Socio-Economics History Blog

Socio-Economics & History Commentary

Obama Weighs Military Options in Mexico


  • The drug war in Mexico is escalating. There are real doubts the  Mexican government can handle it victoriously. With a population well over 100 million, the collapse of Mexico can destabilize the entire North America. America will be affected greatly.
  • Alex Johnson comments In Mexico’s drug wars, fears of a U.S. front :
    With U.S. forces fighting two wars abroad, the nation’s top military officer made an important visit last week to forestall a third. He went to Mexico.
    Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, made the trip to confer with Mexican leaders about the Merida Initiative, a three-year plan signed into law last June to flood the U.S.-Mexican border region with $1.4 billion in U.S. assistance for law-enforcement training and equipment, as well as technical advice and training to bolster Mexico’s judicial system. 
    The assistance is intended to help Mexican President Felipe Calderón Hinojosa step up his war against drug cartels. The drug lords and their soldiers are blamed for having killed more than 6,300 people since January 2008, including more than 1,000 in the first two months of this year alone.
    That’s about 100 people every week for the last 14 months.
    The cartels usually do not target civilians, but dozens, perhaps hundreds, have died in the crossfire.  “It’s a real war,” says Jorge Ramos, mayor of Tijuana, Mexico, across the border with San Diego. “We’re not faking.”
    The point of the U.S. initiative is not just to quell the violence in Mexico. More important for the Obama administration, it is to keep the violence from spilling across the border more than it already has, especially in the border states of Texas, California, Arizona and New Mexico. The concern is very real. Mexican drug cartels already control about 90 percent of the cocaine trade across the United States and most of the market for marijuana, methamphetamine and heroin, with operations in 230 cities, according to the U.S. Justice Department’s National Drug Intelligence Center. They have essentially supplanted the Colombian and Dominican criminal groups that terrorized major U.S. cities through the 1980s and ’90s, the agency said. 

    Texas pleads for U.S. troops
    Now, to hear Texas Gov. Rick Perry tell it, U.S. resources are being focused too much on Mexico and not enough on Americans on this side of the border.
    Last month, Perry called on the Department of Homeland Security to send 1,000 troops to the U.S. side of the border. Complaining that the federal government had not done enough to protect Americans in the border region, Perry dismissed potential constitutional concerns about assigning active-duty U.S. personnel to military operations inside the United States, saying bluntly, “I really don’t care.”
    Similar fears are taking root in Arizona, where law-enforcement officials last month urged the Legislature to dedicate more state resources to protecting communities in the border region. The Mexican city of Sonora, they said, was emerging as a central battleground just across the border.
    “This is organized crime,” Arizona Attorney General Terry Goddard testified before a state Senate panel. “The enemy we are combating is extremely well organized, extremely disciplined and extremely well trained.”
    Nor is the threat merely regional. The National Drug Intelligence Center lists 230 U.S. cities in 45 states where the drug trade is controlled by Mexican cartels. Many are concentrated along the Mexican border, of course: 30 in Texas, 27 in California and nine in Arizona, for example. But the center also lists 22 cities in Washington state and five in Idaho. With their long unprotected northern border, the states are a prime gateway for cartel-affiliated drug smugglers into Western Canada.
    Twelve cities in North and South Carolina, where large Latino immigrant populations fuel the states’ textile industries, are on the list. So are eight in Ohio. In Alabama, which has six cities on the list, Shelby County Sheriff Chris Curry said investigators believed that the torture-murders in August of five men in Birmingham were linked to Mexican-controlled drug operations.
    “It was clear to me that I was not fishing in a Shelby County pond,” Curry said. The list even includes three cities in Hawaii and one in Alaska.
    “The fact that they have taken over the drug trade in North America is one thing, but what they have done is they are proliferating throughout the United States,” said Fleming, the author of “Drug Wars.”
    “You can look at the drug problem, and that’s one facet of it,” he said. “But when you start having narco terrorists operating on U.S. soil with the abilities that these organizations have, you have now instituted a tremendous threat to the national security structure of our country.” 

  • There is no doubt the fighting will spill over into America. This will be the beginning of a new war for America. The real intent is the merger of Mexico and America followed by Canada ie the North American Union (NAU) as defined in the SPP (Security & Prosperity Partnership).
  • So, what is President Obama’s next step in this brewing crisis? Mark my words it will be a military ‘assistance’ option, sending US troops into the fray. Anne Gearan reports in Mullen offers Mexico update to Obama :
    President Barack Obama was briefed Saturday by Joint Chiefs of Staff Chairman Adm. Mike Mullen about the drug wars in Mexico and wanted to know how the United States can help.
    “Clearly one of the things the president was interested in was the U.S military capability that may or may not apply to our cooperation with the Mexicans,” said a U.S. military official who requested anonymity because the discussions were private. “He was very interested in what kind of military capabilities may be applied.”
    Mullen briefed Obama on Saturday morning about discussions with Mexican military leaders about the drug wars there. Mullen, who was in Mexico on Friday, has referred to the recent spike in violence as a crisis. Mullen has said Mexico could borrow from U.S. tactics in the fight against terrorism as it battles a crisis of drug-related violence along the U.S.-Mexico border.
    On Saturday, the military official said the additional U.S. help could come in the form of U.S. equipment and intelligence-sharing. “We’re already sharing information with the Mexican military and have been looking for ways to expand that particularly in the realm of intelligence,” the official said.
  • Now you understand why the Federal government has never been keen to defend the integrity of American border with Mexico. You also understand why the Feds have been lax in enforcing illegal immigration laws especially with regards to Mexicans. We will see the eventual merger of the 2 countries soon. See also:
    Texas Makes Emergency Plans In Case Violence Spills Over From Mexico
    Mexico Declares Martial Law!!
    Mexico Collapsing into Drug Wars !


March 11, 2009 Posted by | GeoPolitics | , , | 4 Comments

Worst Collapse in UK Manufacturing in 4 Decades!

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  • United Kingdom is tanking! See also:
    Britain on the Brink of Collapse!
    American & British Banks are Bankrupt!
    ‘Run on UK’ sees Foreign Investors Pull $1 Trillion Out !
    Eastern Europe Crisis & Financial State of Western Europe !
    Britain Faces “Summer of Rage” !
  • The Telegraph reports :
    The “horrendous” scale of Britain’s industrial recession has been laid bare by figures showing that manufacturing output is declining at the fastest rate since records began more than 40 years ago.
    In figures labelled by analysts as “shocking” and “a horror show”, Britain’s industrial production dived at record speed, underlining how hard the global downturn has hit producers and exporters. The statistics are doubly surprising because many economists had expected the weakness of the pound over the past year to have boosted their fortunes.
    Manufacturing output dropped by 2.9pc in January alone – well below City forecasts, and taking the annual rate of decline to 12.8pc – the biggest since January 1981, according to the Office for National Statistics. Underlining how much of that has come since November, the quarter-on-quarter contraction was 6.4pc – the most severe since comparable records began in 1968. 
    The broader industrial production total, which also includes mining and utilities, is also now falling at an annual rate of 11.4pc – again the worst since 1981.
    The slide in Britain’s industrial production is mirrored elsewhere throughout the world. A sudden freeze in export markets in November has meant that although most attention is still focused on financial markets and the banking system, manufacturers and exporters are proving the biggest victims of the global recession.
    According to Ross Walker, UK economist at Royal Bank of Scotland, the industrial production figures would have been even worse had it not been for a cold period which boosted output from power stations and gas plants.
    “Manufacturing output contracted at a record pace – these data stretch back to 1968, aptly, a year of major social and economics upheaval,” he said. “The UK data also serve to emphasise the severe and highly synchronised collapse in industrial output globally (other figures published today showed industrial production slumping by 3.1pc in France and 2.5pc in Sweden in January). Industrial capacity is being eliminated at an unprecedented pace, with few signs of any imminent alleviation.”
    David Kern, chief economist at the British Chambers of Commerce (BCC), said: “The much worse than expected manufacturing figures show that the sector has so far failed to benefit from the sharp falls in sterling. Clearly, the essential rebalancing of the UK economy towards industry is not yet taking place.
    “The critical priority is to ensure that the vital skills base within manufacturing is not lost during this recession. Urgent measures are needed to help viable and well managed firms hold on to their trained and skilled employees. A loss of this precious resource will cause immense long-term damage to the economy.”
    Peter Dixon of Commerzbank said the figures represented an “industrial output horror show”. He added: “Even assuming that industrial output remains flat in February and March (a heroic assumption if ever there was one), the industrial sector will subtract 0.8 percentage points off first quarter gross domestic product growth in what is now the biggest collapse in this sector in almost 30 years.” 


March 11, 2009 Posted by | Economics | , , , | Comments Off on Worst Collapse in UK Manufacturing in 4 Decades!

53% Say It’s Likely the U.S. Will Enter a Depression Similar to 1930’s

  • People are waking up. Rasmussen Reports :
    Most Americans (53%) now think the United States is at least somewhat likely to enter a 1930’s-like depression within the next few years. The latest Rasmussen Reports national telephone survey found that 39% think this outcome is unlikely.
    Nineteen percent (19%) say a Depression is Very Likely while 7% say it is not at all likely. The latest results are more pessimistic than those found in
    early January, when 44% said a 1930’s-like depression was likely in the next few years, and 46% disagreed.
    In March 2008, only 38% of adults said the country is likely to slip into a depression, while most (55%) disagreed. The most recent survey also found that half of all adults (49%) say today’s children will not be better off than their parents. Only 26% hold the more optimistic view, while another 25% are not sure. Those results have changed little from January, when only 27% said children will be better off and 47% disagreed. Twenty-six percent (26%) were undecided at that time.
    Adults in their 30’s are the most worried, with 62% who say it is likely the nation will slip into a deep depression. Less than half (47%) of those Americans over 65 think the country will slip into a 1930’s-like depression.
    Fifty-four percent (54%) of investors and 53% of non-investors say it is likely the country will slip into a serious depression. Forty-one percent (41%) of investors disagree, along with 38% of non-investors. 
    A third (32%) of adults with children living at home with them say today’s children will be better off than their parents, while only 22% of adults with no children at home agree.
    Related Rasmussen polling found that only
    45% believe anyone who wants to work can find a job, but most say it is possible for just about anyone to work their way out of poverty in America. As the economy continues to flounder, consumer and investor confidence continue to hit record lows.  


March 11, 2009 Posted by | Economics | , , | Comments Off on 53% Say It’s Likely the U.S. Will Enter a Depression Similar to 1930’s

3 Month LIBOR for Dollars Increases for 11th Day

  • LIBOR stands for the London Interbank Offer Rate. This is the interest rate banks offer to one another for lending. Bloomberg reports :
    The cost of borrowing in dollars for three months in London rose for an 11th day as banks sought cash to cover their commitments through the end of the first quarter.
    The London interbank offered rate, or
    Libor, that banks say they charge each other for such loans climbed two basis points to 1.33 percent, the highest level since Jan. 8, the British Bankers’ Association said. The Libor-OIS spread, a gauge of bank reluctance to lend, increased to the most since Jan. 9.
    Banks are balking at lending amid a squeeze on cash toward the end of March on concern more financial institutions will need to be rescued by governments following almost $1.2 trillion of writedowns and losses since the start of 2007. Italy’s Banco Popolare SC today became the nation’s first lender to seek state aid.
    Lloyds Banking Group Plc, the U.K.’s largest mortgage provider, ceded control to the government March 7 in return for state-asset guarantees.
    “The liquidity will be horrible in the next couple of weeks,” said
    Vincent Chaigneau, head of international rates strategy at Societe Generale SA in London. “We have seen renewed stress in the Libor-OIS spread.”
    The spread, the difference between the three-month Libor for dollars and the overnight indexed swap rate, widened two basis points to 107 basis points. It averaged 11 basis points from December 2001 to July 2007, and soared to 364 basis points in the weeks following the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc. 
  • When the LIBOR for USD rises it means the demand for USD is increasing. If it keeps rising there will be a credit crunch/contraction. When the LIBOR is very high it also signals that interbank lending is freezing up: banks have no confidence in each other, so prefer not to loan money out. This effectively locks up the banking system. This is when the central banks need to step in to boost liquidity and be the lender of last resort.


March 11, 2009 Posted by | Economics | | Comments Off on 3 Month LIBOR for Dollars Increases for 11th Day