The de facto nationalization of the global financial system
The US housing bubble. Bursting.
Soros’ thirty year super-bubble in leverage and financial assets. Bursting. Perhaps.
Oil. Still going up. Maybe way up. And perhaps not a bubble. Perhaps the bubble that burst was the assumption that the supply of conventional (i.e. low-cost) oil was as elastic as it seemed to be in the 1990s. We still don’t know.
Emerging market government financing of the US and Europe? Still very bubblicious. Look at this chart, drawn from data presented in the statistical appendix of the IMF’s WEO.
The IMF data includes emerging market sovereign fund, the Saudis non-reserve foreign assets (which are counted as reserves) and valuation gains. It excludes China’s state banks and Asian NIE (Korea, Singapore, Hong Kong and Taiwan) reserve growth. Rather than do a ton of adjustments, I’ll just note that I believe that the increase in emerging market government assets that the IMF doesn’t pick up is about equal to the valuation gains that they include, so the overall picture isn’t that far off. The IMF data only covers the emerging world, so it also leaves out Japanese reserve growth and the increase in Norway’s sovereign fund. Together they amount to about $100 billion.
What is driving the strong growth? A dual surplus – a surplus in the current account and large net private capital inflows.
The following chart is also drawn from the IMF WEO data.
This isn’t just a product of high oil prices. In 1980, oil was quite high but emerging market official asset growth was about 0.5% of global GDP. It is now more like 2.5% of global GDP.
The main reason for the difference between the current era of high oil prices and 1980?
Asia, which imports oil, added to its official assets at an even faster pace than the oil exporting economies in 2007. That may not change in 2008, though the oil exporters are sure to give Asian oil importers a run for the title.
China’s foreign asset growth seems to have picked up to an absurd $200b a quarter pace. We still don’t really know, as China hasn’t indicated exactly how much foreign exchange was handed over to the CIC in the first quarter. And who knows what will happen in q2. China’s trade surplus usually builds over the course of the year, but rising oil may start to bite. But for all the uncertainty, China’s official asset growth will still be strong.
And if oil prices average $110b a barrel this quarter – and if the per barrel price needed to cover the oil-exporters import bill is about $50 a barrel – the external surplus of the oil exporters in the second quarter should be above $200b. If oil stays at its current level for the summer, that surplus will only get bigger. And most of that surplus goes to the state in one way or another. Some countries use their central bank. Russia’s reserves were up by over $25b in April alone, Saudi non-reserve foreign assets increased by around $40b in the first quarter; others use a sovereign fund.
Barring a major change, the Gulf and China could easily combine to add close to a trillion dollars to their official assets this year.
Nothing goes up forever. At some point, the pace of increase in official asset growth has to slow. But as of now, there isn’t much sign of a real slowdown.
Felix claimed not so long ago that the US was too big to fail. Certainly many emerging markets are doing their best to finance the US through its current troubles, and thus keep up demand for their oil and goods. But a part of me wonders if the rise in inflation in the Gulf and China and the difficulties both are facing trying to sterilize the rapid growth in the foreign assets is an indicator that there is a small risk that the US also might end up being a bit too large for the emerging world to save.
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Not sure how reliable it is, but Pesek has noted that Soros camoe out of retirement just to play the markets for what they are worth, presumably, he needs a lot more to get out of bed than, say, Giselle Bundchen. Money, lovely money!
Perhaps the Euro rises against the US Dollar due to the interest rate differential between the currencies as per the Bloomberg article. The US Dollar is losing its long-term status as a reserve currency due the \"cheap money\" monetary policy of the Bernanke Federal Reserve. In the 5 trillion dollar per day currency markets, even the China PBoC is a follower of market trends established by billions of financial transactions across the world. It is a BS canard to blame US Dollar/Euro daily currency fluctuations on any actions by the China PBoC.Euro Rises Against Dollar as Trichet Highlights Inflation Risk http://www.bloomberg.com/apps/news?pid=20601116&sid=a3SMLIxtH1jQ&refer=africaMay 8 (Bloomberg) — The euro rose from an eight-week low against the dollar after European Central Bank President Jean- Claude Trichet said inflation remains the bank\’s top priority, signaling policy makers won\’t cut interest rates anytime soon.
This is a great blog, but it\’s really unfortunate that the others on this site, almost as good, don\’t get more attention. No comments so far on those concerning Brazil and Russia. Sure, China (which gets 90 percent of the attention of Brad\’s commenters) is biggg but not yet the whole world. More evidence that Americans on the whole are most interested in short term profit and loss and don\’t give a sh** about the future of the planet.
Farrar — there are a lot of network externalities when it comes to comments, and the comments section here does tend to be China-centric. That reflects the interests of the \"regulars\" along with the fact that i post regularly on the topic. My posts on the Gulf don\’t generate the same level of comments. however, i don\’t think the lack of comments on the RGE \"economonitors\" is a function of a lack of interest on the part of Americans so much as a function of the fact that these are group blogs and thus lack a consistent voice — and so far they haven\’t attracted a regular sent of commentators. In any case, i am interested in reactions to my post. Did i overstate the case? Can the rest of the governments of the emerging world support the US until private demand for us assets comes back? Will this surge in reserve growth be massively inflationary in the emerging world?
It is hard for me to see how the current imbalances could be resolved in a benign fashion. I would be curious to hear some plausible scenarios.
Personally I seriously doubt that US Economic imbalances can go on more than a few more months. The velocity of everything is going well past the \"red line\" where things really start to fly apart. Does the US Economic Model based on \"cheap energy\" still work when spot oil sells for $123 per barrel? Does the US home ownership society still function with Fannie Mae essentially bankrupt? Can the US still afford to be Global Supercop and fight stupid wars in the Middle East?http://jameshowardkunstler.typepad.com/clusterfuck_nation/The basic situation is this, the world is awash with bad US mortgage paper. The standard of living in the US can\’t be supported on debt anymore. The people of the US don\’t produce enough real value to service their debts. Institutions can no longer be supported on debt gone bad. Something\’s got to give — meaning something has to bring the US standard of living down to a level consistent with our declining actual wealth. Meanwhile all the higher-end banking shenanigans will only debase the dollar and make it more difficult for people already in distress to buy gasoline and food. Investors are rapidly diversifying into other stores of wealth including commodities and energy.
The $1 TRILLION gorilla in the room is our spending on Defense. We have military bases in over 100 foreign countries. (see Chambers Johnson). They exist to enforce economic arrangements which, in the end, provides huge benefits to the top 5 or 10 percent of the US population. We are, as a senior admin official stated, an imperial power. Like all other empires before, we will be crushed eventually when the costs far exceed the benefits (think Rome Spain, Great Britain). The reason we will fail will be because the power of that 10% will maintain this system way past its useful life, causing extreme hardship in the end. Go ahead, try and name one useful US govt. policy invention in the last 30 yrs. that has caused other nations to copy. Healthcare, modern rail system, cell phone structure, cheap internet access?? No, No and No. these are all pretty much in private hands. But the history of successful nations are those that have carefully blended public and private policies. Look at S. Korea, Japan, Taiwan to name a few. I plead for you to go read a book by Ha-Joon Chang titled \"Bad Samaritans; the myth of free trade and the secret history of Capitalism\".
Price of oil may sputter a bit, but the price trend will continue. I think 200 $/barrel is more a question of will it hit before the New Year, or within a year\’s time. Even if demand growth slows down a bit, the exhaustible nature of the commodity will continue to tell, stronger and stronger.Economic superpower status of US is under real threat, and the possible consequences are scary. Push may come to shove, and it may involve more than one military giant.Bubbles bursting here and there would pale to insignificance until at the other end, when the time to pick up the pieces comes along. Economists might be put aside for a while, if the military activity goes into high gear.Doom and Gloom?It\’s a real possibility.
I believe the Asian Pacific Rim nations are informally preparing for the coming end of US Economic Superpower status. Chinese President Hu Jintao is in Japan to patch-up differences. Accords include several Panda bears along with a PetroChina refinery investment in Osaka Japan, and joint Chinese-Japan Gas Field development. Even if no common currency is envisioned, an ASEAN+3 tariff-free common market by 2010 is planned that includes China, Japan, and Korea. The ASEAN+3 countries also agreed to a finacial defense fund against Wall Street Hedge fund attacks. Malaysia has agreed to a Defense Security pact with China that includes joint maintenance of Malaysian Airforce Su-30 Fighters and the purchase of a Chinese Air Defense missile system. The risk of a Taiwan Straits conflict has also been greatly reduced with a new government elected in Taipei. All of the Pac Rim Asian nations recognize that mutual cooperation and economic integration are the keys to lasting prosperity for the region.
\"The de facto nationalization of the global financial system…\"and I feel fine…
Brad – A very informative post. My immediate reaction to the first graph was to ask for the second. (So, as I suspected, it appears that a huge part of the explosion of official currency purchases was done to offset incoming capital flows to maintain current account surpluses.) My reaction to the second graph is to ask for one that separates out the oil exporters.
DC: The velocity of everything is going well past the \"red line\" where things really start to fly apart. Does the US Economic Model based on \"cheap energy\" still work when spot oil sells for $123 per barrel? Does the US home ownership society still function with Fannie Mae essentially bankrupt? Can the US still afford to be Global Supercop and fight stupid wars in the Middle East?I think you are massively overstating the problems that the US faces, and the current situation can probably go on for a decade or more. People have generally massive underestimated the resillance of the US economic and political system, and the problems that the US faces now are much smaller than the one\’s the US has faced in the past. If oil goes to $500/barrel, the US will sign deals with Canada and people will drive smaller cars. If Fannie Mae goes bust, someone will think of a new way of financing mortgages just as they did when the Savings and Loans went bust in the 1980\’s. As far as Iraq. as long as Americans aren\’t dying in large numbers, no one in the US is going to push for the US to leave, and the causalty rate is now low enough such that the US will probably stay for decades. The US can afford to be Global supercop is that the costs of doing so are far less on a relative basis than either the war in Vietnam or World War II, and China and Saudi Arabia are more than happy to finance the US being supercop. The Saudis to keep Iran under control, and China to keep Japan under control. The fact that the US is so powerful naturally leads to resentment which causes \"wishful thinking\" that the current problems that the US faces will pull it down. They won\’t. In particular the fact that Asian economies are cooperating with each other doesn\’t exclude the US. Japan is still buying fighters from the US, and the election of Ma Ying-Jeou in Taiwan was very heavily influenced by US displeasure at Chen Shui-Bian. It is true that China wants good relations with other Asian countries, but China wants good relations with everyone, especially the United States. Taiwan is the only major issue that can cause problems between China and the US, and everyone outside of the DPP had a strong interest in getting that resolved.
\"there is a small risk that the US also might end up being a bit too large for the emerging world to save.\"It is likely that Fannie and Freddie will be nationalized (or the equivalent). At that point it seems to me that the US becomes too large to save. What do you think?
A response to the requests for Gulf-related comments:I think China has a high degree of discretion over the disposition of its net fx intake. It must balance its development strategy (the role of markets in the US and now the EU that must be financed via recycling), its own financial health (risk of inflation that Brad mentions), geopolitics. You can criticize their choices, but they are clearly their choices.The Gulf is a different kettle of oil. We are talking about feudal regimes that owe their existence and survival over the decades to US security support. They have some freedom of maneuver on political issues, such as what posture to adopt in the Israel-Palestine dispute, but it is not conceivable that they would be free to not recycle their oil revenues. I have no evidence to back this up, but can one really believe, given the intensity of military scrutiny the US has extended to the Middle East over the past 50 years, and the potential vulnerability of these regimes, that they would face no consequences if they failed to place their earnings (net of imports) in assets denominated in the proper mix of dollars and euros?If the Atlas of global creditors is going to shrug, it won\’t start in the Gulf.
Peter — an interesting question. I am not sure though that the US knows what exact mix of euro and dollar assets the gulf should be buying — the export sector would prefer more euro purchases (easier for the us to export), the financial sector more high-margin financial products/ services, and so on.On the other hand, threats to survival are domestic as well as external and if high inflation threatens the regime\’s domestic base, they might need to change — no matter what the us wants.don — don\’t worry — some breakdowns will be forthcoming next week
\"I think you are massively overstating the problems that the US faces, and the current situation can probably go on for a decade or more.\" – TwofishI disagree. No one in the corridors of Washington even recognizes any problems. No one has the balls to do what really needs to be done to fix the myriad of serious issues. I usually strongly disagree with Thomas Friedman on most foreign policy issues, but I think even he is getting the message that the era of US Global Hegemony is coming to a rapid finish. NYT\’s Friedman: Hard Work \’Asian Values,\’ No Longer American Valueshttp://www.nytimes.com/2008/05/04/opinion/04friedman.html?em&ex=1210046400&en=740ad78e29276577&ei=5087%0AAmericans sense something deeper — that we’re just not that strong anymore. We’re borrowing money to shore up our banks from city-states called Dubai and Singapore. We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years.” A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II. How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it’s because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world’s best talent — including Americans. Who will tell the people? We are not who we think we are. We are living on borrowed time and borrowed dimes. We still have all the potential for greatness, but only if we get back to work on our country.
one small prediction – if/when oil gets to $40/barrel again, everyone will be wishing it was back at $200 . . .
Brad u have to fix comments – if you type a long comment, the site just does not take it.In short – it\’s pretty obvious that nobody is going to pay anyone this sums of money in real terms anytime soon. If you sum up all corporations, consumers and state credit in the west it\’s multiples of world GDP, and as we see lossses are beeing rapidly transfered from private agents to state and semi-state agencies.So either default of currency debasement. In case of default as Russia showed – if a military strong country (think lots of Nukes) defaults very little can be done about it, but here it\’s not some hedgfunds buying EM debt, wea re talking huge amount multiple of creditor countries GDPs. Storng tension, may be not war, but potential collapse of world trade and depression?In case of currency debasement – think the fate of Chineese first paper currencies ages ago and the conquenses. What do you think?
Re: \"Farrar — there are a lot of network externalities when it comes to comments, and the comments section here does tend to be China-centric. That reflects the interests of the \"regulars\" along with the fact that i post regularly on the topic. My posts on the Gulf don\’t generate the same level of comments.however, i don\’t think the lack of comments on the RGE \"economonitors\" is a function of a lack of interest on the part of Americans so much as a function of the fact that these are group blogs and thus lack a consistent voice — and so far they haven\’t attracted a regular sent of commentators.\"I read regularly (daily) and am an American expat, very interested in the Euro and many of the issues presented in the several regional blogs. I rarely comment. I come here for information and the comments and am not an economist. I hold all my money in Euro bank accounts and and am not interested in other \"investments.\"I do not know if my reading the site or linking to it counts as one of the externalities in Dr Setser\’s comment, but I do give the posts and comments serious attention and really appreciate the quality of both.
\"People have generally massive underestimated the resillance of the US economic and political system….\"On the contrary, they have read it quite properly: Huge trade deficit–up to the eyeballs in debt–a currency that is becoming more questionable everyday–and a financial system that is just broken, almost unfixable…now at the mercy of central banks. As for the political system–run by admen and focus groups, monitored and guided by lobbyists. Third and fourth parties should be welcome…but they are not…no talking head or media will allow them national access…even so-called liberal media. Real political debate rarely happens.Economists that want to talk about trade and how globalization has been structured are relegated to the sidelines. Any talk of finite resources is dismissed.Regarding trade: It would be interesting to put on one of those graphs above the trade and account deficit. Bet they would follow the other lines quite well.
Here is the simplest possible way of assessing global macro risk: 1) Leverage has run unchecked, worldwide for decades; unless we have repealed the the laws limiting exponential expansion, there HAS TO be a massive de-leveraging to regain equilibrium (the U.S. housing market is only the first and most visible step). 2) At the same time, the country that supplies the world\’s reserve currency (and is one of its biggest consumers) has settled into permanent and accelerating trade deficits; unless other countries are willing to hold unlimited amounts of dollars in reserves forever to prop up their paper value the dollar HAS TO fall, with all the standard consequences (inflation, high interest rates, etc). Does the great de-leveraging and devaluing have to happen suddenly and catastrophically? Of course not – we are watching the Fed, Treasury, and G7 scrambling before our eyes to \"prevent\" such an crash dive (and, as always happens in these scenarios, proclaiming \"mission accomplished\" prematurely). But that doesn\’t mean the Great Adjustment won\’t unfold gradually (with fits, bumps, apparent \"recoveries,\" etc over many years). Remember, the credit and trade distortions that came from World War I took two decades of national and international efforts to ignore – and then attempt to forestall – them before they finally turned the corner of self-correction at the bottom of the Great Depression.
Regarding “DC” and “TwoFish”. Nothing will “blow apart” unless the peasants “blow apart”. Happily, however, the US has very gullible and loyal peasantry. The US nobility has always been able to manipulate them to do their bidding by appealing to the peasant’s natural stupidity, xenophobia, and superstition (something that only Europeans having lived here can even comprehend). Plus, the “majority US racial group” is still more obsessed about “those people” and “those government loving liberals, giving their tax money to those welfare queens” than they are about how nice the train stations are in German. (Beside, most people know “those people” ride public transportation, and “individual automobiles” get “the real `mericans” away from “those people” on public transportation, which is why “those liberals” hate cars and love trains!! So, let’s not talk about trains in the presence of the peasants, ok?) The US peasants will happily accept a lower standard of living as long as their nobility can give them somebody to blame. THAT shouldn’t be very difficult.
To DC: Friedman sounds exactly like someone talking about Japan in 1990. I\’m not that old, but I\’ve been through several episodes of \"America is doomed\" that it\’s very hard for me to see why this time is different. You can go back to the 1920\’s or the 1850\’s, and people say *exactly the same thing* about the US (i.e. Americans are lazy and New York City is dirty). If you want to convince me, you have to explain why what Friedman is saying is *different* from someone in 1989 says about Japan, and why people aren\’t making the same mistakes. Mistake #1. Forgetting that people have agendas. Do you think that the President of Harvard would testify that they don\’t need government money? A lot of the talk about the US losing its scientific edge are just academics that want more federal funding. Mistake #2. Mistaking messiness for decay. Sure JFK and Penn Station are a mess, because there are so many people using it. The fact that JFK is crowd is partly because they are constructing new terminals. Mistake #3. Looking at one spot and missing the others. Penn Station is a mess, but Grand Central is beautiful, and people are trying to figure out what to do with Penn Station.
Guest: The US peasants will happily accept a lower standard of living as long as their nobility can give them somebody to blame. THAT shouldn’t be very difficult.One other factor is that the elites in the US are very good at finding people who could otherwise challenge the system and absorbing them so they work to defend the system rather than to overthrow it.
Anonymous: Leverage has run unchecked, worldwide for decades; unless we have repealed the the laws limiting exponential expansionSince the industrial revolution the world economy has been expanding exponentially. You can put in some figures as to when industrialization reaches its limits, and those limits don\’t get hit until the 22nd century.Also, if you look at the imbalances as a fraction of the total economy, they don\’t look nearly as alarming now as they did in the 1960\’s, and the US survived that. Finally even if the US sinks, it takes a lot of time to sink. Britain\’s decline took decades and the Soviet Union had about a generation of economic mismanagement before something dramatic happened.It\’s useful to have a historical approach and to read things from the 1920\’s to the 1980\’s and see how people just got things wrong.
Did i overstate the case? – bsetserAbsolutely not. I’m in the too large to save camp and like Fullcarry believe that adjustment won’t be benign. It would be wrong to underestimate the ability of govts to push these imbalances on down the road. They’ve demonstrated remarkable ingenuity and creativity in coming up with new ways to do that. And quite clearly there is a lot of interest, including foreign interest, in the status quo. But the imbalances are unsustainable and there is no way – no way – that a country which has off-shored its industrial sector can produce the wealth necessary to grow out of the magnitude of debt that this one has incurred. Haircut for everybody. Or, if the govts run for the exits (you have shown private money already has) – that’s the part that I can’t see. What does the world look like without a reserve currency?I keep asking myself, “what is keeping that govt money in”? Political stability? At some point that doesn’t compute either. High food prices, whether a result of current capital flows or simply coincidental to them, have the potential to create even greater political instabilities. We are in the fortunate position, for the moment, to be able to afford to buy food to fuel our SUV’s while others cannot afford to eat! That, to me, doesn’t seem sustainable either. The rest of the world will have to deal with it. And they will.I have wondered for 10 years why China has chosen to develop an export oriented economy to sell goods into saturated markets when it has a 1.2 billion person undeveloped internal market? I can’t figure that out either. And why, oh why, do they believe they can build an industrial society on the basis of the automobile (cheap oil) at the same time that we are kicking ourselves for having done that.It’s that “American Dream”. We’ve sold it internationally. The whole world wants blue jeans, sneakers, American cigarettes, big cars, and rock-n-roll music! It’s not sustainable. It’s not just the financial markets. The business model is broken.
Brad,It gives me the shivers to hear an oxford educated economist with a specialist in foreign funds bring up the concern of whether emerging market assets are big enough to cover our U.S. debt. But I think this is part of the fear and doom that is regular market phenomenon in our down cycles. True, the economic tale is startling, but I don\’t think the innovation, market transparency, regulation (granted it is subpar), liquidity, counter party sophistication, or depth, is emerging in these newly rich countries. There have been some interesting studies completed by Kaufmann about the network effect. According to his studies, networking significantly reduced the degrees of separation from one individual to the next. Similarly, decision making in networks is complicated by the fluidity, division of knowledge, and level of approvals required. I look at the United States as a massively complex economic organization. Chocked full of networked individuals. My fear is that our financial economic sector has grown to complex with to little regulation. I don\’t know if we\’ll be so leveraged ever again. In regard to your fear of emerging markets financing America\’s ridiculous appetites, I think the decline of American wealth will bring about the affluence of emerging economies. In a strange way, the economic leader didn\’t have a tremendous amout to gain from globalization. The effects of thermodynamics and the trending towards stasis will flatten the inter country wealth spreads. http://econdynamism.blogspot.com
Chinese companies will be encouraged to buy farmland abroad, particularly in Africa and South America, to help guarantee food security under a plan being considered by Beijing.Buying up the world to feed the Chinese.
Pakistan rupee is in crisis as i said 5 days ago. Today it fell 3.5%. Forex reserves of pakistan hold is a lie and they are leveraged as thailand did in 1997. Weak demand season of may-june has not stopped oil price from reaching 125 dollars. Demand is 86 mbd now and supply is same. I dont what will happen in jan 2009 when oil demand will be 90 mbd and supply at 86.5 mbd. There is a shortage of 3.5 mbd. New refineries are coming in 2009 which will be causing even more demand for crude.I have no doubt that pakistan will be indonesia of 2008.
Twofish,You really need to travel more to other booming parts of the developing world. The US Economy is no longer towering above other parts of the world. In fact, the booming skyscraper skyline in Dubai, Shanghai, Tokyo, Taipei, Kuala Lumpur, and even Mumbai India will prove to you otherwise. It\’s not just that Dubai is building the world\’s tallest skyscraper, it the emphatic declaration that even in Muslim majority states Malaysia and Dubai, disparaged by the US mainstream media as banana republics, those societies have developed a truly working economic model that represents a hybrid of public and private capital. While the US Economy stalls into recession, all the BRIC nations are booming forward. For the record, even Kuala Lumpur\’s Airport in Malaysia is lightyears ahead of the disorganized and traffic jammed JFK Airport in New York City.
Satish,Want to know why Pakistan is screwed up? Read today\’s Asia Times Article on the tightening grip of US Intelligence Agencies on Pakistan.http://www.atimes.com/atimes/South_Asia/JE10Df01.htmlAlso read,China PLA concern over US-led NATO Military Operations along Western Chinese borderhttp://www.thenational.ae/article/20080504/FOREIGN/965819339/1015/NEWS&Profile=1015Now the North Atlantic Treaty Organization (NATO) will provide the cannon fodder for US military adventurism by the Chicken Hawk Neo-cons along the Western border of China.
DC,world is not about china and US. world is much bigger than that. Please dont refer all troubles of world to US. I am not against pakistan either. I am just refering to BoP crisis that pakistan will face soon. I just want to keep the post not beyond economics.
DC — re the argument that these societies have built a model based on a \"hybrid of public and private capital\". hmmm. In dubai methinks the hybrid is that the same guy who runs the public capital is also the biggest private capitalist — a model that i concede was some positive effects for a real-estate driven economy. but more generally, for all your railing against over-easy US monetary policy, your list of sources of success left out massively negative real interest rates fueled by enormous monetary creation stemming from pegs to teh US. THat probably has something to do with the burgeoning skylines. the same forces that generated mcmansions in the us are encouraging property development in the $ block right now.there are other differences — high rates of savings have allowed much of the world to finance a high rate of investment and still have money left over to lend to the US, and the US doesn\’t save enough to cover current levels of investment, let alone a program to renew our infrastructure. but some aspects of the boom you cite have somewhat less savory causes, and may create boom/ bust cycles of their own.
Brad,Under US Neo-liberal Economic dogma, government intervention in the sphere of \"Industrial Policy\" is forbidden fruit, except in the case of a Federal Reserve led illegal bailout of Bear Sterns and other Wall Street financial institutions in the form of a \"cheap money\" monetary policy. Me thinks that compared to the \"crony capitalism\" taxpayer bailout of politically connected Wall Street banksters, Asian government intervention plays second fiddle. I am much more supportive of the Taiwan government financing of TSMC semiconductor facilities that produce \"real\" economic wealth than the US government Federal Home Loan Bank serving as dumping ground for Wall Street subprime toxic waste. The gross misallocation of capital in the US Economy from fraudulent \"creative accounting\" practices needs to be addressed seriously. There won\’t be any skyscrapers or industries built in the US if these fraudulent Level 3 accounting practices continue.
\"Buying up the world to feed the Chinese.\"With the US gov\’t creating massive amounts of liquidity and trying to inflate its way out of recession, effectively stealing from other countries (commodities priced in USD, peg or no peg), it isn\’t rocket science why developing countries would adopt defensive protection to bypass green paper. If the reserve currency wasn\’t so confetti-like, there would be no need to adopt such extraordinary measures (also witness rice cartels).
FT: But the imbalances are unsustainable and there is no way – no way – that a country which has off-shored its industrial sector can produce the wealth necessary to grow out of the magnitude of debt that this one has incurred.I really don\’t think that this is the case. You can offshore the industrial sector and then work on services, which can\’t be easily offshored. The problem with services is that does tend to increase income inequality, but that\’s a different problem from wealth generations.FT: I have wondered for 10 years why China has chosen to develop an export oriented economy to sell goods into saturated markets when it has a 1.2 billion person undeveloped internal market?It actually hasn\’t. Most of the growth in China has been internal, and the export markets hasn\’t been the prime driver of Chinese growth. Exports get a lot of attention because they are politically visible in Western nations whereas internal growth isn\’t.
DC: In fact, the booming skyscraper skyline in Dubai, Shanghai, Tokyo, Taipei, Kuala Lumpur, and even Mumbai India will prove to you otherwise.Booming skyscaper skylines say to me \"real estate bubble.\" Doesn\’t impress me. Odd that you mention Taipei, since Taipei is having economic problems right now, which is why Ma got elected. You can point to the world\’s tallest building, but what is the occupancy rent. If you are building half-empty skyscrapers that\’s a sign of a badly run economy rather than a well-run one.DC: While the US Economy stalls into recession, all the BRIC nations are booming forward. And in three to five years, when the business cycle turns, the BRIC nations stall into recession, and the US economy will be booming, at which point you should ignore most of the articles about how China has failed.DC: For the record, even Kuala Lumpur\’s Airport in Malaysia is lightyears ahead of the disorganized and traffic jammed JFK Airport in New York City. What about Newark Liberty? Also what about Terminal 5? Also if you go into NYC, you shouldn\’t drive, you should take the Airtrain to Jamaica and then the LIRR. NYC has intentionally (and I think wisely) decided not to invest heavily in roads and spend its infrastructure money on things like the LIRR connection to Grand Central and the Second Avenue subway. New York City is a dirty, messy, chaotic city, which is why I think it will out-create Singapore any day.Also I don\’t think that one should lump in China, the Middle East, and India in one model, since they have nothing in common except their economies work differently than the US. There are lots of different ways of successfully running an economy, and a lot of different ways of messing up an economy. I hate the idea of \"economic models\" since any successful economic system has to grow organically. Which means that there is no reason to think that what works in China will work in Dubai.
\"You can offshore the industrial sector and then work on services, which can\’t be easily offshored. The problem with services is that does tend to increase income inequality.\"For \"little\" England that is the size of Pennsylvania state, a niche economy based on financial services and tourism is probably ok, even though it contributes to gross income inequality which can be ameliorated by progressive taxation policies. A post-industrial service based economy for a large continental country including the US, Brazil, Russia, or China isn\’t going to work. A normal industrial economy would be 50-50 consumption versus production whereas the imbalanced US Economy is 75-25 consumption versus production. Post-industrialism was another stupid idea from the very beginning by Clintonite Robert Rubin.
If you are building half-empty skyscrapers that\’s a sign of a badly run economy rather than a well-run one. – TwofishThat\’s what Western pundits said about the Pudong district in Shanghai. That it would be a white elephant, that no one in their right mind would invest in Shanghai. The Western pundits have been flat wrong. Well even Japan Mori Corporation has privately financed and built the multi-billion dollar Shanghai WTC, which will be the world\’s tallest building for a few months before Dubai\’s skyscraper is completed. The Japanese aren\’t stupid to invest their hard earned capital into Shanghai; the Mori owned Shanghai WTC is already fully leased. Build it and they will come!\"New York City is a dirty, messy, chaotic city, which is why I think it will out-create Singapore any day.\"At 12:00PM midnight, I would rather take my chances on the \"gum stain free\" Singapore metro, than ride the \"grime and gang\" infested New York Subway back from the Airport. Most people I know value their own life. Are you sure New York will be a successful city in the 21st century with a 30% high school drop-out rate? LOL
\"Taipei is having economic problems right now, which is why Ma got elected.\"That is because the previous stupid leadership under the DPP party attempted to isolate the Taiwan economy from mainland China. Direct trade and commerce was inhibited by Taiwan Independence politics. Now we will have direct Air China and China Southern flights into Taipei Taiwan. The tourist industry in Taiwan is already salivating over the prospects of millions of mainland Chinese tourists. Similarily, the US high-tech industry is another big loser from the Neo-nuts US foreign policy with China.
As far as the U.S. dollar is concerned I\’m sure the new currency THE AMERO is on the horizon that will compete with the €URO as well as other currencies.To me FRB policies are leading North America in that direction.
DC: A post-industrial service based economy for a large continental country including the US, Brazil, Russia, or China isn\’t going to work.70% of US GDP comes from services, so it does indeed work. This is one reason few people really care that all the manufacturing jobs are going to China.DC: That\’s what Western pundits said about the Pudong district in Shanghai. That it would be a white elephant.And it has been a white elephant at various times. The Shanghai property market has had its share of booms and busts. DC: Build it and they will come!No they won\’t.DC: At 12:00PM midnight, I would rather take my chances on the \"gum stain free\" Singapore metro, than ride the \"grime and gang\" infested New York Subway back from the Airport. If you want to get to Manhattan, you should take the LIRR not the J or E train. In any case, I don\’t know what you mean about \"grime and gangs.\" The J train is a bit run down, but I\’ve never had a problem with safety.DC: Are you sure New York will be a successful city in the 21st century with a 30% high school drop-out rate? LOLThe high dropout rate is in large part because people with money live in the suburbs, and the high schools in New Jersey and Connecticut are some of the best in the world. NYC also has some world class high schools (Stuyvesant and Bronx Science).
DC: That is because the previous stupid leadership under the DPP party attempted to isolate the Taiwan economy from mainland China.And they were doing this while building lots of buildings in Taipei. This is why a nice skyline isn\’t a sign of a well run economy.
The other thing is never underestimate the power of good political leadership. New York City is a completely different city now than it was in the 1970\’s (as is China), and if NYC and China can both move from where they were in 1970\’s to where they are today, I can\’t imagine why people are so pessimistic about the US economy.
um, no one is forcing the RotW to peg to USD, so why blame the US? to the extent that the RotW\’s CBers apparently believe the twofish versus DC PoV they obviously believe that the US\’ supposedly disastrous monetary policy either is overstated or that the US\’ economic prospects really aren\’t too horrible wrt the RotW otherwise you\’d think — assuming they are smart — they would come up with something better and they haven\’t, ergot wtf? … like if iran and venezuela, per DC, are so keen about wresting themselves away from \’dollar hegemony\’ well then, good luck to em, but you don\’t see anyone else from the RotW following suit and wanting to emulate them; who wants to be iran or venezuela? until more nations start seceding from the US\’ sphere of orbit, either because US-derived inflation becomes much too onerous or a better development model presents itself elsewhere, then tis hard for me to imagine the status quo shifting. either DC needs to make a better case, or he will just have to suck it… and he can\’t have it both
\"And they were doing this while building lots of buildings in Taipei.\"That\’s nonsense. The ousted Taiwan DPP party receives its support from rural Southern Formosa doesn\’t own any skyscraper buildings in Taipei. The Taiwan Kuomintang Party which has a large hidden war chest of money in the billions is another story, but they weren\’t in control for the past 8 years.
\"NYC also has some world class high schools (Stuyvesant and Bronx Science).\"But overall, New York City has among the worst public school systems in the nation. While not sounding politically correct, the truth is ethnic-Asians around 10% of the NYC population that attends Stuyvesant and Bronx Science High School can\’t compensate for the Hispanic 30% of the NYC population with a 50% High School drop-out rate. In the end, ethnic-Asian get screwed anyway in college admissions due to \"whites-only legacy quotas\" for morons like George Bush with a MBA from Harvard University (ie. self-proclaimed C student with 1100 SAT admissions score).
Dear Twofish: You can say this again:DC: For the record, even Kuala Lumpur\’s Airport in Malaysia is lightyears ahead of the disorganized and traffic jammed JFK Airport in New York City. What about Newark Liberty? Also what about Terminal 5? Also if you go into NYC, you shouldn\’t drive, you should take the Airtrain to Jamaica and then the LIRR. NYC has intentionally (and I think wisely) decided not to invest heavily in roads after noting the comments by John Gapper in Thursday\’s FT: If anyone doubt the problems of US infrastructure I suggest he or she take a flight to JFK…ride a taxi on the pot-holed and congested Brooklyn-Queens Expressway and try to make a mobile telephone call en route. That shoudl settle it particularly for those who have experienced smooth flights, train rides and road travel and speedy communication networks in, say, Beijing…or Abu Dhabi recently. The fuld in public and private infrastructure is, to put it mildly, alarming for US competitiveness.Mean while the US spends billions on its silly pointless wars in Iraq and Afghanistan.
Sorry should have typed \"The gulf in…\"
\"70% of US GDP comes from services, so it does indeed work.\" As I previously stated, the velocity of everything in the United States is going well past the \"red line\" where things really start to fly apart. Does the US Economic Model based on \"cheap energy\" still work when spot oil sells today for $125 per barrel, up another 2 dollars overnight? It isn\’t going to work because the US Economy produces little \"real\" economic wealth anymore, and it is physically impossible to restructure the US Economy in time for permanently rising energy costs.
Guest: If anyone doubt the problems of US infrastructure I suggest he or she take a flight to JFK…ride a taxi on the pot-holed and congested Brooklyn-Queens Expressway and try to make a mobile telephone call en route.This is almost as bad as the people in China who are there for one week and think they know everything about it. Take one trip down the BQE and you think you know everything about US infrastructure. (And how you were planning to get to JFK down the BQE I have no idea.)You should have taken the LIRR to Jamaica Station and then the Airtrain, either that or the bus from Grand Central. Since the 1960\’s, New York City has made a conscious decision *not* to spend money on expressways but rather on things like the Grand Central tunnel which when it opens in a few years will get you a direct train connection from midtown to JFK. The BQE is particularly starved for funding because it doesn\’t lead to anything important (which is why I wonder how you got on it).Guest: That should settle it particularly for those who have experienced smooth flights, train rides and road travel and speedy communication networks in, say, Beijing…or Abu Dhabi recently. The fuld in public and private infrastructure is, to put it mildly, alarming for US competitiveness.And you can get that on the way to JFK. There is a very comfortable shuttle bus that leaves every 15 minutes from Grand Central and then the LIRR from Penn. I\’d never take a cab to JFK. NYC is spending large amounts of money on infrastructure, just not roads.
DC & Twofish. Ok we heard you. One shouldn\’t underestimate the staying power of the US, neither should we overestimate the depth of its problems. Bottom line: you can\’t judge that from looking at the skylines of developing nations nor the gum spots in NYC subway. It may be that much of the appearance of wealth that we see around us is superficial and based on debt. The only thing we can do is look at statistics like like trade deficit etc… But even that says little about a nation of educated people, and its capacity to take a hair cut and grow back. Nations don\’t disappear because of a financial crisis, they disappear when no one believes in them. One thing we should not underestimate is the capacity for things to change. Change is slow, but it accumulates and the world can change completely in 20 years. The rise of emerging countries can\’t be stopped. And things that aren\’t sustainable won\’t be sustained. The question, looking at Brad\’s exponential like growth in official assets, is: will there be a discontinuity in that curve – as usually happens with exponentials. Will change be fast, that time.
Yeah, Twofish we know America\’s infrastructure is in tip top shape. Everybody says so. All the foreigners who come here make invidious comparisons of the splendors of our infrastructure with the lousy situation in the Gulf and in China, etc., etc. I guess the guy who wrote in the FT was just dumb and a grouch.
Just a tip for you boys and girls, if you want to own a piece of profits from OPEC energy sales, buy Brazil Petrobras (NYSE Symbol: PBR). Wall Street analysts generally pan Brazil\’s Petrobras for the Brazilian Government\’s 70% ownership. Who cares what the Wall Street slimy analysts think. Petrobras is actually one of the best managed corporations in the Global Energy Industry that produces 95% of Brazilian oil, and significant ethanol production from sugar cane. Petrobras has a joint venture with PetroChina in Africa\’s Angola and also offshore China.Report: Brazil wants OPEC membershiphttp://www.businessweek.com/ap/financialnews/D90I841O3.htmBrazilian President Luiz Inacio Lula da Silva believes his nation wants to join OPEC, a leading German weekly quoted him as saying Friday. Silva said in the interview published in Der Spiegel news magazine that his nation plans to exploit massive deep-water oil reserves discovered near Rio de Janeiro. \"Then Brazil will become a major oil exporter,\" Silva said in an advance copy of the interview to be published Saturday.
DC: But overall, New York City has among the worst public school systems in the nation.It depends on what criteria you use. Given the huge challenges it has, I think it does reasonably well.DC: can\’t compensate for the Hispanic 30% of the NYC population with a 50% High School drop-out rate.It\’s more of a class thing than ethnicity. Upper class Latin Americans do well in American schools. Lower class Chinese do poorly. I live in a mostly Hispanic neighborhood and I\’ve ended up with a tremendous amount of respect for the people there. They work hard and do the best they can with what little they have. What happens is in most places is that to make things \"clean\" they try to kick out the riff-raff, and so you end up some something \"clean\" but \"sterile.\" Even with the recent tightening of immigration, the US in general and NYC in particular are places were the \"tired hungry masses yearning to breathe free\" end up to make something of themselves.What you see as signs of US decay, I see as signs of power. The reason I think I\’m right is that if you go back to 1980, 1960, 1920, 1900, and even 1850, you see foreign travelers saying exactly the same things about NYC, making exactly the same conclusions, and being proven completely wrong in the end.
And now the CIA is making a boogey man out of China. I love the statement that China could be a threat to our \"forces in the region\" without saying what region is meant. I presume the region is East Asia. Rather as if China said the US military could be a threat to its \"forces in the region\" meaning the Gulf of Mexico, if it had any forces there. US imperialists don\’t seem to think China has any business being a power in its own backyard if we are there. Amazing.http://www.worldtribune.com/worldtribune/WTARC/2008/ea_china0124_05_09.asp
Guest: All the foreigners who come here make invidious comparisons of the splendors of our infrastructure with the lousy situation in the Gulf and in China, etc., etc.People see what they want to see. If someone comes to either the US or China with the preconception that it is backward and decaying, they can find evidence to explain what they are looking for. At that point you look at their criterion of judgment, and it doesn\’t look good.Tokyo has much better infrastructure than NYC and people were saying how Japan was going to beat the US in the early 1990\’s. Part of the problem is people see what they want to see.If you want to see good road infrastructure in the United States, you can go to Texas. There is a huge amount of infrastructure development in NYC, its just that most of it is underground. The trouble with road infrastructure is that it leads to horrible urban sprawl and a car/SUV culture which I think is not going to be a good thing if oil prices reach $200/barrel.
Twofish,It is certainly true that Hispanics are generally hard working people. However, with the exception of the established Cuban community, Hispanics also have a low cultural regard for education as reflected in their staggering drop-out rates from High School and primary education. It is true that poorer Chinese also have difficulties. A teacher friend who worked in Flushing Queens NY described the situation to me. She stated that while alot of poor Chinese immigrant students didn\’t study very much, at least they showed up at the classroom which is enough to graduate from high school in New York City. The Hispanics were mostly AWOL (Absent Without Official Leave) from school. At least they should show up at class.
DC: Hispanics also have a low cultural regard for education as reflected in their staggering drop-out rates from High School and primary educationThis is just bluntly not true at least among the groups that I have any familiarity with. There are many complex reasons for the high drop out rate, but a cultural lack of regard for education is just not one of them.
Regarding the contents of the blog (China vs Middle East etc), I would like to see more focus on US economic policy and how it could be improved to tackle the challenges that the rest of the world presents to America. I am neither optimistic or gloomy about the US. Given the size of China, India, Brazil etc, relative US decline is inevitable, but the US can still stay ahead per capita provided that it is realistic about its problems and is willing to make sacrifices to solve them.In an attempt at \"policy invention\" (Guest on 2008-05-08 11:07:23), I set out in my own blog reservedplace.blogspot.com (which was intended as a satellite of this) how I think the US could have dealt better with the reserve inflows. I believe the solutions I suggest are still workable, but the sacrifices necessary to adopt them keep growing the longer work is delayed. The blog is my way of avoiding writing long comments (flipper). I recommend that DC and Twofish set up their own blog to conduct their arguments. I might even look in occasionally….honest!
\"The basic situation is this, the world is awash with bad US mortgage paper. The standard of living in the US can\’t be supported on debt anymore. The people of the US don\’t produce enough real value to service their debts. Institutions can no longer be supported on debt gone bad. Something\’s got to give — meaning something has to bring the US standard of living down to a level consistent with our declining actual wealth. Meanwhile all the higher-end banking shenanigans will only debase the dollar and make it more difficult for people already in distress to buy gasoline and food. Investors are rapidly diversifying into other stores of wealth including commodities and energy\"I hate to say this, but I agree. We\’ve been using credit to paper over things for so long we have no idea how to go back.
That\’s funny, Twofish. Most of the US infrastructure that is worth seeing is \"underground\" where it can\’t be seen. You are right that people tend to see only what they want to see, including marvelous \"infrastructure\" that is all \"underground\". Or maybe in Texas, but nowhere else?
flipper — the RGE system automatically logs out inactive accounts, and typing a longish comment doesn\’t register as activity. I have lost posts (not just comments) because of this. the solution is to type the long comment in word (or a la rebel econ, set up your own blog! — i don\’t mind references to blog posts that are in response to my post in the comments). I generally though would prefer shortish to longish comments.Rebel — I think there is something to the Dutch disease anology. But the solution to Dutch disease is usually more public savings (to avoid real appreciation), not more public investment. More investment financed by government borrowing would have pushed up the risk free rate, but it also likely would have produced a bigger deficit. Basically the answer would have been a policy of restraint — we will lock up all the funds you send our way by adding to our reservse and sending them back out rather than spending the inflow. and that isn\’t the american way.incidentally, we still are supporting our standard of living by debt. look at the growth in the custodial accounts at the NY fed. this week saw a small fall in total central bank holdings, but after the huge recent rise that isn\’t all that much of a surprise. weekly data bounces around.
The sky is falling! The sky is falling!If you look at the US current account deficit, pretty much all of it can attributed to two sources. The Bush tax cuts and the Iraq war. Neither of these were good ideas, but these two bad decisions are not going to doom the US, and the deficits aren\’t due to deeper problems in the US economy. If you reverse the Bush tax cuts and stabilize the situation in Iraq, that\’s all you really have to do to make the numbers work out.
Brad,Thanks for your reply, Brad. I was assuming that the private sector deficit (spent on consumption and excessive housing for example) is the problem, and higher long term rates would mean less of that, such that the overall US deficit was shifted to the government, who would spend it on something more productive. A deficit per se is not a problem, provided you spend it on something that yields more than the cost of funding. You have to borrow to access the exorbitant privilege. Both infrastructure spending and reserve accumulation imply a government deficit. I am afraid that the \"American way\" is precisely what no longer works, and has to change.
Production is the key. Restarting the current system, especially housing, simply adds even more currency pressure if thats even possible. Very tough choices are going to have to be made no matter what.
unable to tap the housing ATM, credit card debt is now accelerating to support American living standards; this is not going to end well
I don\’t think that the US really has a wealth production problem. What it has is a wealth distribution problem. If you have an education and skills, the US economy is really, really good, the problem is that if you don\’t have education and skills then you are in trouble. One thing that I think is driving a lot of what is going on is that we are in the age where wealth depends crucially on control and participation in social networks, and in this situation wealth attracts wealth. It\’s not so much that wealthy people are conspiring to take wealth from poor people. It\’s that if you get an owner of a concrete factory talking to an owner of a pencil factory, the interaction produces wealth.My prescription for the US is \"soak the rich\" in order to pay for public goods like health and education. One interesting thing is that the subprime mortgage mess has been a very unintentional form of wealth distribution from Wall Street to people with poor credit. Something more intentional would be useful.As far as \"underground infrastructure\", NYC is very unlike any other American city for its use of public transportation, and there are several large infrastructure projects going on right now, most of them being expansions of the subway/railway system. The reason that got brought up is that one big project is the tunnel between Grand Central and the Long Island Railroad is going to drastically shorten the commute to JFK, which is why I find Gapper\’s remarks utterly non-sensical. Also, I don\’t know why he was going to JFK since Newark is a much nicer airport, and I certainly have no idea why he was taking the BQE to JFK in a taxi. (Since the most direct way to JFK is through the Long Island Expressway and then the Van Wyck. My guess is that the taxi driver is trying to pad the fare since anyone that takes a yellow taxi to JFK is a sucker.) As for cell phones, I don\’t know why he had problems since I\’m typing this through my 3G cell internet connection on my way to Newark Airport.
Sorry, been busy but hope Farrar is still reading this particular post\’s comments; been on other sites which focus on Brazil and Russia – they had lotsa comments but were mostly in Portuguese and Russian, both of which, due to my own incompetence, I don\’t speak , would be really interested if you could provide links to sites which provide English content on either or both Brazil and Russia. BTW, I\’m not American , came by Brad\’s site on a referral link from another site, though Brad hardly needs anyone to defend his site but itr\’s a bit hard to balance stats based material and interesting content, suffice to say, too much of either tends to alienate readers on either side of the spectrum.
The fact is, though, that foreign nations, particularly China have artificially undervalued their currency versus the dollar. THe increases in debt in the United States and current account deficits were just the natural reactions to these circumstances. Now, the chickens have come home to roost, in Jerimiah Wrights words. THe real question is, which economic system can withstand a low valued dollar the most?Is it the European or Chinese? These are the nations that created the artificial circumstances in the first place. THe reason for this is that their economies are export driven. TO be competitive they required overvalued US dollars. With the depreciation of the dollar these economies will no longer be competitive. In fact, to survive, European corporations are going to have to move jobs to the United States.IN the United States, the problems will be higher gas and commodity prices. But, the fact is, the conspicuous consumption within the United States can easily handle reductions in energy and commodity utlization. That is a small accomodation to make given the fact that as a debtor nation we now can repay our bills with lower valued currency.
No Mark, the reserve inflows were a potential advantage to the US, and have actually long been envied by Europe. Unfortunately, America failed to organise itself to take that advantage:http://reservedplace.blogspot.com/2008/04/us-economic-policy-shot-in-foot-2.html
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http://www.salebrandsneakers.comThis year marks the 20th anniversary of the famous Bo Knows commercial series. Nike has rolled out a number of shoes honoring the best who represented the Nike Training category. This colorway featuring a Black Nubuck upper and Metallic Silver accents. Similar to the Tecmo Bo Air Trainer 1 and Tecmo Bo Blazer Mid, pixels find their way into the mix by surrounding the Swoosh on the midpanel and depicting a football clad Bo Jackson sprite on the tongue tag. The Tecmo Bo Nike Sky Forces are available at salebrandsneakerswww salebrandsneakers com are wholesale cheap:I sell nike air force 1,nike air jordan,salebrandsneakerscheap nike nike dunks for women,jordan brand shoes low 1996,Custom White NIke Dunks,get cheap af1,air jordan shirts cheap,all navy blue jordans basketball sneakers,where can i buy nike air max cheap,Pls kind contact us or chat with me onwww.salebrandsneakers.comMSN:firstname.lastname@example.orgYahoo&E:email@example.com