Value-added analysis and commentary on economic and social affairs. The blog name is my handle; G D A E are the four notes on a violin or mandolin; music is one of my diversions.
Oops! International activists laid a trap for Israel, and Israel took the bait. The activists went out on Palestinian fishing boats to serve as witnesses to any mis-deeds by the Israeli government.
Mission Accomplished: The activists are now being held in Israeli prisons having been effectively taken by gunpoint from Palestinian territory. Read More on Democracy Now Website
The central bank of central banks has spoken. The Bank for International Settlements (BIS) had the following to say in its annual report:
While difficult to predict, their interaction [credit crisis and inflation] does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect. [1]
The BIS is not alone. One of President Nixon's chief political advisers has laid out the reasoning in a book. Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. Phillips is saying the US is facing a crisis of historic proportions. He identifies seven contributing factors on which I've written in the recent past. When introducing these factors during interviews, Phillips says:
Normally when a country is—United States is—heading into a recession, there are one or two, sometimes three, factors that you worry about. But at this point in time... there are like six or seven [factors], and you don’t usually see anything like that number.
There is an eighth contributing factor to consider: stagflation. The primary control mechanism of the US Federal Reserve (Fed) is setting interest rates. The inconvenient truth is that we are facing dangerous inflation (controlled by increasing interest rates), while at the same time facing a stalling economy (controlled by cutting interest rates). First we saw evidence that the private sector lost control, as the Fed had to step in with tax-payer backing to support a buy-out of Bear Stearns. Now we see that the Fed itself doesn't really have control.
Update: The BIS perspective on the consensus view is corroborated by the June National Employment Report:
The number of private sector jobs fell by 79,000 in June, according to a payroll report released Wednesday, with the decline exceeding economists' forecasts. Economists polled by Briefing.com had expected jobs to decline by 20,000 in June.[2]
The US is in it's third phase of monetary history in regard to its international influence. The key is the US dollar serving as the international reserve currency (the US dollar is accepted like gold for exchanges between countries with different currencies). This was established at the Bretton Woods conference following World War II.
First, the US dominated the world when the other nations were in post-war shambles or underdeveloped. The US could give money away to help build other economies, and the other nations naturally accepted US policies. Under the Bretton Woods System the US dollar was placed deliberately at the center of the system, with the US government guaranteeing other central banks that they could sell their US dollar reserves at a fixed rate for gold if they so desired. (The dollar was literally "as good as gold").
Second, after the gold standard collapsed in 1971, the US still had economic muscle and could effectively bribe other nations to go along with its imperialist foreign policies.
Third, the US economy has become hollow, having a huge trade debt, government debt and personal debt. Jobs and corporate head quarters have gone offshore, taking the tax base with them, making it nearly impossible to pay off these debts. The US is starting to depend on military force to get others to go along with its imperialist foreign policies.
The final phase will be the collapse of the dollar and it's rejection by other nations as the international reserve currency. This is already happening. It's just a matter of time, and we might be very close.
Oops! International activists laid a trap for Israel, and Israel took the bait. The activists went out on Palestinian fishing boats to serve as witnesses to any mis-deeds by the Israeli government. 
The central bank of central banks has spoken. The Bank for International Settlements (BIS) had the following to say in its annual report:
