Wednesday, November 4, 2009

Eat your vegatables

The Senate finally extended unemployment benefits by 14 or 20 weeks depending on what level of Depression your state is living with; they should have done this 14 weeks ago. The Republicans that have been holding up this bill have pushed something on the order of a million people into poverty with little chance of them ever leaving it. The corporate media is circulating the rumor that Larry Summers was really behind the delay in order to reduce the unemployment numbers. The White House denies that this was ever in any way the policy of the Obama Adm.

Personal bankruptcies were up 9% last month. Home foreclosures already in the pipeline equal 60% of the total of annual home sales. Officially over 200,000 jobs disappeared last month, of course we know its much worse than that. The self employed and contractors don’t count, jobs that are split into 2 or 3 part time jobs at half pay or less don’t show up in the statistics either.

As the Dollar slowly fades away to nothing but a grin, a major clearing exchange will now allow US trading houses to use physical gold as collateral to meet all margin requirements. We aren’t quite to the point where gold is the "only" thing acceptable. Then we will know how Jefferson Davis felt when they stopped accepting Confederate script.

When Obama goes to China he is expected to ask them to end their so-called "unofficial" peg of their currency to the Dollar. This would in theory reduce the trade deficit and make US goods competitive in China as the Dollar would weaken against Chinese currency. It would not of course increase our exports, since China doesn’t import anything from the US if it can produce it themselves.

It’s not clear what Obama is really hoping to accomplish with this trip but he has been successful in getting China to end the massive dumping of products into the US. This practice has been destroying US companies that were otherwise able to resist the Big Box stores’ deliberate attempts to force them to manufacture all products in China.

Making some sort of deal with China is crucial but what will work at this point isn’t clear. How soon will Chinese parents be exhorting their children to finish their vegetables, "don’t you know there are starving children in America".


dchap said...

I seem to remember a Doonesbury cartoon back in the 70s where Duke was attending a state dinner in China. One of the leaders was exhorting his child to finish his jellied duck's web by reminding him that starving children in West Virginia would surely love to have some "nice jellied duck's web".

Mark Limacher said...

I got into a bit of an argument with a free market fundy the other day about the state of the US dollar. Basically I was told that a "collapse of the dollar is so inconceivable", and even if it did ("god-forbid") occur, it wouldn't be all that bad anyways- just a "rocky period of adjustment to a new market model". It didn't matter what facts, statistical information, or readily available news I brought up, I was just a nut case for getting nervous about this. Are there any plausible elements within his chicanery?

prairie2 said...

It is certainly possible that Obama can fix things so that the Dollar survives but that will be more to do with the Communist Chinese than American Capitalism. It's more likely that we will come through this, than is that your friend will end up in a mass grave. But he has no more idea about what is coming than a blade of grass knows about the lawn mower and as much ability to avoid it. Ask people living in their cars even though they have jobs, how we are doing as an economy.