About Me

Retired College Professor, Archaeologist

Friday, April 10, 2009

FRENCH WORRY ABOUT DEFLATION


DEFLATION IN FRANCE?

"The worrisome specter of deflation has raised its head in France." In: a piece published today, April 10, 2009, entitled, "France very close to deflation" the Paris cyber-magazine, Liberation.fr, (http://www.liberation.fr/economie/0101561332-la-france-tres-proche-de-la-deflation) reports that inflation has continued to fall. "In February it was four-tenths of one percent and in March, it reached only two-tenths of one percent (0.2%), while annually, inflation is now estimated at just three-tenths of one percent (0.3%).
"These figures, (are) the weakest annual since June 1999. The chief (government) analysts of inflation predict the possibility of deflation in the near future. Paradoxically this phenomenon (deflation i.e. falling rather than rising prices) is a new threat to the economy because it significantly lowers demand (the consumption of goods) and strongly impacts economic activity. In effect, in the case described, the consumer anticipates the fall of demand (anticipates that prices will continue to fall—i.e. deflation) and thus defers consumption and investment and encourages savings. " Thus the fall of demand (all consumption of goods) has a strong impact on economic activity," states the Liberation.fr author. The author adds, "This phenomenon is presented in the economic manuals as a precursor of generalized depression. Thus it is the last stage of economic catastrophe."

In a personal example, this author knows a couple well, who were contemplating the purchase a new home in a small Florida community near where they owned a condominium. The advantages of the pleasantly developed small community, shops near by, their own garage and a back garden were attractive inducements. Within this community they found a nice three bedroom they liked, but a little research revealed that prices were falling consistently and there were many houses available. The falling prices caused them to reconsider. "Why should we buy now at $250,000, when we could wait a few months or more and pick this same property up for less than $200,000?" asked the husband. The wife added: "And how would you feel, if you did purchase now, moved in there and discovered that your neighbors bought a very similar house next door for half the price that you paid?" "I’d feel like a real dummy!" he responded. They decided to wait and kept their funds in the bank.

"Energy and Fresh Products: Prices Fall."

The very light rise of inflation in March, ‘resulted principally from the rise of the price of clothes, shoes (+6.0%) and of other manufactured products (+0.5%) resulting from winter sales’ reveled the Institute of National Statistics. The same with the prices of rents, of water and of services of removal of household wastes (+0.3%).

"These increases were ‘in part compensated for by the fall of price of energy (-2.0%), services of transport and communication (-0.8%) and of fresh products (-1.1%). The prices of other food products and other services were stable’ noted the National Institute of Statistics."
(Translation by RJK)
Thus the fall of prices in France were confined to lower energy, transport, communications and fresh products, while other services were stable, clothes, shoes and These were partly compenstated for by rises in prices in wearing apparel..manufactured products and rents were close to even However, these elements all have an important impact on the over-all economy. One wonders will this

Saturday, April 4, 2009

CHINA'S DOLLAR TRAP- A REVIEW AND INTERPRETATION

Paul Krugman
China's Dollar Trap
http://www.nytimes.com/2009/04/03/opinion/03krugman.html?em


Krugman (Paul Krugman, NY Times April 2, 2009) states that trade with China, often ridiculed as a "one –way-street" finally turned out to be a "fair exchange" after all. They sold us melamine-laced milk products, sulfurous gypsum boards that stunk up our new houses, lead painted children’s toys, and we got back at them by off-loading toxic securities on their markets.
I posted a related idea when I posted in an earlier blog that the economic crisis has been a two way street with China. They helped to feed our "affluenza" while their controlled Yuan (kept at parity with the dollar) encouraged a trade situation that fed our exuberant buying spree. Without China's collusion we would not have been able to get ourselves (as easily) into this mess.

But Krugman carries the review of our China relationship further. In the depths of the economic crisis the "fair exchange" deal we joined-in with them has finally broken down. China’s cheap products are not as attractive to a nation with little or no bank savings, financial institutions virtually shut down, home values collapsing, our premier GM motor company on the skids, credit cards tapped-out and nearly one in ten out of work. And on the other side of the world, as they watch us stumble into stagnation and negative GDP, those securities they bought from us are beginning to generate concern.

Krugman considers that the big news last week was that the Chinese floated a call to drop the dollar as a reserve currency. their plan would establish a new 'reserve world currency' in the form of a "basket of national currencies" (perhaps the average value of a group of currencies such as the Yen, Yuan, British Pound, German Mark, Swiss Frank, etc.) and use that "value" as a reserve. According to Mr. Krugman, "paranoid Republicans" viewed this as a sinister plot to attack the dollar’s preeminence in the world market, and as an attack on our economy. That was not the case, states Mr. Krugman in this piece. In fact, he concludes that the monetary suggestion of the Chinese was rather a revelation that the Chinese have got them selves in a "dollar trap" that they got into and now do not know how to get our of unscathed! It was a plea for help. He sees no one jumping to their aid.

Early in this decade, China, a nation which prides itself on its hard working, simple-living people devoted to Confucius who encouraged a culture of saving and an aversion to extravagance (See http://www.international-relations.com/cm4-1/Zhang.htm Economic Lessons from Confucius for the New Century, Youmin and Tianchen, 2000. In 1988, 74 Nobel Prize winners made the assertion in Paris that if human beings want to live in peace and prosperity in the 21st century, they must look back 2,500 years and seek the wisdom of Confucius.) found itself in the enviable position of selling more goods abroad than those it imported (i.e. running a trade surplus) and at the same time it attracted large sums of foreign "inflows of capital" for investment. These factors would naturally cause its currency (yuan) to rise in value. Were that to happen, the higher value would tend to decrease its export volume. The big attraction of Chinese products were always their low cost. They did not want exports to decrease, so rather than let their currency fluctuate they chose to keep the value of the Yuan "more or less fixed"(1 Yuan = @ 0.15 cents). That of course, made it difficult for us to sell China our (more expensive goods). Their policy also protected their native industries from import competition. The US complained, but in general, I suspect the vast number of importers and consumers were happy and the government kept silent since it helped to sustain our economic bubble..

To prevent the yuan from rising in value, the Chinese had to "buy up dollars as they came flooding in. As the years went by, these trade surpluses just kept growing—and so did China’s hoard of foreign assets."

See Telegraph.UK article on "China prepares to buy up foreign oil companies" http://www.telegraph.co.uk/finance/newsbysector/energy/4781037/China-prepares-to-buy-up-foreign-oil-companies.html

Krugman notes that the "fair exchange" story above, though amusing, was not really accurate. The Chinese did not buy many "toxic" securities. They mainly accumulated US Treasury Bills. These "T" bills are safe, but they have a very low rate of return (right now about zero). China eventually accumulated over $2 trillion dollars of these low-yielding T bills—turning it into the "T bill People's Republic". According to Krugman they did it not out of any sinister intention but "in a fit of absence of mind", and only now realize they have a problem.

These US securiites were purchased in "dollar value" so any fall in the value of the dollar in the future would mean a "big capital loss for China". So if China were to desert the dollar and diversify its currency holdings it will have to sell its dollars and drive the value of its holdings down. That would be a no no.

According to Mr. Krugman's analysis they seem to simply want it to keep the status quo. That is, to continue to produce products for the US and other world market and permit their workers to save more and invest abroad what they can not use at home. "In other words go on as we were. The world has changed "and that is …not going to happen," concludes Krugman.

China has not yet faced up to the "wrenching changes that will be needed to deal with this global crisis," and neither have we." states Krugman.
But we can not go back to the paradigms of the past.
In the recent decades investors were fixated on wealth-generation. They concentrated on stock positions, derivatives, hedge funds, and any esoteric securities that might maximize profits. These greed-based motivations led to our present disaster. Now the emphasis has turned to simple wealth preservation.
For the individual "the era of the house as a constantly appreciating asset is over." Monetary advisors ask now: What is your risk level? Are you living above your means? Are you saving enough?
These are questions individual must ask to prevent disaster. But our national government should be looking in the same mirror. Are we as a nation living above our means? Are we saving enough? Are we afflicted with the "affluenza"?.
Over the last decades the USA, has evolvied into a culture deeply afflicted a disease, which encourages its citizens to measure their worth only by the narrow meter of financial success and material possessions. One might only scan our media outlets, newspapers, magazine shelves and repeated adverts day after day bombarding us in the electronic media to demonstrate how pervasive these ideas have become(After Wikipedia definition of "affluenza").

Krugman states we must face up to "wrenching changes" but what are they? What can we do trapped as we are in an economy of blatant consumerism and militarism? How can we save ourselves and our Nation from these twin plagues? Some seem only to suggest we go back to drink from the same polluted trough.
We need a new paradigm. But who can guide us? President Barak Obama increasingly seems to eschew that role--of savior and guide into new territory. So far he seems to be simply guiding us back into the same beat-up vehicle which lays a hulk, just crashed at a crowded intersection. He pats us on our heads and tells us to be more careful next time. Then sends us back to cruise the same dangerous roadways.

Friday, April 3, 2009

RAINY DAY THOUGHTS

Marianna’s Rainy Day

“You know, Pop Pop…..”

Said five-year-old Marianna,

Walking, head-down, by my side,

On our rainy-day.

“I like the rain.”

Milo trotted wet-footed along side.

“It tickles my face, when I look up.”

The “tickling” rain made Milo shake his head.

His leash jingled.

“It makes pretty circles in puddles too.”

We walked on, silently,

Each with our own thoughts.

Her backpack dripped soft rain.

“It makes the flowers grow, too.”

Milo shook his leash.

“I don’t think Milo likes it, though.”

She thought some more.

“And later, when it goes away,

I like to splash the puddles it leaves.”

“Then make my footprints on our walk.”

She looked up at me, soft rain tickling her smiling face.

“I like the rain, Pop Pop.”

Wednesday, April 1, 2009

WHAT HAPPENS TO TORTURERS!

(BUSH CHENEY TAKE NOTE)

Torturer Pleads For Mercy and Apologizes to his Victims
(See photo at: http://info.france2.fr/monde/52972080-fr.php)

France2.com reports, March 31, 2009 in "Douch Demande Pardon" that thirty-four years after the initiation a program of horrrible acts of torture, former infamous head of information of the Khymer Rouge Regime, in Cambodia, and director of the prison at Tuol Sleng, Mssr. Guek Eav, aged 66 years, known to his victims as “Douch” stood before a tribunal in late March 2009 to beg for mercy after admitting his part in the atrocities committed against Cambodians in the years 1975-1979.

This story underscores the fact that the wheels of justice do indeed move with glacial speed, (four decades is a long time) but thankfully they grind exceedingly fine! Douch is expected to be confined to prison for the rest of his life.

For our own home grown variety of torturers and advocates for the procedure, prospects for justice-enacted are less sanguine. If we here in the USA proceed at the rate of speed the Cambodian justice system, given their present age, Cheney and Bush will have long faced the disgust and punishment of their maker before their crimes could be judged by their peers.

But the younger Bush-Cheney co-conspirators such as John Yoo, Condoleeza Rice, Douglas Feith, Alberto Gonzales and others who advocated for torture and facilitated the Bush torture program ---beware! This piece gives us all hope that their days secure from prosectution are numbered.

Read the entire article at: http://info.france2.fr/monde/52972080-fr.php

Sunday, March 29, 2009

IRAQ SECURITY PACT WITH US

“A government that is more dangerous to our liberty than the enemies it claims to protect us from.
Keith Olberman October 17, 2006 in response to Bush signing military commissions act October 17, 2006.

Iraq security pact poses detainee problem for U.S. AP November 24, 2008

“Iraq security pact poses detainee problem”, (Newsday, Nov 24, 2008). The authors reval that the American military in Iraq is rushing to prepare criminal cases against some 5,000 detainees held in Camp Cropper Bagdhad, as well as other camps in Iraq, because the proposed security pact with Iraq would end it the American military’s right to hold prisoners without charge as they have since 2003. Some “high value” prisoners have been incarcerated for five years without knowing what they are charged with. Some were juveniles when arrested in “sweeps” and are now adults. Beginning on January 1, “all detentions would have to be based on evidence (i.e. habeas corpus would be in effect in Iraq) and the US will have to prosecute detainees in Iraqi courts or failing that…release them.” The report reveals that the US has evidence on “only a few hundred” out of the nearly 17,000 detainees held in American-run Iraqi jails. The rest are held on hearsay evidence, or were caught up during sweeps of areas where jihadists might have been.

There was something that deeply bothered me about this story. Perhaps it was the irony that a fractured, ethnically divided, recently-conquered Middle Eastern nation, just breaking away from a long history of tyranny and disastrous occupation and with the experience of democratic process one can count on one hand, has forced the USA- kicking and screaming in opposition—to apply the laws of habeus corpus which we as a nation (rightly) brag of as our own.

Saturday, January 24, 2009

HARD TIME RECIPES OF THE 1950s

LIVER AND BACON

In this "post Bush" era when Campbell soups and Spam are reported as the best selling items on the grocery shelf, I too have been looking back. I recall here some of my mother's "hard times"recipes. She was a wonderful and creative cook who, adapted traditional recipes she learned at her mother's home for her own family and new times. She was concerned mostly about nutrition, cost, flavor and taste. But cost was the controlling factor. The times I'm thinking of were the early 1950s when the nation was still crawling out of the last great war, housing was tight, jobs were scarce, and they paid little while people had to make do with a tight budget.

My Dad was paid by the week in cash--I can still see the little brown envelope with his name scrawled on the top. From that amount, what came in that little packet, Mom and Dad had to make do--to set aside the money for their mortgage, pay the electricity bill, buy coal for the furnace, and put food on the table. What ever exigencies that they didn't plan on--a doctor bill, replacement clothes, something broke, or needed medicines--had to come out of that food budget. So on many days Mom had to be very creative about how she used that food money.

I don't know what Mom got as her weekly food allowance, but it couldn't have been much. Since Dad was paid on Friday, it was on that evening that he would stop at Benkert's Bakery on 15th Avenue on his way home, for his one excess--he would purchase a coffee ring and a crumb cake. Those were the only "sweets" in the house and had to last for the whole week. I never liked either of his choices and when I had a chance would beg for Boston cream pie or even apple pie, but to no avail. But Dad's very last stop before coming home on Friday (to a supper of fish--which he hated--) was made at Julgie's corner grocery store where we had a weekly bill. He paid that bill then came home to supper. It was by then quite late...closer to seven PM.

From Friday to Sunday--the week-end the menu would tend to be more expansive....some type of roast on Sunday. But on Monday we would see leftovers (of Sunday's meal). Then the week would slowly close down gustatorially. Tuesday might be better than the rest, perhaps it a meat loaf and potatoes or even a rear creamed chicken and rice, but then Wednesday we would have to expect chicken croquettes and vegetables. Thursday things started really thinning out, and Mom would get me to go up to "Julie's" (the grocery store on our corner) to get what the few necessaries she needed to put together a meager supper, since her pantry was now empty. Usually, by the end of the week our normal "American" meals began to take on a more Mediterranean flavor. Like some pasta dish. I guess it was good for us. Certainly I later loved to eat these foods....but as a child I was all "meat and potatoes."
For some reason I remember ochi di lupo as one of the macaroni types I was requested to buy on these trips to the corner grocery. Well, I actually didn't "buy" anything-- there was no money passed between Julie and me. I was chosen to go because, by this time of the week Mom's food budget had vaporized (I think back now and realze that perhaps, it was my Uncle (no name here) who might have visited during the week to "borrow" a few bucks for his family since he was out of work with a bad back.)
So about this time of the week Mom would present me with a little lined-white paper list and orders to "put it on the cuff", or as Julie would say: " I put thees in a blacka boook, eh? Robbie?" and I would nod my head, with my empty hands in my pockets. Then she looked up at me. She had large, dark kind eyes, an alabaster complexion and dark brown hair with little streaks of gray around the temples. She was simple and shy and very soft looking like the "molito" the inside of a loaf of Italian bread.

Once I had given her the list Julie and her elderly mother who every one in the neighborhood called the "old lady" collected the items on the list. When they were done, Julie would take her book out from under the counter. It was a black and white "marble" soft-cover notebook with the stub of a pencil tied on a string to the spine of the book. Julie's father, a well tanned, very short and thin man saw what was happening and came up to the counter. He looked at the pencil. "I sharpa' Julie," he said, in a thick Italian accent.
I knew well enough he wasn't going to do anything to Julie. as he pulled a large, dark-stained carving knife from behind the counter, and with a few strokes of the giant blade carved the pencil into a sharp point. Then he carefully scraped up the wood curls and dark pencil-lead from the white marble counter with his sun-browned, rough hands. Julie looked closely at the tip and nodded her head so her bun bobbed a little.

Julie opened the book and carefully turned the pages until she came to the one with our family name at the top. Each week had a little list that she would cross out on Friday when Dad paid it and then start a new list for the next week.
Today she checked last week's cross-out and smoothed out the paper with her clean white hand. Following closely and mechanically on the thin blue lines, she wrote the date. "March 15, 1951.' She tapped the box of macaroni with her pencil. She wrote neatly as she slowly repeated the words outl-oud, "One... box.... Ronzoni.... 'ochi di lupo'," said Julie, pressing hard on the pencil.

Her mother, a short woman who seemed to always wear the same faded floral house-dress covered by a clean white apron, also kept her her hair in a neat gray bun. The "old lady" looked on from behind the counter, carefully checking on Julie. Though Julie was in well into her late thirties at this time, her mother seemed to treat her as if she was a child. I noticed that..and at eleven years old--I worried that this might happen to me too.

Julie looked over at my goods again and tapped the can of tomatoes with her pencil. "One... 8... ounce.... can.... Hunt's......whole...... tom ah...toes... with.... basil." She finished the line.
Her mother came closer and tapped her shoulder.
"Julia," she said slowly and kindly, giving me a little look first, "Non e neccesario per a scivai tutte".
Julia looked over her shoulder, as a little flush rose into her powder-white throat. She turned back to her book and continued. "One... loaf ...Italian... bastoni."
She went on to the next line " one..... head......broccoli."
She finished, looked up and smiled at me seming very satisfied with herself. She turned to look at her mother. The old lady's straight lips curled up ever so slightly at the ends.

Julie pulled a brown paper bag from under the white counter. She smoothed out the bag several times, and taking the pencil again she wote the list over on the rough brown paper of the bag.
She looked up at me. "This if for your momma," she said, pointing at the dark shiny pencil lead marks on the bag. She then added the figures up and made a large circle around the total. After carefully putting each item into the bag, and checking the list each time she handed the crinkly dry bag to me. She reached over the counter to hand me the bag and I noticed how white her arms were.

"You be gooda boy, today and helpa yo' momma!" she smiled, reaching back to put the pencil in her bun. I noticed that her underarms were very hairy too. Eleven year old boys notice such things.

"Thank you, Julie. See ya!" I said, and walked home with what Mom was going to use to make supper. We were having broccoli and pasta! No it was not a favorite of mine then.

But on other Thursdays we might have liver and bacon. Liver was cheap, nutritious, and it was meat, so as Mom said, it made "blood". It was very tasty the way she prepared it. She served it on those blue willow-ware plates with the raised ceramic divisions on it for three parts of the meal: a meat, "starch" and a vegetable. You couldn't go wrong with those plates. Generally she served liver with a big blob of milky white mashed potatoes and some other vegetable. A big pile of sliced bread and margarine was always on the table too. If you didn't have enough on your plate, or you didn't like the liver, the bread and margarine was there to fill any voids.

Mom's Broccoli and Pasta
One head broccoli (fresh and tender) with large thick stems removed.
One half pound pasta of your choice. The classical dish calls for Orechiette, but you can use ziti, penne, or even Ochi di Lupo. Be sure the pasta is hard durham wheat or imported from Italy.
1/4 cup good extra virgin olive oil. It has taste.
1/4 cup grated Parmesan cheese (or Peccorino Romano which was my Mom's real favorite.)
Red pepper flakes (e neccesario!)
Fresh ground black pepper (e anche questo!)
One tomato, chopped fine as a garnish. (Mom never did this, but I like it.)
Put a large, six quart pot with five quarts of water on to boil. To this pot add the head of trimmed broccoli. Cook the broccoli until tender. A thick stem should crush easily between your thumb and forefinger.
Using a slotted spoon remove the cooked broccoli from the pot and place in a large mixing bowl.
Keep warm.
Add your pasta to the boiling broccoli water. The nutrients from the greens will be absorbed into the pasta. It tastes good.
Cook to al dente and drain. Mom always saved a cup of this water to add to the dish if it was too dry.
While the pasta is cooking: In the mixing bowl, mash the broccoli with a potato masher. Add one quarter cup of olive oil and one quarter cup Parmesan or Romano cheese. Mix well. The pasta should be done now. Drain as indicated above, and add the cooked pasta to this bowl and mix with the mashed broccoli and the cheese and serve. If you desire, you may add a little of the reserved pasta water to losen the mix.
Top with garnish of more cheese and the finely chopped tomato.
Simple as that.
Besides having this dish at home as a kid, I was served it once at a very fancy restaurant in Rome. The name of the place escapes me now, but it was an elegant place on the Via Veneto. Well it happens that we had arrived (I was traveling with my family) in the city on a somewhat late flight. So now it was early evening, and after getting into our hotel and rushing around a bit, we were quite hungry. Our bodies were still on American time and here in Rome it was only early evening, well too early for dining. We wasted as much time as we could. Out bellies cried out to us for food. But still it was only about seven PM (Rome) when hunger drove us into a nice place on the Via Veneto. "No! Siamo chiuso! Coma back later!," said the man at the door. We walked on and tried again at another place.
At this place we entered with the entire hungry-looking crowd. A well dressed Maitre d'otel came to meet us at the door and very politely looked at his watch. "We are not open now,' he said, shaking his head at the stupid Americans. But he said it with a such a polite smile.
I begged in Italian...Perhaps we could sit here and wait..."Percioi una po di vino e una pezza di pane?" I begged.
The main looked over at the chef who had just come out of the kitchen.
"Alora, I will seat you....but you see-- there is no staff available..." he pointed to the kitchen staff who were just then filing out of the kitchen and into the back of the restaurant. In their clean white outfits they took their places around a big table that had been prepared for a big family dinner. It was dinner time for the staff.
"We have no where to go right now...I said.
We were seated. The Maitred'hotel brought us drinks and a basket of breads.
The staff began to chatter animatedly and eat with a great clatter of dishes and utnsils at the far end of the restaurant. We looked over at them. The chef at the head of the table saw us. He took pity on us. He called to one of the young boys just coming out of the kitchen. The boy turned back and soon returned with a massive pot he held in two hand with a dish cloth and five big bowls stacked on top. He placed the bowls in front of each of us and as he did a wonderful fragrance of a mix of pasta and broccoli wafted our of the big pot. The young boy, still hungry himself, served us all. Brought over a big dish of grated cheeze and then went to his own dinner. It was the best pasta and broccoli we've ever had!
We did leave them a nice tip. It was the cheapest and best dinner we had in Rome.
Mom's Bacon and Liver
You will need:
Package of sliced liver. Beef liver is good, but recently I found you can purchase calves liver. You will need one large slice per person (about 1/4 pound per person)
4 slices of calves liver (about one pound)
four slices of American style bacon
one egg
Oil for frying (peanut oil or olive oil)
1/4 cup milk
bread crumbs
one large onion sliced very thinly
cup of sliced mushrooms
two small red hot peppers (pickled) sliced into thin strips (about 1/4 cup)
Two large Roma tomatoes chopped.

Mix the egg and milk in a bowl and beat. Add the liver slices.
Bread the pieces in the bread crumbs. Pat them dry and set aside.

Fry the bacon in a large pan until crisp. Remove and set aside. Remove most of bacon fat and add one full tablespoon of olive oil for frying. Add more oil if necessary.

Fry the breaded slices of liver quickly on each side done to rare or medium rare, i.e. thin, pink layer in center of slice.

Add sliced onions, .

Cook until onions are translucent then add mushrooms chopped tomato and sliced red peppers and cook until they are done. Re-pan partly cooked liver slices into onions, peppers and mushrooms, tomatoes and add bacon. Add any juices from partly cooked liver to the pan.

Cook until flavors meld and the the liver slices are fully cooked. But don't overcook a slight pink layer is desireable.

Serve with mashed potatoes and steamed broccoli or your favorite vegetable. An alternate is to serve the liver and bacon with a green salad and a loaf of crusty bread.