Be aware of the authorities which influence your life

There are more authorities around than you might think of. If you are not aware of these authorities they influence you in a perfidious way.

In its common sense authorities refer to political or municipal authorities. Yet, if you consider every organisation or person which is able to influence your life, the the number of "authorities" increases tremendeously.
What all authorities have in commen is that they need control to prevent them from getting too much power. This conclusion is a reflection of the work of Montesquieu on the seperation of powers which led him to come up whith the concept of the three branch theory. This theory still grants the stability of modern democracies. The loss of the seperation of powers was always a threat to freedom and human rights as we can learn from history.

Since Montesquieu new authorities or powers have evolved which affect the stabilitiy of a democracy which were left unaccounted in the theroy of the three branches. These powers are basically economy and information.

As we can learn from communism economy should not be controled form the governmet. On the other hand stakeholders of the economy should not have any control over the government. Moreover as single company should never have the opportunity to control the market without considerable competition. This might destabilzie the economy and as a result the whole country.

Information should also be free and independent. Yet we should never forget that our opinion is always based on the information we can access. Thus, those who can control information can control our opinion. Freedom of Opinion is one of our most important human rights since we control the government in a free democratic country with our opinions and our votes.

In conclusion we should always be alarmed if too much power is cummulation in one place. Examples for this are:

1. Silvio Berlusconi : Italien Prime Minister, owner of companys which dominate Italien mass media. (Information, Economy, Legislative)

2. FOX News: Said to be controled by the republicans. (Anyway, they are not independent nor balanced)

3. Microsoft: Responsible for the operating system and office application most of us use (90%+). Trying to gain control over the whole IT-market. (Economy. controls IT market)

4. George Bush: Said to have close accosiations to oil-industry (Economy, Legislative, Information -> see FOX News)

Be alert !!!

LewRockwell.com: Greenspan: 'The Devil Made Me Do It!'

This article by Gray Norh is a very interesting analysis of the current accont deficit, worth reading. He focusses on the long term impact of the current account deficit. He also thinks that the problem of the current account deficit is not so much the trade deficit. It's
i)the buy now pay later mentality and
ii) the buying of asian goods since they are cheaper than US goods and
iii) they are cheaper because Asia pegs their currency too low to the dollar which actually means Asia has dumping prices.
iv) this problem can not be resolved by depreciation of the dollar since Japan and especially China can afford the depreciation much longer than europe since Asian economy is doing much better for the time beeing.

The result of all this will be, that US manufacturing is destroyed to the favor of the asian manufacturing.

I don't know what this will mean for the US, but I think Asia will have kind of a monopol on manufacturing and this means rising prices and complete dependency on asian counries. Fact is that asia sucked-up/stole western know-how and destroyed western manufacturing by means of cheap labor and pegging their currency at low prices to the dollar. Future manufacturing in the US will be owned by Asia. For some reason I don't like this cause we'll loose influence.
The advantage of all this is that we all get cheap goods from asia and we don't need to pay for it, since liquidity created is financed by China and Japan. But this might only be a temporary thing and after this we are slaves of asia and not the other way round any more.

www.mike-morgan.com - weblog: Why Does the U.S. Get to Make All the Rules?

I found this post from the I-Tach weblog deserves to be commented:

[...] One of these years, the U.S. will elect a president .... who will have the balls .... to not worry about placation or hurt feelings, and will honestly answer the lame question, "Why should the U.S. be the country that makes all the decisions?"

Whiners worldwide have been asking this...:

The truth is plain and simple: the U.S. gets the biggest say in things because, within a measly 229 years, starting from nothing at all, we've built the most powerful, most experienced, richest, most generous, and most scientifically and technologically advanced country on earth.

Deal with it!!

This is a typical example of the category :" I am a extremist with an extremist opinion, but I have no idea what I am talking about and I refuse to think about it". This has nothing to do with rational behavior. This is just the expression of irrational aggressiveness and feelings of superiority.
Don't forget that the whole thing is not about ruling its about making the right decisions. Have you seen "A beautiful mind"? The point which astonished me the most about this movie was the Nash equilibrium. This is not surpirsing since Nash was awarded the Nobel-prize for his finding. This mathematical model might be in part applicable to predict the possible outcome of any aspect of life where people strive for succes, though it might be sometimes difficult to define the exact rules of the game. If the US is not trying to coordinate their interests with the rest of the world to increase their domestic profit the rest of the world will do the same. As a result every member of the world will make less profit. This is because the US has the superiority but not supremacy in the world which means in other words it's the leader of the world but its still part of the world. If US makes the wrong decisions they might loose their superiority sooner than you expect. The rest of the world is not sleeping.
It is also wrong to say the US started form nothing 229 years ago. The US started as a colony of Europe with the crossing of the atlantic ocean by christopher columbus more than 500 years ago. 229 years ago , in 1776, was the declaration of independence when 13 colonies split from Britan. You can't really think that this is a start from nothing. This means the USA had an ahead start due to the transfer of know-how and human recources from Europe to the US. Until today the USA imports human recourses and know-how from all over the world which is good for the economic superiority of the USA. This inflow might cease if the USA favors "un-fair" play from now on. Moreover USA does not rule since 229 years but only since 10 or 20 years or so since the end of the cold war. This means the position of the USA today is the result of a lot of right decisions of the USA in the past 60 years or so. I hope the US keeps up the good work. Yet, if the US administration makes the wrong decisions, they might easily mess up the whole world. Smart politics made the US strong, not sledgehammer methods. If you are a leader, you will be more successful if you are supported by those you lead - E pluribus unum

The Fable of the "Fearsome Deficits"

The Fable of the "Fearsome Deficits": The Fable of the "Fearful Deficits"
As I first read this article I was fist stunned. I had the feeling what he said is right and after carful reconsideration I still belive that thers a lot of truth in this article.
If you think about it you'll recognize that depreciation of the dollar was mostly due to "talking down" of the dollar. The depreciation was mostly a result of the statement of Greenspan. Currently you can observe that now the dollar is deprediated so much, that it could endager the world economy its beeing talked up again. And see it works.
I think that the reason for this is that the depreciation of the dollar hits mainly the european economy. China and Japan can easily get along with the depreciation of the Dollar because they have an growth rate of their economy of 8%+. Don't forget China is a communistic regime. They treat their workers like slaves more or less and they have 1,300,000,000 of them. Neither US nor European labour will ever be compatible to this. So China has the potential to destroy western economy. The Euro is just to strong compared to the dollar and the USA still needs the economy of europe because otherwise the would be dependent on asia alone. That the euro is so expensive is basically a result of that the euro is the only major currency which is not pegged to the dollar and the ECB has a stable currenc policy which independent of the government. So what would you do if you fear the dollar is depreciated? Probably selling dollars and by euros. Anyway the depreciation of the dollar is more a political thing and its not so much founded on the current account deficit. The current account deficit is more a thing to make the public fear to make them comply to the changes the administration wants to do. Current account deficit will not cause the dollars depreciation because the dollar is the worlds resereve currency.
Next intersting point is this fear fear fear thing. It reminded me of Michal Moore. He also thinks that the government trys to talk the american people into fears which do not exist just to make them more compliant to the government decisions.
Last point I want to comment on is the current account deficit itself. The current account account deficit is actually nothing bad itself. The question is what causes this current account deficit. It can be caused by a trade deficit, a budged deficit and so on. What it comes down to is that more money is invested in USA than USA invests in the rest of the world. It doesn't really say why. I can't see something bad in the current account deficit for the US per se. The USA has had a current account deficit sice more than 30 Years and nothing happened. The problem today might be that the current account deficit is mainly caused by the budged deficit of the government, and not so much by the trade deficit.
Anyway the current account deficit becomes only a problem if the world is not willing to finance it anymore. And this will happen if the dollar is not the worlds reserve currency any more. And weather the dollar will stay to be the worlds reserve currency or not is dependent upon a stable dollar no more no less.
The only drawback in expect from the current account deficit of the US is that it makes the USA dependent upon the economy of other countries wich actually means that the USA will not be indipendent any more since USA has expanded their economic area to the world.

He who thinks the trade surplus is the only indicator for economic success doesn't understand anything!

There is no doubt, that the trade deficit alone is no indicator for economic success. But who beliefs this would be the only question of concern about the current account deficit has not understood the problem. The trade deficit is not the same as the current account deficit.

I will refer to the post "The economic monster is bogus" from Adam Smith institute Blog:

Today's Wall Street Journal Europe attacks those who complain that the US needs to export more and import less. These people believe that "the economy is being put in jeopardy by some monster called the current account deficit".

Much of the same thinking abounds in the UK, too. The Chancellor of the Exchequer gets attacked for an 'imbalance' in our economy due to a 'trade deficit'. A 'trade deficit' sounds like a bad thing. But as the Journal points out, the only country which exports more current account goods than the US is Germany, and it is not doing too well. Despite a 'trade surplus', Germany's growth was only 1.2% following three years of near-total stagnation. It also has double the unemployment rate of the US.

In other words, having a 'trade surplus' is no indication of economic success.

You can't compare Germany and USA that easily. Without the "trade surplus" German economic growth would be much worse. In other words, the trade surplus is in Germany the single most important factor fueling the economic growth not only in Germany but also in the USA as 70% of trade surplus of Germany is absorbed by the current account deficit of the USA. If Germanys economy is struggling, who will finance the devastating current account deficit of the US in the future?
The high unemployment rate is still a result of the reunification. The good economy of western Germany can't compensate that easily for the crappy economy of the former GDR. Moreover, labor is in Germany too expensive, compared to the world which results in German companies migrating their production to foreign countries, where they can produce cheaper and more competitive. This effect was particularly augmentet through the EU-extention rendering the cheap labor of eastern europe accesible to european companys. In addition high unemployment rate is a result of the well established social system of Germany propagating the immigration of people with poor education who just intend to live on social benefits. The social benefits moreover compete with employment, since education of many unemployed is that bad, that they would never be able to find a job where the get as much money as they get from the social welfare office. As a result they don't want to work. Unemployed people get a hell lot of money for doing nothing, that's what it all comes down to. Germany can only finance their social security system with their trade surplus. The USA would never allow this kind of abuse of their social systems.
Moreover, Germany finances large parts of the EU with their trade surplus. Without the funds Germany was paying to the EU economic growth would be much better.
The reason for the US economy to be stable despite their current account deficit is that the dollar is the worlds reserve currency which results in an increased monetary inflow in the US-market though fundamental economic data of the USA does not support this behavior. That is the reason why it works for the US but not for any other country in the world,especially not for Germany, IMHO.
The growing economy in the US is partly due to the weak dollar which is also a result of the current account deficit. Yet, with a dollar to low and to unstable as a result of the current account deficit and political interests, the dollar might loose its relevance as a reserve currency which would cause the USA to change their policy fundamental.
As a result of the current account deficit, the US will have to increase the interest rates to keep the money inflow up despite the devastating current account deficit. Increasing interest rates usually mean decreasing economic growth. Thus, figures might look different next year.
Moreover, the value of the dollar will rise again, as the interest rates are increasing. This will put the US export under pressure and will further increase the current account deficit.
I think that a certain current account deficit will always be tolerated by the world-markets. But if it's going too high the system will become instable in the long run and it would be impossible to rebalance this instability by a short intervention. In the long run the current account deficit will not be compensated by the decline of the dollar, but the current account deficit will decrease the importance of the American currency as the world reserve currency.

The Decline of the greenbacks is o.k - The Current Account Deficit is not !!!

The US fed. Bank kept the interest rates low which, together with the current account deficit and the obvious non-willingness of the administration to stop the decline of the dollar is the main reason for the decline itself. Therefore, it is reasonable to say that the decline of the dollar is intended by the Bush-administration.
The dollar was probably over valued in the recent time due to the massive intervention of Asian national banks especially Chinas people bank. The tag their currency to the dollar at a very low price to keep their products cheap if imported to the US. On the first sight this sounds good for US customers yet you have to take into consideration that Chinese goods will compete with local manufacturers and this means unfair competition IMHO. Actually this behavior of china comes down to some kind of price dumping. This is not fair but the Chinese refused to float their currency freely.
The decline of the dollar puts china under pressure. They hold a lot of dollars which now start to loose their value. Its said, that china lost 1o billion $ so far due to the current devaluation of the dollar. Therefore China is pissed. If they continue buying dollars the keep the dollar up and the yuan down they thereby actually finance the war and the cut in taxes and the current account deficit of the US. If they stop buying dollari, the yuan will rise against the dollar and Chinese products will become more expensive in the US. Moreover their dollar reserve will devalue which will mean great looses for their bank. Both factors will lead to decrease the growth of their economy. Moreover their credits might turn bad because they are covered by the dollar reserve which turns out to be less and less worth. For china or Japan the falling greenbacks is a loose lose situation. Yet, it their own fault because to peg the yuan to the dollar isn't fair at all.
For the US the falling dollar is probably a win win situation. It might help to decrease the current account deficit and render US-products more competitive on international markets. Moreover their debts the have in foreign counties will decrease as the value of the dollar decreases. On the other hand If the Chinese government chooses to sustain the exchangerate between dollar and yuan they finance the account deficit of the US. Us can keep the interest rates low and this will promote the economy.
Strange enough that this works. Probably no other country in the world would be rewarded by buying its currency for having such a tremendous current account deficit. A currency of any other country would be worth nothing today. The reason why is that the dollar is the worlds reserve currency. So far the existed no alternative to the dollar as a reserve currency. So far the current account deficit didn't matter. But know things might be a little different since the introduction of the euro. The ECB has strict limits for the budget deficit of the participating countries of the euro zone which have to pay severe fines if they exceed this limits. ECBs duty is to grant the stability of the euro. This policy might render the euro an interesting alternative as a reserve currency to the dollar. The recently observed all-time high of the euro indicates that this interpretation is shared by many investors.
Moreover, most countries earning their money with oil hate the US because of the recent interventions of the US in the Orient and would love to sell their dollars if the had an alternative, which they now might have found in the euro.
Another drawback of the current account deficit is, that this actually means, that the US is selling itself to china and Japan, which basically finance the current account deficit, since a negative currenct account balance means that more foreign money is invested in the US than the other way round. To put it in a very negative way this would mean, that china, Japan and Saudi Arabia would own the US sooner or later. And then you will remember: No pain no gain.
In conclusion tough the decline of the dollar is good for the US economy and in part fair from a global point of view it should not jeopardize the dollar as a reserve currency and thereby the economic superiority of the US in the words by escalating the current account deficit and the budget deficit.