Bankers wage open war on workers

This is a(nother) wakeup call for those stubborn working class conservatives who still believe that pinko commies are out to get them.

Nothing can be further from the truth.

The folks that have you in their crosshairs wear custom suits, roam marble halls, and shake your hand as they drain all the life from your systems.

More money in workers' pockets may mean less for some investors. Accelerating wage growth around the world is making central bankers less willing to cut interest rates than some investors expect.

The concern is that the increasing labor costs may trigger a renewed rise in inflation even as energy prices abate.

Of course, nowhere in this report or elsewhere, do they present any theory for WHY 'increased labor costs lead to inflation' - just their incessant unsubstantied assertions.

"Wages are creeping up," Paul Volcker, the former chairman of the U.S. Federal Reserve, told the Concord Coalition, a fiscal-policy watchdog group, in New York last week.

When it comes to inflation, Volcker said, "we're a little bit on the edge."

In the United States, unit labor costs rose last quarter at the fastest pace in almost 25 years. The largest steel makers in Germany, ThyssenKrupp and Salzgitter, are giving workers their biggest pay raise in more than 10 years. New Zealand wages increased at a record pace in the third quarter.

Conspicuously missing from this equation is the increased compensation for salaried professionals and corporate executives, not to mention their record breaking bonuses.

There is only ONE explanation for why they would worry about one and not the other - their PRIMARY GOAL is to exploit hourly workers - the people most easily exploited.

The International Monetary Fund expects unit labor costs at manufacturers in advanced economies to chalk up their biggest increase in six years in 2007.

Behind the surge in salaries is a worldwide hiring boom that has driven unemployment down, forcing companies to pay more to get and keep the employees they want.

Again, lies and distractions.

The only statistic offered are for hourly workers - NOT salaried professionals and executives, whose compensations consistently rise, virtually unopposed.

Moreover, the assertion about unemployment being low is a flat out lie.

Michael Mussa, the former chief economist at the International Monetary Fund who is now at the Peterson Institute for International Economics in Washington, expects the Fed to resist lowering interest rates over the next nine months.

Investors see it differently. Based on trading in interest-rate futures, they see about a 70 percent chance the central bank will cut its target rate a quarter percentage point, to 5 percent, by the end of May, and a 33 percent chance that could happen as soon as March.

"When you talk to investors about rates, everyone is reluctant to think they'll go up," said Dario Perkins, an economist at ABN AMRO in London, and a former British Treasury economist.

"But central banks will act, and that's not good news for investors."

Why?

Because many cannibals (lower in the food chain) don't want to pay more to borrow money!

As equity investors, the increased interest will eat into their profits and as lenders, the increased interest will mean their old debts will be worth less than they were worth before the increase in rates.

So, for a group of freelance cannibals out there, increased interest rates is bad news.

But, for the hardcore institutional vampires, at the top of the food chain, increases in interest rates are always a good thing.

At their October meeting, Fed policy makers saw a risk that a sustained increase in wages could push up inflation, according to minutes released last week.

"The upside risk to the inflation outlook from labor-market pressures appears to have been growing," Glenn Rudebusch, senior vice president at the San Francisco Fed, said in a note last week.

European central bankers express similar concerns. "You should be really vigilant," Nout Wellink, a member of the European Central Bank's governing council, said last week.

Labor costs "become a problem" when "there is no spare capacity any more," he said. "We are on the verge of full capacity."

What garbage.

Tell that to the millions of unemployed Americans and others around the world looking for work.

The truth is that a Central Banker's GOAL is to maintain unemployment.

In their grotesque system, built on inequity and exploitation, there MUST be LOSERS in order for there to be 'winners.'

The ECB's president, Jean-Claude Trichet, said this month that excessive wage rises would "hamper sustainable growth, hamper job creation and contribute to more inflation."

The ECB raised rates five times in the past year and is signaling it will do so again next month. Economists at UniCredit and Goldman Sachs Group this month revised their forecasts to predict that the ECB's benchmark rate will reach 4 percent next year, up from 3.25 percent currently.

The Bank of England says wage pressures may jeopardize its forecast of slower inflation next year. The retail- price inflation rate, a benchmark for the cost of living that will be used in 2007 wage negotiations, rose in October to the highest level since 1998.

Is that clear?

Central Bankers worry about rising wages because (allegedly) it causes inflation which central bankers need to keep under control in order to keep wages under control.

Makes perfect sense - if you're braindead.

"The main risk to the inflation outlook in the medium term surrounds the behavior of pay growth," the governor of the Bank of England, Mervyn King, said last week. To be sure, some economists question whether the concern is warranted.

A paper last year by Anirvan Banerji, research director at the Economic Research Institute in New York, found that rising labor costs are a lagging, not leading, indicator of inflation, as workers try to catch up with past price rises.

Which is what they just admitted in the last paragraph!

In the United States, the Democratic takeover of Congress following the recent election may add to the pressure on wages. Democratic lawmakers plan to push through an increase in the U.S. minimum wage, and President George W. Bush is unlikely to veto it, saying after the election that that was an area where he could find "common ground" with the Democrats.

The usual - feign cooperation for the nation's sake, then screw us all for the bankers' sake.

Nothing they can possibly do with the minimum wage can ever compensate for the major wanking working Americans get via inflation and central bankers' favorite weapon INTEREST.

Companies are already feeling the pinch from higher labor costs. Brink's, the security company in Richmond, Virginia, said this month that its operating profit margin slipped in the third quarter as labor costs rose.

This of course, is the central banker's cue to ramp up interest rates for some MAJOR redistribution of wealth, capitalist-style.

Wakeup America, time is running out.

The enemy is moving in for the kill.