Friday, June 18, 2010

Jobless men keep moving, you’re not welcome here

There is a big show down coming between the Obama Administration and the Peoples Republic of China. China had intimated that they were about to re-value the Yuan when their Premier came to Washington for the nuclear weapons conference. Since then they have used the Euro crisis to stall any action indefinitely.

Secretaries Clinton and Geithner plus Fed Chairman Bernanke have all been to China and have reportedly delivered an ultimatum to China. Obama has told them that they must announce that they will revalue their currency by the G-20 meeting that starts at the end of next week. The word is that China’s failure to act will result in an intense push back from Washington.

The Yuan is undervalued by about 40% by most estimates and the Congress is chomping at the bit to ramp up tariffs before the election season starts. This is more political than substantive, just revaluing the currency won’t bring the jobs back since the multi national corporations that are now our masters aren’t going to do that no matter what the currency is worth. Gold reached a new high today.

On the jobs front; that iconic billboard from the last Republican Great Depression is back in corporate form; “Jobless men keep moving, you’re not welcome here.” Reportedly three quarters of corporations and job placement firms have an openly declared policy of not even considering applicants who are not currently employed and the other 25% just don’t say it out loud.

This is as universal as any rightwing talking point so it isn’t just their “dark side of the force” training they got at MBA school. The largest corporations are enacting this policy in writing. Somebody is pushing this meme with the clear intention of creating a permanent under class. Since they can’t whip the corporate slaves anymore they are doing the next best thing, a sort of neo-black-listing. Offend the corporation and you will be driven out into the wilderness where you and your family will perish.

In the old days, if you became disillusioned with the corporate world you could go into business for yourself or get a middle class union job. Wal-Mart makes owning a small business impossible and there are no union jobs anymore. Everyday thousands of people exceed the maximum number of weeks of unemployment and a third are not even eligible for benefits, the lines at Rush Limbaugh’s dumpster are going to get longer and longer. Hitler’s Brown Shirts were recruited at the soup kitchens.

Thursday, June 17, 2010

Jumping on the Island

Unemployment claims for last week took a sharp turn up and the news said the analysts were expecting the numbers to go down. The analysts always seem to be wrong about these binary choices, they need to get a better coin to flip and then maybe they would be right half of the time. The new number wiped out all the modest gains over the last four months and claims are back up above January numbers.

On the subject of analysts, stock analysts are almost universally picking BP as a “buy” stock. They are using the heads I win and tails the suckers lose coin to pick that stock. BP’s assets are at most worth a couple of hundred billion and it has a good trillion in liabilities without things getting any worse. Of course the analysts are issued their coins by companies that have BP stock to unload.

The consumer price index fell last month in a period when we should see inflation. Inventory levels are getting quite high again and nothing is being done to boost demand. With layoffs picking up again demand will begin another downward spiral and deflation will likely follow once companies start to run short of cash and start cutting prices to make CEO payroll. At the moment everybody is flush with cash but commercial credit has started to tighten again.

The housing market is starting to deteriorate already and the last of the sales where the buyer received government incentives haven’t even been processed yet. New construction is sagging of course with more and more foreclosed homes coming on the market. The only bright note everybody is pointing to is a sharp up tick in pickup truck sales but this is probably just pent up demand from people who have been putting off replacing worn out equipment rather than any real growth.

The finance reform bill is in Conference Committee to reconcile the House and Senate bills but it remains unclear if any real reform will survive. Eight House Members (mostly Republicans) are the subject of a ethics investigation for shaking down Wall Street banks just before voting on the legislation in early December. The fact that some withdrew amendments that would have cracked down the banks after getting huge bundles of campaign contributions to their personal Political Action Committees is largely shrugged off as business as usual.

These PAC slush funds allow Congressmen to wield influence beyond their everyday corrupt practices by bailing out colleagues who would be voted out of office if their constituents weren’t bombarded with TV ads. Thanks to the Supreme Court, corporations can now campaign directly in elections with unlimited funds so these PACs are likely to fade away. Fund raising will become much simpler for a Congressman as corporations will simply express their jumping needs and the Congressman will only ask how high?

In Italy during the twenties the legislature finally stopped meeting entirely as the council of corporations made all the decisions. Of course today we have TV cameras so the Congressmen will continue to perform as if it were some sort of reality show. But on this show the tribe doesn’t really get to vote anybody off, that is decided by the corporate suits behind the cameras.

Monday, June 14, 2010

Fighting for Niobium or War Is A Racket

In case anybody was wondering why we have been staying in Afghanistan in order to protect a route for a pipeline we will never be able to build, the answer is we weren’t. Afghanistan has been long suspected of having potentially huge mineral deposits and the report from the Pentagon has leaked out. The NY Times quotes unnamed US government sources that that says there are previously unknown deposits of a whole smorgasbord of minerals including iron, copper, cobalt, gold plus rare earth and essential industrial metals including lithium totaling more than one trillion USD, some mining sources say it‘s real value is more like three trillion (that‘s getting close to the eventual cost of the war).

This is on top of publicly known deposits of staggering wealth including a soon to be developed copper mine so big that China bribed the Afghan Minister of Mining 30 million USD to get the rights to it, China expects revenue of 3 billion. The existence of these deposits has apparently been known since the 1980’s when mining surveys were done by the Soviets. Original Soviet documents were supposedly uncovered by geologists working in Afghanistan in 2004 (where was the CIA for the previous 20 years?). The new estimates are based on follow-up aerial surveys done since then including the use of sophisticated gravity sensing equipment.

Afghanistan has a recent law giving control over and the revenue from all mining to the puppet government in Kabul instead of the provinces (or god forbid, the people). The puppet masters pulling the strings on this bit of wealth enhancement for the corporations was the World Bank in Washington DC (located across the street from the White House) who provided the legislation verbatim to be rubber stamped by the Afghan marionette government.

These friendly bankers are always happy to race to the aid of a country in need. No matter whether you need money because predatory capitalists have wrecked the economy, or some puppet dictator has the wealth of the nation in his own Swiss bank account, or you’ve been bombed into the stone age by the US for no good reason, you can count on the World Bank to arrange a friendly loan. All they require is for you to turn over to their corporate cronies all your resources from now until eternity or until your country is just a moonscape of mining waste.

Afghanistan has no governmental infrastructure to control the dumping of hazardous waste. They don’t even have the pretense of a Minerals Management Service like the Bush Administration provided to protect us from British Petroleum. In other words Afghanistan is a libertarian paradise, at least it will be once the US mercenaries wipe out those pesky indigenous people.

The lithium deposits (like in the batteries) are probably the biggest in the world and more than enough to keep American boys bleeding for years to come. Essential metals and especially the rare earths with the strange names like niobium (used as an alloy in steel and super conducting magnets) have become the exclusive domain of Chinese miners primarily because China has been throwing around their vast reserves of USD to put producers in the rest of world out of business. Stocks in companies that use lithium are up sharply.

Not that the US has any use for these metals since we don’t have any factories, but you didn’t think the US military was actually fighting for America did you? The US Marines no longer occupy countries for the benefit of US interests, they work for the transnational corporations. Just as the German/Hessian soldiers and the British Redcoats really worked for the British East India Company. They were attempting to put down the revolt of the colonists when they objected to the abuses of the trans-colonial corporations, democracy was only an after thought.

Now that the little job the US Military did for British Petroleum in Iraq is winding down they do need something to earn their keep and China needs more niobium. Oh and by the way, we have vast undeveloped reserves of rare earths in the US but it’s cheaper to mine them else where if you don’t count the Pentagon budget. Two thirds of corporations pay zero US taxes so it doesn’t cost them a dime.