Russ, et. al.,

I'd like to learn more about the World Bank and IMF (more than just what their websites say about themselves).

Any articles or opinions about their actions, activities, and direction would be greatly appreciated.

Regards,

Brad

Well here's one person's summation from the BBC:

"Explained: the IMF and World Bank

The IMF and the World Bank were established at the Bretton Woods conference in 1944 and designed to achieve different but complementary ends.

The IMF was designed to defend the international monetary system which meant in effect helping governments overcome balance-of-payments problems.

The World Bank - its proper name is International Bank for Reconstruction and Development - had the role to invest in programmes to promote post-war reconstruction. In Europe there were few countries which did not face such a problem or need no help from the World Bank.

In the five decades since then the world has changed but the two bodies have recognisably the same task.

The IMF lends money to countries which are in deep economic trouble - Mexico in the 1980s for example, Mexico again in 1995, South East Asia and Russia in the late 1990s, Argentina in 2001.

The World Bank backs these programmes with loans for specific ends. Today these often include financial support for social networks to protect the poor from some of the worst effects of the economic problems the IMF is trying to overcome.

How the IMF and World Bank work

The Fund offers its programmes to a government in need. The government is, however, said to 'own' the programme.

At the outset it signs a so-called Letter of Intent which lays out the elements of the recovery plan and in return the Fund commits itself to grant loans in stages as and when economic targets specified in the Letter are achieved. These will include cutting budget deficits and inflation.

But today there are other components in IMF programmes that have become more important. In East Asia the Fund demanded the reform of the banking system in Thailand and Indonesia and the introduction of proper formal accounting systems in South Korea.

Similarly the Bank now looks more at the long-term strategic goals of an economy than at traditional development schemes such as new highways and dams.

Charged with failure

Both institutions face unprecedented criticism.

The Fund is accused of enforcing one-size-fits-all recommendations that are too harsh in certain areas including budget cuts and inflation.

The Bank is criticised for its supposed failure to take proper account of human and environmental needs in its projects, and for being bloated and inefficient.

Both deny the charges and both are undertaking various reforms to meet the criticisms.

On of the most important reforms, they say, is a new emphasis on consulting national governments, local experts and aid organisations before laying-out policies- the so-called Poverty Reduction and Growth Strategy...

See: http://news.bbc.co.uk/1/hi/business/the_ec...ports/95218.stm

The criticisms I have seen in many another venue, and I would have wished for more detail on the BBC's part. Perhaps some other forum dweller/netizen has a better, more detailed analysis at hand?

The World Bank is a tool of the New World Order to force countries into capitalism. To privitize the resources, free trade, with multinational companies stepping in to take advantage of the unsophisticated people who have no experience with nation building. Paul Wolfowitz is President of the World Bank now. He left the White House after trying to remake the Middle East into capitalist democracies and failed, now he is at the Bank, I suppose to try and remake the World by either giving or withholding funding for the countries in need. The rules by which they receive the loans are the way the New World Order is being created. They must agree to be capitalist, have free trade and be willing to privitize everything.

The World Bank is the reason for the movement of South America to Socialism. See just one example below. There are hundreds of examples of how the Bank hurt, not helped the people of the South American continent.



Secretive World Bank Tribunal Bans Public and Media Participation
in Bechtel Lawsuit Over Access To Water

Citizens excluded from $25 million suit against Bolivia
for company's failed water privatization scheme


For Immediate Release: February 12, 2003
For more information, please contact:

Martin Wagner, Earthjustice (Oakland, CA) 510-550-6714
Marcos Orellana, CIEL (Washington, DC) 202-785-8700
Jim Shultz, The Democracy Center (Bolivia) 011 591 4 429 0725



--------------------------------------------------------------------------------

Washington, DC-The Bechtel Corporation was handed a powerful victory last week, when a secretive trade court announced that it would not allow the public or media to participate in or even witness proceedings in which Bechtel is suing the people of Bolivia for $25 million. Aguas del Tunari, a subsidiary of the California-based engineering giant, is suing South America's poorest nation over the company's failed effort to take over the public water system of Bolivia's third largest city, Cochabamba. After taking over the water system in 2000, the company imposed massive water rate hikes, which resulted in widespread protests countered by military force that killed one person and wounded 175 others.

Oscar Olivera, a leader of the coalition of Bolivian peasants, workers and others that formed in opposition to Bechtel, said, "Now the World Bank is not only imposing its ideas and programs on us, it is also preventing the people affected from participating in a case that directly affects our lives. This is profoundly undemocratic."

Bechtel's legal action is being heard by the International Center for the Settlement of Investment Disputes (ICSID), a tribunal administered by the World Bank that holds all of its meetings in secret. Bechtel is suing Bolivia for the profits it claims it would have made from the water privatization scheme had the rate hike protests not led to its unplanned departure from the city of Cochabamba in April 2000. (See background story at http://www.pbs.org/frontlineworld/stories/bolivia/)

The President of the tribunal arbitrating the case responded last week to a petition filed by Oscar Olivera and a coalition of other Bolivian citizens and public interest organizations seeking to participate in the case. (View the petition http://www.earthjustice.org/news/documents...iapetition.pdf) The President's letter asserted that the tribunal had no power to permit affected citizens to participate, a stance inconsistent with other arbitral tribunals and U.S. courts, where interested parties are regularly allowed to submit "friend of the court" briefs. The letter also indicated the tribunal's rejection of the groups' requests that documents and hearings in the case be open to the public. (View the letter denying access http://www.earthjustice.org/news/documents...IDResponse.pdf) The tribunal is comprised of one member appointed by AdT, one appointed by the Bolivian government, and a third - the tribunal's president - appointed by the President of the World Bank.

"The panel explicitly rejected all of our requests for public participation in this closed-door process," said Martin Wagner, an attorney for the US-based law firm, Earthjustice. "It is inexcusable that a panel considering an issue as fundamental as the right to water should be able to exclude the very people whose rights will be affected by the case."

According to Sarah Anderson, Director of the Global Economy Project at the Institute for Policy Studies in Washington, DC, "There has been an outpouring of international support for the Bolivian petitioners in this case. So many people have become familiar with such investor-state lawsuits from the NAFTA experience and they see them as one of the most extreme examples of excessive power granted to corporations."

REQUESTS FOR PUBLIC PARTICIPATION DENIED

In August 2002, a coalition of citizens' organizations from around the world requested in a letter to the tribunal (View letter and signatories http://www.earthjustice.org/news/documents...zensletter.pdf) that the panel make all of the documents and meetings in the case public, that it travel to Bolivia to receive public testimony, and that it allow Bolivian civic leaders to be an equal party to the case. The tribunal's response to the petition serves as a rejection of this request as well.

"The ICSID Tribunal's decision reveals structural deficiencies in the ICSID arbitration system," said Marcos Orellana an attorney for the Center for International Environmental Law (CIEL). "By failing to recognize its power to allow affected citizens to participate in the case, the Tribunal's decision would allow corporations such as Bechtel to manipulate and compromise the integrity of international arbitration, as well as countries' ability to protect the public welfare."

The legal team representing the Bolivian petitioners includes California-based Earthjustice and the Washington, DC-based Center for International Environmental Law (CIEL), both of which have been involved in attempts to intervene in similar investor-state lawsuits filed under the North American Free Trade Agreement (NAFTA).

"The World Bank's secret trade court has now made it absolutely clear that it wants to continue doing its work behind closed doors, without public scrutiny or participation by the people expected to pay Bechtel off," said Jim Shultz of the Bolivia-based Democracy Center. "Neither the public nor the media will be allowed to know when the tribunal meets, where it meets, who it hears from, or what they say. This secrecy is just a preview of what communities in the U.S. can expect under the proposed FTAA [Free Trade Area of the Americas, an extension of NAFTA]. Local governments from Alaska to Chile will be dragged before secret panels as multinational corporations, like Bechtel, seek to undo local environmental, health, worker and consumer protections, branded as barriers to free trade."

AFTERMATH OF A REVOLT AGAINST WATER PRICE HIKES

In the late 1990s the World Bank forced Bolivia to privatize the public water system of its third-largest city, Cochabamba, by threatening to withhold debt relief and other development assistance. In 1999, in a process with just one bidder, Bechtel, the California-based engineering giant, was granted a 40-year lease to take over Cochabamba's water, through a subsidiary the corporation formed for just that purpose ("Aguas del Tunari").

Within weeks of taking over the water system, Aguas del Tunari imposed huge rate hikes on local water users. Families living on the local minimum wage of $60 per month were billed up to 25 percent of their monthly income. The rate hikes sparked massive citywide protests that the Bolivian government sought to end by declaring a state of martial law and deploying thousands of soldiers and police. More than a hundred people were injured and one 17-year-old boy was killed. In April 2000, as anti-Bechtel protests continued to grow, the company's managers abandoned the project.

Aguas del Tunari filed the legal action against Bolivia last November, demanding compensation of $25 million, a figure that represents far more than the company's investment in the few months it operated in Bolivia. The action also aims to recoup a portion of the company's expected profits from the project. The company filed the case with ICSID under a bilateral investment treaty between the Netherlands and Bolivia. Although Bechtel is a U.S. corporation, its subsidiary recently established a presence in the Netherlands in order to make use of the treaty.

The rules in the Dutch-Bolivian treaty are similar to those in NAFTA and the proposed Free Trade Area of the Americas.

http://www.ciel.org/Ifi/Bechtel_Lawsuit_12Feb03.html

cptrev,

I think the lack of joining this discussion stems from the fact that most people don't understand what the IMF, World Bank or even the Federal Reserve are, or do. Facts that would show the "unseen hand" in the New World Order are almost never published or are couched in such esoteric language to make it near impossible for mere humans to understand. See Alan Greenspan.

How much do you know about the Fed? The IMF is like the Fed on a grand scale. Instead of banks lending money to individuals, money is loaned to countries. The World Bank is just the banks of the richest nations getting together to make money on the poorest countries only with supposed "good intentions".

Sherry,

I cannot thank you enough for taking the time to share your post, your views, and your information. But for what it is worth. Thank-you.

How much do I really know about the Fed and World Bank and IMF?

Not nearly enough to be painfully honest.

Best regards,

Brad

I could give you a quick Reader's Digest easy to read lesson on the Fed and IMF, if you want.

Please do, in your own words if you will.

All right. First a little history of one of the powerful institutions on the planet.

The inner workings of money and banking need to be understood first. In America the ultimate control of money rests with the bankers of the Federal Reserve System.

William Greider, former assistant manager of the Washington Post and author of Secrets of the Temple: How the Federal Reserve Runs the Country, calls the Fed "a crucial anomaly at the very core of representative democracy, an uncomfortable contradiction with the civic mythology of self-government.

We originally started with gold. But it was unwieldy and tended to be stolen by robbers. So we went to paper money that was simply a promissory note. You could turn it in at any time for gold.

Then some individuals figured out that you could lend money out for a fee, which could then generate even more money.

The early goldsmiths warehoused gold and used it as a basis for issuing paper money. Since it seemed unlikely that everyone would come at the same time to collect their gold for the paper money, the goldsmiths became bankers. They would lend out a portion of their stockpile for interest or profit.

This practice of loaning out a greater portion of the stockpile while only keeping a small portion for emergencies (lots of people wanting to turn in their paper) is called fractional banking. This worked out well unless everyone suddenly wanted their gold back and made a run on the bank.

Added to fractional banking was "fiat" money. In China, the emperor forced his people to accept pieces of paper with a seal on them as legal payment under the pain of imprisonment or death. He then used this worthless paper to pay his own debts.

Our Federal Reserve Notes are adorned with seals, signatures, the government pays its expenses with them, the people are forced to accept them, they and the invisible checkbook and debit plastic money are made in such a vast quantity that it is equal to all the treasures of the world. And they take nothing to make.

Our present monetary system is almost an exact replica of the system that supported the warlords seven centuries ago. Today it is bankers who profit, not warlords, and they have created an incredible system for doing it, the FED.

Early American colonists had printed small amounts of paper money and were prospering.

Ben Franklin explained, "In the colonies we issue our own money called Colonial Script. We issue it in proper proportion to the demands of trade and industry so the products can pass from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one."

The Bank of England urged the British Parliament to stop this money so they passed the Currency Act of 1764 which prohibited the printing of currency. The colonies were forced to accept the Bank of England notes.

Franklin said that it was the outlawing of debt-free money which caused the economic depression and widespread unemployment which precipitated the American Revolution.

The idea of a central bank run by professional bankers was a contentious issue since the founding of the nation. The arguments for and against can be seen in the debates between Thomas Jefferson and Alexander Hamilton.

Hamilton believed in a strong central government and central bank overseen by wealthy elites. "No society could succeed which did not unite the interest and credit of rich individuals with those of the state." Supporters of Hamilton's elitist ideals formed America's first political party, the Federalists. Hamilton was described as a tool of the international bankers and he argued that "a national debt, if not excessive, will be a national blessing."

The Bank of North America was created before the drafting of the Constitution by Robert Morris, who tried to craft it after the Bank of England. It failed in three years then Hamilton established the First Bank of the United States which was strongly opposed by Jefferson and his followers.

Jefferson knew from European history that a central bank could quickly become the master of a nation.

He stated, "I sincerely believe that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity under the name of funding, is but swindling futurity on a large scale. He wrote in 1816 that "Already they have raised up a money aristocracy...The issuing power should be taken from the banks and restored to the people to whom it properly belongs."

Jefferson further believed that a central bank to be unconstitutional. He felt the bank took power that was only granted to the state or the people.

Ironically, Jefferson's supporters, considered liberal at the time, were to become the Republican Party.

John Adams wrote "Our whole banking system I ever abhorred, I continue to abhor, and I shall die abhoring. Every bank of discount, every bank by which interest is to be paid or profit of any kind made by the lenders is downright corruption. It is taxation for the public for the benefit and profit of individuals.

The First Bank of the US was modeled after Bank of England and partnered with the government. Twenty percent of the banks capital was obtained through the federal government, eighty percent pledged by private investors, including the Rothchilds. The records show that the Rothchilds were the power in the Bank of the US and it was clear that the European bankers were trying to gain control of America's money supply.

The bank was not renewed after it's twenty year charter but after the war of 1812 and chaotic financial conditions, a Second Bank was formed. It ended when President Andrew Jackson vetoed an extension of it's charter. That started the "Bank War". Jackson called the central bank unconstitutional as well as "a curse to a republic, inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."

An assassination attempt was made on Jackson and he was furious, he withdrew government funds from the "den of vipers" and the Second Bank retaliated by curtailing credit nationally and creating economic panic. According to records, the assassin was an agent of Jacob Rothchild in Paris.

When Jackson left office after two terms he had completely eliminated the national debt.

The Federal Reserve System was created in 1913. In a secret meeting on Jekyll Island, J. P. Morgans island retreat seven men representing perhaps as much as one fourth of the wealth of the world met and the Federal Reserve was created. The seven men were Frank Vanderlip/representing Wm. Rockefeller and Jacob Schiff's investment firm of Kuhn, Loeb, & Co.; Asst. Sec. of the Treasury Abraham Piatt Andrews; senior partner of JP Morgan/Henry Davidson; First National Bank of New York/Charles Norton;Benjamin Strong/Morgan lieutenant; Paul Martin Warburg/Kuhn; Loeb & Co.;Nelson Aldrich, the only nonbanker in the group but was father in law of John D. Rockefeller Jr. Warburg/represented the European Rothchilds

They formulated a plan for banking reform, when there were repeated panics, runs on the banks Woodrow Wilson proclaimed his solution to the financial panic. "All this could be averted if we appointed a committee of six or seven public spirited men like JP Morgan to handle the affairs of our country". Cries for a stable national banking system rose.

Many people think the panics were driven by the bankers themselves to gain control of the banking system with the centralized Federal Reserve System.

The plan was to have several banks, not one central bank and no one was to utter the words bank or central. It was made to look like an official agency of the US government. The organization is a union of all the banks of the country for definite purposes. Any restrictions on the bankers were removed later.

The Fed today is composed of twelve Federal Reserve Banks, each serving a section of the country, but dominated by the New York Federal Reserve Bank.

The Fed is such a pivotal force in the world that it is watched by every nation as even the slightest interest rate tick can roil markets and create or destroy millions of jobs.

But the real story is who controls the Fed and Why. Using the Fed to create alternate periods of inflation and deflation, whipsawing the public for vast profits has been worked out by the international bankers to an exact science.

It is an invisible government by the money powered bankers.

Although the name Federal sounds like a government agency, it is a private organization. owned by it's member banks which in turn are owned by stockholders. And who are the stockholders? The major stockholders in the New York City banks are a few families related by blood, marriage or business interests. The Rothchilds, Morgans, Rockefellers Warburgs and others.

We now have private control over a central bank. The major bankers achieved a long held goal-taxpayer liability for the losses of private banks. While technically the Fed note is an obligation of the US government, in reality it is an obligation , the sole actual responsibility for which rests on the reserve banks. The government could be called upon to pick them up after the banks failed.

The money to cover government overspending comes from a mechanism instigated by the same men at the same time period- a national income tax and the means to collect it. The banker globalists sounded like the politicians of today. Wilson pushed through more progressive legislation than any other previous administration. Added to the Federal Reserve System enforcement of the graduated income tax with the IRS to enforce it, the Federal Farm Loan Act which created 12 banks for farmers, the Federal Trade Commission to regulate business.

The Fed states"The function of the Fed is to foster a flow of money and credit that will facilitate orderly economic growth, a stable dollar and long run balance in our international payments"

In 1972 Nixon devalued the dollar as the Europeans refused to accept it. Since 1976 the US has had a negative trade balance, and in 1985 for the first time since 1914 the US debt owed to foreign governments exceeded US creditors.

So the Fed isn't working out as it should have.

Another aspect of the money game is the demand deposits. Checks and debit cards that depositors pay ever increasing service fees for the privilege of allowing the banks to use their money to be used for profit by their bank.

The Fed charges interest on pretended loans, overnight movements of money from one to the other with interest charged, is usury and has become institutionalized under the Fed system. This has been done by masking what the Fed is doing by using arcane terms and working in secrecy. The mechanism by which the Fed converts debt into money seems to be complicated at first, but just remember that the process is not intended to be logical but to confuse and deceive.

Henry Ford said "It is well enough that the people do not understand our banking and monetary system for if they did I believe there would be a revolution before tomorrow morning."

"Most Americans have no real understanding of the operation of international moneylenders, the bankers want it that way," said Barry Goldwater

International bankers make money by extending credit to governments. The greater the debt of the political state, the larger the interest returned to the bankers. The national banks of Europe and the United States Federal Reserve System are all owned by private interests.

According to Greider, today's money managers has designed such intricate and esoteric details surrounding their financial transactions that the Fed has assumed the proportions of a cult.

"Thanks to the Feds decision to tolerate an enormous increase in the money supply, and to the flood of foreign capital seeking safe haven in the US, American consumers and businesses will have a surfeit of credit available to them", wrote Philip Langman in the US News and World Report in Jan. 1999.

When the gold standard was abandoned, a new dimension of trust in the illusion of real worth was added.
The initial purpose of money, to represent tangible goods was forgotten.

Money today is mere electronic blips on a computer accessed with a plastic card. There is nothing to back it up. Yet this illusory money is loaned at interest. As the amount of the money grows it's worth decreases. This is called inflation which is in effect a tax on the use of money. Inflation can be controlled up or down by those who control the little blips on the computer.

The result of the whole system is massive debt at every level of society. Banks are in debt to depositors, depositors money is loaned out creating indebtedness to the banks. Making this system even more akin to a maniac's nightmare is the fact that the banks, like other lenders, often have the right to seize physical property if it's paper money is not repaid.

In the Great Depression money retained it's value. Today we are experiencing an inflationary depression-prices continue to rise because of the inflated money supply. The more money that is circulation the less it's worth.

I got some of the information from the book, Rule by Secrecy by Marrs and some from Google and some I just learned along the way. Hope it helped.

I thank you - I haven't had time to read, let alone digest, the Reader's Digest Condensed version above - but wanted to quickly express my gratitude for your taking the time to post it.

I'll be in Florida for the next 4 days - see you upon my return.

Good so far, it takes an obvious editorial position after that, but the main point is valid and works for me. Let the people own the means of production as people, not as some conglomerate called "the government", which includes people like Bush, Nixon, Carter, Clinton, Stalin, Hitler, Pol Pot, Castro and a host of dingdongs who can't find real jobs.

Was my condensed version of the Fed readable? I typed that at 3 in the morning. I hope it made sense and was informative.

So many people don't know that when you speak of the debt and the interest on the debt exactly how much is owed and who the money is owed to. I think once they realize that the interest payments are going to rich families and not some government arm somewhere or something, they are shocked. I know I didn't have a clue until I started to read about it and it changes the way you think about the debt, the bankers and the way the "unseen hand" of the Fed can manipulate the worlds money supply.

I was suprised to hear Greenspan say that the surplus was a bad thing, that we needed to have debt, but then you have to remember that the families are collecting the interest on the debt. Billions of dollars in interest. I just heard on the television that our greatest export is dollars. The consuming of so many foreign goods is sending ungodly amounts of money overseas which they are bringing back to buy our infrastructure. They aren't buying any of our goods but are buying control over vital infrastructure with the full blessing of the government. Someone thinks its a good idea. Buying whole factories, taking them apart, taking the technology and shipping it back to their home countries.

And we just keep printing more and more worthless paper. I have a feeling this is going to come back to haunt us. Someday.

While it obviously had an editorial slant it did make sense and was informative. Nobody uses a gold standard anymore, the one thing that might lead to honest money that meant something.

The Koran forbids interest. One of the admirable tenets of the Muslim faith. They believe if someone is in need, you don't take advantage of them. You are to be charitable. We learned about money from a different branch of Abrahams family.

Your comment would seem to include other folks who might simply wish to start a business. They would not normally be considered "in need" in the sense you suggest...would not interest be a fair concept there?

No interest means no reason to lend money, and most big projects require some borrowing and lending. No wonder so many Arabs are poor.

One wouldnt lend money considering those that you lent to would build something that in the long run would require something more that you provide?

Seems to me a good businessman might consider a loan to be an investment. From what I have heard building infrastructure and networking are both good business.

I don't know how to copy and paste these things so if you want to see the ownership of the Federal Reserve Banks, the people who control them, go here:

http://land.netonecom.net/tlp/ref/federal_reserve.shtml

It shows a family tree of sorts.

Try this book: http://www.realityzone.com/creature.html

Much more readable than Greider's, with the same information.

Bush quietly reshaping the Fed

Low seniority for central bankers could mean rates go higher than they need to, hurting growth, or sparking recession.

By Chris Isidore, CNNMoney.com senior writer

March 3, 2006: 6:39 AM EST


NEW YORK (CNNMoney.com) - Few presidents have had the opportunity to shape the Federal Reserve the way President Bush has this year.

Once Bush replaces Vice Chairman Roger Ferguson, the only Democrat on the Fed's board who resigned recently, four of the Fed's seven governors will have taken office in 2006, and all seven will be Bush appointees.


Ben Bernanke became Fed chairman on Feb. 1, but he still has more seniority than two other Fed governors, with a third appointment due soon.


That would make Bush only the third president to place all seven governors on the board, after Ronald Reagan in 1988 and Franklin Roosevelt in 1936.

The new Fed members, and their relative lack of seniority at the central bank, could end up having a big impact on your finances.

That's true even though very few average Americans, not to mention a number of lawmakers, could name any of the governors, aside from new Fed Chairman Ben Bernanke.

The need for the Fed and its new members to establish their credentials as inflation fighters could prompt the central bank's policy-makers to raise interest rates a quarter-percentage point or perhaps even a half-point more than more seasoned policy-makers would have, Fed watchers and economists say.

"As a group, they will have a sense they have something to prove and that what they have to prove is they can be tough on price stability," said Tom Schlesinger, executive director at the Financial Markets Center, a research group that tracks the Fed.

But Schlesinger and others say they also think that this group is relatively united in the belief that combating inflation is the more important part of their dual mandate, the other part being the promotion of economic growth, even though Fed governor Mark Olson registered a rare dissenting vote against raising rates at the Sept. 20 meeting after Hurricane Katrina.

"If Bernanke turns out to be a stern hawk on inflation in the manner of (former Fed chairman Paul) Volcker, it's not clear to me that Olson (or the other Bush appointees) will lay down in front of his tracks to try to stop that train," said Schlesinger.

That's not necessarily good news for the Bush administration, with Republicans facing what is seen as tough mid-term elections this fall. Strong economic and job growth are usually a better environment for incumbents than is low inflation.

"If the Fed overshoots, we could potentially see a recession by the end of this year, which could be the worst case scenario for Bush," said Ian McCulley, an analyst with Grants Interest Rate Observer.

Fed picks under Congress' radar

Still, Bush's selections to the nation's central banks have barely had any public or even Congressional scrutiny, compared to the Washington blood sport that's been the battle over his Supreme Court nominees.

To be sure, Bernanke's appointment and confirmation hearings got news coverage, but some leading senators admitted to the media they weren't aware the hearings had even been held.

Bernanke sailed through without any serious opposition, even though he advocates the somewhat controversial strategy known as "inflation targeting." That policy uses a preset formula for interest rate hikes if inflation reached certain levels, even if the economy is experiencing a combination of higher prices and slower growth at the same time.

"I think most people in Congress don't understand or care much about monetary policy," said McCulley. "It's not a divisive issue they can throw at the other party. It's too much of a wonk issue to get into a conversation about inflation targeting."

And the new Fed makeup may make it easier for Bernanke to win approval of an inflation targeting policy sooner rather than later, according to some Fed watchers. The departing Ferguson was one of those on the record as opposing inflation targeting.

"This (next appointment) could be the one who tips the balance," said Gus Faucher, director of macroeconomics at Moody's Economy.com, regarding who Bush nominates to succeeds Ferguson. "If Bush nominates a strong proponent of inflation targeting, it would be a signal they want (that)."

Fed watchers say they have doubts how much Congress would fight such an inflation targeting advocate joining Bernanke, even if there are misgivings about the policy. There doesn't seem to be much interest or stomach in probing the nominees, even though some say that would be well worth it.

One of Bush's two most recent picks for the Fed, Randall Kroszner, is a very conservative economist who had been a University of Chicago professor.

Schlesinger at the Financial Markets Center says Kroszner has argued in his writings that markets and private entities, such as credit rating agencies, are always superior to government regulations, supervision and safety nets in regulating financial markets.

"People are always trying to explain the lack of questions as saying there's a consensus around monetary policy, but there's anything but a consensus on monetary policy," said Dean Baker, co-director of the Center for Economic and Policy Research. "What upsets me more than anything is no one is asking serious questions."

The other recent Fed pick was White House economic staffer Kevin Warsh. He was criticized outside of Congress for a thin resume -- he is only 35, making him the youngest Fed governor in history, and has neither a Ph.D. nor an economics degree.

He is also the son-in-law of Ronald Lauder, a major Republican contributor and a member of the family that controls Estee Lauder Cos (Research).


But both Kroszner and Warsh sailed through on voice votes in the Senate with nary an objection and virtually no coverage in the media -- even though critics were comparing Warsh to Harriet Miers, the White House counsel whose nomination to the Supreme Court was withdrawn under a hail of criticism about her qualifications.

"I would have thought the Warsh appointment would get a lot more attention, but most senators don't care, they don't think about it," said John Silvia, chief economist for Wachovia.

http://money.cnn.com/2006/03/02/news/econo...dex.htm?cnn=yes

I've appreciated the reading.

Back from Florida... working hard to catch up on the posting.

Regards,

brad

Hope you had a good trip.

We waited for you. You'll find that people expect "the host" to be involved so it slows when the host ain't around. (my new dsl toy has had me busy updating my computer and preparing to dump my old ISP)

Either Brad's a slow reader or he lost our address.

The first, Sherry. I assure you it is the first!

Actually, my 4 day weekend set me behind here, at work (and Ilike getting paid), and in my online Masters program (and I pay them a lot for the privilege and hope to graduate in a year!).

So, understandably, my spanner community has had to take a back seat... I log in daily, read a little, and jump back out before I have time to compose any response worth reading (and not counting this as such!!!)

Best regards,

Brad

Well, good, I'm glad you didn't lose our address. We'll be waiting for your return.

Alrighty then,

My waiting to re-read the info and follow the links was well worth it to me.

Sherry, I'm sure you are used to people disagreeing with your overt point of an organized "New World Order". I certainly grant you the point of the growing power of a relatively small number of mega-corporations and perhaps a similarly small number of billionaires with controlling interests... and yet I don't believe they meet to plot the course of world events with sinister intent.

That aside, I admit to a great preference for capitalism myself. I don't blame the IMF for developing countries' problems - I blame a culture of graft and corruption (that doesn't stop at the borders of developing nations, but envelops the UN, IMF, US, EU, and most other letters of the alphabet IMHO).

Those generalities aside, I definitely appeciate your posts, your condensed history of the World Bank, and especially the article of how Bush has stacked the Fed - with at least one underqualified political hack - typical of this administration to my sorrow.

I'd like to put the Fed aside for the purposes of this "international issues" thread - although as I said, it WAS interesting reading.

Learning from history, yet not being enslave by it, what do "you" (Everyone Welcome!) see as the current role played by the IMF and World Bank? Who controls its decisions? Are its decisions "out of control"? Does it play a positive role, a negative role, or a balanced role - doing good where it can and doing bad where human error causes failure.

It's interesting to see who hates the World Bank.

http://www.econjustice.net/wbbb/whojoined/index.htm

<h2 align="center">Who Has Joined the World Bank Bonds Boycott?</h2>



Municipalities

• Racine County, Wisconsin (October 23, 2003)
• City of Arcata, CA (June 2003)
• City of Richmond, CA (April 23, 2003)
• [url="http://www.econjustice.net/wbbb/whojoined/cambridgejoins.htm"]City of Cambridge, MA (April 29, 2002)
• City of Milwaukee, Wisconsin (March 5, 2002)
• City of Boulder, Colorado (August 21, 2001)
• City of Takoma Park, MD (April 23, 2001)
• City of San Francisco, CA (October 2, 2000)
• City of Oakland, CA (July 18, 2000)
• City of Berkeley, CA (March 28, 2000)

[/url]
Socially Responsible Investment Firms

• ASN Bank, the Netherlands (June 2003)
• Ecological Building Society, UK (2002)
• [url="http://www.econjustice.net/wbbb/whojoined/harringtonstatement.htm"]Harrington Investments, Inc (April 2001)
• Lowell, Blake, and Associates (affirmed March 2001)
• Calvert Group (affirmed September 13, 2000)
• Citizens Funds (September 12, 2000)
• New Alternatives Fund, Inc. (September 2000)
• Noetica Financial Advisory Group (September 2000)
• Progressive Assets Management (April 10, 2000)
• Trillium Assets Management (March 2000)
• Parnassus Fund (February 24, 2000)

Universities

• University of New Mexico (March 2003)

University Student Unions

• Wadham College JCR, Oxford University, England (2003)
• Ohio Wesleyan University
• Wheaton College
• Clark University

[/url]
Labor Unions – Internationals

• Farm Labor Organizing Committee (July 2004)
• [url="http://www.econjustice.net/wbbb/whojoined/teamster.htm"]International Brotherhood of Teamsters (October 2002)
• American Postal Workers Union (APWU) (August 2002)
• Service Employees International Union (SEIU) (June 2002)
• American Federation of Government Employees (AFGE) (June 2001)
• International Longshore and Warehouse Union (ILWU) (June 2001)
• Communication Workers of America (August 2000)
• United Electrical, Radio and Machine Workers (UE) (August 2000)
• Industrial Workers of the World (IWW) (August 2001)

Labor Unions – Locals and Central Labor Councils

• United Electrical, Radio and Machine Workers (UE) District 2, New England (October 2005)
• New Mexico Federation of Labor, AFL-CIO (September 2005)
• Vermont Worker's Center (August 2005)
• United Electrical, Radio and Machine Workers (UE) Local 221, Vermont (July 2005)
• AFSCME Council 40, Wisconsin (April 2003)
• Wisconsin Federation of Teachers (November 2002)
• Public Employee Federation, New York (October 2002)
• Professional Staff Congress, City University of New York (September 2002)
• Wisconsin State AFL-CIO (September 2002)
• United Autoworkers Local 2322, Massachusetts (July 2002)
• Teamsters Local 85, San Francisco, CA (May 2002)
• United Steelworkers of America Local 1304, Oakland, CA (April 2002)
• Central New Mexico Central Labor Council (December 2001)
• United Steelworkers of America Local 1527, Milwaukee, Wisconsin (November 2001)
• Milwaukee Central Labor Council (November 2001)
• National Union of Hospital and Health Care employees, District 1199, New Mexico (affiliated with AFSCME) (September 15, 2001)
• Midstate New York Central Labor Council (June 19, 2001)
• Northeast Indiana Central Labor Council (May 22, 2001)
• Alameda County Central Labor Council (May 4, 2001)
• SEIU (Service Employees International Union) Local 250, California (April 26, 2001)
• AFSCME staff union (April 2001)
• San Francisco Central Labor Council (April 4, 2001)
• United University Professions, American Federation of Teachers Local 2190, New York State (March 2001)
• South Bay Central Labor Council (April 2000)
• Communications Workers of America Local 9423 (March 2000)

[/url]


Churches and Religious Communities

• Episcopal Diocese of New Hampshire (August 2005)
• St. George Church, Ontario CA (November 2004)
• Filipino Ministry, Diocese of San Bernadino (November 2004)
• Alliance for Interntional Monasticism USA (July 2004)
• Sisters of St. Francis of Philadelphia (May 2004)
• Sisters of St. Francis, Leadership Team, Dubuque, IA (May 2004)
• Dominican Sisters of St. Mary of the Springs (February 2004)
• Humility of Mary (July 2003)
• Maryknoll Lay Mission Association (June 2003)
• Maryknoll Sisters (June 2003)
• Maryknoll Fathers and Brothers (June 2003)
• Sisters of St. Agnes, Fond Du Lac, Wisconsin (February 2003)
• University Unitarian Church, Seattle, WA (February 2003)
• Dominican Sisters of Hope (December 2002)
• Mercy Investment Program (December 2002)
• Ursuline Sisters of Tildonk, U.S. Province (December 2002)
• Sisters of Charity of the Blessed Virgin Mary, Dubuque, IA (November 2002)
• Adrian Dominicans (October 2002)
• Franciscan Friars, Order of Friars Minor, Sacred Heart Province, St. Louis, MO (September 2002)
• Franciscan Friars, Order of Friars Minor, Assumption Province, Franklin, WI (September 2002)
• Franciscan Friars, Order of Friars Minor, Province of St. John the Baptist, Cincinnati, OH (August 2002)
• Conference of Major Superiors of Men (August 2002)
• Immaculate Heart of Mary Leadership Council (July 2002)
• Racine Dominicans (June 2002)
• The Marianites of Holy Cross (May 2002)
• The Sisters of Holy Cross (May 2002)
• The Eastern Province of Brothers of Holy Cross (May 2002)
• Sisters of St. Joseph of Orange (February 14, 2001)
• Pax Christi, USA (August 15, 2001)
• School Sisters of Notre Dame Cooperative Investment Fund (October 2001)
• Sisters of St. Francis of Tiffin (Ohio) (August 2001)
• Sisters of the Holy Cross (August 2001)
• Unitarian Universalist General Assembly (June 2001)
• Marianist Brothers and Priests Provincial Council – New York (March 31, 2001)
• Sisters of Loretto (September 2000)
• Illinois Disciples Foundation (April 2000)
• Walker Lutheran Church, Minneapolis, MN (March 2000)
• Macalester Plymouth Methodist Church, MN (March 2000)

<h3 align="left">Foundations</h3>

• McKenzie River Gathering Foundation (December 2005)
• Grassroots International (June 2005)
• Lawson Valentine Foundation (May 2005)
• Normandie Foundation (May 2005)
• Angelica Foundation (April 2005)
• Winds of Change Foundation (January 2005)
• Martha J. Trolin Fund of New Mexico Community Foundation (December 2004)
• Further Foundation (September 2004)
• JoMiJo Foundation (September 2004)
• Lambi Fund of Haiti (December 2003)
• HKH Foundation (September 2003)
• French American Charitable Trust (March 2003)
• Changemakers (March 2003)
• Norman Foundation (March 2003)
• Lydia B. Stokes Foundation (January 2003)
• Solidago Foundation (January 2003)
• Threshold Foundation (November 2002)
• Global Greengrants Fund (September 2002)
• <a href="http://www.econjustice.net/wbbb/whojoined/benandjerrys.htm">Ben and Jerry's Foundation (July 2002)
• Rockwood Fund (May 2002)
• Needmor Fund (May 2002)
• Magnolia Charitable Trust (May 2002)
• Jessie Smith Noyes Foundation (November 2001)
• Woodbury Foundation (formerly Do’Ikyte Foundation) (October 2001)

You can't lend money but you can take payments and charge interest, like GMAC does with cars.


Let any one of the nations currently holding all those T-bills have a recession or other cash-flow problems, and they'll be up for sale at a big discount.

Not that I'm any apologist for international banksters or their worthless currencies -I'm not- but the situation isn't anywhere near as bleak as the economic Chicken Littles would have people believe.

Interesting distinction. A religious loophole, or just doody?

It's not a religious difference, but one more based in ownership, and that financing and credit don't necessarily rely upon existence of a fiat currency.

http://www.safehaven.com/showarticle.cfm?id=4331&pv=1



Some interesting comments on this story...
http://iraqwar.mirror-world.ru/article/74534

I didn't know this Charlie, and I HATE the concept of hiding such an important piece of public knowledge (M-3).

I'm going to have to write a few Congressmen and my heretofor utterly useless Senators from California. Doesn't seem like the Fed can just hide something like this without approval from the Legislative branch.

Thanks for the article Charlie. (Once again delving into the domestic side rather than international... but with obvious and serious international implications!)

regards,

brad

If oil is going to be the new gold, we better think about "mining" all of our own that we can get our hands on. If Iran closes the Straights of Hormuz we're all going to be in deep shiite.


Iran Readies Plan to Close Strait of Hormuz

http://www.newsmax.com/archives/articles/2...1730.shtml?s=lh

Kenneth R. Timmerman, NewsMax.com
Wednesday, March 1, 2006

Iran's Revolutionary Guards are making preparations for a massive assault on U.S. naval forces and international shipping in the Persian Gulf, according to a former Iranian intelligence officer who defected to the West in 2001.

The plans, which include the use of bottom-tethered mines potentially capable of destroying U.S. aircraft carriers, were designed to counter a U.S. land invasion and to close the Strait of Hormuz, the defector said in a phone interview from his home in Europe.

They would also be triggered if the United States or Israel launched a pre-emptive strike on Iran to knock out nuclear and missile facilities.

"The plan is to stop trade," the source said.

Between 15 and 16.5 million barrels of oil transit the Strait of Hormuz each day, roughly 20 percent of the world's daily oil production, according to the U.S. government's Energy Information Administration.



The source provided NewsMax parts of a more than 30-page contingency plan, which bears the stamp of the Strategic Studies Center of the Iranian Navy, NDAJA. The document appears to have been drafted in September or October of 2005.

The NDAJA document was just one part of a larger strike plan to be coordinated by a single operational headquarters that would integrate Revolutionary Guards missile units, strike aircraft, surface and underwater naval vessels, Chinese-supplied C-801 and C-802 anti-shipping missiles, mines, coastal artillery, as well as chemical, biological and nuclear weapons.

The overall plans are being coordinated by the intelligence office of the Ministry of Defense, known as HFADA.

Revolutionary Guards missile units have identified "more than 100 targets, including Saudi oil production and oil export centers," the defector said. "They have more than 45 to 50 Shahab-3 and Shahab-4 missiles ready for shooting" against those targets and against Israel, he added.

The defector, Hamid Reza Zakeri, warned the CIA in July 2001 that Iran was preparing a massive attack on America using Arab terrorists flying airplanes, which he said was planned for Sept. 11, 2001. The CIA dismissed his claims and called him a fabricator.



The source also identified a previously unknown nuclear weapons site last year to this writer, which was independently confirmed by three separate intelligence agencies.

NewsMax showed the defector's documents to two native Persian-speakers who each have more than 20 years of experience analyzing intelligence documents from the Islamic Republic regime. They believed the documents were authentic.

A U.S. military intelligence official, while unable to authenticate the documents without seeing them, recognized the Strategic Studies Center and noted that the individual whose name appears as the author of the plan, Abbas Motaj, was head of the Iranian navy until late 2005.

A former Revolutionary Guards officer, contacted by NewsMax in Europe, immediately recognized the Naval Strategic Studies institute from its Persian-language acronym, NDAJA. He provided independent information on recent deployments of Shahab-3 missiles that coincided with information contained in the NDAJA plan.

The Iranian contingency plan is summarized in an "Order of Battle" map, which schematically lays out Iran's military and strategic assets and how they will be used against U.S. military forces from the Strait of Hormuz up to Busheir.

The map identifies three major areas of operations, called "mass kill zones," where Iranian strategists believe they can decimate a U.S.-led invasion force before it actually enters the Persian Gulf.

The kill zones run from the low-lying coast just to the east of Bandar Abbas, Iran's main port that sits in the bottleneck of the Strait of Hormuz, to the ports of Jask and Shah Bahar on the Indian Ocean, beyond the Strait.

Behind the kill zones are strategic missile launchers labeled as "area of chemical operations," "area of biological warfare operations," and "area where nuclear operations start."

Iran's overall battle management will be handled through C4I and surveillance satellites. It is unclear in the documents shared with NewsMax whether this refers to commercial satellites or satellite intelligence obtained from allies, such as Russia or China. Iran has satellite cooperation programs with both nations.

The map is labeled "the current status of military forces in the Persian Gulf and the Strait of Hormuz, 1384." 1384 is the Iranian year that ends on March 20, 2006.

Iran plans to begin offensive operations by launching successive waves of explosives-packed boats against U.S. warships in the Gulf, piloted by "Ashura" or suicide bombers.

The first wave can draw on more than 1,000 small fast-attack boats operated by the Revolutionary Guards navy, equipped with rocket launchers, heavy machine-guns and possibly Sagger anti-tank missiles.

In recent years, the Iranians have used these small boats to practice "swarming" raids on commercial vessels and U.S. warships patrolling the Persian Gulf.

The White House listed two such attacks in the list of 10 foiled al-Qaida terrorist attacks it released on Feb. 10. The attacks were identified as a "plot by al-Qaida operatives to attack ships in the [Persian] Gulf" in early 2003, and a separate plot to "attack ships in the Strait of Hormuz."

A second wave of suicide attacks would be carried out by "suicide submarines" and semi-submersible boats, before Iran deploys its Russian-built Kilo-class submarines and Chinese-built Huodong missile boats to attack U.S. warships, the source said.

The 114-foot Chinese boats are equipped with advanced radar-guided C-802s, a sea-skimming cruise-missile with a 60-mile range against which many U.S. naval analysts believe there is no effective defense.

When Iran first tested the sea-launched C-802s a decade ago, Vice Admiral Scott Redd, then commander of U.S. naval forces in the Gulf, called them "a new dimension ... of the Iranian threat to shipping."

Admiral Redd was appointed to head the National Counterterrorism Center last year.

Iran's naval strategists believe the U.S. will attempt to land ground forces to the east of Bandar Abbas. Their plans call for extensive use of ground-launched tactical missiles, coastal artillery, as swell as strategic missiles aimed at Saudi Arabia and Israel tipped with chemical, biological and possibly nuclear warheads.

The Iranians also plan to lay huge minefields across the Persian Gulf inside the Strait of Hormuz, effectively trapping ships that manage to cross the Strait before they can enter the Gulf, where they can be destroyed by coastal artillery and land-based "Silkworm" missile batteries.

Today, Iran has sophisticated EM-53 bottom-tethered mines, which it purchased from China in the 1990s. The EM-53 presents a serious threat to major U.S. surface vessels, since its rocket-propelled charge is capable of hitting the hull of its target at speeds in excess of 70 miles per hour. Some analysts believe it can knock out a U.S. aircraft carrier.

The Joint Chiefs of Staff has been warning about Iran's growing naval buildup in the Persian Gulf for over a decade, and in a draft presidential finding submitted to President Clinton in late February 1995, concluded that Iran already had the capability to close the Strait of Hormuz.

"I think it would be problematic for any navy to face a combination of mines, small boats, anti-ship cruise missiles, torpedoes, coastal artillery, and Silkworms," said retired Navy Commander Joseph Tenaglia, CEO of Tactical Defense Concepts, a maritime security company. "This is a credible threat."

In Tenaglia's view, "the major problem will be the mines. Naval minefields are hard to locate and to sweep," and the United States has few minesweepers. "It's going to be like running the gauntlet getting through there," he said.

When Iran last mined the Gulf, in 1987-1988, several U.S. ships and reflagged Kuwaiti oil tankers were hit, even though the mines they used were similar to those used in the Battle of Gallipoli in 1915, Tenaglia said.

The biggest challenge facing Iran today would be to actually lay the mines without getting caught. "If they are successful in getting mines into the water, it's going to take us months to get them out," Tenaglia sa

Glad to be USeful... though I'd jUSt like to find some actual good news to report sometime.

I've been watching and waiting for the predicted "adjustment" in the financial markets. Since our country has been reclassified from an industrial giant to a financial "services" economy, we may face a meltdown of our stock market.

I'm wondering if this is bad news or good.


IMF acts to avoid markets meltdown

Heather Stewart, economics correspondent
Sunday May 14, 2006
The Observer


The International Monetary Fund is in behind-the-scenes talks with the US, China and other major powers to arrange a series of top-level meetings about tackling imbalances in the global economy, as the dollar sell-off reverberates through financial markets.

Amid tumultuous trading, which sent the dollar to its lowest level in a year against the euro in late trading on Friday and gave the FTSE its worst day for three years, the IMF was working privately to exercise its new powers to bring decision-makers together.

At the IMF's Spring Meetings last month, its managing director, Rodrigo de Rato, was handed new responsibilities to carry out 'multilateral surveillance', assembling groups of relevant countries to discuss critical issues in the global economy. With the long-predicted dollar bear market sending ripples throughout the world, the IMF is keen to use its powers as soon as possible.

Analysts believe the weakening of the dollar is the beginning of a long-awaited readjustment in the global economy. After the Federal Reserve appeared to hint last week that it could pause in its series of interest rate rises, attention in the markets switched to the weaknesses of the US economy.

David Bloom, currency strategist at HSBC, described the switch of focus as a 'regime change'. 'I'm saying don't use the philosophical methodology you used last year: chuck it away. The market has wholesale changed the way it looks at the world,' he said, predicting that the euro could rise to $1.40 over the next 12 months, from its current level close to $1.29.

Few analysts expect IMF discussions to result in a concerted deal on stemming the dollar sell-off; but governments and central banks will want to avoid a crisis.

'We are in meltdown mode,' said David Brown, chief European economist at Bear Stearns. 'It's all being whipped up into a bit of a selling frenzy. The dollar has a massive portfolio of negatives against it: it's the long-term problems of the trade deficit, and the government's budget deficit.'
Bloom warned that 'phase two' of a sell-off would cause turmoil in the equity markets, as on Friday, when both the Dow Jones and FTSE saw sharp losses. 'I'm expecting an increase in volatility and uncertainty across the board,' he said.

Brown added that the dollar's woes were likely to be exacerbated by central banks shifting their reserves towards other currencies, including the euro. 'Asian central banks have been buying fistfuls of dollars as the flipside of their massive current account surpluses. They're long dollars.'

He added that with the US current account deficit with the rest of the world worth 7 per cent of its GDP in 2005, the White House and the Federal Reserve would probably be happy to watch the dollar decline. 'I don't think Washington's going to be concerned,' he said.

http://observer.guardian.co.uk/business/st...1774162,00.html

I wonder if anybody knows what to do? I suppose if it crashes the sun will still come up in the morning.

What I can't figure out is the rationale given for the latest round of tax cuts. That is supposedly to "stimulate the economy" yet the Fed has hiked interest rates to "slow down the economy."

Can you ay nonsensical?

It's as if the left hand doesn't have a clue to wht the right hand is doing. If the dollar is devalued, it will surely hurt us lower 80% much harder. We don't have millions of dollare to cushion us against that like the top 10% does.

Trickle down theory. I'm still waiting to be trickled on. The further slide of the dollar was cited in the NYT this morning.

Under U.S. Pressure, China Allows Yuan to Gain


By KEITH BRADSHER

Published: May 15, 2006

HONG KONG, May 15 China allowed its currency to strengthen today past the psychologically significant level of 8 to the dollar for the first time since 1994, rattling currency and share markets already shaken by the dollar's extended slide and Friday's drop in United States share prices.

The actual rise in the Chinese currency, known as the yuan or renminbi, was tiny: one-tenth of a percent from Friday's level. But the breaching of the 8-yuan threshold unnerved regional investors, who feared that it may prove a prelude to further declines in the dollar.

The dollar dropped to a two-year low against the euro and approached an 8-month-low against the Japanese yen before recovering considerable ground late in the Asian trading day. In New York, the dollar was up 0.6 percent, to 1.2846, against the euro in morning trading; it was its first gain against the euro after losing ground for four straight days.

Ben Simpfendorfer, a currency strategist in the Hong Kong offices of the Royal Bank of Scotland, said that the dollar had briefly dropped so fast earlier in the day that investors became worried that a weak dollar would hurt Asian exports and make Asian shares less attractive, which in turn limited demand for Asian currencies.

"What it has done is begin to undermine risk appetite," for investments in Asia, he said.

Indeed, stock markets plunged across Asia on today, partly on worries that American consumers would buy fewer Asian goods as the price of these goods eventually rises along with Asian currencies. Bourses in emerging markets like India, which fell 4 percent, and Indonesia, down 6 percent, fared worse than the stock market in wealthy Japan, which lost less than 1 percent.

The Shenzhen and Shanghai stock markets actually rose 4 percent, continuing a recent rally. In New York, stocks were mixed in early trading, with the Standard & Poor's 500 stock index and the Dow Jones industrial average up slightly but the Nasdaq composite index down slightly.

The appreciation today of the Chinese currency, known as the yuan or renminbi, marked the first time that it has breached 8 to the dollar since China devalued and unified a series of separate official rates in 1994 into a single exchange rate. That rate was initially set then at 8.7 yuan to the dollar.

The People's Bank of China set a rate of 7.9982 yuan to the dollar at the opening of heavily regulated trading in Shanghai, and the Chinese currency strengthened a little further during the day to close at 7.9976.

Many economists have argued that the biggest beneficiary from an appreciating yuan could be China itself. Wages and real estate prices in China look so cheap in dollar terms at current exchange rates that foreign corporations and individuals alike have been rushing in to buy factories, apartment buildings and other assets, in a frenzy that threatens to kindle inflation in China.

Allowing the yuan to appreciate also makes gasoline, diesel and other commodities priced in dollars less expensive in yuan terms, also helping to control inflation

But exporters in China — a powerful constituency in a country in which exports equal more than a third of economic output — have been deeply worried that a stronger currency could destroy their profit margins. They are especially worried because big companies like Wal-Mart have resisted paying more to suppliers as the yuan rises.

"The impact is very big," said John Huang, the owner of Victory Furniture, an exporter in Shenzhen. "I'm definitely worried about it, our competitiveness is becoming a problem."

From garments to cars, Chinese companies are already responding to the gradual strengthening that has already taken place, and to the likelihood of further appreciation. With encouragement from the government, companies are trying to develop better-designed, higher-quality, more technologically sophisticated products that can command higher prices and profit margins.

"We are prepared for the appreciation — we think it is a big test," said Jiang Lei, the executive vice president of the China Association of Automobile Manufacturers, a government agency that helps set automotive policies. "It is a message for us that we cannot rely on cost alone, we have to improve our technology and our level of management skills."

The Chinese shift toward higher-value goods will put them in more direct competition with products manufactured in North America, Europe and elsewhere in East Asia, however, which could fan further trade frictions.

The Bush Administration has been pressing China for three years to allow the yuan to rise sharply, although the Treasury stopped short last Wednesday of labeling China as a country that manipulates the value of its currency. That prompted many predictions that China would reward the conciliatory gesture by allowing the yuan to move a little higher in interbank trading in Shanghai.

The yuan actually weakened slightly on Thursday and Friday before finally rallying today. China revalued the yuan by 2.1 percent on July 21 and has allowed it to creep up another 1.4 percent since then, including today's increase.

But the yuan has actually been losing ground against the euro and yen, as the dollar has slipped sharply against both of those currencies in the past month. The yuan has fallen 5.3 percent against the euro and 6.1 percent against the yen since April 1.

China released economic statistics today that provided further evidence of a potentially unsustainable economic boom fueled by money pouring into the country. The broad M2 measure of money supply accelerated further in April to show an increase of 18.9 percent from a year earlier, while total loans outstanding were up 14.8 percent in April from a year ago.

Retail sales in China were also 13.6 percent ahead in April from a year ago, a sign that domestic demand in China is strong enough that the country's economy may be able to absorb some slowdown in exports as the yuan rises.

http://www.nytimes.com/2006/05/15/business...artner=homepage

The tax cuts were aimed at the wealthiest citizens and the ones in danger of being caught by the Alternative Tax. We get about $9. And so it goes.

According to CW high fuel prices bring a slow economy, so the Fed won't be doing any further increases. So I've heard.

A strong dollar isn't all upside, even though it sounds great. If Chinese prices rise maybe we'll have more incentive to keep jobs in the US.

I don't think that the weak dollar or the raising of the yen will do anything to keep jobs here. We've lost the battle to globalization. We are now considered a "financial services" economy. No turning back the clock on this. We'll do some manufacturing, but that is not going to be what our economy is based on now.

I've been doing a lot of reading to try and figure out where this globalization is taking us. It appears even ecomonists like Larry Summers (speech in India) and Greenspan are worried about the global imbalances. The emerging economies like China, India, the oil producing nations have so much excess money they are pouring it into US debt. We are close to $10 trillion in national debt, (congress just raised the debt limit again).

With the massive trade imbalance we are sending our cash (which we borrowed from the emerging economies) to the emerging economies and building their middle class while we put ourselves into further debt and take people out of the middle and put them into the lower and poverty class. So the emerging states will not only hold our debt, but have managed to destroy our job base.

Larry Summers seems to think that some form of global governance is needed to keep order in the global world of finance. (say New World Order, anyone?). He really doesn't know what's happening because this has never happened before. Greenspan says the debt is unsistainable, but doesn't give specific ways to change things. They all seem to agree that we'll never be able to GROW the economy enough to knock down the debt load.

Of all the people I've read lately, all the economists seem to wonder how the US can keep going so well. I know how, we just keep printing more and more fiat money. It will come back to haunt either our children or grandchildren, if we don't have a crash before that.

Sen. Voinivitch thinks we should impose a temporary tax to pay for the war, Katrina, massive debt, but he didn't get any attention, right after his speech, the republicans cut taxes again for the wealthiest among us.

I suppose the best thing we can hope for is a really nice summer this year.

We can hope.

Larry Summers Speech.




http://www.president.harvard.edu/speeches/2006/0324_rbi.html

Thanks Sherry, I look forward to following the link to hear Dr. Summers' speech.

I believe your points are valid... not very optimistic, but valid!

Lefties have been wondering how the US stays afloat since Lenin. Sadly the two thing we can't seem to get a handle on are SS and Medicare costs, both big government liberal entitlements.

That a a couple of billion every two weeks for our adventure in Iraq.

Artie,

Ironic that the threats you mention are the most leftist elements of our capitalist system. Yet the fact remains that our continued "strength" has left behind a river of red ink. Sooner or later, that red ink will have to be dealt with.

I look at the "information age" propaganda and think "preposterous". 80% of our kids are nowhere near able to compete in that economy. At some point, we will no longer be able to finance the ever growing needs of the ever larger number of welfare recipients, fast food workers, blood sucking trial lawyers, minimum wage factory workers, and the seemingly limitless excessive hoarding of wealth by the tiniest sliver of super-wealthy praelatorian class.

The government employs a shockingly huge number of people when you consider their indirect employees? How much medical care is paid for by Medicare/Medicaid? How much food, rent, entertainment is paid through Social Security? How many workers exist only to feed the military industrial complex?

Although my alarm may sound "leftist" to you, in actuality I believe myself far more fiscally conservative than any others I hear. Teh government is failing in its job to protect our free market from monopolistic oligarchy while harming the economy by taking over an ever increasing percentage of "wealth" production (by borrowing and by printing money).

Way too domestic... sorry, but our international economy really hits home.

anyone want to save our thread and get us back to the IMF and World Bank??

Here's a link to a financial website that has a translation into English of Greenspan's latest speech. He's very worried about the US economy and the reasons are here. I don't believe Greenspan could be considered a leftist, but I could be mistaken.

http://www.rgemonitor.com/blog/setser/109865

The good and the bad.

http://www.nam.org/s_nam/sec.asp?CID=201507&DID=229891

Introduction

In the midst of the weakest economic recovery in decades, the NAM Board of Directors launched the Campaign for Growth and Manufacturing Renewal to re-educate the nation about the importance of manufacturing to our economy and national security to call attention to the unprecedented challenges we face and to identify ways to invigorate American industry.

The Facts About Modern Manufacturing is an important part of the NAM’s arsenal of information about manufacturing, which remains the foundation of our nation’s economy and its most important source of creativity, innovation and productivity.

Unfortunately, too many Americans are unaware of how dependent they are on manufacturing for their high standard of living, and too many policymakers are indifferent to the implications of losing our leadership in global manufacturing.


Order The Facts About Modern Manufacturing here

Order The Facts About Modern Manufacturing here.

But the recent recession that was fairly shallow for much of the economy was deep and painful for manufacturing:

* Exports recorded their largest drop in 50 years.
* More than 2.8 million manufacturing jobs were lost.
* The manufacturing recovery was the slowest on record. and
* Costs stemming from natural gas price hikes, rising legal bills, health care and regulation make keeping up with intense global competition all the more difficult.

Manufacturing plays a central role in growth, primarily through a unique, interlocking system of innovation that affects all sectors of the economy. Thus, the overall economy has been able to regain its former strength only when manufacturing got back on its feet in 2004. This was true in the prosperity of the past decade, when manufacturing contributed 22 percent of GDP growth, and it is true today. The strengths of modern manufacturing lie in its —

* formidable research and development, accounting for two-thirds of all R&D;
* unprecedented increases in productivity that reduce costs, raise the standard of
living and keep inflation low;
* international competitiveness, which helps the nation pay for its sizeable imports,
increases the number of high-paying jobs and stimulates innovation;
* multiplier effect that creates 8 million additional jobs in other sectors; and
* rewarding careers and jobs that pay 22 percent more than the national average.

By highlighting mainly official U.S. government statistics in this publication, manufacturing leaders are armed with the ammunition they need to help elected officials, the press and educators better understand the enormous contributions of manufacturing to U.S. prosperity.

Manufacturers and their employees are committed to aggressively competing in the world economy. We commend this report to you and invite your comments and inquiries at MfgRenewal@nam.org.

Sincerely,

Jerry J. Jasinowski
President
The Manufacturing Institute

According the Mr. Summers, the IMF and World Bank are only good for bailing out failing economies, not for fixing massive imbalances, such as the ones that threaten us now. He's for building what I would consider a New World Order system of Global Financial Controls. One world, one government, one bank. I see it coming now.

I don't know if the Hamilton Project has been discussed here in the last couple of months, but it has been a topic at TPM Cafe, where I've been posting. Kevin Phillips wrote today about his thoughts on the Project. He hits on quite a few points that I feel are very important to any discussion about our "new" ecomomy.


Kevin Phillips

"As progressive Democrats from California to New Hampshire hold their traditional Jefferson-Jackson Day dinners, they must pause for a groan at ex-Treasury Secretary Robert Rubin’s April ploy for re-lionizing himself as the party’s top economic thinker. It’s a Washington-based bit of pretentiousness called – of all things – the Hamilton Project.

Rubin, now Chairman of the Executive Committee of Citigroup, the world’s biggest bank, co-chairs the HP with fellow Wall Streeter Roger Altman, in thinly disguised pursuit of moving party policymaking from the grassroots of voter primaries and caucuses to the golden financial roots of Manhattan. Thomas Jefferson and Andrew Jackson, who loathed Federalist Alexander Hamilton and what he stood for – using government to support the monied classes – must be rolling over in their graves.



Not that this is the first time. Back in the late 19th Century Gilded Age, President Grover Cleveland, a conservative Democrat from New York, fatally divided the national party with his loyalty to Eastern finance. During the 1920s, the Democrats did much the same thing by nominating Wall Street lawyer John W. Davis for president in 1924, sending progressive and labor voting flocking to third-party candidate Robert LaFollette. The Clinton administration, tutored by Rubin, moved in some similar directions. But no one ever dared a Hamilton Project.

My interest was piqued some weeks ago by a blistering attack on me and my new book American Theocracy: The Perils and Politics of Radical Religion, Oil and Borrowed Money by Jacob Weisberg, the editor of Slate. Not knowing Weisberg – indeed, barely knowing who he is – his venom was a surprise, and likewise his odd pre-occupation: that I have tried to mislead Democratic economic policymakers who should ignore me. The name Robert Rubin appeared nowhere in this screed.

But the clouds blew away when I saw Weisberg identified as the “co-author” with Robert Rubin of a 2002 book In an Uncertain World: Tough Choices From Washington to Wall Street. While this tome never quite suggested that Rubin’s portrait replace Hamilton’s on the ten-dollar bill, hints lurked everywhere. Indeed, Weisberg auditioned for this ghostwriting with a 1998 article for the New York Times Magazine about Rubin (un-prophetically entitled “Keeping the Boom From Busting”), which oozed like an overgrown Valentine.

“Co-author,” however, is not quite right. Check on Amazon.com and you won’t see Weisberg’s name under Rubin’s on the cover without a magnifying glass. Indeed. Rubin’s short bio in the Hamilton Project press release refers to his recent authorship (and then in parentheses “with Jacob Weisberg”). Sorta like My Story by Zsa Zsa Gabor with Dwayne Slick or some such. Nevertheless, Weisberg was undoubtedly close enough to Rubin to pick up the man’s view of Kevin Phillips and his books.

Over the years, these views have been mixed. In 1990, he liked my volume The Politics of Rich and Poor enough to try to enlist me in his and the Democratic party’s service. Unwilling to be anybody’s strategist, I said no. In 1993 and thereafter, as Rubin’s star rose in the new Clinton administration, my negativity centered on three Rubin hallmarks: bond-market fetishism, multiple bail-outs for finance (the Mexican peso crisis, and the Russian and East Asian currency crises) and late 1990s financial bubble-blowing. My book Arrogant Capital in 1994 had suggested that the truer Democratic philosophy came from Thomas Jefferson who said that “Banking establishments are more dangerous than standing armies” and from Andrew Jackson, who wanted to see “all the stockbrokers, jobbers and gamblers swept from the land.”

In 2002, my book Wealth and Democracy: A Political History of the American Rich, described how during past economic go-go periods, important elements of the Democratic party invariably competed with the GOP in wooing the financial community. Luckily for party self-respect, these courtships always ended when times got tough. Robert Rubin, the book suggested, had been the most skillful Democrat working to knit the Clinton Administration into what was rapidly becoming a bipartisan Washington strategy of favoring and bailing out the financial sector while largely ignoring the shrinking manufacturing sector. The book also pointed out a less-heralded dimension: “Never before had a Democrat in the White House presided over a great technology mania and bubble.” The 1920s equivalent had been Republican.

American Dynasty, my book out in 2004, did not mention Rubin but dwelt on the dangers to U.S. politics from the growth of dynasties – Bushes for the GOP, Clintons on the Democratic side – that invariably promote famous names and entrenched privilege. My 2006 book, in turn, bore down heavily on the watershed transformation of the U.S. economy from one dominated by manufacturing (a quarter of U.S, GDP in the 1970s) to one in 2000 where financial services (20%) had displaced manufacturing (down to 14%). Once again, the 1990s and Rubin were identified as pivots – dangerous because financialization has been a key to decline for previous great powers, most recently Britain.

This year’s volume also noted, without citing Rubin, that Citigroup had emerged during the 2000s as America’s most anti-social financial institution. As the Times of London observed in 2004, “Name any scandal of the last decade – Enron, Worldcom, Parmalat, biased (stock) research – and Citigroup’s name will crop up.” On the surface, Rubin enjoys a reputation as an unassuming man of unblemished character and deep charitable and social concern. However, he was Chairman of the Citigroup Executive Committee (since 1999) while much of this anti-social behavior was going on; he also called the U.S. Treasury to pitch for help to Enron, with which Citigroup was closely involved (a collusion for which Citi paid a huge fine of $300 million). A 2008 Democratic campaign that includes Robert Rubin will not be credible on Enron-type issues.

For now, he is not worried about that. He is trying to enlist disaffected moderate Republicans in groups like the Council on Foreign Relations and several budget organizations to back the newly centrist and pro-finance Hillary Clinton in 2008. Presumably this includes the further Hamiltonization of the party of Jefferson and Jackson.

If these words have done any injustice to Bail-Out Bob the Bubble Blower, fear not. He can always put chalk to Slate and re-appear in the guise of his heavy-breathing acolyte."

Kevin Phillips’s new book, American Theocracy: The Perils and Politics of Radical Religion, Oil and Borrowed Money was published in March by Viking, and featured in TPMCafe's BookClub.


I wonder what cptrev and the rest think will be coming in the next few years. I fear a hard landing, market crash, and revolution. Any thoughts?? Anyone??

Thanks for posting this. It was interesting to read about a fued between writers and policymakers from the POV of the lesser known.

My most optimistic prediction is that the US takes small measured steps to a more conservative, more 'protectionist' (in quotes because my views of tariffs are akin to "Fair Trade"), and less socialist. I believe we CAN avoid anything like a crash - although an uncomfortable bump would occur if we truly tried to realign.

My most likely prediction is that we will follow France into a socialist hole of less productivity propped up by unlimited low-wage immigration who cannot enjoy the "safety net" of our bloated government redistribution bureaucracy. In that direction may very well lay crashes and busts and riots.

But revolution? Not in this age. If anyone truly threatens the ruling class, I believe you've a hard shock coming at just how many weapons can be turned to bear.

The problem is there really isn't a "ruling class". A few people hold temporary political power, a few more hold great financial power, and a large percentage of middle and poor Americans are armed to the teeth and are invested in the status quo as much as the rich and powerful are. There is great mobility between classes and even lower class gladhanders like Bill Clinton can be president. Hell, Hillary may become President with not much more to recommend her than sleeping with a lower class gladhander who turned out to be president.

And despite what some would tell you, if the US goes down everyone else in the world is in trouble too. It's like a lot of people would like to shoot their boss and the owner of the company, but doing so doesn't help their long term prospects.