Ekonomi Dan Kerobohan

 UPDATE: As yet another example of silly things to worry about, given the much more serious economic problems, a bunch of religious fundamentalists with too much time on the their hands have decided to protest the Miss World contest, for which the contestants are already arriving.  That's right...it's been planned for at least two years, involves multiple venues over two weeks, and these yutzes are just getting around to protesting the fact that the contestants won't be wearing bikinis.  Yes, you read that right.  If you look at the article, you can tell by the picture that the protesters know they're a bunch of yutzes, because they covered their faces so their friends wouldn't laugh at them.  Sheesh!  What's worse are the complete and utter nincompoops in government that are holding hearings over an event that has already been approved and licenses for at least a year and now the crowds are showing up.  At the very best, this circus is to elicit bribes from the producers to ensure things go on as planned.  If I were the KPK, I'd be watching the bank accounts of every government blow-hard involved in the debate.

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Sudden impacts with reality are seldom pleasant.  If usually involves folks who have been living in a dream world rapidly coming to grips with the murky fantasy they've been living in.

Source: TradingEconomics.com

Such appears to the be case in Indonesia as we speak. The country has been on a boom unlike anything in its history.  Though the late 80s and early 90s were high times, the economic benefit was not as widely spread across socio-economic levels as it is today.

The current boom has been fueled in part by the massive Chinese expansion and great gobs of foreign investment money created by the Western bailouts in 2008.  The fire was further fueled by low interest rates and prices domestically.  But the music shows all the signs of stopping and the musicians are looking a bit tired and ready to take a smoke break.

Among the many reasons I chose to move to Indonesia was the speculation that this country, and the whole region, were about to boom, and I wanted some.  I haven't been disappointed.  And I'm not alone.  Western companies, languishing in sloggy economies back home, have been buzzing around Indonesia for nearly a decade now, pouncing on any vague opportunity that came along.  And therein lies the problem.

The combination of loose money and Indonesia's long cultural tradition of corruption combined to make a lot of folks rich, but as money supplies have tightened up and speculators have become quite a bit more skittery, the mire of Indonesian business practices have chased a lot of the easy money away.

Here's an example: in an effort to encourage growth in various regions of the country, the central government gave the provinces a lot of autonomy in allocating mining concessions.  As a consequence, there was a great deal of confusion (must intentional) over who would issue and benefit from licenses.  Every village, county and provincial government got in on the act, with dozens of overlapping claims on any given concession.  As a consequence, lawsuits started flying and many foreign interests, having gotten burned since the courts invariably decide in favor of local folks, have been leaving the country in droves.

Source: TradingEconomics.com

This hase the double whammy of draining foreign cash out of the system, and shutting down hospital, school and other social projects that are typically part of deals made with outside operators.  The flight of foreign currency in turn has caused a crisis of confidence in Indonesian bonds sending rates steeply up and making it expensive for the central government to maintain the debt, which in turn sucks more money out of the economy.

Combine the above with the recent end to the subsidized fuel system, which has been in place since the days when Indonesia was a member of OPEC and a net exporter of oil and gas.  A combination of drying up old fields, insane one-sided policy and endemic corruption have all but shut down new development and production, leaving Indonesia a net importer or oil now.

Ceasing the fuel subsidy only two months ago has sent the price of everything through the roof.  From cab fares to food prices, everything has suddenly become much more expensive, with double-digit inflation on the horizon.  The only immediate action the central bank can take is to raise rates, which it has done, and which is further slamming the brakes on the economy.

While it's not entirely undesirable to cool off the economy, which has been growing at 6%+ for the past five years, having it happen all at once could send the whole country into a tail-spin.  All the loose money slopping around has caused a number of bubbles in things like housing and designer clothes and other useless stuff.  Folks, flush with easy money, have been turning into lite Americans, buying electronics and gee-gaws like they are going out of style, rather than saving and deploying money wisely.

The wildly expanding middle class here is now populated with folks who have four cars, two tablet computers, a half-dozen cell phones, 37 pairs of shoes, and three armoirs full of clothes they never wear.  Furthermore, everyone's become a real estate magnate, buying and flipping houses and apartments as a hobby at the breakfast table.

And that brings us to the crux of the problem: consumerism.

Consumerism is a pointless and empty pursuit.  A company puts out a product, saturates the market, prices run up wildly and then crash, and then some new product comes along.  Do this enough times with enough products and eventually the entire economy collapses - from sheer exhaustion if nothing else.  Everyone has bought all the crap they can store and prices have run up as high as anyone will pay.  All the new iCrap and BoobBerries can't pry open pockets.  Crash and burn.

Emerging economy appears to be just a polite way of saying a new group of suckers.  As fast as the corporate masters can heat up an economy, they launch the same old tired game: dangle gee-gaws and what-nots in front a people and get them to chase the carrot round and round until everyone just collapses.  By then, the greedy bastards have moved on to the next playground.

Every time, people are led in orgies of consumption until the Board Members pull their money off the table - right at the peak or greed and corruption.  Areas where the puppet-masters are just starting their work are called 'emerging economies'.  Areas that have been led round the consumption barn repeatedly are called 'mature or developed economies'.

They come into an economy where people buy a home for life, and mom can stay home with the kids, and life is simple and affordable.  When they are finished, everything is polluted, families are tapped out and both parents have to work just to pay the debt, as they sit amongst a pile of gee-gaws that no longer have novelty or usefulness.  Neighbors have been turned against each other as they competed to out-do each other with their toys.

Maybe, just maybe, in the coming train wreck that we will call the global economy, folks will learn that pointless consumerism is an economic dead-end that only empowers and enriches the 1%.  To them, we are nothing but rats in a maze, chasing imaginary cheese until we fall over from exhaustion.

Have Indonesians really received a higher standard of living?  Or have they traded a quiet and idyllic life for clogged cities, smog-choked skies and piles of garbage?  Have all the gee-gaws and what-nots actually improved life?  Or have they only made us more neurotic and selfish?

Source: TradingEconomics.com

The question remains can Indonesia turn itself around?  Can government and the people control their impulse to slide the knife between the 4th and 5th vertebrae to get an inch further than the next guy?  Can people pull themselves back from the precipice from which the West has jumped like so many lemmings?  Is it really necessary to buy just one more iFad or car or what-not?  Can we resist the urge to shackle ourselves with debt for the appearance of wealth and success?

It was just 15 short years ago that Indonesia fell into a dark moment of history, with riots, destruction and killing in the name of having more stuff.  It's important to remember that kind of behavior provides entertainment for the Money Masters who play us like so many rag dolls.

Is it too much to ask for a little restraint before we all leap into the Abyss?

The Camel's Nose

Birth, flares, gold, oil.  Sounds like a Red Hot Chili Peppers come-back album.  This week produced some big headlines.  One was a real game-changer, but we'll get to that in a minute.

The Obama eligibility trial was a curiosity that I followed with some interest.  That he is not qualified to be president I think has been proven beyond a doubt, since he himself has never hidden the fact.  His (claimed) father was a British subject who never became a US citizen, or even resident.  Obama is therefore disqualified from holding the office.  Plain and simple.

The incident does belie Obama's contempt for the rule of law, even as the top enforcer in the land.  Comments made by his attorney also show no respect for the sovereignty of the individual States, which is a fundamental aspect of the nation's Constitution.  Those who argue that the Constitution is a dead letter forget that without it, the federal government ceases to exist except by fiat and force.  In most dictionaries, that would be the definition of dictatorship.

The interesting thing about this story is that the religious fervor that surrounded Obama back in 2008 is fading rather dramatically.  When he was elected, the world held its breath and one was required to genuflect and cross themselves when mentioning the name "Obama."  This was a global phenomenon, especially here in Indonesia where he had citizenship for a few years, and may still, for all we know.

To say that his is a failed presidency is, I think, a fair estimate.  Obama had not even warmed the seat in the Oval Office before they were giving him Peace Prizes.  He has failed miserably at that particular measure.

What repercussions the Georgia hearing will have remains to be seen.  Obama has successfully weaseled his way out of many such tight corners, though this is the first to actually get any evidence and testimony on record.  The implications, should he ever be found lacking in the eligibility department, would be the vacating of every law he has signed since taking office, among a great number of other things.  Something to watch.

The Sun woke up this week with a sizable puff of plasma and radiation that swarmed Earth's neighborhood and caused everything from enhanced aurora to minor communications hickups.  At least one airline rerouted flights across the Arctic Circle to avoid any problems.

This will be an issue to watch throughout the year and into the next.  So far, Sun Cycle 24 has proved to be fairly unusual, beginning as it did with a very quiet period that is only now seeming to end with a bang.  There are numerous theories around tying sun spots to extreme weather, earthquakes and similar natural calamities.

The possibility always sits on the sidelines that a major X-class flare could put a quick end to civilization, seeing as how we are all tied to electronics and electricity.  The Canadian blackout in the late 80s is but a small taste of what is possible.  The Sun's behavior going forward for the next couple of years will definitely bear watching.

The Reputican primaries are notable only for the fact that they have degraded into a giant cat fight.  The sheer amount of hissing and spitting and fur flying is great entertainment, but has little to offer in the way of substance, which I suppose is a metaphor for US politics anymore.

It has served to wipe Ron Paul out of the headlines, which I suppose is the real purpose.  All the finger-pointing over who worshipped Reagan more is otherwise completely pointless and completely misses the fact that Reaganomics is a major factor in the current US economic situation.  The world is suffering the results of the Reagan administration's policies.  Any politician trying to out-Reagan another should be avoided at all costs, because they just don't get it.

Rand Paul has done a fine job of keeping the family name in print, though.  He simply denied TSA the right to get intimate with his 'goodies.'  What no one seems to have mentioned in all this, is that the TSA committed a felony by violating the Senator's Constitutional mandate to be able to go unmolested to Washington to attend to official business.  Paul, on the other hand, did not commit any crime, since TSA's mandate is by fiat and not by law.  They exist by law, but their supposed power has not been codified, and so they are acting as rogue agents without warrant.

Something to watch, if Daddy and Son Pauls decide to take it any further.  Meat for the media grist, otherwise.

The biggest story of the week, and of year-to-date, comes out of my part of the world.  India and Iran inked a deal for India to buy oil using gold.

Now you may be thinking, "What does this have to do with the price of tea in China?"  Well, every country in the past twelve years that has dared to unhinge oil trade from the dollar benchmark has been invaded and demolished.  Every...Single...One.  Of course, it was all in the name of democracy and freedom, and in, "You will be free or we will kill you."

The root of the invasions have all been keeping the dollar standard in the oil trade.  That is the one and only thing that is propping up the dollar.  The world is absolutely dependent on oil for energy, and having the dollar as the global standard for buying oil keeps it in demand and at the center of global trade.  If anyone, and by that I mean ANYONE dares to undermine that system, they must be destroyed.

The alternative is that the dollar crumbles under the weight of its debt, US hegemony vaporizes and the folks at home will revolt about ten minutes after the pump price hits $10 per gallon.  There is simply too much riding on petro-dollars.  The entire American Empire is built on this one simple fact.

Now, Iran is no problem.  The west has been demonizing Iran since what?, the 1980 hostage situation, though western meddling in Persia dates back centuries.  Bombing Iran into dust, or at least attempting to, won't be much of a problem from a propaganda point of view.  If the western media said that Iranians were a bunch of 3-eyes monsters with six fingers and toes, most Americans would believe it.

The real nightmare here, at least from the Anglo-American elite perspective, is India.  India has been painted as a strategic trade partner, and indeed, a great gob of US jobs have been shipped to India to keep it latched on the western teat.  The country sits on the back porch of China and the US has at least one major military base on Diego Garcia, which is claimed by the British, but that is largely due to India not exercising its historical claim...so far.

The British, despite having lost India as a slave colony some time back, have maintained a 'guiding hand' in Indian affairs.  This has served to balance China's ambitions in the region, which serves the western interests.  That India is showing signs of independence and self-interest is dangerous to the western elite.

This one act has numerous implications, not the least of which are undermining US hegemony over oil trade (the dollar), providing Iran with very fungible and uncontrollable means to buy weaponry and technology, and re-establishes gold as a currency, which the western elite have worked tirelessly to stop over the past century.

You see, you can crash a paper currency if things get out of hand, leaving folks with little more than toilet paper if they don't toe the line.  But you can't do that with gold.  Everyone everywhere will accept gold at all times for trade.  This is a dangerous precedent for those who would rule the world.  It's even more insulting that India has been quietly turning its dollars into gold for decades, because simply put, in Asia gold is still king.  Around these parts, wealth is not measured in piles of paper and digits, it is a function of how many pallets of gold one controls.

What is worth watching in this story is the way in which the western elite will handle it.  Iran, of course, is already demonized, but what about India?  If India can't be brought back under control, then it must be destroyed, because it is a key balance on China.

One sign that things are already getting out of control is the price of gold.  It took a week or so, but the gold price has started up sharply again, after being reigned in for the past two months.  If it is allowed to reach its natural level against fictions like Wall Street exchanges, it will be well over $2,000 an ounce soon.

This whole thing could be a catastrophe for the elite.  If the gold-for-oil trade isn't soundly put down, and fast, then it could well catch on.  By the end of the year, there could be similar agreements with Russian oil producers, and China certainly has the ability to buy its energy needs with gold from places such as Venezuela, Brazil, Indonesia, and others.

If the value of the dollar starts to fall sharply, which it has this week, then action is imminent.  We will likely see an attack on Iran, at the minimum, within two months.  But what happens if a dozen countries start down this path?  The US/Nato doesn't have the where-with-all to mount that many war fronts at one time, and if it tried, it would simply hasten the outcome they are trying to avoid.

The student of global empire will want to closely watch this development.  It slipped by rather quietly, but trust me, there are a lot of soiled shorts behind the curtain.  A lot of countries are sitting up to see what will happen.  The Fed move this week to keep the dollar interest rate at zero is a sign that they are desperately clinging to the dollar.

At the end of WWII, there were only two powers left standing: the US and USSR.  The USSR has failed and the EU, which was set up to join the game, is failing.  The only major power left is the US, and it stands on the dollar and the military power as its left and right legs.  Kick either one out from under it, and the whole house of cards crashes.

Nato's Libya escapade (Qaddafi wanted gold for oil too) sucked the life-blood out of Greece, Italy, Spain, and the rest.  They can't effectively shore up the US military weakness caused by dollar devaluation.  At some point, the straw will come that breaks the camel's back.  It is inevitable.  Whether the Iran-India agreement is it remains to be seen.  What is a fore-gone conclusion is that the western interests can not allow it to go on.

Might want to set up a news scanner for India/Iran/gold.  There's liable to be some fireworks very soon.  The Sun may not be the only source of radioactive flares in our near future.