At a Tucson “tea party” on June 22, Steven Knope, M.D., opened the discussion with the remark that the U.S. just doesn’t have the money for the proposed “change” in American medicine—or anything else.
This is becoming increasingly clear to foreigners, if not to Americans. The U.S. was told “no” when it requested to attend the June 15/16 meeting in Yekaterinburg, Russia, as an observer. The six-nation Shanghai Co-operation Organisation was discussing ways to challenge American economic hegemony.
Member nations are Russia, China, Kazakhstan, Tajikistan, Kyrgyzstan, and Uzbekistan. Iran, India, Pakistan, and Mongolia have observer status.
“If China, Russian and their allies have their way,” writes Michael Hudson, the “world’s largest debtor” will no longer be able to “live off the savings of others” (Financial Times 6/15/09).
Some believe that the U.S.—or “Wall Street”—has been propping up the dollar by temporarily smashing the prices of commodities such as gold and crude oil. Having been thwarted in its efforts to buy an important stake in Western commodity firms such as Unocal or Rio Tinto, China has been directing its dollar reserves toward hedge funds, writes Jim Willie. He views this as part of an encirclement strategy, which will deprive the U.S. of a key method of supporting the dollar.
“China commands the Great Wall of Money that will eventually cascade onto world markets. That cascade could be more important as a factor in generating U.S. price inflation than the buildup and spillover of the USFed balance sheet” (Goldseek.com 6/18/09).
Chinese students recently laughed at U.S. Treasury Secretary Timothy Geithner when he told them that Chinese dollar assets were safe. Former Chinese central bank advisor Yu Yongding referred to the Federal Reserve as the “world’s biggest junk investor.”
If one counts private debt, official government debt, off-budget obligations, and internal commitments, America owes 100 times as much as Weimar Germany. And it just keeps borrowing more. In 2009 alone it will borrow $1.3 trillion, “just shy of the debt that sank the Weimar Republic,” writes Bill Bonner (LewRockwell.com 6/22/09).
The Federal Reserve is adding bank reserves at a rate that allows the money supply to expand geometrically, at a rate of 4,500%. Any normal bank that did that would be closed down immediately, Bonner states.
In 1923, Karl Helferich, Chairman, Central Bank of Germany, wrote: “To follow the good counsel of stopping [the inflation machine] would mean…that in a very short time the entire public, factories, mines, railways and post office, national and local government, in short, all national and economic life would be stopped.”
Some argue that hyperinflation will not occur—because the inflation machine simply will not work any more. Deflation is inevitable, they say, because of continuing debt collapse. Open market paper, instead of growing as it had in almost every prior quarter in history, is collapsing at an annual rate of $662.5 billion. The only major player borrowing money in big amounts is the U.S. Treasury, sopping up $1,442.8 billion of the credit available, leaving less than nothing for the private sector, writes Mish Shedlock (Mish’s Global Economic Trend Analysis 6/24/09).
Would more regulation work? Richard Maybury writes that instead of being restrained by a free market (contracts, courts with informed juries, and competition), all financial entities, no matter how incompetent or dishonest, are now under the same massive regulatory umbrella, so it is impossible to distinguish good guys and bad guys. Regulations are providing camouflage for crooks. Massive malinvestments in the U.S. economy are not being corrected. Huge injections of money are simply not being circulated. (Daily Bell 6/7/09).
The current version of “regulatory reform,” in any event, amounts to handing dictatorial control of the entire U.S. economy over to the Federal Reserve, said Congressman Ron Paul, M.D. (R-TX).
Paul concludes, in his June 22 weekly address, that the apparent goal of the Administration and Congress, with the continuing round of “stimulus” packages, is to bring about the total economic collapse of the United States.
“Bank robbers rob banks because that’s where the money is. Similarly, governments tax producers because that’s where the money is,” observes Robert L. Hale (Reactionary Utopian 5/20/09). Compared with the other five-sixths of the economy, how well off is medicine? Is it likely to be the sink for redistributed money—or the source?
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