www.guerrillanews.comAmerica, poverty and December 04Sun Jan 4 14:08:12 2004220.127.116.11
http://www.guerrillanews.com/war_on_terrorism/doc3669.html America, poverty and December 04Adam Porter, December 29, 2003A year ago we wrote that it was time to cash in your chips. Relativesecurity in the market place over the next twelve months would allowanyone who could do to get out. To do what the big boys are doing.Getting out of debt, getting out of dollars, getting into cash and gold.Secure your capital base and leverage it from there.Now, senior economists are calling the same tune. Safe to say we said itfirst. So here is another shot at economic forecasting, after all thelast one was right, maybe this one will be too.You can expect the equities markets, especially Dow Jones, to contract(today, December 29 2003 it is at 10305) in the short term. To see someprofit taking. Expect to see the Dow back at around 9270, the FTSEaround 4050, somewhere between a five and ten percent hit. Possibly asearly as New Year, maybe as late as Easter. With a possible rise againin the summer if the current administration looks like being re-elected.After all the Dow, and other equities markets, are now only an indicatorof the values of the elite. It is not some kind of pseudo democraticmarket place where small investors can play with the institutional ones.That was a lie, obvious to some but not enough, created to extract thevalue of the small investor. Created to give the money of your Mum andDad or brother or sister or self, to the banks. It worked well. Littlepeople provided part of the liquidity to the super-elite, as did thehuge gamble on internet-based and telecom technology. And of courseliquidity is vital to the financial elites, how else do they get morestuff? They don't create wealth, that phrase is just for people whodon't understand economics, they shift wealth. To themselves. They arenot wealth creators they are wealth movers. And hoarders.So more than ever now the Dow, (and the other equities markets aroundthe world) really represent the aspirations of those elites, financialand otherwise. As you can see it has been quite a good year for them.Returns for them are generally running at around 5-15% depending on whattrade they are in. That is reflected in the rises of the equities'markets', year on year. The markets have been solidified somewhat.Those returns however are based on hacking away at ordinary people.First cost-cutting, redundancies and, in the main, under-employmentspurred the spurious notion of 'economic growth'. Then of course therewas the selling of debt to the public at record levels.In the USA, which is the main focus of trade and equities, they havepulled out every stop to keep their economy liquid. They have interestrates at a dangerously low 1%. Dangerously low because when they go upAmerican households are going to be slammed in the face with debtrepayment, certainly the poorest 80% will be. A rise of 25 basis points(one quarter of one percent, the minimum possible raise) will mean a 25%rise in debt repayments. But there is gigantic liquidity for the elitefrom the debt they have sold. There are billions of dollars in `growth`for the banks and the financial institutions locked up in ordinaryAmerican homes. Eventually it will be taken back.The low low interest rates could not work on their own of course. So thepresent U.S. administration has created a huge debt of its own, thepublic deficit. No one disputes that the deficit is unsustainable. Itjust depends who is going to pay for it in the end. Well, of course itis going to be the American public. However, that is certainly not goingto happen before the next U.S. election.As well as a huge debt and dangerous interest rates the present U.S.administration still could not introduce liquidity into the economy. Sothey have allowed, in fact pushed, the dollar to record lows againstforeign currencies (today ?1.24). This in order to boost manufacturingand exports, basically to preserve jobs. To suck in all the availableliquid from foreigners. In turn they have stuck it to their ownimporters, brutally damaged those whose `profit` comes in dollars, butcrucially dampening the effect of the price rise in oil (today it is at$29.40, beyond the $24-$28 benchmark set by OPEC: futures contracts forJanuary are at $31.95).As well as all these measures designed to prop up an economy that showsno sign of `creating` its own wealth there are also the protectionistmeasures this administration has created. Firstly steel tariffs. Illegalunder any kind of international rules or regulations. The sanctions werecreated with the full knowledge that it would take many months to sortthem out. Thus keeping some of that precious liquid until the WTO couldslowly grind to a decision. But by then it was too late, this U.S.administration had already slapped more illegal tariffs on othercountries. Notably China.Then of course there is the war in Iraq. Providing huge subsidies fromthe U.S. taxpayer straight to elite industries, financial, military andenergy related. This knocks though into different 'markets' creatingfurther 'growth'. As we all realise now, this kind of 'growth' isnothing more than book-cooking of the highest order. That money has beentaken from ordinary American's savings, or has been leant to ordinaryAmericans at interest by the banks. A double winner. Then that 'spend'is counted as forming 'growth'. Along the way of course those eliteindustries are 'skimming', taking a slice. Halliburton are the mostextreme, charging the U.S. taxpayer way over the odds for petrol importsfor the U.S. Army from the UAE. Halliburton charge $2.64 per gallon, thegeneral going rate is 74c. Now that's what we call wealth creation! JoeSchmo fights and dies, has his legs blown off, his flesh ripped, shootsa few kids, has his Mum pay the bill, gets charged a 400% surcharge forpetrol by the skimmers and when he gets home will find that hisPresident has cut army benefits, to save money. But surely an increasein army benefits would be 'economic growth'? It would create extraliquidity? Hey, who cares when you make it up as you go along? Pay anddie.So, this is the crunch time, watch out for the elections. Watch out forNovember 2004. All that value that is being spent propping up anuncompetitive American economy, sucking in cash from foreigners andcreating huge waves of debt is not sustainable, even in the medium term.Bits of it might be, like war or tariffs, especially war. But both theimbalance and the greed of the financial industries will mean thateventually Americans will pay it back. The poorest 95% that is.However, to November, it will be mostly okay in the short term, for thenext eleven months. We say mostly. Up to the elections for sure, this isthe whole point. American votes are being bought because American votersare being cushioned against economic reality for the benefit of theirelite.They are being loaned giant wedges of cash, in various forms as we havementioned above. Steel workers who kept their jobs for example. Thething about loans is that they only work because the person who loansthe money makes cash when he takes it back. Or even better when he cangrab assets. Now, either the Republican administration will reap thereward it desires after it wins the next election, crushing a furthertranche of the American public into the mire. Or, on the outside chancethat a Democrat wins, then they will have to return the money theRepublicans snorted up their collective schnozzles. A Democratadministration will have to fix the huge deficits, just as Clinton did.Either way ordinary Americans are going to get it in the neck.Slice by slice, quietly but efficiently, the American public are beingherded onto poverty trains and are being sent straight to the ghetto,never to emerge. After all, the most socially mobile country in theworld is not America, it is France. But American under employment andunemployment figures (so fictional they make a good bed time read) maskthe reality of U.S. poverty and how it is encroaching further andfurther into the dying middle class. Meanwhile the dying middle classavoid complexities (helped in no small part by a media politicallyaligned to the elite) and become obsessed with the fear of the blackman/the Hispanic man/the Arab/the "traitor academics" and are becomingfat on their own personal terrors. This whilst 15% of Americans gohungry sometime every year.To paraphrase an incarcerated black man, Gil Scott Heron, this recessionwill not be televised. This recession will happen slowly, they will notjump from the trading floor windows, they will not know who to blame,they will not riot when black men are beaten to death, or shot whilsthandcuffed, they will not care that Afghan children are vaporised,because they don't even know enough about their own situation at thebank to save themselves. This recession will go on for years, chip, chipchipping, until there is some kind of political will to embark upon thedemocratic revolutions the world needs now. That revolution, thedemocratic revolution, will be televised. But by the time the fearfilled Americans switch on their sets and realise they have been duped,the American poor will be so very very angry.Like we say, sell up and move to Marakesh.
250,000 to 500,000 homeless veterans Manuel Valenzuela, Sun Jan 4 18:40
Main Page - Tuesday, 01/06/04
Message Board by American
Patriot Friends Network [APFN]