The Great Depression Online

Great Depression Online Archive Issue:

Being Reduced to Third World Status

Great Depression Online
Long Beach, CA
October 22, 2010

Inside This Issue You Will Discover…

*** When Duty Calls
*** China Embargos Rare Earth Elements
*** Being Reduced to Third World Status
*** And More

When Duty Calls

We were summoned for jury duty Wednesday.  We reported promptly to the courthouse building at 7:45 AM, took off our belt, passed through the security scanner, turned in our affidavit, and took a seat.  We sat, and sat, and when we were done sitting…we sat some more.

When we were released for lunch, we stepped outside into something completely and utterly unfamiliar…rain.  Soon after we discovered we had a hole in the bottom of our shoe.  Who knows how long it’s been there?  For it hasn’t rained in nearly a year – or longer.

The day was dreary.  A group of subdued winos congregated in the park.  We crossed Ocean Boulevard to our favorite pizza place – Buono’s Pizzeria – for lunch.  We browsed across an article in a local rag commenting on the 100-year anniversary of the Los Angeles Times building bombing by iron workers union members.

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After lunch we returned to the court house and sat.  We sat all afternoon.  At the end of the day we were dismissed.  We’d fulfilled our duty.

What a waste.  We’ll take a hectic day at the office any day.

Nonetheless, come to find out, while we were sitting, the world kept turning…

China Embargos Rare Earth Elements

We reported on Tuesday the budding trade war between the United States and China.  Since then we’ve come across reports that China, after recently embargoing shipments of rare earth elements to Japan, is now also embargoing them to the U.S. and Europe.

Popular Science reports…

“It was disconcerting last month when industry officials reported that China had halted shipments of rare earth elements to Japan.  Now, if reports in the New York Times are true, it seems the secret embargo has widened to include the U.S. and Europe.  Anonymous officials claim that Chinese customs officials quietly imposed the export restrictions on Monday morning, just hours after a top Chinese trade official denounced U.S. trade actions.

“Needless to say, this is a disturbing trend.  The alleged halting of shipments to Japan came on the heels of an international tussle over a Chinese fisherman who was detained after running into a couple of Japanese Coast Guard vessels in Japanese waters that China has long contested. Now the rumblings of this unspoken embargo on shipments to the West follow a round of intense political sparring and finger-pointing over trade and currency issues between the U.S. and China last week.”

What the heck are rare earth elements anyway?

Popular Science continues…

“The seventeen rare earths – elements like neodymium, dysprosium, and cerium – are crucial for the manufacturing of just about everything a modern economy relies upon, from catalytic converters on cars to portable electronics to computer monitors to advanced weapons systems.  They are not exactly rare but China has a lock on the export of refined rare earths, producing between 95 percent and 97 percent of the world’s supply, depending on whose estimate you believe. Without them, much industry in the West would grind to a halt.

“A recent report by the U.S. Government Accountability Office suggests that setting up an independent U.S. supply chain of rare earths would take fifteen years.”

What to make of it?

Being Reduced to Third World Status

Here at the GDO we believe this is a sign of things to come…where economic warfare is carried out with tit for tat retaliations. 

At the heart of the issue is the U.S. dollar…and China’s massive pile of them.  This gives Beijing massive leverage over Washington.  It subverts the autonomy of U.S. decisions makers.

Yet most Senators don’t currently have a clue as to just how far over the barrel they hang.  We suspect their learning curve will be steep and painful.  And the Federal Reserve, which accelerated China’s rise to economic power by artificially suppressing interest rates and encouraging a massive credit induced consumer spending binge, is still at it with their brain dead policies of economic destruction.

With a Federal Reserve like this, and a Senate like that, America’s being reduced to third world status faster than a three strikes convict gets thrown back in the calaboose.

We don’t like it one bit.  But getting worked up over it sure doesn’t do any good.  We just grin and grimace as the government impoverishes us alike.

Enjoy your weekend,

M.N Gordon
Great Depression Online

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