Author Archive

Major Foreign Holders of Treasury Securities

Friday, July 3rd, 2009

Check this list of current foreign holders of US government debt. I found that while reading Economic Fragility Underestimated – Collapse May Be Imminent on Seeking Alpha.

The 4 Key Reasons an Economic Collapse is Likely Imminent

1. The U.S. has unprecedented, massive amounts of current and coming debt.
2. Foreign countries have experienced their own crises, and they cannot offer added levels of debt funding for the U.S. Even if they could, they are unlikely to do so.
3. Productivity is declining, and everything the government is doing is further hurting productivity.
4. The U.S. is printing unprecedented, massive amounts of money and no longer has an ability to control inflation and deflation.

The US treasury department list of Treasury Security holders is updated I assume every month, last stats from April. Note that almost every major holder has less US government debt in April than in May, despite the US government selling record amounts of debt to fund it’s bailouts of the cancerous financial leeches which abuse the term ‘industry’ beyond belief (‘industries’ produce things, and debt is not a thing).

So who is buying the rest? I assume we, the US tax payers are. And please don’t spout any of that Fox news generated nonsense about ‘tax and spend liberals’, this is about gross economic collapse fueled by 20 years of removing financial regulations, coupled with humanity reaching a peak in per capita natural resource consumption, then a physical peak in gross natural resource production, especially in oil, which is the primary resource that drives our modern non-sustainable ‘economy’.

Watch that chart to see what happens. Since the US needs to sell some 1.5 trillion more debt this year if I get the numbers right to keep afloat, and since increasing amounts of the debt held now by China and other major debt holders is short term, the real stat to track is who is buying the long term debt.

I suspect that the Chinese and others are now in the process of moving their longer term debt, as it comes due, to shorter term positions, which avoids creating the appearance of dropping long term investments in US bonds while actually creating the situation where they can exit slowly by translating dollar holdings into real things, like oil companies, natural resource contracts, and so on.

This is a big game, and the USA is losing.

The Ascent of Humanity by Charles Eisenstein

Monday, June 29th, 2009

Online version, read it here.

More than any other species, human beings are gifted with the power to manipulate our environment, and the ability to accumulate and transmit knowledge across generations. The first of these gifts we call technology; the other we call culture. They are central to our humanity.

Accumulating over thousands of years, culture and technology have brought us into a separate human realm. We live, more than any animal, surrounded by our own artifacts. Among these are works of surpassing beauty, complexity, and power, human creations that could not have existed—could not even have been conceived—in the times of our forebears. Seldom do we pause to appreciate the audacity of our achievements: objects as mundane as a compact disc, a video cellphone, an airplane would have seemed fantastical only a few centuries ago. We have created a realm of magic and miracles.

At the same time, it is quite easy to see technology and culture not as gifts but as a curse. After millennia of development, the power to manipulate the environment has become the power to destroy it, while the ability to transmit knowledge transmits as well a legacy of hatred, injustice, and violence. Today, as both the destruction and the violence reach a feverish crescendo, few can deny that the world is in a state of crisis. Opinions vary as to its exact nature: some people say it is primarily ecological; others say it is a moral crisis, a social, economic, or political crisis, a health crisis, even a spiritual crisis. There is, however, little disagreement that the crisis is of human origin. Hence, despair: is the present ruination of the world built in to our humanity?

Is genocide and ecocide the inevitable price of civilization’s magnificence? Need the most sublime achievements of art, music, literature, science, and technology be built upon the wreckage of the natural world and the misery of its inhabitants? Can the microchip come without the oil slick, the strip mine, the toxic waste dump? Under the shadow of every Chartres Cathedral, must there be women burning at the stake? In other words, can the gift of technology and culture somehow be separated from the curse?

Table of Contents (under fold)
(more…)

Kevin Baker Barack Hoover Obama: The best and the brightest blow it again

Tuesday, June 23rd, 2009

Good video of Harper’s Kevin Baker’s July 2009 cover article: Barack Hoover Obama: The best and the brightest blow it again.

It’s pretty long, worth watching. But I have to say, the people who called in to that c-span show, both left and right, don’t give me much room for optimism. The right continues to ignore every single actual foundational component of our current issues, the Libertarians continue to blindly regurgitate their absurd anti government, pro free market foolishness long after the current financial collapse has once again proven, as if this even needed proving, that free markets don’t exist, they are fictions designed to disguise the blatant grab of power and wealth by those who espouse them. Not to say actual free markets don’t exist, but they aren’t run by oligarchs and cartels, they are individual, non corporate, and, most important, local and community based.

No hope in this administration I’m sad to say, find a copy of the July Harper’s magazine and find out why, or watch the video, it covers most of the key points.

Remember: without single payer health care, dismantling of the current financial oligarchs, and a serious redoing of the corporate lobbying industry (like banning it completely) we will not be able to move on to the next phase of our existence.
(more…)

Canary in the Coal Mine – Airlines

Sunday, June 21st, 2009

Just a quick note, keeping in mind that we live in an allegedly globalized world, which will allegedly prove more efficient etc. That’s all nonsense of course, globalization is all about corporations moving responsibilities and liabilities (such as environmental concerns, labor costs, and so on) to where they can generate the highest short term rates of return while generating the greatest possible social disruption and global destruction in the process.

So it strikes me, what is the first thing to go when this system starts to crack due to rising resource costs and peaked production levels of key resources, like oil? Airlines, of course. So it’s not surprising to see, after a disastrous last year, that World’s airlines in fight for survival (with 9 billion US dollars in losses this past year).

Faced with their biggest crisis in history, airlines from throughout the world gathered in Kuala Lumpur to take stock and swap survival strategies.

“Numbers can tell powerful stories,” International Air Transport Association director-general Giovanni Bisignani told his audience of 500 airline representatives at their annual summit.

Airlines are expected to collectively lose US$9 billion (NZ$14b) this year as falling demand, lower yields, broken consumer confidence and the swine flu pandemic threaten to wipe out US$80b in revenue.

Those losses will come on top of last year’s US$10.4b deficit thanks to the double hit from record high fuel prices and the collapse of the world economy.

“The ground shifted and our industry was shaken,” Mr Bisignani says.

Airlines are in survival mode and in desperate need of help to see them through the crisis and allow them to emerge with a business model that delivers a financially sustainable future.

Yep. Can you say: (re)nationalized airlines? In fact, can you say: the only countries that will have any chance of controlling the bumpy downhill slide are going to be the ones where the state controls resource allocation and pricing? Watch the ‘free market’, one of the greatest pieces of nonsense ever generated as a concept in human history, start to show more and more how pathetically unable it is to actually do anything other than serve as an excuse to funnel more money to the hands of those who control it.

Orlov Astyk and Greer on Collapse

Sunday, June 21st, 2009

Some things to think about, if you want to take a deeper look at the worse case scenarios (which I recommend, pretty much all climate science findings are pointing to results consistently worse than predicted as worst case scenarios only a few years ago), give this latest by Dmitry Orlov, Definancialisation, deglobalisation, relocalisation.

Back to what is actually happening right now. There seems to be a wide range of opinion on how to characterise it, from recession to depression to collapse. The press has recently been filled with stories about “green shoots” and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from “later this year” to “sometime next year.” None of them dares to say that global economic growth might be finished for good, or that it will be over in “the not-too-distant future” — a vague term they seem to like a whole lot.

There does seem to be a consensus forming that last year’s financial crash was precipitated by the spike in oil prices last summer, when oil briefly touched $147/bbl. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, it is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained, and after that suddenly it’s game over. François Cellier has recently published an analysis in which he shows that at roughly $600/bbl the entire world’s GDP would be required to pay for oil, leaving no money for putting it to any sort of interesting use. At that price level, we can’t even afford to take delivery of it. In fact, at that price level, we can’t even afford to pump it out of the ground, because the tool pushers, roughnecks and roustabouts that make oil rigs work don’t drink the oil, and there would no longer be room in the budget for beer.

And so, the actual limiting price, beyond which no economic activity is possible, is certainly a lot lower, and last summer we seem to have experimentally established that to be around $150/bbl. which is something like 25% of global GDP. We may never run out of oil, but we have already run out of money with which to buy it, at least once, and will most likely do so again and again, until we learn the lesson. We will run out of money to pump it out of the ground as well. There might still be a few gushers left in the world, and so there will be a little bit of oil left over for us to fashion into exotic plastic jewelry for rich people. But it won’t be enough to sustain an industrial base, and so the industrial age will effectively be over, except for some residual solar panels and wind generators and hydroelectric installations.

I think that the lesson from all this is that we have to prepare for a non-industrial future while we still have some resources with which to do it. If we marshal the resources, stockpile the materials that will be of most use, and harness the heirloom technologies that can be sustained without an industrial base, then we can stretch out the transition far into the future, giving us time to adapt.

(more…)