THE MAINSTREAM Press is catching on. (Finally!)
This from the Times:
"Robson traces the credit crunch to the failure of the West to adapt to intensifying competition from China and other emerging nations. “Stoking up the economy on debt was a way for the West to sustain an unsustainable standard of living,” he said. “In this sense the financial system wasn’t the cause of the problems. It was the messenger.”
(DB: But a slow, long-delayed messenger, after trillions had been badly invested.)
Where, asked Smith, are politicians telling it like it is? “Living standards are going to fall,” he said. “House prices should fall. They are too high.”
Robson wonders how America and China will stabilise their unhealthily symbiotic economic relationship. America relies on Chinese savings to fund its deficits, he said, and the Chinese rely on the American export market to sustain their high growth rate.
(The Chinese can use their dollar reserves to "vendor finance" someone else.
Don't forget, Americans werent spending their own money, they were spending borrowed money,
mostly what had been borrowed against "fictitious" home valuations, now sliding.)
“The yuan is too low against the dollar,” said Robson. “If the Chinese won’t revalue it, the US needs to talk about import tariffs.” In hock to the Chinese, however, America is in a weak position to get tough."
/more: http://business.timesonline.co.uk/tol/busi...icle4596656.eceWHY can the mainstream media not bring themselves to talk about
The media helped to encourage it, and stood by as it was happening with little or no comment.
Thus, they are 'accessories', I suppose, and don't want to admit their blindness and involvement.
"The Corrigan group and other policymakers in tandem with the private sector are labouring to bring the boom-bust cycle back under control. The International Monetary Fund (IMF) estimates that banks will write off $1 trillion as a result of the credit crunch. In the first half of the year Barclays offloaded £6.3 billion of impaired loans and securities. “Assets are moving,” said Diamond. “There are new buyers, new structures, new prices.”
At the same time, Barclays and its rivals have begun to recapitalise themselves. While others have tapped the sovereign wealth funds of China and Singapore, Barclays went to the Qatar Investment Authority, where Barclays Capital does extensive business."
(Those mal-investments need to be written off and restructured before, and cycle of confident
lending can begin. I find it sad that Sovereign Wealth Funds can find nothing better to do than
to make equity investments in the very banks that engineered so many poor investments,
profiting -temporarily- while they did so. Aren't there better stewarts for their wealth around? )
= =It's so easy being ahead of these myopic editors. Why are they so slow to catch on to problems?
And so useless at warning their readers while there is still time to do something?
RIP, Mainstream. Long-live the internet leaders !
This part, I agree with:
"The main factor determining where the credit crunch goes from here is the competence of the American government, he said. Not wanting to interfere, he hesitated, but then blurted it out: “The US election is the most important thing happening this autumn. A Barack Obama victory would signal a new beginning to the world.”
So who, then, is right? City bulls who say the situation is bad but manageable and will be back to normal by 2010? Or City bears who say the situation is very bad, out of control and set to drag on indefinitely?
In a way, the former wealth-fund manager said, both are right. “The West — especially America with the entrepreneurial energies of its new immigrants — will come back,” he said. But as the boom lasted a generation, it may take a generation to get over the bust."After a "strong whiff of deflation", which may be experienced as dis-inflation, It seems likely that the next administration will try to do something, and that may well touch off the next inflation.
How soon? Time will tell, and I cannot.