As if Americans didn't have enough financial problems to worry about -- with high unemployment, foreclosures, and an ongoing credit crunch -- Federal Reserve Chairman Ben Bernanke is sounding the alarm on yet
another potential threat to the economy: an imbalance of cash flow between America and foreign nations.
Simply put, Bernanke is worried about global trade and capital flows.
Bernanke sees America's trade deficit with other countries -- China in particular -- as financially dangerous. Even though the Fed Chairman didn't specifically cite China by name, in Bernanke's words "capital flows are once again posing some notable challenges for international macroeconomic and financial stability." Bernanke made his comments in Paris at a Bank of France meeting. Finance ministers and central bankers from G20 countries, which account for about 85% of the world's economic output, are convening for a two-day meeting in France to try to agree on a set of international policy guidelines that would help avoid the kind of financial meltdown that began in the U.S. in 2008 and spread to the rest of the world.
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US President Barack Obama greets employees after speaking about advancing education for US students to compete on the international stage after touring a manufacturing facility at Intel in Hillsboro, Oregon, on February 18, 2011. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
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US President Barack Obama greets employees after speaking about advancing education for US students to compete on the international stage after touring a manufacturing facility at Intel in Hillsboro, Oregon, on February 18, 2011. AFP PHOTO / Saul LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
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(FILES) This January 7, 2010 file photo shows Intel Corp. Chief Executive Officer Paul Otellini delivers his keynote address at the 2010 International Consumer Electronics Show in Las Vegas, Nevada. US President Barack Obama will name Intel chief executive Paul Otellini to his jobs council on February 18, 2011, in a move to harness the power of innovation to ignite economic and employment growth. Obama will travel from San Francisco, where he dined with a hall of fame of Internet pioneers on Thursday, to Oregon to make the announcement, as he tours an Intel facility billed as the world's most advanced semi-conductor plant. Otellini will be named to the president's Council on Jobs and Competitiveness, a White House official said. AFP PHOTO / Robyn Beck (Photo credit should read ROBYN BECK/AFP/Getty Images)
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SINGAPORE - FEBRUARY 18: Shoppers browse books at Borders Singapore flagship store in Wheelock Place on February 18, 2011 in Singapore. REDgroup Retail the parent company of Borders Singapore announced yesterday that it had been put into voluntary administration. The company employs some 2500 staff in Australia, New Zealand and Singapore. The announcement came a day after the United States, Borders Group filed for bankruptcy. (Photo by Chris McGrath/Getty Images)
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SINGAPORE - FEBRUARY 18: A Borders employee stocks shelves at the Borders Singapore flagship store in Wheelock plaza on February 18, 2011 in Singapore. REDgroup Retail the parent company of Borders Singapore announced yesterday that it had been put into voluntary administration. The company employs some 2500 staff in Australia, New Zealand and Singapore. The announcement came a day after the United States, Borders Group filed for bankruptcy. (Photo by Chris McGrath/Getty Images)
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SINGAPORE - FEBRUARY 18: Shoppers browse through the bargain books section at Borders Singapore flagship store in Wheelock Place on February 18, 2011 in Singapore. REDgroup Retail the parent company of Borders Singapore announced yesterday that it had been put into voluntary administration. The company employs some 2500 staff in Australia, New Zealand and Singapore. The announcement came a day after the United States, Borders Group filed for bankruptcy. (Photo by Chris McGrath/Getty Images)
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SINGAPORE - FEBRUARY 18: A woman looks through the bargain books section at Borders Singapore flagship store in Wheelock Place on February 18, 2011 in Singapore. REDgroup Retail the parent company of Borders Singapore announced yesterday that it had been put into voluntary administration. The company employs some 2500 staff in Australia, New Zealand and Singapore. The announcement came a day after the United States, Borders Group filed for bankruptcy. (Photo by Chris McGrath/Getty Images)
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SINGAPORE - FEBRUARY 18: Shoppers enter the Borders Singapore flagship store in Wheelock plaza on February 18, 2011 in Singapore. REDgroup Retail the parent company of Borders Singapore announced yesterday that it had been put into voluntary administration. The company employs some 2500 staff in Australia, New Zealand and Singapore. The announcement came a day after the United States, Borders Group filed for bankruptcy. (Photo by Chris McGrath/Getty Images)
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SINGAPORE - FEBRUARY 18: A man flips through a magazine behind the Borders logo at Borders Singapore flagship store in Wheelock Place on February 18, 2011 in Singapore. REDgroup Retail the parent company of Borders Singapore announced yesterday that it had been put into voluntary administration. The company employs some 2500 staff in Australia, New Zealand and Singapore. The announcement came a day after the United States, Borders Group filed for bankruptcy. (Photo by Chris McGrath/Getty Images)
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Spanish speaking roofers who are employed by an Omaha roofing company, work in Fremont, Neb., Thursday, Feb. 17, 2011. A federal judge on Thursday scheduled an April 2012 trial in the lawsuits challenging Fremont's voter-approved ordinance that bars businesses from hiring and landlords from renting to illegal immigrants. (AP Photo/Nati Harnik)
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In some ways, his comments echoed previous remarks the Fed Chairman has made about the need to
"rebalance" the global economic recovery. Bernanke and some other G20 leaders want to use real exchange rates and currency reserves as a way to measure global economic imbalances. But so far the Chinese have
rejected that idea. It's clear that something needs to be done to prevent the kind of recent global financial contagion that hurt consumers, banks, governments and entire countries, including the U.S., Greece, Spain, Ireland, and more.
But for all his talk about international stability and fixing the global economic landscape, I suspect that another source of Bernanke's comments are also his worries about China's growing financial clout and what that means for America's long-term financial standing on the world stage. China is the world's largest capital exporter. In economics lingo, the country is said to run a large "current account surplus." China is not only gaining economic strength, but also political clout because of its vast cash holdings and financial assets. By contrast, the U.S. is struggling with massive debts and a runaway deficit.
Still, U.S. officials have long charged that China boosts it exports by
keeping its currency relatively weak, compared with the U.S. dollar. For example, even though China's monthly trade surplus has diminished lately, as recently as October, it still jumped to $27 billion -- more than analysts had expected. With all the cash it has on hand, China has been able, among other things, to throw money into the U.S. -- snatching up everything from stocks and bonds to U.S. real estate and businesses.
Why would it be a problem that China is flooding America with cash? It boils down to three issues:
- A loss of America's economic competitiveness and financial stature in the global marketplace.
- Decreased political clout on the international stage
- A greater risk of the U.S. dollar being eliminated or supplanted by another currency as the world's foremost currency.
There is such diminished faith right now in the U.S. dollar that in places like New York and Los Angeles, you can even
open a Chinese bank account and invest in the Chinese currency, known as the yuan or renminbi.
For the longest time, China was the largest holder of U.S. Treasuries, which are often thought of a super-safe investments since they're backed by the full faith and credit of the U.S. government. China holds about
$892 billion in U.S. Treasuries.
Recently, however, the Federal Reserve surpassed China as the world's largest holder of Treasuries. Since Bernanke has launched a massive bond-buying program, known as Quantitative Easing 2 (or
QE2), the U.S. has been buying its own debt in massive quantities in a bid to keep interest rates low and stabilize the U.S. economy. By the time QE2 ends in June, the Fed will hold roughly $1.6 trillion in U.S. Treasuries. A lot of economists and financial analysts say the U.S. has been forced into this bond-buyng binge -- something that indicates financial weakness.
A lot is at stake, and it remains to be seen how well America will recover from the Great Recession of 2007-2009. But one thing is certain: if America does hang onto super-power status, it might be a title Americans will have to be prepared to share with China.
Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has been featured in the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times best seller
'Zero Debt: The Ultimate Guide to Financial Freedom.'
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By: DueGee on 2/19/2011 4:07PM
That which is stated by Fed Chairman Ben Bernanke is as plane as the nose on your face and is nothing new,This has been yers in the making.
The racist Caucusoids who make up the Republican Party, Tea Partiers, White Supremacists, the KKK, The Skin Heads etc. they are more concerned about causing the failure of First African American President rather than about causing this country to succeed in lifting itself out of this economic down turn.
They refuse to pass legislation because of their racist outlook on life this is the strangle hold that they have on the US economy.
They are more concerned about keeping tax credits for the few millionaires and billionaires who have the ability to pay than about the majority of the US population who are not Millionaires or billionaires and do not have the ability to pay.
The Republican Party, The Tea Partiers and other racist political groups remain true to their political ideology so that The rich get richer and the poor get poorer.
If the minority with the money would pay their taxes this country would be able to lift itself out of this economic slump, again...they have a strangle hold on the US economy which they refuse to relinquish being blinded by a racial superiority complex and greed.
They are more concerned about their moments in the spotlight and the malicious context of their speech against the Obama administration rather than the economic conditions of the people of this country.
From the racist Senator from South Carolina Joe Wilson who insulted the President of the United States by calling him a liar in the middle of an address to the speaker of the house John Boehner they all have one objective which is to defeat the elected president.
This senator made an arrogant display ignorance to the public, and acts like this one is what motivates more senseless acts by the constituents around the country, like the shooting of 14 people and killing of 6 people in the Super Market parking lot in Tucson, Arizona. (“For every action there is a reaction”.)
This is how the first African American President is being accepted by the losing party which is made up predominantly of Racist Caucusoids
(individuals like Senator Joe Wilson)whose intent is to make Barak Obama the worst president in US history even if it means the collapse of the US government.
These same individuals cannot stand to think of the possibility an African American being the best president to ever hold office, because this would confirm that America has had a strangle hold on itself by means of the oppression of African Americans in this country.
African Americans have held political office since the end of Civil War but because of the racial oppression they never sought the office of President of the United States until the latter half of the twentieth century when Shirley Chisholm and then Jessie Jackson did put forth the efforts to obtain this office.
The racist Caucusoids of this country fail to consider what could have been offered by the minds of intelligent African American Politicians in this country.
Instead they are driven by the spirit of their racist philosophy “white is right”.
As it was brought out in the article: “China is the world's largest capital exporter. In economics lingo, the country is said to run a large "current account surplus." China is not only gaining economic strength, but also political clout because of its vast cash holdings and financial assets. By contrast, the U.S. is struggling with massive debts and a runaway deficit.”
This fact was known by the Republicans when they forced President Obama’s hands to sign the extension of the Bush era tax cuts for the millionaires and billionaires, before they would ok the extension of unemployment benefits and other legislation, during Christmas time.
The article also stated : “ With all the cash it has on hand, China has been able, among other things, to throw money into the U.S. -- snatching up everything from stocks and bonds to U.S. real estate and businesses…… There is such diminished faith right now in the U.S. dollar that in places like New York and Los Angeles, you can even open a Chinese bank account and invest in the Chinese currency, known as the yuan or renminbi.”
Perhaps those racist self defeatist politicians opposing the Obama Administration might agree to a name..... The United States of Ameri-China?????????
The article further stated: China holds about $892 billion in U.S. Treasuries.....it remains to be seen how well America will recover from the Great Recession of 2007-2009. “
How well we recover from the recession depends on how well the racist politicians get over their, “white is right and Black get back philosophy”.
In this country when their are tragedies around the world millions of dollars are donated to numerous organizations in an effort to help these countries.
How ironic this is, when the economic stability of our own country is crumbling and the millionaires and billionaires refuse to pay their taxes.
The key to making the tax system work is the more you have the more you pay not the more you have the less you pay.
And when you get right down to it, without the governmental system in this country they would not have accumulated this wealth.
So why not make donations as we are called upon to do for other countries in times of disaster, yes this is a time of disaster and all in America are victims of this disaster which has not climaxed.
As was stated in the article: “The U.S. has been buying its own debt in massive quantities in a bid to keep interest rates low and stabilize the U.S. economy. A lot of economists and financial analysts say the U.S. has been forced into this bond-buying binge -- something that indicates financial weakness.
Financial weakness.....If they have the funds to buy back they should never have made the sell to begin with, obviously greed is one of the motivating factors to these economic conditions.
This situation was years in the making for at one time China was insignificant in regard to being a threat to the US economy.
That which you seen on the US market Made in China was a cheap little toy and the words Made in China meant lack of quality........as for as change is concerned ....I do not need to say any more.....with the US borrowing money from China and China buying up the US the way that they are.
Then at one time this nation was a mass producer we exported goods to other nations now the tables have been turned we import more than we export which is why we are in this economic plight.
As stated earlier this has been years in the making, the corporations saw only dollar signs when they moved factories outside the US because of being able to produce items and pay those producing them slave labor wages.
Well to all the politicians who allowed and had a hand in closing plants in the US and corporations that moved outside the Us......Your chickens have come home to roost..... now you are paying the price....For the slave labor you recieved.
“If you dance to the music ….you got to pay to the piper.”
Now that this goverment is folding think of your prospects...."You can always go to the country where you moved your factories and live beside those you were paying the slave wages"
Lastly what has President Obama been saying in regard to plants in this country?
He has been interested in this and spoke of plants manufacturing wind powered generators to be used to produce electricity, which would produce jobs and have enormous ecological benefits while drastically lower the cost of the electric bills we pay.
But then this is another reason why the negative voices that are speak against him for he will upset the flow of things..... the money going to pockets of those producing the electricity by coal and other costly polluting means.
Then too we are strapped by the high cost of fueling these gas burning automobiles.
Obama has showns interest in environmentally friendly electric cars but again President Obama will be upsetting the flow of things.....the money going into the pockets of the oil company owners who sell the gas for the gas burning engines.
And the flow of money to the pockets of those producing gas burning engines here in America,it will cause them to have to change from the production of cars driven by gas burning engines to cars driven by electric engines which is a change they do to care to make all tought they can do it.
So to combat these changes that President Obama will bring on they pay individuals yes politicians to discredit him undermining every political maneuver he makes to prevent his success in passing legislation and because iof this failure use this to prevent him from being re-elected.
While all the time everybody has their hand in the man on the bottom’s pocket….Whose hand is in your pocket??????
DueGee
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By: DueGee on 2/19/2011 8:44PM
The Declaration of Independence is at once the nation's most cherished symbol of liberty.
Those who signed the document were out right Hippocrates The founding fathers owned slaves while at the same times signing a document which stated all men are created equal.
Thomas Jefferson penned the Declaration of Independence Thomas Jefferson a founding father, farmer, architect, inventor, slaveholder, book collector, scholar, diplomat .
I specifically call your attention to the fact that he was a slaveholder which in fact makes him a two faced hypocrite for near the opening of this document are the words :
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness..
This founding father while writing this document was denying the very same freedoms that the founding fathers were declaring they were entitled to.
African American slaves rights as human beings had been alienated from them for as slaves they were not considered as human beings but chattel (property) which was filed with the founding father’s taxes.
They had no liberty other than the liberty to be worked and treated as animals or worse as many were.
The pursuit of happiness, what ever happiness they could imagine they could not be pursued beyond the plantation boundaries.
Of the three items mentioned in this excerpt They did have life to be lived in the service as animal not treated with the same respect as they would their horse, for they take pity on overworking a horse but their were no laws against them beating or working their slaves.
It is now understandable how from these founding father’s evolved into the KKK , The White Supremacists, The Skin Heads and The Tea Partiers for this superiority complex was passed down to successive generations.
As it is with The Sons Of Confederate Soldiers, they have by birthright taken on the responsibility of preserving the spirit which motivated those treasonous individuals who sought to overthrow the government of this country.
They state: “the Sons of Confederate Veterans is preserving the history and legacy of Confederate soldiers.
This legacy is the love they had for enslaving human being subjecting them to cruelties which would not be brought upon an animal and the tenacity they had to be willing to attempt to overthrow the country to be able to continue their actions.
Under the guise of a legacy which can be legitimate What they are preserving is illegitimate which were the treasonous acts of the Confederate soldiers, their fighting to continue to enslave African Americans and the death of all the soldiers killed during the Civil War.
And now you state that :
“It's time to return to the limited government envisioned by the founders and the Constitution.”
Well these founding fathers had slaves, are you saying that we should return to enslavement of those of African American descent?
If this is the case I will strongly object because I am of African American descent and will by no means consent to becoming a slave of anyone on this earth.
This limited government was the cradle for the Civil War for they did not take a stand against slavery as the words of the Declaration of Independence so eloquently stated.
This limited government to appease those who desired to own slaves and those who did not was weak and did not follow what the words of the Declaration of Independence for after 1812 states were admitted into the union by pairs, for or against slavery.
For every state that was admitted for slavery one was admitted against slavery.
To appease the desires of the racist caucusoids of the 19th century by allowing slavery to exist they in fact set up the battle ground for the Civil War.
So when you choose to go back into history you had better know all that history contains, these founding fathers were nothing more than racist Caucusoid politicians who sought to make their lot in life better while enslaving the African American nation.
There were racist politicians then just as there are racist politicians now like Senator Joe Wilson of South Carolina carrying on his legacy representing the people of South Carolina.
South Carolina was a slave state and this legacy of the confederate soldiers has been passed down to Senator Joe Wilson which explains his disrespecting the President Barack Obama who is of African American descent yelling out and calling him a liar in amidst an address.
Something which has never ben done toward any president before.
DueGee
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