As Iranian President Mahmoud Ahmadinejad continued his Latin American tour, U.S. Treasury Secretary Timothy Geithner arrived in Beijing to persuade the Chinese government to support sanctions on the Iranian oil industry.
China is the largest importer of Iranian crude but decreased volumes recently due to a dispute over contract terms. Although the country's demand for crude oil has decelerated, the latest data still showed a growth of 6 percent in 2011 compared to a year earlier.
What Should China's Response Be?
I propose this:
Dear Secretary Geithner
In light of the fact that the US Defense Secretary announced on Face the Nation that "Iran Not Trying to Develop Nuclear Weapon" China will not support a US-Led oil embargo.
Moreover, we will consider any efforts by the US or Europe to block Iranian exports to be economic warfare against China.
We call on the United States to dump their unfounded economic attack on Iran immediately.
That would set the proper tone for discussion and make the Obama administration as well as Republican warmongers look foolish in the process.
Unfortunately, China is unlikely to do that. Instead, If the US and Europe are stupid enough to ban Iranian oil, China would have additional leverage on those disputed Iran oil contracts mentioned above.
Nowhere in the slanted article does the author mention the fact that Leon Panetta emphatically stated "Are they trying to develop a nuclear weapon? No. But we know that they're trying to develop a nuclear capability, and that's what concerns us."
Instead all we see mentioned in the above Bloomberg article is "They need to know that if they take that step, they're going to get stopped," Defense Secretary Leon Panetta said Jan. 8 on CBS News' Face the Nation."
Not only is Panetta's position absurd, so is the war-mongering position started by Bush and continued with Obama.
Speaking of which, notice how these war-mongering nutcases think:
"[Former Obama advisor] Ross underscored that U.S. willingness to stop Iran from getting nuclear weapons affects decision-making in other countries that fear Iran, including Israel and Gulf states. If the White House abandoned a pledge to stop Iran made by Obama and President George W. Bush before him, the U.S. would lose all credibility, he said."
Credibility is lost when the secretary of Defense freely admits Iran has no nuclear weapons program, when Iran volunteered to step up inspections, yet the US insists that Iran stop its nuclear program entirely, not just its weapons program (that it does not even have, much like the nonexistent WOMD program that Bush used in a war that wasted $trillions in Iraq).
Credibility in news reporting is lost when Bloomberg quotes the defense secretary, leaving out the most important part.
I emailed, Mark Silva, the Bloomberg editor responsible for this story this morning. I will send a second email with a link to this article Mark Silva and also to Indira Lakshmanan, the reporter for this slanted story as well.
Chinese stock have been on a 2-day tear as Premier Wen Jiabao has come flat out in support of the stock market.
Moreover, money supply in China is up the most since last April and new Chinese loans exceeded the estimates of all 18 Bloomberg economists. M2 rose 13.6 percent, the fastest pace since July.
China's stocks rose the most in three months after new lending and money supply exceeded estimates in December, boosting speculation the government is relaxing monetary policies to bolster economic growth.
Chinese new loans totaled 640.5 billion yuan ($101 billion) last month, the highest amount since April, the People's Bank of China said yesterday. That exceeded the estimates of all 18 economists surveyed by Bloomberg. M2, a measure of money supply, rose 13.6 percent, the fastest pace since July, it said. That compared with the 12.9 percent median of 18 estimates.
Premier Wen Jiabao called for measures to boost confidence in the nation's stock market, the Shanghai Securities News reported today, citing his comments at the National Financial Work meeting. He urged reforming initial public offerings and improving companies' dividend payouts, according to the report.
The premier's comments signal the government may take more measures to boost stocks, including allowing social security funds to buy equities, David Li, UBS's chairman and country head for China, said in an interview in Shanghai. Funds may flow out of the property market and into stocks as the government isn't showing any inclination to ease curbs in the real-estate industry because prices "are still high," he said.
Central bank governor Zhou Xiaochuan said yesterday the nation must be ready to combat possible shocks from Europe's debt crisis and an uncertain U.S. economic outlook. China cut the reserve requirement for the first time since 2008 on Nov. 30 as Europe's debt crisis eroded demand for its exports.
$SSEC Shanghai Stock Index Daily Chart
The Shanghai stock index has been on a big two-day advance, but let's put some perspective on the story.
$SSEC Shanghai Stock Index Monthly Chart
US vs. China M2 - Who is Printing More?
For all the hype talk about US hyperinflation and soaring money supply from the Bernanke Fed, let's add some perspective on money supply growth as well.
US vs. China M2 Absolute Amounts
click on chart for sharper image
US vs. China M2 Year-Over-Year Percentage Change
Charts courtesy of Chris Puplava at Financial Sense. I asked for them yesterday in expectation of writing this post today. Chart annotations and comments are mine.
The above chart provides a nice visual explanation for the "reverse decoupling" and outperformance of the US stock market in 2011. Money supply plunged in the Eurozone as well.
Bernanke flooded the markets with liquidity, yet all if did was hold stocks flat. Compared to China and Europe, that was a huge "accomplishment" but it fueled a rise in gasoline and food prices and brutally punished those on fixed incomes with excessively low interest rates on savings accounts.
Note that Money supply in China in mid-to-late 2009 was soaring at 30% annual growth. The recent stock market plunge in China came with growth "collapsed" to 13.60%. Meanwhile M2 growth in the US peaked at 10%.
All things considered, it is amusing to hear all the US hyperinflation rants, especially those accompanied with a virtual love affair for China such as Peter Schiff and Jim Rogers.
Those looking for malinvestment can find no bigger place than China.
"In the last 200 years the population of our planet has grown exponentially, at a rate of 1.9% per year. If it continued at this rate, with the population doubling every 40 years, by 2600 we would all be standing literally shoulder to shoulder." says Professor Stephen Hawking as reported by Edward Morgan in Looking at the New Demography.
Suffice to say the rate of population growth will not continue, and Morgan makes the case we are already in stage 5 of The Demographic Transition Model
click on chart for sharper image
Peak Oil Implications on Population Growth
Whereas Morgan presents a relatively benign view of things, even wondering if there are ways to reverse stage 5 decline, Paul Chefurka in Population: The Elephant in the Room sees things quite differently, primarily because of oil usage.
Each of the global problems we face today is the result of too many people using too much of our planet's finite, non-renewable resources and filling its waste repositories of land, water and air to overflowing. The true danger posed by our exploding population is not our absolute numbers but the inability of our environment to cope with so many of us doing what we do.
It is becoming clearer every day, as crises like global warming, water, soil and food depletion, biodiversity loss and the degradation of our oceans constantly worsen, that the human situation is not sustainable. Bringing about a sustainable balance between ourselves and the planet we depend on will require us, in very short order, to reduce our population, our level of activity, or both. One of the questions that comes up repeatedly in discussions of population is, "What level of human population is sustainable?"
Oil first entered general use around 1900 when the global population was about 1.6 billion. Since then the population has quadrupled. When we look at oil production overlaid on the population growth curve we can see a very suggestive correspondence:
A closer look at the two curves from 1900 to the 2005 reinforces the impression of a close correlation:
The first questions everyone one asks when they accept the concept of Peak Oil is, "When is it going to happen?" and "How fast is the decline going to be?"
The steepness of the post-peak decline is open to more debate than the timing of the peak itself. There seems to be general agreement that the decline will start off very slowly, and will increase gradually as more and more oil fields enter decline and fewer replacement fields are brought on line. The decline will eventually flatten out, due both to the difficulty of extracting the last oil from a field as well as the reduction in demand brought about by high prices and economic slowdown.
The post-peak decline rate could be flattened out if we discover new oil to replace the oil we're using. Unfortunately our consumption is outpacing our new discoveries by a rate of 5 to 1. to make matters worse, it appears that we have probably already discovered about 95% of all the conventional crude oil on the planet.
A full picture of the oil age is given in the graph below. This model incorporates actual production figures up to 2005 and my best estimate of a reasonable shape for the decline curve. It also incorporates my belief that the peak is happening as we speak.
In ecology, overshoot is said to have occurred when a population's consumption exceeds the carrying capacity of its environment, as illustrated in this graphic:
Overshoot
Populations in serious overshoot always decline. This is seen in wine vats when the yeast cells die after consuming all the sugar from the grapes and bathing themselves in their own poisonous alcoholic wastes. It's seen in predator-prey relations in the animal world, where the depletion of the prey species results in a die-back of the predators. Actually, it's a bit worse than that. The population may actually fall to a lower level than was sustainable before the overshoot. The reason is that unsustainable consumption while in overshoot allowed the species to use more non-renewable resources and to further poison their environment with excessive wastes.
In the case of humanity, our use of oil has allowed us to perform prodigious feats of resource extraction and waste production that would simply have been inconceivable before the oil age. If our oil supply declined, the lower available energy might be insufficient to let us extract and use the lower grade resources that remain. A similar case can be made for a lessened ability to deal with wastes in our environment.
Excess Deaths
[Chefurka goes through a series of grim charts culminating with with this explanation of what is coming]
The Cost
The human cost of such an involuntary population rebalancing is, of course, horrific. Based on this model we would experience an average excess death rate of 100 million per year every year for the next 75 years to achieve our target population of one billion by 2082. The peak excess death rate would happen in about 20 years, and would be about 200 million that year. To put this in perspective, WWII caused an excess death rate of only 10 million per year for only six years.
Given this, it's not hard to see why population control is the untouchable elephant in the room - the problem we're in is simply too big for humane or even rational solutions. It's also not hard to see why some people are beginning to grasp the inevitability of a human die-off.
UN Population Projections
Let's put aside the really grim projections and simply ponder the "low population track" in the following charts of population projections from the UN.
I cannot find the article or source for that chart but the image is from a link on Seeking Alpha.
Demographic and Economic Questions
Is that low UN track that unbelievable? If not, what if the starting point is now, not 2040?
Who is going to pay the medical costs of all the retirees in the developed-world if people live longer and the population simply stagnates?
Where are the energy resources going to come from if the population keeps growing instead?
Where are the energy needs of China alone going to come from at the current rate of China's economic growth regardless of whether the Chinese population grows or not?
Those who think we are going to "grow" our way out the the current global economic mess better have good answers for the questions in points number one and three above.
Problem number two is a huge problem in Japan right now. Thee US will face the same problem not too far down the road.
Those who suggest immigration and population growth is the solution to problem number two better have an answer to question number three while also explaining how immigration and population growth is nothing more than a can-kicking exercise.
The China problem is right here, right now. Peak oil all but ensures China's growth rate is going to plunge in the not too distant future, there is going to be a huge global showdown over oil supplies with China the winner, or a cheap easy to produce means of renewable energy is found in the next five years?
All the tin hats that disputed Ron Paul's position that Iran was not developing nuclear weapons can now hear the same thing from US Secretary of Defense. Please consider Panetta admits Iran not developing nukes.
U.S. Defense Secretary Leon Panetta let slip on Sunday the big open secret that Washington war hawks don't want widely known: Iran is not developing nuclear weapons.
Appearing on CBS's Face the Nation on Sunday, Panetta admitted that despite all the rhetoric, Iran is not pursuing the ability to split atoms with weapons, saying it is instead pursuing "a nuclear capability."
That "capability" falls in line with what Iran has said for years: that it is developing nuclear energy facilities, not nuclear weapons.
"I think the pressure of the sanctions, the diplomatic pressures from everywhere, Europe, the United States, elsewhere, it's working to put pressure on them," Panetta explained on Sunday. "To make them understand that they cannot continue to do what they're doing. Are they trying to develop a nuclear weapon? No. But we know that they're trying to develop a nuclear capability, and that's what concerns us. And our red line to Iran is, do not develop a nuclear weapon. That's a red line for us."
That admission by Defense Secretary Panetta proves just how preposterous the US position is. Hopefully Europe has second thoughts over the absurd embargo it is considering later this month.
America's corn farmers have been benefiting from annual federal subsidies of around $6 billion in recent years, all in the name of ethanol used as an additive for the nation's vehicles.
That ends on Jan. 1, when the companies making ethanol will lose a tax credit of 46 cents per gallon, and even the ethanol industry is OK with it -- thanks in part to high oil prices that make ethanol competitive.
Subsidized since 1979 as a homegrown fuel cleaner than gasoline, corn ethanol had plenty of opponents, environmentalists among them.
Environmentalists question the cleaner energy premise -- adding factors like tractor diesel emissions and fertilizer runoff make it dirtier, they say.
"Corn ethanol is extremely dirty," Michal Rosenoer, biofuels manager for Friends of the Earth, said in heralding the tax credit's demise. "It leads to more climate pollution than conventional gasoline, and it causes deforestation as well as agricultural runoff that pollutes our water."
Opponents also see corn ethanol, which now takes a larger share of the U.S. corn crop than cattle, hogs and poultry, as a factor in driving food prices higher.
"The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables," Rosenoer added.
But there's a nearer-term battle brewing over corn-based ethanol. A 2005 law requires that 7.5 billion gallons of renewable fuel be produced by 2012 -- 6.25 billion gallons were produced in 2011. A 2007 revision gradually increases that to 36 billion gallons by 2022.
In January, the federal government is stopping a 45-cent-a-gallon subsidy to ethanol producers, who will pass that extra expense to drivers who buy ethanol-supplemented gas, said AAA Carolinas spokesman Tom Crosby. Extra costs at the pump will amount to about 4 cents, he said.
For the first time in more than three decades of generous US government subsidies for the domestic ethanol industry, coupled with a steep tariff on imports, the United States market will be open to imported ethanol as of January 1st, 2012, without protectionist measures. Today's adjournment of the 112th Congress means both the US$0,54 per gallon tax on imported ethanol and a corresponding tax credit of US$0,45 per gallon for blenders, the VEETC (Volumetric Ethanol Excise Tax Credit), will expire as expected on December 31st.
"With Congress in recess, there are no opportunities for further attempts to prolong the tax credit or the tariff, so we can confidently say these support mechanisms will be gone at the end of 2011," said the Washington Representative for the Brazilian Sugarcane Industry Association (UNICA), Leticia Phillips. This means that in 2012, the world's largest fuel consuming market will be open to imports of less costly and more efficient ethanol, including sugarcane ethanol produced in Brazil, recognized since 2010 by the US Environmental Protection Agency (EPA) as an advanced biofuel because of its verified reduction of up to 90% in greenhouse gas emissions compared to gasoline.
If attempts in Congress to prolong the tax credit had been successful, the subsidy package now about to expire would continue to cost American taxpayers about US$6 billion per year. As for the tariff, meant primarily to keep Brazilian sugarcane ethanol out of the US market, its demise should reinforce fact-based assessments about the various feedstocks used around the world to produce ethanol, according to UNICA President Marcos Jank.
45 Cent Subsidy Ends, So Does 54 Cent Tariff
With the tariff ending, price of imported ethanol should drop by 54 cents per gallon. The net effect of the end of expiring bill, all thing being equal (which they won't be), should be a 9 cent drop in price of ethanol.
Federal and State Ethanol and Biodiesel Requirements
Minnesota, a major producer of ethanol, has required all gasoline to contain at least 7.7 percent ethanol since 1997. Hawaii requires 85 percent of its gasoline to contain 10 percent ethanol, effective on April 2, 2006. The intention of the law is to spur local production of ethanol from sugar, but the ethanol could also come from the U.S. mainland or from Brazil.
Minnesota was also the first State to require biodiesel blending into diesel fuel, at 2 percent by volume. The requirement became effective in mid-2005, when two new biodiesel plants, each with 30 million gallons per year capacity, began operation in the State. The law was waived several times because of quality problems with the biodiesel, but it is again in effect.
Washington requires 2 percent ethanol in gasoline and 2 percent biodiesel in diesel fuel no later than November 30, 2008. The requirement will increase to 5 percent once the State can produce biodiesel equal to 3 percent of its diesel demand.
Louisiana enacted a requirement for 2 percent ethanol in gasoline and 2 percent biodiesel in diesel fuel, once sufficient capacity is built in-State. Assuming that Louisiana's 2-percent and Washington's 5-percent requirements are triggered, Louisiana, Minnesota, and Washington will require 102 million gallons of biodiesel in 2012 and 146 million gallons in 2030.
State Mandated Ethanol Usage
As noted above, some states mandate its usage, others don't. Mandating various blends adds to the price, due to inefficiencies. Moreover, given that ethanol from corn makes no environmental sense, promoting the idea is absurd.
Most ethanol used for fuel is being blended into gasoline at concentrations of 5 to 10 percent. In California, ethanol has replaced methyl tertiary butyl ether (MTBE) as a gasoline component. More than 95 percent of the gasoline supplied in the state today contains 6 percent ethanol. There is a small but growing market for E85 fuel (85 percent ethanol and 15 percent gasoline) for use in flexible fuel vehicles (FFVs), several million of which have been produced by U.S. automakers. But E85 is primarily found in the Midwest in corn-producing states. Ethanol is also being used to formulate a blend with diesel fuel, known as "E-Diesel", and as a replacement for leaded aviation gasoline in small aircraft.
All gasoline vehicles in use in the U.S. today can accept gasoline blended with up to 10 percent ethanol (sometimes called gasohol). Flexible Fuel Vehicles (VVFs) are cars and trucks that can use any level of ethanol up to 85 percent. They're built with special fuel system components designed to be compatible with higher ethanol concentrations.
Calculating the Savings
For California then, assuming Brazil supplies the ethanol 9 cents cheaper, and the ethanol content of gasoline is 6%, California prices might drop about a half-cent per gallon. In states where the ethanol content is 10%, the price should drop nine-tenths of a cent per gallon.
However, this assumes Brazil supplies 100% of US ethanol and that is not a realistic assumption even if it makes good environmental and economic sense.
More than likely costs go up a couple pennies rather than the 4 cents calculated by the AAA. However, any price hikes on gasoline would be more than made up for by the drop in corn prices which in turn will pass through to grain-fed beef, corn flakes, etc.
Regardless of what happens to prices, ending all tariffs and letting the free market set prices is a very good thing in and of itself. Unfortunately, inane state rules and still intact federal rules mandating ever-increasing amounts of biofuels in gasoline formulations are still in control even though the subsidies ended.
Are you able and willing to maintain a chair for 25,000 British pounds per year (approximately $38,500). Not just any chair. Specifically this one-person chair (as shown from the back).
Inquiring minds may be asking "whose chair is it?" That's a good question too.
The chair belongs to Stephen Hawking, the world's greatest physicist.
Hawking is known for his contributions to the fields of cosmology and quantum gravity, especially in the context of black holes.
He has a motor neurone disease that is related to amyotrophic lateral sclerosis (ALS), a condition that has progressed over the years and has left him almost completely paralysed since 1974.
ALS is commonly known in the United States as Lou Gehrig's disease.
Stephen William Hawking 8 January 1942 (age 69) Oxford, England
At left: Stephen Hawking at NASA, 1980s
Hawking's illness is markedly different from typical ALS because if confirmed Hawking's case would make for the most protracted case ever documented. A survival for more than ten years after diagnosis is uncommon for ALS; the longest documented durations, other than Hawking's, are 32 and 39 years and these cases were termed benign because of the lack of the typical progressive course.
Image and above text from Wikipedia. Please click on the above link. There is much more to the story, and it's fascinating.
Could You be the Hawking's Next Technical Assistant?
The post is more accurately described by the title "Technical Assistant to Stephen Hawking." It is not a PhD or Post-Doc position for academics looking to study physics, but a purely technical post to allow Prof. Hawking to function within the physics community and as a public speaker.
The original purpose of this position was "to aid Professor Hawking in those areas which he has difficulty due to his disability." The job has since expanded and now includes:
Managing national and international travel for Prof. Hawking and his care team. Expect to spend around 3 months per year abroad!
Development and maintenance of Professor Hawking's communication and speech systems
Procurement and maintenance of his wheelchairs and accessible van
Preparation of lecture graphics and public speaking
Dealing with the media and press
Answering inquiries from the public and maintaining the website
The post requires a wide range of skills, most importantly:
Ability to work under pressure
Maintenance of "black box" systems with no instruction manual or technical support
Computer literacy
Electronics knowledge
Ability to speak to a large audience
Ability to show others how to use complex systems
The role of 'Graduate Assistant to Professor Hawking' is funded as a research post at the University of Cambridge. Normally it has been under a 12 month contract, although recent graduate assistants have stayed on for several years.
The famed British physicist is seeking an assistant to help develop and maintain the electronic speech system that allows him to communicate his vision of the universe. An informal job ad posted to the famed physicist's website said the assistant should be computer literate, ready to travel, and able to repair electronic devices "with no instruction manual or technical support."
Hawking has long struggled against amyotrophic lateral sclerosis, a disease which left him almost completely paralyzed.
He lost his real voice in a tracheotomy in 1985, but a wheelchair-mounted computer helps synthesize speech by interpreting the twitches of his face. The synthesizer's robotic monotone has become nearly as famous as Hawking himself, but the computer — powered by batteries fastened to the back of Hawking's wheelchair — isn't just for speaking.
Hawking's website says that the job's salary is expected to be about 25,000 pounds ($38,500) a year.
Media Appearances, Movies, Music
Wikipedia reports ...
In Hawking's many media appearances, he appears to speak fluently through his synthesiser, but in reality, it is a tedious drawn-out process. Hawking's setup uses a predictive text entry system, which requires only the first few characters in order to auto-complete the word, but as he is only able to use his cheek for data entry, constructing complete sentences takes time. His speeches are prepared in advance, but having a live conversation with him provides insight as to the complexity and work involved. During a TED Conference talk, it took him seven minutes to answer a question.
Hawking has played himself on numerous television shows and has been portrayed in many more. He has played himself on a Red Dwarf anniversary special, played a hologram of himself on the episode "Descent" of Star Trek: The Next Generation, appeared in a skit on Late Night with Conan O'Brien, and appeared on the Discovery Channel special Alien Planet. He has also played himself in several episodes of The Simpsons and Futurama, and has had an action figure made of his Simpsons likeness. In 2008, Hawking was the subject of and featured in the documentary series Stephen Hawking, Master of the Universe for Channel 4. In September 2008, Hawking presided over the unveiling of the 'Chronophage' (time-eating) Corpus Clock at Corpus Christi College Cambridge. His actual synthesiser voice was used on parts of the Pink Floyd song "Keep Talking" from the 1994 album The Division Bell, as well as on Turbonegro's "Intro: The Party Zone" on their 2005 album Party Animals, Wolfsheim's "Kein Zurück (Oliver Pinelli Mix)". When he was portrayed on episodes of Family Guy, the voice was actually done by a speech synthesiser on a Macintosh computer, according to DVD commentary. He was portrayed in an episode of the Dilbert cartoon. In The Fairly OddParents, it is mentioned that he was Denzel Crocker's college roommate. As well as being fictionalised as nerdcore hip hop artist MC Hawking, he was impersonated in duet with Richard Cheese on a cover of "The Girl Is Mine". He was also portrayed in the movie Superhero Movie by Robert Joy. In the TV series Dark Angel Logan's technology savvy colleague Sebastian is characterised with many similarities to the actual physicist.
Here is an interesting update on Geekologie showing an image of Stephen Hawking weightless. The link to the official opening is down, but I cannot find news an assistant was found. Perhaps they have closed the application process even if the slot is not filled.
What if we could turn back the clock to the year 2000 and elect a different president for 8 years? What if we elected Ron Paul?
There would be no Fed and we would have sound money.
Fannie Mae and Freddie Mac would have been dismantled.
The big three rating agencies (Moody's, Fitch, and S&P) would not be officially government recognized and rating agencies in general would have been paid on the basis of how well they do their job, not on volume generated by being "officially recognized".
There would have been no housing bubble (or one much smaller).
Ron Paul certainly would not have signed the Medicare bill Bush signed or the Healthcare bill Obama signed..
The US would not have wasted over a trillion dollars in Iraq.
The US would not have had troops stationed in Saudi Arabia and since that was Bin Laden's biggest gripe, there may not have been a 911 attack in the first place.
Davis Bacon and prevailing wage laws would have been scrapped lowering costs to cities and states to provide services.
Cities and states would not be in such bad financial position.
Ron Paul would have ended collective bargaining of public unions
The public union pension crisis would not be as big.
We would actually have smaller government instead of lip service from other Republicans on providing smaller government
People would have lower taxes and more of their own money to spend.
The insane war on drugs would be over and our prisons would not be overflowing at enormous expense to taxpayers
The US would be defending its borders instead of being the world's policeman
I can go on and on. It's amazing how much attention has been focused on things Ron Paul did not even say, instead of things he has consistently stood for. He is the only Republican candidate (actually the only candidate from any party) that has a high level of consistency on critical issues.
I have been thinking about this for days actually, and decided to write it up in response to this must see video by Judge Andrew Napolitano on Fox News.
Except on fringe issues there is no practical difference between Obama and Mitt Romney. The health care act Obama crammed down everyone's throat was based on ideas Romney put in place as governor.
Moreover, there is little difference between George Bush and President Obama on wars, on trade, on sanctions, on tariffs, on bailouts, on banks, on drugs, on education, on jobs, and on spending.There is a difference on abortion (a fringe issue), and on public unions.
Except for an exceptionally hard stance on abortion, there is even less difference between Rick Santorum and President Obama as noted by the Cato Institute in Santorum's Big-Government Conservatism.
There is no doubt that Santorum is deeply conservative on social issues. He is ardently anti-abortion, even in cases of rape and incest, and no one takes a stronger stand against gay rights. In fact, with his comparison of gay sex to "man on dog" relationships, Santorum seldom even makes a pretense of tolerance. While that sort of rhetoric may play well in Iowa pulpits, it will be far less well received elsewhere in the nation.
Santorum's voting record shows that he embraced George Bush–style "big-government conservatism." For example, he supported the Medicare prescription-drug benefit and No Child Left Behind.
He never met an earmark that he didn't like. In fact, it wasn't just earmarks for his own state that he favored, which might be forgiven as pure electoral pragmatism, but earmarks for everyone, including the notorious "Bridge to Nowhere." The quintessential Washington insider, he worked closely with Tom DeLay to set up the "K Street Project," linking lobbyists with the GOP leadership.
He voted against NAFTA and has long opposed free trade. He backed higher tariffs on everything from steel to honey. He still supports an industrial policy with the government tilting the playing field toward manufacturing industries and picking winners and losers.
In fact, Santorum might be viewed as the mirror image of Ron Paul. If Ron Paul's campaign has been based on the concept of simply having government leave us alone, Santorum rejects that entire concept. True liberty, he writes, is not "the freedom to be left alone," but "the freedom to attend to one's duties to God, to family, and to neighbors." And he seems fully prepared to use the power of government to support his interpretation of those duties.
Fake Conservatives
Ron Paul is the true constitutional conservative. Newt Gingrich, Mitt Romney, and Rick Santorum are fakes. I will not vote for Mitt Romney if nominated, nor Rick Santorum.. Nor will I vote for Newt Gingrich. What did Gingrich accomplish as Speaker of the House?
I would vote for Ron Paul or Jon Huntsman if nominated. Otherwise, if Republicans keep nominating fake conservatives and war-mongers that pay lip service to small government, I will keep writing in Ron Paul as I did in the last two presidential elections.
Some may say writing in Ron Paul will only serve to reelect President Obama. I say so what?
In spite of all the talk (and a few differences on social issues), there is no practical difference on major economic matters, foreign policy, war-mongering, or big government between the Republican candidates (except Ron Paul and Jon Huntsman), and President Obama.
Since 2008 I have been stating the US would have "Structurally High Unemployment for a Decade".
Indeed, based on historical trends in labor force growth, the expected unemployment rate for the number of jobs created during the recovery would be well north of 11%. Yet, the unemployment rate is currently an artificially "low" 8.5% (not that 8.5% is anything to brag about).
To show how difficult it will be to bring that rate down, let's take a look at job growth (or losses), for the last three decades (numbers in thousands).
1970's Job Growth
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Avg
1970
-64
126
151
-105
-226
-94
27
-123
17
-430
-110
381
-38
1971
76
-61
54
178
210
6
63
52
252
22
202
264
110
1972
337
207
293
218
304
293
-51
428
131
404
293
305
264
1973
350
397
269
170
190
240
25
255
115
324
304
126
230
1974
69
149
42
89
163
55
32
-15
-5
13
-368
-602
-32
1975
-360
-378
-270
-186
160
-104
249
386
78
303
144
338
30
1976
489
311
232
244
18
65
170
158
188
13
332
211
203
1977
244
295
404
339
359
399
348
238
458
262
379
235
330
1978
187
353
513
702
346
442
254
276
137
336
437
283
356
1979
137
243
426
-62
372
318
106
82
27
157
94
95
166
Decade Annual Avg
162
1980's Job Growth
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Avg
1980
131
79
112
-145
-431
-320
-263
260
113
280
256
195
22
1981
95
67
104
74
10
196
112
-36
-87
-100
-209
-278
-4
1982
-327
-6
-129
-281
-45
-243
-343
-158
-181
-277
-124
-14
-177
1983
225
-78
173
276
277
378
418
-308
1114
271
352
356
288
1984
447
479
275
363
308
379
312
241
311
286
349
127
323
1985
266
124
346
195
274
145
189
193
204
187
209
168
208
1986
123
107
93
188
125
-93
318
113
346
187
186
204
158
1987
171
232
249
338
227
171
346
170
229
492
231
294
263
1988
94
452
276
245
227
363
223
121
340
268
339
289
270
1989
262
258
192
173
118
117
39
47
249
111
277
95
162
Decade Annual Average
151
1990's Job Growth
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Avg
1990
342
245
215
40
149
17
-42
-208
-82
-161
-144
-60
26
1991
-119
-306
-160
-211
-128
87
-47
15
35
12
-58
23
-71
1992
49
-66
50
158
126
60
71
141
35
177
140
211
96
1993
310
242
-51
309
265
173
295
161
241
277
261
308
233
1994
268
201
462
353
331
315
363
300
354
207
423
274
321
1995
321
209
222
162
-16
231
79
271
245
147
148
131
179
1996
-19
434
263
161
323
278
232
196
220
243
296
167
233
1997
230
301
312
291
256
253
283
-18
508
339
303
299
280
1998
270
189
144
277
401
212
119
352
218
193
284
342
250
1999
121
410
106
376
213
266
291
192
202
408
294
294
264
Decade Annual Avg
180
2000's Job Losses!
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Avg
2000
249
121
472
286
225
-46
163
3
122
-11
231
138
163
2001
-16
61
-30
-281
-44
-128
-125
-160
-244
-325
-292
-178
-147
2002
-132
-147
-24
-85
-7
45
-97
-16
-55
126
8
-156
-45
2003
83
-158
-212
-49
-6
-2
25
-42
103
203
18
124
7
2004
150
43
338
250
310
81
47
121
160
351
64
132
171
2005
136
240
142
360
169
246
369
195
63
84
334
158
208
2006
281
317
287
182
11
80
202
185
156
-8
205
180
173
2007
203
88
218
79
141
67
-49
-26
69
91
127
84
91
2008
13
-83
-72
-185
-233
-178
-231
-267
-434
-509
-802
-619
-300
2009
-820
-726
-796
-660
-386
-502
-300
-231
-236
-221
-55
-130
-422
Decade Annual Avg
-10
2010's Job Growth
Year
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Avg
2010
-39
-35
192
277
458
-192
-49
-59
-29
171
93
152
78
2011
68
235
194
217
53
20
127
104
210
112
100*
200*
136
* : preliminary
108
Bear in mind those tables are from the BLS establishment survey data while the unemployment rate is based off a phone survey. Nonetheless, with sufficient time (and BLS revisions), the results merge.
According to Fed chairman Ben Bernanke (and I believe he is correct on this point) it currently takes about 125,000 jobs a month to hold the unemployment rate steady, down from about 150,000 in 2000. I expect that number to drop for a few more years due to boomer demographics, but the key point is the number is positive not negative.
The only reason unemployment rate has dropped recently is because BLS surveys say the number is negative (a shrinking labor force).
Based on historical data and Bernanke's estimates, one would have expected the unemployment rate to have risen during 2010 and peaked mid-2011. Instead, the unemployment rate fell from 10 to 8.5.
If you take a look at the actual number of those "counted" as employed, that number has risen from the recessionary trough. However, in reality, employment is still far below the long term historical trend. Currently, the deviation from the long term trend is the widest on record and has made very little improvement.
In order for the country to return to the long-term trend of employment by 2020, we will need to be creating nearly 250,000 jobs each month. This, of course, is a far cry from 200,000 that we saw this month. With the employment-to-population ratio remaining at levels not seen since 1984, the real pressure on the economy remains focused on the consumer.
There are two very negative ramifications of this large and "available" labor pool. The first is that the longer an individual remains unemployed, the more the degradation in job skills weighs on future employment potential and income. The second, and most importantly, is that, with a high level of competition for existing jobs, wages remain under significant downward pressure.
Business owners are highly aware of the employment and business climate, and regardless of the ranting and raving about the "cash on the sidelines", businesses are not operated as charities. Business owners are milking the current employment climate for all it is worth in order to maintain profitability. With high competition levels for existing jobs, and the impeding threat of job loss for those working, employers can work employees longer hours at less pay. This is great for profit margins, and workers won't complain because there are plenty of individuals that will be happy to take their job and do it for less pay.
This impact on wages, as other inflationary pressures rise, hits the consumer where it hurts the most. We have discussed the fact that recent declines in wages and salaries combined with the rising costs of food and energy are consuming more of the household income. This bleed on incomes has led to significant slides in the personal savings rate and the ability for the consumer to continue to spend outside of the main necessities to meet their basic standard of living. This pattern is unsustainable, and sharp decreases in personal savings rates have historically been precursors to the onset of recessions.
Employment Trends Since 1955
In Employment Trends Since 1955 I posted a chart from reader Tim Wallace that conveys the same idea in a different way.
Employment Trends
click on chart for sharper image
Wallace writes ....
Hello Mish
On today's labor report: Note how the labor force has flat lined for four years even though population growth has averaged 1.5 million for the past 55 years. From 1993 to 2007 population growth was 1.7 million per year!
Thus, the labor force should not suddenly turn flat since retirements do not even come close to explaining the chart. Yet, suddenly the work force has just been frozen in time although the population continues on the same upward trend.
The work force is literally one million smaller than during Bush's last year in office. This is statistically impossible, at least judging from historic trends.
We also are still 5.6 million people below the employment number of the peak year in 2007. So, practically speaking we have approximately 11.6 million more people unemployed than in 2007.
If we add the additional 6 million that should be counted as available for the labor force, the unemployment number at the U-3 level surges past 11% as you have said numerous times.
As of December, our nation continues to face a "jobs gap" of 12.1 million jobs, down by 67,000 jobs from November.
The chart below shows how the jobs gap has evolved since the start of the Great Recession in December 2007, and how long it will take to close under different assumptions for job growth. The solid line shows the net number of jobs lost since the Great Recession began. The broken lines track how long it will take to close the jobs gap under alternative assumptions about the rate of job creation going forward.
If the economy adds about 208,000 jobs per month, which was the average monthly rate for the best year of job creation in the 2000s, then it will take until March 2024—over 12 years—to close the jobs gap. Given a more optimistic rate of 321,000 jobs per month, which was the average monthly rate for the best year of job creation in the 1990s, the economy will reach pre-recession employment levels by February 2017—not for another five years.
Statistically Impossible IFs.
Based on the data tables from the BLS that I posted at the top of this article, each of those dashed line in the above chart represents a statistically impossible IF.
The economy is certainly not going to average 472,000 jobs per month for two years. Nor will it add 321,000 jobs a month for six straight years. Finally, the economy is not going to add 208,000 jobs a month, every month, for the next 12 years.
Indeed, one cannot find any 10-year period in which the economy added that number of jobs. The best 10-year period I can find is 195,000 jobs per month from 1991-2000, overlapping decades by 1 year (during the internet boom with hugely falling interest rates and Greenspan's foot on the gas pedal nearly every step of the way).
Fundamental Case for Structurally High Unemployment
At the height of the internet bubble with a nonsensical Y2K scare on top of that, the economy managed to gain 264,000 jobs a month.
At the height of the housing bubble in 2005, the economy added 208,000 jobs a month.
At the height of the commercial real estate bubble with massive store expansion, the economy added somewhere between 91,000 and 173,000 jobs per month depending on where you mark the peak.
Neither the housing boom, nor the commercial real estate boom is coming back. Nor is there going to be another internet revolution.
Moreover, debt levels are high and millions are trapped in their homes, unable to move. Boomers in retirement or headed for retirement have insufficient savings so one cannot expect a spending boom of any kind. Instead, one can expect boomers to draw down on their savings (assuming that have any savings).
In conclusion, the only way the unemployment rate can substantially decline from here is if millions more drop out of the labor force, thereby creating an even bigger "gap" between reality and the BLS's alleged unemployment rate.
Europe may avoid a recession this year and there were reasons to be more upbeat about prospects for the region, the Business Day newspaper quoted International Monetary Fund's Managing Director Christine Lagarde as saying.
"The euro-zone scene has changed massively over the last 18 months or so ... there are reasons to be a little bit more upbeat about the prospects," she told the daily in an interview conducted during a two-day visit to South Africa.
The euro fell for a fifth week versus the dollar in its longest losing streak in almost two years on concern Europe's debt crisis is worsening and as data showed the U.S. labor market is strengthening.
The 17-nation currency slid to a record low against the Australian dollar and traded at the weakest level in more than 11 years versus the yen as demand at bond auctions spurred concern European nations will struggle to sell debt. The pound rose to a 15-month high versus the euro before the European Central Bank meets on Jan. 12. Hungary's forint tumbled and Fitch Ratings downgraded the country to junk.
"One of the factors driving the market right now is a general lack of demand for European assets," said Shahab Jalinoos, a senior currency strategist in Stamford, Connecticut, at UBS AG. "There are enough sources of new bad news to keep the market adapting; all the bad news is not priced in yet."
It was the worst week for Europe's common currency in four months. The euro lost 1.3 percent against nine developed-nation peers tracked by Bloomberg Correlation-Weighted Currency Indexes, the most since it dropped 1.9 percent in the five days ended Sept. 2. Bets Against Euro
Futures traders increased their bets (ECLRG) that the euro will decline against the dollar to a record high. The difference between wagers the shared currency would fall versus those that it would rise -- so-called net shorts -- surged to 138,909 in the week ended Jan. 3, according to the Commodity Futures Trading Commission.
Sterling reached its strongest versus the euro yesterday since Sept. 10, 2010, touching 82.39 pence. It gained 1.1 percent on the week. The pound slipped 0.8 percent to $1.5426.
The euro dropped as France sold 4.02 billion euros ($5.11 billion) of benchmark 10-year notes Jan. 5 at an average yield of 3.29 percent, compared with 3.18 percent at a sale on Dec. 1. The bid-to-cover ratio, the number of bids received for each unit of debt sold, fell to 1.64, from 3.05. Demand at a German auction of 10-year bonds a day earlier was lower than the five- year average. France, Greece, Germany, Italy and Spain are all scheduled to sell debt next week.
Australia's dollar rallied to a record 80.51 euro cents yesterday. It gained for eight consecutive days versus the shared currency, the longest winning streak since December 2010. Against the greenback, the Aussie advanced 0.2 percent on the week to $1.0228.
The trend of relentless shorting of the Euro currency in the form of non-commercial spec contracts, and as reported by the Commitment of Traders, continues for one more week. As of January 3, EUR shorts rose by another 9%, hitting an unprecedented 138,909 net contracts short - a fresh all time record. What is curious that unlike previously, when an increase in EUR bearishness implicitly meant a increase in USD bullishness, this time that is no longer the case as net spec USD contracts actually declined, and are trading at relatively subdued levels. Overall, this means that FX specs are not playing relative currencies off each other, but are piling into a global European short.
The position of "large specs" (hedge funds and big traders) is 138,909 short. One needs to add another 27,160 short contracts by "small specs" (small traders), to arrive at a combined net speculative position of 166,069 contracts short.
Since in futures trading everything nets to zero, commercial traders (JP Morgan, etc) are net long a record 166,069.
Big Specs vs. Currency Movements
The above chart from ZeroHedge.
I immediately recognized the shape of the red line in the above chart. Here it is in another place.
$XEU - Euro vs US Dollar.
$XJY - Yen vs US Dollar
Not Timing Devices
Speculative futures positions are not timing devices. Note the bounce in October did not hold as short-covering in Euro contracts by the speculators did not approach the zero-line before reversing.
Roughly 17 million barrels of crude a day flow through the Strait of Hormuz and Iran has threatened to block the strait if Europe imposes economic sanctions. How credible is that threat?
Joint Chiefs of Staff says Iran Has Ability to Block Strait of Hormuz
Iran has the ability to block the Strait of Hormuz "for a period of time," and the U.S. would take action to reopen it, Joint Chiefs of Staff chairman General Martin Dempsey said.
"They've invested in capabilities that could, in fact, for a period of time block the Strait of Hormuz," Dempsey said in an interview airing today on the CBS "Face the Nation" program. "We've invested in capabilities to ensure that if that happens, we can defeat that."
Should Iran try to close Hormuz, the U.S. "would take action and reopen" the waterway, said Dempsey, President Barack Obama's top military adviser.
Republican presidential candidate Rick Santorum said Jan. 1 on NBC's "Meet the Press" that he would use air strikes against Iran unless the country dismantled its nuclear program or allowed inspectors to verify that the work isn't aimed at making a weapon.
Dempsey suggested that curbing Iran's nuclear work by bombing its facilities would be difficult.
"I'd rather not discuss the degree of difficulty and in any way encourage them to read anything into that," Dempsey said. "My responsibility is to encourage the right degree of planning, to understand the risks associated with any kind of military option."
Iran Starts Uranium Enrichment at Fordo Mountain Facility
Iran has started to enrich uranium at its Fordo production facility, the official Kayhan newspaper reported without saying where it got the information.
Iran will soon have a ceremony to open the site officially, the newspaper reported, citing the head of the Iranian Atomic Energy Organization, Fereydoun Abbasi. The Iranian nuclear chief was cited yesterday by Mehr News as saying that the underground facility "will start operating in the near future."
The existence of the Fordo plant, built into the side of a mountain near the Muslim holy city of Qom, south of Tehran, was disclosed in September 2009, heightening concern among the U.S. and its allies who say Iran's activities may be a cover for the development of atomic weapons. The Persian Gulf country has rejected the allegation, saying it needs nuclear technology to secure energy for its growing population.
Iran has pressed ahead with its nuclear program even as international pressure increases to prevent the Islamic republic from building an atomic weapon.
The U.S. tightened economic sanctions against Iran over its nuclear program on Dec. 31, and the European Union is weighing a ban later this month on purchases of Iranian crude.
Iran threatened last month to shut the Strait of Hormuz, a transit point for a fifth of oil traded worldwide, if sanctions are imposed on its crude exports in response to its nuclear program.
A pipeline that would allow oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said.
As many as 270 construction issues have pushed back the completion date, said the two people, declining to be identified because they're not allowed to speak publicly on the matter. The $3.3 billion project won't be ready until at least April, one of them said. Abu Dhabi, holder of most of the U.A.E.'s oil reserves, had planned to start exports in January 2011 through the pipeline to a port outside the strait, Dieter Blauberg, the project's former director, said in May 2009.
The 1.5 million barrel-a-day link would ensure the U.A.E. can export crude without risking a blockade at Hormuz, where fully laden tankers exit the Persian Gulf with one-fifth of the world's traded oil. The chance that Iran might try to close the waterway has intensified as Europe prepares to follow tougher U.S. sanctions on the country.
"That pipeline would carry pretty much all of Abu Dhabi's oil," Robin Mills, an analyst at Manaar Energy Consulting in Dubai, said Jan. 5. "It's a critical bit of infrastructure, and it is remarkable it hasn't been completed."
Weeks of Iran tension has added about $10 a barrel to Brent crude prices, said al-Harami, who was head of crude and products marketing at state-run Kuwait Petroleum Corp. during the 1980s "Tanker War," when Iran and Iraq attacked each other's ships.
Still, a closure of the strait by Iran, in response to opposition to the nation's nuclear program, is not a "high- likelihood event," David Fyfe, head of the International Energy Agency's oil market and industry division, said in a Jan. 4 phone interview from Paris.
War posturing by Iran and the US, as well as economic sanctions by Europe are counterproductive and have undoubtedly increased the price of oil. The simple solution to this mess would be for Iran to admit inspectors to check their facilities and for the US to go along with those inspections.
However, the US has demanded Iran stop all enrichment. The US has no fundamental right to demand that Iran stop enrichment for non-weapons usage.
The nuclear program of Iran was launched in the 1950s with the help of the United States as part of the Atoms for Peace program. The support, encouragement and participation of the United States and Western European governments in Iran's nuclear program continued until the 1979 Iranian Revolution that toppled the Shah of Iran.
After the 1979 revolution, the Iranian government temporarily disbanded elements of the program, and then revived it with less Western assistance than during the pre-revolution era. Iran's nuclear program has included several research sites, two uranium mines, a research reactor, and uranium processing facilities that include three known uranium enrichment plants.
After delays, Iran's first nuclear power plant, Bushehr I reactor was complete with major assistance of Russian government agency RosAtom and was officially opened in a ceremony on 12 September 2011. Iran has announced that it is working on a new 360 MW nuclear power plant to be located in Darkhovin. Iran has also indicated that it will seek more medium-sized nuclear power plants and uranium mines in the future. ....
On the question of whether Iran had a hidden nuclear weapons program, the IAEA's November 2003 report states that it found "no evidence" that the previously undeclared activities were related to a nuclear weapons program, but also that it was unable to conclude that Iran's nuclear program was exclusively peaceful.
In August 2005, with the assistance of Pakistan a group of US government experts and international scientists concluded that traces of bomb-grade uranium found in Iran came from contaminated Pakistani equipment and were not evidence of a clandestine nuclear weapons program in Iran. In September 2005, IAEA Director General Mohammad ElBaradei reported that "most" highly enriched uranium traces found in Iran by agency inspectors came from imported centrifuge components, validating Iran's claim that the traces were due to contamination. Sources in Vienna and the State Department reportedly stated that, for all practical purposes, the HEU issue has been resolved.
In late February 2006, IAEA Director Mohammad El-Baradei raised the suggestion of a deal, whereby Iran would give up industrial-scale enrichment and instead limit its program to a small-scale pilot facility, and agree to import its nuclear fuel from Russia. The Iranians indicated that while they would not be willing to give up their right to enrichment in principle, they were willing to consider the compromise solution. However in March 2006, the Bush Administration made it clear that they would not accept any enrichment at all in Iran.
In Resolution 1696 July 31, 2006, the United Nations Security Council demanded that Iran suspend all enrichment and reprocessing related activities.
In February 2007, anonymous diplomats at the atomic energy agency reportedly complained that most U.S. intelligence shared with the IAEA had proved inaccurate, and none had led to significant discoveries inside Iran.
In late October 2007, according to the International Herald Tribune, the head of the IAEA, Mohamed ElBaradei, stated that he had seen "no evidence" of Iran developing nuclear weapons. The IHT quoted ElBaradei as saying "We have information that there has been maybe some studies about possible weaponization. That's why we have said that we cannot give Iran a pass right now, because there is still a lot of question marks ... . But have we seen Iran having the nuclear material that can readily be used into a weapon? No. Have we seen an active weaponization program? No." The IHT report went on to say that "ElBaradei said he was worried about the growing rhetoric from the U.S., which he noted focused on Iran's alleged intentions to build a nuclear weapon rather than evidence the country was actively doing so. If there is actual evidence, ElBaradei said he would welcome seeing it."
In a February 2009 press interview, IAEA Director Mohamed ElBaradei said Iran has low enriched uranium, but "that doesn't mean that they are going tomorrow to have nuclear weapons, because as long as they are under IAEA verification, as long as they are not weaponizing, you know." ElBaradei continued that there is a confidence deficit with Iran, but that the concern should not be hyped and that "many other countries are enriching uranium without the world making any fuss about it".
In explaining why it had left its enrichment program undeclared to the IAEA, Iran said that for the past twenty-four years it has "been subject to the most severe series of sanctions and export restrictions on material and technology for peaceful nuclear technology," so that some elements of its program had to be done discreetly. Iran said the U.S. intention "is nothing but to make this deprivation" of Iran's inalienable right to enrichment technology "final and eternal," and that the United States is completely silent on Israel's nuclear enrichment and weapons program.
The Iranian government has repeatedly made compromise offers to place strict limits on its nuclear program beyond what the Non-Proliferation Treaty and the Additional Protocol legally require of Iran, in order to ensure that the program cannot be secretly diverted to the manufacture of weapons. These offers include operating Iran's nuclear program as an international consortium, with the full participation of foreign governments. This offer by the Iranians matched a proposed solution put forth by an IAEA expert committee that was investigating the risk that civilian nuclear technologies could be used to make bombs. Iran has also offered to renounce plutonium extraction technology, thus ensuring that its heavy water reactor at Arak cannot be used to make bombs either. More recently, the Iranians have reportedly also offered to operate uranium centrifuges that automatically self-destruct if they are used to enrich uranium beyond what is required for civilian purposes.
On 26 July 2009, Secretary of State Hillary Rodham Clinton explicitly ruled out the possibility that the Obama administration would allow Iran to produce its own nuclear fuel, even under intense international inspection.
If anyone is being unreasonable here, it is the US, UN, and Europe. Not Iran.
