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This analysis by Julian Borger of the Guardian newspaper cites experts including former Defense Secretary Perry, on the problems with the Trump escalation of rhetoric with North Korea. The U.S. president promised "fire and fury" in a tweet he made, after the increased sanctions passed in the United Nations had already raised the pressure on the North. Perry says the president has no plans to back up what he says, which hurts U.S. credibility posture. The North Koreans responded by saying they are looking at an attack on the U.S. Guam air and naval base in the Pacific. Other experts warn of the danger of stumbling into something unprepared, and increasing the unpredictability with and adversary who is unpredictable to begin with. Wolfsthal, an expert from the earlier administration under president Obama, says the risk of escalation becomes very high because a miscalculation could take place. Rex Tillerson, the U.S. Secretary of State, tried to tamp down the stressful situation by saying that no action is planned. The U.S. insists it is open to negotiating, but the condition is North Korea putting the ending of its nuclear weapons and missile program on the table. The North Koreans have conveyed their opennesss to negotiate at a meeting in Manila, objecting to the U.S. "hostile" policy as an obstacle.    ...

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That the Tibet issue and suppression of Tibetans takes centre stage in the Taiwan election with both Ma and Hsieh candidates of the Nationalist party and the Progressive Democratic party both denouncing Tibetan suppression shows how far the Tibetan issue can change things around the world. What was once taken for granted that both candidates favored better relations with China is now in question. Hsieh especially has taken part in candlelight vigils for Tibet and a huge pro Tibet rally is being organized by his running mate. And Ma is backing off from his China position in the face of shifting opinion in Taiwan to the suppression in Tibet.

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Manufacturing output showed brisk growth in the first quarter of 2011, growing at four times the estimated rate for the overall U.S. economy. The PNC Financial Group estimates growth for the first quarter for the overall economy at 2%. This growth is supported by exports to developing countries in Asia and Latin America with the help of a weaker dollar. American companies are also increasing investment in computers, machinery and other equipment. This has increased growth and profits for companies such as Intel, Caterpillar, Eaton, and United Technologies. Manufacturing in the U.S. is rebounding from the sharp drop in 2008-2009. During the first quarter it increased at an annual rate of 9.1% according to the Federal Reserve. In the second half of 2011 manufacturing is expected to slow to about 4%, according to Manufacturer's Alliance/MAPI. So far manufacturing has shrugged off concerns about oil prices approaching $110 a barrel and the earthquake in Japan. This growth has pushed the Dow Jones Industrial Averages to 12453, the highest close since June 2008....

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Economist Paul Krugman points out the risks of a trade war in the tariffs announced for steel and aluminium by president Trump. Yet he accepts that he advocated stronger action on China's currency in 2009-2010 when the U.S. economy was weaker. In the past on the TPP agreement proposed by president Obama, Krugman said that it would have an insignificant impact as most of the gains on trade were already made. Here Krugman is critical of the language used by president Trump about trade wars being "easy."  This is taken out of context though as president Trump is saying that it is easy in the context of a country enjoying a $100 billion surplus with the U.S., because that country is going to have incentives to maintain a good trading relationship with the U.S. Essentially this means that the steel industry in the U.S. benefits. China also benefits as it closes many of the older steel plants that led to overproduction. This would reduce overcapacity in China's steel industry, a problem China's economic planners see as a priority. China already is making the shift to higher technology products and this process will be accelerated, as it puts less emphasis on steel and metals as it did in its earlier stage of development. As a result contrary to textbook economics this has the potential to be a win-win solution for the U.S. and China in the long run. So little was done under the Bush and Obama administrations to manage trading relationships with other countries so that the interests of small communities across the U.S. were protected from unfair trade- that Reagan administration trade expert Robert Lighthizer took up the cause of the U.S.,workers in these communities. Surveys showed U.S. public opinion also had shifted among educated, professionals and middle class on this issue by 2015, against unfair trade that hurt U.S. interests. Robert Lighthizer is now the Trade Representative for the U.S. in the Trump administration. Reports in the WSJ about the discussion within the Trump economic council, show Gary Cohn favored not imposing the tariffs on steel and aluminum. Lighthizer advocated the tariffs and was able to convince the president.  For Trump this presents a win-win situation, as a mild response by China -and other trading nations that have enjoyed a favorable situation in the past -with its huge surplus and favorable trading relationship with the U.S. would present a win for the president. Economist Krugman accepts this when he says tariffs in the current context of the trading field- that is more favorable to other countries- are not such a big deal, only the use of such policy that is likely to endanger world trade.  As in much of the debate that takes place this adds to the headlines today yet provides delayed and limited relief to communities across the U.S. devastated by world trade as documented by experts who studied trade patterns and their effect on regions across the U.S.  As the WSJ points out in one report the trade deficit itself may continue to grow under president Trump because of other factors. The U.S. dollar surged 8% during the last 2 years of the Obama administration with the economic recovery underway. With Trump's election win the dollar surged another 3%. This may play a bigger role in the direction of the trade deficit than the new steel tariffs announced by president Trump. Workers and unions matter. As TPP pushed by Democratic party president Obama was opposed by the unions, and by the auto industry (workers and auto companies) in the midwestern states which suffered a hollowing out in the last decade. A WSJ survey after the election showed Clinton received 56% support from union workers in 2018 compared to 65% for president Obama in the 2012 election. Some of that erosion in support may come from Obama's TPP stand fervently opposed by the unions and workers in the auto industry. A similar situation took place in Ontario with hollowing out of the auto industry in this large industrial state in Canada and led to the rejection of the Conservative government and election of the Liberal Party under Justin Trudeau. This lesson is so far lost in the Democratic Party's debate.     ...

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Rappaport of the NYT asks how it is possible that the U.S. Treasury is critical of the EU Commission's ruling that Apple pay back $13 billion in taxes because of its low tax rate of .005% in Europe, when Treasury is strongly critical of tax avoidance. The negligible tax by Ireland, base of Apple operations, is seen as a state subsidy not available to competitors. It also, as the EU Commission says, does not correspond to economic reality because the revenues are mostly made outside Ireland. An arrangement that is basically a strategy of tax avoidance. Today the leading candidates for president, Trump and Clinton, the major parties, and Congress, all are critical of tax avoidance strategies which deprive Treasury of much needed revenues. Restoring upward mobility is a priority today and programs to provide tution free access to public colleges, healthcare access, and infrastructure development, require public funding. Then why is the U.S.Treasury critical of the EU ruling? It is because Treasury sees this as money that should be coming to Treasury not the EU. However Treasury has failed to make this clear. The Financial Accountability and Corporate Transparency Coalition's Clark Gascoigne, calls it very ironic. And other experts say the money would not be coming to the U.S. anyway unless a low tax rate induces Apple to repatriate profits to the U.S. One expert calls it hypocritical. Senator Schumer says he agrees with Paul Ryan that tax legislation for a low tax rate for repatriation of profits back to the U.S. should be the next step, so that an infrastructure fund can be setup. Senator Levin and transparency advocates sees the EU action as normal and to be expected, as the anti-establishment sentiment today comes from such dealings that create the impression that the system is rigged in favor of some corporations. ...

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China's holdings of U.S. Treasury's reached $1.316 trillion in June 2013, the highest on record.

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With funding from the International Finance Corporation, Bangladesh, Pakistan, and other developing countries with shortfall in energy supplies are building offshore LNG terminals. The demand for LNG in these countries is expected to surpass the demand in developed countries.  IEA estimates show 90% of global LNG demand growth by 2022 coming from these emerging economies. Shortages of electricity in places such as Karachi and Dacca are the reason for the growth. Putting LNG terminals offshore is a viable and economical alternative. Petrobangla is completing a offshore LNG terminal by 2018 with IFC funding. Pakistan completed a floating LNG terminal at Port Qasim in 2015 for importing LNG from Qatar. This terminal alone covers 30% of the needs not met from domestic supplies in Pakistan for gas, according to Engro Elengy data.

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Indian Finance Minister Sitharaman gives the following remarks in parliament on the White Paper presented to the 18th Lok Sabha in January 2024, describing the dire condition of the Indian economy by 2013 with mismanagement and "big ticket" corruption. India's Finance Minister Sitharaman describes the situation in three key areas by 2013 that left the economy of India in a fragile state, with projects stalled, development delayed, and capital investment not taking place. She gives as 3 main points of focus- the state of affairs at Defense Ministry, at the Environment Ministry, and for Energy supplies. At the outset she says PM Modi had suggested the need for such White Paper by 2015 so that future generations would know what had happened in India that failed the country at a time when China had already joined the community of developed nations. The issues go back to the coal scandal when coal auctions had to be cancelled by the Supreme Court for irregularities, the misuse of state owned banks leading to a large increase in non performing loans, and the mismanaged Commonwealth Games under government before 2014.  Sitharaman told parliament this had the effect of national security being compromised, Environment as a Ministry becoming a bottleneck, and the leadership failing the country. In the military there was a critical shortage of ammunition and equipment. She cites the Defense Minister at the time having the attitude that independent India has had a policy for many years not to develop the border areas, as an undeveloped border was better than a developed border. She also says Ministry stated that 92% of the Defense Budget was used up and major acquisitions have to wait for the military. Following this Sitharaman cited the scandals of that period and leakages of funds that weakend the country and failed its people. She compared capital expenditures today of 6.22 lakh crores in 2024 thre times the number in 2013 of 2.53 crores. HAL now makes Tejas jets and helicopters in Made in India production. At the Environment Ministry the delays that were 86 days reached a high of 316 days by 2013 for approval of development projects, with 355 projects pending, the nation brought to a standstill with the effects of the coal supplies to thermal power plants being wholly inadequate and Coal India in poor shape. The root of this was said Sitharaman- what everyone in Indian business knew, the term "genteel facts," as the cost of business going up. She cites the changes since then of aiming for Balance and Development- Transparency, Online Green Clearance, Standardized Environment Impact Studies, A new Department of Climate change, International Solar Alliance 2015, Mission Life 2022, Green Hydrogen, Namami Gange, Rooftop Solar. India set ambitious goals at the last Climate change Conference.    ...

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The Chinese car market is changing fast, with domestic brands making up a larger share of the local market. In 2000 these domestic brands made up 18% of total sales, whereas in 2010 forecasts show this to be about 32%, with the share increasing in future years. In a rapidly growing market this did not make much difference, but with the market growth moderating to 7-8% in the next ten years from the heady 33% of recent years, the foreign brands such as GM and VW will not see the growth of recent years. J.D. Powers projects passenger vehicle sales in China at 19.2 million by 2017, with Chinese brands taking 45% of the share, in one scenario. Under this scenario foreign brands like GM and VW would see sales growth of only 5% in the next 7 years. The foreign brands are not allowed to own more than 50% of local operations. And their partners are making their own domestic brands. If Japan is a useful example, China's automobile companies will like Nisssan, Toyota, and Honda, proceed to penetrate global markets and become a dominant player in their local market. This has implications for GM, VW and Daimler....

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The Afghan School in Kabul run by former Taliban officials for girls and boys is one of the best schools in Kabul. Boys and girls attend chemistry classes together. Taliban officials see the schools as a bridge between madrassas and modern schools, and now accept the idea that as long as Islamic ideals are respected girls should go to school like boys. A former Taliban foreign minister- of the government the U.S. ousted under president Bush- now helps his daughter with homework. The changes in neighboring Pakistan where the government of Nawaz Sharif is pushing modern ideas and technological development are likely to push progress in Afghanistan as well- this happens as the U.S. withdraws from Afghanistan. The U.S. leaves a region hungry for progress as new governments pushing technological development supported by business emerge in Pakistan and India in 2013-2014. Unfulfilled promises of economic development are at the forefront of people's minds. A transformation as large as the shift from communism in China to state run market economy and the technological and economic transformation that followed is now at its early beginnings in the region. This shift would be from religious strife and socialist structures to a market economy....

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Prices can top $100 a barrel, some reasons why this is possible including depleted old field and lower production relative to demand. Important article by King and Chazan because of the experts from Aramco, IEA, and Schlumberger being all pretty much aligned in their view and reasoning that not much is happening in the way of oil exploration and production is happening to meet the extra demand from India, China and deveoping countries. Aramco expert cites older depleted oil fields with a 15 year production plateau, Saddad Al- Husseini estimates that price will go up by $12 for every million barrels a day in additional demand. Nobuo Tanaka the new executive director IEA thinks supply will not keep up with demand because many oilresource rich countries are not bringing in outside investors, and also because he is not sure there will be enough investment, skilled workers and technology to to get the oil out in a timely manner. Note there have been constraints in engineering and manpower shortages. And Andrew Gould CEO of Schlumberger says that 70% of the oil fields are over 30 years old, amd just in the last four years from 2003 the demand has increased by the production thats generated from North Sea and Mexico....

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The prices of soyabeans have fallen by half since July and corn prices dropped from $7.54 a bushel in July in central Iowa to $3.81 a bushel Oct 21. But fertilizer and seed costs could go up 40% for next spring's plantings. This year net US farm incomes will hit $95.7 billion up 10% from $86 billion in 2007 and nearly double the $58 billion of 2006, according to the Agriculture Department. In the boom years farmland prices shot up where prices jumped by double digits percentages for 4 years, now Purdue University economist predicts declining prices moderately for next 5 years. The farmers are being squeezed on both sides. Declining farmland prices reduces borrowing power. With the commodities boom prices of everything from fertilizer to harvesting combines went up. Prices of fertilizer are not coming down even as the price of oil has come down. So farmers are reducing the amount of plantings they will make this coming year which should lead to reduced farm production and lower agricultural exports. In the boom years swelling middle class in places like China increased demand for US agricultural products. But with the global crisis and reduced demand from other countries prices are coming down. ...

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India had 11 interest rate increases in 18 months, but this has not slowed the rise of inflation. The Wholesale Price Index is around 10%. Inflation expectations as measured by the Reserve Bank of India are around 12% in mid-2011.