A Skeptical Survivalist

NEW YORK (CNNMoney) — An oil price spike caused by a confrontation with Iran is now seen as the biggest threat to the U.S. economy.

That’s according to nine out of 18 economists surveyed recently by CNNMoney. They say rising oil prices now outweigh the risks posed by the European debt crisis, ongoing gridlock over the budget in Washington and fears of a slowdown in China.

“An Iranian disruption of oil supplies could send oil prices to $200 a barrel,” said Lynn Reaser, chief economist at the Fermanian Business & Economic Institute.

“It’s something we’re really concerned about,” said Chris Lafakis, an economist at Moody’s Analytics. “A military confrontation could push prices to $180 a barrel, which would precipitate a recession.”

The economy, it appears, can handle oil around $100 a barrel and gas prices near $4 a gallon. While these prices are relatively high, consumer spending continues to rise.

China is one of the world’s largest producers and purchasers of precious metals, especially gold and silver. Beijing has now unveiled its first gold ATM machine in a shopping district. More than 2,000 will be installed in the next two years. Since the beginning of the global economic meltdown, China has been purchasing and producing commodities at a rapid pace. Digital Journal has reported in the past that its central bank has bought gold bullion and state-television outlets have even urged citizens to acquire silver bullion. Digital Journal has also reported of gold ATM machines being installed in Germany and the United States. Now, China has unveiled its first gold ATM machine in Beijing’s shopping district of Wangfujing Street.

Read more: http://www.digitaljournal.com/article/312073#ixzz1aLf3IjlM

It’s time for the left to get off its duff and turn the tables on the radical right. And our history reveals that there’s an excellent method for accomplishing precisely that: a great march of the unemployed on Washington.

Recent polls reveal that Americans are decisively more concerned about the crisis of unemployment than the issue of our national debt. But as many commentators have observed in recent weeks, the results of the midterm elections, with Republicans gaining control of the House, and the associated rise of the tea party have pushed an agenda of austerity in government spending ahead of using government resources to fight unemployment.

Once there, these unemployed people would deliver a simple demand: The government must act immediately to give them back employment. They could invoke quite a number of interesting historical precedents: the platform of the pre-Civil War Whig Party, whose leaders, including Henry Clay and young Abraham Lincoln, urged governmental “internal improvements” — public works such as canal- and road-building projects — to give work to the jobless during a ruinous depression that followed a financial panic in 1837.

They would naturally invoke the great precedent of the New Deal’s Works Progress Administration, an agency that under the leadership of Harry Hopkins created jobs for the jobless almost overnight, thus providing some desperate and innocent people with a way to save their families and homes.

To be sure, the left has tried to address economics: It has protested repeatedly on the issues of out-sourcing, deregulation of the financial sector, and so on. But in the midst of the worst economic contraction since the 1930s, it has somehow allowed the extremists of the right to run roughshod over them.

That needs to change. Even many sincere and committed centrists admit that there are times when a disproportionate influence in one direction will require some vigorous counter-pressure if a wholesome balance is to reign.

A march of the unemployed might be the way to do it. And there’s historical precedent for this idea, too — not only in the still-remembered marches on the nation’s capital that occurred in the 1960s, but also in the largely forgotten marches of the unemployed that occurred both in 1894 and (more consequentially) 1932.

The preparations would have to start soon if such an exercise in grass-roots activism is to stand a real chance of affecting our political balance of power next year. Is the left prepared to rise to the occasion?

Read the whole thing

The one retailer prepared to cut costs to the bone to save money for consumers now warns that prices will rise very soon — no matter what. Retailers have generally managed to hold prices low despite rising raw materials costs. They had little choice: High U.S. unemployment and lack of credit has kept people out of stores. That’s over, says Wal-Mart CEO Bill Simon. Prices will now rise across the board for all retailers, Wal-Mart included. He called the situation “serious.”

“We’re seeing cost increases starting to come through at a pretty rapid rate,” Simon told USA Today in a meeting with the newspaper’s editorial board.

Posted July 10, 2010 in the Wisconsin State Journal

Q: The recession has focused increased attention on the unemployment rate. Critics say the rate doesn’t adequately capture the breadth of the labor problem. How is it calculated?

A: One of the primary misconceptions about the unemployment rate is that the federal government somehow counts every single unemployed person individually.

To do so would be impractical and expensive — akin to doing a census every month instead of every decade.

So the federal government surveys about 60,000 households each month. Wisconsin’s portion of the sample is just over 1,000 households, said Eric Grosso, a senior economist with the state Department of Workforce Development.

Only those people without a job who have tried to find work in the prior four weeks are considered unemployed, Grosso said.

“People who drop out of the workforce aren’t counted,” he said. “You need to be actively searching for a job.”

That’s because the government, in order to figure out the unemployment rate, needs to know how many total people are either employed or available to work right then, Grosso said. This is called “the labor force,” and it eliminates those who are imprisoned, confined to nursing homes, under age 16 or otherwise not employable.

People who aren’t looking for work because they’ve given up all hope also are among those considered “not in the labor force,” according to the federal Bureau of Labor Statistics.

To capture those people, the government does a separate calculation, one that rarely gets publicized. It counts people “marginally attached to the labor force.” This figure includes individuals who say they still want a job and have looked for work in the last year. They just haven’t actively searched in the last four weeks.

In June, the official U.S. unemployment rate — the one we all heard about — was 9.5 percent. Meanwhile, the rate of total unemployment, including those marginally attached to the labor force, was 16.5 percent.

The gaping deficits are threatening the economy to the point they can no longer be ignored by anyone in government and may lead “to a crisis that could dwarf 2008,” 10 former members of the President’s Council of Economic Advisers write in an open letter published by Politico.

The letter, written by former chairmen and chairwomen of the council serving both Republican and Democratic administrations, say recommendations by budget watchdogs Erskine Bowles and Alan Simpson arguing that the long-run federal budget deficit will pose a serious threat to the economy need much more attention from both political parties. Bowles and Simpson co-chaired the White House’s deficit-reduction commission in 2010.

“While the actual deficit is likely to shrink over the next few years as the economy continues to recover, the aging of the baby-boom generation and rapidly rising healthcare costs are likely to create a large and growing gap between spending and revenues. These deficits will take a toll on private investment and economic growth.”

Lenders, the authors point out, will run out of patience with Washington’s spending spree. 

“At some point, bond markets are likely to turn on the United States — leading to a crisis that could dwarf 2008.”

Evidence outlined in a Pentagon contractor report suggests that financial subversion carried out by unknown parties, such as terrorists or hostile nations, contributed to the 2008 economic crash by covertly using vulnerabilities in the U.S. financial system.

The unclassified 2009 report “Economic Warfare: Risks and Responses” by financial analyst Kevin D. Freeman, a copy of which was obtained by The Washington Times, states that “a three-phased attack was planned and is in the process against the United States economy.”

While economic analysts and a final report from the federal government’s Financial Crisis Inquiry Commission blame the crash on such economic factors as high-risk mortgage lending practices and poor federal regulation and supervision, the Pentagon contractor adds a new element: “outside forces,” a factor the commission did not examine.

“There is sufficient justification to question whether outside forces triggered, capitalized upon or magnified the economic difficulties of 2008,” the report says, explaining that those domestic economic factors would have caused a “normal downturn” but not the “near collapse” of the global economic system that took place.

Suspects include financial enemies in Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. Chinese military officials publicly have suggested using economic warfare against the U.S

Read the full report here.

The outlook is cheery.  lol

If the recent rise in oil prices sticks, it will most likely slow a growth rate that is already too sluggish to produce many jobs in this country. Some economists are predicting that oil prices, just above $97 a barrel on Thursday, could be sustained well above $100 a barrel, a benchmark.

Even if energy costs don’t rise higher, lingering uncertainty over the stability of the Middle East could drag down growth, not just in the United States but around the world.

But other sources of economic uncertainty besides oil prices have come into sharper focus in recent days. After a few false starts, housing prices have slid further. New-home sales dropped sharply in January, as did sales of big-ticket items like appliances, the government reported Thursday.

Though the initial panic from last year has faded, Europe’s deep debt problems remain, creating another wild card for the global economy. Protests turned violent in Greece this week in response to new austerity measures.

Budget and debt problems at all levels of American government also threaten to crimp the domestic recovery. Struggling state and local governments may dismiss more workers this year as many face their deepest shortfalls since the economic downturn began, and a Congressional stalemate over the country’s budget could even lead to a federal government shutdown.

Some staggering numbers in this report.

WASHINGTON — Leaked diplomatic cables vividly show China’s willingness to translate its massive holdings of US debt into political influence on issues ranging from Taiwan’s sovereignty to Washington’s financial policy.

China’s clout — gleaned from its nearly $900 billion stack of US debt — has been widely commented on in the United States, but sensitive cables show just how much influence Beijing has and how keen Washington is to address its rival’s concerns.