India Joins the Dollar Bashing Club: Getting Out of the US Dollar a Growing Priority for the World.

 

 

 

It seems to be an unspoken reality, as one country after the other expresses its horror at US monetary and economic policy, that nations are trying to divest themselves of the US Dollar before it collapses entirely.  The dollar is being treated like salt water, as if it can be forever printed to cover our outrageous debt and crazed spending and magically we’ll suffer no consequences.  India has looked at the dollar and concluded that they need much fewer of them and that the world trading markets can’t be based on a US dollar because our national debt and spending policies  are clearly unsustainable and insane.  India is an important emerging economy representing a huge market, and labor force, but they’ve seen the light that the dollar is on its way out.  All the nations concerned about the stability of the dollar and who have made it a priority to get rid of the dollar holdings will, as their number and unease grows, eventually trigger a dollar selling spree that will destroy the dollar as a viable currency.

Now India has joined with Europe, Russia, China and various South American Governments that don’t like us very much to raise their voice in protest for our financial malfeasance and to demand, correctly, that a new reserve currency be established that’s not dependant on a single nation.  More straws on the camel’s back for us; and eventually it will be one straw too many, and the camel will break its back just as our dollar will be destroyed; unless we depart from the crazy government policies that are propelling us toward disaster.

Who’s next to join the public display of unease and announce their intentions to divest from our currency, in hushed tones, lest the market get spooked, before they can extract value from our dime-a-dozen dollars?  Japan?  The Arab and Gulf States?  Will the Saudi’s be far behind as they see everyone else getting out and they’re holding an empty bag and half their oil recourses gone?  So is the fact of India joining the dump-the-dollar choir really a big thing? 

You bet it is.  If many more nations take this course a run on the dollar will be inevitable and we’ll be generations trying to repair the damage, if, in fact, it can be repaired.

Consider this article from Bloomberg:

Russia, India Question Dollar Reliance Before Summit (Update2)

 

By Mark Deen and Simon Kennedy

July 6 (Bloomberg) — Russia and India said the world economy is too reliant on the U.S. dollar and called for changes in how $6.5 trillion in currency reserves are managed, as Group of Eight leaders prepare to meet this week.

“The dollar system or the system based on the dollar and euro have shown that they are flawed,” Russian President Dmitry Medvedev said in an interview with Corriere della Sera, repeating his proposal for a new international reserve currency.

Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said in a July 3 interview that he is urging his nation to diversify its foreign holdings away from the dollar.

The challenge to the dollar, a linchpin of world finance and trade since 1945, underlines the shift in relative economic power toward emerging markets and away from the developed nations that spawned the global crisis.

French Finance Minister Christine Lagarde, speaking yesterday at a conference in Aix en Provence, France, said that “we must explore better coordination of exchange-rate policy.”

Questions need to be asked about “the balance of currencies and the role of currencies in a world that has changed because of the crisis and the growing role of emerging countries,” she told reporters.

Bank of France Governor Christian Noyer said at the same conference, “We really need to make sure there is a greater stability between the big currencies in the period to come.”

Dollar Share Grows

“People know that it won’t happen overnight, but the dollar will take the brunt of growing calls by such developing countries as China and Russia for a review of the single reserve currency system,” said Akira Takeuchi, a Tokyo-based currency dealer at Chuo Mitsui Trust & Banking Co., a unit of Japan’s seventh-largest banking group.

The dollar traded at $1.3974 per euro as of 10:12 a.m. in Tokyo from $1.3980 in New York on July 3. The U.S. currency declined to 95.72 yen from 96.04 yen. The euro fell to 133.75 yen from 134.26 yen.

For all the concerns about the dollar’s role, emerging markets such as China and India remain dependent on the currency. The International Monetary Fund said June 30 the share of dollars in allocated global foreign-exchange reserves increased to 65 percent, or $2.6 trillion, in the first three months of this year, the highest since 2007.

‘Years to Come’

The creation of a supranational reserve currency has been discussed in academic circles and isn’t the Chinese government’s position, Deputy Foreign Minister He Yafei told reporters in Rome yesterday. China expects the U.S. dollar to maintain its role for “many years to come,” He said.

While Medvedev said he sees “no alternative” to the dollar or euro now, he repeated his proposal that “regional reserve currencies” be developed and again questioned the wisdom of relying on the dollar.

“In the long term, we must also think about a single unit of payment such as the International Monetary Fund’s Special Drawing Rights,” a unit of an account linked to a basket of currencies, he told the Italian newspaper. “We cannot be hostages to the economic situation of a single country, as is happening today with the United States.”

Russia has support. India’s Tendulkar said he is advising Singh to diversify India’s $264.6 billion in foreign-exchange reserves and hold fewer dollars.

‘Prisoner’s Dilemma’

“The major part of Indian reserves are in dollars — that is something that’s a problem for us,” he said in Aix en Provence. He said big dollar holders face a “prisoner’s dilemma,” a reference to a problem in game theory in which a rational choice for an individual has negative consequences for a group.

The People’s Bank of China, that country’s central bank, said June 26 that the IMF should manage more of its members’ reserves. China said July 2 that it will allow companies to use the yuan to settle cross-border trade and let them keep their entitlement to export tax rebates, seeking to reduce the reliance of importers and exporters on the U.S. dollar.

The dollar’s role as a safe haven was highlighted last week when the currency advanced 0.5 percent against the euro, to $1.3894, on speculation the global economic recovery is faltering.

Emerging Countries

“Some emerging countries have decided to deal more in their respective currencies and trust each other,” Lagarde said in an interview yesterday. “That doesn’t stop other countries from seeing the dollar, and to a lesser extent the euro, as currencies of trading if not reserve currencies.”

Lagarde said that any discussion of currencies needs to encompass the dollar, the euro, the yuan and the yen and that the meetings of the Group of 20 are the right forum.

“The appropriate platform is the one in which all the major currencies are represented,” she said.

Asked in Aix en Provence about currencies, European Central Bank President Jean-Claude Trichet said it is “extremely important” that U.S. officials remain committed to their policy of supporting a strong dollar.

To contact the reporter on this story: Mark Deen in Aix en Provence, France at markdeen@bloomberg.net; Francine Lacqua in Aix en Provence, France at flacqua@bloomberg.net

The Bullet that Kills the United States: More and More Nations are shooting at the Dollar and as the Dollar Goes—- So goes the Country

 

 

The big economic crisis to look for is the worldwide dumping of the United States Dollar.  Technically, (and soon to be formerly) the US Dollar was the world’s reserve currency but ever since the Nefarious Federal Reserve began to print them irresponsibly and to keep interest rates unnaturally low many nations have seen the US dollar as a poor investment. The spending spree of the socialist democrats of the Obama Administration has made the crisis exponentially worse.  The dollar continues to weaken and monetary policy seems to be steering us toward a hyperinflation event not unlike what Argentina experienced.  The Weimar Republic of pre World War II Germany acted just like we are now: and the result was a destroyed economy featuring a German Mark that was so valueless that you needed wheelbarrow full of them to buy a loaf of bread.  Am I saying that we could be coming to the end of the dollar?  Am I saying that we’re coming up on an economic event that will make the Great Depression of the 1930’s look like a folk dance?  Am I saying that our economic dominance of the world is at an end? 

Yes.  I am.

Every sane nation in the world is looking toward what will replace the US Dollar and how to convert their ever more valueless dollars into the new world currency.  Meetings are being held, and continue to be held, in Europe for a new world order financial system: and in this quest they are supported by the Russians and the Communist Chinese.  The Chinese have a huge holding of US Dollars and now they laugh openly at our Treasury Secretary when he lectures at a Beijing University; and they comment weakly on the mismanagement and moral depravity of the Dollar and the US Government.  The Communist Chinese are lecturing us on government spending, monetary policy, trade policy, energy policy and its abundantly clear to the world that the Chinese will be our successor as the dominant nation on earth. Leadership of the western world will return to Europe as I think the Euro will emerge victorious when the dollar dies. The Bible says that in the last days the world will be led by Europe and I suspect that when the dust settles the new global conventions of currency and trade will be drafted largely by and for Europe. The world is looking toward the day when the United State dominance of the global financial system will be over.

 It’s taking place right now in Washington as the disastrous Cap and Trade Bill passes in the House of Representatives and if passed by the Senate will, all by itself, destroy the American Economy.  This is not to mention the insane Socialized Medicine Bill that the White House is ramming through congress, or the talk of more “stimulus” for the economy, or the bankruptcy of our state and local governments.  The Chinese look at this and clearly are amazed at the rate at which we’re committing suicide as a nation, and as a culture. They need a way to get rid of their dollars while extracting as much value as they can, to convert into a new world order currency.  Every nation knows that if they start selling too many dollars too quickly they can spook the market and it would be like a run at the bank.  Every nation would be selling dollars, driving down the value of the dollar and the costs of commodities sky high, while no one would be buying dollars, nor financing our debt, and the USA would be in economic and political anarchy.

When the Weimar Republic went through this they became, to say the least, politically unstable and finally stabilized under a system of corporatism that the world came to know as Fascism and Nazism under a little guy with a funny mustache named Adolf Hitler.  When there’s no jobs, no food at the store, no meaningful money, bread lines and no hope it’s amazing the kinds of people citizens will listen to if they promise them food and jobs in exchange for an all powerful corporate government. People get so grateful to eat and work that they hardly notice the loss of their liberty, unless of course you happen to be in the group that the government has decided to make “the enemy.”  The world has always said that it couldn’t happen in America but don’t be fooled.  It can happen here: Indeed it is happening here, right now, as the government simply takes over everything without opposition.  The key to opening the door to Neo-fascism and economic hell is the destruction of the US Dollar: and the momentum to dump the dollar continues to gain strength daily in Europe, Russia and China.  At any moment, one or more of these nations could set off a selling spree of the dollar that would destroy it as a currency forever.  Our way of life, and capitalism, and our children’s future, hang in the balance while our politicians spend us into receivership, the Fed prints worthless dollars, and the person are parelized with uncertainty as Obama smiles and promises the moon while stealing all our money, in addition to the money of unborn generations.

Who is going to say no to the first Black President as he changes us from capitalism to socialism, or perhaps fascism, while the people face daily social and governmental changes of such staggering magnitude that most people simply can’t comprehend what’s going on. We, the formerly free people of the United States, may not be cognizant of the changes he’s making but that’s not the case with the rest of the world: and certainly not the case with the Chinese.

Keep watch for the fall of the US Dollar——- That’s when the post American world will begin in earnest.  We aren’t going to like living in it.

Consider this article from Bloomberg.com on the Chinese:

Dollar Falls Most in Month as China Urges New Reserve Currency

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By Oliver Biggadike and Ye Xie

June 27 (Bloomberg) — The dollar declined the most against the euro in a month and dropped versus the yen after China repeated its call for a new global currency.

The Swiss franc declined against the euro and dollar this week as foreign-exchange analysts said the central bank sold its currency three times to support the economy. The greenback fell against most of its major counterparts after the People’s Bank of China said yesterday the International Monetary Fund should manage more of members’ foreign-exchange reserves.

“The dollar’s status as a reserve currency is being questioned,” said Benedikt Germanier, a foreign-exchange strategist in Stamford, Connecticut at UBS AG, the second- largest currency trader. “There are reasons to sell the dollar.”

The U.S. currency fell 0.9 percent to $1.4056 per euro this week from $1.3937 on June 19, the swiftest depreciation since the five days ended May 29. The dollar fell 1.1 percent to 95.18 yen from 96.27, its third consecutive weekly drop. The euro decreased 0.3 percent to 133.85 yen from 134.18.

Federal Reserve policy makers said on June 24 inflation “will remain subdued for some time” and that the economy warrants an “extended period” of low rates.

The 10-year Treasury yield fell the most since March as investors bet the Fed will keep interest rates close to zero for the rest of the year. The difference in yield, or spread, between 2- and 10-year yields decreased this week to 2.43 percentage points, near the narrowest level since May 20.

Stronger Real

Brazil’s real gained 2 percent to 1.9363 versus the greenback, its biggest weekly increase in June, as the sale of shares in Visa Inc.’s local credit-card processing affiliate attracted foreign investors to the world’s biggest initial public offering in more than a year.

The dollar depreciated 2.6 percent to 7.8926 South African rand and 1.4 percent to 7.8002 Swedish krona as the People’s Bank of China said in its 2008 review there’s a need for a global reserve currency “delinked from sovereign nations.”

The Swiss franc declined against the euro and dollar as strategists said the Swiss National Bank sold its currency twice on June 24 and once more a day later to support the economy. Nicolas Haymoz, an SNB spokesman, declined to comment on June 25 on whether the bank acted in foreign-exchange markets.

‘Unwelcome’ Strength

“The SNB has to convince markets that it considers a strong franc as unwelcome,” Unicredit SpA analysts Armin Mekelburg in Munich and Roberto Mialich in Milan wrote in a report yesterday. “We fear that franc bulls will start further attempts to wipe out the line in the sand of 1.50.”

The franc fell 1 percent to 1.5230 against the euro and 0.2 percent to 1.0834 compared with the dollar this week. The Swiss currency declined on June 24 to 1.5380 versus the euro, the weakest level since the mid-March period when the SNB said it intervened to weaken the franc.

The ICE’s Dollar Index fell below 80 on the call from China for an alternative to the dollar as the world’s main reserve currency. The gauge tracking the greenback versus the currencies of six leading trading partners decreased 0.5 percent to 79.90.

“To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,” the People’s Bank of China, or PBOC, said. China is the biggest foreign holder of U.S. Treasuries, with $763.5 billion in April.

Russia’s Stance

Russian Finance Minister Alexei Kudrin said on June 13 after the Group of Eight meeting in Italy that his country had full confidence in the dollar and that it’s “too early” to speak of alternative reserve currencies. Japan has “unshakable” trust in the strong-dollar policy of the U.S., Finance Minister Kaoru Yosano said in Tokyo yesterday.

China called on the U.S. to guarantee the safety of its assets in March, when Premier Wen Jiabao said the nation was “worried” about its holdings of Treasuries.

People’s Bank Governor Zhou Xiaochuan urged the IMF that month to expand the functions of its unit of account and move toward a “super-sovereign reserve currency.” Russian President Dmitry Medvedev proposed on June 5 that nations use a mix of regional reserve currencies to reduce reliance on the dollar.

“There may be signs here of tensions mounting between the PBOC’s economic concerns over China’s holdings of dollars and the Chinese government’s diplomatic reasons for doing so,” Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, wrote in an e-mail.

Venezuela’s bolivar plunged yesterday to a seven-week low in unregulated trading after the government said investors won’t be able to use a new $3 billion corporate bond offering to obtain dollars until 2011.

The bolivar fell 4.1 percent to 6.90 bolivars per dollar in the parallel market, traders said. The currency tumbled 20 percent this year in the unregulated market as the government pared dollar sales at the official exchange rate of 2.15 after oil, which accounts for 93 percent of the country’s exports, plunged from last year’s record high.

To contact the reporters on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net; Ye Xie in New York at yxie6@bloomberg.net

Last Updated: June 27, 2009 08:00 EDT

The Secretive Federal Reserve System Sued: Freedom of Information Act Doesn’t Apply to Non Governmental Organizations

Our hats off to Bloomberg News for trying to gain information closely held by the nefarious Federal Reserve System, whose role in our economic demise is “suspect” to say the least. The Fed has been playing Santa Clause of late, as personified by smiling Ben Bernanke, pretending to work so hard, to manage the economic crisis that the Federal Reserve probably created.  Trillions of dollars have been destroyed or transferred from our 401k to either oblivion or some unknown destination.  The rational for future hyper inflation has been laid as well as the seeds of the destruction of the US Dollar. It’s well known that the socialist nations of Europe, and the United States, have a serious problem with entitlement programs like Social Security and Medicare.  Frankly, these social programs are bankrupt and can’t pay up without a massive transfer of wealth from everyone who did it right to those who did it wrong. Government spent the money it collected for these programs on social engineering experiments and political corruption and the money is long since gone.  

It also wouldn’t do for the socialist governments, who specialize in soul sapping dependence on the government, to completely fail and discredit the most effective method to manage the masses, for a ruling oligarchy, ever invented.  The entire planet is in dire straits from the economic depression and planetary unity will come when some wonderful chap steps forward with the solutions that restore world economic stability.  Until then, the lifestyle of the West is falling to the lowest common denominator, as the middle class morphs into a bizarre universal poverty.

Most of the world elites have been looking for a way to implement a new world order, a one world government, and it’s clear that it will come from economic “reforms” necessary to rule the global economy.  From that key point the economic control will likely expand to include more and more social systems, beyond the economic, and where it stops is anyone’s guess.  In our present system, the most powerful branch office of the New World Order is arguably the oldest component: and it’s the western world’s central banking system featuring our very own Federal Reserve System.  Any organization that takes on the Federal Reserve takes on the real power driving our world: so once again I say hats off to Bloomberg for trying to get answers from the real power on earth.

Thomas Jefferson said that a central bank was far more dangerous than standing armies.  Barron De Rothschild said “give me control of a nations currency and I care not who writes the laws”.  There are reasons that Eisenhower warned of what he called the Industrial Military Complex (It’s really the central bank puppet-masters under a favorite alias)  These Central Bankers have been jerking the chain of western governments and ours since the days of Woodrow Wilson and there’s no end in sight.

It’s a fact that before the Great Depression the big money running the Fed pulled out of the market and by the end of the depression these multi millionaires emerged and the world’s first multi billionaires.  If history is to repeat itself than these multi billionaires running the Fed will emerge on the other side of this depression as Trillionairs and will in fact be “the masters of us all”. It started in Europe before the United States but it’s been a cancer in the American Experiment since Woodrow Wilson.  Consider this odd fact of history and ponder why this would be so:  Adolf Hitler continued to pay war reparations to France,  for world war I, until one month before he shot himself in his bunker in Berlin. Since Hitler defeated France early in the war, in a two week campaign, why would he continue to pay reparations to France for years to come? Hitler did it to keep the central bank powers happy because he would have been finished if he had lost their support and he knew it.

I say all that to say this:  There is a transnational power that intervenes in world affairs, it seeks to control world affairs,  it’s based on the world central banking systems that’s very real and that is now engaging  in a “hostel take over” of the United States of America. The Federal Reserve is not really taught in schools and its actions, and role in our society, remain shrouded in mystery and spoken of in hushed tones. the President and the Congress tremble at what actions this mighty, independent, organization of international bankers might take, that will surely dictate the course of the economy. The power of Central Banks seems greater than the world’s governments and the people who run this system are shrouded in mystery and secrecy. 

The Bible says that the love of money is the root of all evil and the Federal Reserve System (Central Bank) is an organization that is the personification of the “love of money” and if it were possible to write its history I have no doubt that it would be seen as the root of evil.  The Fed rarely draws attention to itself, its actions are shrouded in secrecy, its accountable to no one and its actions on the economy rule the American experience.  No one seems to know how it got there or what it really is or how it got the power to print our money and set the interest rates and no politician, of either party, is willing to cross the Federal Reserve.

Here is a brave attempt by Bloomberg attempting to get information from the world’s preeminent power: The Federal Reserve System.  You gotta give Bloomberg points for spunk.  Here’s a cut from their article and the URL for the whole story.

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aG0_2ZIA96TI#

Fed Refuses to Release Bank Lending Data, Insists on Secrecy

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By Mark Pittman

March 5 (Bloomberg) — The Federal Reserve Board of Governors receives daily reports on loans to banks and securities firms, the institution said in response to a Freedom of Information Act lawsuit filed by Bloomberg News.

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast “a stigma” on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

The bank provides “select members and staff of the Board of Governors with daily and weekly reports” on Primary Dealer Credit Facility borrowing, said Susan E. McLaughlin, a senior vice president in the markets group of the Federal Reserve Bank of New York in a deposition for the Fed. The documents “include the names of the primary dealers that have borrowed from the PDCF, individual loan amounts, composition of securities pledged and rates for specific loans.”

The Board of Governors contends that it’s separate from its member banks, including the Federal Reserve Bank of New York which runs the lending programs. Most documents relevant to the Bloomberg suit are at the Federal Reserve Bank of New York, which the Fed contends isn’t subject to FOIA law. The Board of Governors has 231 pages of documents, which it is denying access to under an exemption under trade secrets.

End Game: The Emergence a Global Central Bank and a Socialist America

In order to avoid a terribly painful economic depression, the United States of America has shredded its constitution and changed its form of government to de facto socialism.  The USA has nationalized the mortgage lending industry and a huge chunk of the Insurance industry and the end is nowhere in sight.  This action was undertaken by the Chairman of the Federal Reserve Benjamin Shalom Bernanke representing the Global Money Trust of the world’s super rich and Treasury Secretary Henry Paulson for entrenched Wall Street Interests and the US Government. They nationalized our mortgages and insurance with only cursory meetings with Congress and the President, God only knows if they talked to the Courts, and without fanfare or  even a whimper of dissent they turned us outright Socialist.  Look for us to nationalize the Automakers, Energy Production and Airlines in the days to come.  When we’ve consolidated enough industries into our new socialist government; I have the sneaking suspicion that our currency will crash and new global institutions will rise to clean up the mess.  The nations of the formerly democratic West have merged, us and Europe, into the precursor of a global financial system if not a global government.

Sept. 18 (Bloomberg) — U.S. stocks rose as the world’s biggest central banks planned to pump $247 billion into the financial system and regulators cracked down on abusive speculation against bank shares.

About $3.6 trillion of market value has been erased from global stocks this week, triggered by the bankruptcy filing by Lehman, once the fourth-largest U.S. securities firm.

 

As Rowe V Wade was to making abortion the law of the land against the people will so the Financial Crisis of 08 will be to our form of government except none of the three branches of government had any say in the matter if in fact they were even consulted.  The Market Economy is gone and we’re about to see a wave of regulation and consolidation in the Financial Markets that will make official the new Socialist nation: The Transnational States of America Inc.  You and I are no longer citizens but employees of the greatest corporate takeover in history and the official death of the nation state in favor of corporatism and rule by a transnational oligarchy of the super rich.  No shots were fired.  No one protested.  As the world’s central banks pumped in the money we were grateful and blissfully ignorant of the price we will pay for generations, perhaps forever.

Everyone will be happy if things just calm down on Wall Street and we don’t have to be afraid any more. We now work for the owners and the sham and pretence of our “government” was never more obvious in its impotence and irrelevance as when Bush simply stayed out of the crisis and congress followed suit even adjourning!  They weren’t needed by the real decision makers whose public face is the placid Chairman of the Federal Reserve: Ben Bernanke.

Sept. 18 (Bloomberg) — The Democratic-controlled Congress, acknowledging that it isn’t equipped to lead the way to a solution for the financial crisis and can’t agree on a path to follow, is likely to just get out of the way.

Lawmakers say they are unlikely to take action before, or to delay, their planned adjournments — Sept. 26 for the House of Representatives, a week later for the Senate. While they haven’t ruled out returning after the Nov. 4 elections, they would rather wait until next year unless Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke, who are leading efforts to contain the crisis, call for help.

One reason, Senate Majority Leader Harry Reid said yesterday, is that “no one knows what to do” at the moment.

“When you rush to judgment, you usually make mistakes,” said Sherwood Boehlert, a former Republican congressman from New York. “This is something you can’t go on forever without addressing, but Congress in a short span of time is best served by going home.”

 

            Not only has our President and the Congress been complicit in this corporate takeover of our county by its conspiracy of silence, it’s been an open cheerleader for it!  The congress in a stunning admission of its impotence and unimportance is outright advocating the Fed (The Global Money Trust) to take charge of the “crisis” and do whatever it thinks best for America! Where is Sovereignty?  Where is Democracy?  Where are the courts and the Constitution?  The decisions made by the global money trust on our behalf in the last week will forever change the foundations of the United States of America: How can the Congress and the President outsource this to the world’s super rich?   Consider the following quotes from Bloomberg:

House Speaker Nancy Pelosi defended the decision of Congress to adjourn. Lawmakers can always be recalled to Washington “if there is a need to do so,” she told reporters yesterday. In the meantime, House and Senate committees will hold hearings and the financial crisis will be studied by Congress, she said. “Our work will continue even if we are not still on the floor,” she said.

House Financial Services Committee Chairman Barney Frank said Congress could give the Federal Reserve authority to pay interest on bank reserves sooner than originally scheduled.

“They already have the authority; it’s just a question of moving it up a couple of years,” Frank, of Massachusetts, told reporters yesterday. “We’re trying to work that out.”

Senate Banking Committee Chairman Christopher Dodd said the Fed also has the power to buy and dispose of bad debt stemming from the subprime-mortgage crisis.

“The Fed has the authority to move in this area,” Dodd told reporters in Washington.

 

Lots of people have been warning for years about the Federal Reserve’s “cheap money policy” and what it was doing to the mortgage lending markets whose meltdown triggered all this. The Fed set the interest rates, we all enjoyed the real estate boom, and human greed and avarice did the rest.  The Global Money Trust (The Fed) will say that we didn’t force you to spend all that money and we didn’t force you to make all those crazy loans in the mortgage market and that will be true.  But is the Fed who is now running the country and changing our government without complicity in this mess? 

Back in the Great Depression people blamed the Fed for that crash as well.  They said that it was an engineered crisis and that it was probably done by design and not by error as is the popular fiction.  The Multi Millionaires of the Twenties, The Rockefellers, Warburg’s, Rothschild’s and Morgan’s emerged at depressions end; as the world’s first Billionaires.  I’m sure that’s just a coincidence.  At the end of this crisis they may just emerge as the world’s first trillion-airs.  I’m sure that will be another coincidence.

 

 

Sept. 18 (Bloomberg) — U.S. stocks rose as the world’s biggest central banks planned to pump $247 billion into the financial system and regulators cracked down on abusive speculation against bank shares.

About $3.6 trillion of market value has been erased from global stocks this week, triggered by the bankruptcy filing by Lehman, once the fourth-largest U.S. securities firm.

 

Consider this fascinating passage from the German Der Spegal Online paper:

And then came the announcement that would dominate all of Thursday’s market activities: Morgan Stanley — the venerable Wall Street institution and one of the last two US investment banks left standing — had lost massive amounts and was fighting for survival. Media reports were saying that it was even in talks about a possible bail-out or merger. Rumor had it that possible suitors might include Wachovia or China’s Bank Citic.

China?

“Folks,” economist Larry Kudlow, a host on the business channel CNBC begged his viewers that evening, “let’s not let this magnificent country go down!”

End of an Era

In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that’s changing. Bear Stearns, Lehman Brothers, Merrill Lynch — overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and — at least in Morgan Stanley’s case — have prepared themselves for the end.

“Nothing will ever be like it was before,” said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. “The world as we know it is going under.”

Many are drawing comparisons with the Great Depression, the national trauma that has been the benchmark for everything since. “I think it has the chance to be the worst period of time since 1929,” financing legend Donald Trump told CNN. And the Wall Street Journal seconds that opinion, giving one story the title: “Worst Crisis Since ’30s, With No End Yet in Sight.”

 

To recap then: here is what I see as the major fall out, so far, of the financial crisis:

·       By our outright nationalization of key industries we’re now a socialist nation. 

·       The Financial Crisis is consolidating financial power in fewer and fewer hands.

·       Our political leadership has abdicated responsibility to a Global Money Trust known as the Fed.

·       The Fear of a massive economic depression keeps the people quiet and controllable while these massive changes go on.

The basic conclusion is that the USA has been taken over not by another nation but by a global financial cartel. 

The New World Order is no joke it’s the reality we face today.  I’ve always read, with skepticism, the claims that in the last day we would have one world government and one world economy but today I can see it.  God help us if we don’t wake up and smell the socialism.

Strong Medicine: Wall Street Swallowing its First Dose of Financial Reality

 

With the bankruptcy of Lehman Brothers, the first true consequences of the greed and stupidity of the Sub Prime crisis has finally come due.  Lots and lots of pain: but pain that reflects the reality of the foolishness that caused it, and in so doing, suggests many of the ways we might legitimately correct the system.  As President Bush said; “Adjustments are painful” and so they are, but better a painful adjustment than endless agonizing uncertainty. Clearly we’re not done writing off bad loans and clearly this continued crisis has become a global crisis with global consequences.  Anything can happen now that reality has been reintroduced to the market.  On the table are a massive overhaul of banking regulations as well as a clarification of the proper interface between government and banking that’s long overdue. 

I doubt that we’re going to come out of this thing smelling like a rose and lots of investors around the world will, necessarily, begin to question the wisdom and security of making investments in the USA. It’s not just Americans and American companies that will feel the pain but national banks and foreign investors around the world.  The United States may become something of a pariah nation if governments around the world who trusted us begin to lose their shirts because of bad American investments.

So are we going to face a catastrophic event?  Are we heading for a great Depression?  Are we due to see the American Dollar become a joke? To be honest it’s quite possible.  This crisis isn’t over, not by a long shot, and the stakes are the biggest threat to our national security and way of life since the Revolutionary War.  No, I’m not kidding.  The one big thing we have going for us now is a more sober, clear eyed willingness to face the ugly truth of our own greed and the mismanagement of investment banking.

 There is the possibility now of figuring out a real solution to problems we’re at last ready to admit.  That’s a start.  I suspect that the “lesson” to be learned is about the global nature of the financial system these days and at the end of all the bloodletting that’s sure to come we’ll see a massive concentration of financial power in the hands of a few giant multinational corporations that’s unprecedented in human history.  Banks are going to continue to go down the tubes and be acquired, at fire sale prices, by the global financial elite. 

Essentially the United States Taxpayers have been sold out like an indentured servant to pay the massive debt that our government has guaranteed to the global financial elite to keep the corrupt financial system afloat.  Despite all these gallant efforts by the government, selling our grandchildren as slaves, and the global banking elite( The Fed),  loaning the money necessary to enslave future generations over a crisis they (The Fed) created it’s likely that a new great depression is unavoidable. It could come at any time.

AIG, (American Investment Group) WaMu, (Washington Mutual) are in deep trouble and are likely to go down the tubes to bankruptcy too.  Washington Mutual almost certainly will be bought out or file bankruptcy, and AIG has a better chance of dodging the bullet.  If AIG were to declare bankruptcy then the global effects would really be nasty as there’s a lot of foreign money involved. We’re not going to be very popular in the world. 

 As usual I would urge everyone to track the decline of the dollar, today it was down sharply, a ten year low against the Japanese Yen. 

We’ve been clobbered by Hurricane Ivan and while the damage is severe and in the tens of billions it appears no big time trouble to our offshore assets or our refining assets but the insurance companies are about to get hit hard. 

The Obama Campaign is launching an aggressive attack, blaming the financial crisis on Republicans and the economy is the one polling “internal” that Obama has held a consistent lead over McCain.  Democrat Governor Paterson made a grandstanding play on behalf of AIG and called for additional federal intervention.  The politicization of this crisis is underway and likely to increase rapidly to the detriment of everyone. If this issue resonates with the electorate then a President Obama would have something of a mandate to indulge in massive government regulatory interference which would perpetuate the crisis perhaps indefinitely.  I think we’re in for a long slow economic decline that will be a couple more years before it begins to turn around.

Globalization of the financial industries is predicted by the Bible when it talks about a one world financial system.  Up until the last year or so I would have laughed or smiled at that idea and would have regarded the proponent of such an idea as a loon.  If lots of countries get hurt by our fantasy island valuations of real estate in the last few decades that’s now blossomed into a full blown global banking crisis than the push for a world currency, as a stable system of value, and world regulation of investment banking to ensure confidence, may be the inevitable policy outcome.  This may well be the crisis that makes for something of a true global financial system. 

For the indefinite future I think there’s going to be terrible uncertainty in the market and rising fallout from the uncertainty until we have a financial system that’s transparent and that has proper regulatory oversight for the new global economy.  As this insanity continues people will demand that something be done to restore confidence and security and that’s when we’ll see the real endgame of what this crisis was intended to produce.

It’s going to be a very difficult week on Wall Street because they’re still dealing with the financial hurricane that’s taken up permanent residence over lower Manhattan.

The End of the American Dream: The Beginning of the American Nightmare

 

The dream has become a nightmare and now the firestorm in the Sub Prime Market has ignited the entire housing sector on fire.  The greedy lending practices of the banks and the devaluation of the currency by the Federal Reserves ill-advised policy has created a crisis of epic proportions.  It’s a sort of economic “China Syndrome”, the banking core superheated over  the subprime crisis is melting right thru all sectors of the American economy with what is sure to be a very large, poisonous explosion at the end.  There is no stopping it and it’s the bankers and the Federal Reserve System, as always in our history, who have crashed our economy in earnest. 

I’m reminded of the famous speech in the Movie Wall Street, where Michael Douglas’s character extols the virtues of greed.  “Greed is good”, he says, “greed works”.” Well it’s not working out too well for us in our economy right now because the greed, as so often is the case, is going to come at the expense of every American if not everyone on the planet. Come to think of it, Michael Douglas was in China Syndrome too: and that movie defined the wholesale American dismissal of Nuclear Power and the launch of our Environmental Religion that has so backed us into a corner today.  The French get 80% of their power from nuclear energy and it kills me to complement the French but the French got it right and we got it wrong.  We can’t solve problems by sticking our head in the sand. Maybe we should all stop going to see Michael Douglas movies?

Friday July 11, 2008 was a very scary day with the near meltdown of Fannie Mae and Freddie Mac but the punch line came later, after the market closed, and the first of the financial post mortems ran in the news.  Indy Macwas seized by federal banking regulators declaring it insolvent and Indy Mac will be the first or second largest bank failure in US history, depending on which story you read.  The Point is that it’s a huge failure and its demise came from the crazy mortgage lending practices that even now reverberate through the economy in one form or another.  This thing just keeps growing bigger and bigger and claiming one casualty after another.  Our economic life is so interdependent that it’s having effects all sectors of the economy.  At some point other banks will fail and it’s still possible that Freddie and Fannie will have to be taken over by the government. 

The Airline industry is in deep trouble with fuel prices and they may need a bail out.  Are General Motors and Ford Motors too big to be allowed to fail?  We’re very likely to find out because they’re not doing all that well.  We are in for layoffs and economic distress like we have never seen.  It’s very likely that this will be the straw that eventually breaks the back of the US economy and the US dollar and culminates in the torch of world leadership being passed back to Europe while we spend decades trying to put the USA back together again.

You know its bad times when the Illegal Immigrants start to migrate back to Mexico.  It’s a somewhat crude image but our carcass has been picked clean, we just won’t admit it yet.  What our President and the Congress dared not do, clean up illegal immigration, the greed of the bankers and the Federal Reserve will do by economic means.  There is no such thing as a soft landing given the string of events and failures and devaluations and debt that have been set in motion.  The fact of the matter is that we will not be driving around as once we did.  We may not be eating as carelessly, (I can bring myself to say well) as once we did and our children who have every toy imaginable are about to find out that their parents have largely destroyed their lives before they had a chance to live them.  It might get so bad that we have to smuggle ourselves across the Mexican border for work but the difference will be that the Mexican Government would shoot or imprison us rather than give us free education, health care and sanctuary in many of the biggest cities. 

The Bible has long foretold that in the last days the world would largely be ruled from Europe in general and Rome in particular.  For all of my lifetime, except for the last couple of months, I considered that highly unlikely. The very possibility that we could fall from world dominance within two or three years seemed impossible but now I think I see how it will happen.  We are headed for bad times and the failure of the United States dollar.  This is just the beginning.  

Since the dollar is the world’s reserve currency and since this mess is largely our own greed coming back to bite us in the butt; I don’t think the world is going to be too happy with us, nor too amenable to our leadership in the times to come.  Most of the anti Americanism that’s been out there in past decades seemed devoid of any rational merit.  The Anti Americanism of the future will have a record of what our brand of capitalism has done to ourselves and the world.  It’s not nice to create a planetary depression and we are going to get a refresher course for what’s important in life in one big hurry. American style capitalism will be out of style overnight and some form of European Socialism will become the governing principal of the future. It’s not going to be pretty and, I have to admit, it’s going to mark the end of our turn as “the hope of mankind. I always thought the absence of America in the Bibles last days accounts were improbable, to say the least, but now I suspect I’m standing on the edge of the cliff watching the USA begin to crumble like a house of cards. 

The Bible was regarded as fiction for suggesting Israel would be reborn as a real county in the last days.  In 1948 it happened against all odds.  The Fall of America is seen as improbable, even by my tax accountant who was amused by all the people investing in Euro’s, and yet we are on the cusp of the worst crisis the nation has ever faced.   Our dream of homeownership in the hands of greedy bankers and the childlike baby boomers has become the primary cause for an economic nightmare that will reverberate for decades to come. Even if the Fannie Mae and Freddie Mac crisis has been averted, at least for this weekend, it and other financial issues will be back in play on Monday morning.  So many disasters are brewing right now its just a matter of time before one of them ends the world as we knew it. We have lots of leaks in the dike and the Federal Government, like the contemptible Federal Reserve, is going to find out that it has nowhere near enough fingers to plug all the leaks. We who have had it so well are about to pay the piper and the Euro is about to become the world new reserve currency.  European socialism, not American style capitalism will write the futures economic rules. Only the bible saw this one coming—- until recently I just didn’t believe it’s possible.  How could we have been so blind?

That Old Bear Sterns Panic: Will Fanny and Freddie destroy the Economy?

 

               It’s beginning to be old hat to have another truly bad day on Wall Street.  Having another existential threat emerge in our financial system is frightening, to say the least, but not entirely unexpected.  Fannie Mae and Freddie Mac are the largest mortgage finance companies we have and a meltdown by either or both of them can have catastrophic repercussions throughout the already stressed economy. Shares of these giants went into free fall today and were down some were down by some 47% when I saw them on Bloomberg.  Earlier there were fears that they were insolvent and that the Bush Administration was considering taking them over and putting them in a conservatorship and transferring the risks they took to the US taxpayer: you and me. I’ve seen estimates that they could add, if they failed altogether another five or six trillion to the US National Debt.  (See the National Debt link on this page!  9.5 trillion + 6 trillion = 15.5 Trillion Dollars!)

               These companies make it possible for banks who write mortgages to transfer the risk by selling the mortgage, to Fannie and Freddie and are the lifeblood of the current mortgage system.  If we lose them, given the state of the economy today, the entire mortgage market will come to a standstill overnight until the bankers can get through the night without a supply of sleeping pills and bottled water within easy reach. It’s really very risky in the financial world right now and it’s likely to stay that way for the foreseeable future. It doesn’t matter if the government is backing these companies because we will all face the prospect of having Nancy Pelosi and Harry Reid and very likely a President Obama personally guaranteeing all our mortgages!  That doesn’t exactly fill me with confidence, how about you? Naturally the people on Wall Street weren’t pleased to hear this news, so Freddie and Fannie went into freefall earlier in the day but now seem to have recouped about half their percentage loss from earlier in the day.  As of this writing they are as follows:  Fannie Mae down 20.89% and Freddie Mac down 8.62%.  The Dow is down about 203.71 and had earlier slid below 11,000.  If we were to end the day now it’s amazing how many people would breathe a sigh of relief at Fannie Mae only being down 21%! 

               Bear Stern started a disturbing trend of the United States losing control over its financial destiny, its currency and its markets.  Bear was bailed out by a Federal Reserve facilitated buy out that’s increasingly removing our government from power in our own economy.  The Federal Reserve is a system of private, profit making member banks, who together form the Fed and whose Chairman is picked by the President from a list supplied to him from our creditors! The current Chairman, Ben Bernanke, is a scholar from the academic world whose pet theories about our financial history are being put to the test with the nation’s very lifeblood.  I sure hope this scholar knows what he’s doing because I have to admit that I would much prefer to have a scholar of the streets running the show right about now. We’ve seen another shoe drop today with Freddie Mac and Fannie Mae resulting in another record day for oil and gold while the United States Dollar continues to drop.  This simply can’t continue and there are other shoes waiting to drop out there. 

               I can’t tell you the outcome of all this but in the statements of the administration and Senator Charles Schumer of New York, I can tell you that the trend toward socializing vast aspects of our economy from oil to finances continue unabated and is, in my view, the greatest danger of them all.  Bear Sterns began the trend of consequences being removed from the free market and as a result we are all less free then we were before the Bear Sterns fiasco.  With the vast expansion of the powers of the Federal Reserve and the big money that owns the member banks of which it is composed, I find a certain grim amusement in seeing our own congress disempowered more and more because of its irresponsible spending.  We are a nation in very serious systemic trouble and we live in a time where the US Senate would rather debate global warming than a desperately needed energy policy.  When the levels of government foolishness reach this stage, and remember its government who thinks it can stop our financial meltdown by taking over everything, its time to get a new government. 

               Obama is right about one thing: we need a change.  We need politicians who represent our interests and not those of the member banks of the Federal Reserve or the save the spotted owl society.  We may have dodged another bullet today, for an unknown quantity of time, but that old Bear Stearns panic tugs at my heart at how the system if failing us and I can’t help wondering:  Is this the crisis that sinks us?  How long will it be?  Who will be at the epicenter of the next meltdown?  Is this event even over?  Will we be done in by Freddie and Fannie Mae?