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Ricardo_Amaral 11/19/2010 05:15 AM Report
A reality check regarding the US economy
Overdose: The Next Financial Crisis
http://www.youtube.com/watch?v=4ECi6WJpbzE&feature=player_embedded
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Ricardo_Amaral 11/18/2010 06:54 AM Report
Note: The amount of daily currency transactions in the global markets went from about US $ 1.5 trillion dollars in 1999 to an estimated US$ 4 trillion dollars in 2010.
***
Central Banks and the US Dollar.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=81958&perpage=6&pagenumber=72
...May 17, 2010
SouthAmerica: As you pointed out: “History is littered with the corpses of failed currency unions and fiat currencies.”
Today, the countries that belong to the euro system have only one option available to them: to refine and fix the problems that are coming up regarding their euro currency system – But there is one thing that you can bet for sure “there’s no going back to the old currency system prior to 1999.”
The Germans must figure out a way on how to fix the current euro monetary system and create the necessary tools to handle the problems that show up along the way and improve that currency system for the benefit of all the members of that currency union.
They should do it with innovation, and by being realist and letting some countries to be restructured of their massive debt load. These countries that restructure their debt will pay a price in the coming years when they have to pay higher interest rates if they need to borrow money according to their financial position and balance sheets.
The ball game has changed in a drastic way with the amount of money that moves around the world at the speed of light on a daily basis, and the amount of money keeps growing year after year - the amount of daily currency transactions in the global markets are in the trillions of dollars and the hot money moves faster and faster all the time. If the euro system disintegrates the independent countries with their old currencies would be extremely vulnerable to speculative attacks from the hot money as never seen before.
There’s only one option available to the euro countries today: to move forward and fix the current system – if they try to turn the clock back and go back to their old currencies then they would be all doomed beyond their imagination.
Keep in mind the US dollar international monetary system is in worse shape than the global market is realizing right now. Just wait until the shit hits the fan against the US dollar.
As usual, the mainstream media is highlighting and placing the spotlight only in one direction, but if they started paying more attention to the US economy then they would realize that the problem inside the US dollar system is much greater than the problem inside the Euro system.
California alone counts for 13 percent of US GDP – and the poor state of financial condition of California alone might be a bigger problem than the problem of Greece, Portugal, Ireland and Spain combined.
In the last 30 years the biggest growth industry in California it has been its prison system, they built about 30 new prisons in California and not a single new university during that period of time. The question is how many people can you put in prison to keep your state moving forward economically? And who is going to continue to pay for this brain dead strategy?
http://en.wikipedia.org/wiki/California#Economy
Never mind the economies of states such as New York, New Jersey, Michigan, Illinois, and so on…Talking about a basket cases we don’t know who wins the prize: the US federal government or the various states – it is a race to the bottom.
Just wait and see what will happen to the US dollar when the smart money finally recognizes the massive economic and financial meltdown that is building up and eventually is going to blow up in a worse global financial crisis than in 2008 – the last financial meltdown of 2008 is going to look like the good old days.
And this time around there’s no safety net available anymore – Since 2008 Wall Street managed to go back and do business as usual until now, but the party it will be really over this time around.
***
Maybe what we need is for the current international monetary system based on the US dollar to disintegrate into a massive meltdown and global financial crisis – and then they would be forced to redesign the entire international monetary system and create a new system in sync with the new global environment and the economic and financial realities of the 21st century.
*****
May 17, 2010
SouthAmerica: ...“Today the amount of hot money that the international speculators have under their management is becoming mind-boggling. The amount of daily currency transactions in the global markets is in the trillions of US dollars.
Countries are losing their capability of defending their weak currencies from the foreign attack of these international money speculators.
It is getting easier and easier for these international speculators to destroy the entire economy of countries such as Russia, Indonesia, Malaysia, Thailand, Korea, Argentina, and Brazil, all they have to do is destroy their currency and these economies have a complete collapse. It is a form of modern economic warfare. These countries don't have the economic reserves necessary to defend their currencies from foreign speculative attacks."
In a Nutshell: It is getting easier and easier for these international speculators to destroy the entire economy of countries such as Russia, Indonesia, Malaysia, Thailand, Korea, Argentina, Brazil, Greece, Portugal, Ireland, Spain, and so on…all they have to do is destroy their currency or torpedo their government outstanding debt, and force these economies into a complete collapse. It is a form of modern economic and financial warfare.
For example China, Japan and other countries are setting up the United States for a big fall and they keep extending credit to the US government into the trillions of US dollars – it is like giving a rope to the United States to place around its neck to be hanged in the near future.
This cheap credit that we have had for many years is creating a massive trouble not only for the United States, but this massive problem has been also exported to other countries around the world with the compliments of the US Federal Reserve and Ben Bernanke.
Yes, it is a form of modern economic and financial warfare.
*****
The US dollar and the biggest default in history
http://www.elitetrader.com/vb/showthread.php?s=&threadid=121313&perpage=6&pagenumber=7
...February 12, 2010
SouthAmerica: As the US dollar moves right on schedule to achieve the biggest default in world history…In the meantime the world financial markets waste time with irrelevant and immaterial events.
Maybe Greece is just the canary in the coalmine, and the United States economy and the US dollar are the main event.
Greece’s estimated government deficit for 2010 of about $ 43 billion dollars it is just a minor drop in the bucket inside the $14.52 trillion dollar GDP of the European Union.
For all practical purposes the Greek economy is immaterial regarding the total size of the economy of the European Monetary Union: (Euroland).
Greece’s budget deficit is projected to reach 12.7 per cent of GDP in 2010 and the government in Athens now plans to reduce it below three per cent in 2012.
Greece GDP: $339.2 billion (2009 est.)
12.7 % of US$ 340 billion = $ 43 billion deficit in Greece in 2010
***
Basically the economies of Greece and Portugal are irrelevant in relation to the size of the economy that makes the European Monetary Union = the euro.
But on the other hand the financial mess of the economies of states such as California, New York State, New Jersey, Illinois, Michigan and so on (are Pathetic and basket cases) but they are relevant in relation to the size of the economy of the United State of America and the US dollar.
.
Ricardo_Amaral 11/18/2010 06:30 AM Report
Central Banks and the US Dollar.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=81958&perpage=6&pagenumber=72
...May 17, 2010
SouthAmerica: As you pointed out: “History is littered with the corpses of failed currency unions and fiat currencies.”
Today, the countries that belong to the euro system have only one option available to them: to refine and fix the problems that are coming up regarding their euro currency system – But there is one thing that you can bet for sure “there’s no going back to the old currency system prior to 1999.”
The Germans must figure out a way on how to fix the current euro monetary system and create the necessary tools to handle the problems that show up along the way and improve that currency system for the benefit of all the members of that currency union.
They should do it with innovation, and by being realist and letting some countries to be restructured of their massive debt load. These countries that restructure their debt will pay a price in the coming years when they have to pay higher interest rates if they need to borrow money according to their financial position and balance sheets.
The ball game has changed in a drastic way with the amount of money that moves around the world at the speed of light on a daily basis, and the amount of money keeps growing year after year - the amount of daily currency transactions in the global markets are in the trillions of dollars and the hot money moves faster and faster all the time. If the euro system disintegrates the independent countries with their old currencies would be extremely vulnerable to speculative attacks from the hot money as never seen before.
There’s only one option available to the euro countries today: to move forward and fix the current system – if they try to turn the clock back and go back to their old currencies then they would be all doomed beyond their imagination.
Keep in mind the US dollar international monetary system is in worse shape than the global market is realizing right now. Just wait until the shit hits the fan against the US dollar.
As usual, the mainstream media is highlighting and placing the spotlight only in one direction, but if they started paying more attention to the US economy then they would realize that the problem inside the US dollar system is much greater than the problem inside the Euro system.
California alone counts for 13 percent of US GDP – and the poor state of financial condition of California alone might be a bigger problem than the problem of Greece, Portugal, Ireland and Spain combined.
In the last 30 years the biggest growth industry in California it has been its prison system, they built about 30 new prisons in California and not a single new university during that period of time. The question is how many people can you put in prison to keep your state moving forward economically? And who is going to continue to pay for this brain dead strategy?
http://en.wikipedia.org/wiki/California#Economy
Never mind the economies of states such as New York, New Jersey, Michigan, Illinois, and so on…Talking about a basket cases we don’t know who wins the prize: the US federal government or the various states – it is a race to the bottom.
Just wait and see what will happen to the US dollar when the smart money finally recognizes the massive economic and financial meltdown that is building up and eventually is going to blow up in a worse global financial crisis than in 2008 – the last financial meltdown of 2008 is going to look like the good old days.
And this time around there’s no safety net available anymore – Since 2008 Wall Street managed to go back and do business as usual until now, but the party it will be really over this time around.
***
Maybe what we need is for the current international monetary system based on the US dollar to disintegrate into a massive meltdown and global financial crisis – and then they would be forced to redesign the entire international monetary system and create a new system in sync with the new global environment and the economic and financial realities of the 21st century.
*****
The US dollar and the biggest default in history
http://www.elitetrader.com/vb/showthread.php?s=&threadid=121313&perpage=6&pagenumber=7
...February 12, 2010
SouthAmerica: As the US dollar moves right on schedule to achieve the biggest default in world history…In the meantime the world financial markets waste time with irrelevant and immaterial events.
Maybe Greece is just the canary in the coalmine, and the United States economy and the US dollar are the main event.
Greece’s estimated government deficit for 2010 of about $ 43 billion dollars it is just a minor drop in the bucket inside the $14.52 trillion dollar GDP of the European Union.
For all practical purposes the Greek economy is immaterial regarding the total size of the economy of the European Monetary Union: (Euroland).
Greece’s budget deficit is projected to reach 12.7 per cent of GDP in 2010 and the government in Athens now plans to reduce it below three per cent in 2012.
Greece GDP: $339.2 billion (2009 est.)
12.7 % of US$ 340 billion = $ 43 billion deficit in Greece in 2010
***
Basically the economies of Greece and Portugal are irrelevant in relation to the size of the economy that makes the European Monetary Union = the euro.
But on the other hand the financial mess of the economies of states such as California, New York State, New Jersey, Illinois, Michigan and so on (are Pathetic and basket cases) but they are relevant in relation to the size of the economy of the United State of America and the US dollar.
.
Ricardo_Amaral 11/18/2010 03:28 AM Report
Brazzil Magazine – April 23, 2010
Brazil and the New Economic Miracle. The US Has a Lot to Learn! - Written by Ricardo C. Amaral
http://www.brazzil.com/component/content/article/218-april-2010/10386-brazil-and-the-new-economic-mir acle-the-us-has-a-lot-to-learn.html#comments
Quoting from this article:
...The Global Clash of Speeds
In December of 2006 I read a very interesting new book "Revolutionary Wealth" by Alvin Toffler. He said a lot of insightful things in his book and in chapter 3 "The Clash of Speeds" - he said the following: "The countries with the key economies in today's world - the United States, Japan, China, and the European Union - are all heading for a crisis that none wants, that few political leaders are ready for, and that will set limits on future economic advance. This looming crisis is a direct result of the "de-synchronization effect," an example of how we mindlessly deal with one of the deepest of all the deep fundamentals: Time.
Nations all over the world today are struggling at different rates of speed to build advanced economies. What most business, political and civil leaders have not yet clearly understood is a simple fact: An advanced economy needs an advanced society, for every economy is a product of the society in which it is embedded and is dependent on its key institutions.
If a country manages to speed up its economic advance but leaves its key institutions behind, it will eventually limit its potential to create wealth. Call it the Law of Congruence. Feudal institutions everywhere obstructed industrial advance. In the same way, today's industrial age bureaucracies are slowing the move toward a more advanced, knowledge-based system for creating wealth...In all these countries, key public institutions are out of step with the whirlwind of change that surrounds them."
Anyway, the book has 500 pages and one of the things that he mentioned in his book and I did not forget, is that the most extraordinary thing today is that we still can function at all here in the United States - he shows with many examples how everything is getting completely out of sync.
Not only here inside the US economy, but it is amazing that the US still is able to do business with countries from around the world when everybody is moving at different speeds.
By the way, one of the points that Alvin Toffler makes in his book is that the American legal system is completely out of sync with the reality of what is happening inside the United States, and around the world.
*****
Alvin Toffler on Education
http://www.youtube.com/watch?v=04AhBnLk1-s&feature=player_embedded
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Ricardo_Amaral 11/18/2010 02:31 AM Report
“China's 'State Capitalism” Sparks a Global Backlash”
By Jason Dean, Andrew Browne and Shai Oster
The Wall Street Journal – November 16, 2010
http://online.wsj.com/article/SB10001424052748703514904575602731006315198.html?mod=wsj_share_facebook
BEIJING—Since the end of the Cold War, the world's powers have generally agreed on the wisdom of letting market competition—more than government planning—shape economic outcomes. China's national economic strategy is disrupting that consensus, and a look at the ascent of solar-energy magnate Zhu Gongshan explains why.
A shortage of polycrystalline silicon—the main raw material for solar panels—was threatening China's burgeoning solar-energy industry in 2007. Polysilicon prices soared, hitting $450 a kilogram in 2008, up tenfold in a year. Foreign companies dominated production and were passing those high costs onto China.
Beijing's response was swift: development of domestic polysilicon supplies was declared a national priority. Money poured in to manufacturers from state-owned companies and banks; local governments expedited approvals for new plants.
In the West, polysilicon plants take years to build, requiring lengthy approvals. Mr. Zhu, an entrepreneur who raised $1 billion for a plant, started production within 15 months. In just a few years, he created one of the world's biggest polysilicon makers, GCL-Poly Energy Holding Ltd. China's sovereign-wealth fund bought 20% of GCL-Poly for $710 million. Today, China makes about a quarter of the world's polysilicon and controls roughly half the global market for finished solar-power equipment.
Western anger with China has focused on Beijing's cheap-currency policy; President Obama blasted the practice at the G-20 summit in Seoul last weekend. Mr. Zhu's sprint to the top points to a deeper issue: China's national economic strategy is detailed and multifaceted, and it is challenging the U.S. and other powers on a number of fronts.
Central to China's approach are policies that champion state-owned firms and other so-called national champions, seek aggressively to obtain advanced technology, and manage its exchange rate to benefit exporters. It leverages state control of the financial system to channel low-cost capital to domestic industries—and to resource-rich foreign nations whose oil and minerals China needs to maintain rapid growth.
China's policies are partly a product of its unique status: a developing country that is also a rising superpower. Its leaders don't assume the market is preeminent. Rather, they see state power as essential to maintaining stability and growth, and thereby ensuring continued Communist Party rule.
It's a model with a track record of getting things done, especially at a time when public faith in the efficacy of markets and the competence of politicians is shaken in much of the West. Already the world's biggest exporter, China is on track to pass Japan this year as the second-biggest economy.
Charlene Barshefsky, who as U.S. trade representative under President Bill Clinton helped negotiate China's 2001 entry into the World Trade Organization, says the rise of powerful state-led economies like China and Russia is undermining the established post-World War II trading system. When these economies decide that "entire new industries should be created by the government," says Ms. Barshefsky, it tilts the playing field against the private sector.
...According to China's Ministry of Finance, assets of all state enterprises in 2008 totaled about $6 trillion, equal to 133% of annual economic output that year. By comparison, total assets of the agency that controls government enterprises in France, whose dirigiste policies give it one of the biggest state sectors among major Western economies, were €539 billion ($686 billion) in 2008, about 28% of the size of France's economy....
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Ricardo_Amaral 11/18/2010 01:56 AM Report
Central Banks and the US Dollar
http://www.elitetrader.com/vb/showthread.php?s=&threadid=81958&perpage=6&pagenumber=74
...October 7, 2010
SouthAmerica: The main front page headline on today's Financial Times (UK) reads: “China hits out on renminbi”.
Speaking in Brussels, Mr. Wen Jiabao warned that acceding to demands for a faster rise in the renminbi could cause social unrest in China.
...”Do not work to pressurise us on the renminbi rate – Chinese exporter companies had very small profit margins, which could be wiped out by actions such as the currency import tariffs the US Congress is threatening to impose.
Many of our exporting companies would have to close down, migrant workers would have to return to their villages....
*****
SouthAmerica: What Mr. Jiabao is saying it's true and can result in massive social, and economic turbulence inside China – a situation that very quickly can get out of hand and turn it into a nasty revolution or out of control civil war.
But I wonder what Mr. Jiabao thinks is happening to the Brazilian industrial base and employment in Brazil with the value of the Brazilian currency going up against the US dollar and the renminbi by almost 30 percent since January 2009.
It is OK to destroy the industrial base of other countries, but isn't OK to do the same thing to China?
He expects that the industrial base of the rest of the world to just go to hell in a hand basket without a global overreaction?
That's why we are in a full blown international monetary war, that is escalating by the day.
Why Mr Wen Jiabao and the Chinese government can't grasp that it is time to move ASAP and create the “New Asian Currency”? - A similar currency and monetary arrangement that they already have in Euroland, but this time for countries such as China, Japan, Singapore, Taiwan, Hong Kong, South Korea, India, Indonesia, Malaysia, and Brazil - as I have been suggesting on my articles for many years.
That new international currency arrangement can be created and put into practice almost overnight.
The solution it's obvious for the current international currency war: China should take a leadership role and create the “New Asian Currency”.
By the way, the “New Asian Currency” would be allowed to float in the international markets just like the US dollar and the euro.
***************
Central Banks and the US Dollar
http://www.elitetrader.com/vb/showthread.php?s=&threadid=81958&perpage=6&pagenumber=73
...November 15, 2009
SouthAmerica:...You said: “80% is much too high - very destructive of trade and it would be an administrative nightmare.”
Keep in mind that the target here is the “Hot Money” that is the type of investment that the Brazilian government should keep away from Brazil - just like the plague.
That type of investment it does more harm than good to the long-term economy of any country.
And the new exit taxes to foreign capital would not be as hard to keep track as you think. As the “Hot Money” comes into Brazil they would come to a bank or other investment institution such as a hedge fund, or any other type of organization that handles these foreign cash inflows in Brazil. Then these institutions would be responsible from collecting the 80 percent tax on behalf of the Brazilian government, and if they don’t do their job properly then they would be responsible themselves for the amount due to the Brazilian government.
If the foreign money that came in into one of these foreign investment accounts is withdrawn before 12 months the rate is 80 percent on the profits, and after that you deduct two percentage points for each extra month that the investment stays in Brazil on a decline scale as follows:
First 12 months = 80 percent of profits...
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Ricardo_Amaral 11/18/2010 01:54 AM Report
September 17, 2010
Regarding China's major investments in Brazil:
Brazzil magazine is the most popular Brazilian magazine published outside of Brazil. Only the major magazines in Brazil have more regular readers than Brazzil magazine.
Brazzil magazine is one of the most successful Brazilian magazines on the Internet, and they get an average of 35 to 40 thousand readers per day, and about 45 percent of the readers of Brazzil magazine on average are from China. I receive emails and letters to the editor regarding my articles from people in the United States, Canada, Asia, Middle East, Europe, and also from people in Brazil.
Since Brazzil magazine started publishing my articles a few years ago about China, the market share of readers from China went from zero percent at that time to about 45 percent of the readers today - and another 10 percent of readers are from other Asian countries.
Every time my articles are published I send a copy of the article to every senator, and deputado federal (congressmen) in Brazil; including to my friend a former president of Brazil and the current president of the Senate - Senator Jose Sarney. And I also send a copy to various members of President Lula's cabinet.
Regarding this particular article I also sent a direct copy to my friend former President Jose Sarney, and I did discuss the contents of this article directly with him when I met him in New York in December 2007 - my article published on Brazzil Magazine in October 2007 “The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil.”
You can bet some of these people have been reading my articles and they have been following up with real action that will have an important impact in the Brazilian economy for years to come.
My article suggested that the Chinese government invest long-term money with the Brazilian government in exchange for guaranteed future supplies of commodities including food supplies, oil, other raw materials, and so on…
*****
The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s&postid=1677743&highlight=make+investments+on+behalf+of +China#post1677743
November 13, 2007
SouthAmerica: I did all I could do at this point regarding my economic development plan for Brazil in partnership with China.
I did send a copy of all the information to the China Sovereignty Fund - the fund responsible to make these investments on behalf of China. And also to many other Chinese government financial institutions.
I did send a copy of all the information to all senators and deputados federais in Brazil.
I also sent the information to various members of President Lula's cabinet.
The ball is on their court and let's see if at least a bunch of these people have the foresight and get interested in following up on my economic development plan.
I know that thousands of people are reading my 4-part series of articles on Brazzil magazine.
*****
The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s&postid=2940295&highlight=China+investments+in+Brazil#p ost2940295
September 1, 2010
SouthAmerica: When I wrote the enclosed article in 2007, the current deal that is being negotiated in Brazil with The State Grid Corporation of China (SGCC) – that is not what I had in mind.
*****
Brazzil Magazine – October 2007
"The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil" - Written by Ricardo C. Amaral
…The final conclusion is: It's imperative that China move forward in an aggressive fashion and implement with Brazil the plan described in this four-part series of articles. And China should look at it as a matter of national security and future survival.
Monday, 01 October 2007 - Part 1 of 4
http://www.brazzil.com/component/co...-2007/9977.html
Friday, 05 October 2007 - Part 2 of 4
http://www.brazzil.com/component/co...-2007/9979.html
Thursday, 11 October 2007 - Part 3 of 4
http://www.brazzil.com/component/co...-2007/9983.html
Tuesday, 16 October 2007 - Part 4 of 4
http://www.brazzil.com/component/co...-2007/9985.html
*****
The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://www.elitetrader.com/vb/showthread.php?s&threadid=105680&perpage=6&highlight=china+investments+ in+brazil&pagenumber=12
September 10, 2010
SouthAmerica: It looks like the Chinese have been paying close attention to my articles published on Brazzil magazine.
Here is another example:
***
Soybean and Corn Advisor - June 29, 2010
“Foreign Ownership of Farmland in Brazil Could be Restricted “
...There has been a lot written in the Brazilian press recently about potential changes in the amount of farmland a foreign individual, corporation, or government is allowed to purchase in Brazil. Recent comments by the Brazilian president and various Brazilian senators indicate that something will be done concerning this issue.
What really caught everyone's attention in Brazil was the fact that the Chinese government (through one of its holding companies) purchased several hundred thousand hectares of land in the state of Bahia.
***
September 10, 2010
SouthAmerica: I have been posting information on Brazzil magazine for the Brazilian government to restrict the foreign ownership of farmland in Brazil.
My next article will be on that subject, and much more.
***
"Big crackdown on foreign firms' land ownership in Brazil"
Morning Star (UK)
Wednesday 25 August 2010
.
Ricardo_Amaral 11/18/2010 01:50 AM Report
November 15, 2010
This is a copy of a letter that I sent to John Naisbitt regarding his latest book "China Megatrends":
May 23, 2010
Dear Mr. Naisbitt,
I have been reading most of your books since the early 1980’s, and I just finished reading your latest book “China’s Megatrends.
As usual it is an excellent book, and you did a great job explaining what is happening in China and its miracle economic development.
I was disappointed only about one point that you left out of your book and an important piece related to this outstanding economic performance of China.
I was looking forward to see at least one chapter on your latest book showing the role that the Overseas Chinese Network of networks have been playing as a support and major investor to help China achieve such an outstanding economic development miracle.
When you wrote “Megatrends Asia” that was published in 1996, you said the following:
“The economic resurgence of Asia, driven by an aggressive global network of Chinese entrepreneurs and off-shore money, is moving in the direction of eclipsing the West. Unless the United States and Europe start to participate in the new Asia game, they will end up playing second fiddle to the new global leaders in Asia as early as the beginning of the next decade…The modernization of Asia – economically, politically and culturally – is by far the most important event taking place in the world today.
The true force that we must promptly come to reckon with is more dynamic, a secretive sophisticated network – invisible to most – that will make China and the Chinese the world’s dominant economy. It is decentralized, Pan-Asian, increasingly global and family and education-oriented, and most of all, fabulously rich. It is the phenomenon of the Overseas Chinese. There are 57 million of them, 53 million in Asia alone. They have been around for centuries, but only now is the world becoming aware of their awesome presence.
The Overseas Chinese: The New Great Economic Power
The dynamics of Asia’s extraordinary growth cannot be understood without a thorough examination of the Overseas Chinese, the greatest entrepreneurs in the world. According to an assortment of estimates, Chinese around the world hold between $ 2 trillion and $ 3 trillion in assets, and many believe the real figure is higher.
…Fujitsu Research in Tokyo looked at the listed companies in just six key Asian countries. As its findings below illustrate, the overwhelming majority were owned by Overseas Chinese as follows: Thailand 81 percent, Singapore 81 percent, Indonesia 73 percent, Malaysia 61 percent, and the Philippines 50 percent.
This astonishing revelation about the tremendous economic power of the Chinese is confined only to the publicly listed companies. What about the less glamorous small and medium-size enterprises that together makes up 96 percent of all companies in the Asia-Pacific Economic Cooperation (APEC) realm? According to Bustanil Ariffin, the former Indonesian minister who co-chaired the Pacific Business Forum, it is believed that small and midsize companies employ half of the workforce in most Asian countries. Chinese own 90 percent of these companies.
The economy of the borderless Overseas Chinese is the third largest in the world. If we counted the economic activity of all the Overseas Chinese as country all by itself, it would be outranked only by the United States and Japan.
Ethnic Chinese – not the Japanese – are the largest cross-border investors in Thailand, Malaysia, Indonesia, the Philippines and Vietnam. The Overseas Chinese account for 80 percent of all foreign investment in China, the motherland.
In the thriving new countries of Asia, Overseas Chinese control a huge chunk of the wealth – far more than their numbers might suggest. In Malaysia, they represent 30 percent of the population and control more than half of the economy. The numbers elsewhere are even more remarkable:
* Indonesia: 4 percent control 70 percent of the economy.
* Thailand: 3 percent control 60 percent of the economy.
* The Philippines: 3 percent control 70 percent of the economy.
… The New Paradigm - A Network of Networks
The Overseas Chinese are a network of networks. That is a new paradigm, a new formulation within the framework of the world’s economy. All the key players among the Overseas Chinese know one another. Their businesses stay singularly apart, but they work together when necessary. They are intensely competitive among themselves and exclude outsiders, especially those not of the same family, village or clan. When a crisis arises or a great opportunity presents itself, they will close ranks and cooperate. …If you are being considered for a new partnership, a personal reference from a respected member of the Chinese business community is worth more than any amount of money you could throw on the table.
…The family business of the Overseas Chinese are networks of companies and other enterprises. And they are, in turn, woven together to constitute a huge global Chinese network of networks. Internet is the model for understanding. Just as the Internet is a network of about 25,000 networks, the Overseas Chinese networks number in the tens of thousands.
The number of networks and individuals on the Internet is not limited because the Internet is totally decentralized. …It is decentralized right down to the individual; only the individual can access the Internet. Because of this complete decentralization, the Internet can have as many members as want to join. Similarly, the Overseas Chinese network can get as big as it needs to be to transform Asia’s economy.”
*****
Based on the above information I would assume that in 2007 the Overseas Chinese network of networks must have at least 65 million members outside of China. In 1994 it was estimated that the Overseas Chinese held between US$ 2 trillion and US$ 3 trillion in assets, but in 2007 that figure should be estimated to be around US$ 7 trillion in assets when we take into consideration all the extra success achieved by the Overseas Chinese since that time.
.
Ricardo_Amaral 11/18/2010 01:47 AM Report
November 15, 2010
For over 5 years I have been mentioning on my articles about the United States fast declining clout, prestige and influence in South America. Here I am quoting from my article from over 5 years ago:
Brazzil Magazine - June 2, 2005
“While China Rises the US Falls in Brazil and Latin America” - Written by Ricardo C. Amaral
http://www.brazzil.com/2005-mainmenu-79/152-june-2005/9296.html
...US Influence Declining in South America
The Arab-South America Summit offered to the Arabs commercial alternatives not available before, which will reduce the European and American hegemony in the Arab world.
The Arab Summit laid the foundations to further reduce the gap between the Arab world and South America, an area of the world that is becoming one of the major industrial and commercial trading blocs in the world.
On January 26, 2005 The Financial Times of London had an interesting editorial - "How America became the world's dispensable nation."
That Financial Times article started by saying: "In a second inaugural address tinged with evangelical zeal, George W. Bush declared: "Today, America speaks anew to the peoples of the world." The peoples of the world, however, do not seem to be listening. A new world order is indeed emerging - but its architecture is being drafted in Asia and Europe, at meetings to which Americans have not been invited.
...The US, it turns out, is a dispensable nation. Europe, China, Russia, Latin America and other regions and nations are quietly taking measures whose effect, if not sole purpose, will be to cut America down to size.
Ironically, the US, having won the cold war, is adopting the strategy that led the Soviet Union to lose it."
To further illustrate the United States loss of clout and influence in South America, we just have to look at the results of the latest election of the head of the OAS.
One of US Secretary of State Condoleezza Rice's goals in her trip to Brazil in late April 2005 was to convince President Lula to change his mind and have Brazil vote for the US candidate that would head the Organization of American States (OAS) for the next 5 years.
One week later, the candidate that Brazil was supporting all along, in opposition to the United States, Mr. Insulza from Chile was the winner. It was the first time in the organizations 60-year history that the candidate supported by Washington did not win.
This particular election sends a clear signal to the world of how fast the United States is losing its influence in South America. At the same time that the US is losing its influence, China is quickly replacing the United States influence in the Area.
China's Rising Influence
In a very short period of time China is becoming the most important business partner of Brazil. China has been quickly replacing the United States' influence in Brazil - and that is also happening in other South American countries
On May 17, 2005 - The Financial Times of London had another article trying to explain why US influence was declining in South America: "Latin lessons the US faces a loss of leadership."
The article said: "Why have relations turned so sour? Economics is part of the reason. During the late 1980s and 1990s Latin America embraced free market policies and moved enthusiastically into the US orbit. But when reform often failed to produce growth that began to change, with many Latin Americans blaming the US for their problems.
"The failure of the Bush administration to help Argentina when it ran into a disastrous debt crisis at the end of 2001 was particularly damaging to its image in the region. "Whether or not Washington or Wall Street really bear the blame, many Latin Americans believe the US led them down the primrose path but then were simply not interested when times got tough," says Julia Sweig, a Latin America specialist at the New York-based Council on Foreign Relations.
"After a number of South American countries embraced democracy, and many of the economic policies prescribed by Washington including all kinds of privatizations, the result of these changes did not benefit the South American population as expected.
"And South America's less than impressive economic performance over the past 15 years has led to a fresh bout of soul-searching about what kind of economic model is right for the region.
"... In particular, the role of the state - which policymakers were trying to cut back for most of the 1990s - is undergoing a rethink, in part reflecting South America's growing economic relationship with parts of Asia that have achieved much higher rates of growth."
There is another factor that contributed to the current state of affairs in South America. After the collapse of the Soviet Union in 1991, the United States lost its interest regarding South America.
Some South American countries including Brazil, instead of whining or crying over spilled milk, did something about it, as a capitalist country they started searching around the world for new partners to establish new ties to replace their lost business.
The US decline of influence with Brazil did not happen overnight or because of political reasons; it was as a result of economic reasons as Brazil found new partners.
The Brazilian need to find new markets for its products coincided with the economic explosion that has been happening in the Chinese economy in the last few years. Today, China has an insatiable need for commodities of all kinds to feed its amazing production machine.
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Ricardo_Amaral 11/18/2010 01:45 AM Report
Goldman Sachs is it a Cancer or just a Parasite of the US financial system?
http://www.elitetrader.com/vb/showthread.php?s=&threadid=195957&perpage=6&pagenumber=24
...November 14, 2010
SouthAmerica: Reply to EMRGLOBAL
I have a question for you: Do you work for "Goldman Sachs the Pillage People"?
I am writing an article right now, to show in detail why Brazil has to act immediately regarding the devaluation of the real and become a fixed rate currency pegged to the US dollar and the yuan.
After the G-20 fiasco in South Korea it becomes imperative that Brazil implement ASAP a 30 percent devaluation of the real before the Brazilian government adopts the new fixed exchange rate system of pegged currencies against the US dollar and the yuan as I suggested on other postings.
There's no time to waste - and Brazil has to catch the market by surprise – the global “currency wars” are right on schedule.
If you have been reading my postings then you know that this suggestion is not my first choice. I have been writing for years that Brazil should adopt the "New Asian Currency" - but China is wasting time instead of creating such a currency which would benefit everybody including China, Japan, and Brazil.
I never suggested anywhere in my articles or postings that Brazil should adopt the yuan the currency Chinese currency - and I hope you understand the difference of these two choices.
My suggestion for the 30 percent devaluation of the real and Brazil adopt the new fixed exchange rate system of pegged currencies against the US dollar and the yuan - this is just a temporary solution for Brazil until China wakes up and create the "New Asian Currency" similar to the euro.
I know what is going to happen to the Brazilian economy if they don't follow up on my suggestion. It will not be a pretty sight believe me.
I don't care about what your capitalists friends are saying to you - Brazil does not have a choice, or Brazil follow my above suggestion, or Brazil will pay the price in a big way when the "Hot Money" start a stampede out of Brazil. (You can tell that to your capitalist friends next time you talk to those fellows.)
The world has changed and we need to change ASAP the laws in Brazil regarding land ownership by foreigners - not only limiting the amount of land that foreigners can control direct or indirect, but also give them a period of 5 years for them to sell the over limit size of land that they already own.
We have a new ball game here in the 21st century - you can bet on that.
Your capitalist friends wouldn't be around today if wasn't for massive government intervention to keep the global economy from a complete meltdown during 2008.
And in January 2005 I wrote an article saying in detail how the US economy was going to explode in the fall of 2008 - I even identified the derivatives market as the source of the explosion plus the real estate market.
You should go back to that article and see the postings of people making fun of what I said on that article - by the summer of 2008 these people thought I was better than Nostradamus.
If Brazil does not follow my suggestion then you are going to see a massive meltdown in the Brazilian economy when the herd gets spooked and the stampede start out of Brazil.
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Ricardo_Amaral 11/17/2010 04:02 PM Report
November 13, 2010
I am writing an article right now, to show in detail why Brazil has to act immediately regarding the devaluation of the real and become a fixed rate currency pegged to the US dollar and the yuan.
After the G-20 fiasco in South Korea it becomes imperative that Brazil implement ASAP a 30 percent devaluation of the real before the Brazilian government adopts the new fixed exchange rate system of pegged currencies against the US dollar and the yuan as I suggested on other postings.
There's no time to waste - and Brazil has to catch the market by surprise – the global “currency wars” are right on schedule.
So far my messages about currency has been getting through "loud and clear" to Guido Mantega the Finance Minister of Brazil, and to other top leaders of the Brazilian government.
The results of the last US elections in November 2010 represents "the last nail in the coffin" of the US economy here is why:
The US economy had a complete meltdown and collapsed in 2008. And since that time the US economy has been on intensive care, the patient still is in a coma, and have been kept alive by massive US government intervention, massive US government guarantees, by major Wall Street bailouts, by fudging the books with accounting shenanigans - and the new economic recovery is based on a lot of wishful thinking, and also on the economy that does not exist anymore including all the pieces of Wall Street that went out of business, the thousands of auto dealerships and automobile plants that closed down - and now the Republicans are expecting that all these businesses that don't exist anymore are going to come back from the dead, and they will start hiring people again to help with the economic recovery here in the United States.
The US economy is finish - the US economic system is in a lot worse shape than most people realized.
I live in New Jersey where the new Republican governor cut the New Jersey state budget by 33 percent and he is causing a major implosion in the economy of New Jersey (he did cut the state budget by US$ 11 billion dollars which becomes even worse when you consider the multiplier effect.)
The bread and butter of the New Jersey economy used to be the back office for Wall Street companies, and it's also a major center for the pharmaceutical industry. These pharmaceutical companies are merging and eliminating thousands of jobs or they are moving to another state where they can cut costs and survive in the coming years.
The US economy is in critical condition with very high unemployment, which is going to get worse in the coming years - the truth is the US economy is spinning completely out of control and imploding.
The human capital (the well educated people with higher levels of education) is leaving the United States at an alarming rate and going to places where there's some kind of future for them such as Brazil, India, China, and so on...(In 2008 alone 100,000 Indians went to India and this new generation who are leaving the country are made up of a very well educated people with PhD's and other science degrees these are the guys who start the high-tech companies in Silicon Valley and in other parts of the USA. The reason they are leaving the US and going to India, it's because they think the future is going to be created there and not in the United States.)
The mainstream media here in the United States never say a word on this subject, but in the last 3 years the United States had reverse illegal immigration - that means that there are more illegal immigrants leaving the United States than illegal immigrants coming in - the net loss of illegal immigrants has been around 2 million people during that period – and you can see what is happening with this reverse illegal immigration not only by the exodus that has been happening around the communities where these illegal immigrants used to live, but also in the large decline of the amount of money that these illegal immigrants used to send home to help their families.
This trend of reverse immigration has not happened in the United States in a long time probably in over 100 years. These reverse illegal immigration is the “canary in the coal mine” and represents a major alert signal to the implosion that is happening inside the US economy, since these illegal immigrants are the type of people who would take any type of job to survive and to help their families.
As I mentioned to you the US economy can't create jobs and the real unemployment rate is much higher than the official figures.
But today, the political landscape is changing for the worse in the United States with the latest election - with the major political parties splitting the US Congress and at this critical turning point in US history the current president of the United States will not be able to do anything in the next 2 years. We are going to have a complete paralysis in Washington at a time when what is left of the US economy is imploding, self-destructing, and in critical condition.
There are other trends that will make things even worse for the US economy such as: in most states in the United States their finances are in terrible shape and in 2011, and 2012 many governors around the United States are going to bite the bullet, and they are going to do the same thing that the New Jersey governor did in New Jersey, and they are going to cut the budget of all these states around the United States to the bone laying-off millions of people around the country. They are going to cut all kinds of people's pensions and so on, as never seen before in US history.
And don't forget that at a time of this major economic decline the baby boomers are going to put even more pressure on the system, since for now on every year the US government has to carry about an extra 3 million people, and pay the costs related to Social Security, Medicare, Medicaid, and so on. The number of people depending on these government entitlements is growing very fast from 40 million people to 72 million people in a very short period of time.
Every place you look at you can see signs of massive decline of the US economy. The Shuttle space program is having its final voyage into space in the coming weeks then NASA is laying-off thousands of high power scientists in Florida, and in California – and keep in mind that NASA has been for a long time one of the symbols of American advanced technology – this NASA implosion it's just another sign of American decline and that the American economic system has become completely obsolete.
It's just a coincidence that we had an election in Brazil a few days ago which turned out to be a great result for Brazil regarding the coming years, and today we are having an election here in the United States and the result of this election represents the last nail on the coffin of the US economy.
Today I realized the United States economy has reached the end of the line, and now it's just a matter of time for the rest of the world to arrive to the same conclusion.
The implosion of the economy of declining empires happen much faster today than in the past - today it happens at the speed of light.
On top of all that we have had millions of jobs lost to new technology – there are more jobs that got replaced by new technology than people realized – and these jobs will never return to the US or the global economy.
A very good friend of mine is a salesman – that is what he likes to do and he has been doing it for the last 35 years. He likes to be on the road and getting in contact with a vast number of people and at the same time he has the opportunity and from his view point he can see what is really happening in the economy.
He is a manager and the territory that he is responsible for is the top half of New Jersey – and he goes all over the place and on a daily basis he talk to all kinds of people at the state, county and local level – his company deals with construction and engineering companies, architects, civil engineers and government contractors at all levels.
My friend is afraid of losing his job since company revenues are down 50 percent compared with the first 10 months of last year here in New Jersey. He doesn't know if his company will be able to survive the catastrophic business environment that we have here in New Jersey.
But the feedback that he has been getting from all kinds of people he gets in contact from around the state it is frightening and nobody can remember business being so bad and with no prospects of getting better in the coming years. Many of these people think that this catastrophic economy is going to drive them out of business – they are all at the edge of the abyss.
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Ricardo_Amaral 11/17/2010 10:57 AM Report
The enclosed article I wrote it 4 years ago. It gives in a nutshell what is behind the economic revolution that has been underway for a few years, and for some reason Americans can't grasp it – and they want to go back to business as usual to a world that doesn't exist anymore.
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Brazzil Magazine – September 6, 2006
“While the American Dream is Outsourced Brazil Drives the World in to the Future”
Written by Ricardo C. Amaral
http://www.brazzil.com/component/content/article/171-september-2006/9684.html
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Brazzil Magazine – April 23, 2010
Brazil and the New Economic Miracle. The US Has a Lot to Learn!
Written by Ricardo C. Amaral
http://www.brazzil.com/component/content/article/218-april-2010/10386-brazil-and-the-new-economic-mir acle-the-us-has-a-lot-to-learn.html#comments
The United States Economy
Wall Street corporations were designed for the sole purpose of making profits, and they are in the money business - of making a lot of money or losing a ton of it. As the dot.com meltdown of 2000, and the stock market crash of 2008 have shown us, Wall Street is more in tune with losing trillions of US dollars with their gambling schemes and all kinds of financial shenanigans, than anything else.
And they are also capable of not only losing trillions of US dollars from investors from around the world, but also the pension nest eggs of American workers built over a long period of time. And trillions of US dollars have gone up in smoke almost overnight during every stock market meltdown we had such as in 2000, and in 2008; resulting in a real pension nightmare in the coming years for U.S. retirees and to retirees of other countries as well.
The U.S. economy is in deep trouble and dying a slow death with no hope for meaningful change in sight. The current US economic and government system is heavily influenced by powerful lobbying groups that want to keep the status quo going and their self-serving agendas in place, and making it almost impossible for the system to change and adapt to the new economic circumstances.
And some corporations such as Goldman Sachs have infiltrated the US government at the highest levels with their network of former Goldman Sachs executives in an effort to influence US government policies on behalf of the financial and banking industry and their financial games.
I just read the book "It Takes a Pillage - Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street" by Nomi Prins, a book published in October 2009. The book explains in detail the demise and complete destruction of the US economy by the power brokers of Wall Street.
After reading this book you finally will understand why the new generations of Americans don't have any future and how Wall Street stole their future and wasted the money to the tune of trillions of US dollars. The author gives an outstanding explanation and detailed information about what happened in the US financial markets that ended up in a global financial meltdown.
After reading this book you will have a much better understanding about what is going on with the US economy today, how we got to this point and the massive trouble that lies ahead of us.
Basically there is only one conclusion for this massive financial mess made in the USA, and the year 2008 marks the end of an era, and the capitalist brand of America.
Nomi Prins is a former managing director at Goldman Sachs, and her book exposes the corruption in Washington and Wall Street. Her articles are published in Fortune magazine, the Nation, Mother Jones, and other publications. And her latest book has become an important source of information about the corruption in Washington and its connection to Wall Street.
The book shows how the revolving door between Wall Street and Washington enabled and encouraged the disastrous behavior of large investment banks. You'll meet the Pillage People: the men who funneled trillions of dollars directly to the banks and the executives whose companies drained the American economy.
And if you don't believe me that the US economic system is in deep trouble and beyond repair, then you don't need to look any further than what has transpired in the United States since the financial meltdown of 2008. The US financial system ended up in intensive care, and almost died a quick death. And what has happened in the United States since then regarding any efforts by Congress to try to fix the problems that caused the collapse of the US and global financial system in 2008?
As usual, Americans learned nothing from these past fiascos, and if anything the problems are becoming even bigger today with much bigger surviving financial institutions that are fighting very hard against any government regulation of their business, and they use their powerful lobbying connections to fight very hard to keep things as they were before the last financial meltdown.
How dumb can you be? And next time, when the coming collapse and financial meltdown become a reality once again, then the safety net of the US government won't be there. This time around Wall Street has exhausted the financial resources of the United States.
Remember, since the Wall Street bailouts of 2008, the scoundrels of Wall Street have consistently been milking all the US government resources to the bone, and they also have been putting in place a structure for another major US government bailout of Wall Street in the future - for US taxpayers to pay for the bets that went sour for Wall Street.
When it comes to forms of corruption, in Brazil they still have a crude and old system and they use terms that include: bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. In contrast, the United States has a much more polished and sophisticated corruption system called lobbying. And the American lobbying system works in a very efficient way by buying favors directly from the politicians through campaign contributions.
US Economic and Financial System Is Incapable of Meaningful Change
Let me give you another major example that would explain why the US economic and financial system is doomed, and incapable of meaningful change.
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Ricardo_Amaral 11/17/2010 10:53 AM Report
Over the years I wrote many articles about the US dollar and the Brazilian currency and I know that very influential senior Brazilian government people have been reading my articles:
You can read some of my articles at:
http://brazzilnews.blogspot.com/
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Central Banks and the US Dollar
http://www.elitetrader.com/vb/showthread.php?s=&postid=2799442&highlight=I+send+a+copy+of+my+articles #post2799442
April 11, 2010
SouthAmerica: I hope president Lula is not going to propose during the second meeting of BRIC leaders from April 15-16 the creation of a new currency for the BRIC countries.
I hope he will suggest the creation of the “New Asian Currency” similar to the euro, as I have been proposing on my articles for many years. (When these articles were published on Brazzil magazine I did send a copy of the articles to all members of Congress in Brazil - Senators and Deputados - and also to many members of president Lula's cabinet.)
A “New Asian Currency” similar to the euro that Brazil can also adopt as it’s new currency.
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November 1, 2010
In my opinion, on Wednesday when Ben Bernanke announces the next wave of QE2, then Finance Minister Guido Mantega should also announce a 30 percent devaluation of the Real, and adopt a fixed rate currency system pegged to a basket of currencies including the US dollar and the Chinese yuan – a program designed to stop the “Hot Money” from going into the Brazilian market to blow all kinds of bubbles in Brazil.
There's nothing wrong with this strategy, since the 2 countries with the 2 largest economies in the world are not playing a fair game in the international monetary arena, and Brazil should play the game according to their rules.
If having a ...currency system pegged to the US dollar is good for China, it should also be good for Brazil. And since these 2 countries are very important for the Brazilian economy, then Brazil should first devalue its currency by 30 percent, then adopt a fixed rate currency system pegged to a basket of currencies including the US dollar and the Chinese yuan.
And neither country (USA or China) has the right to complain anything to Brazil if Brazil adopts this currency strategy.
That strategy is designed to protect Brazilian manufacturers, the tourism industry in Brazil, and to keep the “Hot Money” from blowing bubbles inside the Brazilian economy.
After Brazil follow these steps, Henrique Meirelles at the Central Bank should take action and reduce the Selic interest rate in Brazil in the coming months to a level around 8 percent or even lower.
And don't forget to put a penalty in place for when the “Hot Money” starts to leave Brazil in a stampede – make these guys pay on the way out for the damage that their actions will cause to the Brazilian economy.
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Ricardo_Amaral 11/17/2010 09:34 AM Report
“China's Dagong Lowers U.S. Credit Rating on Fed Monetary Policy”
By Joshua Fellman and Ye Xie
Bloomberg News - Nov 9, 2010 9:33 PM ET
China’s Dagong Global Credit Rating Co. reduced its credit rating for the U.S. to A+ from AA, citing a det...eriorating intent and ability to repay debt obligations after the Federal Reserve announced more monetary easing.
The credit outlook for the U.S. is “negative,” as the Fed’s plan to buy government debt will erode the value of the dollar and “entirely encroaches” on the interests of creditors, analysts at Dagong, one of China’s three largest ratings companies, said in a statement. The U.S. is rated Aaa and AAA by Moody’s Investors Service and Standard Poor’s Corp., the highest credit ratings of the New York-based companies.
The downgrade came before a meeting of leaders of the Group of 20 nations this week in Seoul and as the U.S. steps up pressure for China to let the yuan strengthen to help reduce the U.S. trade deficit. China countered the criticism by saying U.S. economic policies threaten the stability of developing nations.
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In a Nutshell:
Here is the result of QE2 plus G-20 meeting in South Korea
http://www.youtube.com/user/NMAWorldEdition#p/u/4/IGYAhiMwd5E
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Here is another example:
“ Decline of US empire will reshape our world”
By: Leon Gettler
The Sydney Morning Herald – November 10, 2010
Other states are on the rise, and the US has squandered its economic power.
MID-TERM elections in the US have traditionally been a poke in the eye for presidents. Before Obama, it happened to Clinton, Bush, Reagan and Truman. But this time around, it feels different. It is another sign of an empire in decline.
The insurgency against Obama reflects a rage against the erosion of American hegemony, its superpower status slipping away, driven by 9.6 per cent unemployment, people losing homes and no let-up in the worst economic crisis since the Great Depression.
Obama has achieved a lot, such as healthcare reform and staving off a depression. But the slippage continues; he was administering chemotherapy on a dying patient.
The decline of the American empire will be felt around the world, by business and society including Australia. It could take decades, but it will reshape our world. As anthropologist Jared Diamond writes in his book Collapse: How societies choose to fail or succeed (Penguin 2005), many civilisations share a sharp curve of decline. It's a common pattern. "Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power,'' Diamond writes.
All empires, not matter how powerful, must come to an end. Nothing lasts forever. Economic historian Niall Ferguson associates imperial decline with fiscal crises where governments must service a mountain of public debt.
http://www.smh.com.au/business/decline-of-the-us-empire-will-reshape-our-world-20101109-17m78.html
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Ricardo_Amaral 11/17/2010 09:19 AM Report
Correction: it would keep the “illusion” of the US dollar as a reserve currency alive a little longer until the rest the world would catch on to the reality of the house of cards.
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Ricardo_Amaral 11/17/2010 09:15 AM Report
Here is the next move of the United States on the current “Currency Wars”:
The New United States Currency - “The New US dollar”
http://www.elitetrader.com/vb/showthread.php?s&threadid=86842&perpage=6&pagenumber=1
February 11, 2007
SouthAmerica: Over the years I remember the Brazilian currency changing its name many times from “Cruzeiro”, to “New Cruzeiro”, then came the “Cruzado”, then the “New Cruzado”, then came the “Cruz Credo” and finally the “Real’.
Today there are so many US dollars flying around the world that might be a good idea for the United States government to replace its current US dollar with the “New US Dollar” – and the new exchange rate would be: each current $ 100 US dollar would be exchanged to $ 1 New US dollar. – Just like they usually do in 3rd world countries when their currency starts becoming worthless.
A house that was bought in our area in Northern New Jersey in the early 1950’s for US$ 4,000 dollars – the same house is worth today in the range of US$ 400,000 to US$ 500,000.
The exchange rate of $100 “Old dollars” to $1 “New Dollar” would be just about right.
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By the way, my screen name on the Elite Trader Economics forum is: SouthAmerica.
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I used Brazil on my example, because Brazil has changed its currency many times in the last 60 years.
Let me clarify one item a little further - among the Brazilian currency names that they adopted over the years the name "Cruz Credo" I added it to the list just as a joke. The other Brazilians on this forum knows what I mean.
Now if instead of taking the current US dollar and converting it at a ratio of 100 to 1 – we could instead convert it using a ratio of 10 to 1. Then in that case each US$ 10 of the current currency it would be converted into US$ 1 New US dollar.
That strategy it would beneficial to the United States in many ways as follows:
1) Instead of the US government having over US$ 10 trillion dollars in accumulative outstanding debt – the US government would have instead only US$ 1 trillion New dollars in cumulative outstanding debt.
In “New US dollars” that debt would represent about the same amount of cumulative US government debt that the US had in the last year of the Richard Nixon administration. It would give the illusion that the clock had been turned back on the debt to the early 1970’s.
2) Instead of the US federal annual budget being around US$ 3 trillion dollars as the coming budget – under the new currency the United States government annual budget would be only US$ 300 billion New US dollars.
The United States would give to the world the “illusion” that all the numbers look a lot better than they actually are.
A change in the value of the US dollar using a ratio of 10 to 1 from current US dollar to New US dollar - it is something for the US government to think about - and I am sure that Ben Bernanke will love this new and innovative idea – it would keep the “illusion” of the US dollar as a reserve currency alive a little longer until the rest the world would cash on to the reality.
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Ricardo_Amaral 11/17/2010 05:27 AM Report
I posted this info on the web on various sites on November 15, 2010:
Financial Times (UK) - (November 6 / 7 2010)
Today the Financial Times had an interesting article on The Lex Column and the article said: “US's missing workers”....pay attention to the labour force participation rate. Only 64.4 per cent of working-age population either has a job or is actively searching for one. The proportion has fallen to the lowest since 1984 (when the job-shy were likely to be homemakers) – and the trend is still down. That is not good.
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Ricardo: The real labour force participation rate of the people who are actually working must be around 50 percent. And it will be even worse in the coming years.
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The sad reality of the US job market
CBS News - “Recession Over? Not With 21 Percent Unemployment.
http://moneywatch.bnet.com/saving-money/blog/home-equity/recession-over-not-with-21-percent-unemploym ent/1194/
On top of the sad state of the job market in the United States there are 2.3 million people in prison, the United States has over 5 million people on parole - and today there are 2.2 criminal gang members across the US and their numbers will continue to grow even further in the coming years.
The crime wave that we have in Brazil is a preview of what is on the way for the United States.
There are no jobs here in the United States even for the people who have an education and want to work - the last issue of The Economist has an article saying that 2 million Americans will lose their unemployment benefits after 99 months of being unemployed - and another 3 million Americans are also losing their unemployment benefits by April 2011 - in total another 5 million Americans are not going to be counted even as unemployed - they are going to classify these poor people in the "Black Hole" category that they created to hide the real unemployment figures - discouraged workers.
The latest issue of The Economist magazine (November 13, 2010) includes an article “Cold comfort” millions of jobless Americans will soon be left without benefits.
http://www.economist.com/node/17465273
...As a result, it looks as though severe joblessness will outlive the programmes intended to address it.
...America’s recession, a post-war record in terms of length and depth, has left the country with unprecedented long-term unemployment.
...Government unemployment benefits keep up living standards among the jobless, and so help stabilise a weak economy by bolstering consumer demand. But America’s unemployment-insurance system can no longer cope with a problem of this size.
Thus in June 2008 Congress authorised a big package of emergency benefits, which now cover workers in 27 hard-hit states (those with unemployment rates above 8%) for up to 99 weeks. In the wake of a “normal” recession, that would be more than enough time for workers to find new jobs. This one has not been normal.
The economy is still running 7.5m jobs short of its previous peak. A growing number of people are exhausting their unemployment benefits without finding new work. The problem will worsen sharply this winter, as the bulge of 5m workers who lost their jobs in the months after the financial meltdown of autumn 2008 notch up 99 weeks of unemployment. And in April, the emergency benefits all expire anyway. Congress has debated but failed to address the challenge posed by “the 99ers”. Republicans blocked in September the last serious effort to add a new tier of benefits beyond 99 weeks.
...Meanwhile, the National Employment Law Project estimates that 2m workers may lose their benefits by the end of the year.
***
Ricardo: On top of that the collapsing state economies of the states around the United States the governors are going to be forced to layoff millions of people around the country when they cut state budgets to the bone in 2011, and in 2012 as the governor of New Jersey did in 2010 – that is going to send the job market in the United States into a “Black hole”.
And don't forget that in most states around the United States they are going to cut their budget in a drastic way (just like the idiot that we have in New Jersey did in our state) in 2011 and 2012 and they are going to throw away millions of Americans over board in the middle of a "Perfect Storm."
At the same time when the job market is collapsing in the United States to Great Depression levels – Wall Street is in complete denial and their mindset as a group are once again in La La Land.
*****
I posted this info on the Elite Trader economics forum
October 24, 2008
SouthAmerica: Let’s say that in the next 2 years with the official US government unemployment rate exploding to 10 percent or even higher.
...During the year of 2007 about 1.3 million illegal immigrants left the United State...s to return to their countries, in 2008 the pace of illegal immigrants leaving the country is increasing because of the deteriorating economic situation in the United States and the increased enforcement of the law that is a major incentive for illegal immigrants to leave the country. In 2008 probably another 1.5 illegal immigrants are going back to where they came from.
Last week a Congressman from California said during an interview by CNN News that on his district there were 10,000 foreclosed houses from illegal immigrants. You can bet that a large number of these foreclosed houses used to belong to illegal immigrants that decided to return home, and I would not be surprised if many of these people also left behind thousands of US dollars in unpaid credit-card debt.
In 2009 you can bet that this exodus of illegal immigrants is going to continue since the unemployment rate is supposed to explode here in the United States. And we can estimate very conservatively that another 1.5 million illegal immigrants are going to leave the United States.
This reversal trend of illegal immigration is going to have a big impact on the US economy. Instead of having the usual 500,000 new illegal immigrant arrivals into the US economy, we are having an exodus of people leaving the country.
By the end of 2009 just on this are of illegal immigrants the US economy is going to suffer a negative impact of almost 6 million people on its GDP.
http://www.elitetrader.com/vb/showthread.php?s&postid=2141023&highlight=illegal+immigrants#post214102 3
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Ricardo_Amaral 11/17/2010 04:55 AM Report
Overblown defense expenditures year after year were the “Achilles heel” that put the last two superpowers on the poor house and out of business – first, the British Empire, and second the “Soviet Union Empire”, and now the United States has been following on the footsteps of these former superpowers, and the United states is on the same path and right on schedule to also become very soon a former superpower.
As you can see from the above information during the 8-years of the Bush administration the United States increased its outstanding cumulative debt by US$ 5 trillion dollars - and during that period the cumulative defense expending was US$ 4 trillion dollars.
That is a good thing that we still have so many suckers around the world such as China, Japan, and the oil producing countries of the Middle East - that are willing to finance the United States wars indefinitely.
One would expect that China would have a better use for its hard earned money than finance the United States adventures around the world.
*****
The Military Industrial Complex became a very important piece of the US economy now for about 70 years, since the 1940’s.
For a long time the United States has been the number one arms dealer around the world.
Why peace on the Middle East i...t is just a mirage?
The US government strategy:
The US taxpayer supplies Israel with foreign aid – mostly military armaments. In turn that creates more demand from the US Military Industrial Complex to supply armaments to countries such as Saudi Arabia, UAE, Kuwait, and so on…
Now we go back to the original question: What is the role of the state?
Is it part of the role of the state, as it is the case in the United States, to cause conflict around the world to keep its Military Industrial Complex busy at home building all kinds of toys to sell around the world?
The US government is doing a great job in that area: Iraq, Afghanistan, Middle East in general, Taiwan, North Korea, Iran, many parts of Africa, Venezuela, Colombia, Germany, Japan and so on…
In a Nutshell:
The US government needs to create on a constant basis the perception that some kind of threat is out there against the United States.
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Ricardo_Amaral 11/17/2010 04:52 AM Report
In May 2009 I posted the following on the Elite Trader Economics Forum:
It is a very sad state of affairs - Living on borrowed money from foreigners and at the same time thinking that they are very wealthy.
Since George W. Bush became presid...ent on January 20, 2001 the US government added to its outstanding debt $ 5 trillion dollars.
It is no coincidence, but as you can see by the enclosed actual figures the total adjusted amount of US defense spending during the 8-years of the Bush administration was over US$ 4 trillion dollar.
My question is: for how many more years do you think foreigners are going to continue funding the defense spending of the United States?
Never mind foreigners funding American military adventures around the world – who is going to fund all the trillions and trillions of dollars of US domestic expenses that are coming due?
***
As of Date - US Government Total Public Debt Outstanding
05/07/2009 $11,256,266,640,050.20
01/16/2009 $10,628,881,485,510.23
09/30/2008 $10,024,724,896,912.49
09/28/2007 $9,007,653,372,262.48
09/30/2006 $8,506,973,899,215.23
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/30/2001 $5,807,463,412,200.06
01/19/2001 $5,727,776,738,304.64
Total public debt outstanding on 01/19/2001 was $5,727,776,738,304.64 and since George W. Bush became president on January 20, 2001 the US government added to its outstanding debt $ 5 trillion dollars.
http://www.treasurydirect.gov/NP/BPDLogin?application=np
******
Year - Interest expense paid by US government on its outstanding debt
2009 $193,437,580,154.01 (Interest Expense Fiscal Year 2009 to the end of April 2009)
2008 $451,154,049,950.63
2007 $429,977,998,108.20
2006 $405,872,109,315.83
2005 $352,350,252,507.90
2004 $321,566,323,971.29
2003 $318,148,529,151.51
2002 $332,536,958,599.42
2001 $359,507,635,242.41
http://www.treasurydirect.gov/NP/BPDLogin?application=np
*****
United States government actual budget figures during the 8-year Bush administration.
United States Government Annual Budget during the Bush administration. Each year, on the first Monday in February, the President of the United States submits his budget request to Congress for the following fiscal year:
United States federal budget, 2009 - $3.0 trillion (submitted 2008 by President Bush)
United States federal budget, 2008 - $2.9 trillion (submitted 2007 by President Bush)
United States federal budget, 2007 - $2.8 trillion (submitted 2006 by President Bush)
United States federal budget, 2006 - $2.6 trillion (submitted 2005 by President Bush)
United States federal budget, 2005 - $2.4 trillion (submitted 2004 by President Bush)
United States federal budget, 2004 - $2.2 trillion (submitted 2003 by President Bush)
United States federal budget, 2003 - $2.1 trillion (submitted 2002 by President Bush)
United States federal budget, 2002 - $2.0 trillion (submitted 2001 by President Bush)
-------------------------------------------------------------------------------------
Total US government Budget for period year 2001 to year 2008 = US$ 20 trillion.
The cumulative total actual US Government budget for the 8-year period of the Bush administration was US$ 20 trillion dollars.
**************
Here is Bushes’ actual military spending - this does not include ANY costs related to Afghanistan or Iraq as they are all in supplemental spending bills:
For Fiscal Year 2008 it is $481.4 billion
For Fiscal Year 2007 it is $470.0 billion
For Fiscal Year 2006 it was $441.6 billion
For Fiscal Year 2005 it was $420.7 billion
For Fiscal Year 2004 it was $399.1 billion
For Fiscal Year 2003 it was $396.1 billion.
For Fiscal Year 2002 it was $343.2 billion.
For Fiscal Year 2001 it was $ 296.0 billion
Note: The Iraq and Afghanistan supplementary spending as of end December 2008 = over $ 650 billion.
--------------------------------------------------------
Total Bush administration actual defense spending for 8-year period 2001 to 2008 = US$ 3,898 billion
Plus other supplementary amounts that the government requested the total adjusted amount for defense spending for the 8-years of the Bush administration it will reach over the US$ 4 trillion dollar level.
Note: The cumulative total actual US Government budget for the 8-year period of the Bush administration was US$ 20 trillion dollars and the actual defense spending for the 8-years was US$ 4 trillion dollar equal to 20 percent of the total.
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Ricardo_Amaral 11/17/2010 04:50 AM Report
Correction: One year later the comments were that the article was now becoming a reality – and by the fall of 2008 people were thinking the article was written by Nostradamus.
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Ricardo_Amaral 11/17/2010 04:48 AM Report
ReMant, keep in mind I wrote this article in November/December 2004 – as you can see the comments following the article first people were making fun of my article. One year later the comments were that the article was not becoming a reality – and by the fall of 2008 people were thinking the article was written by Nostradamus.
Brazzil Magazine - February 2005
"It’s 2008. The US Has Dragged the World into a Depression."
Written by Ricardo C. Amaral
http://www.brazzilmag.com/component/content/article/20/1424-its-2008-the-us-has-dragged-the-world-int o-a-depression.html
...During the second term of George W. Bush’s presidency, finally all the American mismanagement and mistakes did catch up with the American economy, and a number of trends merged into a perfect storm causing the final meltdown of the US economy.
The American economy went through a downward spiraling out of control implosion. Massive US government budget and trade deficits forced the Federal Reserve Bank to raise interest rates to try to stop the steep decline of the US dollar in world markets against other currencies.
...The world lost its confidence in the US economy because they realized that the US economy was over leveraged, and would not have the necessary cash flow to pay its bills in the future.
...the market dynamic of all these events combined to cause a major institutional collapse in the derivatives market, and that started a domino effect in the entire financial system causing a massive meltdown.
Panic among the major holders of US dollar also contributed to the stampede like we had never seen before - and at the end, Chernobyl looked like nothing when compared with the final meltdown of the US dollar, and US economy during the summer of 2008.
*******
I posted this info on various places on the web on November 15, 2010
Ricardo: For over 5 years I have been mentioning on my articles about the United States fast declining clout, prestige and influence in South America. Here I am quoting from my article from over 5 years ago:
Brazzil Magazine - June 2, 2005
“While China Rises the US Falls in Brazil and Latin America” - Written by Ricardo C. Amaral
http://www.brazzil.com/2005-mainmenu-79/152-june-2005/9296.html
...US Influence Declining in South America
The Arab-South America Summit offered to the Arabs commercial alternatives not available before, which will reduce the European and American hegemony in the Arab world.
The Arab Summit laid the foundations to further reduce the gap between the Arab world and South America, an area of the world that is becoming one of the major industrial and commercial trading blocs in the world.
On January 26, 2005 The Financial Times of London had an interesting editorial - "How America became the world's dispensable nation."
That Financial Times article started by saying: "In a second inaugural address tinged with evangelical zeal, George W. Bush declared: "Today, America speaks anew to the peoples of the world." The peoples of the world, however, do not seem to be listening. A new world order is indeed emerging - but its architecture is being drafted in Asia and Europe, at meetings to which Americans have not been invited.
....The US, it turns out, is a dispensable nation. Europe, China, Russia, Latin America and other regions and nations are quietly taking measures whose effect, if not sole purpose, will be to cut America down to size.
Ironically, the US, having won the cold war, is adopting the strategy that led the Soviet Union to lose it."
To further illustrate the United States loss of clout and influence in South America, we just have to look at the results of the latest election of the head of the OAS.
One of US Secretary of State Condoleezza Rice's goals in her trip to Brazil in late April 2005 was to convince President Lula to change his mind and have Brazil vote for the US candidate that would head the Organization of American States (OAS) for the next 5 years.
One week later, the candidate that Brazil was supporting all along, in opposition to the United States, Mr. Insulza from Chile was the winner. It was the first time in the organizations 60-year history that the candidate supported by Washington did not win.
This particular election sends a clear signal to the world of how fast the United States is losing its influence in South America. At the same time that the US is losing its influence, China is quickly replacing the United States influence in the Area.
China's Rising Influence
In a very short period of time China is becoming the most important business partner of Brazil. China has been quickly replacing the United States' influence in Brazil - and that is also happening in other South American countries
On May 17, 2005 - The Financial Times of London had another article trying to explain why US influence was declining in South America: "Latin lessons the US faces a loss of leadership."
The article said: "Why have relations turned so sour? Economics is part of the reason. During the late 1980s and 1990s Latin America embraced free market policies and moved enthusiastically into the US orbit. But when reform often failed to produce growth that began to change, with many Latin Americans blaming the US for their problems.
"The failure of the Bush administration to help Argentina when it ran into a disastrous debt crisis at the end of 2001 was particularly damaging to its image in the region. "Whether or not Washington or Wall Street really bear the blame, many Latin Americans believe the US led them down the primrose path but then were simply not interested when times got tough," says Julia Sweig, a Latin America specialist at the New York-based Council on Foreign Relations.
"After a number of South American countries embraced democracy, and many of the economic policies prescribed by Washington including all kinds of privatizations, the result of these changes did not benefit the South American population as expected.
"And South America's less than impressive economic performance over the past 15 years has led to a fresh bout of soul-searching about what kind of economic model is right for the region.
"... In particular, the role of the state - which policymakers were trying to cut back for most of the 1990s - is undergoing a rethink, in part reflecting South America's growing economic relationship with parts of Asia that have achieved much higher rates of growth."
There is another factor that contributed to the current state of affairs in South America. After the collapse of the Soviet Union in 1991, the United States lost its interest regarding South America.
Some South American countries including Brazil, instead of whining or crying over spilled milk, did something about it, as a capitalist country they started searching around the world for new partners to establish new ties to replace their lost business.
The US decline of influence with Brazil did not happen overnight or because of political reasons; it was as a result of economic reasons as Brazil found new partners.
The Brazilian need to find new markets for its products coincided with the economic explosion that has been happening in the Chinese economy in the last few years. Today, China has an insatiable need for commodities of all kinds to feed its amazing production machine.
*****
A reality check: The United States from China's perspective
http://blog.foreignpolicy.com/posts/2010/11/02/our_little_round_eyed_friends_will_buy_anything
US Military becoming obsolete
http://www.bloomberg.com/video/63400346/
Military spending, collapse of US empire
http://www.youtube.com/watch?v=dIHOP4I3Ovo&feature=player_embedded
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Ricardo_Amaral 11/17/2010 04:06 AM Report
I posted this info on FB and also on Brazzil magazine:
November 15, 2010
The enclosed information I posted on the Elite Trader Economics Forum in January 2008 - since that time the United States government has added at least another US$ 5 to US$ 7 trillion dollars to the over-supply of US dollars circulating outside of the United States.
In November of 2010 there is an estimated $ 25 to $ 27 trillion US dollar that is circulating around the world and most of them are in the form of electronic computer-credits. Only about five percent is in physical cash form. Half of those $ 27 trillion dollars float around the world outside of US borders and outside of the influence of the US government.
*****
January 10, 2008
SouthAmerica:...Here is some food for thought regarding the US dollar:
…Today over 70 percent of US currency circulates outside the United States. The major holders of this currency are the euro countries, Japan, China, Hong Kong, Taiwan, South Korea, Indonesia, and Singapore. (We are talking about trillions of US dollars.)
Over 70 percent of the US dollars ever created are flying around the world completely outside of the power and the influence of the US government including the US Treasury and the Federal Reserve Bank.
…About 75 percent of the US dollars circulating outside the United States are in the hands of these few Asian central banks, and if any one of these countries decides to sell their US dollar monetary reserves to buy gold it will produce a stampede to exit the US dollar, creating a gold and euro buying panic.
…This oversupply of US dollar circulation outside the United States might prove to be the Achilles heel of the US economy and also can become a nightmare to the Federal Reserve. The Federal Reserve would need to raise interest rates in the US, creating a major problem for the US economy and the financial markets.
As of 2007, the US dollar still has the largest share (65.7%) of foreign reserve holdings by central banks from around the world, and the Euro has only a 25.2% market share.
In 2008, the current global currency composition of official foreign exchange reserves includes the US dollar with about a 65 percent market share and the euro has about a 26 percent market share – and combined these 2 currencies accounts to 91 percent market share of official foreign exchange reserves held by central banks around the world.
Here is another issue to keep in mind: the global financial system has been very creative and dynamic for many years and today there is an estimated 20 trillion US dollar in circulation in the world and most of them are in the form of electronic computer-credits. Only about five percent is in physical cash form. Half of those 20 trillion dollars float around the world outside of US borders and outside the US economy.
If we have a major international monetary crisis in the near future and a large portion of that half of the global floating US dollars suddenly returns to US shores, instant hyperinflation in the US would be the result and also the collapse of the current international monetary system.
The day the world loses faith on the future value of the US dollar and the US economy - that's the day when the Titanic will hit the iceberg and sink.
http://www.elitetrader.com/vb/showt...rld#post1742934
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Ricardo_Amaral 11/17/2010 03:57 AM Report
ReMant, I am going to post her some of my postings from my Facebook wall, my postings on the Elite Trader Economics forum, and my postings following my articles published on Brazzil magazine.
After you read most of this information you will realize that the United States has reached the end of the line. And it does not matter what spin doctors say to the contrary the evidence is all over the place - you don't need to be a rocket scientist to figure it out - all you need is the ability to use some basic common-sense, and be able to connect the dots.
If you read many of my articles you will see that I have been writing about and documenting about many trends before everybody else.
I will give you some links to some of these articles.
Now I am writing a lot of material to show how the United States has reached the end of the line, and how things are going to get a lot worse here in the United States in 2011, and 2012 - when the US economy went head on into the "Perfect Storm" and ended up in a Black hole.
The US economic system has passed the point of no return - the new great depression is here with the compliments of the United States and its obsolete political and economic systems.
Americans don't have a clue about what's happening - I have been saying for a long time that the US dollar is the Achilles heel of the United States system and that international monetary system based on the US dollar is ripe for a massive international monetary crisis as never seen before.
The illusion of military power dies a quick death soon after the US currency comes down crashing.
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truth_hates_delay 11/16/2010 07:46 PM Report
State capitalism, fascism, corporatism, plutocracy, and variations of billionaires and the New World Order, the race to universal serfdom and everlasting war. Tonight, at this table.
REMant 11/16/2010 01:54 PM Report
I did some research on Mr Bremmer when I saw that he was due to be on, since I was not familiar with him, and found so many things I didn't like I was surprised I enjoyed this discussion as much as I did and find nothing much to complain about. He is, incidentally, in no way related to L Paul Bremer.
The new book is I understand summarized in an article written with Nouriel Roubini in the Sept 2010 Institutional: "Investor Paradise Lost: Why Fallen Markets Will Never Be the Same"
http://www.iimagazine.com/banking_capital_markets/Articles/2660510/Paradise-Lost-Why-Fallen-Markets-W ill-Never-Be-the-Same.html?utm_source=feedburner&p=1
The thesis appears an extension of his first, which ranged nations on a scale of authoritarianism, and suggested that the difficulty in moving toward democracy is the fear of an initial period of anarchy, Yeltsin-style. It is an idea as old as Aristotle and Polybius. The generally accepted classical view is that aristocracy loses its virtue, degenerates into democracy and anarchy, is bridled by a tyrant, and then challenged by a reborn aristocracy. There was nothing in it about a general progress, which is essentially traceable to some notion of monotheism bound up with atonement and salvation. Just as there is no notion of virtue in progressivism, it being a matter of approbation.
His idea, as should be expected from someone connected with Stanford and the Hoover Institute, etc, is however, that democracy struggles against tyranny, free association with authority (which is their interpretation of Tocqueville, BTW). It is tho progressivism in a neoconservative costume, because virtue or "inner-directedness" is equally left out of the picture. He is saying globalizing liberalism has stalled with the demise of US hegemony, and the world reverted to mercantilism. However, the world had developed serious "welfare dependencies" under the so-called free trade regime both for the developed and developing countries. Dependencies that prevent an emergence into autonomy and perpetuate master-slave relations.*
What I think has happened in the last generation or so, is that 3rd world countries have realized that mercantilism is necessary to their economic development, just as China realized they were getting ripped off by the conglomerates, which, incidentally, I would in no way consider synonymous with free trade. But of course, this can only really take place after a good deal of foreign investment, and presents something of a welfare gap that must be transited. You could say that it is less that anarchy is feared than the loss of the investment - a sort of welfare - that keeps states authoritarian. Heckscher anticipated this in his dichotomy between an entrepot strategy and what he called "fear of goods." Given their history I would think the Chinese would understand this quite well.
In Heckscher's terms, in the past half century we have given up mercantilism for life as an entrepot. Many things like armies and food self-sufficiency, however, are never going to be outsourced, by major powers at least, unless they are in decline. Countries have long known the importance of bounties to support critical industries, and of symbiotic relationships, like the British navy and their carrying trade. Universal military training generally. And there's also public education and healthcare.
When we had money not only did no one object to the Japanese zaibatsu, they were admired, even into the 1993 recession and until their bubble burst. But it is still not acknowledged that those problems were not the result of mercantilism, so much as the response to it, as today with China. Real estate prices could not have risen as they did just because China made it easier to buy a house, but because American wage and price levels did not follow suit and instead asset prices rose. In this sense, it was not a credit bubble, but an asset bubble. It was not that we lived beyond our means, but that we lived in anticipation of ever higher asset prices.
The "quantitative easing" will not make our goods cheaper, but the dollar cheaper. Only greater productivity can make goods cheaper. As I asked earlier, suppose the Chinese did "let their currency appreciate," would it? I'm sure not, not until Chinese wages appreciated significantly, which seems a long way off. In any case, I don't think it matters whether there is protectionism, or not. There are very few economies of scale to be realized in international conglomerates, i.e., competitive advantages, and not many things that need to be made in only a few places, or for which there are comparative advantages.
I think the US has followed a pattern similar to Britain and the Netherlands, where commerce in general gave way to finance, and to financial manipulation. It is this consideration more than anything else I think is behind the Bernanke and Greenspan reasoning. I have wondered for several years if the dollar can continue without the country. I would say possibly, but not if virtue is lost. Greenspan fears the govt bond mkt will collapse, and rightly so. I'm afraid tho there's nothing they do about it.
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*Eric Ambler in Epitaph for a Spy (1938): "The trouble with postwar German social democracy was that it supported with one hand what it was trying to fight with the other. It believed in the freedom of the individual capitalist to exploit the worker and the freedom of the worker to organize his trade union and fight the capitalist. Its great illusion was its belief in the limitless possibilities of compromise. It thought that it could build Utopia within the Constitution of Weimar, that the only sublime political conception was reform, that the rotten economic structure of the world could be shored up at the bottom with material from the top. Worst of all, it thought that you could meet force with good will, that the way to deal with a mad dog was to stroke it. In 1933 German social democracy was bitten and died in agony."