The Organization of Dollar Importing Countries will be forced to pull the plug

Get fixed mortgage rates NOW!!!!! -- law

Billmon says:

... I’d like to pick up where I left off, which was with the question of whether the huge U.S. deficit – and the yawning imbalance it has created in the global economy – is the product of excessive savings (the chicken) or excessive U.S. demand for those savings (the egg.) The former is the position recently taken by Fed governor Bernard Bernanke – and, by implication, the Fed itself. The latter is the argument made forcefully by economist Nouriel Roubini in this recent post.

Roubini’s perspective, I might add, is almost universally held outside the United States – as well as at such bastions of economic orthodoxy as the International Monetary Fund and the Bank for International Settlements. (I’d put the World Bank on the list too, but the coming purge should take care of any right deviationist tendencies among the professional staff.)

Even our Chinese creditors seem to think the label on the problem should read “Made in the USA” – which hasn’t stopped them from continuing to provide the massive amounts of vendor financing needed to keep the problem from turning into a crisis. Maybe we should take a tip from John Mitchell (Nixon’s attorney general) and look at what the comrades in Beijing are doing instead of what they are saying.

As that last comment suggests, my own view is closer to Bernanke’s than Roubini’s – although I don’t find it nearly as comforting as the Fed seems to. Like Bernanke, I think there is a global “glut” of savings, one which has made it possible for the United States to finance its gluttonous appetites at interest rates I would never have believed possible when I first started thinking about this topic more than a decade ago.

However, I agree with Roubini that the Fed is whistling past an economic graveyard if it thinks the savings glut will allow America to continue sucking up 70-80% of all global capital flows for many years to come. The financial conditions that made that possible are on artificial life support. At some point the providers of that support – the central banks of China, Taiwan, Korea and Japan, or as I prefer to call them, the Organization of Dollar Importing Countries – will be forced to pull the plug. And like Roubini, I think that moment is likely to come sooner rather than later.

How much sooner? I would guess within the next 3-5 years, and that may be too optimistic. If the death of Bretton Woods is any guide, the end could be long, drawn out and messy. So the period of relatively trouble free sailing – when the issue could be confined to the back pages of the financial newspapers and to obscure blogs like this one – already may be almost over.

Whiskey Bar: The Chicken and the Egg, Part II

Daily Kos :: Recruitment scandal

Recruitment scandal
by kos
Wed May 11th, 2005 at 00:14:27 CDT

Ahh, call it the chickens coming home to roost. When the Army and Marines start suffering recruitment shortfalls, and when pressure gets too high?

There's this, in Houston.
The Army will set aside a full day on May 20 as the day to have every recruiter across America review Army recruiting policies and standards. It's an effort to stop overly aggressive recruiting tactics.
Nationwide, the Army wants to make sure men and women who become soldiers do so without being threatened.

The announcement comes just one day after the 11 News Defenders exposed a Houston Army recruiter threatening to arrest a local young man if he didn't report that day to the army recruiting station.

Sgt. Thomas kelt left this message on that young man's cell phone: "Hey Chris, this is Sgt. Kelt with the Army man. I think we got disconnected. Okay, I know you were on your cell probably and just had a bad connection or something like that. I know you didn't hang up on me. Anyway, by federal law you got an appointment with me at 2 o'clock this afternoon at Greenspoint Mall, okay? That's the Greenspoint Mall Army Recruiting Station at 2 o'clock. You fail to appear and we'll have a warrant. Okay? So give me a call back."
Before Bush's War, there was no need for such tactics. War supporting politicians could lend a hand by urging people to join up, but they won't. Can't have a call for sacrifice.

Religious Right preachers could use their pulpits to urge their flocks to fight their "just war", but they won't. No parent wants their preacher telling them to send their kid to the grave.

The 101st Fighting Keyboardists could urge their readers to enlist, and then follow suit themselves. But they won't. The un-American cowards make a mockery of our anthem's "home of the brave" line as they hide behind tough talk.

TV blowhards could use their cable channel platform to urge their listeners to head to the nearest recruitment office and put their words in action, but they won't. "Supporting the troops" means nothing more than empty words.

So it comes to this.
Interviews with more than two dozen recruiters in 10 states hint at the extent of their concern, if not the exact scope of the transgressions. Several spoke of concealing mental-health histories and police records. They described falsified documents, wallet-size cheat sheets slipped to applicants before the military's aptitude test and commanding officers who look the other way. And they voiced doubts about the quality of some troops destined for the front lines.

The recruiters insisted on anonymity to avoid being disciplined, but their accounts were consistent, and the specifics were verified in several cases by documents and interviews with military officials and applicants' families.

Yesterday, the issue drew national attention as CBS News reported that a high-school student outside Denver recorded two recruiters as they advised him how to cheat. The student, David McSwane, said one recruiter had told him how to create a diploma from a nonexistent school, while the other had helped him buy a product to cleanse traces of marijuana and psychedelic mushrooms from his body. The Army said the recruiters had been suspended while it investigated.
Nearly one in five recruiters have been investigated in the past year alone for recruitment improprieties. All because no one wants to fight Bush's senseless war. And those who still defend it against all reason are the last to put either their words into tangible action, or urge their followers to do so.

There is a recruiting crisis in this country. Our troops in the Gulf need reinforcements. Yet those who claim to support them the most refuse to lend a hand. Such cowardice has no place in this country. I think we all know who the "surrender monkeys" really are.

Daily Kos :: Recruitment scandal