<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META content="text/html; charset=utf-8" http-equiv=Content-Type>
<STYLE type=text/css>DIV {
MARGIN: 0px
}
</STYLE>
<META name=GENERATOR content="MSHTML 8.00.6001.18904"></HEAD>
<BODY bgColor=#ffffff>
<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>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<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>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<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>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<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>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<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>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Arial></FONT> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"> </DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt">DG<BR></DIV>
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt">
<DIV
style="FONT-FAMILY: times new roman, new york, times, serif; FONT-SIZE: 12pt"><FONT
size=2 face=Tahoma>
<HR SIZE=1>
<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>
<META content=off http-equiv=x-dns-prefetch-control><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>
<DIV class=gmail_quote><BR> </DIV>
<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>
<DIV> </DIV>
<DIV>*smile*</DIV>
<DIV> </DIV>
<DIV> </DIV>
<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>
<DIV> </DIV>
<DIV> </DIV>
<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>
<DIV> </DIV>
<DIV> </DIV>
<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>
<DIV> </DIV>
<DIV> </DIV>
<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>
<DIV> </DIV>
<DIV>Though I think your suggestion here is overly simplistic, it would be
lovely.</DIV>
<DIV> </DIV>
<DIV> </DIV>
<DIV> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex"
class=gmail_quote>
<DIV class=im>On 7/14/10 9:02 PM, John W. wrote:<BR></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #ccc 1px solid; MARGIN: 0px 0px 0px 0.8ex; PADDING-LEFT: 1ex"
class=gmail_quote>
<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>
<DIV>
<DIV></DIV>
<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>
<META content=on http-equiv=x-dns-prefetch-control></DIV></DIV><BR>
<P>
<HR>
<P></P>_______________________________________________<BR>Peace-discuss
mailing
list<BR>Peace-discuss@lists.chambana.net<BR>http://lists.chambana.net/mailman/listinfo/peace-discuss<BR></BLOCKQUOTE></BODY></HTML>