Archive for the 'Uncategorized' Category

14
Sep
09

Economic Illiterates in Washington

By John Stossel

The economic illiterates in Washington are so impressed with the “success” of Cash for Clunkers that they’re readying Cash for Clunker Appliances. The ludicrous “stimulus” bill gave $300 million to the Department of Energy to provide rebates for 10 types of appliances that have been rated energy efficient.

Before government extends Cash for Clunkers to more products, it might be a good idea to examine the original. The fact that Washington and the buyers who took advantage of Cash for Clunkers are gaga is hardly evidence that it was in the public interest.

It wasn’t. As usual, the program has been judged only by its first and most visible consequences, violating Henry Hazlitt’steaching in his classic, “Economics in One Lesson”:

“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

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08
Sep
09

UN wants new global currency to replace dollar

By Edmund Conway

In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises.

It added that the present system, under which the dollar acts as the world’s reserve currency , should be subject to a wholesale reconsideration.

Although a number of countries, including China and Russia, have suggested replacing the dollar as the world’s reserve currency, the UNCTAD report is the first time a major multinational institution has posited such a suggestion.

In essence, the report calls for a new Bretton Woods-style system of managed international exchange rates, meaning central banks would be forced to intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.

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Editor’s note: This just appears to be a larger, more controlled version of what already exists. Any currency that is not back by a commodity is subject to manipulation for the benefit of the issuing institution. It is interesting that the UN is taking a position on this topic, which is a strong signal that the dollar is headed for further crises.

07
Sep
09

Scott Horton Interviews Mark Ames

Mark Ames, author of the article “Obama Is Leading the U.S. Into a Hellish Quagmire“, discusses the U.S. military presence in Afghanistan that surpasses the levels during Soviet occupation, how Russia benefits from (and is gloating about) a U.S./Taliban stalemate, the slim chance of Russia’s inclusion in NATO and George F. Will’s “Walter Cronkite moment” on Afghanistan.

LISTEN HERE

07
Sep
09

China alarmed by US money printing

By Ambrose Evans-Pritchard

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”.

“We hope there will be a change in monetary policy as soon as they have positive growth again,” he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

“If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,” he said.

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21
Aug
09

bernanke couldn’t predict the crises, but…

Bernanke says US economy on cusp of recovery

By Jeannine Aversa, AP Economics Writer

Federal Reserve Chairman Ben Bernanke declared Friday that the U.S. economy is on the verge of a long-awaited recovery after enduring a brutal recession and the worst financial crisis since the Great Depression.

Economic activity in both the U.S. and around the world appears to be “leveling out,” and “the prospects for a return to growth in the near term appear good,” Bernanke said in a speech at an annual Fed conference in Jackson Hole, Wyo.

The upbeat assessment was consistent with the Fed’s observations earlier this month. The central bank has taken small steps toward pulling back some emergency programs to revive the economy.

Still, Bernanke stressed Friday that despite much progress in stabilizing financial markets and trying to bust through credit clogs, consumers and businesses are still having trouble getting loans. The situation is not back to normal, he said.

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21
Aug
09

China reduces holdings in US debt

China reduced its holdings of US government debt by the largest margin in nearly nine years in June, according to data from the US Treasury.

China holds more US government debt than any other country and cut its holdings of US securities by more that 3% in June, said the BBC’s Chris Hogg.

Japan and the UK – second and third largest holders of US debt – increased their holdings over the same period.

China’s holding of US debt is about 7% higher than at the turn of the year.

Inflation fear

In recent months the US government’s budget deficit has widened thanks in part to the Obama administration’s costly stimulus plan.

Our correspondent in Shanghai says that China is worried about this, and fears the stimulus efforts will fuel inflation in the US, reducing the value of the dollar.

This would then erode the value of the debt China holds in the US currency.

In June, China cut its holdings of US securities by about $25bn, a fall of 3.1%.

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20
Aug
09

State, local government jobs up despite recession

CHICAGO (Reuters) – While businesses across the United States slash jobs, state and local governments have actually increased employment slightly since the economic recession began in December 2007, according to a report released on Thursday.

“As is the typical pattern in recessions, overall state and local government employment continued to grow after the start of the recession, although there has been a small decline since the August 2008 peak,” said Donald J. Boyd, author of the report by the Rockefeller Institute of Government, in a statement.

Total employment in state and local government rose in 30 states, fell in 16 and was unchanged in four during the last year, the report found.

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