Global Trade Sags; Striking Workers Shut Down Fuel Pipeline to Paris; US Backs Off Currency Manipulation Charges

With most eyes fixed on Quantitative Easing let’s take a look at some global macro events.

World Trade Sags Yet Again

In yet another sign of the slowing global economy, World Trade, Once Rising, Is Starting to Sag AgainTHE rapid recovery in world trade after the financial crisis appears to have slowed this spring and summer, raising new concerns about the global economy. Exports of many countries have stabilized at levels well under the peaks reached before the crisis sent world trade into a tailspin.

The accompanying charts show the dollar volume of monthly exports reported by 16 major countries since world trade peaked in July 2008.

The latest American figure is 10 percent below the peak. That compares with figures showing falls of 20 percent or more in most of Europe. For some interesting currency and trade charts that accompany the above article, please see World Exports Level Off.

Striking Workers Shut Down Fuel Pipeline to Paris

Reuters reports Fuel to Paris reduced as French protests escalate
Striking French oil refinery workers shut down a fuel pipeline supplying Paris and its airports on Friday and airport workers grounded some flights as protests mounted to derail an unpopular pension reform.

France’s airport operator played down worries of fuel shortages, but strikes at all of the country’s 12 refineries and fuel depot blockades prompted motorists to stock up on petrol.

Truck drivers also were set to join the fray as momentum built for a day of street rallies on Saturday.

The widening protests have become the biggest challenge facing President Nicolas Sarkozy, who is struggling with low popularity ratings as he tries to appease financial markets by stemming a ballooning pension shortfall.

“This movement is deeply anchored in the country,” CGT union leader Bernard Thibault told LCI television. “The government is betting on this movement deteriorating, even breaking down. I think we have the means to disappoint them.”

“We’re filling up at petrol stations to save the fuel we have in depots as much as possible,” said one trucker in Paris’s southern suburb of Rungis. “But if this carries on, we won’t be able to last too long either. We’ll have to go fishing.”

Polls show two-thirds of people oppose Sarkozy’s plan to raise the minimum retirement age to 62 from 60 and change the age at which people can retire on a full pension to 67 from 65.

The government has been at loggerheads with unions for months over the issue and five rounds of strike action since the summer have disrupted public transport and air travel.French Political Refugee Chimes In

My friend Bruno, a French political refugee has a few insights I would like to share. Bruno writes …
Hi Mish,

As a former French, now being a political refugee in Thailand, I would like to put things into context.

First, the retirement age is not automatically 60 in France. Only someone who has contributed to a pension plan for 40 years, or more precisely 160 quarters, can retire at the age of 60. Otherwise, the official retirement age is 65.

However, considering that French people have one of the longest life expectancy in the world, it is not rare to see a father and his son both retired, one age 85 or so, and the other between 60 and 65.

Thus, it is not surprising that the pension funds are broke. Until now, the government has been paying for the difference, thanks to a 8% annual budget deficit. But this won’t last and the day of reckoning is getting closer and closer.

As far as demonstrators are concerned, All of them belong to public companies: train (SNCF), metro (RATP), air traffic controllers, teachers and so on.

On top of that, they all benefit from special retirement conditions, which they are very afraid to lose. Most of them are entitled to retire between 50 and 55, depending on how terrible their working conditions are!

This too must be factored in, when figuring retirement age.

As for getting rid of these people, don’t even think about it! They would not hesitate to destroy the country. The government is afraid of them.The “PATCO” Solution

Bruno’s reply was to comments I made on Tuesday in French Unions On Strike Against Pension Reform, Disrupt Rail, Air Traffic
The correct government response to this mess is to do what Reagan did to the PATCO workers, fire all the public union employees on strike and terminate their benefits.

Moreover, the French government should take this opportunity handed to them on a silver platter and go one step further to make a much needed change and dissolve all public unions. The same should happen in the US.

This would end the nonsense quickly and effectively. As in the US, there would be lines miles long to take those jobs at much lower wage and benefit levels.
Free Lunch Mentality Runs Deep

Bruno thinks the unions would destroy the country if Sarkozy tried what Reagan did. If so, France will be destroyed one way or another because this spending is not sustainable.

U.S. Backs Off Currency Dispute

In what may be pre-election jitters, or perhaps a sign that cooler heads are prevailing, U.S. backs off in currency dispute with ChinaThe Obama administration backed away on Friday from a showdown with Beijing over the value of China’s currency that would have caused new frictions between the world’s only superpower and its largest creditor.

The Treasury Department delayed a much-anticipated decision on whether to label China as a currency manipulator until after the U.S. congressional elections on November 2 and a Group of 20 leaders summit in South Korea on November 11.

China left little doubt about the rancor that would ensue if it is branded as a currency manipulator — a largely symbolic move by the United States that would mandate more consultations with Beijing but no immediate penalties.

“The Chinese yuan should not be a scapegoat for the United States’ domestic economic problems,” Commerce Ministry spokesman Yao Jian said on Friday.Search for Scapegoats

Regarding scapegoats, I said the same thing on Thursday in Geithner’s Search for Scapegoats Avoids the Harsh Truth No One Wants to Hear

Labeling China a currency manipulator would be a big mistake, but it is quite possible after the elections.

The open issue is whether or not Obama would sign such a measure.


Bruno writes …Hi Mish,

Thanks for posting part of my Email.

Regarding the tittle “French political refugee”, I can imagine your readers wondering how on earth a French could end up being a political refugee, in Thailand on top of that!

I consider myself as a “political exile” for one main reason: I can’t stand the quasi-dictatorship inflicted on French people by the “Politically Correct”. It has reached a point where one can’t talk about anything sensitive, without being at risk of getting into serious trouble, including standing trial!

Thousands of French, living in Thailand, enjoy their freedom of speech and don’t hesitate to talk their mind, something they cannot do in France anymore.Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List

Bookmark and Share
Posted by Michael Shedlock at 2:22 PM…. Print…. Email

To sign up for a free copy of our Monthly Client Newsletter, please register your email address at the bottom of the Sitka Pacific Commentary Page.

Buy Gold and Silver Online at GoldMoney
The Best Way to Buy Gold and Silver

Disclaimer:The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Comment Guidelines: Comments should be succinct, constructive and relevant to the story. We encourage engaging, diverse and meaningful commentary. Comments that include personal attacks, racial, religious, or ethnic slurs are not permitted. We continuously review and remove any inappropriate comments.


Newer PostOlder PostHomeSubscribe to:.About Mike Shedlock Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Continue reading…    
 Mish Audio VideoMish with Marc Faber 2010-03-12
“Inflation or Deflation?” Debate: Mish vs. Dr. Doom

On the Edge with Max Keiser 2010-02-12
Spotlight on China, Japan, Jobs, Pensions, Part 1

Spotlight on China, Japan, Jobs, Pensions, Part 2

Tech Ticker 2009-12-09
“Bank Lending, Jobs, The Great Retrace

King World News October 30 2009
Mish and Eric King discuss Gold, the Stock Market, the US Dollar, Sideline Cash, China, and US real estate

May 2009: My Speech at Google – on Blogging and the Economy
Thoughts on Blogging and the Economy – Speech at Google

Podcasts Every ThursdayHoweStreet

May 18, 2009Jay Taylor and Mish discuss deflation and other issues on Voice America

April 27, 2009
The Lew Rockwell Show – “It’s Fallen and It Can’t Get Up”

April 26, 2009
TDI Podcast 106: ZeroHedge and Mish-O-Nomics

January 25, 2009TDI Podcast 92: An Unavoidable Depression? (Dent and Shedlock)

January 7, 2009Commodity Watch Radio – 2009 : Mish and Mike Hampton Give Their Views

November 12, 2008
The Lew Rockwell Show

October 23, 2008
TDI Episode 80: Predicting another 40% DOWN

October 17, 2008
Commodity Watch Radio – A look at the markets Michael Hampton, Mish

August 24,2008
Commodity Watch Radio – Inflation or Deflation? Part 1 James Turk, Michael Hampton, Mish

 John Dennis Beat Pelosi Mish Endorsement of John Dennis  Lawson for Congress Mish Endorsement of B.J. Lawson  Doug Cloud For Congress Mish Endorsement of Doug Cloud  
Calculated RiskLoading…naked capitalismLoading…Steve Keen’s DebtwatchLoading…oftwomindsLoading…Acting Man Austrian Economics DiscussionLoading…Copyright 2009 Mike Shedlock. All Rights Reserved.View My StatsHomeAboutContactSitka Pacific.js-kit-comments { background-color: #ffffff; } white-space: nowrap; color: #ff0000; margin: 0px 0px 0px 0px; padding: 0px 0px 0px 0px; }.js-singleComment { font-size: 9pt; color: #000000; line-height: 1.0em; margin: 0px 0px 0px 0px; padding: 0px 0px 0px 0px; font-family: Verdana, Helvetica; border: solid 1px #c0c0c0; text-align: left; }

View the Original article


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s