I wonder how some of the commenters in the mainstream media get their jobs. Maybe it’s because they write books, as has David Brooks.

I don’t know how those on CNBC like Jim Cramer or Dennis Kneale manage. It’s a complete mystery. These are nothing more or less than distractions. Here, Kneale declares the current recession over:

Here, he goes after Zero Hedge, as if there isn’t anything more important to comment upon than his disagreements with bloggers:

Tom Friedman of the New York Times has written several books and developed the concept of international information swapping making the world in general more accessible – flatter.

Here is a comment from Tom’s latest article remarking about the ineffectiveness of the proposed rules on carbon emissions. He perhaps suggests a redux of the Iranian’s (failed) ‘Facebook Revolution’:

And then there is We the People. Attention all young Americans: your climate future is being decided right now in the cloakrooms of the Capitol, where the coal lobby holds huge sway. You want to make a difference? Then get out of Facebook and into somebody’s face. Get a million people on the Washington Mall calling for a price on carbon. That will get the Senate’s attention. Play hardball or don’t play at all.

Very flattish, this; the conceit largely depends upon an industrial/commercial/manufacturing basis with unrestricted flows of capital funds with businesses and support structures needing to communicate over intercontinental distances. Much is made of the advances in telecommunication from video conferencing, long distance data management, various forms of social networking and other computer/internet related management and organizational toys … er, tools.

This concept therefore requires cheap and abundant energy to facilitate both the electro- mechanical processes intrinsic to digital processing and communication as well as for the underlying production and consumption itself. As has been seen – by simply walking outside – the steady increase in energy costs since 1998 – 99 has severely dented this concept. Globalization is very energy intensive. As energy costs continue to rise – and will do so relatively regardless of inflation or deflation in the surrounding economic context(s) – productive efforts will tend toward localization and away from global commerce.

Perhaps Kneale and Friedman should take their arguments to the Peoples Bank of China or to lower Manhattan. That the increases in energy costs have had this effect can be seen in two areas; China currency and banking policies and the efforts to revive structured finance and securitization on Wall Street.

When Chinese central bankers remark about the need for a new international reserve currency or the government lies about the productivity of their economy they are speaking eloquently by their actions. As the Chinese – as well as the other developing nations – are dependent upon Americans to consume their products the retrenchment in this country coupled with increased energy costs in poor countries is highly destructive to their economies. Reading between the lines suggests – and cannot suggest otherwise – that the Chinese are poised at the edge of the precipice and that the managers of that country are both aware and terrified!

This is from the cited Wall Street Journal article above:

The central bank’s report, on the PBOC Web site, comes a day after Li Lianzhong, an academic at a key think tank under the Communist Party of China, said China’s yuan should become the fifth currency in the SDR, joining the U.S. dollar, yen, euro and sterling. Mr. Li proposed an equal 20% weighting in the SDR basket for the five currencies.

In its report Friday, the PBOC also said China is facing both deflationary pressures in the short term and inflationary pressures in the longer term.

Deflationary pressures have strengthened this year partly because of overcapacity in the domestic market due to weak external demand and falling global commodity prices, it said. But the possibility of global price rises after market confidence recovers, excessive money supply and increasing fiscal deficits in some economies, will likely create inflationary pressures in the longer run, the report said.

The central bank’s report echoed a theme in comments Thursday by former PBOC adviser Yu Yongding. At a three-day United Nations conference on the economic crisis, Mr. Yu pushed for monetary and financial-infrastructure reforms.

First of all, as I have pointed out here previously, the swapping of one fiat currency (IMF SDR’s) for another (US dollar) is pointless, that the suggested IMF Special Drawing Right is a proxy for the dollar, that the IMF is a sock puppet of the US Treasury and establishment business interests and is also pointless and a blatant exercise in Chinese self- interest. It is also irrelevant to what is undermining the world’s economies and the Chinese know all this, anyway!

Second, there seems to be an inflation- in- China consensus developing out of stimulus and recapitalization efforts there. It is reasonably presumable that PBOC governer Zhou Xiaochuan and economist Li Lianzhong know something about their own businesses, on the other hand these characters could simply be cardboard- cutout figures like Kneale.

The manic press forward to restart structured finance by the government, the Fed and the primary dealers on Wall Street also speaks louder than words. Restarting SF and its accompaniment Securitization would create phantom assets that could conceivably hedge against sharp increases in energy costs. This seems to be the consensus strategy for dealing with those costs, rather than the promotion of alternative energy. conservation or greater efficiency. Here is Friedman again:

What are Republicans thinking? It is not as if they put forward a different strategy, like a carbon tax. Does the G.O.P. want to be the party of sex scandals and polluters or does it want to be a partner in helping America dominate the next great global industry: E.T. — energy technology?

The small – r republicans want to use finance to offset energy costs, so does business, heavily indebted consumers, near- bankrupt real estate developers … just about everyone. Conservation requires every American to lose. Financialization means Americans win and the non- structured Chinese … lose. The weight of concensus puts momentum behind the ‘hope’ concept. Forcing equities, housing and other assets higher – even by blatant manipulation – is desireable and necessary. The alternative is chaos.

Everyone knows this and is terrified.

The problem is – like industrialization itself – structured finance has always failed. It failed in 2008 for intrinsic reasons and the same flaws will cause the ‘Son of Structured Finance’ or Structured Finance Deux’ or whatever the establishment cheerleaders want to call it … to fail as well. Bigger. Worse. More spectacularly!

Winston Churchill remarked that “Americans can always be counted on to do the right thing…after they have exhausted all other possibilities.” We are in the exhaustion phase currently. The question is whether the time for the ‘right thing’ has passed already.

Evidence by Chinese central bankers and Wall Street finance is that it has.