Re: The Trade Deficit, another view

..
You got it.
A good bulk of the economists are either brainwashed or
trained to obfuscate the issues... typical "government needs
funding ...we need to change the tax system though so its more
equitable"


that statement is brainwash from the start... its bloated govt
that is taxing the nation to utter ruin..collecting taxes is
not the primary issue. .. these address the symptoms while
being blind to or deliberately obfuscating the causes...I
think its about 80% idiocy and the rest deliberate.


A study of history works well...no nation to date in world
history has self corrected from this inevitable bloat and
corruption (read Ravi Batra "the coming depression" notice
his comments on Kondratiev.).. first these collapse, half the
people starve to death.... then when there is no money to fund
the corrupt govt, it becomes militarily indefensible, these
mostly then collapse. in rare cases they adopt new
tactics...china the most recent example.

The US is irreversibly on that path...massive and corrupt
special interests would have to self destruct in order for a
cure to occur...these are not about to do that of course.




Phil Scott

"Straydog" <asd@xxxxxxxxx> wrote in message
news:Pine.NEB.4.63.0510140025070.5689@xxxxxxxxxxxxxxxxxxx
>
>
> On Tue, 11 Oct 2005, Phil Scott wrote:
>
>>
>> "Straydog" <asd@xxxxxxxxx> wrote in message
>> news:Pine.NEB.4.63.0510111517520.6276@xxxxxxxxxxxxxxxxxxx
>>
>>
>>
>> Stray dog, this is NOT 'Flim flam' from 'Hummel'... that
>> takes some brains at least.
>>
>>
>> Hummel is simply a moron, who thinks that an economy is
>> just a
>> big confidence game and is willing to lie about reality...
>> and
>> has no faintest clue about the underlying demographics and
>> goods production drivers.. nor the effects of govt bloat
>> sucking up the net domestic product only to turn it to crap
>> and toilet paper running out the 8" or larger sewer lines
>> in
>> most state and federal buildings.
>>
>
> Well, thanks for the "heads up" on Hummel. Very recently
> I've started to spend a lot of time reading about banking
> (under that rock you will find a lot of answers, maybe not
> all, but a lot) and economics (under that rock, I've had a
> lot of doubts about what the experts know or don't know)
> because I am finding myself progressively less and less
> satisfied by the overall simplistic crap that comes out in
> the media. The other crap I don't care for is that special
> language, spoken by economists, called economisese which
> includes a special word usage (like legalese) coupled with a
> tendency to --what I call-- 'abstractise' subject mater
> ('abstractise' as in 'make it sound mathematical' so as to
> intimidate the one reading or listening to the 'economist').
>
> One thing that cracked me up not long ago was an article in
> the WSJ where they had two economists give answers to the
> exact same interview questions. From my reading of their
> answers, neither one made any sense anywhere AND the stories
> each gave, regardless of the sense they made, were totally
> different.
>
> I hope you get my drift. I think I got yours.
>
> Straydog
>
> ===== no change to below, included for reference and context
> =====
>>
>> Phil Scott
>>
>>
>>
>> On Tue, 11 Oct 2005, William F Hummel wrote:
>>
>>> "Sharecropper's Society" Revisited
>>> by Thomas E Nugent
>>> August 16, 2005
>>>
>>> Are we selling out to foreigners, as the Washington Post
>>> suggests?
>>
>> Foreigners already own a large fraction of the real estate
>> in
>> a lot of our
>> major cities.
>>
>>> Recently, one of the directors of the Washington Post,
>>> Warren Buffett,
>>> said that the U.S. was on its way to becoming a
>>> "sharecropper's
>>> society." The statement characterizes the Washington
>>> Post's
>>> latest
>>> economic theory on international trade. In a recent
>>> editorial entitled
>>> "A Sharecropper's Society?" the Post bemoans America's
>>> sacrifice of
>>> future standards of living for current consumption by
>>> selling out to
>>> foreigners:
>>>
>>> "Every year Americans sell or mortgage a slice of their
>>> productive
>>> assets to foreigners with the result that income from
>>> those
>>> assets
>>> must flow abroad in the future."
>>
>> When foreigners own real estate here, they also get rents.
>> And, capital
>> gains when RE goes up. Its a cash cow for them.
>>
>>> Does the Post's economic position make any sense?
>>
>> YES,
>>
>> Let's investigate.
>>>
>>> When Americans sell a piece of their productive assets,
>>> they
>>> receive
>>> an agreed upon payment in return. This is a voluntary
>>> transaction at
>>> the "market" price, which means the buyer and seller are
>>> both
>>> satisfied with the price. This price should reflect the
>>> present value
>>> of all expected future cash flows of the productive asset
>>> that is
>>> sold.
>>
>> Not counting inflation, tax changes, depreciation, etc. Its
>> not that
>> simple.
>>
>> The seller also has the cash resources that can be used to
>>> purchase foreign productive assets,
>>
>> You mean cars? They are not fungible.
>>
>> build U.S.-based productive
>>> assets, or simply be saved.
>>
>> Deposit where the interest rates are high but the currency
>> won't be
>> devalued. Also, its not that simple.
>>
>>> If a loan funded a buyer's purchase, the loan also
>>> "creates"
>>> an
>>> equivalent deposit. The transaction means that the loan
>>> itself creates
>>> the funds that buy the productive assets. The funds do not
>>> come from
>>> some mythical "pool of savings," as described in the
>>> "loanable funds"
>>> rhetoric freely tossed around by the media and others who
>>> should know
>>> better.
>>
>> Here is where you are playing big-time bait and switch.
>>
>> It's a zero-sum game, in the sense that loan/deposit
>> expansion
>>> does not create any net financial assets.
>>
>> Loose talk on definitions. Loan/deposit does create money.
>> Its
>> in the
>> books.
>>
>> However, the economic
>>> activity created by the purchase of goods and services and
>>> related
>>> loan creation increases output and income so that the
>>> economy grows
>>> accordingly.
>>
>> Money creation, by the loan/deposit expansio0n does expand
>> the economy.
>> this is in the books, too.
>>
>>> More, the Post's idea that income "flows" abroad is not
>>> what
>>> happens.
>>> Let's go back to the April 10, 1984, edition of the Wall
>>> Street
>>> Journal. Leif Olsen, the chairman of Citibank's economic
>>> policy
>>> committee, made the following important distinction in a
>>> letter to the
>>> editors:
>>>
>>> "If you hear 'import,' what immediately comes to mind?
>>> You'll
>>> probably say 'cars.' Now, if you hear 'capital flow,'
>>> what
>>> do you
>>> think? Money coming in, right? Wrong. Money doesn't
>>> come
>>> in from
>>> abroad like cars. It's already here."
>>
>> Physically, its not even here. It's black ink on paper, or
>> white symbols
>> on computer screens.
>>
>>> In other words, money doesn't flow offshore.
>>
>> Power to use that money does flow offshore. You are getting
>> into bull***
>> territory now.
>>
>> Rather, domestic claims
>>> change hands. Many economic commentators miss the fact
>>> that
>>> when the
>>> U.S. went off the gold standard in 1971, there was no
>>> longer
>>> any
>>> guarantee behind the U.S. dollar - it became a fiat
>>> currency.
>>
>> And, why did the US go off the gold standard? Everyone in
>> the
>> world was
>> taking their "money" in gold and not paper.
>>
>> As such,
>>> there was no gold being moved around in the basement of
>>> the
>>> Federal
>>> Reserve Bank of New York to settle liabilities to
>>> foreigners.
>>
>> There ain't that much left, anyway.
>>
>> Foreign
>>> holdings of U.S. assets, namely Treasury bills, must be
>>> redeemed some
>>> day but can only be redeemed for U.S. dollars and spent or
>>> "saved" as
>>> U.S.-dollar financial assets. Foreigners can trade U.S.
>>> government
>>> liabilities, but in the end, the "buck" stops here.
>>
>> Another string of flim-flam.
>>
>>> To some extent, we are "mortgaging" our future, but the
>>> transaction
>>> whereby we consume their resources now and they consume
>>> our
>>> resources
>>> later is a game that is stacked against foreigners since
>>> our
>>> policies
>>> are the ones that set future domestic prices, export
>>> taxes,
>>> and
>>> restrictions. In other words, we can decide to reduce the
>>> future
>>> purchasing power of foreigners via the multitude of legal
>>> policy
>>> options at hand.
>>
>> And, they have no recourse?
>>
>>> Equal trade, whereby we consume foreign labor (a.k.a.,
>>> creating jobs
>>> abroad) by buying their goods in exchange for U.S.
>>> financial
>>> assets
>>> that allow foreigners to buy our goods
>>
>> "our goods" = hard real estate, mostly.
>>
>> in the future, can provide the
>>> flexibility for each trading partner to time purchases of
>>> goods and
>>> services. For example, Japan has been accumulating net
>>> U.S.
>>> financial
>>> assets for decades and not net spending.
>>
>> Maybe they are smart.
>>
>> For all practical purposes
>>> the Japanese are satisfied with the U.S. consuming their
>>> physical
>>> resources in exchange for their accumulation of U.S.
>>> financial assets
>>> indefinitely. And, as previously noted, we have perfectly
>>> legal policy
>>> options to unilaterally minimize the value of their
>>> holdings
>>> of U.S.
>>> financial assets should we so decide.
>>
>> I'm stil waiting to see this happen.
>>
>>> What are the Post's editors attempting to do? Are they
>>> implying that
>>> selling now is bad and that not selling is good? As I
>>> mentioned, the
>>> total transaction - buying now with I.O.U.'s given to
>>> sellers for
>>> their future buying - works entirely to our advantage.
>>> What
>>> is
>>> important is that the transaction takes place: Domestic
>>> credit creates
>>> the loans and deposits (there is no such thing as
>>> "imported
>>> capital"),
>>> we get the goods and services, foreign investors are paid
>>> for their
>>> output with the newly created deposits, and non-resident
>>> savings are
>>> created for possible future spending.
>>
>> Another line of BS.
>>
>>> The U.S. population benefits, without a sharecropper among
>>> us.
>>
>> A day will come when the debt will fall on people's heads.
>>
>>> - Thomas E. Nugent is executive vice president and chief
>>> investment
>>> officer of PlanMember Advisors, Inc. and principal of
>>> Victoria Capital
>>> Management, Inc.
>>
>> He is full of ***.
>>
>> Here is the book to be read:
>>
>> Recently I posted about a book that I thought might be
>> interesting to read:
>>
>> "The Creature from Jekyll Island: A Second Look at the
>> Federal
>> Reserve" by G. Edward Griffin ( ISBN 0912986182 ) Second
>> edition
>> (fifth printing), 608 pp. I think there is a 3rd edition,
>> now.
>>
>> What attracted more of my interest was the blurb on the
>> back:
>>
>> "Where does money come from? Where does it go? Who makes
>> it?
>> The
>> money magicians' secrets are unveiled. We get a close look
>> at
>> their
>> mirrors, their pulleys, cogs, and wheels that create the
>> grand
>> illusion called money. A dry and boring subject? Just wait!
>> You'll
>> be hooked in five minutes.... This book is about the most
>> blatant
>> scam of all history... the cause of wars, boom-bust cycles,
>> inflation, depression, prosperity."
>>
>> Yep, I was hooked. From the table of contents:
>>
>> "What is the Federal Reserve System? The answer may
>> surprise
>> you.
>> It is not federal and there are no reserves. Furthermore,
>> the
>> Federal Reserve Banks are not even banks."
>>
>> And the author explained all this in the book.
>>
>> To give you an idea of what was involved, here is a quote
>> from
>> page
>> 8:
>>
>> "...riding in the car at the end of the train, were seven
>> men
>> who
>> represented an estimated one-fourth of the total wealth of
>> the
>> entire world." I copied that correctly, one-fourth of the
>> total
>> wealth of the entire world. They were: Nelson Aldrich,
>> Abraham
>> P
>> Andrew (Secy US Treasury, Frank A. Vanderlip (prez of the
>> most
>> powerful bank at the time), Henry P. Davison (J. P.
>> Morgan),
>> Charles D. Norton (J.P. Morgan), Benjamin
>> Strong(J.P.Morgan),
>> and
>> Paul Warburg (representing the Rothshild dynasty). Jekyll
>> Island is
>> a real place and the meeting of these guys was kept secret
>> for
>> years and even denied to have taken place. The meeting was
>> to
>> create a banking cartel that did not look like a cartel or
>> a
>> bank
>> but was to allow private interests to make money (in more
>> ways
>> than
>> one) and shift any and all risk to the taxpayer.
>>
>> I will say that after reading the book I was truly blown
>> away
>> (more
>> way below). Anyone reading this post can go to amazon.com
>> and
>> click
>> on books, advanced search, then put in the ISBN and look at
>> that
>> page, or, copy and paste the URL below (watch out for CRs
>> since the
>> line is wrapped).
>>
>> ===================
>>
>> http://www.amazon.com/exec/obidos/tg/detail/-/0912986182/qid=1112
>> 407833/sr=1-1/ref=sr_1_1/103-3623641-9906207?v=glance&s=books
>>
>> =========================
>> Amazon says that:
>>
>> Customers who bought this book also bought
>>
>> * The Case Against the Fed by Murray N. Rothbard
>> * Secrets of the Temple: How the Federal Reserve Runs
>> the
>> Country by William Greider
>> * What Has Government Done to Our Money by Murray N.
>> Rothbard
>> * The Shadows of Power: The Council on Foreign
>> Relations
>> and
>> the American Decline by James Perloff
>> * Tragedy & Hope: A History of the World in Our Time
>> by
>> Carroll
>> Quigley
>> ====================
>> So, readers are not just casual and superficial.
>>
>> And, Greider's book (see above) is another very amazing
>> book
>> (I
>> didn't read it, but I read book reviews and the blurb)
>> where
>> the
>> author did all the research in a very thick book that
>> showed
>> how
>> the Federal Reserve actually caused the 1987 stock market
>> crash
>> (and I know people that lost a lot of money in this crash).
>> Griffin's book talks about all of these.
>>
>> On a separate piece of paper, I listed all the pages of
>> very
>> amazing paragraphs from probably 50 pages or more. I mean
>> really
>> amazing. It is totally beyond me to quote these for your
>> benefit.
>> Yes, wars were caused and promoted and had their financing
>> arranged
>> by cliques and families of the rich or people who
>> controlled
>> money!
>> Its even a bigger deal than the book(s) on the Krupp family
>> and
>> Germany. Conspiracy? Yes, England dragging the USA into the
>> war
>> with the sinking of the Lusitania. It was all a setup.
>>
>> The author is not a crackpot. The book has a large number
>> of
>> references to the serious historical and banking
>> literature. I
>> actually looked up a few, including one book on the sinking
>> of
>> the
>> Lusitania and a lot of the details surrounding the
>> investigation.
>> The guy in charge of the investigation refused to take a
>> fee
>> for
>> the job (it was a coverup) and, later in years, said it was
>> all a
>> "damned dirty business."
>>
>> Also, right there on Amazon there are 82 reviews of the
>> book.
>> Yes, 82
>> reviews of Griffin's book. All that I read were better and
>> more detailed
>> than the one I'm writing here. I had the distinct
>> impression
>> that the
>> authors of these reviews knew a lot more about the subject
>> than I did.
>>
>> Conspiracies? The book describes many and cites references.
>> I
>> looked up just one:
>> ==========
>> at:
>> http://www.bookfinder.com/search/?ac=sl&st=sl&qi=qv28kE4AkI1IPykZ
>> gYipqLoydJA_1971096349_2:29:80
>> "Tragedy and Hope..." by Caroll Quigley
>> you should find the text below:
>>
>> ISBN: 094500110X
>> Publisher: GSG & Associates, 1975.; Reprint. 1,348 pages.
>> "The
>> powers of financial capitalism had a far-reaching (plan),
>> nothing
>> less than to create a world system of financial control in
>> private
>> hands able to dominate the political system of each country
>> and the
>> economy of the world as a whole" - Carroll Quigley. Brand
>> new
>> hardback. Satisfaction guaranteed by professional seller.
>> All
>> books
>> plastic-wrapped for shipment.
>> ==================
>> The name "Carroll" is misspelled as "Caroll" in some
>> places.
>>
>> The author's agenda seems politically conservative and he
>> is
>> definitely on the warpath to have the Federal Reserve
>> system
>> abolished. Entities such as the World Bank, according to
>> the
>> author, are conduits for the flow of money from the USA to
>> developing countries as part of "carrots" and "pitchforks"
>> to
>> alter
>> their political ways (including trade treaties, interal
>> human
>> rights, etc.). I think that elimination of the Federal
>> Reserve
>> will
>> not happen (and at least not in my lifetime) and I'm not
>> sure
>> its
>> a good idea because it will surely cause major problems all
>> over
>> the world. As far as the world bank and influencing
>> international
>> political systems involving the flow of money and the
>> author's
>> notion that we should get out of the UN and get the UN out
>> of
>> the
>> USA, I'm not so sure about that, either. I'd like to hear
>> from
>> the
>> oposing side before giving my judgement. However, as a
>> lesson
>> in
>> how money works and as a lesson in how private financial
>> interests
>> of very small numbers of very powerful and rich people (or
>> people
>> in control of very large amounts of money), it is an
>> excellent
>> book. The author is in favor of returning to a form of
>> money
>> that
>> is either made of precious metals or at least backed by
>> precious
>> metals. His case and arguments are compelling but I won't
>> take
>> a
>> stand on the issue without thinking about the issue a lot
>> more.
>> But, as a forewarning of future "storms" of our economy
>> and
>> the
>> world's economy, its pretty clear to me that -- yes --
>> there
>> will
>> be economic collapses and depressions again in the future
>> and
>> a lot
>> of people will be hurt and hurt badly.
>>
>> The Federal Reserve is the US system of a central bank of a
>> government. The Bank of England is a similar central bank.
>> Most of
>> the modern countries have their own central banks and, from
>> the
>> book, apparently operate in very similar ways: they
>> manipulate
>> currencies, arrange funding of wars, and the population at
>> large
>> doesn't have the faintest idea what is going on.
>>
>> Griffin also explains how the Federal Reserve was
>> _causally_
>> involved in
>> the great depression of '29. The crash was engineered by
>> the
>> Fed and even
>> before the crash, rich people were warned consideralby in
>> advance to get
>> out of the stock market. And, they did. And, how! The
>> depression that
>> followed the crash was not anticipated and not meant to
>> take
>> place
>> (thanks to Murphy's Law and "The best plans of mice and men
>> oft go awry")
>> but it happened and lots of innocent people got hurt bad.
>>
>> I know I have dissed economists all over the place in
>> recent
>> years
>> but I have more respect for the "moneychanger" business and
>> the
>> world of money, banks, and business in general. That is
>> where
>> there
>> is power and control, and as far as I'm concerned, the
>> stuff
>> in Griffin's
>> book is important and significant. I had the feeling, after
>> reading this book, that all of this "New World Order" has,
>> under the
>> surface, still more machinations from the rich and
>> powerful.
>>
>>
>>
>> ^Z
>>
>>
>>


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