<\/p>\n
Paul Craig Roberts<\/span><\/p>\n The housing market is now apparently turning down. Consumer incomes are limited by jobs offshoring and the ability of employers to hold down wages and salaries. \u00a0The Federal Reserve seems committed to higher interest rates\u2014in my view to protect the exchange value of the US dollar on which Washington\u2019s power is based. \u00a0The arrogant fools in Washington, with whom I spent a quarter century, have, with their bellicosity and sanctions, encouraged nations with independent foreign and economic policies to drop the use of the dollar. \u00a0This takes some time to accomplish, but Russia, China, Iran, and India are apparently committed to dropping \u00a0or reducing the use of the US dollar. \u00a0<\/span><\/p>\n A drop in the world demand for dollars can be destabilizing of the dollar\u2019s value unless the central banks of Japan, UK, and EU continue to support the dollar\u2019s exchange value, either by purchasing dollars with their currencies or by printing offsetting amounts of their currencies to keep the dollar\u2019s value stable. \u00a0So far they have been willing to do both. \u00a0However, Trump\u2019s criticisms of Europe has soured Europe against Trump, with a corresponding weakening of the willingness to cover for the US. \u00a0Japan\u2019s colonial status vis-a-vis the US since the Second World War is being stressed by the hostility that Washington is introducing into Japan\u2019s part of the world. \u00a0The orchestrated Washington tensions with North Korea and China do not serve Japan, and those Japanese politicians who are not heavily on the US payroll are aware that Japan is being put on the line for American, not Japanese interests. \u00a0<\/span><\/p>\n If all this leads, as is likely, to the rise of more independence among Washington\u2019s vassals, the vassals are likely to protect themselves from the cost of their independence by removing themselves from the dollar and payments mechanisms associated with the dollar as world currency. \u00a0This means a drop in the value of the dollar that the Federal Reserve would have to prevent by raising interest rates on dollar investments in order to keep the demand for dollars up sufficiently to protect its value.<\/span><\/p>\n As every realtor knows, housing prices boom when interest rates are low, because the lower the rate the higher the price of the house that the person with the mortgage can afford. \u00a0But when interest rates rise, the lower the price of the house that a buyer can afford.\u00a0<\/span><\/p>\n If we are going into an era of higher interest rates, home prices and sales are going to decline.<\/span><\/p>\n The \u201con the other hand\u201d to this analysis is that if the Federal Reserve loses control of the situation and the debts associated with the current value of the US dollar become a problem that can collapse the system, the Federal Reserve is likely to pump out enough new money to preserve the debt by driving interest rates back to zero or negative.\u00a0<\/span><\/p>\n Would this save or revive the housing market? \u00a0Not if the debt-burdened American people have no substantial increases in their real income. \u00a0Where are these increases likely to come from? Robotics are about to take away the jobs not already lost to jobs offshoring. Indeed, despite President Trump\u2019s emphasis on\u00a0\u201cbringing the jobs back,\u201d Ford Motor Corp. has just announced that it is moving the production of the Ford Focus from Michigan to China. \u00a0<\/span><\/p>\n Apparently it never occurs to the executives running America\u2019s offshored corporations that potential customers in America working in part time jobs stocking shelves in Walmart, Home Depot, Lowe\u2019s, etc., will not have enough money to purchase a Ford. \u00a0Unlike Henry Ford, who had the intelligence to\u00a0pay workers good wages so they could buy Fords, the executives of American companies today sacrifice their domestic market and the American economy to their short-term\u00a0\u201cperformance bonuses\u201d based on low foreign labor costs.<\/span><\/p>\n What is about to happen in America today is that the middle class, or rather those who were part of it as children and expected to join it, are going to be driven into manufactured\u00a0\u201cdouble-wide homes\u201d or single trailers. \u00a0The MacMansions will be cut up into tenements. \u00a0Even the high-priced rentals along the Florida coast will find a drop in demand as real incomes continue to fall. The $5,000-$20,000 weekly summer rental rate along Florida\u2019s panhandle 30A will not be sustainable. \u00a0The speculators who are in over their heads in this arena are due for a future shock.<\/span><\/p>\n For years I have reported on the monthly payroll jobs statistics. \u00a0The vast majority of new jobs are in lowly paid nontradable domestic services, such as waitresses and bartenders, retail clerks, and ambulatory health care services. In the payroll jobs report for June, for example, the new jobs, if they actually exist, are concentrated in these sectors: administrative and waste services, health care and social assistance, accommodation and food services, and local government.<\/span><\/p>\n High productivity, high value-added manufacturing jobs shrink in the US as they are offshored to Asia. \u00a0High productivity, high value-added professional service jobs, such as research, design, software engineering, accounting, legal research, are being filled by offshoring or by foreigners brought into the US on work visas with the fabricated and false excuse that there are no Americans qualified for the jobs. See: http:\/\/www.amazon.com\/Failure-Laissez-Faire-Capitalism\/dp\/0986036250\/ref=sr_1_2?s=books&ie=UTF8&qid=1532992327&sr=1-2&keywords=Paul+Craig+Roberts+books&dpID=51HWdHsbtFL&preST=_SY291_BO1,204,203,200_QL40_&dpSrc=srch<\/span><\/a><\/span><\/p>\n America is a country hollowed out by the short-term greed of the ruling class and its shills in the economics profession and in Congress. \u00a0Capitalism only works for the few. It no longer works for the many.<\/span><\/p>\n On national security grounds Trump should respond to Ford\u2019s announcement of offshoring the production of Ford Focus to China by nationalizing Ford. \u00a0Michigan\u2019s payrolls and tax base will decline and employment in China will rise. We are witnessing a major US corporation enabling China\u2019s rise over the United States. Among the external costs of Ford\u2019s contribution to China\u2019s GDP is Trump\u2019s increased US military budget to counter the rise in China\u2019s power.<\/span><\/p>\n Trump should also nationalize Apple, Nike, Levi, and all the rest of the offshored US global corporations who have put the interest of a few people above the interests of the American work force and the US economy. \u00a0There is no other way to get the jobs back. \u00a0Of course, if Trump did this, he would be assassinated. \u00a0<\/span><\/p>\n America is ruled by a tiny percentage of people who constitute a treasonous class. These people have the money to purchase the government, the media, and the economics profession that shills for them. This greedy traitorous interest group must be dealt with or the United States of America and the entirety of its peoples are lost.<\/span><\/p>\n In her latest blockbuster book, Collusion<\/i>, Nomi Prins documents how central banks and international monetary institutions have used the 2008 financial crisis to manipulate markets and the fiscal policies of governments to benefit the super-rich.<\/span><\/p>\n