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    Daily Digest 11/23 – ‘Coal War’ with Beijing, Praise for Oil Spill Response, Siberian Ice Leak

    by DailyDigest

    Tuesday, November 23, 2010, 4:00 PM

  • ‘Coal War’ with Beijing Next Hit on U.S. Economy
  • Fed’s Hidden Agenda of Driving U.S. Into a Second Great Depression
  • The Just-in-Time Consumer
  • When Irish Banks are Ailing
  • Stocks Fall on Korea Clash, Europe Debt, China Lending; Dollar Strengthens
  • BP, Government Praised for Inventive Response to Oil Spill
  • Leaking Siberian Ice Raises a Tricky Climate Issue

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Economy

‘Coal War’ with Beijing Next Hit on U.S. Economy (darren)



The situation is that hundreds of millions of people in nations like China are moving rapidly from the Stone Age to the 21st century as American dollars have flooded that part of the world, and officials have been struggling frantically to make enough power to run all of the gadgets the new lifestyle includes. Similar circumstances also are developing in India and places like Indonesia, and the demand is sending the expense of coal through the ceiling, making relatively insignificant President Obama’s promise during his 2008 election campaign that he wanted to regulate those who build coal mines and coal-fired power plants until they were bankrupt.

Fed’s Hidden Agenda of Driving U.S. Into a Second Great Depression (johnny)



Ben Bernanke has said that the Fed is trying to promote inflation, increase lending, reduce unemployment, and stimulate the economy. However, the Fed has arguably – to some extent – been working against all of these goals. For example, as I reported in March, the Fed has been paying the big banks high enough interest on the funds which they deposit at the Fed to discourage banks from making loans. Indeed, the Fed has explicitly stated that – in order to prevent inflation – it wants to ensure that the banks don’t loan out money into the economy, but instead deposit it at the Fed.

The Just-in-Time Consumer



The Great Depression replaced a spendthrift culture with a generation of frugal savers. The recent recession, too, has left in its wake a deeply changed shopper: the just-in-time consumer.For over two decades, Americans bought big, bought more and stocked up, confident that bulk shopping, often on credit, provided the best value for their money. But the long recession—with its high unemployment, plummeting home values and depleted savings accounts—altered the way many people think about the future. Manufacturers and retailers report that people are buying less, more frequently, and are determined to keep cash on hand.

When Irish Banks are Ailing (ilene)



Ireland’s annual deficit is the worst in Europe at 30% of GDP (that would be like the US having a $5Tn annual deficit) and the nation is expected to slash its budget by $20Bn next year just to keep it under that level. Prime Minister Cowen holds a very thin majority and now faces a “no confidence” vote that could lead to further turmoil with a special election coming on Thursday for a vacant parlimentary seat.  “The likelihood of this government surviving long beyond the first month or two of next year is virtually gone now,” says David Farrell, professor of politics at the University College Dublin.  

Stocks Fall on Korea Clash, Europe Debt, China Lending; Dollar Strengthens 



“The news that we’ve seen recently on China, on Ireland and now on Korea has just reminded people of the risks out there,” said Andrew Milligan, the Edinburgh-based head of global strategy at Standard Life Investments, which oversees the equivalent of about $245 billion. “The most significant of the worries is probably the uncertainty about China.

Energy

BP, Government Praised for Inventive Response to Oil Spill 



Despite the fact that oil companies have been drilling for years in the Gulf of Mexico and the potential for problems was widely recognized, those involved were essentially caught flat-footed when the BP platform exploded and sank. “There were many success stories in the effort to control the Macondo well, including, but not limited to, the ultimate successes of capping and killing it,” the report said. “And the speed with which government scientists, with little background in deep-sea petroleum engineering, established meaningful oversight was truly impressive. “These remarkable efforts were necessary, however, because of a lack of advance preparation by industry and government,” investigators said.

Environment

Leaking Siberian Ice Raises a Tricky Climate Issue (dps)



Gas locked inside Siberia’s frozen soil and under its lakes has been seeping out since the end of the last ice age 10,000 years ago. But in the past few decades, as the Earth has warmed, the icy ground has begun thawing more rapidly, accelerating the release of methane — a greenhouse gas 23 times more powerful than carbon dioxide — at a perilous rate. Some scientists believe the thawing of permafrost could become the epicenter of climate change. They say 1.5 trillion tons of carbon, locked inside icebound earth since the age of mammoths, is a climate time bomb waiting to explode if released into the atmosphere.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the “3 Es.”

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