O-'boom' or 'bomb'-ma?

DIE HARD III

Herman Tiu Laurel

11/9/2012

There's a notion promoted since time immemorial that a Democratic Party US president is better for Filipinos than a Republican. This is a false notion proven by experience. Any US president, Democrat or Republican, will put only one interest in mind — the interest of the United States of America, its ruling class and possibly, when circumstances allow, its people. Some argue that Democrats are lenient on immigration and thus are good for countless Filipinos who crave to migrate, but that helps only individual Filipinos and not the nation as a whole. The plain truth is the Philippines is and will always be a market to pry open wider and wider for US predatory financial investments such as "hot money," businesses repatriating profits, as well as goods and loan shark services.

Obama II's mission is to fulfill the original promise that propelled Obama I — the "Change the US Can Believe In," promises of Obama I that millions of Americans began to see fading before their eyes as jobs recovery sputtered from 2009 to 2012, home mortgage confiscations continued, and promises of an end to an era of war postponed with new wars in Libya and Syria while "resets" and "re-pivoting" of relations with Russia and Asia created more tensions than signals for peace.
The change Obama needs now will begin with change in the "bust" of the US economy to a "boom" leading to US economic and jobs recovery; but this requires a strategic, non-armed war of the US against the World — its wars to export more goods and services to the World. Filipinos are still oblivious of this war.
The loss of the peso exchange rate to the dollar is what Guido Mantega, Brazil's finance minister, calls the "currency war."

The US launched it with the fancy term QE3, i.e. the third quantitative easing or printing of dollars since the 2008 Wall Street and US financial crash at the rate of $40 billion a month since Obama approved it last September. The is the "strategic depreciation" of the US through massive creation of the US dollar to bring down its value, dampen imports and trade deficits with traditional exporting countries the US bought goods from (like China and Asia), spur exports and create jobs. Hence, the Philippine peso exchange rate to the US dollar threatens to diminish from P41-P42 down to P39 to the dollar by early 2013.

Everyone should understand that the reduction in exchange rate of the peso to the dollar massively damages the Philippine economy since OFW peso incomes precipitously decline, export and BPO incomes reel and the entire domestic economy contracts from shrinking domestic consumer purchasing power and consequential shriveling of local manufacturing, farm and services business and jobs. US Ford CMV (compact multipurpose vehicles) like the model "Escape" are now ubiquitous on Metro-Manila streets, and Chevys, too; expect more US brands like these gaining bigger and wide shares of the local car market of the rich and middle class, and start draining our dollar reserves from OFW remittances. Expect pressure to increase for Cha-cha to remove restrictions on US exports and businesses here.

Obama's victory in the US does not portend a "boom" for the Philippines as some say, it will invariably mean an economic "bomb" unless the Philippines can pick up the vision and courage to set up the "bomb shelters" by instituting protectionist policies such as "currency" and "capital" controls to halt the reduction of the peso exchange rate to the dollar. The Bangko Sentral ng Pilipinas (BSP) and the DoF (Department of Finance) do not seem inclined to provide any umbrage for the Philippine economy in the face of the threat, leaving the Filipino people to fend off the impact of the coming economic super-storm by themselves. The national political leadership both in the ruling party and the electoral opposition do not seem aware of the tremendous perils the nation faces, though a few economic analysts and pundits are sounding the warning (like BusinessWorld's Ben Diokno in "Exporters hurting badly").

The real Obama II "boom" is for the World as hopefully the US stops dropping bombs in the Middle East and launching drones all over. The "peace dividend" can then improve. Israel's Netanyahu Iran war crusade is stymied with the loss "warmonger" Romney. One-on-one Iran-US talks under Obama II are now rumored to be in the offing, and the battle of the Straits of Hormuz may finally be a fear of the past. Oil price easing and stability may restart the global economy. The Bush era of war can finally be put to an end by Obama II. That is, if the military-industrial and banking complex in the US does not do a Dallas Texas-John Kennedy scenario again.

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