|IndyWatch Australian Economic News Feed Archiver|
IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.
UNTIL this week President Donald Trump had not fully signed up to the losing quadrella of folly marked by all Republican Presidents since Eisenhower: tax cuts for the rich; less regulation of markets; austerity for middle- and lower-income people; and indefinite war.
This week he signed on for indefinite war this time in Afghanistan, the USs longest war.
He said he would commit more force to kill terrorists and that he was not interested in nation-building. He gave no time frame or any benchmarks against which he could decide mission accomplished and leave.
The quadrella is appalling destructive. Ronald Reagan massively increased military spending and military meddling and cut taxes for the rich. George Bush senior followed suit, leaving Democrat Bill Clinton with a huge deficits of $225 billion, according to Office of Budget Management and Federal Reserve figures. Clinton got them under control and handed the George Bush junior a surplus of $127 billion.
Bush junior gave large tax cuts to the very rich, none of which trickled down, and ramped up military spending with disastrous invasions of Afghanistan and Iraq. He handed Barack Obama a deficit of $1,400 billion. Obama reduced that to $485 billion to hand over to Trump, despite the stimulus package needed to meet the recession caused by lack of regulation and control of the financial markets..
True, Bush junior did the right thing with the bail-outs of the banking system on the advice of his Treasury and the Federal Reserve, but that would not have happened without the Democrat-controlled Congress agreeing.
Under Obama the Republicans in Congress did everything they could to stop the stimulus package, even threatening default.
Tax cuts for the rich and high military spending are a deadly deficit-creating combination unlike economy-boosting public spending on infrastructure and welfare. And Trump is at it again.
He should have stayed with his earlier view that going in to Iraq and Afghanistan was wrong. But like presidents before him he could not admit that the blood and treasure spent was futile or that western interference in Afghanistan, Iraq and the rest of the Middle East in the cause of the terrorism not the solution.
The folly of his action is illustrated by Pakistan. Parkistan harbours anti-US terrorists, so surely it, too, should be invaded and bombed. But no-one is suggesting that.
Our seven dual-citizen Members of Parliament may not be aware of another peril they face. The 1975 Common Informers (Parliam...
Amazon supremo Jeff Bezos may finally have a rival to give him a bit of worry.
Thats because Walmart and Google are teaming up to go after his market share.
Google and Walmart are two of the biggest companies in the world.
Together they could make a creature like Frankensteins monster.
Walmart is fighting back after being knocked off its perch somewhat in recent years.
Its sheer buying power and store network across the US meant it was almost invulnerable at one point.
Online shopping changed that.
The New York Times says Amazon wins 45 cent of every dollar spent online in America, while Walmart gets 2 cents.
The worry over at Google is that US consumers are increasingly beginning any online search by shopping on Amazon right from the get-go.
Now the fight ramps up
Walmart has invested heavily in its online division.
Not only that, Walmart is one of the few companies that can actually compete with Amazon in terms of distribution, because of its exisiting infrastructure.
The New York Times says the newly announced deal will see Google offer Walmart products on its Express service in the US.
I didnt even know Google had an Express service. Its an online shopping marketplace.
This will be the first time Walmart has sold its products online via a third-party platform in the US.
The initial buzz surrounding the alliance story is that buyers can use Googles AI (artificial intelligence) tech to order items using their voice only.
Thats a market that Amazon pioneered and currently dominates.
Under this new alliance, Walmart fulfils the orders from its own distribution network.
Thats the headline stuff
Heres what I found even more notable.
Google said on Wednesday (US time) that its scrapping the $95 dollar annual fee users previously had to pay. This charge was to get free shipping for orders above a certain cart value for the Express service.
This comes after Walmart already cut the $49 fee it asked its customers to pay in order to get free two-day shipping from its online store.
Now US consumers only have to spend around $30-40 at either Google Express or Walmart online to get free shipping.
You can see whats going on here.
Walmart and Google are trying to undercut the appeal of Amazons loyalty program, Prime. This is the flywheel that keeps customers returning to Amazon over and over.
The hook was free shipping on everything.
If thats available everywhere, it weakens the appeal for new customers to sign up to Prime.
One wonders how long it will be before Amaz...
The 11 remaining countries involved in the Trans-Pacific Partnership are continuing to meet in an effort to revive this failed agreement. Their target date is at the APEC Leaders Meeting in Vietnam on November 11 this year.
Send a message to the Australian Trade Minister Steven Ciobo telling him not to revive the TPP!
For billions of years bacteria dominated the globe, but at some point a major transition occurred and complex multicellular life began to take hold. The when and why of this transition has been the source of great debate for years, but a team at the Australian National University (ANU) has made a discovery that could finally answer those questions and it takes us all the way back to a time when the Earth was a giant snowball.
An extreme ice age hit the planet around 717 million years ago. Known as the Sturtian glaciation, this event is more informally dubbed Snowball Earth and its thought to be the most extreme, and long-lasting, ice age the planet ever experienced. For around 50 million years, the entire globe was essentially covered in ice.
In between the Sturtian glaciation and the planets next, but much shorter, glaciation event there was a small stretch of around 15 million years. It is this relatively s...
The number of countries with banks experimenting with blockchain
technology is growing rapidly. The Pacific island nation of Papua
New Guinea (PNG), north of Australia, has joined the movement with
its own central Bank of Papua New Guinea running blockchain
Central Bank Governor Loi Bakani, known as a champion of new technologies as a way to enable financial inclusion, recently hosted a conference to showcase his countrys commitment to blockchain technology, with participants from at home and around the world, including Abt Associates, Paycase, Othera, IDbox, Pacific Markets, UCash, Seso and ADCCA.
At the conference, Bakani described the blockchain trials underway at the Bank of PNG and introduced the PNG Digital Commerce and Cryptocurrency Association for the growing number of Papua New Guinea tech entrepreneurs and businesses interested in blockchain technology.
Bakani said, This will allow PNG to join the Global Blockchain Forum, which gets PNG a cutting edge in discussions about Blockchain at a global level, along with Australia, Canada, U.S.A., Dubai, UK and Japan. There is no reason why PNG cant be a leader for emerging markets.
There are already central banks experimenting with blockchain technology around the world, including Bank of America, HSBC, Credit Suisse, Deutsche Bank, Bank of England, People's Bank of China, Bank of Canada, the National Bank of Cambodia, and the Central Bank of India.
Elizabeth Genia, Assistant Governor of the central Bank of PNG said, It is the new innovations that can change peoples lives almost 85 percent of our people live outside the banking system.
According to Abt Associates Jane Thomason, who helped manage the conference, 85 percent of PNG has little or no access to banking services and accounts, and the island is among the most expensive remittance corridors in the world, with nearly 10 percent of all funds transferred going to fees alone.
Thomason told the conference that blockchain-based technologi...
The potential for war over the Korean Peninsula is as great as ever.
The news cycle we live in is a world of 24-hour updates. With what seems more like 24-minute intervals between when stories come and go, it is easy to lose focus on the major stories.
The situation in North Korea is absolutely not going away. Thats really important for investors to recognise because this is going to come back again and again.
Buying the dip is a successful strategy until it isnt.
Now that we have entered the escalatory phase in rhetoric and military preparation, markets have still not come to terms with reality.
In March of 2003, when the US invaded Iraq, we could see that coming.
CIA Director George Tenet was sending warnings, Secretary of State Colin Powell was speaking at the United Nations, and then President George W. Bush declared Saddam Hussein a global threat.
While the CIA bungled the pre-war intelligence, the point is that the orders to invade Iraq were given a year before.
The same story is playing out now.
While the US President can always call off military action, the planning phases for an attack on North Korea are going on now. Orders have been given. Preparations have been made. It is fair to say that contingency plans have been in place since the late 1990s.
The North Korean issue was dumped in Donald Trumps lap. It is largely attributed to bad diplomacy and faulty leadership through the Clinton, Bush and Obama administrations. There have been deals with North Korea, put in place throughout the years, which put hard sanctions on the regime.
Weve been down this road before. Every time North Korea engages in dangerous behaviour, the international community and the US place pressure on the rogue state. It has worked where both sides have agreed to terms, but the North Koreans continuously break their promises and escalate programs.
For the eight years under the Obama administration, nearly nothing was done and the issue was largely ignored. Its hard to point blame at Trump. While he has dialled up the rhetoric, this has been going on for decades.
As tensions increase, theres going to be rising stock market volatility. This is where the logic of war comes in. The French call it la logique de la guerre. The logic of war is different than the logic of diplomacy. It refers to the dynamic of how wars begin, despite the fact that the war itself will be horrendous, counterproductive, and possibly end in complete defeat.
Under the logic of war, theres an escalatory logic that leads to war even when no one thinks its a good idea.
There is a theory that Kim Jong-un is mentally unstable. But in many ways, the situation is even more complex because he is extremely isolated and exists in his own dangerous bubble.
Very few people have told the No...
It was the pipedream that mesmerised medieval monarchs: to finance castles and conquests by turning lead into gold. Now astrophysicists have gone one better, turning plastic into diamonds.
Californian scientists say they have used a laser and the worlds brightest X-ray to recreate the diamond rain thought to occur deep inside planets Uranus and Neptune. The experiment, outlined in the journal Nature Astronomy, supports a theory that extreme pressure and heat distils methane into piles of diamonds.
The researchers, based at an accelerator laboratory managed by Stanford University, used polystyrene to simulate the methane that gives Neptune its bluish tinge.
They bombarded it with pairs of shockwaves caused by a high-powered laser, in an experiment designed to mimic conditions about 8000km below the planets surfaces.
Diamonds were formed during the pressure peak when the second shockwave overtook the first....
A good friend sent me a document that was released under the US
Central Intelligence Agencys rules about archives. The CIA has
established a fabulous Freedom of Information Act Electronic
Reading Room where all sorts of stuff is released after they deem
it benign to current security concerns. The 1985 CIA document
France: Defection of the Leftist Intellectuals written by CIA
operatives, provides an analytical summary of the leading lights in
the French left-wing intellectual thought in the 1980s with a view
of promoting .. It is redacted but only marginally. There is no
doubt as to what the message is. It helps us understand the forces
that were mounted against the progressive Left by right-wing,
pro-market forces and how the public was manipulated to reject This
is part of the research I am currently doing on the way literature,
particularly fiction, is used to advance the neo-liberal
ideological position to make it look as though the ideas about
governments running out of money and the like are just extensions
of our usual individual experience in families and households. That
research will be disseminated in a paper that Louisa Connors and I
are giving at the upcoming MMT conference in Kansas City.
Regular readers will know that I have written extensively about the so-called austerity turn that the Mitterrand Socialist government took in 1983, which has been used, in addition to James Callaghans British Labour Conference speech in 1976, as the turning point in a progressive Left acceptance of the market and the alleged limitations on the capacity of the state to maintain full employment and prosperity.
At the time (and since) Mitterrands decision, driven by the increasingly Monetarist Jacques Delors, who was on his way to leading the charge to Maastricht, was constructed as being the only alternative (an application of what Margaret Thatcher would term the TINA option).
Any coherent analysis the situation in 1983 makes it clear that Mitterrand did have an alternative, just as the British Labour government had an alternative in 1976. Their respective embrace of what we now broadly term neo-liberalism was a choice not an inevitability.
France could have attenuated its chronic problems by breaking the nexus with the dominant German mark (under the European ERM) and floating the franc, a choice which would have freed domestic macroeconomic policy from its recession-prone bias (given the relative trade strengths of the German and French currencies).
The point is that the austerity turn was an explicit decision to embrace neo-liberalism and abandon the Socialist roots of the PS. The alternative, to remain faithful to their roots and to reject the growing Monetarist, free-mark...
That was quick
In early July, I wrote that the US would make a strategic play to send American natural gas to Eastern Europe.
Well, guess whatLithuania just became the first ex-Soviet state to import some this week.
The US is stealing market share from Russia here. This wont be good news for the men in Moscow.
Oil and gas dominate the Russian economy even more than iron ore and coal dominate ours. Every lost sale hurts.
Russian gas used to have a monopoly market here, and it gave Russia enormous geopolitcal sway. The implied threat was always shutting down the pipelines.
Except thats now weakening. And make no mistake: Lithuania is definitely giving the bird to Russia right now.
The Financial Times quotes Lithuanias energy minister as saying,
We are happy to reach a point where importing gas from U.S. is not only politically desirable but also commercially viable.
Notice the politics comes first and the price second.
The US will treat the Baltic states and Poland favourably to keep Russia contained on its Western border. Even sweeter, these energy exports are going to send a lot of money back to the US.
This is only just gearing up. The company actually shipping the gas isnt just exporting to Europe. Its also shipping to Latin America and Asia.
More gas will follow, and export cheap energy all over the world.
This is wildly bullish for European countries like Spain, without much in the way of energy reserves. It will bring costs down.
But thats not all
We know now that Trump is not the true maverick he appeared to be before the election. Therell be no genuine attempt to dismantle the US military industrial complex.
That means the giant US defence firms will continue to see a river of government money flow to them.
Look no further than Afghanistan for proof of this. Trump has now reversed his position to withdraw the US military from Afghanistan. The US is now going to add more troops and treasure to the 16-year war.
I also find it interesting that Trump has singled out Pakistan for further American pressure. Pakistan has become a strategic place for another big player in town China.
Beijing has built a strategic port on the Pakistani coast, which gives China access to the Indian Ocean, and the potential to send energy imports to its eastern province.
Chinas aim is to diversify its supply lines, which are heavily dependent on the South China Sea. Its also why its inking energy deals with Russia to come overland in the Far East.
Perhaps the US is interested in staying in Afghanistan to knock out Pakistan if the US ever wants to put a chokehold on China....
|IndyWatch Australian Economic News Feed Archiver|
IndyWatch Australian Economic News Feed was generated at Australian News IndyWatch.
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