There is another side to the trade balance, which is not the current account balance but the capital account. This means that there could be Chinese investments in the United States, for instance, in infrastructure. The Chinese showed that they are very good at this and the U.S. needs it. That is a capital flow too, which could go from the East to the West, and if you put together trade account and capital account, this can move towards parity as a target.
Italian Undersecretary of State for Economic Development Michele Geraci
A Note To Readers
Since the government remains paralyzed, even though the shut-down is over, at least for a couple of more weeks, President Trump’s infrastructure building policy, which even the Democrats at least give lip-service to, is not even on the agenda.
Meanwhile, the southwest of the country continues to slide toward a full-blown disaster as the Colorado River shows no signs of a revival of an adequate flow of water to be able to sustain 40 million people in the years ahead. Today the state of Arizona was to pass the legislation approving the Drought Contingency Plan of the seven states that are dependent on the Colorado. That plan is nothing but a rationing plan that all agree on. If Arizona does not approve the plan, then the Bureau of Reclamation Commissioner Brenda Burman will impose her own plan, which some definitely will not like, especially Arizona, which is at the end of the line for which states get water first.
This did not have to happen. Members of Congress, presidential candidate Robert Kennedy and many others in the late 1960s promoted the building of the North American Water and Power Alliance (NAWAPA). That project, had it been built when it was so presented, would have provided today not only the water the southwest now requires, but also done so for the mid-west states, the Canadian prairies and Mexico. Yes, I know I have said this before, but sometimes one must repeat the lesson for the student in order for it to sink in. More on NAWAPA next week.
In this week’s report:
We begin with reports that celebrate that the snowpack and the reservoirs have reached their average levels for this time of the year. That is kind of funny– there really are not that many things that are praised for just being average. But, it has been some time since California has seen the extent of drought in the state rapidly decline and the supply of water in the reservoirs being as high as they are now, and even a snowpack that looks almost healthy. The snowpack, if you will recall, provides about 30 percent of the water used in the state, especially later in the summer.
We have a brief report on the Colorado Drought Contingency Plan, and I am sure there will be more next week.
Then the fall-out of the PG&E bankruptcy filing that occurred as scheduled on January 29. The hedge funds, some of which bought millions of shares of PG&E stock just before the Camp Fire in November, are loudly crying as they count up their hundreds of millions of dollars of loss as the stock prices have fallen about 80 percent.
But, there are more than just crying speculators who are getting the shaft. Of course, PG&E, itself a felon with at least two counts against it, remains in a real and serious crisis. In addition, victims of wildfires caused by PG&E’s equipment are considered to be unsecured creditors, meaning their legal claims in bankruptcy get paid after secured lenders such as banks, and even after financial analysts and bankruptcy lawyers expected to charge hundreds of millions of dollars, already PG&E has suspended payments to some they settled with from a 2015 fire in the Sierras. And, most likely, electricity rates will rise, maybe dramatically so, some, like pot growers may not be able to stay in business. Oh, what a tragedy!
Infrastructure includes the necessary inputs required for agricultural productivity, so this report comes next: “Anti-Population Lobby Targets Agriculture Chemicals, Alleges Glyphosate Causes Cancer.”
Some in California have had their minds deranged a little by the completely incompetent high-speed rail system being built, or maybe, not being built. Competent and necessary high-speed rail construction and operations have been mastered by Japan, China, and others. And their systems are constantly being expanded and upgraded. Japan will soon be running a train that will cruise at 360 kilometers per hour. Currently, Japanese high-speed trains run at about 100 km less than that. Japan is also preparing to put into operation magnetic levitation trains, and they will run at 603 kph (375 mph).
The full report on Italian Undersecretary of State for Economic Development, Michele Geraci’s proposed policy completes our updates for this week.
The Feature is the ongoing class series on the principles of real economics presented by LaRouche PAC.
