usmjam/economics

From the page: Certain entities, for whatever reasons, are bailed out, while others suffer the collapse of their wealth for trusting in the belief that asset prices always go up forever.

As Real Estate Collapse (Wave One) in the US proved, no asset will appreciate all the time. Like Dubai, the underlying assets in America, Europe, and even China have been slowly simmering for the last year or so. And once the public gets a taste of the toxicity, there will be no stopping the panic as everyone in just about every asset class decides to run for the exit.

When the panic does start, it may be an event perceived to be too-small-to-matter, like a Dubai that exposes several larger global players, which leads to a domino effect that will echo through the entire financial markets. It may start with debt defaults in an Euro Zone country like Greece or Hungary, or maybe with commercial real estate or Wave Two of the Mortgage Meltdown in the US. It could be a geo-political event with Iran and Israel, or a terrorist attack on a Saudi Arabian pipeline.

Right now, the world is on edge. The citizens of the US, as well as the global public don't really know who to trust to tell them the truth. They are on alert, consciously or subconsciously, and if they perceive even a small threat, the fight-or-flight system will be activated.

Some say that a year ago we faced economic disaster on a massive scale. In one year, governments around the world have printed money, and done little else, except to provide daily lip service and commentary. The contagion has been lying dormant and will become an epidemic.

No bailout will stop it."

From the page: "Washington continues to believe that the U.S. dollar is a weapon and most of the G8 is playing along. They simply can't see - or won't acknowledge - where the dollar is actually headed, even though the evidence is right before their eyes.
On the other side of the world, however, China is refusing to drink the U.S. Kool-Aid. It sees what's really happening with the greenback, and understands the implications for its own finances and economic growth.

That's why Beijing has taken matters into its own hands.
As Beijing breaks with the West, Western investors need to take notice - China is now a serious player on the global financial stage. It's only going to grow in power and stature.
And it has a powerful hand to play"

From the page: \"WASHINGTON - U.S. unemployment likely will remain high for the next several years because the economic recovery won\'t be strong enough to spur robust hiring, Federal Reserve officials warned Tuesday.

The cautionary note struck by the presidents of regional Fed banks in San Francisco and Atlanta were the first public remarks of Fed officials since the government reported last week that the nation\'s jobless rate bolted to 10.2 percent in October. It marked only the second time in the post-World War II period that the rate surpassed 10 percent.

In separate speeches, Janet Yellen, president of the Federal Reserve Bank of San Francisco, and Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that rising unemployment could crimp consumers, restraining the recovery. Consumer spending accounts for about 70 percent of economic activity.\"

"WASHINGTON -- A widening gap between data and reality is distorting the government's picture of the country's economic health, overstating growth and productivity in ways that could affect the political debate on issues like trade, wages and job creation.

The shortcomings of the data-gathering system came through loud and clear here Friday and Saturday at a first-of-its-kind gathering of economists from academia and government determined to come up with a more accurate statistical picture.

The fundamental shortcoming is in the way imports are accounted for. A carburetor bought for $50 in China as a component of an American-made car, for example, more often than not shows up in the statistics as if it were the American-made version valued at, say, $100. The failure to distinguish adequately between what is made in America and what is made abroad falsely inflates the gross domestic product, which sums up all value added within the country.

American workers lose their jobs when carburetors they once made are imported instead. The federal data notices the decline in employment but fails to revalue the carburetors or even pinpoint that they are foreign-made. Because it seems as if $100 carburetors are being produced but fewer workers are needed to do so, productivity falsely rises -- in the national statistics."

Press TV /News Analysis/US Banking System Continue to Deteriorate/ 24 /10 /2009

From the page: "It WILL happen if we don't change course. Tickerguy shows you the numbers, depicted in graphs.

Every man, woman and child in America needs to see this video. Come check out the text at market-ticker.org/archives/143 [market-ticker.org/archives/143] ..."

"Life here went from heaven to hell in an instant," says lifelong resident Wang Xiuhua, 78. A torrent of waste is one of the effects of Chinese industrialisation. Cities are bursting at the seams, and are struggling to cope. The amount of rubbish produced has more than tripled in two decades to about 300 million tonnes a year.

Americans are still way ahead of China. A population less than a quarter the size of China's 1.3 billion generated 254 million tonnes of waste in 2007.

But for China, the problem represents a rapid turnabout from a generation ago, when families, then largely rural and poor, reused everything.

"Rubbish was never complicated before, because we didn't have supermarkets, we didn't have fancy packaging and endless things to buy," said Nie.

"The US survey of economists, taken in September, found them predicting a 2.9 per cent annualised growth in US output in the second half of 2009. Unemployment would remain over 10 per cent for much of 2010 before edging down to 9.5 per cent by December.

But the survey found they saw the huge growth of the US Federal debt and deficit as a lasting weight slowing the economic recovery. The Congressional Budget Office has projected that without policy changes, the deficit is likely to remain more than 5 per cent of GDP for the next decade.

A new paper yesterday by economist Robert Carling at the Centre for Independent Studies in Sydney warns that the Obama Administration's spending plans are unsustainable.

''Excessive leverage of American households and financial institutions has been at the core of the global financial crisis,'' he said. ''There is a process of deleveraging under way, but at the same time the government sector is increasing its leverage on a massive scale.''

''The explosion of government debt contains the seeds of the next financial crisis.''