<html><head><style type="text/css"><!-- DIV {margin:0px;} --></style></head><body><div style="font-family:times new roman, new york, times, serif;font-size:12pt"><DIV><EM><FONT size=2 face=Arial>It looks like to me that a readjustment of the dollar downward and the RMB upward is inevitable.</FONT></EM></DIV>
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<P><FONT size=2 face=Arial>In this case, I think "inevitable" means "a good thing."</FONT></P>
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<B><SPAN style="FONT-WEIGHT: bold">From:</SPAN></B> E.Wayne Johnson <ewj@pigs.ag><BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> David Green <davegreen84@yahoo.com>; John W. <jbw292002@gmail.com>; C. G. Estabrook <galliher@illinois.edu><BR><B><SPAN style="FONT-WEIGHT: bold">Cc:</SPAN></B> peace discuss <Peace-discuss@lists.chambana.net><BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> Thu, July 15, 2010 4:27:53 PM<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [Peace-discuss] How to win in November: jobs & income<BR></FONT><BR>
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<DIV><EM>No, probably not. But I don't think the deficit (or the cumulative national debt) is in any way "chimerical" I think it's very real, and the interest on it alone saps something like a third of all the income taxes we Americans pay. We owe real money to real lenders; or else the Fed is simply printing money, which devalues the currency and creates inflation. Either way or both ways, there's nothing chimerical about it.</EM></DIV>
<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT size=2 face=Arial>About 2 trillion of US government debt is held by the Chinese, who recently downgraded the quality of that paper from AAA to AA. The Chinese wont willingly buy more US debt.</FONT></DIV>
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<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT size=2 face=Arial>The current rate of inflation is about 6%. It is currently misreported as about 2.5% via the trick called geometric adjustment of the CPI. An accurate reporting of inflation will cause mass chaos so they dont dare tell the truth.</FONT></DIV>
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<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT size=2 face=Arial>At an AWARE meeting several months ago I made the statement that the value of the US dollar would fall by 50% in the next year. If one considers the price of gold as a measure of the value of the dollar, indeed the dollar has lost about 50% of its value, howbeit it took longer than I said it was going to. Part of that loss in value has been mediated somewhat by trading in virtual gold (gold that doesnt exist). The Chinese recently also stated that the dollar has lost 50% of its value, and are no longer buying Treasury bills but are buying gold like its going out of style. They have chosen print Renminbi at the same rate that the Fed prints dollars thus maintaining the peg to the dollar. </FONT></DIV>
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<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT size=2 face=Arial>There was somewhat of a sell off of Treasury bills by the Chinese some time back but they seem to have agreed to desist rather than shake the house down.</FONT></DIV>
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<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt">In any event, deficit spending now is needed to put people to work, and eventually bring the deficit in line with historical levels. Given the shortage of demand, there is no concern about inflation--in fact, deflation is more of a concern. Our currency needs to be devalued in relation to the Chinese, but that will only make domestic products more competitive. Again, that's a different (but related) issue.</DIV></BLOCKQUOTE>
<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT size=2 face=Arial>The RMB has been historically drastically undervalued relative to the dollar. There was a small adjustment some time back from 8.2xxx to 6.8xxx. The black market rate used to be 10 while the bank would give 8.23xx. No one in China much wants dollars presently. Devaluing the dollar will harm Chinese exports but cause Americans to pay more for what they buy, and the Chinese will pay less for the raw materials and feedstuffs they buy. US debt is no longer considered to be a safe haven. It looks like to me that a readjustment of the dollar downward and the RMB upward is inevitable.</FONT></DIV>
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<DIV style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt">DG<BR></DIV>
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<B><SPAN style="FONT-WEIGHT: bold">From:</SPAN></B> John W. <jbw292002@gmail.com><BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> C. G. Estabrook <galliher@illinois.edu><BR><B><SPAN style="FONT-WEIGHT: bold">Cc:</SPAN></B> peace discuss <Peace-discuss@lists.chambana.net><BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> Wed, July 14, 2010 10:18:25 PM<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> Re: [Peace-discuss] How to win in November: jobs & income<BR></FONT><BR><BR>
<DIV class=gmail_quote>On Wed, Jul 14, 2010 at 9:27 PM, C. G. Estabrook <SPAN dir=ltr><<A href="mailto:galliher@illinois.edu" rel=nofollow target=_blank ymailto="mailto:galliher@illinois.edu">galliher@illinois.edu</A>></SPAN> wrote:</DIV>
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<BLOCKQUOTE style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex" class=gmail_quote>"...beyond the scope of this post"?! Come on, John. When did you think anything to be beyond the scope of your posts?<BR></BLOCKQUOTE>
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<DIV>*smile*</DIV>
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<BLOCKQUOTE style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex" class=gmail_quote>You're right that Americans are much more concerned about jobs than about the deficit - in spite of all that Republicans and Democrats and the entire MSM can do to get them worried about the chimerical deficit - but Americans doubt (correctly) that the war is producing many jobs. Our mercenary army, of course, and some arms manufacturing jobs - but they'd be there anyway. (Israel e.g. needs weapons.) Americans' first reaction to an announcement that the US is withdrawing its troops from the Mideast would not be, "Oh, no, there go our jobs!"<BR></BLOCKQUOTE>
<DIV>No, probably not. But I don't think the deficit (or the cumulative national debt) is in any way "chimerical" I think it's very real, and the interest on it alone saps something like a third of all the income taxes we Americans pay. We owe real money to real lenders; or else the Fed is simply printing money, which devalues the currency and creates inflation. Either way or both ways, there's nothing chimerical about it.</DIV>
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<BLOCKQUOTE style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex" class=gmail_quote>In fact a withdrawal of US expeditionary forces abroad would produce a clamor for "building up our defenses" - and probably scotch any attempt (like the Barney Frank-Ron Paul proposal) to reduce the military.<BR></BLOCKQUOTE>
<DIV>Probably. Because we (collectively) still believe in the "terrorist" bogeyman, and have absolutely no concept of how American foreign policy creates and sustains what terrorists there are around the world.</DIV>
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<BLOCKQUOTE style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex" class=gmail_quote>How about spending the money going to war actually to hire people (maybe even to do useful work, like building mass transit)? The $33.5 billion "supplemental" war budget the House just passed would pay a lot of wages and salaries - more than it's doing through the profit-heavy "defense" industries.<BR></BLOCKQUOTE>
<DIV>Well, of course I agree with you here. But apparently a majority of Americans don't....or at least our "leaders" don't.</DIV>
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<BLOCKQUOTE style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex" class=gmail_quote>We need a movement (in any political party) that demands the federal government provide a living-wage job to anyone who wants one. </BLOCKQUOTE>
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<DIV>Though I think your suggestion here is overly simplistic, it would be lovely.</DIV>
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<DIV class=im>On 7/14/10 9:02 PM, John W. wrote:<BR></DIV>
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<DIV class=im><BR>On Wed, Jul 14, 2010 at 8:36 PM, C. G. Estabrook <<A href="mailto:galliher@illinois.edu" rel=nofollow target=_blank ymailto="mailto:galliher@illinois.edu">galliher@illinois.edu</A><BR></DIV>
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<DIV class=h5><mailto:<A href="mailto:galliher@illinois.edu" rel=nofollow target=_blank ymailto="mailto:galliher@illinois.edu">galliher@illinois.edu</A>>> wrote:<BR><BR>[And no one believes any more that the Democrats will provide that. People<BR>are beginning to notice that the war is making us poor. --CGE]<BR><BR>I think not, Carl. The reality is that war generally creates jobs but adds<BR>to the deficit. America's loss of jobs over the past 30 years is due, not to<BR>war, but to other factors beyond the scope of this post. Since according to<BR>the poll Americans are much more concerned about jobs than about the deficit,<BR>this would support the very opposite of your tortured reasoning.<BR><BR>Americans Really Care About Jobs; Deficit, Not so Much By: Jon Walker<BR>Wednesday July 14, 2010 8:01 am<BR><BR>While collective deficit hysteria fully grips Washington, what the American<BR>people really care about is jobs and the
economy. According to a new CBS News<BR>poll, 38 percent of Americans think the most important problem facing our<BR>country is the economy and jobs. Second is the wars in Iraq and Afghanistan<BR>at seven percent. Health care comes in third at about six percent, and all<BR>the way back in fourth place, with a mere five percent, is the budget deficit<BR>and national debt.<BR><BR>I have said it before, but since members of Congress are descending into<BR>highly destructive deficit insanity, it needs to be said again. The American<BR>people don’t really care about the deficit. They consider it to be an issue<BR>that should eventually get addressed but is a low priority right now. As<BR>common sense would dictate, with almost 10 percent official unemployment and<BR>a serious problem of long-term unemployment, what the American people care<BR>about is jobs.<BR><BR>When the poll specifically asked people for the most important economic<BR>problem facing the
country, the top response, again at 38 percent, was jobs<BR>and unemployment. That number is even slightly higher when you consider that<BR>three percent chose the issue of jobs going overseas. The collective topic of<BR>budget, national debt and government spending was the top priority for only<BR>10 percent of the country.<BR><BR>For Washington politicians to obsess about the deficit at the expense of job<BR>creation and protection is clearly not what most Americans want their leaders<BR>to do. Doing the opposite of what the voters want is an even worse political<BR>move, considering that increasing average real disposable income is a<BR>significant predictor of how well the incumbent party will do in the next<BR>election. So, refusing to extend unemployment insurance, continue COBRA<BR>subsidies and provide aid to local governments to prevent massive teacher<BR>layoffs right before an election is a bad move for the party in power. It is<BR>even worse
because the main excuse given for the focus on the deficit, bond<BR>vigilantes, is nothing more than a Washington, DC fever dream with no basis<BR>in reality. The cost of American borrowing is still much lower than even a<BR>few years ago.<BR><BR>So, this deficit hysteria is not only misguided policy and morally cruel but<BR>also extremely bad politics. The pollsters and political advisers who have<BR>convinced Democrats to focus on the issue at the expense of aiding regular<BR>Americans are either secretly trying to destroy the party or are incompetent.<BR>Either way, they should have been fired yesterday.<BR><BR><A href="http://fdlaction.firedoglake.com/2010/07/14/americans-really-care-about-jobs-deficit-not-so-much/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CampaignSilo+%28Jane+Hamsher+Campaign+Silo%29&utm_content=Twitter" rel=nofollow
target=_blank>http://fdlaction.firedoglake.com/2010/07/14/americans-really-care-about-jobs-deficit-not-so-much/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CampaignSilo+%28Jane+Hamsher+Campaign+Silo%29&utm_content=Twitter</A></DIV></DIV></BLOCKQUOTE></BLOCKQUOTE></DIV></DIV><BR>
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