Alternative Visions

Alternative Visions- The Biden-McCarthy Debt Ceiling Deal

Dr. Rasmus describes the likely terms of an imminent debt ceiling deal about to be announced this weekend. Reportedly ‘caps’ will be imposed on non-defense social program spending in a two year agreement, while Pentagon spending will rise 11% in the 2024 fiscal budget and an undisclosed further rise in 2025. Some of the possible details are considered: left over Covid funds, student debt cancellation, IRS hiring, work requirements to receive food stamps and Medicaid, fossil fuels licensing and environmental reviews. The NY Times estimates a 18% cut in non-defense spending while Pentagon spending (and higher still total Defense spending) rises. No tax increases to pay for the Pentagon hikes, especially no changes in Trump’s $4.5T 2017 tax cuts. Meanwhile, the CBO estimates failure to reverse the Trump tax cuts will result in a $2.7 trillion boost to the US deficit and debt, now at $31.4 trillion. How real is the US debt default if no deal? And what are some constitutionality issues

Alternative Visions - The Debt Ceiling Negotiations Dance

What’s behind the debt ceiling negotiations?  Is June 1 the real deadline date? Dr. Rasmus describes what’s happened to the national debt since 2000 and the causes for its rise from $4T to $31.4T and why interest on the debt is projected to accelerate rapidly to nearly $1T/yr by end of this decade.

How much have the declining share of tax revenue contributed to the annual US budget deficits and thus the national debt? War and Defense spending? Social program spending? Rasmus reviews the various fiscal policies since Covid—3 Covid relief spending plans in 2020-21 followed by 3 business subsidy and investment plans in 2021-22 by Biden.

Why the debt ceiling negotiations are really a cover about how much social program spending to cut in the next federal budget beginning October 1, 2023. Once the debt ceiling is raised again, what’s the prospect for further budget deficits and still more increases in the US national debt?

Alternative Visions - Inflation USA: Analysis of Latest CPI and PPI Reports

 In this week’s show Dr. Rasmus takes a ‘deep dive’ into last week’s Consumer and Producer Price Index Reports. Conclusions: Fed record rate hikes have shaken out demand driven causes of inflation but further gains will require even higher interest rate hikes. March CPI at 5% has improved only to 4.9% for April. Inflation reduction has ‘stalled out’. The reduction thus far has impacted energy and some food—i.e. what’s called ‘headline inflation’ but has left ‘core’ inflation (all rest) virtually unchanged at 5.5% for most of past year.  Producer prices (that eventually drive consumer prices) are actually rising again. Energy (gasoline) costs and travel costs will again rise in coming months while business unit labor costs will rise due to collapsing US productivity and continuing price gouging by monopolistic corporations (ex: bakery goods) and rents hikes by landlords.

Alternative Visions - US Economic Updates: the Fed, Banking Crisis, and US Productivity & Jobs Reports

The show begins with two questions: Will the Fed’s recent interest rate hike last week be its last? Has the Fed failed in its inflation objective, given the continuing rise of prices in the US services sector? Discussion then turns to the latest developments in the regional banking crisis with last week’s failure of First Republic and new banks new experiencing stock price collapse: PacWest Bancorp, Western Alliance and First Horizon. Rasmus explains why the banking crisis is not over and compares the current bank instability with the prior financial crisis in spring-summer 2008. Why the current bank instability may prove even more serious than 2008. The show concludes with a discussion of 2 key reports issued the past week: the US productivity report showing a decline of -2.7% for Jan-March 2023—the 5th consecutive quarter fall and the longest decline since data began in 1948; And last Friday’s most recent jobs report for April showing 253,000 jobs and the unemployment rate continuing to drop. Rasmus explains why the Fed’s major focus on the JOLT (10m unfilled jobs) statistic of 10m is grossly inaccurate with half of which ‘ghost’ jobs

Alternative Visions - De-Dollarization (continued) + Banking Crisis Updates

 Dr. Rasmus picks up the discussion on the global de-dollarization trend from last week, focusing on the Congressional Budget Office’s April Report “The U.S. Dollar as an International Currency and Its Economic Effects” analysis—i.e. the official US govt view of the trend.  How accurate is the CBO Report’s conclusion that the Euro poses no threat to displace the dollar (and actually will decline) and that the threat from the China ‘Yuan’ currency is currently minimal, will rise only gradually, and even if China economic growth significantly exceeds the USA’s, the use of its currency is held back by China policies. CBO identifies 3 ‘wild cards’ that may accelerate the dollar’s decline (as both reserve and trading currency): world war, severe financial crisis in US, shift to digital currencies. Rasmus critiques the report by ignoring current developments like US sanctions and war in Ukraine driving a shift from the dollar to a expanded BRICS-based currency. The show also addresses the latest events in the US banking & financial system instability, specifically today’s announced failure and coming govt bailout of First Republic bank, and the growing instability in the US commercial real estate market.

Alternative Visions - De-Dollarization Trends + US Economic Update

Dr. Rasmus reports on several latest data releases showing growing slowdown of US economy: latest housing states -2.4%; manufacturing PMIs contracting faster; and US leading economic indicators down -7.8% year on year, the worst seen since 19981 recession. Second half hour of the show begins the analysis of the emerging decline of the US dollar, a key lynchpin in the US global economic empire.  The forces driving up the value of the dollar in the short run recently and the emergence of longer run developments undermining the dollar as global currency are discussed. Distinguishing between the $ as dominant global trading currency and as global reserve currency. Why $ as reserve currency has thus far fallen from 80% to 60%. And as trading currency to 60%.  How US sanctions on Russia is driving China and expanding BRICS toward alternative currency solutions to trade. General view of the negative implications for US economy in longer run. Why the $ will continue to decline as global currency. (Next week: A deeper look at CBO’s just released report in April: “The US Dollar as an International Currency and Its Economic Effects”)

Alternative Visions - US Economy & Global Empire Weakens + The Military Situation in Ukraine

 Dr. Rasmus reviews important news events of this past week: US jobs report, Chase Bank CEO, Jaime Dimon’s letter to shareholders, OPEC announcement of big production cuts, China’s brokering of deal between Saudi Arabia and Iran, expanding trade using China Yuan currency instead of US dollars, and Macron’s visit to China. Following discussion of these events, Dr. Rasmus reviews the military strategies and status of the war in Ukraine during its first year. Where will the announced new spring 2023 military offensives by Ukraine and Russia likely occur? How the historic ‘principles of war’ (concentration of forces, mobility and surprise, reserves, internal lines of supply, etc.) have played—and will continue to play--a role in the war.

Alternative Visions - Artificial Intelligence vs. the Working Class

Today’s show begins with discussion of several reports issued this past week: first, evidence by the Wall St. Journal that the 11m open jobs reported by the US Labor Dept’s ‘JOLT’ statistic may be wrong; second, why widespread media reports that the banking crisis is now stabilized are wrong; and, third, why weekly unemployment benefit claims per a Bloomberg News report represent only 25% of workers actually newly unemployed each week. Dr Rasmus then discusses a fourth report this past week by Goldman Sachs bank research indicating that up to 300 million jobs will be negatively impacted (lost jobs or hours of work reduced) as a result of the accelerating implementation of Artificial Intelligence by businesses. Rasmus explains fundamentally what AI is, its enabling technologies, and how AI will destroy millions of simple decision making jobs by eliminating many occupations or sharply reducing hours of work in those occupations. Rasmus reports 1300 tech experts this past week (including Musk) issued a written warning calling for a moratorium on AI and ChaptGPT. But AI is too profitable and the AI tech train has left the station. The show concludes with discussing how AI is critical for advanced military weaponry and is much of the basis of US attack on China’s tech industry today

Alternataive Visions - The Fed’s Role in the Emerging US Banking Crisis

Dr. Rasmus explains how the Fed is ultimately behind the current banking crisis. Distinguishing between causes of the crisis that are ‘fundamental’, ‘enabling’, and ‘precipitating’, Dr. Rasmus explains how the Fed’s pumping $9T of free money (lowering rates to zero in the process) since 2008 created the recent bubbles in Tech and Cryptos that burst and is now bringing down regional banks exposed and over-invested in those sectors. Fed is the ultimate ‘fundamental’ cause. Rasmus explains the ‘enabling’ and further contributing causes of banks’ mismanagement and government deregulation of the sector. And the Fed once again as the ‘precipitating’ cause as result of its unprecedented rapid rise in interest rates over the past year. How the US banking crisis has contributed in part to the simultaneous collapse of Credit Suisse bank in Europe and what’s happening their in its wake. How the current crisis in US and Europe is both similar and different from the crisis of 2008-10 (and 2010-14 in southern Europe’s banks). Rasmus notes how all this was predicted in his 2017 book, ‘Central Bankers at the End of Their Ropes’ and why it represents a general contradiction and crisis of capitalist monetary policy in the 21^st century. (for print version analyses of the banking crisis and the Fed’s role, check out Dr. Rasmus’s blog, http://jackrasmus.com for posting of recent articles on the crisis and the Fed)

Alternative Visions - From Silicon Valley Bank to Larger Banking Crisis?

 Dr. Rasmus gives an update on US and global banking instability in the wake of the collapse of Silicon Valley Bank a week ago this friday. What exactly happened at Silicon Valley Bank and is that process occurring elsewhere? What is the role of the Federal Reserve in causing and precipitating the crisis? Have the efforts of the Fed and big banks to staunch the crisis in the US regional banks in recent days working? Is the Fed solution in the short run the cause of future banking instability in the longer run?  What happened to bank regulation after Dodd-Frank Act? The three indicators of continuing bank instability. What’s happening at Credit Suisse bank in Europe? Similarities and differences with 2008 crisis. What does it all mean for future Fed rate hikes (next week) and Fed strategy to slow inflation? Consequences of the current banking crisis for US real economy and global economy. (Check out Dr. Rasmus’s print article on these topics this weekend at his blog, http://jackrasmus.com)