Busted: Bankers and The Global Economy

June 15, 2011

US economist predicts economic storm in 2013

devalued dollarA “perfect storm” of fiscal woes in the United States, a slowdown in China, the debt crisis in Europe and stagnation in Japan has a decent chance of damaging the global economy by 2013, Roubini told reporters late last week. Even so, he is being quite conservative about it. A 33% chance doesn’t seem like news to me. All this by New York University professor Nouriel Roubini, who correctly predicted the global economic crisis in 2008.

According to Mr. Roubini, the world economy expansion may slow in the second half of this year as “the deleveraging process continues, fiscal stimulus is withdrawn and confidence ebbs.”  To me, this seems obvious. This process is really part of what is already happening. It’s not news. The job market stinks in the U.S. and other modern nations. Money isn’t being made abundantly in the real economy. It’s all on Wall Street and in the investment world, based on heavy borrowing and debt restructuring of nations based on fiat money. Washington has been unwilling to deal with a one-trillion-plus budget deficit and a distinct bond market revolt is in the wings. Investors are waking up to the danger to their investment as US bonds are in danger of becoming junk. This will create higher interest rates and possible hyperinflation, which will remove any possibility of a recovery, even resulting the destruction of the dollar for an international medium of exchange. The bankers aren’t truly bothered by this. Based on inside information, the bankers already have a plan in the wings that I have touched on previously. It’s all about marketing, presentation to them.

Already, we have riots in Greece, as they face the music regarding the bad debt that the nation and bankers have created. They claim that officials need to restructure the debt of Greece, Ireland and Portugal. Waiting too long will ultimately result in the disintegration of the euro zone stability, experts say. Roubini agrees. The ridiculous aspect to the entire scenario is that all banking debt in the current system that is created will never be paid back. Further, much of this debt has been cleverly folded into Wall Street investments with the idea of making money, either through long or short selling. But this does not solve the problem of any debt unless the nations involved have the ability to make money by having control. They don’t. Only the bankers make money on any debt. In the meantime, these nations are paying on interest, not on principal. It’s stupid. The spiral never ends. Roubini and most economists remain silent on this aspect of the system.

Many other analysts, like myself,  have repeatedly warned of a “possible” repeat of the 2008 global economic meltdown in the immediate future. Others, like Moscow financial expert Alexander Osin expresses hope that the international community will be able to find the way out. Russian economist Konstantin Sonin  warns against overdramatizing the situation since people like Roubini are full of it, false prophets, in essence. The solution?

“The world economy faced such a problem in the 1930s,” Osin says, adding that Adolf Hitler’s ascent to power and the beginning of World War Two helped to resolve the problem. “At present, it should be solved by peaceful means, which the global community is almost certain to find.” Certainly, the Russians and Arabs are doing quite well since they are sitting on oil profits. That will only last as long as the current monetary gaming system does. That is the problem behind the whole matter. An eternal debt-based banking system destroys the nations that depend on it unless they are sitting on huge cash cow. Rest assured, that is temporary. If they are doing business with the bankers, the banking system will drain that wealth too. That is the nature of the system in place, as well as the nature of the future system.

So, to solve the problem we need a global war and preferably another Hitler. In the meantime, resolving the monetary system crisis is all about “hope,” and now we are listening to Russians for economic advice. The global economy really is in trouble. There won’t be any gain without plenty of pain. Never mind the pain that so many are in now.

E. Manning

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June 1, 2009

Fed Puzzled by Stats: Are We In Danger?

fed battle economic gloomAll interest rates are not equal when it comes to any given investment product. The rates on bonds of different maturities behave independently of each other. Short-term rates vs. long-term rates can move in opposite directions simultaneously. The gods of finance say that what is important is the overall pattern of interest-rate movement: a direct reflection of the future of the economy and Wall Street confidence.

The Fed is not certain what is driving the sharp rise in long-dated bond yields and has noticed a widening gap between short and long term yields. What does it all mean? Is someone like the Chinese manipulating the market?

A steepening yield curve could mean that investors are worried about the deterioration in the U.S. economic outlook… or the possibility for a collapse in the U.S. dollar as the Federal Reserve continues to load the world with newly minted currency as part of its recent program.

Economists are involved in open combat over what is driving the signs and even worse, what the cause or the solution really is. Some Fed officials believe that a recent glimmer-of-hope in economic data is encouraging investors to believe there is less need for ‘safer government bonds’. Richard Fisher in the Dallas Fed contends that the steepening yield curve is generally a sign of a recovery, but huge debt may dampen that perception.

What is certain is that the U.S. Treasury is being forced to sell more bonds to cover the unprecented U.S. debt and falling tax revenues as a result of the recession. What does appear to be certain is that the relentless dumping of dollars on the market will ultimately result in inflation that could easily get out of hand. Is it recovery from investor confidence, investor manipulation, worried investors or defective monetary policy driven by central bankers? Not even the gods of finance know the answer. The gods of finance do not know right or wrong. They know theory and are now in uncharted territory.

February 9, 2009

Mortgage Bailout on the Way?

obama-mortgage-fingerprintsRemember the mock outrage of so many politicians last year as the U.S. economic national debt ceiling approached $10 trillion? Last October, when we heard about a $700 billion bailout of the financial system, it seemed like all the money in the world as a manner of speaking. Never mind the debt ceiling since President Obama doesn’t recognize national debt as an issue. Since then, the collective “we” in this country have managed to spend another $10 trillion without accomplishing a thing beyond buying preferred shares in certain banks. The year isn’t over yet (it’s only February 9th) and more economic stimulus is probably on the plate as job losses continue.

How has the nation lost its’ way? A lack of common agreement regarding simple principles and a common vision for the future that makes sense reveals the true crisis. Deceptive flawed thinking among lawmakers portends a real problem for the future as far as the common American is concerned.  Disagreement and strife is the real standard that lawmakers hold to. There has been no presidential honeymoon that this writer can see. We have forgotten what stewardship really is. Hope isn’t on the plate where elected lawmakers are concerned. A divided house cannot stand indefinitely. Perhaps President Obama needs to campaign to the American people to grip some sort of vision….but I digress from this mental exercise.

Another couple of trillion dollars would pay off every residential mortgage in the country and Americans would be home free…literally. What foreclosure crisis? Every American with a home would have a piece of America to call their own without a bank involved. Think of the quick national stimulus  the nation would enjoy as everyone spent their house payment on disposable income and new vehicles, the current blight of lack in the current economy.

The fact remains that the national foreclosure crisis is always on the back burner, yet is blamed as the basis for the nation’s economic demise. Naturally, lawmakers can’t support any kind of quick national housing stimulus that I sarcastically penned because of the $40 trillion plus in potential interest  income that scandalous bankers would never receive because of early prepayment before the term. Any bailout like that won’t happen because it takes power away from the system. Taking money away from bankers would be far too simple while firing and imprisoning financial thieves is too difficult and embarrassing.  Real economic stimulus is far too simple when it comes down to rewarding honest income producing activities. Instead, politics simply gives bankers more money as if that will really solve the problem as they complain about esoteric banking derivatives that nobody knows how to fix. Let Timothy Geithner have a go at this bailout.  Based on what has been discussed, the nation is still looking at investment shell games that are no better than what bolstered the economic crisis to begin with on Wall Street. That is the financial literacy that the Federal Reserve and Wall Street know. ‘Democrats’ deserve a chance to repair the system and they will have that chance.

Can you imagine a retired economist presenting such ideas and speaking in such a way? Remember, it is always about money and authority, but then it always comes back to money and the status quo. That’s all about authority too. ~ E. Manning

July 27, 2008

Expanding Inflation Risks U.S. Economy

The debate has been on since the United States has seen an alarming increase in the costs of essentials across the board. For years, the Federal Reserve has ignored the impact of energy and food prices in its computations for inflation. As a result of recent events, the Fed has been forced to retool its thinking, even though the Fed body of thought insists on using the same computations.

The Fed remains skeptical that high commodity prices will ripple through the economy, leading to broad price hikes and big wage increases. Why the Fed assumes that wage increases are even in the cards is beyond most economist thinking. The fact is that the United States is in the midst or very close to what the Federal Reserve and economists hate the most: the evil of stagflation. There won’t be appreciable increases in income, only hikes in cost, loss of jobs and the devaluation of the monetary system.

The myth is that the Federal Reserve can control (more…)

May 5, 2008

New Credit Proposals Rattle Bankers

The Federal Reserve has been setting new baselines all year and last week was no exception. With new power and influence, the Federal Reserve is proposing a new set of credit lending rules that are rattling bankers from coast to coast.

Fed Chairman Ben Bernanke wants to put predictability back into banking costs where credit cards are concerned. The Federal Reserve is setting a new baseline for fairness in banking practices in issuing late fees, unfair interest rates, allocation of payments using balances with different rates, excessive fees, unfair computing of balances and deceptive practices. According to the Federal Reserve: (more…)

May 4, 2008

The Federal Reserve Panic Button

With so little wiggle room in the interest rate, we’ve mused about what the Fed intends to do to encourage the market and to free up liquidity. The Fed has come up with another quick fix. It’s called expanding the Term Auction Facility to $75 billion per auction. Now, the Fed is allowing an expansion of what it will receive as collateral for the TAF. The Fed will now accept securitized “junk” bonds based on the subprime and alt-a mortgage loans in exchange for bank credit to expand banking liquidity. This action is hoped to take additional pressures from the liquidity-pressed commercial bankers in the U.S.

Interestingly, similar measures are being adopted at other international “fellow central banks”. (more…)

March 16, 2008

Fed Emergency Move (on Sunday)

In reaction to U.S. economic turbulence last week, the Fed reacted in emergency sessions on Sunday by dropping the primary credit rate from 3-1/2 percent to 3-1/4 percent. The Fed claims that its reaction is to preserve liquidity for well-functioning markets in the U.S. economy. Based on information that we possess, “Busted Bankers” expects a rough week for the U.S. financial community.

fed-reserve-shot-1.jpgIn a partial enhancement of a recent press release, the Federal Reserve Board voted unanimously to authorize the Federal Reserve Bank of New York to create a lending facility to improve the ability of primary dealers to provide financing to Wall Street banking securities markets. This lending facility will be available for business on Monday, March 17 and will be in operation for at least six months. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment-grade debt securities. In updated news regarding cost, the interest rate charged on lending credit will be the same as the primary credit rate, or discount rate, at the Federal Reserve Bank of New York. The Fed is expecting massive “temporary” bailouts in exchange for banking securities this week and in the immediate future. The Fed has admitted to monetary profits from this endeavor at the cost of the primary credit rate.

The purchase takeover of Bear Stearns by JP Morgan, the fifth-largest U.S. investment bank and a major securities repackager, was also approved in this weekend session. Remember that the economy wouldn’t be in this position if the majority of bankers had not been involved in financial improprieties and blatant greed.

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