The Long Cold Winter

[can't sit still]

Not to worry, There is money everywhere!!!!!!!!!!!

Take a look at the annual money-supply growth rates around the world –
US +12%
Euro zone +13%
Britain +14%
China +20%
Russia +51%
India +23%
S. Africa +22%
Brazil +12%
In fact, central banks will continue to print money until the world runs out of trees.
Peru Saxena

[can't sit still]

I'm still trying to get a clear picture of where the economy is going. It appears that all of humanity is being sold down-river by the central bankers. The U.S. dollar has lost 1/3 of it's value since 2002. Greenspan created a gazillion dollars out of thin air. BUT while the dollar supply grew 13% in one year, the Chinese currency grew 84%. The Russian currency grows at 50% a year. The Euro is growing too. It's referred to as a "race to the bottom" Bankers trash the currency to keep exports competitive.
This vid is extremely informative Watch all 5 parts.

Greenspan was knighted for his contributions to central banking, so I think it's safe to assume that central bankers will stay on course. Greenspan was also responsible for keeping interest on savings so very low. That means that people must invest their money just to try to keep even with inflation. If the money is in a savings account, it can't very well be stolen,,, only inflated into uselessness. Once it's invested, it can be readily stolen.
By inflating the currency,,,, it's not readily apparent that the value of the money has been stolen. 40 years ago, 1 silver quarter would buy a gallon of gas. Today, 1 silver quarter will still buy a gallon of gas.
If the Dow Jones averages were restated in 1999 dollars, the current level of the DJIA would be <4665>
Greenspan fucked the entire world not just Americans. The dollars that the Chinese are holding are worth about 39 cents compared to what they paid,,,, depending on purchase date. Our junk debt that we sold to the rest of the world will continue to explode. We've spread the poison of the "British banking system" to the whole world.

The US went from a manufacturing economy to a service economy. Then we tried to recast our system as the financing capitol of the world. Problem is; we didn't have any capital. So, we just sucked in everyone elses capital. They've caught on to this BS and won't buy anything non-physical.
They've finally caught on to the fact that we sold them 5% bonds when we have 11% inflation. The more that we lower interest to spur the economy, the more we chase away foreign money. GOV has made it very clear that it will destroy the dollar to try to preserve the banks. They refer to it as "socialising the debt" The rich sustain losses,,, the poor pay it off.
Using the corporatist mentality, it's OK to drive the dollar to worthlessness. Then we can repay our foreign debt with worthless paper. The general population and especially the people on fixed income might have to eat rats, but that doesn't enter into corporate calculations.
The military-industrial complex demands all the money. This makes jobs and wealth. If the same money were used for social programs, it would raise the standard of living and the quality of life. It would not enrich the banks.
Money is traded by the trillions every day. http://en.wikipedia.org/wiki/Foreign_exchange_market The US is trying to prop up the dollar at the same time that it prints it to death. The Plunge Protection Team is as busy as a 1 legged man at an ass-kicking contest.

It took <5> months for the dollar to collapse last time [1929]. Because of the FOREX, it could happen in a day or two.
http://en.wikipedia.org/wiki/Working_Gr ... al_Markets
They use the capital from the SS fund [among others] to distort the markets buy buying and selling gold and instruments. The US also does arm-twisting of other countries to get them to buy dollars and sell gold. It's reliably reported that the central banks are 11,000 tons short of the gold that they are supposed to have.
http://www.goldsilverbullion.com/CrisisExecSum.htm
The US is slowly squeezed to death by the Federal Reserve Bank. They don't seem to have any shortage of gold.
http://www.newyorker.com/archive/1989/0 ... _000351851
The end result is that most of the people in the US get poorer day by day. They're starting to get pissed off about it. GOV would much rather build internment camps than stop stealing.

Once again the US is ready to try socialism as an antidote to runaway capitalism. Everyone is going to have to work a whole lot harder. Prices are going way up. Our standard of living is going down. The social fabric is being strained more and more every day. Lives are being destroyed to fulfill the Midas dreams of a small group.

[can't sit still]

Y'all know that the US only survives by selling 3 billion dollars a day to foreign investors. Well, we poisoned our credit and they're all running for the exits. Not only did they quit buying, they sold 165 billion of instruments last month. Well, you can bet that GOV isn't going to stop spending,,,,, so who's buying the bonds now????????
No problem,,,,,,,, the social security fund has lots of money. They're buying. Also, the FED is printing money to buy government bonds. Could this be considered incest. It's certainly a good fucking all around.
Believe it or not, gas is cheap. If you priced it adjusted for inflation, the price would be about $3.95. Oil just hit $90 a barrel. The oil companies have actually been holding the lid on gas prices.
The Dems aren't talking about fiscal responsibility. They're going to have both guns and butter. The Reps are going to give us guns and more guns. Reality is coming our way. We're going to have guns,,,,, no butter or ammo.

[can't sit still]

To the public view, GOV is flat broke and living on OUR social security money. Truth is, GOV has it's own stash "CAFR" http://cafr1.com/TheGameDefinition.html
Now, at what point does GOV dip into CAFR money to keep things together? Or does it just raise the crap out of taxes,,,, or default on it's debt?
The CAFR money is invested in corporations, etc , but corporations aren't doing too great either.
"Fully 71 % of today’s corporate debt is rated junk; and, the contraction of capital markets now threatens the continued existence of these junk-rated corporations."
http://news.goldseek.com/GoldSeek/1193929590.php
GOV has cooked the books. The true inflation rate is 16%. GOV just said that the GDP grew at 3.9%. It doesn't matter that the American truckers association reported that they hauled 7.8% less freight. Sure bet,,,, the GDP is growing. Corporate America doesn't look too good either.
No paper currency has ever lasted. Ours is being degraded daily. Gov will happily throw us to the wolves just to keep themselves afloat. I hope that all you burners are ready to practice radical self reliance,,,, in the default world.
Dan

[mdmf007]

cant sit still -

you hit the nail on the head. Anyways - The writing is on the wall, Start preparing now for long lines, shortages, and high prices. China IS going to want their money back. The bonds they hold are pretty paper - but nothing more than paper.

China is our largest holder of US notes - and they can sell them any second they want. What happens when they want the TRILLIONS back? the market is flooded with dollars thats what. I would put money on our dollar tanking another 30% the second after they sell thier bonds

Scary stuff.

[can't sit still]

007, I don't doubt that you're correct. There is another possibilty. US companies do have value,,, even if the dollars don't. China is buying mainly commodities right now. There is much speculation that they will buy US companies at fire-sale prices. They have to get some kind of value out of the cash they hold. They would get more value to buy us up rather than to dump the bonds on the market.
The financial industry is,,,or at least, was very profitable. It's speculated that the Chinese will try to buy financial interests. They already tried to buy Dow Jones.
It's looking very bad now for Citi and Merrill. If Citi crashes, China could buy them and have a real presence in the financial world. The simple fact is that the US gov has had 2.5 trillion taken out of it's yearly paycheck. I believe that China and Russia are going to do whatever they feel like doing and America will just have to get used to it.
The US is, from some viewpoints, just an extension of England. The English enslaved China to opium for many decades. I don't think that the Chinese have forgotten the degradation. They may be very harsh with us. They may even go so far as to shoot down all our TV satelites. That would cause grief and despair beyond all description.

[diane o'thirst]

I'm not looking forward to becoming a slave to China...

There's a local joke that Oregon is the brake shoes of the country: whenever the economy slows down, we're the first to feel the heat. I'm seeing some of that heat right here in my own neighbourhood, with "For Sale" signs springing up like mushrooms, and streetlights gone dark because tweakers and vandals have gutted them for the copper wire.

What truly frosted my cake this week was that Bush vetoed the SCHIP bill and then asked Congress for another $100 billion to revamp the country's nuclear arsenal. Oh great, we can't streamline medical science because Jesus thinks it's eebul, but we can make nukes so they can kill more people more quickly. Makes sense to me, that does.

[can't sit still]

Diane, there are 4 states that are worse off then Oregon. They have less employment and more drought. Search on soup lines. I'm glad to see that many gun nuts have taken to hunting deer and bringing them to soup kitchens in the poor counties.
Oregon has a lot of water and that is going to be excruciatingly important in the future. If the Rockies and the Sierras don't get a good snowpack this year, it's going to be very bad for food production. California just borrowed 770 million to make up for a budget shortfall. If Ag dives, Ca will never be able to sell bonds in the future. The bonds have a 7 month maturity. The Governator needs an extra billion next summer.
The president of Iceland just came to town to talk up geothermal power. Iceland was the poorest. They have so much power now that they're importing bauxite to refine it,,,electrically. Oregon is now just about to start drilling geo-thermal wells. All those volcanoes are finally good for something besides scenery. They especially want to drill Paulina to keep it from exploding.
A big part of Oregon's future will depend on it's enviornmental restrictions. There are Chinese factory ships just waiting to buy off all the old-growth timber. Or. has always had a competition between enviornment and jobs.
I have my log house in Bend but I'm in L.A. to get my grub stake before it all hits the fan. I'm planning on buying some farmland near Myrtle Point or Coquille. I checked the rainfall and these 2 places seem perfect. Rainfall is decreasing world wide, not withstanding the floods in Tabasco state. I want to be someplace with rain because wells and rivers are subject to GOV regulation. If it has value or can be stolen, you can bet that GOV will steal it.
Eugene is a nice place. The problem is that there is an inverse relationship with nice places. The nicer a place is to live,,,, the harder it is to make a living. The crappier a place is, the easier it is to make a living. The more that we degrade our world, the easier it is to get a job. China is starting to see huge problems with pollution. The arctic populations have a 2 to 1 ratio of girl babies to boy babies due to pollution. It's getting very interesting. I want to witness all of it. I just don't want to push a shopping cart and eat dog food. I'm looking for farmland that has reliable water.
Dan

[can't sit still]

This is long but a great explanation of credit.

MONEY AND THE PRICE SYSTEM

By C.H.Douglas

Condensed version of a speech given at Oslo on February 14, 1935, to H. M. the King of Norway, H.E. the British Minister, and the president and members of the Oslo Merchants Club.

There is…a good deal of discussion in regard to what we shall call the crisis, matters of unemployment, the economic depression, and other names we give to our present state of affairs…[There is also] a great deal of misunderstanding which surrounds the various proposals made,…for dealing with this crisis arises from an unfamiliarity with the…monetary system….

…We hear, or we did hear in the happy days gone by, that, let us say, Mr. Jones was "making money." Mr. Jones was a bootmaker or a brewer, or something of that kind, or a manufacturer of motor cars….[but] there are only three classes of people in the world who make money, in any literal sense of the word. In Great Britain, for example, there is the Master of His Majesty's Mint, who makes metal coinage….There is the gentleman who sets up a little plant of his own and either makes counterfeit coins or writes very delicately executed signatures on pieces of special paper. He "makes" money, but he gets as a reward fifteen years imprisonment. There is the third who…is much less advertised and much more retiring, and that is the banker, and it is he, in the literal sense of the word, who makes over 90 per cent of the actual money that we use.

The method by which the banker makes money is ingenious, and consists very largely of bookkeeping….Every bank loan creates a deposit, the repayment of every bank loan destroys a deposit; the purchase of a security by a bank creates a deposit and the sale of a security by a bank destroys a deposit. There you have…a quite undeniable statement of where money comes from. All but 0.7 of one per cent. (or over 99 per cent), in Great Britain…of the money transactions - without which none of us under modern conditions could exist - are in the form of "bank credit," which is actually manufactured by the banking system and is claimed by the banking system as its own property. That is undeniably because the banking system lends this money (it does not give it), a condition of affairs which will be accepted by anybody as sufficient proof of a claim to ownership.

Over against that, you have the manufacturer of real wealth, by which I mean things which money will buy, clothes, houses, motor cars, the things that go to raise the physical standard of living…. We realize…that the possession of money is a claim upon real wealth: some of us…are still hypnotized into thinking that money is real wealth. I am sure, in an audience of this calibre, it is not necessary to emphasize this: money is not real wealth….

The modern economic production system is not a system of individual production and exchange of production between individuals. It is more and more the synthetic assembly, in a central pool, of wealth consisting of goods and services which are preponderantly due to the use of power, to modern scientific processes, and all sorts of organizations and other constituent contributions of [factors] which will occur to you. The problem is not to exchange the constituent contributions of each one of us to that central pool, because in fact our contribution to that central pool, in the ordinary sense of tangible economic things, is that a small number of persons operating on this machine of industrial "production", can produce all that is required for the use of the population….The problem is to draw from this central pool of wealth by means of what can be visualized as a ticket system. And the modern money system is in fact losing almost daily its aspect of …a medium of exchange, and becoming more and more a ticket system by which people, who are not exchanging their production, can draw from that central pool of wealth….

…When…money was a medium of exchange and…everyone was…employed in a productive system…the price system was what is called self-liquidating…If I make a pair of shoes and charge Kr.10 for them, the amount which you have given for those shoes has…been distributed; it has come to me as an individual, and I am able to spend that Kr.10 on buying ten kroners' worth of things, say five kroners' worth of leather and five kroners' worth of bread. The fact that the system is self-liquidating, that it will go on working more or less indefinitely is self-evident; and this is the assumption of the classical economists….The whole economic and financial system in its present form stands or falls by the contention that the present price system is self-liquidating, that is to say, that no matter what price is charged for an article, there is always sufficient money distributed through the production of that or other articles to buy the article and therefore there is nothing inherent in the system…to prevent the process going on indefinitely.

…This belief is not true…the [present] price system is not self-liquidating. There is…â€

[can't sit still]

Fucking bankers are bleeding the world dry.

"Interest composes as much as 77% of the cost of capital-intensive goods and services such as public housing. The average is brought down by labor-intensive services such as garbage collection, for which interest makes up only about 12% of the cost; but the overall average cost of interest has been estimated at about half of everything we buy.1"

[can't sit still]

This paper arrears to be very important. A recent court decision would leave the banks unable to foreclose on many mortgages. If you're facing foreclosure, you would do well to read this
http://rense.com/general79/subprime.htm

Essentially, the banks did a big bo-bo. They hold the note but don't hold the actual mortgage. The court won't allow them to evict without posessing the actual mortgage. This would affect people who's note was resold as a debt instrument.
There was also another case where the homeowner asked [in court] for the bank to prove that they had paid for his house. They hadn't,,, it was just an entry in a ledger. He prevailed in the case.
Dan

[Rabbi Dali Rick]

Does this explain Milk jumping to almost $6 a gallon in the last week?


The stores this year started with 50-60% off sales this Christmas season, so where does that leave them for the cost cutting toward the end of the buying season? But who has money to buy even if they cut them by 75%?


5 of the 6 people I know, who owned their house have had to put them up for sale, or have lost them.


I'm pretty lucky I've got 4 jobs lined up before Christmas, but it has been quite lean for the last few months. Usually I would have worked about 25 jobs in the last few months but I have managed to only work about 5 (which really sucks)


I have heard that we may go to "war" with Iran before the Christmas Holiday, which will keep George Bush in office indefinately.





the rebbi

[can't sit still]

Rabbi Rick, I'm happy to disagree with you. I don't think that Israel will be able to manage dragging us to war. The new report on the lack of nukes along with Gate's statement that he would support the constitution over the president, seem to make it very difficult to start a war with Iran.
Also, the military is in complete revolt. They're tired of being thrown into the meat grinder for no useful purpose. They're more than willing to fight, but it just won't make any difference. We aren't going to stop China.
Our shithead decider is so desperaste to start a war that he snuck out the nukes at Minot Base. He won't get that chance again.
He sent the fleet to the persian gulf to be anhilliated by Iranian "Sizzler" missles. That didn't work because the Revolutionary Guard know that if they blow the navy out of the water,,,, the next wave will be ICBMs. I'm sure that the navy and the guard are in very close contact to avoid any problems.
40% of the world's oil goes through the Straits of Hormuz. Iran will close that. That would starve europe, Japan and India. I'm quite sure that Europe and Japan have let the decider know that they won't sit by and let him ruin their economies.
The FED is going to lower interest rates at the next meeting. That will kill off any and all foreign investment. The next pres will inhieret a country that is flat broke. They won't be off making war.
Unfortunately, the bond market is starting to blow. Once it picks up steam, the major unemployment will kick in.

I'm thinking of starting a commune for wood nymphs. What do you think? http://www.realestateoregon.com/display/7056585.html

[theCryptofishist]

If it comes to it, all China has to do is call in its loans to us--they are the ones we're most in debt to. My guess is they won't do it right away, they need us to buy their crap to fund their industrial revolution. I doubt that even together, Europe, Japan, Australia and India can fill in that hole.

But I'm no expert

[can't sit still]

Ms Crypto, I'm no expert either. All I can hope to do is to read endlessly and come to an informed conclusion. Here's a story about 3 powerful women who are experts;


(1) China insulated from Western banking crisis; Asia the big winner
(2) Impending Destruction of the US Economy - Paul Craig Roberts
(3) Terrorism Prevention Act of 2007 - pays tribute to Orwell, but speaks Newspeak
(4) CIA Ops in Venezuela
(5) Sunday Times: Israelis hit Syrian 'nuclear bomb plant'
(6) Ha'aretz: [WINEP] Study: U.S., Israel should begin planning Iran strike


(1) China insulated from Western banking crisis; Asia the big winner

From: "Sino Economics" <sino> Date: Sat, 1 Dec
2007 22:44:15 -0800

China wins from credit crunch fallout

Special investigation by City staff

Last Updated: 1:23am GMT 29/11/2007

http://www.telegraph.co.uk/money/main.j ... KXQFIQMFSF
GGAVCBQ0IV0?xml=/money/2007/11/28/ccrock128.xml&page=1

In the final part of our investigation into the collapse of Northern
Rock, we look at how China may in the end be the biggest winners from
the credit crisis

Towards the end of September, a group of the world's most powerful
bankers met for an emergency summit on the credit crunch which, days
earlier, had threatened to topple Northern Rock, Britain's fifth-biggest
bank.

All those present knew about the extraordinary scenes on the UK's high
streets as thousands of savers queued for days to withdraw more than
£10bn of their savings in the country's first run on a bank since
Victorian times.

But while banking and investment executives elsewhere in the world had
watched the TV pictures with a sense of horror, those who gathered in
the spartan meeting room 5,700 miles from London had another word at the
forefront of their minds: opportunity.

For this was not London, New York or Frankfurt, but Shanghai. And the
senior officials from communist China's central bank who had convened at
the People's Bank of China that day knew that the crisis in the global
financial markets had served only to hasten the transfer of economic
power from Europe and the US to Asia.

For a decade, China has deliberately insulated itself against the boom
and bust cycles of the capitalist West by building up the greatest cash
fortune ever assembled: a staggering $1.3trillion (£650bn) in foreign
exchange reserves.

China's colossal war chest reflects its emerging status as a superpower
challenging the West not only economically but politically, with
potentially profound implications for us all.

In this, the final part of our series on the worldwide credit crunch, we
examine where the global economy goes from here, and probe how the
balance of power is shifting from West to East.

The total secrecy in which the Chinese state conducts all of its
business means that the meeting of central and commercial bankers at the
People's Bank of China in Shanghai, the country's commercial capital,
has never been reported. Officially, the Chinese government and the
state bank will not even confirm that it happened.

But The Daily Telegraph has been exclusively briefed on the discussions,
which gave a rare glimpse of the workings of the communist regime and
its financial operations.

Those present included senior executives from some of China's "Big Four"
commercial lenders, each of which has the government as its majority
shareholder. Officials from the People's Bank of China wanted to know
whether the lending banks "had any skeletons in the closet", according
to one person present.

Had they, in other words, bought any Western loan packages whose value
could be affected by the global "credit crunch" which had been sparked
by America's sub-prime mortgage crisis?

By and large, the answer was "no". The insider said: "There was a debate
which drew one general conclusion: that China's capital walls had
largely insulated the country's banking sector from the crises elsewhere.

"There may have been a feeling of vindication, but there was not one of
complacency."

Strict regulations on the flow of money into, and out of, China meant
that the contagion spreading across the rest of the world's financial
markets would have little direct impact on the world's most populous
country.

Weeks later, China's economic ascendancy was neatly illustrated when
Bear Stearns, one of the US banks worst affected by the sub-prime
mortgage crisis, was forced to go cap in hand to a major Chinese
brokerage to secure a cross-shareholding agreement which would put it
back on its feet.

Economists are in no doubt about the long-term implications of the
credit crunch.

"Has this sped up the transfer of the mantle of economic superpower from
West to East? Quite simply, yes," said Peter Spencer, chief economist
for the Ernst & Young Item Club.

"We've seen a flight [of money] to East Asia in recent months. The US
economy is in a terrible jam now, with a falling housing market and a
weakening economy."

Mr Spencer added: "The US and UK economies are heavily based on
financial services. Our governance depends on things like credit ratings
agencies for financial products and accountants for financial
statements. When you have a shock like Enron, which raises doubts about
the latter, and the credit crunch, which raises all sorts of questions
about our system of financial regulation, it clearly makes us less
attractive from the point of view of investors."

China's trillion-dollar cash reserves are managed by three of the most
powerful women in the world, known as the three Xiaos.

They are Wu Xiaoling, 60, the senior deputy governor of the People's
Bank of China, Hu Xiaolian, 49, who is in charge of foreign exchange,
and Zhang Xiaohui, who directs monetary policy. (To further confuse
matters, the male governor of the bank is named Zhou Xiaochuan).

When Wu Xiaoling, a cheerful-looking woman who typically wears a plain
white blouse and bulky blue suit, was appointed president of the
Shanghai branch of the People's Bank of China in 1998, Asia was in crisis.

The Asian debt bubble had just burst. Thailand, Indonesia, Malaysia and
their neighbours were facing steep recessions after Western investors
pulled out their money. China quickly learned from the experience and
began building up its vast cash reserves, largely held in US Treasury
bonds, under the guidance of the three Xiaos.

Nine years on, the policy is reaping its rewards. While the West faces a
serious slowdown, if not a recession, as a result of the credit crisis,
the Chinese economy is growing stronger by the week. The markets in
Shenzhen and Shanghai have climbed to record highs more than a dozen
times in the space of a month.

Wu Xiaoling's reward for her shrewd financial stewardship is a modest
government salary of around £250 a month.

But entrepreneurs who have flourished in China's booming economy are
rather less abstemious. In 2006, the country had 22 billionaires,
according to the respected Forbes Magazine. Today there are 66.

The Shanghai stock market has risen 300pc since January and PetroChina,
the state-owned company which listed its shares on the Shanghai stock
exchange this month, is valued at more than $1 trillion, dethroning
ExxonMobil as the world's most valuable company.

A British banker who owns part of a faux-leather goods factory in the
Pearl River Delta reports that because of this frenetic financial
activity, inflation is rising in China. "We've raised prices three times
this year and not bothered to export because demand is so strong within
a 100-mile radius of our factory," he says.

A similar story is unfolding in the booming economies of Brazil, Russia
and India (they, together with China, have been given the acronym BRIC
by economists).

The British banker worries that China and the other BRIC countries will
end up exporting inflation to the West. The risk, he says, is that the
Bank of England and the Federal Reserve in Washington won't then be able
to cut interest rates if the Western economy stops growing. This is but
one of half a dozen nightmare scenarios for 2008 and beyond being
advanced by pessimistic economists.

Others include crude oil rising above $100 a barrel and acting as a
brake on the world economy; the dollar's fall turning into a collapse
that generates a new round of panic; the risk of a political shock like
a US strike on Iran, and a failure of Western economic policymakers to
co-ordinate their actions, leading to a 1987-style stock market crash.

Optimists point out that over the past five years the world economy has
grown strongly. The International Monetary Fund forecasts that the
credit crisis will cut 2008 global growth only marginally - from 5.2pc
to 4.8pc - while the UK economy grows at a sluggish but satisfactory 2pc
or more. But the official forecasts could prove over-optimistic if the
banking system continues to be dragged down by the credit crisis.

While "things have improved significantly since August", Bank of England
governor Mervyn King said in a BBC interview earlier this month, risks
remain.

"There is always in a period like this the possibility that a shock from
outside the UK, one from the world economy, might create further
fragilities," he said.

The UK may be more vulnerable than other countries if the decade-long
boom in house prices turns to bust.

The International Monetary Fund calculates that UK house prices have
risen 50 per cent more than they should have in the past decade.

Vincent Cable, acting leader of the Liberal Democrats, says banks have
been guilty of irresponsible lending by offering mortgages of up to six
times salary.

"Four years ago, I warned Gordon Brown that we were heading for a
dangerously unstable position based on excessive and irresponsible
lending," he said. "Mr Brown told me I was 'generating alarm without
substance'."

All the while, however, Northern Rock was allowed to carry on with its
high-risk strategy of borrowing massively to fund more and more
mortgages - a policy which proved disastrous when banks stopped lending
to each other.

As the regulator of individual banks, the Financial Services Authority
bears a degree of responsibility for failing to spot the riskiness of
Northern Rock's strategy. FSA chairman Sir Callum McCarthy and chief
executive Hector Sants have both acknowledged this.

But while the FSA could have done more to regulate Northern Rock, its
powers do not extend to the international markets in which the credit
crunch has its roots.

Interviewed shortly before he became chairman of Citigroup (which
changed its leader after it, too, was caught out in the sub-prime
mortgage fiasco) Robert Rubin, Bill Clinton's Treasury secretary, told
The Daily Telegraph that more regulation was needed.

"What caused the mispricing of risk? Human nature," Mr Rubin said.
"There's something that drives people toward excesses. The key is to let
free markets operate, but to get the balance right."

Mr Rubin believes that in dealing with financial bubbles (and the
consequences when they burst), "the right policy response is to deal
with each crisis as it comes along. What do you do to temper
risk-taking? It's not a mainstream view, but my view is that you take
steps to make it so people can't borrow so much. How do you do this? You
put in place capital requirements, margin requirements".

In the 1920s, individual Americans went on a binge, buying shares on
margin - that is, borrowing as much as 90 per cent of their cost. In
October 1929, when the US stock market started to fall, these investors
were forced to liquidate their holdings to pay back what they owed. The
downward financial spiral helped to precipitate the Great Depression.

Between 2002 and 2007, banks were buying bonds on margin - borrowing
more than 90 per cent of the cost to pay for their investments. In
August, when parts of the bond market collapsed, the spectre of 1929
began to haunt the world's major banks.

So far, the British economy appears to have had a narrow escape.
Northern Rock savers did not lose any money as a result of the bank run,
and although British banks are expected to write off millions as a
result of their exposure to their sub-prime mortgage crisis in the US,
and shareholders in the Rock have suffered losses, the UK financial
system as a whole has held.

Opinions are divided on whether the weakness in the financial system
will lead to a recession or whether the resilient broader economy will
ultimately restore confidence.

We can be certain, however, that the three Xiaos, and their counterparts
in the emerging Asian economies, will have plenty of say in our future.

Reporting by Peter Koenig, Gordon Rayner, Katherine Griffiths, James
Quinn, Mark Kleinman, Edmund Conway, Jonathan Sibun, Philip Aldrick,
Andrew Porter, Robert Winnett, James Kirkup and Iain Dey.

(2) Impending Destruction of the US Economy - Paul Craig Roberts

From: [email protected] Date: Sun, 2 Dec 2007 02:09:19 EST

Impending Destruction of the US Economy

by Dr. Paul Craig Roberts

Global Research, December 1, 2007

http://informationclearinghouse.info/>i ... house.info

Hubris and arrogance are too ensconced in Washington for policymakers to
be aware of the economic policy trap in which they have placed the US
economy. If the subprime mortgage meltdown is half as bad as predicted,
low US interest rates will be required in order to contain the crisis.
But if the dollar’s plight is half as bad as predicted, high US interest
rates will be required if foreigners are to continue to hold dollars and
to finance US budget and trade deficits.

Which will Washington sacrifice, the domestic financial system and
over-extended homeowners or its ability to finance deficits?

The answer seems obvious. Everything will be sacrificed in order to
protect Washington’s ability to borrow abroad. Without the ability to
borrow abroad, Washington cannot conduct its wars of aggression, and
Americans cannot continue to consume $800 billion dollars more each year
than the economy produces.

A few years ago the euro was worth 85 cents. Today it is worth $1.48.
This is an enormous decline in the exchange value of the US dollar.
Foreigners who finance the US budget and trade deficits have experienced
a huge drop in the value of their dollar holdings. The interest rate on
US Treasury bonds does not come close to compensating foreigners for the
decline in the value of the dollar against other traded currencies.
Investment returns from real estate and equities do not offset the
losses from the decline in the dollar’s value.

China holds over one trillion dollars, and Japan almost one trillion, in
dollar-denominated assets. Other countries have lesser but still
substantial amounts. As the US dollar is the reserve currency, the
entire world’s investment portfolio is over-weighted in dollars.

No country wants to hold a depreciating asset, and no country wants to
acquire more depreciating assets. In order to reassure itself, Wall
Street claims that foreign countries are locked into accumulating
dollars in order to protect the value of their existing dollar holdings.
But this is utter nonsense. The US dollar has lost 60% of its value
during the current administration. Obviously, countries are not locked
into accumulating dollars.

The reason the dollar has not completely collapsed is that there is no
clear alternative as reserve currency. The euro is a currency without a
country. It is the monetary unit of the European Union, but the
countries of Europe have not surrendered their sovereignty to the EU.
Moreover, the UK, a member of the EU, retains the British pound. The
fact that a currency as politically exposed as the euro can rise in
value so rapidly against the US dollar is powerful evidence of the
weakness of the US dollar.

Japan and China have willingly accumulated dollars as the counterpart of
their penetration and capture of US domestic markets. Japan and China
have viewed the productive capacity and wealth created in their domestic
economies by the success of their exports as compensation for the
decline in the value of their dollar holdings. However, both countries
have seen the writing on the wall, ignored by Washington and American
economists: By offshoring production for US markets, the US has no
prospect of closing its trade deficit. The offshored production of US
firms counts as imports when it returns to the US to be marketed. The
more US production moves abroad, the less there is to export and the
higher imports rise.

Japan and China, indeed, the entire world, realize that they cannot
continue forever to give Americans real goods and services in exchange
for depreciating paper dollars. China is endeavoring to turn its
development inward and to rely on its potentially huge domestic market.
Japan is pinning hopes on participating in Asia’s economic development.

The dollar’s decline has resulted from foreigners accumulating new
dollars at a lower rate. They still accumulate dollars, but fewer. As
new dollars are still being produced at high rates, their value has
dropped.

If foreigners were to stop accumulating new dollars, the dollar’s value
would plummet. If foreigners were to reduce their existing holdings of
dollars, superpower America would instantly disappear.

Foreigners have continued to accumulate dollars in the expectation that
sooner or later Washington would address its trade and budget deficits.
However, now these deficits seem to have passed the point of no return.

The sharp decline in the dollar has not closed the trade deficit by
increasing exports and decreasing imports. Offshoring prevents the
possibility of exports reducing the trade deficit, and Americans are now
dependent on imports (including offshored production) for which there
are no longer any domestically produced alternatives. The US trade
deficit will close when foreigners cease to finance it.

The budget deficit cannot be closed by taxation without driving up
unemployment and poverty. American median family incomes have
experienced no real increase during the 21st century. Moreover, if the
huge bonuses paid to CEOs for offshoring their corporations’ production
and to Wall Street for marketing subprime derivatives are removed from
the income figures, Americans have experienced a decline in real income.
Some studies, such as the Economic Mobility Project, find long-term
declines in the real median incomes of some US population groups and a
decline in upward mobility.

The situation may be even more dire. Recent work by Susan Houseman
concludes that US statistical data systems, which were set in place
prior to the development of offshoring, are counting some foreign
production as part of US productivity and GDP growth, thus overstating
the actual performance of the US economy.

The falling dollar has pushed oil to $100 a barrel, which in turn will
drive up other prices. The falling dollar means that the imports and
offshored production on which Americans are dependent will rise in
price. This is not a formula to produce a rise in US real incomes.

In the 21st century, the US economy has been driven by consumers going
deeper in debt. Consumption fueled by increases in indebtedness received
its greatest boost from Fed chairman Alan Greenspan’s low interest rate
policy. Greenspan covered up the adverse effects of offshoring on the US
economy by engineering a housing boom. The boom created employment in
construction and financial firms and pushed up home prices, thus
creating equity for consumers to spend to keep consumer demand growing.

This source of US economic growth is exhausted and imploding. The full
consequences of the housing bust remain to be realized. American
consumers lack discretionary income and can pay higher taxes only by
reducing their consumption. The service industries, which have provided
the only source of new jobs in the 21st century, are already
experiencing falling demand. A tax increase would cause widespread distress.

As John Maynard Keynes and his followers made clear, a tax increase on a
recessionary economy is a recipe for falling tax revenues as well as
economic hardship.

Superpower America is a ship of fools in denial of their plight. While
offshoring kills American economic prospects, “free market economistsâ€

[can't sit still]

Interesting;
"Twenty-eight nations have Sovereign Wealth Funds (SWFs) with assets of about $2.1 trillion. In 2011 and 2012 that figure could b $8 trillion and perhaps $12 trillion. Washington is concerned that these funds may not just be used for economic reasons, but also for political and strategic purposes. The concern is not of foreign ownership but rather government ownership. These investors will be acting in the interests of foreign governments, not in the interests of the US. At today’s accelerating pace the US will end up with a “sharecropper economyâ€

[can't sit still]

Progress report;

The central banks have created 3/4 of a trillion dollars in the last <9> days. They know that immense amounts of bonds and instruments are going to mature on Dec. 31. If people cash out rather than rolling over their money into new paper, this will show the banks to be insolvent. The problem from the bank's point oif view [other than being insolvent] is that the bucks are being lent out on 2 and 3 week notes.
They say that the FED is pushing on a string,,,, you can't force people or banks to borrow money.

"forecast made by Denmark-based Saxo Bank, chaos will take a grip on the world in 2008. Oil prices will skyrocket to 175 dollars per barrel, the Chinese market will collapse by 40 percent, whereas the U.S. will suffer a 25-percent setback.
It is worthy of note that the majority of Saxo Bank’s previous forecasts for 2007 have proved to be true to fact. "
http://newsfromrussia.com/world/america ... -economy-0#
The next couple of months are supposed to be "make or break" for the economy. I do hope that all you Burners have taken the time to make an informed decision about your long range financial plans, Dan

[mdmf007]

a reckoning is coming - writings on the walls.

[can't sit still]

007, yes the writing is on the wall. Most people prefer to not read it. The internet is the ultimate tool for finding skeletons in past and present closets. It's common knowledge that Roosevelt blockaded the Japanes to provoke an attack. That dastardly surprise attack on Hawaii drew us into WWII.
Then along came Truman. He was deathly afraid that his generals were going to arrest him for treason. He was passing all military plans to North Korea. Then along comes Vietnam, who it turns out, has lots of oil off the coast.
Everywhere you look, American militarism is destroying the world. The military industrial alliance drags us from one war to the next. We could just buy the damned oil easily if the warmongers didn't impoverish our country. If the warmongers can't supply enough wars, Israel can always be counted on to drag us into some kind of genocidal campaign somewhere.
The impoverishment of America to support all this killing is destroying the societal fabric of the country.
The constant war, impoverishment, and societal destruction is just too much for many people. They just don't want to hear any more bad news. GOV and media are happy to oblige. They just don't mention the bad stuff. The writing is on the wall, but too many people are already overloaded. They're ignoring the whole thing. Should it come to pass, they'll be completely blindsided.

[Apollonaris Zeus]

Look at the bright side: foreign deficit: DOWN! foreign investment: up! Exports: Up! Foreign tourists: Up! China Exports: Down! Housing Market: Down, Down and continued Downward for the next 4 Yrs! All good message to the "Turn that House" suckers.

The Good also comes with the Bad.

In 8 yrs, after the corrections make their final play in the Dow and the treasury we will be in a good position economically to start the whole bubble again: Short, Short, Short the stock market now for the long term.



AIIZ

[can't sit still]

Zeus, I can't argue with any of your logic. I am wondering though, how is the US going to pull out of recesion . In a few years the cost of energy will be much higher. The infrastructure will be in worse condition. I don't expect wages to go above the global norm in most sectors.
If you look at the "Baltic dry goods index", the cost of transportation is supposed to climb continually. How does the US economy fit into the world economy when we can't transport cheaply. I haven't an answer for that. I don't expect that the US will be shipping salads to Canada 6,000 miles away in the future.
My expectation is that what we now spend on descretionary expenses will be spent on energy and transportation.
I expect our Ag production to be much more important in the future.

[can't sit still]

Well, this coming year should be very interesting. The Wilshire Index has lost about 1.3 trillion. They show a return of about 1.78 %
http://www.wilshire.com/Indexes/Broad/W ... stics.html
Inflation changes that to a negative of about 10 % depending on where you look.
There is much speculation about where the next problem will occur.
"What would occur if the corporate credit markets fall? This will make the subprime crisis look like a walk in the park. The corporate debt markets dwarf the residential mortgage market and are at the backbone of the world's banking system. Moody’s (MCO) has declared that it anticipates that corporate defaults will quadruple."

China has raised interest rates 6 times lately to cool down the economy. Sure, they hold 1.4 trillion in currency reserves but Chinese banks hold about 1 trillion in bad loans. SAXO predicts that the Chinese stock market will lose 40% this year.
Loan resets and foreclosures are going to really kick-ass in 2008. A large % of investors are recommending that their clients move to cash. If investors don't roll over their paper starting today, the credit markets will have a real problem.
The bond markets and the bond insurers look to blow sky-high. Moodys and Fitch were just waiting for year end before they rated AMBAC and MBIA as junk rated.
In the final analysis, Bush and his predecessors used Greenspan to overheat the economy. This was done to finance a military expansionist policy that could never have been financed by taxes.
Each bubble "they" produced,,,, each foreigner who bought a junk bond forestalled the final economic reconning.
I wish all people of good will a prosperous and happy new year.

[can't sit still]

Nobody pays any serious attention to the inflation index. It's just fiction. We have heard lately that unemployment has gone up. These numbers are all BS too. GOV is claiming that no jobs were lost in the financial sector in 2007. http://www.financialsense.com/fsu/edito ... /0104.html The global unemployment numbers in developed countries runs somewhere near 16%. As everything becomes globalised, one would expect unemployment in the US to go to this norm. If 45 million Americans are out of work, this may very well have an effect on both the election and immigration. Ron Paul obviously doesn't have all the answers, but any good shakeup would be welcome.

Jim Willie has come up with a list of things that need to be changed;



HOW TO FIX THE USECONOMY & FINANCIAL SYSTEM:
- dismantle the US Federal Reserve
- back the USDollar with gold or silver or coal or Great Lake fresh water
- balance the USGovt budget
- end all monetization efforts to support financial instruments
- enforce all regulations against outsized futures contract positions
- remove all lobbyists from Congressional contact
- dismantle the military defense network with contractors in US firms
- end all fractional banking practices (lend 10x deposits)
- tighten all financial accounting, with felonies charged routinely
- severely limit the credit derivative contract creation and its system
- prosecute the fraud from the $1500 billion Fannie Mae theft (1988 to 2000)
- separate Goldman Sachs from Dept Treasury, due to insider trading risks
- separate JPMorgan from USFed, due to insider trading risks and extreme collusion

- prosecute JPMorgan for serving as the Enron instructor

- end all illicit talks between stock & commodity regulators with Wall Street
- require 30% down payments on all home mortgage loans

- end all private deals between Chinese leaders and Wall Street for IPO stocks

- dismantle at least 75% of the foreign US Military bases, bring soldiers home
- dismantle all US security agency participation in contraband trafficking
- dismantle the Bank of Baghdad as central clearing house for that trafficking
- dismantle all tight relationships with USMilitary and Halliburton

- install a broad manufacturing base in the United States, even if attached to prisons

- institute framework for foreign receivership of US capital structure and policymaking

- give China, Japan, Saudis, and Persian Gulf Coop Council seats on US Prez Cabinet

- give China, Japan, Saudis, and GCC veto power on US federal budget approval

- create a Cabinet level post of Special Prosecutor with ties to International Courts
- create a Cabinet level post to manage the housing & mortgage Resolution Trust Corp

- encourage numerous voter referendums annually, which bypass Congress

- reduce the influence of Israel in dominating security and military related policy

- forbid any US citizen from working as World Bank or Intl Monetary Fund directors

- end all tax incentives to relocate business overseas (which kill US jobs)
- end the Alternative Minimum Tax burden completely

- rescind the Medicare payment system and its entire program
- install legitimate economic statistics for GDP, CPI, Jobs, and more
- install proper Cost of Living Adjustments in Social Security and USGovt pensions
- install tax incentives to save from income outside the 401k & IRA pension systems
- dismantle all the concentration camps (230 of them) on US soil, recently completed
- reopen a 911 Commission to issue a verifiable report, not a whitewash BS report
- end all chemtrail experiments in the upper atmosphere to control weather
- release American Medical Assn cures for cancer which are available in Latin America

- begin massive US infrastructure repair, a reconstruction initiative with foreign funding

- admit to the world that the Untied States has become a Third World nation

http://news.goldseek.com/GoldenJackass/1199461473.php
It's a good list to think about.
Dan

[can't sit still]

HUNGER


Severe food shortages, price spikes threaten world population

Worldwide food prices have risen sharply and supplies have dropped this year, according to the latest food outlook of the United Nations Food and Agriculture Organization. The agency warned December 17 that the changes represent an “unforeseen and unprecedentedâ€

[Toolmaker]

I feel for my Italian relatives. While they pay more for pasta I eat it alot cuz its cheaper and I'm broke. Wahh.. how fookin screwy is that. I'm just glad I can still afford pasta.. maybe I should stock up like my pop does next time there's a sale. With gas prices rising maybe OUR food will go up next.

[can't sit still]

Toolmaker, you might suggest to your relations in Italy to start a garden. If you do reading on Cuban gardening, they've got it all worked out to grow food in the city without pesticide or fertiliser.
The wholesale price of eggs has doubled in 1 year. Milk is no bargain, especially when you consider that it's loaded with hormones. I think that it's safe to say that food will go up.
A garden is the way to go. I think that potatoes are the cheapest thing that you can buy to fill your stomach.
I just bought a cast iron frying pan with a lid and also a small steel spatula so that I could cook potatoes the way that I like them. Fucking pan and spatula cost $ 107.
I think that it's safe to say that we are never going to win.

[theCryptofishist]

From what I saw in the Veneto, people know about gardens. From what I saw in Venice, not everybody has the land for a garden.

[Toolmaker]

I think I'm the only one that doesn't currently have a garden. The new place we are in has some space so since I'm no longer apt. bound we may make one. We have a banana tree and avacado tree already out back that came with the place. I have like 5ft by 10ft or so I could use, probably do different tomatoes, some herbs and salad makins.

[can't sit still]

You are SO right Ms Crypto. I travelled all over Italy in a converted double-decker bus. Every bit of it was nice,,, Of course, I didn't go to Napoli. We stayed in a campground in Venecia. The Venetians don't need to farm,,, they can hunt. The mosquitoes are as big as sparrows.
I'm sure that they have droughts in Italy. After all, who can forget "Manon of the Spring"??

[theCryptofishist]

Wasn't that France?