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Predator state calls the shots
The all-too-visible predatory nature of contemporary US governance is
quintessentially linked to corporations. Yet attempts to change this uniquely
American phenomenon may push voters to a closer embrace of the predators. - Thomas
I Palley (Aug 21, '08)
Don't cry for Doha
The recent collapse of the Doha Round of trade talks raised misplaced cries
that an opportunity was being lost to lift millions of people out of poverty.
The round was based on a myth. Reforms happen because countries find greater
openness to be in their best interest. (Aug 21, '08)
 THE
MOGAMBO GURU
The new silver
- made with paper
All the bad news in the world about inflation and conflict and a collapsing US
financial system might make you wonder why gold and silver prices are not going
through the roof. But then there's the paper trail ...
(Aug 21, '08)
THE MOGAMBO GURU
The profit potential of pork
products
Inflation is a real screw-job because you have to buy twice as much at a cost
that is three times as much merely to eat as much as you used to. Ask the
pork-loving Chinese. It's a dance of death, and we are doomed!!
(Aug 20, '08)
THE BEAR'S LAIR
The new cold war era
The redrawing of the political map with Russia's invasion of Georgia signals
the onset of a new cold war. The economic consequences that will follow are
extensive. They also mean that, with will and competence, victory for the West
should be much quicker and easier this time round.- Martin Hutchinson
(Aug 19, '08)
THE MOGAMBO GURU
Unemployment survival guide
Suburban subsistence farming is the new trend in the US as food prices soar and
as more and more people are finding time on their hands to plant potatoes. Yet
academics remain blind to the fruits of Alan Greenspan's tenure as Federal
Reserve chairman. (Aug 19, '08)
The US economy is in a funk
Domestic woes in the US economy are exacerbated by trade deficits on oil and
with Asia on consumer goods. Regulatory and personal changes of habit are
needed to get back on track. A tax on yuan-dollar transactions proportional to
Chinese currency intervention would also help. - Peter Morici
(Aug 18, '08)
THE MOGAMBO GURU
A big stinking economic heap
How will this inflation end? When the central bank is no longer able or willing
to extend credit, or consumers and businesses figure it no longer makes sense
to borrow. Things will get rough in the months ahead.
(Aug 18, '08)
Empty drums
The US Republican Party of presidential candidate John McCain has stumbled
across a genuine domestic policy issue it feels can work to its advantage, but
attempts to link gas price declines with the lifting of curbs on oil drilling
along America's coasts are bogus. - Julian Delasantellis
(Aug 15, '08)
THE MOGAMBO GURU
Gold and the out-of-whack
economy
Things that are out of whack tend to get back into whack, or put another way,
things that sell for half their value end up costing full price. Take gold as
an example. Or silver. It is enough to make you scream "Bargain!!!"
(Aug 15, '08)
Food aid left off the table
Hunger isn't inevitable, and in the 21st century the world grows enough food.
Change is required not just where hunger is prevalent, but also in rich
countries, particularly in the US, whose food aid practices, such as slow
delivery and monetization of what it offers, act against resolving the problem.
(Aug 14, '08)
Set to soar - or swoon
The apparent recent strength of the US stock market and dollar, in spite of
worrying news items, might be read as indicating a floor has been reached. Yet
if the past decade is any guide, the future remains bleak. - John Browne
(Aug 14, '08)
THE BEAR'S LAIR
Downsizing of finance underway
The Corrigan plan to bring US-traded derivatives under the ambit of regulators
is a feeble first step in the right direction. It at least demonstrates that
much of the financial services innovation of the last generation was spurious
and unsound, and needs to be done away with. Pity about the meltdown that will
follow.
- Martin Hutchinson (Aug 12, '08)
Food crisis sows seed for change
The present food crisis reflects a breakdown in the global food system that
threatens to worsen poverty, climate change and insecurity. The response of
institutions and governments is vastly inadequate. It is time for a new,
accountable vision of cooperation. (Aug 7, '08)
The Fed's next move is down
With the US Federal Reserve showing no stomach to fight inflation, the recent
decline in commodity prices gives Fed chairman Ben Bernanke a golden
opportunity to cut interest rates further to avoid the looming recession
becoming a depression. - John Browne (Aug 7,
'08)
Bernanke wins a bit of time
US Federal Reserve chairman Ben Bernanke this week scored a victory against
anti-inflation insurgents in his rate-setting committee. Now he has free rein
to make the US and world economies once again "great and glorious". But he had
better do it fast. - Julian Delasantellis (Aug
6, '08)
Henry Paulson has lost control
US Treasury Secretary Henry Paulson claims that the US's banking system is
sound - a remarkable description when the debts of "the only functioning part
of the home loan market" are greater than its assets. The country's
middle-class and blue-collar workers have a better grasp on reality. - F
William Engdahl (Aug 5, '08)
Maestro won't face the music
Former US Federal Reserve chairman Alan Greenspan's criticisms of the
irrationalities that have brought about the implosion of the real estate market
entirely overlook his own key role in the devastation. - Peter Schiff
(Aug 5, '08)
THE BEAR'S LAIR
The collapse of consumer
spending
The patina of stability in the US economy painted by last week's data masks a
much darker picture, of an economy being sucked into a pit of depression by the
vortices of employment and retail spending. - Martin Hutchinson
(Aug 5, '08)
SPEAKING FREELY
False signs of the end
The US government's bailout of Fannie Mae and Freddie Mac, along with a falling
oil price, has helped promote a recovery in parts of the stock market. At face
value, this would suggest investors believe the worst is over. Do not believe
it. - Ronald Solberg (Aug 4, '08)
BOOK REVIEW
Tarnished 'truth'
The New Paradigm for Financial Markets by George Soros
Economists teaching us that we are creatures of the market claim a universal
"truth" that limits questions about what life is for. As the US financial
crisis deepens and, Soros argues, heralds the end of an economic era, his
message should get a hearing in the debate over what system of exchange
replaces it. - Nicholas Kiersey (Aug 1, '08)
The cost of socialism
The United States is seeking to resolve its present financial crisis by
socializing losses. International precedents indicate that this path leads to
curbs on individual freedom and enterprise, and economic decline. - John Browne
(Jul 31, '08)
Bear's death and
the US way of banking
As US regulators seek out culprits on whom they can pin culpability for the
collapse earlier this year of Bear Stearns, the more important policy question
is why did the bank have to die? Was that not a feature of the business it had
chosen? - Julian Delasantellis (Jul 30, '08)
COMMENT
Paulson still doesn't get it
US Treasury Secretary Henry Paulson's latest effort to build trust in banks
will be a tough sell because there is not much to trust in a Wall Street bank
these days. What is required is systemic reform in business practices and
compensation structures. - Peter Morici (Jul
30, '08)
The death of Doha
World Trade Organization director general Pascal Lamy claims he has not given
up on securing a global trade deal after rifts between rich and developing
countries killed the near seven-year Doha Round of trade talks.
(Jul 30, '08 )
THE BEAR'S LAIR
Volcker's best apprentice
The refusal of central banks to follow the lead of former US Federal Reserve
chairman Paul Volcker and raise interest rates to appropriate levels means
inflation has become a global phenomenon. One unlikely exception is displaying
Volker-like monetary maturity. The benefits will follow. - Martin Hutchinson
(Jul 29, '08)
COMMENT
Bailout cure worse than disease
The US government bailout of Fannie Mae and Freddie Mac eliminates all
market-based deterrents to reckless lending for conforming loans, and with
American homes still overvalued, their prices can be pushed up only with
reckless lending and inflation. The cure will kill us, not the disease. - Peter
Schiff (Jul 28, '08)
 VIDEO
Peter Schiff predicts the coming US housing crisis, in November 2006.
Bernanke blighted by tunnel
vision
US Federal Reserve chairman Ben Bernanke in his recent testimony to Congress
masked a faulty money policy which, if continued, will lead to even deeper
economic decay, worsening inflation and financial disorder. - Hossein Askari
and Noureddine Krichene (Jul 24, '08)
COMMENT
No bottom for flailing
financials
The sell-off of US financial stocks may tempt investors to seek out bargains.
That raises the questions of whether the government will be able to underwrite
the entire financial industry and what impact its interventions will have on
inflation. - John Browne (Jul 24, '08)
Fraud and the subprime bubble
Theories abound for the cause of the US subprime crisis, with the alleged
culprits ranging from greedy corporations to rating agencies. Yet fraud lies at
the core of the crisis, with the firms now being blamed as primary perpetrators
actually being among the victims. - George Pugh
(Jul 23, '08)
THE BEAR'S LAIR
The death-knell of Bernankeism
The most recent US price data show inflation securely in the 1970s framework.
That means it is no longer possible to inflate the money supply by pretending
that inflation in the real economy is not a problem. Other means will have to
be found to perpetuate the shell-game.
- Martin Hutchinson (Jul 22, '08)
SPEAKING FREELY
Duplicity without borders
As the West's political leaders parade their peace credentials with professions
of support for Israel and their opposition to nuclear proliferation, they sell
billions of dollars in weaponry to client states in the Middle East, trample
the Geneva Convention, and support covert operations. It does not have to be
this way. Decency can replace duplicity. - Hossein Askari
(Jul 22, '08)
THE MOGAMBO GURU
The power of the Chinese credit
card
As US consumers discover the horror of what happens when they can no longer
live on borrowed money, the Chinese are just starting to enjoy the beauty of
plastic money and consumerism. With prices rising, that's great news for
commodities - and buyers of real stuff like gold. (Jul
22, '08)
Bush team turns to the
dark side
The George W Bush administration, after almost eight years of proclaiming an
unassailable faith in the wisdom of the markets, has gone for a deal with the
dark side by turning against short sellers. The US government should be
protecting, not persecuting, those who on a regular basis have the courage and
wisdom to think independently. - Julian Delasantellis
(Jul 22, '08)
Debt capitalism
self-destructs
With free-market capitalism turned into a gigantic Ponzi scheme, witness
troubled mortgage guarantors Fannie Mae and Freddie Mac, the world is
witnessing the collapse of the central banking regime that came into being in
the US in 1913. At the same time, amid all talk of how to deal with the crisis,
not one official voice is heard about the need to increase worker income. - Henry
C K Liu (Jul 21, '08)
 CHAN
AKYA
A stone for Chris Cox
Investors in the United States might wish they, like Pakistanis, could stone
their stock exchange. New rules designed to reduce market volatility will have
the exact opposite effect by locking in unsophisticated investors into a
permanent downward spiral. (Jul 18, '08)
Japan ducks
rice-crisis solution
The Japanese government, faced with record global rice prices, TV images of
food riots and growing fears of increased malnutrition among the world's poor,
could have led the way in resolving the crisis this month when hosting the G-8
summit. It dodged the issue, as did China and the US, opting to keep rice
stocks in storage until they deteriorate enough to sell as livestock feed.
(Jul 17, '08)
Energy reality starts to
bite
The fourth oil shock of the past half-century-plus is unlike the previous three
and isn't going away any time soon. In the medium term, the world will need to
rely on two key but controversial forms of energy - "cleaned up" coal and
nuclear - to find relief. China and India won't lead the way, this burden will
fall on the affluent societies of the West. - Dilip Hiro
(Jul 16, '08)
The next big wave is
breaking
The bailout of US mortgage guarantors Fannie Mae and Freddie Mac will not halt
the financial tsunami that is sweeping corporate America and later the world,
as the mad experiment of asset-backed securitization unravels in wave after
wave of destruction. - F William Engdahl (Jul 16,
'08)
G-8 darkens climate hopes
The Group of Eight endorsement of a 50% cut in greenhouse gas emissions by
2050, far from being a major step forward, as claimed by the world's leading
industrialized nations at their recent summit, is a giant step backward that
may undermine the prospects of developing an effective global climate strategy.
- Walden Bello
(Jul 16, '08)
Jaws close in on
Bernanke
The plunge of US home-loan agencies Fannie Mae and Freddie Mac into the arms of
a government-funded rescue may have killed the likelihood of an interest rate
increase in the near future. That would mean the death of US Federal Reserve
chairman Ben Bernanke's credibility as an inflation fighter. - Julian
Delasantellis (Jul 15, '08)
Ban fails UN and global
challenge
United Nations secretary general Ban Ki-moon may be correct in stating that all
global problems come together at his organization. Yet its failure to come up
with any solutions, notably regarding surging fuel and food prices, is a
condemnation of his own lack of leadership skills. - Kaveh L Afrasiabi
(Jul 15, '08)
THE BEAR'S LAIR
Financial collapse edges closer
Some sort of life-support system will almost certainly be instituted to pull
Fannie Mae and Freddie Mac out of their Bear Stearns-like death spiral. That
will not necessarily prevent a financial meltdown of the US financial system.
Such a total collapse is a contingency that should now be planned for. - Martin
Hutchinson (Jul 15, '08)
For oil, think onions and tears
Airlines and haulers are seeking public support to curb the role of speculators
in the oil market while the US Congress is considering a new bill with the same
goal in mind. But they are warned that the results could lead to tears - just
consider the price of onions. (Jul 15, '08)
The G-8 ignores
basics
The refusal of leaders of the top industrialized countries to
publicly acknowledge the basic reason for soaring oil and food prices will
usher in worsening inflation, a faster decline in real incomes and more
hardship for the world's poor. - Hossein Askari and Noureddine Krichene
(Jul 14, '08)
CHAN AKYA
And now, for Fannie and Freddie
The US government, faced with a possible failure of mortgage guarantors Fannie
Mae and Freddie Mac, is looking to once again prop up defunct institutions
instead of giving up the ghost on such entities. The markets may welcome such
efforts, but the implications for the ultimate credit quality of the government
are negative. (Jul 11, '08)
Stagflation sightings
multiply
With Warren Buffet joining the ranks of those recognizing the presence of
stagflation, investors have cause to be concerned by an apparent weakening of
Europe's determination to combat rising prices. Even the "insurance" of gold
carries an easily-forgotten risk - confiscation. - John Browne
(Jul 10, '08)
Paid-up card-carriers feel the
pain
US consumers are discovering that even fully paid-up card-carrying capitalists
are no longer entitled to literally unlimited spending as the enfeebling
tendrils of the subprime mortgage crisis spiral ever deeper into the country's
economic structure. - Julian Delasantellis (Jul
10, '08)
Labor back in the picture
The length and scale of present energy price increases threaten to start
altering the profitability and desirability of marginal production processes.
That will increasingly force a rethink of the balance between capital and
labor. - Max Fraad Wolff (Jul 8,
'08)
Greed and dogma fertilize food
crisis
Soaring food prices reflect the transformation of agriculture from a primarily
local activity to a global business. When agricultural policy is made by
international financial institutions with market fundamentalist policies and by
big agribusiness whose primary concern is their own bottom line, it is a recipe
for disaster. (Jul 8, '08)
THE BEAR'S LAIR
A tale of two downturns
Sliding home prices in Britain are just the start of a plunge into a recession
that will be deeper than that facing the United States and which will prefigure
the demise of Britain as a global financial center. As the positive parts of
Margaret Thatcher's legacy disintegrate, her mistakes are returning to haunt
the country in ever-more terrible form. - Martin Hutchinson
(Jul 8, '08)
Iron grip
The George W Bush administration's decision to approve a Rio Tinto-BHP Billiton
combination is a terrible public policy decision, further strengthening an
oligopolistic mining market whose recent 85% hike in iron ore prices will
likely fuel inflation and further undermine economic activity. - Thomas I Palley
(Jul 7, '08)
CHAN AKYA
The gullible and the greedy
Cringe-worthy analysis by luminaries ranging from the Bank for International
Settlements to the Indian finance minister shows fundamental misunderstanding
of market mechanisms. Yet with so-called experts from investment banks and
rating agencies found wanting in their basic responsibilities, other
participants have plenty of leeway to mumble-swerve.
(Jul 3, '08)
COMMENT
West's loss of Gulf funds East's
gain
Moves by Western countries, including the United States and Germany, to
restrict investments by the Gulf's sovereign wealth funds threaten to rebound
to the benefit of Eastern economies. (Jul 3, '08)
End of the petroleum age
The numerous proposals put forward at last week's global oil summit in Saudi
Arabia to claw back high oil prices required turning a blind eye to one
fundamental point - the world is running out of oil. - Michael Klare
(Jul 2, '08)
SPEAKING FREELY
They dare not speak its name
Gold-standard theorists are now dismissed by mainstream economists, while a
mendacious facade that modern writings provide a balanced view of the topic
masks avoidance of key aspects, much as the devil avoids holy water. Yet a more
thorough-going debate is essential as the world enters its latest financial
crisis. - A E Fekete (Jul 2, '08)
Intervention will not
stop dollar's slide
The US Federal Reserve's optimism in regard to the inflation outlook masked a
fear of a continued slide in the dollar, even if it raised rates. And with
foreign currency reserves less than those of Poland, and allies with no reason
to intervene on its behalf, the US Treasury has little to counter such a slide.
- Peter Schiff (Jul 1, '08)
A poisoned chalice
Senator Barack Obama is in celebratory mood as the White House appears within
his and the Democratic Party's reach. Yet tackling and even resolving the US
and global economic crisis over the next four years may cast any eventual
victor of the presidential election and his winning party into political
oblivion for the foreseeable future. - James Cumes (Jul
1, '08)
THE BEAR'S LAIR
Infrastructure's inefficiencies
Condemnation of the state of US infrastructure in the wake of recent flooding
of the Mississippi River overlooks the political and financial obstacles facing
big-spending projects. The problem is one of US economic structure, and it
urgently needs to be solved.- Martin Hutchinson(Jul
1, '08)
 SPENGLER
How to stop the Great
Crash of '08
The United States can still break out of its economic death spiral. Tax changes
and higher interest rates are a start. And let overseas funds buy American
banks. While investors are waiting for that to happen - it won't - they would
do best to sit back and watch the horrors unfold. (Jun
30, '08)
Flat-earther blind to oil facts
Columnist Thomas L Friedman's demand that the United States set an oil-price
floor of US$100 a barrel to trigger renewable-energy investments and end the
country's oil "addiction" is worse than simplistic. The realities were clear
three years ago when oil was at $50. Little has changed. - Henry C K Liu
(Jun 27, '08)
FDI curbs threaten world growth
An increasing tendency of countries, including China and the US, to restrict
inward foreign direct investment is a protectionist drive that could stifle
global growth for years to come, according to a US think-tank.
(Jun 27, '08)
Fed words strike false note
US Federal Reserve chief Ben Bernanke on Tuesday sounded chirpy on growth, gave
a nod to inflationary concerns - and kept interest rates steady. The markets,
awake to the overwhelmingly grim data on jobs, prices and even bank stocks,
don't think he means a single word he says. Next time, he'll have to come
through with some action. - Julian Delasantellis
(Jun 26, '08)
Cheerleaders turn backs on
reality
American investors are beginning to understand that the United States faces
stagflation, recession and financial inflation at the same time. Yet as the
markets have the threat of major declines, don't look for any TV pundits to
tell you this. They are too busy shaking their pom-poms. - John Browne
(Jun 26, '08)
Oil speculators leave giveaway
print
The role of speculators in the present oil-price spike, denied by some
economists, is nevertheless identifiable. Implementing regulations to curb that
role will be an uphill struggle, given conventional economic wisdom, but some
unilateral populist action is possible. - Thomas I Palley
(Jun 26, '08)
SPEAKING FREELY
Are they really oil wars?
A widely cited factor behind recent United States wars of choice is oil,
opponents of the conflicts citing, conflictingly, both Washington's desire for
cheap fuel and Big Oil's wish for high prices and profits. Even as speculators
and the Peak Oil theory are thrown into the mix of explanations behind recent
record prices, it is evident such views fall short of reality. - Ismael
Hossein-zadeh (Jun 24, '08)
THE BEAR'S LAIR
A new model for nastiness
Economists seeking parallels with the darkening crisis in the United States and
other countries turn to the inflation-hit 1970s and depression-struck 1930s for
comparison. Neither is apt. The likelihood is for a global downturn combining
both, along with the geopolitical hazards that emerged from the Great
Depression. Not an appealing prospect. - Martin Hutchinson
(Jun 24, '08)
US regulator needs
regulation
The present financial crisis has been attributed to growing complexity and
innovation in the financial system. But when lenders take higher risks due to
high liquidity and low interest rates, the blame should fall on the central
bank. Failure to bring the US Federal Reserve Bank into the realm of orthodox,
transparent and fully stable banking practices will have a cost that is
immeasurable. - Hossein Askari and Noureddine Krichene
(Jun 24, '08)
Untouched water
It is a no-brainer: spend US$11 billion a year to meet global water
requirements and get back $84 billion while helping 20% of the world's people
access potable water, and preventing up to 2 million children dying annually
from water-related illnesses.Yet the US presidential candidates ignore the
chance to change the course of history. (Jun 24,
'08)
The Fed unreserved
The US Treasury secretary's wish to give the Federal Reserve new powers to
oversee the financial services industry ignores the central bank's history over
the past 50 years and the grim consequences for the average US citizen. The
move is tantamount to giving the fox complete autonomy to guard the henhouse. - Peter
Schiff (Jun 23, '08)
Bubbles, risk, crunch and
war
A solution to the present economic crisis remains remote, the search unhelped
by glib demands for increased oil drilling in the United States, and confusion
over the role of "fictitious capital". Meanwhile, the drumbeat of war helps
roil the markets. - Cyrus Bina and Fernando Dachevsky
(Jun 20, '08)
BOOK REVIEW
No longer just goodies for the
top 1%
The Trillion Dollar Meltdown by Charles R Morris
The time for Milton Friedman's theories, like those of Keynes, previously a
generation's benchmark for economic decision-making, is up. At this turning
point, Morris pins down an unusual suspect for the present epochal economic
crisis and foresees the dawn of a period more concerned with the whole of
society rather than just its blessed 1%. - Julian Delasantellis
(Jun 20, '08)
A world still half red
The not-long-ago political atlas that had half the world tinted communist red
has reversed - drastically. Today, the capitalist Cold War victors would be
filled in red, denoting their crushing public and private debt. Their former
adversaries would be green, representing healthy economies and swollen foreign
exchange reserves. - Julian Delasantellis (Jun 19,
'08)
G-8 fails to sound the
charge
Leading finance ministers and central bankers last week failed to come up with
any worthwhile public response to the deepening global economic crisis. Evident
to all, the source of instability is the US, finger-pointing by its Treasury
secretary Henry Paulson notwithstanding. - John Browne
(Jun 19, '08)
Guns blight US energy choices
The United States, noted for losing low-skilled jobs to developing countries,
has ceded the ground to Europe and Japan in higher-level manufacturing, notably
in the sustainable-energy sector. That flows from the Pentagon draining
engineering, scientific and business talent that could otherwise develop
technologies that would help the country avoid economic and environmental
collapse. (Jun 19, '08)
US in military misstep
over African oil
Strong expansion of the US military presence in Africa comes as the country's
oil companies are also exanding their interest in and dependance on the
continent. The more direct US military oversight of oil operations may have the
virtue of honesty, but the risks far outweigh any potential benefit.
(Jun 18, '08)
Are we all North Koreans now?
The global economy is reeling from the triple whammy of soaring energy and food
prices and extreme weather stress, and as long as policymakers don't address
all three of these trends as one major crisis, it could get a whole lot worse.
Just ask North Korea, which in the 1990s was the world's canary. The famine
there that killed as much as 10% of the population was a harbinger of the
crisis that now grips the globe - though few saw it that way at the time. - John
Feffer (Jun 18, '08)
COMMENT
Time is up for Friedman
The loss of the wage-bargaining powers of workers in the United States since
the 1970s means the US Federal Reserve's low interest-rate policy does not
carry the threat of driving up inflation. That reality means it is time at last
to discard Milton Friedman's theory on unemployment and rewrite economic
textbooks to fit the facts. - Thomas I Palley (Jun
18, '08)
Myth-makers caught in oil
speculation
As consumers demand to know why they are paying more at the pump speculators
are being singled out as the bogeymen in the fuel markets. Their culpability is
only one of the myths surrounding the doubling of oil prices over the past
year. The slippery facts point elsewhere, while above all lies the cruel
reality that it is hard to keep an unsubstitutable commodity down for long. -
R M Cutler (Jun 17, '08)
 Iran
says oil price artificial (AFP)
Fed actions risk deeper crisis
US Federal Reserve chairman Ben Bernanke's need for lower interest rates to
stimulate the US economy conflict with the Treasury's need for a strong dollar
to deal with runaway oil prices. The Fed should recognize that its actions are
misguided. The potential harm of a sustained weak dollar can make the credit
crisis look like a minor storm. - Henry C K Liu
(Jun 17, '08)
THE BEAR'S LAIR
The murder of US manufacturing
The air of inevitability shrouding the long decline of manufacturing in the US
- epitomized by GE's decision to sell its appliances business - masks the cause
of its death. Bad management and misplaced investment resulted in blue-collar
jobs leaking away, not cheap foreign labor - Martin Hutchinson
(Jun 17, '08)
CHAN AKYA
Lehman and the liars
A fresh crisis at a US investment bank brings to the fore a similar phalanx of
deceit and consequences in other corners of the financial markets, ranging from
yields on US Treasury bonds to the price of donkeys in Turkey. At the heart of
all these events is the unraveling of convenient lies.
(Jun 13, '08)
SPEAKING FREELY
Back to basis for silver
It is clear that the cause of the West's banking crisis is assets concentrated
in debt denominated in the irredeemable US dollar, unhedged by gold and silver.
Chinese banks, for whom silver is money and the US dollar is a dishonored
promise, hedge their dollar assets in metal and are in no need of a bailout.
Silver is the canary in the coal mine - but first you must understand the
message carried by the silver basis. - Antal E Fekete
(Jun 12, '08)
The next big US spending spree
Emphasis by US Federal Reserve chairman Ben Bernanke in his recent Harvard
speech on high energy costs, dependence on foreign oil and the plus side of
robust fiscal stimuli points to a new splurge in government spending. That is a
recipe for more bureaucracy and higher inflation, and banks on voters having
bad memories. -John Browne (Jun 12, '08)
Japan sets standard to cope with oil
shocks
The world should not be surprised at the recent sharp oil-price increase; it
has happened before. Yet only Japan appears to have learnt the lesson of past
surges, whatever their cause. - Dilip Hiro(Jun 11,
'08)
Next up - the credit
default swap crisis
As the markets indicate receding concerns over the US subprime mortgage crisis
and its follow-on effects, which have impacted global finance for the past year
and more, another crisis is ready to emerge, this time in the US$62 trillion
market for credit default swaps. - F William Engdahl (Jun
11, '08)
Bernanke aggravates trade
deficit risks
US Federal Reserve Board chairman Ben Bernanke's comments suggesting central
banks can act to resist an oil-price induced recession distract attention from
the consequences of the growing US trade deficit and its causes. That is
damaging the US economy and inflicting costs on the workforce. - Peter Morici
(Jun 11, '08)
Food summit
overlooks price ingredient
A United Nations-sponsored summit on soaring food prices demanded more aid for
developing countries, adjustments to trade barriers - and more cash for UN
agencies. This bureaucratic soup was unflavored by recognition of a core cause
of the problem - the US Federal Reserve's bailout of investment banks and
mortgage lenders. - Hossein Askari and Noureddine Krichene
(Jun 10, '08)
COMMENT
Bernanke Fed getting it right
Criticism in the United States and Europe of US Federal Reserve Board chairman
Ben Bernanke's handling of the subprime crisis varies, but unites in pointing
to the inflationary risks raised by his sharp cuts to interest rates. Such
attacks are unjustified. After a slow response last year, the Fed's policy
stance seems right. - Thomas I Palley (Jun 10, '08)
THE BEAR'S LAIR
A less-free world dawns
The future is grim for free-market believers, with the statist policies of the
main US presidential candidates accurately reflecting voters' current views.
That means more state handouts, an increased government share in national
output and more protectionism. The world will endure an unhappy downward
economic spiral until the emergence of a new Ronald Reagan or Margaret
Thatcher. - Martin Hutchinson (Jun 10, '08)
Bad times get worse for Ben
Events late last week in the US, from the surge in the oil
price to jobs data, are cause for great trepidation. Export demand is now about
the only thing keeping the American economy away from the abyss. The
credibility of Federal Reserve Board chairman Ben Bernanke is at similar risk
as he faces nothing but bad choices. - Julian Delasantellis
(Jun 9, '08)
SPEAKING FREELY
It's not a dollar crisis, it's a
gold crisis
Governments and central banks tell you they are combating inflation, in the
hope they can escape the pull of the backwardation of monetary metals. A
forlorn hope because that pull is the global manifestation of countless
individuals' seeking shelter against deliberate monetary debasement in the
ownership of monetary metals. - Antal E Fekete
(Jun 6, '08)
Time overdue for a world
currency
Overly expansionary US monetary policy is bringing the world
upheaval-threatening inflation, discouraging savings and driving sober
investors to speculative plays. Reform of the international financial system is
required, including staying the free hand of national authorities to wage
monetary warfare and establishing a full-fledged world central bank. - Hossein
Askari and Noureddine Krichene (Jun 5, '08)
US preaches what it
practices not
The recent flurry of concern in the United States over the growing size and
potential role of sovereign wealth funds may be what developing countries have
long looked for - a thoroughgoing debate on sovereignty and the role large
financial institutions, mostly in US and Western hands, play in the global
markets. (Jun 5, '08)
Failed expectations in US trade
policy
China's accession to the World Trade Organization is a story of long and
tortured negotiations in which Beijing granted concessions while the US gave
away nothing. Yet the resulting gains appear to have accrued only to China,
multinational companies and their partner financial institutions. The next
White House administration must take note. - Robert Cassidy
(Jun 5, '08)
SPEAKING FREELY
Iran's untapped resources
Sanctions-hit Iran sits on some of the world's biggest reserves of oil and gas,
yet imports much of its gasoline supplies. Energy companies shun involvement in
the country's vast offshore South Pars gas field, wary of domestic and regional
instability. The benefits that would come from a better relationship between
Tehran and the West are clear. - Andrew Bishop (Jun
4, '08)
CHAN AKYA
Cheap talk, pricey banks
US Federal Reserve Board chairman Ben Bernanke's desperate attempts on Tuesday
to talk up the US dollar highlight the Fed's increased concerns of further
stress in the financial system after investment banks report their quarterly
results later this month. A rising US dollar though is murderous for Asian
inflation, while investments in US banks are bad for regional wealth.
(Jun 4, '08)
Oil
prices fall in Asia on Fed chief's comments (AFP)
The Fed's unholy legacy
The US Federal Reserve Board was created to safeguard price and financial
stability by controlling money supply and credit creation. Betraying its
mandate, it is responsible for price instability, a collapse in the US dollar,
unemployment and food riots. - Hossein Askari and Noureddine Krichene
(Jun 3, '08)
THE BEAR'S LAIR
Exploding innovations
The creation of a clearing house for the US$62.3 trillion credit derivatives
market is overdue, although in a truly deep credit disruption it would go
under, along with most market participants. Further solutions are required in
policing and allowing financial innovation. - Martin Hutchinson
(Jun 3, '08)
COMMENT
Extending discount window
a threat to markets
Proposals that the US Federal Reserve give securities firms permanent access to
Fed loans tied to greater oversight overlook the failure of oversight in the
recent banking crisis. The Fed should instead take more seriously its
regulatory role and focus on real reforms. - Peter Morici
(Jun 2, '08)
Stop the Fed before it's
too late
As everyone from the US Congress to the general public hunts for explanations
for the oil and food crises, the Federal Reserve Board, whose monetary policy
is responsible, has exploited this state of ignorance for its own ends. The
same US president that pleaded with the Saudis to increase oil supplies should
now plead with the Fed to change its monetary course. - Hossein Askari and
Noureddine Krichene (May 30, '08)
The bubble of all US bubbles
Official US responses to the subprime crisis and the war in Iraq are
disconcertingly similar, a combination of surge and reality-avoiding rhetoric,
with more of both required to move fewer and fewer people's attitudes. This is
how bubbles grow and burst - even belief in government spin. - Max Fraad Wolff
(May 30, '08)
Union alliance seeks global
power
Organized labor unions in the West, after decades of seeing
their negotiating power weakened as the benefits of globalization accrued to
Big Business, are moving into the mergers business to correct the imbalance of
power, first with trans-Atlantic ties, later with Asia, Australia and Latin
America. At least, that's the dream. (May 28, '08)
US-made oil disaster has mileage
Numerous factors, from speculation to poor
infrastructure, are at play in the recent strong gains in the price
of oil. Yet behind many is the hand and policies of the United States. A change
in Washington's behavior would resolve more than just the price issue. - Hossein
Askari and Noureddine Krichene (May 28, '08)
Self-inflicted US misery
Americans, increasingly miserable and faced with rising
inflation and unemployment, have, contrary to the adage, little company in
their unhappiness. Other economies are barely slowing or are rattling along at
high speed. The US, having sold the ability to control its own economic
destiny, may finally realize how self-inflicted its misery is.- Julian
Delasantellis (May 27, '08)
THE BEAR'S LAIR
Time to do something about oil
The US government will eventually have to respond to the recent fast increase
in the oil price, which with similar gains in other commodities is both
inflationary and recession-producing. A steep interest rate increase, the
correct answer, won't happen. Invading another oil-producing country, and
getting it right, is another option. - Martin Hutchinson
(May 27, '08)
Oil price mocks fuel realities
Blame for the surging price of oil - almost double from a year ago - has been
pinned on demand from China and India, supply constraints, terrorism scares,
among other factors. The real culprits are closer to home, in the offices of
banks and hedge funds, leveraged for all their worth. - F William Engdahl
(May 23, '08)
CHAN
AKYA
Indiana Jones and the last
capitalist
The latest avatar of the archetypal American capitalist takes viewers on a
thrilling ride while raising existential questions on the side. Individual
liberties and innovation that spawned decades of prosperity are now under
assault globally as much from a sprawling corporate culture as from Luddite
forces of modern communism. (May 23, '08)
What a woman wants
The lower-income white voters pursued by Hillary Clinton, and
who against their own self interest have kept in power the big-business,
big-money Republican Party, form an ever-diminishing constituency due to their
failure to compete in a globalized workforce. The burgeoning Hispanic
population holds the future for US politics - and they, for now, are Barack
Obama's. - Julian Delasantellis (May 22, '08)
SOVEREIGN WEALTH FUNDS, Part
2
Prosperity and harmony - or just
greed
Investment by independent sovereign wealth funds of the huge gains flowing to
oil-producing countries would promote prosperity and improve citizens' welfare
for generations to come, usher in more democratic governance and promote
regional harmony. The elites in these oil countries will of course condemn any
such redistribution of wealth. - Hossein Askari (May
22, '08)
This concludes a two-part report.
Part 1:
The forgotten issues
US choke point for WHO
Developing countries desperate to get their hands on cheaper
drugs to help cut the global death toll from infectious diseases and other ills
take on the United States in Geneva this week in their latest effort to ease
patent regulations in their favor.
(May 22, '08)
THE SHAPE OF US POPULISM,
Part 6
The birth of the New Deal
Jimmy Carter in 1979 warned of a "crisis of the soul and
confidence". With gas and gold prices more than treble those confronting Carter
and a trade surplus with China turned to an annual US$200 billion deficit, the
US needs its next president to match Franklin D Roosevelt's Great Depression
battle cry that "the only thing we have to fear is fear itself".
(May 21, '08)
Henry C K Liu continues his analysis of US populism.
Part 5:
Rubin's poisoned chalice
The day free markets died
The theory that the US stock market operates under free-market principles was
looking deeply flawed before the present financial crisis. Price movements over
the past few months and the actions of the US Federal Reserve have blown what
is left of the free-market myth out of the water. - Doug Wakefield
(May 21, '08)
SOVEREIGN WEALTH FUNDS, Part I
The forgotten issues
Demands by the US and others for rules to limit the policies and operations of
sovereign wealth funds highlight the vast amount of money at the funds'
disposal. Overlooked are questions such as who does this wealth belongs to and
how can it benefit the citizenry of the oil and gas-rich countries holding, or
misspending, the cash? - Hossein Askari and Noureddine Krichene
(May 21, '08)
This is the first article in a two-part report.
CAMPAIGN OUTSIDER
Money issue needs a champion
There is a simple proposal that would appeal to nearly 100 million voters in
the United States, promote fairness and democracy, and show real daylight
between presidential candidates on a key economic issue. So far, no candidate
has gone near it. - Muhammad Cohen (May 20, '08)
THE BEAR'S LAIR
A
government failure, not the market's
The deeper the economic mess confronting the United States, the louder are
calls for more regulation and state control and laments over the failings of
the free market. Yet the cause of the bubbles, burst and yet to burst, in
stocks, housing or commodities, is not free markets but government
interference. - Martin Hutchinson
(May 20, '08)
SHAPE OF US POPULISM, Part 5
Rubin's poisoned chalice
The Roaring Twenties and their aftermath demonstrated the need for regulation
to rein in the suicidal excesses of financial free markets, a lesson US
Treasury secretary Robert Rubin ignored in his promotion of deregulation. But
whereas the 1932 presidential election was held amid a severe depression, the
full impact of the bursting of bubbles created by Rubinomics will be felt only
after President George W Bush leaves office. - Henry C K Liu
(May 20, '08)
Part 1:
A rich free-market legacy - for some
Part 2:
Long-term effects of the Civil War
Part 3:
The progressive era
Part 4:
A panic-stricken Federal Reserve
DISPATCHES FROM AMERICA
How to rule the world after Bush
The "free trade" elite in the United States, upset by the George W Bush
administration's neo-conservative go-it-alone nationalism that disregarded
multilateral means of securing influence, wants a "guerilla assault" to return
to the softer empire of corporate globalization. These corporate globalists are
now bidding to control the direction of the US's economic policy, and they see
the Democrats as their best chance. - Mark Engler
(May 19, '08)
SPENGLER
The monster and the sausages
Call it the missing "link" in deciphering German President Horst Koehler's
denouncement of the world financial market as a "monster" for making "massive
leveraged investments with minimal capital". Think of a sausage: the gross
parts of a pig are ground into an appetizing package. Just don't blame the
sausage-maker, Koehler, when it is time for financial heartburn.
(May 19, '08)
The silver lining in high
commodity prices
The global commodity price boom has had enormously complex and uncertain
effects, helping poor farmers and poor resource-rich countries while severely
hurting the urban poor. But high prices send a real message about scarcity in a
globalizing world. Those who ignore it, especially by blocking market forces,
are making a tragic mistake. (May 19, '08)
COMMENT
Jobs up for grabs in cleaner
economy
Talk of building a cleaner economy no longer automatically conjures up
opposition on the grounds that jobs are at risk from cutting pollution. To the
contrary, even politicians are becoming aware of the employment benefits that
are being created in heading off climate catastrophe. Those jobs are local and
global. (May 19, '08)
Fed pause promises financial
disaster
The US Federal Reserve's expansionary policy, particularly since August as it
seeks to jerk up housing prices and bail out failing banks, has made
speculation more remunerative, credit riskier and financial savings less
attractive. The US central bank should start concentrating on what is under its
control, that is liquidity, and give up trying, and failing, to manage the
entire economy. - Hossein Askari and Noureddine Krichene
(May 19, '08)
Climate ripe for military budget
overhaul
The West's generals, as ever, are still fighting the last war - and still
pouring funds into weapons systems that are as outdated, even as climate change
poses a bigger threat than any hostile forces. New submarines can't be used to
fight terrorism - or climate change. The need now is for a climate-orientated
industrial complex. (May 15, '08)
Seed giants see gold in climate
change
Monsanto, BASF and other developers of genetically modified crops are looking
to patent changes in plants that help them survive better in the world's
changing climate. But the crop developments may lead to higher bills for
farmers as they become forced use a proprietary biotech platform.
(May 14, '08)
Sears: From majesty to
hedge-fund dust
The life and near death of one store charts the rise and decline of the
American economy, from frontier innovation to the present crisis of
overconsumption. The great US money-creation machine of the past few years has
almost shut down. As the dust settles, we see that very little of real worth
remains.- Julian Delasantellis (May 13, '08)
THE BEAR'S LAIR
Productivity's poisoned legacy
The Wall Street welcome to improved US labor productivity may be short-lived,
with the prospects far less positive. Among other factors, capital will
probably become more expensive in the years ahead, trade protectionism will
intensify and more regulation will burden manufacturing. The next US president
will not be responsible, but will take the blame. - Martin Hutchinson
(May 13, '08)
China's weakness the
greater danger
Claims that China is an emerging superpower overlook the reality that the
ineffectually governed country will struggle for decades to get and stay beyond
subsistence. The West, rather than fearing China's expansion, should be
preparing for a dramatic setback in Chinese economic growth and resulting
breakdowns in domestic order.
(May 12, '08)
An oil-addicted ex-superpower
The United States' brief reign as the world's sole superpower is over, its
status crumbling as surely as the unlamented Berlin Wall. Last month's NATO
summit is merely recent evidence of the decline. America's utter addiction to
oil, which once powered its climb to might, is its undoing, and an aid to
Russia's resumption of power. - Michael T Klare (May
9, '08)
CHAN AKYA
Cyclone cowards fear ultimate
market
Curbs by cyclone-hit Myanmar on overseas help for its devastated population is
merely an extreme example of a government cowering in fear of information. At a
more prosaic level, Asian authorities concerned with improving their citizens'
well-being should let markets with their abundance of information act in their
favor. They should start with currencies, and then laugh all the way to the
bank. (May 9, '08)
BOOK REVIEW
A new voice to Paine's cry of
rebellion
Bad Money by Kevin Phillips
Four decades ago, author Phillips showed how a coalition of the new
Sunbelt and the old white South would come to create a long-term Republican
majority. Two decades is long-term enough for him, and he now declares
rebellion against the entire American establishment controlling a near bankrupt
country devoid of serious financial debate and civic engagement. - Joe
Costello (May 9, '08)
G7 loses grip on global policy
The world's seven leading economies until recently had the power to effect
coherence to the policies of the great triumvirate of the international
economic system - the World Trade Organization, the International Monetary Fund
and the World Bank. No longer. Developing nations grouped as Outreach 5 have
taken control and are not going to return it. (May
8, '08)
Fed wins space for more cuts
The US Federal Reserve was expected to call a halt to its series of interest
rate cuts at its meeting next month, amid mounting concerns over inflation. But
the latest productivity data give the Fed latitude to further reduce interest
rates if economic conditions warrant. - Peter Morici
(May 8, '08)
The Fed's deformed maturity
The purportedly independent US Federal Reserve betrays its origins with its
knee-jerk response to downturns from technology stocks to housing prices, its
willingness to finance large fiscal deficits through low interest rates and its
blindness to the impact of inflation and demands for economic justice. The US
Congress and policymakers should remain indifferent no longer. - Hossein Askari
and Noureddine Krichene
(May 7, '08)
The delusion of markets
Markets buoyed by the illusion that US GDP rose in the first quarter ignore the
impact of years of stagnant workers' earnings and rising unemployment. A
significant portion of the middle class is being squeezed - and their votes
will count come the November presidential election. - Max Fraad Wolff
(May 7, '08)
Fuel tax cut running on empty
US presidential candidates pledging to cut fuel taxes blithely ignore the fact
they are not placed to make that happen. As bad, it is not what their country
needs in response to rising prices. Worse, any such cuts would hit funding of
transport infrastructure that already lags behind its counterparts in Asia. - Julian
Delasantellis
(May 6, '08)
Food-crisis anger turns on
UN bodies
The Food and Agriculture Organization of the United Nations is the latest
pan-global organization established to ease poverty in the world's
less-developed and largely rural economies to face bitter criticism as soaring
prices of essential commodities expose a lack of preparation and investment in
agriculture. (May 6, '08)
THE
BEAR'S LAIR
Draining
national prosperity
Relief engendered by the latest US GDP figures is misplaced, given recent
monetary and fiscal inputs. Gradually increasing output and the optimistic
stock market will sooner or later be confronted by consumer price figures. At
that point, the US will suffer a monetary and political crisis. Awkwardly, that
is more likely to occur before November's US presidential election. - Martin
Hutchinson (May 6, '08)
Speculators knock OPEC off
oil-price perch
 The
bulk of price gains in oil is attributable not to supply problems but to
speculative activity by hedge funds and others with no direct use for the fuel
beyond profiting from its changing value. The door to much of this unregulated
trade was opened by the US energy futures regulator under the George W Bush
administration. - F William Engdahl (May 5, '08)
China
faces trade war climate challenge
China's growing economy has brought the country to the center of the debate on
curbing greenhouse gas emissions. Its reaction to moves by the US Congress to
tax imports from other major greenhouse gas emitters could prove crucial in
determining the most effective means of forcing international action on global
warming.
(May 5, '08)
Gold
price suppression scheme
How long the present relatively low price of gold will stay that way may depend
on whether the US Federal Reserve has sold half the country's gold and if it is
prepared to stop at half. At least that would give us the opportunity to buy
more gold cheaply for a while longer yet.
(May 5, '08)
CHAN AKYA
Abandoning the USS Titanic
As the world comes to grips with declining United States power both in
political and economic terms, it almost seems surreal that global media appear
so keen to paper over the cracks. With even the corrupt and unctuous Gulf
dictators rebelling against the US dollar, this is the beginning of the end.
(May 2, '08)
Economic
woes take US center stage
A major new survey finds that oil prices and other economic issues are edging
out foreign policy concerns on the US public's worry list. Seventy percent of
respondents say they worry "a lot" about soaring energy costs, and the survey's
aptly named "Anxiety Indicator" shows that 84% worry about the way things are
going for the US. - Jim Lobe (May 1, '08)
The twilight of irredeemable
debt
Debts used to be considered obligations and issuance of irredeemable debt a
crude form of fraud, facts ignored by courts and academics alike. But banks
will eventually learn there is no way to rid the system of poisonous bad debt
by creating more. - Antal E Fekete (May 1, '08)
COMMENT
Sanctions and rights -
the odd couple
The use of trade sanctions to promote human rights is inconsistent - imposed on
Cuba, not on China - and their value unproven. It is not known if enhanced
protection boosts trade, or if increased trade leads governments to improve
human rights. Yet the dearth of information has not stopped policymakers from
wedding the two. (May 1, '08)
Fed may want inflation
US Federal Reserve chairman Ben Bernanke continues to cut interest rates, even
as concerns grow at home and abroad at rising prices across swathes of the
global economy. Despite public pronouncements to the contrary, it is possible
the Fed chief sees more pros than cons for the US in the inflation he risks
stoking. - Axel Merk (May 1, '08)
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