Tuesday, February 24, 2009


More Fear-Mongering

This from the Washington Post:
FBI Director Robert S. Mueller III today warned that extremists "with large agendas and little money can use rudimentary weapons" to sow terror, raising the specter that recent attacks in Mumbai that killed 170 people last year could embolden terrorists seeking to attack U.S. cities.
I won’t force you to read the rest of this drivel, but you can guess how it continues. This is fear-mongering at its best. Raise the color-code alert! Put on your helmets and hunker down!

The question we ought to be asking here is: Why haven’t we had lots of Mumbai-style attacks in the US already? The United States of America is one huge soft target, just begging for terrorist attacks. The neocons themselves (whom I assume are hated by “Islamic radicals”) are a group of soft targets. For all the show and talk, there is really very little defense against terrorist attack anywhere in the world, including the US. If terrorists wanted to mount attacks with little money and rudimentary weapons, it would not be hard at all. So the obvious conclusion here is that there is no real terrorist threat. It is just unconscionable fear-mongering.

What about 9/11? That was of course an inside job.

So relax. If terrorists were out to get you, they would have done it already.

Monday, February 23, 2009


Struggle over Crimea

Take a look at the map and you’ll see at a glance that Crimea occupies a highly strategic position. As such, it’s no surprise that Russia is moving fast to bring the peninsula back into its orbit. Ukraine naturally wants to hang on to Crimea, and to that end floated a totally hopeless suggestion to have the US site a diplomatic mission there, an idea which went up like a lead balloon. Ukraine is bankrupt, beaten, and flailing in the dark.

Sunday, February 22, 2009


China’s Appetite for US Debt

Continuing on the last two posts, people with functioning brains are no doubt wondering how much longer China’s appetite for US debt can last.

As everyone knows, factory shutdowns have sent millions of people back to their dirt-poor villages in the provinces, raising the specter of mass unrest. Beijing will have to spend some money on keeping these people gainfully employed, or on repressing unrest.

Then there is the matter of consumer demand inside China itself. Since consumer shopping vouchers are already being issued, the authorities see demand as insufficient to drive the economy. And take a look at this eyewitness account of conditions inside China, where department store clerks far outnumber customers, and people are desperate to rent apartments at any price. Then check out this piece on Beijing’s commercial real estate bust. Do you smell a disaster in the making?

Sure, the Chinese government is sitting on a big barrel of cash. But as we have seen from the recent experience of automakers, you can burn through huge piles of cash in no time when the going gets tough.

Finally, you have to wonder what the Chinese think they are getting for their money. No matter what, the US is not going to rise back to the high level of unsustainable consumerism that characterized the last few decades. Since the Chinese aren’t stupid, they can surely see that. Sooner or later, no doubt sooner, the Chinese will be forced to show their hand, and it will no doubt be very instructive for the rest of us.

Saturday, February 21, 2009


China and US Securities

Continuing from my last post, let’s take a look at this Bloomberg article, which tells us that Secretary of State Clinton begged China to continue purchasing US securities.
The two nations’ economies are intertwined and it wouldn’t be in China’s interest if the U.S. were unable to sell its government debt, Clinton said in an interview with Shanghai’s Dragon Television today. China knows it needs a healthy American economy as its biggest export market, she said, adding that the U.S. must take “drastic measures” to stimulate growth.
Yea, that’s it in a nutshell. China loans a colossal amount of money to the US government, that money then supposedly trickles down to the consumers (already choking on debt), who then supposedly spend it on more Chinese-made goods. Then, in an ideal scenario, the US government eventually pays the loan back to the Chinese government. I say “ideal” because there’s a catch, alluded to here.
The Chinese government said last week it plans to keep buying Treasuries, adding that future purchases will depend on the preservation of their value and the safety of the investment.
Oops! Yea, the Chinese might someday decide that US T-bills have no value and are not a safe investment. Indeed, the Chinese are finding that perhaps they have better things to spend their money on. Since the Chinese are not stupid, surely they see that an economic recovery in the US (or for that matter anywhere) is highly unlikely. How long will they keep beating the dead horse of US securities?

Friday, February 20, 2009


Poverty Pragmatism

Human rights activists are shocked that US Secretary of State Clinton has announced that the US and China will paper over their differences on human rights. While I agree that human rights is a vital issue, apparently those activists are not shocked by the ongoing collapse of the world financial system, indeed the decline of industrialism itself.

So let us not be shocked by this US government position. The US desperately needs someone with deep pockets to finance its debt (which is of course impossible to pay back). You got anybody in mind other than China and Japan?

The name of the game is poverty pragmatism. And not biting the hand that feeds you.

Tuesday, February 10, 2009


Another Day on the Planet

Well, the new stimulus plan has been unveiled, and the markets reacted by tanking. We’re off to a great start. But let’s be honest: You’d have to be out of your mind to believe this is a solution in the first place. Supposedly boosting “consumer lending” is going to get the consumers consuming again, and that will help kick-start the economy. In case you haven’t noticed, American consumers — whom all the world depends on to consume, consume more, and consume still more — are already in debt up to their lower lips. No, make that up to their eyeballs. And the answer is to have them take on even more debt? What’s more, American consumers are losing their jobs by the tens of thousands, and the last time I checked, unemployed people don’t do a lot of shopping.

Meanwhile, the US government debt — already over $10.7 trillion the last I checked — continues to climb, states are bleeding red, California is bankrupt, and the world banking system is insolvent, but what the heck, it’s just another day on the planet.

Monday, February 09, 2009


Mexican Influence in the US

In a previous post on the Russian Panarin’s predictions I said that “‘Mexican influence’ in the US southwest will not be from the Mexican government (or whatever is left of it when this is all over), but rather from Mexican drug/warlords.” The words are barely out of my mouth when this AP article, Mexican drug violence spills over into the US, makes its appearance. Note especially this passage.
Investigators fear the violence could erupt elsewhere around the country because the Mexican cartels are believed to have set up drug-dealing operations all over the U.S., in such far-flung places as Anchorage, Alaska; Boston; and Sioux Falls, S.D.
Drug lords have set up shop in the US and are openly operating there. Recall the boldness of pirates in the Gulf of Aden. Like the pirates, the drug lords have sensed the incipient power vacuum caused by the widening chinks in industrial civilization’s armor. Watch for more power grabbing and chaos as the system falls apart.


UAE Foreign Workers

Last month I ran an item on thousands of Indian workers fleeing Dubai, but now it appears that they will be leaving the United Arab Emirates by the tens of thousands (and here). The real estate and construction boom appears to be hitting the skids faster than anticipated, which will be a serious blow to the economy.

Sunday, February 08, 2009


Panarin’s Crystal Ball

The prediction of Russia’s Igor Panarin on the breakup of the United States is still making the rounds, no doubt because it seems real and inevitable to some, or perhaps because of morbid fascination among some Americans. So it seems useful to examine the linked article and make a few comments where I think he got it right and wrong. Not that I have a crystal ball, but a little realistic thinking and common sense can help us evaluate his prediction more accurately.

First, is the US going to break up, and will it happen in 2010? Because all empires and their homelands eventually disintegrate, this is in part a no-brainer: there is no question that it will happen eventually. However, calling the year is trickier. There are so many variables that it would be hard to say when the breakup will actually begin, in what manner it will proceed, and how long it will take before we can say unequivocally that “the United States of America no longer exists,” or at least that the US as we know it no longer exists.

Why the US will disintegrate is becoming clearer every day. It takes a lot of energy, money, and strong central control to hold a large country together. Peak oil has triggered energy decline, perceived wealth is disappearing quickly, infrastructure is crumbling, the economy is in the sewer, unrest is growing in many countries, and around the world globalization is pulling back as industrial civilization starts to decline. Preexisting and new initiatives toward secession will add to the forces trying to tear the country apart.

Let’s focus on Pararin’s map. He has the states marked off in neat blocks. Obviously such neat divisions are highly unlikely. Although state lines may be used in some situations or in the initial stage, it is more likely that new divisions will eventually form along bioregional lines, major rivers, mountain ranges, and other natural features.

Second, Panarin says that each block will go to another power or fall under its influence. This prediction highlights a big mistake: he is assuming that other countries will not disintegrate. Clearly he’s wrong about this because Russia, China, Canada, Mexico, and the EU all have the same problems as the US does in varying degrees, and worse in some cases. China and Mexico are veritable powder kegs ready to blow up, so they’ll certainly be in no position to take and hold US territory. Ultimately what we now know as the Mexican government will likely end up in the same position as the current “government” of Afghanistan: maintaining tenuous control over the downtown area of the capital city. Beijing will at the least lose control over Tibet and the western regions and be hard-pressed to maintain control over the traditional Han region amid food shortages, mass unemployment, and civil uprisings. Russia, as we’ve seen in the news, has problems of its own, while EU unity is already being tested, and the international economic meltdown is just getting started. Hence, although some of these powers might at first have territorial ambitions in North America, they will soon find themselves overtaken by events at home.

“Mexican influence” in the US southwest will not be from the Mexican government (or whatever is left of it when this is all over), but rather from Mexican drug/warlords. Similarly, “Chinese influence” will more than likely be from China-based privateers or pirates.

So, where Panarin got it wrong is assuming that only the US will be seriously affected by the destructive global forces already at work.


Wheat Disease in China

As if China did not have enough problems with multi-millions unemployed, factories going belly-up, social unrest, and drought, stripe rust is now threatening the summer wheat crop. A food shortage would add still more fuel to this already boiling cauldron of seething tensions.

Friday, February 06, 2009


California Agriculture

Secretary of Energy Steven Chu has been surprisingly frank about the future of agriculture in California. But of course the situation is actually worse, as Chu was just talking about the effects of climate change. California has already gone bust financially, so even if they had plenty of water, the state would no longer be able to be one of the country’s major food producers and exporters. Surprising frankness, yes, but nonetheless I was even more surprised by Chu’s brutally frank statement that “I don't actually see how they can keep their cities going.” I don’t, either, but to hear this from a Cabinet member is something that doesn’t happen every day.

One other thing: California is America’s top milk producer, which aggravates its situation owing to the collapse in milk prices.


Tax Revolt

Here we have an item on California counties openly considering tax revolt. There are already no doubt lots of angry Californians who were — especially this year — counting on their income tax refunds. The picture is not pretty, and it’s going to get much uglier.

The mood is getting uglier. Incidents of road rage are increasing, and now people are even shooting at each other. But you ain’t seen nothin’ yet.


Dark Clouds Over Renewable Energy

New Scientist has posted an article titled “Why sustainable power is unsustainable.” This deals mainly with the rarity of iridium and platinum, and the fuel-vs-food problem of biofuels. Unfortunately, the challenges faced by renewable energy are far more numerous and daunting. Total dependence on fossil fuels for manufacturing, deployment, and maintenance, as well as on fast-disappearing capital are quickly rendering the hope of renewable energy into a false promise.

The best that we could ever have hoped for, of course, is that lots of renewable infrastructure could have been built before the crash, which would have facilitated a soft landing. Yet, even though the implosion of industrial society has already begun, on a worldwide scale very little renewable infrastructure has been built, and little more will be built before the industrial economy hits the skids.

Monday, February 02, 2009


States’ Budget Shortfalls and Infrastructure

The US state of California is facing a grave budget shortfall, as everyone knows. But other states are also coming up short. As time goes on, the problem will get worse, and increasing cuts will have to be made. As the reader knows, infrastructure is already falling apart. President Obama’s stimulus is not going to provide nearly enough money to repair and upgrade infrastructure, and with states being increasingly cash-strapped, we can expect infrastructure deterioration to proceed largely unabated.

This page is powered by Blogger. Isn't yours?