| | | Page 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 | Watch, Its happening ,the global economic change.
| Anonymous Coward
User ID: 574525
12/17/2008 8:10 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
[link to www.mybudget360.com]
Gross Domestic Product: 40 Percent of the United States GDP comes from 5 States; California, Texas, New York, Florida, and Illinois.
* Posted by mybudget360 in Employment, economy, government, housing
* 0 Comments
Our gross domestic product contracted in the third quarter of 2008 and is contracting in the forth quarter. There is very little doubt surrounding that. The National Bureau of Economic Research put the start date of our current recession at December of 2007. Simply looking at the employment patterns and trends it appears that this recession will be the worst on record since World War II. Another reason why this recession will be so painful is that 40 percent of our national GDP comes from 5 states, many that are in painful contractions.
The United States received 40 percent of its GDP from California, Texas, New York, Florida, and Illinois. California accounts for over 12 percent of national GDP and currently has a state unemployment rate of 8.2%, the third highest in the nation. If we dig deep and look at the California housing market, it is abysmal and shows no signs of bouncing back. This weekend 60 Minutes talked about the Alt-A and option ARM crisis that will hit us in the upcoming years. The 2 states with the largest concentration of these loans are California and Florida.
First, let us take a look at each individual state GDP on a map:
GDP states
*Click for sharper image
Looking at the map this way, it is easy to see why a few states can cause such widespread pain. Even states that avoided the housing bubble to a large extent are feeling the repercussions of what is going on. If we are to include the top 10 states in terms of GDP, we will then account for 55% of total U.S. GDP. That is why arguments that look at states as silos only hold true if the recession is minor or isolated. This is no isolated recession. The tentacles of the problems run deep and are very widespread. Let us now shift and look at unemployment on this map:
unemployment rate
3 out of the top 5 GDP states have unemployment rates above the 6.7% national rate. California, the biggest GDP contributor has an unemployment rate of 8.2%. The only state of the five that seems stable is Texas. New York is quickly jumping higher because of the job losses now hitting New York City this year. The number should change rapidly. Ironically, the only stable state Texas is the single state of the five that had very little influence this decade with the housing bubble. States like California and Florida which depended more on the housing market are feeling even deeper pain.
The next map should give you an idea why many of these states are on the verge of bankruptcy:
tax revenues states
This above graph tells the story. A state like California is so enormously dependent on taxes. All you need to do is take a look at California and you’ll understand the magnitude of the problem:
California revenues
Expenditures
A state like California with over $100 billion in expenses does not have the flexibility to adjust a budget on the fly. In fact, these budgets are planned nearly a year in advance. This budget was planned before the California housing market fell over 40% statewide. That is another reason why severe market volatility is not good for the health of the economy because it throws a wrench into future planning. But the more troubling sign is look at the 2 largest revenue sources for California. The personal income tax makes up 44.7% of revenue and sales tax makes up 27%. Together, these 2 volatile areas make up 71.7% of revenue to the state. Well, if you refer to the above employment chart you can begin to see how this all starts to tie in. With less employment, the personal income tax revenues will fall. With that, you will also see the sales tax decrease because in recessionary times, people spend less and certainly those with no employment will not be buying.
In conclusion, the fact that many of these states still have profound problems in their housing markets almost assures us that this will be no minor recession. 5 states account for 40 percent of the U.S. GDP and some of the states have the worst housing bubbles which are still deflating signals to us that U.S. GDP is set to decline for the near future. |
| Anonymous Coward
User ID: 574525
12/17/2008 8:11 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
FRAUDULENT "CREDIT CRISIS" PAVES WAY FOR ECONOMIC DISASTER
By Cliff Kincaid
December 16, 2008
NewsWithViews.com
Doing the kind of investigative reporting we should expect from the major media, a financial research and consulting firm has released a major analysis of the “credit crisis” that concludes that the claims made by Treasury Department Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke to justify a socialist takeover of the financial industry were demonstrably false.
The analysis, Flawed Assumptions about the Credit Crisis: A Critical Examination of US Policymakers, concludes that the result of the unjustified massive federal intervention in the economy could be similar to the economic crisis in the Weimar Republic of 1922, where disastrous hyperinflation made the currency worthless and threatened the nation’s political system and stability.
The analysis was released by Celent, a Boston-based firm that provides independent information and advice to financial services companies. The 30-page report, made available to Accuracy in Media, does not accuse Paulson and Bernanke of lying about the “credit crisis.” But it does say that “It is startling that many of Chairman Bernanke’s and Secretary Paulson’s remarks are not supported or are flatly contradicted by the data provided by the very organizations they lead.”
Using charts and graphs of data from the Federal Reserve and other agencies, the Celent study says that statements from Paulson and Bernanke about a “credit crisis” affecting businesses, real estate, banks, and state and local governments were just not true.
The report says there is “a contradiction” between what Paulson and Bernanke have said and the reality of the situation, as demonstrated in the official data. It calls these “discrepancies” and says that some of their remarks are “puzzling.”
Asked for comment on why he was able to uncover this information while the major media have not, Octavio Marenzi, founder and CEO of Celent, told AIM, “What we need from the media is more skepticism and more engagement. Too frequently statements are taken at face value. Also, most journalists are under such tight time pressure that they do not have the time to reflect and to dig deeper. They are on a conveyor belt and just trying to keep up with the required level of output.”
Paulson had claimed that, by mid-September, when he persuaded President Bush to go public with demands for Congress to approve a $700-billion bailout plan, the financial system had “seized up,” credit markets had “froze,” and interbank lending had been “substantially reduced.”
But none of this was true. “The freezing of the credit markets that Secretary Paulson cites is not visible” in the data, the Celent report shows.
Paulson also made the claim that blue chip industrial companies could not issue longer-term commercial paper. But this claim “finds no support” in the data, the report says.
Bernanke had claimed that businesses were “confronting diminished access to credit” when in fact “the opposite” was true, the study demonstrates.
The suggestion is made that Bernanke and Paulson were acting on behalf of “a particular set of businesses and financial institutions” and exaggerated the problem in order to justify “unprecedented levels of government intervention in the markets.”
It is implied that these firms were certain big banks and companies. But while they may have been having problems raising funds, the credit market in general was “working well,” the report said.
It declares, “Doubtlessly, a number of the leading financial institutions in the US are in serious trouble, as are a number of the leading industrial firms. However, credit difficulties surrounding a specific set of firms is not the same as a problem in the credit markets in the aggregate.”
The study says that, “A clear and cogent analysis of the credit crisis has not been presented by policymakers, despite the fact that unprecedented levels of public funds are being deployed.” As a result, the “massive injection of funds could well exacerbate the problem rather than help.”
The report says the money supply “has recently increased at a pace never seen before in US history” and could signal a pending bout of hyperinflation. It says the increase is “a staggering 74% in only 84 days” and explains, “Previously, this kind of jump would be seen over the course of a decade or more.”
It then concludes by suggesting that the real danger to the U.S. is not a great depression like that of 1929 but a hyperinflationary period comparable to the Weimar Republic in 1922.
While it is possible that Paulson and Bernanke have additional data supporting their hypothesis that there has been a general breakdown in credit markets, Celent says they have not shared this data with the public and there would have to be an explanation of why the data being released to the public is incorrect. Celent is skeptical that any kind of additional and therefore secret data exist.
The Celent study has gotten limited media attention, including a Reuters news agency report, and CEO Marenzi was interviewed on CNBC for about three-and-a-half minutes by a somewhat skeptical Larry Kudlow.
The minimal coverage is troubling because the Celent study suggests that the Bush Administration and Congress were panicked and stampeded into approving unprecedented socialist measures for the economy that were not justified by the evidence.
The “seizing up” of the credit markets, as reported by the media at the time, has so far resulted in promises of more than $7.76 trillion of taxpayer money in order to “rescue” the financial system, according to the latest Bloomberg News estimate. The money amounts to half the value of everything produced in the nation last year, Bloomberg reported.
Last week 83 members of Congress sent a letter to House Speaker Nancy Pelosi and Rep. Barney Frank, chairman of the House Committee on Financial Services, asking for the CEOs of institutions receiving some of the Paulson bailout money to testify about what has happened to the funds.
Meanwhile, the Washington Times on Monday reported that Bush has nearly doubled the national debt during his eight years in the White House. Reporter David M. Dickson reports that “the number was $10.66 trillion at the end of November, and it has been rising at an astronomical rate.” Today, foreigners hold more than 50 percent of U.S. publicly held debt, the story adds.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, is quoted in the article as saying that the “next big bubble” to affect the economy could very well be a “government debt bubble.” |
| Anonymous Coward
User ID: 574525
12/17/2008 8:13 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Lawsuits, The Cadaver & Gold
Jim Willie CB
Jim Willie CB is the editor of the "Hat Trick Letter"
Dec 16, 2008
Use this link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
The principal missing piece in the grand American mosaic of banking destruction, corrupt collusion, fraudulent bonds, Wall Street control, suppressed regulators, compromised ratings agencies is JUSTICE. Foreign entities are aghast as the lack of prosecution, remedy, and removal from positions of power, as policy continues to be set by the participants responsible for the structural failure and prevalent fraud. Their actions are reaching climax levels. The climax of the Wall Street strangehold is the confiscation of the TARP funds to date. However, whatever has not been nationalized is subject to lawsuits. The pattern of human behavior indicates that lawsuits can spawn additional lawsuits, and quickly control is lost. It is open season on Citigroup, Bank of America, and perhaps other lesser players. Two major lawsuits have the potential to change the landscape. Curiously, neither receives much publicity. Then again, the press seems somewhere between subservient and compromised anyway. They have failed to shine many lights on much of any developments until after the damage is done. Odd court cases, missing people, factional politics, and border patrols seem more important on their agendas. Much of the US media & press seem a graduation of National Inquirer to television.
The USFed might be vulnerable. Could it be that the US Federal Reserve will face a growing expanding escalating lawsuit that finally is heard before the US Supreme Court? Give it a 50-50 chance, but this really needs a Vegas line. They are behaving and reacting much like a crime syndicate. Stonewall tactics by the USFed on disclosed disbursement of TARP funds continues, despite court challenges. The USFed has begun to take on some curious similarities to a crime syndicate central clearinghouse. It refuses to disclose which banks received bond swaps, and refuses to reveal what assets it accepted as collateral. Before long, RICO Laws against racketeering might be invoked. The word has been mentioned in the press by one particular Congressman. Recall. The Racketeer Influenced & Corrupt Organizations Act of 1970 has been a powerful legal weapon to confiscate crime syndicate assets. The RICO Laws have been properly used much more than abused.
FEDERAL RESERVE CHALLENGED IN LAWSUIT
Bloomberg filed a lawsuit under the Freedom of Information Act on November 7, requesting details from the USFed on Congressional TARP fund confiscation. The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The USFed operates as a contractor agency, but possibly with as much scrutiny permitted as Halliburton on basic fraud. The Bloomberg lawsuit is Bloomberg LP vs Board of Governors of the Federal Reserve System, 08-CV-9595, US District Court, Southern District of New York (Manhattan).
Incredibly, with shock to many, the USFed will continue to withhold internal memos as well as information about trade secrets and commercial information. Are you kidding me? TRADE SECRETS BY AN AGENCY HIRED TO MANAGE THE DOLLAR AND TREASURYS??? That is quantum levels more preposterous than defying the USCongress when it pursued accounting of the gold status owned by the nation. Anger has erupted within the USCongress. The USFed appears to be hiding information so as to shield its own corruption, as its public response cites 'substantial multiple harms' being avoided. Harm to whom? Is this Nixon all over again citing 'Executive Privilege' to conceal crimes and misdemeanors? The USFed is scared and on the defensive. The Board usually does not go into such detail about its position. Lee Levine is from the law firm Levine Sullivan Koch & Schulz. He said, "This is uncharted territory. The Freedom of Information Act was not built to anticipate this situation. That is evident from the way the Fed tried to shoehorn their argument into the trade secrets exemption."
This case is worth watching, but strangely receives very little attention. It could be a landmark case that holds together the nation's financial purse strings. My conjecture is that the USFed is intent on hiding numerous transactions that hide the tracks of deep Wall Street corruption in bond redemption, with powerful motive to avert international lawsuits, and a pervasive desire to prevent grassroots solutions since mortgage bond securities have very little legal standing in legitimacy. WE ARE WATCHING THE DENOUEMENT OF THE BIGGEST BOND FRAUD IN MODERN HISTORY.
USFed Chairman Ben Bernanke and Treasury Secy Henry Paulson said in September they would meet demands for transparency in a $700 billion bailout of the banking system. They lied. Both the antagonists and the USFed might soon realize that a battle has been waged, one against a crime syndicate.
Can you say Supreme Court?
Could a test come of the national sovereignty versus crime syndicates?
If the case reaches the highest court, it will likely be stuck on its front steps.
IMPLICATIONS TO STABILITY AND SECURITY OF MONEY ITSELF INVITES A HUGE HIDDEN GOLD MOTIVE. A CANCER IS GROWING UNDER THE USDOLLAR AND USTREASURY BONDS, WHOSE ALTERNATIVE IS CLEARLY GOLD.
GOLDMAN SACHS: THE NEW CORLEONE FAMILY
Anyone who has missed that the profound influence by Goldman Sachs leadership at the Dept Treasury has contributed to the destruction of both the USEconomy and US banking system is simply asleep since 1992. JPMorgan is the other principal player. Neither will likely ever be prosecuted, since they ARE the USGovt on all matters and dealings financial. The entire Enron sequence of lawsuits proved JPMorgan will never be pinned down and prosecuted or successfully sued. Accounts of the third World Trade Center building on 11 Sept 2001, where Enron records were kept in JPMorgan offices, read like a bad James Bond movie with a Warren Commission cloak. Treasury Secy Paulson has pulled off a successful Coup d'Etat to usurp power, by means of assumed prestige, claimed expertise, naked intimidation, and clever contract language. His defiant yet slippery Kashkari has been pointman for the stonewall effort.
Permit a sidetrack here. USFed Chairman Bernanke has been so busy playing with his alphabet soup, that he forgot to drop any helicopter money at all to the Main Streets of America. We were told that was his main job description. At least that was his sales pitch to obtain the job. Instead, he drains funds from the private mainstream banking system in order to pour those funds into Wall Street firms. The press networks constantly repeat that Bernanke is flooding the system with liquidity. Yet he is only flooding Wall Street balance sheets and enabling executive bailouts. Back to Goldman. Sorry, one more thing. Is it necessary to be a Goldman Sachs veteran to obtain a US Administration Cabinet post, or to be head of a Canadian central bank? One must wonder. Has anything gone right in the USEconomy or US financial system at the conclusion of a presidential term with Goldman Sachs men in cabinet posts? RECENT HISTORY SAYS NO. Shut up and quit digressing!
Assistant Treasury Secy Neel Kashkari seems to me no different from Sonny Corleone in the Godfather family, but mine is a suspicious eye. Does anybody notice that the name Kashkari is close to Kash & Karry? His testimony last week as Asst Treasury Secy resembled a slippery snake oil salesman. He actually had the audacity to claim that the lack of US financial market collapse was proof that they wisely administered the funds. THEY WENT 85% TO EXECUTIVE BONUSES TO FED RESERVE BANKERS!!! In fact, the lack of market collapse is proof that the $125 billion was NOT desperately needed for banks to avert a disaster. Kashkari is careful in his words. For instance, he claimed that his office has no contractual agreements with big banks to limit lending and horde cash. All pressures have been stated verbally only!
Hank Paulson is treated with kid gloves by the media networks. He is really the wrong messenger for the entire Wall Street mortgage related bailout. Paulson was one of the five executives who went to the Securities & Exchange Commission in 2004 to plead for permission to lever upward the Wall Street firm businesses even more, like to 30:1 or 40:1 ratios. Without any question, he was an architect in the crisis.
AS PRESTIGE WEARS OFF ON GOLDMAN SACHS, GOLD WILL FILL A VACUUM. There are reasons why the Goldman Sachs gold short position in Tokyo has dwindled to nearly zero in the last two years. Goldman is secretly going long gold, in my view, just like they went short the mortgage bonds just a couple years ago. THE WALL STREET ELITE MIGHT SOON TURN ON A DIME AND GO LONG GOLD, WHEN THEY PULL THE SWITCH AND IGNITE REFLATION IN ORDER TO PREVENT A SYSTEMIC COLLAPSE.
CITIGROUP LAWSUIT
Citigroup is in hot water in three key ways: general urgent need for bailout, revealed motive for timing of bailout, and a potentially damaging lawsuit. The legend of Robert Rubin is being shattered and ruined. This man has no basis for any claim of elite or icon status. His career as a legendary currency trader was followed by a ministry post that saw a path of vanished gold during a failed Strong Dollar Policy and a tech telecom stock bust, then followed by a ruined Citigroup from risk gone wild after pursued deregulation. It seems unbridled competition without regulation breeds destruction among the kids without babysitters. The broad strokes of the big hastily crafted $322 billion bailout deal for Citigroup has many components, most steeped in corporate failure, deep insolvency, and unabashed desperation.
The entire rescue package seems a drop in the bucket, compared to the $2300 billion in assets on the Citigroup balance sheets, much of which are soured. Friedman Billings Ramsey estimated independently that Citi needed $160B in fresh capital to turn solvent. This deal is patchwork, hastily cobbled and arbitrarily applied, that leaves them still insolvent. This is pure life support. Future rescue will obviously be needed. The secret motive for protecting the credit markets from a Citigroup total bust and liquidation was their heavy involvement in credit derivatives. They are the second biggest player. Explosions in credit derivatives would result in a sequence of Hiroshima bombs, one triggering another, all much bigger than Lehman Brothers, probably extending to the basement chambers of JPMorgan and Bank of America. In a sense, an argument can be made that Citigroup blackmailed the USGovt and Dept Treasury with its passively placed bombs under CDS labels.
JUST WHY WASN'T CITIGROUP LED TO THE SLAUGHTERHOUSE OF BANKRUPTCY AND THE VATS OF LIQUIDATION? First, some truly wealthy insider Wall Street superstars would possibly face ruin or deep embarrassment. Second, their mortgage bond and related leveraged security portfolio would cause a problem 10x bigger than Lehman Brothers. Third, their credit derivatives book would set off several Hiroshima bombs, with uncertain outcome of spread darkness. Fourth, their failure would very likely ignite fires, explosions, meltdowns, bank failures, and ripple effects that could possibly bring down the entire banking system in the United States. Fifth, a Citigroup bankruptcy would likely pull back the curtains and reveal the deep corruption and massive fraud endemic to US banking. Enough on why, and back to the story leading to an important lawsuit.
A federal lawsuit has been filed against Citigroup for an alleged complex cover-up of toxic securities that resulted in huge losses, and thus severe shareholder losses. THIS CASE SEEMS TO HAVE TEETH AT A TIME WHEN THE PUBLIC WANTS BLOOD, WHICH MIGHT LEAD TO SEVERAL OTHER MAJOR LAWSUITS AGAINST WALL STREET FIRMS. Named in the lawsuit were Director Rubin, ex-CEO Chuck Prince, Vice Chairman Lewis Kaden, along with the current and previous CFOs. In all, over $120 billion in shareholder value was wiped out. Rubin himself cleared $30.6 million, Prince $26.5 million, in stock sales. A Ponzi scheme is claimed, wherein Citi purchased repackaged unmarketable leveraged mortgage securities known as Collateralized Debt Obligations, but hid their toxic exposure off the balance sheet in shell corporations. Rubin and other named executives sold $150 million of personal shares at a time when they allegedly benefited from undisclosed inside information.
THIS LAWSUIT HAS THE POTENTIAL TO ATTACK THE LEGITIMACY OF HIDDEN BALANCE SHEETS. Such hidden assets falsify the corporate valuation itself, a gigantic affront to any claim of a fair market, let alone a free market. Off balance sheets have become executive playgrounds at best, and the scene of the fraud crime at worst. An investigation filed by law firm Kirby McInerney cleared the path for the lawsuit, which has taken the new form of a blanket investor lawsuit. Look for a mushroom effect of lawsuits soon to occur, encouraged by successful ground breaking ones. Wall Street firms are extremely vulnerable to lawsuits, damages, and remedy, like restitution repurchase of fraud-ridden bonds. Look for the system to be flooded with class action lawsuits in 2009. Wall Street firms, what is left of them, might be forced to buyback much of their toxic bond waste. This could become a motive for nationalization of mortgages!!!
IF WALL STREET FIRMS COME UNDER SEIGE, THEY MIGHT LOSE THEIR GRIP ON THE GOLD SUPPRESSION AT A TIME WHEN THE COMEX GOLD IS ALREADY UNDER SEIGE.
MADOFF LAWSUITS NEXT?
The largest Ponzi Scheme fraud case ever to be prosecuted in the United States has just been announced and prosecuted. Bernard Madoff Investor Securities is charged in a $50 billion fraud case by the Securities & Exchange Commission. He is the former chairman of the Nasdaq stock market, which enabled him to attract huge investment funds and to fend off wide scrutiny on his methods. His BMIS firm had partners with Goldman Sachs and Merrill Lynch. Watch that duo go Scott-free! He faces up to 20 years in a federal prison, and up to a trifling $5 million fine, 10 thousand times less than his fraud.
The Ponzi Scheme snared numerous influential well-heeled groups, both charity organizations and foreign investors, including some extremely wealthy people. It appears that at least $15 billion of wealth, most concentrated in southern Florida and New York City, has vanished. Complications come from the fact that much income tax was paid by investors when the gains were total illusions. Numerous complaints had been filed against Madoff in the past, but the SEC took no action. Madoff apparently conducted his own trades, managed his own books, and permitted no independent audits. Renewed criticism has come to the SEC, for once more being asleep at the desk. Isn't that what the elite pay the SEC to do? Recall that when a mid-level SEC officer a couple years ago attempted to run an investigation against John Mack of Morgan Stanley, he was fired almost immediately by the SEC.The SEC has forgotten its investigation role, ever since ex-Wall Street heads have been in control of the commission. That is like hiring ex-Mafia dons to run a police force.
The Madoff case pushes the door open even wider for more lawsuits against the elite corners of Wall Street. The floodgates are not far from being pushed open. GOLD SHOULD BENEFIT FROM BOTH TARNISHED IMAGE OF THE US$ KNIGHTS OF THE SQUARE TABLE, AND GRADUAL LOST FOREIGN SUPPORT FOR A CRIMINAL CULTURE IN THE US FINANCIAL DISTRICT. In time, numerous sacrificial lambs will be offered up, some of surprising identity and lofty status.
BLOOD TRANSFUSIONS TO A FINANCIAL CADAVER
For a concise disturbing insightful interview, see the iTulip article entitled "Major US Banks Worse Than Japan's Zombies" (CLICK HERE) as the anonymous industry insider Dr Banker is interviewed. The guest claims the massive blood infusions have failed to revive the defunct banking system. "The transfusions usually take two to six months, and typically six months or so after the crisis is over, are gradually withdrawn over a period of several months to return total money in the system to pre-crisis levels. My theory is, and I admit not everyone will agree with it, is this: the patient is dead... They can keep the intravenous tube hooked up to a pint bottle or a 100-gallon drum of blood, but it does not matter if the blood is not circulating through the patient, so he can take it in... Note that many smaller banks that do not operate as part of the Fed system are working just fine... The reason: Credit Default Swaps. It is now well understood that CDS are at the root of today's financial crisis... CDSwaps certainly killed [the patient] but removing them is no cure." Dr Banker went on to explain how in the last ten years, Credit Default Swaps alone have sustained the US banking system. Their liquidation would require the writedown losses of between $5 and $10 trillion. See the transfusions in the chart below. Bank loans are not forthcoming. The banking system is defunct. So hundreds of billion$ have been pumped into major US banks, yet they remain comatose. Is their condition dictated by the Paulson gang or victimized by mortal wounds?
The entire AIG takeover by the Dept Treasury with USFed loans was intended to place the acidic AIG losses from Credit Default Swap contracts under the watchful guidance and management of JPMorgan. They wanted CDSwaps out of public view. The AIG blowups now do their damage under the USGovt roof, at federal expense, with much reduced publicity, thus preserving this incredibly queer USDollar rally. AIG has to date received $205 billion in three tranches, without any enforceable demand to cut waste and luxury for executives, who ruined the company. Expect about 40 to 50 more tranches, and at least $2 trillion more in seemingly endless AIG bailout backstops in the next few years. Maybe AIG will face some lawsuits soon.
HERE IS THE KEY QUESTION, ASKED AND ANSWERED MANY TIMES BY ROB KIRBY. If AIG blew up, why didn't JPMorgan? If Citigroup blew up, why didn't JPMorgan? They had tremendous overlap in book of business. Whatever happened to Citi's mortgage book and CDSwap book would have happened to JPMorgan 3x bigger, louder, and more damaging. The answer is that JPMorgan is a crime syndicate bank, a toxic chemical factory, free from the obstacles and nuisance of accounting. They are the USFed alter ego. They manage the 'Garbage Can' and engage in special project amusements like Enron with total impunity.
THE PLIGHT OF STATES
The whole is made from the sum of its parts. The states suffering the worst economic and fiscal damage seem to be California, Michigan, Ohio, Florida, and Nevada. On a percentage basis, New York and Arizona face the worst fiscal deficit gaps, over 20% of budget, but California's is the largest in size. The National Conference of State Legislatures estimates that the 50 states face $97 billion in shortfalls over the next 18 to 24 months. They cannot expect little from the USGovt, which has been negligent so far. MAYBE SOME STATES CAN INITIATE SOME LAWSUITS AGAINST THE USGOVT FOR NEGLIGENCE AND PREOCCUPATION WITH WAR!!! My eye is trained on California, which has motive to attempt to print money. They stand in gray area with IOUs issued for the second time. They once were usable as legal tender on a limited basis. A WIDER MOVE TO PRINT GOLDEN STATE DOLLARS COULD PLACE THE USDOLLAR OVER A PSYCHOLOGICAL SINKHOLE.
DOLLAR DEATH RALLY COMES TO END
The USDollar has rallied for three months, based upon a massive liquidation of trades that have as their basis a short in USTreasury Bonds, and based upon massive payouts to Credit Default Swaps for failed corporate and mortgage bonds. Talk about a bizarre platform. The top of the USDollar rally was called in my November Hat Trick Letter. Other foreign currencies are sure to take wicked blows and endure downward spirals, but the USDollar rally is largely done. The next blows will come from the march toward 0% in the Fed Funds rate. This is the badge of shame for USFed Chairman Bernanke to wear. He has had 16 months to work his magic, to lower interest rates, to flood the system with phony money. All he has done has been to flood Wall Street firms with money, and starve Main Street and its many resident banks. He has secretly run the agenda of his masters, TO ENABLE THE CONSOLIDATION OF FEDERAL RESERVE BANKS. They are brimming with reserves, lending next to nothing, and are preparing grand acquisitions of assets intentionally pulled down in price.
NEXT IS THE DISINTEGRATION OF THE USECONOMY, a process already begun. The financial sector was never supposed to lead any economy, but rather serve it toward capital formation and functional lubrication. The complete and total thunderous crash of the financial engineering monstrosity and risk pricing models has set the USDollar up for collapse. The only thing that would breath new Frankenstein life into it would be another major failure of a New York financial firm. The current rally this autumn was a fakeout.
The fundamentals of the USDollar are mired in failure. The banking system is insolvent. The households in America with mortgages are 18% insolvent. The jobs wagon just rolled over a cliff, as one million monthly job losses are likely by summertime. The car industry is in ruins, and the retail chains face major shutdowns. The eradication of the United Auto Workers union is the agenda, which if not permitted, will result in untold job losses throughout the biggest vertically integrated factory and financial network in the nation. Newspapers and websites are seeing their ad revenues slowly vanish, sure to lead to job cuts. Major universities and colleges are forced to find a way to continue without the benefit of rising endowments, thereby forcing job cuts and construction pullbacks. The hidden risk is the gigantic sinkhole of insurance firms, which endure liquidation, thus exposing thousands of companies to shutdowns.
The USTreasury Bill bubble is soon to lose its luster, tarnished by chronic near 0% offered yields. Its supply requirements will lead to exhaustion. The investment community will seek an alternative in gold, especially when all cylinders will be fired up to produce inflation. The policy makers are inching toward the inevitable decision to nationalize mortgages. By summertime, a panic will enter the picture, which will motivate a movement into GOLD for safe haven. The COMEX gold fireworks should light up the skies long before July Fourth. |
| Anonymous Coward
User ID: 574525
12/17/2008 8:15 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Unfortunately, the Ponzi economy doesn’t stop there. A chain letter is no more viable when run by governments than when run by private citizens. However, government orchestrated pyramids have the advantage of required participation. As a result, they can maintain the illusion of viability for several generations. But the longer such schemes operate the larger will be the losses when they ultimately collapse.
The Social Security Administration runs its “trust funds” with precisely the same methods used by Madoff and Ponzi. As money is collected by from current workers, the funds are then dispersed to those already receiving benefits. None of the funds collected are actually invested, so no investment returns are ever generated. Those currently paying into the system are expected to receive their returns based on the “contribution” made by future workers. This is the classic definition of a Ponzi scheme. The only difference is that Ponzi didn’t own a printing press.
The United States Government runs its own balance sheet based on the Ponzi principal as well. Our national debt always grows and never shrinks. As existing debt matures, proceeds are repaid by issuing new debt. Interest payments on existing debt are also made by selling new debt to investors. The whole scheme depends on an ever growing supply of new lenders, or the willingness of existing lenders, to continue to roll over maturing notes. Of course, as was the case with Madoff, if enough of our creditors want their money back, the music stops playing.
In Madoff’s case, the rug pulling was provided by the huge financial losses suffered by some of his clients in other non-Madoff investments. When enough of these clients looked to sell some of their apparently well-performing Madoff assets to help offset such losses, the scam collapsed. The same thing could befall the United States Government. Now that China and our other creditors are looking to spend some of their U.S. Treasury holdings to stimulate their own economies, look for a similar outcome with even more dire implications. |
| Anonymous Coward
User ID: 574525
12/17/2008 8:31 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
« Illuminating the Illuminati: Charles Schumer and Barney Frank Are Owned By The Big Banks
December 16, 2008 2:46PM
The Federal Reserve Is Ruining Us and Must Be Destroyed
By Cody Willard
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The economy is in bad shape and as I’ve outlined repeatedly, the socialist Republican/Democrats that you guys keep voting into power are not going to be able to fix any of it. Remember always that the only thing that makes stocks go up in the long run is profits. And profits don’t come from the government. They come from you and me. And until the government gets at least somewhat back into the job of what they are supposed to be doing – mandating the rule of contract law – we’re not going to get back into a growth mode in this economy.
We’ll get some rule of law back into this country…and it will happen sooner rather than later. And that means over the next 3,000 days or so, stocks will climb higher as profit growth will come from the empowerment that comes from knowing that the papers you sign matter and that the ones you don’t sign won’t come back to haunt you.
That’s really the biggest kicker with all this white-collar welfare and corporate bail outs for Wall Street, Detroit and home owners – that all you rich people who had enough capital or enough access to capital to own banking stocks or houses or boats or cars or 70” plasma televisions for your trailer now want those of us who saved, rented and prepared to take advantage of the many, many mistakes you’ve made…instead we’re forced to keep you in your stocks, bonds, funds, houses, boats and cars.
We’re not cool with that and all of you who are working to create these wildly unfair governmental policies for irresponsible companies and people are the scum of the earth. You make us sick.
Hey Ben Bernanke, have you ever bothered to read what the STATED mission of the Federal Reserve actually is? Here it is straight from federalreserve.gov –
Mission
The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.
Today, the Federal Reserve’s duties fall into four general areas:
* conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
* supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
* maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
* providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation’s payments system
And here’s what you explicitly told us you’re going to do to those of us who saved and rented and expected that we’d have an economic downturn or twenty during our lifetimes just like every economy always does as people get overgreedy at the top and overscared at the bottom:
The focus of the Committee’s policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve’s balance sheet at a high level. As previously announced, over the next few quarters, the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities and as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.
-
Bold stuff there above is mine, of course.
As a throwaway thought, I wonder why the idiotic, evil bureaucrats at the Fed bother to kinda quantify their moves as “HIGH level”, LARGE quantities”. I personally think that using the printing press that the private bank that the Federal Reserve has to buy even a MILLION DOLLARS of crap from people and companies who stupidly ignored all risks and levered themselves and their shareholders up in expectation of making profits but now have losses would be a HIGH level and LARGE quantity. I suppose the two trillion dollars that the Fed has stolen and given to the crooks running the banks that the Fed was supposed to be supervising and regulating might already be considered HIGH levels and LARGE quantities. It’s all relative if you’re rich and connected, I guess.
The Fed is part of the problem. And yeah, partly because it’s unconstitutional and because it’s destroying our economy and society too, the Fed must be destroyed. The socialist Republican/Democrats who have total disregard for you and your hard work and savings and the rule of contract law that you’ve been respecting in this country your whole life but that you guys keep voting into office are obviously the biggest part of the problem. You can vote them out next time you get a chance.
[link to cody.blogs.foxbusiness.com] |
| FHL(C)
User ID: 468982
12/18/2008 2:43 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
[link to www.mybudget360.com]
U.S. Treasury and Fed Determined to Destroy Dollar and Force Savers to Spend: Investing in a Government Hoping for a U.S. Dollar Collapse.
* Posted by mybudget360 in Employment, bailout, banks, credit cards, deflation, dollar cost average, economy, government, savings, wall street
* 2 Comment
Tuesday’s action by the Federal Reserve has placed us into the history books. The Fed cut the federal funds rate to an unprecedented 0.25% and gave a rather firm statement that they are prepared to keep the rate at this low level as long as the markets deem it necessary. When asked why they didn’t cut rates down to 0 a Fed official replied that it would help the credit markets run more smoothly. The markets don’t believe that. In fact, the markets have been trading near the zero percent mark for some time now.
As the market volatility has increased causing 2008 to be one of the most volatile years on record, we are seeing some historical action occur. First, let us look at 3 key economic indicators:
fed funds rate reserves
*Click for sharper image
Let me try to walk you through a few things here. First, the federal funds rate is now sitting at a historic low. We are now seeing a zero interest rate policy regardless of what the Fed is saying. The fact the rate was left at 0.25 is merely symbolic. What the move signals is the Fed is basically done with monetary measures. It has no choice. It has reached the bottom of the barrel.
What led it to the bottom of the barrel is how quickly the red line on the chart above is shooting lower, consumer inflation. Some are trying to call it “dis-inflation” but let us be honest, this is deflation. This is scaring the Fed into doing unprecedented things. So why is this deflation? Let us count the ways:
(a) Housing market is imploding taking prices down
(b) Employment is skyrocketing keeping wages stagnant for many and wiping out income for others
(c) Stock markets are tanking across the globe. With nearly $50 trillion in global wealth lost in one year.
There is nothing remotely close to calling this inflation. In fact, the CPI released fell the most on a monthly basis in 61 years. In fact, this was off the charts since the BLS started keeping track of this data point in 1947. It dropped 1.7 percent in November. Compound that with the 1 percent drop in October and you can quickly see that we are quickly approaching a year over year percent drop on the CPI. The last time the CPI dropped on a year over year basis was in the early 1950s as you can see from the chart above.
The other point on the chart is the reserve bank credit which is over $2.2 trillion. Now some may argue that this is inflationary. It is only inflationary if it makes its way into the hands of Joe and Susie public and that is not happening. How can we tell? Because when we look at reserve bank credit which includes much of the bailout funds, banks are pouring them into treasuries and sitting tight:
bank reserves
This is unprecedented. Banks are scared witless to lend because of the grim reality of all the losses they will face in subsequent quarters. In fact, most banks are simply gearing up for a long economic winter and bailout funds are being used as a cushion. The blame does fall with banks but what did one expect with the Treasury lending banks money and at the same time expecting banks to lend with stricter standards? It was a losing proposition from day one. Why? First, the massive credit boom of the last 30 years was dependent on a healthy employment base and lax credit. Now, we have the exact opposite. We have a quickly deteriorating employment picture and banks are expected to be more strict in lending money.
The only way credit will flow again as it once did is for someone to become the large non-prime lender. Wall Street and foreign banks took up that role gladly during this decade. Now, the only entity with enough power to fill that role is the government. The Federal Reserve in conjunction with the U.S. Treasury are attempting to become the biggest non-prime lender of all time. Consider that 0.25 a teaser rate for a future of economic trouble.
It sometimes helps to see what is being sacrificed here. The first major casualty is the U.S. Dollar which got pummeled by the Fed rate cut:
U.S. Dollar Index
The U.S. Dollar has been in a steady decline. That is, until early summer of this year when it started a ferocious rally. What occurred near this time? A few things. Global decoupling was laid to rest and the oil bubble burst. Massive deleveraging led investors to a common resting spot. The U.S. Dollar. Keep in mind the one thing we are not hearing anyone talk about is a strong dollar policy. Why? Because it wouldn’t sound too good to the American public if the Fed stated that they were systematically trying to destroy the value of the U.S. Dollar on the global exchange markets. Why? Well, unfortunately the massive amount of debt which amounts to approximately $49 trillion in the U.S. is simply back breaking. The Fed is desperately going to do anything it can to bring back inflation even if it means an all out war on the U.S. Dollar. You need only look at the chart above to see what is happening.
Anyone that has traveled abroad realizes the destruction of the U.S. Dollar. Let us take a longer view of this and you will understand why:
U.S. Dollar Index
In the last 7 years the U.S. dollar has fallen a stunning 33 percent. In global terms we are steadily getting poorer and poorer and the Fed and U.S. Treasury are happy to oblige. You need to remember that it would be very easy for the Fed to strengthen the dollar. All they need to do is increase the fed funds rate to encourage saving. Yet the only people that are saving right now are foreigners and many are happy to invest at 0 percent rates of return:
IRX
Is this even good for our country? It depends if you enjoy a weak dollar that is systematically being attacked. The Fed is desperately trying to engineer inflation to get us out of our massive debt. Remember that in deflation debt is the worst possible thing to have. The reason for this is asset values are declining while the face value of the note remains the same. Housing is a perfect example. Say you bought a home for $500,000 and took out a $450,000 mortgage. The home is now worth $300,000. A current buyer purchase a similar home for $300,000 today and takes out a $250,000 note. You have a $450,000 mortgage still and the new buyer has a mortgage $200,000 cheaper than the one you have. Now multiply that over thousands of times. Deflation is to be avoided at all cost because it renders the Fed a wizard behind the curtain (at least that is what they hope to avoid).
It may be worthwhile to take a look at Japan since they went down a similar path:
Japan interest rates
They followed a zero interest rate policy and injected billions into their banks after their real estate market bubble collapsed and their stock market burst. If you take a look at the chart above, the Bank of Japan systematically started cutting rates in the early 1990s and has held them low ever since. Nearly 2 decades after. How did this help their stock market and real estate market?
Nikkei 225
Japan bust
I remember when this argument was made in the initial days how quickly it was brushed off. We are not Japan echoed the argument. That is true. We are different in many ways. Yet we have similar circumstances especially in our financial markets. Let us outline at least the similarities and you judge for yourself:
(a) Massive unsustainable real estate bubble
(b) Lax lending standards
(c) Over building
(d) Massive stock market bubble
(e) Stock market and real estate bubbles burst together
(f) Japanese government injects liquidity into banks
(g) Bank of Japan cuts official discount rate to near zero
(h) Start of deflation
We’re playing out the same scenario above. Sure, Japan is different culturally and in many other ways but a through h above are essentially what we are living. That is simply a fact. We had a real estate bubble and stock market bubble burst together. We had horrifically bad lending standards. There was massive over building in real estate. Our government is now injecting capital into banks. Our Federal Reserve is approaching the zero interest rate policy. We are now seeing a taste of deflation.
The only ace in the hole is that the Fed is trying all these other creative instruments to get credit going again. You know what is the only thing that will work? The only way this will work is if the Fed and U.S. Treasury nationalize all banks and enforce lax lending standards and bring back the bubble days. That way, they can directly oversee how the funds are being disbursed. Otherwise, banks privy enough to get a cut of the bailout funds will sit comfortably looking for deals as banks not on the bailout list implode. Next year we know that we will be seeing massive fiscal stimulus and it is hard to say how the market is going to react to an aggressive Fed while the government becomes the number spender. We’ve never been down this road before.
Yet the major losers here are those who are prudent and savers. If you look at savings rates at your local banks, you are looking at another zero interest rate policy. The notion of dollar cost averaging into the stock market has gone out the window for probably a generation. If we were to go back to historical rates of 5 to 6 percent many savers would start storing money especially given the current economic shock. Yet we are doing the opposite. The Fed now is trying to make rates so low that banks will be forced to lend. Yet here is the kicker. A bank would rather have a 0 percent rate of return than a certain loss to a bad borrower.
I mourn for the U.S. Dollar primarily. It is a very tough time to be a saver with our current Fed and U.S. Treasury destined to annihilate our once mighty greenback.
[link to freewordofgod.yuku.com] |
| Anonymous Coward
User ID: 574525
12/19/2008 8:33 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
A Devastating Impact as the Market Unleverages and a Winter of Discontent
Posted: December 17 2008
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Two sets of rules on wall street, 50 billion ponzi scheme by Bernard Madoff uncovered, court case for the toxic waste coverup, Paulson's efforts are futile, commercial and residential real estate market alike now frozen, fed is frantic, an elitist engineered collaps of the U.S, derivative problems galore, and no real debate taking place in government As we know there are two sets of rules in banking and on Wall Street - one for the anointed and one for everyone else. The anointed never go to jail for their crimes.
On Friday, it was reported that former Nasdaq stock market chairman Bernard Madoff was arrested for running a fraudulent investment business that lost $50 billion before he confessed to senior employees it was a “giant Ponzi” scheme.
Federal investigators working through the weekend to unravel Bernard Madoff’s alleged $50 billion Ponzi scheme found evidence he ran an unregistered money-management business alongside his firm’s brokerage and investment-advisory subsidiaries, two people with knowledge of the inquiry said.
Clients of the undisclosed unit may have included hedge funds, according to the people, who declined to be identified or to name the funds because the probe isn’t public. Investigators from the U.S. Securities and Exchange Commission are looking for signs that others participated in the alleged fraud and are examining why Madoff’s wife’s name appeared on documents linked to transactions under scrutiny, the people said. His wife, Ruth Madoff, has not been accused of any wrongdoing.
We now are faced with another budding scandal, which is engulfing Robert Rubin former Treasury Secretary under Bill Clinton and his former disciple Chuck Prince for their roles in another Ponzi scheme that is now choaking world banking.
They and their accomplices over the past five years are named in a federal lawsuit for an alleged complex cover-up of toxic securities, which was administered worldwide. They caused part of what you see in CDO, Collateralized Debt Obligations, which have been responsible for trillions of dollars in losses. These disastrous securities that were sold by Citibank were off the books in shell entities. The actions of Rubin and his partners in crime were responsible for the collapse of Citigroup, which wiped out $122 billion in shareholder value.
What is equally onerous to shareholders is that Rubin and his gang of accomplices were able to hold Citigroup’s shares up in value while they cashed out $150 million worth - stock sales that were suspicious and calculated to maximize the personal benefits from undisclosed inside information. A trait Wall Street Illuminists are famous for.
Rubin made $30.6 million on the deal. What more would you expect from the masters of the universe?
Considering this suit we see a winter of deep discontent. It is the apparent result of twisted ideology or manifest sociopath behavior. Financial innovation was just another ruse to empty the pockets of the investor. This was an age of mitigating risk by spreading it throughout the system. It was thought that this would blunt the negative force of such scams. It did not work. This is what we forecast six years ago and which only became realty 1-1/2 years so. When the results of such antics began to take the financial system down.
Americans and others have no idea what is going on nor do they understand the gravity of the situation. This is an event that only happens once every 500 to 1,000 years. This is going to be one of the granddaddies of all collapses. The elitists had to play boosting the value of real estate to dizzying heights and then burying it in structured finance. In a world of stable real estate prices, SIV’s and CDO’s were relatively risk free, but this was not a stable environment. Professionals should have realized that normal rules didn’t apply. Foreign banks, hedge funds, insurance companies and other institutions bought 70% of what became toxic waste, as they poured dollars back into the US economy supplying at times $3 billion a day in investment to keep America from going bankrupt. The buyers knew that lending practices had changed dramatically and that risk had increased exponentially. Eighty percent of mortgages were being securitized.
Greed drove all the players from the borrowers to the buyers of what became toxic garbage. A daisy chain of corruption and greed. The buyers were not happy with a better yield, they had to borrow money and leverage the CDOs and SIVs 30 to 100 to one. As you know we have just witnessed the de-leveraging of this process and the devastating effect it has had on all markets and the world economy.
The Illuminists got the ball rolling by getting revenge on Bear Stearns by financially assassinating them and looting the valuable assets of the company. The recipient was JP Morgan Chase, a major owner of the Federal Reserve, which you loaned $29 billion to pull off this theft. This started the de-leveraging and the run on the derivatives. Lehman Brothers was next and their demise caused even more havoc. Just prior to that was the collapse of Fannie Mae and Freddie Mac, both derivative borne disasters. Taxpayers are on the hook for $9.4 trillion and climbing. The Fed refuses to say who received their largess and what the terms are. Citigroup will cost $1 trillion and AIG $500 billion. The Treasury is backstopping $600 trillion in derivatives and the Fed and the Treasury are doing the same for the entire structured finance segment. The latter and municipal bonds are essentially frozen. There are few buyers.
There is nothing normal about this recession/depression. We are looking at the destruction of the system, which we forecast over eight years ago. Any entity with money doesn’t want to lend or to buy. That is ABS, CDOs, SIVs, CP, munis, auction rate securities and CDS. It is a semi-frozen to frozen system. In order to get banks to lend at all the Fed poured funds into domestic and foreign banks, and has forced down interest rates on Treasuries as well as the Libor.
Paulson’s attempt to revive loan securitization is an exercise in futility. The banks do not even want to borrow short and lend long anymore. No more 30-year fixed rate mortgages for now. They have too many bad debts and do not need any more foreclosures. Let the FHA handle the business until the smoke clears. The banks, Wall Street, government, and the Fed are putting out so many fires that they have little time to restore confidence. There is still no transparency. When you ask a simple question of government the answer is it is a state secret and cannot be divulged. The Fed arrogantly simply refuses to answer.
As we stated previously banks are lending but only to the best borrowers and loans are up 20%, but only in that category – and that includes mortgages.
The system falls deeper and deeper into trouble every day. The banks are holding on with Fed and Treasury help, as are most sectors of the economy. What is really vulnerable is Wall Street, insurance, pension and retirement plans, hedge funds and those in the stock market. The market is only 50% down. It has 50% more to go.
The stimulation brought forth by the Treasury and the Fed has to lead to a decline in the dollar and a rise in gold and silver. We are already into a dollar correction. The fight by the Treasury and the Fed to keep interest rates low will get more difficult and cost more money. They have again lost control of the dollar. This means gold and silver should break out again soon. Treasuries, the bond market and the stock market will all be under tremendous downward pressure. The perceived safety of Treasuries will soon be history. This is why we have recommended for those of you who want only safety to use Swiss franc Treasuries.
The dollar faces a $1.3 trillion fiscal deficit in September of 2009 and a trade deficit of $57 to $60 billion and a $500 billion balance of payments deficit. The M3 started rising again and will start to show up in inflation again in January. It is now only a matter of time before interest rates rise again from their ridiculous current levels.
As the dollar comes under pressure the Treasury market is experiencing fails-to-deliver of $2 trillion and that is hardly chicken feed. This certainly has to be a crisis of confidence for Treasury investors and another good reason to stay away from them. Who would want to chase record low yields and fails that range from $1.3 to $2 trillion? It is like who’s on first. As a result broker/dealers have stopped delivering bonds. Holders of US Treasuries are now scared to lend them into the repo market in case their bonds are not returned, and potential buyers sit on the sidelines fearful of handing over their money to a counterparty that at best might not deliver a bond on time, and at worse, might go under.
Treasuries are some safe haven. It could be in time investors will refuse to buy Treasuries. That would make it increasingly difficult and expensive to raise money and rollover maturing debts. Due to fails-to-deliver the natural balance of supply and demand has been altered and the true price of Treasuries has been obscured. In addition, fails have spread across other bond markets. While this transpires the Fed sits on its hands and does nothing. They just told the players to sort it out for themselves. Could it be the Fed wants a collapse? The global economy has significantly contracted since the collapse of Lehman, which spurred this problem. The Fed’s attitude hardly instills confidence when 8.6% of all Treasuries failed in the first five months of the year.
Now that figure is 20%. As we said these fails have affected other markets and this problem is not new. In 2004, fails for government agency MBS was 40%. It really is a case of greed by the players not wanting government to interfere. Once the system breaks down, and it will break down, the pros and the institutions will get delivery but not the public. The profit lies with the institutions.
Another problem is that more bonds are trading than exist. That is due to naked shorting mostly by dealers. An investigation is underway, but as usual, nothing will happen.
As we warned some time ago not only residential real estate has serious problems, but so does commercial. The market is frozen because buyers cannot get financing. Months ago we brought to your attention in NYC the Stuyvesant Town-Peter Cooper Village and the Riverton Apartments in Harlem. There are developments all over the country that are in serious trouble due to lower revenue or cancellations. Bonds for such commercial projects are yielding on average 15.2% versus 8.5% in mid-November. Credit default swaps on such bonds on AAA securities rose 133.5 bps to 847.5, or $847,500 in annual premiums to insure $10 million of the debt. That is $619,000 more than at the end of October.
The 2006 funded ALT-A mortgages delinquencies averaged 20.3% and 12.5% for 2007 up from 16.9% and 12.2% just six months ago, and as unemployment rises these mortgage problems will worsen.
The credit crisis has begun to be reflected in a demand collapse. The downturn is the worst in 27 years. This unfortunately is what we predicted and it has come to pass. The Baltic dry index has fallen from 11,000 to 800 and China will shut down 100,000 plants this year. As we have reported previously rioting has been rife in major cities. In large exporting cities unemployment is over 10%. It is no wonder the Communist government is going to spend $650 billion on domestic infrastructure.
These problems will hit every economy and society. Versus gold every currency will fall. The chickens are coming home to roost. No matter what governments following Keynesianism say, every government will have to revert to a gold standard and God help those that do not have gold reserves. They will have to buy reserves back and that, of course, will send gold soaring. Yes, inflation drives up gold and silver and deflation does as well as it becomes a flight to quality. When nations currencies are not worth the paper they are written on gold becomes the standard. We do not know for sure where gold is going. Official inflation since 1980 would put it close to $3,000 and unofficial inflation over $6,000. If we return to a gold standard we could be looking at $9,000 to $10,000 an ounce, who knows. All we know is that is where all this is headed. We have seen one report that was looking for more than $50,000 an ounce.
November was the worst month in the US labor market since the oil crisis of 1974. The rising cost of corporate debt is flashing warning signals that far worse is to come over the next few months and job losses are headed for levels last seen during the “Great Depression” of the 1930s.
As investors flee risk in corporate bonds they pursue US Treasuries, which are just as risky. The pace of layoffs already happening in the US is indicative of panic. Mind you, what you are seeing are official statistics not real numbers, which are much worse.
As troops go into the process of leaving Iraq troop levels in Afghanistan have risen 20,000 and it is expected troops on the ground theme within the next 18 months will rise to 58,000.
Just like in Vietnam the conventional wisdom says these troops are absolutely necessary. While this goes forward we do not hear a peep from Congress. There is no debate it is just happening. The opium profits have to be protected and how else do you get unemployed young people off the streets?
Over the past three months the monetary base has risen $630 billion or 76% yoy. From 8/87 to 11/05 the monetary base rose at a 6.8% rate.
As an afterthought, the Fed’s portfolio of securities extended by $1.2 trillion over the past eight weeks to a record $2.2 trillion. Banks have increased lending to their best clients, but most of the injections ended up in dividends, bonuses and or the balance sheet. The legacy NYC banks under new law are getting interest 1% above the Fed funds rate. This will flood the financial system with unlimited amounts of money. This is part of quantitative easing that includes unlimited amounts of money and credit and zero interest rates. It also includes the purchase of toxic junk, ABS, including credit card packages, car loans and student loans.
In just over the last year more than $10 trillion has been lost in residential real estate, the inventory overhand is more than 10 months or some 3 million homes for sale.
The Fed and the Treasury are purchasing hundreds of billions of ABS and MBS from banks and Wall Street and from Fannie Mae and Freddie Mac. As a result of the latter, 30-year mortgages are being driven relentlessly lower. In addition the Fed and others have driven interest rates to their lowest level in over 50 years. The 10-year Treasury notes recently were driven down to 2.48%. As the Fed’s manipulation proceeds massive amounts of new Treasury securities are entering the market.
We are calling the federal deficit at $1.3 trillion for fiscal 2009. Some already believe it will go over $2 trillion. Tell us why would anyone want to be long US Treasuries or the US dollar?
As we predicted, in spite of a 4-1/4% drop in the Fed funds rate, housing continues to fall in value. We believe it will continue to do so at least for 2 to 3 more years. This while unemployment grows and consumer spending falls. The deflationary spiral is there. The question is how long can the Fed and the Treasury hold it off? Japan failed and the US will fail.
The elitists engineered the collapse of the US, Canadian and European economies now they’ll have to deal with the workers they’ve dispossessed. They know who was responsible for their plight. The public has worked their entire lives and has little or nothing to show for it. Their pensions and 401k’s have been decimated and they are trapped unable to stop the decimation of their wealth. What has transpired over the past eight years has been a massive transfer of wealth from the workers to the very wealthy. This time even the upper-middle class and the middle-class are being pulled apart. Wall Street and banking are responsible and ironically they are bailing themselves out leaving the workers with very little.
These, the world’s most productive workers, who work longer and harder, see shrinking wages and falling purchasing power the victim of stealth inflation. The greed and corruption of the Illuminists knows no end. They have left 50 million people without health care.
Business has converted full time jobs to part-time jobs to eliminate benefits and in the process lower the pay scale. It just doesn’t end. It goes on and on and can only get worse.
Word on the ‘Street” is that JP Morgan Chase is a systemic risk problem and they do not know how to solve the problem. Merrill put out a sell on Morgan. They have derivative problems not only with their own paper, but also with that inherited from Bear Stearns. It could be gold and silver that takes Morgan to the edge. We could be talking trillions of dollars in losses. Morgan is one of our recommended shorts at $39.36. It closed at $28.60. We are pulling our first short cover at $23.00 and leaving it open. Morgan is going much lower.
The wreckage in the $500 billion subprime and $1 trillion ALT-A mortgages will get much worse. The foreclosures are headed even higher than expected.
We are not even close to discounting the credit-market meltdown that will stretch well into the future.
The FDIC is looking to hire about 125 new workers in order to cope with more bank closings in 2009. The starting salary is $156,000 a year.
The municipal bond market lost 8.2% in 2008.
As you know we are short a number of major homebuilders. We believe almost all of them will be wiped out, because how can you build and sell when there are millions of unsold home inventory on the market. The option-ARM resets will be a killer.
The SIPC has been wiped out by the Madoff Ponzi scam. It will be interesting to see what government does next.
Diary Farmers of America and to former top officials will pay $12 million in penalties for a 2004 scam to manipulate milk futures.
Bristol Myers Squibb is going to cut an additional 800 jobs, or 10% of its workforce.
Interest rates at zero or 0.25% make little difference. Fourteen months ago rates were substantially higher and lowering them has not extracted us from the financial credit crisis. The lower rates won’t make bad loans good. These psychological boosts have withered each time they have been produced. Tuesday’s Fed rate lowering will accomplish little and the market will come tumbling back down. Worse yet, the Fed has played its last interest rate card. They have accomplished little since this deadly fiasco began. Their efforts have not stopped the recession nor have the mountainous creation of money and credit – they are a complete failure.
They created a stronger dollar for five months; now the dollar has collapsed again.
The Fed can only increase money and credit in greater volume, as inflation becomes hyperinflation and gold and silver soar. The Fed is trapped, they are in a box and they cannot get out. They and their lies and corruption are going to go down in flames. There can be no miracles, reality is what it is. Truth is about to triumph. The Ponzi scheme is in its final stages. All the prosperity since the 1970s has been a big lie. You must have all your investible assets in gold and silver related assets. It is your last chance to capitalize at inexpensive prices.
The lack of trust in the financial world over counterparty risk is accelerating and contracts of all kinds are being forced to be settled. Derivatives in the trillions of dollars are being forced to be settled and JP Morgan Chase is in serious trouble. Morgan is the biggest Fed shareholder and that means the Fed and the Treasury will bail them out for trillions of dollars. That means money and credit will have to be created at breakneck speed. The scandal at Citigroup with Robert Rubin, the mirror Madoff catastrophe, only $50 billion and now we have JP Morgan Chase on the ropes. Wall Street, banking and Washington are trying to keep the problems at Morgan under wraps.
The Fed, by cutting its official rate to 0 to 0.25%, is just putting the Fed’s target rate in line with the effective or real rate. But the Fed, via its communiqué, is admitting that it is petrified of what is occurring in the economy and financial system so it is now in all out money/credit dump mode.
Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.
As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.
The Fed is frantically signaling that it wants asset prices to inflate and will engage in any and all activities that will force asset prices higher. The Fed announced that it will monetize the entire debt market if necessary. As we have asserted, the Fed has bet the entire ranch. Now we get to see if it works.
[link to www.theinternationalforecaster.com] |
| Anonymous Coward
User ID: 575951
12/19/2008 7:42 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
hi FHL, looks like you were onto what is happening now in 2005. Can I ask, are you a Christian, believe we are in the last days? |
| Commoner
User ID: 551991
12/19/2008 7:53 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
There are fingers flying into the dike that holds back the sea of debt. |
| Anonymous Coward
User ID: 575967
12/19/2008 8:10 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
we are not in the last days, yet. |
| Anonymous Coward
User ID: 574525
12/20/2008 10:46 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
"The near meltdown of the financial system produced by the subprime mortgage crisis in the United States is the outcome of the entrapment of the poorest sections of the population, in loans they could never repay, by the banks and lending institutions. It is indicative of the growth of financial parasitism on an unprecedented scale."
[link to www.hermes-press.com] |
| Anonymous Coward
User ID: 576338
12/20/2008 10:54 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
DOOM and GLOOM on the world economy.
Wallah here it is!
[ link to www.tldm.org]
Whenever she hits whatever the catalyst maybe!
BOOM BOOM BOOM
it´s inevitable just keeps being delayed...
Got Gold and Silver?
Will definetly happen before 2009.
Love and Light
............ well, let's say before 2012.
But then the doubling of gold since January
2005 (400 to 800) wasn't bad. |
| Anonymous Coward
User ID: 576338
12/20/2008 10:57 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
(PS: Above quote from Sandalafon was from January 2005) |
| Anonymous Coward
User ID: 577452
12/22/2008 9:25 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
Our 2009 Predictions
Roger Wiegand
Dec 22, 2008
"We think we now have enough data from both the fundamentals and technicals to make some serious forecasts and predictions for 2009. While 2008 was a nasty year when lots of things imploded, they are far from being repaired. Treasury Secretary Paulson told us this week there are no more surprises, which tells me we haven't even discovered but a small portion of this monster derivative mess. His ripping-off of the taxpayers to the tune of $700 billion is only a warm-up. However, the larger question for traders and investors is what could happen next and when.
In the following report we take the key global economic points and suggest the outcome for 2009."
-Traderrog
The most important news for 2008 was the destruction of the big global banks' net worth and their badly wounded ability to conduct normal business and make market-moving loans. Ben & Hank's bailout only helped the bad-boy banks reliquify themselves to remain somewhat solvent and stay in business. They are doing nothing to extend credit to any business enhancing western or global economies. The 2009 result will be no significant banker lending, taking more bailout money and sweeping additional bad loans of all stripes under the banker's rug and hiding the rest in back rooms.
The largest surprise in our view was the massive disaster at insurance giant AIG. Despite numerous injections of bailout billions, AIG remains in very serious trouble hanging on by their proverbial fingernails. The 2009 result will be a surprise crash and failure of AIG frightening the world at large causing ripples of failures throughout western and Asian nations unable to conduct business without mandatory insurance policies. Most folks have no comprehension as to the monster fallout this will create. It is in our view literally immeasurable, and this is why Paulson handed them so much money.
Our new president is determined to hand out $860 Billion to One Trillion dollars in a Herculean effort to literally buy a new economic recovery. While some of his ideas are noble indeed the overall plan
will have little effect and Great Depression II shall take hold in 2009 with crashing stock markets in May and September-October 2009. We think the worst of the worst hits in later September 2009.
During the spring of next year we see:
(1) A second larger wave of residential housing mortgage failures; (2) The first big wave of auto loan failures and repossessions; (3) Over $40 billion in credit card defaults, smashing the bank lenders; (4) The first wave of commercial mortgage failures and foreclosures on shopping malls, office buildings and other commercials; (5) And finally, the grand smashing finale of CDS Credit Default Swaps originated with No margin money or down payments! We heard today the total is 500 trillion! I cannot even fathom that number. These five converging train wrecks could take the Dow from a dead cat bounce of 10400-10800 back to 7250, or even 6600, or 5600.
Shares traders and investors have one more solid quarter, in our view to regain some stock market losses on the forthcoming Obama Trillion Dollar handouts. We think the rising share markets will help most all sectors gain some recovery and provide the illusion the bottoms are in and new bases found. The stark reality hits home after shares peak in April or early May taking an unprecedented selling high dive scaring the wits out of Americans and the watching world.
Even with these events and rising unemployment and social problems, economic observers and analysts could continue to plead the worst is over, the bottoms are in and a fine, new, shiny world of trading and investing in our bright economy lies just ahead for the fall of 2009. Then, in later September and early October, the New York, London, Tokyo and Asian markets take a monster crash. How low is low and how bad can it get? We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. One guideline will be a falling overshoot of PE's on our largest, so-called international corporations posting lows of 4 to7. Today, many of them are near 18. What does this tell us about the severity of our projections?
Unemployment nationally in the USA is now touching 16%. The officially posted number is somewhere near half of that. By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALLTIME 1930'S DEPRESSION HIGH OF 25% UNEMPLOYED. SADLY, THAT IS NOT THE WORST AS IT GETS MORE DIRE. WE PREDICT REAL, USA UNEMPLOYMENT REACHES 30-40%. IN THE RUST BELT STATES OF MICHIGAN AND OHIO, WHILE 40% IS NOT UNREALISTIC.
Several European nations have larger, more established social safety nets for the unemployed. In the USA, local, regional and national authorities are not nearly as prepared. The American federal government departments for food stamps and the job of providing welfare provisions will be overwhelmed. This will be a Katrina event for the hungry citizens of the United States. Urban areas will see skyrocketing crime and in parts of some cities, life could become totally uninhabitable.
The last report we've seen on those receiving food handouts and related welfare amounted to 11 million USA citizens with 700,000 children going hungry each day. We suspect the true amount of those needing food help will rise to 35,000,000 with an untold tragic number of them being little, defenseless children. Governments remain in denial and are not prepared for this national emergency whatsoever. As things worsen, food riots and others with violence aimed at the "haves' are common.
The number of bank failures over the next three years will be in the thousands. In addition, the US Dollar's valuation could break recent lows near 70.00 on the index, dropping to 46.00 by 2011 or 2012.
Inflation or potentially hyperinflation is quite real as the Federal Reserve and US Treasury strain to print and circulate cash to prod our stalled economy. It is simply not working even with the dramatically lower interest rates of late. Benny Bernanke is out of rate cut running room.
Consumers are broke and going broker. Households of interrelated families are doubling and tripling up even with several employed members being under one roof. Basic costs of rent, mortgage payments, health care, food, utilities and taxes are too much to bear on stagnant and in some cases falling wages. In some areas of America, there are entire subdivisions of homes totally abandoned or existing with only a hand full of occupants. The millions thrown at lenders for new mortgages are not getting through to buyers, as there are fewer of them. We are witnessing system breakdown.
Municipalities and states are sinking into a spending, debt-ridden morass. It was reported today that 22 of 50 USA states are in serious budgetary trouble. California is one of those in terrible condition and Michigan is already technically broke as are many of her cities. Detroit will file bankruptcy in 2009 and there will many other surprises as well. There will be a cascade of bond defaults and the outcome will cap the ability of these cities, states and counties to borrow ever more.
The shining light through all of this is the faster we find the bottom the faster we can recover. Sadly, the recovery process will take years. Futures and commodities traders should continue to earn steady profits as the stock markets slide into oblivion for years. We see no recovery until 2015.
Trader Rog - Roger Wiegand
Editor, Trader Tracks
email: traderrog@comcast.net
Trader Tracks from www.miningstocks.com |
| .
User ID: 577452
12/22/2008 7:23 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Omega Subscriber
Total Unequivocal Bad Fuckin' News
User ID: 340280
12/21/2008 8:53 PM
Report abusive post
Japan Exports Plunge Record 27% as Recession Deepens
Quote
Damn thats...catastrophic.
I have it on good authority boolit sales in the US are way up.
Imagine that.
Some people see whats coming .
So should you.
Japan Exports Plunge Record 27% as Recession Deepens (Update1)
By Toru Fujioka
Dec. 22 (Bloomberg) -- Japan’s exports plunged the most on record in November as global demand for cars and electronics collapsed, signaling more factory shutdowns and job cuts are likely as the recession deepens.
Exports fell 26.7 percent from a year earlier, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted a 22.3 percent decline. The drop was the sharpest since comparable data were made available in 1980.
The Bank of Japan lowered its benchmark interest rate to 0.1 percent last week after business sentiment dropped the most since 1975 and the yen surged to a 13-year high against the dollar. Honda Motor Co. said last week that it may shift manufacturing overseas if the currency strengthens further.
“Japan’s export crash is finally upon us, and this is the worst thing that could happen,” said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo. “The recession will be very severe as companies adjust investment, production and labor.”
The yen traded at 89.70 per dollar as of 9:35 a.m. in Tokyo from 89.50 before the report was published and 87.14 on Dec. 17, the strongest since 1995. The Nikkei 225 Stock Average edged 0.6 percent higher after the U.S. government agreed to provide General Motors Corp. and Chrysler LLC with emergency loans.
Gross domestic product shrank in the past two quarters, sending the world’s second-largest economy into the first recession since 2001. The government last week forecast zero growth for the year starting April 1.
Toyota, Sony
Honda, Toyota Motor Corp. and Sony Corp. are among the companies that are shedding thousands of workers and closing production lines as profits dwindle. Car exports slid 32 percent last month, the most ever, and semiconductors slumped 29 percent, the ministry said.
Today’s report showed the global recession is spreading to the emerging markets that propped up exports earlier this year as demand from the U.S. and Europe evaporated. Exports to Asia fell 27 percent, the most since 1986, after the first decline in six years in October. Shipments to China, Japan’s largest trading partner, fell 25 percent, the steepest drop in 13 years.
“There are no markets that can make up for the drop in demand for Japanese-made goods,” Dai-Ichi Life’s Shinke said.
Exports to the U.S. tumbled a record 34 percent, and those to Europe slid 31 percent, the second-most ever.
Imports fell 14.4 percent, the first decline in 14 months, as oil costs eased and the yen gained. That wasn’t enough to prevent a trade deficit of 223.4 billion yen (2.5 billion), the third shortfall in four months.
Yen’s Damage
The yen strengthened 25 percent against the dollar this year as the global financial crisis prompted investors to sell riskier assets purchased with money borrowed in the currency.
Honda President Takeo Fukui last week said the government should take action to halt the yen’s rise. Every 1 yen gain against the dollar cuts Honda’s annual operating profit by 18 billion yen ($201 million), according to the automaker. About 90 percent of Honda’s revenue comes from overseas.
Companies are also struggling to obtain funding as the market turmoil dissuades investors from buying corporate debt. To help businesses get financing, the Bank of Japan last week decided to buy commercial paper for the first time.
Sales at home are unlikely to make up for the collapse in demand from abroad. Households, whose confidence is at a record low, pared spending in each of the eight months to October as wage growth stagnated and job prospects worsened.
The Finance Ministry last week submitted an extra budget for the year ending March that includes 2 trillion yen in cash handouts for households as Prime Minister Taro Aso tries to spur spending. That may be too little, too late, economists say.
“Japan’s economy has never weaned itself off of the overbearing reliance on exports, and especially to the U.S.,” said Kirby Daley, senior strategist and head of capital introductions at Newedge Group. “Japan did nothing to prepare itself” for the collapse in demand from abroad.
To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net
Last Updated: December 21, 2008 19:38 EST
[link to www.bloomberg.com] |
| .
User ID: 577452
12/22/2008 7:31 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
If you blow long enough, you will burst any bubble. If you fail to maintain your brakes, they will break down at some inopportune time. Failure to maintain personal solvency in your bank account leads to bankruptcy. When you carry a balance on your credit card, you pay far higher than the original cost of the item or service.
How do you—or a nation—arrive at a point of financial breakdown? Does arrogant entitlement and over-extension beyond one’s means resonate with today’s news headlines?
On a national level, we experience the severity of living on international credit—now come home to roost. For the past 20 years, our Congress encouraged massive outsourcing, insourcing and offshoring of American jobs. That caused us to lose our manufacturing base and facilities. Thus, today, we tolerate a $700 billion annual trade deficit. We pay China, India and other third world countries to manufacture our goods at lower prices while our middle class languishes with millions of job losses—and cannot continue buying those goods.
Few Americans realize that when you shop at such stores as Wal-Mart, Lowe’s, Kohl’s, Home Depot and Target, you slit your neighbor’s and your own financial throat.
James Howard Kunstler, author of, The Long Emergency, said, “Americans failed to recognize the essential fraudulence of the idea that this destruction was ‘creative’ and would lead to a higher good, that the end justified the means, even as they watched their towns die around them. Wal-Mart and its imitators used their wealth and muscle to set up ‘superstores’ on the cheap land outside small towns and put every other merchant out of business, often destroying most of the town’s middle class. They also destroyed the local capacity to produce goods. The public enjoyed this bonanza of ‘supercheap’ manufactured goods without reckoning any of the collateral costs, which were astronomical.”
While Congress dismantled our manufacturing and construction base, and millions of necessary jobs, Congress exacerbated our vulnerability by borrowing (selling), unknown to average citizens, $1.3 trillion in Treasury Bills from (to) China to prop up our moribund economy. On a national level, the average credit card runs a $9,240.00 balance (debt) according to NBC’s Brian Williams. Total consumer debt exceeds $2 trillion. National debt tops $10.1 trillion! Ahh, the abundance of unsubstantiated bailouts flow from a Monopoly Board checkbook!
Additionally, another $700 billion vanishes from our nation annually with the cost of imported oil. Since the oil crisis of the 1970s, this nation failed to place any kind of a fuel-conservation policy into effect. Despite President Carter’s sage warning concerning reducing oil consumption drastically, we ignored him and continued our full-blast consumption habits surpassing California wild fires! After all, Alaska oil fields opened—seemingly refuting limitations! As if to render our insolence acceptable, we continue our myth that another discovery in Alaska, Antarctica or the Gulf of Mexico will dismantle any ‘oil crisis hypotheses’.
“After all, this is America!” Paris Hilton, prominent and highly sought-after Hollywood authority, said. “Limits are unacceptable!”
The day approaches, likely 2010, supported by the Hubbert Curve analysis—when galloping population expansion collides with declining oil extraction.
Similarly, we falsified home values with escalated appraisals cradled in vacuous, lofty ideals. We allowed millions of poor borrowers without down payments or viable financial histories to purchase homes clearly outside their range.
“No problema amigo,” Wells Fargo banker said. “We can work the numbers to make the American Dream yours!”
Surprise! The real estate bubble burst! Millions of foreclosures strangled American citizens and poor migrants who lost jobs while they watched interest rates rise beyond their means.
Can you guess the next bubble to burst? What can we see exploding in our faces? What crisis long denied by our presidents and Congress zeroes-in on our civilization like a stealth missile?
Immigration-driven hyper-population growth extends its ubiquitous tentacles into every aspect of American society.
While, according to President Bush, 573,000 manufacturing jobs vanished in November, the United States imported 200,000 job- seeking immigrants from third world countries. It doesn’t end there! Our myopic Congress proposes doubling legal immigration to 2.4 million annually and giving amnesty for 20 million plus illegal migrants! Watch for that political torpedo in 2009.
U.S. Representative Zoe Lofgren (D-CA) promoted an H-1B bill to add 550,000 foreign workers.
That’s on top of another 200,000 immigrants added in December! Add another 200,000 immigrants in January, and the same, month in and month out!
Does anyone see the correlation with our financial plight? Where is the common sense of importing more bodies when our own workers stand in unemployment lines?..... |
| .
User ID: 577452
12/22/2008 7:34 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Fiscal Insanity Virus Rapidly Spreading The Globe (Part 1)
Warning: A dangerous new virus, FIV, is rapidly spreading the globe.
This part 1 of a very long post. The symptoms of the disease are complex. Part 1 addresses the symptoms of the disease and part 2 continues with more symptoms and a discussion about preventative measures and cures.
Scientists have dubbed the disease, FIV, the Fiscal Insanity Virus.
FIV is more contagious and far more dangerous than the common flu virus now making its rounds. The primary symptom of FIV is irrational, often delusional fear of deflation. The virus has an uncanny ability to seek victims in positions of authority. Those afflicted with the virus start taking (or promoting) fiscally reckless actions guaranteed to damage the host country.
FIV's most recent victim is Bank of Israel Governor Stanley Fischer. Evidence of affliction is irrefutable: Fischer Says Bank of Israel Will Do Everything We Can To Prevent Deflation.
“We’re going to do everything we can,” Fischer said in a Dec. 18 interview in Tel Aviv. Prime Minister Ehud Olmert’s failure to win parliamentary approval for the 2009 budget and a stimulus package means “more of the burden is thrown on monetary policy. We’ll try and take up some of the slack.”
“It’s a very, very fast moving situation,” he said. “And there are occasions when something happened yesterday, and you need to react immediately.”
The comments suggest that he isn’t done yet cutting interest rates after already lowering the benchmark lending rate four times in the past 10 weeks. The reductions, including two unscheduled ones, pushed the cost of borrowing to a record low of 2.5 percent. The central bank is also buying $100 million in foreign currency a day to help weaken the shekel and make exports cheaper.
The ZIRP Symptom
Those severely inflicted with FIV show a marked propensity to compete in the race to ZIRP. For more on ZIRP, please see Global ZIRP And The "Impossible Contraction".
That post was written on November 2. On December 16, ZIRP Arrives: Fed Targets Interest Rates 0 to 1/4 Percent. Bernanke "won" the mad dash to ZIRP.
Genetic Markers
Scientists in 33 countries studying the disease have uncovered similar patterns in the DNA of every victim. To date, every person afflicted with FIV has been found to have one of two distinct Marker Chromosomes now identified as the K-Marker (Keynesian-Marker), or the M-Marker (Monetarist-Marker). No one with the recently discovered A-Marker (Austrian-Marker) has yet to contract FIV.
Scientists conclude that those with the A-Marker may be biologically immune to FIV.
DNA Samplings At Universities
Random DNA samplings of university professors are not encouraging. Scientists have discovered that 99% of all economic professors have either the K-Marker or the M-Marker.
Economic professors, while not in a position to direct policy, are highly contagious. Those with FIV have encouraged those in positions of power to do reckless things. The victim is always in denial about the disease.
Prominent DNA Hair Samples
A hair sample taken from economist Paul Krugman, professor of Economics and International Affairs at Princeton University, and Op-Ed writer for the New York Times shows an unusual pattern of multiple repetitive K-Markers.
A hair sample taken from Nouriel Roubini, Professor of Economics at the Stern School of Business at NYU and Chairman of RGE Monitor shows the typical K-Marker pattern.
A hair sample taken from economist Greg Mankiw, professor of economics at Harvard University shows unmistakable signs of the M-Marker. Interestingly, some scientists have reported Mankiw's hair sample also shows a faint trace of the A-Marker. Those scientists believe traces of the A-Marker are responsible for the train of thought found in Passing the Buck.
More public projects would pass a cost-benefit test if we repealed the Davis-Bacon Act. This law requires contractors on these public projects to pay "prevailing wages," which are typically union wages well in excess of what would occur in a free market. If the government paid market-determined wages for infrastructure projects, we could have both more infrastructure and less government debt. Without doubt, that legacy would benefit future generations.
Bear in mind the A-Marker trace in Mankiw is highly questionable, while the M-Marker is irrefutable. Inquiring minds wishing to investigate Davis Bacon more thoroughly should read Thoughts on the Davis Bacon Act and why it's a "real porker".
Hair samples taken from Ron Paul, member of the US House of Representatives, have now been analyzed. Scientists report that Ron Paul has the only known double repetitive occurrence of the A-Marker. Scientists speculate that such individuals would be highly immune to FIV, even in the most highly diseased environments such as US Congress.
Hair samples from Ben Bernake, Chairman of the Board of Governors of the Federal Reserve, were much more difficult to obtain for obvious reasons. However, the efforts paid off. In 10,102 samples studied by scientists globally, Bernanke's DNA sports the only known instance of multiple, repetitive, alternating K-Marker M-Marker pairs.
Scientists now speculate those alternating markers are what inspired his infamous, if not delusional, helicopter drop speech in 2002, Deflation: Making Sure "It" Doesn't Happen Here. Clearly Bernanke has been afflicted with FIV for quite some time.
My rebuttal to Bernanke's speech was made on December 31, 2007: Things That "Can't" Happen.
.....
Ironically, it is the unvarnished arrogance by Bernanke in conjunction with greater fools who believe in his untested academic wizardry, that fostered the very extreme risk taking attitudes towards credit that makes deflation inevitable.
Things that can't happen, are about to.
Feud Between the K's and the M's
The K's and the M's are now in open debate as to how best to improve destroy the economy.
The K's, championed by professor Krugman want to squander dollars on massive government spending, believing it is possible to spend one's way to fiscal prosperity. The M's, championed by Mankiw think that cheapening the dollar via massive printing, in and of itself is sufficient to heal the economy.
Witness The Debate
On December 16, 2008 in The Next Round of Ammunition Mankiw writes:
Even if the Fed cannot reduce nominal interest rates, it can reduce real interest rates by committing to a modest amount of inflation. I am more comfortable having the Fed commit itself to modest inflation than having the federal government commit itself to a trillion dollars of new spending. The more we can rely on monetary rather than fiscal policy to return the economy to full employment and sustainable growth, the better off future generations of taxpayers will be.
Of all the things that Roosevelt did to get the economy out of the Depression, jettisoning the gold standard was the most successful. Today, monetary policy is fettered not by gold but by fear of inflation. Perhaps it is time is get over that fear, at least for a while.
Update: A reader points out to me that Paul Krugman seems miffed that I failed to cite his contribution to the large literature on expectations management by the central bank. Sorry, Paul. I actually do like Paul's paper on the topic quite a lot, and I cite it in my intermediate macro text when I discuss the liquidity trap (see footnote 5 on page 325 of the 6th edition).
It is funny. For academics, it is an occupational hazard to feel that your work is insufficiently cited. I had always assumed that the feeling would go away after winning a Nobel prize. I guess I was wrong.
Color in the above excerpt was added by me. The update (noted by the bold red label), was Mankiw's response to Paul Krugman who on December 17, 2008 wrote A whiff of inflationary grapeshot:
Greg Mankiw suggests that the Fed respond to the crisis by committing to substantial inflation over the next decade. Great idea, wish I’d thought of it. Oh, wait …
Actually, Greg has arrived at the same conclusion I did more than a decade ago, when I tried to model the problems then facing Japan, and now facing us. As I pointed out back then, the essence of a liquidity trap is that the real interest rate is too high, even when the nominal rate is zero. So the theoretically “correct” answer, if you can swing it, is to create expected inflation, pushing the real rate down.
FIV Works In Mysterious Ways
As the K's and the M's battle it out, neither Krugman nor Mankiw has the faintest clue that both of them are wrong. Constant bickering between the two of them is a possible sign of extreme viral contagion.
Both Krugman and Mankiw would be advised to read and understand a few books on my reading list. However, both are too busy, each stuck with their own academic theories, even though they have been disproved multiple times in real world applications.
Recommended Reading List
* What Has Government Done to Our Money?
* Economics In One Lesson
* Economics For Real People
Mankiw's Claim Analyzed
Mankiw's claim that "Of all the things that Roosevelt did to get the economy out of the Depression, jettisoning the gold standard was the most successful" is simply preposterous.
Roosevelt confiscated gold by executive order in 1933.
The chart at the left shows the "success" of Roosevelt's policy as measured by the official unemployment rate.
In the 8 years shown from 1933-1940, the lowest unemployment rate was 14.3% in 1937, hardly a glowing testimonial to the "success" of Roosevelt's policies.
Employment only increased as a result of the war effort and thereafter by the massive destruction of productive capacity worldwide during the war.
Note that destruction of productive capacity is not a good thing, although it may have seemed like it from the point of view of the US whose productive capacity was not destroyed.
Mankiw's statement proves without a doubt, that he, like Bernanke and Krugman, does not understand either the cause or the cure of the Great Depression.
Those With FIV Struggle With Definitions
Another symptom of the disease is those afflicted struggle with the definitions of inflation and deflation. A poll of those with the A-Marker show a clear understanding of the definitions as well as the cause of each.
* Inflation: A net expansion of money supply and credit
* Deflation: A net contraction of money supply and credit
In both cases credit needs to be marked to market.
Humpty Dumpty On Inflation
Using a proper definition deflation of deflation, we are clearly in it.
Those confused about the definition or anyone needing to see a rock solid evidence that we are in deflation need to read Humpty Dumpty On Inflation.
"Things That Can't Happen" Did Happen
In CPI Drops Most On Record, What's Ahead? I presented a deflation timeline. The US has been in deflation since March of 2008, if not before.
March 17, 2008 Now Presenting: Deflation!
Current accounting rules allow banks to pretend. And certainly the Fed is going out of its way to bend the rules to allow new forms of pretending. Expect to see still more accounting rules that allow broker dealers to pretend.
However, all the pretending and misdirection about the sinking dollar and the price of gold cannot stop the fact that deflation is about contraction of money supply and credit. The former is not growing and the value of the latter is collapsing no matter how many pretend otherwise.
It's time to face the facts: Deflation is right here right now.
April 22, 2008 Deflation In A Fiat Regime?
The mad scramble by some corporations to raise capital, the scramble by others to play "hide and seek" with level 3 assets, and the scramble by virtually
everyone to play swap-o-rama with the Fed supposedly just to prove the process works tells the real story. The real story is deflation.
August 10, 2008 The Future Is Frugality
We are in deflation now, but few see it because they do not understand what deflation is: a net contraction of money supply and credit.
The only question now is how long deflation lasts, not whether it gets here.
October 10, 2008 Roubini Discusses the Double D's, Deflation and Depression
So far, none of the liquidity measures taken by the Central Bankers have worked.
The reason is simple: You Cannot Patch a Busted Dam With Water no matter how hard you try.
November 11, 2008 Industrial Bond Yields Strongly Support Deflation Thesis
The data are crystal clear. We are not in a period of inflation, we are not in a period of stagflation, we are not in a period of disinflation. If you exclude all the options proven to be impossible, the remaining option no matter how unlikely it may seem at first glance, must be the correct answer. That answer is deflation. We are in it, and have been for some time.
Peak Credit
Those who focused on Peak Credit and its counterpart Peak Earnings saw this coming. Those blindly looking at prices or money supply alone are still trying to figure out how and why treasury yields are where they are, the stock market has collapsed, commodities have plunged, and banks are scared to death to lend.
The Cause Of Deflation
The cause of deflation is the unsound credit boom that preceded it. The cause of the unsound boom is fractional reserve lending and micro-mismanagement of interest rates by the Fed.
It is axiomatic in nature that the cure cannot be the same as the disease. It was reckless spending that got us into this mess, so reckless spending cannot possibly get us out of this mess. Yet, those afflicted with FIV keep attempting to do just that.
Part two continues later today...
Mike "Mish" Shedlock
[link to globaleconomicanalysis.blogspot.com] |
| Anonymous Coward
User ID: 577452
12/22/2008 7:37 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
[link to www.godlikeproductions.com]
FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE?
Quote
Its not a federal entity, and they love printing money with interest....
Who are the kings in revelation?
Notice it says "Kings without a kingdom"...
That would be people with money...
Anonymous Coward
User ID: 577204
12/21/2008 7:20 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
The Federal Reserve is getting sued.
Who do you think got the bailout money from the taxpayers? Yep, the Fed and that is why they won't disclose how the TARP has been allocated.
They got back the money they used to bolster the markets before everything tanked...BIG TIME. But, all the fake monopoly money they can print won't avert the continued collapsing of the evil global financial system of debt being "money".
Anonymous Coward
User ID: 553433
12/21/2008 7:29 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Its not a federal entity, and they love printing money with interest....
Quoting: rodm
WHAT interest?? And the interest the Fed usually gets goes straight into the Governments coffers!
dumbass
.
Anonymous Coward
User ID: 577204
12/21/2008 7:39 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Its not a federal entity, and they love printing money with interest....
WHAT interest?? And the interest the Fed usually gets goes straight into the Governments coffers!
dumbass
.
Quoting: Anonymous Coward 553433
You are wrong!
The owners of the FED (which is NOT government owned) get the interest. The gov'ts don't collect the interest...they just print the money FOR these bloodsuckers who own the FED and other central banks.
In Canada, 1/3 of the annual taxes collected from the people go to pay the interest on their national debt.
Anonymous Coward
User ID: 577129
12/21/2008 7:44 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
WHO OWNS FEDERAL RESERVE?
No one. But banks who own stock in the federal reserve banks will receive dividends.
Jackinthebox
User ID: 556904
12/21/2008 7:48 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
The Rothschilds own the Federal Reserve. Every single Dollar you spend, you owe interest on to the Federal Reserve which IS NOT a government agency, but a private enterprise with the illusion of oversite.
If you really want to know how our economy operates, take the 47 minutes to watch Money as Debt, or stay a sheep...
[link to video.google.com]
"They (who) seek to establish systems of government based on the regimentation of all human beings by a handful of individual rulers call this a new [world] order. It is not new and it is not order" -FDR
“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.” -FDR
"By the skillful and sustained use of propaganda, one can make a people see even heaven as hell or an extremely wretched life as paradise." -Adolf Hitler
Anonymous Coward
User ID: 576806
12/21/2008 7:49 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
The Vatican ownes the Federal Reserve Banks, managed by their papal Knights of Malta / Templars, Pilgrim Society bankers.
Obviously, when the Fed loans money to the banks they do so at interest.
Don't ask me how all the bonds work and how exactly the Fed also get the IRS money, but I understand this is the case.
Anonymous Coward
User ID: 440474
12/21/2008 7:51 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Its not a federal entity, and they love printing money with interest....
WHAT interest?? And the interest the Fed usually gets goes straight into the Governments coffers!
dumbass
.
Quoting: Anonymous Coward 553433
Are you a complete idiot or something? Some mothers do have em.
Anonymous Coward
User ID: 536588
12/21/2008 7:52 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Its not a federal entity, and they love printing money with interest....
WHAT interest?? And the interest the Fed usually gets goes straight into the Governments coffers!
dumbass
.
Quoting: Anonymous Coward 553433
And we wonder why things are so bad, with people like this, who have not a clue!
Anonymous Coward
User ID: 564739
12/21/2008 7:54 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Its not a federal entity, and they love printing money with interest....
WHAT interest?? And the interest the Fed usually gets goes straight into the Governments coffers!
dumbass
.
Quoting: Anonymous Coward 553433
You must be an obamabot!
Anonymous Coward
User ID: 577129
12/21/2008 7:56 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
No one "owns" the Federal Reserve Banks or the Federal Reserve System. Just because you own stock, does not mean you own the corporation. The system is set up like a corporation, but its not.
The Federal Reserve System is dirty. We can go on and on about that. And large banks take advantage of it. Its wrong.
But no person, corporation, or bank, "owns the federal reserve.
Anonymous Coward
User ID: 577204
12/21/2008 8:03 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
No one "owns" the Federal Reserve Banks or the Federal Reserve System. Just because you own stock, does not mean you own the corporation. The system is set up like a corporation, but its not.
The Federal Reserve System is dirty. We can go on and on about that. And large banks take advantage of it. Its wrong.
But no person, corporation, or bank, "owns the federal reserve.
Quoting: Anonymous Coward 577129
Ownership structure of the FED:
[link to www.save-a-patriot.org]
Anonymous Coward
User ID: 577204
12/21/2008 8:41 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Quote by Woodrow Wilson after allowing the creation of the FED, the "cancer in America:
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
Jackinthebox
User ID: 556904
12/21/2008 8:54 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
The Fed is fucking evil, but the groundwork was laid before 1913. 1933 was the nail in the coffin. But one should also consider this...
[link to www.godlikeproductions.com]
Stars for you OP, and I don't usually do that.
"They (who) seek to establish systems of government based on the regimentation of all human beings by a handful of individual rulers call this a new [world] order. It is not new and it is not order" -FDR
“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.” -FDR
"By the skillful and sustained use of propaganda, one can make a people see even heaven as hell or an extremely wretched life as paradise." -Adolf Hitler
Jackinthebox
User ID: 556904
12/21/2008 8:57 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Also consider the "Empire of the City" which is actually a tale of three cities. Washington D.C., London, and Vatican City.
If you have the time, you really should watch this one as well...
[link to video.google.com]
"They (who) seek to establish systems of government based on the regimentation of all human beings by a handful of individual rulers call this a new [world] order. It is not new and it is not order" -FDR
“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.” -FDR
"By the skillful and sustained use of propaganda, one can make a people see even heaven as hell or an extremely wretched life as paradise." -Adolf Hitler
rodm
User ID: 562070
12/21/2008 10:31 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Also consider the "Empire of the City" which is actually a tale of three cities. Washington D.C., London, and Vatican City.
If you have the time, you really should watch this one as well...
[link to video.google.com]
Quoting: Jackinthebox
Thanks also wondering could the Vatican be the one who owns the most gold or have the most money?
Could they do as Branham said "own the world" so to speak...My paraphrase?
rodm
User ID: 562070
12/21/2008 10:33 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
The Vatican ownes the Federal Reserve Banks, managed by their papal Knights of Malta / Templars, Pilgrim Society bankers.
Obviously, when the Fed loans money to the banks they do so at interest.
Don't ask me how all the bonds work and how exactly the Fed also get the IRS money, but I understand this is the case.
Quoting: Anonymous Coward 576806
Oh man, I didn't know that. Thanks...Then Branham may be right, they can own the system after it collapses?
.
User ID: 576828
12/21/2008 10:45 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Blessings Bro Rodm,
great thought from you there, Thank you lord for more revelation about it.
and to the other contributing posters, thanks for the info, very good.
Anonymous Coward
User ID: 577129
12/21/2008 10:48 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Ownership structure of the FED:
[link to www.save-a-patriot.org]
Quoting: Anonymous Coward 577204
Those people dont "own" the reserve system, they are just share holders. And share holders get a dividend.
Just because you are a share holder of Ford or Wal-Mart, it doesnt make you the owner, you just get a dividend, you get a cut, part of the profit, based on how many shares you hold.
You can be a share holder of the Federal Reserve System too.
But first you have to the CEO of a very large and profitable bank,(meaning you probably own other banks too) be FDIC insured, and a long list of other prerequisites.
Anonymous Coward
User ID: 577204
12/21/2008 11:31 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
What is important is the "essence" or the intent behind an entity. Consider the quotation below:
"Permit me to issue and control the money of a nation, and I care not who makes its laws."
Quote by Mayer Amschel Rothschild (1744-1812)
Anonymous Coward
User ID: 577204
12/21/2008 11:46 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Quote by Thomas Jefferson, who penned the Declaration of Independence and who instructed Madison to attach to the US Constitution the Bill of Rights, without which, Americans, and as a byproduct, the citizens of many other nations, would have none.
"The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered."
Do you think any leader in the world today would utter such truth? What a difference between TJ and the gangsters operating the crime syndicate in Washington today, and for that matter the last century and more except for maybe JFK.
george_glass
User ID: 520349
12/22/2008 12:04 AM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
good to see so many people so far know what theyre talking about.
i want to take it a notch deeper.
the fed was started by the rockefellers and rothschilds, which was kept secret from the public for years.
interestingly enough, the workers of the fed get paid out of europe, they though print our money.
for those that want to see how the vatican is tied to ths stock markets, check this organization out. [link to www.legatus.org]
look at the qualifications area.
pretty much anytime something bad happens, it happens after one of their "summits" their next summit is in feb of 09.
this group is one of the vat's key players.
check out their promo video
[link to www.youtube.com]
trust me when i say that these people run the shit around here. do some research and you will see it too.
"the primary function of ANY government is to pretend to fail" -r
george_glass
User ID: 520349
12/22/2008 12:08 AM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
oh and here is their summit in feb video
[link to www.youtube.com]
"the primary function of ANY government is to pretend to fail" -r
The Monk
User ID: 572710
12/22/2008 12:16 AM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
The Federal Reserve is getting sued.
Who do you think got the bailout money from the taxpayers? Yep, the Fed and that is why they won't disclose how the TARP has been allocated.
They got back the money they used to bolster the markets before everything tanked...BIG TIME. But, all the fake monopoly money they can print won't avert the continued collapsing of the evil global financial system of debt being "money".
Quoting: Anonymous Coward 577204
Shhhhhh...
The Monk
User ID: 572710
12/22/2008 12:17 AM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Its not a federal entity, and they love printing money with interest....
WHAT interest?? And the interest the Fed usually gets goes straight into the Governments coffers!
dumbass
.
Quoting: Anonymous Coward 553433
Profits throw off to the IMF to be lent to developing nations.
rodm
User ID: 562070
12/22/2008 12:32 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
Blessings Bro Rodm,
great thought from you there, Thank you lord for more revelation about it.
and to the other contributing posters, thanks for the info, very good.
Quoting: . 576828
Actually Jim told me that!!! Can't claim it as my own..
rodm
User ID: 562070
12/22/2008 12:41 PM
Re: FEDERAL RESERVE, BENEFITS FROM NEW DEBT: WHO OWNS FEDERAL RESERVE? Quote
good to see so many people so far know what theyre talking about.
i want to take it a notch deeper.
the fed was started by the rockefellers and rothschilds, which was kept secret from the public for years.
interestingly enough, the workers of the fed get paid out of europe, they though print our money.
for those that want to see how the vatican is tied to ths stock markets, check this organization out. [link to www.legatus.org]
So Branham was right?
1963
THE FIRST SEAL JEFFERSONVILLE IN 63-0318 169
THE.FIRST.SEAL_ JEFF.IN MONDAY_ 63-0318
168-4 {349} And after the church is taken away, Rome and--and the Jews will make a covenant with one another. The Bible said they would, with the holy people. And now notice, they'll make it, because why? This nation is going to be busted, and the rest of the world that's on the gold standard is busted. You know that. If we're living off of taxes, due bills for forty years from now, where are we at? There's only one thing can happen. That's to call in the currency and pay off the bonds; and we can't do it. Wall Street owns them, and Wall Street's controlled by the Jews; the rest of it's in the Vatican, and the Jews has got the rest of it in Wall Street with the commerce of the world. |
| FHL(C)
User ID: 578683
12/24/2008 8:09 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Any one else see what this could mean if T-bills were treated in the same way, especially during a sell off.
FU&FW
[link to www.independent.co.uk]
Bank of China furious at Deutsche debt move
By Sean Farrell, Financial Editor
Monday, 22 December 2008
What are these?
Investors in bank debt are threatening to boycott lenders that follow Deutsche Bank in breaking an unwritten rule and failing to exercise a call option on subordinated debt.
In a co-ordinated action, angry bond investors are writing to bank treasurers and investor relations heads telling them that any failure to exercise a call option will be considered a breach of trust that could cause all the issuer's debt to be shunned.
Deutsche stunned the debt market last week by choosing not to redeem €1bn (£932m) of subordinated lower tier 2 bonds because to do so was cheaper than refinancing. But though the move saved Germany's biggest bank up to €150m, it caused fury among buyers of the debt who worked on the assumption that bonds would always be redeemed at their first call date.
The letter, seen by The Independent, said a bank's decision not to call debt would be taken to mean "the institution is in such difficulty that it is an impossibility to call the instrument or the institution feels that it is in such a strong position that it can afford to alienate itself from the support of a wide portion of the fixed-income institutional investor community".
Bank of China, a major buyer of bank debt, has gone further in its communication with issuers. The giant Chinese lender's Hong Kong operation has told banks that "any non-call by a given institution will result in that institution's debt (not just lower tier 2 but senior and tier 1 as well) being ineligible for future investment consideration".
Bank of China added that Deutsche Bank had also been removed from consideration as a counterparty for any credit derivative transaction in future.
The bank is writing to all of Britain's banks, along with lenders elsewhere in Europe.
The bond buyers are stressing to issuers that they cannot afford to become debt-market pariahs when their capital buffers against losses are under threat from a global downturn and they may need to raise more capital. Without being able to issue debt, which counts as lower-grade tier 1 and tier 2 capital, institutions would be forced to seek costly new equity, angering their shareholders.
"Non-call may indeed save you some money today but it will seriously impact your capital structure options in the future," Bank of China warned. "Being only left with severely dilutive equity to raise capital is not in anyone's interest."
Deutsche Bank will be hoping that other banks follow its lead, giving it safety in numbers. The wave of threats from investors is intended to stop others opting to join Deutsche, and is the most hard-line response yet to the breaking of the debt-market code.
Refusing to call the debt means that the hybrid notes effectively become longer term and more risky than the investor originally assumed. Deutsche's decision caused the entire subordinated debt class to be repriced last week.
[link to freewordofgod.yuku.com] |
| FHL(C)
User ID: 578683
12/24/2008 8:43 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
That is even if the gold is there, some think Fort knox is almost empty and has been for decades, read the rest of the article.
FU&FW
[link to www.atimes.com]
Loaned, sold, gone - and doomed
By The Mogambo Guru
I was slurring my words pretty badly, and I forget where I saw it because it mysteriously disappeared in a frenzy of cutting and pasting back at the office, but I'm telling the bartender that some bozo was saying that if the Treasury's gold (or the Fed's gold, depending on who you figure has it) was revalued up from its current and historical book value of $42 an ounce, then the financial picture of the United States doesn't look so bad! Hahahaha!
I can tell by the look on his face that he is not a big fan of economic humor, and must be pretty much "all business" by the
way he keeps repeating, "That'll be $6.50 for the drink, pal."
Cleverly, I reply, "I don't know if you are aware of it or not, my dear fellow, but the total amount of gold held by the government/Fed is only about 261 million ounces! That's all! Less than one ounce per person in the USA!"
He looked at me again and repeated, "That'll be $6.50, pal."
Undaunted, I went on, "And at $800 an ounce, that 261 million ounces comes to a value of $209 billion! Hahaha! A lousy $209 billion! Hahahaha!"
At this, I stand up and address the other patrons of the bar, saying, "And already something like $8.5 trillion over the next years in new spending/guarantees have been proposed! Not to mention the original $700 billion in TARP scams and schemes already spent, and more hundreds of billions in bailouts of every kind every day!"
[link to freewordofgod.yuku.com] |
| FHL(C)
User ID: 578683
12/24/2008 9:47 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Edited for brevity.
I don't think they will get the money from overseas sources easy anymore, sooner rather than later, but because this is street level amounts they are talking to/about and appealing to, to get the US consumer agreeing to further bailouts. When are they going to arrest the financial criminals and murderers and wannabe mass murderers, that are leading the situation to break point?
[link to www.atimes.com]
Novel debt management
By The Mogambo Guru
I thought I was dreaming when I read on Bloomberg.com that short-term Treasuries rose in market value as buyers rushed to buy them, thus "pushing rates on the three-month bill negative for the first time, as investors gravitate toward the safety of US government debt amid the worst financial crisis since the Great Depression."
More specifically, "The Treasury sold US$27 billion of three-month bills yesterday at a discount rate of 0.005 percent, the lowest since it starting auctioning the securities in 1929. The US also sold $30 billion of four-week bills today at zero percent for the first
time since it began selling the debt in 2001."
Since I was dreaming, I figured that I would somehow involve some of the more cute employees in some erotic fantasies, which I quickly discovered did not turn out as I had planned and made me question the whole "I must be dreaming" thing, even though according to Stephen Meyerhardt, "a spokesman for the Bureau of Public Debt in Washington", he "wasn't aware of the three-month bill ever trading at a negative rate before", indicating that this MUST be a dream!
The reason for my relapse in symptoms is that Bloomberg.com reported that US Treasury assistant secretary Karthik Ramanathan, "the department's chief debt manager", said that the United States faces "as much as $2 trillion in borrowing needs this year" and warns us that they "may introduce new financing methods to sell a record amount of government debt", requiring them to use "novel approaches to debt management". Yikes!
But perhaps people will be interested to know that the federal government is going to make sure that we are all losers, as inflation in consumer prices destroys us, which I cleverly deduce when Bloomberg said, "Ramanathan cited private analysts' estimates of borrowing needs that may reach $1.5 trillion to $2 trillion in the financial year that ends in September 2009."
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
[link to freewordofgod.yuku.com] |
| FHL(C)
User ID: 578683
12/25/2008 4:02 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
[link to www.informationclearinghouse.info]
Higher Wages or Bubblenomics:
What's it gonna be?
By Mike Whitney
December 22, 2008 "Information Clearinghouse" -- - -Wages, wages, wages. It all gets down to wages.
A strong economy must be built on a solid foundation of steadily rising wages. If wages don't keep pace with production, the only way the economy can grow is through the expansion of debt, which leads to disaster.
Consider this: the US economy is 72 percent consumer spending. That means the Gross Domestic Product (GDP) cannot grow if salaries don't keep up with the price of living. Low Income Families (LOF)--that is, any couple making less than $80,000--represent 50 percent of all consumer spending. These LOF's spend everything they earn just to maintain their present standard of living. So, how can these families help to grow the economy if they're already spending every last farthing they earn?
They can't! Which is why wages have to go up. The cost to short-term profits is miniscule compared to the turmoil of a deep recession which is what the world is facing right now. The present crisis could have been avoided if there was a better balance between management and labor. But the unions are weak, so salaries have languished while Wall Street has grown more powerful, stretching its tentacles into the government and spreading its anti-labor dogma wherever it goes.
The investor class has rejiggered the system to meet their particular needs. Financial wizardry has replaced factories, capital formation and hard assets while real wealth has been replaced by chopped up bits of mortgage paper, stitched together by Ivy League MBAs, and sold to investors as priceless gemstones. This is the system that Bernanke is trying to resuscitate with his multi-trillion dollar injections; a system that shifts a larger and larger amount of the nation's wealth to a smaller and smaller group of elites.
When Alan Greenspan appeared before Congress a few months ago, he admitted that he had discovered a "flaw" in his theory of how markets operate. The former Fed chief was referring to his belief that investment bankers could be trusted to regulate themselves. Whether one believes Greenspan was telling the truth or not is irrelevant. What really matters is that the wily Maestro managed to skirt the larger issues and stick to his script. Congress never challenged Greenspan's discredited, trickle-down economic theories which guided his policymaking from the get-go. Nor was he asked to explain how a consumer-driven economy can thrive when salaries stay flat for 30 years. An answer to that question might have exposed Greenspan's penchant for low interest rates and deregulation, the two fuel-sources for the massive speculative bubbles which emerged on Greenspan's watch. These are the tools the Fed chief used for 18 years to enrich his buddies at the big brokerage houses while workers slipped further and further into debt.
There's no "flaw" in Greenspan's thinking; his views perfectly reflect his unwavering commitment to the rich and powerful. That's never changed. Since retiring, he has continued to ingratiate himself to his Wall Street paymasters while fattening his bank account with royalties from his best seller. Unfortunately, his success has come at great cost to the country.
Millions of homeowners are now facing eviction, consumers are tapped out, and the job market is in a shambles. When equity bubbles unwind, it's never pretty and the Greenspan implosion has been particularly nasty. Assets are being sold at fire sale prices and there's a frantic rush to the safety of US Treasurys. It's a catastrophe.
That said, it may seem like a bad time to boost workers' pay, but that's not the case. Crisis creates opportunities for change---real structural change. And that's what's needed.
The bottom line is that this whole mess could have been avoided if demand was predicated on wage increases instead of asset inflation. Of course, that precludes the Fed's traditional remedies for economic malaise--easy money and massive leveraging. Just last week, Bernanke announced a plan to buy $800 billion of securities backed by mortgages and credit card debt in an effort to stimulate more borrowing. The Fed chairman would rather drown the country in red ink than support pay raises for workers. Go figure? This just illustrates the class bias that underscores the Fed's policies, which is why pointless to debate the issue or try to find common ground. The only way to effect real change is with political power.
From Bernanke and Greenspan's perspective, any small gain by workers is tantamount to communism. They will continue to do everything in their power to preserve the current labor-debasing system which keeps workers just one paycheck away from the homeless shelter. This type of hostility is neither good for the economy nor the country. It just intensifies class animosities by accentuating the chasm between rich and poor. The only way to overcome these differences is by narrowing the wealth gap and rewarding hard work with fair pay.
John Bellamy Foster and Fred Magdoff explain how establishment economists and their corporate patrons developed their ideas of how to use equity bubbles to grow the economy and shift wealth from workers to elites. In their Monthly Review article "Financial Implosion and Stagnation":
"It was the reality of economic stagnation beginning in the 1970s, as heterodox economists Riccardo Bellofiore and Joseph Halevi have recently emphasized, that led to the emergence of “the new financialized capitalist regime,” a kind of “paradoxical financial Keynesianism” whereby demand in the economy was stimulated primarily “thanks to asset-bubbles.” Moreover, it was the leading role of the United States in generating such bubbles—despite (and also because of) the weakening of capital accumulation proper—together with the dollar’s
reserve currency status, that made U.S. monopoly-finance capital the “catalyst of world effective demand.”
Greenspan figured out how to strengthen the grip of the banking sector by creating asset bubbles. That was his great contribution during the Clinton years. The leveraging of complex financial products and the surge in real estate prices gave the impression of prosperity, but it was all smoke and mirrors. The "wealth effect" vanished as soon as the interest payments on mortgages could no longer be paid. That's when Maestro's bubble blew up and Greenspan retired to write his memoirs.
So far, world stock indexes have lost over $30 trillion and there will probably be another bloody leg down in 2009. As the underlying economy contracts, there's no need for a lumbering, oversized financial system. Institutions will have to be shut down and their assets will have to be sold at auction. That means prices will continue to fall, business activity will falter, and GDP will shrivel. The mismatch between output and falling demand presages a painful correction. When credit gets scarce, business activity slows, and nervous investors head for the exits. That forces businesses to lay off workers which causes prices to fall even further, accelerating the pace of deflation. Economist Henry Liu made these observations in his article "China and the Global financial Crisis":
"US neoliberal trade globalization, having promised a primrose garden of economic growth, has instead led the global economy into a jungle of poison reed, resulting in the worst financial disaster in a century, setting the whole world ablaze with a financial firestorm. This unhappy fate was finally acknowledged as having been policy-induced by Alan Greenspan, the former Chairman of the US Federal Reserve who was largely responsible for the monetary indulgence that had caused this hundred-year financial perfect storm....The Federal Reserve under Greenspan repeatedly created money faster than the global economy could profitably absorb, creating serial bubbles denominated in fiat dollars. Greenspan insisted that it was not possible, nor desirable, to identify an economic bubble in the making as he was inflating it with easy money, lest economic growth should be prematurely cut short. It was a perfect example of the rule that intoxication begins when a drinker becomes unable to know its time to stop drinking." (Henry C.K. Liu China and the Global Financial Crisis", Asia Times)
The Fed wants to stimulate demand by slashing the price of money to 0% while pumping trillions of dollars into the financial system (quantitative easing). But the millions of foreclosures, credit card and student loan defaults, indicate that the underlying economy is rapidly contracting and cannot support such an oversized system. Something's gotta' give. Homeowners and consumers are poorer than they were a year ago. They're focused on paying down their debts not creating new ones. Attitudes towards spending have changed; people are hunkering down. That's why Bernanke's radical liquidity experiment is doomed. There's no way to reflate a bubble if consumers refuse to spend.
If the Fed is serious about fulfilling its mandate, it should abandon its serial bubblemaking altogether and return to basics; productivity, good wages and sound money. The country's future rests on its workers. They don't need a bailout, just a raise.
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| FHL(C)
User ID: 578683
12/25/2008 4:14 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
[link to www.guardian.co.uk]
Greed has pushed political credibility and financial trust into freefall
Recent scandals in America reveal a value system that puts the wealth of a few before the welfare of many
Comments (…)
* Gary Younge
*
o Gary Younge in New York
o The Guardian, Monday 22 December 2008
'What an ideology is, is a conceptual framework with the way people deal with reality," Alan Greenspan told the Congressional House oversight and government reform committee on 23 October. "Everyone has one. You have to - to exist, you need an ideology. The question is whether it is accurate or not." As the former chairman of the Federal Reserve, from 1987 to 2006, Greenspan stood at the helm of US monetary policy during the time conditions for the current meltdown were being created.
"And what I'm saying to you," he continued, "is, yes, I found a flaw. I don't know how significant or permanent it is, but I've been very distressed by that fact ... [I found a] flaw in the model that I perceived is the critical functioning structure that defines how the world works."
Greenspan's ideology was unfettered, free-market capitalism. Its understanding of how the world works was rooted in self-interest. It was a value system that placed the private before the public, the individual before the collective, and the wealth of the few before the welfare of the many.
So pervasive was this worldview that, after a while, it was not even understood to be a view at all. It was just the hard-nosed reality against which only lunatics and leftists raged. "Unlike many economists," Bob Woodward wrote of Alan Greenspan in his book Maestro (the title speaks volumes), "he has never been rule driven or theory driven. The data drive." They drove a sleek black limousine over the edge of a steep cliff. And since the invisible hand of the market ostensibly guided everything, there was no one who could really be held accountable or responsible for anything. The buck didn't stop anywhere. Indeed, for those who were already wealthy, the bucks just kept rolling in.
But the flaw in Greenspan's ideology did not just govern finance - it infected all spheres of human relations, including politics. "This process has become a great deal about money. A lot of money," said Tom Vilsack (whom Barack Obama has just picked as his agriculture secretary), as he withdrew from the Democratic primaries almost a full year before a vote had been cast. "So it is money, and only money, that is the reason why we are leaving today."
A poll released by Judicial Watch the day before Greenspan testified revealed that almost two-thirds of Americans "strongly agree" with the statement that political corruption played a big role in the US's recent financial crisis. A further 19% said they "somewhat agree".
The two most prominent scandals in recent weeks illustrate how the line between what is unethical and what is illegal in politics, and what is reckless and what is fraudulent in finance, has been so blurred as to have erased much in the way of meaningful distinction. Credibility in public life, like Greenspan's ideology and the stock prices it relied on, is in freefall.
The first scandal is the demise of Bernard Madoff, who was arrested after he confessed to defrauding investors of about $50bn in an elaborate, global Ponzi scheme. Madoff's alleged transgression went beyond just the financial. A pillar of the Jewish and financial communities, he traded on trust.
"In an era of faceless organisations owned by other equally faceless organisations," said his firm's website. "Bernard L Madoff Investment Securities LLC harks back to an earlier era in the financial world: the owner's name is on the door." Investors had to be recommended by friends - the exclusivity made it attractive - and the returns were constantly excellent. Madoff paid out about 15% a year, regardless of what the market was doing. In Palm Beach, Florida, people joined the Country Club and the golf club just so they could meet him. They virtually begged him to take their money. The roll call of the swindled is illustrious: Steven Spielberg, Jeffrey Katzenberg, author and humanitarian Elie Wiesel, New Jersey Senator Frank Lautenberg, and the New York Daily News' publisher, Mortimer Zuckerman. It was as though America's rich and famous had succumbed to a huge online scam.
The level of returns seemed too good to be true, and it was. But the sense of entitlement the wealthy have to even more wealth is just too entrenched to bother with truth. In a heartbeat, generations of savings and entire charities have been extinguished.
The second scandal concerns the foul-mouthed Democratic governor of Illinois, Rod Blagojevich, who has the right to appoint a successor to the Senate seat left vacant by Obama. He was arrested after federal wiretaps allegedly revealed he was poised to sell the seat to the highest bidder. The day after the election, as at least half of the nation basked in the warm glow of Obama's victory, Blagojevich, it seems, was trying to line his pockets. He told one aide: "I've got this thing and it's fucking golden, and, uh, uh, I'm just not giving it up for fucking nothing. I'm not gonna do it."
Suggestions that both men must have been seized by psychological disorders do not seem outlandish. Particularly Blagojevich, who has been under at least a dozen federal investigations since 2005 and knew he was being wiretapped. But far more worrying is the greater likelihood that they are entirely sane and rational. Blagojevich may be crude and sociopathic, and Madoff socially manipulative. Their actions may have violated the letter of the law. But they were consistent with the spirit of the ideology that has governed American life for at least a generation.
Blagojevich did not invent the notion that wealth and political influence go hand in hand. Had he been more patient, the lobbying deals and board memberships that routinely come after political office would have come his way. And anyone seeking a seat would have to show they could pay their way. Indeed, the New York governor, David Patterson, seems set to hand over Hillary Clinton's Senate seat to Caroline Kennedy at least in part because Kennedy can raise vast sums of money for a run in 2010. Unlike Blagojevich, Patterson is not looking to benefit from it personally. But no one is expecting him to end up in the poorhouse when his term is done.
As for Madoff, if the Securities and Exchange Commission, the financial services watchdog, had been doing its job, it could have prevented him from committing this crime. But if he had done it by the book, an analogous situation could have occurred that would have left his investors almost as broke. His fraud was exposed after some investors sought to withdraw more capital than he could produce. That is essentially the same as the bank runs we have seen over the last few months. But while Madoff is under house arrest, the bankers are about to reap huge bonuses.
When a political system where you have to pay to play meets a financial system run like a giant Ponzi scheme, widespread criminality, corruption and calamity are the only feasible outcomes. The only remaining questions then are what society is prepared to excuse, accountants are able to write off or lawyers are able to defend. "It is easier to rob by setting up a bank," argued the German playwright Bertolt Brecht, "than by holding up a bank clerk."
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| FHL(C)
User ID: 580899
12/27/2008 8:58 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Thank you ac 580857.
[link to www.godlikeproductions.com]
Anonymous Coward
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12/27/2008 8:51 PM
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China and The Financial Crisis
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China and The Financial Crisis
by Andrew Hughes
Global Research, December 17, 2008
With the waves of destruction brought about by the Global Financial Meltdown there comes a defining moment of obligatory reflection. If such disaster has been visited upon the Globe, what lessons can be learned to dismantle the mechanism that brought it about in the first place?
The remedies proposed by Governments the world over are not working as every real economic indicator confirms. The eternal corrupting influence of Money on Government policies and planning have all but guaranteed that whatever methods are employed to redeem the economy from the whale's mouth, they will be like drops of rain meeting a river. The one overwhelming factor that does not seem to be factored in to the equation is that to get oneself out of a financial mess one needs financial resources. Not the borrowed kind but the saved kind. This is where China holds an Ace.
The U.S. has a real financial shortfall of $53 Trillion which it can never pay back.
The U.K. is on the way to destroying its currency and increase its debt as is France.
China, on the other hand, is in a very unique position in that it has $1.9 Trillion in foreign currency reserves. This puts it in a very unique position with regards to the rest of the world. While the latter was absorbed in consuming everything that China produced, the Chinese were amassing an enormous cushion of real cash that they can now use to divert the focus away from an export driven economy to one that begins to focus on domestic demand. The economic fundamentals for a recovery in China are more evident than in the rest of the world because there has not been the same credit driven overconsumption that was the driving force for GDP in so many other countries. Even on an individual basis "Household savings climbed 382.7 billion Yuan from the previous month (October 2008).
The Central Economic Work Conference's $585 Billion stimulus plan addresses several areas that are essential to increasing domestic consumer demand and purchasing power.
Housing projects for urban dwelling low-income families, subsidies for low-income rural families, funds for Medical care and education. China is also supporting the Steel, Automotive and telecommunications industries through lowering taxes and encouraging innovation through research and development subsidies. Imports of iron ore are increasing and the steel produced is being stored for future use. The latter point is notable as it presents China with an advantage in manufacturing baseline costs as the fall in shipping and commodity prices has meant that it has built its stockpile at bargain basement prices.
This is real investment with real available money. China saved up for the rainy day and, now it has arrived, can put their resources to work for them. It will take time for China to turn around its gigantic economy but at least they don't have to worry about paying off an unpayable debt to the rest of the world. While every other country is desperately trying to formulate a rescue plan fueled with an increase in the national debt, China does not have this worry and this will form its primary advantage.
The investment in the population's purchasing power and employment prospects through improving the country's infrastructure and providing tax breaks and subsidies will pay off much better than throwing money at financial institutions. The Chinese already knew this and how little use it would be in turning around a bad situation. The world's Policemen might be Occidental but the world's teacher, as it has for millennia, still resides in the Orient.
Andrew Hughes is a frequent contributor to Global Research. Global Research Articles by Andrew Hughes
[link to www.globalresearch.ca]
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| FHL(C)
User ID: 580899
12/27/2008 9:03 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
[link to biz.yahoo.com]
AP
China to let yuan be used in some export deals
Thursday December 25, 12:32 am ET
By Anita Chang, Associated Press Writer
China seeks to boost exports by allowing yuan to be used in some foreign trade transactions
BEIJING (AP) -- China will launch a pilot project allowing its currency to be used in some international trade transactions, the government announced, a move aimed at shoring up the country's battered exporters.
The program would permit use of the yuan in trade between the self-governed Chinese territories of Hong Kong and Macau and the heart of the mainland export industry, Guangdong province and the Yangtze River delta, the central government Web site said in a statement late Wednesday.
The statement also said transactions would be allowed between the southwestern Chinese regions of Yunnan and Guangxi and the 10-member Association of Southeast Asian Nations.
Other details were not announced, and it was not known when the program would begin, how long it would last or what mechanisms would be put in place to allow the money flow back and forth.
The program was one of several economic stimulus measures announced by Premier Wen Jiabao, including an increase in the number of stores in rural areas and a rise in export tax rebates for high-tech products.
The currency pilot project aims to "improve financial services for exports" and "help small and medium-sized companies," the government statement said.
The Chinese yuan is currently not internationally traded and mainland companies seeking to do export business mostly work with dollars and euros. The pilot program would simplify the process at a time when Chinese exporters have been hammered by a drop in foreign demand, leading to thousands of factory closures and layoffs.
The malaise is also spreading inland as domestic demand for steel, autos and other goods weakens. Communist leaders have warned that more job losses might fuel unrest and are pressing employers to minimize cutbacks.
In the longer term, the program could be a small first step toward allowing the yuan to be traded internationally, with increased demand for Chinese currency helping to boost its value.
The U.S. has long argued that the yuan is undervalued, giving China's exporters an unfair price advantage and adding to its trade surplus.
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| FHL(C)
User ID: 580899
12/27/2008 9:45 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
Thank you Albanila.
albanila
User ID: 576512
12/20/2008 6:41 PM
Re: BALTIC DRY INDEX DOWN 93%: INTERNATIONAL TRADE WITH THE US IS DEAD Quote
As a BDI watcher I've been collecting links:
[link to www.dryships.com]
[link to www.ft.com]
[link to www.euro2day.gr]
What I did not hear on the video was some other info on the above links, also verified by someone who lives near the CA port south of LA (I forget the name): thousands of flotillas of idled ships are piling up in ports everywhere.
Say someone ordered shoes six months ago - by the time the cargo reaches CA, the banking confidence crisis had made it impossible to get a letter of credit. Not only can parties not pay, but the shipping companies can't afford to send the ship back (some 90% of ships are Greek owned, where they're having riots ( [link to www.dailymail.co.uk]
It's not just numbers.
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| FHL(C)
User ID: 580899
12/27/2008 10:47 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
[link to www.unleavenedbreadministries.org]
Winter Economic Crises
GEAB N°30 is available! Global systemic crisis – New tipping-point in March 2009: 'When the world becomes aware that this crisis is worse than the 1930s crisis'
- Public announcement GEAB N°30 (December 16, 2008) -
LEAP/E2020 anticipates than the unfolding global systemic crisis will experience in March 2009 a new tipping point of similar magnitude to the September 2008 one. According to our team, at that period of the year, the general public will become aware of three major destabilizing processes at work in the global economy, i.e.:
• the length of the crisis
• the explosion of unemployment worldwide
• the risk of sudden collapse of all capital-based pension systems
A whole range of psychological factors will contribute to this tipping point: general awareness in Europe, America and Asia that the crisis has escaped from the control of every public authority, whether national or international; that it is severely affecting all regions of the world, even if some are more affected than others (see GEAB N°28); that it is directly hitting hundreds of millions of people in the “developed” world; and that it is only worsening as its consequences reveal throughout the real economy. National governments and international institutions only have three months left to prepare themselves to the next blow, one that could go along severe risks of social chaos. The countries which are not properly equipped to cope with a surge in unemployment and major risks on pensions will be seriously destabilized by this new public awareness.
In this 30th issue of the GEAB, the LEAP/E2020 team describes these three destabilizing processes (two of them are described in this public announcement) and gives recommendations to cope with the surge in risks. In addition, this issue also provides the opportunity to make an objective assessment of the reliability of LEAP/E2020's anticipations and specifies a number of methodological aspects of the analytical process used. In 2008, LEAP/E2020's success rate reaches 80%, and even 86% when it comes to strictly socio-economic anticipations. In a year of major upheavals, our teal ise altogether quite proud of this result.
The crisis will last at least until the end of 2010
Evolution of the US money base and indications of related major US crisis periods (1910 – 2008) - Source: Federal Reserve Bank of Saint Louis / Mish’s Global Economic Analysis
As we already explained in GEAB N°28, the crisis will affect in different ways the different regions of the world. However, and LEAP/E2020 wishes to be very clear on that aspect, contrary to the dominant stance today (coming from those experts who denied the fact that a crisis was coming up three years ago, who denied that it was global two years ago, and who denied the fact that it was systemic six months ago), we anticipate that the minimum duration of the decanting phase of the crisis is 3 years (1). It shall be finished neither in spring 2009, nor in summer 2009, nor at the beginning of 2010. It is only towards the end of 2010 that the situation will start stabilizing again and improving a little in some regions of the world, i.e. Asia and the Eurozone, as well as in countries producing energy, mineral and food commodities (2). Elsewhere, it will continue; in particular in the US and UK, and in all the countries depending on their economy, were the duration could approximate a decade. In fact these countries should not expect any real return to growth before 2018.
Moreover no one should imagine that the improvement at the end of 2010 will correspond to a return of high growth. The recovery will take long. For instance, stock markets will take a decade to return to levels comparable to 2007, if they ever return to that. Remember that it took twenty years before Wall Street resumed its 1920 levels. Well, according to LEAP/E2020, the present crisis is deeper and longer than in the 1930s. The general public will gradually become aware of the long-term aspect of this crisis in the coming three months and this situation will immediately trigger two tendencies carrying with them socio-economic instability: fear of the future and enhanced criticism towards leaders.
The risk of sudden collapse of all capital-based pension systems
Finally, among the various consequences of the crisis for dozens of millions of people in the US, Canada, UK, Japan, Netherlands and Denmark in particular (3), there is the fact that, from the end of the year 2008 onward, news about major losses on the part of the organizations in charge of managing the financial assets supposed to finance pensions will multiply. The OECD anticipates that pension funds will lose 4,000 billion USD in 2008 only (4). In the Netherlands (5) as well as in the United Kingdom (6), monitoring organizations recently blew the whistle asking for an emergency contribution reappraisal and a State intervention. In the United States, growing numbers of announcements call for contribution increases and benefit reductions (7), knowing that it is only in a few weeks time that most of these funds will start calculating their total losses (8). Most of them are still deluding themselves about their capacity to build up again their capital after the markets turn around. In March 2009, when pension fund managers, pensioners and governments will become simultaneously aware of the fact that the crisis is there to last, that it coincides with the « baby-boomer » generation’s age of retirement and that the markets will not resume their 2007 levels until many long years (9), chaos will flood this sector and governments will reach the moment when they will be compelled to nationalize all these funds. And Argentina, who took this decision a few months ago already, will appear a pioneer.
All the trends described above are already at work. Their combination and the public becoming aware of the consequences they could entail, will result in the great collective psychological trauma of Spring 2009, when everyone will realize that we are all trapped into a crisis worse than in the 1930s and that there is no possible way out in the short-term. The impact on the world’s collective mentalities of people and policy-makers will be decisive and modify significantly the course of the crisis in its next stage. Based on greater disillusion and fewer beliefs, social and political instability will settle down worldwide.
Finally, this GEAB N°30 presents a series of 13 questions & answers designed to enhance savers'/investors'/decision-makers' capacity to understand and anticipate the next stages of the global systemic crisis:
1. Is this crisis different from the previous crises which affected capitalism?
2. Is this crisis different from the 1930s crisis?
3. Is the crisis as serious in Europe or Asia as in the USA?
4. Are the current actions undertaken by public authorities worldwide sufficient to curb the crisis?
5. What are the major risks still weighting on the world financial system? And are all savings equal in front of the crisis?
6. Is the Eurozone a true protection shield against the worst aspects of the crisis and what should the Eurozone do to improve its protection status?
7. Is the Bretton Woods system (in its 1970s last version) currently collapsing? Should the Euro take the place of the Dollar?
8. What can be expected from the next G20 meeting in London?
9. Do you think that deflation is right now the biggest threat to economies worldwide?
10. Do you think that the Obama administration will be able to prevent the USA from sinking into what you called the ‘Very Great US Depression’?
11. In terms of currencies, beyond your anticipation of the Dollar resuming its collapse in the very next months, do you think that the UK Pound and the Swiss Franc are still currencies with an international status?
12. Do you think that the CDS market is about to implode in the coming months? And what could be the consequences of such a phenomenon?
13. Is there a ‘US Treasury Bonds Bubble” about to burst?
---------
Notes:
(1) It can be useful to read on this crisis a very interesting contribution by Robert Guttmann published in the 2nd half of 2008 on the website Revues.org, supported by the Maison des Sciences de l'Homme Paris-Nord.
(2) As a matter of fact, commodities have already started contributing to boost the market of international sea transport. Source: Financial Times, 12/14/2008
(3) It is in those countries that capital-based pension systems were most developed (see GEAB N°23) but is also the case of Ireland. Source: Independent, 11/30/2008
(4) Source: OECD, 11/12/2008
(5) Source: NU.NL, 12/15/2008
(6) Source: BBC, 12/09/2008
(7) Sources: WallStreetJournal, 11/17/2008; Phillyburbs, 11/25/2008; RockyMountainNews, 11/19/2008
(8) Source: CNBC, 12/05/2008
(9) Not to mention the effect of an explosion of the US T-Bond bubble on pension funds. See Q&A, GEAB N°30.
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| FHL(C)
User ID: 580899
12/27/2008 11:29 PM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
[link to www.godlikeproductions.com]
Thank you,
Phennommennonn Subscriber
The Queen Of Mean
User ID: 526890
12/26/2008 8:55 PM
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50,000 U.S. STORES COULD CLOSE NEXT YEAR, EXPERT SAYS (is this it?)
Quote
[link to www.financialpost.com]
NEW YORK -- Retailers will face a Darwinian fight for survival next year as they run out of cash as early as January and competition forces thousands of store closings, according to private-equity buyers and restructuring experts.
Probably 50,000 stores could close without any effect on consumer choice, Gregory Segall, a managing partner at buyout firm Versa Capital Management Inc., said earlier this month during a panel discussion.
"The United States is massively over-stored in all categories," Mr. Segall said. He said his firm is in "a wait mode" and he expects banks to squeeze retailers after Jan. 1.
Plunging home prices, rising unemployment and tightening credit have led consumers to rein in spending, resulting in what may be the worst holiday season in at least four decades. Macy's Inc., Kohl's Corp. and other retailers have marked down items 50% to lure customers, eroding margins at a time when store owners hope to make a third or more of their annual profit.
Only retailers with healthy balance sheets will survive the recession, said Matthew Katz, a managing director at consulting firm AlixPartners LLP.
"This is a very Darwinian time," Mr. Katz said.
At least a dozen U.S. retailers have entered bankruptcy this year, according to data compiled by Bloomberg. Circuit City Stores Inc. and Boscov's Inc. have said they will reorganize and leave court protection as smaller chains, while Linens ‘n Things Inc., Sharper Image Corp., and Value City Department Stores LLC all plan to liquidate.
There are some "fires that need to be left to burn" in retail, Mr. Segall said. "At the moment we think it's a time for a very cautious approach."
Increases in consumer confidence, reductions in credit spreads and a lower jobless rate would be indicators that the retail sector is beginning to turn around, panelists said.
"Americans are inherently optimistic," said Cathy Leonhardt, a managing director at boutique investment firm Peter J. Solomon Co. "And when the credit markets open back up, and they will, our optimism comes back."
The Standard & Poor's 500 Retailing Index had shed 29% by mid-December, with only three of its 27 members posting gains. The index doesn't include Wal-Mart Stores Inc., the world's largest retailer, which had climbed 16%.
While Wal-Mart will continue to be important, smaller specialty stores are returning, said James Schaye, chief executive officer of Hudson Capital Partners LLC. The liquidation firm's clients have included Kmart and Linens ‘n Things.
"People are going back to the one, or two, or three-store chains," he said. "People are getting a little tired of going to the mall and buying all the same thing."
Overall, the retail market will get tougher starting next month as banks start to see all "the messes that have been left to fester," Versa's Mr. Segall said. With the turmoil in the financial sector, banks have been focused inwardly for the past few months and that will change come January, he said.
There are also some perfectly healthy companies trading at distressed values, according to Leonhardt at Peter J. Solomon.
"For acquirers, this is an unprecedented period," she said.
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| FHL(C)
User ID: 580899
12/28/2008 12:05 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
FU&FW
GEAB N°30 Quoting: FHL(C)
Just want to make the point, That GEAB is good info, but is not taking into full account other things that are positives in relation to the Kings of the East.
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| FHL(C)
User ID: 581258
12/28/2008 10:42 AM | | Re: Watch, Its happening ,the global economic change. | Quote |
With thanks to 544249
[link to www.godlikeproductions.com]
total collapse
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12/28/2008 10:02 AM
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Second part of the economic crisis coming in 2009 ...and it is BAD!!!!
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The Corruption Crisis of 2008
Saturday, 27 December 2008 05:35
Economic Meltdown: Are you ready for Part II?
Alex Wierbinski
We are, and have been, sitting in the eye of an economic hurricane for about two months now. We have been sitting in a state of false calm at the 8000 level on the Dow since the October Crash of Global Markets. We are about to depart the eye of the storm.
Although the wise and honest among us clearly saw this disastrous economic hurricane building strength in the heart of the American political economy for well over twenty years, our political, social, and economic leaders have done nothing but feed the corruption that has spawned and fed this storm. This impending economic catastrophe has grown to such terrible size and power due to our politician’s corruption and the voracious corporate greed they feed.
Our “leaders” have fed this storm by draining our middle-class of its wealth and political power, doing everything in their power to accelerate and supercharge the irresponsible corporate concentration of our nation’s wealth, political power, and profits that have kept the corporate politicians of both parties in power. Although the majority of what we are about to experience is economic in nature, make no mistake about it: political corruption is the birth mother of this storm.
The wealth stolen from our middle-class started this storm when it was used to fund the complete corporate takeover of our democratic institutions, the complete privatization of our national resources, and funded the breakdown of ownership laws that allowed the corporate capture of our once free press.
In October this great financial storm, this economic Katrina that has been growing for decades in the heart of America , first hit the markets with full force. The housing, credit, and financial markets were crushed as they moved through the first storm wall, bankrupting banks around the world and dropping the Dow down from the 14,000 level to the 8000 level in the most precipitous fall in values ever seen in World Economic History.
The American Middle-Class was devastated. Personal savings, retirements, and equity-based investments which were unwisely put into the markets have lost nearly half their value. These losses were primarily financial, based on the depth of fraud and criminal irresponsibility in the heart of our political, banking, and credit system. But this was merely the beginning, not the end, as so many pundits and market watchers have been telling us. The next stage will see the storm moving from financial markets to the general economy, and then back into the markets with devastating force. This stage is beginning right now.
Now we have to depart the eye of this financial Katrina, and our economy is about to go through the other half of the storm as the economy feels the full force of being ripped-off by our corporations and their political minions. Not only have the housing and automotive markets already prepared the way for a general economic collapse by completely collapsing themselves, but the irresponsible credit-fueled shopping spree of the middle and lower classes have come to an abrupt halt.
You must understand by now that this financial crisis has already spread to the general economy and is the process of bringing consumption to a virtual halt, where it will stay at an unbelievably low level for at least the next seven years. Our middle-class was robbed of their wealth over the last 35 years, and now their credit and equity has shrunk to much less than zero, and they are incapable of maintaining the level of purchase required to maintain the Dow at even the 8000 level. Mark my words: the Dow will ultimately drop to the level that reflects the consumption our middle and lower class citizens can support on their actual earnings.
Our average middle-class folk have been drained of their share of our nation’s wealth and political power for decades. What masked this rip-off was that their consumption was pumped up by the false bubble-equity in their houses, the bloated stock prices in their 401Ks, and the flood of easy credit at their disposal.
As every foreigner who our corporations and politicians snuck into our country lowered our wages, destroyed our social infrastructure, and stole our rights, so too was every product we once produced here (for decent wages) sent to be manufactured by slave labor in China . This made corporate profits grow even as our middle-class, our economy, and our infrastructure (not to mention our democracy) was drained and destroyed.
Corporate America , their politicians, and their foreign minions have drained The American Middle-Class of their share of our nation’s wealth and political power during the massive irresponsible expansion which has taken place during the last 35 years. This process has so altered our economic and political situation that our country has used this massive growth to transform itself from a democratic republic into a corporate fascist state right before our eyes.
The American middle-class responded to these dramatic changes by going on a massive debt-fueled shopping spree at Wal-Mart, and sealed their own fate. The American middle and lower classes, which were being drained of their earning and political power, responded putting both parents to work while raising kids, and drowning themselves in debt to maintain the lifestyle that one wage-earner provided twenty years ago. They shopped at Wall-Mart while hiring Mexicans to mow their lawns and clean their toilets, and now they can afford neither. Justice is a funny thing, isn’t it?
The Bottom Line here is that neither the American Middle-Class nor the illegals possesses the money, credit, subservience, or equity sufficient to stop this grand corporate growth-bubble scam that has been perpetuated by our corporate politicians and their corporate masters from imploding.
Understand that the “consumer” (citizen?) cannot shop us out of this crisis, nor can pumping in another couple of million illegals this year to slave for the corporations and pump-up consumption “grow” us out of this crisis. Those scams have both failed at great expense to the general welfare of the average American. But our corporate bastards made themselves as rich as Nazis.
Both processes, the endless massive growth of “consumer” consumption, and massive illegal growth have run their natural courses. Both processes have been completely drained of all their profitability, drained our land of all of its natural resources, polluted our air and water, devastated our social infrastructure, changed the frk’n weather, and this big scam has now economically blown up in our faces.
We are now left with a massive population unable to pay its previous debts, fund its present operating expenses, nor see the bottom of this hole we have dug ourselves into. Gee, that’s a big surprise. The costs of our irresponsible growth policies have come due, and nobody’s ready or able to pay the debt, but pay we will.
The American Middle-Class has been steadily losing their already diminished share of our nation’s wealth and political influence for over a decade, but until just recently the Middle-Class has maintained their outrageous consumption through credit-based purchases backed by the confidence they had in the artificially bloated prices of their housing and stock holdings.
The first stage of this economic Katrina wiped out their housing and stock equity, leaving the tattered remnants of the American middle-class saddled with a massive debt load, houses worth less than their purchase prices, and stock values that will not fund the education of their children or support them in old age. The second stage, which we are just now entering, will take their jobs and the remainder of their wealth.
After the popping of the housing bubble ravaged the housing market, brought down the related credit, banking, and equities markets this economic storm was not nearly finished. Now it has moved out of the financial/market sectors into the broader economy. Our corporate politicians responded predictably: They ignored the economy and gave 8 TRILLION to exactly the same financial/markets people who stole our money and ruined our economy in the first place: their Wall Street Bribers.
These 8 TRILLIONS did absolutely nothing to support housing prices or stabilize the real economy, which if this bailout was spent properly would have limited the fall of mortgage security values and actually stimulated the credit markets by funding buyers, rather than lenders. This virtual printing of money and the effective lowering of interest rates to zero will ignite strong inflation without stimulating the economy. Just give it a little time. I’d say that within six months inflation will be well on its way to double-digit levels.
We will see that when the US starts putting this much debt onto the global debt markets, the level of interest required to fund a debt of this size will be astronomical. We’ll see if China spends it’s money keeping it’s people from revolting, or buying US Treasuries. It appears that these final acts of thievery by our politicians for their corporate masters, as Rome Burns around them, are going to be paid for during a long and severe bout of inflation during the height of our economic collapse.
As the financial markets are forced to reckon with these radically deteriorating economic conditions, which they themselves created through their financial and political corruptions, we will finally see the final capitulation that will mark the psychological bottom of this market. We are going to see the market move to the 6000 level within the next month or two, and we are going to see this happen through a drastic decline or two, during which the majority of market players will throw in the towel, fold up shop, and go home. When this baby hits the bottom, the sound of this crash will reverberate around the world.
The next major moves by the financial markets will be strongly downward, and will no longer just be reflecting the fall of the housing and credit markets, but will be a powerful expression of the precipitous drop in citizen spending and a clear indication that the real economy is grinding to a screeching halt. During this stage of our crash the US will have to fund greater and greater amounts of the 8 TRILLIONS+ they have given away to their Wall Street bribers, as well as funding our substantial private debt, which will stoke the flames of inflation upward as the market crashes down, while economic activity comes to a near standstill.
To put it sharply, all of the corporations who based their operations and profits on cheap credit are as finished as are the middle-class that based its consumption on cheap credit. The party is so over. Far too many corporations based their profits on nothing more than cheap money and illegal, if not slave labor. This irresponsible model of growth has collapsed.
This “business model” of borrowing $1,000,000 dollars, hiring state-subsidized illegals to work illegally and cheaply, ultimately making three dollars profit for every $100,000 borrowed, (30 dollars total profit on somebody else’s million) while forcing our citizens to subsidize the education and medicine for their illegal work force is now over.
These abuses are not ending because they are illegal, immoral, treacherous, and bad for our country, but only because the cheap money has dried up and the bills for the last 35 years of draining our infrastructure to subsidize this irresponsible growth are demanding immediate payment. The days of getting a $1,000,000 loan and paying back the loan at $1,000,010 are dead in the water, no matter how much money the government prints and gives to its Wall Street Bribers. This means that Tens of Millions are heading towards unemployment this Christmas.
The result is easy to foresee: Millions of illegals, consumers of our empire, and citizens are going to lose their jobs as our country comes to the very harsh realization that the economic bubbles in our country are not just limited to the Black Heart of Wall Street, nor are they confined to the housing and the credit markets. Our country’s whole model of growth is popping before our eyes.
Our various layers of economic, financial, demographic and consumption bubbles are signs of a much deeper bubble, composed of something other than wealth and power. It is an ethical lapse, a moral bubble of complete stinking corruption that has established itself in the heart of the American Spirit.
Our ethical bubble expresses itself through our national concept of ourselves as forever growing in power and wealth, the center of “a better way of life” that demands illegal wars and crimes against humanity to support itself. We stink of hubris and our pride and greed has eaten away at the very foundations of our democratic institutions and spawned real policies as dependent on endless violence and compulsion as it is dependent on an endless growth in population, consumption, and profits to support itself.
This behavior assures us that our time at the top will be limited by the lifespan of our economic bubble, which is ultimatly determined by the lifespan of the corruption bubble at the heart of our Spirit. All of these material and spiritual expressions of our greed are short-term bubbles in mind and body, and they are doomed to pop and bring a resounding wave of pain to our country and the world.
This grand bubble of endless material growth is not just going to pop, it is about to blow up in our faces. Our concept of ourselves has grown past the writ of our Constitution, past the limits of common sense, and past all ethical restrains on greed that would have moderated a good people. Now it’s time to pay the piper.
Understand this well: The sound of the bubble popping in the housing, credit, and equities markets will be considered as nothing when the bubble of irresponsible growth that has fueled our whole economy for the past few decades pops. The sound of this bubble popping will change the way you think about your country and the crimes it has committed against itself and other nations.
Here’s where we are: The financial bubble has popped. The economic ramifications of the financial bubble popping have spread to the broader economy, collapsed business activity and consumption, and is about to crash back into the Stock Markets, triggering the next great fall to the 6000 level.
Unemployment will hit an honest 20% within six months, and inflation will begin spiking as the international value of the dollar responds to zero interest and the trillions in government bailout debt are going to be put onto the international debt markets.
The economic reverberations of this broad economic collapse will shortly boomerang back into the financial markets, supercharged by the inflationary pressures our corrupt politicians created by giving 8 TRILLION+ of our dollars to the corrupt corporate thieves on Wall Street. You know who these Wall Street guys are, they are the same guys who brought on this crisis in the first place, after bribing both parties into deregulating open greed.
Now the economy coming to a screeching halt will have to be priced into the already damaged financial markets, and this is when the financial and economic aspects of this crisis will come together and be compounded with interest. Ka-Boom! We will be lucky if the markets stop dropping at the 6000 level.
Be prepared. The second stage of our Financial Hurricane is about to blow through the heart of the economy itself. I expect serious social troubles within a year, followed by serious calls to restore our democracy within the next two years. If we are lucky, this disaster will not just tear our economy apart, but it will tear apart the delusions and lies that our corporate politicians have used to justify their criminal government and brought on this downfall.
As our nation departs the eye of the storm, where we are now resting, the popping of our economic bubble is about to knock Wall Street from its knees onto its back, while our whole nation is about to go through the equivalent of a major heart attack.
If we respond wisely, this will be the time for us to identify and put aside not just the traitors who have destroyed our democracy and our economy, but to end the tools and processes that have been used by our corporate traitors/bribers to neutralize our democracy and keep these traitor politicians in positions of public responsibility.
Unfortunately our people were not wise enough, not sensitive enough, nor moral enough to prevent the corrupt from destroying our democracy, looting our nation of its natural and material wealth, and attacking free people around the world.
Because of our failure to live up to our own values we are facing the greatest crisis in our country’s history, encompassing not just the economy, the environment, and our "global" empire, but a crisis of identity.
We are going to have the opportunity to see if our people have the ethics, if not the wisdom and will necessary to restore our democratic republic, and reverse the disaster that political corruption has brought onto our country.
The true test is upon us. Are our people able to identify the corrupt and the corruptions that brought us to this crisis, and eliminate them? In any case, the fight’s on. It is NOW PAST the TIME for ALL GOOD AMERICANS to COME TO THE DEFENSE OF THEIR COUNTRY: Foreign and Domestic Enemies have joined together and have destroyed our democratic republic.
[link to freewordofgod.yuku.com] |
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