Bitter Republican Losers for Hillary: Or Why the Neocons Hate Trump

Hillary Clinton is now threatened by her own party leadership, which realizes she could lose the Presidential election to Donald Trump and is, therefore, thinking about replacing her as the party's nominee.

To counter this threat,  the Clinton campaign has come up with an anti-Trump ad, featuring a parade of GOP losers, from Mitt Romney to the egregious warmonger Lindsey Graham, plus other also rans in the Republican presidential nomination contest, JEB, Marco Rubio, and Ted Cruz, all heaping contempt and loathing on their party's presidential candidate.

This raises two questions. Will potential Democrat voters really be swayed by what a bunch of bitter Republicans have to say against their own Party leader? And, more interesting, why do so many of the Republican leadership so hate their own presumptive presidential nominee that they now appear as advocates for their supposed Democratic Party opponent?

The answer to the second question is that for the past 24 years, the Republicans and the Democrats have been two parties with one overriding policy; namely, the destruction of the democratic and sovereign nation state, including America, in a process of universal genocide, the objective being the subordinating of all humanity to corporate rule. But what Donald Trump revealed in a speech on foreign policy delivered at the invitation of the Center for the National Interest, is his intent to trash the entire Neocon Republicrat consensus project.

As one commentator summarized the speech:

To everyone’s surprise... «the Donald» did not have anything to say about his position on various subjects, aimed at satisfying one lobby or another, but instead delivered an analysis of US policy and describing its total overhaul.

According to Trump, it was a fundamental error to have attempted to export by force the Western democratic model to people who had no interest in it. He delivered a criticism of a neo-conservative ideology ...

After having denounced the gigantic human and economic waste of the Neo-conservative policy, for the countries concerned as well as for the United States themselves, he continued with an indirect attack on the «military-industrial complex», blaming the general excess of weapons in the world. There was no mistake – for the first time since the assassination of John Kennedy, a presidential candidate was denouncing the omnipotence of the arms manufacturers, who have eaten up almost all of US industry.
...

With a certain sense of provocation, Donald Trump placed his project for a new foreign policy under the slogan «America First», by reference to the association of the same name which existed before the Second World War. This group remains in peoples’ memories as a Nazi lobby which attempted to prevent the «Land of Freedom» from going to the help of the British, who were under attack by the perpetrators of the anti-Jewish genocide. In reality, «America First», which was indeed diverted from its mission by the US extreme right, was originally a huge association created by the Quakers [who] denounced the World War as a confrontation between imperialist powers, and consequently refused to take part.

And so the adversaries of Donald Trump are presenting him in a false light. He is absolutely not an isolationist like Ron Paul, but a genuine realist.

Donald Trump was not a politician until now, but a real estate promoter, a businessman and a television presenter. This absence of a political past allows him to envisage the future from an entirely new angle, without being bound by any previous engagement. He is a dealmaker, the sort that Europe met in Bernard Tapie in France and Silvio Berlusconi in Italy. Two men not without fault, but who renovated the exercise of power in their own countries by shaking up the ruling classes.

America's ruling class, clearly does not appreciate anyone intent on shaking them up.

Related:

JEB Bush: In November, I will not vote for Donald Trump

Breitbart: New World Order Spox, Barack Obama, "Britain's sovereignty is outdated."

Yahoo.News: First Muslim Mayor of Londonistan

Orrazz.com: David Cameron has no intention of withdrawing his claim that Donald Trump was “divisive, stupid and wrong” to call for a ban on Muslims entering the US, Downing Street has said

The New American: Leaked TTIP Deal to Merge U.S. and EU Triggers Outrage

A Glasgow Primary School Without a Single Scottish Pupil: Proof That Mass Immigration Means Genocide

Daily Mail: May 2, 2016: A Glasgow primary with 222 pupils has no native Scots in the school, it was revealed today.

Annette Street School is pleading for cash to help teach its Roma, Eastern European and Asian children, who don't speak English as a first language. Overall, 181 of the school's 222 pupils are from Romania or Slovakia.

Read More

Image Source

Meantime, in Open Entry America, Mexican kids show their respect for the host nation with obscene shouts and gestures

And in Germany, the Migrant Rape Crisis Worsens.

Related: 

Irish Savant: Luvvies fight for the spoils

'Multicultural society' is an oxymoron. If it's a society it cannot be multicultural and vice versa. Because under multiculturalism each race/culture (excluding of course Whites of Christian stock) fights for its own, having little or no concern for the welfare of broader 'society'. Take the current contest for Mayor of London. It's between a Muslim and a Jew, who growl and snarl at one another as they feast on the mangy carcass of what had once been the world's greatest city and the embodiment of the British people. A people who can now but look on helplessly as the spoils of office wait to be dished out by one of the tribalists representing two very different forms of parasite - the brown/black welfare parasites (Sadiq Khan) and the financial parasites of the City (Zac Goldsmith). Read more

How Globalization Enriches the Money Power While Undermining the Prosperity of Almost Everyone Else

Globalization is driven by international corporations seeking what in economics jargon is known as "increasing returns to scale." What "increasing returns to scale" means is an increase in profit margin with increasing market share. A consequence of the increasing returns to scale achieved by some corporations through globalization is the retardation or reversal of economic development in all but the most advanced sectors of the most advanced economies.

How returns increase with scale, i.e., how profit margins expand with market share, is easily understood by considering the case of Microsoft, one of the corporations that has profited mightily from globalization. If Microsoft spends $100 million on upgrading a software package or developing a videogame, the cost to Microsoft of the first copy of that product is $100 million. However, the second copy that Microsoft sells, if delivered over the Internet, costs only pennies. Thus, if the sale price of the software is $100, then the break even point for Microsoft is a million copies. At two million copies, Microsoft has a profit of one hundred percent. At ten million copies, Microsoft has a profit of one thousand percent. That's the magic of increasing returns to scale.

No wonder, then, that the global corporations are willing to do almost anything, including buying the allegiance of governments, to grab a greater share of the global market. Besides software developers, the companies that benefit from increasing returns to scale include: book publishers, movie makers, Internet pornographers, drug manufacturers and the the producers of consumer electronics, household appliances, and cars, all of which have high first-copy development costs.

How globalization affects the middle class of the Third World.
Image source.

Achieving increased returns to scale means having governments in place that will press for the elimination of trade barriers and regulatory regimes that restrict global sales. The result is to crush start-ups and less well capitalized competition throughout the world. The Russians, for example, had serviceable, if clunky cars (and many other products) of their own manufacture prior to the collapse of the Soviet Union. However, after the collapse, domestic industries were hammered as state assets were looted and much of the cash thus realized expended in conspicuous consumption of imports — Mercedes, BMW and other high-end foreign brands. As a result, many of the indigenous domestic industries were destroyed and the workers made redundant, often dying prematurely as a result, while the globalized corporations that destroyed them enjoyed increased returns to scale.

The same dynamics occur wherever global competition is let loose against weak domestic producers, as is occurring in Ukraine under the economically suicidal oligarchy headed by the US and Nazi backed billionaire, Petro Poroshenko. But the damage is not confined to less developed economies. In Europe and North America, for example, globalization has devastated local manufacturers of shoes and shirts, computers and car parts to name but a few of those unable to compete against low-wage Asian sweatshops. Thus, while shareholders in Microsoft, Apple, IBM, GE, and WalMart, to name but a few, have pocketed trillions in capital gains since Bill Clinton and his European counterparts signed the 1994 GATT agreement that kicked off the current round of globalization, workers in the west have suffered falling or stagnant wages, or long-term unemployment as a direct result. Moreover, the impact on Western workers has been greatly exacerbated by mass immigration of cheap labor from the Third World, the other deadly, indeed genocidal, aspect of globalization.

 Thus, throughout the ex-Soviet Union and the Third World, globalization has meant the reversal of economic development. In these countries, the most advance industries have mostly been crushed in the competition with giants of the First World, to be replaced by either sweatshops paying mere pennies an hour, or primary industries, including farming, forestry and mining. In either case, the returns to scale are negative, thus driving a continual reduction in standard of living.  For example, a country may earn foreign income by logging its forests and exporting the products, but as production grows, prime forests are depleted forcing the resort to lower quality timber that yields lower returns on investment in labor, roads, machinery, etc. The same negative return to scale emerge in both agriculture and mining, as the best resources become fully exploited and further expansion of the industry depends on the resort to poorer land or lower grade mines.

The current drive for globalization, thus chiefly serves only one interest: that of the Money Power. To ordinary folk in every country, rich or poor, globalization has proved detrimental to human welfare. Thus now is the time to restore the independence of democratic nation states free from the control of the Money Power and free to develop national economic policies that serve the interests of the people, not those of bankers software billionaires, and sweatshop operators.

Related:

Erik Reinert: How Rich Countries Got Rich . . . and Why Poor Countries Stay Poor

Andy Grove: How America Can Create Jobs

CanSpeccy: Europe, the Perils of Complacency

Plutonomy: Lexical Camouflage for the Crimes of the Rich

Plutonomy is a neologism coined by a Citigroup global strategy group in 2005 to describe a country characterized by massive income and wealth inequality. According to these people, the U.S. is a plutonomy, along with the U.K., Canada and Australia.

But this is an absurd mis-coinage. Plutonomy has two Greek roots: Plutos, wealth, and nomos, rule, so the only logical meaning of the term plutonomy is rule by the rich, analogous to autonomy, meaning self-rule or independence.

But we already have the word plutocracy to describe rule by the rich. So what are these Citigroup bozos up to? If they’d wanted a word that honestly referred to the increasingly gross income inequality of the Western world they would have come up with a Greekified term describing an industrialized nation on track for economic convergence with the Third-World.

Instead they come up with a bogus word and then define it in terms that makes them look like benevolent improvers of the human condition.

Thus, according to Citigroup’s word-bending geniuses, plutonomy arises through technology-driven productivity gains, creative financial innovation, the rule of law, particularly patent law, globalization and mass immigration.

All good stuff, obviously, with an ever-increasing share of national income justly accumulating in the hands of the virtuous innovators and creators.

But here’s another way of describing what Citigroup’s global strategy group inanely refer to as a plutonomy:

Plutonomy, n.

A bum neologism denoting a plutocracy in which the means by which the plutocrats have enriched themselves at the expense of the vast majority are acknowledged only selectively. Most importantly, reference to plutonomy must exclude mention of global wage arbitrage involving the export of jobs and the import of cheap labor, the saving in wages thus achieved accruing to the owners of capital, i.e., the plutocracy.

Factory collapses are a recurring problem in
Bangladesh, the latest claiming 1,127 lives. Image source.

Today, the plutonomocrats at Citigroup, the WSJ, the boring old Globe and Mail, Rupert the pornographerMurdoch’s, London Timesey, etc. have such sway that the deliberate impoverishment of your own compatriots by exporting their jobs to a collapsible garment factory in Bangladesh or an electronics assembly plant with nets to catch suicidal workers seems a completely natural and inevitable process that only a Luddite or a moron would question.

Yet it was only a generation ago that the states designated by the plutonomocrats as the prototypical plutonomies; namely, the US, Britain, Canada and Australia, were quite self-consciously democratic, and in such democratic states, the fact that something enriches the owners of capital is no justification for trashing the income or welfare of 99.99% of the population.

Foxconn factory with nets to catch suicidal workers.Image source.

Astonishingly, to anyone with the slightest historical perspective, trashing the nation to enrich the 0.01% is seen today not only as entirely natural, but even virtuous. And the proof of its virtue is the fact that it makes the rich richer. Oh, and supposedly it’s brings prosperity to the Third World, as if the people of the US, Britain, Canada and Australia elect governments to serve the interests of (a) the hyper-rich and (b) foreigners. (That is, in fact, what they do, but inadvertently.)

So in the transition to plutonomy, the Western states are experiencing not only a profound shift in the conditions of life of the vast majority of the people, but a shift in morality. Christianity is the work of the Devil. The new code is plutonomianism, the basic tenet of which is that whatever adds to the wealth and power of the already rich and powerful is good, whereas democracy, like Christianity, is the work of the Devil, driven by the greed of working people, their anti-immigrant racism, and their vile religious prejudice manifest by adherence to the faith of their fathers

First posted on CanSpeccy.wordpress.com December 27, 2013. 

Trump, Not Keynes, Holds the Key to Economic Recovery in the West

Tony Blair: laughing all the way to the bank 
since leaving office.*

This article, by Mike Whitney in the Unz Review, explains how US (and by extension European) monetary and fiscal policies* saved criminally reckless Western financial institutions from bankruptcy. The method was to provide the bankers with virtually limitless amounts of cash at negative real interest rates, which enabled them to blow a huge stock market bubble that financed their return to solvency. At the same time, Whitney argues, governments were careful to limit the magnitude of monetary stimulus so as to insure no substantial growth in aggregate demand or, therefore, in employment or wages.

On the latter point, Whitney offers the correct Keynesian analysis. But Keynes addressed the problems of a different age, when the US economy was largely self-contained, with external trade amounting to less than 5% of GDP.

Globalization with input factor mobility, i.e., free movement of labor from the Third World to the First World, free movement of capital and technology from the First World to the Third World, and free movement of the products of sweatshop labor from the Third World to the First World means lower wages and higher unemployment in the First World, which in turn shrink aggregate demand resulting in even lower wages and higher unemployment.

The Keynesian solution to shrinking demand and rising unemployment was deficit spending to raise aggregate demand and hence employment and wages. But today, in an era of globalization to the max, the effect of deficit spending is primarily to suck in more cheap Chinese shoes and shirts, computers and car parts, all of which Americans and others in the First World used to make for one another. Add in the effects of computerization, automation, robotization and insane student debt and the outlook for employment and wages for ordinary folks becomes, as is now apparent, bleak indeed.

There are two measures to improve the welfare of the proletariat. One is massive infrastructure spending, since this generates work that cannot be off-shored and is still largely beyond the scope of automation and robotization. The other is a return to free trade without input factor mobility, which as David Ricardo explained in his 1817 classic, “On the Principles of Political Economy and Taxation” yields the benefit of “Comparative Cost”, or “Comparative Advantage” as it is now known, i.e., the benefit of increased total output and lower costs than if each nation tried to produce in isolation.

These,  as I explained here, in a post that was rejected for publication in the Unz Review, are the economic policies espoused by Donald Trump, i.e., restoration of the border to limit influx of labor from the Third World, and the imposition of tariffs to restrict influx of products of foreign sweatshops financed with First World capital and technology, thereby achieving the benefits of comparative advantage through international trade, and last but not least a massive infrastructure renewal project.

———

* Said policies are administered by governments largely owned by said criminally reckless financial institutions, for example, the great American banking firm of J.P. Morgan, which took former UK Prime Minister Tony Blair on as an "adviser" for a fee of two million pounds per year. This is in accordance with the Western tradition of political bribery, which as explained by Thomas Macaulay (The History of England (1848)), involves payments made after the bribed individual leaves office, an arrangement that is entirely legal, and one that no politician would ever think of changing.

Britain's Treason Party for Globalization Attacks Donald Trump

Of the proponents of globalization, Jon Rappoport writes:

They intend to create one integrated planet under a top-down, locked-down political and economic management system, backed up by coercion.

In order to achieve this goal ... the notion of separate nations must be eradicated.

The primary goal of the provoked chaos in the Middle East and parts of Africa is: redraw that whole territory and push waves of immigrants into the West, primarily Europe. [thereby drowning] traditional cultures and ethnic identities [to create] a nationless Europe, broken from its past.

Donald Trump's campaign for the US Presidency threatens the more than one-hundred-year career of the Treason Party's drive for "global governance," which is to say, a Money Power regime, fronted by pseudodemocratic puppets such as David Cameron, Angela Merkel and Barack Obama, and backed by the corporate-owned media, purveyors of pornography, and Hollywood fake history and the global corporations that export Western jobs along with the capital and technology accumulated by the sweat of generations, to the lowest wage, lowest tax, Third-World jurisdictions with minimal workplace health and safety standards, and environmental protection.

Mr. Trump wants to restore America's borders and make America a real country again, with immigration only in accordance with the interest of the United States and subject to law. Moreover, he advocates a national economic policy designed to promote the welfare of Americans, not the profits of global corporations. In this Mr. Trump is almost certainly sincere, since his own business consists very largely in selling real estate and resort services to Americans and thus depends for its success on the prosperity of Americans, not the shareholders of global corporations.

Hence the outpouring of hate speech directed at Mr. Trump by members of the British Parliament during yesterday's debate to consider a petition demanding that Mr. Trump be banned from entry to the UK.

This question, for example, from Dr. Rupa Huq (New Labor, at right) to Paul Flynn (New Labor):

Does my hon. Friend not agree that the fact that it is Martin Luther King day today makes it even more ​bizarre that this hate figure is preaching these ridiculous things that we should reject? 

Note, no evidence of hate speech by Mr. Trump is offered by the Hon. member, perhaps because she does not know of any. Or perhaps when she describes Mr. Trump as a hate figure she means that he is a figure who all politically correct members of the Treason Party must hate.

Paul Flynn (New Labor)

But Paul Flynn (left) was prompt to supply evidence of Mr. Trump's hate speech, albeit based on lies and a preposterous assertion:

He [Trump] described the people of Mexico as rapists and drug abusers.

 But this is a total fabrication, a lie.

Here is what Trump has consistently stated about the people of Mexico:

I don’t see how there is any room for misunderstanding or misinterpretation of the statement I made on June 16th during my Presidential announcement speech. What can be simpler or more accurately stated? The Mexican Government is forcing their most unwanted people into the United States. They are, in many cases, criminals, drug dealers, rapists, etc.
 Many fabulous people come in from Mexico and our country is better for it. But these people are here legally, and are severely hurt by those coming in illegally. I am proud to say that I know many hard working Mexicans—many of them are working for and with me…and, just like our country, my organization is better for it.

Flynn also stated:

More recently he [Trump] suggested that Muslims not be allowed into his country, which is an extraordinary and extremely dangerous thing to say.

Which is untrue. Trump did not "suggest," he asserted that there should be a total "shut down" in Muslim immigration to the United States pending determination of the cause of the intense anti-Western hatred among some Muslims, i.e., radical Islamic extremists, such as those who perpetrated the recent Paris massacre of 130 innocent civilians, the Muslim couple, one newly immigrating, who last month murdered 14 American workmates in San Bernadino, California, and the hundreds or thousands of Muslim "refugees" responsible for a wave of sex crimes against European women in Germany and Sweden and elsewhere.

But is would be fascinating to know why Mr. Flynn says advocating a cessation, albeit temporary, to the flow of Muslim immigrants to the US would be "extremely dangerous." Is he suggesting it would lead to more radical Islamic terrorism against the West? Or is his concern that it would end the current wave of racial and cultural destruction being wrought by mass Islamic immigration to the West? It is regrettable, though not surprising, that the Hon. Mr. Flynn did say.

Tulip Siddiqi, MP for Kilburn and Hamstead (majority 
foreign born): A pretty face, and a contempt for Britain's 
tradition of free speech. 

And here is Tulip Siddiqi (right):

I draw the line on freedom of speech when it leads to violent ideology being imported, which is what I feel is happening.

As clear an indication as one needs of the settler mentality of Britain's immigrant community, which is characterized by a contempt for Britain's tradition of free speech, and which justifies that contempt by what they "feel" is happening. No facts required folks. If we, the settler immigrants, "feel" hurt, then everyone whoever we say had better shut the fuck up and stay the fuck outta the country.

And so the debate went on, with much hate speech directed at Mr. Trump, particularly by New Labor party members and members of the immigrant and Muslim community, although there were some occasionally sensible comments also. What the debate confirms is that the Treason Party, the party that privileges immigrants and would-be immigrants over the interests of the native population of the European nations, is dominant in Britain, as in Germany, France and currently the United States, and that these people will resort to unending lies in there determination to destroy the European nation states, including the predominantly European United States of America.

Related:

Stefan Molyneux a Review of the Reaction to Donald Trump's Presidential Candidacy:
Excellent research.

Why Western Elites Are Destroying Their Own People By Mass Immigration and Multiculturalism

The Saker has an article over at the Unz Review in which he argues that the ongoing racial and cultural genocide of the European peoples by mass immigration and multiculturalism is unstoppable, first, because of the decadence of the European people, and second, because of the malign manipulation of the Anglo-Zionist money power. 

This is a plausible but entirely mistaken analysis of what is happening to the European people both in Europe and in North America.

The elite are destroying their own people because the have no respect for them, or sense of kinship with them, and because it pays. This goes back to the beginning of the industrial revolution, when an urban proletariat, with no family connection to the landowning and capitalist class that dominated Parliament,* rapidly expanded and became a perpetual threat to the security of the state. Hence Disraeli’s recognition of the existence of “Two Nations” between whom, as a character in his novel "Sybil" (1945) remarked:

there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets. The rich and the poor.

The Great Chartist Meeting on Kennington Common, London in 1848
by William Edward Kilburn. Chartism was a movement for workers rights
and political representation.

In Disraeli’s time, free trade with input factor mobility, i.e., the import of cheap labor, or the export of capital and technology to cheap-labor areas whence products could be imported to the home market, was rarely if ever an option for the owners of capital, which meant that the industrial proletariat, though considered by the elite to be both dangerous and disgusting, had to be tolerated.

But input factor mobility is not only possible today, but the underlying reason for globalization. Thus there is a massive flow of cheap Third-World labor to the high-wage West, a flow of products of sweat-shop labor in the same direction, and a flow of capital and technology in the opposite direction, all of which negatively impacts wages in the West. Multiculturalism is the inevitable, and from the elite point of view, desirable consequence of the Third-World migrant flow. Desirable, that is, because a culturally divided proletariat is much less of a threat to the elite than a united nation.

But the Saker is right about two things. First that mass migration means the complete cultural and racial extinction of the European peoples. Second, that mass immigration will continue inexorable for the foreseeable future, the reason being that, for every worker in, say, England (pop. 53 million), there will certainly be many better qualified people (higher IQ, more energy, more ambition, little if any commitment to workers’ rights, etc.) in the Third World (pop. 5 billion plus), who are paid a fraction of what an English worker is paid. And among these potential migrants,  rickshaw drivers earning a dollar or two a day, for example, there will always be some ready, if they are permitted, to migrate to London to earn twenty or thirty dollars an hour driving a bus? And naturally, the elite welcomes such people. If the newcomers hassle the local girls, squeeze the natives out of decent housing, build mosques, etc., so what? What can the natives do about it? Nothing, as it now is clear. And if it means ever rising taxes to pay for new maternity hospitals, roads, schools, etc., that's very satisfactory: it keeps the construction industry prosperous and it allows a growing bureaucracy to soak up the educated middle class who might otherwise begin to think seriously about what is going on. And if the net result is that the native working class becomes an underclass — i.e., white trash despised by all and sundry, again, so what? There’s not a damn thing they can do about it: the supposedly left-wing workers parties being funded by the same plutocratic donors as the so-called conservative parties.

As for the Saker's assertion that the genocide of the Western nations is an Anglo-Zionist Money Power plot, that is just thoughtless conspiracy theory. One might as absurdly impute the Rothschild's or the Illuminati. Many members of the elite are Jews, for sure, but many are Anglos, and many more are Asians, Middle-Easterners or Africans. The issue is that genocide by immigration and multiculturalism pays. The ethnicity of the genocidal elite is irrelevant.

———
* An understanding of the change in relationship between the landowning classes in Britain, i.e., the elite, and the common folk that occurred with the industrial revolution was provided by Adam Smith in his treatise on economics. There he explained that, before the industrial revolution, there was close kinship between the upper and lower classes due to differential mortality between the rich and the poor. Overall, the population remained relatively constant, but because of high child mortality, the poor failed to fully reproduce themselves and the resulting population deficit was made up by the excess fertility of the rich. Thus, the rich were permanently downward mobile with two results. First, most of the rich had poor relatives for whom they had a personal sympathy, second the poor, many not so long descended from the rich, tended to adhere to the conservative values of their better off relatives. These factors made for a united nation. This unity fractured with the rise of the urban working class, which though living in seeming squalor and bestial ignorance, achieved well above replacement reproductive rates and which, as it swelled in number, adopted socialistic ideas. Thus, in purely hereditary terms, the industrial proletariat became much more distant from the elites than had been the rural poor of the pre-industrial era. In addition the political ambitions of the proletariat came to threaten the security of the elite, as they do to this day.

Related: 

CanSpeccy: The Ongoing Destruction of the European Nations Is No Mistake

GLOBALIZATION IS GOOD (For the Rich)

First published 7/25/2013; updated 11/01/2016: 

Over at Carpe Diem, the blog of business school Prof., Mark J. Perry, globalization is GOOD.

Not surprisingly. A business school professor without faith in globalization would be like a priest without faith in God: useless to the powers that be, financial or ecclesiastical as the case may be.

American business has a legal obligation to maximize shareholder value, which for many means shuttering American factories, contracting production to Asian sweatshops, and selling the product back home with computerized efficiency via suburban big-box stores employing minimal staff at minimal wages.

The profitability of replacing American workers with cheap foreign labor in manufacturing, and cheap foreign brains in software, design, and R and D was explained by David Ricardo thus, "Wages plus profits, together, are always the same."

Which is to say, cheap offshore production and service = big profits.

Globalists, naturally, are reluctant to broadcast this particular piece of economic wisdom. But mere silence is not the way at Carpe Diem. There, not only is globalization not bad for the American worker, it's positively beneficial as we discover in the post: Yes, the middle class has been disappearing, but they haven’t fallen into the lower class, they’ve risen into the upper class.

Think about that for a moment.

Is not the concept of the middle class “rising into the upper class” some kind of logical or categorical mistake?

What is the middle class if not the people in the middle? You know, those who come between the upper class and the lower class. I mean, we're talking money here, aren't we?  That's how business school profs. define social class, isn't it? So, then, there'll always be some folks in the middle of the income distribution, won't there? Which means that if some people in the middle rise in relative income, some other people are going to take their place in the middle. Which is to say that the middle class ain't goin' no place, neither up nor down.

But what has actually happened to the incomes of those in the middle?

Well according to the Center on Budget and Policy Priorities, during the 30 years to 2009, the mean income of the middle 60% of the US population rose 26%, which was less than that of the bottom 20% at 35%, and of the 80th to the 99th percentile at 50%, and of the top one percent at 133%. So the evidence is conclusive: the middle-class in American have been financially downward mobile for thirty years or more. That is true both in relative terms and in real, inflation-adjusted money.

And between January 2009 and June 20012, so the Wall Street Journal reports, median US household income adjusted for inflation fell by $4,019 — hardly evidence of the flight of the middle class into the socio-economic empyrean.

But Carpe Diem goes further. Wal-Mart, declares Mark Perry: deserves the 2013 Nobel Peace Prize for improving the lives of millions of low-income consumers globally.

Yeah well, as the greatest purveyor of the products of sweatshop labor, painting Wal-Mart as the savior of America's working poor seems a stretch.

But if the argument is that Wal-Mart has enriched tens or hundreds of millions of Asian sweatshop employees, then, yeah, Mark Perry may have a case.

But nowhere, naturally, do globalists like to acknowledge globalization's dirty secret, which is that its profitability depends largely on global wage arbitrage, which is to say the export of the capital and technology accumulated in the West through the sweat of generations to the low-wage economies of the world, this being greatly to the detriment of the majority of working people in the West.

But, hey, maybe I'm just slow to see a joke.

So yeah, sure, if Barack O'Bomber of Tripoli, Kissinger of Cambodia, and that old terrorist Menachem Begin of the King David Hotel Massacre got the Nobel Piss Prize, why not the biggest bloodsucking American corporation of them all.

Let's see, a one-million -dollar prize means about one thirtieth of a cent per share. Not much, it's true. Still, when you're as tightfisted as the owners of Wal-Mart, every one thirtieth of a cent surely counts.

Related:

Jon Rappoport: The State of the Union speech Obama won’t give

Canspeccy: The 2014 Average Income of the 81 Million Lowest Paid Half of American Workers: $12,681

CanSpeccy: How globalization destroys Western prosperity

David Ricardo (1772-1823)

 CanSpeccy: Exporting the economy 

Ricardo was explicit ...that international free trade is beneficial to all parties only if capital is immobile, since exporting capital, one of the factors of production, will inevitably lower the productivity and hence reduce the prosperity of the population.

Consistent with these ideas, enlightened national governments endeavored to restrict capital outflow, promote workforce education and training, and in the Western World, limit mass immigration from the developing World since that diluted the capital stock of the nation on a per capita basis, reduced the per capita availability of land and infrastructure, and lowered average workforce skills and education -- aside from its potential for destroying the nation through population replacement and reproductive competition.

CanSpeccy: Why even balanced trade between the West and Rest threatens your job

CanSpeccy: Why China Booms While America Slumps

So why have the benefits of foreign trade that David Ricardo predicted [under the very different conditions of 200 years ago] not materialize?

First, because an important assumption underlying Ricardo's theory of comparative advantage no longer applies.

Experience... shews, that the fancied or real insecurity of capital, when not under the immediate control of its owner, together with the natural disinclination which every man has to quit the country of his birth and connexions, and intrust himself with all his habits fixed, to a strange government and new laws, checks the emigration of capital. These feelings, which I should be sorry to see weakened, induce most men of property to be satisfied with a low rate of profits in their own country, rather than seek a more advantageous employment for their wealth in foreign nations.

Today, there is no need for the investor or capitalist to "quit the country of his birth and connexions" in order to exploit cheap foreign labor.

The executive jet, the Internet, the enormous size and hence political clout of the multi-national corporate and financial entities and the international acceptance of a single set of rules governing world trade make it a safe and simple matter to invest almost anywhere in the world.

For this reason, if no other, foreign trade need not, as Ricardo believed, necessarily benefit all parties to the transaction.

When capital is exported from a high-wage nation to a low-wage nation, the investment per capita and hence the productivity of labor in the former declines and the investment per capita and hence productivity of labor in the latter increases, with a consequent decrease in wages in the former and an increase in wages in the latter.

Related:

CanSpeccy: The Globalist Lies of the New York Times: No. 47 — Trashing Trump With Free Trade Bunk

CanSpeccy: Third World Wages Coming to a Factory or Workshop Near You

CanSpeccy: How globalization is destroying the livlihood of Western youth

CanSpeccy: Barbgate: How Western elites opened the gates and what to do about it

CanSpeccy: Ending the Hegemony of Liberal Economic Ideas and Western Economic Stagnation

CanSpeccy: The Second Great Depression and The Cause That None Dare Name

CanSpeccy: USA Boom or Bust: The Next Decade

First published 7/25/2013

Exporting the economy

David Ricardo (1772-1823). Image source

Until recent times, it was understood that the prosperity of a nation depended on three factors: capital invested in industry; the skills and experience of the workforce, and the availability of land for economic activity, i.e., the three factors of production, land, labor and capital.

International trade was acknowledged to be advantageous to all parties insofar as it enabled each country to do more of what it is did best. This was the theory of comparative advantage, enunciated by 19th Century British economist and bond trader, David Ricardo.

Ricardo was explicit, however, in stating that international free trade is beneficial to all parties only if capital is immobile, since exporting capital, one of the factors of production, will inevitably lower the productivity and hence reduce the prosperity of the population.

Consistent with these ideas, enlightened national governments endeavored to restrict capital outflow, promote workforce education and training, and in the Western World, limit mass immigration from the developing World since that diluted the capital stock of the nation on a per capita basis, reduced the per capita availability of land and infrastructure, and lowered average workforce skills and education -- aside from its potential for destroying the nation through population replacement and reproductive competition.

But today, to hear the media, the Nobel-prize-winning economists, the politicians-on-the-make, and the human rights activists tell it, that's all anti-diluvian racist rubbish.

How come?

In one word, globalization.

Or in several words: We're an empire now and the leadership elected nationally, serves the empire not you, the people, who elected them.

But how does that change the principles of economics?

Easily: through the allocation of money, fame and power.

Thus, says J.J. goldberg in a  Jewish Daily Forward article entitled: A Low-Rent America Can't Be a Strong Friend of Israel.

Fans of New York Times columnist Paul Krugman might get a kick out of this. Nearly a decade and a half ago, the acclaimed economist savagely reviewed a new book on the perils of economic globalization, dismissing it as “simplistic,” “foolish,” “thoroughly silly” and more. He said the author, Rolling Stone investigative journalist William Greider, had naively failed to consult “competent economists,” which led him to “trip on his own intellectual shoelaces.” Classic Krugman.

Krugman has since moved from MIT to a tenured chair at Princeton and a Nobel Prize. Greider moved from Rolling Stone to the smaller and less remunerative weekly The Nation. The funny thing is, Greider turned out to be right. Krugman got globalization very wrong.

Then there's the case of Paul Craig Roberts, a better man than Krugman, surely. Former Deputy Secretary of the US Treasury, former associate editor of the Wall Street Journal, Business Week, and Scripps Howard News Service, senior fellow in political economy at the Center for Strategic and International Studies, contributor to numerous magazines and newspapers, author or co-author of eight books.

On March 26, 2010, Roberts wrote Truth Has Fallen and Taken Liberty With It

There was a time when the pen was mightier than the sword. That was a time when people believed in truth and regarded truth as an independent power and not as an auxiliary for government, class, race, ideological, personal, or financial interest.

Today Americans are ruled by propaganda. Americans have little regard for truth, little access to it, and little ability to recognize it.

Truth is an unwelcome entity. It is disturbing. It is off limits. Those who speak it run the risk of being branded “anti-American,” “anti-semite” or “conspiracy theorist.”

Truth is an inconvenience for government and for the interest groups whose campaign contributions control government.

Truth is an inconvenience for prosecutors who want convictions, not the discovery of innocence or guilt.

Truth is inconvenient for ideologues.

Today many whose goal once was the discovery of truth are now paid handsomely to hide it. “Free market economists” are paid to sell offshoring to the American people. High-productivity, high value-added American jobs are denigrated as dirty, old industrial jobs. Relicts from long ago, we are best shed of them. Their place has been taken by “the New Economy,” a mythical economy that allegedly consists of high-tech white collar jobs in which Americans innovate and finance activities that occur offshore. All Americans need in order to participate in this “new economy” are finance degrees from Ivy League universities, and then they will work on Wall Street at million dollar jobs.

Economists who were once respectable took money to contribute to this myth of “the New Economy.”

In evidence of this charge of treason by America's elite Roberts continued:

I was associate editor and columnist for the Wall Street Journal. I was Business Week’s first outside columnist, a position I held for 15 years. I was columnist for a decade for Scripps Howard News Service, carried in 300 newspapers. I was a columnist for the Washington Times and for newspapers in France and Italy and for a magazine in Germany. I was a contributor to the New York Times and a regular feature in the Los Angeles Times. Today I cannot publish in, or appear on, the American “mainstream media.”

For the last six years I have been banned from the “mainstream media.” My last column in the New York Times appeared in January, 2004, coauthored with Democratic U.S. Senator Charles Schumer representing New York. We addressed the offshoring of U.S. jobs. Our op-ed article produced a conference at the Brookings Institution in Washington, D.C. and live coverage by C-Span. A debate was launched. No such thing could happen today.

...The American corporate media does not serve the truth. It serves the government and the interest groups that empower the government.

And what Roberts says of the American elite and the American corporate media is true of the elite and the corporate media throughout the West. The interests of the people are to be sacrificed without limit for the "interest groups that empower the government."

Thus, jobs are off-shored and outsourced to take advantage of cheap labor in Asia, the Middle East and Africa. Thus, mass migration from the developing world to densely populated Western Europe is promoted to drive down wages, while it destroys local culture, and in an increasing number of urban areas, reduces the indigenous populations to a demoralized minority that is being out-bred by the immigrants, of whom some show an unconcealed contempt for local customs and religion.

Likewise in America, native born citizens are displaced from the labor pool by millions of illegal immigrants who work in the underground economy at below minimum wages and often under appalling and illegal conditions, a process enabled by the Federal Government by the deliberate non-enforcement of Federal immigration law.

Thus, also, Nobel Prizes and newspaper columns for bent economists, power and prestige for "human rights advocates" who promote mass immigration and genocidal policies of political correctness and multi-culturalism, and massive profits for those enabled by a corrupt political establishment to engage in unrestricted global wage arbitrage resulting in mass unemployment in the West, collapsing welfare services, failing schools, underfunded pensions, and racial and cultural demoralization and destruction.

And astonishingly, so callous is the ruling elite that the fate of the unemployed and the underemployed is barely discussed. Indeed, it is enforced by minimum wage laws, bad schools, and welfare legislation that scandalously deny employment and the opportunity to gain work experience to a large part of the workforce that cannot compete with Asian labour that in some industries earns only pennies per hour.

What Milton Friedman said in 1978 about black poverty in the United States, is now applicable to much of the white working class in the U.S., Canada and Europe. Sadly, Milton Friedman is no longer around to state the fact.

Europe: The Perils of Complacency

Source: The modern typewriter

The UK urgently needs to wean itself off international finance and get back to what it did well 150 years ago, making and selling quality things and services. That will mean an attitudinal revolution in the UK ...

That's a quote from a discussion at the Slog, which prompted some reflection.

One thing the above-quoted remark brought to mind was a cartoon, in the style of the 19th Century Punch Magazine, which seemed to exemplify the thinking of many Europeans during the present moment of financial shock. It portrayed a fat man watching a cricket match on the village green and wearing a look of astonishment at the moment of being struck in the stomach by the ball.

Sadly, I was unable to find the image on the Internet, which raises the interesting though irrelevant question of whether I retain in memory more images than Google has stored on its servers. But Google did provide a link to the image of the sinking Titanic and a note by the Modern Typewriter:

On April 14th, 1912, the RMS Titanic hit an iceberg at 11:40 pm. ... the Captain ordered the lifeboats to start leaving the ship. The passengers were frightened. They thought that leaving such a safe ship into a[n] “unsafe” lifeboat wouldn’t be smart. So they refused to enter the boat[s].

The insistence of some in Europe on clinging to the past, and on assuming that what Europeans did better than the rest of the World 150 years ago they can do better than the rest of the World today with little more than an adjustment in attitude, is reminiscent of the belief of those on the Titanic who apparently thought that if they kept a stiff upper lip and refrained from panic they could stay aboard the warm, comfortable sinking ship indefinitely, without need to brave the cold ocean in a tiny lifeboat.

The question these people need to ask is how can Britons get back to making things, quality or otherwise, when competing with those in Asia and elsewhere who are earning a tenth or less of what UK workers earn?

150 years ago, Britain was the workshop of the world because she had the world’s most advanced industrial technology powered by the World's largest coal industry.

Today, energy is available everywhere and the most advanced technology is moved to wherever labor is cheapest -- and that includes not only factory labor, but much white collar labor including design, software engineering, all kinds of R & D and back office work in financial services, publishing, marketing, etc.

There appear to be only three ways Britain (or any Western nation) can revive its manufacturing sector, these being to: (1) construct a massive tariff wall that excludes cheap products from low wage economies, (2) print massive amounts of money, while keeping a tight lid on nominal wages, thereby driving real wages to the Asian level, or (3) subsidize wages to create a work force that can be employed at internationally competitive rates, i.e., by wealth transfers from the 1% to the 99%.

It seems that the inflationary route (plus mass immigration of third world labor to help drive market wages down) is the route that, without public acknowledgment, has been chosen. To be effective, it will take many years, possibly a decade or two, and it will cause much social conflict in a period during which multinational corporations that can take advantage of opportunities for wage arbitrage continue to reap huge profits by off-shoring production and services.

In the meantime, something like one quarter of the Western world's workforce continue to be treated as so much useless baggage to be kept alive in a demoralized and degraded condition on food stamps or other forms of welfare including residential programmes in prisons and mental hospitals.

Cecil Rhodes' secret society for Anglo-Saxon global empire and Alex Jones--Master of Misdirection

Anyone viewing Alex Jones' video on Cecil Rhodes' secret society for world empire, is in danger of swallowing an unhealthy dose of misinformation.

The Colossus of Rhodes

To the sound of imperial marching music, the vid begins with the words:

Cecil Rhodes (1853-1902) was a key figure in the aims of the British Empire

Yeah, well literacy aint a strong point over at JonesReport.com.

But, yes, as the video conveys with a handful of visuals, Rhodes was an unscrupulous money-making animal, who played a key role in shaping British policy in southern Africa.

But he did not scheme alone.

Joe Chamberlain
British Colonial Secretary 1895-1903

It was the imperialist politician, Joe Chamberlain, British Colonial Secretary ( father of the better know Chamberlain of appeasement fame), whose complicity was essential to the instigation of the Boer war, a war that led to the consolidation of South Africa under British rule.

But, the JonesReport.com informs us:

Cecil Rhodes along with other British elites would have greater aims -- that of World Federation

Yikes, how terrrifically original of them. Or as Zbigniev Bzrezinski put it in the first sentence of his tract on geopolitics The Grand Chessboard, "Hegemony is as old as mankind."

But now the music changes to a minor key and an ominously repetitious spooky theme, as the text on screen informs us that Rhodes set up a secret society to pursue his goals.

A select few, including Lord Milner, William Stead and Lord Rothschild were in on the plan.

Warning folks -- conspiracy.

The group that gave birth to South Africa would now shape the entire World.

 Ha! A bold statement of what has not been demonstrated.

The next image:

Bill Clinton

Rhodes Scholar, 1968

Oxford.

Now, there's the evidence. Clinton went to Oxford, had his brains washed by those devious Brits, and, hey, the Brits are still running the World.

LOL.

But there's more:

Secretly, Rhodes also established the Round Table Group that pulled its select initiates from Oxford and Cambridge institutions

Actually, Rhodes did nothing of the kind. The organization of the Round Table Group was the work of Alfred Milner and associates in the period 1909-1913, years after Rhodes' death. The Round Table magazine, founded in 1910, was largely funded by Sir Abe Bailey. Rhodes money may have been used by the Round Table group, but not through the provisions of his will or via the Rhodes Trust, which established that devious scheme for the Rhodes Scholarships, which would bring students from around the World to study at Oxford University.

Rhodes, we are told, wished to:

federate the English-speaking peoples and to bring all the habitable portions of the world under their control

John Ruskin (1819-1900)

An understandable notion when Britain already ruled one quarter of the World's population, and dominated the world both financially and militarily. And it was an idea inspired by Rhodes Oxford mentor, John Ruskin, who, in a lecture that Rhodes transcribed by hand in its entirety, included the following admonition:

You, the undergraduates are] the possessors of a magnificent tradition of education, beauty, rule of law, freedom, decency and self-discipline but... this tradition [can] not be saved, and does not deserve to be saved, unless it can be extended to the lower classes in England itself and to the non-English masses throughout the world. If this precious tradition is not extended to these two great majorities, the minority of upper-class Englishmen will ultimately be submerged by these majorities and the tradition lost. To prevent this, the tradition must be extended to the masses and to the empire.

Rhodes, the JonesReport asserts, in his third will:

Left his fortune in the hands of Lord Rothschild--an instrumental partner in the quest to expand the British Empire. 

What the JonesReport does not mention is that Rhodes' third will became null and void as it was succeeded by other wills. The final will said nothing whatever about any endeavor to promote the expansion of the British Empire.

Then after more scary music in a minor key and the display of the Rothschild family escutcheon, the soundtrack reverts to drums and imperial marching music and a list of obscure Brits (Philip Kerr, Lionel Curtis, Steven Cox, David Evans -- you ever heard of 'em?) who sought to create a federation of English-speaking nations - -an idea that was firmly and promptly rejected by the newly independent dominions of Australia, Canada and New Zealand, and an idea that was surely not even mooted in India.

Ah, but (as the soundtrack returns to a repetitious motif in a minor key), these people are unknown because they were more effective

directing policy in the shadows

...through splinter groups like the Royal Institute on International Affairs (RIIA) and the Council on Foreign Relations (CFR).

In fact, there is no firm evidence that these organizations were funded by Rhodes. Certainly his final will made no such provision. Moreover, the CFR has no direct connection with the British RIIA and was funded by JP Morgan, a fact that reflects the intention of the British Rhodes-Milner Group which, after WW1, believed that their project for global governance could only be effected by the United States, and they sought, therefore, to encourage Americans to undertake that mission as their own.

As for the RIIA, it staggers on, like so many foundations, interest groups and think tanks, long since its useful life ended.

Known in Canada for more than half a Century as the Canadian International Council, it continues earnestly to discuss such vital topics as Canada's legacy in Afghanistan, Is Canada's international liberalism dead? and What role will the Great Lakes play in Canada's economic future.

Our local chapter of the CIC recently hosted The Honorable Flora MacDonald who addressed members on the following important matter: “UPDATE ON DEVELOPMENT IN BAMIYAN PROVINCE, AFGHANISTAN.”

Yes, a formidable and dangerous organization indeed, illustrated in the JonesReport.com video by shots of Lord Alfred Milner's Germanic mustache.

Then the image of Iain Curtis alongside the covers of the books he wrote: World War, Its Cause and Cure and the Capital Question of China -- a dangerous conspirator, obviously.

Curtis it was, the vid informs us, who hit upon the evil scheme of changing the name of the British Empire to The British Commonwealth of Nations. What is more, this monster, plotting secretly for global Anglo-Saxon hegemony, is exposed by the JonesReport.com of having:

decided that India must be given complete self-government.

LOL, indeed.

What this absurd video confirms is that Alex Jones is a liar and an Anglophobe.

He is also a master of misdirection. The narrative of Carroll Quigley's book, The Anglo-American Establishment, an account of the lives and work of those connected with Cecil Rhodes' secret society from which this video draws its information, ends in 1949 by which time Quigley considered the project, as a British undertaking, entirely defunct.

Quigley supported the aims of the Round Table Group, not because they promoted Anglo-Saxon world domination, but because they conformed with the ideals of 19th century liberalism: the liberalism that fought for the abolition of the slave trade, the abolition of slavery, and the spread of democracy and enlightenment, as exemplified by the plan for  the education of the Indian elite in preparation for independence, which was set forth in the famous memorandum on Indian Education by the great liberal historian, Thomas Macaulay. Cecil Rhodes, in short, wished to perpetuate and extend Western civilization.

Rhodes' scheme for the creation, under Anglo-Saxon leadership, of a World federation of democratic states, where the rule of law and the fruits of Western civilization would be enjoyed by all kinds and ranks of men, made sense at the time it was conceived. Then, Britain ruled a quarter of the World's population, and was by far the wealthiest and most powerful nation on earth.

But Britain has long since given place to America as the dominant World power and Anglo-Saxon domination of America is a thing of the distant past.

Today, America's elite takes its guidance on international affairs from an East European aristocrat, Zbigniev Bzrezinski, a German Jew, Henry Kissinger, and a mongrel elite of native born Jews and and other non Anglo-Saxon ethnics including the African-American Barak Obama.

One group that appears to have slight influence is the old WASP establishment, which is likely too squeamish about torture, trashing the constitution or following the Hitlerian policy of unbridled military aggression.

But blaming the US project for global hegemony, now under the direction of a group of Zionists, both Jewish and gentile, on the Brits is a neat piece of misdirection if you can get away with it.

Revised July 30, 2011

See also:

Alex Jones and Webster Tarpley: Propagating Looney Lies About the British Monarch

USA Boom or Bust: The Next Decade

Hooverville of the 21st Century

Will the U.S. economy ever recover?

"I'm a huge bull on America" declared Warren Buffett in September 2010, while ruling out the possibility of a double dip recession.

But 48% of Americans think America is already entering the next great depression.

And they, according to Bill Bonner, are optimists who have failed to notice that America has been in a recession for the last ten years, with no sign of a letup for many years to come.

Who to believe?

Perhaps everyone's right.

Bonner appears to be correct in saying the US GDP has gained flip all in the last ten years.

Self-employment: USA 2011

Meantime, unemployment, homelessness, and outright poverty have become widespread features of the American economic landscape.

And as millions of the unemployed run out of unemployment benefits, while losing hope of reemployment, and as millions more illegal immigrants flood in, the outlook for tens of millions of Americans becomes increasingly grim.

But on the bright side, corporate profits have never been higher. Since the low of 2002, IBM's share price is up 300%, Apple's is up 3000% (yes that's right, three thousand percent), and even the Dow and Buffett's stodgy Berkshire Hathaway are up 50%.

So what is going on, and why?

Two words that I've never heard Warren Buffett use explain it: "outsourcing" and "off-shoring".

What these words mean for the American economy I have already discussed in Why China Booms While America Slumps. But the chief point is made in two sentences:

In 1993 Chinese wages were about 3% of those in America.

and since 1993,

Chinese manufacturing wages have been driven up only marginally, reaching US$134 per month in 2004 or just 4.9% of the US rate of US$2732 per month.

Here lies the answer to the dichotomy of view between Buffett and the common man.

As David Ricardo explained:

As the wages of labour fall, the profits of stock rise, and they be together always of the same value...

Cheap labor in China and throughout the developing world means mega profits for American business and poverty for a tens of millions of Americans, and the hardship for millions of Americans is made worse by minimum wage laws that prevent those with skills of limited value from competing on price with Asian, African or Middle-Eastern labor.

Corporate profits hit a record high in 2011

How will this end?

Two possibilities:

(1) Revolution.

(2) Wage equilibration in the tradable goods and services sectors of the economy between America and other Western economies, on the one hand, and the developing world on the other hand, which would mean a fully globalized economy with American living standards more or less matching those in Shanghai, Mumbai, Istambul and Cape Town.

The second alternative is clearly the objective of the ruling elite. So how will the transition be accomplished?

Wages, as Lord Maynard Keynes observed, are sticky on the downward side. Inflation is therefore almost certainly necessary to achieve the transition. This cuts real wages without lowering the dollar amounts paid in wages. It is achieved by printing dollars.

The printing press provides a technology that Ben Bernanke's Fed is proud to possess. We have seen QE 1, aka Money Printing 1, and QE 2. In due course expect to see QE 3, 4, 5 ...

As dollars spew out, the exchange value of the US dollar will fall. It has been falling for years, but now it should fall faster. The result should be a fall in the price of American exports in terms of other currencies and a rise in the cost of America imports in terms of dollars. The net effect should be a gradual restoration of American manufacturing with increasing exports and declining imports.

Trouble is, China, now the workshop of the World, is inflating as fast as Ben Bernanke can crank the press at the Federal Reserve. Net result? Chinese imports remain just as competitive in the American market as before.

What to do? Print even more US dollars.

This will be bad for China, since it will depreciate the hoard of dollars they have accumulated to prevent the Renmimbi from rising against the dollar. It'll serve them right.

Chart source: Shadow Government Statistics

But it will be good for many US equities, though not necessarily for those in the consumption sector, since American consumption is about to undergo a permanent decline.

And it will be very bad for those with cash.

Is gold an alternative?

Maybe.

But remember, gold is not money. No one is promising to pay the bearer any particular number of dollars for an ounce of gold.

The price of gold is the creation of market psychology. At six times the price of only a decade ago, the price of gold could crater anytime.

See also:
Why China booms while America slumps
America's inflationary depresssion