Will the U.S. and China co-operate on North Korea?

If the U.S. or China, were to exercise military options in North Korea, it would affect all Koreans on the peninsula. The only real difference is the options available to a North or South Korean. The North Koreans have fewer options and already live in dire circumstances. Their options include staying put (hiding, fighting) or flooding into China and South Korea (running). The prosperous South, however, has nowhere to run. Their only real option is to strengthen the DMZ and keep their forces on high alert. China is currently bracing for a possible human tsunami, and have recently strengthened capabilities at their border with North Korea. The U.S. and Japan are looking at measures to evacuate their citizens, while military assets are being moved into theater (THAAD, CSGs, strategic bombers) etc. As you can imagine, pieces are currently being moved around in the region.

The real question is, will China and the U.S. work together to find a resolution? If either party ignores the concerns of the other, and takes unilateral action, a chance of an even worse conflict could arise. Therefore, a regional coalition of the willing is paramount in tackling the belligerent regime in Pyongyang.

The problem is, the North Korean problem is metastasizing. A decade of trade sanctions did limit its growth, yet, only up until very recently did China cease importing North Korean coal. China has started to shift away from being the enabling neighbor it has been for decades. China may soon cease oil exports as well. I ask the question. Has North Korea finally run out of friends? It has no future in its current state. Will it give in peacefully, or will it continue to provocatively wave its nuclear wand in the region ? I guess we can not know until we are at the precipice of war.

If North Korea were to play its military hand first, it would suffer an enormous response, which would undoubtedly usher China and America into its borders. Political capital would have been completely spent. The North Korean regime would be ticketed for destruction. Missiles would rain down on military installations, troops would be flooding in from China. The South would battle to maintain its border. Seoul could be on fire, and Japan would find out how credible the nuclear threat really was (hope your AEGIS destroyers work). Or, the North continues to saber rattle, and the stalemate continues until the North waves the white flag or the U.S loses patience and goes in alone or with allies and friends in the region.

If China has actually ceased its tacit support of the regime, and is ready to uninstall Kim Jong-Un, this may be enough for North Korea to fold under pressure.

Either way, stay tuned, as the North Korean problem isn’t going anywhere.

Please feel free to comment.

Regards

D.S

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Economic Reality: Neo-Keynesian Experiment on Death Bed

“Ignorance is refuge from reality. Willful ignorance is refuge from reason”. – Anonymous

INFANTILE OBSESSIONS WITH FAIRNESS

Wealth and income inequality are neither abnormal nor abhorrent. The tug of war between labor and capital is normal and equilibrium seeking. Excessive regulation distorts the mechanism.

Microcosm of the Future: Hijacking Evolves into High-Tech?

If the Insurance industry gets behind it, then it looks like a forgone conclusion. I’d like to point out that a hijacking need not be limited to a low-tech, pistol at pilot’s head type of hijacking, it could also be unauthorized remote access of the plane.

The downside of an automated, internet centric machine, is that without the option of a manual override, you are entirely at the mercy of the software. On any given day, it may seem the only way to mitigate human error, yet, even though humans are not perfect, it is hard not to imagine a scenario where a plane, automobile, or another robotic system contracts a virus and wreaks havoc. Obviously humans have intrinsic mental/ideological viruses. Organizations such as ISIS, or other suggestible fanatics throughout history are obvious proof of this. Yet, at least humans have their own ability to somewhat filter out what is basically a crazy idea. It may take weeks to indoctrinate suggestible minds. Conversely, a computer virus could outright takeover the system. I think totally relying on automated systems is a disaster in the making. The more dependent we are on robots, software etc, the less independent we become.

Do humans require a car that drives autonomously, with obvious vulnerability to remote access?  A to B type driving from apartment to grocery store, for example, may well be a different matter for city dwellers. The busy or intoxicated person would prefer to be chauffeured around in a driver-less car I suppose, but that is not the future I desire. I am not against others having the technology, I just hope that low-tech vehicles are not outlawed and or made obsolescent. Sigh.

Has the technology we have created allowed mankind to transcend the mental shackles of our past and biology, or are we on a loop, just with more destructive technology. Not all countries are the same of course. From the U.S.A to Afghanistan, Switzerland to Fiji, we are different. Cultural differences have managed to offer visceral alternatives to each other. Tangible contrasts to compare our successes and failures. Yet we still persist to adopt ignorance over knowledge, hate over love, violence over peace. As the supposed dominant and intelligent species living in this biosphere, on this planet, it seems self evident that we need to educate, love, think. This is a path we can take, step by step, as individuals. If the oft spoken cliches; lead by example, be the change you want to see, can somehow take hold and bear fruit, then perhaps humanity has a chance, at least for a few more centuries. If we allow ignorance, hate, and violence to pull the world into chaos and destruction, we will indeed set ourselves back, and potentially never recover.

I am not interested in living a hive-mind, drone-like existence. Picture a city, with its requisite plantations of “workers”, busy making themselves obsolescent. I have no desire to be citizen number #491993-49 of sector XYZ123. To be a sedated shell living in a dystopian future, efficiently shuttled to a station where the worker performs a function until finally the job has been made obsolescent. Without some type of enlightenment permeating the masses, extricating humanity from our drug/media induced quasi-hypnosis, we will continue to bumble along this new tangent of technophilia, slowly but surely replacing ourselves, rendering ourselves less relevant, less capable, inert.

The current rotten economic, monetary, financial system has predominantly and enormously benefited a very small percentage of people. The 1% vs the 99% sounds catchy, but that is still an illusion. Within the 1%, is another 1%. This is called the 0.01%. It is totally bizarre. Of course, though, no system is perfect, no system will benefit everyone symmetrically, yet I find the problem to be systemic, by design.

The bizarre practice of manufacturing goods to be obsolescent and poorly constructed, has immensely wasted resources and driven pollution. The consumer with few choices economically, will likely confirm the behavior and purchase the cheap and poorly made item. This is the problem. We could produce a decent pair of shoes. Do we need cheap shoes from a country far away, eroding traditional workmanship, quality, jobs, intrinsic knowledge, all for the sake of getting a cheaper pair of shoes. We don’t need to make a few people in society super rich. That is neither important nor vital for society. It is inimical to society’s interests. In this system we have created, a few will manage to dominate and extract a vast amount of wealth. It is not even sustainable. Once the inequality reaches critical mass, a revolution occurs. Oppression feeds revolution. The revolution is destructive. Some of us are unhappy and desire more. It doesn’t matter how rich we become, it will never be enough. To amplify this, others must become poorer. This arrogance is destructive. We live briefly. Is our focus to be on standard of living or quality of life. Is there a trade off, or can we have both?

If the aim of the organization is to provide shareholder value (efficiency), then perhaps we will continue to seek ways to cut costs, be fraudulent, corrupt, and deny people insurance cover or medicine when they are eligible?  How about we provide goods and services with the emphasis on quality, workmanship, durability. Let profit not be the motivating factor. Of course, this can only happen with regulations. Perfection is not obtainable, but worth striving for. If an inferior plastic bag can replace a traditional bag made of flax that was once produced domestically, because it is cheaper, is that really progress? It was cheaper to buy, but it is also not biodegradable, it was not made on the island, it didn’t provide jobs, it didn’t keep the tacit knowledge local. The free market failed. Can the invisible hand produce quality and forget about shareholder value? Can a single organization? We need not satiate the insatiable greed of mankind. Profit need not factor into the price of a pair of shoes. A single organization dedicated to producing shoes at a lower cost to the environment (shoes that last 10 years instead of 6 months etc) is greatly possible. The same can be said for clothing and other textiles. Does this mean that privately owned producers will go out of business. Perhaps, or they will become competitive. The world doesn’t need endless consumption of low quality goods. This may please quarterly profit projections, but again, not environmentally sustainable. The state of the economy need not be measured by current metrics. What good is GDP growth if the masses are getting poorer and their quality of life diminishing. Jobless GDP growth is more likely. Automation. Rising unemployment. Software and robots displacing humans. This is the current trajectory. Debt. Interest payments. Tax. Inflation. Currency depreciation. Quantitative easing/debt monetization. Central bank balance sheet expansion. Collapse. Oops. Where to next? IMF, please lend out some Special Drawing Rights (XDR) fiat to restart the global economy. We want to do it all over again!

If robots and software are to continue replacing humans, we will get the extra leisure time promised to us in the textbooks, only we won’t have much money to enjoy it. Is utopia obtainable for the masses? In a perfect world, it is possible. We have the resources, the intrinsic and extrinsic knowledge, the labor required to achieve a utopian world for humanity. Idealism is a wonderful thing. Back in reality, however, capital has won. Labor has become increasingly less relevant. This is the trend.

SOCIAL ENGINEERING AND THE FUTURE

The final revolution is already upon us. We are descending into oblivion as a species. Humanity seems intent on walking down our historical paths of ignorance, violence and greed. Although our future is not entirely futile, in reality there only need be 10-20% of the population, the percentage highly suggestible and vulnerable to propaganda, to become mobilized and incite enough hate and violence to persuade the moderately suggestible and ignorant majority to welcome an ever expanding police state.

The willfully ignorant and fearful masses have passively ensured that forced medication, incarceration, and an ever widening net of poverty are what humanity has to look forward to. Do we handover our humanity to technology, do we place our faith the state? Is that how we will reap the rewards of the final revolution? Will robots take care of our old, raise our children, police our streets, fight our wars, farm our crops, pour our drinks, suck our cocks, and become the “new” slaves that hypothetically never revolt? Laughably while billions of humans live lives of frivolity? No. We are not part of the final equation. We are not needed. Not even in the form of a slave. All we have yet to do is set the final stage of our obsolescence.

GET IN THE GAME

Ideally and realistically speaking, we need to develop awareness in ourselves and in others. To slowly replace our distorted perception of reality. Less “did you see what happened on Game of Thrones”, more “did you read the analysis paper called ‘WHICH PATH TO PERSIA, OPTIONS FOR A NEW AMERICAN STRATEGY TOWARD IRAN’, written by The Saban Center for Middle East Policy and The Brookings Institution”. This is the reality I speak of. Taking interest in the “real” Game of Thrones.

This prison ship we live on is accelerating toward oblivion. It seems the worse things get, the more people retreat into cognitive dissonance. Ignoring the disease only makes it worse. Ultimately, it needs to be addressed. What will you do?

 

PS – If you disagree, please leave comment. Thanks.

Perfect moral hazard – Privatizing gains, externalizing costs

“All the world’s a stage, and all the men and women merely players.”

What version of capitalism places zombie financial institutions on life-support using super cheap liquidity pumped into the zombies’ veins via central banks?

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The Long and the Short of it

So, the major banks, central banks, and government haven’t been prudent. Hell, they haven’t even been incompetent. In my opinion, they have been about as responsible as a group of children guarding a room full of other peoples candy. The oversight being the children’s parents, whom only bother to look in periodically, and then only occasionally fining each child 5 pieces of candy for every time they were caught misappropriating the candy, just so they appear to be doing their job.

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The banking system a few years ago

When the banks ran out of candy and could no longer hide it, the government burst into action to keep these failed institutions alive by filling them back up with candy. The great bail out of 2008. The government simply used the candy taken from the people, to keep specific candy shops in business. They were just to big to let fail. So it seemed like business as usual. All was well again in the land of cognitive dissonance. Until… Cyprus ran out of candy. Out of nowhere, candy vanished from Cyprus, and their major banks were looking likely to fall. BitCandy rose in value suddenly, and candy stores went on holiday. People were disenchanted once again, but this time it was different. The concept of candy haircuts was posited in the media for all. It would only be about 1 or 2%, the Cypriots were told. Only the final figure was officially 47.5%. although in reality it may even be more. Depositors in Laiki bank and the Bank of Cyprus have been taken for a ride on the chicanery train. That was the time for the Cypriots to disembark the system, take control and purge their system of this toxic candy, and repopulate their government. I guess they shrugged it off. As, the haircut was only for uninsured deposits over 100,000. Nobody went hungry this time.

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The banking system today, circa 2014

Today it’s better than ever. Citizens of some European countries have become enlightened, and forced their respective governments to concede that their golden chocolate bars, that they had faithfully entrusted with the United States of America and Great Britain, had undergone rehypothecation, and been sold to someone else, and someone else, and someone else again. The game of musical chairs must eventually stop. Ten players and one chair. Who will be left with the golden chocolate bars, who will be left with IOU’s? Golden chocolate in all shapes and forms, is being sucked into Switzerland for refining, Eastward bound. The Chinese have a love affair for golden chocolate, and like to put it into deep storage. The Indians prefer to wear it on their body for adornment. Europeans and North Americans prefer to have their gold rehypothecated and sold, and vanished, and gone to someone else. I would have to say, with all the economic uncertainty, and endemic financial manipulation, I would be getting my hands on these golden chocolate bars, and as many as I could carry. Not just for capital gain and the short term, but for the purpose of owning a true and tested form of money. If the supply of gold doubled each year, it would eventually become as common as sand on a beach, and nobody would be interested in it. Apart from its metallurgic qualities, if nobody were to accept it as a form of payment, it may as well stay underground. But that is not the case. In fact, Asia seems more than happy to accrue physical, and the price is still low. Why?

WealthEquality

Deleveraging of the toxic debt candy

It is no secret that major Western banks are leveraged to the eyeballs, are insolvent, and along with central banks are inflating financial assets and buying securities, keeping the game of musical chairs going for the top 10% or so who own stocks and these assets. The “foodstamp” zombies are growing concurrently too. The wealth divide is wider than ever. So when the music does stop, as it inevitably does, what does the picture look like? For the poor huddled masses, the picture looks fairly similar. For the working poor, they will join the foodstamp zombies. I’d say that most will be in for shock. Especially the rich. The 1% or so will probably be fine. They will have their wealth safely tucked away from inflated and dangerous paper assets. Gold, land, fine art. Traditional avenues of wealth preservation. Probably they will expand their wealth, as they buy up assets and land at rock bottom prices, when the rest of the population is selling and heavily disenchanted. Oh well. Better luck next time.

Ignorance is Futile

If the truth scares you, if you prefer ignorance to knowledge, distraction over reality, convenience of CNN soundbites over your own research, then a FEMA camp is waiting for you. Call them today and check if they have room. I’m guessing their capacity is enormous.

Below is a link to the official continuation of the National Emergency Act. Obama has renewed it every year since 2009. He will renew it again within the week. Guaranteed.  He signed the PATRIOT Sunsets Extension Act of 2011, in May 2011, which extends key provisions for a few additional years.

http://www.whitehouse.gov/the-press-office/2012/09/11/message-continuation-national-emergency-respect-certain-terrorist-attack

http://www.govtrack.us/congress/bills/112/s990#overview

The National Emergency Act, coupled with the Patriot Act, gives broad legal support (not moral support, I felt I must make a clear distinction here), for government agencies like the National Security Agency, Federal Emergency Management Agency, Department of Homeland Security, etc, to bypass some of your constitutional rights. If you have wondered how on earth previous administrations have been getting away with all this war, spying, domestically and abroad, then you need go no further. One fateful day, the 9/11 tragedy changed the rules of the game overnight.

If you believe the official story of 9/11, due to your fragile mind being unable to accept the horrible truth, and prefer the comfortable and convenient deception, that fear is your true motivation, and you quell that fear with ignorance, then your future looks dim. There are so many holes in the official story. Have you done your research?

Why do people avoid the big picture? We know we can’t escape danger by burying our head in the sand, yet that is what the majority of people are doing, figuratively speaking. If we wear ignorance as a shield, then a gulag is the only true place we belong. We must fight for freedom and truth. We must summon the strength to face it head on. Ignorance is futile.