Category Archives: Globalization

IMF: G-20 Fiscal Stimulus On Target

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In the news:

The IMF says the G-20 fiscal stimulus will reach its 2% target.

Bloomberg reports on the figures spent so far:

“The G-20 countries will spend $820 billion on stimulus measures in 2009, up from a March estimate of $780 billion, and will spend $660 billion in 2010, the fund estimated.

The IMF also revised its forecast for budget deficits in G- 20 countries as a result of fiscal expansion. Today’s report calculates that budget deficits in the G-20 this year will increase by 5.5 percentage points of gross domestic product relative to 2007 and 5.4 percent in 2010. In March, the fund forecast a 4.7 percentage-point rise this year and a 5.1 percentage-point jump next year.

Strauss-Kahn said yesterday that governments should start to discuss “exit strategies” from the emergency spending once the crisis passes.

The fund’s estimate for financial-sector support also increased today to 32.1 percent of GDP, up more than 3 percentage points from the March estimate….”

My Comment (check back for more):

Domininique Strauss-Kahn, a member of the Socialist party and a former finance and economy minister in  Lionel Jospin‘s “Plural Left” government became the new managing director of the International Monetary Fund on September 2007, replacing Spain’s Rodrigo de Rato.

Interesting things to note about Strauss-Kahn:

  1. He’s part of the European Council on Foreign Relations, launched in October 2007 (i.e. just after DSK became IMF chief), which in an expression of pan-Europeanism in world affairs. Rubbing shoulders with DSK, according to Source Watch are such notable globalists as George Soros (Chairman of the Open Institute), Stephen Wall (Chairman of the influential PR firm Hill & Knowlton, advisor to Tony Blair), and Timothy Garton Ash (whose influential book, The Magic Lantern, cheered on the 1989 revolutions in Eastern Europe). Note: Hill & Knowlton was the outfit that concocted the story about Iraqi soldiers killing babies that became a provocation for the 1991 Gulf War.
  2. Strauss-Kahn has been linked to the financial scandal around ELF Aquitaine, a state-owned oil giant through which former President Francois Mitterand allegedly channeled money to Germany’s Christian Democrats. Strauss-Kahn’s wrong-doing was apparently less serious than some of the fraud and corruption with which other French government officials and company heads were charged (including money-laundering, influence peddling, falsification of documents, and bribery)
  3. Money from the ELF oil company, as well as from the Taiwan frigates scandal, passed through “unpublished accounts” at  Clearstream Banking, the clearing division of Deutsche Bourse, based in Luxembourg. The ELF affair and the Taiwan frigates scandal were the two major financial scandals that hit France in the 1990s. And in both, Clearstream was a platform for money-laundering and tax evasion.

Ten No-No’s In Indian Business Circles

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In honor of elections in India (April 16 – May 13) I’m going to ignore politics and politicians there altogether and post something useful to anyone wanting to do business  in India.

That, I think, is a more worthy activity than wasting one more second of precious time on figuring which set of incompetent, crooked, pompous, self-serving, supercilious, under-worked, overpaid set of bureaucrats is going to boss Indians around until the next set takes over.

I was just as even-handed with the American election. I avoided them altogether by legging it to Morocco.

[Unfortunately, I couldn’t get away from the political process even there.  On the appointed day in November, I woke up in a lush courtyard in a riyadh near Rabat to the sobs of a young American-born German who was apparently beside herself with joy that Obama had won, hard evidence of world-wide Oba-mania that’s still a bit mystifying to me…..]

Anyway, digressions aside, here it is, a list of 10 don’ts in Indian business circles taken from CIO.com

General:

  1. Don’t use a person’s first name automatically. It’s bad manners in many parts of India. Lila: traditionally, names are thought to contain the essence of things/people. Speaking someone’s first name is therefore an intimate act, reserved for use by people who know you well, like your family, or for people who are superior to you hierarchically, like your boss.
  2. Take off your shoes before you go into someone’s home or into a temple or into a public meeting place.  You should probably take them off before entering anywhere else too, especially if you see footwear lined up at the entrance.
  3. Don’t eat beef (Lila: cows have a special place in Hindu iconography and worship)
  4. Don’t accept or give anything with your left hand. (Lila: Traditional Indian culture – like many cultures – designates the right hand for eating food and the left hand for douching/cleaning up after using the toilet)
  5. Don’t expect overt disagreement. People often say yes to be polite. Lila: The Indian head wag, from side to side, looks like a no to Westerners. It’s actually okay/yes/alright/got it/I don’t know/maybe/whatever.
  6. Don’t say no to an invitation or to hospitality.
  7. Don’t be offended by argument or debate. All Indians like to argue. Lila: It’s not personal and it’s not about scoring points. Indians are prone to nit-picking analysis.  They like lists…and distinctions…and categories. They’re chatty people.
  8. Don’t ignore hierarchy/pecking order in the workplace. Lila:  Seniority is a big deal in India. Buddying up with your juniors won’t endear you to a lot of people. Keep some distance in most cases.
  9. Don’t recommend unconventional ideas/projects, since the notion of trying out things and failing isn’t highly regarded. Lila: There aren’t many social networks in India. Families  have to take the hit for failure.  India may have been socialist for a long time, but there’s little in the way of medical insurance, for example. So, telling someone to go adventure traveling or climbing the Himalayas isn’t the cost-free bit of advice it might be in the West, where insurance companies will pick up the tab for an accident.
  10. Write down instructions or requests, since verbal agreements aren’t considered final.

Churches Object to US mandate of Frankenfood Research for Developing Countries

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Advocates of food self-sufficiency have responded critically to the U.S. Senate Foreign Relations Committee’s hasty passage of the Global Food Security Act (S. 384) on March 31, which would mark a major shift in U.S. policy. The Act mandates foreign agriculture research for genetic engineering.  Faith groups responded sharply too:

“Andrew Kang Bartlett of the Presbyterian Church (U.S.A.) said, “While the intentions behind the Global Food Security Act may be laudable, the question is whether poorer farmers left behind by the last Green Revolution will again be swept aside by a top-down approach that benefits mostly transnational corporations.” Dave Kane, of Maryknoll Office for Global Concerns, a Catholic missionary organization with priests, brothers, sisters and lay people working in Asia, Africa and Latin America, added, “We have found GM technology to be disastrous for small farmers and rural communities. Our missioners in Latin America and Asia have seen farmers get deeper and deeper into debt as they struggle to pay for all the seeds, fertilizers and herbicides that GMO technologies require. The result: farmers lose their land and with it, the ability to feed themselves and their families.”

The National Family Farm Coalition, a North American member of La Via Campesina, the international peasants movement, will be pressing the G8 to reconsider policies that advocate for food sovereignty. Ben Burkett, a Mississippi farmer and president of NFFC said, “Farmers both here and in Africa know that the current industrial agriculture model—and the push to fast-track trade liberalization—has failed to alleviate global hunger and denied family farmers a sustainable livelihood. A recently released report this month by Union of Concerned Scientists titled “Failure to Yield: Evaluating the Performance of Genetically Engineered Crops,” showed that despite 20 years of research and 13 years of commercialization, genetic engineering has failed to significantly increase U.S. crop yields while only driving up costs for farmers. In comparison, traditional breeding continues to deliver better results. The G8 needs to move away from Green Revolution monoculture practices and instead implement the IAASTD’s most promising options: support ecologically sound practices, more equitable trade rules and local food distribution systems to empower family farmers.”

More at Food First.

Nightmare on Wall Street

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Here’s the central argument of a long piece I wrote on media manipulation of the bail-out story, its effects on the policy debate and on the price of gold, “Nightmare on Wall Street.”

“Gold Underwhelms

By the end of the week, after a month of relentless international friction and spiraling financial and economic collapse exacerbated by make-shift and venal policies from the Treasury and the Federal Reserve, the Dow is actually at 7776.18, a full 700 points higher than at the beginning of March, Gold – the crisis commodity – is below the band of resistance and looking weak, and the Dollar Index is trading strongly over 85.

Gold’s underwhelming performance did not surprise everyone, of course. The Gold Anti-Trust Action Committee, the leading activist group on gold manipulation has alleged for many years that leading bullion banks (such as, Goldman Sachs and JP Morgan Chase) have been colluding secretively with central banks and world monetary authorities to sell gold whenever necessary, so that rising bullion prices don’t tip off the market to insidious currency debasement.

In fact, GATA is now pressing for an independent audit of US gold reserves at Fort Knox, something that hasn’t been done since President Eisenhower.

GATA’s efforts are commendable. But attention needs to go equally to another kind of manipulation – the manipulation of public perception.

Between the Lines

Take the nationalization debate.

On the face of things, nationalization versus private-public partnership seems to be a debate pitting the good guy, the People’s Pundit (Paul Krugman) against the bad guys, the Bankers’ Bozos (Geithner and Bernanke).

But these terms preempt thinking about more limited and nuanced approaches. And that makes you wonder if the public isn’t being set up to be patsies, no matter which of the two sides it picks.

Take Krugman’s March 1 op-ed, “The Revenge of the Glut,” which blames the crisis on Asian savers. It’s published on the Sunday just before the Fed Reserve begins stone-walling on AIG and before Bernanke and Greenspan also decry the Asian savings glut.

On that, the Pundit and the Bozos are singing from the same page.

Then, look at Krugman’s March 6 op-ed, “The Big Dither,” where he demands nationalization at once. His argument is that government is going to have pour trillions into the crisis anyway, so why not now and why not with government control, so the government gets the upside as well?

If that’s the extent of his reasoning, it’s clearly flawed.

For starters, it’s perfectly possible for the government to do nothing now and also nothing later. It could just stick to prosecuting wrong-doers and ensuring a safety net and redress for victims. Throw a few more jail terms at the problem, and some of the money we think has vanished might reappear. Bottom line: There’s no need for the public to absorb the bad debt of banks at all…with subsidized loans or anything else. Just let the bank’s bond-holders take the losses.

Secondly, with such a crooked set of players, why wouldn’t nationalization just put more power into the hands of the banking cartel?

Thirdly, whatever upside potential remaining bank assets might have, they might not cover the explicit and hidden costs of a full-scale government take-over.

Fourthly, the Swedish solution that Krugman likes to push turns out not to have been nationalization at all. In Sweden in the 1990s, only one bank, Gota Bank, was taken over and that only after it had collapsed. So says William Isaac, the only one in the debate who’s actually nationalized a bank (“Bank Nationalization is Not the Answer,” Wall Street Journal, February 24, 2009).

Isaac points out that Sweden’s largest bank was about a tenth as big as any one of the three largest banks in the US. Unlike Sweden, the ten largest banking companies in the US hold two-thirds of the nation’s banking assets.

If what’s needed is to put some institutions into receivership and to make sure bondholders take losses that the public’s now taking, why not just say that? Why use the term nationalization, which has much broader implications and can set precedents we don’t want in other areas?”

More at Gold Seek.

Global Games: World Bank Boosts the Buck

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“The dollar will remain the world’s dominant reserve currency and a strong U.S. currency is critical to lifting the world out of economic and financial crisis, World Bank President Robert Zoellick said on Tuesday.

Speaking at a newsmaker event at Reuters’ London office, Zoellick announced a $50 billion program to reverse a sharp drop in trade in the global crisis and urged G20 leaders to back the effort.

But he played down the chances of a dethroning of the dollar as the world’s leading currency.”

More at Reuters.

Eurozone Rebuffs Brits On Bail-Outs

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“GORDON BROWN’S carefully laid plans for a G20 deal on worldwide tax cuts have been scuppered by an eve-of-summit ambush by European leaders.

Angela Merkel, the German chancellor, last night led the assault on the prime minister’s “global new deal” for a $2 trillion-plus fiscal stimulus to end the recession.

“I will not let anyone tell me that we must spend more money,” she said.

The Spanish finance minister, Pedro Solbes, also dismissed new cash being pledged at Thursday’s London summit.

“In these conditions I and the rest of my colleagues from the eurozone believe there is no room for new fiscal stimulus plans,” he said.

Nicolas Sarkozy, the French president, has insisted that “radical reform” of capitalism is more important than tax cutting….”

Give Immigrants Residency to Prop Up Housing Market

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“The Obama administration should seriously consider granting resident status to foreigners who buy surplus houses in this country. This makes more sense than the president’s $275 billion housing bailout plan, which Americans greeted with a Bronx cheer.”

Comment:

A great proposal and one I wrote up here on March 6 2009….

http://www.google.com/search?hl=en&q=lila+rajiva&start=30&sa=N

Lila Rajiva: The Mind-Body Politic. Individuals Not Ideologies ….. Lila Rajiva on Washington Won’t Let Skilled Immigrants Solve Housing Crisis …
lilarajiva.org/ – 57k

Some of my pieces have this weird way of getting tucked behind the others, even when they’ve been opened many more times.

The immigration piece only shows up on the second or third page when you do a search for Lila Rajiva. Same for this piece:

The Paulson Putsch

Sep 25, 2008 … Lila Rajiva [send her mail] is the author of the ground-breaking study, The Language of Empire: Abu Ghraib and the American Media (MR Press, …
www.lewrockwell.com/rajiva/rajiva10.html – 56k – Cached –

But this one with far fewer hits is on the first page.

Three Card Capitalists.

Oct 1, 2008 … Lila Rajiva [send her mail] is the author of the ground-breaking study, The Language of Empire: Abu Ghraib and the American Media (MR Press, …

www.lewrockwell.com/rajiva/rajiva11.html – 35k

It’s from the same site, Lew Rockwell, so I don’t see why Google wouldn’t put that on the first page of a search. Got to figure that out.

India Declining….

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“There are four Indians—Anil Ambani, Lakshmi Mittal, K P Singh and Mukesh Ambani—among the 10 biggest losers of wealth globally—who are the same four Indians ranked among the 10 richest of the world last year.

Globally, 656 billionaires took a hit on their net worth, against only 44 adding to their wealth during the year. The total billionaire wealth has shrunk to $2.4 trillion, from $4.4 trillion last year.

“Out of total 25 richest Indians, only Malvinder and Shivinder Singh saw their net worth rise.

As many as 29 Indians have lost their billionaire status, while the net worth of the remaining ones has more than halved to just over $100 billion.

“Last year’s biggest billionaire gainer is this year’s biggest loser. His (Anil Ambani’s) fortune is down from $32 billion as shares in his Reliance Communications fell by two-third..”

From India Journal.

Global Super-Currency To Flood the World

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Edmund Conway

The Telegraph, London

Monday, March 16, 2009

The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis.

Alistair Darling and senior figures in the US Treasury have been encouraging the fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.

Should the move, which is up for discussion by the summit of G20 finance ministers this weekend, be adopted, it will represent a global equivalent of the Bank of England’s plan to pump extra cash into the UK economy.

However, economists warned that the scheme could cause a major swell of inflation around the world as the newly-created money filters through the system. The idea has been suggested by a number of key figures, including billionaire investor George Soros and US Treasury adviser Ted Truman.

Simon Johnson, former chief economist at the IMF, said: “The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them.

“The objective is to create a windfall of cash. However, if everybody goes out and spends the money it could be very inflationary.”

Comment:

The Gold Anti Trust Action Committee (GATA) (which has this article on their website) has been one of the first groups to allege manipulation of the gold price. They’ve launched a Freedom of Information Act (FOIA) inquiry into the actual quantity of gold reserves held by the US, and they allege that it’s likely to be half the official amount because of secret sales, leases, and other arrangements promising it out.  Rising gold prices indicate an erosion in savings, so a stifled gold price is part of government “propaganda” to keep people from figuring out that they’re losing their savings.

I also found an excellent piece by Antal Fekete on their site. Fekete, a renowned Hungarian mathematician, critiques a recent article by NY Times columnist and rock-star Keynesian, Paul Krugman, in which Krugman blames Asians for the financial crisis. The article,   “Revenge of the Glut,” claims that Asian savings caused excess spending and debt. Fekete correctly calls this a piece of nonsense.

Instead, he points out something I haven’t seen any other writer talk about – the fact that while low interest rates are a good thing for business, falling interest rates aren’t. What falling rates do is make the cost of old loans more burdensome. A falling interest rate environment raises the cost of debt liquidation and thus erodes  capital. Eventually it eats up the entire capital base of firms and banks, which is why we are seeing an across the board collapse of banks and auto companies.

Low interest rates thus feed the derivative bubble which in turn drives the interest rate lower and lower.  Ultimately the savings and capital of the whole economy are destroyed. That’s what we are living through.

I’m actually working on a piece myself on Krugman’s article and how it ties in with the propaganda of the last two weeks.

I hope to have it ready tomorrow. Meanwhile, here’s a great line from the Fekete article for you to think about:

That’s the nature of the so-called Keynesian revolution. It is not a branch of economic  science; it is a branch of Leninism, a blend of collectivist ideology reinforced with unmatched expertise on conspiracy, street fighting and barricades.

Obama Considers National Guard to Police Mexican Border

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“President Barack Obama spoke out about the recent violence that has enveloped our neighbor to the south and has begun to spill over from Mexico into the United States. He admitted that he has been weighing the possibility of moving National Guard troops to the border in an effort to contain the violence but ruled out immediate military action.

“We’re going to examine whether and if National Guard deployments would make sense and under what circumstances,” said President Obama, “I think it’s unacceptable if you’ve got drug gangs crossing our borders and killing U.S. citizens.”

One thousand people have already died along the border in 2009 alone, and almost 6 thousand died in 2008. Phoenix, AZ has seen a huge uptick in violence, earning the dubious title of “kidnapping capital of America” while “rape trees” are being found in increasing numbers on the US side of the border…..”

More at Latina

 Comment:

OK. This calls for some Clintonian parsing.

“weighing the possibility” = it’s gonna happen

“ruled out immediate action” = let’s test the waters for now, but wait a bit before going all Wyatt Earp down there

On the positive side, the Sooth-Sayer-In-Chief did admit mundane reality into the thick fog of DC-speak when he conceded that for every drug sale northward, there was a gun sale southward.