THE LEAD

                                                                                                                                                                                                                                                                                        

The British Are Totally Bankrupt: It's Time To Dump Obama, Schäuble, and Wall Street

October 27, 2015

Last week's visit to Britain by China's President Xi Jinping came at a time when the British economy is totally collapsed, the British banks are hopelessly bankrupt, the British Monarchy is in a state of disintegration, and the entire global Anglo-Dutch system is on the edge of total disintegration.  The Chinese are well aware of all of these factors, and are moving accordingly.

From the standpoint of the West, it is time for some immediate house-cleaning, before the British-owned desperados, like President Obama, start the world war they have been attempting to provoke since the ouster and assassination of Libya's Qaddafi in late 2011.  The war drive is driven by their bankruptcy and their imminent loss of power.  The crucial question is whether the world, starting in the trans-Atlantic region, is going to plunge into chaos, or whether an orderly end to the British System, through a revival of the Hamiltonian principles, starting in the United States, can occur in time.

The U.S. Congress is dysfunctional, as evidenced by the fact that there has been no U.S. Congressional action against Obama's Drone Kill policy, even weeks after the release of the "Drone Papers" by The Intercept (the German Bundestag has already held hearings with U.S. former drone pilot whistleblowers).  Congress is thoroughly corrupted, particularly the Republicans, with very few exceptions.  The very existence of Wall Street assures the perpetuation of this corruption.  Wipe out Wall Street, which is already hopelessly bankrupt, and Congress can be restored to its Constitutional mandate.  Wipe out Wall Street and Obama is out.

In Europe, German Finance Minister Wolfgang Schäuble is the key figure promoting the genocidal austerity measures, known in Germany as "black zero."  Sunday's second leading German tabloid, Welt am Sonntag, published an open call for German Chancellor Angela Merkel to be dumped for her soft-on-refugee policies and replaced by Schäuble.  If Europe is to survive, Schäuble, like Obama, must be ousted immediately.

The United States economy, after 15 years of British-owned Presidents, is itself in a state of physical economic breakdown. The collapse of the U.S. productive economy is accelerating tremendously, as evidenced by recent reports on growing poverty, and ten consecutive months of decline in industrial output. Vital sectors like housing, construction, transportation and machine tools, are declining at an accelerated rate.  This is Obama's responsibility.  He destroyed the U.S. economy deliberately, on behalf of Wall Street and London—and with the complicity of most of Congress.  Congress should be put on notice:  Until you dump Obama and shut down Wall Street, you can't be paid.  You don't deserve to be paid.  Find some productive outside work, or, better yet, do your job by ousting Obama and putting Wall Street out of its misery, through  Glass-Steagall and a revival of Hamiltonian credit, for a revival of the productive powers of labor, through infrastructure investment, and through science-driver programs.

                                                                                                                                                                                                                                                                                        

SUPPORTING MATERIAL


U.S. Manufacturing Plunge Threatening Corporate Debt Bubble

The Federal Reserve's zero interest rate policy continues to build in a debt crash. The ZIRP policy has fostered massive lending to inefficient industries (shale), overleveraged people (auto buyers), and overindebted companies (buybacks, mergers, etc.). The bubble in U.S. corporate debt, used overwhelmingly to feed the stock market, is growing at a record rate. Just under $1 trillion in investment grade bonds have been issued through September, a 13% jump from 2014 which was a record year. High-yield, or junk bond issuance has been an additional $224.3 billion for the first three quarters, continuing the record pace of 2014, according to SIFMA, the Securities Industry and Financial Markets Association. The junk bond bubble has reached $1.8 trillion, and now $400 billion of it is in the oil sector, plus $350 billion in high-yield, so-called "leveraged loans" to overindebted oil-related companies.

But the earnings of U.S. companies, at the same time, are down about 5% so far this year, compared to 2014; led, again, by energy, where earnings are down by two-thirds. The Wall Street Journal reported Oct. 25: "Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as industrial firms warn of a pullback.... From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year." The Journal estimated the S&P 500's sales revenues would drop 4% in 2015, along with the 5% in earnings.

Manufacturing industry has been going into collapse. In addition to the drumbeat of Federal Reserve district bank reports of shrinking industrial activity and wages (the Dallas Fed just issued its 10th straight such monthly report), large manufacturers with very large numbers of business customers are reporting "recession is underway." Caterpillar's three years of continuous and increasing revenue losses have become infamous. Fastenal Co. — literally nuts and bolts, the largest industrial fastener distributor in North America, lost sales this year for the first time since 2009. On an investor call reported in the Wall Street Journal, Fastenal CFO Dan Florness said,  "The industrial environment's in a recession—I don't care what anybody says, because nobody knows that market better than we do. You know, we touch 250,000 active customers a month."

3M Co. said it will lay off 1,500 employees, or 1.7% of its total, as sales growth sagged for a wide range of wares.

ZeroHedge.com cites Fredrik Eliasson, chief sales and marketing officer at railroad operator CSX Corp.: "If you look at .... the broad industrial-production index, you see industrial production sequentially coming down." It reports that truckload carriers are not seeing any holiday uptick in retailer demand, because business inventories are already so large. Alex Vecchio, a transportation analyst at Morgan Stanley, is quoted: "Transportation companies are typically a leading indicator, and our data is not good." 


AIIB Chairman Explains the Bank's New Approach to Lending

Jin Liqun, the chairman of the Asian Infrastructure Investment Bank, visited Brookings Institution in Washington on Oct. 21 to explain the importance of the AIIB's new approach to development financing. Jin tried to put aside any misconceptions about the AIIB viewing itself as a alternative to the World Bank or to the Asian Development Bank. “Both World Bank and the ADB have contributed to Asian poverty reduction over the decades,” Jin said. “But poverty reduction is hard to achieve, not so much because of a lack of funding, but because of the approach. I don't think poverty reduction in and of itself will go far in affecting the lives of people. In most of the cases, the approach needs to be refined and needs to be improved.” He then went on to describe the situation of a community in a remote area cut off from the outside world. Whatever efforts may be made to relieve their situation will not be of much use, he said, but instead “will make them completely dependent on alms and charity from the government and from international doaners, even though the areas may be very rich in their natural resources,” Jin said. “But the locals have no way of tapping the resources for their own benefit. The only solution in my opinion is connectivity. This will bridge the gap between the local community and the outside world.” And this he explained was what the AIIB wished to accomplish, creating that connectivity.

He praised the ADB and the World Bank, saying that they had contributed greatly to the development of China through the years with its investment in infrastructure, but now that China was becoming a major economic power, it felt it also had a responsibility to begin offering the same assistance to other countries.  He said that the AIIB was formulated as a bank for Asia, an alternative to non-regional financial institutions which also imposed certain conditionalities. But when all these other non-Asian countries wanted to be a part of it, they felt they couldn't restrict membership to Asian countries alone. The Asian countries will retain the majority holdings in the bank regardless of how many countries end up joining.

While the World Bank originally began with the title International Bank for Reconstruction and Development, with the task of helping in the reconstruction of Europe after the Second World War and then assisting in the development of the Third World countries, by the 1970s, under the combined influence of the growing financial crisis and the paradigm shift towards the zero-growth perspective, the World Bank shifted toward what was euphemistically called “poverty reduction,” income distribution and, under the guidance of Robert McNamara, population control. The “new approach” indicated by Jin Liqun is the type of paradigm shift the world needs to move forward on the road to development.

When someone asked if AIIB would finance China's One Belt, One Road project, Jin responded that the Belt and Road project were being supported by domestic Chinese funds, including the Chinese Ex-Im Bank, with far greater resources than the AIIB. But if there were to be projects which are a part of the Belt and Road strategy, which were in line with the AIIB's lending guideline, the AIIB would, of course, be willing to participate.

                                                                                                                                                                                                                                                                                        

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