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Saturday, September 17, 2011

"Old Cathedral" of global affairs – built on American power – is crumbling and should not be rebuilt. - Mr. Yeo

Gordon Brown fears euro crisis worse than Lehman as 1930s beckon

Gordon Brown has warned that Europe's fast-escalating crisis is now more dangerous than the Lehman Brothers disaster three years ago, threatening to tip the West into a 1930s-style slump unless global leaders work together to take dramatic action.

2:18PM BST 16 Sep 201 TELEGRAPH

"The euro can't survive in its present form and will have to be reformed drastically," he told a mostly-Chinese audience at the World Economic Forum in Dalian.

The former Prime Minister said EMU's malaise is at root a banking crisis, not a debt crisis. "The European banks as a whole are grossly under-capitalised: they have liabilities far in excess of American banks. We have now got the inter-play with sovereign debt because we socialised the liabilities," he said.

"It has morphed into a sovereign debt crisis, and is more serious than 2008 because governments then could intervene to sort of out banks. Now both banks and governments have problems," he said.

"You cannot begin to solve this unless you realise that it is a banking problem and a growth problem, as well as being a fiscal problem. You have to take co-ordinated action in all three areas," Mr Brown said, echoing the views of the International Monetary Fund.

He added that the €440bn (£385bn) European Financial Stability Facility (EFSF) bail-out fund will need "substantially more resources" to cope, with an expanded role for the IMF to shore up the whole EMU system. "People do not believe that Greece can pull through without a default," he said.

Mr Brown called for a revival of the "global growth pact" agreed at the G20's London Summit in March 2009, combining stimulus from America, Europe and Asia to create a multiplier effect that breaks the vicious cycle.

"China must be persuaded to increase consumption," he said, touching on the core issue of East-West trade imbalances that lie behind the global crisis. China's consumption has actually fallen from 48pc in the late 1990s to 36pc of GDP, reflecting a deeply distorted economy.

The suggestion met a caustic response from Singapore's former foreign minister George Yeo Yong-Boon, sitting next to him. "China is not going to consume to save the world. It will act in its own enlightened self-interest," he said. Chinese premier Wen Jiabao said earlier this week that his country will shift from export-led growth to greater internal demand under its new five-year plan, but this is unlikely to be fast enough to satisfy the rest of the world. Mr Yeo said talk of global architecture is an attempt by Western countries to wriggle out of hard choices and "pass on their pain" to somebody else. The "Old Cathedral" of global affairs – built on American power – is crumbling and should not be rebuilt.

"China and India are going to grow whatever happens to the global system. The world will muddle along as it has for much of history," he said. Mr Yeo called for a bout of "creative destruction" in the West, warning of "very painful" times as American and European workers learn to compete toe-to-toe with educated Asians willing to put in longer hours for much lower pay. This may test political systems to breaking point.

"If Greece leaves the euro, it is more likely the eurozone can be saved, and it would have an illuminating effect on politics in Europe," he said, echoing a widespread view among Asia's policy elite.
Mr Brown said the momentum from the G20 accord in 2009 had been squandered, degenerating into currency squabbles and misplaced obsession with fiscal austerity. Citing Winston Churchill's aphorism, he said leaders had been "resolved to be irresolute, adamant for drift, solid for fluidity, and all-powerful for impotence."

"Unless there is global co-ordination, I foresee 10 years of low growth in Europe and America, with very high levels on unemployment, that will lead in the end to greater protectionism. This is exactly like the 1930s."
Mr Brown said Europe's austerity drive reflects same misguided views that prevailed during the Great Depression when Keynesian proposals were dismissed as "inflation, extravagance, and bankruptcy".

"You can impose all the fiscal contraction in the world, and yet more austerity, and that will drive the economy further into recession. Greece's economy will contract 5pc this year, and we're not seeing recovery in Spain, Portugal, Italy and Ireland," he said.
"The Europeans can hold hundreds of meetings but if they are not prepared to face up to the problem they are dealing with, they are not going to get the right answer."

Mr Brown admitted that he was hardly a pin-up politician for stimulus and global action, having lost last year's election on such a manifesto, saying: "People preferred a more parochial solution, seeing debt as the bigger problem. But I have been proved right."


  1. To hell with Mr Yeo


  2. Those were manufactured in Korea I believe (south of course, not a thing but starvation going on up north) then shipped through Japan to Portland, then up the Columbia and Snake to Lewiston, headed for Montana and Canada.

    There is a new movement on here


    which none of these shit birds had heard of three years ago

    Idaho State Police Arrests





  3. How many megaload shipments?

    Not sure but it's in the hundreds.

    There are two differing configurations making the counting hard.


  4. South Korea built each section of the new Narrows Bridge and brought them over on three shiploads where they were craned up into place.

    So if you ever wondered what happened to all that scrap metal we sent overseas...

    Back in the day the United States could do mega steel like that. Now we just make chicken nuggets.

  5. We all know that living standards in the West will fall. Current wage levels, welfare states and bloated bureaucracies are sustained by borrowing, which cannot continue much longer. The politico-bureaucratic elites know this but pretend otherwise in public.

    There are actions the West can take to ameliorate the situation, but we first need to acknowledge the root causes of the problem rather than pretending that it can be cured by the magic pill called GROWTH. There is a need for EFFICIENCY.

    'Mr Yeo called for a bout of "creative destruction" in the West, warning of "very painful" times as American and European workers learn to compete toe-to-toe with educated Asians willing to put in longer
    hours for much lower pay. This may test political systems to breaking point.'

    So, for most folk in the West, this will be much WORSE than the 1930s as their living standards decline to converge with those of far more numerous Asians. Expect decades of political turbulence.

    Oh well, lets' stay on the sunny side. I'll raise a glass to China's "creative destruction" and hide under my duvet until the next great war has passed and the United States of Eurasia has been formed by the Chinese.

  6. Back in the day the United States could do mega steel like that. Now we just make chicken nuggets.

    In the pre-nugget, somewhere over the rainbow era

  7. This was the America that was.

    Five blast furnaces still standing at the Bethlehem Steel plant in South Bethlehem cast long shadows over the site and the community. When slag was dumped from the furnaces at night, people living on the surrounding hills thought the flow looked like volcanic lava. At the peak of operations in 1957, the power of those furnaces provided employment directly for 165,000 people and ancillary livelihoods for hundreds of thousands more. As a corporation, though, Bethlehem Steel cast an even larger shadow than its tall furnaces, and the power of its products flowed far beyond the sightlines of those hills.

    From its incorporation in 1904, Bethlehem Steel Corporation dedicated its operations to putting goods in motion. The Bethlehem Steel Company functioned as the steelmaking enterprise within a corporation that actually had more invested in shipbuilding. With Harlan and Hollingsworth yards in Wilmington, Delaware, Union Iron Works in San Francisco, California, two shipyards each in New Jersey and Maine, and one in Groton, Connecticut, the Steel started its corporate life already as a beast with many tentacles. Charles Schwab, the forceful personality behind the corporation in its formative and flourishing years, had an endless appetite for acquisitions, something he had learned in his youth working for Pittsburgh’s legendary steel man, Andrew Carnegie. Whenever prices were down, Schwab bought, and in the end the empire of Bethlehem Steel Corporation stretched across the globe.

    Steelmaking, in a certain sense, required this kind of global extension.

  8. There is only so much we have to take. NYC is going to have to accept 20,000 taking over Wall Street , getting the bull by the horns, setting up beds, kitchens, peaceful barricades and occupying Wall Street for a few months. Keep them company.

    Like our brothers and sisters worldwide, we plan to use our revolutionary tactic of mass occupation to restore democracy in America. Real democracy, not the plutocracy of corporate cronyism. We also encourage the use of nonviolence to achieve our ends and maximize the safety of all participants.

    Stronger than ever, step by step, we will send 20,000 braves that are ready to flood into Lower Manhattan.

    We will see Police reaction... this is peaceful movement, non violence is our believe and our weapons are our faith in democracy and our voices to send a clear message:

    Politicians, bankers, elite ... your days are counted... we have the new technologies and the youth , against your failed greed.

    One voice One world One revolution
    NYC fight for your freedom!

  9. No fears No tears said... There is only so much we have to take. NYC is going to have to accept 20,000 taking over Wall Street , getting the bull by the horns, setting up beds, kitchens, peaceful barricades and occupying Wall Street for a few months. Keep them company.

    Wall Street is just for show, something to show the tourists. It's all done by computer now. So, good luck.

  10. China plays hardball and by their own rules when they can get away with it.

    Every day we learn more about the true nature of the Chinese Communist party. Anyone who does business with them does so at their own peril.

  11. By the way, if you ever want to move megaloads, get the permitting FIRST.

    Never has the hospitality industry in Lewiston had better times.

    Once the loads were at the Port of Lewiston, the lawsuits began.

    Around and around it went, for over a year, with all these guys sitting around the motels with absolutely nothing to do. Sanity finally prevailed but that company spent millions fighting for the right to use the highways here.


    (Funny note: the issue went to the Idaho Supreme Court, and their ruling was: it's none of our business and sent it back to the Idaho Transportation Department)



    No shit. The last piece to go in the new Narrow Bridge was a couple of expansion joints that actually were made in the US, but back East. They were hauled out here on I-90 on a big flatbed, but when they got to the border, near Spokane, the Staters made them stop, and it took a couple of weeks to get all the paperwork squared away.

  13. .

    The Bethlehem Steel Company functioned as the steelmaking enterprise within a corporation that actually had more invested in shipbuilding

    Look at the Ford Rouge Complex. Ford owned the boats that brought the ore from Upper Michigan. They had the steel plant within the complex. Machining operations. Pretty much made most of the things going into the car. And then, of course, there was (is) the Ford Rouge Assembly Plant.


  14. .

    At one point, Ford owned plants to produce everything in the car, even rubber plantations in SA for rubber to produce tires.


  15. Import replacement should be a national goal. The advantage to having so much industry closed ios that you can start new with state of the art facilities. You don't announce it but certainl a priority should be to replace Chinese imports. Why do we import any food items from China?

    Trade with China is good for countries like Canada or Australia because it is based on extraction industries but even there an attempt at higher valued added would be in their interests.

  16. People have learned or are learning their lessons about China. We are continuously bombarded with the singular idea that the West is doomed,and the East is rising. I believe the opposite.

    It is Western expertise and investment ,and Chinese central control,that has created the economic "miracle" that is todays China. They are coming off a very low socio-economic base. Give it ten years and we shall see a different scenario.

    The last place on earth I ever expected to hear of Schumpeterian recommendations for creative waves of destruction would be from the command and control economies of southeast Asia. I guess the western education paid off after all. Strange and striking that the lessons of the Marxist economic professoriate that inhabits western academe didn't seem to have much resonance with the folks who grew up in such an environment. Let me see if if I have this straight.

    The problem is that we have privatized gains and socialized risks and the former PM's solution is to recommend what? More socialization of the risks? This isn't muddled thinking - it's the insanity of pretending you'll get a better result this time.

    Creative waves of destruction destroying the underpinning notions of this tripartite cabal of failing banks, failed politicians and a failure of the EUSSR is precisely what is at hand - and the sooner, the better.

    Joseph Schumpeter? Ludwig von Mises? Friederich Hayek? Finding homes in, of all places, the Manchurian economies of Southeast Asia? Who da' thunk?

  17. I think the US economy is structurally more unsound that even Greece. It may be bigger but the present realization that it's security over the last 2 generations was really based on borrowed money is now sinking in.The last thing the EU needs is advise from Geithner, who is a joke. Since his days at NY Fed, he has done nothing but work for Wall Street. He was responsible for supervising Wall Street and the collapse happened under his watch.

    Both the US and EU suffer under structural problems that make it impossible to grow into it's balance sheet. The problem in the US is made much worse because of the massive corruption in our political system. Washington is now entirely ruled by special interest groups.

    AIPAC orchestrated war based on lies have cost us already $5.5 trillion and counting. The main funding source of AIPAC, Wall Street has cost us trillions of losses, covered by additional debt. These special interest groups provide the cover for Wall Street to continue it's massive fraud in exchange for the funding needed to orchestrate the congressional elections for "approved" candidates.

    American dream has become a nightmare because of these parasites.

  18. First thing, before breakfast, make all Corporate Taxes 10%, and have them be payable at the end of the quarter in which they're earned (not upon "repatriation" from some God-forsaken shithole tax haven where they're parked into infinity.)

    Or, hell, even go with Sarah Palin's Zero Corporate Tax Rate. Anything to get that money back home, and being invested Here.

  19. .

    Joseph Schumpeter? Ludwig von Mises? Friederich Hayek? Finding homes in, of all places, the Manchurian economies of Southeast Asia? Who da' thunk?,

    The Chinese have the words but they lack the music.

    What I see in the economic battle between China and the US is two mercantalistic systems interacting.
    In China, government dominated merchantalism and in the US crony capitalism, merchantalism by another name.

    Anyone believing we have free-market capitalism in the US should understand how the price of milk is set and why we pay twice as much for surgar as we should. For a more obvious example they should look at why our healthcare prices escalate so rapidly.

    As a country, we have made choices. Some of them don't make economic sense. The question is what do you do moving forward. Or, what will you be forced to do moving forward.


  20. .

    The last time we offered the business community repatriation, 2% of the money was used to invest and create jobs. 98% went to dividends, stock buybacks, and bonuses.

    What we need is incentives (positive or negative) to get these guys to create jobs here.


  21. Speaking of Bonners Ferry-

    A grizzly bear killed a hunter in a remote area along the Idaho/Montana border, and then was fatally shot by the hunter's partner.

    The attack occurred about 10am in a mountainous heavily forested region near the Canadian border.

    The identity of the hunter killed is being withheld pending notification of next of kin.

    The hunter was white, medium age male.


    Article goes on -

    It is a crime to kill a grizzly bear which is a protected species. It was not immediately known if the man who shot the bear would be charged.

    :) heh

    Bear comes along a tears your friend to shreds, and you're supposed to......do what?

    shoo, shoo, go away, back into the woods, shoo shoo now


  22. What would you do, Quirk?

    There you are, up against the law.

    You have to decide whether to follow the law or let some situational ethics kick in.

    Choose, you have no choice.

  23. I'd a just speared the son bitch.


  24. 98% went to dividends

    which probably went to create jobs, after dividend taxes got paid


  25. Sarah is an idea girl even though some here call her an airhead.


  26. Sarah is an airhead even though some here call her an idea girl.


  27. One of the big arguments against the megaloads was 'why my G-d they will ruin our highways!!!!'.

    Truth is though, there isn't anything in those big barrels, cept air, and the number of tires supporting the weight is so great a bike might do more damage.

    There was some concern they had to cut some trees down and unhook some overhead wires and stuff. And they can only move in the middle of the night and they have to pull over every once in while, whether there is traffic or not.

    They are escorted by State Patrol.


  28. I never left a putt short. I was damned sure going to "give it a chance."

    I feel the same way about getting that money back in the U.S. If it's here, it's "got a chance" to create jobs. Over there? None.

  29. Daddy used to say "A putt that comes up short ain't got no chance."


  30. Bob-al-Harb: Sarah is an idea girl even though some here call her an airhead.

    "[Paul Revere] did warn the British. And in a shout-out, gotcha-type of question that was asked of me, I answered candidly. And I know my American history." (June 5, 2011)

    "But obviously, we've got to stand with our North Korean allies." (Nov. 24, 2010)

    "I want to help clean up the state that is so sorry today of journalism. And I have a communications degree." (Nov. 22, 2010)

    "Peaceful Muslims, pls refudiate." (Tweet, July 18, 2010)

    "Go back to what our founders and our founding documents meant -- they're quite clear -- that we would create law based on the God of the bible and the Ten Commandments." (May 6, 2010)

    "Only dead fish go with the flow." (Quitting as governor, July 3, 2009)

    Daddy used to say "A putt that comes up short ain't got no chance."

    You've got a mouth like an outboard motor... Putt putt puttity putt

  31. .

    Opinions can vary on repatriation.

    In my view, US corporations are sitting on $2 trillion in corporate profit and not investing.
    Results of the 2004 repatriation as reported by NBER were disappointing to say the least.

    If we got nothing from the 2004 repatriation and companies are sitting on hordes of cash as it is, it seems there is moral hazard in repeating the same repatriation mistake.

    One, we will likely get no new investment; and two, after this repatriation effort, companies will go back to keeping profits overseas knowing that at some point in the future they will be able to bring the money home through another repatriation.

    In 2004, they were able to bring money home at about 5.25% as I recall. Sweet deal.


  32. O Miss T, may I quote you?


  33. Actually some of them quotes ain't so bad, once you let them sink in a little.
    Couple of N/S forgetmenots but other than that.....

    If I was a collector of Miss T's misquotes, which I'm not, thank Heaven, that would take all my retirement away, I could have a field day.

    Besides she is better lookin' than Quirk.

    I just want something nice to look at in my older years.


  34. risky's new saddle is here. Now we got two saddles, and one horse.



  35. That, Q, is why I said nothing about "repatriation" being the answer.

    We really need to "change the tax rate" on Corporations, in order to be competitive with the rest of the world. And,

    2) The Taxes have to be "Payable" Immediately. No, waiting for repatriation. Payable, Now.

  36. Once they're "square with unca sugar" there will be no reason to leave the money sitting in Bermuda, or the Netherlands Antilles, or wherever.

  37. This is interesting.

    As of June 2011, California investor-owned utilities have signed and submitted for approval from the regulators 8,631 MW of contracts with solar companies. The exact contract price is kept confidential. However, we do know whether the contract is above or below the Market Price Referent, or MPR. The ‘market price referent‘ is an annual calculation of the anticipated 20-year levelized cost of energy of a new combined-cycle gas turbine in California, and serves as a proxy for the cost of building new non-renewable power.

    Of that 8.6 GW of signed contracts, 4,408 MW is below the MPR . So there we have it. Massive amounts of solar, for less than the cost of the fossil fuel alternative.

    Solyndra, Schlomyndra. Solar is Kickin'

  38. Look, when are you going to get it?

    There is no fixing of the economy.

    It is the farmers fault for making an edible surplus.

    We need to back to hunter/gathering/fishing of old, or, with Jacques Costeau, back to the sea.

    It won't be long now, before that prophetess from nowhere is shown to be right. Confedgal.

    Bob will rule.


  39. I looked her up, this mystery woman prophetess says I will rule this is all I could find

    Bob Will Rule


  40. It was the hush
    Of holy consideration
    And sacred conflict
    As my father and I
    Entered the Friendship Gathering
    I had to show him
    Where the cookies were
    And the coffee
    He wasn't a church goer
    You see
    But the high issue of the day
    Was who to hire
    And who to fire
    As Pastor
    And the line that
    Got Pappa's vote
    Was Pastor X
    "People, I'd die for you."
    "Hell Robert, nobody ever
    Offered that to me before
    He's got my vote."
    He got mine too.
    Then we homed and
    Watched the Vandies game


  41. i will rise

    The only argument I got here is the use of the future tense.


  42. You are risen already, what the hell else are you?

    Death being the other side of life.

    "A human spirt once being created cannot ever come not to be."

    And nobody calls your name but your own very self.


  43. Rabbit dies saving owners from house fire ... wife later found pregnant.

  44. This comment has been removed by the author.

  45. The ending of shitbot is only the sunset away.


  46. yet, however, though, although, nevertheless, even so, all the same

    If you'd
    Ask me so

    I'd slap
    Thy very butt


  47. But I best
    Make no mo
    I be
    Ban - ed

    Hope you and yours are all well, Mel.


  48. This post has been removed by the author.

    Rather by the authoress.

    And all it had was a typo.

    It rained here all spring, the rain coming down in sheets, rain dripping from the cedar trees, the alfalfa thick and strong in the fields, and I put covers over the woodpiles, and now, it has been since late June that we have gotten rain. The runoff is all gone now and the rivers are very low and easy to fish and the fields are looking yellow now with the coming of the fall and the raptors have it easy and the first leaves are falling off the cottonwoods, yellow in the trout streams. I can smell it in the air now though, the coming of the autumn rains, and it is overcast overhead and it is only somewhat you can see the moon. My daughter has ordered a delivered morning paper and I read that before I make her her scrambled eggs and toast. She has her new saddle now and is making if fit and is trying it out and hasn't come home yet tonight.

    :) hope you are well, you and all your family

    The Lord G-d has taken my heaviness away

    bob hemingway

  49. You are funny, deuce, she can take care of herself.


  50. It is absurd to sit around and talk day after endless day about the economy.

    What in the Lord is that going to do for you on your deathbed?

    I want a ripping girl up in the cedars.

    That means something.

    Which is of course, an anticipation of heaven.

    Only that, an anticipation.


    I am going now deuce, you take good care of Melody, though I think she can take care of herself, I got more to do.

    Delete away.

    Have fun with Allen.

    I hope you and yours are doing well, Melody.

  51. I see our boy's off his meds, again.

    Musta got the Vet bill.

  52. Global Investment in Green Energy jumped 32% to $211 billion. China Leads the Way, of course.

  53. More from the Telegraph:

    Given the growing sense that a tumultuous "euro-quake" end-game may soon be upon us, or at least the still traumatic acknowledgement of an explicit Greek default, the newsflow from Europe last week was almost overwhelming. So there was, perhaps, less comment than there should have been on the fact that UK inflation had just equalled its three-year high.

    It used to be reasonable to assume that when the economy slowed, and unemployment rose, then inflation was likely to fall. Well, the UK has just endured its worst recession in more than 60 years. The economy shrank, peak to trough, by more than 6pc. Despite this historic drop, growth has failed to bounce back, remaining as low as 0.2pc during the second quarter.

    Yet still, price pressures have been rising. Not so long ago, the publication of data showing that CPI inflation had overshot the Bank of England's 2pc target by more . . . . . .

    A Double-Dip, and 4.5% Inflation, too?

    It just seems so, . . . Un-British

  54. A big reason still higher UK inflation looks inevitable in the coming months is the price of energy and other commodities. Utility bills are soaring, as are UK food prices – which rose 6.2pc during the year to August. These miserable outcomes have their origins in the fact that global energy prices, to the surprise of many, have remained remarkably firm despite the latest Western slowdown. As such, another economic assumption of old has been upended.

    Until recently, a slump in the "advanced countries", most of which are oil importers, was enough to generate a fall – expected, actual or both – in world oil prices, due to the impact of weaker Western energy demand. This was very useful for the developed world because the lower oil prices that resulted when our economies slowed helped to bring about our recovery. Cheaper fuel and heat would cut household and industry costs, boosting disposable incomes, profits and growth itself. Lower oil prices also helped tame inflation, giving our central banks the room to cut rates, so consolidating recovery.

    Global oil markets, then, have long provided a crucial "self-correction" mechanism for the Western world. In light of the cardinal importance weaker crude prices have played in bringing about previous Western recoveries, it's worth examining their recent path.

  55. I took the comment down.

    I read it on a friends page and thought it was funny. I thought I would share. I copy and pasted, hence the misspelling of the word.

    It was not meant for comments.

  56. It's called "vertical integration".