“Because the Lord guides us, we will not be misled. Therefore, I set my face like flint, determined to do his will. And I will not be put to shame.”
Isaiah 50:7
Saturday, April 30, 2011
Friday, April 29, 2011
Two Chaebol-Related News This Week; What’s Lacking in Research on Chaebols?
The Korean media outlets have reported two chaebol-related news this week.
Korean chaebols have expanded its affiliates, increasing its debt levels under Lee administration partly due to its pro-business stance and accompanying policies.
Doesn’t this sound familiar when the 1997 financial crisis was playing out?
Another news is that Korea’s income gap is widening. This also stems in part from chaebols-centered export-dependent growth strategy, industrial structure and their expansionist drive and waning SMEs’ competitiveness,
Despite the shortcomings of chaebol-centered economic model, they continuously grow and reap high profits.
Much of the research on chaebols has been from the perspective of ownership and governance structure or its competitive strategy.
Aside from their own strategies and competence, there have been forces, international and domestic, which have helped chaebols to grow and prosper.
The political economy of Korea has favored the chaebol-centered economic system for various reasons I have discussed.
There are outside forces in conjunction with internal forces which have made Korea’s rapid economic growth possible and put Korea in austerity mode. They did that for their benefits.
As I have alluded on more than a few occasions, Korea’s exponential growth came with a cost: the 1997 financial crisis was a big symptom.
Of course, unless Korea’s policy instrument including mercantilist export-dependent economic drive, taxation and regulations favoring chaebols change to a significant degree, chaebols’ dominance in Korea’s economic landscape would be unlikely to wane. In other words, Korea’s overall economic stance and the dynamics and dubious collusion between the state and chaebols, let alone international politics and the U.S. political economy matter much.
Accordingly, more research on these forces is needed to address some of the underlying issues in an effort to revamp the skewed industrial structure, which in turn would generate more jobs, and nurture entrepreneurship and innovative discipline. Otherwise research on chaebols may miss the forest for the trees.
Korean chaebols have expanded its affiliates, increasing its debt levels under Lee administration partly due to its pro-business stance and accompanying policies.
Doesn’t this sound familiar when the 1997 financial crisis was playing out?
Another news is that Korea’s income gap is widening. This also stems in part from chaebols-centered export-dependent growth strategy, industrial structure and their expansionist drive and waning SMEs’ competitiveness,
Despite the shortcomings of chaebol-centered economic model, they continuously grow and reap high profits.
Much of the research on chaebols has been from the perspective of ownership and governance structure or its competitive strategy.
Aside from their own strategies and competence, there have been forces, international and domestic, which have helped chaebols to grow and prosper.
The political economy of Korea has favored the chaebol-centered economic system for various reasons I have discussed.
There are outside forces in conjunction with internal forces which have made Korea’s rapid economic growth possible and put Korea in austerity mode. They did that for their benefits.
As I have alluded on more than a few occasions, Korea’s exponential growth came with a cost: the 1997 financial crisis was a big symptom.
Of course, unless Korea’s policy instrument including mercantilist export-dependent economic drive, taxation and regulations favoring chaebols change to a significant degree, chaebols’ dominance in Korea’s economic landscape would be unlikely to wane. In other words, Korea’s overall economic stance and the dynamics and dubious collusion between the state and chaebols, let alone international politics and the U.S. political economy matter much.
Accordingly, more research on these forces is needed to address some of the underlying issues in an effort to revamp the skewed industrial structure, which in turn would generate more jobs, and nurture entrepreneurship and innovative discipline. Otherwise research on chaebols may miss the forest for the trees.
Thursday, April 28, 2011
Wal-Mart CEO: Our Shoppers Running Out of Money; Not Seeing Signs of a Recovery
From Money:
Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.
"We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact."
Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.
Lately, they're "running out of money" at a faster clip, he said.
"Purchases are really dropping off by the end of the month even more than last year," Duke said. "This end-of-month [purchases] cycle is growing to be a concern.
Wal-Mart, which averages 140 million shoppers weekly to its stores in the United States, is considered a barometer of the health of the consumer and the economy.
To that end, Duke said he's not seeing signs of a recovery yet.
With food prices rising, Duke said Wal-Mart is charging customers more for some fresh groceries while reducing prices on other merchandise such as electronics.
Wal-Mart has struggled with seven straight quarters of sales declines in its stores.
http://money.cnn.com/2011/04/27/news/companies/walmart_ceo_consumers_under_pressure/index.htm
Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.
"We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact."
Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.
Lately, they're "running out of money" at a faster clip, he said.
"Purchases are really dropping off by the end of the month even more than last year," Duke said. "This end-of-month [purchases] cycle is growing to be a concern.
Wal-Mart, which averages 140 million shoppers weekly to its stores in the United States, is considered a barometer of the health of the consumer and the economy.
To that end, Duke said he's not seeing signs of a recovery yet.
With food prices rising, Duke said Wal-Mart is charging customers more for some fresh groceries while reducing prices on other merchandise such as electronics.
Wal-Mart has struggled with seven straight quarters of sales declines in its stores.
http://money.cnn.com/2011/04/27/news/companies/walmart_ceo_consumers_under_pressure/index.htm
Japanese Retail Sales Tumble Most in 13 Years; Japanese Debt Outlook Cut to Negative
From Bloomberg:
Japan’s retail sales tumbled the most in 13 years last month as the nation’s record earthquake shut stores and discouraged households from spending money.
Sales slumped 8.5 percent in March from a year earlier, the biggest decline since March 1998, according to a statement by trade ministry in Tokyo today.
Toyota Motor Corp. led a record drop in auto sales in March and domestic output plunged 63 percent after disruptions in its supply chains and factory closures. Production will return to normal by December, the automaker said.
Prime Minister Naoto Kan unveiled a 4-trillion yen ($49 billion) extra budget last week to rebuild the northeast area that was devastated by the earthquake and tsunami. The spending aims to provide more than 100,000 temporary homes and clean up debris from the disaster.
The magnitude-9 quake and ensuing tsunami crippled the Fukushima Dai-Ichi nuclear plant operated by Tokyo Electric Power Co., causing radiation leaks and power shortages in eastern Japan. The disaster left more than 26,000 people dead or missing, according to the National Police Agency.
http://www.bloomberg.com/news/2011-04-27/japanese-retail-sales-slump-most-in-13-years-after-quake-nuclear-crisis.html
From Bloomberg:
Japan’s sovereign-rating outlook was cut to “negative” by Standard & Poor’s as the nation’s reconstruction needs following last month’s earthquake will likely add to what’s already the world’s biggest debt load.
The outlook on Japan’s local-currency debt rating, at AA-, the fourth-highest grade, was lowered from “stable,” S&P said in a statement today. The company had reduced the rating by one step in January in the first cut since 2002. Moody’s Investors Service said last month the disaster may bring forward the “tipping point” for the country’s bond market.
Today’s decision adds to pressure on Prime Minister Naoto Kan, who has yet to detail how the rebuilding will be paid for and how he plans to rein in longer-term fiscal deficits. As public spending increases, revenue will likely decline because of the economic hit from the disaster, with a report today showing retail sales tumbled the most in 13 years last month.
Moody’s today reported no change to its negative outlook for Japan's Aa2 grade rating, the third highest, after a reduction from “stable” in February because of political gridlock. Japan’s public debt will probably increase 5.8 percent to 997.7 trillion yen ($12.2 trillion) in the year started April 1, from a projected 943.1 trillion yen last year, the Finance Ministry said in January.
The Organization for Economic Cooperation and Development last week urged Kan’s government to at least double a sales tax to 10 percent and to implement increases as soon as possible. The nation’s total public debt will reach 204 percent of gross domestic product this year, according to the OECD, the highest level among nations tracked by the group.
http://www.bloomberg.com/news/2011-04-27/japan-debt-outlook-cut-to-negative-by-s-p-as-quake-rebuilding-adds-to-debt.html
Japan’s retail sales tumbled the most in 13 years last month as the nation’s record earthquake shut stores and discouraged households from spending money.
Sales slumped 8.5 percent in March from a year earlier, the biggest decline since March 1998, according to a statement by trade ministry in Tokyo today.
Toyota Motor Corp. led a record drop in auto sales in March and domestic output plunged 63 percent after disruptions in its supply chains and factory closures. Production will return to normal by December, the automaker said.
Prime Minister Naoto Kan unveiled a 4-trillion yen ($49 billion) extra budget last week to rebuild the northeast area that was devastated by the earthquake and tsunami. The spending aims to provide more than 100,000 temporary homes and clean up debris from the disaster.
The magnitude-9 quake and ensuing tsunami crippled the Fukushima Dai-Ichi nuclear plant operated by Tokyo Electric Power Co., causing radiation leaks and power shortages in eastern Japan. The disaster left more than 26,000 people dead or missing, according to the National Police Agency.
http://www.bloomberg.com/news/2011-04-27/japanese-retail-sales-slump-most-in-13-years-after-quake-nuclear-crisis.html
From Bloomberg:
Japan’s sovereign-rating outlook was cut to “negative” by Standard & Poor’s as the nation’s reconstruction needs following last month’s earthquake will likely add to what’s already the world’s biggest debt load.
The outlook on Japan’s local-currency debt rating, at AA-, the fourth-highest grade, was lowered from “stable,” S&P said in a statement today. The company had reduced the rating by one step in January in the first cut since 2002. Moody’s Investors Service said last month the disaster may bring forward the “tipping point” for the country’s bond market.
Today’s decision adds to pressure on Prime Minister Naoto Kan, who has yet to detail how the rebuilding will be paid for and how he plans to rein in longer-term fiscal deficits. As public spending increases, revenue will likely decline because of the economic hit from the disaster, with a report today showing retail sales tumbled the most in 13 years last month.
Moody’s today reported no change to its negative outlook for Japan's Aa2 grade rating, the third highest, after a reduction from “stable” in February because of political gridlock. Japan’s public debt will probably increase 5.8 percent to 997.7 trillion yen ($12.2 trillion) in the year started April 1, from a projected 943.1 trillion yen last year, the Finance Ministry said in January.
The Organization for Economic Cooperation and Development last week urged Kan’s government to at least double a sales tax to 10 percent and to implement increases as soon as possible. The nation’s total public debt will reach 204 percent of gross domestic product this year, according to the OECD, the highest level among nations tracked by the group.
http://www.bloomberg.com/news/2011-04-27/japan-debt-outlook-cut-to-negative-by-s-p-as-quake-rebuilding-adds-to-debt.html
Wednesday, April 27, 2011
Bob Eisenbeis: What’s a Central Bank to Do?
From the Institutional Risk Analyst:
Faced with largely the same set of facts when it comes to their inflation outlook, some of the world's major central banks have come to markedly different conclusions about the appropriate policy.
The ECB began to exit from its accommodative policy by increasing its policy rate by 25 basis points to 1.25% on April 7. The ECB noted that growth was improving moderately, but inflation had increased to 2.6% and was up from 2.45% the previous month. The rise was largely due to increases in energy, food, and commodity prices. The concern was the potential second round effects and that these increases could become embedded in inflation expectations.
The same day, the Bank of England kept its policy rate at 0.5%, despite the fact that inflation had been running well above its target rate of 2% for more than a year and was likely to remain so through 2011. Again, the Committee noted that the near term path for inflation was higher due to energy, imported commodities and other goods. Concern was also expressed about inflation expectations having risen in the UK, the US and the euro area relative to what they had been before the financial crisis. Finally the UK real economy was softer than that of the EU generally with output having declined by 0.5% in the fourth quarter of 2010.
While the FOMC will meet this week, Fed Chairman Ben Bernanke and Vice-Chair Janet Yellen have already signaled that they view the recent increases in commodity, energy and food prices as transitory. Governor Yellen in particular provided an extremely thorough and detailed dissection of the inflation data and her views on the real economy and employment in her April 11th speech in New York. She indicated clearly that the causes of the run-up in food, energy and commodity prices were rooted in increases in global demand, combined with energy supply shocks and uncertainty about oil flow from the Middle East. Like the Chairman, she expressed the view that the increases were transitory.
Most notably she attempted to debunk the widely discussed view that accommodative policies in the US were the cause of the increase in global prices. She was very clear that the main concern was for the US expansion and employment situation, that the current stance of policy was appropriate, and that QE II would be completed as scheduled. So we don't expect any notable news coming from this week's FOMC meeting.
These three views on the appropriate stance of policy and how individual-country central banks may think about policy shows a growing disconnect between traditional approaches to monetary policy and globalization. For example, the US economy historically has been largely isolated from the rest of the world. International markets were not particularly significant (exports and imports were roughly balanced and accounted for less than 13% of GDP). Inflation was largely a domestic issue and could be directly affected by changes in US policy rates. From the 50s through 70s, the main channel for monetary policy was through housing: when interest rates exceeded the Reg Q ceilings that banks and thrifts could pay for funds, the supply of funding to housing was cut off. Then construction declined and the effects rippled through the rest of the economy. Most of the economic models have that structure and international isolation embedded within them. Yet this is not the world that policy makers are now dealing with, as the above descriptions of the causes of the current inflation aptly illustrate.
If the major causes of inflation are external to an economy, and policy makers have domestic tools and targets for inflation and local employment, either explicitly or implicitly, then how should they respond to externally generated causes of inflation? What is the link between the central bank's domestic policy interest rate tool and the external causes of price increases? These key questions are not currently addressed within contemporary policy frameworks employed by the FOMC, the ECB, or the Bank of England, as best one can determine.
In the current inflation environment, one can justify any one of three alternatives, and some of these are clearly being adopted. Furthermore, all can be mostly right or mostly wrong.
First, a policy maker could attempt, as the US did during the 1970s oil crisis, to insulate the real domestic economy from the contraction supply shock by keeping rates low. This policy seemed appropriate and was politically acceptable, especially since the price increases were viewed as temporary. But it clearly failed, and we paid the cost with higher inflation.
Second, if one believes that the energy, food and commodities price increases are transitory, then no response is called for; and this can justify focusing on domestic employment, as is currently being done in both the US and UK. Even if the increases are permanent, doing nothing may be the appropriate policy. Permanent increases in energy, commodity, and food prices will shift these prices relative to other goods and services and generate substitution and accommodative responses by business and consumers. We may, for example, drive less and adopt more hybrid transportation alternatives -- moves that are already beginning to take place -- than we would if the energy price increases were viewed as being temporary.
But doing nothing also has its own risks. Maintaining an accommodative policy too long risk overheating an economy and fueling both an increase in domestically-produced goods and services prices and passing along the increased prices of external goods and energy prices as second round effects. As always, timing is everything when it comes to exiting from an accommodative policy.
Third, a central bank can move to increase its policy rate to choke off inflation, as the ECB has begun to do. But this policy has certain risks associated with it. If the causes of the inflation are external to the economy, then one would not expect those prices to be responsive to a policy move by a domestic central bank. But the increase in rates will clearly impact those domestic and non-international activities that are affected by rising interest rates. Economic activity in those areas will contract, including production, employment, and prices. So the impact of responding to an external inflation source is to force a decline in an aggregate price index by contracting domestic economic activity. This seems a risky path indeed. Right now it may appear less so because policy, as ECB President Trichet stated, is still viewed as being extremely accommodative.
So what is a central bank to do, especially when policy is overly accommodative? While Vice-Chair Yellen may argue that the increase in world prices is not our fault, it is undeniable that the world's central banks collectively have flooded world financial markets with liquidity by printing money.
This situation is likely to become even worse in the near term if Japan resorts to inflation as a means to finance the cleanup and rebuilding necessitated by the recent earthquake, tsunami, and nuclear disasters. When domestic economies are no longer insulated from international markets and forces, individual central banks can no longer go-it-alone with their policy decisions. In such a world, perhaps the best policy is to remove the distortions cause by current policies, and then attempt to avoid extremes. Unfortunately, how to get from here to there in a non-disruptive way is not at all obvious, as the ECB may soon find out..
What this means for investors is that market uncertainty is likely to remain high for some time to come, and attempting to play in international markets carries with it huge foreign-exchange and real risks that need to be hedged.
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
Faced with largely the same set of facts when it comes to their inflation outlook, some of the world's major central banks have come to markedly different conclusions about the appropriate policy.
The ECB began to exit from its accommodative policy by increasing its policy rate by 25 basis points to 1.25% on April 7. The ECB noted that growth was improving moderately, but inflation had increased to 2.6% and was up from 2.45% the previous month. The rise was largely due to increases in energy, food, and commodity prices. The concern was the potential second round effects and that these increases could become embedded in inflation expectations.
The same day, the Bank of England kept its policy rate at 0.5%, despite the fact that inflation had been running well above its target rate of 2% for more than a year and was likely to remain so through 2011. Again, the Committee noted that the near term path for inflation was higher due to energy, imported commodities and other goods. Concern was also expressed about inflation expectations having risen in the UK, the US and the euro area relative to what they had been before the financial crisis. Finally the UK real economy was softer than that of the EU generally with output having declined by 0.5% in the fourth quarter of 2010.
While the FOMC will meet this week, Fed Chairman Ben Bernanke and Vice-Chair Janet Yellen have already signaled that they view the recent increases in commodity, energy and food prices as transitory. Governor Yellen in particular provided an extremely thorough and detailed dissection of the inflation data and her views on the real economy and employment in her April 11th speech in New York. She indicated clearly that the causes of the run-up in food, energy and commodity prices were rooted in increases in global demand, combined with energy supply shocks and uncertainty about oil flow from the Middle East. Like the Chairman, she expressed the view that the increases were transitory.
Most notably she attempted to debunk the widely discussed view that accommodative policies in the US were the cause of the increase in global prices. She was very clear that the main concern was for the US expansion and employment situation, that the current stance of policy was appropriate, and that QE II would be completed as scheduled. So we don't expect any notable news coming from this week's FOMC meeting.
These three views on the appropriate stance of policy and how individual-country central banks may think about policy shows a growing disconnect between traditional approaches to monetary policy and globalization. For example, the US economy historically has been largely isolated from the rest of the world. International markets were not particularly significant (exports and imports were roughly balanced and accounted for less than 13% of GDP). Inflation was largely a domestic issue and could be directly affected by changes in US policy rates. From the 50s through 70s, the main channel for monetary policy was through housing: when interest rates exceeded the Reg Q ceilings that banks and thrifts could pay for funds, the supply of funding to housing was cut off. Then construction declined and the effects rippled through the rest of the economy. Most of the economic models have that structure and international isolation embedded within them. Yet this is not the world that policy makers are now dealing with, as the above descriptions of the causes of the current inflation aptly illustrate.
If the major causes of inflation are external to an economy, and policy makers have domestic tools and targets for inflation and local employment, either explicitly or implicitly, then how should they respond to externally generated causes of inflation? What is the link between the central bank's domestic policy interest rate tool and the external causes of price increases? These key questions are not currently addressed within contemporary policy frameworks employed by the FOMC, the ECB, or the Bank of England, as best one can determine.
In the current inflation environment, one can justify any one of three alternatives, and some of these are clearly being adopted. Furthermore, all can be mostly right or mostly wrong.
First, a policy maker could attempt, as the US did during the 1970s oil crisis, to insulate the real domestic economy from the contraction supply shock by keeping rates low. This policy seemed appropriate and was politically acceptable, especially since the price increases were viewed as temporary. But it clearly failed, and we paid the cost with higher inflation.
Second, if one believes that the energy, food and commodities price increases are transitory, then no response is called for; and this can justify focusing on domestic employment, as is currently being done in both the US and UK. Even if the increases are permanent, doing nothing may be the appropriate policy. Permanent increases in energy, commodity, and food prices will shift these prices relative to other goods and services and generate substitution and accommodative responses by business and consumers. We may, for example, drive less and adopt more hybrid transportation alternatives -- moves that are already beginning to take place -- than we would if the energy price increases were viewed as being temporary.
But doing nothing also has its own risks. Maintaining an accommodative policy too long risk overheating an economy and fueling both an increase in domestically-produced goods and services prices and passing along the increased prices of external goods and energy prices as second round effects. As always, timing is everything when it comes to exiting from an accommodative policy.
Third, a central bank can move to increase its policy rate to choke off inflation, as the ECB has begun to do. But this policy has certain risks associated with it. If the causes of the inflation are external to the economy, then one would not expect those prices to be responsive to a policy move by a domestic central bank. But the increase in rates will clearly impact those domestic and non-international activities that are affected by rising interest rates. Economic activity in those areas will contract, including production, employment, and prices. So the impact of responding to an external inflation source is to force a decline in an aggregate price index by contracting domestic economic activity. This seems a risky path indeed. Right now it may appear less so because policy, as ECB President Trichet stated, is still viewed as being extremely accommodative.
So what is a central bank to do, especially when policy is overly accommodative? While Vice-Chair Yellen may argue that the increase in world prices is not our fault, it is undeniable that the world's central banks collectively have flooded world financial markets with liquidity by printing money.
This situation is likely to become even worse in the near term if Japan resorts to inflation as a means to finance the cleanup and rebuilding necessitated by the recent earthquake, tsunami, and nuclear disasters. When domestic economies are no longer insulated from international markets and forces, individual central banks can no longer go-it-alone with their policy decisions. In such a world, perhaps the best policy is to remove the distortions cause by current policies, and then attempt to avoid extremes. Unfortunately, how to get from here to there in a non-disruptive way is not at all obvious, as the ECB may soon find out..
What this means for investors is that market uncertainty is likely to remain high for some time to come, and attempting to play in international markets carries with it huge foreign-exchange and real risks that need to be hedged.
http://us1.institutionalriskanalytics.com/pub/IRAMain.asp
Tuesday, April 26, 2011
Fallacy and Shortcomings of the Mercantilist Export Model
Why have Korea and other Asian countries pursued its mercantilist export model in the first place? The dollar peg, taxation, regulations, and big business-centered industrial structure revolve around this model.
Who is engineering the dollar peg?
Who are the beneficiaries of these policies?
The success of export-dependent economic model comes with a cost. In promoting this model, Korea has depressed its currency, purchased the U.S. treasuries, pegged its currency to the USD, and nurtured the chaebol-centered industrial structure. This policy apparatus served Korea well in the early stage of industrialization. For instance, it helped Korea to grow its economy and build its industrial base rapidly. And yet, ironically, the problems Korea has been facing in the later days of industrialization are largely attributable to this model.
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
Who is engineering the dollar peg?
Who are the beneficiaries of these policies?
The success of export-dependent economic model comes with a cost. In promoting this model, Korea has depressed its currency, purchased the U.S. treasuries, pegged its currency to the USD, and nurtured the chaebol-centered industrial structure. This policy apparatus served Korea well in the early stage of industrialization. For instance, it helped Korea to grow its economy and build its industrial base rapidly. And yet, ironically, the problems Korea has been facing in the later days of industrialization are largely attributable to this model.
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
Monday, April 25, 2011
Charles Hugh Smith: Anatomy of a Crisis: 2011
From Of Two Minds:
What's behind the disturbance in the financial Force? QE, ZIRP, the dollar peg and inflation, to name a few factors.
There is a great disturbance in the world's financial Force
1. There is a rising loss of faith in the conventional (i.e. propaganda) account of the U.S. economy.
2. The idea that quantitative easing is benign has lost credibility.
3. Much of the analysis of U.S. policy is narrowly U.S.-centric.
The key dynamic is the linkage of the renminbi (yuan) and the U.S. dollar.
4. China appears to be in the grip of a classic wage-price spiral inflation.
As noted in Your Pick, Ben, But One Goes Off the Cliff, the Fed's ZIRP and QE policies have pared future policy down to a stark fork in the road
So why is the Fed carpet-bombing the global economy? To protect the domestic economy? That makes no sense, for the Fed's policies are pushing oil up to the point where there is no way to keep the U.S. economy from tipping into recession. It isn't acting on behalf of the domestic economy, of course; it's acting on behalf of domestic banking and Wall Street.
The Fed is busily destroying the village, suposedly to save it--only it's the global village. But the Fed isn't the only player with a stake in its game, and the other players, notably China, are tipping their hand that they will have to act, and soon, to protect their own domestic economies from the Fed's destructive policies.
Additional note: I have often asked how hyperinflation would benefit the Financial Elites;blogger FOFOA kindly offered a detailed answer.
http://www.oftwominds.com/blogapril11/anatomy-of-crisis4-11.html
What's behind the disturbance in the financial Force? QE, ZIRP, the dollar peg and inflation, to name a few factors.
There is a great disturbance in the world's financial Force
1. There is a rising loss of faith in the conventional (i.e. propaganda) account of the U.S. economy.
2. The idea that quantitative easing is benign has lost credibility.
3. Much of the analysis of U.S. policy is narrowly U.S.-centric.
The key dynamic is the linkage of the renminbi (yuan) and the U.S. dollar.
4. China appears to be in the grip of a classic wage-price spiral inflation.
As noted in Your Pick, Ben, But One Goes Off the Cliff, the Fed's ZIRP and QE policies have pared future policy down to a stark fork in the road
So why is the Fed carpet-bombing the global economy? To protect the domestic economy? That makes no sense, for the Fed's policies are pushing oil up to the point where there is no way to keep the U.S. economy from tipping into recession. It isn't acting on behalf of the domestic economy, of course; it's acting on behalf of domestic banking and Wall Street.
The Fed is busily destroying the village, suposedly to save it--only it's the global village. But the Fed isn't the only player with a stake in its game, and the other players, notably China, are tipping their hand that they will have to act, and soon, to protect their own domestic economies from the Fed's destructive policies.
Additional note: I have often asked how hyperinflation would benefit the Financial Elites;blogger FOFOA kindly offered a detailed answer.
http://www.oftwominds.com/blogapril11/anatomy-of-crisis4-11.html
China Proposes to Cut Two Thirds of Its 3 Trillion USD Holdings
From Zero Hedge:
All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?
From Xinhua:
China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.
Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
And as if the public sector making it all too clear what is about to happen was not enough, here is the private one as well:
China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.
The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said on Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.
However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.
The last sentence says it all. While China is certainly tired of recycling US Dollars, it still has no viable alternative, especially as long as its own currency is relegated to the C-grade of not even SDR-backing currencies. But that will all change very soon. Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions). As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.
http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings
All those who were hoping global stock markets would surge tomorrow based on a ridiculous rumor that China would revalue the CNY by 10% will have to wait. Instead, China has decided to serve the world another surprise. Following last week's announcement by PBoC Governor Zhou (Where's Waldo) Xiaochuan that the country's excessive stockpile of USD reserves has to be urgently diversified, today we get a sense of just how big the upcoming Chinese defection from the "buy US debt" Nash equilibrium will be. Not surprisingly, China appears to be getting ready to cut its USD reserves by roughly the amount of dollars that was recently printed by the Fed, or $2 trilion or so. And to think that this comes just as news that the Japanese pension fund will soon be dumping who knows what. So, once again, how about that "end of QE" again?
From Xinhua:
China's foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.
Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
And as if the public sector making it all too clear what is about to happen was not enough, here is the private one as well:
China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.
The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
Tang's remarks echoed the stance of Zhou Xiaochuan, governor of China's central bank, who said on Monday that China's foreign exchange reserves "exceed our reasonable requirement" and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.
However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.
The last sentence says it all. While China is certainly tired of recycling US Dollars, it still has no viable alternative, especially as long as its own currency is relegated to the C-grade of not even SDR-backing currencies. But that will all change very soon. Once the push for broad Chinese currency acceptance is in play, the CNY and the USD will be unpegged, promptly followed by China dumping the bulk of its USD exposure, and also sending the world a message that US debt is no longer a viable investment opportunity. In fact, we are confident that the reval is a likely a key preceding step to any strategic decision vis-a-vis US FX exposure (read bond purchasing/selling intentions). As such, all those Americans pushing China to revalue, may want to consider that such an action could well guarantee hyperinflation, once the Fed is stuck as being the only buyer of US debt.
http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings
Saturday, April 23, 2011
“For God so loved the world that he gave his only son, that whoever believes in him shall not perish but have eternal life. For God did not send his son into the world to condemn it, but to save it. Whoever believes in him is not condemned, but whoever does not believe stands condemned already. This is their condemnation: Light has come into the world, but people have loved darkness instead of the light, because their deeds were dark. All who do evil hate the light.”
John 3:16-20
부활 주일을 맞이해 다시금 올바른 리더의 등장과 육성을 소망한다. 이 공간에 글을 올리는 것도 이 어려운 시기에 내가 할 수 있는 작은 노력의 일환으로 현재의 상황을 직시하고 근원적인 문제를 개선하기 위해 개인의 안녕을 너머서 사회적으로 의미 있는 일을 하기를 원하는 사람들이 내 글을 읽어 주었으면 하는 바램에서 비롯된 것이다. 전세계에서 꾸준히 고정 독자들이 찾아와 읽어 주고 있고 최근에 한국의 검색 엔진에 잡히면서 한국에서 들어와 읽어 주시는 분들도 늘었다. 정부, 기업, 학교 등지에서 올바른 리더가 그 역할을 다하고 차세대 리더들이 실력과 혜안을 갖추고 성장하기를 소망한다.
지난 주에 영희씨 병문안을 다시 갔었다. 다행히 혈소판 수치는 떨어졌으나 백혈구 수치가 지난 주부터 염려할 정도로 올라가서 주치의 선생님과 심각한 얘기를 나누었는데 정작 본인은 좋은 시간을 보내는 듯 해서 안심도 되었지만 마음이 아렸다.(일반적으로 암에 걸려 비좁은 병실에 입원해서 항암치료를 받는다는 여건은 최악으로 생각될 수 있는데) 비인가 장애인 시설에 방치되어 매일 실내에서 지내던 것과 달리 맘에 드는 공공근로 간병인, 동생과 올케가 돌보아 주고, 산책도 다니고, 맛있는 것도 먹는 등 소소한 기쁨을 즐기고 있는 듯 했다.(얼굴도 시설에 있을 때 보다 밝고 좋아 보였다.) 언젠가 블로그에도 썼듯이 지금의 경험이 밑거름이 되어 후에 장애인들을 위한 뜻있는 일을 하기를 소망한다.
고 이태석 신부님에 관한 다큐멘터리, 영화 중에서 아래 주소에서 볼 수 있는 다큐멘터리를 가장 좋아한다. 아프시기 전, 세상에 그 이름이 알려지기 전에 그의 소박하고 아름답고 밝은 모습을 볼 수 있다. 귀하고 선하셨던 분, 당신을 잊지 않고 있답니다.
http://tvpot.daum.net/v/29433944?lu=flvPlayer_in
John 3:16-20
부활 주일을 맞이해 다시금 올바른 리더의 등장과 육성을 소망한다. 이 공간에 글을 올리는 것도 이 어려운 시기에 내가 할 수 있는 작은 노력의 일환으로 현재의 상황을 직시하고 근원적인 문제를 개선하기 위해 개인의 안녕을 너머서 사회적으로 의미 있는 일을 하기를 원하는 사람들이 내 글을 읽어 주었으면 하는 바램에서 비롯된 것이다. 전세계에서 꾸준히 고정 독자들이 찾아와 읽어 주고 있고 최근에 한국의 검색 엔진에 잡히면서 한국에서 들어와 읽어 주시는 분들도 늘었다. 정부, 기업, 학교 등지에서 올바른 리더가 그 역할을 다하고 차세대 리더들이 실력과 혜안을 갖추고 성장하기를 소망한다.
지난 주에 영희씨 병문안을 다시 갔었다. 다행히 혈소판 수치는 떨어졌으나 백혈구 수치가 지난 주부터 염려할 정도로 올라가서 주치의 선생님과 심각한 얘기를 나누었는데 정작 본인은 좋은 시간을 보내는 듯 해서 안심도 되었지만 마음이 아렸다.(일반적으로 암에 걸려 비좁은 병실에 입원해서 항암치료를 받는다는 여건은 최악으로 생각될 수 있는데) 비인가 장애인 시설에 방치되어 매일 실내에서 지내던 것과 달리 맘에 드는 공공근로 간병인, 동생과 올케가 돌보아 주고, 산책도 다니고, 맛있는 것도 먹는 등 소소한 기쁨을 즐기고 있는 듯 했다.(얼굴도 시설에 있을 때 보다 밝고 좋아 보였다.) 언젠가 블로그에도 썼듯이 지금의 경험이 밑거름이 되어 후에 장애인들을 위한 뜻있는 일을 하기를 소망한다.
고 이태석 신부님에 관한 다큐멘터리, 영화 중에서 아래 주소에서 볼 수 있는 다큐멘터리를 가장 좋아한다. 아프시기 전, 세상에 그 이름이 알려지기 전에 그의 소박하고 아름답고 밝은 모습을 볼 수 있다. 귀하고 선하셨던 분, 당신을 잊지 않고 있답니다.
http://tvpot.daum.net/v/29433944?lu=flvPlayer_in
Thursday, April 21, 2011
The Political Economy of Technology Development in Korea after the 1997 Financial Crisis
Changes in global environments including trade and technology in conjunction with the financial crisis that hit Asia in 1997 has created different conditions under which Korean firms operate. There has been much freer flow of capital. Further, the current WTO regulations prohibit most governmental provisions such as export incentives to specific industries. Faced with these changes, Korean firms have come to realize the need for shifting their strategic focus from scale-intensive, low-cost manufacturing-based businesses to higher value-added high-tech ones.
Policy attention of Korea has also shifted toward a more market-based industrialization since the financial crisis. And yet, it is under debate whether Korea’s shift to a more market-based industrialization has contributed to the growth of the real economy of Korea. Is this predicated on genuine capitalism?; or heavily influenced by crony Western capitalism?
Despite its more market-oriented policy stance on the surface, the Korean government intervening in the markets has persisted to a larger degree...
It may be true that political progress, the 1997 financial crisis and external environment have weakened the control of the government in the economy. However, although to a much lesser degree than in the early years of industrialization, running businesses in Korea continues to be heavily influenced by government policy...
Globalization has permeated the Korean economy. Capital inflows have increased. The global environment loaded with the free flow of capital and free trade has presented a whole new condition and opportunity for the Korean high-tech firms...
The interplay between technonationalism and globalization forces has posed challenges at both national and private levels...
In a command economy, capital is controlled by politicians...
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
Policy attention of Korea has also shifted toward a more market-based industrialization since the financial crisis. And yet, it is under debate whether Korea’s shift to a more market-based industrialization has contributed to the growth of the real economy of Korea. Is this predicated on genuine capitalism?; or heavily influenced by crony Western capitalism?
Despite its more market-oriented policy stance on the surface, the Korean government intervening in the markets has persisted to a larger degree...
It may be true that political progress, the 1997 financial crisis and external environment have weakened the control of the government in the economy. However, although to a much lesser degree than in the early years of industrialization, running businesses in Korea continues to be heavily influenced by government policy...
Globalization has permeated the Korean economy. Capital inflows have increased. The global environment loaded with the free flow of capital and free trade has presented a whole new condition and opportunity for the Korean high-tech firms...
The interplay between technonationalism and globalization forces has posed challenges at both national and private levels...
In a command economy, capital is controlled by politicians...
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
Wednesday, April 20, 2011
The Political Economy of Technology Development in Korea Till 1997
In the Asian Rim countries such as Korea, Japan, China, Taiwan, and Singapore, national policies have been guided by the governments’ vision of using technology for economic development. Korea, Japan and Taiwan all propelled economic growth by protecting infant industries, intervening in markets and guiding the development of specific technology-intensive industries. They tend to be technonationalistic and are yearning for global recognition. Technological progress has also been regarded as a means for being independent from Western countries.
Government officials in Korea seem to have thought that dependence on market forces only might result in hampering the developing process of home-grown companies. The Korean government, thus, protected the domestic market during the period of rapid industrialization. I have discussed the limits of export-dependent economies on several occasions. Why has the Korean power elite pursued its export-dependent economy in the first place? Boosting domestic consumption has hardly been on their agenda.
The Korean government has exerted its efforts to enhance technological prowess in an attempt to achieve not only economic goal but also political objective...
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
Government officials in Korea seem to have thought that dependence on market forces only might result in hampering the developing process of home-grown companies. The Korean government, thus, protected the domestic market during the period of rapid industrialization. I have discussed the limits of export-dependent economies on several occasions. Why has the Korean power elite pursued its export-dependent economy in the first place? Boosting domestic consumption has hardly been on their agenda.
The Korean government has exerted its efforts to enhance technological prowess in an attempt to achieve not only economic goal but also political objective...
(A detailed analysis on this topic won’t be shared due to the proprietary nature of the content.)
Tuesday, April 19, 2011
Illusionary growth vs. Organic growth
We may be facing the greatest economic downturn in history. The U.S. seems to go on with another round of QE perhaps until the bond market makes them stop.
As I posted, the Korean economy has reportedly grown. Is this an organic growth or just an illusionary growth?
When a nation’s growth has been fuelled by deficit/credit binge, not organic spending, that is an illusionary growth.
Korea has to curb bubbles and balance the budget.
In the meantime, Korea may have to invest in productive enterprises more proactively to boost incomes and employment, which will in turn prop up the middle class. Korea needs the domestic consumption base to fall back on when its exports dwindle.
As I posted, the Korean economy has reportedly grown. Is this an organic growth or just an illusionary growth?
When a nation’s growth has been fuelled by deficit/credit binge, not organic spending, that is an illusionary growth.
Korea has to curb bubbles and balance the budget.
In the meantime, Korea may have to invest in productive enterprises more proactively to boost incomes and employment, which will in turn prop up the middle class. Korea needs the domestic consumption base to fall back on when its exports dwindle.
Monday, April 18, 2011
Nearly 3 Million Korean College Graduate Outside Labor Force
From Yonhap News:
The number of South Korean college graduates outside the labor force was close to 3 million in the first quarter due to the country's sluggish job market, a government report showed Monday.
According to the report by Statistics Korea, 2.95 million people with two-year college degrees or higher were not in the labor force during the January-March period. The number accounted for roughly 18 percent of the 16.39 million people outside the labor force.
The figure represents a noticeable increase from a decade earlier when there were 1.64 million non-economically active college graduates. The number has been growing on average by around 90,000-220,000 people every year over the past decade.
"The rise reflects relatively weak job market conditions in South Korea following the 1997-98 Asian financial crisis and a steady rise in high school graduates going to college," the statistical office said.
The overall employment rate, which stayed above 60 percent before the crisis, has remained locked at around 58 percent in recent years, the office said.
http://english.yonhapnews.co.kr/business/2011/04/18/8/0502000000AEN20110418001600320F.HTML
The number of South Korean college graduates outside the labor force was close to 3 million in the first quarter due to the country's sluggish job market, a government report showed Monday.
According to the report by Statistics Korea, 2.95 million people with two-year college degrees or higher were not in the labor force during the January-March period. The number accounted for roughly 18 percent of the 16.39 million people outside the labor force.
The figure represents a noticeable increase from a decade earlier when there were 1.64 million non-economically active college graduates. The number has been growing on average by around 90,000-220,000 people every year over the past decade.
"The rise reflects relatively weak job market conditions in South Korea following the 1997-98 Asian financial crisis and a steady rise in high school graduates going to college," the statistical office said.
The overall employment rate, which stayed above 60 percent before the crisis, has remained locked at around 58 percent in recent years, the office said.
http://english.yonhapnews.co.kr/business/2011/04/18/8/0502000000AEN20110418001600320F.HTML
U.S. Student Loan Debt Outpaced Credit Card Debt
From the New York Times:
Student loan debt outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year as more students go to college and a growing share borrow money to do so.
“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.
Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.
Some education policy experts say the mounting debt has broad implications for the current generation of students.
“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” said Lauren Asher, president of the Institute for College Access and Success. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”
In some circles, student debt is known as the anti-dowry. As the transition from adolescence to adulthood is being delayed, with young people taking longer to marry, buy a home and have children, large student loans can slow the process further.
In 2009, the Obama administration made it easier for low-earning student borrowers to get out of debt, with income-based repayment that forgives remaining federal student debt for those who pay 15 percent of their income for 25 years — or 10 years, if they work in public service.
Deanne Loonin, a lawyer at the National Consumer Law Center, said education debt was not good debt for the low-income borrowers she works with, most of whom are in default.
“About two-thirds of the people I see attended for-profits; most did not complete their program; and no one I have worked with has ever gotten a job in the field they were supposedly trained for,” Ms. Loonin said.
“For them, the negative mark on their credit report is the No. 1 barrier to moving ahead in their lives,” she added. “It doesn’t just delay their ability to buy a house, it gets in the way of their employment prospects, their finding an apartment, almost anything they try to do.”
http://www.nytimes.com/2011/04/12/education/12college.html?_r=3&hp
Student loan debt outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year as more students go to college and a growing share borrow money to do so.
“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.
Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.
Some education policy experts say the mounting debt has broad implications for the current generation of students.
“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” said Lauren Asher, president of the Institute for College Access and Success. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”
In some circles, student debt is known as the anti-dowry. As the transition from adolescence to adulthood is being delayed, with young people taking longer to marry, buy a home and have children, large student loans can slow the process further.
In 2009, the Obama administration made it easier for low-earning student borrowers to get out of debt, with income-based repayment that forgives remaining federal student debt for those who pay 15 percent of their income for 25 years — or 10 years, if they work in public service.
Deanne Loonin, a lawyer at the National Consumer Law Center, said education debt was not good debt for the low-income borrowers she works with, most of whom are in default.
“About two-thirds of the people I see attended for-profits; most did not complete their program; and no one I have worked with has ever gotten a job in the field they were supposedly trained for,” Ms. Loonin said.
“For them, the negative mark on their credit report is the No. 1 barrier to moving ahead in their lives,” she added. “It doesn’t just delay their ability to buy a house, it gets in the way of their employment prospects, their finding an apartment, almost anything they try to do.”
http://www.nytimes.com/2011/04/12/education/12college.html?_r=3&hp
Total U.S. Debt above the Ceiling; S&P Downgrades U.S. Debt to Negative from Stable
From Zero Hedge:
A quick look at today's just released total debt to the penny from the Treasury may crimp the artificial smile of even such die hard administration sycophants as Moodys. Why: because the total debt, as we predicted when we observed last week's 30 Year auction, is now at $14,305,336,580,992.11. This is a problem because as anyone who rails against the broken US fiscal apparatus should be able to tell you, the debt ceiling is $14.294 trillion. In other words we have now officially breached the debt ceiling by $11 billion. So why has the US not filed a notice of default yet? Because the actual debt that matters for legal purposes is the debt "subject to the limit", which is $52 billion less than the total debt primarily due to $10 billion held at the Federal Financing Bank, and $41 billion in unamortized discount: a number which fluctuates in time depending on how much over or under par bonds are issued, but which ultimately will be zero at maturity of all debt (haha). In other words, as of today, the US Treasury has dry powder for just another $41 billion in issuance, or just over your average 5 Year auction. This can be seen best on the following chart from the Treasury where the total debt line has just passed the limit.
So what does this mean for near term issuance? Also per the Treasury, there is a total of $55 billion in debt paydown in the next week primarily in bill redemptions, offset by $14 billion in issuance in the last week of April. The problem is that this week also happens to be a major tax refund week. We anticipate that tax refunds will likely total between $20 -25 billion net over tax revenues. Which means there will be a net cash need of about $75 billion. As we ended Thursday at about $30 billion, Friday's cash balance (released at 4pm by the FMS) could be very critical to determine if the Treasury will be forced to come up with some emergency form of 11th hour cash raise. It also means that the debt ceiling clock is ticking ever louder. The Treasury will have capacity for one more full weekly auction, to be completed in the first week of May, and then it is game over.
http://www.zerohedge.com/article/total-us-debt-now-officially-above-ceiling
From AFP:
Ratings agency Standard & Poor's on Monday revised its outlook on US sovereign debt to "negative" from "stable", citing Washington's looming debt and fiscal deficits.
"Because the US has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable," S&P said in a statement.
http://www.google.com/hostednews/afp/article/ALeqM5jWu7EtBT7fZzjXa1iGkVvOzI-rKA?docId=CNG.b2f7eab93ee7199c6f0fe40a128bb8d8.631
A quick look at today's just released total debt to the penny from the Treasury may crimp the artificial smile of even such die hard administration sycophants as Moodys. Why: because the total debt, as we predicted when we observed last week's 30 Year auction, is now at $14,305,336,580,992.11. This is a problem because as anyone who rails against the broken US fiscal apparatus should be able to tell you, the debt ceiling is $14.294 trillion. In other words we have now officially breached the debt ceiling by $11 billion. So why has the US not filed a notice of default yet? Because the actual debt that matters for legal purposes is the debt "subject to the limit", which is $52 billion less than the total debt primarily due to $10 billion held at the Federal Financing Bank, and $41 billion in unamortized discount: a number which fluctuates in time depending on how much over or under par bonds are issued, but which ultimately will be zero at maturity of all debt (haha). In other words, as of today, the US Treasury has dry powder for just another $41 billion in issuance, or just over your average 5 Year auction. This can be seen best on the following chart from the Treasury where the total debt line has just passed the limit.
So what does this mean for near term issuance? Also per the Treasury, there is a total of $55 billion in debt paydown in the next week primarily in bill redemptions, offset by $14 billion in issuance in the last week of April. The problem is that this week also happens to be a major tax refund week. We anticipate that tax refunds will likely total between $20 -25 billion net over tax revenues. Which means there will be a net cash need of about $75 billion. As we ended Thursday at about $30 billion, Friday's cash balance (released at 4pm by the FMS) could be very critical to determine if the Treasury will be forced to come up with some emergency form of 11th hour cash raise. It also means that the debt ceiling clock is ticking ever louder. The Treasury will have capacity for one more full weekly auction, to be completed in the first week of May, and then it is game over.
http://www.zerohedge.com/article/total-us-debt-now-officially-above-ceiling
From AFP:
Ratings agency Standard & Poor's on Monday revised its outlook on US sovereign debt to "negative" from "stable", citing Washington's looming debt and fiscal deficits.
"Because the US has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable," S&P said in a statement.
http://www.google.com/hostednews/afp/article/ALeqM5jWu7EtBT7fZzjXa1iGkVvOzI-rKA?docId=CNG.b2f7eab93ee7199c6f0fe40a128bb8d8.631
Saturday, April 16, 2011
“As it was in the days of Noah, so shall it be with the coming of the Son of man. In the days before the flood, they were eating and drinking, marrying and being given in marriage, even to that very day in which Noah entered into the ark. They did not suspect what was happening until the flood came and swept them all away. So shall the coming of the Son of man also be… Watch therefore, because you do not know at what hour your Lord will come.”
Matthew 24: 37-42
Matthew 24: 37-42
Friday, April 15, 2011
China’s Reserves Exceeded $3 Trillion for the First Time
How will China be using its $3 trillion reserves?
From Bloomberg:
China’s foreign-exchange reserves exceeded $3 trillion for the first time, highlighting global imbalances that Group of 20 finance chiefs aim to tackle at meetings in Washington.
China’s currency holdings, the world’s biggest, swelled by $197 billion in the first quarter to $3.04 trillion, the central bank said yesterday. New loans were a more-than-estimated 679.4 billion yuan ($104 billion) in March, it said.
http://www.bloomberg.com/news/2011-04-14/china-s-3-trillion-reserves-show-g-20-task-as-wen-resists-yuan-pressure.html
From Bloomberg:
China’s foreign-exchange reserves exceeded $3 trillion for the first time, highlighting global imbalances that Group of 20 finance chiefs aim to tackle at meetings in Washington.
China’s currency holdings, the world’s biggest, swelled by $197 billion in the first quarter to $3.04 trillion, the central bank said yesterday. New loans were a more-than-estimated 679.4 billion yuan ($104 billion) in March, it said.
http://www.bloomberg.com/news/2011-04-14/china-s-3-trillion-reserves-show-g-20-task-as-wen-resists-yuan-pressure.html
Thursday, April 14, 2011
How Long Will Inflation Go On While Deflation in the Real Economy Worsens?
We know that there has been inflation in the monetary base and the necessities around the globe. Inflation of all inputs necessary for economic growth is rampant. Meanwhile, deflation in the real economy is getting worse.
The major culprit for this is the U.S. quantitative easing. Of course, many central banks have engaged in QE as well.
In light of QE, the purchasing power around the globe is decreasing.
The U.S., Japan, Korea and Europe are facing the inexorable forces of debt.
Chinese version of capitalism is running its course, given its overstated GDP growth, bubbles and inefficient financial system.
We are all concerned about the outcome of the U.S. policy and the damage that may be inflicted on many parts of the world.
The major culprit for this is the U.S. quantitative easing. Of course, many central banks have engaged in QE as well.
In light of QE, the purchasing power around the globe is decreasing.
The U.S., Japan, Korea and Europe are facing the inexorable forces of debt.
Chinese version of capitalism is running its course, given its overstated GDP growth, bubbles and inefficient financial system.
We are all concerned about the outcome of the U.S. policy and the damage that may be inflicted on many parts of the world.
Wednesday, April 13, 2011
TEPCO Confirms Damage to Part of Reactor 4 Spent Fuel Pool
This is a concern for Korea as well.
From Kyodo:
The firm known as TEPCO said its analysis of a 400-milliliter water sample taken Tuesday from the No. 4 unit's spent nuclear fuel pool revealed the damage to some fuel rods in such a pool for the first time, as it detected higher-than-usual levels of radioactive iodine-131, cesium-134 and cesium-137.
The No. 4 reactor, halted for a regular inspection before last month's earthquake and tsunami disaster, had all of its 1,331 spent fuel rods and 204 unused fuel rods stored in the pool for the maintenance work and the fuel was feared to have sustained damage from overheating.
The cooling period for 548 of the 1,331 rods was shorter than that for others and the volume of decay heat emitted from the fuel in the No. 4 unit pool is larger compared with pools at other reactor buildings.
According to TEPCO, radioactive iodine-131 amounting to 220 becquerels per cubic centimeter, cesium-134 of 88 becquerels and cesium-137 of 93 becquerels were detected in the pool water. Those substances are generated by nuclear fission.
The government's Nuclear and Industrial Safety Agency said the confirmed radioactive materials were up to 100,000 times higher than normal but that the higher readings may have also been caused by the pouring of rainwater containing much radioactivity or particles of radiation-emitting rubble in the pool.
The roof and the upper walls of the No. 4 reactor building have been blown away by a hydrogen explosion and damaged by fires since the disaster struck the plant. The water level in the spent fuel pool is believed to have temporarily dropped.
http://english.kyodonews.jp/news/2011/04/85295.html
From Asahi Shimbun:
Plan for removing spent fuel rods
http://www.anarchyjapan.com/wp-content/uploads/2011/04/craneplan.jpg
From Kyodo:
The firm known as TEPCO said its analysis of a 400-milliliter water sample taken Tuesday from the No. 4 unit's spent nuclear fuel pool revealed the damage to some fuel rods in such a pool for the first time, as it detected higher-than-usual levels of radioactive iodine-131, cesium-134 and cesium-137.
The No. 4 reactor, halted for a regular inspection before last month's earthquake and tsunami disaster, had all of its 1,331 spent fuel rods and 204 unused fuel rods stored in the pool for the maintenance work and the fuel was feared to have sustained damage from overheating.
The cooling period for 548 of the 1,331 rods was shorter than that for others and the volume of decay heat emitted from the fuel in the No. 4 unit pool is larger compared with pools at other reactor buildings.
According to TEPCO, radioactive iodine-131 amounting to 220 becquerels per cubic centimeter, cesium-134 of 88 becquerels and cesium-137 of 93 becquerels were detected in the pool water. Those substances are generated by nuclear fission.
The government's Nuclear and Industrial Safety Agency said the confirmed radioactive materials were up to 100,000 times higher than normal but that the higher readings may have also been caused by the pouring of rainwater containing much radioactivity or particles of radiation-emitting rubble in the pool.
The roof and the upper walls of the No. 4 reactor building have been blown away by a hydrogen explosion and damaged by fires since the disaster struck the plant. The water level in the spent fuel pool is believed to have temporarily dropped.
http://english.kyodonews.jp/news/2011/04/85295.html
From Asahi Shimbun:
Plan for removing spent fuel rods
http://www.anarchyjapan.com/wp-content/uploads/2011/04/craneplan.jpg
Tuesday, April 12, 2011
Charles Hugh Smith: Students Are Exploited Debt-Serfs
Korea is not immune from this issue. Education in Korea is becoming more of a business, emulating the U.S. model. Many college students are burdened by the high cost of educational debt.
From Of Two Minds:
Of all the exploitative systems in the U.S., none is more rapacious than the Education Cartel. Like the proverbial frog that is unaware that it's being boiled because the water temperature rises so gradually, college students and their parents are unable to recall what higher education was like before students were herded into debt-serfdom.
Apologists for the Education Cartel like to blame Corporate America or the banks, but the reality is that the Federal and State governments and the employees of the Cartel are willing partners in the exploitation and fraud. How did we get to the boiling-water point where students are expected to take on $100,000 or more in debt to attend college--even a mediocre one?
Answer: immensely profitable Government-backed loans. If the Central State wasn't partnered with the Education Cartel, today's debt-serfdom would be impossible.
http://charleshughsmith.blogspot.com/2011/04/students-you-are-exploited-debt-serfs.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+google%2FRzFQ+%28oftwominds%29
From Of Two Minds:
Of all the exploitative systems in the U.S., none is more rapacious than the Education Cartel. Like the proverbial frog that is unaware that it's being boiled because the water temperature rises so gradually, college students and their parents are unable to recall what higher education was like before students were herded into debt-serfdom.
Apologists for the Education Cartel like to blame Corporate America or the banks, but the reality is that the Federal and State governments and the employees of the Cartel are willing partners in the exploitation and fraud. How did we get to the boiling-water point where students are expected to take on $100,000 or more in debt to attend college--even a mediocre one?
Answer: immensely profitable Government-backed loans. If the Central State wasn't partnered with the Education Cartel, today's debt-serfdom would be impossible.
http://charleshughsmith.blogspot.com/2011/04/students-you-are-exploited-debt-serfs.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+google%2FRzFQ+%28oftwominds%29
Monday, April 11, 2011
Japan Raises Its Nuclear Disaster to the Highest, Level 7
Japan officially admits this is a full blown crisis: radiation is massive and still going on.
From NHK:
For a series of accidents happening at TEPCO's Fukushima Daiichi Nuclear Power Station, Nuclear and Industrial Safety Agency of the Ministry of Economy, which released large amounts of radioactive substances that affect human health and the environment in a wide range. As an assessment based on international standards of the accident, the worst "level seven" decided to raise. "Level 7" is the same as the evaluation occurred in the Soviet Chernobyl disaster. Nuclear Safety Agency, 12, held a press conference with the Nuclear Safety Commission has decided to publish the contents of the evaluation.
http://www3.nhk.or.jp/news/html/20110412/t10015249911000.html
From NHK:
For a series of accidents happening at TEPCO's Fukushima Daiichi Nuclear Power Station, Nuclear and Industrial Safety Agency of the Ministry of Economy, which released large amounts of radioactive substances that affect human health and the environment in a wide range. As an assessment based on international standards of the accident, the worst "level seven" decided to raise. "Level 7" is the same as the evaluation occurred in the Soviet Chernobyl disaster. Nuclear Safety Agency, 12, held a press conference with the Nuclear Safety Commission has decided to publish the contents of the evaluation.
http://www3.nhk.or.jp/news/html/20110412/t10015249911000.html
Korean Tap Water Threatened by Buried Animal Carcasses
From Bloomberg:
More than 1,000 kilometers from Tokyo, Seoul is having its very own crisis of faith in tap water, and radiation isn’t to blame.
In South Korea, the carcasses of 9.7 million cattle, pigs and poultry were buried in mass graves across the frozen countryside after outbreaks of foot-and-mouth disease and bird- flu last winter. That’s raised concerns that pollutants may enter groundwater now that the soil has thawed, said Jun Kwan Soo, a professor of environmental engineering at Yeungnam University.
“Health has to come before everything else regardless of the expense,” said Lyu Soon Ha, a 63-year-old grandmother who is buying bottled water from remote Jeju Island because she fears supplies from the mainland could be contaminated. “I want to give my grandchildren good water when they come to visit.”
http://www.bloomberg.com/news/2011-04-11/buried-animal-carcasses-cause-korean-water-concerns-as-evian-sales-climb.html
More than 1,000 kilometers from Tokyo, Seoul is having its very own crisis of faith in tap water, and radiation isn’t to blame.
In South Korea, the carcasses of 9.7 million cattle, pigs and poultry were buried in mass graves across the frozen countryside after outbreaks of foot-and-mouth disease and bird- flu last winter. That’s raised concerns that pollutants may enter groundwater now that the soil has thawed, said Jun Kwan Soo, a professor of environmental engineering at Yeungnam University.
“Health has to come before everything else regardless of the expense,” said Lyu Soon Ha, a 63-year-old grandmother who is buying bottled water from remote Jeju Island because she fears supplies from the mainland could be contaminated. “I want to give my grandchildren good water when they come to visit.”
http://www.bloomberg.com/news/2011-04-11/buried-animal-carcasses-cause-korean-water-concerns-as-evian-sales-climb.html
Korean Chaebols Increase Asset Holdings and Affiliates under Lee Administration
One needs to examine the political economy of Korea to understand why Chaebols prosper.
From Hankyoreh:
Data by the Fair Trade Commission revealed Sunday that the Samsung Group has ballooned its asset holdings almost 60 percent over the past three years since President Lee Myung-bak took office in 2008. Samsung is the largest and representative chaebol, family-owned conglomerate, in South Korea. Most conglomerates have expanded greatly in terms of the number of affiliates and assets under the Lee administration.
According to the FTC data as of April 1, the number of Samsung Group’s affiliates increased 32.1 percent to 78 from 59 in 2008, with its assets going up 59.9 percent to 230.9 trillion won ($213 billion). Samsung’s assets are more than the combined assets of the second largest conglomerate Hyundai Motor Group amounting to 126.7 trillion won and the third SK Group’s 97 trillion won. Samsung accounts for 37.1 percent of the combined assets of the top five, which is tallied at 622.5 trillion won.
Hyundai Motor Group also saw its affiliates grow from 36 to 63 and its assets increase 71.2 percent in the same period. SK, LG and Lotte increased their assets by 34 percent, 58.7 percent and 76.8 percent, respectively. Non family owned conglomerate POSCO’s assets jumped from 31 trillion won to 69.8 trillion won and its affiliates went up from 30 to 61.
The top 20’s combined asset holdings grew 54.2 percent from 683.6 trillion won to 1,054.4 trillion won and the number of their affiliates went up 36 percent to 922 from 678 three years earlier.
Experts attributed those leading conglomerates rapid expansion to their aggressive M&A drives and the Lee government’s business-friendly policies including corporate tax reductions.
http://english.hani.co.kr/arti/english_edition/e_business/472384.html
From Hankyoreh:
Data by the Fair Trade Commission revealed Sunday that the Samsung Group has ballooned its asset holdings almost 60 percent over the past three years since President Lee Myung-bak took office in 2008. Samsung is the largest and representative chaebol, family-owned conglomerate, in South Korea. Most conglomerates have expanded greatly in terms of the number of affiliates and assets under the Lee administration.
According to the FTC data as of April 1, the number of Samsung Group’s affiliates increased 32.1 percent to 78 from 59 in 2008, with its assets going up 59.9 percent to 230.9 trillion won ($213 billion). Samsung’s assets are more than the combined assets of the second largest conglomerate Hyundai Motor Group amounting to 126.7 trillion won and the third SK Group’s 97 trillion won. Samsung accounts for 37.1 percent of the combined assets of the top five, which is tallied at 622.5 trillion won.
Hyundai Motor Group also saw its affiliates grow from 36 to 63 and its assets increase 71.2 percent in the same period. SK, LG and Lotte increased their assets by 34 percent, 58.7 percent and 76.8 percent, respectively. Non family owned conglomerate POSCO’s assets jumped from 31 trillion won to 69.8 trillion won and its affiliates went up from 30 to 61.
The top 20’s combined asset holdings grew 54.2 percent from 683.6 trillion won to 1,054.4 trillion won and the number of their affiliates went up 36 percent to 922 from 678 three years earlier.
Experts attributed those leading conglomerates rapid expansion to their aggressive M&A drives and the Lee government’s business-friendly policies including corporate tax reductions.
http://english.hani.co.kr/arti/english_edition/e_business/472384.html
Saturday, April 9, 2011
“Do not be deceived by false words, because these bring the wrath of God on the sons of disobedience. You were once in darkness, but now you are in light. Live as children of light, for light produces goodness and truth. Learn what is pleasing to the Lord. Take no part in the barren works of darkness; rather expose them, for what is done in secret is shameful. Everything exposed by the light becomes visible, and everything that becomes visible is light.”
Ephesians 5: 8-14
Ephesians 5: 8-14
Thursday, April 7, 2011
Black Princeton Professor Criticizes Obama: Obama Is for Big Business
Cornet West talks about the current state of the American economy and criticizes Obama’s policies on the following video clip posted on Naked Capitalism.
From Naked Capitalism:
http://www.nakedcapitalism.com/2011/04/cornel-west-obama-is-for-big-business-not-the-jobless.html
From Naked Capitalism:
http://www.nakedcapitalism.com/2011/04/cornel-west-obama-is-for-big-business-not-the-jobless.html
방사능 비 노출 피해야: 안정성 보장할 수 없어
이미 우리는 외국 보도를 통해 일본 정부가 방사능 관련 사실을 국민들에게 제대로 알리지 않고 있다는 것을 알고 있고 바로 전에 올린 제로헤지 포스팅에서도 한국정부도 일본정부처럼 똑 같은 일을 하고 있다는 것을 지적하고 있다. 한국언론에서도 방사능 노출과 관련된 위험을 경고하고 있다.
미디어 오늘로부터:
7일부터 8일까지 전국적으로 내리는 비에 후쿠시마 제1원전 발 방사능이 포함됐을 가능성이 제기되면서 이 같은 방사능에 노출될 경우 인체에 어떤 영향을 미칠지에 관심이 모아지고 있다. 한국원자력안전기술원 등 정부 당국은 '극미량''전혀 영향이 없다'고 거듭 주장하고 있지만 해외나 국내 의료시민단체 쪽을 중심으로 위험성을 배제할 수 없다며 정부가 적극적으로 시민들에게 외출 자제와 비를 맞지 말도록 권고해야 한다고 촉구하고 있다.
하미나 단국대 의과대학 예방의학과 교수는 7일 오전 미디어오늘과 인터뷰에서 “WHO 기준으로 볼 때 연간 10베크렐을 넘겨서는 안되는데, 누적노출량을 계산해볼 때 기준치의 약 4 내지 5분의1 수준”이라며 “이는 낮은 수준이 아니다. 기준치일 때 암 발생 확률이 10만 명 가운데 1명이라는 것이고, 또한 이것의 4 내지 5분의 1이라는 것은 한국 국민 4800만 명 가운데 100명 안팎이 평생 동안 추가적으로 암이 발생할 확률이 있다는 뜻”이라고 분석했다. 하 교수는 “10만명 중 1명이라는 기준이 개인적으로 볼 때 피부로 느끼지 못하는 수준이라고 생각할 수 있지만 사회적으로 볼 때는 예방해야 하는 수준”이라며 “모든 국민이 다 노출된다면 추가적인 암 발생률이 높아지기 때문”이라고 설명했다. 그는 “이 때문에 ICRP(국제방사선방호위원회)는 이 정도 방사성물질이 검출되고 있을 때엔 시민들에게 ‘노출을 통제하라’고 권고한다”며 “특히 식수, 음식, 공기 등 사람이 노출될 수 있는 모든 경로에 해당하는 것을 관리하도록 촉구하고, 이에 대비할 수 있도록 정보를 알리도록 하고 있다”고 전했다. 국내에서 극미량이기 때문에 전혀 걱정할 이유가 없다고 장담하는 것에 대해 하 교수는 “우리 나라의 경우 예방하라는 의견에 대해 방사능 공포를 조장한다고 하는데, 크게 양보해서 100만명 중의 1명이 추가적으로 암이 발생할 확률이 생긴다고 해도 정부는 국민에게 사회적 노출을 더욱 더 줄이라고 해야 옳다”며 “‘극미량이니 건강에 미치는 피해가 적다’고 할 수는 있어도 ‘극미량이니 안전하다’고 해서는 안된다. 안전하다고 할 수 없기 때문”이라고 조언했다.
우석균 보건의료연합 정책실장도 “정부는 사전예방의 법칙에 따라 가능하면 국민들에게 방사성물질 우려가 있으니 외출을 자제시키고 체육활동을 금지시키도록 얘기해주는 것이 맞다”며 “극미량으로라도 계속 노출되면 인체 내에 축적될 수 있기 때문”이라고 말했다. 그는 “제주도로 한정할 경우 인구 50만 명으로 보면 1~2명이 평생동안 추가적으로 암이 걸릴 확률이 생긴다는 것인데 이를 무시하고 지나갈 수는 없는 것”이라고 말했다.
http://www.mediatoday.co.kr/news/articleView.html?idxno=94731
Update:
한국원자력안전기술원(기술원)이 매일 발표하고 있는 대기 중 방사성물질 측정 값이 실제보다 작다는 의혹이 제기됐다. 울진원전민간환경감시기구(감시기구)는 7일 활성탄필터를 이용해 대기 중 방사성 요오드 양을 측정한 결과 기술원이 측정한 수치보다 평균 최고 6배 많았다고 밝혔다.
경향신문에 따르면, 기술원은 전국 12개 지방방사능측정소에서 유리섬유필터를 이용해 방사능 수치를 측정하는데 반해, 감시기구는 활성탄필터를 이용해 측정한다. 활성탄필터는 24시간 동안 80㎥의 공기를 채집해 방사능 수치를 측정하는 반면, 유리섬유필터는 24시간 동안 1200㎥의 공기를 채집해 측정한다.
기술원 관계자는 “활성탄필터는 요오드 외의 다른 방사성물질은 검출할 수 없다”며 “유리섬유필터를 쓰는 것이 국제적 기준이고 활성탄필터는 발전소 근처에 기체상태의 방사성물질이 다량 나오는 지역에서만 소규모로 사용한다”고 말했다. 이에 대해 감시기구 측은 “전국 12개 측정소만으로는 우리나라의 방사성물질을 제대로 측정했다고 보기 어려운데, 그마저도 제대로 된 측정설비를 갖추고 있지 않다”고 지적했다.
http://www.mediatoday.co.kr/news/articleView.html?idxno=94754
Update:
우석균 보건연합 정책실장(성수의원 전문의‧가정의학과)은 “방사성물질의 허용치가 리터당 10베크렐이라 해도 이는 어른에 맞춰진 것이고, 아이들의 경우 많게는 10~20배의 위험성이 있다는 점을 고려해야 한다”고 말했다.
우 실장은 ‘2리터씩 2년간 먹어도 X레이 방사선 1.4배 쬔 것과 같은 수준’이라는 조선일보의 주장과 ‘1년 내내 먹어도 아무렇지 않다’는 중앙일보 문화일보 등의 보도에 대해 “하늘에서 떨어진 빗물에 방사성물질이 섞여있다는 것을 알고도, 과연 이 물을 자신들의 아이들에게 먹일 수 있겠는지 의문”이라며 “빗물은 수돗물이 되고, 수돗물은 방사선을 거르지 못한다. 이를 방목하는 가축이 먹고, 또한 땅에 스며들어 지하수가 된다. 무엇보다 기사를 쓴 기자 자식에게 먹일 자신이 있느냐”고 되물었다.
http://www.mediatoday.co.kr/news/articleView.html?idxno=94780
미디어 오늘로부터:
7일부터 8일까지 전국적으로 내리는 비에 후쿠시마 제1원전 발 방사능이 포함됐을 가능성이 제기되면서 이 같은 방사능에 노출될 경우 인체에 어떤 영향을 미칠지에 관심이 모아지고 있다. 한국원자력안전기술원 등 정부 당국은 '극미량''전혀 영향이 없다'고 거듭 주장하고 있지만 해외나 국내 의료시민단체 쪽을 중심으로 위험성을 배제할 수 없다며 정부가 적극적으로 시민들에게 외출 자제와 비를 맞지 말도록 권고해야 한다고 촉구하고 있다.
하미나 단국대 의과대학 예방의학과 교수는 7일 오전 미디어오늘과 인터뷰에서 “WHO 기준으로 볼 때 연간 10베크렐을 넘겨서는 안되는데, 누적노출량을 계산해볼 때 기준치의 약 4 내지 5분의1 수준”이라며 “이는 낮은 수준이 아니다. 기준치일 때 암 발생 확률이 10만 명 가운데 1명이라는 것이고, 또한 이것의 4 내지 5분의 1이라는 것은 한국 국민 4800만 명 가운데 100명 안팎이 평생 동안 추가적으로 암이 발생할 확률이 있다는 뜻”이라고 분석했다. 하 교수는 “10만명 중 1명이라는 기준이 개인적으로 볼 때 피부로 느끼지 못하는 수준이라고 생각할 수 있지만 사회적으로 볼 때는 예방해야 하는 수준”이라며 “모든 국민이 다 노출된다면 추가적인 암 발생률이 높아지기 때문”이라고 설명했다. 그는 “이 때문에 ICRP(국제방사선방호위원회)는 이 정도 방사성물질이 검출되고 있을 때엔 시민들에게 ‘노출을 통제하라’고 권고한다”며 “특히 식수, 음식, 공기 등 사람이 노출될 수 있는 모든 경로에 해당하는 것을 관리하도록 촉구하고, 이에 대비할 수 있도록 정보를 알리도록 하고 있다”고 전했다. 국내에서 극미량이기 때문에 전혀 걱정할 이유가 없다고 장담하는 것에 대해 하 교수는 “우리 나라의 경우 예방하라는 의견에 대해 방사능 공포를 조장한다고 하는데, 크게 양보해서 100만명 중의 1명이 추가적으로 암이 발생할 확률이 생긴다고 해도 정부는 국민에게 사회적 노출을 더욱 더 줄이라고 해야 옳다”며 “‘극미량이니 건강에 미치는 피해가 적다’고 할 수는 있어도 ‘극미량이니 안전하다’고 해서는 안된다. 안전하다고 할 수 없기 때문”이라고 조언했다.
우석균 보건의료연합 정책실장도 “정부는 사전예방의 법칙에 따라 가능하면 국민들에게 방사성물질 우려가 있으니 외출을 자제시키고 체육활동을 금지시키도록 얘기해주는 것이 맞다”며 “극미량으로라도 계속 노출되면 인체 내에 축적될 수 있기 때문”이라고 말했다. 그는 “제주도로 한정할 경우 인구 50만 명으로 보면 1~2명이 평생동안 추가적으로 암이 걸릴 확률이 생긴다는 것인데 이를 무시하고 지나갈 수는 없는 것”이라고 말했다.
http://www.mediatoday.co.kr/news/articleView.html?idxno=94731
Update:
한국원자력안전기술원(기술원)이 매일 발표하고 있는 대기 중 방사성물질 측정 값이 실제보다 작다는 의혹이 제기됐다. 울진원전민간환경감시기구(감시기구)는 7일 활성탄필터를 이용해 대기 중 방사성 요오드 양을 측정한 결과 기술원이 측정한 수치보다 평균 최고 6배 많았다고 밝혔다.
경향신문에 따르면, 기술원은 전국 12개 지방방사능측정소에서 유리섬유필터를 이용해 방사능 수치를 측정하는데 반해, 감시기구는 활성탄필터를 이용해 측정한다. 활성탄필터는 24시간 동안 80㎥의 공기를 채집해 방사능 수치를 측정하는 반면, 유리섬유필터는 24시간 동안 1200㎥의 공기를 채집해 측정한다.
기술원 관계자는 “활성탄필터는 요오드 외의 다른 방사성물질은 검출할 수 없다”며 “유리섬유필터를 쓰는 것이 국제적 기준이고 활성탄필터는 발전소 근처에 기체상태의 방사성물질이 다량 나오는 지역에서만 소규모로 사용한다”고 말했다. 이에 대해 감시기구 측은 “전국 12개 측정소만으로는 우리나라의 방사성물질을 제대로 측정했다고 보기 어려운데, 그마저도 제대로 된 측정설비를 갖추고 있지 않다”고 지적했다.
http://www.mediatoday.co.kr/news/articleView.html?idxno=94754
Update:
우석균 보건연합 정책실장(성수의원 전문의‧가정의학과)은 “방사성물질의 허용치가 리터당 10베크렐이라 해도 이는 어른에 맞춰진 것이고, 아이들의 경우 많게는 10~20배의 위험성이 있다는 점을 고려해야 한다”고 말했다.
우 실장은 ‘2리터씩 2년간 먹어도 X레이 방사선 1.4배 쬔 것과 같은 수준’이라는 조선일보의 주장과 ‘1년 내내 먹어도 아무렇지 않다’는 중앙일보 문화일보 등의 보도에 대해 “하늘에서 떨어진 빗물에 방사성물질이 섞여있다는 것을 알고도, 과연 이 물을 자신들의 아이들에게 먹일 수 있겠는지 의문”이라며 “빗물은 수돗물이 되고, 수돗물은 방사선을 거르지 못한다. 이를 방목하는 가축이 먹고, 또한 땅에 스며들어 지하수가 된다. 무엇보다 기사를 쓴 기자 자식에게 먹일 자신이 있느냐”고 되물었다.
http://www.mediatoday.co.kr/news/articleView.html?idxno=94780
Wednesday, April 6, 2011
Radioactive Cloud Passes Over Korea
From Zero Hedge:
As the following animation from ZAMG demonstrates, courtesy of Northeastern winds, a major cloud of radioactive Iodine 131 is currently passing right over South Korea. Making matters worse is the fact that it is currently drizzling in the landlucklocked nation, putting people on edge. Yet one cursory look at Korean press, in this case Arirang, demonstrates that absolutely nothing has changed in how governments, ready to sacrifice everything at the altar of mass panic, interact with their population when it comes to sensitive issues such as radioactive rain. "Meanwhile unlike many have anticipated the Korea Meteorological Administration assured that the seasonal winds accompanied by rain approaching from Japan will have almost no impact on Korea." Well, there's spin and there's facts. And for what it's worth the animation shows the facts. This way at least some people will have the choice of making an informed decision.
http://www.zerohedge.com/article/radioactive-iodine-cloud-passes-over-korea-government-downplays-risks
As the following animation from ZAMG demonstrates, courtesy of Northeastern winds, a major cloud of radioactive Iodine 131 is currently passing right over South Korea. Making matters worse is the fact that it is currently drizzling in the landlucklocked nation, putting people on edge. Yet one cursory look at Korean press, in this case Arirang, demonstrates that absolutely nothing has changed in how governments, ready to sacrifice everything at the altar of mass panic, interact with their population when it comes to sensitive issues such as radioactive rain. "Meanwhile unlike many have anticipated the Korea Meteorological Administration assured that the seasonal winds accompanied by rain approaching from Japan will have almost no impact on Korea." Well, there's spin and there's facts. And for what it's worth the animation shows the facts. This way at least some people will have the choice of making an informed decision.
http://www.zerohedge.com/article/radioactive-iodine-cloud-passes-over-korea-government-downplays-risks
Tuesday, April 5, 2011
A Japanese Reporter on the Japanese Quake
The following interview tells a different story on the Japanese March 11 quake than the mainstream media outlets.
From Time Out:
In the immediate aftermath of the March 11 earthquake and tsunami, the Japanese media stayed remarkably calm. While overseas news outlets fretted about nuclear meltdown and terrified expats stranded in a 'City of Ghosts', their Japanese counterparts generally hewed closer to the official line: stay calm, go about your business as usual. And, yes, you can still drink the tap water.
But that was only part of the picture. While the mainstream media presented a reasonably united front, a group of freelance and internet journalists were openly dissatisfied with the explanations being given at Tokyo Electric Power Co.'s seemingly endless stream of press conferences. Why wasn't the company mentioning levels of plutonium around the stricken Fukushima Daiichi power plant? What had happened to TEPCO's president, Masataka Shimizu – last seen on March 13?
One of the most influential members of this group of dissenters is Takashi Uesugi, a former New York Times journalist and, in an earlier incarnation, aide to Liberal Democratic Party bigwig Kunio Hatoyama. The author of books including The Collapse of Journalism, Uesugi is a vociferous critic of Japan's 'Kisha Club' system – a network of exclusive press clubs that, he says, nurtures excessively close relationships between reporters and the organisations they are supposed to cover.
Obviously a lot has happened over the past couple of weeks, but what are the main things you've learned?
Basically, something that I knew from the beginning, but has become more blatant yesterday and today [March 27-28], is this terrible situation where the government and TEPCO are suppressing information. To be more specific, I thought it was strange that there was nothing written about plutonium when the data about reactor 3 was given out at the TEPCO press conference on the 27th, so I asked them if it was true that no plutonium had been detected in reactor 3, and for how long it had not been detected. TEPCO answered: 'Plutonium hasn’t been detected.' To confirm what they were saying I asked if perhaps it wasn't that none had been detected, but that they hadn't actually taken any measurements. They were alarmed, and it turned out that it wasn't even that they hadn't taken any measurements, but that they didn't have the instruments to do so in the first place.
That's one example. Another is the question of where exactly has the TEPCO company president gone? There was a rumour doing the rounds a while ago that he had been hospitalised, when actually he had been away because of fatigue. This time they're using the pretence of hospitalisation for the same situation. All of it's lies. It's emblematic, isn’t it? [Note: TEPCO president Masataka Shimizu was hospitalised on March 29, and subsequently resigned.]
Two weeks ago I told someone in the government that TEPCO was lying. I called a friend from back when I was a governmental aide directly on their mobile phone and said that the government was being deceived, but I didn't get any response at all. On top of that, even though I was able to attend the Chief Cabinet Secretary’s press conferences before the earthquake, after the quake, all the freelance journalists, foreign media and Internet reporters were kicked out. So I took on the role of representative for those media outlets, and tried to negotiate by constantly badgering the official residence – like a stalker – saying, ‘If you don’t let in the foreign media too, there won’t be any way for information to be conveyed abroad, will there?’
Ever since the [nuclear] trouble started, I’ve been saying again and again via the different media and radio programs that I appear on that TEPCO are concealing things about the accident, that they're lying, and that the government is being fooled. I’ve been saying that TEPCO is a client of the media and the press clubs, being one of their biggest advertisers – so the press won’t be able to say certain things, and will be holding back, won't they? But then, at the end of one of the programs, the producer came to me and asked me to stop doing the show at the end of the month, and I was dropped. When I criticized TEPCO on a different program, they also wanted to get rid of me. But the producer of that particular program is a strong person, and actually went ahead and did it without a sponsor.
When The New Yorker interviewed you recently, you talked about how the Japanese public were 'brainwashed' by the media. Can you tell us a bit more about that?
From a young age Japanese people become convinced that newspapers and the television are correct, and that magazines and the Internet are full of lies. But the information in the newspapers and on the television is just what the government is giving out through the press clubs. Even if it's different from the information and data that reporters have gathered themselves, they just accept what the government announces.
http://www.timeout.jp/en/tokyo/feature/2776/Takashi-Uesugi-The-Interview
From Time Out:
In the immediate aftermath of the March 11 earthquake and tsunami, the Japanese media stayed remarkably calm. While overseas news outlets fretted about nuclear meltdown and terrified expats stranded in a 'City of Ghosts', their Japanese counterparts generally hewed closer to the official line: stay calm, go about your business as usual. And, yes, you can still drink the tap water.
But that was only part of the picture. While the mainstream media presented a reasonably united front, a group of freelance and internet journalists were openly dissatisfied with the explanations being given at Tokyo Electric Power Co.'s seemingly endless stream of press conferences. Why wasn't the company mentioning levels of plutonium around the stricken Fukushima Daiichi power plant? What had happened to TEPCO's president, Masataka Shimizu – last seen on March 13?
One of the most influential members of this group of dissenters is Takashi Uesugi, a former New York Times journalist and, in an earlier incarnation, aide to Liberal Democratic Party bigwig Kunio Hatoyama. The author of books including The Collapse of Journalism, Uesugi is a vociferous critic of Japan's 'Kisha Club' system – a network of exclusive press clubs that, he says, nurtures excessively close relationships between reporters and the organisations they are supposed to cover.
Obviously a lot has happened over the past couple of weeks, but what are the main things you've learned?
Basically, something that I knew from the beginning, but has become more blatant yesterday and today [March 27-28], is this terrible situation where the government and TEPCO are suppressing information. To be more specific, I thought it was strange that there was nothing written about plutonium when the data about reactor 3 was given out at the TEPCO press conference on the 27th, so I asked them if it was true that no plutonium had been detected in reactor 3, and for how long it had not been detected. TEPCO answered: 'Plutonium hasn’t been detected.' To confirm what they were saying I asked if perhaps it wasn't that none had been detected, but that they hadn't actually taken any measurements. They were alarmed, and it turned out that it wasn't even that they hadn't taken any measurements, but that they didn't have the instruments to do so in the first place.
That's one example. Another is the question of where exactly has the TEPCO company president gone? There was a rumour doing the rounds a while ago that he had been hospitalised, when actually he had been away because of fatigue. This time they're using the pretence of hospitalisation for the same situation. All of it's lies. It's emblematic, isn’t it? [Note: TEPCO president Masataka Shimizu was hospitalised on March 29, and subsequently resigned.]
Two weeks ago I told someone in the government that TEPCO was lying. I called a friend from back when I was a governmental aide directly on their mobile phone and said that the government was being deceived, but I didn't get any response at all. On top of that, even though I was able to attend the Chief Cabinet Secretary’s press conferences before the earthquake, after the quake, all the freelance journalists, foreign media and Internet reporters were kicked out. So I took on the role of representative for those media outlets, and tried to negotiate by constantly badgering the official residence – like a stalker – saying, ‘If you don’t let in the foreign media too, there won’t be any way for information to be conveyed abroad, will there?’
Ever since the [nuclear] trouble started, I’ve been saying again and again via the different media and radio programs that I appear on that TEPCO are concealing things about the accident, that they're lying, and that the government is being fooled. I’ve been saying that TEPCO is a client of the media and the press clubs, being one of their biggest advertisers – so the press won’t be able to say certain things, and will be holding back, won't they? But then, at the end of one of the programs, the producer came to me and asked me to stop doing the show at the end of the month, and I was dropped. When I criticized TEPCO on a different program, they also wanted to get rid of me. But the producer of that particular program is a strong person, and actually went ahead and did it without a sponsor.
When The New Yorker interviewed you recently, you talked about how the Japanese public were 'brainwashed' by the media. Can you tell us a bit more about that?
From a young age Japanese people become convinced that newspapers and the television are correct, and that magazines and the Internet are full of lies. But the information in the newspapers and on the television is just what the government is giving out through the press clubs. Even if it's different from the information and data that reporters have gathered themselves, they just accept what the government announces.
http://www.timeout.jp/en/tokyo/feature/2776/Takashi-Uesugi-The-Interview
Monday, April 4, 2011
Korea’s Debts at Both Public and Private Levels Hit Record High in 2010
I am concerned that the fiscal and monetary path Korea is on may have a high likelihood of failure over the coming years.
From Yonhap News:
Debts owed by the government, individuals and companies in South Korea reached a record high last year, data showed on Sunday, raising concerns that the high level of debts could derail the economy off the recovery track.
According to data compiled by the Bank of Korea, their interest-bearing debts reached 2,586 trillion won (US$2.37 trillion) at the end of last year, up 7.4 percent from 2,408 trillion won a year ago.
The debts are roughly 2.2 times the country's nominal gross domestic product (GDP), which reached 1,172 trillion won last year, data showed.
By sector, individuals' debts reached 937.2 trillion won at the end of last year, up 8.9 percent from a year ago, and the debts are expected to exceed the 1,000-trillion mark this year.
Public firms owed 254.7 trillion won in debts at the end of last year, and the government has debts totaling 367 trillion won, data showed.
Private companies had the largest amount of debts at 1,281 trillion won, they showed.
http://english.yonhapnews.co.kr/business/2011/04/03/17/0501000000AEN20110403000900320F.HTML
From Yonhap News:
Debts owed by the government, individuals and companies in South Korea reached a record high last year, data showed on Sunday, raising concerns that the high level of debts could derail the economy off the recovery track.
According to data compiled by the Bank of Korea, their interest-bearing debts reached 2,586 trillion won (US$2.37 trillion) at the end of last year, up 7.4 percent from 2,408 trillion won a year ago.
The debts are roughly 2.2 times the country's nominal gross domestic product (GDP), which reached 1,172 trillion won last year, data showed.
By sector, individuals' debts reached 937.2 trillion won at the end of last year, up 8.9 percent from a year ago, and the debts are expected to exceed the 1,000-trillion mark this year.
Public firms owed 254.7 trillion won in debts at the end of last year, and the government has debts totaling 367 trillion won, data showed.
Private companies had the largest amount of debts at 1,281 trillion won, they showed.
http://english.yonhapnews.co.kr/business/2011/04/03/17/0501000000AEN20110403000900320F.HTML
Friday, April 1, 2011
Wal-Mart CEO Warns on Serious Inflation for Clothing, Food and Other Products
We know what is stoking inflation and why they are doing this. The general public around the globe will have to face a much higher cost of living.
From USA Today:
The world's largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
"Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along," Long says. "Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."
Consumer prices — or the consumer price index — rose 0.5% in February, the most since mid-2009, largely because of surging food and gasoline prices. Core inflation, which excludes volatile food and energy costs, rose a more modest 0.2%, though that still exceeded estimates.
http://www.usatoday.com/money/industries/retail/2011-03-30-wal-mart-ceo-expects-inflation_N.htm
From USA Today:
The world's largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
"Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along," Long says. "Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."
Consumer prices — or the consumer price index — rose 0.5% in February, the most since mid-2009, largely because of surging food and gasoline prices. Core inflation, which excludes volatile food and energy costs, rose a more modest 0.2%, though that still exceeded estimates.
http://www.usatoday.com/money/industries/retail/2011-03-30-wal-mart-ceo-expects-inflation_N.htm
Subscribe to:
Posts (Atom)