Monthly Archives: April 2011

The popping of the Chinese bubble?

With all the talk of inflation, China is experiencing a deflation problem. Marketwatch reports:

China is urging major supermarkets to boost vegetable sales and encouraging farmers to bypass middlemen and market produce directly, in a bid to curb a steep slide in prices that is hurting farmers’ incomes, the Ministry of Commerce said in a statement.

Twelve major supermarkets, including Wumart Stores Inc., have agreed to boost sales, the ministry said. The China Daily newspaper said Thursday Wal-Mart Stores Inc. and Carrefour SA are also involved in the effort.

The ministry has also set up a “work group” to maintain prices at a “reasonable” level.

Its statement Wednesday underscores the difficulties the government faces in controlling volatile prices. The impact of an official push last year to raise vegetable output appears to be unraveling now, amid overproduction and clogged distribution lines.

Vegetable prices have fallen 21% in a month and 5.9% from a week ago, the ministry said.

The sharpest declines were seen in green pepper, which fell 20.9% from a week ago, and cabbage, chili pepper and lettuce, which fell 12%, 8.9% and 8.1% respectively.

In contrast, grain, pork, beef, metals and rubber all continued to post small increases of between 0.2% and 1.7% from a week ago.

Last year, the Ministry of Agriculture pushed farmers to raise vegetable acreage by 7% and production by 7.5%, following almost three years of little to no growth in the sector.

The directive was part of wider efforts, including price caps on cooking oil and flour, to curb a surge in food prices.

Worldwide commodity inflation has been driven, in part, by demand from China. Are these price corrections the first sign that the Chinese bubble has popped and that inflation will turn to deflation as Chinese demand evaporates?

Advertisements

Sovereign debt crisis hits record levels. Preview of United States?

A quick look at the charts shows the sovereign debt crisis has hit record levels along with European interest rates:

Greece 10-year yield:

Ireland 10-year yield:

Portugal 10-year yield:

With 10-year interest rates up at 14.9, 10.5, and 9.5 percent (and two-year rates even higher in many cases), it is hard to see how these countries can afford to pay these rates. If the United States were paying a 10% interest rate with debt about 90 percent of GDP, 9 percent of GDP and about a third of federal spending would go just to paying interest on the debt. In Greece, where debt is about 130 percent of GDP, the government is spending about 19.4 percent of GDP on interest. This is clearly unsustainable, which is why everybody expects these countries to “restructure” their debts, a euphemism for defaulting and paying back less than they owe. This expectation is a self-fulfilling prophecy because it pushes rates even higher.

With the situation in the United States only marginally better, how long before rates rise here and the U.S. defaults? Best to cut spending now, when we have a choice, than later when interest rates rise and the government has to divert spending to interest payments.

New website. To announce new book on May 2.

Been very busy over here at ThePathToTyranny working on my new website. MichaelENewton.com is now up and running and ready for expansion. I will still be blogging here at thepathtotyranny.wordpress.com, so no need to change your bookmarks of subscription if you follow me here.

On that note, I will be announcing my new book on Monday May 2 at noon Eastern time (plus or minus a few minutes). As I’ve mentioned many times, this new book will be about the competing ideologies of the American Revolution. God willing, the book will be out this July (or maybe early August).

So watch your email, facebook, twitter, or my new website on May 2 for details on my upcoming book.

Obama’s Plan for Automatic Tax Increases (via Conservatives on Fire)

Must read information from Conservatives on Fire. We can’t let the neo-liberals continue their tax and spend policies.

Did you know that Obama had a plan to increase taxes automatically? I didn’t know about Obama’s plan. Apparently the MSM doesn’t know or doesn’t care. Worst of all, it would seem that our Republican’s in Washington are also unaware of Obama’s plan and that makes me FURIOUS! Yesterday I received an E-mail from my friend Pat Slattery of The Free Market Project. Here is how Pat’s message began: We’ve got the bastard now!  James Howe pointed Obama’s … Read More

via Conservatives on Fire

Obama’s speech proves that Fox News has won!

The great James Taranto debates with himself about what word Obama and the Democrats will use to push their budget, which will include tax increases. Taranto writes:

The Washington Post reports that Obama will give a speech tomorrow at George Washington University “promoting a bipartisan approach pioneered by an independent presidential commission” whose recommendations he had ignored until now…

….Our guess is that the mantra will be “balance” rather than “fairness”…

…Whereas “fairness” is a readily identifiable code word for socialism, “balance”–as in “a balanced budget”–connotes living within one’s means.

If Obama and the Democrats have to choose between fair and balanced, clearly Fox News’ fair and balanced motto has already won.

Windfall profit tax on ex-government officials

For the second time in three days, Glenn Reynolds of Instapundit mentioned the idea of a “50% surtax on the earnings of former government officials.”

On April 10, 2011:

SO OBAMA’S PEOPLE ARE TALKING TAX INCREASES AGAIN. Here’s my proposal: A 50% surtax on anything earned within five years after leaving the federal government, above whatever the federal salary was. Leave a $150K job at the White House, take a $1M job with Goldman, Sachs, pay a $425K surtax. Some House Republican should add this to a bill and watch the Dems react.

Then on April 12, 2011:

FORGET JOHN GALT, WHO IS PETER ORSZAG? Peter Suderman writes: “Here’s my answer to the question: He’s a pretty-boy pencil pusher whose business, as the top budget brainiac in the administration, was to mislead the public about the budget. . . . Ultimately, it doesn’t really matter what Orzag is doing for Citibank. His primarily job duties are intangible. Mostly it seems he’s there to cast his sexy geek-boy light on the institution and serve as a conduit to Washington’s power centers.”

Seems like another good argument for my 50% surtax on the earnings of former government officials. After all, at least half of Orszag’s value to Citibank comes from his prior government service. Why shouldn’t the taxpayers claw some of that back? Shared sacrifice, dude. . . .

While I almost always oppose taxes, I might be able to get behind this one. However, I don’t like the idea of a surtax. I think it should be called a windfall profit tax.

Mother Earth to get rights. Can I file a lawsuit against her?

The United Nations has a plan to give Mother Earth the same rights as people:

Bolivia will this month table a draft United Nations treaty giving “Mother Earth” the same rights as humans — having just passed a domestic law that does the same for bugs, trees and all other natural things in the South American country…

…It also establishes a Ministry of Mother Earth, and provides the planet with an ombudsman whose job is to hear nature’s complaints as voiced by activist and other groups, including the state.

Presumably, these “activist and other groups” will sue corporations and individuals to stop Earth-harming activity and also sue for damages. So, can we sue these same groups for damages Mother Earth does to us (earthquakes, hurricanes, tornadoes, etc.)?