| 'A crumbling empire'?
SIOUX CITY -- Occasionally when I read the Business section in The Journal, I feel like a voyeur peeking in on the annals of a crumbling empire." target="_blank"> | Small | Large
SIOUX CITY -- Occasionally when I read the Business section in The Journal, I feel like a voyeur peeking in on the annals of a crumbling empire.A while back I read the U.S. borrows over $2 billion a day to buy Chinese widgets. China gladly loans us vast sums of money (with interest) to buy their products because they know they're creating a dependency trap. As low-wage foreign labor undercuts our wages, we tend to buy the same cheap Chinese products that are bottoming out our wages. More disturbing is how the massive loans from China help prop up the value of the dollar, making us dangerously vulnerable to inflation.
Candy-Coated Crystal Meth
As if crystal methamphetamine, more commonly known as crystal meth, was not enough of a threat to rural America, meth manufacturers are now creating a candy-colored and flavored variety of the drug along with cartoon characters to recruit younger users. Meth is a highly addictive synthetic stimulant that is usually in the form of crystalline powder. The nature and composition of the drug makes it one of the most difficult drugs to quit. It’s just wrong. We at The Hilltop think deliberately targeting young people in order to help the drug trade thrive is deplorable and unconscionable. However, this marketing tactic of attracting younger users is not unique to the illegal drug market. It all started with the cigarette industry and Joe Camel. Chocolate, grape, peanut butter and strawberry are just some of the latest flavors being offered by dealers and manufacturers in our ever-changing drug economy.Perhaps meth manufacturers are engaging in this lethal marketing ploy because teen drug use has gone down 23 percent nationwide over the last five years according to an annual survey by the University of Michigan.Whatever the reason is, it is troubling lawmakers who are trying to prevent teen drug use.So attracting young people to meth would potentially secure a strong economic base for the industry, as users would be in the grips of addiction for a long period of time – if they’re lucky.
Fed Not Expected To Change Rates
While the Fed is not expected to change interest rates at this meeting, the central bank could modify its statement describing current economic conditions to take notice of the weaker data since January. The federal funds rate, the interest that banks charge each other, has been at 5.25 percent since last June when the central bank capped a two-year, credit-tightening campaign with its 17th consecutive quarter-point rate hike. .
State must spend more, spend smarter to save kids
Within a month, parents have been arrested in connection with the deaths of three Tucson-area children, all of them previously known to the state's Child Protective Services agency. That alone doesn't prove that Gov. Janet Napolitano's approach to fixing CPS is a failure, but the data behind those horrors do. .
Defense Offsets are Spreading Protectionism Across Commercial Sectors
Last week, I had the opportunity to again participate in the annual SMI International Offsets conference in London (March 21-22). The focus of the paper I presented the first day of the conference was whether the new Democratic Congress would change U.S. trade policy in ways that would help constrain foreign demands for offsets on American exports. Offsets are industrial compensation packages required by foreign governments as a condition for purchasing U.S. defense systems. They include co-production, licensed production, subcontractor production, technology transfers, counter-trade, and investment in foreign firms.
It is now common for foreign governments to demand 100 percent offsets against the cost of American weapons and associated equipment and services. This is not because they cannot afford the hard currency to buy the systems. They all run trade surpluses with the United States.
Cross Currents for USTBonds
The many bond factors act as cross currents for USTBonds. Some factors are bullish, others being bearish. Some are more important now, but just a few months ago, they were critical. UNWIND OF DOMESTIC BOND SPREADS (bullish for bonds) As US-based bond spreads unwind, USTBonds are bought back. The typical trade has been to grab the higher yield from a mortgage bond, and sell short the USTreasury. If not the higher yielding mortgage bond, then the object has been the corporate bond. For high risk appetites, the object has been the junk bond for companies with troublesome past histories. As these domestic bond spreads fail, lose money, and are liquidated, as seen in the past few weeks, the USTreasury is bought back just like a short covering of a stock. At that same time, the object bonds lose value and rise in yield, as they should in an environment of poor credit conditions.
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