Busted: Bankers and The Global Economy

December 31, 2010

2011: A New Year for Dogs & Ponies

It’s been a great year if you haven’t looked much at the world around you, but there is always potential, especially for Wall Street leveraging and central bankers. Since I’ve retired in earnest, I sometimes shut off the news because I’d rather think about something else. Perhaps you’ve been doing this too. If so, you may not for much longer. Scuttlebutt at the G20 has it that the dollar won’t be the darling of the world much longer. So what, you say! That kind of talk has been going on for years. Apparently, the G20 finance ministers have decided that on May 4, 2011 that the dollar will no longer be the “world reserve currency.” So what you say? Even if you don’t believe it, the scenario is rather entertaining, i.e., would make a great movie. It’s a real dog and pony show.

Even now silver and gold paper is highly leveraged, much like the dollar is with the fractional reserve. There is so much leveraged paper out there that the system in place is likely to implode from the panic. There isn’t enough silver and gold bullion in the marketplace, or rather, in the storehouses. This is already heating up into a potential crisis, a run on the bank, as it were. Won’t that make gold and silver more valuable? Only if you have your gold or silver in real gold or silver. In that case, you won’t have worthless paper securities, but a real danger of having your life taken from you if anyone knows you have it. Because of this, you won’t be able to spend it either, because if you did, somebody would know you had it.

As I said, the demand for the real gold and silver will be terrific as the former world reserve currency plunges into oblivion. Either singular scenario means hyperinflation. With OPEC oil being the USA major import, the nation will shut down from lack of fuel or rather, the ability to buy it. The nation has an oil reserve, but that won’t last long the way America consumes it. Too bad we can’t leverage the oil reserve to pretend there’s more. I’m not finished yet.

The Fed has initiated Quantitative Easing (known as QE2) that spells an end to the Bretton Woods accord with the idea of replacing it with a different system. Trading partners are nervous, but they aren’t the only ones. For now, export-dependent nations recycle capital to USA markets in order to sustain demand. The Federal Reserve decided that the only way to fight deflation and high unemployment in the USA was by weakening the dollar to make USA exports more competitive. That means that the USA will be battling for the same export market as the rest of the world, which will shrink global demand for goods and services. Never mind that China’s decision to back off on the dollar would be enough to cause a dollar crisis. Never mind that the multinationals will hate this as profits plunge. Government officials will wet their pants in panic. Number of jobless Americans will go through the roof, if we had one. Wal-Mart, so dependent on China exports will close. Inventories will be short. National GDPs will shrink. Economies will contract. Ooh. It’s not pretty.

Paul Volcker recently opined: “The growing sense around much of the world is that we have lost both relative economic strength and more important, we have lost a coherent successful governing model to be emulated by the rest of the world. Instead, we’re faced with broken financial markets, underperformance of our economy and a fractious political climate…” Everyone has rode the pony too hard. Now the powers that be are preparing to run the show in a way that is untested. We aren’t sure whether the dogs can carry the weight. All those “risk-free” treasury bonds are in real danger. The whole system is bankrupt. The USA stands to lose all its status. Central bankers know this, but they already hold all the valuables, and the means for a new system.

The world doesn’t care about the USA deficit, as long as it’s used to bail out the world in some sense. 100 major cities are facing bankruptcy this year unless they get a federal bailout. Even though Great Britain opted for austerity measures, the USA doesn’t really have this for a choice because they hold the debt bag for the global standard. Central bankers have the valuables and the credit to prolong the current system as they please or not. Meanwhile, Main Street and the population is more tightly squeezed than ever. Those trained dogs are walking a tightrope, but for how long? President Obama needs to hold everything together with a grand distraction so that he will be handily re-elected. What do you think that will be? It’s sure to be glorious.

In the meantime, go ahead and shut off your TV until something better comes along. Have a party while you can. You might not have long to wait.

October 9, 2010

World economy breaking with US

As the US economy teeters on the edge of decline and a double dip recession, emerging economies continue to grow at a fast pace, fueled by multinational corporations. This changing global economy reveals a United States that is not the center of the economic world.

Financial leaders have joined hands to decide how to boost the global economy at the annual IMF and World Bank meeting. A number of these financial leaders suggest a break up, what is known as a “de-coupling”, in the wings for a number of years, but gaining traction as the US economy stagnates. Central bankers, along with complicit US politicians, have rode the US horse into the ground and now have their eyes on the next rising star to enhance their prosperity. Most politicians advertise that the US will live forever, even though powerhouse nations through history have ebbed like the tidal flow.

The world is breaking away from the US as the consumer of last resort,” said analyst Edward Harrison, the founder of CreditWriteDowns.com. “You’ll see a lot more importance in China, in Russia.” Corporate multinationals and US politicians have raided the US economy over the last thirty years and put that stock in other economies like China, Brazil, Russia and India in the name of globalism. The view is that growth in the global economy will be much more dependent upon these countries than on the “developed economies.” Whether this is true or not remains to be seen.

Meanwhile, the US continues to run by idiot lawmakers that are afraid of multinational corporate power or are having their pockets lined behind the scenes. Like the old Roman Empire, the US seems bent on its’ own self-destruction to salve the interests of a few “leaders of men.”

July 30, 2009

Video: The World of Planet Finance

Filed under: banking, economy, inflation, money — Tags: , , , , , , , , — digitaleconomy @ 1:13 am

ascent of moneyEpisode Four of the Ascent of Money illustrates the spread of financial practices across the globe including the bad, the American real estate bubble and the consequences of the subprime mortgage fiasco. The series, hosted by Professor Niall Ferguson is not exactly perfect and leaves out some details along the way. However, the presentation is worth your while and contains some nuggets of understanding that you can take to heart. At the end, this episode clearly shows what happens during hyperinflation, using the plight of Argentina as an example. America faces a similar plight, but has been immune so far because the dollar is the prevalent world currency, bolstered by foreign investment. The dollar as the chief currency could change and when it does, so will the fortunes of the nation.  Right now we have a mighty wrestle going on between central bankers and many nations that could benefit mightily from a global currency change. A shift in that balance will mark the end to  the status that the nation enjoys.      video link

July 16, 2009

Global Economic Crisis: G8 and the Papacy

G8 ItalyDuring the G8 economic meetings and debate in Italy, Pope Benedict released a new encyclical saying “there is urgent need of a true world political authority.” In that document, Pope Benedict XVI urged G8 leaders meeting in Italy to rewrite global financial rules and to defend the world’s poor from the effects of the economic crisis.

responsibility of the market

In and of itself, the market is not, and must not become, the place where the strong subdue the weak. Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations. Admittedly, the market can be a negative force, not because it is so by nature, but because a certain ideology can make it so. It must be remembered that the market does not exist in the pure state. It is shaped by the cultural configurations which define it and give it direction. Economy and finance, as instruments, can be used badly when those at the helm are motivated by purely selfish ends. Instruments that are good in themselves can thereby be transformed into harmful ones. But it is man’s darkened reason that produces these consequences, not the instrument per se. Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.

responsibility of business

Owing to their growth in scale and the need for more and more capital, it is becoming increasingly rare for business enterprises to be in the hands of a stable director who feels responsible in the long term, not just the short term, for the life and the results of his company, and it is becoming increasingly rare for businesses to depend on a single territory. Moreover, the so-called outsourcing of production can weaken the company’s sense of responsibility towards the stakeholders — namely the workers, the suppliers, the consumers, the natural environment and broader society — in favour of the shareholders, who are not tied to a specific geographical area and who therefore enjoy extraordinary mobility. ...business management cannot concern itself only with the interests of the proprietors, but must also assume responsibility for all the other stakeholders who contribute to the life of the business: the workers, the clients, the suppliers of various elements of production, the community of reference.

The papacy has taken an interesting step by inserting itself into the G8 debate framework and  by ordering the involvement of Italy in the process. Certainly, in much earlier times, the papacy was directly involved in such matters without better consequences in those times. History is the best  witness of that truth. Now, the pope indicates that we need a man in charge once again as if the G8 institution is really in charge beyond politics. The real charge has been given to multinational corporations including central bankers on a global basis. The central bankers operate as a global corporate fraternal brotherhood through none other than the Swiss and Rome. Is the papacy and politics going to ‘take authority back’ or have they really lost any authority? The reality is that the papacy already holds ‘such coveted authority’ through the central bankers. Most of them have simply forgotten their moral compass in their need to service their clients. Pope Benedict is simply reminding his league that he holds them to a higher priority and that they need to exert a new influence as they continue to profit from money lending.

G8 first ladies and pope

April 14, 2009

Bernanke: It’s All About the System

monopoly moneyPresident Obama declares that the sun is coming out as the economic storm wanes. “The financial and economic risks posed by a collapse of AIG would have been at least as great as those created by the demise of Lehman. In the case of AIG, financial market participants were keenly aware that many major financial institutions around the world were insured by or had lent funds to the company. The company’s failure would thus likely have led to a further sharp decline in confidence in the global banking system and possibly to the collapse of other major financial institutions. At best, the consequences of AIG’s failure would have been a significant intensification of an already severe financial crisis and a further worsening of economic conditions. Conceivably, its failure could have triggered a 1930s-style global financial and economic meltdown, with catastrophic implications for production, incomes, and jobs. The Federal Reserve and the Treasury agreed that in the environment then prevailing, AIG’s failure would have posed unacceptable risks for the global financial system and for our economy.” – Ben Bernanke in speech to Morehouse College

Magic Money T-ShirtThe American taxpayers have been put on the hook to bail out Wall Street.  Success is still not guaranteed despite a recently sunny disposition. Meanwhile the European Union supports a new monetary system and retirement of the dollar as the prop of the global community that central bankers have long proffered. The general undercurrent in much of the EU underwrites “the collapse of the Bretton Woods system based on the US Dollar as sole pillar of the global monetary system.” This was predicted by some parties in the EU last year, but so far has not come to pass because of the creativity and financial manipulation of the International Society of Central Bankers.

March 29, 2009

Geithner Admits Fed Role in Economic Collapse

geithner charlie roseThe Obama administration wants to add a glimmer of hope to the global fiscal crisis that started with corrupted U.S. corporate policy and banking investment greed. Despite efforts of many to put lipstick on the ongoing economic recession and remove blame from corporate bankers and government, in a recent interview with Charlie Rose, Tim Geithner admitted

“a deepening recession. You’re seeing the recession intensify here and really around the world. You know it started here, but the world is sort of catching up. That’s putting more pressure on business and the financial system as we see it. We start with this deepening recession, intensifying housing crisis, a deep fiscal hole in the financial system that’s in some ways very damaged. Parts of it are working well, parts of it are still very damaged. It’s going to take a lot to work through this. Again, we start with a — just a deep mess. It is our obligation to clean it up and to fix it…”

“I want to be clear. Again, we start with a mess, a deep mess, made worse by the deepening recession. And these things are pitting on themselves. And it’s very important for people to understand, it’s going to take some time to work through this. But what I want people to know is that we’re going to do what’s necessary to get through it. And these things will get traction. They will start to help unfreeze things, and they will help lay the foundation for recovery.”

“They (the Fed) projected that optimism in the future and that created the conditions where people took more risks than they should have, and they, frankly, didn’t pay enough attention to the possibility that when this ended, came apart, that the consequences would be as damaging as they did. Now, I spent almost every day from the first time I walked into the New York Fed about five years ago working with my colleagues on ways to try to make the system stronger so we were going to be better able to withstand the kind of pressures when this came apart, and we did some very important, powerful things, but many of the things didn’t have enough traction, and we share with really all parts of the financial oversight bodies here and around the world a deep responsibility for not having done more and a really deep obligation for trying to fix this quickly and put in place the kind of reforms to prevent this from happening again.”

“Our system was not designed to sustain a shock, a crisis of this magnitude. It’s the tragic failure of financial regulation in this country. It was just not designed to tolerate anything of this magnitude. The critical test of any financial system in some senses is how you deal with stress and shock because you want a system that’s going to be strong and resilient enough to handle almost anything it could face. And this system didn’t meet that test because we had a regulatory framework that was designed, largely, 90 years ago and did not adapt to take account of these huge changes in the structure of our financial system.”

March 11, 2009

U.S. Economy: Prepare for Depression and Inflation

Central Bankers Support More Inflation Now

European Union Rejects Breakneck Fiscal Stimulus

economic-knife

Article on Associated Content by E. Manning

We are living on the edge of an economic knife. The U.S. government is bailing virtually everyone in the financial system out. If this continues, the U.S. can expect hyperinflation that hasn’t been seen since post-war Germany down the road.

Older Posts »

Create a free website or blog at WordPress.com.