Tag Archives: Globalization

Amnesty International Says Repression Of Migrant Workers In Malaysia Must Stop

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Malaysia has been promoted as a good destination for international travelers, retirees, and job seekers in Asia. But it’s also had serious and persistent problems with discrimination, not only in housing, education and work, but in working conditions for immigrants. This seems to be an endemic problem with Malaysia’s foreign manual laborers, who suffer conditions similar to those experienced by Asian workers (skilled and unskilled) in Dubai and other Middle Eastern countries:

“A report released by Amnesty International on Wednesday urged Malaysia to end migrant abuse and reform labour laws in order to better protect foreigners working in the country. The rights group said that many migrant workers are being forced to work long hours in harsh conditions and are subject to rape, abuse and unpaid labour. The rights group says these conditions amount to little short of ‘bonded labour’, adding that laws that allow employers to hold workers’ passports prevented them from leaving abusive workplaces for fear of arrest.

The report entitled ‘Trapped: The Exploitation of Migrant Workers in Malaysia’ accuses the Malaysian authorities of extortion, exploitation, arbitrary arrest and facilitating human trafficking of migrant workers through ‘loose regulation of recruitment agents and through laws and policies that fail to protect workers.’ More than 200 migrant workers, both legal and illegal, were interviewed for the compilation of the report. Amnesty has called on the Malaysian government to investigate abuses in the workplace and by police. Migrant workers constitute more than a fifth of the Malaysia’s work force.”

At a 10,000 man protest in 2007 by Hindu Malays over discrimination in favor of native-born Muslim Malays (bhumiputras), a Hindraf (Hindu rights action force) spokesman said:

“They [Malaysian Indians] are frustrated and have no job opportunities in the government or the private sector. They are not given business licenses or places in university.” (Reuters, November 25, 2007)

The Indians were also incensed by demolitions of Hindu temples at the time.

Last year (Sept, 2009), the government decided to ban the use of English in teaching math and physics to students, a practice introduced by former Prime Minister Mahathir in 2003 as essential to Malaysia’s competitiveness as a destination for foreign businesses. The reason given for the ban, which will take effect in 2012, is the poor performance of the students in those subjects and the deterioration in English language skills, but some consider the real reason to be intense lobbying against English by Malay nationalists.

Native Malays continue to be Muslim by force.  Take the famous case of Azlina Jailani who at 26 converted to Christianity and changed her name to Lina Joy. Under Malay law she’s still a Muslim, since Malay Muslims are forbidden from converting. She’s been fighting in the courts since 1999 to become a Christian legally.

“Every Malaysian citizen over the age of 12 must carry an identification card, called a MyKad, which states the bearer’s religion. In 1999, Joy, a sales assistant, succeeded in getting officials to change her name on the card. Although she said she had been baptized in 1998, she was not able to have the word Islam removed from the card. Her fight to do that is what got her to Federal Court.

It is not possible to be an ethnic Malay in Malaysia without being a Muslim. Apostasy or conversion is a punishable offence in most states in Malaysia, either with a fine, a jail sentence or both. Muslims, most of them ethnic Malays, make up 60 percent of Malaysia’s population and dominate public institutions in an uneasy balance that has remained touchy since anti-Chinese race riots in 1969 that are presumed to have killed hundreds on either side of the ethnic divide. Some 25 percent of Malaysians are ethnic Chinese, followed by Indians with about 11 percent. Indigenous peoples and non-citizens make up the rest.”

(Asia Sentinel, 27th April, 2007)

Joy’s case was finally dismissed in May 2007 and the Federal court ruled that only the Shariya court could remove Joy’s identification as a Muslim on her national ID card.

This is “secular”  Malaysia.

And meanwhile, statists in the Anglophone world continue to labor under the delusion that a national ID card is somehow in the interests of the citizenry and intended to protect them from harm.

As the case of Malaysia shows, ID cards are always about control of the population.

More Capital Controls Hidden In Obama Stimulus Act

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Zerohedge notes the tightening of capital controls in the hiring incentives act (HIRE) passed on March 18 by the Obama administration. A more sober summary of the changes introduced can actually be found at Lexology.  Salient points from Lexology’s summary:

1. Withholding Tax on Payments to Foreign Financial Institutions, Trusts and Corporations. Effective January 1, 2013, the HIRE Act essentially forces foreign financial institutions, trusts, and corporations to choose between either agreeing to provide the IRS with information about their U.S. account holders, grantors and owners, or subjecting themselves to a 30% withholding tax on almost any payment they receive from a U.S. payor. The rules applicable to foreign financial institutions differ from those that apply to foreign trusts and corporations……….

….In general, “withholdable payments” to an FFI are subject to the 30% withholding tax unless the FFI enters into an agreement with the Treasury Secretary requiring the FFI to:

  • Obtain sufficient information from every holder of every account maintained by the FFI to determine whether the account is a United States account.
  • Comply with the verification and due diligence procedures that the IRS and U.S. Treasury may require regarding identification of United States accounts.
  • Provide annual reports on each United States account maintained by the FFI, which must include:
    • The name, address, and TIN of each account holder which is a specified U.S. person and, in the case of any account holder which is a U.S.-owned foreign entity, the name, address, and TIN of each substantial U.S. owner of such entity;
    • The account number;
    • The account balance or value; and
    • Except as provided by the Treasury Secretary, the gross receipts and gross withdrawals or payments from the account.
  • Deduct and withhold a tax equal to 30% of any “passthru” payment by the FFI to either a “recalcitrant account holder,” which is a U.S. account holder who withholds information from the FFI, or another FFI that does not meet the requirements necessary to avoid the 30% withholding tax.
  • Comply with requests by the Treasury Secretary for additional information about any United States account held by the FFI.
  • If foreign law would prevent the required reporting on United States accounts, attempt to get a valid waiver, if one is available under the applicable foreign law, from the account holder, and close the account if a waiver is not obtained within a reasonable period of time…………..

Foreign Entities that are not Foreign Financial Institutions. The new Code Section 1472 also requires 30% withholding on withholdable payments made to nonfinancial foreign entities, unless the withholding agent is provided with certification either (1) that the foreign entity has no substantial U.S. owners or (2) that identifies the name, address, and TIN of each substantial U.S. owner.

Payments to corporations whose stock is regularly traded on an established securities market or of (Lila: correction, “to”) an expanded affiliated group of such corporations, to entities organized under the laws of a U.S. possession and owned entirely by bona fide residents of that U.S. possession, to foreign governments and central banks, and to international organizations are not subject to 30% withholding under Code Section 1472.

[Lila: File under Crikey, What Does This Gobbledygook Mean?]

2. Required Disclosure by Individuals of Foreign Financial Accounts, Increased Penalties, and Extension of Statute of Limitations.The HIRE Act requires individual taxpayers who have an interest in a “specified foreign financial asset” to attach a statement to their income tax return if the aggregate value of all such assets during any year is greater than $50,000………

Required Disclosure. The taxpayer must disclose: In the case of any account, the name and address of the financial institution in which such account is maintained and the number of such account.

  • In the case of any stock or security, the name and address of the issuer and such information as is necessary to identify the class or issue of which such stock or security is a part.
  • In the case of any other instrument, contract, or interest, such information as is necessary to identify such instrument, contract, or interest, and the names and addresses of all issuers and counterparties with respect to such instrument, contract or interest.
  • The maximum value of the asset during the taxable year.

Penalties. There are new penalties for both the failure to disclose a foreign financial account and for understatements of tax attributable to undisclosed foreign financial assets.

The HIRE Act imposes a $10,000 penalty for failure to furnish the required information when due. If the taxpayer fails to correct such failure for more than 90 days after receiving notice of the failure, an additional $10,000 penalty is imposed for each 30-day period (or fraction thereof) during which the failure continues after the expiration of the 90-day period following the notice, up to a maximum penalty of $50,000.

In addition, the HIRE Act increases the penalty on of any portion of an underpayment of tax that is attributable to any undisclosed foreign financial asset understatement from 20% of the understatement to 40% of the understatement.

Extended Statute of Limitations for Undisclosed Foreign Accounts. The HIRE Act extends the statute of limitations for audits of certain unreported income from a foreign financial account from three years to six years.

3. Repeal of Foreign Exceptions to Registered Bond Requirement. The HIRE Act denies an interest deduction for interest on any unregistered bond (typically these will be bearer bonds), effective for bonds issued after second anniversary of the date of enactment.

4. PFIC Reporting. In addition to the reporting already required from shareholders of a passive foreign investment company (PFIC), effective as of March 18, 2010 the HIRE Act requires that each United States person who is a shareholder of a PFIC file an annual report containing such information as the Secretary may require. A foreign corporation that generates passive income (typically interest and/or dividends) is classified as a PFIC if (a) 75% or more of the corporation’s gross income is passive income for purposes of the CFC rules or (b) 50% or more of the average value of the corporation’s assets produce, or are held for the production of, passive income.

5. Electronic Reporting by Financial Institution Withholding Agents. The HIRE Act authorizes the IRS to impose electronic reporting requirements on financial institutions that are withholding agents, even if the institution files less than 250 information returns (the current threshold).

6. Foreign Trust Changes. The HIRE Act makes a number of changes in the rules governing foreign trusts. A transferor to a foreign trust that has a U.S. beneficiary is treated as owner for U.S. tax purposes of the portion of the trust payable to or accumulated for the benefit of a U.S. beneficiary. The HIRE Act provides that an amount is treated as being accumulated for the benefit of a U.S. beneficiary even if the U.S. person is only a contingent beneficiary or if any person has the discretion to distribute from the trust to any person unless the trust specifically identifies the class of permitted beneficiaries and none of the members of the class are U.S. persons.

Loans to a U.S. person or allowing a U.S. person to use trust property are also treated as payments to or accumulations for the benefit of a U.S. person unless the U.S. person repays the loan at a market rate of interest within a reasonable period of time or pays fair market value for the use of the property.

The HIRE Act also requires that any person who is taxable as the owner of a foreign trust must provide such information about the trust as the IRS may require. Penalties for failure to comply with the foreign trust reporting requirements were also increased, effective for returns required to be filed after December 31, 2009.

7. Taxation of Dividend Equivalents. The HIRE Act provides that dividend equivalents used in lieu of dividends to avoid 30% withholding on FDAP income, such as securities lending transactions, sales-repurchase agreements, and notional principal contracts, are treated as U.S.-source dividends for U.S. tax purposes………..”

My Comment:

The Zerohedge headline is rather alarmist, but on closer inspection, despite the dreadful sneakiness of sticking this into some apparently minor stimulus legislation, the controls are only a continuation of a trend already well under way.

The 30% withholding for refusal to disclose US account holder information is pretty high and so are the new penalties, and I’ll post on what I find out about them, but the disclosure rules are already in effect.

Most of this seems to be part of the administration’s attempt to go after off-shore business accounts suspected of money-laundering, tax-evasion, or criminal activity.

The proximate causes of the financial crisis lie in the off-shore and re-insurance racket. And the Obama administration is determined to end banking secrecy in order to end that. I can sympathize, because indeed multinational corporations do siphon off most of their profits through shell accounts in tax-havens, paying little or nothing to the jurisdictions in which they actually work and use public services. Meanwhile, the havens have become festering centers of crime, drugs, and arms sales, and also the home of  penny-stock fraud , as well as of naked short-selling scams.

The European Union Bank, chartered in Antigua in the Caribbean, for example, which boasted of being the first online bank, and which offered secrecy to account holders, was chartered as a subsidiary of Menatep, a large Russian bank, notorious for involvement with organized crime, as this Washington Post piece by Douglas Farah in 1996 noted.

The outfit Tax Justice.net is a global effort to deal with this huge relatively unrecognized problem, initiated by veteran off-shore investigator Lucy Komisar. It seeks banking transparency and an end to the off-shore racket.

This is a laudable goal. And so far as exposure of the crimes and corruptions of these havens help us understand poverty, development, and the impact of globalization, neo-liberalism, and various tax and regulatory regimes, I’m sympathetic.

But, beyond that, I’m wary of the methods and underlying premise. Strengthening the government regulatory and enforcement apparatus has more potential for abuse than use, this late in the crony capitalist game. There’s a much simpler and more libertarian approach to the underlying problems. And that is to reduce income taxes to the lowest level compatible with paying incurred obligations. A simple flat tax should do it.

Abolish pay-roll, personal income, and corporate taxes. Make up the short-fall where it should be made up –  in the kind of user fees and sales taxes described at Fair Tax.org, which are targeted at the biggest users.

Roads, for instance, are largely used..and damaged…by commercial trucks. Yet, these trucks pay far less than they ought, because of the lobbying of their trade associations. Fix these sorts of leakages and then cut income taxes and taxes on investment and job-creating activities, as illustrated in this WSJ piece on people moving to low income tax states. Then go back to sound money and a market interest rate.

You’ll get rid of the incentives for corruption, encourage small businesses to compete more easily, and keep big business onshore. But that’s unlikely to happen any time soon….

Instead, we’re going to have deeper infringements on privacy.

We already knew that private bank accounts were a thing of the past for most ordinary people. Not for the very rich, of course. But we already knew that too..

It remains to be seen whether the new controls will change that.

China Bubble: State Firms Bid Up Land Prices To Record Levels

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China Daily:

“In spite of all the government’s tough talk against excessive home price hikes, the record land price for residential housing in Beijing was broken twice on Monday thanks to aggressive bids by State-owned enterprises.

The weeklong postponement of the land auction seemingly served to save policymakers, who were explaining to the National People’s Congress how they would prevent housing bubbles, from trouble.

Yet, the jaw-dropping results only underscored how differently these cash-rich State firms think about housing prices. It seems that all the measures that the government adopted to raise capital requirements and leverage restrictions have so far worked only to discourage private property developers while doing little to restrain the appetite of State firms for a bigger market share.

The record land sales on Monday certainly cast doubts on a previous official claim that not a single cent of the country’s 4-trillion-yuan stimulus package has flowed into the real estate sector. Worse, they fueled expectations of more price hikes to undermine government efforts to prevent housing bubbles.”

Surreal India

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Daily life in India grows more surreal for the ordinary man, says writer Pritish Nandy:

“You can’t afford food? No worries, we will give you a stunning cricket extravaganza with lots of movie stars and pretty cheerleaders.

You feel insecure because Maoists are now in 20 states and have killed more people than the jihadis? Don’t bother, we will buy you a $2.35 billion refurbished old Russian warship.

Your cities are crumbling under the pressure of migration because agriculture’s no longer a sustainable profession? No stress, we will build you fancy bridges and flyovers and walkways where no one will ever walk.

You can’t find a job despite all your education? No sweat, we promise 30% reservations for women in the Lok Sabha.

Increasing terrorist strikes are scaring you? Chill yaar, we will give you the perfect Indo-US nuclear deal.

Public transportation in the cities is on the verge of collapsing? Not an issue, we are building helipads at prominent locations.”

—  Pritish Nandy, “The Wonderland That’s India,”  Times of India, March 15, 2010

Vatican Moves Away from Frankenfoods

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The head of the Pontifical Council for Justice and Peace, Cardinal Peter Turkson, has moved away from his predecessor’s support for developing genetically modified food to alleviate hunger in poor countries. Instead, he argues that adoption of the “precautionary principle” is warranted:

“There are a lot of claims that are disputed (like) that GMOs never call for the use of pesticides or insecticides or anything because they are resistant,” he said. Such claims have been challenged, he said, and some say “at a certain point (these crops) require insecticides whose chemicals break up later in the soil and render the soil less fertile.”

Given the disputed claims and doubts, “I think that we should go easy and probably satisfy all of these objections to the full satisfaction of those who raise these objections,” he said.

Because of the companies’ control over the patented seeds, “what is meant to alleviate hunger and poverty may actually in the hands of some people become really weapons of infliction of poverty and hunger,” Cardinal Turkson said.

Previously, opponents of GM carried the burden of proving that some harm was being inflicted. Under the PP, companies that planned on introducing genetic changes into an organism would have to bear the burden of proving that it was safe.

While this might seem counter-libertarian, I would argue it is not.

1. Since changes in genetics are impossible to regulate post facto, they cannot be subject to the usual economic arguments available to libertarians. The potential devastation is so irreparable that the principle of liberty demands that the bar be raised ahead of the event.

2. Biotechnology as an industry is concentrated in so few and such large companies, that free market conditions do not prevail at all in other respects. The companies owe their position in the market to their influence on government regulations and laws, to begin with. That suggests that there will be little in the way of normal market forces to check their natural profit-seeking from turning into rent-seeking based on preferential treatment, captive markets/monopoly, and government enforcement.  PP is simply a thoughtful mechanism to prevent profit from careening into plunder.

Bottom line, PP prevents looting or theft.

That makes it libertarian.

The Great Missile…er…Engineering Gap…

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An article in the Christian Science Monitor, Dec. 20, 2005, suggests that data-manipulation abounds in tech rivalry between countries. Our geeks beat yours, is the 21st century version of saber-rattling:

“India provides the clearest example of how the numbers can be interpreted differently. The 350,000 engineers that it supposedly graduated last year is almost certainly false. After publishing that number in October, the National Academies revised it downward to 200,000 in a note issued last month. The Duke study pegs the number at 215,000, but it also points out that nearly half of those are three-year diplomas – not the four-year degrees counted in the US.

More four-year diplomas than India

Last year, the US awarded bachelor’s degrees to 72,893 engineering students, according to the American Society for Engineering Education. But using India’s more inclusive definition, the Duke study finds the US handed out 137,437 bachelor’s degrees last year, more than India’s 112,000. The US number is far more impressive in rela-tive terms, since India has more than three times as many people.

China’s numbers are more problematic because its government does not break them down. In its revised figures, the National Academies reduced the Chinese total from 600,000 to 500,000. The Duke study pegs the total at 644,106, as reported by the Chinese Ministry of Education. But the study also points out that, as with India, the Chinese total includes engineering graduates with so-called “short cycle degrees” that represent three years or less of college training.

“China includes in its count a lot of graduates – including auto mechanics – who would not be included as engineers in the US or many other nations,” says Gary Gereffi, a coauthor of the study and a professor of sociology who directs Duke’s Center on Globalization, Governance, and Competitiveness.

A press spokesman of the Chinese embassy in Washington declined comment, and its education office there did not respond.

China still graduated 351,537 engineers with four-year degrees. That’s 2-1/2 times the US total (although China has four times the US population).

For its part, the National Academies stands by its report, even after its revisions. “I don’t think we believe at all that these new numbers change the ultimate recommendations we have,” says Deborah Stine, of the National Academies. “The US is well behind other countries.”

Back toward 1986 graduation peak

The number of US engineering graduates peaked in 1986, fell back, then has slowly built back up since the late 1990s, says Daniel Bateson, of the Engineering Workforce Commission.

While US numbers don’t approach China’s, some experts say the quality of US graduates remains superior. A McKinsey Global Institute study last summer found that only 10 percent of Chinese engineers and 25 percent of Indian engineers were capable of competing for outsourced work.”

My Comment

We love the land of our birth dearly, but stereotypes have a reason for existing. My countrymen – and I know every variety of them — are not always as self-critical as they should be. Many call them arrogant…

Satyameva Jayate is the national motto: Truth Always Triumphs.

But Satyam (Truth) Computers found that with Big Four Accounting Firm PricewaterhouseCoopers (PwC) signing off on them, cooked books can also triumph…at least until the market collapses.

Indian cricket teams, in terms of sheer talent possibly the best in the world, are nonetheless notorious for snatching defeat out of the mouths of certain victory. They tend to rest on their duffs, when they  should keep their heads down and put their money in their shoes.

True, there is a strong professional and entrepreneurial class. But remember, this is a country of a billion and a third, where nearly a billion people live lives of bare subsistence.

There’s universal corruption. The Corruption Perception Index 2009 by Transparency International has ranked India as the 85th most corrupt country, among 180 countries in the world. It is 19th on the bribery index.

There’s mind-numbing bureaucracy  The Hong Kong-based political and economic risk consultancy group (PERC) reports that Indian civil servants are the least efficient among 12 Asian counterparts: Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines, Indonesia and India.

India, Thailand, and Malaysia face the worst political and social risks, adds PERC.

In some states, the courts and police are feared worse than criminals.

Indian society is often sickeningly color and status-conscious.*

India is a good long-term bet for investment, if you’re careful and monitor your positions. But it’s a  sure-fire disaster for cocky, blind-folded speculation.

Update (March 17, 2010):

*I add a quote from an inter-racial couple:

“My partner is white and I am black, facts of which the Indian public reminds us daily. Bank associates have denied me chai, while falling over to please my white friend. Mall shop attendants have denied me attentiveness, while mobbing my partner. Who knows what else is more quietly denied?

“An African has come,” a guard announced over the intercom as I showed up. Whites are afforded the luxury of their own names, but this careful attention to my presence was not new. ATM guards stand and salute my white friend, while one guard actually asked me why I had come to the bank machine as if I might have said that I was taking over his shift.”

Illegal Immigrant Workers

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David Kramer, at Lew Rockwell blog:

“You know what an “illegal” immigrant worker is, don’t you? It’s someone who voluntary decides to move from one piece of land on the planet Earth to another piece of piece of land on the planet Earth because he or she knows of a person at that second piece of land on the planet Earth who wants to voluntarily exchange with him or her a medium of exchange for his or her labor services—but wasn’t given permission to by a third party with a gun (i.e., the government).”

What China Wants

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The Financial Times points out the quirks in the Chinese market that have Western companies racking their brains to stay on top of sales:

“The big spender in China, in years past and even more so today, is the state: private consumption as a percentage of gross domestic product has fallen from 60 per cent in 1968 to 36 per cent last year and could be as low as one-fifth in 2009 as the government ramps up capital investment.

In fact, the Chinese, who already have a world-beating savings rate of nearly 40 per cent of their income, tend to become more frugal when times are tough. As bank deposit rates decline, most of us spend more. The Chinese tend to stash away even greater sums to make up for the lost interest. The reason for this conservatism is the lack of a social safety net in China – citizens have to provide for their own medical care, old age and possible unemployment.

This makes them “penny pinching, ruthless, suspicious shoppers”, says Tom Doctoroff, north Asia director of advertising agency JWT and a writer on Chinese consumer trends. In a recession this behaviour only grows worse. “The downturn has made people keener on finding the cheapest deal,” says Yuval Atsmon, an associate principal in McKinsey’s Shanghai office. Even when they can easily afford it, buying a PC typically involves six visits to a store, and more often than not, customers will wait six months before making their decision after consulting blogs, online comparison sites and – the most important source of information in China – friends and family. Sales of copycat mobile phones, with all the functions of top models but a lower price, have soared from 17 million units in 2006 to 62 million units last year.

Brand consciousness is high, at least in the big cities, but brand loyalty is much lower than in the west. A price cut or good in-store promotion can often sway shoppers. And for cultural reasons, appealing to an individual’s taste or personal comfort typically doesn’t work, Doctoroff points out. A purchase either has to publicly signal status or wealth, like a flashy car does. Or provide a practical benefit: the latest craze in China is chocolate with added calcium, eaten not for pleasure but for the health benefits. The growing appeal of diamonds to women is not based on romance, but as a financial signal of a man’s commitment. Trust is another key issue in a country where so many consumer products are faked. Chinese mothers, for example, will pay 30 per cent more for safe baby milk – and this should favour foreign brands.

But foreign retailers and manufacturers have to cope with vast regional differences in demographics, language and culture that make it hard to plan a single marketing strategy – indeed treating China like a single country is usually a mistake. Natives of Zhejiang on the east coast like “toilet roll as rough as sandpaper”, the former head of Wal-Mart China liked to observe, a penchant thankfully absent elsewhere. Atsmon points out that cities even an hour apart can be entirely different: in southern Shenzhen, more than four-fifths of the population consists of migrant workers, mostly under the age of 35, who speak Mandarin and drink in bars. In nearby Guangzhou, migrants number just over a quarter, more people are older, enjoy watching Cantonese TV and go out to restaurants to drink with family members. Adequately addressing such niches requires an army of local suppliers, costly infrastructure and several layers of wholesalers and intermediaries. Even then, success may remain as elusive as it always has been: “No matter what you may be selling, your business in China should be enormous, if the Chinese who should buy your goods would only do so,” lamented Carl Crow, an advertising executive in Shanghai and author of the original book on how to sell to the Chinese … more than 70 years ago.”

The Corporate Media: Suffering From Truth Emergency

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We have an elite that has a stranglehold on what gets heard through its grip on professional societies and the major print and TV news. Prizes, media attention, peer approval go to very few media outlets. It’s well- known that only reporters and columnists at a handful of papers get serious attention. That’s a truly dangerous state of affairs and we’re suffering the fall-out from it. What makes it even worse is that news itself is more and more swept aside by trashy, sensation-seeking reporting, which leaves the audience with misinformation or simply a great black hole of ignorance.

Mickey Huff and Peter Phillips analyze the “truth emergency” ravaging the corporate media in the West (and to a lesser degree, everywhere):

“Truth Emergency: Keeping the Facts at Bay

The truth comes as conqueror only because we have lost the art of receiving it as guest.
– Rabindranath Tagore

What are some of these truths, that not knowing them creates a literal state of emergency for human society? Here are two of many possible examples. A 2008 report from The World Bank admitted that in 2005, over three billion people lived on less than $2.50 a day and about forty-four percent of these people survive on less than $1.25. Complete and total wretchedness can be the only description for the circumstances faced by so many, especially those in urban areas of so-called developing nations. Simple items Americans take for granted like phone calls, nutritious food, vacations, television, dental care, and inoculations are beyond the possible for billions of people.6

In another ignored but related story, Starvation.net logged the increasing impacts of world hunger and starvation. Over 30,000 people a day (eighty-five percent of children under five) die of malnutrition, curable diseases, and starvation. The number of deaths has exceeded three hundred million people over the past forty years. These stories should be alarming headlines, certainly more significant than celebrity tripe and tabloid hype.7

Continuing on the theme of human poverty and its ramifications, farmers around the world grow more than enough food to feed the entire world adequately. Global grain production yielded a record 2.3 billion tons in 2007, up four percent from the year before, yet, billions of people go hungry every day. The website Grain.org describes the core reasons for continuing hunger in a recent article “Making a Killing from Hunger.” It turns out that while farmers grow enough food to feed the world, commodity speculators and huge grain traders like Cargill control the global food prices and distribution. Starvation is profitable for corporations when demands for food push the prices up. Cargill announced that profits for commodity trading for the first quarter of 2008 were eighty-six percent above 2007. World food prices grew twenty-two percent from June 2007 to June 2008 and a significant portion of the increase was propelled by the $175 billion invested in commodity futures that speculate on price instead of seeking to feed the hungry. This results in erratic food price spirals, both up and down, with food insecurity remaining widespread.“

My Comment:

Some of this commentary of course paints speculation with too broad a brush. Futures markets can, and do, provide efficient allocation of resources if they function as they should. The problem is not the futures market but the corruption of the market and the constant meddling in it by the state, which blunts the normal checks that the market would otherwise provide.

And again that goes back to public culture and professional standards that have become debased. The deeper question is how they became debased.

Which, of course, leads us to the government’s manipulation of the interest rate. That is where the problem lies.

But meanwhile, where is the media in all this? Providing the context so people can understand what’s going on?

No. It’s rooting around in John Edward’s trash can……

Soros: Gold In Bubble; But Keep Stimulus Going…..

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Always nice to see people talk out of both sides of their mouth.

Here is currency speculator George Soros (ex of legendary hedge-fund Quantum) at the World Economic Forum at Davos:

“When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”

So far so good. Mis-price money (cheap interest rates) and people don’t want to keep their savings in it. They want it in something that isn’t subject to mis-pricing (so they hope) – hence gold.

But then Soros shows how disingenuous he’s being by adding this:

“I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. Some countries, like the US and European countries, have plenty of room to increase their deficits. The political resistance to doing so increases the chances of a double dip in the economy in 2011 and after that.”

That is, he’s suggesting running more deficits and keeping the money spigot going, just the thing that’s caused the gold price to rise.

So how do we understand this?

Gold is due for a technical correction, but it’s also probably responding to deflation in the general economy. It’s not going down that fast, because a lot of people are also buying it speculatively.

That’s the tug of war.

Meanwhile, who know what Soros’ holdings are and who knows what his motivations are in making such contradictory statements.

But anyone who takes these sorts of pronouncements as any kind of lead for their own investments/speculations, should be prepared to part fairly soon from their money.