When does Core inflation become like--ah, real Inflation?
I sit here and ponder this Question. Housing is up drastically, Rents are up seriously, Utilities are fracturing their Charges again to boost the Consumers, Gasoline soars, Diesel surcharges are being added to Transport Costs, Health Care Costs zoom, and Checkout Clerks are having to learn how to count again. Coffee shops are thinking of renting tables by the Hour. What exactly are the volitile Products subtracted from the overall mix?
This Author reads that the price of Oil stays over $71/barrel because of sustained Consumer demand. Huh? Must be all those Mexicans flocking across our Border, they must operate Gas-guzzlers. It could not be Oil-rich Arabs playing with the Oil markets. I remember when the Hunts tried to corner the market with Silver; I thought I had a fortune because I had some lbs. of Silver, but the Market collapsed. Do OPEC countries feel artificially wealthy?
I still should get back to the original question, like when are We supposed to consider Inflation real. Is it when they confiscate this Computer, in lieu of payment of the Electric bill? Or can it be considered Inflation after they have emptied your wallet and taken back your Charge Cards? The reality remains that the Concept of Core Inflation becomes more nonsenical by the day. This is not to say that the Fed should raise rates further; in fact, those Rates should be lowered to minimize Business and Consumer Costs. Taxation is the correct Currative of Inflation, and the only one that works. Only higher Capital Gains taxation and non-exempted Income taxes have any ability to stop, and eventually reduce Inflation. lgl
Friday, May 26, 2006
Thursday, May 25, 2006
True State of the Economy
GDP for Q1 revised up to 5.3%, but Consumer spending and Business investment are disappointing. Overall Corporate Earnings, though, average about an 8% increase Year over Year. Many Economists believe less energy use over the winter and strong Export Demand brought on the better showing in the revision. I have me doubts!
The higher Corporate Earnings can only come from denuding subDivisions of Investment capital. Poor Business investment was the natural result. The less Energy use did not deprive Utilities of Profits, what with Year over Year doubling (actually about 40%, but the Author likes Drama) of Energy Costs. The record tide of Immigration has multiplied the Household Startup purchases (about 3 times the normal High School--College Graduate wave). The later has bouyed the Consumer Spending numbers, hiding the real drop in Consumer Spending levels by Household. Labor Wages and Business investment has suffered from Inflation badly--volitile Energy and Food included. Lots of Clouds on the horizon!.
A real Problem lies in the Fed lack of awareness. The Fed seems determined to further rob Business investment and Consumer Spending by higher Credit charges, which obviously does nothing for the real sources of Inflation. Corporations continue to steal Wages and Recapitalization funds to justify Corporate Executive Bonus and Stock Options. It is going to be a rough Year, especially as Congress is determined to increase Spending, and reduce Tax revenues. lgl
The higher Corporate Earnings can only come from denuding subDivisions of Investment capital. Poor Business investment was the natural result. The less Energy use did not deprive Utilities of Profits, what with Year over Year doubling (actually about 40%, but the Author likes Drama) of Energy Costs. The record tide of Immigration has multiplied the Household Startup purchases (about 3 times the normal High School--College Graduate wave). The later has bouyed the Consumer Spending numbers, hiding the real drop in Consumer Spending levels by Household. Labor Wages and Business investment has suffered from Inflation badly--volitile Energy and Food included. Lots of Clouds on the horizon!.
A real Problem lies in the Fed lack of awareness. The Fed seems determined to further rob Business investment and Consumer Spending by higher Credit charges, which obviously does nothing for the real sources of Inflation. Corporations continue to steal Wages and Recapitalization funds to justify Corporate Executive Bonus and Stock Options. It is going to be a rough Year, especially as Congress is determined to increase Spending, and reduce Tax revenues. lgl
Wednesday, May 24, 2006
Economic Flux
The Economy has been expressing patterns of high fluid shifting, not only in Pricing, but also in Production Indexes and levels. The worst element of the sharp shifting of direction may be the inducement to speculate, this tendency has always increased prior to a Recession; often driven by invested interests trying to shore up the Market in the face of declining Prices. Neither the invested interests, or the Speculators, are successful in the long-term. This Author has been considering all the known instances of erratic Market pattern, and cannot think of an instance where the pattern led back to a Bull Market. Other Trackers may actually utilize Market records, though, and challenge the previous statement.
I proved yesterday, to my own satisfaction if not Others' (I am easy to please), that OPEC had engaged in a Shore of the Oil Price. I find today that New Home Sales are up dramatically, though only by sloughing off the Inflation clips of the initial Purchase Price. The numbers of units available for Sale functionally forestall any attempt to shore Prices here, something like 5 months worth of units at the current Sell levels. Durable Goods Orders fell some 4.8%, 2% if one removes Aircraft; the real worry is unreported, this consisting of Business Contract orders for vehicles. What does it all mean?
Another month of current levels of Index readings will mean that the Stock Markets will have to dump an appreciable degree of value from their current Stock prices. This could be delayed up to one Year, and even reversed, by better Production numbers; but current Stock prices insist on preservation of full Production, and expectation would imply that Plant utilization will continue to decline from the present 86.1% (I think this was the last Reading). Stockholders should not be in a hurry to shift out of Stocks, though, as other Markets will also be declining if Plant utilization is going down. lgl
I proved yesterday, to my own satisfaction if not Others' (I am easy to please), that OPEC had engaged in a Shore of the Oil Price. I find today that New Home Sales are up dramatically, though only by sloughing off the Inflation clips of the initial Purchase Price. The numbers of units available for Sale functionally forestall any attempt to shore Prices here, something like 5 months worth of units at the current Sell levels. Durable Goods Orders fell some 4.8%, 2% if one removes Aircraft; the real worry is unreported, this consisting of Business Contract orders for vehicles. What does it all mean?
Another month of current levels of Index readings will mean that the Stock Markets will have to dump an appreciable degree of value from their current Stock prices. This could be delayed up to one Year, and even reversed, by better Production numbers; but current Stock prices insist on preservation of full Production, and expectation would imply that Plant utilization will continue to decline from the present 86.1% (I think this was the last Reading). Stockholders should not be in a hurry to shift out of Stocks, though, as other Markets will also be declining if Plant utilization is going down. lgl
Tuesday, May 23, 2006
We are being played!
It may someday be called "The great Tuesday Jump", with Oil and Metals all going up some 2% and Copper up some 5%. Is this normal Market movement?
One Informant (who might equally be as incompetent as this author) relayed the supposition that over $70 bn worth of new money had to enter the Markets to bring on such a rise in Market value. Study of financial reserves Worldwide indicate therefore that the Oil-rich OPEC nations are the only source of financial Capital of this magnitude inside a Two-Week Turnaround. One could ask why? The Answer states OPEC wants the high Returns for Oil, and boosting the Metals markets limits desire to transfer to alternative Energy sources, especially the price of Copper.
An Federal investigation should be initiated to identify the sources of new Cash in the Markets, but the current Bush administration is too close to both the Oil industry and the house of Saud. It will probably not be conducted until after the inaugeration of the next Administration, but this Author suspects OPEC will have lost the genial Good Will of the American People, if not their bought and paid for Government. The next Administration may be forced to eliminate all OPEC nations from Most-Favored Nation Status.
I have long suspicioned that the American People have endured forms of Monop0ly pricing in both internal and external Markets. This Author grew up inside Farm and Ranch life, and long associated with Gelding and Steer-making. Arabs and OPEC may not have to fear Anerican reaction to realized Theft, but their American Quislings may find need for caution. lgl
One Informant (who might equally be as incompetent as this author) relayed the supposition that over $70 bn worth of new money had to enter the Markets to bring on such a rise in Market value. Study of financial reserves Worldwide indicate therefore that the Oil-rich OPEC nations are the only source of financial Capital of this magnitude inside a Two-Week Turnaround. One could ask why? The Answer states OPEC wants the high Returns for Oil, and boosting the Metals markets limits desire to transfer to alternative Energy sources, especially the price of Copper.
An Federal investigation should be initiated to identify the sources of new Cash in the Markets, but the current Bush administration is too close to both the Oil industry and the house of Saud. It will probably not be conducted until after the inaugeration of the next Administration, but this Author suspects OPEC will have lost the genial Good Will of the American People, if not their bought and paid for Government. The next Administration may be forced to eliminate all OPEC nations from Most-Favored Nation Status.
I have long suspicioned that the American People have endured forms of Monop0ly pricing in both internal and external Markets. This Author grew up inside Farm and Ranch life, and long associated with Gelding and Steer-making. Arabs and OPEC may not have to fear Anerican reaction to realized Theft, but their American Quislings may find need for caution. lgl
Monday, May 22, 2006
Searching for What?
Tyler Cowen at Marginal Revolution has a very interesting Post on immigration and David Card's findings.The Comments of the Post should be read as well. The only thing I doubt is the exact orientation of both Card's evaluation and Cowen's reaction. Both start from the supposition that American Business has an essential need for immigrant labor. I wonder if this stands as the exact impetus for Business support of immigration.
American Business may be greater concerned with Retail opportunity, than it finds need for labor, even for labor at suppressed Wage levels. Many Americans hold the image of aged vehicles carrying hordes of only semi-educated immigrants, who cannot even converse in English. Perhaps too many of Us have read The Grapes of Wrath. The world of Immigration has changed, and likely the Change did not come from the Immigrants themselves; though the image of inability to speak English may remain.
Where did the change in Immigration come from? First We should define the Change: the Immigrants today as well-fed, well-clothed, well-housed, and driving a relatively new vehicle. Many Economists and all Liberals suggest the rationale for Immigration is to suppress Wages. In truth, the functional reason for Immigration is Immigrant capacity for Consumption. The piddling Business profits from low Wages amount to Millions, while the Business profits from Immigrant consumption totals Billions of Dollars. This is the real need of American Business: Generation of Retail consumption, in order to keep the Profits flowing. lgl
American Business may be greater concerned with Retail opportunity, than it finds need for labor, even for labor at suppressed Wage levels. Many Americans hold the image of aged vehicles carrying hordes of only semi-educated immigrants, who cannot even converse in English. Perhaps too many of Us have read The Grapes of Wrath. The world of Immigration has changed, and likely the Change did not come from the Immigrants themselves; though the image of inability to speak English may remain.
Where did the change in Immigration come from? First We should define the Change: the Immigrants today as well-fed, well-clothed, well-housed, and driving a relatively new vehicle. Many Economists and all Liberals suggest the rationale for Immigration is to suppress Wages. In truth, the functional reason for Immigration is Immigrant capacity for Consumption. The piddling Business profits from low Wages amount to Millions, while the Business profits from Immigrant consumption totals Billions of Dollars. This is the real need of American Business: Generation of Retail consumption, in order to keep the Profits flowing. lgl
Sunday, May 21, 2006
Tax Cuts
Even Individuals less radically dense than myself can possibly wonder at elected officials claiming victory after initiating Tax Cuts, when those Tax reductions will worsen an already deficit Budget. One could ask why Anyone would feel victorious about a destabilized Government budget being further degraded. It appears obvious One should attempt to improve a corrupted fiscal instrument, not ensure its further destruction.
What is the major problem with Tax Cuts?
The real answer is Accountants. Why should I slight such an honored Profession? The Answer states the evil of Tax Cuts lies in the methodology of the granting system of Tax exemption. Any projected Tax Cut has two ways in which it can be introduced: set financial size, or by percentage of Income covered. Personal Exemption, it may be noted, always are set by direct financial size; they don't want Just Anyone getting a percentage take on the Tax break; why this might even reach a point where Legislators could not increase the taxation of the Poor. Many other Tax Cuts can be found where they are of set financial size, or at least, a set financial limit is imposed. Accountants realize you can't give just Anyone too much more money!
The other method of Tax Cut award is percentage estimating. Accountants love this one, which is the Bread and Butter of their profession. You might notice that no Tax credit for Investment has ever been granted as set financial size, like: You invest $10,000 or more, you will get a $10,000 remission of Tax. Accountants could do nothing with such an aberration. Why, whether their Customers invested anywhere from $10,000 to $1 bn, the tax remission would still only be $10,000. This would be wholely unacceptable to both Accountant and Customer. Still, with a thing like a 23% Capital Gains Tax rate, Our deficit would be well on its way to being eliminated. We might possibly eliminate the National Debt in entirety, even when marching into the ballooning Social Security Costs of the retiring Baby Boomers. lgl
What is the major problem with Tax Cuts?
The real answer is Accountants. Why should I slight such an honored Profession? The Answer states the evil of Tax Cuts lies in the methodology of the granting system of Tax exemption. Any projected Tax Cut has two ways in which it can be introduced: set financial size, or by percentage of Income covered. Personal Exemption, it may be noted, always are set by direct financial size; they don't want Just Anyone getting a percentage take on the Tax break; why this might even reach a point where Legislators could not increase the taxation of the Poor. Many other Tax Cuts can be found where they are of set financial size, or at least, a set financial limit is imposed. Accountants realize you can't give just Anyone too much more money!
The other method of Tax Cut award is percentage estimating. Accountants love this one, which is the Bread and Butter of their profession. You might notice that no Tax credit for Investment has ever been granted as set financial size, like: You invest $10,000 or more, you will get a $10,000 remission of Tax. Accountants could do nothing with such an aberration. Why, whether their Customers invested anywhere from $10,000 to $1 bn, the tax remission would still only be $10,000. This would be wholely unacceptable to both Accountant and Customer. Still, with a thing like a 23% Capital Gains Tax rate, Our deficit would be well on its way to being eliminated. We might possibly eliminate the National Debt in entirety, even when marching into the ballooning Social Security Costs of the retiring Baby Boomers. lgl
Saturday, May 20, 2006
Last of the Big Deals?
Study of major International Corporations will indicate they are beginning to have problems. They have to fight local Governments on issues of Wages, Economy, Health Care, Retirement, and other residuals. They are finding increasing strictures based upon local Tax issues. Everyone seems to have their Hand out, and large Organizations produce large Population segment Opposition. The real crux of their Problem, though, is the maintenance of Profitability. Big Deals remain profitable for Deal-Makers, but much less so for Deal-Managers.
Corporations also face adverse economic conditions, some critical to effecient Operations. Labor Salaries and Benefits become institutionalized with large Labor pools, and resistence to change of these elements grow exponentially fast. Bolivia and Venezuela holds forefront on the Caps which can be placed on Profitability for Internationals, and signal the Changes of the future. Simple knowledge of Accounting and Debt-Leverage Arts does not provision Management with expertise in Production functions. Ignorance of methodology in squeezing Profit from marginal productivity operations leads often to Line sell-offs which are necessary conpponents to overall Production line success. The Day of the Multinational may be coming to an end, not with a whimper or a bang, solely for better Management practice.
Corporations also face adverse economic conditions, some critical to effecient Operations. Labor Salaries and Benefits become institutionalized with large Labor pools, and resistence to change of these elements grow exponentially fast. Bolivia and Venezuela holds forefront on the Caps which can be placed on Profitability for Internationals, and signal the Changes of the future. Simple knowledge of Accounting and Debt-Leverage Arts does not provision Management with expertise in Production functions. Ignorance of methodology in squeezing Profit from marginal productivity operations leads often to Line sell-offs which are necessary conpponents to overall Production line success. The Day of the Multinational may be coming to an end, not with a whimper or a bang, solely for better Management practice.
Friday, May 19, 2006
Smell on the Wind
The Price of sweet Crude dropped below $68/barrel today based upon Newscasters' thought as a sympathy sink with the drop in Metals. Don't think so! Methinks We are seeing a Market trend here, and understanding of Markets can be helpful. Markets traditionally advance, retreat, then return to about 25-30% of the previous advance where they stabilize for a short Period lasting from 3-24 months. I will make the totally unsubstantuated prediction that Oil will reach $50/barrel by the end of July, then the cycle will drive it back close to $60/barrel by the end of August.
What could make me advise such a ridiculous idea?
China is in trouble. Internal Wage rates are rising in the Export arena faster than the International average, and production levels are falling without those Raises. The Labor Forces of other nations are looking like an equally good deal, and doing business elsewhere is easier and cheaper due to Chinese overregulation. A second element is the American Consumer, who faces vast Inflationary increases in Energy and Utilities, and is adjusting their Consumption patterns accordingly. Their purchase patterns are decreasing purchase of the very Products which are the Chinese Export backbone. The Chinese economy is slowing, and likely not be able to accomplish better than 2% economic growth, until their Export pattern improves. Other nations lack the resources to take up the slack, and American Business is not prepared to invest under the current economic conditions. Chinese Oil Imports may decrease by 10-12% this Year.
Study of the American economy highlights a condition which this Author sees no definite pattern, but always held a suspicion of the existence of it. Precisely stated: Utility charges to Consumers always increase before an economic slowdown. The reasons for this are varied. One reason is that Utilities are basically second-hand, or Retail Consumers of Energy. They are also second-hand Consumers of Capital Equipment. They, like normal Consumers, receive their Costs increases only at the tail-end of the Production Cycle. Their increased Charges, though, have a distinct suppression on Consumer purchases.
Leading Indicators Index express a potential slowdown in the American economy. China seems destined to have a slowdown as well. The rest of the World is not likely to substitute a viable economic impulse to take up the slack. The American Tourist season promises to suppress the price of Oil even more, as will the slowdown in American Construction. OPEC may cut Productrion, but this is self-defeating; they are confronted with massive Capitalization payments in the near future, and pumping cheap Oil remains a better Capitalization payment system, than drawning down upon their present financial reserves. lgl
What could make me advise such a ridiculous idea?
China is in trouble. Internal Wage rates are rising in the Export arena faster than the International average, and production levels are falling without those Raises. The Labor Forces of other nations are looking like an equally good deal, and doing business elsewhere is easier and cheaper due to Chinese overregulation. A second element is the American Consumer, who faces vast Inflationary increases in Energy and Utilities, and is adjusting their Consumption patterns accordingly. Their purchase patterns are decreasing purchase of the very Products which are the Chinese Export backbone. The Chinese economy is slowing, and likely not be able to accomplish better than 2% economic growth, until their Export pattern improves. Other nations lack the resources to take up the slack, and American Business is not prepared to invest under the current economic conditions. Chinese Oil Imports may decrease by 10-12% this Year.
Study of the American economy highlights a condition which this Author sees no definite pattern, but always held a suspicion of the existence of it. Precisely stated: Utility charges to Consumers always increase before an economic slowdown. The reasons for this are varied. One reason is that Utilities are basically second-hand, or Retail Consumers of Energy. They are also second-hand Consumers of Capital Equipment. They, like normal Consumers, receive their Costs increases only at the tail-end of the Production Cycle. Their increased Charges, though, have a distinct suppression on Consumer purchases.
Leading Indicators Index express a potential slowdown in the American economy. China seems destined to have a slowdown as well. The rest of the World is not likely to substitute a viable economic impulse to take up the slack. The American Tourist season promises to suppress the price of Oil even more, as will the slowdown in American Construction. OPEC may cut Productrion, but this is self-defeating; they are confronted with massive Capitalization payments in the near future, and pumping cheap Oil remains a better Capitalization payment system, than drawning down upon their present financial reserves. lgl
Thursday, May 18, 2006
House Budget Passage
The House of Representatives passed a new Budget for next Year calling for $2.7 trillion in Spending. The humor in it lies in the fact there is absolutely no attempt to curtail the Deficit. An aside in the internal Politics of its passage, was granting moderate Republicans some $3 bn in welfare programs, lest the moderate Republican draw the funds from the $869+ Defense Budget (remember that the Pentagon could save at least a Billion dollars by forcing Pentagon Employees to pay Retail Market price for Food and Beverages). These are your compassonate Republicans!
The Index of Leading Indicators dropped 0.1 to 138.9. Washington and Wall Street flies into a tizzy like the World has fallen in, because it shows an expected slowdown in the Third Quarter. No one much considered the increase of Unemployment Claims, though a jump of around 12% (I didn't do the Math, as it wasn't on a test) seems like there should be a murmur in the Economic community. The excuse about Government layoffs in Puerta Rico has got to be one of the lamest excuses this Author has ever heard. Let's see, about 2000 layoffs and new Unemployment claims over 48,000?--humm!
Bush is going to his political base, though, and all should be alright. Instead of hiring the necessary 50,000 more Border Patrol officers which the Situation mandates, he will grant some $2 bn in Contracts to the military/industrial complex to build a Security fence just like the one that SoD (the name escapes me at the moment) wanted to build in Vietnam in the 1960s to fence out the Ho Chi Minh Trail (all sensible estimations suggest this planned fence should work equally as well). This Author wonders what We are going to do in the 3 Years it will likely take to construct. Oh, It's a wonderful world We live in! lgl
The Index of Leading Indicators dropped 0.1 to 138.9. Washington and Wall Street flies into a tizzy like the World has fallen in, because it shows an expected slowdown in the Third Quarter. No one much considered the increase of Unemployment Claims, though a jump of around 12% (I didn't do the Math, as it wasn't on a test) seems like there should be a murmur in the Economic community. The excuse about Government layoffs in Puerta Rico has got to be one of the lamest excuses this Author has ever heard. Let's see, about 2000 layoffs and new Unemployment claims over 48,000?--humm!
Bush is going to his political base, though, and all should be alright. Instead of hiring the necessary 50,000 more Border Patrol officers which the Situation mandates, he will grant some $2 bn in Contracts to the military/industrial complex to build a Security fence just like the one that SoD (the name escapes me at the moment) wanted to build in Vietnam in the 1960s to fence out the Ho Chi Minh Trail (all sensible estimations suggest this planned fence should work equally as well). This Author wonders what We are going to do in the 3 Years it will likely take to construct. Oh, It's a wonderful world We live in! lgl
Wednesday, May 17, 2006
Bernacke, Hedge Funds, and the CPI
Our Fed Chairman may be mistaken about ease of regulation of Hedge Funds. The 140 point drop in the Dow emphasizes the rapidity with which the Hedge Funds respond to Market trends. It is obvious that Hedge Fund Market strategies rely too impactively on mathmetical formulas, where a arithmetic change in input data can generate a geometric sell-off in Stock. What would have happened if the CPI had been close to 1%, rather than the 0.6% it actually was? What would have happened if the core inflation had been 1%, instead of the 0.3% that it actually was? Hedge Funds are swinging too much weight in the Stock and Commodites markets. Cowboy Hedge Funds threaten the stablity of the Markets.
The real problem with Hedge Funds come in their leverage of existing assets. The later is what gives them their real weight in the Market. It is a weight which is granted to few other Investors, due to the normal caution of Bankers, and gives Hedge Funds undue power to control Markets. What caused the recent drop in Oil? It most certainly was not normal Market forces, and it was not normal Market forces which had driven the Price of Oil up in the first place. Shifts in Global Demand and current supplies did not trigger the reduced Oil pricing, Hedge Fund investment strategies issued Sale orders. Leverageing grants Hedge Funds the right to borrow more money, every time they make a Profit. Do We want Hedge Funds to develop weight in the Markets at twice the speed of all other Investors? lgl
The real problem with Hedge Funds come in their leverage of existing assets. The later is what gives them their real weight in the Market. It is a weight which is granted to few other Investors, due to the normal caution of Bankers, and gives Hedge Funds undue power to control Markets. What caused the recent drop in Oil? It most certainly was not normal Market forces, and it was not normal Market forces which had driven the Price of Oil up in the first place. Shifts in Global Demand and current supplies did not trigger the reduced Oil pricing, Hedge Fund investment strategies issued Sale orders. Leverageing grants Hedge Funds the right to borrow more money, every time they make a Profit. Do We want Hedge Funds to develop weight in the Markets at twice the speed of all other Investors? lgl
Tuesday, May 16, 2006
The Wholesale Price Index
The importance of the Reading is the Year over Year increase of 4%. It is fashionable among Economists to concentrate on Core inflation, but Business does not pay the core prices, they pay the real prices. This cuts into Profit Margins, if the CPI does not also rise equally in advance. Another interesting element of the entire estimation is it ignores the Energy consumption of the Distribution sector. Shipping Costs are among the highest Energy consumers in both the greater Economy, and in the Production cycle. Added Energy Costs cuts into Profit Margins drastically through the Distribution sector.
The CPI is supposed to be reported tomorrow, and comparison should be made of the differance between the PPI and the CPI. Any disparity between the Two indexes in percentage term, means that Profit Margins have gained or lost, or that Distribution Costs are biting into Profit Margins by non-passage of Energy Costs to Consumers. One must remember that loss of Profit Margins affect Recapitalization Expense far more rapidly than it impacts Investment. Business will let Capitalization decay faster than it will alter overall Investment Schedule. This results in more inefficient future Production. lgl
The CPI is supposed to be reported tomorrow, and comparison should be made of the differance between the PPI and the CPI. Any disparity between the Two indexes in percentage term, means that Profit Margins have gained or lost, or that Distribution Costs are biting into Profit Margins by non-passage of Energy Costs to Consumers. One must remember that loss of Profit Margins affect Recapitalization Expense far more rapidly than it impacts Investment. Business will let Capitalization decay faster than it will alter overall Investment Schedule. This results in more inefficient future Production. lgl
Monday, May 15, 2006
Keynesian Theory
John Maynard Keynes was a respected Economist long before he came up with his theory of utilizing Government deficits to end the Great Depression. I find I must take a quick aside to explain the causes of the Great Depression, before I can outline Keynes' Thoughts.
The real reasons for the Great Depression:
1) The American Stock Market was afloat with neuvo-rich Investors, a huge percentage having shown signs of Wealth since 1921. Their entire fortunes came from, or were invested in, the Stock Market.
2) Businessmen throughout the late 1920s had been investing all Business Profits in the Stock Market.
3) Banks were extending loans to Business and Individuals, who were transferring funds to investments in the Stock Market.
4) The Stock Market suffered a series of Reverses, most notably a lack of Consumer Demand coupled with overstocked Inventories of Business.
5) The nuevo-rich Investors paniced, trying to drag their Wealth from a Bear market.
6) Business had their financial reserves invested in the Stock Market, witnessed those financial reserves disappearing, and immediately slashed Production.
7) The activity of the Federal Reserve had relatively little to do with the Great Depression, other than refuse to absorb the bad loans of Banks which were going to fail anyway, because of the bad loan policy.
The rest of the World followed the American economy, mainly due their own native conditions, which mirrored the American condition. Keynes witnessed the Supply curve dropping below the potential Supply curve as exhibited by recent prior performance. He deduced the major factor for economic recovery would be redevelopment of Consumer Demand, but a redevelpment which could not be regenerated by huge Unemployment. He decided the Government must spend its way out of the Great Depression, creating Jobs which would eventually regenerate Consumer Demand.
Keynes' Theory was not a discussion of a normal Condition, but of the aberration of the Great Depression. He never believed that Government deficits were beneficial, except in the Case where there was a collapse of Consumer Demand. Government Deficits under relative full employment conditions were as despictable to him as to myself.
It is a sadness that the Thought of great Economists must be corrupted for such Individual to be considered eminent. There are many today who are castigating John Kenneth Galbraith, but they are not criticizing what he expounded, ranting only because of lack of serious study of his Thought. lgl
The real reasons for the Great Depression:
1) The American Stock Market was afloat with neuvo-rich Investors, a huge percentage having shown signs of Wealth since 1921. Their entire fortunes came from, or were invested in, the Stock Market.
2) Businessmen throughout the late 1920s had been investing all Business Profits in the Stock Market.
3) Banks were extending loans to Business and Individuals, who were transferring funds to investments in the Stock Market.
4) The Stock Market suffered a series of Reverses, most notably a lack of Consumer Demand coupled with overstocked Inventories of Business.
5) The nuevo-rich Investors paniced, trying to drag their Wealth from a Bear market.
6) Business had their financial reserves invested in the Stock Market, witnessed those financial reserves disappearing, and immediately slashed Production.
7) The activity of the Federal Reserve had relatively little to do with the Great Depression, other than refuse to absorb the bad loans of Banks which were going to fail anyway, because of the bad loan policy.
The rest of the World followed the American economy, mainly due their own native conditions, which mirrored the American condition. Keynes witnessed the Supply curve dropping below the potential Supply curve as exhibited by recent prior performance. He deduced the major factor for economic recovery would be redevelopment of Consumer Demand, but a redevelpment which could not be regenerated by huge Unemployment. He decided the Government must spend its way out of the Great Depression, creating Jobs which would eventually regenerate Consumer Demand.
Keynes' Theory was not a discussion of a normal Condition, but of the aberration of the Great Depression. He never believed that Government deficits were beneficial, except in the Case where there was a collapse of Consumer Demand. Government Deficits under relative full employment conditions were as despictable to him as to myself.
It is a sadness that the Thought of great Economists must be corrupted for such Individual to be considered eminent. There are many today who are castigating John Kenneth Galbraith, but they are not criticizing what he expounded, ranting only because of lack of serious study of his Thought. lgl
Sunday, May 14, 2006
Personal IIntellectual Stance
This Author has just finished reading the Posting and Commentary written by HedgeFundGuy and Contributors, HedgeFundGuy criticizing Galbraith. The Posting and Commentary was indeed informative, but it produced fear inside myself that so much of my own musings could be equally miscontrued. I decided I should set down certain basic intellectual beliefs of myself, which guides my economic speculations.
1) I do not believe in Monetarist policy. Inflation, Growth, recessions, and economic performance are not governed by the liquidity of Money Supply. It is directly caused by unfunded Government Expenditures (read as Deficit spending). It magnifies a form of Money (think Treasury instruments), also duplicated by State and Local Governments. The expenditure of such raised Funds incite People to believe they are better off than they are. b) The very expenditure of such Funds artifically increases the draft upon Resources, making Production more expensive (shifting the entire Supply line for the Country).
2) The argument that large Corporate structure do not allow for greater Profits is fallicious. Those Profits are hidden through Corporate acquisitions and expansion of the total amount of Corporate stock. Evaluation of real Profits-taking by Corporate concerns will determine that original Sector performance has been increasing in total Dollar Profits receipts above the level of Inflation, this also creating additional Inflationary pressures.
3) The real Cause of Recessions lie in Corporate overexpansion leading to the absence of Corporate financial reserves in the face of overdraft of Resources--the higher Costs of Resources curtailing Production operations.
4) The worst Scenario for Recessions is a combination of Corporate overextension coincident with Government overspending. The real Private Sector response to Corporate overextension is Stockholder procedural control to force distribution of Corporate Profits through award of Dividends to Stockholders. The real Public Sector response to Government overspending lies in Voter demands to stop the Spending.
5) The Tax Code of this Country should be simplified. The current Code fosters Corporate overexpansion to gain what are basically idiotic Tax credits. Government can and should give Short-term, low-Interest loans to Business concerns rather than Investment Tax Credits.
I could probably develop endless assessments of this order, so I will stop here. An additional comment I would make is that while I do not fancy myself in the same league with eminent Economists, I hope this short rendition will in some way preclude potential Readers from making the same misjudgements about my Writings, as came from the Posting and Commentaries by HedgeFundGuy about the mentioned Economists. lgl
1) I do not believe in Monetarist policy. Inflation, Growth, recessions, and economic performance are not governed by the liquidity of Money Supply. It is directly caused by unfunded Government Expenditures (read as Deficit spending). It magnifies a form of Money (think Treasury instruments), also duplicated by State and Local Governments. The expenditure of such raised Funds incite People to believe they are better off than they are. b) The very expenditure of such Funds artifically increases the draft upon Resources, making Production more expensive (shifting the entire Supply line for the Country).
2) The argument that large Corporate structure do not allow for greater Profits is fallicious. Those Profits are hidden through Corporate acquisitions and expansion of the total amount of Corporate stock. Evaluation of real Profits-taking by Corporate concerns will determine that original Sector performance has been increasing in total Dollar Profits receipts above the level of Inflation, this also creating additional Inflationary pressures.
3) The real Cause of Recessions lie in Corporate overexpansion leading to the absence of Corporate financial reserves in the face of overdraft of Resources--the higher Costs of Resources curtailing Production operations.
4) The worst Scenario for Recessions is a combination of Corporate overextension coincident with Government overspending. The real Private Sector response to Corporate overextension is Stockholder procedural control to force distribution of Corporate Profits through award of Dividends to Stockholders. The real Public Sector response to Government overspending lies in Voter demands to stop the Spending.
5) The Tax Code of this Country should be simplified. The current Code fosters Corporate overexpansion to gain what are basically idiotic Tax credits. Government can and should give Short-term, low-Interest loans to Business concerns rather than Investment Tax Credits.
I could probably develop endless assessments of this order, so I will stop here. An additional comment I would make is that while I do not fancy myself in the same league with eminent Economists, I hope this short rendition will in some way preclude potential Readers from making the same misjudgements about my Writings, as came from the Posting and Commentaries by HedgeFundGuy about the mentioned Economists. lgl
Tax Code and Series Index
Mothers' Day seems a little empty nowadays with the Author's absence of a Mother, and so he is contemplating odd Thoughts today, especially after reading a current Posting by Mark Thoma about the actual progressiveness of the Federal Tax system. We have a mess with the Tax Code now, never more so because of the Bush Tax Cuts and their sliding Expiration dates. The system is simply crumbling under it's own confusion.
This Author began to consider a Series Index, where Lifetime earnings would be estimated, instead of current Year recorded. The length of Time considered should naturally be 45 Years in duration, but with allowable extension before and after, with Highs and Lows knocked off with expansion. The normal estimates of Income growth would be included, altered to account for the Inflation rate. Each Year of Recorded Income would affect the overall Average and Estimates of Income, and the Rate of Taxation would shift appropriately. There could even be a program of Tax rebates in evaluation of the overall data (the Individual not expected to earn the average growth normally assumed).
What is the purpose here?
Several ideas can be presented. The First and Best would be the Means to eliminate all forms of Tax deductions, exemptions, or credits. The second Thought would be that younger Households gain natural advantage in Tax rates, due to their less Income, lower Average of Incomes, and thereby, lower estimates of Lifetime income. The Series Index actually favors lower Incomes of all types, possessing lower range data fields. Tax Rates could be set based upon the needs for revenue by the Government, not by attempts to achieve political support, or to keep the Poor afloat. Government Welfare payments could be included in the Average of Income, and become a factor in Tax determination. Tax rates can be made truly Progressive, where better capitalization of Households are factored in, along with State and Local taxation. Higher financial status will be taxed at higher rates than lower financial status, but with realistic Tax rates; all forms of Income to be considered Equal, and assessed the same. The Result would be a justified Tax impact.
Computers allow for Series indexing, and requires far less input than does the mydraid level of current Tax provisions. Base Tax rates will be easy to impose by Congress, and easy to determine by Tax Assessor. Taxpayers could easily find they have to pay less Tax when their Expense levels are high, and find their Tax assessments to be less impactive as they attain higher Income levels. The greatest benefit could be that common Taxpayers may again be able to fill out their own Tax Returns. lgl
This Author began to consider a Series Index, where Lifetime earnings would be estimated, instead of current Year recorded. The length of Time considered should naturally be 45 Years in duration, but with allowable extension before and after, with Highs and Lows knocked off with expansion. The normal estimates of Income growth would be included, altered to account for the Inflation rate. Each Year of Recorded Income would affect the overall Average and Estimates of Income, and the Rate of Taxation would shift appropriately. There could even be a program of Tax rebates in evaluation of the overall data (the Individual not expected to earn the average growth normally assumed).
What is the purpose here?
Several ideas can be presented. The First and Best would be the Means to eliminate all forms of Tax deductions, exemptions, or credits. The second Thought would be that younger Households gain natural advantage in Tax rates, due to their less Income, lower Average of Incomes, and thereby, lower estimates of Lifetime income. The Series Index actually favors lower Incomes of all types, possessing lower range data fields. Tax Rates could be set based upon the needs for revenue by the Government, not by attempts to achieve political support, or to keep the Poor afloat. Government Welfare payments could be included in the Average of Income, and become a factor in Tax determination. Tax rates can be made truly Progressive, where better capitalization of Households are factored in, along with State and Local taxation. Higher financial status will be taxed at higher rates than lower financial status, but with realistic Tax rates; all forms of Income to be considered Equal, and assessed the same. The Result would be a justified Tax impact.
Computers allow for Series indexing, and requires far less input than does the mydraid level of current Tax provisions. Base Tax rates will be easy to impose by Congress, and easy to determine by Tax Assessor. Taxpayers could easily find they have to pay less Tax when their Expense levels are high, and find their Tax assessments to be less impactive as they attain higher Income levels. The greatest benefit could be that common Taxpayers may again be able to fill out their own Tax Returns. lgl
Saturday, May 13, 2006
Who Me?
This Author faced some accusations since yesterday's Posting stating I was trying to set Prices by my sliding Gas Tax of 100% over a baseline of $2/gallon. It seems like I may have baseballed my Readership--the practice of not providing the necessary underpinning of my argument, so that the entirety was misconstrued. One should consider my verbal forays into the mystical, before they complain of the later Post. Anyway, here is my reasoning on the Gas Tax.
1) Never did I consider elimination of normal Tax reduction for encountered Costs.
2) Never did I imply curtailing normal business Profits at the Retail level. I would suggest allowing normal Profits accurring to this Retail level equivalent to a Gas price between $1.90-$2.
3) The beauty of this Gas Tax is it allows shift of liability backwards to the Distributor, Wholesaler, Refiner, potential Importer, and finally Oil Producer. Each would be given the same consideration as at the Retail level, except for the normal reduction in Gas Cost per gallon, always allowing for normal Tax reduction for encountered Costs.
The beauty of this Gas Tax, with the allowed reduction at each level for Costs, compensates for all Inflationary Costs except for the base fuel Cost. Computation of the Tax impact allows for normal increase in Profits due to outside inflationary Costs except for the fuel. It fulfills all the goals as estimated in the last Posting, but does not allow for Windfall Profits propelled by provision of the Product itself. lgl
1) Never did I consider elimination of normal Tax reduction for encountered Costs.
2) Never did I imply curtailing normal business Profits at the Retail level. I would suggest allowing normal Profits accurring to this Retail level equivalent to a Gas price between $1.90-$2.
3) The beauty of this Gas Tax is it allows shift of liability backwards to the Distributor, Wholesaler, Refiner, potential Importer, and finally Oil Producer. Each would be given the same consideration as at the Retail level, except for the normal reduction in Gas Cost per gallon, always allowing for normal Tax reduction for encountered Costs.
The beauty of this Gas Tax, with the allowed reduction at each level for Costs, compensates for all Inflationary Costs except for the base fuel Cost. Computation of the Tax impact allows for normal increase in Profits due to outside inflationary Costs except for the fuel. It fulfills all the goals as estimated in the last Posting, but does not allow for Windfall Profits propelled by provision of the Product itself. lgl
Friday, May 12, 2006
Smell of Change in the Air
One of the most common indications of Policy change in American Politics consists of greater irritation levels among Our younger Economists. There is increasing heat among Economists about the threat of political constraints on Gasoline pricing. Most of the irritation seems produced by fear of damaging Market efficiency, but there can be Worries about dropping Consumer Sentiment, Trade balances, decreasing Gas Demand's effect on Productivity, and the role of Speculation. It seems there might actually be some political deal before Election, simply for Republicans up for Election to claim a functioning Congress.
This Author is not a bleeding heart for Consumers. American Driving habits do need to be curbed, and the Price of Energy needs to be cut. Nigeria has already lost in excess of 1000 lives through Fires started by cutting into Gas Pipelines. Bolivian Morales has already commented that Oil companies may not be compensated, if they finally nationalize the Oil fields--definitely a bad trend. Speculators are driving the Oil markets, as a short-term Cash Cow that can be played. I believe it is time for Taxation.
My favorite ploy for a Gas tax would impact Consumer Demand, provide great revenue to the Federal Treasury, and stop major Speculation in the Oil markets. It is a Tax upon all Gas Sales equivalent to an equal amount of the price of Gasoline, starting from a floor of $2.00 per gallon. It would effectively cut Gas consumption for nonessential traffic, inform Oil companies without regulation that excessive Profits-taking will result in massive loss of Gas revenues, and tell Speculators that the Federal Treasury is going to take the windfall Profits of high Oil Cost. lgl
This Author is not a bleeding heart for Consumers. American Driving habits do need to be curbed, and the Price of Energy needs to be cut. Nigeria has already lost in excess of 1000 lives through Fires started by cutting into Gas Pipelines. Bolivian Morales has already commented that Oil companies may not be compensated, if they finally nationalize the Oil fields--definitely a bad trend. Speculators are driving the Oil markets, as a short-term Cash Cow that can be played. I believe it is time for Taxation.
My favorite ploy for a Gas tax would impact Consumer Demand, provide great revenue to the Federal Treasury, and stop major Speculation in the Oil markets. It is a Tax upon all Gas Sales equivalent to an equal amount of the price of Gasoline, starting from a floor of $2.00 per gallon. It would effectively cut Gas consumption for nonessential traffic, inform Oil companies without regulation that excessive Profits-taking will result in massive loss of Gas revenues, and tell Speculators that the Federal Treasury is going to take the windfall Profits of high Oil Cost. lgl
Thursday, May 11, 2006
Tax Cut Suicide?
The Republicans think they have locked in their Election chances with the latest Tax Cut, but have they? It might be great to fill political campaign coffers, meeting the implied promises by the heavy money. Does it do that same job with Voters?
All Sources, later to be funded by Democrats, states 80% of the benefit goes to the top 10% of Income Earners. Does this excite the Republican Rank and File, most of whom do not fit the bill for great benefit from the Tax Cut. There is other criterea as well, namely that Sweet Crude is again selling for $73/barrel, the previous Employers of most of the White House (for Those not in the know, I talk of the Oil industry) are recording the highest Profits ever, and the Congress is entirely Gridlock except for Tax Cuts and Spending. The only thing which has come out of Congress in the last Year is Pork.
Even the most wistful of the Affluent do not expect any more Tax Cuts within the parameter the current Administration. Any future Projects of this Administration can only mean higher Deficits, at a time the National Debt already exceeds $8 trillion and expected to pass $10 trillion by the time Bush leaves Office. Both President and Congress have expressed Deadhead in dealing with the problems of Gas shortages, Medicare and Medicaid lack of revenues, the shrinking Social Security Fund, the mess of Proscription D setup, curtailment of Federal Spending, or getting out of our foreign wars. It remains a long time until Election Day, and Congress and President are gearing up to run political campaigns, not the Country!
Some Voters think there should exist a more viable leadership in Washington, and several Polls indicate that Some or Sum may exceed 50% of the Election Turnout in November. We still have yet to hear the Democrats tell how they are going to lose the Election. lgl
All Sources, later to be funded by Democrats, states 80% of the benefit goes to the top 10% of Income Earners. Does this excite the Republican Rank and File, most of whom do not fit the bill for great benefit from the Tax Cut. There is other criterea as well, namely that Sweet Crude is again selling for $73/barrel, the previous Employers of most of the White House (for Those not in the know, I talk of the Oil industry) are recording the highest Profits ever, and the Congress is entirely Gridlock except for Tax Cuts and Spending. The only thing which has come out of Congress in the last Year is Pork.
Even the most wistful of the Affluent do not expect any more Tax Cuts within the parameter the current Administration. Any future Projects of this Administration can only mean higher Deficits, at a time the National Debt already exceeds $8 trillion and expected to pass $10 trillion by the time Bush leaves Office. Both President and Congress have expressed Deadhead in dealing with the problems of Gas shortages, Medicare and Medicaid lack of revenues, the shrinking Social Security Fund, the mess of Proscription D setup, curtailment of Federal Spending, or getting out of our foreign wars. It remains a long time until Election Day, and Congress and President are gearing up to run political campaigns, not the Country!
Some Voters think there should exist a more viable leadership in Washington, and several Polls indicate that Some or Sum may exceed 50% of the Election Turnout in November. We still have yet to hear the Democrats tell how they are going to lose the Election. lgl
Wednesday, May 10, 2006
The AMT
The Republicans in the Congress are getting set to again provide a $70 bn Tax Cut, basically for the Affluent. It is supposed to contain another exemption for Those subject to the Alternative Minimum Tax for another Year. It also means to extend the Bush Tax Cuts. Everyone knows that the AMT has to be fixed, but this Author would like to extend an Alternative Fix to the AMT.
The only thing wrong with the AMT is the level of Income in which it cuts in, and the either/or nature of how Taxes are paid. This Author thinks the level of Income where the AMT takes force should be raised, somewhere around $200,000 per year. The major difference in my Solution would be that all Taxpayers would be forced to switch to the AMT when their Income exceeded the level chosen. This is the simple statement that affluent Taxpayers have no guarantee of any Tax break. There exist Those who would claim this, so this Author will simply state it is a Case of taxing Those with Deep Pockets.
My Fix would generate a great deal of Tax revenue for the Government, would not be noticed by either the Economy, or by almost All of the 145 million Taxpayers. No One can estimate sanely the gain in Tax revenue, but it would probably exceed $100 bn, and probably be less than $300 bn per Year. The Government surely does need the added Tax revenue, because the small Government Republicans cannot seem to keep within a Budget. This Arthor is somewhat grouchy about that, as he remembers the furor aroused in the early 1960s, when a Democrat thought to raise the National Debt to $100 billion. lgl
The only thing wrong with the AMT is the level of Income in which it cuts in, and the either/or nature of how Taxes are paid. This Author thinks the level of Income where the AMT takes force should be raised, somewhere around $200,000 per year. The major difference in my Solution would be that all Taxpayers would be forced to switch to the AMT when their Income exceeded the level chosen. This is the simple statement that affluent Taxpayers have no guarantee of any Tax break. There exist Those who would claim this, so this Author will simply state it is a Case of taxing Those with Deep Pockets.
My Fix would generate a great deal of Tax revenue for the Government, would not be noticed by either the Economy, or by almost All of the 145 million Taxpayers. No One can estimate sanely the gain in Tax revenue, but it would probably exceed $100 bn, and probably be less than $300 bn per Year. The Government surely does need the added Tax revenue, because the small Government Republicans cannot seem to keep within a Budget. This Arthor is somewhat grouchy about that, as he remembers the furor aroused in the early 1960s, when a Democrat thought to raise the National Debt to $100 billion. lgl
Tuesday, May 09, 2006
Disappointment
The translation of the Iranian Letter has been provided by the NYTimes by way of United Nations provision. Both the Iranian and American President resorted solely to Party line construction for both the Letter and the American response. Neither advanced any initiative to better Relations between the two Countries, or presented any Plan for the solution of any of the Problems involved. The only element change was to incite Speculation in the Oil markets, probably the real Intent of both Presidents.
Concerned Citizens should provide the Iranian President with historical evidence that the Holecaust did occur, this Author grew up being cared for by two Displaced Persons who were Survivors of Auschwitz. The Iranian President also makes contradictory statements, first admitting that Conquests take place, then trying to deny that Israel should exist: Palestinians first left Israel voluntarily, not through force, then the Israeli Armies defeated any number of neighboring Islamic nations successively to maintain their national sovereignity. A belief in the practice of Conquest accepted, so must be the existence of Israel in fact. The national leader rants the stale claim that Palestinians should have their land back, after the Israeli nation has increased the Capital worth of the land by a estimate factor of 22 times since the Palestinians held it. His rant against Israeli violence totally ignores the element of Palestinian terrorism against Israeli citizens from the beginning.
Our American President also brings consternation to the hearts of most Americans, already undergoing a four-Year War with over 2600 American Dead without either Goal definition or End in signt. Another military altercation will induce insufficient military assets, which lack occurs mainly due to the current Administration refusal to raise adequate military levies, or provide the base level weaponry necessary for the type of Combat to be faced. The American President, under these conditions, replys to the Iranian Letter in the manner most calculated to insult Iranian national sentiment and the Islamic World.
The only serenity Americans can enjoy lies in the knowledge the Iranians will not stop the flow of Oil, as long as the Price of Oil is high. The Iranian President seeks recognition in the world of Islam, and the American President desires Popular Support by his Cowboy posturing in the face of foreign complaint of American behavior. The trouble comes from the fact that neither the American people or the Islamic World gains anything from this, except for higher Living Costs and delays of national goals. lgl
Concerned Citizens should provide the Iranian President with historical evidence that the Holecaust did occur, this Author grew up being cared for by two Displaced Persons who were Survivors of Auschwitz. The Iranian President also makes contradictory statements, first admitting that Conquests take place, then trying to deny that Israel should exist: Palestinians first left Israel voluntarily, not through force, then the Israeli Armies defeated any number of neighboring Islamic nations successively to maintain their national sovereignity. A belief in the practice of Conquest accepted, so must be the existence of Israel in fact. The national leader rants the stale claim that Palestinians should have their land back, after the Israeli nation has increased the Capital worth of the land by a estimate factor of 22 times since the Palestinians held it. His rant against Israeli violence totally ignores the element of Palestinian terrorism against Israeli citizens from the beginning.
Our American President also brings consternation to the hearts of most Americans, already undergoing a four-Year War with over 2600 American Dead without either Goal definition or End in signt. Another military altercation will induce insufficient military assets, which lack occurs mainly due to the current Administration refusal to raise adequate military levies, or provide the base level weaponry necessary for the type of Combat to be faced. The American President, under these conditions, replys to the Iranian Letter in the manner most calculated to insult Iranian national sentiment and the Islamic World.
The only serenity Americans can enjoy lies in the knowledge the Iranians will not stop the flow of Oil, as long as the Price of Oil is high. The Iranian President seeks recognition in the world of Islam, and the American President desires Popular Support by his Cowboy posturing in the face of foreign complaint of American behavior. The trouble comes from the fact that neither the American people or the Islamic World gains anything from this, except for higher Living Costs and delays of national goals. lgl
Monday, May 08, 2006
Iranian Letter
The content of the Iranian Letter is as yet unknown to the Public, but it brings contemplation of the possible scenarios which this first step in diplomacy could engender. Several venues may possibly open, and for the purpose of diplomatic courtesy, a quick response should be rendered. Belligerience in the Letter need not be answered by corresponding rheturic. The Bush administration must above all, send a message of reasonable initiative.
This Author would suggest an international forum, now that Iran has expressed a Right to withdraw from the current Nuclear Proliferation Treaty, based on the sovereign national interests of the Nations involved. I would call for a International forum and Treaty on Nuclear Waste issues, calling for a specific set of Interest resolutions. A good starting point would be the following:
1) Ban on any nuclear development project without a projected Nuclear Waste Schedule Study.
2) The Study must clearly outline the total amount of nuclear waste which the Project is estimated to produce per year by separate levels of radioactivity, the planned methodology for storage of such nuclear wastes, and the Costs of such confinement in Storage facilities.
3) The forum and Treaty should discuss and set Standards mandatory on all Parties for the safe management of nuclear facilities, and the Nuclear waste management necessary for their operation.
4) The Nuclear Waste Treaty should include the Provision that the International Community be granted the Right to intervene to forestall unsafe operation at any level from nuclear Research, nuclear plant management, to nuclear waste storage.
5) International intervention by the International Community could take any form up to and including International assumption of control of said nuclear facilities.
6) The Treaty would outline a methodology by which nuclear development can be forbidden by the International Community, if the Nuclear Waste Schedule Study is deemed insufficient to protect the National or International Communities from contamination. lgl
This Author would suggest an international forum, now that Iran has expressed a Right to withdraw from the current Nuclear Proliferation Treaty, based on the sovereign national interests of the Nations involved. I would call for a International forum and Treaty on Nuclear Waste issues, calling for a specific set of Interest resolutions. A good starting point would be the following:
1) Ban on any nuclear development project without a projected Nuclear Waste Schedule Study.
2) The Study must clearly outline the total amount of nuclear waste which the Project is estimated to produce per year by separate levels of radioactivity, the planned methodology for storage of such nuclear wastes, and the Costs of such confinement in Storage facilities.
3) The forum and Treaty should discuss and set Standards mandatory on all Parties for the safe management of nuclear facilities, and the Nuclear waste management necessary for their operation.
4) The Nuclear Waste Treaty should include the Provision that the International Community be granted the Right to intervene to forestall unsafe operation at any level from nuclear Research, nuclear plant management, to nuclear waste storage.
5) International intervention by the International Community could take any form up to and including International assumption of control of said nuclear facilities.
6) The Treaty would outline a methodology by which nuclear development can be forbidden by the International Community, if the Nuclear Waste Schedule Study is deemed insufficient to protect the National or International Communities from contamination. lgl
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