Culture:
Philippines
November 19, 2008
As the tribe disappeared in the rearview mirror, I realized that soon they would disappear forever. Did that mean little Jonus would die, never having attended school? Lorenzo would surely be one of the first to go. Then who would be the leader of the tiny enclave that would be left? Would people like Elicio come and exploit them further?
Opinion
News Flash: Obama hypnotizes Zinn
November 19, 2008
The tens of thousands of readers who look to Zinn as a trusted voice of wisdom and reason are being dangerously misled by an article that omits the reality that every indication points to Barack Obama doing the exact opposite of what Zinn writes.
Opinion
Some things are bigger than any of us
Some things in life are bigger than any of us. The anti-slavery movement recognized this. Today, the entire planet is enslaved…to profit-seeking corporations and the corrupt politicians they own. Are this generation’s abolitionists ready to step up and create change?
Burma
November 14, 2008
Writer Antonio Graceffo has become the target of a disinformation campaign by the ruling junta in Burma for opposing the oppressive regime.
Opinion
November 14, 2008
In my younger days, I considered the Village Voice to be required reading. But—like The Nation, Mother Jones, The Progressive, and so many other once useful publications—I no longer find the Voice to be relevant or remotely radical. However, it’s free in NYC and I ride the subways. Thus, I’ll sometimes grab a copy to peruse as I navigate the subterranean tunnels of transportation. I end up regretting this move…every single time.
Opinion
November 12, 2008
As you know, the Empire has selected a new emperor. The Mafia has chosen a new don. The corporation has hired a new CEO. Are you brimming with hope yet? Read on…
Analysis
Israel, America & Iran: A Wiser Path
November 11, 2008
The best thing that could happen to Israel would be a rapprochement between the U.S. and Iran.
Opinion
November 11, 2008
Note to those striving for enduring
social change: It's time to not be nice.
Culture/Language
A Cast of a Thousand Characters
Learning to Read Chinese
November 11, 2008
Learning to read Chinese means memorizing one or more characters for every single piece of vocabulary in your head. The characters are based on over a hundred base characters. So, after a while, you can see a new character and guess that it has something to do with talking or driving or is esoterically related to the heart or an open door, but for the most part, it is pure memorization. The Chinese language is like an epic movie, starring a cast of thousands of characters.
Perspective: Economy
Effects of U.S. Financial System Felt around the Globe
Global Economy Shudders as Federal Reserve System Approaches Theoretical Collapse
Monday, October 6, 2008
The global economy continues to shudder under the impact of the U.S. financial crisis. Reuters reports that "From Iceland to Italy, officials scrambled to contain the fallout from the deepest financial crisis since the 1930s.... European banks have been hit hard by the fallout from a crisis which began in the United States when the housing market collapsed and bad mortgage debts multiplied." Germany offered a blanket deposit guarantee to boost consumer confidence and help prevent a run on the banks. Italy revived talk of a bank bailout similar to what has been done in the U.S. As the market dropped this week in Europe, banks pumped more money and credit into the system.
Meanwhile, the New York Times reports that "American consumers are pulling back on their spending, all but guaranteeing that the economic situation will get worse before it gets better."
One might think that saving and refraining from spending money one does not have would be only wise policy for individuals, and thus, for the overall economy. But a "strong" economy, under the Federal Reserve system, is measured by how much people are spending money they don't have.
To produce "money", central banks under the fractional reserve system simply conjur paper bills into existence and loan them out to banks. Those banks then are only required to have ten percent of depositor's money on hand (or "in reserve") at any given time. So with ten thousand dollars in reserves, a bank may loan out $100,000, including to other banks. Those banks may then repeat the cycle, creating more money, usually in the form of credit, out of nothing.
What's more, private central banks like the Federal Reserve charge interest on loans made. When more U.S. currency is printed, it's not usually thought of as a "loan", but that's essentially what it is. The U.S. government prints government bonds, which are "traded" for Federal Reserve Notes of the same total value. But this money is loaned out to the banks and then to consumers, an interest requirement is attached, payable not to the government, but to the central bank.
The principal of the loan equals the total amount of currency in circulation. What this means is that to pay off the total federal debt would require every dollar to be removed from circulation. Ergo, there would be no monetary notes left to pay the interest. The interest is paid in the form of borrowers paying back to the banks for something of real value for foreclosures on loans made by creating paper money out of thin air.
When people conserve by consuming less and saving more money, it removes those dollars from circulation. This means banks don't have that money on deposit to to create even more money out of nothing, which is deemed bad for the economy. When consumer confidence is down (meaning people aren't spending as much), banks lower interest rates to encourage more people to borrow. By loaning more, inflation occurs as more money is invented into circulation. This in turn results in a raise in the cost of consumer goods, translating into less buying power per dollar. The health economy is measured under the present financial system by the continuation of this cycle.
Naturally, this completely absurd system is totally unsustainable. The U.S. economy is beginning to see the early tremors of the Federal Reserve system nearing its theoretical limit.
No doubt, this is well recognized amongst the political and financial elite. The only question is how to replace the Federal Reserve system once it becomes clear that the illusory bubble of an economy it results in with another similar system designed to transfer real wealth from the masses to the relatively small number of financial elites.
One possible solution there have been some indications may be being considered would be the creation of a single new currency under a North American Union trade zone developed as an extension of NAFTA. The latest bailout bill was proposed by the banks themselves and are designed merely to keep the bubble afloat for a while longer rather than addressing the real root issues and causes of the present financial crisis.
