Busted: Bankers and The Global Economy

May 12, 2011

Dangerous Inflation is on the Way

Filed under: economy, inflation, recession, stagflation — Tags: , , , — digitaleconomy @ 12:01 pm

I’ve written about false inflation figures for years. The U.S. government continues to pretend that Americans won’t be facing dangerous inflation by 2012. The facts show otherwise.

The Producer Price Index (PPI) increased 0.7% last month. This equates to 8.4% annual wholesale inflation in America! Prices are rising much faster than wages by any means.  April wholesale inflation data reflects an ever-accelerating cost of living in 2011.

Can official government statistics be trusted? Not according to John Williams at Shadowstats.com, whose alternative inflation index shows costs rising four times higher than “official” rates. Since 1980, the Bureau of Labor Statistics (BLS) has changed the way it calculates the Consumer Price Index (CPI) in order to account for the substitution of products, improvements in quality and other things.

“Near-term circumstances generally have continued to deteriorate,” says Williams. “Though not yet commonly recognized, there is both an intensifying double-dip recession and a rapidly escalating inflation problem.”

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May 2, 2011

China Considering Dumping US Investments

The U.S. dollar continues to slide in value as out of control spending continues. China, the largest holder of U.S. debt, is considering dumping two-thirds the dollar reserves that it holds, to the tune of about $3.04 trillion.

According to a report from China’s Xinhua news agency, a member of the Chinese central bank’s monetary policy committee is recommending that Beijing reinvest its foreign exchange reserves. Other Chinese financial authorities confided at a forum in Beijing that China’s current U.S. holdings are too high. The governor of China’s central bank has said that China’s foreign exchange reserves are excessive and that Beijing should begin to diversity its vast pool of dollars.

While American corporations have led the world in economic growth for more than a century, China’s government has had enough business sense to become the world’s second largest economic power. China is on target to overtake the U.S. economy.

Central bankers and many investors want to unplug the dollar as the international mainstay of finance. China wants its currency to play a more dominant role in the global economy, dumping the dollar (treasuries) as a viable investment, since the Federal Reserve is addicted to printing money, which further devalues the dollar to keep the current global money scene afloat.

April 9, 2011

The Path to Prosperity: America’s Two Futures

Filed under: banking, corporatism, economy, federal reserve, government, inflation, money, politics, video — digitaleconomy @ 7:49 am

Congressman Ryan says that President Barack Obama’s budget strategy is to “do nothing, punt, duck, kick the can down the road” while the debt remains on track to eventually hit 800 percent of GDP. Ryan added that the CBO is saying it “can’t conceive of any way” that the economy can continue past 2037 given its current trajectory.

April 3, 2011

The World’s Greatest Ponzi Scheme

Filed under: central bank, credit, economy, government, inflation, money, recession — Tags: , , , , , , , — digitaleconomy @ 9:11 pm

house of cardsIn the month of March, the U.S. government spent more than eight times its monthly tax receipts, including money spent for maturing U.S. treasuries.

The U.S. treasury cleared $128.18 billion in tax receipts during the month of March, but paid out a total of $1.05 trillion, which included $49.8 billion in Social Security benefits, $47.4 billion in Medicare benefits, $22.58 billion in Medicaid benefits and $37.9 billion in defense spending. The real financial beating springs from maturing U.S. treasuries where the U.S. paid out $705.3 billion.

In order for the U.S. government to stay afloat with only $128.18 billion in tax receipts, it had to spend $72.5 billion from the balance of cash on hand. This closed the month at $118.1 billion, including the sales of $18 billion worth of TARP assets. Most importantly, the U.S. treasury had to sell $786.5 billion in new treasury bonds, which it will be required to mature at a still higher in the future in order to keep the shirt of its’ back. Surely this is the greatest Ponzi scheme ever executed on the world as the government endlessly seeks to outrun the debt that it creates. The nation is able to fund government expenditures and pay off maturing debt instruments by issuing new and larger amounts of debt. Up to now the Federal Reserve interest has made this debacle survivable.

At this time the interest payments on the United States national debt is the government’s largest monthly expenditure. The world is waking up to the fact that the U.S. government is truly insolvent and that the benefits of propping up the U.S. dollar will no longer be worth the expense to foreign creditors. The U.S. government Ponzi scheme is being exposed for the world to see.

China is becoming more reluctant to continue buying U.S. treasuries as it positions the yuan to be the world’s new reserve currency. Japan needs to raise $300 billion to rebuild parts of their country that were destroyed by the earthquake, tsunami, and nuclear disaster. They will be unable to invest handily in the U.S. or may opt to invest outright in China as money is available. The U.S. desperately needs Japan and the Arab world to roll over national treasuries into larger amounts of new ones. With Arab revolutions taking place across major Saudi states and the U.S. occupying Libya for no good reason at all, the nation is likely see a global disdain for its previously valued treasures that it must sell to cope with the runaway spending and deficits of Congress.

April 1, 2011

U.S. Budget Madness Ensues

Filed under: economy, government, invest, money — Tags: , , , — digitaleconomy @ 7:37 am

fiddling as the nation burnsThe U.S. Treasury has released a final statement for the month of March that demonstrates that financial madness has gripped the federal government.

During the month, according to the Treasury, the federal government grossed $194 billion in tax revenue and paid out $65.898 billion in tax refunds netting $128.179 billion in tax revenue for March.

At the same, the Treasury paid out a total of $1.1187 trillion. When the $65.898 billion in tax refunds is deducted from that, the Treasury paid a net of $1.0528 trillion in federal expenses for March.

That $1.0528 trillion in spending for March equaled 8.2 times the $128.179 in net federal tax revenue for the month.

March 30, 2011

U.S. Geithner Shocks Global Markets by Supporting International Currency

Filed under: business, central bank, corporatism, economy, federal reserve, inflation, politics — digitaleconomy @ 6:49 am

devalued dollarThe plight of the dollar and recent national inflation is making the United States quite shaky for a long-term economic recovery. The powers that be haven’t helped matters. Recently, economic adviser Timothy Geithner has been suggesting that a global currency sponsored by the IMF is desirable. This earth shaking statement caused the dollar to plunge instantly against the euro, yen, and sterling as the comments flashed across trading screens. The fact that anyone of importance is considering dumbing down the dollar is causing great fear and not a little doubt. The mainstream media in the United States has tried to quiet the news by keeping it out of the news.

Barack Obama, in a prime-time press conference on March 25, had at first ignored a question about the subject and, when it was put to him responded tersely: “I don’t believe that there’s a need for a global currency.”

Mr Geithner later qualified his remarks, insisting that the dollar would remain the “world’s dominant reserve currency … for a long period of time” but the seeds of doubt have been sown.

The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours that there is no threat to the reserve status of the dollar.

“I don’t believe that there is a need for a global currency. The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world”

March 15, 2011

Obama’s Plan To Punish Banks

Filed under: banking, business, corporatism, economy, recession — digitaleconomy @ 11:56 am

Large banks targeted“Shock and awe” are in the wings as the Obama administration seeks to force mortgage firms to reduce monthly payments for as many as 3 million distressed homeowners. This is to happen in the next 6 months as part of an agreement to settle accusations for improper foreclosures as well as patent violations of consumer protection laws.

The forced agreement would accomplish four goals set out by state and federal policy makers and regulators as part of multi-agency investigations into abusive mortgage practices by the nation’s largest financial firms. It will punish banks for violations of state law and federal regulations, provide much-needed assistance to distressed borrowers and send a warning to firms about abusing homeowners in the future.

Obama hopes to start a healing process required to clear the large volume of repossessed and soon-to-be-foreclosed homes that’s continue to depress the housing market and prices while draining consumer confidence.

 

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