House of Paine

another view: part two

its da jah  vu
all stupid again

but fuck
i'm idle anyway 

and love
poking  holes in cheese cloth 



=================================


" POWER DRAIN

There is little doubt 
that U.S. external debt
 and the current account deficit
 are eroding the appeal 
of the U.S. approach 
to economic policy"

-------- to foreign whos??? ----------------


" an important element
 of U.S. "soft power."
 Asian policymakers
 in particular
 view U.S. economic policy 
not as a model 
but as a problem" 

------- woohhhh  
a model?

there can be only one emperor -------------- 

"the United States'
   "exorbitant privilege" 
 Charles de Gaulle's term
 for Washington's ability 
to finance deficits by printing dollars 
 comes at their expense"

---------- yup its all uncle's
   junior partners'
                  " price to play "

       the seignorage rake off

for the moment
running 
  about 5 % of  global inter state  trade action  ------------------

"The United States 
has a particularly delicate relationship
 with China"

" currently the single biggest buyer
 of U.S. debt"

--------  fitting
  as the runnerupper
          of uncle's 
             largest trade deficits ---------------


" To date, disagreements on other issues
 have not prompted China 
to slow its accumulation 
of dollar reserves,
 but that is not to say 
that it could not happen
 in the future"

" The ability to send 
a "sell" order 
that roils markets
 may not give China 
a veto over U.S. foreign policy
 but it surely does increase
 the cost of any U.S. policy 
that China opposes"

---------- none sense

   think of a single trigger
 that fires off two guns

 one yes pointed at uncle
but the other
 is pointed at 
the great han  babe   herself ----------------------

" Even if China never plays its financial card
 the unbalanced economic relationship
 between the United States and China 
could add to the political tensions 
likely to accompany China's rise"

----------- the japan american
  trade  experience since 1950
would be a solid counter example ----------------.

"Economic power usually flows to creditors
 not debtors"


----------"usually"
is not always
uncle is a very unique debtor indeed -----------


". While the United States roams 
the world looking to sweep up
 any spare savings 
to finance its huge deficits"



--------spare savings ??
the system is awash in excess savings -----

" China roams the world 
looking for new places to invest
 its surplus savings"

-------- dollar funds no doubt 
another reason to keep up the dollars value ------------


" including in oil and gas resources 
and in states that Washington 
has judged pariahs"

-------- oh boy
"massive  red herring school sighted 
off the port bow "------------

 "This is a far cry 
from the early days of the Cold War
 when the United States used
 its surplus savings 
to finance the reconstruction
 of its allies, 
cementing political alliances 
with strong economic ties"

--------- ah the good old days
when the pope and ike fucked italy
up the ass 
 like a calabrian waif ------------------

"Levey and Brown are right that so far,
 the world's appetite for U.S. credit
 has bolstered the U.S. ability
 to be a global hegemon 
"on the cheap." "

----------- so its worked till now
like the james town dam ---------------------

"The United States exports enough
 to pay for only two-thirds 
of its imports"

------- hence the dollar swoon policy of the bushites
to both tweak export competitiveness
and maybe even source
 a few more products domestically------------- 
 
" after recent tax cuts,
 the U.S. government collects 
enough non-Social Security revenue
 to cover only two-thirds
 of its non-Social Security spending"

----------- okay -------------


" Foreigners made up 
the difference last year
 buying enough U.S. Treasuries 
to fund the entire budget deficit"

----------okay -------


 "But without access 
 to this easy financing
 from foreign central banks
 the U.S. government 
and the U.S. electorate 
will have to make 
the kinds of unpleasant choices 
they have thus far avoided 
among .............

guns, butter,
 pork, tax cuts,
 and low interest rates"



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

" It is far better for Washington 
to act now
 when it can act on its own terms
 than to wait until sharp falls 
in foreign demand 
for dollar debt 
forces it to act"


-------- "sharp falls "
are now an assumption
like saying in Seattle next time it rains 

how bout if the correct line
is next time the clouds drop
   50 feet  of water in an hour -----------------

 "The most important step
 of course
 is to start cutting the budget deficit
 rather than just talking about cutting
 the budget deficit" 

-------- ah he's a belt tightener ---------------


"This will require reversing
 some recent tax cuts,
 not just controlling spending"

--------------  re soak the rich ???? -------------

" Otherwise, the only way to reduce
 U.S. demand for foreign savings
 would be through a sharp decrease 
in private investment and consumption "

--------- oh so u do know of macro ---------------

 "with disastrous consequences 
for the U.S. economy"


--------- yes if the required Rx were drasdtic
the results would be disasterous
 if if if if -----------------------------

" The Bush administration has been lucky
 over the past few years 
the growing value of U.S
                held European assets
 has kept U.S. external debt from rising"


--------this is incoherent
  does he mean  the asset to liability ratio
on the national balance sheet ? ---------

 "  and
  foreign central banks'
 willingness to buy U.S. debt
 has helped keep 
U.S. interest rates low 
in the face of large deficits 
 but its luck could easily turn"

" Arguing that deficits
 external as well as domestic 
 do not matter 
     does not make them go away"

----------- indeed ----------------

" Celebrating the United States' 
real economic strengths 
while ignoring the real
 and growing 
 economic vulnerabilities associated
 with unprecedented
 current account deficits 
                  is dangerous" 

-------------- booooo !!!!! ---------------


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