US Banks double whammy

Even if the bonds dont suffer a downgrade, fear will induce people to panic and withdraw or sell whatever securities or bonds or other financial instruments.

This will cause liquidity problem to the banks and in the end, the bonds will be downgraded as there isnt enough liquidity to support that rating.

So it is a lose lose situation here. Intervention will only delay the inevitable althought CB can print whatever money they want. But the risk they take by intervening has no rewards other than to soothe the stock market and preventing it from crashing. But still, the inevitable will still come.

This bear is going to be one long one with an incoming short rally in the middle, which people will get burned at the peak. Everyone is just waiting at the sidelines, waiting for the right opportunity to come. Therefore the herd mentality has already formed. Therefore a spark is needed for the herd to move. More rate cuts anybody?

The Fed & Starcraft

I think they are quite similar. Here goes:

The Fed Rate cut is similar to Stim pack for the marines in starcraft. When you clicked Stim pack once, you shoot faster and walk faster, but you also die faster. So there are 3 more Stim pack to use. When the effects are gone, you click the stim pack once more when little zerglings come to rape you.

Now you are left with 2 more tries and 20/40 health. So you need a MEDIC!!! So the fed comes to the rescue again from the horrible zergs with a $200 billion first aid kit to stop the bleeding. But then suddenly, motherly hydralisks comes!!! You quickly stim pack with your newly found strength given by the medic. This time you need double the stim pack, because the Hydralisk is suffering from PMS!!! So you clicked twice and it's back to square one of 20/40 health.

This time the sexy medic has already gone back to base because she sees the marine as not worth saving. Furthermore, her woman's intuition tells her to RUN!!!

This time the mighty Ultralisk comes. You decided to stim pack the last two times not because you want to fight it - you just want a quick death!!! LOL. (He could have ran. But the Ultralisk runs on 4 legs, so it is faster!!!)

The medic is smart to run to fight another day. But will she call the Protoss for help??? Will the terrans be afraid that the Protoss will take over??? Will the Ultralisk convert to become a vegetarian??? Time will tell.

Rising Inflation and Africa

With the world facing rising inflation and thus decreasing real income, how will this stabilise?

What if the world population rises more than the food supply? It is sure to cause increasing inflation. It will mainly affect the middle and lower income. In this capitalist world economy, where countries are increasing relying on domestic consumption to sustain themselves in times of economic uncertainty, such as India, capitalist main target is the middle income group because of their mass population.

But this rising inflation will not hit them in a direct way. People will still spend because of the instilled culture-ideology of consumerism through mass media (TV, paper media, internet, advertisements).

People who still live with their parents will rely them for food and lodging, thus a "subsidy" for this rising inflation. Those that cannot stop spending always have alternatives such as using the lovely plastic cards or borrow from their generous friends.

Tackling Food Inflation

Although the world cannot do much to the energy inflation because of the OPEC, we can do something to food inflation. This problem has to be tackled globally in order to achieve stability in every country.

If not for the goal for profit and growth of capitalistic companies, major excess food supply can be channelled to poor countries such as Africa. For a start, those people need at least carbohydrates to sustain themselves. Only when they have the energy to work, they channel their time to start at the basics at every civilisation. They have to start by agriculture or by farming. But the problem is that these people are used to grow all these food for export purposes.

If only the food problem is solved in these poor places will they break their poverty cycle. It is the first step so that everyone can concentrate to build a civilisation. These countries need some hero like Gandhi to make a spark for them to get out of their situation. Perhaps benevolence like Gandhi and leadership like Hitler(excluding his atrocities).

This means that the country needs high bureacracy at the start - central planning. The government can then progress to democracy slowly. Only then can they build infrastructure for growth - Industrialisation. They could perhaps be the next place for cheap labour and for FDI to flow in. Although this is exploiting, the people will still benefit until a growing middle class emerge.

However, this may not be the case. It's because everyone is thinking for the short term in this fast paced world. People wants to make profit in the short term. Bureacrats knows that they cannot be in their position for long so they need to increase their wealth by corruption. The cycle continues. The irrationalities of rationality indeed.