Some News

Some news to keep abreast of the changes occurring in the world. Portugal is seeking a bailout from the European Union after its Parliament rejected austerity measures,

Portugal's prime minister said Wednesday his country has asked for financing assistance from the European Union due to its high debts and difficulty raising money on international markets.[...]Portugal becomes the third financially troubled eurozone country after Greece and Ireland to request assistance from Europe's bailout fund and the International Monetary Fund.[...] Such an announcement had long been expected as Portugal, one of the 17-nation eurozone's smallest and weakest economies, struggled to finance its economy. Following a rejection of additional austerity measures by its parliament last month, Portugal has seen its borrowing costs rise to unsustainably high levels.

It looks like another EU country has fallen. Instead of making very painful budget cuts, Portugal has decided to receive a bailout. This will no doubt require that Portugal cede some of its sovereignty to the larger international governing body as happened in the case of Ireland and Greece. This bit of news needs to be put into the larger context of the EU debt sovereign debt crisis and Dominique Strauss-Kahn's recent speech to understand what how this piece fits into the still nebulous large puzzle that is being put together. Every time period is one of change so this transformation is nothing new.

The IMF managing director has made some comments on the direction that the global economy is headed,

In a speech entitled “Global Challenges, Global Solutions”[...] Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), called for a new approach to economic policymaking in the wake of the recent global crisis. He singled out three areas for improvement: a new approach to macroeconomic and financial sector policies, a new approach to social cohesion, and a new approach to cooperation and multilateralism.[...]Middle East, noting that it is going through an 'historic transformation' as 'citizens are seeking greater freedom, and a fairer distribution of economic opportunities and resources'.[...]'In designing a new macroeconomic framework for a new world', he stated, 'the pendulum will swing—at least a little—from the market to the state, and from the relatively simple to the relatively more complex'.[...]Mr. Strauss-Kahn called for policymakers to pay more attention to inequality and social cohesion. 'The lethal cocktail of prolonged high unemployment and high inequality can strain social cohesion and political stability, which in turn affects macroeconomic stability.' He suggested that inequality, which was a factor in the Middle East, might also have been among the root causes of the global crisis, and that sustainable global growth is associated with more equal income distribution.[...]Mr. Strauss-Kahn stressed the virtues of enhanced cooperation and multilateralism in the post-crisis world, noting that 'the great challenges of today all require a collective solution'. [ All emphasis is mine.]

I disagree with some of what is stated in this speech, most notably that in the new global economic framework the state will have a larger role, but my disagreement does not negate the realities of the world that we live in nor does it mean that this should not happen. The lost of social cohesion due to high unemployment, inflation, and overall bad economy will pose a very real threat to global stability, the Middle East and Europe are a prime example. This unequal distribution of wealth, "inequality", being spoken of sounds like the main theme of "The Communist Manifesto". This problem begs the question: who or what entity will solve this inequality? Government or the private sector? Well the pendulum is swinging a new direction. The challenges that the world faces will require "collective solution". If the nations of the world, the collective, are all socialist, then what will that solution be?

Americans took a pay cut because of inflation, "You may not have noticed it when you opened up your paycheck last month, but you just took a pay cut. Wages in America are flattening as inflation surges, therefore real income growth is actually negative, according to the latest data from the Labor Department. " If I had to make a guess I would say that real inflation will peak around thirty percent.

And El Baradei of Egypt has decided to challenge Israel's right to exist and promise to declare war on them. There is nothing like a peaceful uprising of the youth in the name of democracy.

Some interesting and exciting news.