Daily Archives: May 24, 2010 @ 1:32 pm (Monday)

quotes…

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>   
>   (email exchange)
>   
>   Two quotes from a compilation of Einstein’s writings and speeches
>   that I thought you’d enjoy:
>   

1) “The gold standard has, in my opinion, the serious disadvantage that a shortage in the supply of gold automatically leads to a contraction of credit and also of the amount of currency in circulation, to which contraction prices and wages cannot adjust themselves sufficiently quickly.” (1934)

2) “If we could somehow manage to prevent the purchasing-power of the masses, measured in terms of goods, from sinking below a certain minimum, stoppages in the industrial cycle such as we are experiencing today would be rendered impossible.” (1934)

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US Plays Down European Crisis but China Worried

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Yes, China is worried- they own the national govt paper a part of their currency reserves

US Plays Down European Crisis but China Worried

The United States suggested Europe’s debt crisis would have minimal impact on global growth, but China took a more pessimistic view, warning it would impact demand for its exports and other regions would suffer too.

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Spanish banking issues

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The end game is unfortunately unfolding as Spanish bank losses become Spanish govt losses.

Deposit insurance is only credible at the ‘Federal’ level, not the ‘State’ level.

If the ECB had to write the check the issue would be inflation, but not solvency.

The euro govts can no more fund bank losses than the US States could cover bank losses.

And the euro zone response of spending cuts and tax increases only makes matters worse.

From inception, the euro system has been exactly this kind of accident waiting to happen.

CajaSur Seizure Marks Change for Spain’s Ailing Banks

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BP issues

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bp issues

I now fear something far worse.

BP appears to have delayed measures to plug the well and stop the damage.

Instead it appears they have taken measures to salvage revenues.

They inserted a siphon tube that initially allowed them to load a portion of the escaping crude onto surface ships, presumably to be sold.

Instead of inserting a siphon tube, could BP have deposited aggregate (rocks) or other materials (steel rods, etc.) to start filling the hole with something ‘heavy’ that could obstruct the outward flow?

In fact, would not something as simple as an armada of barges filled with aggregate dumping their fill over the open pipe have built a mound over it that, when it got high enough, would completely stop the leaking crude?

Right from the beginning, could there not have been an emergency call to action for the US Navy and Coast Guard, as well as privately owned ships, to begin the parade of barges needed to continually dump aggregate over the site?

There has been no discussion that I have seen along these lines. Instead, public trust, as low as it may poll, remains high enough for it to be unthinkable that BP could have made the decision to attempt to siphon some crude rather than immediately take measures to plug the well based on narrow corporate cost/benefit analysis that showed the clean up costs of leakage that could have been stopped to be less than the present value of the well if it could be salvaged.

Warren Mosler
www.moslerforsenate.com
www.moslereconomics.com

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