Common Cents

Chessboard Accord

Ralph Murphy

(4/16) The nation's trade deficit lowered by about $6 billion in late February to settle at about $39 billion for the month. The gains were variously explained but seem likely closely tied to lower commodity prices especially fuel amid OPEC producer disarray. It was coupled with continuing deficit in the current account which includes a balance of foreign non trade monetary investment of about $130 billion. While costly in appearance that does in reality reflect lateral domestic changes in ownership, often within the same bank, to chartered or registered aliens. Over 60% of world foreign trade is in dollars, which at $6.7 trillion recorded reserves also stands out as the top store of value.

Foreign direct investment or FDI is a key component of the current account in trade estimation. In the current system the funds are still available here for domestic use. They affect politics and policy and should be explored in light of recent funding expectations both to the federal reserve and other central banks which still try to work in tandem policy until merger legislation as the Basel rounds are repealed. It is important to differentiate between import and export earning versus the unpredictable FDI flows as the latter are free of other mooring than simple transfers and if not converted to the foreign host currency. can and are used as if regular currency abroad. If accommodated by both monetary authorities it can maintain value as tied to earnings but ideally would be converted through a predictable exchange rate also linked to changes in growth to maintain value.

The problem in the current system and financial environment seems a very deep seated cultural one. It’s linked in addition to simple lack of training or resources as some hosts permit or encourage theft or costly redirects that don’t factor into others advanced investment concerns. Europe is fairly predictable, but to developing nations with emergent or unsecured investment prospects the appeal or draw of high yield bonds and other securities routinely collapse leaving the investor little recourse beyond other suasion like political or diplomatic usually without success. Argentine debt is notorious for that, fooling even savvy New Yorkers in a tragicomic series of losses.

A real issue now is the interlocutor of the central banks and host legislatures that are mired in a mind set of continued easy access to stored project money that ended with Dodd Frank repeal legislation about two years ago. The money was dispersed to smaller or medium sized banks closer to actual investors due to theft and liable issues linked to the larger bank controls. The politicians can’t seem to recognize that as domestic funding bills are predicated in part on the non existent bank support. It’s reflected in trade policy as well with, for example, the now largely defunded European Central Bank clamoring for a promised 750 billion that any of the four top New York banks could have provided pre repeal, but is now just a wish list to current access of it.

There was also a European Stability Mechanism or ESM that promised access to 500 billion or euro zone members in the event they needed fund aid linked to official project shortfalls. In a recent funding exploratory project released to the press they’d settle for 240 billion, which by possible coincidence is the approximate America import level tied to actual sales receipts. The whole project seeks the 750 billion to also include a value added tax or customs duty on domestic and trade goods or services. It used to be supplanted by the Americans especially politicized investment banks like Goldman Sachs who ushered in Citibank, as well as others but now are largely victims of that type gift giving as their assets approach at best mid level banking in government concession programs.

Japan serves the production motor for the Far East, but their banking system is linked to a complex ownership system known as keiretsu that merged former shogunate regions with local companies linked to a primary producer each sharing a single bank. There are six main ones and Tokyo seems mistrusted by them having fallen victim to external program requirements. They had to merge the six banks linked to the six keiretsu production areas into three banks and lost a great deal of project money to external deals. It’s recoverable but the investments have to stay close to its source earnings or they do again become no return losses. Tokyo passed a $1 trillion dollar stimulus or commercial aid package linked to the Covid virus but as with the American $2.2 trillion dollar package and the ECB one the source money presumed as accessible is now denied from conventional laws.

That led both the American federal reserve and EU officials to scramble for what one of the Europeans described as ‘innovative financing instruments’ to save the projects. A corona bond was advanced but not funded yet. EU and American fed official policy seems to have settled on a vague promise loan program to save appearance of competence as tax and arbitrary bank support is not possible in the current lending environment. That brings attention to other programs which had been subsidized by tax equity or maintained through poor vigilance of the bank lenders and artificially maintained programs which otherwise weren’t in viable market demand.

Most of the chain closures or draw downs attributed to Covid and to include the coffee shops or delivery groups appear to fit that pattern. It’s a simple correction of consumer not planner demands and should be viewed as useful in that respect. The non performers would suffer, but the money is still available and they would have to just realign and conform with actual consumer demand. It’s far more optimal if resources can flow freely given price brokers in a standard and competitive market.

I mentioned the culture link at the start of this text as again it is a vital precondition to production. While sociology often bodes subjective there are principles that seem to apply in both that field and economics with minor modifications to circumstance. There’s a concept of comparative advantage in trade policy that claims partners benefit by buying or selling a good based on ease or ability as resources and investments rather than building it themselves. It’s routinely the case given human and resource variance. The problem as it reflects politics and nurtured investment patterns seems a people can be classified based on a cultural cloak that doesn’t allow for routine diversity. Broadly Hispanics are trapped in Calderon, British in Shakespeare, German politics in Faust. There a lack of basic perceived choice and the bonding affects their thought and actions. Oddly the very effective ones are literature sourced with religious ones tending more authoritarian than subtle influence. The whole populace has to follow a narrow esoteric lead and it’s encouraged by the international, especially if a single leader personifies it in personality orientation.

It might be overstep but priorities do have to be established and clarity to legislation afforded based on that understanding. In religion the influence can be dangerously manipulative in the wrong control spheres. It’s important to differentiate roles in that respect and view cultural edicts as divorced in routine from divinity control in the sense an atheist would have to acknowledge their need or focus. I’m oversimplifying but Christian giving, Buddhist begging, Muslim raiding, and Jewish output have merged dangerously to consolidated control interests and could settle to even an occult lead in the current political environment.

It’s important to note major trends and influences and few reflect the disarray or confusion of the Jewish faith as now estimated in politics. There are 27 different parties to include coalition groups in the 120 seat Israeli Knesset or parliament. They reflect ideological as well as the theological convictions that again lack most any common accord beyond the very broad designation of Jewish. Historically there appears to have been consensus the coded laws of the Pharisees would prevail without much accord on divine direction. It was optimal in systemic fidelity but theologically again consensus seemed rare beyond an orthodox common law type oriented branch otherwise discriminated against amid pacifist interpretation of predestination beliefs. In recent years they have both been eclipsed by modern Sadducees who live for carnal pursuits likely on others efforts. Their programs required easy funding access and since Dodd Frank repeal its over in that sense. They’ll have to conform and the politics will surely tighten as a result.

That brings us to this coronavirus campaign and it really has to be confronted as to just go along with policy isn’t helping personal well being. Local ‘stay at home’ orders have extended to all 50 states and the territories in a world scare likely tied to the realignments linked to the subsidy cuts and lead ousters of non performers. Politics haven’t caught up with the street authority to include especially security linked intelligence at real odds with the cultural suasion group closely tied to the emotive Sadducee. The latter won’t appear in many earnings reports. They’re just cost measures not to be trusted to broad social leads. The control funneling is awkwardly esoteric, even erotic, and as an unlikely defense foundation intelligence seems to want to realign without them. Instead it seems to now favor a police type support role of American and allied interests abroad guarding against theft or damage. It had been sponsoring cultural and business ventures everywhere. The same types once openly fought as the target problem.

As to the Covid issues the symbols and actions imply politicized campaigns very consistent with older communist endeavors. The Chinese have been required to wear those medical masks since the SARS epidemic there almost twenty years ago. It’s an exact ploy replication and not in keeping with plurality advantages of alternate social orders consistent here to the west and that should put the limited disease range in proper perspective. You’d have a better chance of being hit by lightening than contracting it.

View the politics with suspicion and note its sourcing for redress understanding. That official team has degraded to a party pack. It cannot make the money connection required for program maintenance given the legal controls presented, manages just peripheral militias or police as enforcement of it and I really think could easily be confronted given those foundations and orientations.