Saturday, December 10, 2005

New York Times Calls Our Sucking Up of All World Financing "An Addiction"


By Elaine Meinel Supkis

As Americans pile into their huge SUVs that are polluting the planet and go off Xmas shopping using credit courtesy of Asia and Europe both of whom are frantically offering us billions in debt instruments so we will keep on buying their stuff while we lose one factory after another here at home, the NYT calls this "an addiction". Well, I call it "Traitors in America selling us down the river."

From the NYT:

t's an addiction. Every day, the United States sucks in more and more of it from abroad, just to keep the nation going. We speak, of course, about foreign money.

At our current rate of trade and budget deficits, foreigners need to purchase $2 billion in dollar-denominated assets each day just to keep the dollar stable, said Axel Merk, who manages $60 million at Merk Investments and runs the Merk Hard Currency Fund.

Over half the national debt is now financed by foreigners, according to Roger Ibbotson, chairman of the financial consulting firm Ibbotson Associates in Chicago and a professor at Yale School of Management. That's been true since 1980, but the difference now, he says, "is the scale of the game."

"I guess everyone wants to keep this game going," Ibbotson said. But if one of the countries we're most dependent on drops out, it could be "like a bank run."
When empires fall apart financially, the whole world trade systems collapse. It happened to the Spanish empire. It happened to the British Empire. It will happen to our empire. Anyone who knows anything about history minus the stupid propaganda points (like pretending we were fighting for democracy during WWII) knows that when an empire reaches its apex it nearly always goes into a financial frenzy, building palaces and stadiums, getting more and more reckless with their currency, wild military exploits that bring home no spoils, only corrupting the empire further. Diminishing returns on a shrinking market as the distant provinces demand support. All empires react by pulling back but only after they go bankrupt and it is pointless.

Why is the interest rate in Japan so pathetic? They have inflation. They import 100% of their oil, for example. Yet they are flourishing while our economy is on the ropes, kept alive only by history's biggest spending spree. One last time, we rush to the stores to buy stuff we no longer make. Once more, we fall into the same, stupid trap. As the sun sets on our empire, we send our leader (snark) abroad to be insulted and laughed at, a caged bear with a begging bowl, covered with fleas. Even now, the lesser provinces like Israel and Poland, drags on our diplomacy, demand we pay them tribute, not the other way around.

We now pay the highest interest rates in the world and the money we print like crazy comes flowing back home in a tidalwave of red ink. We then shoot this into our arm to feel no pain and to feel invincible even as our health declines and we are obviously in serious trouble. I have known heroin addicts. None of them made it past their 40th birthdays. Over doses, shoot outs during bungled muggings or break-ins. Committing ever graver crimes and getting less and less a hit off of a shot.

Spending all their time looking for horse.

Dead. And this is what America will be, financially, when we can no longer demand the entire planet feed our frenetic addiction. Our desire is bottomless. The bottom line isn't infinity.

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