, according to Panarin.
“Today I received another confirmation that the collapse of the dollar and the US is inevitable. Japan’s Democratic Party won the election, and I’d like to remind you that its leader [Yukio Hatoyama] has the snubbing of the dollar among his economic plans. In plainer words, he plans to transfer Japan’s monetary reserves from US dollars into another currency. The move will seriously accelerate the dollar’s exchange slump as early as this November. Disintegration will follow shortly,” he said, adding that next year China would also begin to massively dump the dollar and that Russia would begin to sell oil and gas for roubles.
Panarin previously stated that the dollar would eventually be replaced with “a common Amero currency as a new monetary unit”, referring to the Security and Prosperity Partnership agreement between the U.S., Canada and Mexico.
He foresees the U.S. breaking up into six different parts, roughly along lines similar to those of 1865 during the Civil War, “The Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong,” according to Panarin.
Longer term, Panarin predicts that the breakaway states will eventually be taken over by the European Union, Canada, China, Mexico, Japan and Russia and America will cease to exist altogether, as depicted in the illustration above.
Panarin blames the collapse on a “political elite that implements an absurd and aggressive policy that aims to create conflicts around the planet” and warns that increasing firearms sales in the U.S. are a sign that people are preparing for “chaos” in the aftermath of a total financial meltdown.
“In my opinion, the probability of the US ceasing to exist by June, 2010 exceeds 50%. At this point, the mission of all major international powers is to prevent chaos in the US,” Panarin concluded.
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08.19.09
Posted in Culture, Immigration, Nationalization, North American Union, journalism, politics at 11:32 am by Administrator
Phyllis Schlafly
TownHall.com
President Obama went to Guadalajara, Mexico, in August as part of his promise to “rejoin the world community” and become a “citizen of the world.” He participated in a conference with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper.
These cozy meetings of the so-called three amigos used to be labeled the Security and Prosperity Partnership. The three North American heads of state met in Waco in 2005, in Cancun in 2006, in Quebec in 2007 and in New Orleans in 2008.
After conservatives exposed the mischievous goals, the amigos accepted the Hudson Institute’s helpful suggestion to change their name. Now they call themselves the North American Leaders Summit.
Prestigious internationalist think tanks, the Council on Foreign Relations, the Hudson Institute and the Center for Strategic & International Studies, explained the real purpose of these high-level get-togethers. These meetings were planned to be the first steps toward a North American Union modeled on the European Union, with open borders and a common currency, which Canada’s Fraser Institute prematurely labeled the amero.
The words “union” and “amero” have become embarrassing, so the goal has now been identified as “economic integration” and “labor mobility.” The Guadalajara joint statement reaffirmed the purpose of “integrated economies,” and that still means allowing unlimited access for cheap labor from Mexico to take U.S. jobs.
President Calderon demanded unlimited “labor mobility” and asserted that it is “unthinkable” for the United States to function “without the contribution of the Mexican laborers and workers.” He also wants free access for Mexican trucks to all U.S. roads and U.S. citizenship for Mexicans living illegally in the U.S.
Canada’s Harper wants all three to pledge to work “together on a North American focus against climate change in order to assure and guarantee a new international covenant that is efficient and truly global.” Harper also complained about the “buy American” provision in our $787 billion stimulus law.
Obama reaffirmed his commitment to pass the Cap-and-Trade bill so he would be hailed as a hero at the upcoming United Nations climate-change conference in Copenhagen, Denmark. He promised to “take the lead by reducing U.S. emissions by 80 percent by 2050″ and to “work with other nations to cut global emissions in half.”
Obama also promised to “continue to work to fix America’s broken immigration system,” which most people see as code words for amnesty for illegal aliens. He did not promise to stop the flow of illegal drugs and people coming across our southern border, but he did say he wanted “to stem the illegal southbound flow of American guns and cash that helps fuel this extraordinary violence.”
In other words, he was blaming the United States for Mexican drug violence. In fact, most of the guns found at Mexican crime scenes are not American, and U.S. taxpayers are already generously footing the bill to train Mexicans to fight the drug war.
Fortunately, Obama did not pledge to open our roads to Mexican trucks, which may be his only concession to American public opinion so far in his presidency. Congressional law forbids the entry of Mexican trucks, and the latest Rasmussen Survey shows that 66 percent of Americans oppose lifting this congressional ban.
Under NAFTA, the United States agreed to let Mexican trucks operate freely in our country after 1999 so long as they meet U.S. safety standards. But they have never met them — and nothing in NAFTA requires us to admit trucks that don’t meet U.S. standards.
Highway safety is the primary reason why Americans are adamantly opposed to allowing Mexican trucks on our roads. The problem is not only the wear and tear on our deteriorating highways from additional tens of thousands of heavier, environmentally dirtier trucks.
U.S. truck drivers are limited to 10 consecutive hours of service, but Mexican drivers typically drive up to 20 hours a day. Even if limits are imposed, nobody knows how many hours they are behind the wheel before reaching the border.
In contrast to U.S. requirements for truck drivers, Mexico has no credible system of driver training, licensing, drug testing, physical and age requirements, safety inspections even for brakes, weight limits, insurance, or nationwide criminal or driving-record databases.
U.S. law requires commercial drivers to be able to “read and speak the English language sufficiently to converse with the general public, to understand highway traffic signs and signals in the English language, to respond to official inquiries, and to make entries on reports and records.” But Secretary of Transportation Mary Peters testified at a Senate committee hearing last year that when Mexican drivers respond to our questions in Spanish, her employees nevertheless check the box for English-proficient.
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08.17.09
Posted in Culture, Immigration, Islam, politics at 4:55 pm by Administrator
British National Party, BNP.org.uk
The controlled media has finally admitted what the British National Party has been saying all along: that all of Europe stands on the brink of being overrun and colonised by masses of Third World Muslim invaders.
An article entitled “Muslim Europe: the demographic time bomb transforming our continent” recently published in The Telegraph could have been lifted directly from previous articles on the BNP website.
Written by Adrian Michaels, the article says that the “EU is facing an era of vast social change” caused by “Europe’s low white birth rate, coupled with faster multiplying migrants.”
According to Mr Michaels, this will “change fundamentally what we take to mean by European culture and society.”
The BNP has been the only party to warn about the coming demographic tidal wave which, if left unchecked, will extinguish all of Europe and bring an end to thousands of years of Western civilisation.
Mr Michaels also said, “Britain and the rest of the European Union are ignoring a demographic time bomb: a recent rush into the EU by migrants, including millions of Muslims, will change the continent beyond recognition over the next two decades, and almost no policy-makers are talking about it.
“The numbers are startling. Only 3.2 percent of Spain’s population was foreign-born in 1998. In 2007 it was 13.4 percent. Europe’s Muslim population has more than doubled in the past 30 years and will have doubled again by 2015. In Brussels, the top seven baby boys’ names recently were Mohamed, Adam, Rayan, Ayoub, Mehdi, Amine and Hamza.”
Mr Michaels goes on to point out that the altered population mix has far-reaching implications for “education, housing, welfare, labour, the arts and everything in between.”
According to figures quoted by Mr Michaels, “EU numbers on general immigration tell a story on their own. In the latter years of the 20th century, the 27 countries of the EU attracted half a million more people a year than left.
“Since 2002, however, the latest EU report says, net migration into the EU has roughly tripled to between 1.6 million and two million people per year.”
According to the US’s Migration Policy Institute, residents of Muslim faith will account for more than 20 percent of the EU population by 2050 but already do so in a number of cities.
“Whites will be in a minority in Birmingham by 2026, says Christopher Caldwell, an American journalist, and even sooner in Leicester. Another forecast holds that Muslims could outnumber non-Muslims in France and perhaps in all of Western Europe by mid-century. Austria was 90 percent Catholic in the 20th century but Islam could be the majority religion among Austrians aged under 15 by 2050, says Mr Caldwell.”
Karoly Lorant, a Hungarian economist who wrote a paper for the European Parliament, calculates that Muslims already make up 25 percent of the population in Marseilles and Rotterdam, 20 percent in Malmo, 15 percent in Brussels and Birmingham and 10 percent in London, Paris and Copenhagen.
Despite spelling out the problem in detail, the article makes the obligatory snipe at the BNP and other European political parties which have opposed the mass immigration policies of the ruling elite.
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