Monday, February 28, 2011

Obama's printing of billions of new dollars likely to create an even bigger world financial crisis

Comment from an Australian expert below

Reserve Bank board member Warwick McKibbin has warned that Australia is being caught up in a global bubble that could hit us much harder than the global financial crisis and expose the weaknesses of Labor's economic settings.

Professor McKibbin told The Australian the bubble in global commodity prices and property markets in Asia threatened to dwarf the US housing market bubble that led to the GFC in 2008. He warned that the inevitable bursting of the bubble would reverse the surge in Australia's record high terms of trade, push down the dollar and leave the Reserve Bank struggling to fight off rising global inflation pressures.

"This is shaping to be much bigger than 2004 to 2007," he said in comparing the new excess of global liquidity with the global financial bubble that led to the worst global financial crisis since the 1930s. "This cycle is even bigger."

Professor McKibbin suggested the surge in global liquidity fuelled by US monetary expansion had echoes of the early 1970s surge in food, mining and energy prices that led to global "stagflation", or the combination of high inflation and high unemployment.

An internationally renowned macroeconomist at the Australian National University, Professor McKibbin has been a Reserve Bank board member since 2001. He is not expected to be reappointed by Wayne Swan when his second term ends in July following his criticisms of Labor's budget stimulus spending and now its flood levy.

His analysis suggests much of the surge in mining, energy and food prices is being driven by the near zero official interest rates and so-called quantitative easing of credit conditions in the US and Europe in the wake of the GFC.

The Reserve Bank's commodity price index has jumped 49 per cent in the past year that includes a recent 9 per cent jump driven by a surge in food prices.

Reserve Bank governor Glenn Stevens last week noted strong demand from China and India had fuelled the surge in Australia's terms of trade -- the ratio of the prices we get for exports compared to the prices we pay for imports -- to their highest sustained level for at least 140 years. This was producing the biggest mining development boom in a century.

But Professor McKibbin suggested that perhaps 40 per cent of this terms of trade surge was being driven by US and European monetary expansion, which is feeding generalised inflation pressures. "That is why inflation is taking off all over the world," he told The Australian.

"It is already out of the bag. As interest rates go up, a whole bunch of assets and balance sheets will get crunched, so I am not optimistic."



Safety alert forces removal of fuel from Iran reactor

In a significant setback to Iran's nuclear program, technicians will have to unload fuel from the country's first atomic power plant because of an unspecified safety concern, a senior government officer said.

The vague explanation has raised questions about whether the mysterious computer worm known as Stuxnet might have caused more disruption at the Bushehr plant than previously acknowledged. However other explanations are possible for unloading fuel rods from the core of the newly completed reactor, including routine technical difficulties.

While the exact cause of the fuel removal is unclear, the admission is seen as an embarrassment for Tehran because it had touted Bushehr - Iran's first atomic power plant - as its showcase nuclear facility and a source of national pride. When Iran began loading the fuel just four months ago, national officials celebrated the achievement.

Iran's envoy to the United Nations nuclear monitoring agency in Vienna said that Russia, which provided the fuel and helped construct the Bushehr plant, had demanded the fuel be taken out.

"Upon a demand from Russia … fuel assemblies from the core of the reactor will be unloaded for a period of time to carry out tests and take technical measurements," the semi-official IRNA news agency quoted Ali Asghar Soltanieh as saying. "After the tests are conducted, [the fuel] will be placed in the core of the reactor once again.

"Iran always gives priority to the safety of the plant based on highest global standards," Mr Soltanieh added.

He and other officials have denied any link to the Stuxnet computer virus.



There's suddenly more to the Middle East than Israel

They all warned us. The geniuses at Peace Now. The brilliant diplomats. The think tanks. Even the Arab dictators warned us. For decades now, they have been warning us that if you want "peace in the Middle East," just fix the Palestinian problem. A recent variation on this theme has been: Just get the Jews in the West Bank and East Jerusalem to "freeze" their construction, and then, finally, Palestinian leaders might come to the table and peace might break out.

And what would happen if peace would break out between Jews and Palestinians? Would all those furious Arabs now demonstrating on the streets of Cairo and across the Middle East feel any better? Would they feel less oppressed?

What bloody nonsense.

Has there ever been a greater abuse of the English language in international diplomacy than calling the Israeli-Palestinian conflict the "Middle East peace process?" As if there were only two countries in the Middle East.

Even if you absolutely believe in the imperative of creating a Palestinian state, you can't tell me that the single-minded and global obsession with the Israeli-Palestinian conflict at the expense of the enormous ills in the rest of the Middle East hasn't been idiotic, if not criminally negligent.

While tens of millions of Arabs have been suffering for decades from brutal oppression, while gays have been tortured and writers jailed and women humiliated and dissidents killed, the world -- yes, the world -- has obsessed with the Israeli-Palestinian conflict.

As if Palestinians -- the same coddled victims on whom the world has spent billions and who have rejected one peace offer after another -- were the only victims in the Middle East.

As if the Israeli-Palestinian conflict has anything to do with the 1,000-year-old bloody conflict between Sunni and Shiite Muslims, or the desire of brutal Arab dictators to stay in power, or the desire of Islamist radicals to bring back the Caliphate, or the economic despair of millions, or simply the absence of free speech or basic human right throughout the Arab world.

While self-righteous Israel bashers have scrutinized every flaw in Israel's democracy -- some waxing hysterical that the Jewish democratic experiment in the world's nastiest neighborhood has turned into an embarrassment -- they kept their big mouths shut about the oppression of millions of Arabs throughout the Middle East.

They cried foul if Israeli Arabs -- who have infinitely more rights and freedoms than any Arabs in the Middle East -- had their rights compromised in any way. But if a poet was jailed in Jordan or a gay man was tortured in Egypt or a woman was stoned in Syria, all we heard was screaming silence.

Think of the ridiculous amount of media ink and diplomatic attention that has been poured onto the Israel-Palestinian conflict over the years, while much of the Arab world was suffering and smoldering, and tell me this is not criminal negligence. Do you ever recall seeing a U.N. resolution or an international conference in support of Middle Eastern Arabs not named Palestinians?

Of course, now that the Arab volcano has finally erupted, all those chronic Israel bashers have suddenly discovered a new cause: Freedom for the poor oppressed Arabs of the Middle East!

Imagine if those Israel bashers, during all the years they put Israel under their critical and hypocritical microscope, had taken Israel's imperfect democratic experiment and said to the Arab world: Why don't you try to emulate the Jews?

Why don't you give equal rights to your women and gays, just like Israel does?

Why don't you give your people the same freedom of speech, freedom of religion and freedom to vote that Israel gives its people? And offer them the economic opportunities they would get in Israel? Why don't you treat your Jewish citizens the same way Israel treats its Arab citizens?

Why don't you study how Israel has struggled to balance religion with democracy -- a very difficult but not insurmountable task?

Why don't you teach your people that Jews are not the sons of dogs, but a noble, ancient people with a 3,000-year connection to the land of Israel.

Yes, imagine if Israel bashers had spent a fraction of their energy fighting the lies of Arab dictators and defending the rights of millions of oppressed Arabs. Imagine if President Obama had taken 1 percent of the time he has harped on Jewish settlements to defend the democratic rights of Egyptian Arabs -- which he is suddenly doing now that the volcano has erupted. Maybe it's just easier to beat up on a free and open society like Israel.

Well, now that the cesspool of human oppression in the Arab world has been opened for all to see, how bad is Israel's democracy looking? Don't you wish the Arab world had a modicum of Israel's civil society? And that it was as stable and reliable and free and open as Israel?

You can preach to me all you want about the great Jewish tradition of self-criticism -- which I believe in -- but right now, when I see poor Arab souls being killed for protesting on the street, and the looming threat that one Egyptian Pharaoh may be replaced by an even more oppressive one, I've never felt more proud of being a supporter of the Jewish state.




“Free” public radio is anything but: " As an example of how much begging public radio does, Wisconsin Public Radio — a network of 32 stations programmed by seven regional stations – reported that 13 percent of its total budget in 2009 was used for fundraising. Additionally, the network’s website reveals that 25 percent ($1.94 million) of the revenues garnered from listener and corporate donations ($6.25 million and $1.58 million, respectively) are directly allocated to fundraising. State taxpayers cover a big chunk of public radio’s bill through subsidies to state universities and colleges that house transmitters, offices, studios, and utilities. One publicly supported station in Michigan told me that this arrangement amounts to 12 percent ($405,159) of its annual budget. Wisconsin Public Radio has a similar 10 percent ($1.6 million) “indirect/in-kind” arrangement."

Public enemy No. 1: Government unions: "Wealth creators, big and small, pay government teachers. They, in turn, pay the unions, who turn around and agitate for raising taxes on their benefactors. This hapless taxpayer cannot withhold his coerced contribution, cannot leverage it to improve the product and, in general, has no real representation at the negotiating table."

Anti-Obamacare constitutional amendment: "So far twenty seven states have joined in the lawsuit against Obamacare. That is more than a majority, and most of the distance towards the thirty seven states that would be required to pass a constitutional amendment. The last time a constitutional amendment was almost passed by a convention of the states was the repeal of prohibition. In order to maintain the precedent of constitutional amendments being passed first in congress, the congress acted quickly to pass the amendment before the states would."

Crony capitalism again: "I’ve reported on a remarkable little window company, Serious Materials. Somehow, that little company got personal endorsements from both President Obama and Vice President Biden. ... of all the window companies in America, why does just that one get Presidential and Vice Presidential attention, plus a special tax credit? Maybe because Serious executives gave thousands of dollars to the Obama campaign? Maybe because the energy department official who gives out government grants, Cathy Zoi, is the wife of the Vice President of Policy of Serious Windows?"

Governor Walker’s Coolidge moment: "Targeting public unions is unwise, rash and retrograde. That's the take in some quarters on Republican Gov. Scott Walker's plan to curtail collective bargaining for public-sector unions in his state, Wisconsin. ... On, contributor Stephanie Taylor described Walker's effort to strip away long-standing public-sector bargaining rights as 'a step backward, not forward, in the march of American progress.' Such analysis has it backward. Walker's decision to reduce public-union powers isn't rash. It is overdue."

This Time, It's Different: "When the Los Angeles Times signs on to efforts to reform government-worker pensions -- in part by (gasp!) requiring workers to contribute more to their own retirement and raising the retirement age -- it's not just a surprise. It signals the rapid approach of fiscal armageddon. The linked op/ed actually does a good job at explaining why the current course is unsustainable, and for that reason alone, it's worth a read. Going forward, one of Republicans' most important challenges will be to explain to the American people why this crisis is real, and why it requires big changes."

That Ted Kennedy died peacefully in his bed is proof that there is no justice in this world: "The most entertaining documents relate to a trip Kennedy took to Latin America in 1961. He visited a number of countries, accompanied by his "political counselor." In each country, Kennedy met with prominent Communists or other left-wing leaders. The U.S. Ambassador to Mexico was outraged that Kennedy wanted to bring such people to the embassy--this was the heart of the Cold War, after all--and he refused, telling Kennedy to arrange his own interviews somewhere else. A State Department official in Peru described Teddy as "pompous and a spoiled brat." By the time he got to Chile, Kennedy apparently was tired of political work, so he "made arrangements to 'rent' a brothel for an entire night" in Santiago."

There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.


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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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