US-led global recession
A Chinese perspective on America’s Economic Crisis
by Lau Nai-keung
Global Research, October 19, 2005
China Daily
It’s time to take seriously a US-led global recession
I think it is time that we should take a serious look at the possibility that the US is going to take us down towards a worldwide recession in one or two year’s time.
It is well known that the US is the world’s biggest economy, taking up about 30 per cent of global GDP, but it is now also the world’s biggest debtor country. According to the most authoritative person on this subject, the US Comptroller General David Walker, who audits the federal government’s books, the tab for the long-term promises the US Government has made to creditors, retirees, veterans and the poor amounts to US$43,000 billion, US$145,000 per US citizen, or US$350,000 for every full-time worker.
And this figure does not even take into account all the personal debts such as credit card bills and mortgages. With a low interest rate of 1 per cent running for the past three years in a row, savings plummeted to just 1.8 per cent last year, below 1 per cent since January and at zero in the latest estimate from the Bureau of Economic Analysis. In 2000, household debt broke 18 per cent of disposable income for the first time in 20 years. Credit card debt alone averages US$7,200 per household.
The US Government indebtedness is financed this way: The US now runs a trade deficit roughly 6.5 per cent of its GDP and the gap is widened every day. Its citizens are spending ever more on foreign goods, and with the US dollar as the international currency, the US Government just prints money to finance the deficit. And with this money, central banks in the surplus countries purchase most of the US Treasury bonds as currency reserve.
By now, Japan is the largest creditor of the US Government, and the Chinese mainland has been a fervent buyer for the last few years. As for Hong Kong, most if not all of our reserves are in US dollar denominated assets. The US Government in turn uses this foreign borrowed money to finance as much as 90 per cent of the federal deficit which stood at US$412 billion last year. The federal deficit is expected to be running at about US$2 billion a day at the moment.
Put it simply, the Americans have been living way beyond their means for much too long. On top of this, the Bush Administration is cutting tax at least three times while fighting an expensive war in Iraq, which has already cost the country US$700 billion, and currently progressing at US$5.6 billion per month. Now the US economy is dependent on the central banks of Japan, China and other nations to invest in US Treasuries and keep American interest rates down. The low rates keep American consumers snapping up imported goods.
Any economist worth his salt knows that this situation is unsustainable. This includes the country’s economic guru driver Alan Greenspan, who recently warned his countrymen that the federal budget deficit would hamper the nation’s ability to absorb possible shocks from the soaring trade deficit and the housing boom. Now he may have to add two more worries: soaring oil prices and cyclones.
The US is now clearly in huge trouble, economically, socially, politically, and internationally. The Bush Administration bungled big in cyclone Katrina’s aftermath in New Orleans, and then a minor rerun from Rita in Houston, and this will trigger the general outburst of people’s dissatisfaction with the government, leading to great internal turmoil lasting for many years. In all likelihood, long-term interest rates are going to rise, and the greatest property bubble the world has witnessed is going to burst in the next one to two years.
The countdown is in progress, and there is no way that anybody can do anything to reverse it either by short-term measures such as fiscal and monetary policy, or through long-term reform of tax policy, entitlement programmes and even the entire federal budget. This is as inevitable as gravity, and it will take place under a new and inexperienced chairman of the Federal Reserve Board. I do not want to sound alarmist, but I see very bad omens.
To make things simple, let us just examine some key economic issues raised by some economists:
What if the dollar plummets? Do stocks follow? How about pensions?
What if interest rates soar? How would all the new homeowners, who stretched to buy with adjustable and interest-only loans, cover their mortgages?
How would consumers with record credit-card debt make their payments? Would they stop buying? Stop taking vacations? What will happen if they go bankrupt? New rules going into effect later this year make it harder on such debtors.
How would a government, which depends on the taxes of a strong economy to operate, keep all its promises?
To us, the good news is that when the country is in deep trouble, the US will not have the energy to pick on China. Even when it is necessary to start another war to divert people’s attention, it would pick one much smaller in size and weaker in strength, like Iran. This will provide a much more amicable environment for China to make good use of its “period of strategic opportunity” till 2020 for the country to pass through a turbulent zone between per capita income of US$1,000-3,000.
But in the short term, now the US not only sneezes, and all symptoms indicate that it is going to suffer from a SARS-like trouble, the whole world should take extra precaution not to get infected. One thing is for sure, some time in the not too distant future, every central bank and institutional investor is going to dump US dollar and US Treasury bonds. Once, when a country like South Korea dumps the dollar, the still unsold US Treasuries in the asset column of Asian central banks - US$2,000 billion according to some estimates - will collapse. The cheapened dollar will cause a sudden jump in the US inflation, which forces the Fed to jack up interest rates. A giant leap in inflation will cause a severe recession, or perhaps a depression, in the US. These countries’ exports to America will dry up, which in turn will spread the global economic downturn like wildfire.
After the stampede, everybody is going to get hurt, not least the central bank of China, and the Hong Kong Monetary Authority, which are major US creditors and with the US as their number one export market. The recent currency reform of the RMB is most timely, and it is about time we should do something about the Hong Kong dollar. At the same time, China should make extra efforts to rekindle internal consumption, and diversify its market really fast before the great US bubble bursts.
There are news about it already, it was said that a vast number of loyal japanese fans has launched an online origami-folding campaign to wish for a miracle for ayu. So sweet…., maybe we should also do this!!
Translation by goku@ayunite:
Hamasaki Ayumi confessed to deafness in left ear
Yesterday, Japanese Queen Hamasaki Ayumi confessed that her left ear has completely lost all hearing function. However, she will not give up being a singer, and even said that she will only leave her career when her right ear also loses hearing. After hearing these brave words, a vast number of loyal fans has launched an online origami-folding campaign to bring blessings to their idol.
Celebrating her 10th year in the entertainment industry, ayu has decided to go on her second Asia Tour “Asia Tour 2008 ~10th Anniversary~”" in April. After her CountDown concert on New Year’s Eve at Yoyogi First Gymnasium, ayu posted a message on her TeamAyu website at 4.55am yesterday, saying that her ear has been having problems for the past few years, which resulted in sudden deafness. The problem existed until last year, when a trip to a ear specialist confirmed that she had lost all hearing in her left ear.
Will Not Give Up Career
Even though her left ear is beyond repair, ayu still seems strong. She promised her fans that she will not give up easily on her career. Ayu said that she will continue on using her right ear until the very end, using this to prove that she is a professional singer.
Actually, ayu’s hearing problems started about 7 years ago, until in 2000 summer, when a sudden loss of hearing caused her to cancel numerous concerts. Also during that year, while rehearsing her a concert, she accidentally fell from the top of a 1.5m platform, worsening her health. This has also caused ayu to have to use her hand to press on her earpiece during recent performances, affecting the quality of her singing.
Folding Paper Cranes to Bless Their Idol
Using her TeamAyu website, ayu announced her breakup with Tomoya Nagase last July, and news of her loss of hearing yesterday. Many fans immediately left messages on the site, cheering their idol on. Fans on the Japanese forum mixi also praised ayu for being a true professional, and even launched a paper crane folding campaign to bring blessings to ayu, wishing for her left ear to make a surprise recovery.
With regards to the Asia Tour this April, her record company has only released information on 19 stops in Japan so far. Overseas destinations have yet to be announced, and ayu’s hearing problems may cause some problems in future performances.
Bill Gates recently gave a speech at a High School about 11 things they did not and will not learn in school. He talks about how feel-good, politically correct teachings created a generation of kids with no concept of reality and how this concept set them up for failure in the real world.
Rule 1 : Life is not fair - get used to it!
Rule 2 : The world won’t care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself.
Rule 3 : You will NOT make $60,000 a year right out of high school. You won’t be a vice-president with a car phone until you earn both.
Rule 4 : If you think your teacher is tough, wait till you get a boss.
Rule 5 : Flipping burgers is not beneath your dignity. Your Grandparents had a different word for burger flipping: they called it opportunity.
Rule 6 : If you mess up, it’s not your parents’ fault, so don’t whine about your mistakes, learn from them.
Rule 7 : Before you were born, your parents weren’t as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you thought you were. So before you save the rain forest from the parasites of your parent’s generation, try delousing the closet in your own room.
Rule 8 : Your school may have done away with winners and losers, but life HAS NOT. In some schools, they have abolished failing grades and they’ll give you as MANY TIMES as you want to get the right answer. This doesn’t bear the slightest resemblance to ANYTHING in real life.
Rule 9 : Life is not divided into semesters. You don’t get summers off and very few employers are interested in helping you FIND YOURSELF. Do that on your own time.
Rule 10 : Television is NOT real life. In real life people actually have to leave the coffee shop and go to jobs.
Rule 11 : Be nice to nerds. Chances are you’ll end up working for one
Giant skeleton of enormous dimensions,resembling to the description of the character of Ghadotkach in Mahabharata, was excavated in some unknown desert in India. There was also a photograph of the skeleton with two investigators standing nearby.
Giants appear in the legends of Australia, Bavaria, Belgium, Chad, Chile, China, England, France, Germany, Greece, Holland, India , Italy, Kazakhstan, Laos, Morocco, the Netherlands, Nova Scotia, Pakistan, Patagonia, the Philippines, Poland, Rwanda, Russia, Scotland, Sicily, Spain, Sweden, Switzerland, Terra del Fuego, Turkey, the United Sates, Wales, Zanzibar, and the ancient Incan, Toltec, and Nordic cultures, just to name a few.
The first report appeared on the internet,telling that the skeleton was found somewhere in the deserts of western India. The Indian government had the area cordoned off by the Indian army and nobody was allowed to visit the site except a special National Geographic excavation team,the report said.
The Indian mythology speaks about giants namely Rakshasas, who reigned over the forests.
so, how well do you know about our very own sex bomb fiona xie? thanks to reader babymon for linking me to ibon.
My favourite past time is a joker. That’s collecting cut-out and articles of models and celebrities. I have been doing that during my secondary school days, thank God i stop when i got better things to do. LOL!
Well, i decided to trash away some of the really old fashioned magazines cut-out. And i found out a model looking very familiar. It give me 5seconds to know who is this person. It stunned me and i started looking at the photos carefully because it look so different then.
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You don’t believe me, you see it yourself.
Where is the breast?
Yeah, that’s the sexy mediacrop babe that a lot of guys will dream for, Fiona Xie. I think she’s probably 19-20 years old then.Xie was spotted by a talent scout at the age of fifteen, and modelled for numerous print and television commercials in Singapore and Hong Kong before joining Mediacrop Studios as a full-time artiste in 2001. -wikipedia
Actually it’s not surprising for plastic surgery nowadays. But I felt human are going towards the wrong direction. Just imagine everyone on the earth have plastic surgery. Where is the real God’s creation? Get to the point, none is perfectly a beauty. Yet you cannot define what’s true beauty, it can’t be see from your eyes. Rather beauty is what you use your heart to see. Your eyes can go blind, but your heart will never be affected unless you die.
I encourage everyone to live with confidence and whole heartedly. None can judge each other, because everyone aren’t perfect inside out. I think those actress and actors went for surgery because they had no choice but must look they think is “good” in front of the people. It is their way to fame and career. It must be hard on them because they had to lose their real identity, into another body form that might deform. Yet most of them got back was sarcasm and backstabbings. So either way there are gain and lost.
