Tuesday, May 18, 2010

Old Men caught with their Pockets empty!

Does this assessment make sense? I agree with the belief that most nations of the EU would benefit with cutting their ties with one another, and that the Baltic nations should forget tying their Currencies to the euro. One of the horrors of Globalization comes from the need for independent agents to achieve success. Independence allows negotiation for advantage, utterly necessary to have genuine Trade advantage. World leadership has spent the last quarter century crippling that independence. There can be no Tariffs, no selling below Cost, no negotiated Favored Nation agreements, and everyone must give everyone else equal time and advantage. Middleman Profits have been persecuted on the only level where they make Sense. Everyone must have low Taxes, and Public Expenditures must be financed with Debt. Does anyone wonder Why Debt has been rising so rapidly, or Why nations are all in trouble with their Credit liabilities?

Read this totally unrelated Post, and ask if it is not a similar line of inadequate defense. Small Pox vaccinations were ended by 1970, but Now We found that such vaccinations could help against HIV. It also is indicative that Small Pox has made a minor resurgence in later years. It is like the medical practice of proscribing antibiotics for the Common Cold, and Now we have resistant strains of bugs in our blood. Doctors are awaiting the loss of any and all weapons against disease, before they will regulate the use of such drugs. Nations await the complete collapse of national fiscal finance, before they think to moderate their positions on both benefits and Taxes. Everyone gets to suffer the consequences of such short-sighted management.

I will let the Reader ramble through this Post, which I only scanned. Do I believe the information to be accurate? I would trust that it is so. The real Turning Point on the slow Recovery must be the heavy debt levels generated at all levels of the economy. Only Corporations possess large Cash reserves, and they are not noted for Investment in the absence of Consumer Demand. Remember that the later in not just desire, but the ability to pay for those Products. One should note that Consumer Demand will not increase in the face of rising Unemployment. I may later advance the theory that the heavy debt of Governments nullify the effects of any Stimulus package, especially if it is all borrowed funds. There is difficulty in defense of this theory, and there are Those so egregious as would insist that I come up with some evidence–instead of simple suspicion. Some would even advance the argument that I am trying to utilize old and outdated capital to engender belief. lgl

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