World trade is at the bottom of the well of misery of the financial system. This is why we can’t just ‘fix the banks’. We have to fix the entire way we interface with the rest of the world. And Haiti reminds us very much, what is at stake in all these debates. Haiti is an environmental disaster area and it very connected to out of control human reproduction. While international trade is all about out of control human manufacturing. But fixing all these things requires ideological changes which are very difficult to do.
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Glassmaking Thrives Offshore, but Is Declining in U.S. – NYTimes.com
The majestic steel beams of a soaring office tower beginning to rise from the ruins of the World Trade Center are a tribute to American resilience, but also a marker in the decline of yet another industry. Not an inch of imported glass went into the two lost towers, built 40 years ago. The lower floors of the new one will soon be sheathed in Chinese glass.
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The decline of glassmaking in America started gradually in the 1990s and accelerated during the Great Recession. What’s more, the big companies, like Corning and Guardian Industries, say that even as the economy improves, they are unlikely to bring domestic employment and production back to prerecession levels. Imports, for one thing, inhibit sales. And bigger profits lie abroad, so they are channeling investment and expansion to their overseas factories….
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…“We definitely need to put tariffs on some of the glass coming from China,” said Tim Tuttle, chairman of the glass industry department of the United Steelworkers. Overall industry employment has declined 30 percent over the last nine years, to fewer than 95,000 workers, 15,000 of them unionized.
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The Obama administration shies away from identifying specific industries, like tires, steel and now glass, for special protection from imports. “The president wants to help create the economic conditions such that broad new industries can evolve consistent with his priorities, particularly in the area of clean energy,” said Jared Bernstein, chief economist to the vice president.
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Doing suicidal things is human nature. We have an amazing ability to ignore incoming information in favor of ideological beliefs. This is why logic and science struggle at the best of times to penetrate the mental and emotional fog of human thinking systems. For example, the global warming debate shows clearly how useful information can get set into a rock solid wall of illogical thinking so that all debate shuts down. I harp on this because I find it very fascinating, watching scientists even, refusing to think things all the way to the end. That is, ignoring the obvious fearful truth that we should fear an ice age much more than global warming.
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The intersection between economic ideology and environmental science is most amazing. To clean up the environment, for example, means either eliminating most humans or reducing humans to live like stone age cultures. That is, in the long run, the only real solution. Or, go into outer space. For example, many years ago, I tried enlisting the abundant energies of the environmentalist movement into the concept of moving most manufacturing into the L-5 orbit which is a stable orbit where it takes little energy to bring in extraterrestrial raw materials and is easy to ‘drop’ into our gravitational pool.
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But that was sidetracked early on by a desire to make a ‘Garden of Eden’ in the L-5 orbits rather than moving the dreadful ‘satanic mills’ into space. Of course, people wanted to have a fantasy alternative universe of bucolic animal pleasures but this backwards view of the L-5 systems basically killed the ideological push to remove dirty industries from our planet’s surface. Now we have a major political movement afoot that aims to simultaneously fix ‘poverty’ while at the same time, must cut down on CO2 production which goes into the automobile culture created by mainly the US.
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The US has become increasingly ‘bucolic’ via moving nearly all major industrial production to other counties and then complaining about how unbucolic China or Mexico is compared to the US. Well, of course! The earliest industrial revolution sites in England and New England quickly took on ‘satanic’ characteristics just as all mining operations turn landscapes into lunar landscapes which is why I very much support mining the asteroids and the moon rather than our bucolic earth. Other industrial powers are very much aware of the L-5/lunar/asteroid mining possibilities and are seeking ways of bringing this about. This, in turn, requires lots of investment in space technology and this is where the ‘environmentalists’ pull the plug in the US: they don’t want this at all. They want a fantasy world which I fear, would very much end up looking like Haiti without anyone helicoptering in any aid.
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The CO2 footprint of the Haiti rescue illustrates clearly the contradictions in the environmentalist movement: they heartily endorse expending vast seas of fossil fuels to fly or ship in aid to that beleaguered environmental disaster area. And at the same time, bemoan anyone using fossil fuels too much. This sort of ‘have your cake and eat it too’ thinking is epidemic in human societies. We all want to ignore ‘Horns of Dilemma’ and have everything end up a happy ending via magical Deus ex machina operations. To have someone or something helicopter in and save us is a fun idea and totally unrealistic.
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Back to the glass industry: my father was very involved with both the German and US glass manufacturers because of their research and cooperation with the AURA (the astronomy research organization built up after WWII) in manufacturing all sorts of telescope mirrors and spy lenses for the CIA. And I traveled with him to various factories in the US and Germany and got to see the production systems up close. A fascinating business. The two earliest businesses launched by the Continental Congress and with the greatest urging of Washington, Jefferson, Franklin and other revolutionaries was the glass and the gun manufacturing businesses.
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They totally understood the urgent need to have these two particular industries in the US and owned by Americans. And now, this is all being thrown away with both hands because we want to get things cheap. And the saddest part of this NYT article about the total decimation of our glass industries is the part where Obama is reluctant to even put specific tariffs on vital, key industries! I say, the discussion MUST be how we MUST have universal tariffs and many barriers! Or we become Haiti!
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Yen Carry Trade’s Appeal Shows Japan Is Losing Mojo (Update2) – Bloomberg.com
Forecasts for the euro, yen and Swiss franc from 61 Bloomberg survey contributors are within 9 cents of the mean on average, down from 11 cents a year ago. They haven’t been so unified since Lehman Brothers Holdings Inc.’s 2008 bankruptcy. The predictions’ so-called standard deviation fell 16 percent last quarter, the biggest drop in at least two years, after jumping 48 percent in the three months after Lehman’s demise.
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The growing consensus signals that foreign-exchange swings will decline, luring investors to sell currencies from countries with lower interest rates to buy higher-yielding ones. That may weaken the yen and franc, and rein in the resurgent dollar. Japan’s currency, which fell 6.6 percent since its 14-year high of 84.83 per dollar on Nov. 27, may be the biggest loser as Prime Minister Yukio Hatoyama fights deflation and a recession.
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ARRGH….I tear my hair out! Japan WINS if the yen weakens! Japan HATES a strong yen. Japan was ripping its own throat out due to a too-strong yen. Japan’s exporters want a 120 yen to the dollar. They said so two years ago! Duh.
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Declining volatility and the rising U.S. currency means “people are thinking about alternatives to the dollar as a funding vehicle, and the yen is the obvious candidate,” said Richard Franulovich, a strategist in New York at Westpac Banking Corp., Australia’s second biggest bank. “Not only do they already have low rates, the authorities are talking about a new quantitative-easing program. There’s a big fiscal expansion playing out under the new government, and the currency had a big rally last year.”
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This last paragraph clearly shows that the Japanese carry trade will soon resume. It shifted to the US for one year thanks to us going ZIRP but Japan is more than ZIRP: it is now in Minus ZIRP even if this means a 300% debt to GDP system. This is the antipode cyclonic money flow system that always wants to run the opposite of the US. Now, with China overtaking the US as Japan’s biggest trade partner, this antipode cyclonic system is disarranged. The Japanese long for that status quo of the US/Japan tremendously unbalanced trade in Japan’s favor.
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‘Massively’ Cheap Mexican Peso Wins Over Aberdeen (Update3) – Bloomberg.com
The Mexican currency is forecast to at least double last year’s 4 percent gain after exports rose to a 13-month high and industrial output fell the least since July 2008. The U.S, which buys 80 percent of Mexican overseas sales, will post 2.7 percent economic growth this year, double the pace of the 16-nation euro area and Japan, forecasts compiled by Bloomberg show.
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As the US lies on the floor like a drunken giant, all our trade partners are rapidly destroying our native industries. Since Mexico has been the very first to get NAFTA rights to suck out all our jobs (Perot: ‘Giant sucking sound’ was spot on, alas) it is the deepest involved in the process of eating up US industrial and other jobs. We buy 80% of what Mexico exports…and this is going UP! Good gods. And double the pace that Japan and Europe are seeing, and all of this is thanks to a weak currency. The Japanese are furious that Mexico is doing what they want desperately to do: make the currency weak vis a vis the US dollar.
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As we can see, Japan is in very serious trouble. And is looking for one solution: export to the US. They have a huge market in China but this has a lower PROFIT margin compared to the US. Thus, the desire to milk the US consumer cows like they did last summer when the majority of the US clunker program subsidized Japanese export rivals.
China Narrows Technology Gap With US | Benzinga.com
“At 1.47 million, the number of researchers in the United States is still the highest of all the regions surveyed, but the overall growth from 1995 to 2008 was 3%. The growth in number of researchers in China over the same period was 8.7%, with 1.42 million today, and no signs of slowing,” said Rolf Lehming, director of NSF’s Science & Engineering Indicators (S&EI) Program.
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“The time that we had a monopoly on talent, if there ever was such a time, is behind us,” Lehming added.
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The U.S. accounted for nearly a third of $1.1 trillion spent on research and development globally in 2007, minted more science and engineering doctorates than any other country, and led the world in innovative activity. Efforts by China and other developing Asian countries to boost their science and engineering capabilities are bearing fruit, however, and the gap between them and the U.S., though still wide, is narrowing.
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China already rendered the tech gap a moot point since many of the degrees granted in the US are to Chinese citizens. Many of whom come here on government support systems and return to China or work in the West but on China’s behalf. So boasting that we have this system is stupid if all our educational systems are doing is training trade rivals so they can hammer us even more.
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Editorial – After Dubai – NYTimes.com
These strains could have deep and lasting repercussions. A breakdown of the euro would be disastrous — sending a potent shock through already jittery financial markets — deepening and extending this worldwide recession. Some observers worry about the secularly tolerant Dubai being driven into the arms of the much more conservative Abu Dhabi. And the world economy is too fragile to withstand another round of careening markets.
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We understand that voters in the rich, industrial world might be feeling deep bailout fatigue. Still, bailouts will be necessary. To begin with, the more powerful countries of the European Union — like Germany — must come to the rescue of their weaker neighbors. But other countries, including the United States and China, must stand ready to provide help. It might be expensive. But it would be cheaper than another round of crisis.
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The NYT comment section shows clearly, when we look at reader’s comments, that virtually no one likes this editorial and nearly all hate it for the same reasons: everyone notes that the US is not ‘rich’ at all but a debtor nation. Many mention our debts to China (while ignoring Japan, of course) and many point out that the US won’t bail out our very own states while the Times wants us to bail out foreign powers who are our trade rivals! And a few perceptive readers point out the obvious fact that these entities are rivals and we have to bail ourselves out. Our own ship is sinking, rapidly!
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Of course, one of the biggest ‘free trade’ pushers are the NYT street punks. No one who is anti-free trade is allowed any editorial space at all. Krugman, the beloved icon of stupidity for liberals, never, ever talks about the trade deficit. And Friedman celebrates the destruction of our sovereign economy. Not one reporter dares cover the trade issues in a sane way. Even when there is an article about the death of our glass industries….this was the very first industry founded in our revolution because Britain wouldn’t allow us to make any glass!…doesn’t talk about the role free trade and all our goofy WTO treaties have done to us. No, it is this industry or that business that might be saved, perhaps, some day.
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Well, ‘some day’ passed 35 years ago. We had only one year with a trade surplus since then and that was due to two things: a global recession and Bush selling our soldiers to Kuwait. This mercenary sale of our precious sons and daughters, sending them to die for autocrats in a distant land, was disgusting and is not going to happen again since even the Kuwaitis know they no longer have to pay us to die in their battles. Speaking of which, the stupid surge into Afghanistan isn’t working so hot. The Taliban were so bold as to have an open attack on Kabul this week and every day, NATO and US fighters die as they are picked off by snipers and bombers.
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And Iraq is collapsing into chaos. Iran is having an internal struggle for power and if they can keep foreigners out of their own affairs, they will eventually settle this by becoming more liberal. And compared to Saudi Arabia and Kuwait, they are much more liberal already! Not that the US cares much.
Seems to me, our economy is unsustainably juiced and headed for rough spots in three distinct ways:
1) good old fashioned overspending, credit binging, and money printing
2) selling off our industries via “free trade” to be temporarily richer from the proceeds and get more credit
3) depending on front side hubbert curve energy increases to monopolize money supply increases via worldwide credit expansion
It will be worse if we have to contend with the collapse of all three of these at the same time. What we don’t want is to hit peak oil right as we run out of industries to ship overseas at the same time as when we can’t sell one more T-bill.
Ambrose Evans-Pritchard
“Japan’s Bernholz index will rise above 50pc this year for the first time, meaning that it will have to borrow more from the bond markets than raises in tax revenue. You see the problem.”
Japan is in Unchartered Waters:
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100002951/a-global-fiasco-is-brewing-in-japan/
There is a saying in Germany that you can hear the bell, but you can’t make out the steeple. You are always stuck on some antiquated notion of manufacturing leading our industrial policy. Maybe forty years ago it was important to stanch inflation when money printing was under control. Financial services want no trade barriers so that they can grow over the whole world. This is the industry that is dictating trade policy to manufacturing. While you seem to recognize that England wants to prosper by export of financial innovation, you do not see that the USA is lead by the same industry and hence flows all of its trade policy. Our trade is not controlled by manufacturing but by banking.
personally i think the output of our international politics is D+ at best… we are engaged in to many wars with unstable POOR countries… but the future decides what will pass based on present reality
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so what we have is a empire instead of a robust constitutional republic… we would possibly have a better road on the former if you would believe our founders vision
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yet in the era of empire can you afford to ‘melt away’ the security apparatus of the true nation state…. id think it would be a mess and ruin some perfectly good omni directional alliances
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there is much good will in this world…. so unfortunately we will probably be fighting other peoples wars… LIKE ISRAEL as the corporate multinationals get bot and sold like politicians to the will of at best a D+ global leadership
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and china does see much opportunity in our excess waste
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http://video.google.com/videoplay?docid=-181259944046452879&q=iluminati&total=111&start=0&num=10&so=0&type=search&plindex=4
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Europe is gravy
”some antiquated notion of manufacturing leading our industrial policy.”
seems to work for your rivals.
Mervin King wants
to merge G20 and IMF.
That would diminish
US influence to rising
G20 power?
http://www.telegraph.co.uk/finance/economics/7029818/Bank-of-England-Governor-Mervyn-King-calls-for-merger-of-G20-and-IMF.html
Free Trade is quickly becoming an anachronism. Not even the insolent ignoramuses running the global Ponzi scheme can do anything about it.
Watch Rubin explain it, he validates everything Micheal Ruppert said in his Collapse video.
“…“We definitely need to put tariffs on some of the glass coming from China,” said Tim Tuttle, chairman of the glass industry department of the United Steelworkers.”
And other countries definitely need to put tariffs on products coming from the United States.
“I tried enlisting the abundant energies of the environmentalist movement into the concept of moving most manufacturing into the L-5 orbit…”
That ended up with lots of other dreams of the 60s and 70s, like the personal hovercraft I was supposed to be driving by 1985.
Other countries use more insidious ways to keep trade unbalanced with the US. Since we run deficits with EVERYONE a collapse in free trade helps us in the long run. Short run, too.
If other countries are using various means to subsidize their export industries to create a favorable advantage – Is it not just as reasonable for the US to subsidize it’s financial industry, which is it’s major exporter of paper assets?
If I were in charge of designing the building, I’d start by finding out what materials were available that were still made in USA, and then just use those. No glass sheathing made in USA any more? Then don’t sheath the building with glass!
This is pretty much how I go about managing my own affairs. I go to a lot of trouble to try to source made in USA stuff, often buying used on ebay where there is no new USA-made stuff. I am not doing this just out of the goodness of my heart. I know that the people in charge in Washington are looking after the interests of the people that have paid them off rather than looking after the national interest. Thus, we the people are going to have to take the initiative to look after the national interest ourselves, without waiting for direction or help from Washington.
@Joseppi, “Is it not just as reasonable for the US to subsidize it’s financial industry, which is it’s major exporter of paper assets?”
How about we export some paper asset-holes?
Rubin tops my list.
Rocky is next, or maybe Geithner, or both.
Maybe export a piece at a time.
@PLO:
It is difficult to export crap that no one wants under at any price. Trying to find a bigger fool to take a Rubin or a Geithener or even parts of them is a waste of resources.
Buying overpriced labels is a mug’s game.
The USA is a label, a mostly hollow and failing state.
“While international trade is all about out of control human manufacturing.”
I am glad you finally mentioned this. The economic model of dumping a flood of cheap goods on other countries is a disaster for the environment no matter how you do it. Since we blew the option of using oil and natural gas to build a space flight program, our only real option left (and Nature will force it on us) is to revert to a pre-industrial state of living.
I suppose that if we discover dilythium crystals somewhere on earth, we can try again, but I doubt it. Sometimes you only get one shot at something, and that’s just the way it is.
The Laws of Nature are neither good nor bad, they just are.
Yes, dilythium crystals! I also want to time travel….
International trade continues to manufacture toxic products, despite the fact that poisonous real goods and Ponzi paper assets are the popular items exported – How can this obvious world criminal activity continue?
Human desire is the engine that keeps the folly in motion. Human desire is limitless, and has the amazing ability to ignore the imbalances and the facts.