Tag Archives: US

G20 Opposed To Fed QE2

Reuters reports in an article entitled G20 Finds Common Ground Opposing Fed that the Fed announcement to purchase 600bn in treasuries does not share in the ideal of the members sharing common ground in terms of responsibilities toward the global economic recovery, fearful that the Fed move will cause large capital inflows into countries like China and Brazil and make their exports less competitive.

Although these arguments at face value are good arguments, if thought about with rationale for more than just a second any validity is thrown like money from a helicopter. First, because the Fed is not a government entity and this is not government stimulus. Contrary to popular belief, the Fed only shares a common mission with the U.S. government in it’s recent announcement to purchase treasuries and that is to hopefully stimulate the economy and put Americans back to work.

Another very important factor is that the Sino-US trade imbalance has been growing for almost a decade and the deliberately manipulated currency of China, who maintain tight currency controls, is a leading factor. Notwithstanding the fact that introduced as congressional testimony for years running, the US government has failed to take action declaring China a currency manipulator before the WTO, an action that could ignite cold war style sentiments between the two largest economies of the world.

Finally, leading the global recovery are precisely China, Brazil and even Germany, the countries that complain about the Fed announcement the most, countries that while experiencing high levels of GDP growth do not appreciate the Fed effort of elevating the US out of a stagnant or stalled recovery.

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Obama’s India Visit Began on Positive Note

President Barack Obama, notwithstanding the news that Minnesota Republican Michelle Bachmann slammed the Obama India visit due to the approximate cost of $200mn per day, started the weekend off on a positive note in India where NDTV reports that:

20 deals have been signed between the US and India worth $10 billion and these are expected to President Obamacreate over 50,000 jobs in the US. The deals range from gas and steam turbine engines to oil and gas equipments.

Aviation giant Boeing has got an order for thirty three 737s from Indian carrier Spice Jet. The deal is pegged at $2.7 billion and is likely to add 12,000 US jobs. The company has also reached preliminary agreement on the sale of C-17 engines.  That transaction is valued at more than $4 billion and is likely to support 22,000 jobs.

Global engineering firm, General Electric is likely to get the contract for 100 engines to power India’s indigenous Light Combat Aircraft (LCA). The $800 million deal will lead to 44, 000 jobs in the US.

Hard to believe that Michelle Bachmann having recently won her re-election campaign couldn’t understand the enormous benefits associated from the Obama India trip where trade deals were sealed worth $10bn making the initial investment for travel and security purposes of an entourage of hundreds of people at only $200mn per day well worth even a greater cost in the presence of near double-digit unemployment and an anemic economy.  Minnesotans may want to rethink Ms. Bachman’s recent re—election if she cannot reasonably come to the conclusion that  creating 50,000 jobs through a $10bn trade deal while strengthening foreign policy and bilateral ties with an emerging super economy is worth the money spent.

Not surprisingly, when Michelle Bachmann was asked by CNN to identify specific cuts in the federal budget that she would support, she refused to identify any.  Refused, or couldn’t?  Apparently, Michelle Bachmann doesn’t want Americans to have opportunities.

On behalf of , have a great weekend.

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Is America Safe?

A recent article in the New York Times discusses a review in which flaws are cited about the U.S. Antimissile Program, specifically, the Standard Missile 3 (SM-3) which is a rocket-powered interceptor coined exoatmospheric kill vehicle that per a Pentagon assessment which the Missile Defense agency defends, intercepted 84 percent of incoming targets during tests.  However, “a new analysis being published by two antimissile critics, at M.I.T. and Cornell, casts doubt on the reliability of the new weapon,”  stating in their analysis of 10 tests between 2002 and 2009 they found that the SM-3 upon deployment only hit the warhead once or twice, significantly reducing the 84% rating given by the Pentagon.

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