SPENGLER: Don't Cry for ME-Argentina

[unhappycamper]

http://atimes.com/atimes/Global_Economy/GECON-01-270114.html



SPENGLER: Don't Cry for ME-Argentina
By Spengler
Jan 27, '14

I wish I had a nickel for every prediction of social unrest in China that I've read in the past year. Apart from the risk of stampedes at shopping malls before the Lunar New Year, China is tranquil. Meanwhile there are several dozen dead in Cairo overnight, central Bangkok remains under lockdown, street protests are out of control in Ukraine, Argentines are looting stores during power outages, and the stink of tear gas still overhangs the public squares of Istanbul from last year's demonstrations.

There is social unrest in a lot of places other than China, and it goes together with the collapse of local currencies. The Chinese aren't rioting because they are gainfully occupied and their wages are rising 15% to 20% a year. Other so-called emerging markets are in trouble because they are teeming with people who have nothing remunerative to do.

Most of the world's people farm for a living, but we need perhaps 1% of the world's population to grow crops at American standards of productivity. The rest are marking time. We will need less unskilled factory labor as automation takes hold, which implies dire consequences for most of the farmers who managed to get to a city and get an entry-level factory job.

Turkey was supposed to be the poster-boy for prosperity through Muslim democracy. Instead, it has become an object lesson in emerging market mediocrity, and its currency is collapsing because it pretended to be something better than that.




Turkish Stock Market ETF, Past 12 Months




Turkish Lira to US Dollar




Argentine Peso to US Dollar




US Labor Force - High-School Graduates

[dixiegrrrrl]

1. He is blaming the result of the problem for the problem.

If you refuse to pay people liveable wages, they will not have any money to spend to keep the economy going.
Henry Ford knew that, and was famous for solving the problem, locally at any rate.

There are still jobs to be created in alternative energy, building decent schools,providing decent social services, etc.
Even if we GAVE people 1/10th of what the top 1% make, we would be stimulating the economy.

[bemildred]

2. These are matter of faith, reason will not convince them they err.

Money is a religion in the USA, and it has its dogmas and sermons and catechisms.