Friday, January 27, 2017

Negotiating Chaos

Nonlinear Extrapolations,

"How America Could Collapse", by Matt Stoller, looks at one breakdown mode of global capitalism, the interruption of fragile supply chains, which rely one a single global source.
In the cold war era, there was no question that critical components of American products needed to be made in America, and that supplies of components and spare-parts were held at manufacturing sites, to prevent interruptions of production, and to allow quick production increases, if need arose. 
Japan's just-in-time model of production, where the factories hummed along in unison, avoided the costs of holding inventory, and was appealing in the post-cold-war 1990s. "Hey, nothing can disrupt supply lines. We are the unipolar power."
By the 2000s, there was a massive move of industrial production to wherever it was cheapest, and all in one big cheap factory. "Intellectual property rights", enforced by the Unipower, made this very attractive for global multinationals. Profits were maximized by using the cheapest labor, cheapest fuel and dirtiest factories they could build, and selling into the most expensive markets. Chinese production and US/EU consumption resulted Chinese workers got screwed with cheap wages and toxic air/water, and western workers got to watch daytime TV forever.
All of the vitamin-C (ascorbic acid) in America comes from China. Some recent examples of industrial shortages that affected us are given. I didn't know about them. 
There are more political threats to global supply chains, and a political movement underway to bring production back to the US. I expect turbulence.

Donald Trumps' strategy for negotiating with China is to be unpredictable, which is officially announced by the White House. Chinese are premier-negotiators, says President Donald, so he needs to keep them off-guard and more nervous. This is effectively a statement that the US will do the unpredictable. The only way to back a declared strategy of appearing unpredictable is to be unpredictable. This is possible in trade, because the producing country has investments in manufacturing that require steady flow of profit to avoid bankruptcy. The certainty of ongoing trade has led to over-leveraging of Chinese debt by any standard. China is exceedingly vulnerable, and financial reset of Chinese shadow banking can only be delayed or hastened, not avoided. (Guess what! Now, guess how...)

Global trade and economic activity peaked forever in 2014, around mid year, and fell fairly hard in early 2015, never again to rise. We got peak CO2 production in 2014, as a result. Mish Shedlock correlates the price of oil to global exports and finds that it is a tight correlation. 
(I will point out that it's not one causing the other, but that both reflect global economy. A booming economy can pay more for oil, but a strangled economy can't. High oil prices strangle economy, which was built on cheap oil for 100 years. The implication going forward is that only cheap/easy oil can support the lifestyle to which we have become accustomed, and the lifestyle is now in terminal decline, along with the easy oil.)

"What Would a Labor-Centered Economy Look Like?" Charles Hugh Smith
Charles explores all of the forms of "capital" which come together to create "economy", which is the meeting of societal needs. Only some of the meeting of societal needs is profitable, the rest "loses money". That's why rich neighborhoods are nicely kept and poor neighborhoods are not. The wealthy people can lose money, obtained through "profitable" activities, to keep up appearances which please them. This structure exists right now, because easy-money is created and provided to the wealthiest 1% of society. It is possible to provide this created money directly to the bottom half of the wealth pyramid, in return for work that will benefit society, and to leave the top half to be funded by profitable industry. Public works projects, which have been funded for thousands of years, in most civilizations, have supported western and eastern societies in hard times.

"Trade War Threat Grows" (Yeah, duh...)

A German writer, Holger Stark, writing for Der Spiegel, observes a big change in America, which he did not notice until the election process last year. He had been living in American cities, seeing the urban life. He sees that the loss of jobs to global capitalism has deprived Americans of identity and livelihood. Good observations from the baffled.

"Outrage Dilution", is the assessment of Dilbert creator, Scott Adams, observing the Trump-Transition. What he sees is that 30 abrupt changes in one week is intellectually paralyzing to the human mind. The mind organizes well to resist one abrupt change in a week. With 30 changes in a week, the mind says, "he's sure doing a lot, let's see how it works out". (What I would like to point out is that a lot of what appears to be one thing, is not actually a specifically defined thing at all. Media portrays it as a certain thing, but it may really be able to take a variety of forms. That's complicated. An example is the Keystone-XL and Dakota-access pipelines. The media presents these as done-deals, but they are merely a re-opening of negotiations, with much pro-business fanfare. The price of oil is way too low to support either venture with actual profit. Those who bet against them play the safer hand. Trump is shifting the cost/benefit equation, by saying that all the pipe for these lines (not most) should be made in America (not Canada). The societies that have blocked these pipelines, to protect their land and water, have not rolled over to play dead. Trump creates an impression for his constituencies, which they like the looks of. He gets credit now, but actually sets up a political process, where any eventual outcome will be on terms he has set. This is skilled negotiation. We don't know the ultimate intent.)

Robert F. Kennedy Jr. looks at the protected vaccine monopoly corporation called the CDC. Really. This is exactly what we are not supposed to think.

Lurching Towards the New Paradigm: Don't look for any conclusive answers here, but it is eloquently composed observation of our path into the world of fake reality, away from our broader-senses. We are slapped in the faces with certain facts and conclusions now. 
Engage the real world. Death may lie in the comfort-zone. It may go "poof". It's not real It requires vast, unseen support structures and energetic inputs to look simple.

Eleni sends this article, suggesting that Donald Trump represents a faction of Global Capitalism, which includes Rothschild family interests. Rockefeller interests reportedly backed the Clinton-Neocon faction. The currently ascendant faction accepts global-economic-collapse, as modeled in The Limits to Growth, and seeks to rapidly retrench going into it.
Fortress-America is a moderately good bet.
Unipolar world empire is unsupportable without vast cheap energy and other cheap resources.


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