GOP:Nero-esque Fiddlers While Economy, Climate Burn

What happens to the Chinese economy resounds far beyond Shenzhen and Shanghai. The majority of the people in the rest of the world might shrug but economists point to looming troubles unless the idiotic austerity programs still in place in the U.S. and Eurozone don’t back down from the voodoo economics of supply-side theories that are devastating world demand for goods and services no matter how cheap they are.keith-tucker-cartoon-banksters

The last financial disaster was brought about by the same people who, while not seeing the canary in the coal mine when $100k houses were being bought and sold for $500k, cannot see this next financial crisis will be much more stealthy…student debt. Almost every student has an overwhelming debt load and no means of repaying them in the foreseeable future. Since most of this huge and growing group has not worked and therefore cannot get unemployment, cannot get jobs and are largely gloming off of their parents, further diluting the discretionary income of the individual households they’ve had to return to….therefore they are not reflected in unemployment figures and the amount of actual cumulative debt is unknown…but experts indicate it dwarfs the amount of the bad mortgages of 2007 and there are no assets of any kind tied to the debt to recoup.

And as these “un-dismissable” loans continue to go unpaid, the ultimate finaciers are once again relying upon banks being reserved to deal with the accumulating unpaid debt instruments with the same credit default swaps that are many times more under funded than was AIG when Lehman Brothers came calling for relief from defaulting mortgage holders and, oopsy, AIG only had $1 for every $35 they were insuring. And the student debts aren’t being pegged as “bad debts” becuase they are supposed to be “un-dismissable”.

What was bad then is worse now because not one perpetrator of the massive fraud from colluding major investment banks and AIG has been prosocuted and the banks are fewer but many times bigger than the “too-big-too-fail” banks were in 2007.

And ignoring the warnings signs are nearly as dangerous as ignoring climate change…your children and grandchildren will wonder what in the hell was wrong with our grandparents that they fell for the same line of crap that tobacco companies and gun manufacturers sold to the American public for decades. Despite the same type scientific evidence tha smoking was not cool or healthy, as commercials and advertising of the time would have you to believe, in general Americns chose to ignore the warnings.

As our grandparents came to be known as “The Greatest Generation”, we will surely be called “The Most Clueless Generation”, and it will be our grandchildren who will wake up to the choking smog that is already seen from Los Angeles, to Mexico City, to just about everywhere in China, and dead or dying animal species by the tens of thousands.

Unlike the housing debacle during the waning days of George W. Bush’s long string of abject failures from 9/11 to Katrina, this austerity crisis is slow and insidious; it’s not unlike watching a python squeeze the last agonizing breath from its victim before devouring it.

It’s tantamount to the same idiots who say, “What global warming? It’s freezing in Milwaukee!”, or the python-like GOP meme that has NEVER come through in the four decades…that “trickle down” economics is one of the biggest scams in history.

Lack of Global Deman for Goods and Services…at ANY price

Those affected by China, the world’s second-biggest economy, range from South African coal miners and Canadian oil-field workers to Australian gas producers and Americans saving for retirement they will never realize.

Beijing said Monday that the nation’s economic growth dipped to 6.9 percent from July through September from a year earlier — its slowest pace in more than six years. The news added to evidence that China continues to slow as investors, executives and policymakers watch with concern.

Growth in China’s gross domestic product has decelerated for four straight years and will likely keep slowing through 2017, according to the International Monetary Fund.

What does that mean for the U.S. and global economies? You might not want to know, but you should.



The IMF says China’s deceleration is having a bigger-than-expected impact on the global economy. No matter how much China devalues its currency to spur exports so that their inventories from steel to toys quit piling up, exports continue to decline and inventories continue to build. That’s one reason the IMF has lowered its forecast for global growth this year to 3.1 percent, which would be the weakest rate since the recession years of 40 years ago and down from a July estimate of 3.3 percent.

On the heels of three decades of super-charged growth, until 2015 China accounted for 30 percent of global growth last year, up from 13 percent a decade earlier, according to the World Bank.

Most of the pain is being absorbed by emerging market countries and others that supply raw materials to China. But the IMF expects emerging market economies to slow for a fifth straight year.

“China’s economic struggles are adding to the uncertainty that is already in place for the global economy, signaling that lower growth rates for the global economy may be in store,” a report Monday from the International Strategic Analysis consulting firm warned. We haven’t seen global numbers that rival this level since 1929. Failed austerity attempts in the Eurzone, the U.S. and the U.K. have been total failures with governments, who provide the backstop for so many private contracts, and therefore jobs, have been slashed and wage increases have been slowing since Ronald Reagan’s policies put the breaks on the following economy growth viability until stagnation for the middle class and below have been sinking into the quagmire that only serves to redistribute gins from the masses to the upper 1%.



As its economy surged, China consumed disproportionate amounts of the world’s resources — nearly 50 percent of the copper, 54 percent of aluminum, 50 percent of nickel and 45 percent of steel, according to the World Economic Forum.

Now that China is slowing, commodity prices have been sinking. The Standard & Poor’s GSCI commodities index — which measures 24 commodity prices, including crude oil, copper and cattle — has dropped 37 percent in the past year. The pain is widespread: South Africa and Zambia depend on coal exports to China, Chile on copper shipments, and Australia on a range of commodity exports.

Tumbling oil prices, reflecting China’s slower growth, contributed to a contraction in Canada’s economy for two straight quarters — the technical definition of a recession.



Investors, who had grown used to China’s role as an economic powerhouse, have been shaken by signs of its weakness. But with American investors still borrowing money at zero percent interest and using those borrowed funds to gamble on the stock markets, it’s only a matter of time until the Federal Reserve raises interest rates and those same investors will flee global markets like bison on the old frontier…and they will trample anything standing in its way.

Stating the obvious, Beijing hasn’t helped itself. Last summer, it made a clumsy attempt to halt a slide in Chinese stock prices. It spent heavily to prop up shares, arrested or threatened to arrest and seize the houses of any middle class Chinese who would not take out second mortgages to buy stock and prosecuted investors who bet on falling prices.

Then, on Aug. 11, it unexpectedly devalued the Chinese currency, the yuan. China said it was just catching up with signals that investors felt the currency was overvalued. But many investors saw the move as a desperate bid to help Chinese exporters (who enjoy a price edge from a lower currency) and as a sign that China’s economy was worse than anyone knew or would admit.

Over the next two weeks, the Dow Jones industrial average plummeted 11 percent. The Dow has since recovered most of the lost ground. But investors remain on edge. Monday’s report of a minimal third-quarter growth at least provided reassurance that China wasn’t on the brink of an economic collapse, assuming the reports from China are accurate.

Add to the above the Death of Free Enterprise or Free Market, especially since the Citizens United ruling has allowed 158 families to finance (and therefore command undue influence) GOP elections, a Ruling Class has emerged wherein all GOP candidates have been forced to appease  and serve their money-machine backers rather than the voters. We are essentially now a hideous conjoining of a Plutocracy  and a Monarchy rather a Democracy. The Free Market is a myth, and the most successful business of all time , the NFL, is the most successful and quintessential model of socialism in history.



The Federal Reserve has long been expected this year to lift short-term U.S. interest rates, which it has kept at record lows since December 2008. The American economy, though sluggish and slowing from ill-advised, GOP-forced austerity measures that has crippled private contractors from National Park maintenance, to military contracts, EPA and FDA inspections, to veterans benefits, is the world’s largest and most powerful. But at their September meeting, Fed policymakers decided to hold off on a rate hike: In part, because they were too worried about China’s slowing economy and what it meant for the rest of the world.

Add the adverse effects that the continued GOP threats of more and more cuts to wealthy, passive income earners and corporations who hide their profits off-shore, with increases facing the cash-strapped middle class and poor civilians who spend all of the income they manage to make and the similarities between 2015 and 1929 continue to mount.

But another Great Depression couldn’t possibly happen any more than the Arctic ice could melt right? Pull up a chair, light a cigarette, and watch the next coming economic disaster brought on by voodoo economics…


Harvey A. Gold