Secretary of Labor of new Obama Administration starting in 2013

[SouthAmerica]

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November 26, 2012

SouthAmerica: The thread “Secretary of Labor of new Obama Administration starting in 2013” has been moved from the economics forum to the “Politics & Religion” forum.

This thread is about economist Richard D. Wolf, well known for his work on Marxian economics – and I added to this thread his excellent and informative lectures about Marxian economics.

If I had to guess which moderator moved this thread from the “Economics” forum to the “Politics & Religion” forum I would guess that Joe did it, because he is more of an IT person than anything else.

It is obvious to me that Joe did not check the content of that thread before he moved it, but I just wonder if Joe thinks that “Marxian economics” is a subject that is related to politics or to religion?

I have no idea why anyone using common sense would move this thread from the economics forum to the politics & religion forum? – the subject of that thread “Marxian economics” gives a clear clue to the moderator that it is about economics and not about religion.


Forum Economics
Moderated by Joe, Morganist, TGregg


Forum Politics & Religion
Moderated by Joe


*****


Joe probably heard what Karl Marx said about religion, and he thought “Marxian economics” is some kind of religion that gives opium to the people.

Hah, hah, hah...


Marx and religion


Marx’s most famous statement about religion comes from a critique of Hegel’s Philosophy of Law:

Religious distress is at the same time the expression of real distress and the protest against real distress. Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people.

The abolition of religion as the illusory happiness of the people is required for their real happiness. The demand to give up the illusion about its condition is the demand to give up a condition, which needs illusions.1

This is often misunderstood, because the full passage is not used. The quote is presented dishonestly by most people as 'Religion is the sigh of the oppressed creature...' leaving out the 'heart of a heartless world.' This is more a critique of society that has become heartless and is even a partial validation of religion that it tries to become its heart. In spite of his dislike towards religion, Marx did not make religion the primary enemy of his work and thoughts; if he had regarded religion as a more serious enemy than would have devoted more time on it.

In the above quotation Marx is saying that religion’s purpose is to create illusory fantasies for the poor. Economic realities prevent them from finding true happiness in this life, so religion tells them that this is OK because they will find true happiness in the next life. Although this is a criticism of religion, Marx is not without sympathy: people are in distress and religion provides solace, just as people who are physically injured receive relief from opiate-based drugs.


***

1 Critique of Hegel’s Philosophy of Right, K Marx.


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[Arnie]

Whoever moved it, did the right thing.

 

[jem]

the... "minimum profit" level becomes a much higher threshold to cross as govt starts taxing and regulating.

we see that former marxist countries like China and the USSR... start to prosper as they adopt the understanding that to make it in the world economy they must compete.

The problem with marxist ideas is that they can't compete in the real world.

Quote from SouthAmerica:

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November 25, 2012

SouthAmerica: On my article published at Brazzil magazine in September 2006 I said the following: “...Technology Changed Everything - Right now, we are in the middle of a historical turning point. In the last few years we had a revolution in technology, and today we can do things that were not viable only two years ago. …”


Brazzil Magazine - September 06, 2006
“While the American Dream Is Outsourced Brazil Drives the World into the Future”
Written by Ricardo C. Amaral
http://www.brazzil.com/component/content/article/171-september-2006/9684.html

...On a daily basis, the lifeline of the American economy is being exported overseas - including its R&D, American "know how" and with it the potential of future innovations. Everybody knows that this is going on, but still there is a major disconnect between the perception of what people think is happening and the actual speed of this process and economic revolution.

To help us understand what is happening today we need to take a close look at two giants of economic thought.

First, John Maynard Keynes, a British economist who lived from 1883 to 1946 - considered by many people to be the greatest economist of the last century. His Keynesian Economics is an economic theory stating that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.

Any government that adopts Keynesian economics believes it is the government's job to smooth out the bumps in business cycles. Intervention would come in the form of government spending and tax breaks in order to stimulate the economy, and government spending cuts and tax hikes in good times, in order to curb inflation.

Keynesian theory had its origins in his passionate attachment to the free market and Keynes would be right at home in today's market-driven, free trade-oriented world.

In my opinion, John Maynard Keynes can be considered the most influential economist in the last 70 years in relation to the development of the major industrial economies in the world. He would be number one on my list of influential economists up to 2005.

Second, but in the beginning of the new millennium - from 2006 on - the number one position of the most influential economist belongs to another outstanding economist: Joseph A. Schumpeter a giant in the history of economic thought. In a very short period, almost overnight, Schumpeter became the most relevant and important economist for the 21st century.

Joseph A. Schumpeter, an Austrian economist who lived from 1883 to 1950 - his economic theory of "creative destruction" will have the greatest economic impact on countries around the world in the future, and will help explain why globalization will speed up and will rearrange the global economy on the coming years.

In 1983, Peter Drucker wrote the following on "Modern Prophets" about Schumpeter's "creative destruction" economic theory: "Schumpeter insisted that, innovation - that is, entrepreneurship that moves resources from old and obsolescent to new and more productive employments - is the very essence of economics and most certainly of a modern economy.

Schumpeter's Economic Development does what neither the classical economists nor Marx nor Keynes was able to do: It makes profit fulfill an economic function. In the economy of change and innovation, profit, in contrast to Marx and his theory, is not a Mehrwert, a "surplus value" stolen from the workers. On the contrary, it is the only source of jobs for workers and of labor income.

The theory of economic development shows that no one except the innovator makes a genuine "profit"; and the innovator's profit is always quite short-lived. But innovation in Schumpeter's famous phrase is also "creative destruction." It makes obsolete yesterday's capital equipment and capital investment. The more an economy progresses, the more capital formation will it therefore need.

Thus what the classical economists - or the accountant or the stock exchange - considers "profit" is a genuine cost, the cost of staying in business, the cost of a future in which nothing is predictable except that today's profitable business will become tomorrow's white elephant. Thus, capital formation and productivity are needed to maintain the wealth-producing capacity of the economy and, above all, to maintain today's jobs and to create tomorrow's jobs.

Schumpeter's "innovator" with his "creative destruction" is the only theory so far to explain why there is something we call "profit." The classical economists very well knew that their theory did not give any rationale for profit. Indeed, in the equilibrium economics of a closed economic system there is no place for profit, no justification for it, no explanation of it. If profit is, however, a genuine cost, and especially if profit is the only way to maintain jobs and to create new ones, then capitalism becomes again a moral system.

The question in Schumpeter's economics is always, is there sufficient profit? Is there adequate capital formation to provide for the costs of the future, the costs of staying in business, the costs of "creative destruction"?

The basic question of economic theory and economic policy, especially in highly developed countries, is clearly: How can capital formation and productivity be maintained so that rapid technological change as well as employment can be sustained? What is the minimum profit needed to defray the costs of the future? What is the minimum profit needed, above all, to maintain jobs and to create new ones?"


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[SouthAmerica]

Quote from jem:

the... "minimum profit" level becomes a much higher threshold to cross as govt starts taxing and regulating.

we see that former marxist countries like China and the USSR... start to prosper as they adopt the understanding that to make it in the world economy they must compete.

The problem with marxist ideas is that they can't compete in the real world.

November 26, 2012

SouthAmerica: Reply to Jem

Jem, I just watched session 1 of Richard D Wolff 's seminar about “Marxian Economics" and I will watch the other 3 sessions one at the time as I have time.

Richard D Wolff shows that “Marxian Economics" was a critique of the capitalist system of his time and not about the taboo subject that we associate today with communism or socialism.

I can see why Americans would want to hide and deny as long as they can about one of the subjects that Richard D Wolff covers on his seminar – he gives the historical background why wages were higher in the United States for the last 200 years, and why the party is over and wages are not going to go up in the United States since global reality caught up with the American economic and social system.

Americans are a very docile herd of people who is adjusting very well to a fast declining standard of living, and to a future as a bunch of serfs, and peasants living in the new global economic and financial system of the 21st century.

Remember the book by John Naisbitt - "China's Megatrends: The 8 Pillars of a New Society" - since that book gives profound insights about all the transformations that have been going on in China's economic and social systems.

His book serves as a guide and a road map to a totally new economic and social system that is still a work in progress. But so far this new system has delivered outstanding results for China and the Chinese population; this new complex system that has been so successful in lifting about 400 million people from poverty in China, and will continue lifting hundreds of millions of new people out of poverty in the coming years.

China has been giving a lesson about capitalism to the United States in every sense for many years and today China is the master and the United States is becoming the serf.
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[jem]

please don't answer with read the book or watch the video.

address the issue.

China tried and failed with a centrally planned command economy.
So did the whole eastern block.

a. why would anyone ever expect a centrally planed economy to work in the long run?

b. why would anyone ever expect a command economy to work with people who are free not to work?

seriously who could that be possible?

work for crap wages... or don't work and get paid the same?
you can't have free people and marxism in the real world.

Quote from SouthAmerica:

November 26, 2012

SouthAmerica: Reply to Jem

Jem, I just watched session 1 of Richard D Wolff 's seminar about “Marxian Economics" and I will watch the other 3 sessions one at the time as I have time.

Richard D Wolff shows that “Marxian Economics" was a critique of the capitalist system of his time and not about the taboo subject that we associate today with communism or socialism.

I can see why Americans would want to hide and deny as long as they can about one of the subjects that Richard D Wolff covers on his seminar – he gives the historical background why wages were higher in the United States for the last 200 years, and why the party is over and wages are not going to go up in the United States since global reality caught up with the American economic and social system.

Americans are a very docile herd of people who is adjusting very well to a fast declining standard of living, and to a future as a bunch of serfs, and peasants living in the new global economic and financial system of the 21st century.

Remember the book by John Naisbitt - "China's Megatrends: The 8 Pillars of a New Society" - since that book gives profound insights about all the transformations that have been going on in China's economic and social systems.

His book serves as a guide and a road map to a totally new economic and social system that is still a work in progress. But so far this new system has delivered outstanding results for China and the Chinese population; this new complex system that has been so successful in lifting about 400 million people from poverty in China, and will continue lifting hundreds of millions of new people out of poverty in the coming years.

China has been giving a lesson about capitalism to the United States in every sense for many years and today China is the master and the United States is becoming the serf.
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[SouthAmerica]

Quote from jem:

please don't answer with read the book or watch the video.

address the issue.

China tried and failed with a centrally planned command economy.
So did the whole eastern block.

a. why would anyone ever expect a centrally planed economy to work in the long run?

November 27, 2012

SouthAmerica: Jem, here is the reality today in a nutshell:

You seem to be in complete denial, and you don't want to confront the real world of the 21st century – living in the past is not going to bring back the glory days of the US economic and financial system.

In the last 30 years China lifted the boats of almost 400 million people to a middle class, and at the same time the US economic and financial system sunk the boats of almost 50 million Americans to a life of food stamp poverty and despair.

China must be doing something right with the new economic system that they are developing in China one step at the time – it is a work in progress.

I understand the American mindset where everything has to be "black or white" and there's no shades in between.

Anyway,....

Quoting from this article: “It is symptomatic of the national condition of the United States that the worst humiliation ever suffered by it as a nation, and by a US president personally, passed almost without comment last week. I refer to the November 20 announcement at a summit meeting in Phnom Penh that 15 Asian nations, comprising half the world's population, would form a Regional Comprehensive Economic Partnership excluding the United States.

President Barack Obama attended the summit to sell a US-based Trans-Pacific Partnership excluding China. He didn't. The American led-partnership became a party to which no-one came.”


*****


Asia Times – November 27, 2012

“Post-US world born in Phnom Penh”
By Spengler
http://www.atimes.com/atimes/Global_Economy/NK27Dj02.html

It is symptomatic of the national condition of the United States that the worst humiliation ever suffered by it as a nation, and by a US president personally, passed almost without comment last week. I refer to the November 20 announcement at a summit meeting in Phnom Penh that 15 Asian nations, comprising half the world's population, would form a Regional Comprehensive Economic Partnership excluding the United States.

President Barack Obama attended the summit to sell a US-based Trans-Pacific Partnership excluding China. He didn't. The American led-partnership became a party to which no-one came.

Instead, the Association of Southeast Asian Nations, plus China, India, Japan, South Korea, Australia and New Zealand, will form a club and leave out the United States. As 3 billion Asians become prosperous, interest fades in the prospective contribution of 300 million Americans - especially when those Americans decline to take risks on new technologies. America's great economic strength, namely its capacity to innovate, exists mainly in memory four years after the 2008 economic crisis.

A minor issue in the election campaign, the Trans-Pacific Partnership initiative was the object of enormous hype on the policy circuit. Salon.com enthused on October 23,

“This agreement is a core part of the "Asia pivot" that has occupied the activities of think tanks and policymakers in Washington but remained hidden by the tinsel and confetti of the election. But more than any other policy, the trends the TPP represents could restructure American foreign relations, and potentially the economy itself.”

As it happened, this grand, game-changing vision mattered only to the sad, strange people who concoct policy in the bowels of the Obama administration. America's relative importance is fading.

To put these matters in context: the exports of Asian countries have risen more than 20% from their peak before the 2008 economic crisis, while Europe's exports have fallen by more than 20%. American exports have risen marginally (by about 4%) from their pre-2008 peak.

Exhibit 1: Asian, European and US exports (check article to see the chart)

China's exports to Asia, meanwhile, have jumped 50% since their pre-crisis peak, while exports to the United States have risen by about 15%. At US$90 billion, Chinese exports to Asia are three times the country's exports to the United States.

After months and dire (and entirely wrong) predictions that China's economy faces a hard landing, it is evident that China will have no hard landing, nor indeed any landing at all. Domestic consumption as well as exports to Asia are both running nearly 20% ahead of last year's levels, compensating for weakness in certain export markets and the construction sector. Exports to the moribund American economy are stagnant.

Exhibit 2: China's exports to Asia vs USA (check article to see the chart)

In 2002, China imported five times as much from Asia as it did from the United States. Now it imports 10 times as much from Asia as from the US.

Exhibit 3: Chinese imports from the US and Asia (check article to see the chart)

Following the trade patterns, Asian currencies began trading more closely with China's renminbi than with the American dollar. Arvind Subramanian and Martin Kessler wrote in an October 2012 study for the Peterson Institute:

A country's rise to economic dominance tends to be accompanied by its currency becoming a reference point, with other currencies tracking it implicitly or explicitly. For a sample comprising emerging market economies, we show that in the last two years, the renminbi (RMB/yuan) has increasingly become a reference currency which we define as one which exhibits a high degree of co-movement (CMC) with other currencies.

In East Asia, there is already a RMB bloc, because the RMB has become the dominant reference currency, eclipsing the dollar, which is a historic development. In this region, 7 currencies out of 10 co-move more closely with the RMB than with the dollar, with the average value of the CMC relative to the RMB being 40% greater than that for the dollar. We find that co-movements with a reference currency, especially for the RMB, are associated with trade integration.

We draw some lessons for the prospects for the RMB bloc to move beyond Asia based on a comparison of the RMB's situation today and that of the Japanese yen in the early 1990s. If trade were the sole driver, a more global RMB bloc could emerge by the mid-2030s but complementary reforms of the financial and external sector could considerably expedite the process.

All of this is well known and exhaustively discussed. The question is what, if anything, the United States will do about it.

Where does the United States have a competitive advantage? Apart from commercial aircraft, power-generating equipment, and agriculture, it has few areas of real industrial pre-eminence. Cheap natural gas helps low-value-added industries such as fertilizer, but the US is lagging in the industrial space.

Four years ago, when Francesco Sisci and I proposed a Sino-American monetary agreement as an anchor for trade integration, the US still dominated the nuclear power plant industry. With the sale of the Westinghouse nuclear power business to Toshiba, and Toshiba's joint ventures with China to build power plants locally, that advantage has evaporated.

The problem is that Americans have stopped investing in the sort of high-tech, high-value-added industries that produce the manufactures that Asia requires. Manufacturers' capital goods orders are 38% below the 1999 peak after taking inflation into account. And venture capital allocations for high-tech manufacturing have dried up.

Exhibit 4: Venture capital allocations for export-related (check article to see the chart)

Exhibit 5: US capital goods orders nearly 40% below 1999 peak in real terms

Without innovation and investment, all the trade agreements that the Washington policy circuit can devise won't help. Neither, it should be added, will an adjustment in exchange rates.

It is hard to fathom just what President Obama had in mind when he arrived in Asia bearing a Trans-Pacific Partnership designed to keep China out. What does the United States have to offer Asians?

It is borrowing $600 billion a year from the rest of the world to finance a $1.2 trillion government debt, most prominently from Japan (China has been a net seller of Treasury securities during the past year).

It is a taker of capital rather than a provider of capital.

It is a major import market but rapidly diminishing in relative importance as intra-Asian trade expands far more rapidly than trade with the United States.

And America's strength as an innovator and incubator of entrepreneurs has diminished drastically since the 2008 crisis, no thanks to the Obama administration, which imposed a steep task on start-up businesses in the form of its healthcare program.

Washington might want to pivot towards Asia. At Phnom Penh, though, Asian leaders in effect invited Obama to pivot the full 360 degrees and go home.


***


Spengler is channeled by David P Goldman. His book How Civilizations Die (and why Islam is Dying, Too) was published by Regnery Press in September 2011. A volume of his essays on culture, religion and economics, It's Not the End of the World - It's Just the End of You, also appeared last fall, from Van Praag Press.


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[jem]

china has abandoned marxist ideas and gone from one of the poorest countries in the world to one that crushed brazil in every economic way.

So why would anyone adopt marxist ideas when they failed so badly

and quick search of China today... I see schools are private, the post office is private, welfare is only for the military.. roads are private, there is little to know public healthcare and income taxes are flat at 10 or 20 percent.

China public sector is a very small part of its GDP now.. while you lefties root for larger and larger Govt sectors...

You have it all ass backwards... ask china.

During carter and now obama administrations the U.S. seems to receive international snub after international failure... yet you fully support our most leftist presidents.

Perhaps you are rooting for America to destroy itself by following your advice.

 

[SouthAmerica]

Quote from jem:

china has abandoned marxist ideas and gone from one of the poorest countries in the world to one that crushed brazil in every economic way.

During carter and now obama administrations the U.S. seems to receive international snub after international failure... yet you fully support our most leftist presidents.

Perhaps you are rooting for America to destroy itself by following your advice.

November 27, 2012

SouthAmerica: Reply to Jem

Brazil and China have been following many of my suggestions that I gave on my articles and following comments to these articles regarding the economy of these countries and their interaction.

You seem to be clueless about what has happened in Brazil in the last 10 years.

Here is how bad Brazil has been doing according to your evaluation:

The economic policies in Brazil has lifted the boats of 40 million people to the middle class. Remember in the same period the United States sunk the boats of almost 50 million people into a life of despair, food stamps and massive poverty all around the country.

In the last 10 years Brazil went from a debtor nation owing billions of US dollars to foreign countries and also debt from the 1980's to the Club of Paris to Brazil's position today - where besides paying all its old debts, Brazil was able to accumulate about US$ 400 billion dollars in foreign reserve currency.

If anything, today Brazil is in terrific shape financially.

On the other hand, the United States went from having a total cumulative debt of US$ 6.2 trillion dollars as of September 30, 2002 to the current total cumulative debt of US$ 16. 3 trillion dollars as of November 27, 2012. (Nothing to write home about.)

In plain English: in the last 10 years the Brazilian economy had real growth year after year in contrast the illusion of an economy that we have had in the United States in the last 10 years were all based on borrowed money – never mind the trillions of US dollars in debt that the Federal reserve is hiding on its balance sheet to keep the illusion going a little longer.

Things are so bad for the United States that today the US owes Brazil US$ 400 billion dollars.

Brazil has a real economy with a GDP of US$ 2.3 trillion dollars for 2011.

The United States has an artificial economy based on debt with a questionable GDP of US$ 15 trillion dollars for 2011.

Jem, you wrote: “Perhaps you are rooting for America to destroy itself...”

I gave up on the US economy and financial system a few years ago - it's beyond repair, and we have “Dumb and Dumber” running the US economy and financial system for many years including the government and the crooks in Wall Street, and they are not going to change any time soon.

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[jem]

actually you all are starting to follow my policy when you started to realize the problem for Brazil was China's peg to the dollar. You were cheerleading china as they were stealing your lunch.

nevertheless after reflection I am sure you will agree China is not now following marxist economic policy.

Quote from SouthAmerica:

November 27, 2012

SouthAmerica: Reply to Jem

Brazil and China have been following many of my suggestions that I gave on my articles and following comments to these articles regarding the economy of these countries and their interaction.

You seem to be clueless about what has happened in Brazil in the last 10 years.

Here is how bad Brazil has been doing according to your evaluation:

The economic policies in Brazil has lifted the boats of 40 million people to the middle class. Remember in the same period the United States sunk the boats of almost 50 million people into a life of despair, food stamps and massive poverty all around the country.

In the last 10 years Brazil went from a debtor nation owing billions of US dollars to foreign countries and also debt from the 1980's to the Club of Paris to Brazil's position today - where besides paying all its old debts, Brazil was able to accumulate about US$ 400 billion dollars in foreign reserve currency.

If anything, today Brazil is in terrific shape financially.

On the other hand, the United States went from having a total cumulative debt of US$ 6.2 trillion dollars as of September 30, 2002 to the current total cumulative debt of US$ 16. 3 trillion dollars as of November 27, 2012. (Nothing to write home about.)

In plain English: in the last 10 years the Brazilian economy had real growth year after year in contrast the illusion of an economy that we have had in the United States in the last 10 years were all based on borrowed money – never mind the trillions of US dollars in debt that the Federal reserve is hiding on its balance sheet to keep the illusion going a little longer.

Things are so bad for the United States that today the US owes Brazil US$ 400 billion dollars.

Brazil has a real economy with a GDP of US$ 2.3 trillion dollars for 2011.

The United States has an artificial economy based on debt with a questionable GDP of US$ 15 trillion dollars for 2011.

Jem, you wrote: “Perhaps you are rooting for America to destroy itself...”

I gave up on the US economy and financial system a few years ago - it's beyond repair, and we have “Dumb and Dumber” running the US economy and financial system for many years including the government and the crooks in Wall Street, and they are not going to change any time soon.

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[SouthAmerica]

Quote from jem:

actually you all are starting to follow my policy when you started to realize the problem for Brazil was China's peg to the dollar.

nevertheless after reflection I am sure you will agree China is not now following marxist economic policy.

November 28, 2012

SouthAmerica: Reply to Jem

Jem, since March 2005 I wrote many articles about “Brazil and China”, and also about the “New Asian Currency” - in the last 8 years between my articles and comments following these articles on this subject there's enough material to publish a book.

Jem, if you read the enclosed article that I wrote in February 2007, and it was published in March 2007 that article would give you a clue about how the Chinese were able to develop their economy in China at such a fast pace in the last 30 years.

Brazzil Magazine - March 2, 2007
“Here Is Why Brazil Should Adopt the New Asian Currency”
Written by Ricardo C. Amaral
http://www.brazzil.com/component/content/article/177-march-2007/9821.html


*****


Jem, China has been transforming its economic system for a few decades and today China is developing a new social/economic system. And regarding China's currency peg to the US dollar – I wrote a lot about that subject in the last 4 years, and here is what I posted on the ET economics forum in October 2010:

Central Banks and the US Dollar
http://www.elitetrader.com/vb/showt...razil+has+to+devalue+its+currency#post2984170

October 17, 2010

SouthAmerica: A lot of people are reading the comments section of an article published on Brazzil magazine, since the discussion moved from the subject of the article politics to the current subject of currency war.

Here is what people are reading about the currency war on Brazzil magazine:

Reply to Joao da Silva
written by Ricardo C. Amaral, October 17, 2010

...The current issue of “The Economist” magazine the main articles are about the current currency war – and they mentioned in one of the articles that the Brazilian currency is overvalued by 42 percent right now.

...The Brazilian government should devalue the Real immediately by 30 percent, and lock in the fixed rate and start a pegged system against a basket of currencies including the Chinese yuan, and the US dollar.

That would be beneficial to the Brazilian economy in many ways since it would reduce costs of manufactured goods made in Brazil, it would make Brazil cheaper for tourists to come from around the world to visit Brazil, and it would give a competitive advantage to Brazil.

The Federal Reserve is going to continue playing the same destabilizing currency game as long as they can get away with new rounds of quantitative easing, because Wall Street has become addicted to cheap money, and they will continue the carry trade in turn blowing bubbles on emerging market economies.

That game will continue for a long time, because the US dollar is the major reserve currency and the United States can continue to printing US dollars to bank its game as long as the international community goes along with this destruction of the value of the US currency. Slowly the US Federal Reserve is turning the US dollar into confetti.

The Chinese also will continue playing their currency game as long as they can get away with it.

Since the Brazilian economy is dependent on what happens to these 2 currencies then Brazil has to adjust, and Brazil has to start playing the same game as the United States and China.

And the way to do that is to devalue the Real immediately by 30 percent and start the new fixed exchange rate system pegged to the US dollar and the Chinese yuan.

Brazil has to move fast to a new system of fixed exchange rate to lock its currency and fluctuate with the other 2 currencies that are very important to the foundations of the Brazilian economy because of the loop – China buys from Brazil – then China sells manufactured products into the US market. Brazil builds massive foreign exchange reserves, and the United States builds massive debt for future generations of Americans.

But in the meantime Brazil needs to spend these reserves and build all the infrastructure that I mentioned on my articles – Brazil can't keep building these foreign exchange reserves like China, because the value of these reserves in the future are going to decline very fast as the value of the US currency is being turned into confetti by the US Federal Reserve. (They are printing US dollars as if the US dollar could be printed to infinite amounts – translation – a situation similar to the value of the German Mark in the early 1920's comes to mind.)


*****


Jem, I never suggested on my posting that the United States become a “Marxist state.”

All I did was to suggest that the new Barack Obama administration should include economist Richard D. Wolf on top of the close circle of economic advisors to the president during his second-term.

Why?

Because the newly elected head of state in China, President Xi Jinping has a doctorate in Marxist theory and ideological education, and he will be around for the next 10 years guiding the main economic competitor of the United States in the coming years.

I also read in one of the business magazines that besides President Xi Jinping the other 6 new members of the Standing Committee of the Politburo are also well versed in “Marxian economics”.

Economist Richard D. Wolf, well known for his work on Marxian economics, would have a better understanding and grasp of what is really happening in China regarding its economy and the direction that China is heading in the coming years.

As I said on my prior posting: we have “Dumb and Dumber” running the US economy and financial system for many years including the government and the crooks in Wall Street, and they are not going to change any time soon.

Since most economists in the United States are clueless about “Marxian economics”, I would not expect an intelligent decision by the US government to include economist Richard D. Wolf on top of the close circle of economic advisors to the president during his second-term. (To have someone close to the president who understand what is happening in China with this new Chinese administration economic policies.)

The alternative it would be to follow also regarding China the US foreign policy that the United States has been following for many years in the Middle East: “Operation Clueless”....


Note: The name "Operation Clueless" is very important in this case, because it defines what the United States is trying to accomplish in the Middle East.

The name “Operation Clueless” is also important, because when you don't have a clue about what you are doing any result it will be O.K.

In a Nutshell: US foreign policy is so incompetent that amounts to nothing more than a very sad JOKE.

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