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Home
 The
Coming Economic Depression
– June 2005 Update
This is the
latest update to a series. Earlier sections appear here.
Doomsday
Ahead.
Folks, as I said, in
one of my a-periodic updates a couple of weeks ago, fasten your
seat belts. There is so much happening on the financial front
these days that it is sometimes difficult to keep track and take
stock of it all. When GM and Ford had their credit ratings
downgraded it signaled the end of a long era of American
industrial might. Soon, if GM and Ford cannot get their
financial act together, they will go bankrupt. This is becoming
a very real possibility. How are these guys going to pay for
pensions now that their bonds are junk? What is going to happen
to all of those workers? What is going to happen to all of the
parts makers that supply these two Automakers? No, they are not
bankrupt yet but frankly, I do not see how they can remain
solvent as long as they have to pay the benefits they do to
their workers, and compete with Japan, Europe and increasingly
Korea. This turn of events is very ominous for the US economy in
general but it also speaks volumes on the economic model that
our elite has been working from for the past 30 years; that
being that you can actually have a service based economy that is
also the economic engine of the world. One may argue that some
economies can exist being primarily service based, one thinks of
those wonderful banking havens in the Caribbean, Luxembourg and
to a lesser degree Switzerland. Yes, it probably can be done on
a small scale. Where our elite made their primary mistake was to
assume that such an economy could remain at the center of the
global economy and continue to consume goods and capital to
maintain a lifestyle it cannot afford. One can argue whether
this policy was formulated in ignorance or some sort of other
grand strategy that caused them to embark on this course, I will
not say either way other than to say that in Washington, there
is both an abundance of ignorance and conspiracy and more often
than not, the two join hands with their brother corruption when
policy is made.
But now that GM and
Ford have their massive corporate debt downgraded to junk, it
seems that if they do not go bankrupt some sort of previously
unthinkable reorganization will have to transpire. Consider:
Ford will have costs
of around 1.15 billion if it
is to take over Visteon. Consider: Ford and GM now are offering
even
more incentives to get people
to buy their cars. Consider: there is now concern that a slump
at GM and ford will lead to an economic slump in the Midwest.
Consider: the Current months sales of vehicles in the US was
13.3 million units, vice 13.9 million units last month.
Consider: GM is now planning to layoff 25,000 people by 2008.
Let the spin doctors in the financial media twist this story all
they want, the US economy, its workers, its financial sector
will not be able to deal with these two companies going
bankrupt, it would be an unmitigated catastrophe.
Federal Debt, Hedge Funds And Automotive
Bonds.
It seems that it is
possible that we have reached critical mass in our deficit
funding and now the FED, using what resembles a sophisticated
money laundering operation, is monetizing our debt. This cannot
be stated as fact but the circumstantial evidence is compelling.
Note that this month a very
interesting article was put out by Roy Kirby
that showed that the Fed and the Treasury lied
about which foreign Central Banks were holding how much US debt.
The article was most telling and shows that Enron style
accounting appears to have affected the US Treasury.
Department
of the Treasury/Federal Reserve Board, March 15, 2005
Holdings at end of
period are estimated foreign holdings of U.S. Treasury
marketable and nonmarketable bills, bonds and notes are
based on Treasury Foreign Portfolio Investment Survey benchmarks
and on monthly data reported under the Treasury International
Capital (TIC) reporting system. 2) Includes Bahamas, Bermuda,
Cayman Islands, Netherlands Antilles, and Panama. [emphasis
added]
Look
at the latest release of TIC data below and see that the
numbers for the most important holders of US debt and shadowy
Caribbean banking centers have been altered – after the
fact.
From the above chart
one can see that something strange is going on. Now admittedly,
these figures (as I understand them) are very difficult to
calculate and it could be due to some kind of clerical or
administrative error, but I have to tell you in all honesty…
I just don’t think that is the case at this critical
juncture in America’s fiscal dilemma.
Clearly,
America’s two major financiers – Japan and China –
have completely stopped accumulating American debt. In fact, the
data suggests that they have been completely absent from the
bidding process at the debt auctions over the last 3 months. If
you go back and look at the Treasury auctions in March [where a
lot of the latest TIC data is drawn from] you will see that the
Fed proudly announced robust bid to cover ratios on their debt
auctions [2Yr. on
Mar. 30, 10yr. Mar.
10, 5yr. Mar.
9]. – yet the latest TIC data suggest that both China and
Japan were not even at the table?- Roy
Kirby
Folks are not going
to like the conclusions drawn by Mr. Kirby in the above
referenced article. But truth is simple, even if the Fed
is not monetizing our debt at present (I think it is) it will
have to very, very soon. John Berry in a recent column in
Bloomberg mentions the Fed's concern of a sharp dollar sell off
due to trade and fiscal imbalances that would compel the Fed to
sharply raise interest rates. Potential trade rows with the EU
and China only make matters worse. Greenspan has been
uncharacteristically frank and incessant for a central banker on
these imbalances. He even at times uses language that ordinary
people can understand in stating the seriousness of our trade
and fiscal imbalances.
As most of you are
aware, several hedge funds lost a lot of money since GM and Ford
were downgraded. This led to a lot of speculation as to who and
how much was lost. Information on this is difficult to find but
some (non Internet) financial publications did give out some
names. The trouble at hedge funds is far from over, but any
specific reporting on their financial state is very hard to come
by and thus will not be elucidated here.
Housing
The question around
the net is simple, when is it going to crash? Housing prices
have certainly defied gravity for a long time and probably will
for a while longer. That is because mortgage interest rates have
remained low despite the FED's rate increases. In fact mortgage
rates have declined over the past eight weeks to 5.62%.
This certainly has contributed to the rapid rise in housing
prices, which nationwide hit 12.5% annualized. The States of
California, Maryland, Florida and Nevada all saw increases of
over 20% for the year. So, homeowners are happy because they
know that once they decide to sell, buyers will be plentiful.
Rather than only looking on the dark side of this there is a
bright side, that being more people own their own homes and more
people are fixing up their homes and enjoying them. This is not
a bad thing. Some homeowners are cashing out some of their
equity for a variety of reasons, once again this, despite what
some may say, is not all bad. People who are sitting on
equity that in excess of 100% of their existing loan may find it
is a good idea to help Junior go to college or pay off credit
cards or help aunt Emma get her hip replaced. Problems come in
when folks are sitting on a total loan amount that is within
20-30% of the homes present day value are begging for trouble
when the market does slide. How far it goes southward is
anybody's guess. But realistically, one can probably expect
prices to recede back to 1990 levels, if interest rates rise
significantly. Buyers will be scarce because foreclosures will
be rampant. This will mainly be due to the creative mortgages
people have today, ‘interest only’ and ARM's. These
kinds of loans will be very difficult for people to afford with
interest rates running at 9-15%. Those with interest only loans
will find in a few years that they have barely touched the
principle on the price they paid for their homes and then, when
the balloon payment is due (usually after 15 years) they will
lose their homes, plain and simple. What are they going to do
when they become upside down on their homes? Herein lies the
danger for the economy as a whole because once the default cycle
begins in earnest, the entire US economy will be under siege.
Remember Fannie Mae and Freddie Mac; Greenspan and others have
spoken about the real threat they pose to the entire economy.
While some have
decided to sell their homes, take profits and rent until the
bubble bursts, their wait may be much longer than they think,
especially if credit becomes easier to obtain because of FED
policy changes. This is a very real possibility as Greenspan is
set to leave the FED in January 2006 and everyone seems to think
that Ben
Bernanke will take his place.
If this happens there is increased likelihood of inflation
becoming more pronounced and this price inflation would include
housing. Another factor to consider as well is that the US could
begin encouraging foreigners with money to move into the US and
buy homes or they could invite foreign investors to begin
purchasing homes or entire housing divisions to keep the market
from caving in completely. Today, it is not uncommon for more
than one generation of a family to live in a home. There are
many macroeconomic methods that the government, banks and FED
can use to help keep the markets from moving too far south. This
is all speculation to be sure, but keep this in mind; it is in
the interest of the Central Bank to cool housing prices, not
to have them collapse. Yet it appears that there are many who
are beginning to wonder if this really can go on indefinitely,
It seems that with rising housing prices, low interest rates,
and (according to the Government) rising incomes this phenomenon
is here to stay. If this is so, then housing prices can and will
probably continue their ascent. Doug Noland in his excellent
Credit
Bubble Bulletin notes in a
section of the June 3rd edition has a section called
'This Time Its Different' in which he states;
The
latest stripe of New Paradigmism envisions a Permanent Plateau
of Low Interest Rates, Global Excess Savings, Abundant
Marketplace Liquidity, Placid Inflation and General Financial
Stability. The most recent fads have bonds and houses as
one-decision, can’t lose investments for the long-term.
And while I don’t hesitate to scoff at silly theories
hailing from major market melt-ups, as an analyst I do recognize
that This Time It Is Different. - Doug Noland
Housing: Percentage
change in prices
Judge Owen
Judge
Owen finally got her seat on the bench. The folks who used to
work at Enron and those who still work at Halliburton should be
very, very happy. Each of these firms contributed to her
election campaign in Texas and then got favorable rulings from
Judge Owen.
THE
ENRON AND HALLIBURTON CASES: Two notable past corporate-friendly
cases ruled on by Owen involve very publicly known corporations
- Halliburton and Enron - both of which had donated to Owen's
judicial campaign. In the case of Sanchez v. Halliburton, a
Halliburton field worker "won a $2.6 million verdict after
the jury found that a company supervisor had framed him to test
positive for cocaine." After an appeals court ruling
overturned the verdict, Sanchez tried to bring the case to the
Texas Supreme Court. In the months during which the case was
before the Court, Halliburton made its only campaign donations
to Texas Supreme Court justices that year, giving thousands of
dollars to three justices: Priscilla Owen, Nathan Hect, and
Alberto Gonzales. Result: the court declined to hear the case
and the ruling overturning Sanchez's case stood. In Enron Corp.
v. Spring Independent School District, Owen "authored the
opinion for a unanimous court [decision] that ... saved Enron
$225,000 and resulted in lost revenue for the
school district. Quoted From the Daily
Kos
Folks, prepare to be
sold down the river. The GOP, as I said last month, seems to be
interested in only one thing, cold hard cash. The entire
system is being raped by the Bush administration. The saddest
part is that they are using a bunch of religious dupes in the
churches to help. Seeing this appointment to the Bench will not
bode well for the future, especially when it comes time for
pensioners who paid money into their pension plans to go to
court. The 'business friendly' judge will almost certainly side
with the corporations (if they gave to the GOP) and leave
workers to hang out to dry. This may sound cynical but let us
consider all of these things carefully because the pension
crisis is a real one.
“Here’s
a basic moral value: taking
someone’s money without their permission is stealing.
Except in America, where, if you’re a corporation that
takes away someone’s pension, it’s okay.”
- Tom
Paine
This is why the GOP is working so very, very
hard to put conservative judges on the bench. The Corporations
have stolen all of the money they were supposed to be putting
into their pension funds and the Congress and recent Presidents
have stolen the money in the Social Security Trust fund. Now
they must have judges that will codify the theft
into law to ensure that they are not compelled to pay. The
Supreme Court is key and expect a 'knock-down, drag-out' fight
when Rehnquist retires early this summer. This is not about
abortion, or embryonic stem cells, it is about money and the
legal right to steal it.
The state pension fund in New Jersey is in
trouble. The Chairman for the states pension fund, Orin Kramer
has stated that the deficit the state runs to pay its teachers,
firefighters, and other public employees would face even wider
deficits if something is not done.
Massive failures
of defined-benefit pension plans, shortfalls in pensions for
state employees and the debts plaguing the federal Pension
Benefit Guaranty Corp. are sparking worries about the security
of retirement benefits. - Accountingweb
The problem has many facets to it.
Underfunding – Companies fail to
adequately fund their pensions
'Smoke And Mirrors' Accounting –
'elastic' rules on how pension money is accounted for in
company’s balance sheets, hazy actuarial tables that make
absurd assumptions and outright accounting fraud.
Declining Returns – Returns on some
investments and the corporate scandals have seriously and
negatively impacted many pension funds.
Courts that refuse to view the life long
pension paying retiree as the victim of fraud but rather,
as a parasite to be swatted like a fly.
Anyone, and I do mean anyone who
is paying into any kind of pension or is receiving one
needs to fully educate themselves as to the depth and the
breadth of this problem. To be misinformed now is to be broke
later; after having sacrificed, scrimped and saved only to find
out that you were robbed by white collar criminals and then have
their appointed judge rule in their
favor when it all goes to court.
This may only be peripherally related, but look
at the recent Supreme Court decision on Arthur Andersen. Here is
a company that according to news reports and court testimony,
shredded all kinds of documents after Enron collapsed because of
shady accounting. Yet the Supreme Court in their never ending
quest to create a 'Corporate Nirvana', overturns the verdict of
a jury! Why? Here's a great one for you: they didn't like the
judges instructions to the jury (as though ordinary folks that
sit on juries are stupid and can't tell when someone has been
robbed). Pension funds around the nation are still reeling from
Enron's collapse and this is how the High Court responds. They
went on to say that in essence that the shredding of those
documents may not have been a crime. What a wonderful message to
send out to corporations nationwide: 'if you are stealing
grandma's retirement money, shredding documents is OK with us'.
Americans, this is why your pensions are being stolen. The
reason is this, the legal system in general and the Supreme
Court in particular, the Congress and the executive branch of
the government are working together against you to protect the
rich and powerful and leave you out in the cold.
Dear readers this much I can assure you, people
are getting fed up. I read it in the online blogs,
chatrooms, e-mails and websites. The entire legal and political
system needs to take very serious stock of what it
is doing because I am sensing a lot of people getting more
than just a little irate over the corruption and I just
don't think people are going to let America's elite steal their
pensions without a real fight. Such a fight may not confine
itself to the 'marching peacefully in the streets' and 'voting
them out' sort of actions. It would be well to remember 1789,
Paris and the guillotines. Don't laugh, Ecuador just removed its
President and sent him into exile. Bolivia
is about to do the same thing from
the looks of the turmoil. History repeatedly teaches us that
people do get fed up and often what follows is no good
for anyone. If you are one of America's elite and are reading
this (I know a couple of you do) take heed! Americans have not
been totally lobotomized by the TV just yet! People expect their
leaders to look out for their interests not to help the rich and
powerful fleece them.
As noted in the past couple of updates the
bankruptcy bill is about to become law. This happens on October
17, 2005 and lawyers are expecting a rush in filings. These
filings are already up to 660,566 so far this year. This is up
over 25,000 from last years filings covering the same period.
Once again, little mercy will be shown to debtors from a
'business friendly' judge. Additionally legal fees are expected
to rise in future filings as the new law is requires the lawyers
to do more work. Thus, we can expect to see these rising rates
for the rest of the year. Even now, since we have seen
rising bankruptcy filings, things will get worse
as the filing deadline nears. But how much of this is just a
rush to get in before the new laws go into effect? There are a
great many people who are simply in dire financial condition and
are forced to go to court and to try to liquidate their debts.
Financially healthy people do not file bankruptcies in record
numbers, new laws or not. Now many conservatives (those who
believe that corporations should always be given the upper hand
in legal cases) have said that there were too many abuses in the
old system. True. Folks with gambling debts, irresponsible
credit card charges and debt for extravagant travel were a
reality. Yet there are many, many more who just need to start
over again. They got sick and went broke from medical bills,
they had unforeseen periods of unemployment or they had a myriad
of other financial woes that did not stem from irresponsibility
but from a system that no longer functions in a way the benefits
the average Joe. They lost the fight, Congress (GOP and many
Democrats) sold them down the river for a few campaign
contributions and now there is a mad dash to the bankruptcy
attorney's office.
Jobs
America is just not creating the number of jobs
it needs in order to call what we are in right now a 'recovery'.
It has been suggested that the only real job creation that
transpired over the recent
reporting period, was through
statistical chicanery. One primary method is the Birth
Death Model which is a highly
questionable;
To account for
this net birth/death portion of total employment, BLS is
implementing an estimation procedure with two components: the
first component uses business deaths to impute employment for
business births. This is incorporated into the sample-based link
relative estimate procedure by simply not reflecting sample
units going out of business, but imputing to them the same trend
as the other firms in the sample. The second component is an
ARIMA time series model designed to estimate the residual net
birth/death employment not accounted for by the imputation.
- BLS
Using this statistical model the BLS is able to
create 207,000 jobs that it has no real evidence for other than
this extremely convenient model which usually gives them more
jobs rather than less. If you take out this BLS fiction, you
have a Net Loss of jobs by about 130,000! These models
and most government statistics are made not to enlighten people
as to the state of the economy, but to deceive. If the Fed's
really wanted to see exactly who was working and who was not, a
fairly simple analysis of tax receipts from the Federal Income
Tax withholdings that every employee must pay would be in order.
Then you would know who is working and who is not. As far as
marginally attached workers and counting them is concerned, this
too can be accomplished by correlating those who have filled out
tax returns in the past 3 years with those who still reside in
the US and have not and you will have a real good estimate of
who is unemployed over a long period of time. In the olden days
this would be a monumental tasks that would be almost impossible
to accomplish, today anyone with a powerful enough PC and all
the correct information could do it in a few hours provided the
software was available. This is not going to happen because the
reality of unemployment and underemployment would be a political
bombshell and calls would be made to go back to the statistical
mendacity we currently employ. These kinds of statistics should
be simple to calculate; who is working and who is not, but
instead they have hired hundred of statisticians and accountants
to do what a few math and computer savvy people could do. If
accuracy and honesty were what you wanted, the process would be
straight forward and simple, if lies and deceits are what you
want, hire the accountants and statisticians... and lawyers.
These jobs numbers do not mesh with the publicly
announced GDP figures, we should be creating more jobs than a
paltry (concocted) 74,000. This should tell anyone that these
GDP numbers do not correlate with real wealth creating
productivity, but rather with Americans pushing pieces of paper
back and forth between one another and calling it a
'productivity miracle'.
China
I cannot leave you without talking about China.
All the signs seem to indicate that China and the US will not
have a trade war just yet. It seems likely that China will try
to accommodate the US and eventually let its currency float even
if that float is partial. The threat of sanctions was very real
and China will come to realize that for the time being a
strategic retreat is in order, but this subject is far from over
even if the Chinese acquiesce. Essentially the US wants China to
play by its rules. Floating currencies is a great idea for the
US because in essence, it gives the bigger player more power and
leverage, A stable currency is generally a much more fair system
that keeps currency manipulation out of the trade equation. In
my humble opinion, fixed rates for all global trade would be a
great solution and allow many counties who are in debt to the
IMF to create economic policies and to structure their finances
without an unknown variable thrown into the equation. A variable
that has rarely worked in favor of poorer nations, I might add.
America's Elite realize this and have stated so
publicly as in a speech by Ambassador Richard McCormack who
spoke to the Council On Foreign Relations
in May on America's Current Account Deficit and China.
Present and projected U.S. current
account deficits cannot continue indefinitely; and as my old
friend Herb Stein noted long ago, they won’t. But the
present and projected current account deficits, and the economic
measures needed to service and sustain them, pose problems and
potential mid term dangers to the American economy, the Chinese
economy, and the broader global economy. - Richard McCormack
The US is, as the Chinese have correctly
observed, trying to force China to help it solve fiscal problems
that are purely of America’s own making. We allowed our
corporations to relocate to China (often with tax breaks) taking
with them much needed jobs. We allowed our deficits to pass 3%
of our GDP and we cannot control our profligate military
spending which is set next year to surpass ALL
OF THE DEFENSE SPENDING FOR THE REST OF THE WORLD PUT TOGETHER.
We have allowed lobbyists and convicted criminals to advise and
fund our political campaigns. We have allowed a network of
criminality to shift billions of dollars in government contracts
into work that has not nor will ever be performed and now we are
in fiscal hot water and want to blame China.
The problems area structural and as Mr.
McCormack so eloquently put it,
America has an absolute
requirement, over time, to buy less from abroad, sell more
overseas, or some combination of the two. More and more of the
fruits of our work and productivity will otherwise go to our
foreign creditors in interest payments and other financial
transfers. This ultimately could impact living standards here,
depending on the ultimate size of our accumulating external
debts. Our current account deficits deeply trouble many people,
including the nation’s premier long-term investor, Warren
Buffett, who famously sold the dollar short two years ago, and
profited from it. - Richard McCormack
Practical Matters
I hope that these pages over the past couple of
years has put you on your guard rather than filled you with
fear. Dear readers I do not want to be the victim of vague
feelings and intuition as so many people are, but personally,
the feeling of something very ominous headed our way has
troubled me for the past few months. While there are certainly
many non-economic events that should concern all of us, it is
the economic imbalances that plague the world’s largest
debtor nation that seem to be the most perplexing and immediate.
Things I have done to prepare and protect myself have been
considerable. The first thing I did was to get myself out of
unsecured debt, I personally think that that one should get out
of 'variable rate' and 'interest only' home loans and get a
fixed rate mortgage... signed in blood, especially if you plan
on staying in your home a few years. If interest rates start to
rise and mortgage rates rise with them, there are a whole lot of
people who are going to be on the street renting, while carrying
a lot of debt because they could not pay their mortgages and
could not meet stringent 'means testing' to liquidate their
debts that is now required by law. Ever tried to rent with a lot
of debt and bad credit? Keep your credit cards balances to the
barest of minimums. Personally, I now only use an American
Express Card, pay it off every month and a MasterCard that I use
for certain recurring charges that can only be paid for by
credit card. I will tell you something, I think these credit
card Companies/banks/GOP controlled Congress have something up
their sleeve and it is going to leave a lot of people in a
financial lurch. I cannot tell you what it is, but one need only
look at the flurry of changes to cardholder agreements that are
sent to cardholders and begin to read some of them and you get
the picture.
Universal Default – Be late on any
bill you have (light, cable, mortgage, toddler care) and have
it be reported to a credit bureau and you can get shoved into a
default interest rate, which can be as high as 29.9%!
New minimum monthly payments – If you
have a lot of debt and can only make the minimum payment, you
are going to be in for a shock in a few months. Your payment
may increase by as much as 250%. Yes, that is right, most card
companies require a 2% minimum payment but soon most will raise
that to 4% and some to 5%. Do the math.
New times of receipt for when and how your
credit card companies will receive your payments.
New ways to calculate interest rates.
New powers given to collectors to require
more and more personal information for cardholders under the
guise of ‘fighting terrorism’.
If you are not rich and do not have tens of
thousands of dollars stashed away in personal, readily
accessible savings then I would say that reducing ones monthly
expenses is a significant step that can be made. Every little
bit helps. For example, I have bundled all my telecommunications
services, cable, phone (VOIP) and Internet and I saved a lot of
money, especially when I got rid of my local telephone monopoly.
I drive an older car. I take excellent care of it because I do
not want to get saddled down with another car payment anytime
soon. Besides, as mentioned in an earlier edition of this
series, I am not at all fond of the new technology, tracking and
otherwise, that is going into all new cars. This technology I
might add, is not revealed to the car buyer at the time of
purchase. Keeping one's eye on and clearly differentiating
between 'need to have' and 'want to have' items is
something all should do. It seems that many people are not at
all capable of doing that. This is the result of our consumer
oriented society and the 'keep up with the Jones' mentality that
is at its foundation. I think that those who are living on two
incomes should seriously consider reducing their compulsory
monthly outlay (lights, gas, heat, housing, food, insurance and
any unsecured debt) so that the family can
conceivably and without any serious disruption, get by on only
one income. One never knows when someone is going to get laid
off or be forced to relocate.
If many are correct who are saying that many
'need to have' items will significantly rise in price over the
next couple of years (food, gasoline, heating, electricity,
food, insurance) then it would be wise to prepare yourself
accordingly now . Others see a deflationary scenario. I will not
say which is more likely other than to say that if the Fed is
monetizing our fiscal deficits, the inflationary tendencies will
grow.
None of the above is professional
financial advise, I am not legally qualified to give it
and only provide the above as some personal observations and
purely personal opinion.
Conclusion
This month's update is abbreviated because I
have been working on another project dealing with human
trafficking for the past 6 weeks as well as another project.
Neither is likely to be published on the web. But I do want to
impress on people to take a good look at the State
Departments Assessment On Human Trafficking. It
is a real eye-opener. Informed sources tell me that human
trafficking is a major source of funding for Al Qaeda and other
terrorist organizations. This is going to be a very important
issue in the months and years ahead as the President is
determined to persue this with vigor. This is becoming a
major global problem and you pretty young ladies out their take
note; many, many abductions take place throughout the world
(including in America) of very attractive, young women. These
women are provided to those who can pay and I need not tell you
what these women are used for. I beg of all of you to take
notice, especially Caucasians who usually hear about slavery and
think it only happens to black people or other people of color.
Caucasians in western nations particularly need to consider
this. In some parts of the world, human trafficking is more
profitable than drug trafficking and a gorgeous blonde-haired
blue eyed female fetches a hefty price on the slave auction
block. As global economic dislocations continue and people
become desperate to better their economic circumstances and
certain members of the global elite become more depraved, it
should be no surprise that slavery will be a growing problem.
Furthermore, the economic impact of indentured servitude
(slaves) on regular salaried workers incomes is real, as many of
those who are indentured slaves are taking work away from those
who are not and are keeping wages artificially low. I call this
new slavery the scourge of globalization.
As the world slips into greater economic
uncertainty and wealth continues to be amalgamated in the hands
of fewer and fewer people, I expect enforcement of any laws to
combat this to be lackluster in scope, incomplete in application
and unremarkable in its overall success.
See
report
by the ILO
As always thanks for stopping by Watson's Web
Mark S. Watson
http://www.markswatson.com
By,
Mark
S. Watson
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