Freewheelin'

Most nights, I have an idea or a plan for a blog. Not tonight. Tonight, I just have the urge to write, but about what I dont know.

Frankly, I was surprised by the strange and twisted debate brought up by "Milk and Melamine". It looks like there some opinions out there, I am glad they found a place to be heard.

Even I have some opinions of my own. The first of which is something like this: People in glass houses shouldn't throw stones. We can look down at China and say--OF COURSE you shouldn't trust your milk poisoning companies--cause they only deal in profit OF COURSE the government should have been regulating and testing for Melamine GOOD THING we Americans have it civilized with our free market system that doesn't need government intervention! wait I forget about.....

700 billion buyout ...caused by...
lowered interest rates....causing....
mass influxes of cash....pitting....
wallstreet vs mainstreet...then came
mccain to the rescue....because....
congress has to fixit....otherwise...
economic recession....after the...
banking meltdown....says the...
chicken little and the sky is falling news report every 10 minutes

"If China is willing to sacrifice its own children for profits, why wouldn't they do the same (or worse) to their exports?" I like this comment, but it could be easily rephrased:

"If America is will to sacrifice family mortgages for profits, why wouldn't they do the same (or worse) to international lending?" The ripple of the Wall Street implosion is spreading the world over....Notice that dollar slipping some more?

This whole Wall Street buyout to me smells something awful. But lets get a basic understanding of the facts as I have been able to deduce.

If we dont buyout Wall Street the consequences are stated by S. Pierce (an old friend):

"The alternative is the 1930's, a massive contraction of credit that sucks the growth out of the economy and causes a rapid contraction (depression). It's actually not too far away, as the system has been allowed to fester and grow unfettered due to the ridiculous mantra of "deregulation".

If the system were allowed to fail, as many are in favor of, businesses would run out of money, consumers would lose jobs, and the problem would become a feedback loop.

Even now you're seeing it. Borrowing costs for businesses have skyrocketed, because nobody wants to lend money, those costs are either passed onto consumers, or absorbed by the company through cost cutting (lost jobs). This, in turn, feeds back into the problem.

You see, this isn't as much about bailing out greedy bankers, but about propping up the system. After that's done we need to put back some of the regulations that would be prevented the problem in the first place."

Also not mentioned is that fact if we due buy out the companies, our national debt soars up another trillion dollars. And then the government has to issue more bonds---and then the dollar slips just a little bit lower still. Something has to change otherwise we will be 1:1 with the peso and the yen soon.

Once we do this, we set a precedent. Every time Wall Street is in trouble, there is going to be someone looking for the government helping hand. Government Bureaucracy will step in and issue more laws, more regulations, and more headaches. A few cycles of this, and the free market would be no more.

But then again economics is so unbelievable complex, that I cant find two experts that seem to agree in the news reports. So everything I say is probably rubbish. Have a good night.

Milk and Melamine

Recently, I am fascinated by the milk scandal now happening in China. It literally speaks volumes about their business practices, government ideology, and their economic revolution.

For those who have glossed over this recent news, let me give a short run down about the controversy. In an effort to increase profits out of the very tame industry of milk farming, the milk suppliers sought a method to water down the milk, without alerting the consumers or the government. Watering down milk is an old practice, so it is commonly tested for by measuring the amount of protein in a given volume. Very normal, boring chemistry. But the suppliers to the milk companies decided to use a simple trick--add an industrial chemical called melamine to the milk to mimic the protein (seen in my picture above). Now they can sell 100 liters of milk for 200 liters, by adding some water and a pinch of powder.

Now melamine is normally used to make plastics and fertilizer. Not extremely toxic, but nothing you would want to eat either, since it can shut down the kidneys by forming kidney stones. Now what strikes me so dumbfounded is the sheer carelessness for your own people, your own children. You could not have a found a better way to poison children in the Chinese culture. China, by history, is not much of a dairy consuming society. Just look at a Chinese menu next time you stop for Sweet and sour chicken. So the majority of those affected are those ingesting milk products like baby formula. Some 13000 infants and children are now hospitalized due to stones or kidney failure so far. Then you have the sheer logistical problem of testing the mass of panicked mothers and their babies from a country with 1.3 BILLION people.

Two things are very surprising about the whole story. The government was alerted to the problem in January. It wasn't until Sept. 11 that they alerted their own public. So much for the communist society where all people are accorded the same worth and respect. The astounding fact is that not one, not two separate companies were found, but 22 Chinese milk producers were found to have this industrial poison in the milk. When 22 companies agree on the same protocols, we have a name for that in the scientific literature--STANDARD OPERATING PROCEDURE.

Its the whole idea of history repeating itself, like the meat packing plants described in Upton Sinclair's The Jungle. Run away capitalism for unheeded and growing companies. A year or two ago it was melamine in the toys and food products, before that it was formaldehyde. I just wonder....Whats next?

Kisses to you.

This picture was taken moments before I lost my glasses for the umpteenth time in my life. I think I might need to buy old lady chains. At the optician, I found my my prescription steadily getting stronger. Maybe its time for LASIK afterall. Or, I just will stare into the laser pointer some more and hope for the best.