Tag Archives: South Korea

Get Ready For An Economic Wake-Up Call This Holiday Season

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By Brandon Smith

Source: Alt-Market.com

If we are to measure the concept of “economic recovery” in real terms, then we would have to look at the fundamentals (not stock markets) and whether or not they’re improving. Unfortunately, not all economic data is presented to the public honestly. Very often it is mired and obscured in a fog of disinformation and false standards.

I would point out, though, that there is relatively accurate information out there in certain areas of the global economy, and it tells us our economic structure is destabilizing. Beyond that, even the rigged numbers are moving into negative territory. But what does all this mean for the holiday retail season, one of the mainstream’s favorite gauges of US financial health? And, if 2019’s holiday profits sink, what does this tell us is going to happen in 2020?

First, let’s start with what we know…

Since we live in a “globalized” economy where everything is supposedly “interdependent”, it helps to examine international export numbers. The US doesn’t manufacture and export much of anything anymore beyond agricultural products, but global markets do expect us to consume the goods of other nations. A decline in exports indicates a failing global economy, but in particular a failing US consumer economy.

The obvious example would be China, which has seen plunging export data at least the past three months, though many will argue that this is merely due to tariffs and the trade war. However, it’s not just China that is showing signs of collapse.

South Korea, another major manufacturing and export hub in Asia (5th largest in the world) has seen declining exports for 11 consecutive months. South Korean shipping is crumbling in November and the media is blaming the trade war, as some SK companies would be “hit indirectly” because they sell intermediate goods to China are are linked to US companies in China. But this makes little sense. Tariffs are highly targeted to specific companies and specific goods, and so far the US has not directed major tariff attention at South Korea beyond the auto market.  Also, the new KORUS deal between Trump and SK is different only cosmetically to original trade agreements, yet, South Korean exports continue to fall.

The same situation can be seen in Japan, with Japanese exports witnessing a 9.2% year-over-year drop in October, the largest decline in 3 years. Japan has seen three consecutive months of declines in exports.

And what about Europe? While Germany, the manufacturing powerhouse of the EU, finally saw a jump in exports to the US this past month, overall the European Union has seen consistently poor export performance for the past year, and Germany itself is hovering on the edge of recession with 0.1% official GDP growth. Many economist already consider Germany to be in recession, as official GDP numbers are constantly manipulated by governments to the upside.

But let’s not forget about the US. Remember how Trump promised that the trade war would result in a renaissance for US manufacturing and that millions of industrial jobs would be returning to our shores? Well, as I’ve warned consistently for the past couple years, there is NO WAY corporations will be bringing manufacturing jobs and factories back to the US without ample incentives. Trump already gave companies tax cuts without demanding anything in return, and the cost/benefit ratio of building new factories and paying American workers top dollar versus keeping existing factories in Asia and dealing with 10%-25% tariffs just doesn’t add up to a new US rust belt renaissance.

While manufacturing jobs have increased, US manufacturing activity has declined.  Meaning, there simply isn’t enough demand for the goods being produced.  US manufacturing ISM index just sank this month and has been sinking for the past four month into negative territory. While US PMI manufacturing data jumped this month, it is still well below the 10 year average and is also very low compared to past holiday seasons, which almost always see a spike in manufacturing.  US manufacturing remains at a historic low of 11% of US GDP and production output has decline steadily since January of this year.

The question is, will the vast decline in global manufacturing translate to a crash in consumer demand?  We know that US credit dependency has skyrocketed in the past few years, but will more debt result in more profits for retailers?  This is highly unlikely, as US retail sales growth, for example, has been in decline at the same time that consumer debt has been rising.  Why?  Credit delinquencies have been relatively stable (so far) this year, so my theory is that people in the US are paying off previous debts by taking on new debt. They are kicking the can on their insolvency.

We have seen this kind of destructive credit death cycle before – Right before the crash of 2008.

So what does all this mean? And why is the media portraying the trade war with China as the cause of the global export and shipping crisis when clearly most of the world is not directly or even indirectly tied to the tariffs?

As noted above, the narrative that is being pushed is that we live in an “interdependent” and globalized world, and that nations cannot function economically without cooperation. The trade war, I believe, is a smokescreen designed by the globalist establishment to do two things specifically:

1) It is being created to hide a crash in the greater economy. Notice that almost no one in the mainstream is talking about a collapse in global production and multiple fundamentals due to DEMAND; instead they constantly talk about the trade war and exports. The trade war is becoming the scapegoat for the implosion of the market bubble engineered by globalists and central banks through a decade of stimulus measures.

The collapse of the economic bubble is being caused in part by massive debt and a lack of consumer demand due to lack of consumer savings and cash flow. The trade war has little to do with it, and I suspect we would be seeing sharp declines in the US economy in particular even without the trade war.

2) The trade war creates a false dichotomy in which many Americans will be lured into blaming China and other nations for their economic ills, and China and the rest of the world will be lured into blaming America. It also reasserts the globalist propaganda argument that when nations and economies “go rogue”, they hurt everyone; therefore, more global controls and centralization will have to be established in order to prevent nationalism from harming the rest of the world.

And what does this all have to do with the Christmas shopping season? Like the end of last year, I think we are in for another ugly holiday retail event – Perhaps far worse than before. All the manufacturing and export data indicates that this will be the case. If so, then the mainstream narrative of recovery, long perpetuated as fact by the media and the Federal Reserve for the past several years, will finally die.

The only thing that might elevate holiday numbers would be increased price inflation in goods, but I predict that even inflation misrepresented as “profits” will not save Christmas stats this year.  Some skeptics of the ongoing crash will argue that Black Friday numbers this year were the best since 2013, therefore the holiday season will be a good one.  These people don’t know their economic history.  In most cases, holiday seasons that start off with a high traffic Black Friday end with poor overall sales data, including 2013.  This is because consumers that are cash strapped are more likely to buy early during Black Friday sales and spend far less over the rest of the season.

In the mind of the average American consumer, holiday retail sales are a primary indicator of the health of the economy. A dramatic crash in Christmas retail will end the delusion of a stable US system and cause the public to start asking questions. Economics is 50% math and 50% psychology. The math in the US economy says we are in the middle of a crash. The psychological orientation of the public has been on the opposite end of spectrum, but is now slowly moving to meet with reality. When the psychological delusion ends, the game is over. And, for the globalists a new game begins.

Order out of chaos is their motto for a reason…

The global “reset” as they sometimes refer to it, has already been triggered. Going into 2020, the question is will the fantasy fall completely away to reveal the grotesque economic swamp our foundation has been built on top of? Or, will the delusion drag on for at least one more year? Given the current data, I suspect the party is over. But it is difficult to predict how the public will react to a financial crash. Sometimes people have no choice but to acknowledge the danger in front of them, but sometimes they simply bury their heads in the sand deeper and hope that by dragging out the inevitable the inevitable will become forgettable.

Thinking Beyond Exceptionalism

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By David Swanson

Source: Let’s Try Democracy

Excepted from Curing Exceptionalism: What’s wrong with how we think about the United States? What can we do about it? (April, 2018).

Try this experiment: Imagine that space aliens really come to earth and really have, as I think is very unlikely, developed the ability to travel to earth while simultaneously remaining so primitive as to violently attack the places they visit. In contrast to the space aliens, could you identify as an earthling to such an extent as to diminish your other senses of identity? “Earthlings — F— Yeah!” “We’re Number 1!” “Greatest Earthlings on Earth!” And can you hold that thought, in the absence of the space aliens, and rid yourself of any notion of opposing any other or foreign group, while still holding that earthling thought? Alternatively, can you cast climate change and environmental collapse in the role of the evil alien Hollywood monster against whom humanity must unite?

Or try this one: Imagine that various species of humans survived to the current day, so that we Sapiens share the earth with the Neanderthals, the Erectus, the tiny little Floresiensis, etc.[i] Could you form your identity in your mind as a Sapiens? And then, can you hold that thought while either imagining the other species back out of existence or imagining learning to be as respectful and kind to the other species of humans as we should perhaps actually be attempting to be to other types of living human and non-human earthlings right now?

Perhaps the most powerful tool for altering habits of thought about groups of people is role reversal. Let’s imagine that for whatever reasons, beginning some seventy years ago North Korea drew a line through the United States, from sea to shining sea, and divided it, and educated and trained and armed a brutal dictator in the South United States, and destroyed 80 percent of the cities in the North United States, and killed millions of North USians. Then North Korea refused to allow any U.S. reunification or official end to the war, maintained wartime control of the South United States military, built major North Korean military bases in the South United States, placed missiles just south of the U.S. demilitarized zone that ran through the middle of the country, and imposed brutal economic sanctions on the North United States for decades. As a resident of the North United States, what might you think when the president of North Korea threatened your country with “fire and fury”?[ii] Your own government might have gazillions of current and historical crimes and shortcomings to its credit, but what would you think of threats coming from the country that killed your grandparents and walled you off from your cousins? Or would you be too scared to think rationally?

This experiment is possible in hundreds of variations, and I recommend trying it repeatedly in your own mind and in groups, so that people’s creativity can feed into the imagination of others. Imagine that you’re from the Marshall Islands seeking restitution for nuclear testing and/or the rising seas.[iii] Imagine you’re from Niger and less than amused that Americans first hear about your country when their government pretends that Iraq purchased uranium in your country, and that Americans only learn about their own military’s actions in your country when the U.S. president is rude to the mother of a deceased U.S. soldier.[iv] Imagine you’re my friends from Vicenza, Italy, who found local and national majority support for blocking the proposed construction of a U.S. Army base but couldn’t stop it — or similar people in Okinawa or Jeju Island or elsewhere around the globe.

And don’t just imagine you’re the other people. Learn and then re-tell the stories with all the details inverted. It’s not Okinawa. It’s Alabama. Japan is filling Alabama with Japanese military bases. The towns and state are opposed, but craven politicians in Washington, D.C., are going along. The military airplane crashes happen in Alabama. The spread of prostitution and drugs happens in Alabama. The local girls raped and murdered are Alabaman. The Japanese troops say it’s for your own good whether you think so or not, and they don’t really care what you think. You get the idea. This can be done with wealth distribution, with environmental impact, with militarism, with any issue under the sun. The danger of over-simplification should be resisted. The idea is not to stupidly convince yourself that all Americans are 100% evil while all Japanese are some sort of angels. The idea is to reverse some key facts and see whether anything happens to your attitudes. If not, then perhaps your attitudes were fair and respectful to begin with.

Another nominee for most powerful tool for altering habits of thought about groups of people is what goes by the very odd name “humanization.” This is the process wherein you supposedly take a human being or group of human beings, and by learning their names and facial expressions and little idiosyncrasies, you “humanize” them, and you come to the conclusion that these humans are . . . wait for it . . . wait for it . . . humans. Now, I’m 100 percent in favor of this to whatever extent it is needed and works. I think Americans (and probably most people) should read more foreign books, learn more foreign languages, watch more foreign films, and travel more in ways that truly involve them in foreign cultures. I think students should be required to spend a year as exchange students in foreign families and schools. I think a key test of childhood education in the United States should be: What have these children learned about all of humanity, including the 96% outside the United States?

I am hopeful that at some point we can jump the humanization and arrive squarely on the understanding that, in fact, humans are all humans, whether we know anything about them or not! It might help to pretend that all Hollywood movies have been made about and starring Syrians (or any other nationality). If that were so, if every favorite character from every film and TV show were Syrian, would anyone in the world have any doubt that Syrians were human beings? And what effect would that have on our perception of the reported Israeli government position, seemingly abetted by U.S. government policy, that the best outcome in Syria is for nobody to win but the war to continue forever?[v]

David Swanson’s forthcoming book from which this is excerpted is called Curing Exceptionalism: What’s wrong with how we think about the United States? What can we do about it? (April, 2018).

 

 

[i] This scenarios was suggested to me by this book: Yuval Noah Harari, Sapiens: A Brief History of Humankind Paperback (Harper Perennial, 2018).

[ii] https://www.nytimes.com/2017/08/08/world/asia/north-korea-un-sanctions-nuclear-missile-united-nations.html (January 16, 2018).

[iii] Marlise Simons, “Marshall Islands Can’t Sue the World’s Nuclear Powers, U.N. Court Rules,” New York Times, https://www.nytimes.com/2016/10/06/world/asia/marshall-islands-un-court-nuclear-disarmament.html (October 5, 2016).

[iv] David Caplan, Katherine Faulders, “Trump denies telling widow of fallen soldier, ‘He knew what he signed up for’,” ABC News, http://abcnews.go.com/Politics/trump-denies-telling-widow-fallen-soldier-knew-signed/story?id=50549664 (October 18, 2017).

[v] Jodi Rudoren, “Israel Backs Limited Strike Against Syria,” New York Times, http://www.nytimes.com/2013/09/06/world/middleeast/israel-backs-limited-strike-against-syria.html?pagewanted=all (September 5, 2013).