Category Archives: Business/Economics

Business/Economics, International

What Economic Recovery? S & P’s says Europe’s action on Greek debt will result in automatic default

Standard & Poor’s is warning that a French plan to “rollover” Greek debt will force Greece into default.  The plan was put forth by the Fédération Bancaire Française.

S & P’s is not the only finance rating company to make such a claim.  It’s complicated, but basically they claim the French plan would result in current “investors” in Greek bonds receiving much less of a return on their investment, so much so that S & P’s is willing to declare Greece in default.

The plan was approved by the only economic powerhouse in the European Union: Germany.

“In our view, Greece’s near-term reliance on European Union and International Monetary Fund official financing, the government’s difficulty in reducing its sizable fiscal deficit, and the current pricing of Greek government debt in the secondary market all underscore the Hellenic Republic’s weak creditworthiness and, consequently, point to a ‘realistic possibility’ that financing option would fit the ‘distressed’ category.”-Standard & Poor’s

Business/Economics, International, Opinion, Technology

Government Incompetence: Europeans now blaming Egypt for deadly E Coli, no real proof, are GMOs to blame?

First the Germans blamed Spanish cucumbers.  Then they blamed sprouts, from a northern German farm.  Then the French blamed a German owned grocery store selling French grown sprouts.  Then the French blamed a U.K. seed company which supplied the seeds to grow the sprouts.   Then the Swedish blamed the Germans, then backed off when they began having e.coli cases in people who’d never been to Germany, or eaten sprouts.  Now the Europeans are blaming Egyptian fenugreek seeds for the deadly e.coli.  Fenugreek is used as an herb and a spice.

The Europeans have gone so far as to ban any more imports of Egyptian fenugreek.  On top of that they’re banning other Egyptian agricultural products, until they can be proven safe.

Here’s the problem; no one has proven conclusively where the deadly e.coli strain is coming from!

Fact: German health officials traced some of the e.coli cases back to a typhoid Mary suspect, a woman who worked for a catering company.  The woman seems to be a carrier.  She thinks she might have eaten sprouts.

Fact: E.coli comes from humans, not plants.  The only way plants could get infected is if they came into contact with humans waste.

So far at least 49 people have died, and more than 4,000 are sick.  Knowing the facts about the case, how can European officials now blame Egyptian fenugreek?  Of course they claim the seeds were used to grow the sprouts that made people sick.  But up ’till now the claim has been that “bean” sprouts are the culprits. Now suddenly it’s fenugreek sprouts?

Seeds get contaminated when they come into contact with the bacteria.  This could be at anytime in the planting, growing and harvesting process.  It only takes a tiny bit of the bacteria, once the seeds are planted not only does the plant grow, but some does the e.coli, and it spreads.  That’s the traditional way.

Here’s a new way: In an earlier posting I wrote how some scientists say it looks like the deadly e.coli strain was engineered in a lab.  If you understand the way genetic engineering of plants works, then it actually makes sense.  In order for scientist to make their genetic modifications ‘stick’, they must use a bacteria that is resistant to almost all forms of self preservation by the original plant genes.  Yes, e.coli is one of those deadly bacterias that agricultural giants like Monsanto could be using to create GMOs (Genetically Modified Organisms).

They also want their newly modified plants to be super resistant to natural diseases, and man made chemicals.  Again, that’s where the deadly bacterias come into play.  GMOs contain bacteria that are intentionally made to be super resistant.

Are we looking at the first cases of deadly results from genetically modified plants?

Business/Economics, International

No Economic Recovery for the U.S.: German car sales explode, but not because of the United States

German car makers are scrambling to keep up with international orders.  They expect that by the end of the year they will have exported 4.15 million German made cars.  But the majority of those cars are not going to the U.S., they’re going to China, and to some extent India.

“We are seeing international markets pick up much more rapidly than many had expected.  The drivers of growth are above all Asian markets.”-Matthias Wissmann, German Car Industry Association

Audi alone saw a 64% increase in their sales to China and Hong Kong, in 2010.  But BMW is turning out to be the big money maker, just in the first six months of 2011, their sales in China exploded by 101%!

Executives for German car makers admitted they are scrambling to rethink their corporate strategy, because they never expected such high sales in China, so soon.

 

Business/Economics, International

No Economic Recovery for the U.S.: Germany & China sign $3 billion deal

Germany, not the United States, is becoming China’s most important business partner.

In fact the latest deal puts to shame the recent deal signed between China and the United Kingdom, by several hundred billion dollars.  At the end of June Germany and China signed a $290+ billion deal.

The deal includes not just the purchase of products, but investments into anything from universities to medical research to environmental services.  Sounds like everything President Obama promised the people of the United States.

Currently Germany has invested $20 billion into Chinese industries, with China investing only $600 million into Germany.  This new deal greatly increases Chinese investment into Germany.

According to Rainer Gehnen, managing director of the German-Chinese Business Council, China, not the United States, is now Germany’s most important market, and will be for the long run.

 

 

 

Business/Economics, International, Opinion, Technology, U.S.

Rare Earth Minerals the ‘oil’ of the 21st Century. Who controls the most? Same old adversaries of the 20th Century

Rare earth minerals will become the ‘oil’ of the 21st century.  That’s because they’re used in high tech electronics, and the more the world becomes reliant on electronics, the more valuable rare earth minerals become.

In fact, some analysts say some of the current wars raging on the African continent are all about control of rare earth minerals.

Here are some examples of rare earth minerals: Dysprosium is used in electric motors for vehicles, and Terbium for the latest televisions.

Who’re the biggest controllers of rare earths?  Why they’re the same major players of the Cold War in the 20th century: Russia (the boss of the Soviet Union during the Cold War), China and the United States.

However, China actually controls 90% of the production/refining of rare earths.  This is where their true power comes in.

Rare earth minerals are so important that the Japanese University of Tokyo spent a lot of money conducting a search for other sources of rare earths.  Their target search area was the Pacific Ocean.  International law would prevent any monopolization by any country, of rare earths found in the Pacific Ocean.

They found plenty.  From 2000 samples taken at 78 locations, Associate Professor Yasuhiro Kato estimates there is 800 times the rare earths at the bottom of the Pacific Ocean, than there is on land.

They targeted volcanic vents on the Pacific Ocean floor.  Hawaii has a lot.  The problem is that most of the high concentrations are at depths of 3,000 to 6,000 meters (9,842 to 19,685 feet).  So there are technical limits to getting at the Pacific Ocean rare earths.

Business/Economics, International

What Economic Recovery? China to raise interest rates, requires banks to hold more money in reserve

The Chinese government is contemplating another increase for interest rates, in an attempt to fight off inflation.

On top of that, the Chinese government has ordered banks to tighten their hold on cash.  Currently Chinese banks are required to hold back 21.5% of their cash. The increase in capital reserves, as it’s sometimes called, is intended to slowdown lending.  Lending is another way to drive up inflation.

However, the Bank of China issued a report that says increasing interest rates, and forcing banks to cut back on lending by increasing their capital reserves, is not having any immediate affect on inflation.  That’s because Chinese banks went on a huge lending spree, which flooded the economy with so much money that it will take some time before inflation is brought under control.

In a previous report, it was estimated by a Chinese government audit, that local governments (just local governments) are now in debt by $1.65 trillion.

 

Business/Economics, International

What Economic Recovery? Inflation hits makeup, Cosmetics prices to go up, up

Estee Lauder Group announced they will be raising prices on their various makeup brands by 8% to 10%.

Corporate officials are blaming the price rise on the increased cost of labor, and resources.

Estee Lauder Group is not the first cosmetics company to raise their prices.  Earlier in the year Christian Dior, Lancome, Biotherm, Chanel and others announced prices increases.

Business/Economics, International

What Economic Recovery? China reports slowdown in non-manufacturing

“We will continue to monitor the situation and evaluate whether this bodes a further slowdown for business activity and economic growth.”-Cai Jin, China Federation of Logistics and Purchasing

China continues to see evidence of economic slowdown, as the non-manufacturing sector shows slowed growth for second month in a row.

The slowdown in non-manufacturing (things like basic resources for bigger companies) is blamed on declining orders from the manufacturing sector.  Manufacturers are cutting back because of declining orders from their international customers.

China is the world’s second largest economy.  If the slowdown in their economy continues, it could be a sign that there is no global economic recovery.

Business/Economics, Opinion, U.S.

Declare Independence from Banks: Economist says Big Banks control the United States, revolution only answer

“People think jobs create wealth, they don’t, they don’t.  It is being done by capital instruments [loans].”-Rodney Shakespeare, Trisakti University

A British economist with Trisakti University, in London, U.K., says ‘wealth’ is now actually created by big banks, and the big banks totally control the U.S.

The ‘wealth’ is created by the interest and fees the banks charge on their loans (capital instruments), and their money is fake:  “The banks do not lend existing money.  They create money out of nothing.  They add administration costs and they add interest and then they lend it for anything.   And that is where you’ve gone horribly wrong.”

The real money, the ‘wealth’, comes from individuals, governments and corporations paying back the loans the got from the big banks.  Essentially the banks are making big money for themselves, from nothing (why else do they keep reporting huge profits in a bad economy).

Over the past few decades, big western banks have been gaining control by making as many people, governments and corporations addicted to living off of their loans.  A tiny elite of people are benefiting: “Of course the banks and financial elites think this is a marvelous idea, because it effectually means that all the time they can ‘cream off’ what is essentially a ‘tax’…”

There are two answers Professor Shakespeare suggested; share the ‘wealth’ by spreading the benefits of capital instruments (bank loans) amongst the people, or: “…an uprising against what could be summarized as ‘banker occupation’.  Until that happens there’s no chance of new thinking coming into being.”

I can only think of mass default on loans to be the most destructive way to rise up against “banker occupation”.  This would involve not only individuals, but governments and corporations as well.

Business/Economics, Idaho, U.S.

What Economic Recovery? Corporate officials used Idaho unemployment funds to float their companies

According to the Idaho Department of Labor, corporate executives based in Idaho, used unemployment benefits to float their companies (because of the bad economy).

The executives, who own their companies, would apply for unemployment benefits claiming they had lost their executive position.  They would then use the money to float the company that they held controlling stock in.  It was all legal.

As of now they can’t do that anymore.  Idaho lawmakers created a new law that says corporate executives applying for unemployment benefits must prove they have no ownership in the company they had worked for.  The new law affects about 30,000 executives in Idaho.

However, the new law allows corporate executives to stop paying into the corporate unemployment system.  In Idaho unemployment taxes are paid by employers, not employees, but employers can be eligible for a refund.