27 August 2016   Leave a comment

The US and China are both facing the same economic problem: the move toward high-end manufacturing that will require far fewer workers than previous industrial processes.    These advanced processes will continue to generate great wealth but few jobs, and the competition for markets among those countries that can develop these processes will be fierce.  No country  will be able to avoid taking all necessary steps to secure markets, such as currency manipulation, selling products below costs, and imposing regulations that will exclude some competitors, and those steps will likely lead to incredible friction.

Image result for industrial robots

The world is confronting an unusual circumstance: many of the world’s sovereign states are issuing bonds with negative interest rates.  Essentially, investors are so concerned about future economic growth that they are willing to pay sovereign states to protect their money.  A clear signal that a country is regarded as a bad economic risk is a rising interest rate–the country has to pay investors to buy its bonds because the investors are afraid that the country might be unable to repay its debts.  By that measure, Portugal is in serious trouble since its bonds now command more than a 3% interest rate.  We should keep an eye on what happens in the European economy as a whole by watching what happens to Portugal.

The uranium used to create the bomb dropped on the city of Hiroshima by the US in its war against Japan was mined in what was then known as the Belgian Congo and now known as the Democratic Republic of Congo.  The mine was called Shinkolobwe and it was also a casualty in the bombing of Hiroshima.  The miners worked in primitive conditions with no protection against the radioactivity of the uranium (it was 65% uranium, significantly more concentrated than the 1% ore in the US and Canada) and the miners suffered grievously.  The significance of the mine was one reason why the US and the USSR competed so vigorously in the liberation of the Belgian Congo in 1960.

Image result for shinkolobwe uranium mine


Posted August 28, 2016 by vferraro1971 in World Politics

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