"“Hence, the key question is not double dip or not but how good will economic growth be in real and nominal terms.
When an economy shows the weakest recovery on record despite of the biggest monetary and fiscal stimuli on record, something is definitely different from previous cycles. In our view, it is debt deleveraging. So far, the US consumer and financial institutions have undertaken steps and decreased leverage to some degree but we are nowhere near the end of this process. At the very best, it will take another 2 years but most likely longer until that process is complete.
In the meantime, household income growth or the lack thereof will become the decisive factor. At present, it does not look very encouraging as it is stagnant in most countries or anemic at best. Moreover, in the US, housing is an important balance sheet item for the average household and those prices continue to erode..."
Monday, August 30, 2010
Debt is Main Threat to U.S. National Security ... Pentagon Must Cut Spending
"War and The Economic Crisis: Mullen - In February 2009, the head of U.S. intelligence - Dennis Blair - said that the global financial crisis was the largest threat to America's national security. All of America's intelligence agencies apparently agreed.
The same month, the chairman of the Joint Chiefs of Staff - Admiral Mullen - also agreed.
Now, Mullen is focusing on a specific economic threat. Specifically, Mullen is focusing on the debt:
The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.
“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending..."
The same month, the chairman of the Joint Chiefs of Staff - Admiral Mullen - also agreed.
Now, Mullen is focusing on a specific economic threat. Specifically, Mullen is focusing on the debt:
The national debt is the single biggest threat to national security, according to Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Tax payers will be paying around $600 billion in interest on the national debt by 2012, the chairman told students and local leaders in Detroit.
“That’s one year’s worth of defense budget,” he said, adding that the Pentagon needs to cut back on spending..."
Friday, August 27, 2010
China Blocks US-UK Attack On Euro
"...The Anglo-American hedge fund attack, as we have documented here, employed credit default swaps as the primary weapon against Greek, Portuguese, and Spanish government bonds. The failure of London and New York to induce a panic flight out of the euro during the May-June timeframe was partly results of the German self-defense measures, involving bans on naked credit default swaps and bans on naked shorting of German equities. In addition to this, Chinese support for the euro has played a decisive role.
There is every indication that the Chinese made a decision not to allow the destruction of the euro during the late spring and early summer. That decision was technical, commercial, and political at the same time. The technical part was the China sought to re-balance the basket of currencies it uses to maintain the international stability of the renminbi. As the euro looms larger in Chinese trade, purchases of euros and Eurobonds are in order..."
There is every indication that the Chinese made a decision not to allow the destruction of the euro during the late spring and early summer. That decision was technical, commercial, and political at the same time. The technical part was the China sought to re-balance the basket of currencies it uses to maintain the international stability of the renminbi. As the euro looms larger in Chinese trade, purchases of euros and Eurobonds are in order..."
Gold demand jumps by 36pc
"Investors' love affair with gold continues as they look for a safe-haven amid the economic uncertainty.
Total gold demand in the second quarter rose by 36pc to 1,050 tonnes, mainly due to strong demand for gold exchange traded funds, which grew by 414pc.
Physical gold bar demand climbed 29pc to 96.3 tonnes. Global jewellery demand remained robust but fell just 5pc below year-earlier levels..."
Total gold demand in the second quarter rose by 36pc to 1,050 tonnes, mainly due to strong demand for gold exchange traded funds, which grew by 414pc.
Physical gold bar demand climbed 29pc to 96.3 tonnes. Global jewellery demand remained robust but fell just 5pc below year-earlier levels..."
Thursday, August 26, 2010
How Financial Instruments Suppress Silver's Value
"...Exchange-traded notes are about as criminal of a product as you could ever imagine. ETNs take in billions of dollars that are held by the issuing firm. The issuer then makes bets – not actual purchases of silver – on which direction the price of an underlying commodity will move. If $30 billion were to flow into commodity ETNs, not a single dime would actually be invested in commodities. If it were, prices would be affected, but instead, it flows through the backdoor and reduces overall interest in the physical markets.
Don't discount the role of fees in the commodity markets either. With annual fees on commodity mutual funds and ETFs going as high as 2% per year, the total amount of gold and silver held in these funds (if there is any at all) declines at a pace equal to its annual fee without any new investment.
Therefore, if there is $100 billion in commodity backed ETFs, ETNs, and mutual funds, as much as $2 billion a year is cashed out and sold on the marketplace. Without new blood (err, funds), the pool of commodities sees an influx.
And don't forget premiums! The ETF PHYS claims to own deliverable physical metals, but it recently traded with a premium of more than 13%. Thus, for each $1 invested, only $.88 went to the metals markets. Premiums on closed-end funds like PHYS for other commodities can run even higher. The infamous UNG ETF touched a 15% premium before heading lower as new shares were issued, however, even with the new buying power, natural gas continued to stagnate.
Clearly, commodities’ real values are suppressed by the hand of fancy financial vehicles."
Don't discount the role of fees in the commodity markets either. With annual fees on commodity mutual funds and ETFs going as high as 2% per year, the total amount of gold and silver held in these funds (if there is any at all) declines at a pace equal to its annual fee without any new investment.
Therefore, if there is $100 billion in commodity backed ETFs, ETNs, and mutual funds, as much as $2 billion a year is cashed out and sold on the marketplace. Without new blood (err, funds), the pool of commodities sees an influx.
And don't forget premiums! The ETF PHYS claims to own deliverable physical metals, but it recently traded with a premium of more than 13%. Thus, for each $1 invested, only $.88 went to the metals markets. Premiums on closed-end funds like PHYS for other commodities can run even higher. The infamous UNG ETF touched a 15% premium before heading lower as new shares were issued, however, even with the new buying power, natural gas continued to stagnate.
Clearly, commodities’ real values are suppressed by the hand of fancy financial vehicles."
Marc Faber and Peter Schiff on the U.S. Treasury Bond Bubble
"...Schiff basically declares the bond market the mother of all bubbles, and noted that when the bubble bursts, the loss will dwarf the combined losses of the bubbles of stock market and the real estate. Eventually, the government will either inflate or default. Either way will ultimately make bond investors go bust.
For risk-averse investors, Schiff believes gold and foreign bonds such as Switzerland where government debt level is not as high, would be better options than U.S. treasuries..."
For risk-averse investors, Schiff believes gold and foreign bonds such as Switzerland where government debt level is not as high, would be better options than U.S. treasuries..."
Wednesday, August 25, 2010
Bancor: The Name Of The Global Currency That A Shocking IMF Report Is Proposing
"Sometimes there are things that are so shocking that you just do not want to report them unless they can be completely and totally documented. Over the past few years, there have been many rumors about a coming global currency, but at times it has been difficult to pin down evidence that plans for such a currency are actually in the works. Not anymore. A paper entitled "Reserve Accumulation and International Monetary Stability" by the Strategy, Policy and Review Department of the IMF recommends that the world adopt a global currency called the "Bancor" and that a global central bank be established to administer that currency. The report is dated April 13, 2010 and a full copy can be read here. Unfortunately this is not hype and it is not a rumor. This is a very serious proposal in an official document from one of the mega-powerful institutions that is actually running the world economy. Anyone who follows the IMF knows that what the IMF wants, the IMF usually gets. So could a global currency known as the "Bancor" be on the horizon? That is now a legitimate question..."
Morgan Stanley Says Government Defaults Inevitable
"...Investors will face defaults on government bonds given the burden of aging populations and the difficulty of securing more tax revenue, according to Morgan Stanley.
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares, an executive director at Morgan Stanley in London, wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” the report said."
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares, an executive director at Morgan Stanley in London, wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” the report said."
The True U.S. National Debt
"...Today our reported National Debt is $13.362 TRILLION. This is the first big lie. There are two entities named Fannie Mae and Freddie Mac that happen to be 80% owned by the US government. Anyone who thinks these two companies can operate without the backing of the US Government is delusional. The US taxpayer is on the hook for these two disastrously run companies. Somehow, government accounting doesn’t require their debt to be considered the responsibility of the US taxpayer. This is a fraud, pure and simple. Their debt is our debt.
According to their latest 10Q filed in early August (links below), their debts are:
Fannie Mae $3.257 Trillion
Freddie Mac $2.345 Trillion
The true National Debt of the United States is $18.964 Trillion. Therefore, our debt as a percentage of GDP is really 130%. This is beyond the level reached during World War II. We are no longer the manufacturer to the world. We are the consumer to the world. The country adds $4 Billion per day to the National Debt. Our GDP is stagnating with future growth no better than 2% being realistic.
Kenneth Rogoff and Carmen Reinhart, after analyzing data over 200 years throughout the world, have concluded that once debt reaches 90% of GDP, a tipping point is reached. Crisis and collapse will ensue.
“After looking at data from 44 countries spanning 200 years, they’ve concluded that at ratios of debt to GDP up to 90%, there’s not much correlation between government debt and economic growth. Above 90%, however, median economic growth rates fall by one percentage point and average economic growth rates fall by about four percentage points. That makes the 90% level a kind of make-or-break point for countries that are hoping to grow their way out of debt. If the government debt load climbs above 90% of GDP, economic growth slows so much that growth is no longer a viable solution to reducing that debt. Above the 90% level, governments serious about reducing their debt load have to increasingly rely on “solutions” such as reducing wages and depreciating their currencies, which might over time increase global economic competitiveness enough to give a boost to national economic growth. In the short to medium term, however, these “solutions” inflict real pain on the citizens of the countries since they reduce standards of living.”
According to their latest 10Q filed in early August (links below), their debts are:
Fannie Mae $3.257 Trillion
Freddie Mac $2.345 Trillion
The true National Debt of the United States is $18.964 Trillion. Therefore, our debt as a percentage of GDP is really 130%. This is beyond the level reached during World War II. We are no longer the manufacturer to the world. We are the consumer to the world. The country adds $4 Billion per day to the National Debt. Our GDP is stagnating with future growth no better than 2% being realistic.
Kenneth Rogoff and Carmen Reinhart, after analyzing data over 200 years throughout the world, have concluded that once debt reaches 90% of GDP, a tipping point is reached. Crisis and collapse will ensue.
“After looking at data from 44 countries spanning 200 years, they’ve concluded that at ratios of debt to GDP up to 90%, there’s not much correlation between government debt and economic growth. Above 90%, however, median economic growth rates fall by one percentage point and average economic growth rates fall by about four percentage points. That makes the 90% level a kind of make-or-break point for countries that are hoping to grow their way out of debt. If the government debt load climbs above 90% of GDP, economic growth slows so much that growth is no longer a viable solution to reducing that debt. Above the 90% level, governments serious about reducing their debt load have to increasingly rely on “solutions” such as reducing wages and depreciating their currencies, which might over time increase global economic competitiveness enough to give a boost to national economic growth. In the short to medium term, however, these “solutions” inflict real pain on the citizens of the countries since they reduce standards of living.”
Is the U.S. Treassury Bond Bubble About to Burst?
"Jason Simpkins writes: Bonds have provided a welcome safe-haven for investors seeking shelter from the financial maelstrom of the past two years. But now many analysts fear bonds have entered bubble territory and pose a rising threat to their holders.
The amount of money flowing into bonds is "probably not sustainable on a consistent basis" Joel Levington, managing director of corporate credit at Brookfield Investment Management Inc., told Bloomberg News. "Eventually it won't be sustainable. Whether that means five years from now or five weeks is a little difficult to tell."
The amount of money flowing into bonds is "probably not sustainable on a consistent basis" Joel Levington, managing director of corporate credit at Brookfield Investment Management Inc., told Bloomberg News. "Eventually it won't be sustainable. Whether that means five years from now or five weeks is a little difficult to tell."
Gold Demand Increases 36% as Investors Increase Allocations to Bullion
"US and German government bonds, gold and particularly silver rose in safe haven buying yesterday on growing concerns about the robustness of the US recovery. The two precious metals traded flat in Asian and early European trade but have moved up again this morning as the dollar has weakened. Risk aversion has returned due to the very poor housing data yesterday which suggests a double dip recession is increasingly possible. These concerns are not being helped by renewed jitters in sovereign debt markets on Ireland's downgrade with government bond spreads widening again and the spread between Ireland's and Germany's debt at new records..."
Monday, August 23, 2010
Even Tony Robbins Is Warning That An Economic Collapse Is Coming
"...For those not familiar with my previous articles, let's review just some of the reasons why America is headed towards an economic nightmare of unprecedented proportions....
The National Debt - The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. According to Democrat Erskine Bowles, one of the heads of Barack Obama's national debt commission, if we continue on the path we are on the U.S. government will be spending $2 trillion just for interest on the national debt by 2020.
State And Local Debt - Many of America's state and local governments may be in even worse financial shape than the federal government is. In fact, some state and local governments are in such a financial mess that they have starting cutting off even the most essential services.
Consumer Debt - The total amount of consumer debt that Americans have accumulated now stands at approximately 11.7 trillion dollars.
The Trade Deficit - The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars flows out of the country than flows into it. The rest of the world is literally bleeding us dry in slow motion.
No Jobs - Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.
The Credit Crunch - The U.S. is experiencing a credit crunch unlike anything it has seen since the Great Depression. Lending has really, really dried up, but without loans our economic system cannot function properly.
The Housing Crisis - Even with mortgage rates at historic lows, a shockingly low number of Americans are buying houses. There has been a total collapse in home sales since the home buyer tax credit expired. At the same time, mortgage defaults, foreclosures and home repossessions by banks continue to set new all-time records.
Rising Bankruptcies - Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30th.
Rising Poverty - One out of every eight Americans and one out of every four American children are now on food stamps. Approximately 50 million Americans couldn't even afford to buy enough food to stay healthy at some point last year.
The Coming Pension Crisis - America is facing a pension crisis that is so nightmarish that it is almost impossible to adequately describe it. State and local government pension plans are woefully underfunded, dozens of large corporate pension plans either have collapsed or are on the verge of collapsing, Social Security is a complete and total financial disaster and about half of all Americans essentially have nothing saved up for retirement.
The Derivatives Bubble - Our financial system has become a gigantic gambling parlor and we have allowed a horrific derivatives bubble to develop that could destroy the entire world economy if it ever bursts. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars. Once that bubble pops there simply will not be enough money in the entire world to fix it.
The Federal Reserve - The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. There are many economists who would argue that the Federal Reserve is at the very core of our economic problems.
As we get even closer to the economic abyss that we are racing towards, even more big names such as Tony Robbins will come forward with warnings.
The truth is that these problems did not develop overnight, and they are not going to be solved overnight either.
Perhaps our economic future is best summed up by this one statement that economist Paul Krugman recently made....
"America is now on the unlit, unpaved road to nowhere."
The National Debt - The U.S. government has accumulated a national debt that is rapidly approaching the 14 trillion dollar mark. According to Democrat Erskine Bowles, one of the heads of Barack Obama's national debt commission, if we continue on the path we are on the U.S. government will be spending $2 trillion just for interest on the national debt by 2020.
State And Local Debt - Many of America's state and local governments may be in even worse financial shape than the federal government is. In fact, some state and local governments are in such a financial mess that they have starting cutting off even the most essential services.
Consumer Debt - The total amount of consumer debt that Americans have accumulated now stands at approximately 11.7 trillion dollars.
The Trade Deficit - The U.S. trade deficit has exploded to nightmarish proportions over the past two decades. Every single month tens of billions more dollars flows out of the country than flows into it. The rest of the world is literally bleeding us dry in slow motion.
No Jobs - Today it takes the average unemployed American over 8 months to find a job. The number of Americans receiving long-term unemployment benefits has risen over 60 percent in just the past year.
The Credit Crunch - The U.S. is experiencing a credit crunch unlike anything it has seen since the Great Depression. Lending has really, really dried up, but without loans our economic system cannot function properly.
The Housing Crisis - Even with mortgage rates at historic lows, a shockingly low number of Americans are buying houses. There has been a total collapse in home sales since the home buyer tax credit expired. At the same time, mortgage defaults, foreclosures and home repossessions by banks continue to set new all-time records.
Rising Bankruptcies - Nationwide, bankruptcy filings rose 20 percent in the 12-month period ending June 30th.
Rising Poverty - One out of every eight Americans and one out of every four American children are now on food stamps. Approximately 50 million Americans couldn't even afford to buy enough food to stay healthy at some point last year.
The Coming Pension Crisis - America is facing a pension crisis that is so nightmarish that it is almost impossible to adequately describe it. State and local government pension plans are woefully underfunded, dozens of large corporate pension plans either have collapsed or are on the verge of collapsing, Social Security is a complete and total financial disaster and about half of all Americans essentially have nothing saved up for retirement.
The Derivatives Bubble - Our financial system has become a gigantic gambling parlor and we have allowed a horrific derivatives bubble to develop that could destroy the entire world economy if it ever bursts. Nobody knows exactly how big the derivatives bubble is, but low estimates place it at around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars. Once that bubble pops there simply will not be enough money in the entire world to fix it.
The Federal Reserve - The Federal Reserve has devalued the U.S. dollar by over 95 percent since 1913 and it has been used to create the biggest mountain of government debt in the history of the world. There are many economists who would argue that the Federal Reserve is at the very core of our economic problems.
As we get even closer to the economic abyss that we are racing towards, even more big names such as Tony Robbins will come forward with warnings.
The truth is that these problems did not develop overnight, and they are not going to be solved overnight either.
Perhaps our economic future is best summed up by this one statement that economist Paul Krugman recently made....
"America is now on the unlit, unpaved road to nowhere."
U.S. Heading for Currency Destruction Debt Default Great Depression
"As the world sinks deeper into what he calls the Greater Depression, Casey Research Chairman Doug Casey sees default on the U.S. national debt as inevitable—albeit probably in the guise of currency destruction. He anticipates further contraction in real estate, particularly on the commercial front. As long as stocks remain overpriced, he'll shy away from equities—except perhaps in favored sectors such as gold. In fact, in this exclusive interview with The Gold Report, Doug posits that gold juniors might "go up by an order of magnitude or more, even while most other stocks are going down."
China Ditches the U.S. Dollar, Are Times Changing?
"Shae Smith writes: We all know the US flogs its debt to anyone willing to buy it. And up until recently, that's been China.
Very slowly, over the past twelve months China has been lowering its exposure to US treasuries. In fact, in the last twelve months, they've offloaded about USD$100 billion dollars worth..."
Very slowly, over the past twelve months China has been lowering its exposure to US treasuries. In fact, in the last twelve months, they've offloaded about USD$100 billion dollars worth..."
Gold Enters Strongest Period as Eurozone Debt Crisis Returns
"...Following the Fed's revival of quantitative easing at the start of this month, "We would prefer the opportunity to accumulate a larger exposure [to gold investment] on substantial price weakness," Hussman adds, noting that "Mining stocks have essentially gone nowhere since May."
"The markets dip in May and come back after the summer," said Swiss-based fund manager Patrick Pittaway of URAM to CityWire last week.
"From today onwards this is the strongest time for gold."
"The markets dip in May and come back after the summer," said Swiss-based fund manager Patrick Pittaway of URAM to CityWire last week.
"From today onwards this is the strongest time for gold."
Monday, August 16, 2010
Matterhorn Asset Management There Will Be No Double Dip... It Will Be A Lot Worse
"No, there will be no double dip. It will be a lot worse. The world economy will soon go into an accelerated and precipitous decline which will make the 2007 to early 2009 downturn seem like a walk in the park. The world financial system has temporarily been on life support by trillions of printed dollars that governments call money. But the effect of this massive money printing is ephemeral since it is not possible to save a world economy built on worthless paper by creating more of the same. Nevertheless, governments will continue to print since this is the only remedy they know. Therefore, we are soon likely to enter a phase of money printing of a magnitude that the world has never experienced. But his will not save the Western World which is likely to go in to a decline lasting at least 20 years but most probably a lot longer.
The End of an Era
The hyperinflationary depression that many western countries, including the US and the UK, will experience is likely to mark the end of an era that has lasted over 200 years since the industrial revolution. A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyperinflation in the West leads to a destruction of real asset values and a debt implosion.
In the last 100 years the Western world has experienced a historically unprecedented growth in production, in inventions and technical developments leading to a major increase in the standard of living. During the same period government debt, as well as private debt have grown exponentially leading to a major increase in inflation compared to previous centuries..."
at http://www.zerohedge.com/article/matterhorn-asset-management-there-will-be-no-double-dip-it-will-be-lot-worse?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
The End of an Era
The hyperinflationary depression that many western countries, including the US and the UK, will experience is likely to mark the end of an era that has lasted over 200 years since the industrial revolution. A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyperinflation in the West leads to a destruction of real asset values and a debt implosion.
In the last 100 years the Western world has experienced a historically unprecedented growth in production, in inventions and technical developments leading to a major increase in the standard of living. During the same period government debt, as well as private debt have grown exponentially leading to a major increase in inflation compared to previous centuries..."
at http://www.zerohedge.com/article/matterhorn-asset-management-there-will-be-no-double-dip-it-will-be-lot-worse?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
U.S. China Conflict, Moving From War of Words to Talk of War
"Relations between the U.S. and China have been steadily deteriorating since the beginning of the year when Washington confirmed the completion of a $6.4 billion arms deal with Taiwan and China suspended military-to-military ties with the U.S. in response.
In January the Chinese Defense Ministry announced the cessation of military exchanges between the two countries and the Foreign Ministry warned of enforcing sanctions against American companies involved with weapons sales to Taiwan.
The Washington Post reported afterward that during a two-day Strategic and Economic Dialogue in Beijing this May attended by approximately 65 U.S. officials, Rear Admiral Guan Youfei of the People's Liberation Army accused Washington of "plotting to encircle China with strategic alliances" and said arms deals with Taiwan "prove that the United States views China as an enemy."
During the 9th Asia Security Summit (Shangri-La Dialogue conference) in Singapore in early June a rancorous exchange occurred between U.S. Secretary of Defense Robert Gates and Major General Zhu Chenghu, director of China's National Defense University. The Chinese official lambasted the U.S. over more than $12 billion in proposed arms transactions with Taiwan in the past two years, stating they were designed to prevent the reunification of China.
The preceding week China had rebuffed Gates' request to visit Beijing after the Singapore summit.
At that conference Gates spoke of "our collective responsibility to protect the peace and reinforce stability in Asia" in reference to the sinking of the South Korean corvette the Cheonan in late March.
Major General Zhu reacted by casting doubts on the U.S. account of the ship's sinking and indicated that "America’s stance over the Cheonan was hypocritical given its failure to condemn the Israeli commando raid on a flotilla of ships carrying supplies to Gaza on May 31, which resulted in the death of nine activists." He also warned that the latest Taiwan arms package threatened China's “core interests.”
In January the Chinese Defense Ministry announced the cessation of military exchanges between the two countries and the Foreign Ministry warned of enforcing sanctions against American companies involved with weapons sales to Taiwan.
The Washington Post reported afterward that during a two-day Strategic and Economic Dialogue in Beijing this May attended by approximately 65 U.S. officials, Rear Admiral Guan Youfei of the People's Liberation Army accused Washington of "plotting to encircle China with strategic alliances" and said arms deals with Taiwan "prove that the United States views China as an enemy."
During the 9th Asia Security Summit (Shangri-La Dialogue conference) in Singapore in early June a rancorous exchange occurred between U.S. Secretary of Defense Robert Gates and Major General Zhu Chenghu, director of China's National Defense University. The Chinese official lambasted the U.S. over more than $12 billion in proposed arms transactions with Taiwan in the past two years, stating they were designed to prevent the reunification of China.
The preceding week China had rebuffed Gates' request to visit Beijing after the Singapore summit.
At that conference Gates spoke of "our collective responsibility to protect the peace and reinforce stability in Asia" in reference to the sinking of the South Korean corvette the Cheonan in late March.
Major General Zhu reacted by casting doubts on the U.S. account of the ship's sinking and indicated that "America’s stance over the Cheonan was hypocritical given its failure to condemn the Israeli commando raid on a flotilla of ships carrying supplies to Gaza on May 31, which resulted in the death of nine activists." He also warned that the latest Taiwan arms package threatened China's “core interests.”
Saturday, August 14, 2010
Gold Best Investement as Global Financial System is Heading South
"Midas Letter Editor James West is one of the sharpest minds in the gold business, and he puts his money where his mouth is. He owns gold equities, ETFs, coins and even a share of a private Peruvian mine. "Gold is the best investment at this time," he says, a thesis based on the "counterfeiting" of paper currencies and inevitable collapse of the global financial system..."
China Is Winning the Economic War!
"...The U.S. was winning hands down for a long time - but not so much anymore. It used to be that the U.S. was #1 in pretty much everything; education, technology, standard of living, economic and military strength, admired world leadership. It was leading the rest of the world into the future with the demonstrative power of democracy and free markets, new technological breakthroughs in automation, computers, communications, energy, medicine, space travel, to name a few.
In recent years, a number of countries have surpassed the U.S. in specific areas, including consumer incomes, standard of living, and healthcare.
But the economic powerhouse has been China. Some of the statistics, and the speed with which they have changed, have been startling.
Over the last ten years China’s economy has surged past those of Canada, Spain, Brazil, Italy, France, and Germany, and is expected to pass Japan this year, to become the 2nd largest economy in the world, behind the U.S.
Whether it’s manufacturing efficiency, high-speed rail-line technology, nuclear power plant construction, clean air energy technology, education, China is making impressive global inroads, even in areas where the U.S. still has significant dominance. Much of it has to do with China’s massive population, about which the U.S. can do nothing..."
In recent years, a number of countries have surpassed the U.S. in specific areas, including consumer incomes, standard of living, and healthcare.
But the economic powerhouse has been China. Some of the statistics, and the speed with which they have changed, have been startling.
Over the last ten years China’s economy has surged past those of Canada, Spain, Brazil, Italy, France, and Germany, and is expected to pass Japan this year, to become the 2nd largest economy in the world, behind the U.S.
Whether it’s manufacturing efficiency, high-speed rail-line technology, nuclear power plant construction, clean air energy technology, education, China is making impressive global inroads, even in areas where the U.S. still has significant dominance. Much of it has to do with China’s massive population, about which the U.S. can do nothing..."
No Economic Recovery, 40 Statistics Confirm the Collapse of the U.S. Economy
"...The following are 40 statistics that reveal the truth about the collapse of the U.S. economy....
1 - According to one shocking new survey, 28% of U.S. households have at least one member that is looking for a full-time job.
2 - A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.
3 - There are 9.2 million Americans that are unemployed who are not receiving an unemployment insurance check.
4 - In America today, the average time needed to find a job has risen to a record 35.2 weeks.
5 - According to one analysis, the United States has lost 10.5 million jobs since 2007.
6 - China's trade surplus (much of it with the United States) climbed 140 percent in June compared to a year earlier.
7 - This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour..."
1 - According to one shocking new survey, 28% of U.S. households have at least one member that is looking for a full-time job.
2 - A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.
3 - There are 9.2 million Americans that are unemployed who are not receiving an unemployment insurance check.
4 - In America today, the average time needed to find a job has risen to a record 35.2 weeks.
5 - According to one analysis, the United States has lost 10.5 million jobs since 2007.
6 - China's trade surplus (much of it with the United States) climbed 140 percent in June compared to a year earlier.
7 - This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour..."
Double Dip Recession, Keynesianism Is Dying
"...For a year, we have been assured by experts that double-dip recessions are rare. They surely are. The last one was in Carter's final year, 1980 – which is why it was his final year – and Reagan's first year, 1981. As far as the National Bureau of Economic Research has reported, that was the only double-dip recession. The NBER is the unofficial arbiter of each recession's chronology.
A few forecasters a year ago predicted the ever-popular V-shaped economic recovery. They are all hoping that no one remembers. There is no one left standing who predicts anything like this. The economy has barely grown over the last year, and the most recent report from the government is that growth was slower than initially reported for the second quarter of this year...."
A few forecasters a year ago predicted the ever-popular V-shaped economic recovery. They are all hoping that no one remembers. There is no one left standing who predicts anything like this. The economy has barely grown over the last year, and the most recent report from the government is that growth was slower than initially reported for the second quarter of this year...."
Thursday, August 12, 2010
European Central Banks Said to Be Buying Irish Bonds
"European central banks bought Irish government bonds today, according to two traders who witnessed the transactions, following a week of speculation about the health of the nation’s banks that sent the securities plunging.
The central banks made light purchases of Irish debt with maturities no longer than two years, the people said, under condition of anonymity because their trading is private. The ECB returned to the market in afternoon European trading to buy more 2012 Irish notes, one person said..."
The central banks made light purchases of Irish debt with maturities no longer than two years, the people said, under condition of anonymity because their trading is private. The ECB returned to the market in afternoon European trading to buy more 2012 Irish notes, one person said..."
U.S. Is Bankrupt and We Don't Even Know It: Laurence Kotlikoff
"Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”
Thursday, August 12, 2010Is China Executing a Cunning Sun Tzu Strategy to Destroy the Dollar and Cause an Upward Price Explosion in Gold?
"Could China be coveting the role of the next economic superpower, thereby supplanting the USA? If so, is China planning to do this by design or is it simply awaiting this result by default as a result of the total collapse of the American economic system?
Whether we like it or not, China has already become the 800 lb Gorilla in the dining room, economically speaking. We ignore this fact at our peril. Thus it may be advisable to reorientate our thinking from that of the rationalist, pragmatic thought processes which arose out of the Enlightenment and complement our thinking with something more akin to that of the Chinese.
In order to accomplish this, it is constructive to take a closer look at the ancient Chinese philosopher, Master Sun Tzu. In an earlier article , based on a book by Harro von Senger on this theme[1], I have attempted to do this in connection with the Special Drawing Rights[2], as advocated by the Chinese earlier this year. However, I will now examine this idea in the context of the the Chinese possession of US Bonds, a subject not only of relevance to these two countries, but also for the stability of the entire international economic system..."
Whether we like it or not, China has already become the 800 lb Gorilla in the dining room, economically speaking. We ignore this fact at our peril. Thus it may be advisable to reorientate our thinking from that of the rationalist, pragmatic thought processes which arose out of the Enlightenment and complement our thinking with something more akin to that of the Chinese.
In order to accomplish this, it is constructive to take a closer look at the ancient Chinese philosopher, Master Sun Tzu. In an earlier article , based on a book by Harro von Senger on this theme[1], I have attempted to do this in connection with the Special Drawing Rights[2], as advocated by the Chinese earlier this year. However, I will now examine this idea in the context of the the Chinese possession of US Bonds, a subject not only of relevance to these two countries, but also for the stability of the entire international economic system..."
Wall Street Investment Banks and the US Banking System Died
"...The problem in very recent history traces back to the September and October months of 2008, when Wall Street investment banks and the US banking system died. These banks have not and will not recover, since they died. Some deaths were obvious, but others remain well hidden. The big banks do not lend money since they are dead, the dirty little secret. Their insolvency is easy to prove, but obscured by altered accounting rules put in place on April 1st 2009. They include generous rules that permit a dead entity to declare itself alive by filing a false accounting report, valuing their own assets at whatever suits their needs. Generally, insolvency plus illiquidity will force bankruptcy. But Wall Street and the Big US Banks use naked shorting of USGovt-backed bonds to produce urgently needed liquidity. All the extreme efforts to revive the US banks are futile. Imagine numerous transfusions of a dead man in the Emergency Room of a hospital, as more blood does not guarantee a resuscitation. More wires and tubes don't mean squat, since the guy has croaked and his corpse is rotting with a stench spreading into the corridors. The dirty secret, protected from the US public, is that the man died. So Wall Street and the Big US Banks are dead. By withholding the reality, a storm of funding programs has been approved by the USGovt, mostly directed at Wall Street and the Big US Banks. They urgently need liquidity, and are creative how they obtain it..."
Why Investors Must Buy Gold … Before it Runs Away in Price
"Peter D. Schiff writes: As gold hovers near $1,200 an ounce and pundits speculate about a "gold bubble," it's important for investors to remember that a mere decade ago the picture was very different.
In the year 2000, gold sat at an unimpressive annual average of $279 an ounce - a two-decade low. At that time, most analysts thought gold was finished as a monetary metal. They said its price would never recover and only kooks with tin hats would invest in it. I was one of the very few financial commentators publicly saying that gold was not only viable, but entering a long-term uptrend.
With the benefit of hindsight, we can all see that the consensus was wrong. Gold has performed remarkably against the Dow Jones Industrial Average, the Nasdaq Composite Index and U.S. real estate. The reason I was able to confidently forecast this result is because I ignore the 'certainties' determined by Wall Street consensus, and instead study the fundamental trends..."
In the year 2000, gold sat at an unimpressive annual average of $279 an ounce - a two-decade low. At that time, most analysts thought gold was finished as a monetary metal. They said its price would never recover and only kooks with tin hats would invest in it. I was one of the very few financial commentators publicly saying that gold was not only viable, but entering a long-term uptrend.
With the benefit of hindsight, we can all see that the consensus was wrong. Gold has performed remarkably against the Dow Jones Industrial Average, the Nasdaq Composite Index and U.S. real estate. The reason I was able to confidently forecast this result is because I ignore the 'certainties' determined by Wall Street consensus, and instead study the fundamental trends..."
Wednesday, August 11, 2010
Debt and growth revisited
"...Our analysis was based on newly compiled data on forty-four countries spanning about two hundred years. This amounts to 3,700 annual observations and covers a wide range of political systems, institutions, exchange rate arrangements, and historic circumstances.
The main findings of that study are:
•First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below 90% of GDP.1 Above the threshold of 90%, median growth rates fall by 1%, and average growth falls considerably more. The threshold for public debt is similar in advanced and emerging economies and applies for both the post World War II period and as far back as the data permit (often well into the 1800s).
•Second, emerging markets face lower thresholds for total external debt (public and private) – which is usually denominated in a foreign currency. When total external debt reaches 60% of GDP, annual growth declines about 2%; for higher levels, growth rates are roughly cut in half.
•Third, there is no apparent contemporaneous link between inflation and public debt levels for the advanced countries as a group (some countries, such as the US, have experienced higher inflation when debt/GDP is high). The story is entirely different for emerging markets, where inflation rises sharply as debt increases..."
The main findings of that study are:
•First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below 90% of GDP.1 Above the threshold of 90%, median growth rates fall by 1%, and average growth falls considerably more. The threshold for public debt is similar in advanced and emerging economies and applies for both the post World War II period and as far back as the data permit (often well into the 1800s).
•Second, emerging markets face lower thresholds for total external debt (public and private) – which is usually denominated in a foreign currency. When total external debt reaches 60% of GDP, annual growth declines about 2%; for higher levels, growth rates are roughly cut in half.
•Third, there is no apparent contemporaneous link between inflation and public debt levels for the advanced countries as a group (some countries, such as the US, have experienced higher inflation when debt/GDP is high). The story is entirely different for emerging markets, where inflation rises sharply as debt increases..."
In Stunning Decision, EU Orders Germany To Start Onboarding "Bad Debt" To Sovereign Balance Sheet: RBS, Fannie, Freddie Next?
"In what could be the most important news of the day, German Die Zeit reports that, in a stunning move, the EU has ordered Germany to count the holdings of WestLB and Hypo Real Estate (the latter of which failed the stress farce from last month which nobody cares about or remembers anymore) as government debt! As Bloomberg notes, "That could raise Germany’s debt to 90 percent of gross domestic product, Die Zeit said." Of course the implications of this decision are massive, as it takes out all the guess work of whether insolvent institutions are or are not on the government's balance sheet. The net result, for Germany alone, is that just the addition of Hypo's debt would push German debt/GDP from 79% to 90%, both of which are well above the Maastricht limit of 60% (not like anyone cares that is - everyone is now aware the EU is a failed experiment). The next question: what happens to nationalized RBS and it $168 billion in debt? Total UK debt is $1.2 trillion meaning a comparable action in the UK would rise UK debt by 15%! And then there is a whole slew of other banks in the pipeline in Europe that are full of trillions in toxic debt: will the sovereign hosts be able to onboard this debt? Most importantly, what happens to our administration's adamant claims that Fannie and Freddie's $6+ trillion in debt should not be counted as part of total Federal debt. America already has its hand full with $13.3 trillion in debt. What will happen when it moves to $20 trillion (140% of GDP) overnight. We are confident that unless this decision by the EU's statistics office is overturned, it will likely set off the next leg in the sovereign debt crisis as suddenly European Debt to GDP ratios will increase by about 15-20%..."
at http://www.zerohedge.com/article/stunning-decision-eu-begins-onboarding-bad-debt-sovereign-balance-sheet-rbs-fannie-freddie-n?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
at http://www.zerohedge.com/article/stunning-decision-eu-begins-onboarding-bad-debt-sovereign-balance-sheet-rbs-fannie-freddie-n?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
15 Economic Statistics That Just Keep Getting Worse
"...The following are 15 key economic statistics that just keep getting worse and which reveal the horrific economic plight in which we now find ourselves....
1 - The number of Americans who are receiving food stamps rose to a new all-time record of 40.8 million in May. The number of Americans receiving food stamps has set a new all-time record for 18 months in a row. But there is every indication that things are going to get even worse. The U.S. Department of Agriculture projects that the number of Americans on food stamps will increase to 43 million in 2011.
2 - The U.S. economy lost 131,000 more jobs during the month of July. But the truth is that the U.S. economy has been bleeding jobs for a long time. According to one analysis, the United States has lost 10.5 million jobs since 2007. Meanwhile, immigrants (both legal and illegal) continue to pour into this nation in unprecedented numbers.
3 - Americans who are out of work are finding it incredibly difficult to get back into the workforce. In the United States today, the average time needed to find a job has risen to an all-time record of 35.2 weeks.
4 - The U.S. government keeps trying to pump up the economy with debt, and in the process things are getting wildly out of control. According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015..."
1 - The number of Americans who are receiving food stamps rose to a new all-time record of 40.8 million in May. The number of Americans receiving food stamps has set a new all-time record for 18 months in a row. But there is every indication that things are going to get even worse. The U.S. Department of Agriculture projects that the number of Americans on food stamps will increase to 43 million in 2011.
2 - The U.S. economy lost 131,000 more jobs during the month of July. But the truth is that the U.S. economy has been bleeding jobs for a long time. According to one analysis, the United States has lost 10.5 million jobs since 2007. Meanwhile, immigrants (both legal and illegal) continue to pour into this nation in unprecedented numbers.
3 - Americans who are out of work are finding it incredibly difficult to get back into the workforce. In the United States today, the average time needed to find a job has risen to an all-time record of 35.2 weeks.
4 - The U.S. government keeps trying to pump up the economy with debt, and in the process things are getting wildly out of control. According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015..."
Monday, August 9, 2010
John Taylor Says That Despite Everything, Greece And Spain Will Default
"John Taylor was on Bloomberg TV Friday, and in this extended version of his interview, the head of the world's largest currency hedge fund said that the euro will fall, equities could head lower, credit spreads will widen sharply and government bonds will rally.
Taylor discusses last week's NFP report, which he calls a "goldilocks" number as liquidity will be ample, gives his perspective on the upcoming Fed decision, which he agrees with Goldman will be just the MBS roll off proceeds reinvestment into treasuries (which he thinks is already priced in), but he considers it a very small amount of money in the big picture. The result would be a weaker dollar "but only for a number of weeks." The catalyst for the turnaround will be "things getting much worse." Taylor does not see any unintended side effects of a new monetization phase, because, once again, the total amount will likely be small (we are not sure we agree with this: with the amount of margin for OTC products, commodities will likely benefit materially from a new QE round). Taylor repeats the old mantra that unlike Europe, the US has control over its currency, and that Europe is certainlyl unhappy with a weak dollar (a trend we believe we will see a lot of increasingly shorter frequency, higher amplitude moves in over the next few quarters). Taylor concludes by discussing his current trade: the short EURUSD pair. He does not see the euro going far beyond 1.35, and his target of 1 to 1.10 he sees as very realistic. As pertains to Europe, he sees the ECB easing in Q4, and due to the FX mismatch in global assets mostly denominated in dollars, he anticipates a major short squeeze in USD positions in Q3 and Q4, when the "economy starts to roll over." He concludes by presenting his two sure bankruptcy candidates: Greece and Spain. We believe that with the European vacation season drawing to a close, the riotous festivities in the PIIGS may be upon us very shortly once again."
at http://www.zerohedge.com/article/john-taylor-says-despite-everything-greece-and-spain-will-default?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Taylor discusses last week's NFP report, which he calls a "goldilocks" number as liquidity will be ample, gives his perspective on the upcoming Fed decision, which he agrees with Goldman will be just the MBS roll off proceeds reinvestment into treasuries (which he thinks is already priced in), but he considers it a very small amount of money in the big picture. The result would be a weaker dollar "but only for a number of weeks." The catalyst for the turnaround will be "things getting much worse." Taylor does not see any unintended side effects of a new monetization phase, because, once again, the total amount will likely be small (we are not sure we agree with this: with the amount of margin for OTC products, commodities will likely benefit materially from a new QE round). Taylor repeats the old mantra that unlike Europe, the US has control over its currency, and that Europe is certainlyl unhappy with a weak dollar (a trend we believe we will see a lot of increasingly shorter frequency, higher amplitude moves in over the next few quarters). Taylor concludes by discussing his current trade: the short EURUSD pair. He does not see the euro going far beyond 1.35, and his target of 1 to 1.10 he sees as very realistic. As pertains to Europe, he sees the ECB easing in Q4, and due to the FX mismatch in global assets mostly denominated in dollars, he anticipates a major short squeeze in USD positions in Q3 and Q4, when the "economy starts to roll over." He concludes by presenting his two sure bankruptcy candidates: Greece and Spain. We believe that with the European vacation season drawing to a close, the riotous festivities in the PIIGS may be upon us very shortly once again."
at http://www.zerohedge.com/article/john-taylor-says-despite-everything-greece-and-spain-will-default?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
The Horrific Derivatives Bubble That Could One Day Destroy The Entire World Financial System
"...The derivatives market is almost entirely unregulated and in recent years it has ballooned to such enormous proportions that it is almost hard to believe. Today, the worldwide derivatives market is approximately 20 times the size of the entire global economy.
Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars...."
Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars...."
Is Dow 1,000 a Possibility?
"Recently, Robert Prechter of the Elliott Wave Theorist came out with a prediction that the Dow Jones Industrial Average is going to 1000. Marc Faber, the respected editor of the Gloom, Boom & Doom Report said that was possible. Is it?..."
Why the Official Antipathy to Gold and Silver? The Second Oldest Profession
"Every so often someone asks, 'Why do the government and the banks manipulate the price of gold and silver?'
There is a great deal of circumstantial evidence to support this, even some blatant quotes pertinent to the topic from the likes of Volcker, Greenspan, and Bank of England governor Eddie George. Of course it can all be denied. People can deny anything, even well known historical events with many witnesses, if it suits their bias and purposes.
But putting aside the operational aspects, what is the motive?...
...But if I am ever asked about this in the future, I can think of no better, no more concise statement of a possible motive for the manipulation of gold and silver than this:
“The central economic problem plaguing this country since 1913 has been the presence of the Federal Reserve System. Without the Federal Reserve System’s debt-currency scheme having effectively supplanted the constitutional monetary system based upon silver and gold, it would have been impossible - not simply improbable, or difficult, but impossible - for politicians in the public sector and speculators in the private sector to have amassed the staggering level of unpayable, unconstitutional, and unconscionable debt that now bears down upon this country.”
Dr. Edwin Vieira, Jr., Going to the Roots of the Problem..."
There is a great deal of circumstantial evidence to support this, even some blatant quotes pertinent to the topic from the likes of Volcker, Greenspan, and Bank of England governor Eddie George. Of course it can all be denied. People can deny anything, even well known historical events with many witnesses, if it suits their bias and purposes.
But putting aside the operational aspects, what is the motive?...
...But if I am ever asked about this in the future, I can think of no better, no more concise statement of a possible motive for the manipulation of gold and silver than this:
“The central economic problem plaguing this country since 1913 has been the presence of the Federal Reserve System. Without the Federal Reserve System’s debt-currency scheme having effectively supplanted the constitutional monetary system based upon silver and gold, it would have been impossible - not simply improbable, or difficult, but impossible - for politicians in the public sector and speculators in the private sector to have amassed the staggering level of unpayable, unconstitutional, and unconscionable debt that now bears down upon this country.”
Dr. Edwin Vieira, Jr., Going to the Roots of the Problem..."
11 Reasons Why The Federal Reserve Is Bad
"...The following are 11 reasons why the Federal Reserve is not good for the United States....
1 - The Federal Reserve was created as a way to enslave the U.S. government with debt. The truth is that the U.S. government only goes into debt if it chooses to. Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. You see, today the U.S. government does not issue any money. The Federal Reserve issues all money. That is why they are called "Federal Reserve notes"...
1 - The Federal Reserve was created as a way to enslave the U.S. government with debt. The truth is that the U.S. government only goes into debt if it chooses to. Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. You see, today the U.S. government does not issue any money. The Federal Reserve issues all money. That is why they are called "Federal Reserve notes"...
Fooled by Economic Stimulus, U.S. Economy Structural Problems Still Intact
"Bill Watkins, a California Lutheran University professor, provides a nice summary on New Geography of the failure of various stimulus efforts to do anything meaningful in the wake of a collapse by Lehman, a collapse he says is a "regime shift"...
Sunday, August 8, 2010
If deflation wins what will gold stocks do?
"First, we know what happened to the stock market in 1929, and in that initial shock, gold stocks crashed too. A rally ensued in most equities until the following April, including gold stocks. Then the Dow took a one-way elevator ride down for the next two and a half years.
What did gold stocks do?
From 1929 until January 1933, the stock of Homestake Mining, the largest gold producer in the U.S., rose 474%. Dome Mines, the largest Canadian producer, advanced 558%. In spite of the gold price being fixed at the time, gold stocks rose dramatically.
At the same time, the DJIA lost 73% of its value..."
What did gold stocks do?
From 1929 until January 1933, the stock of Homestake Mining, the largest gold producer in the U.S., rose 474%. Dome Mines, the largest Canadian producer, advanced 558%. In spite of the gold price being fixed at the time, gold stocks rose dramatically.
At the same time, the DJIA lost 73% of its value..."
The Great American Collapse, The Gold Decade
"As gold hovers near $1,200 an ounce and pundits speculate about a 'gold bubble', it's important for investors to remember that a mere decade ago the picture was very different. In the year 2000, gold sat at an unimpressive annual average of $279 an ounce - a two-decade low. At that time, most analysts thought gold was finished as a monetary metal. They said its price would never recover and only kooks with tin hats would invest in it. I was one of the very few financial commentators publicly saying that gold was not only viable, but entering a long-term uptrend.
With the benefit of hindsight, we can all see that the consensus was wrong. Gold has performed remarkably against the Dow, NASDAQ, and US real estate. The reason I was able to confidently forecast this result is because I ignore the 'certainties' determined by Wall Street consensus, and instead study the fundamental trends..."
With the benefit of hindsight, we can all see that the consensus was wrong. Gold has performed remarkably against the Dow, NASDAQ, and US real estate. The reason I was able to confidently forecast this result is because I ignore the 'certainties' determined by Wall Street consensus, and instead study the fundamental trends..."
Marc Faber Fed's Printing Press to Create Final Crisis and Crash
""Investors should've listened to me already six months ago, when I wrote that the Fed will continue to monetize, and this is my view ... they will print and print and print, until the final crisis wipes out the entire system," Marc Faber, editor & publisher of The Gloom, Boom & Doom Report, told CNBC. David Bloom from HSBC joined the discussion, adding, "I think we're not quite at those draconian points."
IMF Warns U.S. Real Estate Sectors Could Bring Banking Crisis 2.0
"The International Monetary Fund (IMF) stress tested 53 large banking holding companies and published its findings last month. The report concluded that despite restoration of some stability, there remain certain important risks to the U.S. financial system and economy mainly coming from the real estate sectors:
Further increases in nonperforming loans due to high unemployment rate and significant weakness in the real estate sectors
Credit quality in the commercial real estate (CRE) sector - About $1.4 trillion of CRE loans will mature in 2010–14, nearly half of which are 90 days or more past due or “underwater.”
Housing prices - The very high level of underwater mortgages increases the risk of strategic defaults and further losses to banks and mortgage backed security (MBS) investors.
Market perception of sovereign risk, sluggish growth, and mounting fiscal deficits and debt are also identified as major risks to the economy and the financial system.
IMF noted financial institutions will face rollover risks with large loan maturities in 2011–13, which could bring rapidly rising foreclosures and bank losses. The small and medium-sized banks, which are most heavily exposed to the commercial real estate sector, are causing the most concern..."
Further increases in nonperforming loans due to high unemployment rate and significant weakness in the real estate sectors
Credit quality in the commercial real estate (CRE) sector - About $1.4 trillion of CRE loans will mature in 2010–14, nearly half of which are 90 days or more past due or “underwater.”
Housing prices - The very high level of underwater mortgages increases the risk of strategic defaults and further losses to banks and mortgage backed security (MBS) investors.
Market perception of sovereign risk, sluggish growth, and mounting fiscal deficits and debt are also identified as major risks to the economy and the financial system.
IMF noted financial institutions will face rollover risks with large loan maturities in 2011–13, which could bring rapidly rising foreclosures and bank losses. The small and medium-sized banks, which are most heavily exposed to the commercial real estate sector, are causing the most concern..."
Gold the Hedge Against Chaos
"...At the 2010 Aspen Ideas Festival last month, Harvard Professor Niall Ferguson warned the collapse of the American empire could be imminent.
I think this is a problem that is going to go live really soon,” Ferguson said. “In that sense, I mean within the next two years. Because the whole thing, fiscally and other ways, is very near the edge of chaos..
When America’s empire does collapse and, like all empires, it will, chaos will reign. Today, the US is the world’s super power, its dollar is the world’s reserve currency. The collapse of the US will change all this and more.
This is why the price of gold has quintupled in only ten years. America’s failing grasp on power has been mirrored by gold’s rise during that same time. In 2000, America’s credit-driven prosperity began to falter with the collapse of the dot.com bubble. Ten years later, America has still not recovered. Indeed, as Niall Ferguson predicts, its demise is imminent..."
I think this is a problem that is going to go live really soon,” Ferguson said. “In that sense, I mean within the next two years. Because the whole thing, fiscally and other ways, is very near the edge of chaos..
When America’s empire does collapse and, like all empires, it will, chaos will reign. Today, the US is the world’s super power, its dollar is the world’s reserve currency. The collapse of the US will change all this and more.
This is why the price of gold has quintupled in only ten years. America’s failing grasp on power has been mirrored by gold’s rise during that same time. In 2000, America’s credit-driven prosperity began to falter with the collapse of the dot.com bubble. Ten years later, America has still not recovered. Indeed, as Niall Ferguson predicts, its demise is imminent..."
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