The Economy, Afghanistan, G-20, IMF, China, et al

Just a few points about all of the above not necessarily in any specific order.

Well, we continue to hemorrhage jobs. No change there. And of course, this does not include those who have either stopped searching for jobs, are underemployed or working part-time.

G-20 was not much of a win for President Obama. G-20 agreed to contribute over a trillion dollars to IMF. But if past history is any indication, IMF have not really performed (specially in today's world where everything is and should be performance-based). Many of the developing nations whom IMF "helped" in the past, have to some extent as a backlash turned far to the left. I am not sure what is going to change there. It may just mean money down the drain and more corruption. Not only that, IMFs' excessively stringent requirements for austerity have caused great pain and suffering for the people in the nations being "helped".

And of course, this will not be real money. But SDRs. SDRs are akin to printing money without printing money. This means a potential to cause inflation in the receiving country.

And last but not the least, these are promises. How much money will actually be contributed remains to be seen. Only time will tell.

The world (Or the G-19) seem to want business as usual. That means Americans should continue buying and China should continue financing those purchases. Or as a guest was saying on the local NPR station that the Chinese sold America poisonous toys and candies (melamine in milk-based) and America sold China toxic debt and so we are even.

But I think at least from American consumers' standpoint that behavior is history for the time being (and may be a very long time being). It is high time that the US consumers stop buying "stuff" for the sake of buying stuff and provide stimulus for themselves by saving more for the future.

In the meantime, Chinese are concerned that all the stimulus that the US is providing is going to make their trillions worthless. Well, few things to ponder here.

1. Nobody (including the US) forced China to hold all their reserves in US Dollars. Whatever happened to diversification!!!
2. China for many years have artificially kept their currency under-valued so that their exports would be cheaper (aka dumping). This helped the Communist government create jobs for rural billions and prevent them from being restless and agitate for more democratic rights. Now, of course the situation is unraveling.
   

And to top it all, President Obama has pledged more troops to Afghanistan. I agree more with Vice President Biden who fears Afghanistan becoming a quagmire as Iraq did. I think we should get out of Afghanistan and stop pouring $$$ and American life. Whether OBL is caught or not is a moot point. This is specially true since we the Americans do not need OBL to destroy us. If the last few months are any indication, we are perfectly capable of doing that with our own greed and stupidity.

Well, that's all for now. Write to you again soon.