Dialectics of History

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Spiralman
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The End of Christian America

Post by Spiralman »

http://www.newsweek.com/id/192583/output/print
"The post-Christian narrative is radically different; it offers spirituality, however defined, without binding authority," he told me. "It is based on an understanding of history that presumes a less tolerant past and a more tolerant future, with the present as an important transitional step." The present, in this sense, is less about the death of God and more about the birth of many gods. The rising numbers of religiously unaffiliated Americans are people more apt to call themselves "spiritual" rather than "religious." (In the new NEWSWEEK Poll, 30 percent describe themselves this way, up from 24 percent in 2005.)
.......
In Texas, authorities have decided to side with science, not theology, in a dispute over the teaching of evolution. The terrible economic times have not led to an increase in church attendance. In Iowa last Friday, the state Supreme Court ruled against a ban on same-sex marriage, a defeat for religious conservatives.
[The rise of the Global South, with its multitude of zealous religious Reformations and Counter-Reformations as whole peoples are moving more rapidly than at any time in human history from rural to urban life, and a worldwide increase in personal freedom are being reflected in this tectonic shift of the pluralization of spirituality within America, the headquarters of Global Capitalism.]

Spiralman
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S&P 500 Can¹t See Enough Money to Feed Stocks¹ Rally ; Price

Post by Spiralman »

S&P 500 Can¹t See Enough Money to Feed Stocks¹ Rally ; Price-Earnings Ratio = 40

http://www.bloomberg.com/apps/news?pid= ... refer=home

[This explains the assumptions behind the sucker’s rally.]
Investors are depending on banks more than at any time in at least 60 years to lead the U.S. out of the longest earnings slump since the Great Depression.

American companies will end more than two years of declining income by the fourth quarter, according to analyst forecasts compiled by Bloomberg. Banks will be responsible for all of the 76 percent rebound in the final three months of the year, because without financial companies, the gain turns into a 4.5 percent decline, the data show.
........
Analysts overestimated bank profits for at least six consecutive quarters, data compiled by Bloomberg show. Earnings may not materialize this time either because of declines in commercial real-estate values, which have yet to fully reflect the economic slowdown, according to Arlington, Virginia-based Friedman Billings Ramsey Group Inc.
.....
The government’s plans to kick-start growth don’t guarantee a rebound in earnings and stock prices because consumer spending, which accounts for about 70 percent of the U.S. economy, will stagnate for years as Americans pay debts and businesses cut jobs, she said.

The unemployment rate may rise to 9.4 percent by year end, according to economists’ estimates compiled by Bloomberg, as companies from Detroit-based General Motors Corp. to Microsoft and DuPont fire workers to cope with plummeting demand.

A controlled bankruptcy by GM would squeeze production and may help eliminate about a third of the 3 million jobs in the auto industry, Joseph LaVorgna, the New York-based chief U.S. economist at Deutsche Bank, wrote in a report on March 30.
.......
Americans’ debts have remained near all-time highs even as they reduced spending, because people thrown out of work are depleting savings and tapping credit cards. U.S. household borrowing, which has ballooned almost 11-fold since 1980, equaled $13.8 trillion at the end of 2008, or 0.5 percent less than the record reached earlier in the year, according to data compiled by Bloomberg.
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Spiralman
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Persian Gulf Single Currency Is Latest Casualty of Crisis

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http://www.bloomberg.com/apps/news?pid= ... er=mideast
......
Gulf central bankers met today in Muscat, Oman to discuss plans to create a unified currency, a vision whose near-term prospects are in doubt as the oil-rich states draw up their own plans to deal with the impact of crude prices that have tumbled almost 70 percent from their highs. The six-nation Gulf Cooperation Council last month dropped its Jan. 1, 2010 deadline for a common currency.

“All attention is now focused on the global financial crisis,” said Eckart Woertz, an analyst with the Dubai-based Gulf Research Center. “It’s important to develop a greater degree of unity to go down the path of monetary union. Now it’s every man for himself.”
......
Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman agreed in 2001 to form a European Union-style monetary union by 2010 to boost regional trade. Oman pulled out in 2007.

Pressure to unify mounted last year as inflation accelerated above 10 percent in five of the six countries. All of the member states except Kuwait tend to follow the U.S. Federal Reserve when setting interest rates because of their dollar peg. This fueled price rises last year because of the need to match cuts in U.S. interest rates at a time when inflationary pressures were increasing.

On Dec. 30, the five Gulf Arab leaders confirmed an agreement to set up a single currency and agreed to establish a Monetary Council, a precursor to a central bank, by Dec. 12, 2009. That timetable has since been postponed.

With inflation now easing as commodity prices fall, the urgency to stop pegging the currencies to the dollar has subsided.
......
Woertz said the “earliest possible date” for the introduction of the single currency is 2012.

The root cause for the delays is an absence of political will, John Sfakianakis, chief economist at Saudi British Bank, said in a Bloomberg Television interview on April 1.

“The technical issues are not the ones creating the obstacles - it’s the politics,” he said.
......
By 2012, the world will also broadly be aware of the inevitability of the triumph of the solar revolution and that the days of oil are numbered.

This will throw many expectations of both oil consuming and oil producing nations into disarray.
Popular struggles against oil exporting governments (and their geopolitical patrons) will intensify as they are less able to provide for their people from their rentier state incomes. Conflicts among these countries’ ruling classes will intensify into civil wars and wars against neighbors.

US Dollar hegemony will start to shrink for countries who will through the solar revolution be lessening their dependence upon oil imports. This will be accelerated by these civil and geopolitical conflicts within and among oil producers, which will be fueling an overall sense of energy insecurity for the whole world.

No one can embargo the Sun, no one can choke off solar transport lanes, no one can blow up a solar refinery, no one can jack up the price of the sun, no one has a solar monopoly, no one can force solar consumers to pay for the sun in a particular currency by nuclear blackmailing and military occupation of solar providers to compel them to denominate solar power in their currency.

Spiralman
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Are Competitive Devaluations Starting? & Switzerland and Chi

Post by Spiralman »

Are Competitive Devaluations Starting? & Switzerland and China slide into deflation - Ambrose Evans-Pritchard

http://www.nakedcapitalism.com/2009/04/ ... rting.html
She quotes the whole article below, but there are interesting comments to read in both locations.

Swiss slide into deflation signals the next chapter of this global crisis
Watch Switzerland closely. It is tipping into deflation, the first Western country to succumb to Japan's disease.
http://www.telegraph.co.uk/finance/comm ... risis.html

Spiralman
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US Recovery Is Far Off, Banks 'Basically Insolvent': Soros

Post by Spiralman »

US Recovery Is Far Off, Banks Are 'Basically Insolvent': Soros

http://www.cnbc.com/id/30069223
.........
"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.
.........
The recovery will look like "an inverted square root sign," Soros said. "You hit bottom and you automatically rebound some, but then you don't come out of it in a V-shape recovery or anything like that. You settle down—step down."


[I suspect there could more than one ‘inverted square root’ step down until the principal countries establish state-driven, transnational command-economy blocs that enable successful fighting of the deflationary dynamic under conditions of global overproduction and competitive devaluations.]

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.......
What's more, the Treasury's Public-Private Investment Fund is going to work but it won't be enough to recapitalize the banks in a way that they are able to or willing to provide credit.

"What we have created now is a situation where the banks who will be able to earn their way out of a hole, but by doing that, they are going to weigh on the economy," he said. "Instead of stimulating the economy, they will draw the lifeblood, so to speak, of profits away from the real economy in order to keep themselves alive. This is the zombie bank situation."
.......
"I think the dollar is now under question and I think the system will need to be reformed, so that the United States will be subject to the same discipline as is imposed on other countries," said Soros, whose famous bet against the British pound earned his Quantum Fund $1 billion in 1992. "Being the main issuer of international currency, we have been exempt and we have abused that because we have effectively consumed 6.5 percent more than we have produced. That is now coming to an end."
......
China will be the first country to emerge from recession, probably this year, and will spearhead global growth in 2010, Soros said. [sounds too soon to me] He said world policymakers are "actually beginning to catch up" with the crisis and efforts to fix structural problems in the financial system.
.....
In Europe, he said the crisis provides an incentive for countries that use the euro to remain inside the monetary union, though countries on the periphery still face serious problems.

The euro has been "a tremendous advantage" to countries that use it, adding there's "no question of a weaker country dropping out," Soros said.

Spiralman
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It's 1930 time & A Tale of Two Depressions: Comparing the Gr

Post by Spiralman »

It¹s 1930 time & A Tale of Two Depressions: Comparing the Great Depression to now for the world, not just the US

A Tale of Two Depressions
Comparing the Great Depression to now for the world, not just the US

http://www.voxeu.org/index.php?q=node/3421

[This is a must read!
The world’s crisis this time is as bad or worse than the Great Depression.
This article is linked to by Krugman today, who is criticized in this for focusing only the US and not appreciating the global magnitude of the collapse.
http://krugman.blogs.nytimes.com/2009/0 ... 1930-time/ ]

Figure 1. World Industrial Output, Now vs Then
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Figure 2. World Stock Markets, Now vs Then
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Figure 3. The Volume of World Trade, Now vs Then
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Spiralman
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Neither Krugman Nor Bernanke Can Distinguish Excessive Print

Post by Spiralman »

Neither Krugman Nor Bernanke Can Distinguish Excessive Printing From Excessive Savings & The game of Pick-up Sticks, Mikado, Jackstraws or Spillikins

http://globaleconomicanalysis.blogspot. ... e-can.html

[
Mish mainly nails it, but since he is a free-market ideologue he assumes that private capital is inherently more productive than government-directed production.
In fact during conditions of chronic overproduction, it is impossible to get the private sector to make investments precisely because they have to return a profit on capital invested, whereas government does not, since it has the abilities to print money, collect taxes, and field armies
For this reason, state-capitalism, ie a Command Economy, of various flavors arose during the 1930’s in US, UK, Germany, Italy, Japan, and Russia.

Nonetheless, Mish does nail the bogus theory of “The Savings Glut” and how money accumulating in Japan and China or hedge funds is really just the result of prior overspending and over creation of credit, and crucially, - independent of his romanticism for private enterprise - that investments/stimulus that enhance actual productivity are superior to those that don’t.
He forgets to note that Japan and China cannot deploy that money locally without inflating their currencies to the point where their export-oriented models become uncompetitive with the countries that don’t spend their money locally.
In this Prisoners Dilemma, the exporting countries are trapped sticking their money into their customers’ accounts, just like a local bartender has to keep letting their Homer Simpsons run up a tab, in the hope that eventually they will get paid, and in the meantime leveraging that tab into getting credit from their suppliers and landlords to keep on shipping to them or letting them slide on the lease.

As a related sidenote:
You won’t believe how many times a day I hear people fantasize about the “enormous amounts money sitting on the sidelines.”
This is yet another form of the Savings Glut mythology.
In this case, all of these allegedly- loaded, potential investors are really holding inflated assets, whether paper or physical, so their ‘enormous amounts of money” is just as mythologically useful as China’s holdings of US Treasuries.
If these “loaded investors” actually ever systematically unloaded their stocks, bonds and real estate so that they could make these allegedly huge new investments it would tank the value of everything else, including whatever remains of their unliquidated holdings.

So there is no Savings Glut only a Credit/Debt Glut; and Chinese and Japanese money and rich folks’ Sideline money cannot save the world without simultaneously destroying the world first.

A very useful metaphor for thinking about this situation is the game of Pick-up Sticks or Spillikins, where you try to pull sticks of various values out of the pile without the whole pile crashing, which will inevitably happen.

http://en.wikipedia.org/wiki/Spillikins

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Mish does fail as usual (like most everyone else so far) to recognize that the biggest opportunities for deploying any governmental stimulus or “Savings Glut” or Sideline Money is in the Global South (and I’ll also include Eastern Europe), which are not saturated with infrastructure or consumer goods or even with paid labor, and depending upon whether they are on the 1930’s-WW2 crisis timeline or 1970s-1990s crisis timeline, not all of their workers and businesses are suffering under huge amounts of debt; those on the latter timeline have much less per capita debt.

Spiralman
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Stratfor on Turkey and Poland

Post by Spiralman »

[I believe Turkey will be one of the decisive powers in the developing crisis; they were already pivotal in sabotaging the US invasion of Iraq in 2003 by disallowing them a Northern route. They have one of the most powerful militaries in the world, the 15th largest economy in the world and their geographic position straddling 3 continents is serious stuff. Before WW1 Turkey’s predecessor, the Ottoman Empire had been a major world power. The Sunni PanIslamic/PanArab movement could be coopted under Turkish leadership.

United States and Turkey is really about Turkey’s frustration with having been led on by Europe, and how the US intends to have Turkey lead the AfroEurAsian Islamic World (Indonesia will be America’s Eastern Islamic anchor).

Turkey and Russia on the Rise is about their overlaps in the Caucasus and Central Asia on the following map, and Turkey’s unassailable geography with control over water on three sides, very strong population growth and economic growth, resulting in time being on Turkey’s side vs. the opposite for Russia – geographic vulnerability, virtually landlocked, rapidly shrinking population and decrepit economy stripped of its most talented people and dependent upon oil and mineral exports – ie, Turkey’s rising, Russia is trying to recover buffer area, but it’s in a race against time, [and the collapse in the value of oil, which the article doesn’t touch on.]

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Turkey and the Summits addresses their power relative to the other principal Islamic Middle East core states – Pakistan, Iran, Syria, Iraq

[I also included an article about Poland making a Proposal of Russian NATO Membership because they see NATO as irrelevant and only care about direct US backing.
Poland will become the principal locale for the low-cost, indirect projection of US power within Europe (since NATO will probably collapse) at the lead of the Eastern European countries against Russia.
Considering that Obama’s principal foreign policy guru is Zbigniew Brzezinski, who is Polish, and his son Mark Z. is in charge of European advice to Obama, one has to see the possibility that Poland could re-emerge after this crisis as a very powerful player in Europe, perhaps reversing 200 hundred plus years of dismemberment since 1792, at the hands of Russia, Germany (Prussia) and Austria.
Since Poland’s vulnerable geographic position as well as that of the Baltic states puts them at existential risk in this crisis, they will fight incredibly hard against a resurgent, but ageing and moribund Russia.
The US can just feed Poland the latest military technologies to use to wear down Russia, which is also likely to be facing Turkey’s push into the Caucasus and their fellow Turkmen in Central Asia, as well as facing the collapse of their economic opportunity to export oil and gas to Europe as they are rapidly replaced by solar and wind.

I wouldn’t be surprised if Russia is completely worn out by 2020.
In which case, Turkey and Poland re-emerge as very powerful players in the world.

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http://www.stratfor.com/analysis/200904 ... and_turkey
http://www.stratfor.com/analysis/200903 ... dium=email
http://www.stratfor.com/weekly/20090317 ... ussia_rise
http://www.stratfor.com/analysis/200903 ... membership

Spiralman
Posts: 107
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Saudi reveals oil demand could fall by 45%

Post by Spiralman »

http://www.arabianbusiness.com/543062-s ... all-by-45-

[
I wish I had found this article earlier; it is from January.
Certainly fits with yesterday’s Eichengreen and O’Rourke article:
A Tale of Two Depressions
http://www.voxeu.org/index.php?q=node/3421
Figure 1. World Industrial Output, Now vs Then

Image

Figure 2. World Stock Markets, Now vs Then

Image

Once again, let’s add up the Spike/Crash/Streamline/Replace effects of the Peak Credit crisis:
- Energy price hikes during the Spike drive solar power’s cost effectiveness over the top
- Credit collapse Crashes energy demand, perhaps by 45%
- Profit collapse and geopolitical destabilization of access to oil and gas forces energy usage Streamlining at enterprise and overall society levels, perhaps 30% like the early 80’s
- Recovery based on Solar, the new low-cost Replacement

If my model is correct, then oil consumption and CO2 emissions will be cut back to 1970’s levels within the next 10 years.

This will be tragic for some of the countries dependent upon oil and gas exports, who cannot find other sources of income or reorganize their societies to be more profitable via the solar revolution.

Spiralman
Posts: 107
Joined: Wed Mar 25, 2009 5:07 pm

Saudi reveals oil demand could fall by 45%

Post by Spiralman »

http://www.arabianbusiness.com/543062-s ... all-by-45-

[
I wish I had found this article earlier; it is from January.
Certainly fits with yesterday’s Eichengreen and O’Rourke article:
A Tale of Two Depressions
http://www.voxeu.org/index.php?q=node/3421
Figure 1. World Industrial Output, Now vs Then

Image

Figure 2. World Stock Markets, Now vs Then

Image

Once again, let’s add up the Spike/Crash/Streamline/Replace effects of the Peak Credit crisis:
- Energy price hikes during the Spike drive solar power’s cost effectiveness over the top
- Credit collapse Crashes energy demand, perhaps by 45%
- Profit collapse and geopolitical destabilization of access to oil and gas forces energy usage Streamlining at enterprise and overall society levels, perhaps 30% like the early 80’s
- Recovery based on Solar, the new low-cost Replacement

If my model is correct, then oil consumption and CO2 emissions will be cut back to 1970’s levels within the next 10 years.

This will be tragic for some of the countries dependent upon oil and gas exports, who cannot find other sources of income or reorganize their societies to be more profitable via the solar revolution.

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