“The funding of America is an accident waiting to happen.”

Economist Stefen Roach warns of a near term crash of US assets.

The current account and trade deficit of the US are funded through foreign private savers and Asian central banks who buy US assets. There is an imbalance, when foreign savers increasingly pay for US consumption and an adjustment is needed.

“All the classic symptoms of a US current-account adjustment are now evident. At the same time, the stewards of globalization — the IMF, the BIS, the OECD, and even the Federal Reserve — are now all on the same page in sounding the alarm.

Politics could correct a big part of the imbalances, but tax increases and spending reductions are unpopular with the elecotrate, so this will not happen. The only way Roach sees the correction to be done is by a drop in US asset values, stocks, bonds and the balloned housing market.

When will this happen?

Cont. reading: Dow 6,000

anti-Iraqi Forces describes nationalistic Iraqi insurgents fighting against a foreign occupation as in:

11th MEU battles anti-Iraqi forces in An Najaf.

This is my favorite example for the application of Orwellian Newspeak

The basic idea behind Newspeak was to remove all shades of meaning from language, leaving simple dichotomies (pleasure and pain, happiness and sadness, good thoughts and thoughtcrimes).

Please help me to collect more examples of contemporary Newspeak. Please include:

• the Newspeak wording
• its real meaning
• a link to and/or a citation of an application

A friend will use the collection in a class about 1984.

Thanks!

Looking at the Sunday Talk Shows guest list, the Swift Boat theme is played on. Why has the Kerry campaign not been firing against this with full wrath?

Kerry calls on Bush to stop personal attacks is just lame, as are attempts to stop the smear ads through courts. The general election theme is about leading and defending the people through offence, not about ´calling on Bush´ and ´going to court´.

Kerry should accuse Bush personally of smearing all veterans and all current soldiers. Bush´s campaign supports and facilitate denying the correctness of military records for achieved medals. There is enough material to make a direct Bush campaign involvement play in the media.

The method used on this issue is a hallmark of Rove´s operations. There will be more, much more like this coming in the next weeks. If the Kerry campaign does not learn how to counter such stuff immediately, they lose their defence. If the campaign does not learn to attack with the same ruthlessness, they lose their offence too.

In this election losing either the offence or the defence is sufficient to lose the game.

This from the lead paragraphs of today’s New York Times: U.S. Now Said to Support Growth for Some West Bank Settlements.

The Bush administration, moving to lend political support to Prime Minister Ariel Sharon at a time of political turmoil, … In the latest modification of American policy, the administration now supports construction of new apartments in areas already built up in some settlements, as long as the expansion does not extend outward to undeveloped parts of the West Bank, according to the officials…

Translation:

Cont. reading: Benign Social Genocide

“The thunder of teen sexual activity and dating behavior may signal the lightning of substance abuse”
Joseph A. Califano, Jr. –
Chairman and President of CASA

Cont. reading: Teen Sex

Salim Lone:
I lived to tell the tale

… The UN is precious – not because of its name, but because it struggles, however imperfectly, to reach global consensus on the world’s critical issues. The fanatics who blew up the UN mission dealt a severe blow to its fortunes in the Middle East. But more lasting damage is being done to the legitimacy of this irreplaceable institution by demands to obey US dictates. If it continues to bow to pressure, its capital will be squandered and its resolutions rendered weightless for large chunks of humanity.

Cont. reading: In Memoriam August 19, 2003

From gung-ho in Najaf to closing cinemas in Thailand:

Just five days after they arrived here to take over from Army units that had encircled Najaf since an earlier confrontation in the spring, new Marine commanders decided to smash guerrillas loyal to the rebel Shiite cleric Moktada al-Sadr.
8-Day Battle for Najaf: From Attack to Stalemate

Cont. reading: Unintended Consequences

Either some journalists have no idea of math or economic numbers, or persistent general price increases do not make good headlines when wages are stagnant.

Yesterday the Bureau of Labor Statistics (BLS) published the newest Consumer Price Index (CPI). Today some media come up with these headlines:

• The Journal News – Prices drop in July
  
• Independent – US prices fall as housing market grows
  
• Forbes – Consumer Prices Decline, Housing Rebounds
  
• Reuters – Consumer Prices Drop, Industry Output Up
  
• Toronto Star – US consumer prices dip

These headlines contradict what US friends tell me. What happened? Picked up BLS table CUUR0000SA0 (Not seasonally adjusted, U.S. city average, All items) and crunched it to show the year-over-year inflation rate:

The inflationary year-over-year increase in consumer prices, as measured by the BLS, was 3,0% for July 2004 – slightly smaller than the 3.3% y-o-y increase for June 2004.

BTW: There are valid reasons to believe, that the CPI, as measured by the government, is significantly smaller than the inflation that actually occurs. Well, if you would have to increase your payments for social security recipients, veterans, interests for TIPS-bonds etc. in line with the CPI increases, would you not like to tweak the numbers down a little bit?

Looking at the US election from the outside, makes one wonder about the choices presented. On the one side Bush, elite offspring with deep relations to big money, on the other side Kerry, elite offspring with deep relations to big money. There are some nuances and probably Kerry would be “not as bad as Bush”.

Cont. reading: Bad Choice

in·tim·i·date: to make timid or fearful : FRIGHTEN; especially : to compel or deter by or as if by threats

Knock, knock:

• Will you take part in that demonstration?
• Is your neighbor planing to do so?
• What about your sister?
• Will your parents be there too?
• At that demonstration, are you planning disruptions?
• Are you planing violence?
• Do you know anybody who is doing so?
• Do you realize, that it is a crime to withhold such information?
  Thank you. We´ll be back!

Cont. reading: Knock, knock

In an Los Angeles Times Op-Ed, Sam Harris rants about religion as “Holly Terror”

President Bush and the Republicans in the Senate have failed — for the moment — to bring the Constitution into conformity with Judeo-Christian teachings. But even if they had passed a bill calling for a constitutional ban on gay marriage, that would have been only a beginning. Leviticus 20:13 and the New Testament book of Romans reveal that the God of the Bible doesn’t merely disapprove of homosexuality; he specifically says homosexuals should be killed: “If a man lies with a male as with a woman, both of them have committed an abomination; they shall be put to death.”

Cont. reading: Gods and Daemons

CNNMoney.com currently names a “Second Day of Pain” on its frontpage. They of course refer to falling stockprices and rising oil. But there was no pain for people who were short and used the financial instruments available to bet on falling markets (like I did).

But how can one counter the pain that comes up, when one of the most magical cities of this world gets bombed and destructed in senseless fighting?

Would it help to short an index that reflects the values of:

the library of Al-Haidariyah, the library of Al-Ilmin in At-Tusi’s university, the library of Ash-Shushtariyah Husainiya, the library of Al-Qawam school, the library of both schools of Al-Khalili Al-Kubra and Sughra, the library of Shaikh Jafar Al-Kabir, the library of Shaikh Fakhrul Din At-Taraihi, the library of Ar-Rabitatul Ilmiyah, the library of Abdul Aziz Al-Baghdadi, the library of Muntada An-Nashr which has been moved to the jurisprudence college which locates at Kufah street, the Public Library, the library of Al-Burujirdi, the library of university of Najaf, the library of Shaikh Mohammed Baqir Al-Isfahani, the library of Al-Aakhund, the library of Ar-Rahim, the library of Bahrul Ulum, Sayyid Al-Hakim’s library, the library of Amirul Mu’minin (Commander of Faithful) (peace be upon him), the library of Al-Ya’aqubi, the library of An-Nuri, the library of Al-Balaaqhi, the library of Al-Khutaba’a, the library of Al-Malali (which is related to Aal Al-Millah), the library of Shaikh Aaqa Buzurg At-Tehrani,

and many other libraries in Najaf city?

It doesn´t feel likely to me today.

For a few moments sanity has -maybe-, -hopefully- resurfaced as US troops have halted their planed total assault on Al Sadr´s fighters in Najaf. Any attack on Najaf´s shrine of Imam Ali, where Al Sadr is trying to give himself the same cloud as Imam Ali himself, would be the equivalent of the total destruction of the Vatican and killing of the Pope by non Christians. US troops, NYT: says, would probably be eager to do this:

Cont. reading: Rove Trapped on Phoneline to Najaf

Updated – (Chalabi) at end of post

Light Sweet Crude Oil was slightly below $44 per barrel this morning. There is currently nearly no reserve capacity left on this planet and now this:

Iraq Stops South Oil Output After Militia Threat
BAGHDAD, Iraq (Reuters) Mon Aug 9, 2004 12:48 PM ET – Iraq stopped oil production from its southern oil fields Monday after a Shi’ite Muslim uprising led by radical cleric Moqtada al-Sadr spread to the oil sector for the first time since the late-June handover of power to Iraqi authorities.

An Iraqi oil official said militiamen from Sadr’s Mehdi Army threatened to sabotage operations by the state Southern Oil Company, based in Basra city.

“Pumping from the southern oil fields to storage tanks at Basra was stopped today after threats made by Al-Sadr,” the official told Reuters. “It will remain stopped until the threat is over.”
…
Iraq’s southern fields have been supplying the Gulf Basra terminal with about 1.9 million barrels a day. Exports from Iraq’s northern oil fields have operated only sporadically since the U.S. occupation last year and remain closed after a series of attacks on the main northern export pipeline from the Kirkuk fields.

Now it will be proven by Al Sadr and others that oil is the most effective weapon against the US. Others will recognize this too (Venezuelan recall referendum?). Can anyone expect this threat to end anytime soon?

What may follow now economically? Here are my € 0.02:
– Light Sweet Crude Oil: (far) above $50/bl
– Fed: will not hike rates tomorrow
– Treasuries: will rally
– Stocks: will fall
– US economy: will grind to a halt
– Prices: will rise fast
– US$: down (maybe after a short rally)
– Worst case: stagnation and inflation, given some time developing into hyperinflation, loss of confidence in the US$, US economy crashing into a deflationary depression, others follow.

CHOAM Economic Analysis of Materiel Flow Patterns says:

Melange is the financial crux of CHOAM activities. Without this spice, Bene Gesserit Reverend Mothers could not perform feats of observation and human control, Guild Navigators could not see safe pathways across space, and billions of Imerial citizens would die of addictive withdrawal. Any simpleton knows that such dependence upon a single commodity leads to abuse. We are all at risk.

The Preacher at Arrakeen minds

This is the fallacy of power: ultimately it is effective only in an absolute, a limited universe. But the basic lesson of our relativistic universe is that things change. Any power must always meet a greater power.

Update – 3:58 PM

The stop of the Iraqi oil flowing to Basra seems to have a more sinister background than threats by Al Sadr. As Nemo pointed out in the last open thread, Chalabi is pulling the strings.

When NeoCon darling Achmed Chalabi came back to Iraq after the invasion, a gang of US trained thugs guarded him. Later these men were “integrated” into the security forces of ERINYS, the British company that has the contract to guard all Iraqi oil installations. ERINYS is connected with Chalabis INC organization and reportedly Chalabi was paid $2 million for his helpful recommendations on the contract. Chalabis nephew Salem was hired as a lawyer by ERINYS as were thousands of foreign “security trainer” mercenaries.

Yesterday the CIA asset Prime Minister Iyad Allawi issued arrest warrants for NeoCon asset Chalabi and for his nephew. Today the Flow Of Spice was stopped because militiamen from Sadr’s Mehdi Army threatened to sabotage operations by the state Southern Oil Company.

Maybe the guards of the Iraqi oil assets could step up the security again and hinder sabotage, if … and if … and if… .

Wolfowitz and Negroponte must be negotiating at each others throat by now, while Secretary John Snow prepares to distribute Prozac.

Juan Cole writes:

The story of how the Bush administration prematurely outed Muhammad Naeem Noor Khan, a double agent working for Pakistan against al-Qaeda, has finally hit cable television news. MSNBC picked up the story on Saturday.

On Sunday at around 12:30 pm, Wolf Blitzer’s show referred to it. New York Senator Charles Schumer criticized the Bush administration for revealing Khan’s name. He noted the annoyance of British Home Minister Blunkett (see below) and Pakistani Interior Minister Faisal Saleh Hayat with the Americans for blowing Khan’s cover. He said Hayat complained that if Khan’s name had not been reveaeled to the New York Times by the Bush administration, he might well have provided information that would have led to the capture of Usamah Bin Laden himself!

Blitzer then revealed that he had discussed the Khan case with US National Security Adviser Condaleeza Rice on background. He reported that she had admitted that the Bush administration had in fact revealed Khan’s name to the press. She said she did not know if Khan was a double agent working for the Pakistani government. (!!!)

The Boss has an OpEd in the NYT: Chords for Change

…
Like many others, in the aftermath of 9/11, I felt the country’s unity. I don’t remember anything quite like it. I supported the decision to enter Afghanistan and I hoped that the seriousness of the times would bring forth strength, humility and wisdom in our leaders. Instead, we dived headlong into an unnecessary war in Iraq, offering up the lives of our young men and women under circumstances that are now discredited. We ran record deficits, while simultaneously cutting and squeezing services like afterschool programs. We granted tax cuts to the richest 1 percent (corporate bigwigs, well-to-do guitar players), increasing the division of wealth that threatens to destroy our social contract with one another and render mute the promise of “one nation indivisible.”

It is through the truthful exercising of the best of human qualities – respect for others, honesty about ourselves, faith in our ideals – that we come to life in God’s eyes. It is how our soul, as a nation and as individuals, is revealed. Our American government has strayed too far from American values. It is time to move forward. The country we carry in our hearts is waiting.

Oil expected to hit $50 US
Calgary Sun

Cont. reading: It´s the Oil Price, Stupit

In Little Town people love to eat rabbit stew. Unfortunately rabbits are rare. In bad weather the hunters can not go hunting. In some years there are even hardly any rabbits to hunt. To eat rabbits is expensive. Only a few people can afford rabbit stew.

On Mellow Island people are poor, but some have great ideas. They fence off some land and start to foster rabbits on the new pasture. They butcher the grown up rabbits, freeze them and then scull them over the waters to Little Town.

People in Little Town are happy now. Some haul the rabbits off the boats, some cart them to town. New taverns open up and cater rabbits in tasty meals. Rabbits are cheaper now and can be bought all the year round.

Everybody is happy – the poor of Mellow Island, the people from Little Town – maybe even the rabbits. Only the hunters are grumbling. They walk in to the mayor and complain. “Those rabbits from Mellow Island are too cheap. We don´t want to go hunting for such low prices. They are cheating on us.” And they put a little oil on the mayor’s palm.

The mayor likes the hunters and understands. He issues a new decree:

“Rabbits from Mellow Island are too cheap! From now on, everyone who pays one shilling for a Mellow Island frozen rabbit also has to administer one shilling to our poor hunters. These are honest men like me and we have to promote their valuable trade.”

The price for rabbits doubles. Only a few people can afford rabbit stew now. The taverns stop serving rabbit meals, some close shop. No frozen rabbits are offloaded at the shore anymore. The cart pushers start looking for new occupations. People on Mellow Island are poor again. Only the hunters are happy. And the mayor washes his hands.

A young rabbit – Part of the storyline – The hunters – The tavern owners and cart pushers – The mayors findings one and two – The unhappy people from Mellow Island one, two and three – Who gets the extra money – Some (libertarian) economic background

Cont. reading: Health Care Moral Question

Barfly Colman made a suggestion for a follow up on the discussions on Billmons Minimum Wages piece.

“It seems to me that [discussing what aims an economy should have] is seldom if ever approached these days: everything is cast in terms of the free market and how wonderful it is.”

The need for such a discussion is fundamental to our societies. But when was the last time you did hear a politican openly recognizing it this clearly:

The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. … The most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society.
James Madison in The Federalist, No. 10 cited in An Economic Interpretation of the Constitution, Charles A. Beard, 1913

Madison sees the first objective of the government as the protection of the distinct interests of those who hold and those who are without.

The second part has been lost somewhere. Nowhere but in younger constitutions one finds remnants of the compromise that has been so fiercely fighted for throughout the last two centuries.

Article 14 [Property, Inheritance, Expropriation]…
(2) Property imposes duties. Its use should also serve the public weal. …
Article 15 [Socialization]
Land, natural resources, and means of production can, for the purpose of socialization, be transferred to public ownership or other forms of collective enterprise by a statute regulating the nature and extent of compensation. …
Current Cuban German Basic Law

Societies develop on compromises. These need discussion and arguments form both sides of the aisle. We do know that the right side is strong these days. The speakers list of the DNC convention may represent some middleground. But the communists have vanished – even as scapegoats.

As Colman says – the basic discussion on the aims of the economy, on redistribution of wealth, on the service of the public weal, seems gone. Thereby the economical compromises throughout the world have tilted to the right side – nationally and internationally. The government misses the objective Madisons sets out.

As Madison recognizes, the free market of ´those who hold´ is only one side of the spectrum. What should be the modern version of the compromises? And what is needed on the left side to achieve them?