The global free trade/floating fiat currency system has led to immense trade imbalances as countries strive hard as hell to weaken their currencies vis a vis stronger trade partners in order to flood them with exports and as more and more nations do this same dumb thing, as more and more learn from each other’s tactics how to do these things, instability increases, not decreases. Instability is great for making money, stable systems have little risk whereas unstable systems have greater risk-generated profits. So, the very rich want to be literally infinitely richer via increasing global economic instability.
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This is why the stock markets of many nations are unstable these days. Greatest profits are made when markets ‘yo-yo’. Steadily upwards is not enough but is sufficient if it is a ‘hockey stick’ upwards curve, of course, which is why the very rich want to have these incessant bubbles. Each bubble is a great opportunity to flood a market and then dump a market. They hope endlessly from bubble to bubble and indeed, the excess finances available to the richest investors is now so immense, it creates endless bubbles, ipso facto.
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We see this in gold, for example: the very rich have so destabilized not only economic systems but also, entire governments due to demands for more tax cuts and thus, causing vast pools of debt to emerge even in the so-called ‘richest countries’ especially the US and Japan which, together, owes more than all other world debts combined. So, this trillion+ pool of funny money created by the restless actions of the rich who are not taxed, floods into one area and then another, over and over again.
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These many bubbles keep welling up and then popping and central banks try to fix this but instead, are actually creating this monster via ZIRP lending. These restless market actions are causing global inflation and the ZIRP lending to the inflators who are doing this in the first place is causing market instability, not fixing what is broken. And again, what is badly broken in trade. It cannot continue this lopsided fashion whereby the US sucks down the majority of global export trade!
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Naturally, instead of making it better, everyone is trying desperately to expand free trade’s activities and this means, increasing Asia’s access to US ports and markets: Panama Expands Canal to Increase Shipping Capacity – NYTimes.com
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It is hardly the biggest infrastructure project in the world, “but this is the one that has the most foreign impact,” said Jorge L. Quijano, an executive vice president of the Panama Canal Authority, which has operated the canal since the United States handed it to Panama more than a decade ago. “And I think it is the one that has the most impact on the United States.”…(because) two-thirds of the goods that pass through the canal (will go to the US markets).
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Panama and the EU have worked hard to open this up which is funny since the Panamanians wish to charge Chinese and Japanese ships for transversing this corridor! The EU developers hope to somehow piggy-back the Asians by getting a fist full of trade dollars via charging them tolls. The US has long been selling off our own transportation assets to foreigners who then charge US to use our OWN facilities.
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This, in turn, makes us poorer and poorer and the pain is doubled by the fact that the very same people who are penetrating our markets and destroying our own internal economy are the same people buying our transportation systems and then charging us to use what we built in the first place.
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Panama doesn’t manufacture all that much compared to the EU or Asia. This shipping is all about getting fees from travelers and then using it to fund the government. China, on the other hand, has other ideas and this may throw a few billion dollar spanners in the works, that is, the expected fees taken from Chinese shippers won’t be going to the EU investors in the end! China To Fund Trans-Continental Railway That Will Rival Panama Canal
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“The studies [the Chinese] have made on the costs of transporting per ton, the cost of investment, they all work out, ” he said. “I don’t want to create exaggerated expectations, but it makes a lot of sense [… ] Asia is the new motor of the world economy.”
Although details of exacts costs are vague, the project’s supporters have pointed out that the rail link would not only be faster, but cheaper than maintaining the canal, which is currently undergoing a $5.25 billion expansion. The Chinese investment plan would also see the construction of a new city south of Cartagena, designed to assemble Chinese exports.
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So, it looks like the Chinese are using their now-extensive train technology to circumvent the attempts of others to piggy back on Chinese export trade via transit fees. This is richly ironic since Panama exists only and entirely thanks to the US literally invading the place and then engineering a coup to separate the isthmus from Columbia 100 years ago!
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China now has sufficient political, economical and diplomatic power to prevent the US from having a coup in Columbia and thus, thwart China’s expansion there. This is true in Pakistan where the Chinese inroads are literally inroads as well as sea ports!
About the market chaos of this last week: The media is figuring out the obvious. Duh! Did computers give the market motion sickness? – Aug. 12, 2011
The majority of trading is done on large server farms based in New Jersey and elsewhere…High-frequency trading makes up 53% of all trading in U.S. stock markets, up from 21% in 2005, said Larry Tabb, president and CEO of market research firm Tabb Group. Other estimates put it even higher, at around 65%…Gary Wedbush, executive vice president and head of capital markets at Wedbush Securities, told Bloomberg News on Friday that more than 80% of the firm’s orders since Aug. 1 have come from high-frequency trading clients, at five times the typical volume.
Spaceballs – They’ve gone into plaid – YouTube
This clip says it all: as the guys flying Darth Helmet’s ship try to stop while in Ludicrous Speed. When they do stop, Darth Helmet flies through the air and crashes into the wall. Faster and faster runs the market and it makes tiny profits every day, using computers to ‘trade’ when all they are doing is passing the Old Maid card frantically back and forth between computers until suddenly, the entire ‘trade’ speed is ludicrous and then it crashes! Bang!
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Duh! This entire business has to be slowed down greatly. Not slightly but greatly. All the human slowness of the older system didn’t stop panics but it did stop MEANINGLESS panics. Whenever these computers doing over 60% of the trading screw up, the analysts try to pin the mess on this event or that event.
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This is false. This happens because the computers are too fast and getting faster and faster and they are not trading anything, they are simply churning the markets as fast as possible. This naturally leads to crashes when nothing is happening. Once it happens, this causes other systems that depend on the stock markets to suddenly fail even though there may be no reason for this to happen.
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The gnomes know this but they get rich doing this so when there is a choice between being safe and being reckless, they always vote for more reckless, faster reckless, endless recklessness. Pretending to want to stop this moves various politicians to denounce computer trading as we see in England, the other headquarters for insane computer trading: Lord Myners calls for inquiry on ‘black box’ trading – Telegraph
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London, has been blamed for exacerbating intra-day swings and putting ordinary investors at a disadvantage due to the speed with which such trades are placed in the market.
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Lord Myners, the former fund manager, also called for European banks, which have been at the centre of the storm, to be more honest to investors and increase levels of disclosure of the sovereign debt they are holding…“High-frequency trading appears so detached from the true function of capital markets, but is potentially fraught with hazard. It definitely deserves more attention than either the FSA or the Treasury has given it.”
And look at this: Funds Slash Commodity Bets by Most in 18 Months except in gold markets that suck up everyone who is scared to death that all of this ‘wealth’ will vanish in a puff of smoke.
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And here is something the rich will never allow: France and Germany plan joint taxation – FT.com
France and Germany are to adopt a common corporate tax system by 2013, in an effort to signal greater co-ordination of economic policy after confidence in the euro was buffeted by the sovereign debt crisis…The French and German leaders poured cold water on the idea of common eurozone bond issuance as a definitive solution to the debt crisis. “One day, perhaps,” Mr Sarkozy said. “But at the end of a process of European integration, not at the beginning”.
Naturally, analysts try to pin the tail on the donkey by claiming the decline in markets the other day was due to this news and perhaps it is true, in a noxious way. That is, the last thing these guys want is for France and Germany to impose business taxes on all of Europe! US Stocks Drop As Investors Disappointed By Merkel, Sarkozy – WSJ.com
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“The lack of information on a eurobond is putting pressure on the market,” said Jonathan Corpina, senior managing partner with Meridian Equity Partners. “But this may be a knee-jerk reaction. Investors are trying to figure out how to position themselves after last week’s volatility.”
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German politicians assured the voters there that the euro would not lead to a EU bond that Germany would have to guarantee (Germany has significant assets to exploit! Like the US!). So they barely voted to support the creation of the euro and now are increasingly angry about how this is naturally driving them into supporting the debts of foreigners. They hate this and this may lead to significant trouble in the near future. This is why more and more people are betting against the European Union continuing much longer.
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Most confederations collapse over the issue of public debts versus being separate ‘nations.’ The Confederates defeated themselves in the Civil War due to being unable to tax each other to support a government. The Confederate state politicians today want to ravage DC while paying as little in taxes to other, northern states which is why most Federal tax funds flow to Confederate states while the inverse isn’t true. This is an internal ‘giant sucking sound’ the Northeast US has endured for 75 years and it will happen to Germany, too.
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Strategic moves being made on the chessboard
China has lent Venezuela as much as $32 billion since 2008 to finance infrastructure and social development projects. The South American country, in turn, ships more than 200,000 barrels of oil a day to China to repay the loan. The government is in talks with both Brazil and Russia for new multibillion-dollar loans, Chavez said on Aug. 11.
http://www.bloomberg.com/news/2011-08-16/venezuela-may-move-reserves-from-u-s-to-allied-countries-says-lawmaker.html
Carter ‘returned’ the Canal to Panama….with that ‘anything goes’…
as in the USSR was able to move nukes thru it.
Elaine:
‘ The US has long been selling off our own transportation assets to foreigners who then charge US to use our OWN facilities.’
can you give more info?
Toledo, Idaho etc?
90404, check out:
http://jonesreport.com/articles/150706_foreign_buying_roads.html
Stupid government officials should listen to Ellen Brown and start their own state banks (using their many assets as capital), instead of selling off the people’s assets to fund their bloated, inefficient government services.
Eman..THANKS
did the Chinese buy 50 miles of Idaho?
And have the commons of Chicago been sold [ no street fairs etc]?
‘state banks’..Is that like Solari.com type thinking?
I still don’t understand why the Chinese want to send goods to us. How do they think we will pay for them?
When I traveled from Cleveland, Ohio to Chicago, I noticed toll booths had been set up on all the interstate highways right up to the bridge crossing over to Chicago. I was flabbergasted by this. These highways were federal projects that were paid for and finished. How can a state set up tolls on federal roads? That is not allowed here in Kentucky, and when a state highway bond is paid off, the toll booths are removed.
Are Ohio and Indiana trying to make money off of things we already paid for, or did we sell these highways to the Chinese and Arabs? Either way, it is highway robbery and was angry about it.
In the South and West, the highways were built with money from the East and North. But here in the NE and other places, the ‘highways’ are actually state-owned and thus, can be sold. In NY, we pay to use our ‘highways’ with tolls all over the place! People out West and in the South are spoiled in this regard.
Devaul…I remember in the 1950s?
tollroads in NYS…the ‘Thruway’ they called it.
If you are right maybe contact Alex Jones and C2C radio, George Noori.
90404, not sure about Chicago selling the commons. I’m pretty sure you can still have street fairs and such here. But there is a lot of corruption here. This recent story comes to mind:
http://articles.chicagotribune.com/2011-08-06/news/ct-edit-lolla-20110806_1_parkways-foundation-lollapalooza-mark-vanecko
State banks as in banks run by the state for THE BENEFIT OF THE PEOPLE, such as the one in North Dakota.
http://publicbanking.wordpress.com/
Maybe I was not clear enough. I have no problem with toll booths on state roads and highways, as these need to be paid by those who use them.
My problem, which I encountered in the North for the first time ever about 2 years ago, was that Interstate Highways (ex. I-80), which are paid for by the federal government after collecting taxes from everyone, suddenly had toll booths on them. What right does Indiana or Ohio have to set up toll booths on federal interstate highways like I-80 or whatever? They are making a profit off of something that was paid for jointly by every state, and that is wrong. I was shocked at the first toll stop. The trip from Cleveland to Chicago cost me somewhere between 20 and 40 dollars.
Here in Kentucky, when the Mountain Parkway bond was finally paid off, the toll booths came down. I remember it because I had traveled that road hundreds of times and it was a big deal that the road was finally paid for. Kentucky does not put toll booths on federal highways, but maybe the state government will get desperate and try it. That will definitely cause a public outcry here.
As Elaine points out, I am sure our interstate highways were subsidized by taxes paid by richer states, but we don’t take them and then rob everyone who travels on them, and Kentucky is at the center two main interstate highways systems (I-75: Ohio to Florida; I-64: east to west).
Elaine — The timing on the US (finally) pushing back on Panama to control Chinese encroachment on the canal traffic/trade is quite interesting. Maybe payback for the latest Panama/US trade agreement.
China, through Hutchison Whampao (a hong kong based co) has been de facto controlling the canal for a long while. The Panama Canal authority contracted Hutchison Whampao to operate the canal decades ago! (Without a peep from the US at the time) But since then, you are so right china has moved in to Latin America in spades with Panama as a nice base. Panama is filled to the brim with Chinese business and trade activity and USA has moved out (govt that is, American investors are still there developing ghost town real estate developments on former US military bases)
Additionally Panama has not been charging China ships passage at fair rates — and the US is MAD and now complaining that this is a violation of the Canal treaty agreement. Maybe that’s why China is now looking to build alternative ship cargo transport systems there. Tis a Sign that things are really heating up between US and China.
Chicago has sold sidewalk rights to financial investors to install parking meters. Greece has been ordered to sell $50 billion in land and other national assets to pay off unsustainable debts. Ireland has already gone broke trying to pay off the bankers. Economies all over the world are being turned into privatized “tollbooth economies” to pay infinite, hockey-sticked “public” debts that the real economy could never sustain.
Paulson, Summers, Bernanke, Geithner et al insisted that banks and bondholders be made whole during the financial meltdown, “or we won’t have an economy.”
Well, we don’t have an economy, and that’s because bankers and bondholders have co-opted it.
Somebody has to lose when loans go bad, and in this case it’s taxpayers. Bad loans were sucked onto the governments’ balance sheet, just so that bondholders and big creditors wouldn’t lose. Now the debt is higher than the collateral assets are worth. Having spent enormous sums to make sure that bankers and bondholders don’t lose a penny, governments are now trying to balance budgets by choking off spending throughout the “real” economy — while steering tax policy to benefit the financial sector.
Meanwhile, consumers get hammered, as the country sinks into depression. QE2 dumped $600 billion into circulation, which quickly left the country to finance currency games, bond arbitrage and stock market pump-and-dumps. At home, inflation rages and a devalued currency has effectively devalued the price of labor. It is insanity to believe that reducing the price of American labor will somehow make the economy more “competitive” and lead to growth through exports (with trade partners who can’t — won’t — buy our goods). In the meantime, waiting for this economic miracle to happen, Obama and the Baggers want to bring the deficit down by cutting back revenue-sharing to the states, Social Security, Medicare, Medicaid and other social spending – which transfers even more wealth and income to the top of the economic pyramid. Instead of trying to get the budget back in balance by ending Bush tax cuts and re-introducing progressive taxation, Obama, gutless Dems and thuggish Repugs are using tax revenues to help re-inflate the financial sector.
Cutbacks in federal spending mean that the states can’t cover their own budgets – and their constitutions prevent many from running deficits. So governments at the local level will have to sell of land, roads, streets, infrastructure and whatever is in the public domain so they can bring in credit. These assets themselves will be sold on credit, to buyers who expense their profits as tax-deductible interest. Now user fees from putting up sidewalk parking meters, tollbooths and other rent extraction facilities will all go to the financial sector — who demand low taxes or they will “take jobs” and go elsewhere.
Eventually though, there will be no place for them to go, and ownership of everything will not protect them from angry public uprisings. Just ask Mubarek.
“tollbooth economies” Indeed