FED to Publish Market Predictions (and Save the Economy)

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Bernanke presents state of the economy

Ben Bernanke Makes Big Decisions About Economy

What is the Fed Doing?

The FED has announced their insider market predictions for the world’s markets would be published on January 25,2012 and periodically afterwards.  This landmark act would put the FED’s view on every field, from property sales to stock options, in the hands of the investors.  These projections are some of the most reliable in the world.  This publicizing of information is designed to prepare firms for future turns of the market and inject faith in the financial sector into the capricious investors.  Hopefully, this will kick-start a financial boom.

Why is the FED publishing its reports?

The Federal Reserve is hedging against financial busts.  Busts in the stock market rapidly dissolve trillions of dollars in just days.  The Federal Reserve System, the central banking for the United States, is designed to prevent such catastrophes.  In recent years they have been successful in mitigating busts; however, they have never been able to prevent them.  The FED is attempting to build a new, innovative barrier against sell offs with by posting their predictions: trust.

Why does trust matter?

Trust is essential.  Investor’s careers revolve around moving money.  They buy up capital, which is anything from stocks to beach condos, and sell it once it reaches peak value.  Then they repeat the process.  This simple cycle is the basis of Wall Street.  When inventors do not have faith in the market problems multiply.

Nervous investors sell off in droves at the least opportune times.  This can create market failure, instantly obliterating massive quantities of capital.  By selling off hastily these investors are wasting value and are actually hurting the value of their capital.  Investors that trust the market do not sell off capital until the time is right.  This builds up the market and has allowed the financial sector to prosper.

Through publishing its own facts and figures the FED is injecting trust into Wall Street.  By predicting the trends across the market the FED is allowing investors can acclimate to bends and dips in their projections before they arrive.  Before, capacious investors would be sent into widespread sell-offs at the slightest worry.  The FED hopes that their own figures will calm fears in tumultuous times and weaken the gravity of these sell offs.  The FED is coaxing the investors into a much more reliable rise-decline market cycle which is greatly preferable to the destructive boom-bust cycle we have at present.

Why has the Fed not published it’s predictions before?

They were afraid they could be wrong.

Predictions are never perfect.  Even in the best of times the finest analysts in the world can only make guesses about the state of the market in the near future.  The further out projections plan the less reliable they are.

Previous FED officials were concerned that unforeseeable fallacies in their predictions would disrupt the markets.  Black swans, events which are both highly unpredictable and highly destructive, could tear asunder all predictions and undermine the credibility of the FED.  A loss of trust in the FED, perhaps the single largest force in the world of investing, would result in financial armageddon.

Will this action jumpstart the economy?

Yes.

The finicky investors need this trust to be prosperous.  Before the 2007-2008 Recession the market moved gracefully, positive trends of perhaps a few points per day provided good steady investments for everyone.  Today, it is unsurprising for the DOW to jump over a hundred points in any direction.  This is bad; it jeopardizes the market because with this capricious behavior no investment is safe.  Investors are damaging the market with short sell offs and ragged growth rather than cultivating it.

The FED is pushing the markets back towards the stable growth with their predictions.  Investors will have a baseline prediction to affirm their own predictions.  In addition, the projections of the FED will become self-fulfilling prophecies.  If investors are told the markets will get better they will prepare their own assets for just that eventuality, in doing so they will prepare the market for the FED’s plan of growth.  This move will propel the economy in the right direction.

Developing Countries Hoodwinked: Ditch (of) Free Trade

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3rd world work force
While free trade is the optimum interdependence policies of developed countries it does not aid developing nations.

Free trade endeavors to help workers in developing countries; the problem is that it cannot succeed in our cut-throat, capitalist world.  When corporations go into developing countries they are not being philanthropic: they want to make money.  In order to succeed in our globalized world, companies purge themselves of humanity and squeeze every last cent out of their production.  This is not necessarily good or bad, it is just how the world of business works.

Growths of industries in developing countries create working class jobs.  This class of jobs is both rudimentary and menial.  Some examples are textiles, agriculture, and manufactured devices.  They do not build human capital or financial gains; they are effectively powerless to better themselves.  Karl Marx mourns them as: “that class of modern wage labourers who, having no means of production of their own, are reduced to selling their labour power in order to live.”

These laborers in developing countries, who have opened themselves to free trade, are arrested by wage slavery.  Their occupations pay them just enough to live, but not a cent more.  Free trade, cut-throat capitalism, and nations full of alternative workers guarantee that payrolls will be capped at the living wage.  Budding domestic industries, termed infant industries, are unable to thrive because full-fledged foreign competition steamroll over them.  Once infected by free trade developing countries are in an unfavorable position to ever become developed.

Ayn Rand, the most important philosopher on capitalism, believes that free trade is along the optimal path for economics.  However, she also knows that under free trade, “the good of some men takes precedence over the good of others, with those others consigned to the status of sacrificial animals.”  Developed countries are benefited, while developing countries are left by the wayside.

In conclusion, free trade is not the solution for developing nations because it polarizes their populations into numbed working classes, trapped in loops wage slavery and human capital erosion until a new force, perhaps protectionism, stems the drudgery.  If not, developing nations are, “consigned to the status of sacrificial animals.”

“Oportunidades” for Occupy Wall Street

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The Occupiers in America have one chief concern: economic inequality.

The Mexicans have one stunning solution: Oportunidades.

Mother & Cracker-Eating Son

Impoverished Families of Mexico look to Oportunidades for financial aid and stability.

What is “Oportunidades?”

It is a conditional cash transfer anti-poverty program by the Mexican government that has revolutionized economic equality.

The Mexicans social welfare program differs from many in the developed world.  Rather than paying out blanket benefits to beneficiaries specific criteria must be met before financial aid is released.  Recipients must meet educational, health, and nutrition goals.   Already the program covers 5.8 million families or 30% of the total population.

What are the Criteria?

Education, Health, and Nutrition.

Investing in the human capital of the future generation is of primary importance for Oportunidades.  To be put in layman’s terms, the Mexican government works to make future citizens be self-sufficient and perhaps even give back to their country through employment and taxes.

Guaranteeing students attend school is vitally important.  For each student attending school families receive larger cash transfers.  In addition, for each successive year of education the cash transfers grow significantly. Rather than working in the fields engaged students are getting an education.  Some even progress to college and acquire class changing jobs.

Health and nutrition are also essential ingredients in the Oportunidades miracle.  Cash transfer payments are delivered as long as mothers keep regular medical checkups for their children and enroll themselves in classes detailing disease prevention.  Other workshops educate the mothers about dietary needs of their families and the best methods to get the most nutritional food on the table.

Has Oportunidades Been Effective?

Here is a quotation from an article by Tina Rosenberg the New York Times concerning Oportunidades.  Judge the program for yourself:

“In Mexico today, malnutrition, anemia and stunting have dropped, as have incidences of childhood and adult illnesses.  Maternal and infant deaths have been reduced.  Contraceptive use in rural areas has risen and teen pregnancy has declined.  But the most dramatic effects are visible in education.  Children in Oportunidades repeat fewer grades and stay in school longer.  Child labor has dropped.  In rural areas, the percentage of children entering middle school has risen 42 percent.  High school inscription in rural areas has risen by a whopping 85 percent. The strongest effects on education are found in families where the mothers have the lowest schooling levels.  Indigenous Mexicans have particularly benefited, staying in school longer.”

How Would Oportunidades America Help the Occupiers?

Below is one key demand from the manifesto of Occupy Wall Street : NYC.

CONGRESS PASS THE BUFFETT RULE ON FAIR TAXATION SO THE RICH AND CORPORATIONS PAY THEIR FAIR SHARE & CLOSE CORPORATE TAX LOOP HOLES AND ENACT A PROHIBITION ON HIDING FUNDS OFF SHORE.

The Occupiers exclamation amounts to the government enforcing the graduated income tax on the super-wealthy so that the middle class can return to prosperity.  Oportunidades is a physical manifestation of the Occupiers dream.  The Mexican anti-poverty program redistributes the wealth of the nation, through taxes, to help and empower the impoverished and middle class.  This is what the occupiers need.

America needs Oportunidades just as badly as Mexico did.  Currently, 15.1% of Americans live in poverty. 10.5% of Mexicans live in “extreme poverty.”  Oportunidades is one of the primary reasons why the United States has been surpassed by Mexico on taking care of its own people.  The Occupiers must add reformation in anti-poverty programs in order sustain today’s America and empower future  generations.

Are There Any Pilot Oportunidades Programs  in America?

New York, ground zero for the Occupy Wall Street, is ironically the flagship of the American anti-poverty program.  The private program was entitled Opportunity NYC–Family Rewards.  It takes Oportunidades of the rural Mexico and optimizes it for the urban setting.  Initial results were promising.  The program quantitatively decreased poverty and day-to-day hardships, increased school grades and attendance, proliferated use of health insurance, and even increased dental care.  Despite these promising beginnings, under capitalization and a short trial period doomed the program.  It is no longer funded.

Instead, Bloomberg pays riot police to prevent the impoverished  Occupiers from taking what they were once given.

U.S. Solar Panel Manufacturers Declare War On Chinese Imports For (Justified) Protective Tariffs

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Solar Panels

The American-Chinese Trade War Heats Up

After years of American solar panel producers giving the cold shoulder to sizzling Chinese competition sequestering colossal sales with unscrupulous warlike tactics.  Now at the brink of extinction seven American solar panel producers banded together to defend American manufacturing.

How Will the Americans Save Their Industry?

Seven Solar companies, led by SolarWorld Industries America, have filed a broad trade case before Commerce Department to institute tariffs that would double the price of imported Chinese solar panels.  This protectionist tax wall would inflate the price of Chinese imports.  Demand for Chinese solar panels would elastically erode with the price increase.  The supply of Chinese solar panels in the American market would also deteriorate.  Meanwhile, American panels would be substituted into the fair playing field.

Critics question the damage this move could do to the blossoming solar market.  This will doubtlessly raise the price of solar panels and reduce quantity.  However, everyone agrees it will funnel money to American industry and build American jobs to compete with the Chinese.

Chinese solar panel manufactures have already captured over fifty percent of the international market and eclipsed the United States’ production.  Only a scant six percent of sales remain in American hands.  However, with recent blows to domestic companies such as the bankruptcy of Solyndra, it appears the Chinese seek to monopolize the market.

This cannot stand.  America is in a trade war with China; mobilizing in support of the American companies is the first step in retaking our own economy

How are the Chinese Acting Illegally?

Nationally, the Chinese government is stacking the deck.  Chinese companies are able to outbid American manufactures at extraordinary rates that far outpace Chinese technical development.  Their government sabotages laissez-faire and gives the Chinese produces a disproportional advantage with no interest loans and free land.  This is a definitive trade violation.  America reaps bittersweet sorrow with the Chinese criminality. Early solar energy adapters are excited by the prospects of cheaper solar panels in the short-term.  Meanwhile, their neighbors lose their domestic alternative energy jobs and cannot afford anything more than unemployment will allow.

Each company itself is also rife with corrupt affairs.  Accusations of corporate fraud against Chinese companies rival the gross output of #OccupyWallStreet.  Chinese panel output is hampered intermittently by furious strikes that threaten Chinese manufacturing and international sustainable energy.

Bernie Madoff would be proud; not since his bankrupting of charities has such wholesale criminality at the expense of the American public.  The Chinese parallel this infamous criminal on a transcontinental scale.  First, trust is built on the quicksand of an inflated currency and illegal tactics.  Second, in the darkest days of the recession the criminal is unmasked.  An empty husk of charitable hopes and broken panels of the alternative energy dream are all that remain.

How Must America Retaliate?

America is in a trade war with the Chinese.  Action must be taken.  Currently, Both sides symbiotically cooperate for shared prosperity.  However, nibbles of this analogy are being eaten by the Chinese as they consume the American economy for their own benefit.  Already, China has simply cut off trade of rare-earth metals to the United States.  In Libya, they opposed NATO by attempting to arm the Pro-Gaddafi forces with over two hundred million dollars in weapons.

Whether the politicians like it or not America is at war with the Chinese.  Protect our own industries is the only way to insure the continuation of the American dream.  The only alternative is to watch the lights across the United States go dark, one by one, as we are blotted out by the Sino smog.

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