Money Matters

Global 0% Deflation Grips Banking Systems

Elaine Meinel Supkis emeinel@fairpoint.net I have to rush out of the house today to deal with medical issues within the family. So I am posting, with little commentary, today's news. Will add to this later when I come home. Zero Rate World May Lie Ahead as King, Trichet Cut

(Bloomberg) -- The age of free money may be at hand. As major central banks slash interest rates with unexpected speed, benchmark borrowing costs are now below core inflation for the first time since the early 1980s, and policy makers are signaling they will go deeper. Yesterday's cuts by the Bank of England and European Central Bank, which came with the Federal Reserve and Bank of Japan on the cusp of zero rates, are a bid to shock life back into their recessionary economies and strained money markets. It may be an uphill battle as consumers and businesses show greater interest in saving than spending, and banks hoard capital rather than lend it.

This is what I feared: the Japanese system sucking down all other systems. The existence of a zero percent top central banking mode is a great black hole that now is driving everyone into the same pit. This system cannot exist for very long as is. The articles all talk about people 'saving' money.

They are not. Money is vanishing. Not being saved at all.

The central bankers struggle with this downwards force. I keep saying, the Derivatives Beast will consume all banking wealth that is denominated in digits. Numbers are magical entities and the Derivatives Beast has all the inner characteristics of all demonic creatures from the Outer Darkness. It is advertised as being safe even though it is now painfully obvious, this thing is exceedingly dangerous. Attempts at explaining away the devouring nature of this hungry, hungry beast has not soothed investors. This is simple: investors clearly see their money vanishing. It is not being transfered to other places. It is simply vanishing. Since all fiat money is made out of thin air and waving of magic wands in dark crypts, it can vanish the instant all the exterior forces cause the flow of money from working people to falter or even cease. This is also why I keep saying, the fundamental basis of all monetary systems is human labor. BOJ Helpless as Yen Rises on Carry, UBS, Barclays Say

(Bloomberg) -- The Bank of Japan may be powerless to prevent the yen from rising to a 13-year high, according to the world's biggest foreign-exchange traders.Deutsche Bank AG, UBS AG and Barclays Plc predict the yen will recover from its steepest weekly decline since 1999 as investors reduce carry trades that fund purchases of higher- yielding assets by borrowing in Japan. The currency will appreciate to 90 per dollar from 97.74 today in Tokyo even if the Bank of Japan intervenes to stem the biggest annual gain since 1998, they said.

This is a total catastrophe for Japan. I have explained this in the past and since time is pressing today, here is earlier remarks I made exactly one year ago: More Wizards Of Finance Fall Off Cliff

Starting in 2000 with the super-duper cheap Fed Reserve loans via Greenspan, the big financial houses like Goldman Sachs and Merrill Lynch and Citigroup all rushed into the Alt-A, etc mortgage/CDO markets. This chart clearly shows they put all their eggs into these mortgage baskets and they enjoyed record profits during this time span. This isn't a situation where a leader made a 'mistake'. This is a classic case of someone at the Central Bank opening the vault and letting looters inside. Now the vault is empty and all the former geniuses who were toasted as great financial wizards are stuck there with money stuffed in their pockets but no exit. [caption id="attachment_56" align="alignleft" width="300" caption="Miz Japan tries to kill the yen yet again."][/caption] So the ritual slaughter of these bulls commences. We will see all the heads of all the great financial houses roll. But the next step must be to arrest them for fraud and other crimes and put them in prison. But if we step even further back to look a the global financial picture, we see clearly who should be arrested: the heads of the governments doing all this, the heads of the international banks, the very people at the very apex of this massive pyramid scheme that was set up to loot the world by imposing an amazing amount of unpayable debts on top of the economic system. *snip* Year*USA CD Rate*Bank of Japan's Rates US Japan 1970.....7-8%......5-6% (Note that they are high but close) 1971.....5-3%......5.25% 1972.....3-6%......4.25% 1973.....5-9%......5-7% 1974.....9-12%....7-9% 1975.....7-6%......8-6% 1976.....5-4%......6-4% 1977.....4-6%......6-4% 1978.....4-9%......3% 1979.....9-13 %...4% 1980.....13-19%..7-9% 1981.....17-13%..6-5% 1982.....13-8%....5% 1983.....8-9%......5% 1984.....9-11%....5% 1985.....8-7%......5% 1986.....7-5%......4-3% 1987.....3-7%......2% 1988.....6-9%......2% 1989.....9-8%......3-4% 1990.....8-7%......5-6% 1991.....7-4%......5-6% 1992.....3%.........5-4% 1993.....3%.........3% 1994.....3-6%......2% 1995.....5-6%......1% 1996.....5%.........0% 1997.....5%.........0% (Note: The Asian Banking Crisis began) 1998.....5%.........0% 1999.....4-6%......0% (Asian Banking Crisis Ends) 2000.....5-6%......0% 2001.....5-1%......0% (Note: 9/11) 2002.....1%.........0% 2003.....1%.........0% 2004.....1-2%......0% 2005.....2-4%......0% 2006.....4-5%......0% 2007.....5%.........0%

We just went through one of the worst global inflationary waves I have ever seen. It was an absolute tsunami caused directly by speculators of all those hell hound hedge funds seeking desperately to make profits in the teeth of the Derivatives Beast rearing his ugly, massive head. The US government allowed the US people to be looted for one year. This is very much like a typical medieval king allowing troops three days of looting when taking a city. Then order is restored but the people have been utterly devastated. The people who pay our politicians huge sums to do their bidding were allowed this wonderful boon.

This failed completely. The Derivatives Beast ate every penny gained by this massive commodities bubble.

The privateering funds failed. After destroying the savings of nearly everyone on earth, they are now defeated by the very nature of the creatures that inhabit the Cave of Wealth and Death. The goddess of Inflation was released to do her worst. She slew everyone in her path. Now, as I expected, the goddess of Depression is rising from her throne and picking up her own sword, is destroying jobs. She reads Marx's 'Das Kapital' in German during her idle hours. She knows very well that jobs in the manufacturing value-added industrial base is the basis of the growth of wealth. So now, she stalks the planet, killing off manufacturing jobs. Here is another story at Culture of LIfe News from half a year ago:The Japanese Markets Drop Like Rock The yen continues to defy all efforts of not only the Bank of Japan but also all the Japanese carry traders, rising again and again against the dollar and even the euro. Dollar Declines Against Yen for Third Day on Drop in U.S. Jobs

(Bloomberg) The dollar dropped 0.5 percent to 97.28 yen at 8:51 a.m. in New York, from 97.75 yesterday. The U.S. currency depreciated 0.8 percent to $1.2813 per euro from $1.2715. The 15-nation euro increased 0.3 percent to 124.60 yen from 124.29. U.S. employers eliminated 240,000 jobs last month after shedding a revised 284,000 positions in September, the Labor Department reported today. The median forecast of 78 economists surveyed by Bloomberg News was for a decline of 200,000 in October. The unemployment rate increased to 6.5 percent. The number of Americans receiving unemployment benefits surged to the highest level since 1983, the Labor Department reported yesterday. A total of 3.843 million workers got unemployment-insurance checks in the week ended Oct. 25, up 122,000 from the prior week.

The goddess of Depression hates workman's compensation and unemployment insurance. I must warn everyone of this: any politician who claims we don't need this or Social Security is someone in love with this dire goddess! And trust me, there are many such people stalking the land. They don't care if everyone falls off the cliff. For some people do very well in depressions. Labor is cheap and money becomes increasingly valuable. And debts, harder to pay off. We see this with the negative equity business in housing. If inflation leads to hysteria, deflation leads to suicide and despair. Inflation leads to war and depression leads to revolutions, I might suggest. Here is some statistics from the Bank of Japan for October: Sources of Changes in Current Account Balances at the Bank of Japan and Market Operations (preliminary figures for October 2008

Banknotes 1		-11,185	406
Treasury funds and others 2		-39,045	-26,294

Surplus/shortage of funds 3		-50,230	-25,888
BOJ loans and market operations		14,860	-5,055

Net change in current account balances		-35,370	-30,943
	Net change in reserve balances	-32,380	7,675
Amount outstanding Banknotes, end of month (Average) BOJ loans, end of month4		766,115 (756,035) 9,610	755,892 (749,865) 0

Increasingly in the red. Bank of Japan: Outlook for Economic Activity and Prices (October 2008)

Economic activity in Japan has become increasingly sluggish due to the effects of earlier increases in energy and materials prices and the leveling-off of exports. Compared with the interim assessment conducted in July, both exports and domestic private demand in the first half of fiscal 2008 seem to have been weaker, against the backdrop of a slowdown in overseas economies and a decline in real purchasing power reflecting deterioration in the terms of trade.The Bank's projection from the second half of fiscal 2008 through fiscal 2010 is that increased sluggishness in economic activity will likely remain until around the middle official 2009. During this period, domestic private demand is likely to be relatively weak due mainly to the earlier deterioration in the terms of trade. Exports are also expected to weaken somewhat against the backdrop of the slowdown in overseas economies and the appreciation of the yen. Thereafter, the growth rate is expected to pick up gradually, as the effects of earlier increases in energy and materials prices abate and overseas economies move out of their deceleration phase, although the timing is likely to be sometime after the middle of fiscal 2009. The rates of real GDP growth for fiscal 2008 and fiscal 2009 are likely to be around 0 percent and around 0.5 percent, respectively, and the growth rate for fiscal 2010 is expected to be around the potential growth rate.

Forecasts of the Majority of Policy Board Members:

• ----------------Real GDP ----Domestic CGPI ---- CPI (excluding fresh food)
• Fiscal 2008:......... +0.1 to +0.2.... +4.3 to +4.8.......... +1.5 to +1.6
• Fiscal 2009:...........+0.3 to +0.7 ...-1.4 to -0.4........... -0.2 to +0.2
• Fiscal 2010:...........+1.5 to +1.9....-0.3 to +0.5..........+0.1 to +0.5

The Japanese see little growth in their economy in the future. They are one of the top 4 economies of the world. Their bizarre economic system is now undermining the entire planetary system. It is not all their own fault, either. It is the fault of the US playing this role of passive consumer of global trade goods. We want to be consumers, not producers. We imagine we can run huge trade deficits to the trillions with no downside. The dynamics of all this is now running into a wall. This wall is the inability of the US consumers to take on more debts. We hit this wall full tilt last year. As the speculators drove up all commodities, this wiped out the finances of the mass of consumers. Many Americans used up all their available future credit, paying for things we need to run our society. Food, fuel and other necessities ate up all discretionary incomes and drove many people straight into bankruptcy. Bankruptcies, when they get severe enough, are trademark indications that the goddess of Depression is at work. Strong Yen To Erase Y690bn From Toyota's Profit Toyota's profits are devastated by the strong yen:

NAGOYA (Nikkei)--The yen's sharp gains against the dollar and the euro are expected to erode Toyota Motor Corp.'s (7203) operating profit by 690 billion yen for the year ending March 31, dealing a heavy blow to an automaker already squeezed by lackluster demand and sky-high materials prices. Toyota Continues Bold R&D Push Despite Earnings Slide NAGOYA (Nikkei)--The leading carmaker is determined to keep investing heavily in R&D, tapping its ample cash on hand, even though it expects group operating profit for the current year to plummet 74%.

Stock crash hits luxury spending Want Rolex, cheap? Lots of Tokyoites trying to unload their bling and things

The effect is noticeable in the Roppongi district of Tokyo - a bastion of nightlife for the high-rollers who toil in finance and information technology as well as for entrepreneurs and other members of Tokyo's nouveau riche. Foot traffic is falling off.

Il Mulino New York, an Italian restaurant in Roppongi Hills, a landmark commercial complex where the Japanese unit of Lehman Brothers Holdings Inc. was headquartered, has experienced a sharp drop in the number of diners who apparently work in the financial sector. WDI Corp., which operates Il Mulino as well as other restaurants, suffered a 4.7% year-on-year fall in same-store sales in September.

A former Lehman Brothers Japan Inc. employee in his 30s offered an anecdote that helps to explain the falloff. "I don't eat out in the evening as often as I did while I was at Lehman and had to wait around for midnight video conferences with officials in New York," he said.

Japan had a fake depression last year. Now, it has become quite real. The collapse of interest rates in the world is not a good thing. Nor will it restart lending. Why lend money when people simply use it to go bankrupt? It is impossible! So lending collapses in depressions. US Treasury wants to borrow record 550 bln dlrs

The fourth-quarter borrowing estimate was substantially higher than the 408 billion dollars announced in July, and is a record high for quarterly estimates, a Treasury official said. "The increase in borrowing is primarily due to higher outlays related to economic assistance programs, lower receipts, and lower net issuances of state and local government series securities," the Treasury said in a statement. The Treasury said the federal government had borrowed 530 billion dollars from the markets in the third quarter. Of that amount, 300 billion dollars was borrowed for the Federal Reserve's Supplementary Financing Program, launched in mid-September in a bid to support the ailing economy.

I got an email today about the collapse in the growth of global reserve funds. During the last commodities inflation surge, we saw these things grow like mad in all the OPEC countries as well as countries selling all sorts of raw materials. Now that manufacturing is collapsing, this is ending. China built up its gigantic reserves because they knew that they had to have this as a cushion for the inevitable manufacturing contractions that seem to come every 8 years or so. They are prepared, unlike the US which held less and less in reserves over the last 35 years. Since China and Japan are no longer plowing vast trade profits into buying US debts, the US government is lending to itself. Peter is lending to Paul who is the banker for Peter and who has decided that debt is money and Peter has no intention of paying any of this future debt which is why it is piling up. Still! The excuse here is simple: during bad times, governments should spend to restart things. But the reality is equally simple: the US refused to pay its own bills when the economy was booming. Taxes were continuing to be cut while spending shot upwards. So during the last bubbles under Bush, our national debt doubled. This was deliberate. The architects of all this wonderful mess said openly, they hoped to use up all our joint credit so they could 'drown government social programs in the bathtub.' And so it is! They are drowning us deliberately and with full malice. U.S. Carmakers Said to Seek $50 Billion in U.S. Loans

(Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC, strapped for cash as sales plunge, are seeking $50 billion in federal loans to help them weather the worst auto market in 25 years, a person familiar with the matter said.The package would be $25 billion for health-care spending and $25 billion for general liquidity that could be delivered in different ways, including short-term borrowing from the Federal Reserve, said the person, who asked not to be identified because the plan isn't public. In return, the companies would be willing to take steps such as granting stock warrants, the person said.

Toyota's profits are falling like a rock. But they are still solvent. Our own industries are not solvent at all. Note how they are asking Congress to bankroll the health care benefits of auto workers! Insane. Time for national health care. Ford Has $2.98 Billion Operating Loss as Sales Plunge

(Bloomberg) -- Ford Motor Co., with U.S. sales shredded by the worst financial crisis since the Great Depression, posted a third-quarter operating loss of $2.98 billion and said it used up $7.7 billion in cash. The per-share operating loss of $1.31 was wider than the 93-cent average of 10 analyst estimates compiled by Bloomberg. Ford said it would trim more salaried jobs by January, deepen its fourth-quarter production cuts and shrink capital spending by as much as 17 percent.

No system can run in the red forever. No government can run in the red forever. No trade deficit can run forever. No system can run on 0% interest. The new government in DC has to wrestle with this while trying to deal with the Derivatives Beast. Cox, the head of the SEC, is going to be removed from office as soon as possible. And Paulson will also be kicked to the curb. We can only hope that more people are removed. But fixing this mess will be painful, not happy. We are now in the embrace of the very deadly goddess of Depression. Inflation is easy to control: raise interest rates. Depression is slippery and nearly impossible to kill. Not if she is allied with the Derivatives Beast.

New Web Site: emsnews.wordpress.com

Dear readers,

I finally got around to launching the new web site. I paid over $150 a year for Typepad service. And like typical modern business people, they decided to irritate me to death for this. I had to periodically remind them that I was one of their elite customers who pays, not gets a free ride. But they didn't seem to get the message. So off I go, yet again.

CLICK HERE TO GO TO EMSNEWS.WORDPRESS.COM:

I left Blogspot because they lost or jumbled my archives as well as letting anyone come along and censor me. Censorship is a big issue with me because I step on many toes while doing analysis.

Analysis without toe-stomping is false analysis. We have to put up with people saying things we don't want to hear if we want to hear things that irritate us. Our entire schooling and media system is set up so it can operate as a barrier to seeing the world clearly. We live in a universe which doesn't give two hoots, what sort of limitations we wish to impose on it.

I will continue to cross-post stories to my old blog for a while until everyone catches up and comes over to the new site. I will be doing things differently here because of the features they have on this site. I hope to make a series of improvements and welcome feedback from readers.

I hope everyone is patient with me as we make this move. One thing I must do is an archive crossing scheme. My in-house staff [the kids] should help out with this scheme. I probably won't do that this week because of lack of time. But as the winter snows fall, my outside work slows down and I have more time to fiddle with things here.

Comments on the opening page will be enabled so feel free to comment! Thanks for the patience and all the previous donations that makes this work so rewarding.

OBAMA WINS IN MASSIVE BLOW OUT!

I have to go to bed but I want everyone here to know that one of Obama's people reads this blog. I hope that he provides us with great leadership and the most important thing a leader must do is LISTEN and CHOOSE CAREFULLY.

Bush loved to say, 'I'm the leader who leads' and other noxious things. Then he set off with great determination to do whatever he wanted, damn the Constitution, damn the entire planet and above all, damn the American people.

Some Americans were happy with this sort of mindless leadership. It took us off the same cliff that all dictators who ignore everyone fall off of: like Saddam, Bush seemed to only have a talent for making enemies or making a fool of himself.

He was a spoiled brat, son of a very connected family that should have raised him properly. Instead, Mama Bush let her son torture small animals, skip out on doing his school work and then he grew up to drink, take drugs and evade the draft with a powerful Daddy's help. Papa Bush was worse than Mama Bush. He spoiled his son totally, gave him every advantage which his son tossed off the cliff. Bankrupting companies handed over as birthday presents, crashing things all over the place, getting arrested and then having Papa clean up the police records, etc.

Good riddance! I hope I never see another Bush walk the public stage ever again!

Now it is Obama's turn. We don't know what he will do. He certainly has patience and a good grip on his temper. These are great qualities for leaders. Hitler couldn't control his temper at all and at the end, was screaming at everyone in his tiny bunker.

One of the top qualities for any leader who has to negotiate with foreign leaders like the very formidable Hu of China, just for example, must be able to control his face, his attitude and his demeanor. I supported Obama for the simple reason, he knows how to eat in public and not puke on people like Bush Sr. Or spray food over everyone, talking with his mouth full like Jr. Bush. Also, Obama knows how to shake hands, say hello without smirking or contorting his face in odd ways like Cheney or McCain.

Obama speaks English. It has been very tiresome, listening to Bush. I was an early compiler of 'Bushisms' many years ago. The author of the book of Bushisms even credited me for my tireless work back in 1999-2001. After that, I gave up in disgust. How on earth could anyone stand this creepy man? Foreign powers had a field day, of course.

ALL DIPLOMACY IS CONDUCTED ON THE BASIS IF LANGUAGES! The exact wording of things matter a great deal! And we had this maniac who could barely construct a sentence, doing diplomacy. This dimwitted dopey diplomacy has been a total disaster!

Obama knows how to talk like a sentient being. Our fading empire needs this desperately. We should all hope and pray that he can make the right choices. And to do this, we must assist him by being noisy and letting him and the new Democratic Congress know what we want.

We want the Bush wars to end. Now.

We want to go back to a balanced budget and balanced trade. That can't be done now. But a first step should be to cut down our imperial obligations to a more reasonable size. We are going bankrupt, trying to rule the planet.

We need a new banking system with laws that have teeth and regulators who regulate, not goof offs. This must be done quickly. And all the authors of the banking collapse should be examined and PUNISHED.

And last but not least: restore our ancient Constitutional rights and close that gulag in Cuba. And stop the Cuban and Palestinian embargoes. One can only hope.

A cartoon I drew over two years ago.

November 4, 2008

Elaine Meinel Supkis

Since I am 100% against letting the Republicans run things any more, I am happy that Obama is probably going to win this election. It is time the US got beyond our own dark roots which is all about slavery and racism. A harmonious nation is one that has opportunities to all people of all races and all religions. I despise ethnic/religious dictatorships like the ones that litter the entire Middle East. The US nation is a nation, not a religious enclave. This is why I totally oppose Palin. She is a religious nut who wants the Apocalypse. And McCain is a lost soul. Wealth destroyed him. 

And there is no one running at the top two parties who understands what is going on here. If Obama does understand, he is forced to play with his own cards so close to his chest, even he can't appear to see them. This is due to our media as well as our business class. The terror of our system is from these forces: they are united in trying to keep the US on track to go down into deindustrialized hell. 

Great wealth is being concentrated at the top via the modern system which is all about luring the American people deeper and deeper into debt. Collectively as well as individually, we owe more and more and save less and less. We are encouraged to do this as our entire banking and trade systems are reset so they encourage debt and destroy savings.  The virtues which we call 'old fashioned' are being reforged into a new, destructive moral code.

During the previous dozen elections, I have actually heard responsible adults say to me, 'Who cares about the next generation. I want tax cuts.' People who worry about their own grandchildren would vote for tax cuts which would burden their grandchildren's entire lives. When this is pointed out, a number of people would say, 'MY grandchildren won't have to worry!' 

There was and still is this pet belief that the grandparents would leave a great boon to the heirs and thus, make up for dumping a mountain of public debts on them. Alas, this belief is collapsing as the grandparents who voted for tax cuts are now piling debts on top of their own homes as they struggle to keep up with inflation.So an entire generation will probably inherit not only vast tax obligations but also will inherit virtually nothing. As I look along the great curve of history, it is not hard to see over the horizon. All we have to do is mentally take wing and fly into the dim future. We can see clearly if we see the past. People who live in the 'here and now' cannot foresee the future since they are often ignorant of the past.

  This collective ignorance of the past isn't the fault of the ordinary American voter. It is a fault of all the people at the very top. They are quite aware of the past. But instead of trying to understand it, they use it to justify the present. 

When 'The Decline and Fall of Rome' was written by Gibbon, this was done as a warning to the newly-born British Empire. Gibbon got bogged down in all the details of the Byzantine Empire and lost sight of the general sense of decline that afflicts all empires. But he needed to write a plain history for others, first. The historians and radical thinkers of the 19th century explored the fascinating topic of the decline and fall of all empires.  Even with this, many thinkers were filled with hubris: they thought their own empires were somehow different!

But none were. Even if an empire was built on the foundation of a democracy, they failed. We know this from history! The Athenian/Spartan imperial complex first killed off democracy and then fell to the sword of Macedonia. Then the new ruler, Alexander the Great, marched off to destroy other, older empires.  Empires that were failing internally even though they were at their own military zenith!

For this is the most startling feature of most imperial collapses: they happen when an empire is spending its greatest sums on self-defense. The British empire bled to death when it was its strongest, not weakest. WWI killed the British Empire. It continued to expand but was fatally wounded and it didn't take much a push to collapse it entirely in WWII.

In WWI, the British and French fought the Germans to a stand-still pretty quickly. In WWII, Germany swept in nearly effortlessly. Japan, in the East, rolled right over both French and English colonies with barely a pause. The lessons our 'Greatest Generation' has not learned from all this is obvious: the WWII propaganda is all about how great the West was and how our greatness defeated the Nazis and Japanese.

Not, how very weak the previous imperial rule of Europe had become. And why it was weakened.  Our Presidential candidates cannot run on a platform that discusses the loss of US military and diplomatic power. But it is a very necessary conversation for the US people! We can't evade this anymore.

England's industrial base was destroyed after WWI. Today, Britain has virtually no industries at all. They make believe that this is no tragedy. Why, Britain is just this small island complex! BUT SO IS JAPAN.  Is Japan deindustrializing itself? Obviously, not! There are now no British auto makers. There are still very big German and Japanese auto makers. No British subject runs any automobile systems. German and Japanese auto manufacturing plants are being built and run all over the planet!

 The US native auto industry is collapsing here at home. General Motors and Ford build more than half of their cars overseas. So they continue onwards. But they are deindustrializing the US relentlessly. It is only a matter of time before only foreign owners will be building any cars here. And they will do this only because it keeps political heat off of them. If they just export cars to the US, they get exposed to political calls for tariffs and barriers. 

One major feature of all imperial collapses is the problem of taxes and the increasing burden of past spending.  All empires basically go bankrupt. And a key component of this is military spending coupled with corruption at the core.  To fund the military, it ceases to be a joint effort of the people and becomes a privatized military system which protects only the wealthy and leaves the population as foreign interlopers who must be prevented from interfering with the ruling class.

We see this, again, in Britain: I read in the news this week that the government wants to bring in Gurkas from former colonies in Asia to patrol Britain!  These mercenaries are exactly like the ones Romans used to keep their own people at bay.  Bringing in foreigners who are of a different ethnic/religious group who will swear fealty ONLY to the ruling elites who pay them: this is a certain sign that the British people are finished as a political power.  They are now merely tax sheep to be sheered when necessary. 

It is a slow process: first, you let the population spend on bread and circuses.  Then, you enslave them with the burden of the debts caused by this largesse.

The United States already recruits our troops in foreign lands.  Then, our imperial overlords send these troops to other countries to occupy them and exploit the natives there.  This is tremendously expensive so the overlords merrily charge all of these expenses to the bills owed by the public at home.  That is, our grandchildren.  They will be enslaved by these military and trade bills we are charging to the future!

No one wants to stop this because it is right now, painless.  We imagine that if there were another Pearl Harbor, we would just up the output of our factories and....Britain could barely crawl along during WWII and certainly has no industrial base to activate today if they needed it again.  And the US is rapidly approaching this same, dire situation.  Now, on to the news today:  

Vote for ( ) By THOMAS L. FRIEDMAN

Unfortunately, you’d barely know that from the presidential debates. Watching them in the context of the meltdown of the financial system was like watching a game show where the two contestants were kept off-stage in a soundproof booth and brought out to address the audience without knowing the context. Since the last debate, John McCain and Barack Obama have unveiled broad ideas about how to restore the nation’s financial health. But they continue to suggest that this will be largely pain-free. McCain says giving everyone a tax cut will save the day; Obama tells us only the rich will have to pay to help us out of this hole. Neither is true.

We are all going to have to pay, because this meltdown comes in the context of what has been “perhaps the greatest wealth transfer since the Bolshevik Revolution in Russia in 1917,” says Michael Mandelbaum, author of “Democracy’s Good Name.” “It is not a wealth transfer from rich to poor that the Bush administration will be remembered for. It is a wealth transfer from the future to the present.”

This is one of my earliest Friedman cartoons.  I was just learning to draw using the Wacom pad system.  This system is very difficult to master at first so I drew stick figures.  It was hellishly hard.  Instead of direct transmission of mind to paper, I had to draw in my lap while looking at the computer screen.  Very difficult to do at first!

Friedman is a top pundit.  He is also directly responsible for the destruction of the entire US industrial base.  He is the front man for destroying our nation.  Just this week, an African man was sentenced to prison for committing international crimes when he supported illegal war efforts by his own rulers.  We punished Saddam's press staff.  We punished Hitler's press staff, too.  

They are all held responsible for the actions of the people they service!  So it is here: Friedman is serving the traitors who are rapidly destroying our nation.  He should certainly be arrested for crimes against the entire American people!  Not to mention, his many war crimes.  For he is a war monger as well as a de-industrializer sympathizer and running dog for the international bankers seeking to drive us all into debt.

My 2005 cartoon is pretty clear: Friedman is happily pushing US workers off the New World Order Flat Earth he and his buddies created for us.  Here is one of my oldest articles:

June 14, 2005: FRIEDMAN CELEBRATES JOB LOSSES

My, having a secure job that won't be outsourced certainly is fun. One can happily poke a hot poker into the ribs of fellow Americans while utterly protected. The cold blooded antipatriotism of writers like Friedman astonishes me. Do the owners of the NYT view our country this way? One wonders and one suspects. Seems many in Congress think this way, too. Certainly, most of our business owners are like this. They hate America. JUNE 24, 2005

*snip*

I will spare you all the horror of reading anymore of this tripe. This wealthy, pampered pet of the ruling class, sub group, pro-fascist Israel, thinks a 35 hr week and welfare benefits are silly Frenchie things, non? I would love to park this guy in a mud hut somewhere like in the middle of Gaza and let him fend for himself but this will not happen. So this lapdog doth yap at us mere chattel for wanting simple protections so we won't all end up in mud huts, too.

This was my reaction to a classic Friedman editorial demanding Congress not even slightly restrict imports!  He is one of the many-headed Beast of Babylon that has destroyed our nation.  He is probably one of the top enablers for globalization.  He is focused on one thing: destroying all our protections so we cannot stop a flood of imports.  Japan and China control imports!  Europe does, too, via domestic consumption taxes.

But the low-tax ideology of the US has doomed us to having absolutely no barriers to consumption.  And we consume like crazy.  There is an obvious connection between easy credit and the US public buying too much imported goods.  The cheaper credit is, the higher our trade deficit.  In turn, the Flat Earth empires exporting to us lend us more cheap money so we can continue this.

We saw this week, our own rulers cooperating with the entire planet to drive interest rates here down to sub-1% levels so we can continue to collapse into deeper debt!  And Friedman applauds all of this!

Here, again, is Culture of Life News addressing these problems long ago:

2005:  Friedman Wants US Economy Magically Fixed

So many people trust this con artist. Why are we 'a country in debt and in decline' in the first place? Before 'free trade' took over, we had no trade deficit. As I showed clearly in this week's articles detailing past Federal Reserve speeches, the US decided to cope with suppressing inflation by the neat trick of devaluing the currency abroad while simultaneously opening up the US to 'foreign competition' that was designed to force prices downwards via dropping union wages. To clinch the deal, the US media had to herd the voters into backing anti-unionist Ronald Reagan who cheerfully destroyed the right to strike. Now, strike breakers can replace striking workers permanently so no one dares to really strike anymore. Unions have had severely declining membership since Ronald Reagan's rule and now are utterly vanishing as the Old Guard are bought out with bribes and replaced with non-unionized, weaker workers who have far less pricing power and much, much lower wages and virtually no benefits.

Namely, the workers ate inflation. Free trade benefited Asia and Europe. Both saw huge trade surpluses with the US. Both saw their important industries grow massively. Both saw their sovereign wealth increase. Meanwhile, the US had little inflation but rising debts, loss of good industrial jobs, and the de-industrialization of this nation. If WWII were looming, we would have to surrender to Japan since we can't manufacture much of anything to keep ourselves going. We can make weapons but what if we have virtually no steel mills? Most of our ball bearings, fasteners and other vital things are made in Japan, China and Germany! The materials that make the wings of our fancy jets so fancy are made in Japan, not the US.

Friedman encouraged and enabled all this. For years and years, this Zionist who dreams of making Israel super-strong made America super-weak. We have to talk about this business because when we see treason, we have to answer the question, 'Which nation does this guy really work for, anyway?' Suspicions have to be aired. Of course, if anyone does this, they get censored or shoved aside in the US. We are not supposed to ask this vital question. When writers consistently push for things that destroy America, we must explore the question, 'Why?'

Some time ago, I showed that Israel, Friedman's home away from home, has enjoyed an international trade surplus. This is due nearly entirely because the US has a huge trade deficit with Israel. On top of paying for Israel's military, all peace initiatives and other hand outs. Israel is by far and away, the #1 recipient of US public largess. Friedman never complains about all this. He is very jolly well overjoyed about this. This is for him, good news, not bad news.

Here is another old story I wrote:

MARCH 06, 2006 Flat World Free Trade Traitors Screaming At Americans While Selling Our Security To Enemies

Back to Friedman's NYT editorial today:

A major money market fund — Reserve Primary — failed in September because the extra interest it offered customers derived, in part, from the $785 million in high-yielding Lehman Brothers commercial paper and notes it was holding. Depositors who told their congressmen to just let that greedy Lehman Brothers fail were shocked to discover this meant that their own money market would be frozen. No, we don’t need a president defending greed on Wall Street, but we do need one who can explain that we are all in the same boat, that a leak at one end can sink everyone and that while we must regulate, we don’t want to kill risk-taking and the rewards that go with that — which are essential to growing our economy.

This man is not only nuts, he is heartless.  I don't recall the public demanding that Lehman Brothers fail!  The US public would prefer that NO businesses fail!  Indeed, the #1 job of the Federal Reserve is to protect us from all of this.  And the means for this is to not allow bubbles to form OR TO LET TOO MUCH CREDIT BE CREATED!!!!

The Fed failed, of course.  Since the guys running it listen to creatures like the heartless Friedman guy, we get bad advice as well as the devotion of the Fed's officers are not aimed at protecting us but enabling people like Lehman Brothers to do stupid things.

What stupid thing did Lehman Brothers do, anyway?  HAHAHAHA.  They helped create and feed the Derivatives Beast!  Paulson wanted to save them the same way he saved Bears Stearns: by taking in the losses and handing over the goodies to JP Morgan or Goldman Sachs.

But when he tried this for Lehman Brothers, he discovered that NO ONE WANTED TO DO THIS.  It was because of the huge overhang of Derivatives Beast messes!  Anyone who sucked down this baby would go instantly bankrupt no matter how big.  And this definitely includes our Federal Reserve!

So they decided to see what would happen if they let it all just die. It instantly set AIG off the cliff!  They were forced to save AIG because this would bankrupt the entire planetary system!  Right now, we are seeing the DTCC attempt to make the Derivatives Beast a less frightful creature only even they dare not publish, in public, the actual deals and numbers.  Indeed, Mark It was launched for this purpose: to give us a mark-to-market view of the actual real value of all the SIVs and CDOs and other goofy instruments sold by Lehman Brothers and others.

I watched in amazement last year as the Mark It graphs plunged to basically $0.  They were obviously worthless.  The Treasury and Fed Reserve are still struggling to save AIG.  The bill is now nearly $200 billion and rising.  And the AIG executives are using a huge hunk of this to party and pay themselves bonuses!  All the gnomes being saved are doing this.  They are treating this as a looting expedition, not a way to save America.

Friedman's sneering at the poor savers who are losing over 90% of their savings is pure Friedman fun: he is a terrorist.

About risk taking: the Lehman investors were forced into increasingly risky ventures due to the central bankers dropping interest rates far below the rate of real inflation.  This isn't investor greed.  This is investors being denied a safe return that is realistic.  If they want more, they deserve to lose money if their bets don't pan out.

On the other hand, Friedman and his buddies all lied about risk!  They told investors that the Derivatives Beast would eliminate all risk.  So anyone who wrote positive stories about how credit default swaps ended risk should be arrested for fraud or enabling a con job.

JUNE 17, 2005 SNOW BLINDNESS

Is our economy expanding? Friedman, this last week, said he wanted Toyota to take over our entire auto industry. Because it is collapsing. I suppose next week, he will call for China to take over everything else...oops, they are. If we are "expanding," I see no sign of this. For the last thirty years, hiring in the manufacturing sector has collapsed. At first, they pretended this was due to automation. But we don't see lots of robot run factories being built, are we?

Another very early Friedman cartoon.  Note the corporate jet flying away!  Friedman isn't the only traitor who is la-de-dah about Japan destroying our auto industries.  In England, Honda is forcing the government to subsidize their plant there since there is NO English auto industries anymore.  The ones that were English are now parts of German or Japanese auto corporations!  How far they have fallen!

More Friedman Fun:

So who are the brilliant minds that will be called to talk about all this? Friedman? Kristof? A Bush person? I can't wait to see which liars or fools are called forth here.

Back to Friedman's whining about world trade:

Third, we need a president who can rally the world to our side. We cannot get out of this crisis unless China starts consuming more and unless Europe keeps lowering interest rates. Everyone is interconnected, and everyone is still looking to America to lead.

If China 'consumes more' this means someone has to consume less.  Or pay more in competition with the Chinese.  For example, oil.  If the Chinese buy more cars, they will use more oil and this means we either use less or pay more, ourselves.  And if we imagine the Chinese, who let foreign automakers build factories there, won't take over these systems one by one, we are foolish.

For this is their 50 year plan!  They told me this years ago!  They plan to have all the best factories transfered to China and then relentlessly drive out all the foreign devils who run the main offices.  This is a sly take-over that the entire government is focused on!  Trust me on this one.

Which is the exact opposite of America's ruling elites.  They want to enable foreign domination, not the opposite.

Culture of Life News, May, 2005: WHERE ARE THE EXECUTIVES? asks Friedman

Friedman: 'After six weeks of being a foreign correspondent traveling around America, the biggest question I have come home with is not "What's the matter with Kansas?" but rather, "What's the matter with big business?"'

Earth to Friedman: nothing is the matter with big business. They are doing hunky dory.

No more taxes, no more regulation, no one stopping them from becoming agents for China. As this blog has written about in the past, the magazine, Fortune 500 had jet loads of these MIA execs flying into China to wine and dine and cut deals. They are very much in evidence...overseas. They are busy selling off factories here and shipping them off to communist China. Duh.

*snip*

Friedman at the NYT yet again:'"America faces a huge set of challenges if it is going to retain its competitive edge. As a nation, we have a mounting education deficit, energy deficit, budget deficit, health care deficit and ambition deficit. The administration is in denial on this, and Congress is off on Mars. And yet, when I look around for the group that has both the power and interest in seeing America remain globally focused and competitive - America's business leaders - they seem to be missing in action. I am not worried about the rise of the cultural conservatives. I am worried about the disappearance of an internationalist, pro-American business elite."'

Why can't Friedman find these people? I track them daily, easily. He can too, if he can't, he can read this free blog! Friedman wants to know why General Motors isn't for universal health insurance.

Taxes. This means they pay Federal taxes and they and their buddies want to kill Federal taxes. They want to kill the unions. Using the health insurance issue as a club to smash in the heads of the unions is well worth it. They have zero interest in a good health policy for all Americans. They hate this concept. They think all other industrial nations are nuts to have this, they want communism like the Chinese have. Ahem.

Poor flat earther Friedman wonders why these corporate monsters don't want a sane energy policy. Well, they won't make money on this, to build a new infrastructure will require investing in America and take away money building factories in China. So it is dead in the water. When the Chinese sell us energy systems, and they will, they are very interested in this stuff, we will buy from them. Why invest at home?

Nothing has really changed since I wrote these old articles.  Except our entire banking system has collapsed.  And since 2004, our trade deficit was nearly a trillion dollars in the red every year.  And these facts still don't faze our pundit class clowns.  They continue onwards, deliberately refusing to see reality.  Their reality is pure fun.  

I make very little money commenting here.  Thanks to wonderful readers who take the time and have the generosity to donate funds to my small news service, I get to enjoy posting, using good equipment.  But Friedman makes millions of dollars thanks to his New York Times platform.  He was put mercifully behind a 'pay to view' wall which is why I ceased mentioning him after 2005.  But that wall is down and now I can throw rotten tomatoes at this idiot again.  Thank you, New York Times.

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Culture of Life News Main Page

November 3, 2008

Elaine Meinel Supkis

One of my favorite song birds, Yma Sumac, has flown from this earth and is now gone forever.  Time to memorialize her.  Also, we talk about the Japanese carry trade yet again.  It is being restarted with great effort by the central bankers who want to continue flooding us with debts.  And Rubins and Bernstein, two of Obama's economic advisors, talk at the NYT.  I rip things apart.  And we discuss the Volcano Gods who happen to be in the news today.  

Yma Sumac, a favorite singer I used to love, has just died, age 86.

The fine lady with the most amazing voice, Yma Sumac, has left us a fine legacy of a lot of popular, entertaining music.  When I was a child, I wished I had her wide ranged voice.  But alas, I was not allowed to sing well.  My throat was operated on when I was still a child and I bear the big gash across the neck to this day.  When I was young and the scar was very striking, I used to tell children that someone tried to slit my throat but I fought him off.  Heh.

So much for lying about things!  It was amusing, though.  As for Yma, she sang her heart out and I am glad she concentrated on South American themes, composers and culture.  During WWII, the government was worried about losing the allegiance of South American and Central American nations so they began this big, big push to popularize the cultures that are south of the US borders.

Thank goodness for that!  I happen to love many different cultures.  Japanese, Chinese, European, African, South American, etc.= all have something wonderful to give us!  This export of cultures I highly recommend.  This is quite different from destroying our own industrial base type of export/import markets.  I am an enthusiastic supporter of cultural exchanges.

Back to the 1940's: the US government encouraged artists and performers from this hemisphere to produce things in Hollywood or tour the nation.  So the wide variety of peoples and cultures of the South came to our nation and opened many doors here.  And I remember this flood coming in the 1950's.  It influenced our sense of color and space as well as the rhythms of our music, our dance.  A tremendous influence.  And Yma was one facet of this diamond studded gold rush.  Thank you, my dear, for giving us your gifts so generously.

Indonesians appease volcano gods with sacrifices

Today thousands of pilgrims flock to Mount Bromo on East Java each year to offer the spirits food, live animals and money and ask for prosperity and health. Bromo, a 7,641-foot volcano, is one of Java's most popular tourist attractions. The poor arrive days ahead of the ceremony, carrying fishing nets to catch money and anything edible. They camp under tarps in the crater atop the mountain's chilly slopes.

Time for the annual human sacrifices to the Volcano Gods!  The Volcano Gods are like the Lightning Gods: very, very dangerous but also the source of life and wealth.  The lightning storms brought us fire and water: the falling rain soaks the parched land and things grow.  Volcanoes spew out the wealth of the inner core of this planet.  The mineral wealth this brings is very good for growing things but like lightning, it is also destructive.

The hammer of lightning and the forge of volcanic fire created humans.  We evolved rapidly due to these forces of nature!  Several major volcanic events in the history of this planet shoved evolution forwards at a tremendous pace.  The skies dim under the aerosol veil as the fine dust covers the entire biosphere.  This dimming of the solar energy leads to a cooler climate.  This, in turn, causes starvation and death.

Indonesia's volcanoes have caused huge havoc in the past.  The eruptions there nearly wiped out all early humanoids, for example.  So it is no surprise to see the people there worshipping these dangerous mountains as gods.  But since the best farmlands tend to be in the range of volcanic events, humans are resigned to living with this planetary hazard.

This story today interests me because it is so true to the concept of human wealth and power as well as the dangers that the poor must take to gain even small boons.  Note that the rulers of this region used to use human sacrifices to placate the gods living in these mysterious deep holes that go far into the earth.  Secondly, to make these gods happy, humans not only throw humans but other things into these volcanoes.  

Third: despite the belief that the offerings must go to the gods, the poorest humans scramble into a very dangerous place in the hopes of catching a few of these falling items as they are pitched into destruction.  Fourth:  the destruction of wealth is seen as a way of protecting FUTURE wealth!  This is the top item here, in my mind.

If the people fail to sacrifice something valuable today, they believe they will be punished tomorrow.  So these people who often had little to give up, would assign high values to things and then pitch these into a volcano or a deep, deep lake.  Often, they would make things out of gold and then toss it.  This was because gold was seen as eternal and connected to the Death Gods.  It had little real use in the real world.

But as a currency for the true overlords, the Gods, yes, gold was quite valuable.  We must remember that the Egyptian pharaohs or the Inca emperors didn't park gold deep in lakes or deep in caves or in pyramids, etc in order to keep it for themselves.  They did this for the Afterworld.  What I often call, the Outer Darkness.  Our museums are filled with these things that were created for the Death Gods.  We pay a lot of money to view them with wonder and envy.

So let's go to today's news again.  The world is in a global grip of a mega-financial meltdown which is due to the Emperor of the US refusing to pay tribute to the gods or to keep an even balance between revenues and desires to spend.

Yen Falls on Speculation Stock Rally to Encourage Carry Trades

Bloomberg) -- The yen fell against the dollar and the euro as a rally in Asian and European stocks encouraged investors to step up purchases of higher-yielding assets financed with the Japanese currency.

The yen also weakened versus Australia's dollar on expectations the Reserve Bank of Australia will cut interest rates tomorrow to sustain economic growth. The Japanese currency slid against South Korea's won and India's rupee after Korea announced a $10.8 billion stimulus package and India's central bank cut borrowing costs for the second time in two weeks. The dollar declined against the euro before reports this week that may add to evidence U.S. economic is slowing.

``We're seeing a bit of risk appetite returning as things stabilize and I wouldn't be surprised to see the yen even lower,'' said Ian Stannard, a senior currency strategist in London at BNP Paribas SA, the most accurate forecaster in a 2007 Bloomberg survey. ``We should see lower-yielding currencies coming under some more pressure.''

*snip*

The yen has appreciated 8.8 percent versus the greenback since Sept. 12, the last trading day before Lehman Brothers Holdings Inc. filed for bankruptcy. The remainder of the world's 16 most-active currencies declined as frozen credit markets and a rout in stocks that wiped out more than $13 trillion of market value fueled risk aversion. The yen may drop to 103 against the dollar in the next week, Stannard said.

Japan sighs with relief.  They are absolutely desperate to get the yen above that horror level of 100 or less to the dollar.  They are happy that the US government is equally desperate to restart the mega-moneymaking-machine of the Japanese carry trade.  This will pour more liquidity around the planet and we will continue with our false sense of well-being as we get shoved deeper and deeper into the volcano.  

If the Japanese carry trade leads to huge sums of free funny money being tossed madly into this massive volcano, we can lurk below the rim and catch some of the loot as it plunges downwards.  There is a lot of economic debate going on here on this planet as people struggle to understand the nature of magical money and how it intersects with reality.  

One cannot do this unless one first accepts the concept that all of this is magical and all of this is very connected with fires and holes deep in the earth.  And the heavens, of course.  And above all, death.  If our cultural ancestors across the planet knew that gold and wealth was very much connected to Death Gods, we must accept this as a fact of human nature and deal with it appropriately.

The US prayed to the Kami of Japan for wealth.  These Kami are often found in volcanoes.  And the ocean.  The magic golden fish that grants wishes lives there, for example.  We begged these Kami for wealth without work.  They granted our wish.  But of course, this will destroy us.  But being Death Gods, they are overjoyed we made this request and are very happy to grant us this wish.  Throughout the history of fairy telling stories of yore, there is this common thread: wishes are DANGEROUS.  One doesn't get what one imagines when one wishes.  Especially if the wishes are being granted by the gods and goddesses who control access to the Cave of Wealth and Death!

Bloomberg:

The yen also weakened as volatility implied by one-month euro options against Japan's currency fell to 42.40 percent, from 43.93 percent on Oct. 31, signaling a reduced risk of exchange-rate fluctuations that make so-called carry trades unprofitable. Volatility was 49.62 percent Oct. 27, the highest level since the common European currency's debut in 1999.

In carry trades, investors get funds from countries with low borrowing costs, such as Japan, where the benchmark interest rate is 0.3 percent, and invest the money in overseas markets where returns are higher. Japan's main interest rate compares with 3.75 percent in the 15 nations that share the euro and is the lowest among industrialized countries.

Japan doesn't mind it if the US drops interest rates to Japanese levels.  Since Japan already has worked well at deconstructing the US industrial base and now has outpost factories here which send all their profits to Tokyo, they are happy when our government desperately lowers interest rates and makes credit easier to obtain.

Japan's carry trade was never mainly with the US in the first place.  It is with other, much smaller nations.  This way, they can happily inflate the number of dollars across the planet while virtually none of this except a small overflow, goes directly to the US.  This is fine with our rulers.  They don't want inflation due to this flood of US dollars coming home.  The violent unwinding of the Japanese carry trade coincided with the biggest inflation bubbles in commodities, by the way.  All of which mainly happened in the last 2 years.

The US and Japan like it this way.  The US can overspend budgets and the Japanese buy our debts so they can continue both the carry trade as well as increasing the US trade deficit.  Anyone even slightly interested in fixing the present mess has to address the politics of the Japanese carry trade.  It is painfully obvious to me that everyone at the top want this to continue no matter what.  Let's look even deeper:

5 trillion Yen shortfall in taxes expected

Overall tax revenue for fiscal 2008 will fall more than 5 trillion yen short of the government's 53.5-trillion-yen estimate, due mainly to poor corporate performances, the Finance Ministry said.

The shortage in the general account could force the government to issue deficit-covering bonds, which will likely push the total amount of national bonds issued this fiscal year past 30 trillion yen for the first time in three years.

The government intends to attain a primary balance surplus in fiscal 2011, at which the sum of new government bonds issued each year is kept under the total repayment of interest and principal for bonds issued in the past.

But the additional deficit-covering bonds for fiscal 2008 would make it extremely difficult to achieve that goal unless there is a sudden surge in tax revenue.

The government's tax revenue estimate for the current fiscal year was based on economic forecasts and corporate performances as of last December.

Corporate tax revenue, which accounts for about 30 percent of total tax revenue, was estimated at 16.7 trillion yen.

Japan has the cheapest credit on earth.  And for a very long time, too.  This was no emergency.  Unless an emergency lasts forever.  They have found this deep hole in the ground, one that is actually a volcano.  They are happily using this to create massive global credit.  This, in turn, has flooded all nations with debts.  International debt levels are increasing.  

Japan has the world's #2 FOREX reserves which are mainly dollars.  And yet the government is running in the red!  This, after strangling public services.  The government could use their reserves to make the shortfall.  But why do that?  They are borrowing at virtually free values!  What is there to stop them from borrowing even as they flood the planet with debt via their FOREX reserves?  This is fundamentally very bad!  But they don't care.  Everyone is clamoring for them to do this.

The other matter here is the fact that Japanese corporations that make some of the highest profits via their export trade, pay 30% of the government's taxation!  So let's go to the other side of this trade ledger: the US spending and taxation systems.

THE DECLINE OF CORPORATE INCOME TAX REVENUES By Joel Friedman

Deficits over the next decade are now projected to be enormous in size. A joint analysis by the Center on Budget and Policy Priorities, the Concord Coalition, and the Committee for Economic Development projects deficits totaling $5 trillion through 2013.

An analysis by Brookings economists reaches a very similar conclusion, while Goldman Sachs projects deficits totaling $5.5 trillion.[1]

Despite the deteriorating fiscal outlook and the historically low corporate revenue collections we already face, Congress nonetheless seems poised to shower more tax breaks on corporations that would cause deficits to grow substantially larger over time .

Treasury Department figures show that actual corporate income tax revenues fell to $132 billion in 2003, down 36 percent from $207 billion in 2000.

As a result of these low levels, corporate revenues in 2003 represented only 1.2 percent of the Gross Domestic Product (the basic measure of the size of the economy), the lowest level since 1983, the year in which corporate receipts plummeted to levels last seen in the 1930s.

Corporate revenues represented only 7.4 percent of all federal tax receipts in 2003.

With the exception of 1983, this represents the lowest level on record (these data go back to 1934).

 

I heavily amended these graphs to illustrate the forces at work here.  Here is a most important fact we must never forget:

WHEN THE US RAN TRADE SURPLUSES, WE TAXED CORPORATIONS AT 30%!!!  

This startling fact should be a hot topic.  These graphs are very good at showing how the deterioration of corporate tax revenues corresponds quite directly with the deteriorating US trade situation.  Namely, I simply made the years that we ran a trade deficit, red.  And the previous period in green to reflect the profits from back then.  

A general rule of thumb is very simple: if someone is doing something and it is quite successful, we should imitate them.  The Chinese follow this rule very closely.  This irritates the Japanese, of course.  We are in competition with both China and Japan.  Not to mention, the rest of the world.  We can have and want global trade and I am all for this.  But NOT global one-way trade.  

Namely, the US cannot run deficits nonstop.  There was exactly one year we ran a surplus.  But this was due to Gulf War I when Bush Sr. sold our soldiers as mercenaries to the despotic rulers of Kuwait.  Not because the US suddenly began to manufacture and sell overseas, more US goods.  

More Yma great singing:

Here is a New York Times story about how this flood of Japanese carry trade funny money ravaged our entire corporate base even as the easy lending sent stock markets to the heavens:

Debt Linked to Buyouts Tightens the Economic Vise

Private equity firms embarked on one of the biggest spending sprees in corporate history for nearly three years, using borrowed money to gobble up huge swaths of industries and some of the biggest names — Neiman Marcus, Metro-Goldwyn-Mayer and Toys “R” Us.

When the economy was booming, the firms made huge profits by cutting costs at their new acquisitions, improving operations and then turning around and selling them. In 2007, at the height of the bubble, such deals totaled $796 billion, or more than 16 percent of the $4.83 trillion in all the deals made globally that year, according to data from Dealogic.

Firms like the Blackstone Group and Kohlberg Kravis Roberts & Company, faced an image problem at the height of the bubble for excessive compensation and beneficial tax treatment, but their returns were so high that even investors like pension funds were drawn in. Now these firms, built on enormous amounts of debt, are being forced to go back to the financial markets just as those markets have nearly frozen up.

If history is any guide, the worst may be yet to come. Steven N. Kaplan, a professor at University of Chicago Graduate School of Business, found that nearly 30 percent of all big public-to-private deals made from 1986 to 1989 defaulted.

Why did our nation allow this?  The rulers knew that this sort of debt-piling on game would have AT LEAST a 30% default rate!  This is totally unacceptable.  A 10% default rate can cause an entire economy to go into a bad tailspin. 

Recall, please, how this present collapse is being nearly totally blamed on the poor homebuyers who are at the very bottom of the money feeding scale, the people who live on the lip of the volcano and spread their aprons and nets to catch some of the loot.  How sad this all is!  Innocent people trapped inside the volcano are being blamed for it blowing up.

The US ruling elites and corporate overlords knew perfectly well, the game they were playing would, AT BEST, lead to a 30% loss if things didn't continue to expand.  So they continued to expand things despite knowing this. The tool they used the most was the most insidious of creations: the Derivatives Beast!

Yes, it all boomerangs back to that thing.  Millions of humans will die in the volcano because the Beast lives there and is one of the Death Gods!  Workers who live inside the lip of this mighty volcano were told to give their money to the guys throwing it into the volcano and if they catch some of this falling loot which were their own savings, they would get RICH!  Only, they won't get rich.  For none of the savers in the volcano were told that the failure rate of these loans would be at least 30%.

Instead, they were told lies about the Derivatives Beast.  They were told, this deadly creature would shelter them.  And so the money is lost and people will die because of this.  Now, the NYT has printed a major editorial from the staff working for Obama.  There are many interesting levels of this editorial which I must explore as we think about volcanoes and Death Gods:

No More Economic False Choices By ROBERT E. RUBIN and JARED BERNSTEIN

We also jointly believe that fiscal stimulus must be married to a commitment to re-establishing sound fiscal conditions with a multi-year program that includes room for critical public investment, once the economy is back on a healthy track.

One of us (Mr. Rubin) views long-term fiscal deficits — in combination with a low national savings rate, large current account deficits and foreign portfolios that are heavily over-weighted in dollar-dominated assets — as a serious threat to long-term interest rates and our currency and, therefore, to our economic future. The other views these economic relationships as much weaker.

*snip*

One important policy question is what our fiscal objectives should be in terms of deficits and of the ratio of the national debt to the gross domestic product. In times like these, larger than normal budget deficits will add to the national debt. In more stable times, a budget deficit equivalent to roughly 2 percent of G.D.P. will keep the debt-to-G.D.P. ratio constant, a legitimate fiscal policy goal. In flush times, a smaller deficit would lower the debt ratio and that might be desirable.

We both agree that individual income tax rates and other taxes for those at the very top could be moved back to the rates of the Clinton era. It’s worth remembering that rates at this level helped finance deficit reduction and public investment that contributed to the longest economic expansion in our history.

So, they will up corporate taxes?  HAHAHA.  I would suggest that they read this story of mine and then explain the need for higher taxes.  Namely, our deadly rivals in Japan have these higher rates.  So we should, too.  Period.  No other excuses needed.  

We also see in this editorial that the top economic advisors to Obama are split on many issues.  Actually, this is a very good thing!  Obama can listen to all sides and then MAKE CHOICES.  The one-voice method used by Bush was a failure.  We need debate.  I hope I get invited to these debates over time.  I would be happy if they merely read me.  After all, knowledge is good.  Especially if it is very old knowledge.

Free markets versus regulation and protection: We both feel strongly that there are important lessons to be learned from the disruptions in our financial system, and that significant reforms are needed. The objective ought to be to optimize the balance between increasing consumer protection and reducing systemic risk on the one hand, and preserving the benefits of a market-based system on the other.

We know, too, that Wall Street and Main Street are intimately connected. The consequences of the financial market crisis are profound for Americans in terms of lost jobs, lower incomes and reduced retirement savings. Measures to reform and strengthen the financial system should be evaluated by this measure: Do they ultimately translate into improving the jobs, incomes and assets of working Americans?

With respect to trade, the choice is not trade liberalization versus protectionism. Instead, as trade expands, we must recognize that protecting workers is not protectionism. We must better prepare our people to compete effectively and help those who are hurt by trade — not just dislocated workers, but those who find their incomes lowered through global competition. This means investing more of the benefits of trade in offsetting these losses, through more effective safety nets, including universal health care and pension coverage.

Neither advisor understands global trade.  Nor does virtually anyone working for the major media.  Indeed, the blind spots here are so massive, we could say that, when it comes to trade, our entire pundit class lives in the Outer Darkness.  They are blind and stupefied by propaganda and hubristic imperial belief systems. Or worse, divided loyalties.

Note how these two guys who happen to be Jewish, fret about 'those who are hurt by [this idiotically unbalanced] trade!  Oh dear!  

Well, I have a stark message to both men: THE ENTIRE US ECONOMY AND SOCIETY IS BEING HARMED BY THIS UNBALANCED TRADE!!!

It will kill the entity we call, 'The United States'.  We will become Yugoslavia: the maker of crummy cars who then fell apart with ethnic and religious infighting and is now a series of mini-states after killing lots and lots of people.

Let's look at one prime example of unbalanced trade which involves many financial experts turning a blind eye because they support other nations benefitting from US  trade imbalances:

July 10, 2008: Top Israeli Imports & Exports

The United States of America consumes almost 40% of Israel’s total export shipments, far more than second-place Belgium at 6.5% and third-place Hong Kong at 5.9%.

Israel’s imports are less concentrated, with products from trade partners distributed more proportionately. Leading exporters into Israel include the U.S. (12.4%), Belgium (8.2%), Germany (6.7%), Switzerland (5.9%), the United Kingdom (5.1%) and China (also 5.1%).

In 2007, Israel exported an estimated US$50.2 billion worth of goods onto the international trade marketplace. Israeli imports totalled roughly $55.8 billion, resulting in Israel’s overall $5.6-billion trade deficit last year.

Despite its overall deficit, Israel enjoyed a US$7.8 billion trade surplus with its American trade partner in 2007. The most recent surplus statistic is 32.6% higher than the Israel-US surplus in 2003 but represents a 5% decrease from the $8.2 billion surplus in 2006.

With a population of 7.1 million, Israel exported US$20.8 billion worth of merchandise to the United States in 2007, an 8.6% increase from 2006 and up by 63% in 4 years.

US exports into Israel is 12.5%  but the reverse direction is 40% of Israel's exports are to the US.  Ergo: Israel imports more from others while the US gets a very much smaller slice.  But Israel gets to ship things with pretty much Japanese-levels of impunity to the US!  And this has been climbing steeply.  True, it declined a slight amount this last year.  But this happened with Japan and China and is only a side effect of the US going into a steep recession.

Anyone looking at trade statistics can clearly see that nearly all trade deficit reductions in the past 35 years have come ONLY during recessions.  The minute spending picks up, the US is inundated with imports pouring in all our major ports.

In the last 4 years while the US ran epic trade deficits, Israel had one of the highest growth rates.  True, it is not a towering mess like from China!  But Israel is a very small country, so it is no surprise the amounts are smaller.  But the growth rate is not smaller.

Since none of our leaders, all of whom swear fealty to Israel before running for office, are going to stop this one-way trade with Israel, they can't go off and do this to other nations. So, to let Israel do this, they have developed a philosophical matrix that says, 'It is OK for the US to continuously run trade deficits'.  Closely connected is this concept of, 'The US can run trade and budget deficits forever.'

This is very clearly seen in DC.  Whenever I talked about trade deficits and the need for the US to stop piling on debts, eyes would glaze over.  THIS IS TREASON.  Ignoring dire dangers to the US people due to this is treasonous.  The people who live in DC and run our government are REQUIRED to protect us, protect our borders, protect our Constitution and to live within certain bounds.  Selling us to foreign powers is not allowed.  It is quite outside the directives of our government. 

More Yma Amore

:

More news from today that illustrates all this:

Hard-Fought Battle in Hard-Hit Ohio Decisive State in '04 Is Economically Battered and Electorally Coveted

Both sides expect a close finish, something of a paradox in a struggling state in a year in which the poor economy is driving support for Obama and other Democrats. Ohio lost 300,000 manufacturing jobs this decade and its median income has dropped by 3 percent, yet polls show Obama with no more than a narrow lead in a state that Sen. John F. Kerry lost to Bush by two points.

That may be because the weak economy has driven away younger and college-educated residents who lean Democratic, because abortion remains a potent issue and because an African American candidate with an unusual name remains a tough sell in some corners. But voters also say the poor economy has not swung more voters to Obama precisely because the state has been down for so long -- many have come to see the woes as systemic, and not easily blamed on a particular party.

Ever since the US launched the floating currency, the collective boats of the working class have sunk deeper and deeper.  Or maybe I should say, the workers have been pushed deeper and deeper into the volcano.  They are now cynical and are feeling victimized.  People who are victimized turn to racism or religious fanaticism for comfort.  

This is very bad!  We see it very clearly in past depressions!  Over and over again, no matter what country it is, when the economy goes bad, minorities get hammered.  Ohio has been let down by everyone.  When Ross Perot talked about the 'Giant sucking sound' he got over 20% of the vote.

So the DNC and GOP conspired to kill the sponsorship of Presidential debates so they could exclude anyone who could talk about the Federal Reserve and Free Trade.  Now, we get faux debates where the people must choose based on emotions, not economic principles.

This is why things get worse and worse.  The US auto workers should be demanding tariffs and barriers.  But when they vote for people endorsed by their unions, these same people end up supporting free trade.  This is simple: the entire Congress and the Presidential candidates are owned by the banking gnomes and international dealers seeking to drive us deeper into debt!  

So everyone comes to Ohio to be pious but then goes to DC to be corrupted.

So people left behind in these dying communities are bitter, as Obama noted.  They cling to guns and religion.  A very deadly combo that leads to Yugoslavian solutions.  

Now, back to the Derivatives Beast who lives in this volcano:

DTCC to Provide CDS Data from Trade Information Warehouse

The Depository Trust & Clearing Corporation (DTCC) announced today that it will begin to publish aggregate market data from its Trade Information Warehouse (Warehouse), the worldwide central trade registry it maintains on credit derivatives. Starting Tuesday, November 4 and continuing weekly, DTCC will post on its website www.dtcc.com/derivserv the outstanding gross and net notional values ("stock" values) of credit default swap (CDS) contracts registered in the Warehouse for the top 1,000 underlying single-name reference entities and all indices, as well as certain aggregates of this data on a gross notional basis only. The data is intended to address market concerns about transparency.

The very secretive gnomes running the DTCC can't be trusted nor are they clear.  These monsters are going to soothe markets by publishing hard information.  So I said, 'Whoopee!  I will haunt this website!'  Only I can't!

Only certain people, namely, ONLY GNOMES can access this information!  I hope some of my more connected readers can overcome this barrier for me and send me information published by the DTCC.  I would love to see the actual numbers.

According to the DTCC, the actual physical losses due to Lehman Brothers was virtually nothing.  Less than $10 billion.  Well, this begs the question: what on earth is this stupid Derivatives Beast that is many trillions in size if it isn't big at all?  And if so, why continue to keep this vital information behind a locked door that only gnomes can access?  EH???  

Gads.  They are pulling yet another gnome trick here.  Can't fool me.

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Culture of Life News Main Page

Every day is Trick or Treat Day for the gnomes. 

This artwork is courtesy of Mr. Taylor.

 Elaine Meinel Supkis

I hurt my fingers yesterday so I couldn't post anything. Now, with band aids all over the place, I can type again. Typepad continues to annoy me with bugs and a refusal to understand their coding is awful. But on to less serious matters [hahaha] the economy: time to pause and look at a bunch of graphs. They show a rapidly deteriorating situation which the US has never had before. Roubini's RGE Monitor publishes a ridiculous analysis about the Derivatives Beast. Evidently, this economist named 'Pickel' thinks there is no problem, all is well. The Beast is NOT eating our banking gnomes and spitting out bones! Right. And the Middle East is now sliding into a pre-revolt mode as the oil kings decide to cut welfare payments. Bin Laden is ecstatic.

From Roubini's web page comes this utter rot---Insight: The CDS sector is not the central villain PrintShare Robert Pickel

Last week saw an important milestone in the credit default swaps sector, when counterparties to CDS trades on Lehman Brothers cash-settled their transactions.

Based on a protocol and auction process developed by ISDA, protection sellers paid 91 cents on the dollar to protection buyers. An estimated $6bn to $8bn was paid out. Over the past 25 years, the privately negotiated derivatives industry has developed a robust framework – one that governs and guides participants through such an event, and which includes procedures and processes for valuing and unwinding trades. Recent defaults show the value of these efforts – the industry’s infrastructure clearly works.

Just as clearly, the Lehman default and settlement are not the financial catastrophe CDS critics claimed they might be. The widely cited industry estimate of $400bn in notional amount of Lehman CDS trades outstanding includes a significant number of offsetting transactions. Dealer firms generally have minimal net exposure via CDS; if they sell protection, they also generally buy protection to offset the risk. Net these positions out and net amount of risk transferred is a low single-digit percentage of the notional amount. Cash payments on Lehman were about 91 per cent of that net amount.

Two more points must be kept in mind. First, companiees are required to mark positions to market, and they have already calculated the impact of Lehman’s default on their financials. Second, companies require counterparties to post collateral to back their exposures, so most of the $6bn-$8bn paid out was already collateralised. The bottom line is that groups had little incremental exposure to the Lehman cash settlement.

It’s also worth noting that, in spite of the failure of Lehman, as well as several other large counterparties, the CDS business continues to function effectively. CDS have proven to be the main – and sometimes the only – way to shed risk or express a view on market behaviour. While cash, securities and money markets have seized up, the CDS business still operates.

Here is part of my reply to this utter tripe:

'This guy is NUTS!!!! We just saw not only a 91% loss in a derivatives swap meet, AIG is now gulping down well over $140 billion in just THREE WEEKS and not at the end of this swap of derivative failures for US taxpayer dollars!

This is UNPRECEDENTED.'

Back to today:

On the other hand, the entire collapse of the G7 banking system is not due to derivatives. The Derivatives Beast may be eating up all the major banks in the G7 stellar complex but the real reason 'liquidity' dried up was due to the sudden unwinding of the Japanese carry trade! Even Bloomberg news admitted that most of the world's monetary expansion of the last 10 years has been nearly entirely due to the Japanese carry trade!

Pickels can't see this, of course. The mantra hammered into the noggins of all the economists in America is very simplistic: China is undermining world trade by using cheap labor. Even though China is not the world's number on export profit center, economists focus only on sales, not profits.

This plagues a lot of commentary on capitalism. I wonder why? One would imagine that everyone in the US would be hyper-focused on capital creation! But we are not.

This, not China, lies at the heart of what is going wrong. Americans have become so accustomed to going into debt ever since Nixon cut the gold peg from our now-fiat dollars that we imagine, we can skip the business about profits and simply have a churning economy based on consumerism and debt.

This is why not one of the solutions to our economic collapse are doing even the slightest good. The anxiety of the G7 central bankers is all about restarting lending. It is all about seeing if they can get more people to borrow more money. To make this an alluring prospect, they are all grinding out loans at ridiculous interest rates.

Back to Pickles: like many of the RGE analysts, he cannot really understand the role the Japanese carry trade played in the creation of global debt and global inflationary bubbles. The Derivatives Beast was created by the banking gnomes over the last 20 years as a tool with which they could lend recklessly while being protected from losses. These losses are also called 'bankruptcies.' This, in turn, are massive wealth destroyers.

Recessions aren't simply reductions in consumption. They are wealth destruction cycles. The entire excuse for having central banks is so they can prevent these periodic cycles of wealth destruction.  But even the briefest look at history clearly shows that the ONLY thing the consortium of central bankers have succeeded in doing is this: They have MEGA-BUBBLES AND MEGA-BUSTS!  

This is a notable failure.  Many people who are critics of this system restlessly seek someone responsible.  They light on various names and people.  A common mistake is to blame various ethnic groups such as the Japanese or Jews or the Chinese or the Arabs.  Some people even blame one of the oldest groups who have controlled much of the earth for the last 500 years: the ruling elites of Europe, the Old Nobility. 

Everyone has exploited the modern system of interlocking central banks. This is because it makes people fabulously wealthy....but only during the bubbles.  During the collapses, all hell literally breaks loose.  And even though people assume ruling elites in Arabian lands or Merry England want chaos, this is FALSE. 

Or rather, the chaos is supposed to happen far, far away.  In Afghanistan, for example.  That is a favored site for chaos between empires.  But no: the chaos from bubbles bursting always comes home.  When kingdoms or countries go bankrupt, revolution is not far behind.  And revolutionaries are, by definition, outsiders.  

Mr. Pickles doesn't seem to do much history.  The whole Derivatives Beast thing was an attempt by the central bankers to expand credit when the world was awash in credit.  Already, one of the G7 central banks flooded the world with liquidity via 0% or slightly higher interest rates.  

This unprecedented and very long duration of these interest rates in a world undergoing inflation was very deadly since Japan is the world's #2 economy.  The fact that all the central banks are now plunging into the same abyss means that the Japanese carry trade will NOT resume.  Instead, the whole of the top economic consuming nations on earth which are Europe and North America, will try to go on a huge consuming binge, directly lending to themselves money at infinitely cheap interest rates.

This, in turn, will fuel Asia's industrial development. This is why China supports this business.  The battle between China's central bank and Japan's central bank ended several months ago.  But I suspect, it will re-ignite due to some very shocking news out of Japan concerning a top Japanese general blaming China and the US for all of WWII.  More about that later.

Asia has embarked upon a massive shifting of production from Europe and North America to Asia.  This is simple: the physical facilities of manufacturing are not so easy to move if a government is determined to keep them.  The US voluntarily gave up our industries because we wanted no inflation instead of facing the facts about inflation.

Namely, we wanted money growth with no downsides.  This brings us back to the Derivatives Beast: it grew in direct proportion to the banking gnomes burying inflation in interesting places.  IT INFLATED TREMENDOUSLY.  When inflation finally poured into commodities, the shocking truth came out.  Inflation was really running at over 12% a year.  This wasn't isolated inflation.  This was global inflation.  

Proof: even the strongest currencies with interest rates above 6% saw inflation!  More proof: even Japan, with severe suppression of wages of 80% of the population, still saw inflation over 3% a year!  Now, inflation seems to be receding but it is not.  It is continuing to grow in the darkness.  The reason we don't see it temporarily is simple: all the investors are removing their money from hedge funds and investment funds and HIDING it!  And they are hiding it from the Derivatives Beast. 

Anyone stupid enough to keep their money in the system is seeing it lose value faster than gold or oil is dropping.  So we have lots of cash sitting idle.  And it will sit idle until the Beast is done eating.  And it has barely begun.  The fact that all the major investment banks on earth are rapidly going bankrupt or have ceased growing, isn't due to there not being enough money.   THE MONEY IS BEING HIDDEN RIGHT NOW!  People are waiting to see what item can be turned into an instant bubble.

Now, let's go into the past again:

Congressman McFadden on the Federal Reserve Corporation Remarks in Congress, 1934:

"If this United States is to redeem the Fed Notes, when the General Public finds it costs to deliver this paper to the Fed, and if the Government has made no provisions for redeeming them, the first element of unsoundness is not far to seek.

"Before the Banking and Currency Committee, when the bill was under discussion Mr. Crozier of Cincinnati said: 'The imperial power of elasticity of the public currency is wielded exclusively by the central corporations owned by the banks. This is a life and death power over all local banks and all business. It can be used to create or destroy prosperity, to ward off or cause stringencies and panics. By making money artificially scarce, interest rates throughout the Country can be arbitrarily raised and the bank tax on all business and cost of living increased for the profit of the banks owning these regional central banks, and without the slightest benefit to the people.

The 12 Corporations together cover y and monopolize and use for private gain- every dollar of the public currency and all public revenue of the United States. Not a dollar can be put into circulation among the people by their Government, without the consent of and on terms fixed by these 12 private money trusts.'

"In defiance of this and all other warnings, the proponents of the Fed created the 12 private credit corporations and gave them an absolute monopoly of the currency of these United States- not of the Fed Notes alone- but of all other currency! The Fed Act providing ways and means by which the gold and general currency in the hands of the American people could be obtained by the Fed in exchange for Fed Notes- which are not money- but mere promises to pay.

"Mr. Chairman, if a Scottish distiller wishes to send a cargo of Scotch whiskey to these United States, he can draw his bill against the purchasing bootlegger in dollars and after the bootlegger has accepted it by writing his name across the face of it, the Scotch distiller can send that bill to the nefarious open discount market in New York City where the Fed will buy it and use it as collateral for a new issue of Fed Notes. Thus the Government of these United States pay the Scotch distiller for the whiskey before it is shipped, and if it is lost on the way, or if the Coast Guard seizes it and destroys it, the Fed simply write off the loss and the government never recovers the money that was paid to the Scotch distiller.

"While we are attempting to enforce prohibition here, the Fed are in the distillery business in Europe and paying bootlegger bills with public credit of these United States. "Mr. Chairman, by the same process, they compel our Government to pay the German brewer for his beer. Why should the Fed be permitted to finance the brewing industry in Germany either in this way or as they do by compelling small and fearful United States Banks to take stock in the Isenbeck Brewery and in the German Bank for brewing industries?

"Mr. Chairman, if Dynamit Nobel of Germany, wishes to sell dynamite in Japan to use in Manchuria or elsewhere, it can drew its bill against the Japanese customers in dollars and send that bill to the nefarious open discount market in New York City where the Fed will buy it and use it as collateral for a new issue of Fed Notes- while at the same time the Fed will be helping Dynamit Nobel by stuffing its stock into the United States banking system.

"Why should we send our representatives to the disarmament conference at Geneva- while the Fed is making our Government pay Japanese debts to German Munitions makers?

All over the web, I read spurious analysis that often starts with, 'This GLOBAL banking mess has never happened before!'  This false story irritates me to death.  Since the birth of banking, it has been an international/trade operation.  Nay, banking was launched ONLY for international/trading purposes!  And funding wars, of course.  The bankers were more than happy to lend to foreign lords so they could go to wars.  

But the international character of banking is the basis of banking.  Banks were NOT started so people could buy property!  In the Middle Ages, there were several interesting ways of gaining property: war, marriage or fealty deals with kings.  And the Church gained via death bequests.  And kings seized this property from the Church in various ways like Henry VIII of England.  People didn't buy land.  

There was another way: trading one property for another.  But the preferred way remained the most ancient: sex and war.  And frankly, we are never far from this.  The US did this recently to Iraq.  We wanted the oil so we invaded.

No, banks were mainly for traders.  I have seen short histories of banking where the authors would explain that people would want to protect their gold by giving it to a banker with a safe. 

But why would they do that?  If they were rich enough to have gold, they were rich enough to hire guards and to hide the gold, themselves.  No, the people who parked money with someone else were the traders who had to move from place to place.  And they didn't park it with anyone.  They had to park it with a family they could trust, one that had members across Europe and Asia. So a simple letter would effect a transfer of value from one place to another.  

All paper currencies are contracts.  I wrote about this in the past.  If you read the language on older paper currencies, they are obviously contracts.  The very first paper money issued by the new US government were covered with fine print detailing how the notes were issued, how they could be used and who was responsible for REDEEMING them!  An important issue that is now hidden totally from the unsuspecting public today.

The conservative Congressman from 1934 is basically complaining that the US dollar was now being used for global trade and bills were being created overseas that eventually turned into dollars and thus, the US lost control of its own currency!

Well, this is happening today, in spades!  The world mostly uses dollars and so, they create dollars via debt creation.  And no one created more 'debt for export' than Japan.  The Bank of Japan, not the Federal Reserve, is the real agent who is 'printing dollars'.  But this is not discussed at all by much of the media.  

I saw in a New York Times editorial the other day, a long chat about the economic mess.  Like most people, the unwinding of this mess is blamed on US home owners who are too deep in debt.  As if they could magically make these debts appear!  Now, the government must bankroll a reduction of these debts.  And the banks which manufactured money in Japan and then parked it here, will demand the Treasury and the Federal Reserve turn these Japanese debts into AMERICAN CURRENCY.  Which flows back overseas again!

Click here to see photos showing the course of hyper-hyper inflation in Zimbabwe:

If you think that the current economic crisis is something that has never happened in history before, you may be wrong! After the collapse of the agriculture sector in Zimbabwe in 2000, the inflation in that country skyrocketed to 231 million percent a year! Just think about it - 231 000 000%! Unemployment went up to 80% and a third of country’s population left it. Let`s now have a look at the photos that you may not be able to see anywhere else in the world. Here is a boy getting change in 200 000 dollar notes!

Not a soul on earth wants Zimbabwe's paper money. But everyone on earth wants dollars.  If all the dollars floating about the planet suddenly come home, this is what it would look like: to buy a one pound loaf of bread, you would need 10 pounds of paper money.  This, of course, makes no sense at all.  But Zimbabwe shows that hyperinflation isn't just a Weimar nightmare.  It can happen to anyone.

So it is now time to visit the Federal Reserve to see what is going on this week [click on images to enlarge]:

M1 money stock:

So, this last week, the Federal Reserve increased the basic money supply exactly the same amount as on 9/11.  At 1% interest post-9/11, we saw a global equities inflation bubble.  Then, when the climbing money supply leveled out, we saw a commodities inflation spurt!  This was all the US dollars coming out of hiding when it could no longer be parked on top of global housing or stock markets.  

Now we are at a LOWER interest rate and the same day, the Fed jumps the M1 money supply.  And smart people will bet that we get a repeat of the previous 5 years.  But this cannot happen unless first, enough debt disappears via bankruptcy.

In the previous downturn, that idiot, Donald Trump, went bankrupt.  Then, he got  even more money to waste on stupid real estate deals.  When he goes bankrupt again, this will prepare the ground for him to get even more loans to do this again.  Unless he gets arrested. 

Right now, the central bankers are struggling to prevent the cleaning house via bankruptcies.  They hope to increase lending and increase trade without first eliminating at least 50% if not 100% of the previous dollars created between 2002-2006.

Monetary Base [BASE]:

The monetary base ceased growing in Asia so it is now being artificially grown here in the US.  Only we didn't allow for most of the previous, Asian-manufactured debt to be cleared out via bankruptcy.  Nor has the Derivatives Beast been able to munch on much more than just $3 trillion of the $66 trillion in funny money deals created by the bankers seeking ways to lend like crazy despite risks.

Total Borrowings of Depository Institutions [TOTBORR]:

In all the previous years of our nation, we never, never, never saw this sort of insanity.  The 9/11/1 borrowing binge was billed as a one-time thing due to a direct attack on Wall Street that killed many of the workers there as well as halting trade for a number of days.

But that has been utterly dwarfed by the present rescue.  Was America attacked?  Did Wall Street shut down?  Has anything happened at all?  As far I am concerned, the charts agree with me that the trigger event was in July, 2007: the day the carry trade with Japan suddenly began to unwind.  This is a most singular event.  It is being deliberately ignored not due to stupidity.

The actors on stage who did this to us still run things.  They very definitely want the carry trade to resume.  The G7 central bankers all yelled that they wanted this!  It was in the news this week!  They were all blatantly obvious about this.  They hope to hide the mess again the old way: via lending this money to the West via Japan. Then, it doesn't show up in any charts!

Except it is very inflationary.

The 4 Horseman Have Arrived Debt, Derivatives, Deficits and the Dollar

By John Riley Chief Strategist  

Grim graphs!  The debt to GDP is now nearly double what it was in the Great Depression. And that was due to the GDP being very weak!  Our GDP has barely begun to decline.  But it is showing signs of decline.

On the other hand, when gasoline was selling above $5 a gallon, I saw nearly no one in the malls.  This week, thanks to inflation temporarily receding, I see packed stores again.  So we know that inflation is merely pulling back slightly before unleashing even worse effects: identical to the 1970's.  

We know that foreign powers sold or refused to buy US Treasuries.  It is not only irresponsible, it is treason for our government to be run in this fashion.  Our loss of sovereignty is tremendous.  Few people see this but it is obvious in trade statistics: the US sells Treasuries and debt in direct proportion to demands by our trade rivals to open our markets and allow them to destroy our own economy.  Ergo: it is treason.

Now, after all this grim news, we go to the Middle East again:

Gulf Citizens Beg for Bailout Amid Stock Rout: Week Ahead

(Bloomberg) -- Abdullah Hajeri led a march on the Emir's palace in Kuwait last week, demanding the oil-rich nation's ruler stop stocks from plunging. Adnan Mohammed Saleh, down the Persian Gulf coast in Dubai, said he wants more government protection from the global financial crisis. 

``Every day the market is crashing,'' said Saleh, a 42- year-old trader, staring dumbfounded last Tuesday as company names scrolled across the Dubai Stock Exchange's outdoor ticker in red. The region's rulers are under pressure from citizens to shore up investors, not just banks, as they try to fend off what may be the worst economic crisis since December 1998, when oil at $10.35 a barrel forced them to slash spending. 

Crude prices have fallen 50 percent from a record $147.27 in July, and stock indexes in Dubai and Saudi Arabia are down by as much this year. Gulf economies are more susceptible to financial turmoil than in the past because of their greater dependency on international expertise, investment and tourists to diversify away from oil. While Dubai, home to the world's tallest building and the man-made Palm Island, is considered most at risk, no part of the Persian Gulf will go untouched.

Residents of the region are used to government intervention. All Gulf countries are run by unelected rulers who maintain political power through tribal allegiances and marriages. Generous state welfare programs have traditionally damped demands for more political participation.

 How the region's rulers cope with the turmoil may define relations with their people in the future, as they try to wean their subjects off state handouts and encourage them to find jobs and embrace market capitalism. 

``There's no question that it sets back the move from socialist, paternalistic societies toward more modern capitalist states,'' said Gabriel Stein, a director at London's Lombard Street Research, which provides economic analysis to investors and companies. ``It is a trend that we have seen all over the world. The immediate reaction is that you told us to do this, so now things are going wrong it's up to you to help us out.''

Unlike Asia, the Middle East generally consumes rather than builds industries.  The only possible exception for this is in Turkey, Iraq, Iran and Palestine.  That is, when Palestinians are allowed to build anything at all.  This is due to historical cultural biases. But the proto-nomads of the desert view money as loot.  To be spent having fun.  Frankly, this is now our own ethos.  

Profits are windfalls, not via labor-added manufacturing systems.  Now on to the Jewish director in London: cutting back on 'socialism' in the oil pumping nations will lead directly to revolutions. For these are people who remember and know how to do something: fight.

Which takes me back to history: revolutions and wars are very intertwined with economic matters.  And banking can launch a thousand ships or inspire a million revolutionaries.  And there is one big revolutionary who just cannot wait for the kings and sheikhs to cut social services!

This is bin Laden's plans!  To have the biggest rulers of Muslims fall before the sword as outraged people swarm the palaces and behead them!  And the chances of this happening is around 50% right now.  Give people no money, no hope and no way out and they will be willing to die, fighting.  The Jewish freedom fighters in the Warsaw ghetto fought with all their hearts, contesting every inch the Nazis tried to gain.  Ditto, Stalingrad.

There are many historic battles of this sort.  This is why Chinese generals warn their fellow generals to always allow an 'out' so the opposing armies can retreat rather than stand and fight.  The western pundits advising the king of Saudi Arabia, a despot who got the throne via murder, that he should encourage his people to become 'capitalists' is pure insanity.  They will become DECAPITISTS.  Namely, 'guillotine experts'.  Or in their case, they use swords.

And guess how much oil these revolutionaries will sell Europe and the US afterwards?  And if you want to see hyper-inflation, if the price of oil hits over $500 a barrel due to revolutions and civil wars sweeping all our pets from power, we will see tremendous inflation.

Bloomberg:

Of the Gulf states, Dubai may be hardest hit by a global economic slowdown because it has borrowed more to finance its transformation from a Persian Gulf trading post to a financial and tourist hub, and has only 4 billion barrels of oil reserves. Government-controlled companies owe at least $47 billion, more than Dubai's gross domestic product, and they will continue to accumulate debt faster than the economy grows, Moody's Investors Service estimated in an Oct. 13 report. It concluded that Dubai may need financing help from Abu Dhabi.

Many bankers and others are running off to the Middle East to beg for investments.  Or running off to Asia.  But the price we pay is very high!  This is a boon that has many strings attached.  And these strings will strangle us.  And this is all due to the fact that we ceased being profitable.  We are not a capitalist society.

We are in a debtor's prison.

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Culture of Life News Main Page

Halloween Tricks And Treats

Elaine Meinel Supkis

Halloween is here and the trickery and treatery treachery continues to cause market turmoil. That is, AIG's business with feeding and playing with the Derivatives Beast is now unwinding in the typical way such deals end: the monster eats its master. Right now, it is eating up $144 billion of US taxpayer funds. Also, the DTCC is in the news again because of its own relationship with this same fearful monster, the Derivatives Beast. And the Japanese savers are now being eaten by this same critter! Who would have guessed? And commodity inflation is again, taking off as Japan drops its interest rate to 0.3% and the US to 1%. Who would have guessed again? HAHAHA. 

Click here for Wonkette's video of Born Again Christian Heathens worshipping the Golden Calf:

More Photos & Videos From Yesterday’s Sacrilege Wall Street Bull Prayer

All my life, I knew that the Born Again Christians were really demons working for the Antichrist. They embody all the most hateful things I ever encountered. And now we see them waving American flags and begging their demonic devil of a leader, the Fake Jesus Who Loves Money And Power, to give them money and power! Wow. HAHAHA.

Fed Adds $21 Billion to Loans for A.I.G.

The company said it would be able to borrow up to $20.9 billion under the new program, raising its maximum available credit from the Fed to $144 billion under three different programs. The credit includes an earlier emergency loan of $85 billion from the Fed that carries a much higher interest rate.

A.I.G.’s big borrowings underscore the company’s bewilderingly rapid decline. When it suddenly faced a cash crisis in mid-September, the original estimate of the amount it needed was just $20 billion. A few days later, the Fed stepped forward with its $85 billion credit line. And now, the stunning size of that original bailout has grown by almost 70 percent.

*snip*

The company’s financial products division did a lot of business in that type of derivative, called credit-default swaps.

To put things in perspective: the annual cost of occupying Iraq and Afghanistan including the bombing of Pakistan and Syria as well as border feints against Iran, cost us an extra $150 billion a year.  So the rescue of an insurance fund is the equal to international war.  The war expenses are inexcusable.  But this is far, far worse.

We have to pause and ask, 'What is insurance?'  It is the collective sale of risk which, by being spread as much as possible, can overcome periods of losses.  These losses have to be calculated very carefully so that the insuring agents aren't swamped by some event.

Online, there is much talk about 'black swan events'.  Well, we are seeing a massive flock of black swans migrating south.  The fiscal skies are black with these birds of doom.  For swans were the emblem of death as well as longevity.  The ancient Romans ate swan tongues so they could gain youth.  A black swan was supposed to be impossible.  But then, when the Europeans sailed to places like Australia, they found that the only swans were black swans!  

This is a good frame for the concept of 'the black swan' being a 'rare event.'  Actually, there is always a yin to every yang.  And the insurance risk swap game was predicated on an overall collapse being a 'black swan event' that would probably never happen. 

Anyone reading the history of finance, debt and banking is struck by one major thing: they ALWAYS collapse into chaos!  They always over slop the banks of the river of liquidity.  They always over-expand.  They always form bubbles.  Ergo: the human tendency to go bankrupt is very strong!  The impulse to overrun all barriers, to make too much credit available compared to savings, this is a constant, total temptation.  This is why governments must have very powerful rules to prevent this.

AIG is eating up all our national fiscal resources just as certainly as major wars eat up resources.  To have a country go deep into debt to keep a bunch of idiot insurance agents alive: this is the definition of a black SWAMP event.  We are sinking into the muck and there is no bottom.

A Question for A.I.G.: Where Did the Cash Go?

A.I.G. had come under fire for accounting irregularities some years back and had brought in a former accounting expert from the Securities and Exchange Commission. He began to focus on the company’s accounting for its credit-default swaps and collided with Joseph Cassano, the head of the company’s financial products division, according to a letter read by Mr. Waxman at the recent Congressional hearing.

When the expert tried to revise A.I.G.’s method for measuring its swaps, he said that Mr. Cassano told him, “I have deliberately excluded you from the valuation because I was concerned that you would pollute the process.”

And what was this gentleman 'polluting'?  Why, the money stream pouring out of the stump of the World Tree!  He was polluting the flood of dollars pouring out of the Bank of Japan!  He was polluting the flood of invisible money that was feeding the voracious appetite of the biggest monetary/financial entity ever created by gnomic minds: the Derivatives Beast!

Anyone interfering with the feeding and growing of this monster was ruthlessly eliminated.  The gnomes doing all this were proud that they got more and more money so long as they fed the Beast.  So it grew, they got richer and everyone was happy so long as no one had to collect insurance due to a failure.

Then, starting in July, 2007, the flood of money from the World Tree stump stopped when the Chinese Dragon put a basket on top of it and the yen began its long rise in value against all currencies.  Since that hour, the monkeys have struggled to yank off this thing.  More about that later.  Seems like they might have succeeded.  Yikes.

The gnomes are dirty little monsters.  They consider people seeking to clean up messes to be mean, dirty, ugly.  This is because they live in a reverse world.  By moving into the Cave of Wealth and Death, they think up is down and in is out.  The only way we can stop anyone venturing into this cave is to force them to obey strict rules or they die.  This is Libra: the lady with the scales and the sword.  She decorates many court houses.  She is extremely ancient.

AIG is an anti-insurance entity:

Through spring and summer, the company said it was still gathering information about the swaps and tucked references of widening losses into the footnotes of its financial statements: $11.4 billion at the end of 2007, $20.6 billion at the end of March, $26 billion at the end of June. The company stressed that the losses were theoretical: no cash had actually gone out the door.

“If these aren’t cash losses, why are you having to put up collateral to the counterparties?” Mr. Vickrey asked in a recent interview. The fact that the insurer had to post collateral suggests that the counterparties thought A.I.G.’s swaps losses were greater than disclosed, he said. By midyear, the insurer had been forced to post collateral of $16.5 billion on the swaps.

Though the company has not disclosed how much collateral it has posted since then, its $447 billion portfolio of credit-default swaps could require far more if the economy continues to weaken. More federal assistance would then essentially flow through A.I.G. to counterparties.

Periodically I post these reports.  I usually look at the forward fluff part and then run off to the footnotes because this is where all the real information is buried.  This is what children learn in grade school: put all the bad news in tiny letters on the back page of something and then slap the peanut butter side of the sandwich to that side and smear it.  

Failing that, say, 'The dog ate it.'  How they have grown up!  HAHAHA. And $447 billion in credit default swaps: well, that isn't pennies.  All our top major bankers and insurers, hedge funds and other entities ALL jumped into the Derivative Beast's dinner dish here!  And now, they want US to jump out of their frying pan and into the Beast's fire?  

This, in total, is the plan!  To have us make up the difference in these differentials of losses due to banking gnomes handing out mortgages to UNDOCUMENTED people [aka: illegal aliens, criminals in prison, never-do-wells and Joe the Plumber].  These mortgages are seeing a 90%+ default rate in a rapidly declining market.  Wow.  Who would have guessed?

But then, the entire system is now based on dark pools feeding darker pools which feed into the Derivatives Beast who sucks it all down, quite merrily.  And now is sucking down all banking wealth.

Naked short sellers strike again!

The short sellers say they are scapegoats for the real villains in the meltdown. ``The shorts who warned about the real estate bubble have been proven right,'' Fleckenstein says. ``Now the government has changed the rules overnight. They're blaming the shorts and bailing out the ones who lost all the money and almost took the financial system down.''

Manuel Asensio, 53, president of New York-based Mill Rock LLC, says he and his brethren keep the stock market honest by going after companies with rotten accounting, dubious business plans and excessive debt. ``Short selling is an expression of doubt, not a criminal activity,'' Feiger says.

*snip*``

The management at Lehman, Bear Stearns and Merrill kept saying everything was fine. Then, every few weeks, they'd write off billions.''

Lehman, Bear Stearns and AIG all did the same thing: they stuck the peanut butter side of their lunches onto the reports and then handed the mess over to the SEC.  Cox is a political appointee who paid no attention to this and when his staff complained, he told them to shut up.  Now, he is in the news, pretending to care about the book reports from these gooey fingered gnomes.  'Bad, bad, naughty gnomes,' he cries.  

Bears who trade on real information are very steamed now.  The market has collapsed but is being artificially propped up.  How's that?

Ah!  By pouring trillions of dollars of US tax payer's futures into the markets!  They are using every crummy trick in the book used by African or South American nations seeking to fix economic messes caused by cronyism and criminal manipulation of the bottom line.

According to Short Alert Research, a Charlotte, North Carolina-based firm that produces research for short sellers, from early July to late September short interest in 33 investment banks and brokers plunged by 33.3 percent. Yet, share prices still declined.

``It was the longs getting out,'' says Fleckenstein. ``Probably the insiders.''

*snip*

``During the year prior to passage of the Securities Act and Banking Act in 1933, there was a massive bear raid on Wall Street,'' Geisst says. ``Some executives were shorting their own stock.''

The longs getting out is fancy talk for the rats who run these joints jumping ship.  The gnomes are palming off their dying industries into the laps of someone, anyone.  Since bears are barred from buying, this leaves exactly who? 

HAHAHA.  If you said, 'Uncle Sam!' you win a Derivatives Beast magic decoder ring.  This ring is wonderful.  You put it on your finger and say, 'Make me rich!' and all your money vanishes!  Every child should have one.  

DTCC May Raise Credit-Default Swap Disclosure Amid Criticism

(Bloomberg) -- The Depository Trust & Clearing Corp., which operates a central registry for the $55 trillion credit- default swap market, may agree to disclose more data to counter criticism the derivatives amplified the financial crisis. New York-based DTCC has discussed with banks, brokers and others that own the company ``whether or not there's any broader access to information we might provide,'' spokesman Stuart Goldstein said in an interview yesterday, declining to elaborate on what data may be published.

The DTCC earlier this month began releasing some information on trades in the registry to clear ``misconceptions'' about credit-default swaps following the bankruptcy of Lehman Brothers Holdings Inc., among the market's largest dealers.

*snip*

Officials from U.S. Securities and Exchange Commission Chairman Christopher Cox to New York Insurance Superintendent Eric Dinallo have called for increased regulation of the swaps. Dinallo, in an interview that aired Oct. 26 on the CBS news show ``60 Minutes,'' called the market ``legalized gambling.''

One of the deeper, darker pools is the DTCC.  I wrote about it in the past so we can just visit Culture of Life News back last spring:

May 11, 2008, Naked Short Traders In Red Hell And Black Ice:

A reader kindly sent me a new link, 'Deepcapture.com' which is a site run by a businessman who believes that the phantom financial world of naked short sellers in the hedge fund pirate/hell hound high seas has defrauded himself and other business people. To explore this story means plunging deep into the darker pools of finance, news reporting and downright demonic affairs with everyone pointing fingers at each other. There are no 'good' people in this story. But lots of lost souls and quite a few swindlers not to mention outright criminals, corrupt politicians and the many despicable follies and wild games of the people who are the bleeding heart at the center of our financial world. Like the DTCC, the organization originally set up to transfer ownership of stocks! All are now in this bizarre universe where there are many secret portals, secret chambers and invisible monsters that destroy or create wealth.

Here is my section about the DTCC from the May article above:

So, what is the DTCC? A crypt! A hiding place for invisible things! The place where ALL THE DERIVATIVE CONTRACTS ARE PROCESSED! HAHAHA.

What does the Cave of Wealth look like? We always have to answer this question when reading anything about the systems we depend on to create or regulate the flow of 'wealth'. Stocks and bonds are pieces of paper that are processed by humans and computers. Their relative level of wealth is very uncertain and shifts like the desert sands in the sighing night winds. The guardians of these various chambers in the Cave of Wealth call themselves 'wizards'. They know they are dealing with magical things and via joint efforts can assign values and purpose to all that they control. These wizards are supposed to be the gatekeepers who protect our joint wealth.

But they are sly and self-centered. They love to rig things and do riddles and such. They are also prone to playing games with gods and dragons. Always greedy and seeking some advantage over the masses of humans and giants working up above in the sunshine, these wizards hammer away in the darkness, seeking errors to exploit. They hope that gullible humans would say, 'Oh, you made a mistake,' or 'It takes you five days to process my check?' etc. I am old enough to remember the pre-DTCC days when stock certificates had to be moved from one broker to another. My previous husband had summer jobs working on Wall Street as a courier carrying these pieces of paper from broker to broker. He would go to the outer edges of the trading floor and wait to be called by a frantic trader and then would run off with a scrap of paper to some broker's office. A guy with the legendary green eyeshades would fetch the appropriate stocks from a big, fancy safe with lots of gold trim and pass it through a grill and he would have to sign off and put it in a pouch and physically carry it to the destination where the process was reversed. This took so much time, by the end of the day, there were stocks still not finished with this fetch and carry.

Eventually, during the run up to the big stock crash that ushered in the stagflation years where stocks were flatter than a pancake on a hot tin roof, every Wednesday the market had to close! Totally shut down so the young boys could run back and forth and finish moving stocks to their rightful owners who paid for them. Well, the Big Brains in charge of things said to the governing board, 'Let's build a house of bricks and the Big Bad Wednesday Wolf who shuts us down every week will huff and puff and we can still trade stocks!' So they built this big, brick and marble tower and locked the doors and not even young men wishing to get a start on Wall Street ever touched a piece of paper being traded again.

And when this new system happened, did the time lag between buying a stock and ACTUALLY GETTING IT vanish? HAHAHA. Being greedy, vicious monsters seeking eternal wealth with no labor or even ownership, the guys who set up this system said to each other, 'Those foolish humans and working giants are stupid. We will tell them that even though ALL the stocks are held now in our new brick and marble tower that looks like the Cave of Death, we will pretend that it STILL takes DAYS AND DAYS to process the paperwork and settle affairs! HAHAHA.' So they continued to pretend that it took at least 3 or more days to move the actual stocks into the hands of the actual buyers. Just like bankers, when computers removed all need to process mere 'money', pretend to this very day, it takes them several days to communicate with other computers that have electronic 01010s. Why, they have to use boys like 100 years ago to carry the bags to the front door and the the Brinks guards have to carry it to the other banks, etc! HAHAHA. Of course not. But it is a great fiction that allows banks to use our money for a few days on the overnight LIBOR markets which is yet another ancient thing that used to take time and now takes only a micro second to operate.

We see a pattern here: upgrade and modernize, speed things up to light speed or faster while at the same time, tell all the people being ripped off that the system is very slow and ancient and has many barriers to speed. Then, exploit this time frame ruthlessly to enrich the people who are 'in the know.' How simple is this? And it is also fraud, a swindle and totally evil. Thus, the childish glee this gives the wizards pulling off these tricks.

Now off to 0% interest heaven, Japan.  Japan loved to pretend they were not involved in all this. But they were and still are.  I would suggest, they are the deepest, darkest corner of all this.  We got the news the other day that the LDP, the dictatorial power base of the children of war criminals, has decided not to have any elections until after the economic crisis is over.  Think about this: for the last 16 years, Japan has complained about being in this depression while their export industries have ballooned and have taken first place in many industries!

Well!  Japanese workers have been utterly crushed by the LDP.  They are in severe decline and now are even unable to have babies!  This is going to annihilate the Japanese people in the long run, literally and physically.  Another group being robbed there are savers.  Saving when the interest rate is 0% is impossible.  So desperate savers had to go to con men for help.

Fears mount in Japan over complex yen products

Traders in Tokyo have given warning that about $90 billion (£55billion) of complex foreign exchange products, sold mainly to Japanese households and institutions, are on the brink of falling “like a house of cards”.

A rescue effort by the product issuers - large Japanese, European and American investment banks - is expected to involve extensive hedging measures that will throw global currency markets into even deeper turmoil.

The products, which are known as power reverse dual currency notes (PRDC), were sold to Japanese households as simple products offering higher yields than regular savings but the bonds were in reality hugely complex structures “with 15 moving parts and multiple points of pain”, derivatives experts at RBS in Tokyo said.

The products combine exposure to foreign exchange, interest rate differentials and domestic inflation and have formed a small but potent part of the so-called yen carry trade - the borrowing of yen to invest in currencies offering higher interest rates - a gambit thought to have financed huge amounts of global risk-taking in recent years.

Gads! I read a lot of news and I missed this 'PRDC' product!  The name absolutely REEKS of the Outer Darkness!  Power...that is the Ring of Power, the Rhinegold, the Ring of Doom, Draco, it is dangerous to wield.  Reverse: in the Outer Darkness, up is down and in is out.  Magic is all about reversals!  Lightning is reversals!  Yin and yang is magical.  Dual: duality is the Twins.  This is the force of duplication and duplicity.  It is also yin and yang.  Then there Currency: this comes from the word to flow!  It is red ink.  It is NOW at the same time.  It flows yet it is the point of time when reality is actually happening, it is the connection between the Dire Twins, Future and Past, it is the connection between the goddess of Inflation and the goddess of Deflation.  Life and Death.

So...when we see such a collection of dire, amazing, magical names to describe a dark pool, impossible to explain entity...try explaining credit default swap derivatives!  I spend hours trying to explain this and other amazing concepts.  The best method is mythology and cartoons.

Note the last sentence of the paragraph I highlighted above!  This gambit of the Japanese FINANCED HUGE....HUGE...HUGE AMOUNTS OF GLOBAL RISK-TAKING...'  Thank you, Bloomberg News, for admitting what I have yelled about for years and years!  Everyone in the US media looked to China for causing trouble for us.  It wasn't China, it was never China.  It was Japan.  This banking collapse is the fault of the Bank of Japan, not desperate Japanese housewives struggling to stay afloat.  

They are VICTIMS.  The Japanese workers are VICTIMS.  The trouble makers are the LDP and the Bank of Japan working in collusion with the central bankers in Europe and America: the G7 and the G7 leadership.  And the Bilderberger people as well as the assorted other Real Rulers.  Whew.

Treasury, FDIC Said to Consider Guarantees to Stem Foreclosures

(Bloomberg) -- The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said. The plan, which might put as many as 3 million homeowners into affordable loans, would require lenders to restructure mortgages based on a borrower's ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said.

Lower rates for five years and then raise them?  HAHAHA.  Won't work. Has housing in Japan climbed after the Japanese made a huge bubble at home?  NO!  Now that they flooded the entire planet with EXACTLY the same financing that destroyed Japanese housing values, will we recover?

No...unless we destroy the value of the dollar so it is cheaper.  This is called 'inflation' and we just went through a very nasty wave of this sort of inflation.  And it is not gone, it is gathering power to hammer us yet again.

Oil, Copper Lead Gains in Commodities on Outlook for Rate Cuts

(Bloomberg) -- Crude oil, copper, wheat and sugar led the biggest commodity surge in at least five decades on expectations that lower borrowing costs will aid a rebound in demand for raw materials.

The Reuters/Jefferies CRB Index of 19 raw materials rose as much as 6.4 percent, the most since at least 1956, when the data begin. China, the world's largest consumer of industrial metals, cut interest rates for a third time in two months. The U.S., the biggest oil user, may lower its benchmark rate to 1 percent today, according to the median forecast of economists surveyed by Bloomberg.

What a shock...NOT.  I lived through this in the seventies!  I remember that time.  Has everyone forgotten?  We didn't see one wave of inflation, we saw many waves.  And everything didn't go up in tandem, things fluxed from one item to another.  This wave motion was very restless due to everyone desperately seeking to escape it.  The main thing is, whenever the government tried to bail out the economy via cheap lending, the inflation waves would slosh over very suddenly and usually, in horrible places like food and fuel!

And here is another old story of mine from exactly one year ago.  

Gross DOMESTIC Product Is Up But This Is INFLATION

Culture of Life News, October 31, 2007: More news about and from the Federal Reserve. Stocks are up today based on this 3.9 growth rate of our GDP. Like all the lies surrounding our finances, using the GDP rather than the GNP is typical. It counts the spending on inflation-ravaged items to be 'commerce'. Inflation, not our economy, is growing, of course. So time to talk about all this and what it means as the world slides into an obvious recession caused by high inflation of raw materials and energy.

Isn't it pathetic?  When the government was boasting that all was well, I said, 'This is not consumers being stronger, this is INFLATION.'  As usual, I was right. The need to lie is part of the evil of being a criminal.  Criminals lie.  Libras tell the truth.  Take your pick.

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And here is another video of the rear end of the Wall Street Bull at the top of the story. It is mildly dirty so click on it only if you like to have a ball. Culture of Life News Main Page

October 31, 2008

Elaine Meinel Supkis

Here is my last Blogger posting from March 11, 2006:

 I am leaving Blogspot.

Click here for the new Culture of Life News.
Blogger has been limping along for quite a while. They promised us, the last big crash, all was well and they had new systems.

Well, these systems failed hugely in the last three days leaving my news service in tatters, fouling up the postings and in general, making life impossible. So I decided to move over to "pay for" service which means I can communicate with someone when something happens. Blogger didn't even have the decency to inform us what was going on when the system crashed this last three times.

I am sorry about forcing regular readers to change URLs and do all the annoying updating but I hope this is the last time this news service has to pack the bags and move. There will be some instability here until I and my progeny rearrange the cyber furniture to fit my particular style and needs so in advance, I'm sorry for any inconvenience or difficulties.

Since this site isn't free like Blogger, I have added a "Tip Jar" for anyone interested in making donations. Everyone on line is looking for this. My overhead is under $25 a month, the time I spend posting and doing art is a whole different subject. My ability to produce swift artwork has vastly improved while posting this news service during the last year. Anyone interested in commissioning cartoons can contact me at emeinel@taconic.net.

I hope this will be a much better blog when I am done. I have some ideas as to how to build it. And any suggestions, criticisms, wittisisms or whateversisms readers want to inflict on me, go right ahead and unload on me!

Just don't mistake me for a quail! Heh!

Support Ticket Details:

Subject: Your new program has BUGS!
Category: Weblogs - Posting
Status: Awaiting Staff Response

---

Ticket Transcript:

On Oct 30, 2008 11:09:02 AM, you (Elaine Meinel) said:

No one answered my last email so here we go again:

Bug city! Sometimes, when I go back and forth between HTML code and the new system of posting, I get a million 'bigs' so everything balloons in size when I hit 'save'!

Also, I now see that you lock up the posting after I post it, it can't be amended????

WHAT THE HELL??? This happened to me today. I post something and when I see it on my blog, I sometimes want to change something later. Only I can't even click on the 'rich text' icon, much less, the 'Edit HTML' icon!

Luckily, I have taken to saving my HTML coded stories before publishing due to your bugs. But this is INFURIATING! I could amend a story several times after publishing under your old system.

I liked the old system MUCH MUCH more than this since I can do some simple coding. The new system is sucky. I pray you restore our ability to amend a story or this will be the last straw for me. I hate moving my site because it confuses readers but I will do this if pushed very hard and gads, you guys have made my life a total misery. I used to relax while posting, now, I am filled with rage.

On Oct 30, 2008 5:28:32 PM, TypePad Customer Support said:

Hi Elaine-

We replied to your previous ticket reporting this same issue on October 26th. At Control Panel > Help > Open Tickets, you can view and reply to our response.

Are you able to use the Rich Text (simple) editor? From the Compose page, click on the Display Options link in the right column. Select to use the Rich Text (simple) option and reload the Compose page. More information on using the light editor is available here:
http://kb.typepad.com/id/1288/

Additionally, the post here:
http://elainemeinelsupkis.typepad.com/culture_of_life_news/2008/10/the-true-nature-of-banking-is-not-lending.html

includes two open div tags which are causing problems with the display of the page. The open div tags are pushing the right sidebar to the end of the post. To correct the post, go to Weblogs > Posts and click on the title of the post. Then, click on the HTML tab and remove the 2 <div> tags which are included before the start of the last two paragraphs. Save changes to update your blog.

We apologize for the problems you are encountering, and any information you can provide will help us to troubleshoot the cause. Please let us know if you have any other questions.

Thanks,
Jen

On Oct 31, 2008 5:38:11 AM, you (Elaine Meinel) said:

You obviously refuse to understand what is wrong! Those 'div' pieces of junk are YOUR FAULT. They appear BECAUSE IT IS SCREWY!!!

Not only that, one time I hit 'save' and the entire posting VANISHED!!! I did nothing weird.

On top of that, even when I do the same thing each time, the results are slightly or obviously different. The spaces between paragraphs are RANDOM.

The 'big' and 'small' size of script changes RANDOMLY. I never know how the end result will look!

I DESPISE using your new 'rich text' system. Call me old-fashioned but using my regular HTML template was far, far, far FAR better, easier and saner since it produced a regular result.

I seem unable to impress on you the urgency to pass my very loud objections UPSTAIRS TO YOUR BOSSES. What does it take? Should I threaten even louder, to leave?

Leaving is bad for me, I had to leave blogger because they were crummy. They screwed up my archives and ahem...lost postings when I clicked on 'save' etc.

Now, you are the same! Crummy messes due to YOUR coding difficulties. I swear to god, I have been reduced to constantly clicking and dragging my postings to my desktop before hitting 'save' because I never know what the hell is going to happen.

Yesterday, for example, after hitting save and then preparing to post a cartoon, I found that all the postings were locked both out of rich and HTML so NOTHING could be edited and I couldn't access the HTML at all!

THIS IS YOUR ERROR. THIS IS YOUR, not my, BUGGINESS! YOUR SYSTEM SCREWED UP.

Instead of addressing this, you tell me to read your instructions again. When I hit 'save', this sort of stupid thing is NOT supposed to happen. Got that? Not only that, ever since you did this to me, my web pages act rather strange with side bars shifting mysteriously, etc.

It should occur to you that something is wrong at your end of this deal, not mine. I posted happily and with rare problems in the past especially since I did my own internal coding. I could with great ease, put up very complex stories.

Now, it is a total nightmare and infuriating. You guys should have provided us with the alternative of keeping the old coding. I have no idea why you changed this system WITHOUT ANY INPUT FROM US OLDER USERS.

Can you understand what I am saying? The new system is great for beginners who don't care about systematically posting complex stuff. It is hell for people like me who puts in 10 links and often three or more illustrations each posting. It is hell for me because I do all sorts of color box codes, etc. If you take a look, you can see how complex my pages are.

l am a paying customer who uses the highest level of service. I will continue for a few more months, posting at Typepad but I am also going to write a scathing review of your service along with preparations of moving elsewhere.

Maybe you don't care. I would not be surprised. This is how business is conducted these days: to hell with the customer. Blogger was very snooty with me 'because we are free' so they didn't give a hoot.

But you guys! ARRRGH. You better give a tiny hoot about this. Restore the ability to use HTML without making it hellishly unstable or I leave. Period.

Notice how Typepad's staff absolutely refuses to understand my fury, my complaints. This is classic. Many businesses do things because they think they are nifty or neat. When older customers are greatly inconvenienced by this, they tell them to go to hell, basically.

I use this new system as it is set up and not only does it have obvious instabilities like making things vanish, for example, the new system has severe limitations for editing. In the old system, the full HTML was hidden and only my personal HTML additions showed up. This included the all-important spaces I inserted by simply clicking on the 'return' key while coding.

Now, I have to code in these spaces with the div and p icons. Not only that, the HTML text shows up as one big, fat, continuous mass of text and finding ANYTHING there is like looking for a needle in a haystack!

The staff refuses to understand how irritating, hideous and stupid this is. I had to go into the HTML text to put in my own coding for this story and it was a total headache, a nightmare. Last time these idiots fiddled with the systems, they messed up my ability to click and drag, internally. I used to be able to move things around easily and the posting box would scroll as I moved text around. I DO THIS A LOT.

So starting about three months ago, they decided to make this impossible. I cannot fathom why. But these programmers decided unilaterally to do this crummy thing to me. I complained and not once did they address the fact that they changed a useful tool!

So it is this round: they simply think all I need is to get used to their new system. Except it is very difficult to edit or control the postings with the new system! It is a pain in the ass. Posting this story involved me trying to figure out how to get above the link to write in the header. And for some bizarre reason, the system insisted on using 'bold' rather than normal text! INFURIATING. And I couldn't change it! I never clicked on the blasted 'bold' setting!

I am going to email a link to this story to show these guys running Typepad, this is no joke. People doing simple blogs with those 'look at THIS!' junk can be happy with the new system that disables us older posters from using the really nice, older system. But it is motivating me to launch my own .com site. I pay a lot for this service and would think that I, not the people using the freebie services, would matter a tad to these people.

The complaint department people should send this story upstairs to their bosses. But I don't know if they have either the wit or the ability to let the top owners of this crummy, irritating service know that I, an old customer from way back, who pays the top price for service, am thinking of departing due to this mess.

Hell's bells! Is the only way to get attention, walking away totally? I have done this in the past! I carry grudges. When a store irritates me too much, I never, ever come back. So it is here. I have been unable to do cartoons lately because of the difficulties posting here. And my neck hurts. The muscles from the shoulders to the back of the head are extremely tight.

Normally, I listen to operas while merrily writing away. All is serene. I even laugh.

Now, I literally gnash my teeth. Good riddance, Typepad.

Otober 30, 2008

Elaine Meinel Supkis

White House press airhead, Perrino, tells reporters that banks exist ONLY to lend. This sets me off on my usual screaming fits since understanding the history of banking and the true mission of banking is at the very heart of the collapse of nearly all banks on this planet. Also, the gnomes are using the rescue funds to line their own wallets. Somehow, this doesn't surprise me at all, nor any readers here. Heh. And time to talk yet again about a very verboten topic: the flood of illegal alien home buyers who bid up housing to outrageous levels and who are ditching their purchases that are mostly only a year or two old, as they flee again.

White House tells banks to stop hoarding money

An impatient White House served notice Tuesday on banks and other financial companies receiving billions of dollars in federal help to quit hoarding the money and start making more loans.

"What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money," White House press secretary Dana Perino said.

Though there are limits on how much Washington can pressure banks, she noted that banks are regulated by the federal government.

Dana Perino was selected for the same reasons her clone, Palin, is promoted by the Republicans: she is an airhead. Being congenially silly, she plays a good bimbo. The previous one who died was a male bimbo clone of Dan Quayle.

First of all, banks do NOT exist to 'lend money.' They exist to make a profit! If lending money brings profits, they do this. But their chief original function was to HOLD money for others. The only people who could get loans were people who had big holdings in these early banks. Say, you were a merchant. You could cycle in and out of this lending/capital creation entity. A peasant couldn't go to the bank and ask for a loan!

This was true for many, many, many centuries. When poorer people wanted loans, they had to go to a loan shark. Even in my own lifetime as an adult, people who had no capital had to go to the Mafia for loans. If they didn't pay up, they had bad accidents. Like putting on shoes with cement and then falling into the East River at night.

The beginnings of lending to people with no capital, no property was very gradual. When someone wanted to buy a house, and I was very much one of these people back in 1970, you had to put at least 20% down to qualify for a loan. If you wanted to buy on a credit card, and I had one of these, you put some money in a bank account and American Express would then give you your own money back plus a small forward amount in emergencies [which cost extra!] for a fee. I paid no interest unless I tapped into the emergency fund. This card was used when traveling, especially overseas.

The first credit cards were very difficult to gain! You had to have a sponsor if you didn't have property. Like, mom and dad, for example. Then, the laws were changed. The government was lobbied very hard by the bankers to change the usury laws. Once this was done, they flooded the US economy with easy debt that was very hard to pay off. This was due to the increasingly high interest rates.

One of the many tricks they use to trigger these rates is, if you accidentally go over your limit, they don't stop the use of the card. Instead, they silently reset the interest rates due on the ENTIRE BALANCE from say, 9% to 33%. Then, the poor person goes into shock when they see the impossibility of paying off these debts.

This happened to someone dear to me. We bailed out this person for this is why families are far stronger than individuals. I am a hearty believer that families should stick together. The lessons were learned and frankly, I was quite enraged that Sears would sink so low as to play this sort of Mafioso game. Indeed, I boycotted Sears for years due to this ire.

The childish belief that banks exist to only produce loans is why our banking system is dying. Perino isn't the only airhead running things. She is typical, not exceptional. There are many ugly airheads around. I see them in the news every day.

The United States believed in saving money in my youth not because it was good but because the banks demanded this before they lent anything. The process of socialization was rather simple. When I was only a child, I couldn't wait until I could deposit my babysitting loot in my own bank account. I kept this account until the beginning of the banking collapse in 1970. Then, I went to Wells Fargo and had a big fight with them and withdrew all my money.

I didn't go into debt to go to the University. I worked from May to September in a local bar and this paid enough to live on all the year and pay for school fees! And go on vacation. And I didn't work five days a week, either. Life was good fun back then. Heh. And I learned a lot about banking and business chatting with my customers who were sex-starved gnomes and so, eager to have a young thing listen to their war stories.

The late 1960's was America's financial high tide. It was quite wonderful, actually. I was able to buy hundreds of classical records, dresses and my truck as well as other nice stuff just on babysitting money, working part time ON MINIMUM WAGES. In college, I worked only part time [much higher than minimum wage] and had plenty of leisure and came out of this with zero debt while living in my own two bedroom house which cost me $68 a month. My utility bills were about $12 a month. My pay was about $75 a week and sometimes a lot more due to tips. A dollar was worth something back then. Rent was supposed to be less than one week's wages, not the present 50% of income we see so often today.

Anyway, before you could buy a house, the bank wanted you to pay back some sort of loan. I was rather pissed about that requirement when I went to buy my first house. I always paid cash for things and saved! I asked the officer, what should I buy? He said, 'Buy a car.'

'I already have a 55 Chevy which I rebuilt, with cash,' I complained. Well, I had to go into debt to pay for my first child's doctor. Then, I qualified for a mortgage! This illustrates how parsimonious bankers were before Ronnie Reagan.

Wall Street Won't Surrender Bonuses Amid Outcry, Veterans Say

(Bloomberg) -- Wall Street's chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.

Odds that Wall Street will forgo the payouts are ``slim to none,'' said John Gutfreund, 79, president of New York-based Gutfreund & Co. and the former chief executive officer of Salomon Brothers Inc. ``They're going to have to be a little bit sensitive because politicians, whether they like it or not, are part of their lives now.''

Gnomes are gnomes. Through and through. They aren't just cartoon characters I created. This is their fundamental nature. They are grasping and vicious. They consider the loss of a penny to be worse than dying. They will steal the silverware and eat you out of house and home before giving up a penny. With goddesses, they are foolishly, deliriously generous. But with the people rescuing them, ie, the US taxpayer, they are churlish and snap back.

'Hey! We own the politicians! Try and stop us from looting you schmucks!' snarl the gnome community as they stuff their sacks and rush home. It is very easy to make Wall Street 'forgo their payouts': arrest them all! Then fine them triple of what their payouts would have been. This would be a sharp lesson to these Mafia wannabes.

On November 22, we will be demonstrating in many cities, I hope, demonstrating our ire about the bank rescue and the Federal Private Banking Gnome Headquarters Reserves.

U.S. Treasury Program Shuns Banks That Need Cash Most

(Bloomberg) -- The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say.

``This has the unintended effect of making the strong stronger and the weak weaker,'' said Gray Medlin, founder of Carson Medlin Co., a Raleigh, North Carolina, investment bank focused on banking deals. ``Banks that are getting bad exams and are under intense pressure from regulators won't be successful in applying.''

I am not surprised by this news. At the Congressional hearings concerning the bank bail bill, officers from top investment banks sat on either side of me and talked with each other over me until one of them suddenly noticed I was writing down what they were saying. Then they clammed up.

They figured, no one would notice a $700 billion bank heist. When I arrived in DC, the firestorm over the proposed rescue plan was so great, all of Congress was seriously worried. Now, they are not so worried. This is bothersome. This being an election year, no one feeds the US political golden goose more goodies than Wall Street and in particular, the banking gnomes. So outrage is rather muted, to say the least.

Instead, we talk about that mythical and fake creature, Joe the sort-of-plumber who now wants to be a country western singer who, I presume, will croon about his sex life going down the drain due to lack of funds.

Unintended effect???? HAHAHAHA. When I was in the earlier hearings about the bail the gnomes out by buying them all yachts bill, everyone talked about all the things that are now going on. Everyone knew that the bill was going to allow a bunch of sex-crazed gnomes to raid the public till. There was talk about stopping this and having the bail out be strictly so that US people could pile more debt onto our homes and businesses.

Instead, it piled more loot into the bank vaults of a bunch of pirates. Was this unexpected? Well, back in September, I wrote about the funds given to both GOP and DNC members in Congress. It was a huge amount going to the regulators who have to please this army of well-heeled bribesters.

Banks to Continue Paying Dividends Bailout Money Is for Lending, Critics Say

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

*snip*

Critics, including economists and members of Congress, question why banks should get government money if they already have enough money to pay dividends -- or conversely, why banks that need government money are still spending so much on dividends.

The deal is, the rescuing entity will get dividends. See? So the government lends money at insanely low rates, not credit card rates, takes on ALL LOSSES and then, on top of this, guarantees all dividends of what are essentially bankrupt banks? HAHAHA. This is not a great way to get rich, incidentally. The dark arts of going bankrupt have, through history, been the only way to fix broken businesses or banks.

The tragedy of the Soviet State was, they couldn't let any businesses go bankrupt. So the entire nation went bankrupt. Not exactly a good outcome. I keep pointing out that the US is becoming the Soviet Union. These bail outs are obviously right in step with Soviet thinking. Torturing people,indefinite imprisonment,running gulags, limiting public protests, tasering peoplefor asking 'interesting questions,' throwing away the Constitution, concentrating power in the White House Kremlin clone, etc: we even are fighting a futile war with the very same Afghani groups that destroyed Soviet power!

And here is McCain and Palin claiming that Obama is a communist. HAHAHA. I wish he was a Chinese communist! They seem to know exactly what capitalism is! The present regime in DC is utterly clueless about what capitalism is or what banks are.

The government is in collusion with the people who destroyed not only our banking system but who conspired to turn traditional banking into a debt machine. A machine that has ground out endless red ink, red ink that is killing our nation and drowning the world with cheap dollars. Note how much I paid in rent for a two bedroom house, not apartment, with a yard and a place to park my truck!

Reserve Fund’s Investors Still Await Their Cash

The national “bank holiday” that ushered in the New Deal in 1933 locked up the public’s cash for four days. The crisis that hit last month at the Reserve Fund, the nation’s oldest money market fund, has frozen hundreds of thousands of customer accounts for more than six weeks — with no sure end in sight.

At least 400,000 people, and perhaps as many as a million, can’t get access to their savings, a problem that has quietly persisted in spite of widely publicized federal efforts to restore confidence in money-fund investments.

*snip*

And the Reserve Fund had seemed the least likely candidate for trouble, given its long and stable history — its founder, the legendary Henry B. R. Brown, had invented money market funds.

Initially, the company simply announced that it would delay redemptions from the Primary Fund for up to seven days, as allowed by law. Customers were somewhat reassured, but anyone trying to get additional information was met with busy phone lines and unanswered e-mail.

First, let's go to the web page of this ponzi scheme operation and look at two press releases:

Here is The Reserve's press release from September 16, 2008:

The Board of Trustees of The Reserve Fund, after reviewing the unprecedented market events of the past several days and their impact on The Primary Fund, a series of The Reserve Fund and taking into account recommendations made by Reserve Management Company, Inc., the investment manager of The Primary Fund, approved the following actions with respect to The Primary Fund only:

The value of the debt securities issued by Lehman Brothers Holdings, Inc. (facevalue $785 million) and held by the Primary Fund has been valued at zero effective as of 4:00PM New York time today. As a result, the NAV of the Primary Fund, effective as of 4:00PM, is $0.97 per share. All redemption requests received prior to 3:00PMtoday will be redeemed at a net asset value of $1.00 per share.

Effective today and until further notice, the proceeds of redemptions from Primary Fund will not be transmitted to the redeeming investor for a period of up to seven calendar days after the redemption. The seven-day redemption delay will not apply to debit card transactions, ACH transactions or checks written against the assets of the Primary Fund provided that any such transaction from an investor, individually or in the aggregate, does not exceed $10,000.

The Primary Fund will continue to accept purchase orders.

Effective tomorrow, September 17, 2008, the NAV for the Primary Fund will be calculated once a day at 5:00PM, New York time.

Here is the death notice:

Here is the press release just one month later, on October 27, 2008:

Many shareholders have contacted us regarding the status of their investments in Reserve funds. We hope the information below answers some of your questions.

Suspended Purchases:

We are not accepting subscriptions in any of the Reserve Funds.

Suspended Redemptions and Liquidating Funds:

The U.S. Securities and Exchange Commission (SEC) has issued temporary orders permitting the suspension of all rights of redemption for the following funds:

PRIMARY FUND U.S. GOVERNMENT FUND of the Reserve Fund

*INTERSTATE TAX-EXEMPT FUND* CALIFORNIA MUNICIPAL MONEY-MARKET FUND

* CONNECTICUT MUNICIPAL MONEY-MARKET FUND* FLORIDA MUNICIPAL MONEY-MARKET FUND* MICHIGAN MUNICIPAL MONEY-MARKET FUND

* NEW JERSEY MUNICIPAL MONEY-MARKET FUND

* OHIO MUNICIPAL MONEY-MARKET FUND* PENNSYLVANIA MUNICIPAL MONEY-MARKET FUND

* VIRGINIA MUNICIPAL MONEY-MARKET FUND of the Reserve Municipal Money-Market Trust II

* NEW YORK MUNICIPAL MONEY-MARKET FUND of the Reserve New York Municipal Money-Market Trust

* ARIZONA MUNICIPAL MONEY-MARKET FUND* MINNESOTA MUNICIPAL MONEY-MARKET FUND of the Reserve Municipal Money-Market Trust

* RESERVE YIELD PLUS FUND of the Reserve Short-Term Investment Trust

The Boards of Trustees (the “Boards”) are working on plans to effect the orderly liquidation of the foregoing funds, subject to supervision by the SEC. The Boards seek to ensure that all investors are treated fairly and receive their money in the shortest time consistent with realizing the fair value of the securities. The Reserve intends to begin making payouts as soon as practicable.

In other words, the fund is bankrupt. Note how it was cleverly named to make it sound like these government funds were bonds held by the Federal Reserve. This is a common problem. Bankers would name their banks after government entities like 'The Bank of New York' but they are really dangerous private enterprises. Not that they are really that anymore, anyway. Now that the bankers have raided the Treasury to get their bonuses and dividends!

Usually in a collapse, the first funds to tank are those which appeared the safest. This is yet another typical example. This, the oldest of the Funds which are destroying global savings and wealth, was slain by the Derivatives Beast. He ate the whole thing. When he ate Lehman Brothers, nothing was left, barely any bones!

These funds were quite ordinary. And thus, not all that profitable. When inflation raged ahead of the value of these instruments, the desperate fund managers wanted it to grow, anyway, so they played those stupid, useless and destructive credit default swap games. And interest rate flux games. And monetary values market games. And lost their shirts! This sort of hyper-risky activity is due to the dollar dying! And what is killing the dollar?

Hyperlending. Especially to governments. And the wildest borrower is Congress and the President of the US. The same people putting another trillion plus debt on top of the ten trillion mountain of debt we already owe.

Barclays Seeking Bids on $4.5 Billion in Bonds and Credit Swaps

The average hedge fund has lost more than 18 percent this year, according to the HFRX Global Hedge Fund Index. Managers are selling assets to meet demands from lenders for more collateral and investors that want their funds returned.
<p>
Investors forced to sell a record $2.3 billion of leveraged loans this month sent prices tumbling to a record low 66 cents on the dollar last week from 88.5 cents at the beginning of September, according to Standard &amp; Poor's LCD, which earlier reported the Barclays loan sale. The sales were forced by clauses in funds' borrowing agreements that require them to raise money when prices drop below a set level.

In other words, the gnomes have to return the loot to the investors who want to run away as fast as humanly possible. When I rented my house for $68 a month, there were zero hedge funds in the universe. When the average American had to cough up $3,000 a month to rent homes, we had thousands of these hedge funds. There is a direct connection here.

Old banks were very parsimonious about lending for housing. The flood of debt that poured into all markets due to hedge funds funneling loans from 0% Bank of Japan to our markets has destroyed the value of the dollar. This is because the Japanese wanted to destroy the value of the yen so they could destroy our industrial base.

To keep the yen weak, the Bank of Japan had to make the carry trade flourish. Note how, when the yen got strong, the carry trade ended and LIQUIDITY VANISHED ACROSS THE PLANET! And all these funds have been caught in the wringer here. They are the funnel for these outrageous loans. The Bank of Japan didn't give a hoot how improvident the lending was, they lent to anyone.

It should occur to people that the Bank of Japan did this before! Like, a decade earlier. They cheerfully handed out loans all over the place and Japan's property and stock markets had a monumental bubble. Then, the Bank of Japan turned and did this to the entire planet. The US wasn't the only place that saw epic real estate and corporate debt hikes. The housing bubble was pretty much global.

CNN: Price declines picking up

Of course, the August indexes don't reflect the financial market meltdown that hit in September and severely restricted access to credit, according to Richard DeKaser, chief economist for National City Corp (NCC, Fortune 500). He believes the pace of price declines has picked up since then.

"There are two explanations for these steeper declines," he said, "neither of which are encouraging. One is that the difficulty in obtaining credit has further constricted demand. The second is that home sellers are finally capitulating on prices. They've been holding out for months, refusing to sell except at their prices. Now they're throwing in the towel."

*snip*

Much of that statistical trend is being driven by data from hard-hit western states like California. The California Association of Realtors reported last week that home sales volume jumped a whopping 97% in September compared with the same period a year ago. But the median price of an existing home has fallen 41%.

Like the huge Japanese bubble, all these bubbles are going flat the same way and at the same rate. The US led the pack only because we were showered with the most red ink in the past. Attempts at restarting lending under these circumstances is impossible. But fixing this is even more impossible if the Bank of Japan isn't punished for what they did!

PUNISHMENTS MATTER!!! For example, the other G7 could condemn the Bank of Japan and isolate it. Forbid all commerce with it until it is thoroughly reformed. This means, first shutting down all the pirate coves which were the places that took the carry trade loans and sent them to various countries to load up debts. The US public financed a great deal of our debts via inflating the value of our homes. So now, we are rapidly losing wealth. 0% loans on homes are not happening. Even as the Fed drops rates, house loans are going up, not down, the interest rate mountain. This is due to the simple fact that everyone sane expects future inflation from all the money creation.

Meanwhile, Libra resets her scales in a rather violent way. As we plainly see. The Derivatives Beast is doing an epic job of eating up credit. Unwittingly, the gnomes themselves birthed this monster. And they want us to slay it for them. And then resume the financial games they played with Japan.

Click here to see video of abandoned houses filled with things bought on credit and then left behind: Foreclosure Alley

By Correspondent Lisa Ling

For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

SoCal Connected tracked down some surreal sights associated with the crisis - a company that specializes in removing whatever people leave behind in their foreclosed homes. The process is called a “trashout” - a term the company came up with because it perfectly describes what happens. Everything that’s left is dumped in a trailer and taken to the landfill.

Several things are important here and seldom talked about. One is, the US consumer has grossly over-consumed. The video above is most infuriating. I have scavenged all of my life. Dumpster diving is great sport! Rich or poor, I could never resist dumpster diving. Watching them simply throw away perfectly good, often new, stuff, is amazing. They couldn't get anyone to come and get it!

I am just aghast. The people living in mostly new houses here in this video went on massive decorating/buying sprees after going very deeply into debt, buying the house on easy credit. When they couldn't pay even TWO YEARS of this high-living, they hightailed out and leave nearly everything behind?

Another thing struck me: nearly all the stuff was new. This means, they probably had very little belongings when they moved. I have moved a number of times and each time, required a moving van after age 28 years old. The real estate boom of the Sub Prime years which were from 2004-2007 were not normal house buying years. This was the period whereby banks who forgot the real rules of banking, were anxious to hand out loans to total strangers who didn't have to prove income or even citizenship.

The Hispanic community of illegal aliens believed that if they owned big houses, they would be able to force the government to hand over citizenship even though they jumped the lines in, so to speak. They came illegally. Here is a New York Times graph that clearly shows how this worked:

Note first of all, both Black purchases of homes and general population purchases began a steep decline in 2004. And was NEGATIVE during the HEIGHT of the bubble! On the other hand, the flood of often illegal Hispanic buyers shot up that very same year! Everyone else was exiting the markets because housing was too expensive. Were Hispanics suddenly earning much more than the general population?

NO! But they happily took on epic levels of debt in the hopes of gaining citizenship. Whole real estate businesses were predicated on luring them into very expensive homes. Most sane people would take one look at the high future rates of the various lending tricks and shake their heads and hold onto their purses. But not illegal aliens seeking to prove they had roots!

In 2005, I published a story declaring the housing boom had peaked. And I was right except for this one sub-market of buyers. The very reckless buyers who interfaced with very reckless bankers who took cynical advantage of their weakness.

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Culture of Life News Main Page

October 29, 2008

Elaine Meinel Supkis

World stock markets are shooting up like a rocket based on the perception that the G7 central bankers and politicians will restart the destructive status quo that involves the US allowing the flood of exports to enter our country and devastate our industrial base. Great news, eh? All this will be fed by an orgy of 0% financing. Sounds like all those auto commercials. As we watch the entire concept of banking go into this moral collapse, it pays to look closely at the deals we are accepting here. Just like those auto loans at a fake 0% interest rate: read the fine print and see the truth.

Three-Month Libor for Dollar Falls to 3.42 Percent, BBA Says

The comparable euro rate fell 2 basis points to 4.83 percent today, the 15th consecutive decline, BBA data showed.

The LIBOR rate is finally falling. Or so hope our foolish experts. If only they can get this low enough, all will be well! I recall, during the previous 20 years, everyone who pretends to be economic experts marveled at how cheap credit was and how low inflation was, that is, after the 1971-1982 waves of increasingly bad hyperinflation.

I lived through this entire span of time as a working mother who had to cope with these waves of inflation as well as swimming in the real estate shark pool a lot of the time. So I always was hyper-aware of the interest rate fluxes. Also, we did business overseas so we were aware of currency valuation fluxes, too. Since this is personal and not something I read in a book, I have vivid memories of my problems during this time and how I coped with these sometimes, huge problems.

From 1971 onwards, as the US government and the private banking conspirators in the Federal Reserve struggled to keep the economy growing while piling up huge debts thanks to wars, the goal was always to have credit as cheap as humanly possible. The business about 'taking away the punchbowl when the party gets interesting' was just pure propaganda.

At no point has this ever happened. In the past, the Fed raised interest rates whenever anyone overseas came to knocking at the front gates of Fort Knox, demanding their new-minted dollars which often were created overseas via lending, be turned into physical gold. For example, when the Fed dropped interest rates to restart the US economy after the Great Crash of 1929, France merrily made loans in France based on their DEBT trade with the US and then they raided Fort Knox for gold! Even as the government was demanding the US bankroll Germany's reparations by lending to Germany so Germany could give these dollars to the US and then France would take these same dollars and trot back to the US to demand gold!

Now, we don't care about any of this since Europe tried this yet again in the 1960's and drained away 75% of the gold at Fort Knox. Now, we simply have no gold peg. Nations now live with this floating currency game which is making many people very rich and even more people, very poor.

The LIBOR rates are now dropping but are still hundreds of basis points above the fake rates set by the central bankers. The news that the LIBOR has dropped has to be offset with the news that the LIBOR drop hasn't even begun to catch up with the rate of artificial drops being engineered by the punch bowl boys in the central banks.

Fed May Cut Rate to 1%, Signal Steps to Save Economy

(Bloomberg) -- The Federal Reserve may lower its benchmark interest rate to 1 percent today and signal further reductions to levels unseen since Dwight Eisenhower was president.

Tumbling commodities prices and weaker consumer spending are slowing inflation, which officials described as a ``significant concern'' at their last scheduled meeting in September. Tomorrow, the Commerce Department will probably report that the economy shrank at a 0.5 percent annual rate in the third quarter, the most since the 2001 recession, economists predict.

The Fed ``will be very aggressive,'' said Mark Gertler, a New York University economist and research co-author with Fed Chairman Ben S. Bernanke. ``Inflation risks are off the table'' and ``the issue now is how bad the recession will be.''

World stock markets shot through the roof on wishful thinking that the US public will have access to 0% financing and thus, be able to buy, buy, buy more stuff. I shall disabuse everyone of this notion. It isn't going to happen.

But first, I have to address a philosophical issue today: the central bankers are destroying banking in their looney game of trying to control economies via interest rates! The role of bankers is rather simple: they have to balance the creation of credit with reserves and savings! They don't sit down and say, 'Should we make the economy hotter?' They shouldn't decide, unilaterally, 'We should cool the economy, it is growing too fast.'

They have one job: to preserve the reserves and to grow it so it keeps up with credit creation.

This is what has failed! This is why all banking is now collapsing! This is a total failure of the entire philosophy of the concept of central banking! The ebb and flow of interest rates is due to trade issues and wars. And the only role the bankers have in all this is to raise the rate's basis whenever they notice that someone is borrowing too much and is becoming a credit risk.

This means tracking statistics and this is in particular, the M3 stats that Bernanke just cloaked in obscurity. When there is too much debt, the chance of going bankrupt rises in direct proportion to the climb in borrowing. Red flags appear and to stop the madcap borrowing, the bankers are supposed to raise rates! How simple can this be?

Well, the mandate of the bankers is NOT to protect our savings. That is obvious. Savings are always sacrificed on the altar of 'growing the economy' via debt creation. Since no one ever wants this faux growth to stop, the tendency is to keep interest rates below the rate at which it can attract enough savings to capitalize the banking system.

The globe has collectively decided this month that savings will not be encourage, spending will be encouraged, no matter what. So the savers of the world will be asked to gain nothing while they don't spend. And wild spendthrifts will be encouraged to run riot even more. And no nation is more spendthrift than the US.

Consumers Feel the Next Crisis: It’s Credit Cards

After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers. The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of heavy losses after an era in which it reaped near record gains from the business of easy credit that it helped create.

Credit card companies are allowed to charge ruinous interest rates on easy credit. The fewer questions asked of people being lent money, the higher the interest rate charged against them. The flood of no questions asked lending is leading to a flood of defaults. Credit cards don't mind this, the fees they gain when people fall behind are even greater than the interest collection rates.

Most people pay only the interest on their credit cards so it is pure gravy. A $1,000 purchase can gain a $3,000 profit for the credit agencies.

Anger at 222% Christmas credit card

Major high-street retailers are targeting poor families with bad credit records to prop up their Christmas sales during the credit crisis.

Dozens of high street stores are taking part in a doorstep lending scheme which charges poor families extreme rates of interest. Woolworths, Comet, B&Q and Mothercare and 92 other retailers have been accepting vouchers that are repaid by borrowers at an annual percentage rate of 222 per cent – more than 10 times the rate of a credit card.

Nearly exactly a year ago, I wrote about oil, inflation, interest rates and international central bankers messing around with global trade. The entire article including the data I published is one of my more important stories. The entire efforts of the trade circle of the EU/US/UK and Japan, the G7 group, was aimed at stopping the banking collapse by pouring into the gaping maw, not savings but money created by the central bankers. I was totally against this. I correctly said, the important thing here is to reorganize global trade so it is balanced.

October 30, 2007 Federal Reserve Wants Infinite Debt And Low FOREX Reserves

One of our readers sent this link. I was curious about it since it involves tidbits of data. Like a cat's paw marks on wet cement...ever pour cement? At night, all the animals come to walk on it. When I poured the cement floor to my basement, the dogs, cats, a deer and one horse hoof print appeared at night on it. I didn't fill them in, they amuse me. Anyway, in the banking system, things have to run 24/7 so the Federal Reserve is always open for special solicitations for funds. Generally speaking, banks prefer to make deals with each other and not share 'business' but when business involves working with stinky things like trashy tranches, the Fed is the bank of last resort.

The other time of mega-high rates was in 1980 due to the Iran oil boycott and hyperinflation at home. Unlike Greenspan, Volker raised rates to equal the real inflation rate. I genuinely believe that virtually no one remembers this time period. I remember because I had to do business via barter back then due to high rates. Certainly, I couldn't call a banker. And that was also when banks gave me trouble with money I deposited. They held onto it for as long as possible while I wanted it as fast as possible. Check clearing took forever.

Remembering all this, we look at that 15% deal in mid-October with a sens of foreboding. When there was this sudden hike in the overnight funds meaning that someone came slinking up to the Fed window with a bag of cow droppings, they couldn't get anyone to give them lending loot except at a very high rate indeed. Namely, someone thinks these guys who are probably attached to some pirate ship out at sea, are not long for this world. Too bad we can't tell who this person is. As I keep saying, despite the claims that we have an open system, it is very much 'insider trading' all the time. We get to know enough to think we know what is going on. But this is an illusion. Here it is: we are in trouble due to wild lending at super-low rates leading to the bidding up of various assets and things of every imaginable sort from the futures markets to stock markets, housing markets, etc. The entire problem came about due entirely to the Federal Reserve dropping interest rates lower and lower back in 2001 starting from January 6th of that year. Previous to the election, they tightened the screws, claiming there was inflation even though we were obviously in a recession. Looking at all the data 7 years later, one notices immediately that all the nations of the world went into recession starting in late 1999 and through all of 2000, a time when the Fed raised rates over and over again.

The minute Bush was declared the 'winner' of an election he lost, Greenspan began to loosen rates...right in the teeth of Bush and the GOP irresponibly granting many huge tax cuts to everyone! Then we had 9/11 and rates dropped from a super-low of 3% to a super-duper, mega-low rate of 1%. Right in the teeth of obvious energy inflation. Energy is always a driver of inflation. It doesn't matter what the interest rates are, if energy is rising, inflation rages. This is because energy is a powerful component of all economic systems. From manufacturing to transport, energy is consumed. And as it rises, either wages are cut or profits vanish or both which causes either inflation if both can be passed on or a depression if neither can be passed on and trade and manufacturing slow down.

One of the readers here sent me a link to iTulip.com where one of the members mentioned that the oil crisis of the stagnation years from 1972-1984 was 'fake'. This is typical of many people who were probably too young to remember what happened during those years or were too politically unaware of what was going on back then. My own father was sent to Saudi Arabia in 1974 to be a friendly envoy to persuade King Faisal to cooperate with the US and bring down oil prices.

Instead, the king was simply assassinated and replaced with a man I called, back then, 'The Evil Uncle'. The price of oil suddenly shot up due to wars. The price of oil ALWAYS shoots up due to wars! The more wars, the more the price of oil shoots up. During WWII, the price didn't shoot up because the government rationed oil. During the 1970's, the US again, rationed oil! Who would have thought!

Every time the price of oil is allowed to climb due to wars, we get inflation. This is an iron rule. If people want cheap oil, they can hope for no wars. When Bush and his oil buddies from Texas and Alaska were all agitating for war with Iraq, I warned everyone that this would mean global inflation from high oil prices. And of course, this is exactly what happened!

So, let's go back to Culture of Life News exactly one year ago, October 29, 2007: Energy Drives World Economy Off Cliffs

From Bloomberg: Crude oil climbed above $93 a barrel for the first time, extending this month's gain to 16 percent, after Mexico shut a fifth of its production and the dollar fell to a record low.

State-owned Petroleos Mexicanos, the third-largest supplier of crude to the U.S., halted about 600,000 barrels a day of output as a storm barreled through the Gulf of Mexico, spokesman Carlos Ramirez said in Mexico City. The dollar dropped to $1.4426 per euro, the weakest since the introduction of the 13- nation common currency in 1999. End Bloomberg quote.

There is now a lot of proof that dollars no longer are the basis for oil trading. Namely, every time oil is constricted in some way, the price shoots up more if paid in dollars than paid in euros. So inflation for anyone using or holding dollars is significantly higher than if they use euros.

This dynamic is fairly recent. Ever since Greenspan dropped interest rates to 1%. The aftershocks of this stupid ploy to 'revive' the economy after the Dot Com collapse are still shaking world energy markets. The US itself is aggravating all this by dropping interest rates in the teeth of obvious inflation above 5% and threatening more wars in oil pumping regions.

Why are oil prices dropping this season? It is equally simple: the US and EU have ceased attacking Iran. The threat of war is rapidly fading there. The US is confining its attacks to Pakistan and Syria, non-oil nations. It is leaving the Persian pussy alone. The guys at the top know perfectly well, if they make oil expensive right now, the global economy will continue to collapse. So they are tweaking foreign policy statements and actions to create the illusion of peace.

If the price of oil drops below $50 a barrel, expect more wars in the Middle East.

Back to my story from October 30, 2007:

China's markets are continuing to rise. Of course, they too will fall in the end as a global recession caused by the US overspending and excessive debts and too-small reserves will grip everyone by the throat. Only we won't sail out of this with our empire intact and our power greater. China's retraction will be painful but ours will be fatal. This is due to the logic of all imperial collapses. Just as England, no matter how she twisted and turned, could not shake the depression she caused, so it is with us. Both Germany and the US grew stronger from 1933-1939 while England weakened. When WWII finally began, it really was a confrontation of the new Great Powers: Germany, Japan, the US and Russia. England struggled in vain to hold onto its rotting empire. If the US didn't fight Japan, the Japanese would have finished off the last of the imperial holdings of Australia and India, for example. But the US propped up Britain across the planet and in the end, did most of the manufacturing of war materials.

So now, in this collapse, China will be the world power when all this unwinds. It is quite simple: China isn't up to its eyeballs in debts. And if the US discharges its debts like Russia did twice in the 20th Century, this will destroy us just like it destroyed Russia. And unlike Russia, the comeback won't be easy. Russia has energy to spare. We are on the down slope of the Hubbert Oil Peak and are very vulnerable since our entire transportation and living systems are set to a model that assumes cheap, easy oil.

All over the news are stories about how the G7 are rushing to the Dragon Throne to beg China to bail out everyone. When China's ruler, Hu, went to Africa and openly bailed out IMF victims there, the US and Europe's media and punditry went totally insane with fury and fear. They claimed that China wasn't rescuing Africa but enslaving Africa. HAHAHA. So look at today's news:

British Leader Calls for Larger I.M.F. Bailout Fund

Prime Minister Gordon Brown of Britain called Tuesday for China and the Persian Gulf states to put up more money to help the International Monetary Fund deal with the fallout of the credit crisis.

Mr. Brown’s appeal grabbed the spotlight ahead of a meeting on Tuesday with President Nicolas Sarkozy of France, who called the proposal interesting and vowed to work “hand in hand” with the British leader — just as they had on a coordinated rescue plan for European banks. Mr. Sarkozy said he also believed that the fund needed “additional means” to help ailing economies.

Sarkozy thinks he will get his mitts on Chinese money and then use it to aggrandize French powers? HAHAHA. Mon Dieu! So, China and OPEC are going to bail out Europe? And these guys in France and Britain will back slap each other and imagine, these two devastators of the Chinese and Ottoman empires will be given more power? Are they this blind to history?

The concept that the victims of 500 years of European aggression will hand over goodies to Europe to make them stronger is just beyond pathetic. It is pathological. I try to put myself into other people's shoes. I assume Chinese patriots are like me. Ditto, Japanese patriots. Or Muslims are to their own history. Everyone carries this historical matrix in their minds at all times. Ignoring this is stupid.

Americans try to ignore history but look at the Deep South's white population: they are obsessed with the Civil War. They even go so far as to have huge parties that recreate major battles from that time. These recreationists study all the fine details of that time. We see in our present election, the echoes of the fight to stop slavery while keeping the US as one nation rather than a confederation. The wounds of the Civil War which are not even 150 years old still fester. So imagine how China thinks when many of the things done by Europeans and Japanese invaders are still remembered by living people? Asia wants to help the US and Europe restart the lending game for one reason only: to destroy our economic base and to win the trade wars! Period. This is being done because the US is still too heavily armed and dangerous for more direct confrontations.

The Chinese leadership memorized...I am not exaggerating, they really, really did memorize the book, 'The Rise and Fall of the Great Powers' by Paul Kennedy. They understand that the goal of Chinese trade is two-fold: to increase their industrial base and to destroy the US industrial base. It is pretty simple. So simple, I had hoped US trade negotiators would understand it!

Instead, in order to evade inflation and allow cheap credit so the US government could go deeper into debt, they foolishly pushed for 'free trade' which is entirely in the favor of Asia, deadly for the US. So we got cheap credit and are now busy destroying ourselves with this.

More from my blog last year:

Unable to face reality, we play all sorts of occult and dark games hoping this will allow us to rule the earth without paying for anything, we hope the Chinese and Russians will fund our rule! The corporations which our government protects are nearly all now tax cheats for they want 0% taxes compared to the 35% they are charged with here. Since they are refusing to pay to the tune of nearly a trillion a year, this means our empire is running on lots of red ink instead. The conservative side of the blogsphere is running this futile campaign to present our rulers with a petition begging for them to be fiscally responsible. But this petition does not call for higher taxes, sending our navy to all those tax havens and taking them over and taxing all the corporations hiding there, no.

*snip*

OK: they set their rates and then try to get reality to conform with their happy ideal. They use various means to do this trick. I will note here that the Fed stupidly...VERY, FATALLY STUPIDLY...thinks the game here is to hold as little reserves as possible. NO OTHER MAJOR NATION DOES IT THIS WAY. None. They are all accumulating heroic reserves, far greater than the Federal Reserve. Many times greater! This is the new game.

The Fed, accustomed to setting the rules of international finance for 100 years hasn't figured out that this game ended in 1996 when Japan discovered the felicitous new tool for weakening the yen and thus, gaining trade advantage by hoarding dollars in their FOREX reserves. Then China joined them and one-upped them. Now Russia is doing this along with all the oil pumping nations including Venezuela and Peru, for example. Everyone is doing this! Now, India has joined. Meanwhile, the pointy pencils in the Fed haven't figured this out. Instead, they decided that huge FOREX reserves are not only useless but endanger the holders of these FOREX reserves!

They forget: these reserves have ONE FUCTION: to enable trade on better terms for the holders. Not to make profits via interest rates. Due to the games played by everyone, inflation is woefully understated. No, their only function is to gain profits via trade. Now, Canada must play this same game, they didn't hoard FOREX dollars and now the loonie is on par with the dollar and it is hurting Canada's trade with the US.

So....last year, I correctly explained the thinking and predicted correctly, future actions. Just as I said then, the EU and US powers are rushing off to Asia and even Russia, begging them to save us from our own debt follies. I fear, I sound like a broken record sometimes. I am truly sorry about this. But facts are facts: until the US recognizes the truth, I have to keep yapping. This is so tiresome. Now, back to today's news:

Dollar Falls on Bets for 75 Basis Point Fed Interest Rate Cut

(Bloomberg) -- The dollar fell for a second day against the euro on bets the Federal Reserve will lower interest rates by as much as three quarters of a percentage point today.

The U.S. currency also declined against the yen and the British pound on speculation the central bank will continue lowering borrowing costs as rising unemployment and sliding home values cause the world's largest economy to contract. The yen rebounded from a record loss against the euro on concern slowing global economic growth will limit demand for higher-yielding currencies.

``When the dust settles, the dollar's fundamentals will pressure it to go lower,'' said Masahiro Sato, joint general manager of the treasury division in Tokyo at Mizuho Trust & Banking Co., a unit of Japan's second-largest publicly listed lender. ``Traders will focus more on falling rates and the rising costs of fixing the U.S. economy.''

The dollar weakened to $1.2730 per euro at 11:29 a.m. in Tokyo from $1.2683 late yesterday in New York. It fell to 97.50 yen from 98.03. The yen rose to 124.11 per euro from 124.32, after a 6.8 percent drop yesterday. The dollar may drop to 90 yen by year-end, Sato said.

Ah, the goddess Libra is still at work. She is trying to reset her scales. Everyone is resisting this. She will, in the bitter end, win. She is a death goddess, after all. Japan is terrifically worried that the yen will be 90 to the dollar. This will kill a lot of their export profits. The ability to drop interest rates is nearly gone in Japan. The central bankers, playing traders, not bankers, has kept rates insanely low, even in the teeth of obvious inflation in Japan, so that exports would flourish no matter what. This was very wrong and Japan should have been punished by trade partners.

Instead, they all took advantage of the Japanese carry trade to flood the world with debt. Last month, the army of nations we have trade deficits with, worked very hard to bring up the value of the dollar. But as the US drops interest rates in the hopes we will shop for more foreign goods, the weaker the dollar gets! This is a 'Horns of Dilemma' moment which always happens when Libra is resetting her scales. All escape hatches always lead one back to the same starting point. It is like a nightmare maze: one wants to get to some wonderful point in the past but all the twists and turns leads one back to the Minotaur's horns.

BOJ Rate-Cut Speculation Jumps After Nikkei Report

(Bloomberg) -- Speculation the Bank of Japan will cut interest rates for the first time in seven years jumped after the Nikkei newspaper reported that the central bank may halve its target rate this week.

The chance that the central bank will lower the benchmark lending rate to 0.25 percent from 0.5 percent on Oct. 31 rose to 62 percent from 8 percent yesterday, according to calculations by JPMorgan Chase & Co. using overnight interest-rate swaps.

*snip*

Japan's stocks surged a second day as speculation for a rate cut spurred the steepest drop in the yen in three decades, boosting earnings prospects for makers of cars and electronics.

Miz Japan slits her yen's wrists! And the yen weakens! But the Japanese are furious that all its trade victims are doing the same, rapidly dropping to Japanese banking levels. When everyone reaches 0% financing, Japan will opt for -1% financing. And the death of international banking will continue!

I seriously wish the trade negotiators for the US would include someone that understands all this stuff! I am open for hiring, by the way. I need the money. I live on a fixed income right now and being paid $100,000 a year to do tough negotiations would be lots of fun. Heh. The minute I walk into the room, saying, 'It is finally time to tax low-interest rate countries that are flooding us with their exports,' and I will have earned every penny of my wages! Talk about productive.

Note how Japan makes it all look as if they are helping everyone by dropping rates below that charged by the US and EU bankers!

Economic and Fiscal Policy Minister Kaoru Yosano said yesterday that a rate cut would have a ``symbolic'' effect if done in conjunction with other central banks, showing that Japan is taking part in global efforts to counter the financial crisis.

Yosano's comment ``suggested he hopes the Bank of Japan will lower rates to join its counterparts in the U.S. and Europe,'' said Ueno at Mizuho Securities. ``The government is signaling it wants the central bank to take action too.''

Prime Minister Taro Aso and Finance Minister Nakagawa were circumspect in their comments today on what the Bank of Japan should do.

``How can we tell the BOJ to lower rates? It's a matter for the BOJ, not us,'' Aso told reporters in Tokyo. Nakagawa said deciding whether to lower interest rates is ``up to the Bank of Japan, which is completely independent.''

HAHAHA. Aso is lying through his teeth, of course. The Bank of Japan is joined to the LDP by the hip. The Japanese people accept this deal. They have little experience in opposition politics so the country has basically been ruled by the samurai elites for hundreds of years and still is a closed, one party state.

Honda Jumps Most in 34 Years as Yen Falls Against Euro, Dollar

(Bloomberg) -- Honda Motor Co., Japan's second- largest carmaker, jumped the most in 34 years, leading gains by automakers after the yen declined against the dollar and euro, boosting earnings from exports.

Honda rose as much as 19 percent, or 400 yen, its daily trading limit to 2,465 yen and traded at 2,365 yen as of 9:55 a.m. in Tokyo. Mazda Motor Corp., a third owned by Ford Motor Co., rose as much as 30 yen, or 17 percent, to 206 yen, and traded at 196 yen.

The yen was at 125.17 per euro from 124.32 after dropping 7.3 percent yesterday, its biggest decrease since the 15-nation euro's 1999 debut. A weaker yen inflates the value repatriated earnings from Europe and the U.S.

``The yen weakening helps the carmakers,'' said Hideyuki Suzuki, a market analyst at Morningstar Japan K.K. in Tokyo. ``The market is rebounding from its earlier losses.''

I read in the British news that the former imperialist power is terrified that Honda might lay off English auto factory wage slaves! HAHAHA. The US is in the same fix: bit by bit, we are destroying our own industrial base and it is being sold or rebuilt by Asian powers. Honda desperately wants 0% financing. From JAPAN, not the US. Years ago, people got mad at me when I patiently explained that there was no such thing as '0% financing' for autos. This is ridiculously simple: if you pay cash for a car, the price dropped by around $2,000. If you got a 0% loan, you paid $2,000 more for the car! The differential was the interest payments that were set at about 7% per annum. Yet this game fools lots of people. What a shock that is. Heh.

The price we pay for 0% Japanese cars is extremely high: a loss of sovereignty and power. This is why trade negotiators should be hammering Japan about this, not assisting in this fraud.

China Cuts Interest Rates for Third Time in 2 Months

(Bloomberg) -- China cut interest rates for the third time in two months to stimulate growth in the world's fourth-largest economy after the global financial crisis curbed exports and production.

The key one-year lending rate will drop to 6.66 percent from 6.93 percent, the People's Bank of China said on its Web site today. The deposit rate will fall to 3.60 percent from 3.87 percent. The changes are effective tomorrow.

China's expansion dwindled to 9 percent in the third quarter from 11.9 percent in 2007 and industrial production grew at the slowest pace in six years in September as export markets dried up. The Federal Reserve may reduce its benchmark rate today and the European Central Bank has signaled that it's poised for a similar move.

China's 10%+ growth rate is tremendous. And of course, destabilizes global trade, commodity markets and monetary systems. As China swells and grows rapidly, someone else can't. And that someone else is the G7. Including Japan. Japan's colonization of the US and Europe is a desperate move to save themselves from Chinese growth. The Japanese workers get 0% benefits from all this. Quite the opposite. The Chinese workers depress Japanese worker's wages just as certainly as it depresses American worker's wages.

Japanese firms build things in China just like here. I keep pointing out an obvious flaw in this business. Namely, the US and Japan, living under the US nuclear/military umbrella, can menace any nation daring to kick them out of their own factories in foreign nations. But China can and indeed, parts of the secret 50 year plan is exactly that! I explained to the Chinese that if they have enough military power and enough alliances like with say....um...RUSSIA....they can unilaterally seize any and even all foreign factories and systems and resell them all to the Chinese!

History tells us, this is also inevitable. The Chinese were pleased to learn this news. When I warned the State Department about all this, I was told to go to hell. Of course, since the FBI was listening to our phone calls, etc, the government knew about all this but went onwards to do stupid things because our leadership wanted to get rich, quick. Now, on to the last news story on the topic of interest rates and spending sprees:

U.S. Should Enact $400 Billion Stimulus, Roubini Says

(Bloomberg) -- The U.S. government should enact an economic stimulus package of between $400 billion and $500 billion before the end of the Bush administration in January, New York University professor Nouriel Roubini said.

Roubini, who predicted the current financial crisis in 2006, said the economy risks falling into “a self-fulfilling animal spirit recession that is more severe than otherwise” because of the collapse of credit markets and weak consumer and corporate spending.

“The only way to increase aggregate demand is going to be through” government spending on roads, bridges and other infrastructure, Roubini said at a Bloomberg conference in New York. “We need a huge plan, $300 billion is not going to be enough. I think we’re going to need a plan of $400 billion to $500 billion.”

We are taking bids on how much money to shower on the US consumers! I hear a bid for $300 billion! Make that, $500 billion! Any higher bids? How about $1 trillion? Anyone? $500 billion going once. Going twice...wait, I see the Presidential candidates demanding the trillion dollars! Give them a hand!

To explain the stupidity of Roubini, let us return to my own blog:

Back to exactly one year ago at Culture of Life News:

We saw a huge banking collapse last August. It is continuing. Anyone reading the timeline of the Great Depression knows that the collapse of the banking system took over 4 years to complete and the recovery took 15 years before things began to seriously improve. All the gurantors of the system are now in danger because the entire system is in danger and NOT in nations with huge FOREX reserves. I like to put in a lot of seemingly disparate stories to see what comes into focus and today, it is obviously the hidden hand of the FOREX reserves we must look at to see what will happen next.

My prediction: the US will still refuse to understand how FOREX reseserves operate in the New World Order they, themselves, foolishly created. So, unlike China, the biggest reserves holder, we will continue with our super-low reserves regime and thus, will collapse into infamy and destruction. And killing the dollar won't make us richer if the Chinese have all the export manufacturing bases anyway. It just means we get raging inflation at home. Which the Fed will deal with by lowering our reserves even more! We will continue to follow the wrong magic formula while the Chinese follow a totally different formula and the Japanese will lie to us about their magic formula (the carry trade machine).

How tiresome this all is! HAHAHA. Note that Roubini is always in the news. He doesn't wear a red coat and sport a white beard. But he does a good imitation of that ancient gentleman. The Winter Solstice god who is all about the sun dying and then being reborn. The creature of the great Ice Ages. The one that northern people appeal to to save us when things are at their worst.

But Santa Claus extracts his price, it used to be human sacrifices while fires were lit. We call these 'wars.'

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10/28/2008

Elaine Meinel Supkis

The world's biggest economies are dropping interest rates to 0% while the smaller nations are being forced to raise rates to over 18%.  All smaller currencies are dropping against the yen but finally, the G7 got the yen to weaken slightly and this has caused great rejoicing. I examine the flies infesting this ointment.  China and Russia continue to merge.  Russian billionaires continue to buy threadbare British officials.  American banks are using the bail out money to party, give bonuses and buy out each other, not lend.  And the Chinese design a gigantic rabbit shaped pavilion.  Holy Monty Python!

Australian dollar sinks towards US60c

Traders continued to shun the Australian dollar during another weak offshore session overnight as the popularity of high interest rate currencies continued to fall amid fears of a global recession.

The domestic currency hit US60.12c at 7.30am (AEDT), a level last reached in early April 2003, and came close to retesting that low point again two hours later.

I utterly despise the FX markets.  They really took off after the US dropped the gold peg.  The sorts of games the Germans had to play after the collapse of the Reichsmark at the end of WWI are now global.  Everyone is either trying to get rich, quick, by reading the news and goofy graphs or everyone is placing bets on future instabilities so they can protect their profit margins or international trade deals, etc.


This unstable system has become hopelessly destructive lately.  For on top of everything, the central banks of the biggest powers all manipulate their currencies for trade advantages.  Everyone but the US.  The US, being dead center to all international trade, on the debit side, refuses to defend its own borders and industries.  This is causing a huge global bloodbath while the US dies, rapidly.  As we shall see clearly in today's news.


Australia is a scantily populated country compared to say, Japan, the Koreas, China, Malaysia, Indonesia, etc.  These countries are some of the highest population centers on earth.  Australia is mostly a commodity export nation.  It began as a giant prison for excess lumpen proletariat/Irish/Scottish rebels and petty criminals.  The ones who survived brutal conditions became an important part of the British Empire. 


Just as the Siberian prisoners, they opened up vast mineral, animal and plant reserves and made the very same empire that sought to banish them to the Outer Darkness, into a stalward protector of the empire.  The Siberian soldiers who poured into Stalingrad to fight hand to hand, room by room combat with the Germans are a shining example of this dynamic.


Australia was not intended to be an industrial rival to England.  But today, the main trade partners are now Asian, not English.  Australia was a huge funnel for the Japanese carry trade which is now rapidly unwinding.  As the Japanese and other G7 powers struggle to rewind that coo coo clock, Australia suffers currency troubles.  The hope is, when the carry trade resumes, the good times will return to Australia. 


Iceland Central Bank Raises Key Interest Rate to 18%

(Bloomberg) -- Iceland's central bank unexpectedly raised the benchmark interest rate to 18 percent, the highest in at least seven years, after the island reached a loan agreement with the International Monetary Fund.

Policy makers raised the key rate by 6 percentage points, the Reykjavik-based bank said in a statement today, taking the rate to the highest since the bank began targeting inflation in 2001.

``I don't think 6 percentage points will make the krona any more attractive,'' said Henrik Gullberg, a strategist at Deutsche Bank AG in London. ``Basically what we're seeing is a complete liquidation of everything in emerging markets, and Iceland, even in the emerging-market universe, is very vulnerable. Six percent isn't worth a lot if the currency drops another 15 percent.''

Iceland's woes are self-inflicted.  They wanted to be Switzerland.  But they didn't start off with a huge stash of gold.  They did it as if they were the Cayman Islands. Very few people live in Iceland.  Virtually no one lives in the Cayman Islands. The smaller the population base, the easier it was for a nation to become a pirate island.


But the real fault lies in the modern economic/political system set into motion by the US after WWII.  Iceland, for example, was used as a military base to threaten the Soviets.  We overlooked all sorts of things so they would be our allies. 


The British pirate coves run by the Crown are another example of this: they are intensely destructive for the US government because they function as funnels to move wealth out of reach of our government.  This forces our government to run in the red.  Normally, a sane nation would move rapidly to secure and put under government control, these pirate coves.


Instead, since England itself, despite having a huge population base, is trying to be Switzerland.  'We will be a global financial center,' the British declared proudly.


Well, they are a funnel for a host of Crown tax havens like Jersey as well as the Bahamas, Bermuda, Cayman Islands, etc.  And these havens are hostile to the US government which uses US taxpayer money to protect not only them, but also the head of these pirates, Queen Elizabeth II.  England is cutting back on military spending while leaning more and more on US military spending.


Eventually, someone will come along in the US who will understand that allies who destroy our tax base are enemies.  Then he or she will sail a few ships...hopefully before we are bankrupt and have to mothball them...to these islands and take over.  This is a legal invasion since these islands are being used for hostile purposes, undermining state power here.


The world’s biggest hedge fund is undertaking a radical restructuring amid a shake-up of the multi-trillion dollar industry which spells the end for thousands of its smaller rivals.

Highbridge Capital Management, which is majority owned by JP Morgan Chase and has $25bn under management, is axing 10 per cent of its New York-based staff and plans cuts in Europe and Asia.

The volatility in global stock markets has savaged the performance of some of the world’s best-known hedge funds, raising fears of a collapse in the sector, which could cause a fresh crisis in the financial system.

Big names including Deephaven, Marshall Wace, Citadel Investment Corp, Lansdowne Partners, Third Point and Harbinger, have in recent weeks sustained losses of as much as 20 per cent in some funds.

Investors pulled at least $43bn (£25bn) from US hedge funds in September, according to TrimTabs Investment Research. This is nearly five per cent of the global sector’s estimated $2 trillion in total assets.

Pulling out only 5% is causing all systems which were preset to run only on profits, into a tailspin.  The folly of building business models that can operate only forwards and which have no reverse except for stripping the gears and destroying the brakes is obvious, isn't it?  I marvel at the lack of genius here.


Whenever I locate a paper written about these instruments and businesses that are pure financial finaglings, it is perfectly clear that the downsides are always underestimated.  This is because the true dynamics at work in any market is simple herd instinct: things happen because everyone does the same thing, at the same time.


When they create a bubble, they all make the same bets that the same outcome will be profitable to the same degree.  When everyone is in total harmony and feel they don't have to think, all they have to do is have mindless computers automatically 'do x if y happens' sort of deals.  This means, when x is now in reverse from the previous programming, the computer continues to do x when y is happening instead of y when x is happening.


If they all program their computers or have humans follow strict rules for deals, this still happens: sudden reversals occur and no one keeps up with it.  When they do, they all reverse at the same time.  The whole point of being 'smart' is to exit a bubble before it breaks.  But if everyone is equally smart, this simply means they all beat each other's brains out as things collapse and they all rush to the exit.


Hedge funds were a simple fad.  Since they were mostly if not all, connected to pirate cove tax haven schemes, they should be outlawed and shut down, not saved.

Time to check up on our other allies who are undermining us, Japan:

Nikkei Rebounds Sharply On Falling Yen, Short-Selling Ban

TOKYO (NQN)--Tokyo stocks bounced back strongly Tuesday, closing higher for the first time in five business days.

******************************************************************************************

Nomura Jul-Sep Loss Widens On Global Market Turmoil

TOKYO (Dow Jones)--Nomura Holdings Inc. (8604) Tuesday reported a massive net loss in the July-September period - its third straight quarter of red ink - as the global financial crisis choked its proprietary trading operations, suffocated corporate financing and scared investors away from the market.

******************************************************************************************

Nakagawa: Plan To Ease Mark-To-Market Acctg Rules

TOKYO (Dow Jones)--Japan plans to let financial companies value illiquid assets in a more flexible manner, partly to cushion the impact of the global financial crisis on the nation's banking sector, Finance and Banking Minister Shoichi Nakagawa said Tuesday.

******************************************************************************************

Nakagawa: Plan To Ease Valuation Rules For Banks

TOKYO (Dow Jones)--As part of efforts to fight the global financial crisis, Japan plans to allow financial companies to value selected assets more flexibly, Japanese Finance Minister Shoichi Nakagawa said Tuesday.

******************************************************************************************

Latent Stock Losses Dampen Sanrio 1st-Half Profit Growth

TOKYO (Nikkei)--Sanrio Co. (8136) likely posted a group net profit of nearly 1.2 billion yen in the April-September period, up more than 60% on the year but 100 million yen less than its projection.

Good news for brainless traders!  The yen was weakened slightly last night!   The Bank of Japan worked with all the other goof balls in the G7 and succeeded in preventing the yen from strengthening.  They are also now silent about China's currency.  This is the core of the secret China/Japan central bank accord that was hammered out in August. 


I am just guessing about that meeting's results.  But history, as it evolves, makes it pretty clear, this is what happened.  The Olympics was Team USA's last blow out attempt at unseating the Chinese.  It was a failure.  China took home most of the gold medals as well as the best of the secret deals.  China's markets are in decline like the US.  But China is NOT deindustrializing.  It is shedding the low end businesses and building its true industrial base.  More about that in a minute.


Now to Normura banks: HAHAHA.  Just three weeks ago, they were buying up our banks.  The US has decided to become a colonial third world nation.  Japan boasted that they could take over everything here.  Hello?  Eh?  Anyone alarmed for a minute?  No.  We figure, we will deal with them the same way a hiker deals with a bear: play dead.


I warn everyone, not to try this with DRAGONS.  People playing dead with Dragons get burned to a crisp, anyway.  Dragons have nuclear bombs.  So do Russian Bears.


Well, it turns out that Normura wasn't so hot and is falling apart.  So of course, the Bank of Japan moves swiftly to undo the BIS banking value rules concerning mark to market.  Since the markets are rigged, why not keep them rigged?  After all, this is the underpinnings of the fake cheap yen and the carry trade!  And the G7 is desperate to get that going again!


So 'selective values' for Japanese banking gnomes is the nifty solution.  Now, if I were allowed to restate the value of my own belongings and then burn my house down and then demand a credit default swap insurance value that is 10x reality, I would get real rich, real fast!  Isn't that neat?


And Sanrio: only a 60% increase in profits rather than a 100%?  Oh, the horror!  This is due to the yen strengthening.  Sanrio can't destroy competition world wide without the weak yen backing up their profit margins!  Now, on to the real core of this game, the destruction of the entire US domestic auto industry:

LA Times: The end of the road for U.S. carmakers?

The U.S. auto industry's downward spiral has accelerated dramatically in recent weeks. In a desperate bid for solvency, General Motors Corp. is seeking a merger with Chrysler. Chrysler has talked with Renault and Nissan about partnerships. And now Ford Motor Co., GM and Chrysler -- backed by Michigan lawmakers -- are lobbying Washington to give them cash, implying that failure to provide a bailout could doom the industry to bankruptcy.
*snip*
Some analysts, economists and industry insiders predict a financial cataclysm, while others foresee little more than a shift of the industry to foreign companies such as Toyota Motor Corp. and Honda Motor Co. Some argue that, in the long term, the U.S. economy would be better off moving past automobile making.

"A failure from the Big Three would be a huge, huge hit," said Donald Grimes, a research specialist at the University of Michigan. "But there's a real question about whether there's room for all of them."

Others posit that the failure of just one of the Big Three would send shock waves through the entire manufacturing sector that could devastate suppliers and freeze up the other two carmakers. Hundreds of thousands of jobs would be lost.

GM and Ford have barely half of their workforce or less, in the US.  They are rapidly becoming anti-American corporations that might have headquarters here for a few more years before relocating to Mexico or China.   If they made cars across our borders and then sold them there, it would not be a problem.


But they do NOT do this at all!  These cars are built in cheap labor locations and then imported.  Most of our corporations do this today with the full blessings of the political classes and most of the media and a huge hunk of the economic pundit class.


Note the economist traitor, Grimes: he thinks there is no room for 'three' automakers!  HOW ABOUT JAPAN????  They have multiple automakers and they are now half of our markets here!  We obviously have room for six, and if you include the three big German automakers, nine auto companies!


Why do universities hire economists this stupid?  Eh?  This guy wouldn't last 5 seconds in a debate with me.  Then there are these 'some others' in the article, the economists who think that it would be better for us to 'move past automaking' to what, pray tell? 


We are the major auto buyers in the world.  We should be the major makers of autos!  There is NO REASON to move 'beyond' that!  Tell Japan to move beyond it, instead!  This is why the loss of the tariff tool is so important.  Japan ceased buying American cars long ago.  We didn't retaliate.

This is a dual graph of rapid deindustrialization.  And note the clever craveat at the bottom: these graphs show Canada and Mexico in the US data!  Last time I looked, the mainstream media was mocking the idea of the Amero replacing the dollar.  But it looks to me like the media treats our neighbors as if they are already assymilated by the US. 


If we removed Mexico from these statistics, it would be much, much worse!  A -50% rather than -30%, for example.  Only one other nation is rapidly deindustrializing as fast as the US: Britain.  We are both trapped in the same boat only Britain is also playing pirate.


SEM agrees to issue the Beijing Declaration

(Xinhua) -- The Seventh Asia-Europe Meeting (ASEM) issued a Chair's Statement here on Saturday, agreeing to issue the Beijing Declaration on Sustainable Development. The statement said the leaders held extensive and in-depth discussions on issues of realizing the Millennium Development Goals (MDGs) as well as the sustainable development targets agreed in Johannesburg, strengthening energy security cooperation, jointly addressing the challenge of climate change, and environmental protection, including water resources, forests and air, and improving social cohesion under the framework of sustainable development.

Leaders stressed the importance of mid-term review of the MDGs, and underscored the need for ASEM members to further deepen international development cooperation to meet the IADGs, particularly the MDGs, in a timely manner.

China is busy building the New World Dragon Order.  We can only hope they succeed.  This is because the US version of the New World Order is to spread chaos and destruction coupled with the US shooting at Syria illegally while the UN is totally silent thanks to the G7 control of the Security Council and the US dropping bombs in Pakistan while the Taliban shoot down more helicopters with their missiles.


Oh, they have missiles now.  Maybe we could send in the Germans to attack Afghanistan!  They sat on their base for three years there and didn't leave.  But then, they caused no problems.  If our own soldiers did the same, no more fighting, no more helicopters shot down, etc.  We are rapidly surrendering in Iraq.  The Iraqis use us like we are their garbage men.  And they are taking vast satisfaction in knowing they are killing the US empire dead as a frozen duck after hunting season closes.

Third Sino-Russian economic forum opens in Moscow

(Xinhua) -- The Third Sino-Russian economic forum opened here Tuesday, and Chinese Premier Wen Jiabao and Russian Prime Minister Vladimir Putin addressed the opening ceremony.

Wen, who arrived here Monday evening on a three-day official visit to Russia, spoke highly of the rapid growth of Sino-Russian economic cooperation in recent years.*snip* Sino-Russian trade volume surged by 23 percent year on year in the first nine months of this year to hit 43 billion U.S. dollars, according to Chinese official figures. The two countries set the trade target of 60 to 80 billion U.S. dollars in 2010.

China does over $200 billion in trade surplus with the US.  Russia wants balanced trade with China so it is much smaller trade.  But much, much wiser trade.  Putin and Hu love to negotiate.  Both are canny, clever and cruel.  So they are a perfect fit.  We, on the other hand, send goofy guys who don't seem able to add 2+2 or demand a hard deal and some sort of balance.


This irritates me no end.  The Chinese or Japanese should blanch in fear when we walk in the room, not laugh their heads off.  Europe has to show more respect, too.  Hard to ask them, when we send half-baked wanna be cowboy cowards to negotiate.


One can only hope Obama has more sense.  He certainly has more intelligence.  Even if he is a bastard, if he is a smart bastard, this is tons better than a stupid bastard or in the case of Palin, bastardette.

Tories took donations from Briton linked to Ukrainian billionaire

The Conservative Party has accepted more than £57,000 in cash donations from a British businessman who oversees the assets of a controversial Ukrainian billionaire embroiled in a battle over the control of gas supplies to a large part of western Europe, an investigation by The Independent has revealed.

Robert Shetler-Jones, a 39-year-old property developer who is the chief executive of Group DF – the holding company for the multi-billion pound assets of Dmitry Firtash with offices in Knightsbridge, has made a series of donations over the last two years to Conservative Central Office as a private individual and through Scythian Ltd, a company listed at Companies House as “dormant”.

Isn't it embarrassing that English opposition parties that depend on mindless patriotism of the Queen's subjects [hahaha...inside joke here] are in the pay of get rich quick former Soviets?  And then there is the Rothschild's business: these pay out schemes were cooked on his private Corfu island estates.  And international finances meets history here. 


Foreign money that has island hideaways is being used to undermine democracies.  These people should be arrested, not assisted in holding secret Bilderberger meetings where they all can plot to rule the earth and terrorize all of us.

So When Will Banks Give Loans?

It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual.

Which, of course, it also got thanks to the federal government. Christmas came early at JPMorgan Chase.

*snip*

(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

And stealing stuff.  I was 100% against the bank bail out because it didn't involve arresting lots of people starting with Bush, Cheney and Paulson.  Instead, it was a boondoggle.  And the guys opened yet another door to the celestial bank vault and now are shamelessly demanding more and more bail out money.  And getting it! 


Now, the IMF is saying, they will join the G7 central bankers in piling on the loans by making money out of thin air.  They plan to do this to infinity if this is required to keep the crummy, awful status quo going no matter what.


Whatever sort of revolutionary changes we will witness will be shoved into the future.  But the more we put of reforms, the nastier the revolution will be.  Very explosive.  This is why I don't want to put off reforms.


Time/CNN: How Washington's Bailout Will Boost Wall Street Bonuses

Uncle Sam has a new name on Wall Street — Sugar Daddy. Bonuses for investment bankers and traders are projected to fall by 40% this year. But analysts, compensation consultants and recruiters say the drop would be much more severe, perhaps as much as 70%, had it not been for the government's efforts to prop up the financial firms. "Year-end pay on Wall Street will be higher than it would have been had it not been for the government and mergers," says Alan Johnson, a leading compensation consultant. "You would expect it to be down much more."

Arrest them all!  Every blasted one of them.  Charge them with fraud and treason.



And now for today's most important news:  HAHAHAHA.  I believe in laughing.

Macau unveils jade rabbit design for pavilion

 All of which reminds me of Monty Python's Trojan Rabbit from the Holy Grail: 




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Culture of Life News Main Page

Ending Free Trade Vital For US Survival As Nation

A cartoon I drew over two years ago.

November 4, 2008

Elaine Meinel Supkis

Since I am 100% against letting the Republicans run things any more, I am happy that Obama is probably going to win this election. It is time the US got beyond our own dark roots which is all about slavery and racism. A harmonious nation is one that has opportunities to all people of all races and all religions. I despise ethnic/religious dictatorships like the ones that litter the entire Middle East. The US nation is a nation, not a religious enclave. This is why I totally oppose Palin. She is a religious nut who wants the Apocalypse. And McCain is a lost soul. Wealth destroyed him. 

And there is no one running at the top two parties who understands what is going on here. If Obama does understand, he is forced to play with his own cards so close to his chest, even he can't appear to see them. This is due to our media as well as our business class. The terror of our system is from these forces: they are united in trying to keep the US on track to go down into deindustrialized hell. 

Great wealth is being concentrated at the top via the modern system which is all about luring the American people deeper and deeper into debt. Collectively as well as individually, we owe more and more and save less and less. We are encouraged to do this as our entire banking and trade systems are reset so they encourage debt and destroy savings.  The virtues which we call 'old fashioned' are being reforged into a new, destructive moral code.

During the previous dozen elections, I have actually heard responsible adults say to me, 'Who cares about the next generation. I want tax cuts.' People who worry about their own grandchildren would vote for tax cuts which would burden their grandchildren's entire lives. When this is pointed out, a number of people would say, 'MY grandchildren won't have to worry!' 

There was and still is this pet belief that the grandparents would leave a great boon to the heirs and thus, make up for dumping a mountain of public debts on them. Alas, this belief is collapsing as the grandparents who voted for tax cuts are now piling debts on top of their own homes as they struggle to keep up with inflation.So an entire generation will probably inherit not only vast tax obligations but also will inherit virtually nothing. As I look along the great curve of history, it is not hard to see over the horizon. All we have to do is mentally take wing and fly into the dim future. We can see clearly if we see the past. People who live in the 'here and now' cannot foresee the future since they are often ignorant of the past.

  This collective ignorance of the past isn't the fault of the ordinary American voter. It is a fault of all the people at the very top. They are quite aware of the past. But instead of trying to understand it, they use it to justify the present. 

When 'The Decline and Fall of Rome' was written by Gibbon, this was done as a warning to the newly-born British Empire. Gibbon got bogged down in all the details of the Byzantine Empire and lost sight of the general sense of decline that afflicts all empires. But he needed to write a plain history for others, first. The historians and radical thinkers of the 19th century explored the fascinating topic of the decline and fall of all empires.  Even with this, many thinkers were filled with hubris: they thought their own empires were somehow different!

But none were. Even if an empire was built on the foundation of a democracy, they failed. We know this from history! The Athenian/Spartan imperial complex first killed off democracy and then fell to the sword of Macedonia. Then the new ruler, Alexander the Great, marched off to destroy other, older empires.  Empires that were failing internally even though they were at their own military zenith!

For this is the most startling feature of most imperial collapses: they happen when an empire is spending its greatest sums on self-defense. The British empire bled to death when it was its strongest, not weakest. WWI killed the British Empire. It continued to expand but was fatally wounded and it didn't take much a push to collapse it entirely in WWII.

In WWI, the British and French fought the Germans to a stand-still pretty quickly. In WWII, Germany swept in nearly effortlessly. Japan, in the East, rolled right over both French and English colonies with barely a pause. The lessons our 'Greatest Generation' has not learned from all this is obvious: the WWII propaganda is all about how great the West was and how our greatness defeated the Nazis and Japanese.

Not, how very weak the previous imperial rule of Europe had become. And why it was weakened.  Our Presidential candidates cannot run on a platform that discusses the loss of US military and diplomatic power. But it is a very necessary conversation for the US people! We can't evade this anymore.

England's industrial base was destroyed after WWI. Today, Britain has virtually no industries at all. They make believe that this is no tragedy. Why, Britain is just this small island complex! BUT SO IS JAPAN.  Is Japan deindustrializing itself? Obviously, not! There are now no British auto makers. There are still very big German and Japanese auto makers. No British subject runs any automobile systems. German and Japanese auto manufacturing plants are being built and run all over the planet!

 The US native auto industry is collapsing here at home. General Motors and Ford build more than half of their cars overseas. So they continue onwards. But they are deindustrializing the US relentlessly. It is only a matter of time before only foreign owners will be building any cars here. And they will do this only because it keeps political heat off of them. If they just export cars to the US, they get exposed to political calls for tariffs and barriers. 

One major feature of all imperial collapses is the problem of taxes and the increasing burden of past spending.  All empires basically go bankrupt. And a key component of this is military spending coupled with corruption at the core.  To fund the military, it ceases to be a joint effort of the people and becomes a privatized military system which protects only the wealthy and leaves the population as foreign interlopers who must be prevented from interfering with the ruling class.

We see this, again, in Britain: I read in the news this week that the government wants to bring in Gurkas from former colonies in Asia to patrol Britain!  These mercenaries are exactly like the ones Romans used to keep their own people at bay.  Bringing in foreigners who are of a different ethnic/religious group who will swear fealty ONLY to the ruling elites who pay them: this is a certain sign that the British people are finished as a political power.  They are now merely tax sheep to be sheered when necessary. 

It is a slow process: first, you let the population spend on bread and circuses.  Then, you enslave them with the burden of the debts caused by this largesse.

The United States already recruits our troops in foreign lands.  Then, our imperial overlords send these troops to other countries to occupy them and exploit the natives there.  This is tremendously expensive so the overlords merrily charge all of these expenses to the bills owed by the public at home.  That is, our grandchildren.  They will be enslaved by these military and trade bills we are charging to the future!

No one wants to stop this because it is right now, painless.  We imagine that if there were another Pearl Harbor, we would just up the output of our factories and....Britain could barely crawl along during WWII and certainly has no industrial base to activate today if they needed it again.  And the US is rapidly approaching this same, dire situation.  Now, on to the news today:  

Vote for ( ) By THOMAS L. FRIEDMAN

Unfortunately, you’d barely know that from the presidential debates. Watching them in the context of the meltdown of the financial system was like watching a game show where the two contestants were kept off-stage in a soundproof booth and brought out to address the audience without knowing the context. Since the last debate, John McCain and Barack Obama have unveiled broad ideas about how to restore the nation’s financial health. But they continue to suggest that this will be largely pain-free. McCain says giving everyone a tax cut will save the day; Obama tells us only the rich will have to pay to help us out of this hole. Neither is true.

We are all going to have to pay, because this meltdown comes in the context of what has been “perhaps the greatest wealth transfer since the Bolshevik Revolution in Russia in 1917,” says Michael Mandelbaum, author of “Democracy’s Good Name.” “It is not a wealth transfer from rich to poor that the Bush administration will be remembered for. It is a wealth transfer from the future to the present.”

This is one of my earliest Friedman cartoons.  I was just learning to draw using the Wacom pad system.  This system is very difficult to master at first so I drew stick figures.  It was hellishly hard.  Instead of direct transmission of mind to paper, I had to draw in my lap while looking at the computer screen.  Very difficult to do at first!

Friedman is a top pundit.  He is also directly responsible for the destruction of the entire US industrial base.  He is the front man for destroying our nation.  Just this week, an African man was sentenced to prison for committing international crimes when he supported illegal war efforts by his own rulers.  We punished Saddam's press staff.  We punished Hitler's press staff, too.  

They are all held responsible for the actions of the people they service!  So it is here: Friedman is serving the traitors who are rapidly destroying our nation.  He should certainly be arrested for crimes against the entire American people!  Not to mention, his many war crimes.  For he is a war monger as well as a de-industrializer sympathizer and running dog for the international bankers seeking to drive us all into debt.

My 2005 cartoon is pretty clear: Friedman is happily pushing US workers off the New World Order Flat Earth he and his buddies created for us.  Here is one of my oldest articles:

June 14, 2005: FRIEDMAN CELEBRATES JOB LOSSES

My, having a secure job that won't be outsourced certainly is fun. One can happily poke a hot poker into the ribs of fellow Americans while utterly protected. The cold blooded antipatriotism of writers like Friedman astonishes me. Do the owners of the NYT view our country this way? One wonders and one suspects. Seems many in Congress think this way, too. Certainly, most of our business owners are like this. They hate America. JUNE 24, 2005

*snip*

I will spare you all the horror of reading anymore of this tripe. This wealthy, pampered pet of the ruling class, sub group, pro-fascist Israel, thinks a 35 hr week and welfare benefits are silly Frenchie things, non? I would love to park this guy in a mud hut somewhere like in the middle of Gaza and let him fend for himself but this will not happen. So this lapdog doth yap at us mere chattel for wanting simple protections so we won't all end up in mud huts, too.

This was my reaction to a classic Friedman editorial demanding Congress not even slightly restrict imports!  He is one of the many-headed Beast of Babylon that has destroyed our nation.  He is probably one of the top enablers for globalization.  He is focused on one thing: destroying all our protections so we cannot stop a flood of imports.  Japan and China control imports!  Europe does, too, via domestic consumption taxes.

But the low-tax ideology of the US has doomed us to having absolutely no barriers to consumption.  And we consume like crazy.  There is an obvious connection between easy credit and the US public buying too much imported goods.  The cheaper credit is, the higher our trade deficit.  In turn, the Flat Earth empires exporting to us lend us more cheap money so we can continue this.

We saw this week, our own rulers cooperating with the entire planet to drive interest rates here down to sub-1% levels so we can continue to collapse into deeper debt!  And Friedman applauds all of this!

Here, again, is Culture of Life News addressing these problems long ago:

2005:  Friedman Wants US Economy Magically Fixed

So many people trust this con artist. Why are we 'a country in debt and in decline' in the first place? Before 'free trade' took over, we had no trade deficit. As I showed clearly in this week's articles detailing past Federal Reserve speeches, the US decided to cope with suppressing inflation by the neat trick of devaluing the currency abroad while simultaneously opening up the US to 'foreign competition' that was designed to force prices downwards via dropping union wages. To clinch the deal, the US media had to herd the voters into backing anti-unionist Ronald Reagan who cheerfully destroyed the right to strike. Now, strike breakers can replace striking workers permanently so no one dares to really strike anymore. Unions have had severely declining membership since Ronald Reagan's rule and now are utterly vanishing as the Old Guard are bought out with bribes and replaced with non-unionized, weaker workers who have far less pricing power and much, much lower wages and virtually no benefits.

Namely, the workers ate inflation. Free trade benefited Asia and Europe. Both saw huge trade surpluses with the US. Both saw their important industries grow massively. Both saw their sovereign wealth increase. Meanwhile, the US had little inflation but rising debts, loss of good industrial jobs, and the de-industrialization of this nation. If WWII were looming, we would have to surrender to Japan since we can't manufacture much of anything to keep ourselves going. We can make weapons but what if we have virtually no steel mills? Most of our ball bearings, fasteners and other vital things are made in Japan, China and Germany! The materials that make the wings of our fancy jets so fancy are made in Japan, not the US.

Friedman encouraged and enabled all this. For years and years, this Zionist who dreams of making Israel super-strong made America super-weak. We have to talk about this business because when we see treason, we have to answer the question, 'Which nation does this guy really work for, anyway?' Suspicions have to be aired. Of course, if anyone does this, they get censored or shoved aside in the US. We are not supposed to ask this vital question. When writers consistently push for things that destroy America, we must explore the question, 'Why?'

Some time ago, I showed that Israel, Friedman's home away from home, has enjoyed an international trade surplus. This is due nearly entirely because the US has a huge trade deficit with Israel. On top of paying for Israel's military, all peace initiatives and other hand outs. Israel is by far and away, the #1 recipient of US public largess. Friedman never complains about all this. He is very jolly well overjoyed about this. This is for him, good news, not bad news.

Here is another old story I wrote:

MARCH 06, 2006 Flat World Free Trade Traitors Screaming At Americans While Selling Our Security To Enemies

Back to Friedman's NYT editorial today:

A major money market fund — Reserve Primary — failed in September because the extra interest it offered customers derived, in part, from the $785 million in high-yielding Lehman Brothers commercial paper and notes it was holding. Depositors who told their congressmen to just let that greedy Lehman Brothers fail were shocked to discover this meant that their own money market would be frozen. No, we don’t need a president defending greed on Wall Street, but we do need one who can explain that we are all in the same boat, that a leak at one end can sink everyone and that while we must regulate, we don’t want to kill risk-taking and the rewards that go with that — which are essential to growing our economy.

This man is not only nuts, he is heartless.  I don't recall the public demanding that Lehman Brothers fail!  The US public would prefer that NO businesses fail!  Indeed, the #1 job of the Federal Reserve is to protect us from all of this.  And the means for this is to not allow bubbles to form OR TO LET TOO MUCH CREDIT BE CREATED!!!!

The Fed failed, of course.  Since the guys running it listen to creatures like the heartless Friedman guy, we get bad advice as well as the devotion of the Fed's officers are not aimed at protecting us but enabling people like Lehman Brothers to do stupid things.

What stupid thing did Lehman Brothers do, anyway?  HAHAHAHA.  They helped create and feed the Derivatives Beast!  Paulson wanted to save them the same way he saved Bears Stearns: by taking in the losses and handing over the goodies to JP Morgan or Goldman Sachs.

But when he tried this for Lehman Brothers, he discovered that NO ONE WANTED TO DO THIS.  It was because of the huge overhang of Derivatives Beast messes!  Anyone who sucked down this baby would go instantly bankrupt no matter how big.  And this definitely includes our Federal Reserve!

So they decided to see what would happen if they let it all just die. It instantly set AIG off the cliff!  They were forced to save AIG because this would bankrupt the entire planetary system!  Right now, we are seeing the DTCC attempt to make the Derivatives Beast a less frightful creature only even they dare not publish, in public, the actual deals and numbers.  Indeed, Mark It was launched for this purpose: to give us a mark-to-market view of the actual real value of all the SIVs and CDOs and other goofy instruments sold by Lehman Brothers and others.

I watched in amazement last year as the Mark It graphs plunged to basically $0.  They were obviously worthless.  The Treasury and Fed Reserve are still struggling to save AIG.  The bill is now nearly $200 billion and rising.  And the AIG executives are using a huge hunk of this to party and pay themselves bonuses!  All the gnomes being saved are doing this.  They are treating this as a looting expedition, not a way to save America.

Friedman's sneering at the poor savers who are losing over 90% of their savings is pure Friedman fun: he is a terrorist.

About risk taking: the Lehman investors were forced into increasingly risky ventures due to the central bankers dropping interest rates far below the rate of real inflation.  This isn't investor greed.  This is investors being denied a safe return that is realistic.  If they want more, they deserve to lose money if their bets don't pan out.

On the other hand, Friedman and his buddies all lied about risk!  They told investors that the Derivatives Beast would eliminate all risk.  So anyone who wrote positive stories about how credit default swaps ended risk should be arrested for fraud or enabling a con job.

JUNE 17, 2005 SNOW BLINDNESS

Is our economy expanding? Friedman, this last week, said he wanted Toyota to take over our entire auto industry. Because it is collapsing. I suppose next week, he will call for China to take over everything else...oops, they are. If we are "expanding," I see no sign of this. For the last thirty years, hiring in the manufacturing sector has collapsed. At first, they pretended this was due to automation. But we don't see lots of robot run factories being built, are we?

Another very early Friedman cartoon.  Note the corporate jet flying away!  Friedman isn't the only traitor who is la-de-dah about Japan destroying our auto industries.  In England, Honda is forcing the government to subsidize their plant there since there is NO English auto industries anymore.  The ones that were English are now parts of German or Japanese auto corporations!  How far they have fallen!

More Friedman Fun:

So who are the brilliant minds that will be called to talk about all this? Friedman? Kristof? A Bush person? I can't wait to see which liars or fools are called forth here.

Back to Friedman's whining about world trade:

Third, we need a president who can rally the world to our side. We cannot get out of this crisis unless China starts consuming more and unless Europe keeps lowering interest rates. Everyone is interconnected, and everyone is still looking to America to lead.

If China 'consumes more' this means someone has to consume less.  Or pay more in competition with the Chinese.  For example, oil.  If the Chinese buy more cars, they will use more oil and this means we either use less or pay more, ourselves.  And if we imagine the Chinese, who let foreign automakers build factories there, won't take over these systems one by one, we are foolish.

For this is their 50 year plan!  They told me this years ago!  They plan to have all the best factories transfered to China and then relentlessly drive out all the foreign devils who run the main offices.  This is a sly take-over that the entire government is focused on!  Trust me on this one.

Which is the exact opposite of America's ruling elites.  They want to enable foreign domination, not the opposite.

Culture of Life News, May, 2005: WHERE ARE THE EXECUTIVES? asks Friedman

Friedman: 'After six weeks of being a foreign correspondent traveling around America, the biggest question I have come home with is not "What's the matter with Kansas?" but rather, "What's the matter with big business?"'

Earth to Friedman: nothing is the matter with big business. They are doing hunky dory.

No more taxes, no more regulation, no one stopping them from becoming agents for China. As this blog has written about in the past, the magazine, Fortune 500 had jet loads of these MIA execs flying into China to wine and dine and cut deals. They are very much in evidence...overseas. They are busy selling off factories here and shipping them off to communist China. Duh.

*snip*

Friedman at the NYT yet again:'"America faces a huge set of challenges if it is going to retain its competitive edge. As a nation, we have a mounting education deficit, energy deficit, budget deficit, health care deficit and ambition deficit. The administration is in denial on this, and Congress is off on Mars. And yet, when I look around for the group that has both the power and interest in seeing America remain globally focused and competitive - America's business leaders - they seem to be missing in action. I am not worried about the rise of the cultural conservatives. I am worried about the disappearance of an internationalist, pro-American business elite."'

Why can't Friedman find these people? I track them daily, easily. He can too, if he can't, he can read this free blog! Friedman wants to know why General Motors isn't for universal health insurance.

Taxes. This means they pay Federal taxes and they and their buddies want to kill Federal taxes. They want to kill the unions. Using the health insurance issue as a club to smash in the heads of the unions is well worth it. They have zero interest in a good health policy for all Americans. They hate this concept. They think all other industrial nations are nuts to have this, they want communism like the Chinese have. Ahem.

Poor flat earther Friedman wonders why these corporate monsters don't want a sane energy policy. Well, they won't make money on this, to build a new infrastructure will require investing in America and take away money building factories in China. So it is dead in the water. When the Chinese sell us energy systems, and they will, they are very interested in this stuff, we will buy from them. Why invest at home?

Nothing has really changed since I wrote these old articles.  Except our entire banking system has collapsed.  And since 2004, our trade deficit was nearly a trillion dollars in the red every year.  And these facts still don't faze our pundit class clowns.  They continue onwards, deliberately refusing to see reality.  Their reality is pure fun.  

I make very little money commenting here.  Thanks to wonderful readers who take the time and have the generosity to donate funds to my small news service, I get to enjoy posting, using good equipment.  But Friedman makes millions of dollars thanks to his New York Times platform.  He was put mercifully behind a 'pay to view' wall which is why I ceased mentioning him after 2005.  But that wall is down and now I can throw rotten tomatoes at this idiot again.  Thank you, New York Times.

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Living Inside The Economic Volcano With Angry Gods

November 3, 2008

Elaine Meinel Supkis

One of my favorite song birds, Yma Sumac, has flown from this earth and is now gone forever.  Time to memorialize her.  Also, we talk about the Japanese carry trade yet again.  It is being restarted with great effort by the central bankers who want to continue flooding us with debts.  And Rubins and Bernstein, two of Obama's economic advisors, talk at the NYT.  I rip things apart.  And we discuss the Volcano Gods who happen to be in the news today.  

Yma Sumac, a favorite singer I used to love, has just died, age 86.

The fine lady with the most amazing voice, Yma Sumac, has left us a fine legacy of a lot of popular, entertaining music.  When I was a child, I wished I had her wide ranged voice.  But alas, I was not allowed to sing well.  My throat was operated on when I was still a child and I bear the big gash across the neck to this day.  When I was young and the scar was very striking, I used to tell children that someone tried to slit my throat but I fought him off.  Heh.

So much for lying about things!  It was amusing, though.  As for Yma, she sang her heart out and I am glad she concentrated on South American themes, composers and culture.  During WWII, the government was worried about losing the allegiance of South American and Central American nations so they began this big, big push to popularize the cultures that are south of the US borders.

Thank goodness for that!  I happen to love many different cultures.  Japanese, Chinese, European, African, South American, etc.= all have something wonderful to give us!  This export of cultures I highly recommend.  This is quite different from destroying our own industrial base type of export/import markets.  I am an enthusiastic supporter of cultural exchanges.

Back to the 1940's: the US government encouraged artists and performers from this hemisphere to produce things in Hollywood or tour the nation.  So the wide variety of peoples and cultures of the South came to our nation and opened many doors here.  And I remember this flood coming in the 1950's.  It influenced our sense of color and space as well as the rhythms of our music, our dance.  A tremendous influence.  And Yma was one facet of this diamond studded gold rush.  Thank you, my dear, for giving us your gifts so generously.

Indonesians appease volcano gods with sacrifices

Today thousands of pilgrims flock to Mount Bromo on East Java each year to offer the spirits food, live animals and money and ask for prosperity and health. Bromo, a 7,641-foot volcano, is one of Java's most popular tourist attractions. The poor arrive days ahead of the ceremony, carrying fishing nets to catch money and anything edible. They camp under tarps in the crater atop the mountain's chilly slopes.

Time for the annual human sacrifices to the Volcano Gods!  The Volcano Gods are like the Lightning Gods: very, very dangerous but also the source of life and wealth.  The lightning storms brought us fire and water: the falling rain soaks the parched land and things grow.  Volcanoes spew out the wealth of the inner core of this planet.  The mineral wealth this brings is very good for growing things but like lightning, it is also destructive.

The hammer of lightning and the forge of volcanic fire created humans.  We evolved rapidly due to these forces of nature!  Several major volcanic events in the history of this planet shoved evolution forwards at a tremendous pace.  The skies dim under the aerosol veil as the fine dust covers the entire biosphere.  This dimming of the solar energy leads to a cooler climate.  This, in turn, causes starvation and death.

Indonesia's volcanoes have caused huge havoc in the past.  The eruptions there nearly wiped out all early humanoids, for example.  So it is no surprise to see the people there worshipping these dangerous mountains as gods.  But since the best farmlands tend to be in the range of volcanic events, humans are resigned to living with this planetary hazard.

This story today interests me because it is so true to the concept of human wealth and power as well as the dangers that the poor must take to gain even small boons.  Note that the rulers of this region used to use human sacrifices to placate the gods living in these mysterious deep holes that go far into the earth.  Secondly, to make these gods happy, humans not only throw humans but other things into these volcanoes.  

Third: despite the belief that the offerings must go to the gods, the poorest humans scramble into a very dangerous place in the hopes of catching a few of these falling items as they are pitched into destruction.  Fourth:  the destruction of wealth is seen as a way of protecting FUTURE wealth!  This is the top item here, in my mind.

If the people fail to sacrifice something valuable today, they believe they will be punished tomorrow.  So these people who often had little to give up, would assign high values to things and then pitch these into a volcano or a deep, deep lake.  Often, they would make things out of gold and then toss it.  This was because gold was seen as eternal and connected to the Death Gods.  It had little real use in the real world.

But as a currency for the true overlords, the Gods, yes, gold was quite valuable.  We must remember that the Egyptian pharaohs or the Inca emperors didn't park gold deep in lakes or deep in caves or in pyramids, etc in order to keep it for themselves.  They did this for the Afterworld.  What I often call, the Outer Darkness.  Our museums are filled with these things that were created for the Death Gods.  We pay a lot of money to view them with wonder and envy.

So let's go to today's news again.  The world is in a global grip of a mega-financial meltdown which is due to the Emperor of the US refusing to pay tribute to the gods or to keep an even balance between revenues and desires to spend.

Yen Falls on Speculation Stock Rally to Encourage Carry Trades

Bloomberg) -- The yen fell against the dollar and the euro as a rally in Asian and European stocks encouraged investors to step up purchases of higher-yielding assets financed with the Japanese currency.

The yen also weakened versus Australia's dollar on expectations the Reserve Bank of Australia will cut interest rates tomorrow to sustain economic growth. The Japanese currency slid against South Korea's won and India's rupee after Korea announced a $10.8 billion stimulus package and India's central bank cut borrowing costs for the second time in two weeks. The dollar declined against the euro before reports this week that may add to evidence U.S. economic is slowing.

``We're seeing a bit of risk appetite returning as things stabilize and I wouldn't be surprised to see the yen even lower,'' said Ian Stannard, a senior currency strategist in London at BNP Paribas SA, the most accurate forecaster in a 2007 Bloomberg survey. ``We should see lower-yielding currencies coming under some more pressure.''

*snip*

The yen has appreciated 8.8 percent versus the greenback since Sept. 12, the last trading day before Lehman Brothers Holdings Inc. filed for bankruptcy. The remainder of the world's 16 most-active currencies declined as frozen credit markets and a rout in stocks that wiped out more than $13 trillion of market value fueled risk aversion. The yen may drop to 103 against the dollar in the next week, Stannard said.

Japan sighs with relief.  They are absolutely desperate to get the yen above that horror level of 100 or less to the dollar.  They are happy that the US government is equally desperate to restart the mega-moneymaking-machine of the Japanese carry trade.  This will pour more liquidity around the planet and we will continue with our false sense of well-being as we get shoved deeper and deeper into the volcano.  

If the Japanese carry trade leads to huge sums of free funny money being tossed madly into this massive volcano, we can lurk below the rim and catch some of the loot as it plunges downwards.  There is a lot of economic debate going on here on this planet as people struggle to understand the nature of magical money and how it intersects with reality.  

One cannot do this unless one first accepts the concept that all of this is magical and all of this is very connected with fires and holes deep in the earth.  And the heavens, of course.  And above all, death.  If our cultural ancestors across the planet knew that gold and wealth was very much connected to Death Gods, we must accept this as a fact of human nature and deal with it appropriately.

The US prayed to the Kami of Japan for wealth.  These Kami are often found in volcanoes.  And the ocean.  The magic golden fish that grants wishes lives there, for example.  We begged these Kami for wealth without work.  They granted our wish.  But of course, this will destroy us.  But being Death Gods, they are overjoyed we made this request and are very happy to grant us this wish.  Throughout the history of fairy telling stories of yore, there is this common thread: wishes are DANGEROUS.  One doesn't get what one imagines when one wishes.  Especially if the wishes are being granted by the gods and goddesses who control access to the Cave of Wealth and Death!

Bloomberg:

The yen also weakened as volatility implied by one-month euro options against Japan's currency fell to 42.40 percent, from 43.93 percent on Oct. 31, signaling a reduced risk of exchange-rate fluctuations that make so-called carry trades unprofitable. Volatility was 49.62 percent Oct. 27, the highest level since the common European currency's debut in 1999.

In carry trades, investors get funds from countries with low borrowing costs, such as Japan, where the benchmark interest rate is 0.3 percent, and invest the money in overseas markets where returns are higher. Japan's main interest rate compares with 3.75 percent in the 15 nations that share the euro and is the lowest among industrialized countries.

Japan doesn't mind it if the US drops interest rates to Japanese levels.  Since Japan already has worked well at deconstructing the US industrial base and now has outpost factories here which send all their profits to Tokyo, they are happy when our government desperately lowers interest rates and makes credit easier to obtain.

Japan's carry trade was never mainly with the US in the first place.  It is with other, much smaller nations.  This way, they can happily inflate the number of dollars across the planet while virtually none of this except a small overflow, goes directly to the US.  This is fine with our rulers.  They don't want inflation due to this flood of US dollars coming home.  The violent unwinding of the Japanese carry trade coincided with the biggest inflation bubbles in commodities, by the way.  All of which mainly happened in the last 2 years.

The US and Japan like it this way.  The US can overspend budgets and the Japanese buy our debts so they can continue both the carry trade as well as increasing the US trade deficit.  Anyone even slightly interested in fixing the present mess has to address the politics of the Japanese carry trade.  It is painfully obvious to me that everyone at the top want this to continue no matter what.  Let's look even deeper:

5 trillion Yen shortfall in taxes expected

Overall tax revenue for fiscal 2008 will fall more than 5 trillion yen short of the government's 53.5-trillion-yen estimate, due mainly to poor corporate performances, the Finance Ministry said.

The shortage in the general account could force the government to issue deficit-covering bonds, which will likely push the total amount of national bonds issued this fiscal year past 30 trillion yen for the first time in three years.

The government intends to attain a primary balance surplus in fiscal 2011, at which the sum of new government bonds issued each year is kept under the total repayment of interest and principal for bonds issued in the past.

But the additional deficit-covering bonds for fiscal 2008 would make it extremely difficult to achieve that goal unless there is a sudden surge in tax revenue.

The government's tax revenue estimate for the current fiscal year was based on economic forecasts and corporate performances as of last December.

Corporate tax revenue, which accounts for about 30 percent of total tax revenue, was estimated at 16.7 trillion yen.

Japan has the cheapest credit on earth.  And for a very long time, too.  This was no emergency.  Unless an emergency lasts forever.  They have found this deep hole in the ground, one that is actually a volcano.  They are happily using this to create massive global credit.  This, in turn, has flooded all nations with debts.  International debt levels are increasing.  

Japan has the world's #2 FOREX reserves which are mainly dollars.  And yet the government is running in the red!  This, after strangling public services.  The government could use their reserves to make the shortfall.  But why do that?  They are borrowing at virtually free values!  What is there to stop them from borrowing even as they flood the planet with debt via their FOREX reserves?  This is fundamentally very bad!  But they don't care.  Everyone is clamoring for them to do this.

The other matter here is the fact that Japanese corporations that make some of the highest profits via their export trade, pay 30% of the government's taxation!  So let's go to the other side of this trade ledger: the US spending and taxation systems.

THE DECLINE OF CORPORATE INCOME TAX REVENUES By Joel Friedman

Deficits over the next decade are now projected to be enormous in size. A joint analysis by the Center on Budget and Policy Priorities, the Concord Coalition, and the Committee for Economic Development projects deficits totaling $5 trillion through 2013.

An analysis by Brookings economists reaches a very similar conclusion, while Goldman Sachs projects deficits totaling $5.5 trillion.[1]

Despite the deteriorating fiscal outlook and the historically low corporate revenue collections we already face, Congress nonetheless seems poised to shower more tax breaks on corporations that would cause deficits to grow substantially larger over time .

Treasury Department figures show that actual corporate income tax revenues fell to $132 billion in 2003, down 36 percent from $207 billion in 2000.

As a result of these low levels, corporate revenues in 2003 represented only 1.2 percent of the Gross Domestic Product (the basic measure of the size of the economy), the lowest level since 1983, the year in which corporate receipts plummeted to levels last seen in the 1930s.

Corporate revenues represented only 7.4 percent of all federal tax receipts in 2003.

With the exception of 1983, this represents the lowest level on record (these data go back to 1934).

 

I heavily amended these graphs to illustrate the forces at work here.  Here is a most important fact we must never forget:

WHEN THE US RAN TRADE SURPLUSES, WE TAXED CORPORATIONS AT 30%!!!  

This startling fact should be a hot topic.  These graphs are very good at showing how the deterioration of corporate tax revenues corresponds quite directly with the deteriorating US trade situation.  Namely, I simply made the years that we ran a trade deficit, red.  And the previous period in green to reflect the profits from back then.  

A general rule of thumb is very simple: if someone is doing something and it is quite successful, we should imitate them.  The Chinese follow this rule very closely.  This irritates the Japanese, of course.  We are in competition with both China and Japan.  Not to mention, the rest of the world.  We can have and want global trade and I am all for this.  But NOT global one-way trade.  

Namely, the US cannot run deficits nonstop.  There was exactly one year we ran a surplus.  But this was due to Gulf War I when Bush Sr. sold our soldiers as mercenaries to the despotic rulers of Kuwait.  Not because the US suddenly began to manufacture and sell overseas, more US goods.  

More Yma great singing:

Here is a New York Times story about how this flood of Japanese carry trade funny money ravaged our entire corporate base even as the easy lending sent stock markets to the heavens:

Debt Linked to Buyouts Tightens the Economic Vise

Private equity firms embarked on one of the biggest spending sprees in corporate history for nearly three years, using borrowed money to gobble up huge swaths of industries and some of the biggest names — Neiman Marcus, Metro-Goldwyn-Mayer and Toys “R” Us.

When the economy was booming, the firms made huge profits by cutting costs at their new acquisitions, improving operations and then turning around and selling them. In 2007, at the height of the bubble, such deals totaled $796 billion, or more than 16 percent of the $4.83 trillion in all the deals made globally that year, according to data from Dealogic.

Firms like the Blackstone Group and Kohlberg Kravis Roberts & Company, faced an image problem at the height of the bubble for excessive compensation and beneficial tax treatment, but their returns were so high that even investors like pension funds were drawn in. Now these firms, built on enormous amounts of debt, are being forced to go back to the financial markets just as those markets have nearly frozen up.

If history is any guide, the worst may be yet to come. Steven N. Kaplan, a professor at University of Chicago Graduate School of Business, found that nearly 30 percent of all big public-to-private deals made from 1986 to 1989 defaulted.

Why did our nation allow this?  The rulers knew that this sort of debt-piling on game would have AT LEAST a 30% default rate!  This is totally unacceptable.  A 10% default rate can cause an entire economy to go into a bad tailspin. 

Recall, please, how this present collapse is being nearly totally blamed on the poor homebuyers who are at the very bottom of the money feeding scale, the people who live on the lip of the volcano and spread their aprons and nets to catch some of the loot.  How sad this all is!  Innocent people trapped inside the volcano are being blamed for it blowing up.

The US ruling elites and corporate overlords knew perfectly well, the game they were playing would, AT BEST, lead to a 30% loss if things didn't continue to expand.  So they continued to expand things despite knowing this. The tool they used the most was the most insidious of creations: the Derivatives Beast!

Yes, it all boomerangs back to that thing.  Millions of humans will die in the volcano because the Beast lives there and is one of the Death Gods!  Workers who live inside the lip of this mighty volcano were told to give their money to the guys throwing it into the volcano and if they catch some of this falling loot which were their own savings, they would get RICH!  Only, they won't get rich.  For none of the savers in the volcano were told that the failure rate of these loans would be at least 30%.

Instead, they were told lies about the Derivatives Beast.  They were told, this deadly creature would shelter them.  And so the money is lost and people will die because of this.  Now, the NYT has printed a major editorial from the staff working for Obama.  There are many interesting levels of this editorial which I must explore as we think about volcanoes and Death Gods:

No More Economic False Choices By ROBERT E. RUBIN and JARED BERNSTEIN

We also jointly believe that fiscal stimulus must be married to a commitment to re-establishing sound fiscal conditions with a multi-year program that includes room for critical public investment, once the economy is back on a healthy track.

One of us (Mr. Rubin) views long-term fiscal deficits — in combination with a low national savings rate, large current account deficits and foreign portfolios that are heavily over-weighted in dollar-dominated assets — as a serious threat to long-term interest rates and our currency and, therefore, to our economic future. The other views these economic relationships as much weaker.

*snip*

One important policy question is what our fiscal objectives should be in terms of deficits and of the ratio of the national debt to the gross domestic product. In times like these, larger than normal budget deficits will add to the national debt. In more stable times, a budget deficit equivalent to roughly 2 percent of G.D.P. will keep the debt-to-G.D.P. ratio constant, a legitimate fiscal policy goal. In flush times, a smaller deficit would lower the debt ratio and that might be desirable.

We both agree that individual income tax rates and other taxes for those at the very top could be moved back to the rates of the Clinton era. It’s worth remembering that rates at this level helped finance deficit reduction and public investment that contributed to the longest economic expansion in our history.

So, they will up corporate taxes?  HAHAHA.  I would suggest that they read this story of mine and then explain the need for higher taxes.  Namely, our deadly rivals in Japan have these higher rates.  So we should, too.  Period.  No other excuses needed.  

We also see in this editorial that the top economic advisors to Obama are split on many issues.  Actually, this is a very good thing!  Obama can listen to all sides and then MAKE CHOICES.  The one-voice method used by Bush was a failure.  We need debate.  I hope I get invited to these debates over time.  I would be happy if they merely read me.  After all, knowledge is good.  Especially if it is very old knowledge.

Free markets versus regulation and protection: We both feel strongly that there are important lessons to be learned from the disruptions in our financial system, and that significant reforms are needed. The objective ought to be to optimize the balance between increasing consumer protection and reducing systemic risk on the one hand, and preserving the benefits of a market-based system on the other.

We know, too, that Wall Street and Main Street are intimately connected. The consequences of the financial market crisis are profound for Americans in terms of lost jobs, lower incomes and reduced retirement savings. Measures to reform and strengthen the financial system should be evaluated by this measure: Do they ultimately translate into improving the jobs, incomes and assets of working Americans?

With respect to trade, the choice is not trade liberalization versus protectionism. Instead, as trade expands, we must recognize that protecting workers is not protectionism. We must better prepare our people to compete effectively and help those who are hurt by trade — not just dislocated workers, but those who find their incomes lowered through global competition. This means investing more of the benefits of trade in offsetting these losses, through more effective safety nets, including universal health care and pension coverage.

Neither advisor understands global trade.  Nor does virtually anyone working for the major media.  Indeed, the blind spots here are so massive, we could say that, when it comes to trade, our entire pundit class lives in the Outer Darkness.  They are blind and stupefied by propaganda and hubristic imperial belief systems. Or worse, divided loyalties.

Note how these two guys who happen to be Jewish, fret about 'those who are hurt by [this idiotically unbalanced] trade!  Oh dear!  

Well, I have a stark message to both men: THE ENTIRE US ECONOMY AND SOCIETY IS BEING HARMED BY THIS UNBALANCED TRADE!!!

It will kill the entity we call, 'The United States'.  We will become Yugoslavia: the maker of crummy cars who then fell apart with ethnic and religious infighting and is now a series of mini-states after killing lots and lots of people.

Let's look at one prime example of unbalanced trade which involves many financial experts turning a blind eye because they support other nations benefitting from US  trade imbalances:

July 10, 2008: Top Israeli Imports & Exports

The United States of America consumes almost 40% of Israel’s total export shipments, far more than second-place Belgium at 6.5% and third-place Hong Kong at 5.9%.

Israel’s imports are less concentrated, with products from trade partners distributed more proportionately. Leading exporters into Israel include the U.S. (12.4%), Belgium (8.2%), Germany (6.7%), Switzerland (5.9%), the United Kingdom (5.1%) and China (also 5.1%).

In 2007, Israel exported an estimated US$50.2 billion worth of goods onto the international trade marketplace. Israeli imports totalled roughly $55.8 billion, resulting in Israel’s overall $5.6-billion trade deficit last year.

Despite its overall deficit, Israel enjoyed a US$7.8 billion trade surplus with its American trade partner in 2007. The most recent surplus statistic is 32.6% higher than the Israel-US surplus in 2003 but represents a 5% decrease from the $8.2 billion surplus in 2006.

With a population of 7.1 million, Israel exported US$20.8 billion worth of merchandise to the United States in 2007, an 8.6% increase from 2006 and up by 63% in 4 years.

US exports into Israel is 12.5%  but the reverse direction is 40% of Israel's exports are to the US.  Ergo: Israel imports more from others while the US gets a very much smaller slice.  But Israel gets to ship things with pretty much Japanese-levels of impunity to the US!  And this has been climbing steeply.  True, it declined a slight amount this last year.  But this happened with Japan and China and is only a side effect of the US going into a steep recession.

Anyone looking at trade statistics can clearly see that nearly all trade deficit reductions in the past 35 years have come ONLY during recessions.  The minute spending picks up, the US is inundated with imports pouring in all our major ports.

In the last 4 years while the US ran epic trade deficits, Israel had one of the highest growth rates.  True, it is not a towering mess like from China!  But Israel is a very small country, so it is no surprise the amounts are smaller.  But the growth rate is not smaller.

Since none of our leaders, all of whom swear fealty to Israel before running for office, are going to stop this one-way trade with Israel, they can't go off and do this to other nations. So, to let Israel do this, they have developed a philosophical matrix that says, 'It is OK for the US to continuously run trade deficits'.  Closely connected is this concept of, 'The US can run trade and budget deficits forever.'

This is very clearly seen in DC.  Whenever I talked about trade deficits and the need for the US to stop piling on debts, eyes would glaze over.  THIS IS TREASON.  Ignoring dire dangers to the US people due to this is treasonous.  The people who live in DC and run our government are REQUIRED to protect us, protect our borders, protect our Constitution and to live within certain bounds.  Selling us to foreign powers is not allowed.  It is quite outside the directives of our government. 

More Yma Amore

:

More news from today that illustrates all this:

Hard-Fought Battle in Hard-Hit Ohio Decisive State in '04 Is Economically Battered and Electorally Coveted

Both sides expect a close finish, something of a paradox in a struggling state in a year in which the poor economy is driving support for Obama and other Democrats. Ohio lost 300,000 manufacturing jobs this decade and its median income has dropped by 3 percent, yet polls show Obama with no more than a narrow lead in a state that Sen. John F. Kerry lost to Bush by two points.

That may be because the weak economy has driven away younger and college-educated residents who lean Democratic, because abortion remains a potent issue and because an African American candidate with an unusual name remains a tough sell in some corners. But voters also say the poor economy has not swung more voters to Obama precisely because the state has been down for so long -- many have come to see the woes as systemic, and not easily blamed on a particular party.

Ever since the US launched the floating currency, the collective boats of the working class have sunk deeper and deeper.  Or maybe I should say, the workers have been pushed deeper and deeper into the volcano.  They are now cynical and are feeling victimized.  People who are victimized turn to racism or religious fanaticism for comfort.  

This is very bad!  We see it very clearly in past depressions!  Over and over again, no matter what country it is, when the economy goes bad, minorities get hammered.  Ohio has been let down by everyone.  When Ross Perot talked about the 'Giant sucking sound' he got over 20% of the vote.

So the DNC and GOP conspired to kill the sponsorship of Presidential debates so they could exclude anyone who could talk about the Federal Reserve and Free Trade.  Now, we get faux debates where the people must choose based on emotions, not economic principles.

This is why things get worse and worse.  The US auto workers should be demanding tariffs and barriers.  But when they vote for people endorsed by their unions, these same people end up supporting free trade.  This is simple: the entire Congress and the Presidential candidates are owned by the banking gnomes and international dealers seeking to drive us deeper into debt!  

So everyone comes to Ohio to be pious but then goes to DC to be corrupted.

So people left behind in these dying communities are bitter, as Obama noted.  They cling to guns and religion.  A very deadly combo that leads to Yugoslavian solutions.  

Now, back to the Derivatives Beast who lives in this volcano:

DTCC to Provide CDS Data from Trade Information Warehouse

The Depository Trust & Clearing Corporation (DTCC) announced today that it will begin to publish aggregate market data from its Trade Information Warehouse (Warehouse), the worldwide central trade registry it maintains on credit derivatives. Starting Tuesday, November 4 and continuing weekly, DTCC will post on its website www.dtcc.com/derivserv the outstanding gross and net notional values ("stock" values) of credit default swap (CDS) contracts registered in the Warehouse for the top 1,000 underlying single-name reference entities and all indices, as well as certain aggregates of this data on a gross notional basis only. The data is intended to address market concerns about transparency.

The very secretive gnomes running the DTCC can't be trusted nor are they clear.  These monsters are going to soothe markets by publishing hard information.  So I said, 'Whoopee!  I will haunt this website!'  Only I can't!

Only certain people, namely, ONLY GNOMES can access this information!  I hope some of my more connected readers can overcome this barrier for me and send me information published by the DTCC.  I would love to see the actual numbers.

According to the DTCC, the actual physical losses due to Lehman Brothers was virtually nothing.  Less than $10 billion.  Well, this begs the question: what on earth is this stupid Derivatives Beast that is many trillions in size if it isn't big at all?  And if so, why continue to keep this vital information behind a locked door that only gnomes can access?  EH???  

Gads.  They are pulling yet another gnome trick here.  Can't fool me.

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Fed Reserve Built America Into Giant Debtor's Prison

Every day is Trick or Treat Day for the gnomes. 

This artwork is courtesy of Mr. Taylor.

 Elaine Meinel Supkis

I hurt my fingers yesterday so I couldn't post anything. Now, with band aids all over the place, I can type again. Typepad continues to annoy me with bugs and a refusal to understand their coding is awful. But on to less serious matters [hahaha] the economy: time to pause and look at a bunch of graphs. They show a rapidly deteriorating situation which the US has never had before. Roubini's RGE Monitor publishes a ridiculous analysis about the Derivatives Beast. Evidently, this economist named 'Pickel' thinks there is no problem, all is well. The Beast is NOT eating our banking gnomes and spitting out bones! Right. And the Middle East is now sliding into a pre-revolt mode as the oil kings decide to cut welfare payments. Bin Laden is ecstatic.

From Roubini's web page comes this utter rot---Insight: The CDS sector is not the central villain PrintShare Robert Pickel

Last week saw an important milestone in the credit default swaps sector, when counterparties to CDS trades on Lehman Brothers cash-settled their transactions.

Based on a protocol and auction process developed by ISDA, protection sellers paid 91 cents on the dollar to protection buyers. An estimated $6bn to $8bn was paid out. Over the past 25 years, the privately negotiated derivatives industry has developed a robust framework – one that governs and guides participants through such an event, and which includes procedures and processes for valuing and unwinding trades. Recent defaults show the value of these efforts – the industry’s infrastructure clearly works.

Just as clearly, the Lehman default and settlement are not the financial catastrophe CDS critics claimed they might be. The widely cited industry estimate of $400bn in notional amount of Lehman CDS trades outstanding includes a significant number of offsetting transactions. Dealer firms generally have minimal net exposure via CDS; if they sell protection, they also generally buy protection to offset the risk. Net these positions out and net amount of risk transferred is a low single-digit percentage of the notional amount. Cash payments on Lehman were about 91 per cent of that net amount.

Two more points must be kept in mind. First, companiees are required to mark positions to market, and they have already calculated the impact of Lehman’s default on their financials. Second, companies require counterparties to post collateral to back their exposures, so most of the $6bn-$8bn paid out was already collateralised. The bottom line is that groups had little incremental exposure to the Lehman cash settlement.

It’s also worth noting that, in spite of the failure of Lehman, as well as several other large counterparties, the CDS business continues to function effectively. CDS have proven to be the main – and sometimes the only – way to shed risk or express a view on market behaviour. While cash, securities and money markets have seized up, the CDS business still operates.

Here is part of my reply to this utter tripe:

'This guy is NUTS!!!! We just saw not only a 91% loss in a derivatives swap meet, AIG is now gulping down well over $140 billion in just THREE WEEKS and not at the end of this swap of derivative failures for US taxpayer dollars!

This is UNPRECEDENTED.'

Back to today:

On the other hand, the entire collapse of the G7 banking system is not due to derivatives. The Derivatives Beast may be eating up all the major banks in the G7 stellar complex but the real reason 'liquidity' dried up was due to the sudden unwinding of the Japanese carry trade! Even Bloomberg news admitted that most of the world's monetary expansion of the last 10 years has been nearly entirely due to the Japanese carry trade!

Pickels can't see this, of course. The mantra hammered into the noggins of all the economists in America is very simplistic: China is undermining world trade by using cheap labor. Even though China is not the world's number on export profit center, economists focus only on sales, not profits.

This plagues a lot of commentary on capitalism. I wonder why? One would imagine that everyone in the US would be hyper-focused on capital creation! But we are not.

This, not China, lies at the heart of what is going wrong. Americans have become so accustomed to going into debt ever since Nixon cut the gold peg from our now-fiat dollars that we imagine, we can skip the business about profits and simply have a churning economy based on consumerism and debt.

This is why not one of the solutions to our economic collapse are doing even the slightest good. The anxiety of the G7 central bankers is all about restarting lending. It is all about seeing if they can get more people to borrow more money. To make this an alluring prospect, they are all grinding out loans at ridiculous interest rates.

Back to Pickles: like many of the RGE analysts, he cannot really understand the role the Japanese carry trade played in the creation of global debt and global inflationary bubbles. The Derivatives Beast was created by the banking gnomes over the last 20 years as a tool with which they could lend recklessly while being protected from losses. These losses are also called 'bankruptcies.' This, in turn, are massive wealth destroyers.

Recessions aren't simply reductions in consumption. They are wealth destruction cycles. The entire excuse for having central banks is so they can prevent these periodic cycles of wealth destruction.  But even the briefest look at history clearly shows that the ONLY thing the consortium of central bankers have succeeded in doing is this: They have MEGA-BUBBLES AND MEGA-BUSTS!  

This is a notable failure.  Many people who are critics of this system restlessly seek someone responsible.  They light on various names and people.  A common mistake is to blame various ethnic groups such as the Japanese or Jews or the Chinese or the Arabs.  Some people even blame one of the oldest groups who have controlled much of the earth for the last 500 years: the ruling elites of Europe, the Old Nobility. 

Everyone has exploited the modern system of interlocking central banks. This is because it makes people fabulously wealthy....but only during the bubbles.  During the collapses, all hell literally breaks loose.  And even though people assume ruling elites in Arabian lands or Merry England want chaos, this is FALSE. 

Or rather, the chaos is supposed to happen far, far away.  In Afghanistan, for example.  That is a favored site for chaos between empires.  But no: the chaos from bubbles bursting always comes home.  When kingdoms or countries go bankrupt, revolution is not far behind.  And revolutionaries are, by definition, outsiders.  

Mr. Pickles doesn't seem to do much history.  The whole Derivatives Beast thing was an attempt by the central bankers to expand credit when the world was awash in credit.  Already, one of the G7 central banks flooded the world with liquidity via 0% or slightly higher interest rates.  

This unprecedented and very long duration of these interest rates in a world undergoing inflation was very deadly since Japan is the world's #2 economy.  The fact that all the central banks are now plunging into the same abyss means that the Japanese carry trade will NOT resume.  Instead, the whole of the top economic consuming nations on earth which are Europe and North America, will try to go on a huge consuming binge, directly lending to themselves money at infinitely cheap interest rates.

This, in turn, will fuel Asia's industrial development. This is why China supports this business.  The battle between China's central bank and Japan's central bank ended several months ago.  But I suspect, it will re-ignite due to some very shocking news out of Japan concerning a top Japanese general blaming China and the US for all of WWII.  More about that later.

Asia has embarked upon a massive shifting of production from Europe and North America to Asia.  This is simple: the physical facilities of manufacturing are not so easy to move if a government is determined to keep them.  The US voluntarily gave up our industries because we wanted no inflation instead of facing the facts about inflation.

Namely, we wanted money growth with no downsides.  This brings us back to the Derivatives Beast: it grew in direct proportion to the banking gnomes burying inflation in interesting places.  IT INFLATED TREMENDOUSLY.  When inflation finally poured into commodities, the shocking truth came out.  Inflation was really running at over 12% a year.  This wasn't isolated inflation.  This was global inflation.  

Proof: even the strongest currencies with interest rates above 6% saw inflation!  More proof: even Japan, with severe suppression of wages of 80% of the population, still saw inflation over 3% a year!  Now, inflation seems to be receding but it is not.  It is continuing to grow in the darkness.  The reason we don't see it temporarily is simple: all the investors are removing their money from hedge funds and investment funds and HIDING it!  And they are hiding it from the Derivatives Beast. 

Anyone stupid enough to keep their money in the system is seeing it lose value faster than gold or oil is dropping.  So we have lots of cash sitting idle.  And it will sit idle until the Beast is done eating.  And it has barely begun.  The fact that all the major investment banks on earth are rapidly going bankrupt or have ceased growing, isn't due to there not being enough money.   THE MONEY IS BEING HIDDEN RIGHT NOW!  People are waiting to see what item can be turned into an instant bubble.

Now, let's go into the past again:

Congressman McFadden on the Federal Reserve Corporation Remarks in Congress, 1934:

"If this United States is to redeem the Fed Notes, when the General Public finds it costs to deliver this paper to the Fed, and if the Government has made no provisions for redeeming them, the first element of unsoundness is not far to seek.

"Before the Banking and Currency Committee, when the bill was under discussion Mr. Crozier of Cincinnati said: 'The imperial power of elasticity of the public currency is wielded exclusively by the central corporations owned by the banks. This is a life and death power over all local banks and all business. It can be used to create or destroy prosperity, to ward off or cause stringencies and panics. By making money artificially scarce, interest rates throughout the Country can be arbitrarily raised and the bank tax on all business and cost of living increased for the profit of the banks owning these regional central banks, and without the slightest benefit to the people.

The 12 Corporations together cover y and monopolize and use for private gain- every dollar of the public currency and all public revenue of the United States. Not a dollar can be put into circulation among the people by their Government, without the consent of and on terms fixed by these 12 private money trusts.'

"In defiance of this and all other warnings, the proponents of the Fed created the 12 private credit corporations and gave them an absolute monopoly of the currency of these United States- not of the Fed Notes alone- but of all other currency! The Fed Act providing ways and means by which the gold and general currency in the hands of the American people could be obtained by the Fed in exchange for Fed Notes- which are not money- but mere promises to pay.

"Mr. Chairman, if a Scottish distiller wishes to send a cargo of Scotch whiskey to these United States, he can draw his bill against the purchasing bootlegger in dollars and after the bootlegger has accepted it by writing his name across the face of it, the Scotch distiller can send that bill to the nefarious open discount market in New York City where the Fed will buy it and use it as collateral for a new issue of Fed Notes. Thus the Government of these United States pay the Scotch distiller for the whiskey before it is shipped, and if it is lost on the way, or if the Coast Guard seizes it and destroys it, the Fed simply write off the loss and the government never recovers the money that was paid to the Scotch distiller.

"While we are attempting to enforce prohibition here, the Fed are in the distillery business in Europe and paying bootlegger bills with public credit of these United States. "Mr. Chairman, by the same process, they compel our Government to pay the German brewer for his beer. Why should the Fed be permitted to finance the brewing industry in Germany either in this way or as they do by compelling small and fearful United States Banks to take stock in the Isenbeck Brewery and in the German Bank for brewing industries?

"Mr. Chairman, if Dynamit Nobel of Germany, wishes to sell dynamite in Japan to use in Manchuria or elsewhere, it can drew its bill against the Japanese customers in dollars and send that bill to the nefarious open discount market in New York City where the Fed will buy it and use it as collateral for a new issue of Fed Notes- while at the same time the Fed will be helping Dynamit Nobel by stuffing its stock into the United States banking system.

"Why should we send our representatives to the disarmament conference at Geneva- while the Fed is making our Government pay Japanese debts to German Munitions makers?

All over the web, I read spurious analysis that often starts with, 'This GLOBAL banking mess has never happened before!'  This false story irritates me to death.  Since the birth of banking, it has been an international/trade operation.  Nay, banking was launched ONLY for international/trading purposes!  And funding wars, of course.  The bankers were more than happy to lend to foreign lords so they could go to wars.  

But the international character of banking is the basis of banking.  Banks were NOT started so people could buy property!  In the Middle Ages, there were several interesting ways of gaining property: war, marriage or fealty deals with kings.  And the Church gained via death bequests.  And kings seized this property from the Church in various ways like Henry VIII of England.  People didn't buy land.  

There was another way: trading one property for another.  But the preferred way remained the most ancient: sex and war.  And frankly, we are never far from this.  The US did this recently to Iraq.  We wanted the oil so we invaded.

No, banks were mainly for traders.  I have seen short histories of banking where the authors would explain that people would want to protect their gold by giving it to a banker with a safe. 

But why would they do that?  If they were rich enough to have gold, they were rich enough to hire guards and to hide the gold, themselves.  No, the people who parked money with someone else were the traders who had to move from place to place.  And they didn't park it with anyone.  They had to park it with a family they could trust, one that had members across Europe and Asia. So a simple letter would effect a transfer of value from one place to another.  

All paper currencies are contracts.  I wrote about this in the past.  If you read the language on older paper currencies, they are obviously contracts.  The very first paper money issued by the new US government were covered with fine print detailing how the notes were issued, how they could be used and who was responsible for REDEEMING them!  An important issue that is now hidden totally from the unsuspecting public today.

The conservative Congressman from 1934 is basically complaining that the US dollar was now being used for global trade and bills were being created overseas that eventually turned into dollars and thus, the US lost control of its own currency!

Well, this is happening today, in spades!  The world mostly uses dollars and so, they create dollars via debt creation.  And no one created more 'debt for export' than Japan.  The Bank of Japan, not the Federal Reserve, is the real agent who is 'printing dollars'.  But this is not discussed at all by much of the media.  

I saw in a New York Times editorial the other day, a long chat about the economic mess.  Like most people, the unwinding of this mess is blamed on US home owners who are too deep in debt.  As if they could magically make these debts appear!  Now, the government must bankroll a reduction of these debts.  And the banks which manufactured money in Japan and then parked it here, will demand the Treasury and the Federal Reserve turn these Japanese debts into AMERICAN CURRENCY.  Which flows back overseas again!

Click here to see photos showing the course of hyper-hyper inflation in Zimbabwe:

If you think that the current economic crisis is something that has never happened in history before, you may be wrong! After the collapse of the agriculture sector in Zimbabwe in 2000, the inflation in that country skyrocketed to 231 million percent a year! Just think about it - 231 000 000%! Unemployment went up to 80% and a third of country’s population left it. Let`s now have a look at the photos that you may not be able to see anywhere else in the world. Here is a boy getting change in 200 000 dollar notes!

Not a soul on earth wants Zimbabwe's paper money. But everyone on earth wants dollars.  If all the dollars floating about the planet suddenly come home, this is what it would look like: to buy a one pound loaf of bread, you would need 10 pounds of paper money.  This, of course, makes no sense at all.  But Zimbabwe shows that hyperinflation isn't just a Weimar nightmare.  It can happen to anyone.

So it is now time to visit the Federal Reserve to see what is going on this week [click on images to enlarge]:

M1 money stock:

So, this last week, the Federal Reserve increased the basic money supply exactly the same amount as on 9/11.  At 1% interest post-9/11, we saw a global equities inflation bubble.  Then, when the climbing money supply leveled out, we saw a commodities inflation spurt!  This was all the US dollars coming out of hiding when it could no longer be parked on top of global housing or stock markets.  

Now we are at a LOWER interest rate and the same day, the Fed jumps the M1 money supply.  And smart people will bet that we get a repeat of the previous 5 years.  But this cannot happen unless first, enough debt disappears via bankruptcy.

In the previous downturn, that idiot, Donald Trump, went bankrupt.  Then, he got  even more money to waste on stupid real estate deals.  When he goes bankrupt again, this will prepare the ground for him to get even more loans to do this again.  Unless he gets arrested. 

Right now, the central bankers are struggling to prevent the cleaning house via bankruptcies.  They hope to increase lending and increase trade without first eliminating at least 50% if not 100% of the previous dollars created between 2002-2006.

Monetary Base [BASE]:

The monetary base ceased growing in Asia so it is now being artificially grown here in the US.  Only we didn't allow for most of the previous, Asian-manufactured debt to be cleared out via bankruptcy.  Nor has the Derivatives Beast been able to munch on much more than just $3 trillion of the $66 trillion in funny money deals created by the bankers seeking ways to lend like crazy despite risks.

Total Borrowings of Depository Institutions [TOTBORR]:

In all the previous years of our nation, we never, never, never saw this sort of insanity.  The 9/11/1 borrowing binge was billed as a one-time thing due to a direct attack on Wall Street that killed many of the workers there as well as halting trade for a number of days.

But that has been utterly dwarfed by the present rescue.  Was America attacked?  Did Wall Street shut down?  Has anything happened at all?  As far I am concerned, the charts agree with me that the trigger event was in July, 2007: the day the carry trade with Japan suddenly began to unwind.  This is a most singular event.  It is being deliberately ignored not due to stupidity.

The actors on stage who did this to us still run things.  They very definitely want the carry trade to resume.  The G7 central bankers all yelled that they wanted this!  It was in the news this week!  They were all blatantly obvious about this.  They hope to hide the mess again the old way: via lending this money to the West via Japan. Then, it doesn't show up in any charts!

Except it is very inflationary.

The 4 Horseman Have Arrived Debt, Derivatives, Deficits and the Dollar

By John Riley Chief Strategist  

Grim graphs!  The debt to GDP is now nearly double what it was in the Great Depression. And that was due to the GDP being very weak!  Our GDP has barely begun to decline.  But it is showing signs of decline.

On the other hand, when gasoline was selling above $5 a gallon, I saw nearly no one in the malls.  This week, thanks to inflation temporarily receding, I see packed stores again.  So we know that inflation is merely pulling back slightly before unleashing even worse effects: identical to the 1970's.  

We know that foreign powers sold or refused to buy US Treasuries.  It is not only irresponsible, it is treason for our government to be run in this fashion.  Our loss of sovereignty is tremendous.  Few people see this but it is obvious in trade statistics: the US sells Treasuries and debt in direct proportion to demands by our trade rivals to open our markets and allow them to destroy our own economy.  Ergo: it is treason.

Now, after all this grim news, we go to the Middle East again:

Gulf Citizens Beg for Bailout Amid Stock Rout: Week Ahead

(Bloomberg) -- Abdullah Hajeri led a march on the Emir's palace in Kuwait last week, demanding the oil-rich nation's ruler stop stocks from plunging. Adnan Mohammed Saleh, down the Persian Gulf coast in Dubai, said he wants more government protection from the global financial crisis. 

``Every day the market is crashing,'' said Saleh, a 42- year-old trader, staring dumbfounded last Tuesday as company names scrolled across the Dubai Stock Exchange's outdoor ticker in red. The region's rulers are under pressure from citizens to shore up investors, not just banks, as they try to fend off what may be the worst economic crisis since December 1998, when oil at $10.35 a barrel forced them to slash spending. 

Crude prices have fallen 50 percent from a record $147.27 in July, and stock indexes in Dubai and Saudi Arabia are down by as much this year. Gulf economies are more susceptible to financial turmoil than in the past because of their greater dependency on international expertise, investment and tourists to diversify away from oil. While Dubai, home to the world's tallest building and the man-made Palm Island, is considered most at risk, no part of the Persian Gulf will go untouched.

Residents of the region are used to government intervention. All Gulf countries are run by unelected rulers who maintain political power through tribal allegiances and marriages. Generous state welfare programs have traditionally damped demands for more political participation.

 How the region's rulers cope with the turmoil may define relations with their people in the future, as they try to wean their subjects off state handouts and encourage them to find jobs and embrace market capitalism. 

``There's no question that it sets back the move from socialist, paternalistic societies toward more modern capitalist states,'' said Gabriel Stein, a director at London's Lombard Street Research, which provides economic analysis to investors and companies. ``It is a trend that we have seen all over the world. The immediate reaction is that you told us to do this, so now things are going wrong it's up to you to help us out.''

Unlike Asia, the Middle East generally consumes rather than builds industries.  The only possible exception for this is in Turkey, Iraq, Iran and Palestine.  That is, when Palestinians are allowed to build anything at all.  This is due to historical cultural biases. But the proto-nomads of the desert view money as loot.  To be spent having fun.  Frankly, this is now our own ethos.  

Profits are windfalls, not via labor-added manufacturing systems.  Now on to the Jewish director in London: cutting back on 'socialism' in the oil pumping nations will lead directly to revolutions. For these are people who remember and know how to do something: fight.

Which takes me back to history: revolutions and wars are very intertwined with economic matters.  And banking can launch a thousand ships or inspire a million revolutionaries.  And there is one big revolutionary who just cannot wait for the kings and sheikhs to cut social services!

This is bin Laden's plans!  To have the biggest rulers of Muslims fall before the sword as outraged people swarm the palaces and behead them!  And the chances of this happening is around 50% right now.  Give people no money, no hope and no way out and they will be willing to die, fighting.  The Jewish freedom fighters in the Warsaw ghetto fought with all their hearts, contesting every inch the Nazis tried to gain.  Ditto, Stalingrad.

There are many historic battles of this sort.  This is why Chinese generals warn their fellow generals to always allow an 'out' so the opposing armies can retreat rather than stand and fight.  The western pundits advising the king of Saudi Arabia, a despot who got the throne via murder, that he should encourage his people to become 'capitalists' is pure insanity.  They will become DECAPITISTS.  Namely, 'guillotine experts'.  Or in their case, they use swords.

And guess how much oil these revolutionaries will sell Europe and the US afterwards?  And if you want to see hyper-inflation, if the price of oil hits over $500 a barrel due to revolutions and civil wars sweeping all our pets from power, we will see tremendous inflation.

Bloomberg:

Of the Gulf states, Dubai may be hardest hit by a global economic slowdown because it has borrowed more to finance its transformation from a Persian Gulf trading post to a financial and tourist hub, and has only 4 billion barrels of oil reserves. Government-controlled companies owe at least $47 billion, more than Dubai's gross domestic product, and they will continue to accumulate debt faster than the economy grows, Moody's Investors Service estimated in an Oct. 13 report. It concluded that Dubai may need financing help from Abu Dhabi.

Many bankers and others are running off to the Middle East to beg for investments.  Or running off to Asia.  But the price we pay is very high!  This is a boon that has many strings attached.  And these strings will strangle us.  And this is all due to the fact that we ceased being profitable.  We are not a capitalist society.

We are in a debtor's prison.

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More Naked Short Selling Gnomes And The DTCC

Halloween Tricks And Treats

Elaine Meinel Supkis

Halloween is here and the trickery and treatery treachery continues to cause market turmoil. That is, AIG's business with feeding and playing with the Derivatives Beast is now unwinding in the typical way such deals end: the monster eats its master. Right now, it is eating up $144 billion of US taxpayer funds. Also, the DTCC is in the news again because of its own relationship with this same fearful monster, the Derivatives Beast. And the Japanese savers are now being eaten by this same critter! Who would have guessed? And commodity inflation is again, taking off as Japan drops its interest rate to 0.3% and the US to 1%. Who would have guessed again? HAHAHA. 

Click here for Wonkette's video of Born Again Christian Heathens worshipping the Golden Calf:

More Photos & Videos From Yesterday’s Sacrilege Wall Street Bull Prayer

All my life, I knew that the Born Again Christians were really demons working for the Antichrist. They embody all the most hateful things I ever encountered. And now we see them waving American flags and begging their demonic devil of a leader, the Fake Jesus Who Loves Money And Power, to give them money and power! Wow. HAHAHA.

Fed Adds $21 Billion to Loans for A.I.G.

The company said it would be able to borrow up to $20.9 billion under the new program, raising its maximum available credit from the Fed to $144 billion under three different programs. The credit includes an earlier emergency loan of $85 billion from the Fed that carries a much higher interest rate.

A.I.G.’s big borrowings underscore the company’s bewilderingly rapid decline. When it suddenly faced a cash crisis in mid-September, the original estimate of the amount it needed was just $20 billion. A few days later, the Fed stepped forward with its $85 billion credit line. And now, the stunning size of that original bailout has grown by almost 70 percent.

*snip*

The company’s financial products division did a lot of business in that type of derivative, called credit-default swaps.

To put things in perspective: the annual cost of occupying Iraq and Afghanistan including the bombing of Pakistan and Syria as well as border feints against Iran, cost us an extra $150 billion a year.  So the rescue of an insurance fund is the equal to international war.  The war expenses are inexcusable.  But this is far, far worse.

We have to pause and ask, 'What is insurance?'  It is the collective sale of risk which, by being spread as much as possible, can overcome periods of losses.  These losses have to be calculated very carefully so that the insuring agents aren't swamped by some event.

Online, there is much talk about 'black swan events'.  Well, we are seeing a massive flock of black swans migrating south.  The fiscal skies are black with these birds of doom.  For swans were the emblem of death as well as longevity.  The ancient Romans ate swan tongues so they could gain youth.  A black swan was supposed to be impossible.  But then, when the Europeans sailed to places like Australia, they found that the only swans were black swans!  

This is a good frame for the concept of 'the black swan' being a 'rare event.'  Actually, there is always a yin to every yang.  And the insurance risk swap game was predicated on an overall collapse being a 'black swan event' that would probably never happen. 

Anyone reading the history of finance, debt and banking is struck by one major thing: they ALWAYS collapse into chaos!  They always over slop the banks of the river of liquidity.  They always over-expand.  They always form bubbles.  Ergo: the human tendency to go bankrupt is very strong!  The impulse to overrun all barriers, to make too much credit available compared to savings, this is a constant, total temptation.  This is why governments must have very powerful rules to prevent this.

AIG is eating up all our national fiscal resources just as certainly as major wars eat up resources.  To have a country go deep into debt to keep a bunch of idiot insurance agents alive: this is the definition of a black SWAMP event.  We are sinking into the muck and there is no bottom.

A Question for A.I.G.: Where Did the Cash Go?

A.I.G. had come under fire for accounting irregularities some years back and had brought in a former accounting expert from the Securities and Exchange Commission. He began to focus on the company’s accounting for its credit-default swaps and collided with Joseph Cassano, the head of the company’s financial products division, according to a letter read by Mr. Waxman at the recent Congressional hearing.

When the expert tried to revise A.I.G.’s method for measuring its swaps, he said that Mr. Cassano told him, “I have deliberately excluded you from the valuation because I was concerned that you would pollute the process.”

And what was this gentleman 'polluting'?  Why, the money stream pouring out of the stump of the World Tree!  He was polluting the flood of dollars pouring out of the Bank of Japan!  He was polluting the flood of invisible money that was feeding the voracious appetite of the biggest monetary/financial entity ever created by gnomic minds: the Derivatives Beast!

Anyone interfering with the feeding and growing of this monster was ruthlessly eliminated.  The gnomes doing all this were proud that they got more and more money so long as they fed the Beast.  So it grew, they got richer and everyone was happy so long as no one had to collect insurance due to a failure.

Then, starting in July, 2007, the flood of money from the World Tree stump stopped when the Chinese Dragon put a basket on top of it and the yen began its long rise in value against all currencies.  Since that hour, the monkeys have struggled to yank off this thing.  More about that later.  Seems like they might have succeeded.  Yikes.

The gnomes are dirty little monsters.  They consider people seeking to clean up messes to be mean, dirty, ugly.  This is because they live in a reverse world.  By moving into the Cave of Wealth and Death, they think up is down and in is out.  The only way we can stop anyone venturing into this cave is to force them to obey strict rules or they die.  This is Libra: the lady with the scales and the sword.  She decorates many court houses.  She is extremely ancient.

AIG is an anti-insurance entity:

Through spring and summer, the company said it was still gathering information about the swaps and tucked references of widening losses into the footnotes of its financial statements: $11.4 billion at the end of 2007, $20.6 billion at the end of March, $26 billion at the end of June. The company stressed that the losses were theoretical: no cash had actually gone out the door.

“If these aren’t cash losses, why are you having to put up collateral to the counterparties?” Mr. Vickrey asked in a recent interview. The fact that the insurer had to post collateral suggests that the counterparties thought A.I.G.’s swaps losses were greater than disclosed, he said. By midyear, the insurer had been forced to post collateral of $16.5 billion on the swaps.

Though the company has not disclosed how much collateral it has posted since then, its $447 billion portfolio of credit-default swaps could require far more if the economy continues to weaken. More federal assistance would then essentially flow through A.I.G. to counterparties.

Periodically I post these reports.  I usually look at the forward fluff part and then run off to the footnotes because this is where all the real information is buried.  This is what children learn in grade school: put all the bad news in tiny letters on the back page of something and then slap the peanut butter side of the sandwich to that side and smear it.  

Failing that, say, 'The dog ate it.'  How they have grown up!  HAHAHA. And $447 billion in credit default swaps: well, that isn't pennies.  All our top major bankers and insurers, hedge funds and other entities ALL jumped into the Derivative Beast's dinner dish here!  And now, they want US to jump out of their frying pan and into the Beast's fire?  

This, in total, is the plan!  To have us make up the difference in these differentials of losses due to banking gnomes handing out mortgages to UNDOCUMENTED people [aka: illegal aliens, criminals in prison, never-do-wells and Joe the Plumber].  These mortgages are seeing a 90%+ default rate in a rapidly declining market.  Wow.  Who would have guessed?

But then, the entire system is now based on dark pools feeding darker pools which feed into the Derivatives Beast who sucks it all down, quite merrily.  And now is sucking down all banking wealth.

Naked short sellers strike again!

The short sellers say they are scapegoats for the real villains in the meltdown. ``The shorts who warned about the real estate bubble have been proven right,'' Fleckenstein says. ``Now the government has changed the rules overnight. They're blaming the shorts and bailing out the ones who lost all the money and almost took the financial system down.''

Manuel Asensio, 53, president of New York-based Mill Rock LLC, says he and his brethren keep the stock market honest by going after companies with rotten accounting, dubious business plans and excessive debt. ``Short selling is an expression of doubt, not a criminal activity,'' Feiger says.

*snip*``

The management at Lehman, Bear Stearns and Merrill kept saying everything was fine. Then, every few weeks, they'd write off billions.''

Lehman, Bear Stearns and AIG all did the same thing: they stuck the peanut butter side of their lunches onto the reports and then handed the mess over to the SEC.  Cox is a political appointee who paid no attention to this and when his staff complained, he told them to shut up.  Now, he is in the news, pretending to care about the book reports from these gooey fingered gnomes.  'Bad, bad, naughty gnomes,' he cries.  

Bears who trade on real information are very steamed now.  The market has collapsed but is being artificially propped up.  How's that?

Ah!  By pouring trillions of dollars of US tax payer's futures into the markets!  They are using every crummy trick in the book used by African or South American nations seeking to fix economic messes caused by cronyism and criminal manipulation of the bottom line.

According to Short Alert Research, a Charlotte, North Carolina-based firm that produces research for short sellers, from early July to late September short interest in 33 investment banks and brokers plunged by 33.3 percent. Yet, share prices still declined.

``It was the longs getting out,'' says Fleckenstein. ``Probably the insiders.''

*snip*

``During the year prior to passage of the Securities Act and Banking Act in 1933, there was a massive bear raid on Wall Street,'' Geisst says. ``Some executives were shorting their own stock.''

The longs getting out is fancy talk for the rats who run these joints jumping ship.  The gnomes are palming off their dying industries into the laps of someone, anyone.  Since bears are barred from buying, this leaves exactly who? 

HAHAHA.  If you said, 'Uncle Sam!' you win a Derivatives Beast magic decoder ring.  This ring is wonderful.  You put it on your finger and say, 'Make me rich!' and all your money vanishes!  Every child should have one.  

DTCC May Raise Credit-Default Swap Disclosure Amid Criticism

(Bloomberg) -- The Depository Trust & Clearing Corp., which operates a central registry for the $55 trillion credit- default swap market, may agree to disclose more data to counter criticism the derivatives amplified the financial crisis. New York-based DTCC has discussed with banks, brokers and others that own the company ``whether or not there's any broader access to information we might provide,'' spokesman Stuart Goldstein said in an interview yesterday, declining to elaborate on what data may be published.

The DTCC earlier this month began releasing some information on trades in the registry to clear ``misconceptions'' about credit-default swaps following the bankruptcy of Lehman Brothers Holdings Inc., among the market's largest dealers.

*snip*

Officials from U.S. Securities and Exchange Commission Chairman Christopher Cox to New York Insurance Superintendent Eric Dinallo have called for increased regulation of the swaps. Dinallo, in an interview that aired Oct. 26 on the CBS news show ``60 Minutes,'' called the market ``legalized gambling.''

One of the deeper, darker pools is the DTCC.  I wrote about it in the past so we can just visit Culture of Life News back last spring:

May 11, 2008, Naked Short Traders In Red Hell And Black Ice:

A reader kindly sent me a new link, 'Deepcapture.com' which is a site run by a businessman who believes that the phantom financial world of naked short sellers in the hedge fund pirate/hell hound high seas has defrauded himself and other business people. To explore this story means plunging deep into the darker pools of finance, news reporting and downright demonic affairs with everyone pointing fingers at each other. There are no 'good' people in this story. But lots of lost souls and quite a few swindlers not to mention outright criminals, corrupt politicians and the many despicable follies and wild games of the people who are the bleeding heart at the center of our financial world. Like the DTCC, the organization originally set up to transfer ownership of stocks! All are now in this bizarre universe where there are many secret portals, secret chambers and invisible monsters that destroy or create wealth.

Here is my section about the DTCC from the May article above:

So, what is the DTCC? A crypt! A hiding place for invisible things! The place where ALL THE DERIVATIVE CONTRACTS ARE PROCESSED! HAHAHA.

What does the Cave of Wealth look like? We always have to answer this question when reading anything about the systems we depend on to create or regulate the flow of 'wealth'. Stocks and bonds are pieces of paper that are processed by humans and computers. Their relative level of wealth is very uncertain and shifts like the desert sands in the sighing night winds. The guardians of these various chambers in the Cave of Wealth call themselves 'wizards'. They know they are dealing with magical things and via joint efforts can assign values and purpose to all that they control. These wizards are supposed to be the gatekeepers who protect our joint wealth.

But they are sly and self-centered. They love to rig things and do riddles and such. They are also prone to playing games with gods and dragons. Always greedy and seeking some advantage over the masses of humans and giants working up above in the sunshine, these wizards hammer away in the darkness, seeking errors to exploit. They hope that gullible humans would say, 'Oh, you made a mistake,' or 'It takes you five days to process my check?' etc. I am old enough to remember the pre-DTCC days when stock certificates had to be moved from one broker to another. My previous husband had summer jobs working on Wall Street as a courier carrying these pieces of paper from broker to broker. He would go to the outer edges of the trading floor and wait to be called by a frantic trader and then would run off with a scrap of paper to some broker's office. A guy with the legendary green eyeshades would fetch the appropriate stocks from a big, fancy safe with lots of gold trim and pass it through a grill and he would have to sign off and put it in a pouch and physically carry it to the destination where the process was reversed. This took so much time, by the end of the day, there were stocks still not finished with this fetch and carry.

Eventually, during the run up to the big stock crash that ushered in the stagflation years where stocks were flatter than a pancake on a hot tin roof, every Wednesday the market had to close! Totally shut down so the young boys could run back and forth and finish moving stocks to their rightful owners who paid for them. Well, the Big Brains in charge of things said to the governing board, 'Let's build a house of bricks and the Big Bad Wednesday Wolf who shuts us down every week will huff and puff and we can still trade stocks!' So they built this big, brick and marble tower and locked the doors and not even young men wishing to get a start on Wall Street ever touched a piece of paper being traded again.

And when this new system happened, did the time lag between buying a stock and ACTUALLY GETTING IT vanish? HAHAHA. Being greedy, vicious monsters seeking eternal wealth with no labor or even ownership, the guys who set up this system said to each other, 'Those foolish humans and working giants are stupid. We will tell them that even though ALL the stocks are held now in our new brick and marble tower that looks like the Cave of Death, we will pretend that it STILL takes DAYS AND DAYS to process the paperwork and settle affairs! HAHAHA.' So they continued to pretend that it took at least 3 or more days to move the actual stocks into the hands of the actual buyers. Just like bankers, when computers removed all need to process mere 'money', pretend to this very day, it takes them several days to communicate with other computers that have electronic 01010s. Why, they have to use boys like 100 years ago to carry the bags to the front door and the the Brinks guards have to carry it to the other banks, etc! HAHAHA. Of course not. But it is a great fiction that allows banks to use our money for a few days on the overnight LIBOR markets which is yet another ancient thing that used to take time and now takes only a micro second to operate.

We see a pattern here: upgrade and modernize, speed things up to light speed or faster while at the same time, tell all the people being ripped off that the system is very slow and ancient and has many barriers to speed. Then, exploit this time frame ruthlessly to enrich the people who are 'in the know.' How simple is this? And it is also fraud, a swindle and totally evil. Thus, the childish glee this gives the wizards pulling off these tricks.

Now off to 0% interest heaven, Japan.  Japan loved to pretend they were not involved in all this. But they were and still are.  I would suggest, they are the deepest, darkest corner of all this.  We got the news the other day that the LDP, the dictatorial power base of the children of war criminals, has decided not to have any elections until after the economic crisis is over.  Think about this: for the last 16 years, Japan has complained about being in this depression while their export industries have ballooned and have taken first place in many industries!

Well!  Japanese workers have been utterly crushed by the LDP.  They are in severe decline and now are even unable to have babies!  This is going to annihilate the Japanese people in the long run, literally and physically.  Another group being robbed there are savers.  Saving when the interest rate is 0% is impossible.  So desperate savers had to go to con men for help.

Fears mount in Japan over complex yen products

Traders in Tokyo have given warning that about $90 billion (£55billion) of complex foreign exchange products, sold mainly to Japanese households and institutions, are on the brink of falling “like a house of cards”.

A rescue effort by the product issuers - large Japanese, European and American investment banks - is expected to involve extensive hedging measures that will throw global currency markets into even deeper turmoil.

The products, which are known as power reverse dual currency notes (PRDC), were sold to Japanese households as simple products offering higher yields than regular savings but the bonds were in reality hugely complex structures “with 15 moving parts and multiple points of pain”, derivatives experts at RBS in Tokyo said.

The products combine exposure to foreign exchange, interest rate differentials and domestic inflation and have formed a small but potent part of the so-called yen carry trade - the borrowing of yen to invest in currencies offering higher interest rates - a gambit thought to have financed huge amounts of global risk-taking in recent years.

Gads! I read a lot of news and I missed this 'PRDC' product!  The name absolutely REEKS of the Outer Darkness!  Power...that is the Ring of Power, the Rhinegold, the Ring of Doom, Draco, it is dangerous to wield.  Reverse: in the Outer Darkness, up is down and in is out.  Magic is all about reversals!  Lightning is reversals!  Yin and yang is magical.  Dual: duality is the Twins.  This is the force of duplication and duplicity.  It is also yin and yang.  Then there Currency: this comes from the word to flow!  It is red ink.  It is NOW at the same time.  It flows yet it is the point of time when reality is actually happening, it is the connection between the Dire Twins, Future and Past, it is the connection between the goddess of Inflation and the goddess of Deflation.  Life and Death.

So...when we see such a collection of dire, amazing, magical names to describe a dark pool, impossible to explain entity...try explaining credit default swap derivatives!  I spend hours trying to explain this and other amazing concepts.  The best method is mythology and cartoons.

Note the last sentence of the paragraph I highlighted above!  This gambit of the Japanese FINANCED HUGE....HUGE...HUGE AMOUNTS OF GLOBAL RISK-TAKING...'  Thank you, Bloomberg News, for admitting what I have yelled about for years and years!  Everyone in the US media looked to China for causing trouble for us.  It wasn't China, it was never China.  It was Japan.  This banking collapse is the fault of the Bank of Japan, not desperate Japanese housewives struggling to stay afloat.  

They are VICTIMS.  The Japanese workers are VICTIMS.  The trouble makers are the LDP and the Bank of Japan working in collusion with the central bankers in Europe and America: the G7 and the G7 leadership.  And the Bilderberger people as well as the assorted other Real Rulers.  Whew.

Treasury, FDIC Said to Consider Guarantees to Stem Foreclosures

(Bloomberg) -- The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said. The plan, which might put as many as 3 million homeowners into affordable loans, would require lenders to restructure mortgages based on a borrower's ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said.

Lower rates for five years and then raise them?  HAHAHA.  Won't work. Has housing in Japan climbed after the Japanese made a huge bubble at home?  NO!  Now that they flooded the entire planet with EXACTLY the same financing that destroyed Japanese housing values, will we recover?

No...unless we destroy the value of the dollar so it is cheaper.  This is called 'inflation' and we just went through a very nasty wave of this sort of inflation.  And it is not gone, it is gathering power to hammer us yet again.

Oil, Copper Lead Gains in Commodities on Outlook for Rate Cuts

(Bloomberg) -- Crude oil, copper, wheat and sugar led the biggest commodity surge in at least five decades on expectations that lower borrowing costs will aid a rebound in demand for raw materials.

The Reuters/Jefferies CRB Index of 19 raw materials rose as much as 6.4 percent, the most since at least 1956, when the data begin. China, the world's largest consumer of industrial metals, cut interest rates for a third time in two months. The U.S., the biggest oil user, may lower its benchmark rate to 1 percent today, according to the median forecast of economists surveyed by Bloomberg.

What a shock...NOT.  I lived through this in the seventies!  I remember that time.  Has everyone forgotten?  We didn't see one wave of inflation, we saw many waves.  And everything didn't go up in tandem, things fluxed from one item to another.  This wave motion was very restless due to everyone desperately seeking to escape it.  The main thing is, whenever the government tried to bail out the economy via cheap lending, the inflation waves would slosh over very suddenly and usually, in horrible places like food and fuel!

And here is another old story of mine from exactly one year ago.  

Gross DOMESTIC Product Is Up But This Is INFLATION

Culture of Life News, October 31, 2007: More news about and from the Federal Reserve. Stocks are up today based on this 3.9 growth rate of our GDP. Like all the lies surrounding our finances, using the GDP rather than the GNP is typical. It counts the spending on inflation-ravaged items to be 'commerce'. Inflation, not our economy, is growing, of course. So time to talk about all this and what it means as the world slides into an obvious recession caused by high inflation of raw materials and energy.

Isn't it pathetic?  When the government was boasting that all was well, I said, 'This is not consumers being stronger, this is INFLATION.'  As usual, I was right. The need to lie is part of the evil of being a criminal.  Criminals lie.  Libras tell the truth.  Take your pick.

Email this post

And here is another video of the rear end of the Wall Street Bull at the top of the story. It is mildly dirty so click on it only if you like to have a ball. Culture of Life News Main Page

Typepad's Service SUCKS

October 31, 2008

Elaine Meinel Supkis

Here is my last Blogger posting from March 11, 2006:

 I am leaving Blogspot.

Click here for the new Culture of Life News.
Blogger has been limping along for quite a while. They promised us, the last big crash, all was well and they had new systems.

Well, these systems failed hugely in the last three days leaving my news service in tatters, fouling up the postings and in general, making life impossible. So I decided to move over to "pay for" service which means I can communicate with someone when something happens. Blogger didn't even have the decency to inform us what was going on when the system crashed this last three times.

I am sorry about forcing regular readers to change URLs and do all the annoying updating but I hope this is the last time this news service has to pack the bags and move. There will be some instability here until I and my progeny rearrange the cyber furniture to fit my particular style and needs so in advance, I'm sorry for any inconvenience or difficulties.

Since this site isn't free like Blogger, I have added a "Tip Jar" for anyone interested in making donations. Everyone on line is looking for this. My overhead is under $25 a month, the time I spend posting and doing art is a whole different subject. My ability to produce swift artwork has vastly improved while posting this news service during the last year. Anyone interested in commissioning cartoons can contact me at emeinel@taconic.net.

I hope this will be a much better blog when I am done. I have some ideas as to how to build it. And any suggestions, criticisms, wittisisms or whateversisms readers want to inflict on me, go right ahead and unload on me!

Just don't mistake me for a quail! Heh!

Support Ticket Details:

Subject: Your new program has BUGS!
Category: Weblogs - Posting
Status: Awaiting Staff Response

---

Ticket Transcript:

On Oct 30, 2008 11:09:02 AM, you (Elaine Meinel) said:

No one answered my last email so here we go again:

Bug city! Sometimes, when I go back and forth between HTML code and the new system of posting, I get a million 'bigs' so everything balloons in size when I hit 'save'!

Also, I now see that you lock up the posting after I post it, it can't be amended????

WHAT THE HELL??? This happened to me today. I post something and when I see it on my blog, I sometimes want to change something later. Only I can't even click on the 'rich text' icon, much less, the 'Edit HTML' icon!

Luckily, I have taken to saving my HTML coded stories before publishing due to your bugs. But this is INFURIATING! I could amend a story several times after publishing under your old system.

I liked the old system MUCH MUCH more than this since I can do some simple coding. The new system is sucky. I pray you restore our ability to amend a story or this will be the last straw for me. I hate moving my site because it confuses readers but I will do this if pushed very hard and gads, you guys have made my life a total misery. I used to relax while posting, now, I am filled with rage.

On Oct 30, 2008 5:28:32 PM, TypePad Customer Support said:

Hi Elaine-

We replied to your previous ticket reporting this same issue on October 26th. At Control Panel > Help > Open Tickets, you can view and reply to our response.

Are you able to use the Rich Text (simple) editor? From the Compose page, click on the Display Options link in the right column. Select to use the Rich Text (simple) option and reload the Compose page. More information on using the light editor is available here:
http://kb.typepad.com/id/1288/

Additionally, the post here:
http://elainemeinelsupkis.typepad.com/culture_of_life_news/2008/10/the-true-nature-of-banking-is-not-lending.html

includes two open div tags which are causing problems with the display of the page. The open div tags are pushing the right sidebar to the end of the post. To correct the post, go to Weblogs > Posts and click on the title of the post. Then, click on the HTML tab and remove the 2 <div> tags which are included before the start of the last two paragraphs. Save changes to update your blog.

We apologize for the problems you are encountering, and any information you can provide will help us to troubleshoot the cause. Please let us know if you have any other questions.

Thanks,
Jen

On Oct 31, 2008 5:38:11 AM, you (Elaine Meinel) said:

You obviously refuse to understand what is wrong! Those 'div' pieces of junk are YOUR FAULT. They appear BECAUSE IT IS SCREWY!!!

Not only that, one time I hit 'save' and the entire posting VANISHED!!! I did nothing weird.

On top of that, even when I do the same thing each time, the results are slightly or obviously different. The spaces between paragraphs are RANDOM.

The 'big' and 'small' size of script changes RANDOMLY. I never know how the end result will look!

I DESPISE using your new 'rich text' system. Call me old-fashioned but using my regular HTML template was far, far, far FAR better, easier and saner since it produced a regular result.

I seem unable to impress on you the urgency to pass my very loud objections UPSTAIRS TO YOUR BOSSES. What does it take? Should I threaten even louder, to leave?

Leaving is bad for me, I had to leave blogger because they were crummy. They screwed up my archives and ahem...lost postings when I clicked on 'save' etc.

Now, you are the same! Crummy messes due to YOUR coding difficulties. I swear to god, I have been reduced to constantly clicking and dragging my postings to my desktop before hitting 'save' because I never know what the hell is going to happen.

Yesterday, for example, after hitting save and then preparing to post a cartoon, I found that all the postings were locked both out of rich and HTML so NOTHING could be edited and I couldn't access the HTML at all!

THIS IS YOUR ERROR. THIS IS YOUR, not my, BUGGINESS! YOUR SYSTEM SCREWED UP.

Instead of addressing this, you tell me to read your instructions again. When I hit 'save', this sort of stupid thing is NOT supposed to happen. Got that? Not only that, ever since you did this to me, my web pages act rather strange with side bars shifting mysteriously, etc.

It should occur to you that something is wrong at your end of this deal, not mine. I posted happily and with rare problems in the past especially since I did my own internal coding. I could with great ease, put up very complex stories.

Now, it is a total nightmare and infuriating. You guys should have provided us with the alternative of keeping the old coding. I have no idea why you changed this system WITHOUT ANY INPUT FROM US OLDER USERS.

Can you understand what I am saying? The new system is great for beginners who don't care about systematically posting complex stuff. It is hell for people like me who puts in 10 links and often three or more illustrations each posting. It is hell for me because I do all sorts of color box codes, etc. If you take a look, you can see how complex my pages are.

l am a paying customer who uses the highest level of service. I will continue for a few more months, posting at Typepad but I am also going to write a scathing review of your service along with preparations of moving elsewhere.

Maybe you don't care. I would not be surprised. This is how business is conducted these days: to hell with the customer. Blogger was very snooty with me 'because we are free' so they didn't give a hoot.

But you guys! ARRRGH. You better give a tiny hoot about this. Restore the ability to use HTML without making it hellishly unstable or I leave. Period.

Notice how Typepad's staff absolutely refuses to understand my fury, my complaints. This is classic. Many businesses do things because they think they are nifty or neat. When older customers are greatly inconvenienced by this, they tell them to go to hell, basically.

I use this new system as it is set up and not only does it have obvious instabilities like making things vanish, for example, the new system has severe limitations for editing. In the old system, the full HTML was hidden and only my personal HTML additions showed up. This included the all-important spaces I inserted by simply clicking on the 'return' key while coding.

Now, I have to code in these spaces with the div and p icons. Not only that, the HTML text shows up as one big, fat, continuous mass of text and finding ANYTHING there is like looking for a needle in a haystack!

The staff refuses to understand how irritating, hideous and stupid this is. I had to go into the HTML text to put in my own coding for this story and it was a total headache, a nightmare. Last time these idiots fiddled with the systems, they messed up my ability to click and drag, internally. I used to be able to move things around easily and the posting box would scroll as I moved text around. I DO THIS A LOT.

So starting about three months ago, they decided to make this impossible. I cannot fathom why. But these programmers decided unilaterally to do this crummy thing to me. I complained and not once did they address the fact that they changed a useful tool!

So it is this round: they simply think all I need is to get used to their new system. Except it is very difficult to edit or control the postings with the new system! It is a pain in the ass. Posting this story involved me trying to figure out how to get above the link to write in the header. And for some bizarre reason, the system insisted on using 'bold' rather than normal text! INFURIATING. And I couldn't change it! I never clicked on the blasted 'bold' setting!

I am going to email a link to this story to show these guys running Typepad, this is no joke. People doing simple blogs with those 'look at THIS!' junk can be happy with the new system that disables us older posters from using the really nice, older system. But it is motivating me to launch my own .com site. I pay a lot for this service and would think that I, not the people using the freebie services, would matter a tad to these people.

The complaint department people should send this story upstairs to their bosses. But I don't know if they have either the wit or the ability to let the top owners of this crummy, irritating service know that I, an old customer from way back, who pays the top price for service, am thinking of departing due to this mess.

Hell's bells! Is the only way to get attention, walking away totally? I have done this in the past! I carry grudges. When a store irritates me too much, I never, ever come back. So it is here. I have been unable to do cartoons lately because of the difficulties posting here. And my neck hurts. The muscles from the shoulders to the back of the head are extremely tight.

Normally, I listen to operas while merrily writing away. All is serene. I even laugh.

Now, I literally gnash my teeth. Good riddance, Typepad.

The True Nature of Banking Is NOT Lending

Otober 30, 2008

Elaine Meinel Supkis

White House press airhead, Perrino, tells reporters that banks exist ONLY to lend. This sets me off on my usual screaming fits since understanding the history of banking and the true mission of banking is at the very heart of the collapse of nearly all banks on this planet. Also, the gnomes are using the rescue funds to line their own wallets. Somehow, this doesn't surprise me at all, nor any readers here. Heh. And time to talk yet again about a very verboten topic: the flood of illegal alien home buyers who bid up housing to outrageous levels and who are ditching their purchases that are mostly only a year or two old, as they flee again.

White House tells banks to stop hoarding money

An impatient White House served notice Tuesday on banks and other financial companies receiving billions of dollars in federal help to quit hoarding the money and start making more loans.

"What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money," White House press secretary Dana Perino said.

Though there are limits on how much Washington can pressure banks, she noted that banks are regulated by the federal government.

Dana Perino was selected for the same reasons her clone, Palin, is promoted by the Republicans: she is an airhead. Being congenially silly, she plays a good bimbo. The previous one who died was a male bimbo clone of Dan Quayle.

First of all, banks do NOT exist to 'lend money.' They exist to make a profit! If lending money brings profits, they do this. But their chief original function was to HOLD money for others. The only people who could get loans were people who had big holdings in these early banks. Say, you were a merchant. You could cycle in and out of this lending/capital creation entity. A peasant couldn't go to the bank and ask for a loan!

This was true for many, many, many centuries. When poorer people wanted loans, they had to go to a loan shark. Even in my own lifetime as an adult, people who had no capital had to go to the Mafia for loans. If they didn't pay up, they had bad accidents. Like putting on shoes with cement and then falling into the East River at night.

The beginnings of lending to people with no capital, no property was very gradual. When someone wanted to buy a house, and I was very much one of these people back in 1970, you had to put at least 20% down to qualify for a loan. If you wanted to buy on a credit card, and I had one of these, you put some money in a bank account and American Express would then give you your own money back plus a small forward amount in emergencies [which cost extra!] for a fee. I paid no interest unless I tapped into the emergency fund. This card was used when traveling, especially overseas.

The first credit cards were very difficult to gain! You had to have a sponsor if you didn't have property. Like, mom and dad, for example. Then, the laws were changed. The government was lobbied very hard by the bankers to change the usury laws. Once this was done, they flooded the US economy with easy debt that was very hard to pay off. This was due to the increasingly high interest rates.

One of the many tricks they use to trigger these rates is, if you accidentally go over your limit, they don't stop the use of the card. Instead, they silently reset the interest rates due on the ENTIRE BALANCE from say, 9% to 33%. Then, the poor person goes into shock when they see the impossibility of paying off these debts.

This happened to someone dear to me. We bailed out this person for this is why families are far stronger than individuals. I am a hearty believer that families should stick together. The lessons were learned and frankly, I was quite enraged that Sears would sink so low as to play this sort of Mafioso game. Indeed, I boycotted Sears for years due to this ire.

The childish belief that banks exist to only produce loans is why our banking system is dying. Perino isn't the only airhead running things. She is typical, not exceptional. There are many ugly airheads around. I see them in the news every day.

The United States believed in saving money in my youth not because it was good but because the banks demanded this before they lent anything. The process of socialization was rather simple. When I was only a child, I couldn't wait until I could deposit my babysitting loot in my own bank account. I kept this account until the beginning of the banking collapse in 1970. Then, I went to Wells Fargo and had a big fight with them and withdrew all my money.

I didn't go into debt to go to the University. I worked from May to September in a local bar and this paid enough to live on all the year and pay for school fees! And go on vacation. And I didn't work five days a week, either. Life was good fun back then. Heh. And I learned a lot about banking and business chatting with my customers who were sex-starved gnomes and so, eager to have a young thing listen to their war stories.

The late 1960's was America's financial high tide. It was quite wonderful, actually. I was able to buy hundreds of classical records, dresses and my truck as well as other nice stuff just on babysitting money, working part time ON MINIMUM WAGES. In college, I worked only part time [much higher than minimum wage] and had plenty of leisure and came out of this with zero debt while living in my own two bedroom house which cost me $68 a month. My utility bills were about $12 a month. My pay was about $75 a week and sometimes a lot more due to tips. A dollar was worth something back then. Rent was supposed to be less than one week's wages, not the present 50% of income we see so often today.

Anyway, before you could buy a house, the bank wanted you to pay back some sort of loan. I was rather pissed about that requirement when I went to buy my first house. I always paid cash for things and saved! I asked the officer, what should I buy? He said, 'Buy a car.'

'I already have a 55 Chevy which I rebuilt, with cash,' I complained. Well, I had to go into debt to pay for my first child's doctor. Then, I qualified for a mortgage! This illustrates how parsimonious bankers were before Ronnie Reagan.

Wall Street Won't Surrender Bonuses Amid Outcry, Veterans Say

(Bloomberg) -- Wall Street's chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.

Odds that Wall Street will forgo the payouts are ``slim to none,'' said John Gutfreund, 79, president of New York-based Gutfreund & Co. and the former chief executive officer of Salomon Brothers Inc. ``They're going to have to be a little bit sensitive because politicians, whether they like it or not, are part of their lives now.''

Gnomes are gnomes. Through and through. They aren't just cartoon characters I created. This is their fundamental nature. They are grasping and vicious. They consider the loss of a penny to be worse than dying. They will steal the silverware and eat you out of house and home before giving up a penny. With goddesses, they are foolishly, deliriously generous. But with the people rescuing them, ie, the US taxpayer, they are churlish and snap back.

'Hey! We own the politicians! Try and stop us from looting you schmucks!' snarl the gnome community as they stuff their sacks and rush home. It is very easy to make Wall Street 'forgo their payouts': arrest them all! Then fine them triple of what their payouts would have been. This would be a sharp lesson to these Mafia wannabes.

On November 22, we will be demonstrating in many cities, I hope, demonstrating our ire about the bank rescue and the Federal Private Banking Gnome Headquarters Reserves.

U.S. Treasury Program Shuns Banks That Need Cash Most

(Bloomberg) -- The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say.

``This has the unintended effect of making the strong stronger and the weak weaker,'' said Gray Medlin, founder of Carson Medlin Co., a Raleigh, North Carolina, investment bank focused on banking deals. ``Banks that are getting bad exams and are under intense pressure from regulators won't be successful in applying.''

I am not surprised by this news. At the Congressional hearings concerning the bank bail bill, officers from top investment banks sat on either side of me and talked with each other over me until one of them suddenly noticed I was writing down what they were saying. Then they clammed up.

They figured, no one would notice a $700 billion bank heist. When I arrived in DC, the firestorm over the proposed rescue plan was so great, all of Congress was seriously worried. Now, they are not so worried. This is bothersome. This being an election year, no one feeds the US political golden goose more goodies than Wall Street and in particular, the banking gnomes. So outrage is rather muted, to say the least.

Instead, we talk about that mythical and fake creature, Joe the sort-of-plumber who now wants to be a country western singer who, I presume, will croon about his sex life going down the drain due to lack of funds.

Unintended effect???? HAHAHAHA. When I was in the earlier hearings about the bail the gnomes out by buying them all yachts bill, everyone talked about all the things that are now going on. Everyone knew that the bill was going to allow a bunch of sex-crazed gnomes to raid the public till. There was talk about stopping this and having the bail out be strictly so that US people could pile more debt onto our homes and businesses.

Instead, it piled more loot into the bank vaults of a bunch of pirates. Was this unexpected? Well, back in September, I wrote about the funds given to both GOP and DNC members in Congress. It was a huge amount going to the regulators who have to please this army of well-heeled bribesters.

Banks to Continue Paying Dividends Bailout Money Is for Lending, Critics Say

U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

*snip*

Critics, including economists and members of Congress, question why banks should get government money if they already have enough money to pay dividends -- or conversely, why banks that need government money are still spending so much on dividends.

The deal is, the rescuing entity will get dividends. See? So the government lends money at insanely low rates, not credit card rates, takes on ALL LOSSES and then, on top of this, guarantees all dividends of what are essentially bankrupt banks? HAHAHA. This is not a great way to get rich, incidentally. The dark arts of going bankrupt have, through history, been the only way to fix broken businesses or banks.

The tragedy of the Soviet State was, they couldn't let any businesses go bankrupt. So the entire nation went bankrupt. Not exactly a good outcome. I keep pointing out that the US is becoming the Soviet Union. These bail outs are obviously right in step with Soviet thinking. Torturing people,indefinite imprisonment,running gulags, limiting public protests, tasering peoplefor asking 'interesting questions,' throwing away the Constitution, concentrating power in the White House Kremlin clone, etc: we even are fighting a futile war with the very same Afghani groups that destroyed Soviet power!

And here is McCain and Palin claiming that Obama is a communist. HAHAHA. I wish he was a Chinese communist! They seem to know exactly what capitalism is! The present regime in DC is utterly clueless about what capitalism is or what banks are.

The government is in collusion with the people who destroyed not only our banking system but who conspired to turn traditional banking into a debt machine. A machine that has ground out endless red ink, red ink that is killing our nation and drowning the world with cheap dollars. Note how much I paid in rent for a two bedroom house, not apartment, with a yard and a place to park my truck!

Reserve Fund’s Investors Still Await Their Cash

The national “bank holiday” that ushered in the New Deal in 1933 locked up the public’s cash for four days. The crisis that hit last month at the Reserve Fund, the nation’s oldest money market fund, has frozen hundreds of thousands of customer accounts for more than six weeks — with no sure end in sight.

At least 400,000 people, and perhaps as many as a million, can’t get access to their savings, a problem that has quietly persisted in spite of widely publicized federal efforts to restore confidence in money-fund investments.

*snip*

And the Reserve Fund had seemed the least likely candidate for trouble, given its long and stable history — its founder, the legendary Henry B. R. Brown, had invented money market funds.

Initially, the company simply announced that it would delay redemptions from the Primary Fund for up to seven days, as allowed by law. Customers were somewhat reassured, but anyone trying to get additional information was met with busy phone lines and unanswered e-mail.

First, let's go to the web page of this ponzi scheme operation and look at two press releases:

Here is The Reserve's press release from September 16, 2008:

The Board of Trustees of The Reserve Fund, after reviewing the unprecedented market events of the past several days and their impact on The Primary Fund, a series of The Reserve Fund and taking into account recommendations made by Reserve Management Company, Inc., the investment manager of The Primary Fund, approved the following actions with respect to The Primary Fund only:

The value of the debt securities issued by Lehman Brothers Holdings, Inc. (facevalue $785 million) and held by the Primary Fund has been valued at zero effective as of 4:00PM New York time today. As a result, the NAV of the Primary Fund, effective as of 4:00PM, is $0.97 per share. All redemption requests received prior to 3:00PMtoday will be redeemed at a net asset value of $1.00 per share.

Effective today and until further notice, the proceeds of redemptions from Primary Fund will not be transmitted to the redeeming investor for a period of up to seven calendar days after the redemption. The seven-day redemption delay will not apply to debit card transactions, ACH transactions or checks written against the assets of the Primary Fund provided that any such transaction from an investor, individually or in the aggregate, does not exceed $10,000.

The Primary Fund will continue to accept purchase orders.

Effective tomorrow, September 17, 2008, the NAV for the Primary Fund will be calculated once a day at 5:00PM, New York time.

Here is the death notice:

Here is the press release just one month later, on October 27, 2008:

Many shareholders have contacted us regarding the status of their investments in Reserve funds. We hope the information below answers some of your questions.

Suspended Purchases:

We are not accepting subscriptions in any of the Reserve Funds.

Suspended Redemptions and Liquidating Funds:

The U.S. Securities and Exchange Commission (SEC) has issued temporary orders permitting the suspension of all rights of redemption for the following funds:

PRIMARY FUND U.S. GOVERNMENT FUND of the Reserve Fund

*INTERSTATE TAX-EXEMPT FUND* CALIFORNIA MUNICIPAL MONEY-MARKET FUND

* CONNECTICUT MUNICIPAL MONEY-MARKET FUND* FLORIDA MUNICIPAL MONEY-MARKET FUND* MICHIGAN MUNICIPAL MONEY-MARKET FUND

* NEW JERSEY MUNICIPAL MONEY-MARKET FUND

* OHIO MUNICIPAL MONEY-MARKET FUND* PENNSYLVANIA MUNICIPAL MONEY-MARKET FUND

* VIRGINIA MUNICIPAL MONEY-MARKET FUND of the Reserve Municipal Money-Market Trust II

* NEW YORK MUNICIPAL MONEY-MARKET FUND of the Reserve New York Municipal Money-Market Trust

* ARIZONA MUNICIPAL MONEY-MARKET FUND* MINNESOTA MUNICIPAL MONEY-MARKET FUND of the Reserve Municipal Money-Market Trust

* RESERVE YIELD PLUS FUND of the Reserve Short-Term Investment Trust

The Boards of Trustees (the “Boards”) are working on plans to effect the orderly liquidation of the foregoing funds, subject to supervision by the SEC. The Boards seek to ensure that all investors are treated fairly and receive their money in the shortest time consistent with realizing the fair value of the securities. The Reserve intends to begin making payouts as soon as practicable.

In other words, the fund is bankrupt. Note how it was cleverly named to make it sound like these government funds were bonds held by the Federal Reserve. This is a common problem. Bankers would name their banks after government entities like 'The Bank of New York' but they are really dangerous private enterprises. Not that they are really that anymore, anyway. Now that the bankers have raided the Treasury to get their bonuses and dividends!

Usually in a collapse, the first funds to tank are those which appeared the safest. This is yet another typical example. This, the oldest of the Funds which are destroying global savings and wealth, was slain by the Derivatives Beast. He ate the whole thing. When he ate Lehman Brothers, nothing was left, barely any bones!

These funds were quite ordinary. And thus, not all that profitable. When inflation raged ahead of the value of these instruments, the desperate fund managers wanted it to grow, anyway, so they played those stupid, useless and destructive credit default swap games. And interest rate flux games. And monetary values market games. And lost their shirts! This sort of hyper-risky activity is due to the dollar dying! And what is killing the dollar?

Hyperlending. Especially to governments. And the wildest borrower is Congress and the President of the US. The same people putting another trillion plus debt on top of the ten trillion mountain of debt we already owe.

Barclays Seeking Bids on $4.5 Billion in Bonds and Credit Swaps

The average hedge fund has lost more than 18 percent this year, according to the HFRX Global Hedge Fund Index. Managers are selling assets to meet demands from lenders for more collateral and investors that want their funds returned.
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Investors forced to sell a record $2.3 billion of leveraged loans this month sent prices tumbling to a record low 66 cents on the dollar last week from 88.5 cents at the beginning of September, according to Standard &amp; Poor's LCD, which earlier reported the Barclays loan sale. The sales were forced by clauses in funds' borrowing agreements that require them to raise money when prices drop below a set level.

In other words, the gnomes have to return the loot to the investors who want to run away as fast as humanly possible. When I rented my house for $68 a month, there were zero hedge funds in the universe. When the average American had to cough up $3,000 a month to rent homes, we had thousands of these hedge funds. There is a direct connection here.

Old banks were very parsimonious about lending for housing. The flood of debt that poured into all markets due to hedge funds funneling loans from 0% Bank of Japan to our markets has destroyed the value of the dollar. This is because the Japanese wanted to destroy the value of the yen so they could destroy our industrial base.

To keep the yen weak, the Bank of Japan had to make the carry trade flourish. Note how, when the yen got strong, the carry trade ended and LIQUIDITY VANISHED ACROSS THE PLANET! And all these funds have been caught in the wringer here. They are the funnel for these outrageous loans. The Bank of Japan didn't give a hoot how improvident the lending was, they lent to anyone.

It should occur to people that the Bank of Japan did this before! Like, a decade earlier. They cheerfully handed out loans all over the place and Japan's property and stock markets had a monumental bubble. Then, the Bank of Japan turned and did this to the entire planet. The US wasn't the only place that saw epic real estate and corporate debt hikes. The housing bubble was pretty much global.

CNN: Price declines picking up

Of course, the August indexes don't reflect the financial market meltdown that hit in September and severely restricted access to credit, according to Richard DeKaser, chief economist for National City Corp (NCC, Fortune 500). He believes the pace of price declines has picked up since then.

"There are two explanations for these steeper declines," he said, "neither of which are encouraging. One is that the difficulty in obtaining credit has further constricted demand. The second is that home sellers are finally capitulating on prices. They've been holding out for months, refusing to sell except at their prices. Now they're throwing in the towel."

*snip*

Much of that statistical trend is being driven by data from hard-hit western states like California. The California Association of Realtors reported last week that home sales volume jumped a whopping 97% in September compared with the same period a year ago. But the median price of an existing home has fallen 41%.

Like the huge Japanese bubble, all these bubbles are going flat the same way and at the same rate. The US led the pack only because we were showered with the most red ink in the past. Attempts at restarting lending under these circumstances is impossible. But fixing this is even more impossible if the Bank of Japan isn't punished for what they did!

PUNISHMENTS MATTER!!! For example, the other G7 could condemn the Bank of Japan and isolate it. Forbid all commerce with it until it is thoroughly reformed. This means, first shutting down all the pirate coves which were the places that took the carry trade loans and sent them to various countries to load up debts. The US public financed a great deal of our debts via inflating the value of our homes. So now, we are rapidly losing wealth. 0% loans on homes are not happening. Even as the Fed drops rates, house loans are going up, not down, the interest rate mountain. This is due to the simple fact that everyone sane expects future inflation from all the money creation.

Meanwhile, Libra resets her scales in a rather violent way. As we plainly see. The Derivatives Beast is doing an epic job of eating up credit. Unwittingly, the gnomes themselves birthed this monster. And they want us to slay it for them. And then resume the financial games they played with Japan.

Click here to see video of abandoned houses filled with things bought on credit and then left behind: Foreclosure Alley

By Correspondent Lisa Ling

For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

SoCal Connected tracked down some surreal sights associated with the crisis - a company that specializes in removing whatever people leave behind in their foreclosed homes. The process is called a “trashout” - a term the company came up with because it perfectly describes what happens. Everything that’s left is dumped in a trailer and taken to the landfill.

Several things are important here and seldom talked about. One is, the US consumer has grossly over-consumed. The video above is most infuriating. I have scavenged all of my life. Dumpster diving is great sport! Rich or poor, I could never resist dumpster diving. Watching them simply throw away perfectly good, often new, stuff, is amazing. They couldn't get anyone to come and get it!

I am just aghast. The people living in mostly new houses here in this video went on massive decorating/buying sprees after going very deeply into debt, buying the house on easy credit. When they couldn't pay even TWO YEARS of this high-living, they hightailed out and leave nearly everything behind?

Another thing struck me: nearly all the stuff was new. This means, they probably had very little belongings when they moved. I have moved a number of times and each time, required a moving van after age 28 years old. The real estate boom of the Sub Prime years which were from 2004-2007 were not normal house buying years. This was the period whereby banks who forgot the real rules of banking, were anxious to hand out loans to total strangers who didn't have to prove income or even citizenship.

The Hispanic community of illegal aliens believed that if they owned big houses, they would be able to force the government to hand over citizenship even though they jumped the lines in, so to speak. They came illegally. Here is a New York Times graph that clearly shows how this worked:

Note first of all, both Black purchases of homes and general population purchases began a steep decline in 2004. And was NEGATIVE during the HEIGHT of the bubble! On the other hand, the flood of often illegal Hispanic buyers shot up that very same year! Everyone else was exiting the markets because housing was too expensive. Were Hispanics suddenly earning much more than the general population?

NO! But they happily took on epic levels of debt in the hopes of gaining citizenship. Whole real estate businesses were predicated on luring them into very expensive homes. Most sane people would take one look at the high future rates of the various lending tricks and shake their heads and hold onto their purses. But not illegal aliens seeking to prove they had roots!

In 2005, I published a story declaring the housing boom had peaked. And I was right except for this one sub-market of buyers. The very reckless buyers who interfaced with very reckless bankers who took cynical advantage of their weakness.

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0% Global Interest Rates Totally Destroys Banking

October 29, 2008

Elaine Meinel Supkis

World stock markets are shooting up like a rocket based on the perception that the G7 central bankers and politicians will restart the destructive status quo that involves the US allowing the flood of exports to enter our country and devastate our industrial base. Great news, eh? All this will be fed by an orgy of 0% financing. Sounds like all those auto commercials. As we watch the entire concept of banking go into this moral collapse, it pays to look closely at the deals we are accepting here. Just like those auto loans at a fake 0% interest rate: read the fine print and see the truth.

Three-Month Libor for Dollar Falls to 3.42 Percent, BBA Says

The comparable euro rate fell 2 basis points to 4.83 percent today, the 15th consecutive decline, BBA data showed.

The LIBOR rate is finally falling. Or so hope our foolish experts. If only they can get this low enough, all will be well! I recall, during the previous 20 years, everyone who pretends to be economic experts marveled at how cheap credit was and how low inflation was, that is, after the 1971-1982 waves of increasingly bad hyperinflation.

I lived through this entire span of time as a working mother who had to cope with these waves of inflation as well as swimming in the real estate shark pool a lot of the time. So I always was hyper-aware of the interest rate fluxes. Also, we did business overseas so we were aware of currency valuation fluxes, too. Since this is personal and not something I read in a book, I have vivid memories of my problems during this time and how I coped with these sometimes, huge problems.

From 1971 onwards, as the US government and the private banking conspirators in the Federal Reserve struggled to keep the economy growing while piling up huge debts thanks to wars, the goal was always to have credit as cheap as humanly possible. The business about 'taking away the punchbowl when the party gets interesting' was just pure propaganda.

At no point has this ever happened. In the past, the Fed raised interest rates whenever anyone overseas came to knocking at the front gates of Fort Knox, demanding their new-minted dollars which often were created overseas via lending, be turned into physical gold. For example, when the Fed dropped interest rates to restart the US economy after the Great Crash of 1929, France merrily made loans in France based on their DEBT trade with the US and then they raided Fort Knox for gold! Even as the government was demanding the US bankroll Germany's reparations by lending to Germany so Germany could give these dollars to the US and then France would take these same dollars and trot back to the US to demand gold!

Now, we don't care about any of this since Europe tried this yet again in the 1960's and drained away 75% of the gold at Fort Knox. Now, we simply have no gold peg. Nations now live with this floating currency game which is making many people very rich and even more people, very poor.

The LIBOR rates are now dropping but are still hundreds of basis points above the fake rates set by the central bankers. The news that the LIBOR has dropped has to be offset with the news that the LIBOR drop hasn't even begun to catch up with the rate of artificial drops being engineered by the punch bowl boys in the central banks.

Fed May Cut Rate to 1%, Signal Steps to Save Economy

(Bloomberg) -- The Federal Reserve may lower its benchmark interest rate to 1 percent today and signal further reductions to levels unseen since Dwight Eisenhower was president.

Tumbling commodities prices and weaker consumer spending are slowing inflation, which officials described as a ``significant concern'' at their last scheduled meeting in September. Tomorrow, the Commerce Department will probably report that the economy shrank at a 0.5 percent annual rate in the third quarter, the most since the 2001 recession, economists predict.

The Fed ``will be very aggressive,'' said Mark Gertler, a New York University economist and research co-author with Fed Chairman Ben S. Bernanke. ``Inflation risks are off the table'' and ``the issue now is how bad the recession will be.''

World stock markets shot through the roof on wishful thinking that the US public will have access to 0% financing and thus, be able to buy, buy, buy more stuff. I shall disabuse everyone of this notion. It isn't going to happen.

But first, I have to address a philosophical issue today: the central bankers are destroying banking in their looney game of trying to control economies via interest rates! The role of bankers is rather simple: they have to balance the creation of credit with reserves and savings! They don't sit down and say, 'Should we make the economy hotter?' They shouldn't decide, unilaterally, 'We should cool the economy, it is growing too fast.'

They have one job: to preserve the reserves and to grow it so it keeps up with credit creation.

This is what has failed! This is why all banking is now collapsing! This is a total failure of the entire philosophy of the concept of central banking! The ebb and flow of interest rates is due to trade issues and wars. And the only role the bankers have in all this is to raise the rate's basis whenever they notice that someone is borrowing too much and is becoming a credit risk.

This means tracking statistics and this is in particular, the M3 stats that Bernanke just cloaked in obscurity. When there is too much debt, the chance of going bankrupt rises in direct proportion to the climb in borrowing. Red flags appear and to stop the madcap borrowing, the bankers are supposed to raise rates! How simple can this be?

Well, the mandate of the bankers is NOT to protect our savings. That is obvious. Savings are always sacrificed on the altar of 'growing the economy' via debt creation. Since no one ever wants this faux growth to stop, the tendency is to keep interest rates below the rate at which it can attract enough savings to capitalize the banking system.

The globe has collectively decided this month that savings will not be encourage, spending will be encouraged, no matter what. So the savers of the world will be asked to gain nothing while they don't spend. And wild spendthrifts will be encouraged to run riot even more. And no nation is more spendthrift than the US.

Consumers Feel the Next Crisis: It’s Credit Cards

After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers. The pullback is affecting even creditworthy consumers and threatens an already beleaguered banking industry with another wave of heavy losses after an era in which it reaped near record gains from the business of easy credit that it helped create.

Credit card companies are allowed to charge ruinous interest rates on easy credit. The fewer questions asked of people being lent money, the higher the interest rate charged against them. The flood of no questions asked lending is leading to a flood of defaults. Credit cards don't mind this, the fees they gain when people fall behind are even greater than the interest collection rates.

Most people pay only the interest on their credit cards so it is pure gravy. A $1,000 purchase can gain a $3,000 profit for the credit agencies.

Anger at 222% Christmas credit card

Major high-street retailers are targeting poor families with bad credit records to prop up their Christmas sales during the credit crisis.

Dozens of high street stores are taking part in a doorstep lending scheme which charges poor families extreme rates of interest. Woolworths, Comet, B&Q and Mothercare and 92 other retailers have been accepting vouchers that are repaid by borrowers at an annual percentage rate of 222 per cent – more than 10 times the rate of a credit card.

Nearly exactly a year ago, I wrote about oil, inflation, interest rates and international central bankers messing around with global trade. The entire article including the data I published is one of my more important stories. The entire efforts of the trade circle of the EU/US/UK and Japan, the G7 group, was aimed at stopping the banking collapse by pouring into the gaping maw, not savings but money created by the central bankers. I was totally against this. I correctly said, the important thing here is to reorganize global trade so it is balanced.

October 30, 2007 Federal Reserve Wants Infinite Debt And Low FOREX Reserves

One of our readers sent this link. I was curious about it since it involves tidbits of data. Like a cat's paw marks on wet cement...ever pour cement? At night, all the animals come to walk on it. When I poured the cement floor to my basement, the dogs, cats, a deer and one horse hoof print appeared at night on it. I didn't fill them in, they amuse me. Anyway, in the banking system, things have to run 24/7 so the Federal Reserve is always open for special solicitations for funds. Generally speaking, banks prefer to make deals with each other and not share 'business' but when business involves working with stinky things like trashy tranches, the Fed is the bank of last resort.

The other time of mega-high rates was in 1980 due to the Iran oil boycott and hyperinflation at home. Unlike Greenspan, Volker raised rates to equal the real inflation rate. I genuinely believe that virtually no one remembers this time period. I remember because I had to do business via barter back then due to high rates. Certainly, I couldn't call a banker. And that was also when banks gave me trouble with money I deposited. They held onto it for as long as possible while I wanted it as fast as possible. Check clearing took forever.

Remembering all this, we look at that 15% deal in mid-October with a sens of foreboding. When there was this sudden hike in the overnight funds meaning that someone came slinking up to the Fed window with a bag of cow droppings, they couldn't get anyone to give them lending loot except at a very high rate indeed. Namely, someone thinks these guys who are probably attached to some pirate ship out at sea, are not long for this world. Too bad we can't tell who this person is. As I keep saying, despite the claims that we have an open system, it is very much 'insider trading' all the time. We get to know enough to think we know what is going on. But this is an illusion. Here it is: we are in trouble due to wild lending at super-low rates leading to the bidding up of various assets and things of every imaginable sort from the futures markets to stock markets, housing markets, etc. The entire problem came about due entirely to the Federal Reserve dropping interest rates lower and lower back in 2001 starting from January 6th of that year. Previous to the election, they tightened the screws, claiming there was inflation even though we were obviously in a recession. Looking at all the data 7 years later, one notices immediately that all the nations of the world went into recession starting in late 1999 and through all of 2000, a time when the Fed raised rates over and over again.

The minute Bush was declared the 'winner' of an election he lost, Greenspan began to loosen rates...right in the teeth of Bush and the GOP irresponibly granting many huge tax cuts to everyone! Then we had 9/11 and rates dropped from a super-low of 3% to a super-duper, mega-low rate of 1%. Right in the teeth of obvious energy inflation. Energy is always a driver of inflation. It doesn't matter what the interest rates are, if energy is rising, inflation rages. This is because energy is a powerful component of all economic systems. From manufacturing to transport, energy is consumed. And as it rises, either wages are cut or profits vanish or both which causes either inflation if both can be passed on or a depression if neither can be passed on and trade and manufacturing slow down.

One of the readers here sent me a link to iTulip.com where one of the members mentioned that the oil crisis of the stagnation years from 1972-1984 was 'fake'. This is typical of many people who were probably too young to remember what happened during those years or were too politically unaware of what was going on back then. My own father was sent to Saudi Arabia in 1974 to be a friendly envoy to persuade King Faisal to cooperate with the US and bring down oil prices.

Instead, the king was simply assassinated and replaced with a man I called, back then, 'The Evil Uncle'. The price of oil suddenly shot up due to wars. The price of oil ALWAYS shoots up due to wars! The more wars, the more the price of oil shoots up. During WWII, the price didn't shoot up because the government rationed oil. During the 1970's, the US again, rationed oil! Who would have thought!

Every time the price of oil is allowed to climb due to wars, we get inflation. This is an iron rule. If people want cheap oil, they can hope for no wars. When Bush and his oil buddies from Texas and Alaska were all agitating for war with Iraq, I warned everyone that this would mean global inflation from high oil prices. And of course, this is exactly what happened!

So, let's go back to Culture of Life News exactly one year ago, October 29, 2007: Energy Drives World Economy Off Cliffs

From Bloomberg: Crude oil climbed above $93 a barrel for the first time, extending this month's gain to 16 percent, after Mexico shut a fifth of its production and the dollar fell to a record low.

State-owned Petroleos Mexicanos, the third-largest supplier of crude to the U.S., halted about 600,000 barrels a day of output as a storm barreled through the Gulf of Mexico, spokesman Carlos Ramirez said in Mexico City. The dollar dropped to $1.4426 per euro, the weakest since the introduction of the 13- nation common currency in 1999. End Bloomberg quote.

There is now a lot of proof that dollars no longer are the basis for oil trading. Namely, every time oil is constricted in some way, the price shoots up more if paid in dollars than paid in euros. So inflation for anyone using or holding dollars is significantly higher than if they use euros.

This dynamic is fairly recent. Ever since Greenspan dropped interest rates to 1%. The aftershocks of this stupid ploy to 'revive' the economy after the Dot Com collapse are still shaking world energy markets. The US itself is aggravating all this by dropping interest rates in the teeth of obvious inflation above 5% and threatening more wars in oil pumping regions.

Why are oil prices dropping this season? It is equally simple: the US and EU have ceased attacking Iran. The threat of war is rapidly fading there. The US is confining its attacks to Pakistan and Syria, non-oil nations. It is leaving the Persian pussy alone. The guys at the top know perfectly well, if they make oil expensive right now, the global economy will continue to collapse. So they are tweaking foreign policy statements and actions to create the illusion of peace.

If the price of oil drops below $50 a barrel, expect more wars in the Middle East.

Back to my story from October 30, 2007:

China's markets are continuing to rise. Of course, they too will fall in the end as a global recession caused by the US overspending and excessive debts and too-small reserves will grip everyone by the throat. Only we won't sail out of this with our empire intact and our power greater. China's retraction will be painful but ours will be fatal. This is due to the logic of all imperial collapses. Just as England, no matter how she twisted and turned, could not shake the depression she caused, so it is with us. Both Germany and the US grew stronger from 1933-1939 while England weakened. When WWII finally began, it really was a confrontation of the new Great Powers: Germany, Japan, the US and Russia. England struggled in vain to hold onto its rotting empire. If the US didn't fight Japan, the Japanese would have finished off the last of the imperial holdings of Australia and India, for example. But the US propped up Britain across the planet and in the end, did most of the manufacturing of war materials.

So now, in this collapse, China will be the world power when all this unwinds. It is quite simple: China isn't up to its eyeballs in debts. And if the US discharges its debts like Russia did twice in the 20th Century, this will destroy us just like it destroyed Russia. And unlike Russia, the comeback won't be easy. Russia has energy to spare. We are on the down slope of the Hubbert Oil Peak and are very vulnerable since our entire transportation and living systems are set to a model that assumes cheap, easy oil.

All over the news are stories about how the G7 are rushing to the Dragon Throne to beg China to bail out everyone. When China's ruler, Hu, went to Africa and openly bailed out IMF victims there, the US and Europe's media and punditry went totally insane with fury and fear. They claimed that China wasn't rescuing Africa but enslaving Africa. HAHAHA. So look at today's news:

British Leader Calls for Larger I.M.F. Bailout Fund

Prime Minister Gordon Brown of Britain called Tuesday for China and the Persian Gulf states to put up more money to help the International Monetary Fund deal with the fallout of the credit crisis.

Mr. Brown’s appeal grabbed the spotlight ahead of a meeting on Tuesday with President Nicolas Sarkozy of France, who called the proposal interesting and vowed to work “hand in hand” with the British leader — just as they had on a coordinated rescue plan for European banks. Mr. Sarkozy said he also believed that the fund needed “additional means” to help ailing economies.

Sarkozy thinks he will get his mitts on Chinese money and then use it to aggrandize French powers? HAHAHA. Mon Dieu! So, China and OPEC are going to bail out Europe? And these guys in France and Britain will back slap each other and imagine, these two devastators of the Chinese and Ottoman empires will be given more power? Are they this blind to history?

The concept that the victims of 500 years of European aggression will hand over goodies to Europe to make them stronger is just beyond pathetic. It is pathological. I try to put myself into other people's shoes. I assume Chinese patriots are like me. Ditto, Japanese patriots. Or Muslims are to their own history. Everyone carries this historical matrix in their minds at all times. Ignoring this is stupid.

Americans try to ignore history but look at the Deep South's white population: they are obsessed with the Civil War. They even go so far as to have huge parties that recreate major battles from that time. These recreationists study all the fine details of that time. We see in our present election, the echoes of the fight to stop slavery while keeping the US as one nation rather than a confederation. The wounds of the Civil War which are not even 150 years old still fester. So imagine how China thinks when many of the things done by Europeans and Japanese invaders are still remembered by living people? Asia wants to help the US and Europe restart the lending game for one reason only: to destroy our economic base and to win the trade wars! Period. This is being done because the US is still too heavily armed and dangerous for more direct confrontations.

The Chinese leadership memorized...I am not exaggerating, they really, really did memorize the book, 'The Rise and Fall of the Great Powers' by Paul Kennedy. They understand that the goal of Chinese trade is two-fold: to increase their industrial base and to destroy the US industrial base. It is pretty simple. So simple, I had hoped US trade negotiators would understand it!

Instead, in order to evade inflation and allow cheap credit so the US government could go deeper into debt, they foolishly pushed for 'free trade' which is entirely in the favor of Asia, deadly for the US. So we got cheap credit and are now busy destroying ourselves with this.

More from my blog last year:

Unable to face reality, we play all sorts of occult and dark games hoping this will allow us to rule the earth without paying for anything, we hope the Chinese and Russians will fund our rule! The corporations which our government protects are nearly all now tax cheats for they want 0% taxes compared to the 35% they are charged with here. Since they are refusing to pay to the tune of nearly a trillion a year, this means our empire is running on lots of red ink instead. The conservative side of the blogsphere is running this futile campaign to present our rulers with a petition begging for them to be fiscally responsible. But this petition does not call for higher taxes, sending our navy to all those tax havens and taking them over and taxing all the corporations hiding there, no.

*snip*

OK: they set their rates and then try to get reality to conform with their happy ideal. They use various means to do this trick. I will note here that the Fed stupidly...VERY, FATALLY STUPIDLY...thinks the game here is to hold as little reserves as possible. NO OTHER MAJOR NATION DOES IT THIS WAY. None. They are all accumulating heroic reserves, far greater than the Federal Reserve. Many times greater! This is the new game.

The Fed, accustomed to setting the rules of international finance for 100 years hasn't figured out that this game ended in 1996 when Japan discovered the felicitous new tool for weakening the yen and thus, gaining trade advantage by hoarding dollars in their FOREX reserves. Then China joined them and one-upped them. Now Russia is doing this along with all the oil pumping nations including Venezuela and Peru, for example. Everyone is doing this! Now, India has joined. Meanwhile, the pointy pencils in the Fed haven't figured this out. Instead, they decided that huge FOREX reserves are not only useless but endanger the holders of these FOREX reserves!

They forget: these reserves have ONE FUCTION: to enable trade on better terms for the holders. Not to make profits via interest rates. Due to the games played by everyone, inflation is woefully understated. No, their only function is to gain profits via trade. Now, Canada must play this same game, they didn't hoard FOREX dollars and now the loonie is on par with the dollar and it is hurting Canada's trade with the US.

So....last year, I correctly explained the thinking and predicted correctly, future actions. Just as I said then, the EU and US powers are rushing off to Asia and even Russia, begging them to save us from our own debt follies. I fear, I sound like a broken record sometimes. I am truly sorry about this. But facts are facts: until the US recognizes the truth, I have to keep yapping. This is so tiresome. Now, back to today's news:

Dollar Falls on Bets for 75 Basis Point Fed Interest Rate Cut

(Bloomberg) -- The dollar fell for a second day against the euro on bets the Federal Reserve will lower interest rates by as much as three quarters of a percentage point today.

The U.S. currency also declined against the yen and the British pound on speculation the central bank will continue lowering borrowing costs as rising unemployment and sliding home values cause the world's largest economy to contract. The yen rebounded from a record loss against the euro on concern slowing global economic growth will limit demand for higher-yielding currencies.

``When the dust settles, the dollar's fundamentals will pressure it to go lower,'' said Masahiro Sato, joint general manager of the treasury division in Tokyo at Mizuho Trust & Banking Co., a unit of Japan's second-largest publicly listed lender. ``Traders will focus more on falling rates and the rising costs of fixing the U.S. economy.''

The dollar weakened to $1.2730 per euro at 11:29 a.m. in Tokyo from $1.2683 late yesterday in New York. It fell to 97.50 yen from 98.03. The yen rose to 124.11 per euro from 124.32, after a 6.8 percent drop yesterday. The dollar may drop to 90 yen by year-end, Sato said.

Ah, the goddess Libra is still at work. She is trying to reset her scales. Everyone is resisting this. She will, in the bitter end, win. She is a death goddess, after all. Japan is terrifically worried that the yen will be 90 to the dollar. This will kill a lot of their export profits. The ability to drop interest rates is nearly gone in Japan. The central bankers, playing traders, not bankers, has kept rates insanely low, even in the teeth of obvious inflation in Japan, so that exports would flourish no matter what. This was very wrong and Japan should have been punished by trade partners.

Instead, they all took advantage of the Japanese carry trade to flood the world with debt. Last month, the army of nations we have trade deficits with, worked very hard to bring up the value of the dollar. But as the US drops interest rates in the hopes we will shop for more foreign goods, the weaker the dollar gets! This is a 'Horns of Dilemma' moment which always happens when Libra is resetting her scales. All escape hatches always lead one back to the same starting point. It is like a nightmare maze: one wants to get to some wonderful point in the past but all the twists and turns leads one back to the Minotaur's horns.

BOJ Rate-Cut Speculation Jumps After Nikkei Report

(Bloomberg) -- Speculation the Bank of Japan will cut interest rates for the first time in seven years jumped after the Nikkei newspaper reported that the central bank may halve its target rate this week.

The chance that the central bank will lower the benchmark lending rate to 0.25 percent from 0.5 percent on Oct. 31 rose to 62 percent from 8 percent yesterday, according to calculations by JPMorgan Chase & Co. using overnight interest-rate swaps.

*snip*

Japan's stocks surged a second day as speculation for a rate cut spurred the steepest drop in the yen in three decades, boosting earnings prospects for makers of cars and electronics.

Miz Japan slits her yen's wrists! And the yen weakens! But the Japanese are furious that all its trade victims are doing the same, rapidly dropping to Japanese banking levels. When everyone reaches 0% financing, Japan will opt for -1% financing. And the death of international banking will continue!

I seriously wish the trade negotiators for the US would include someone that understands all this stuff! I am open for hiring, by the way. I need the money. I live on a fixed income right now and being paid $100,000 a year to do tough negotiations would be lots of fun. Heh. The minute I walk into the room, saying, 'It is finally time to tax low-interest rate countries that are flooding us with their exports,' and I will have earned every penny of my wages! Talk about productive.

Note how Japan makes it all look as if they are helping everyone by dropping rates below that charged by the US and EU bankers!

Economic and Fiscal Policy Minister Kaoru Yosano said yesterday that a rate cut would have a ``symbolic'' effect if done in conjunction with other central banks, showing that Japan is taking part in global efforts to counter the financial crisis.

Yosano's comment ``suggested he hopes the Bank of Japan will lower rates to join its counterparts in the U.S. and Europe,'' said Ueno at Mizuho Securities. ``The government is signaling it wants the central bank to take action too.''

Prime Minister Taro Aso and Finance Minister Nakagawa were circumspect in their comments today on what the Bank of Japan should do.

``How can we tell the BOJ to lower rates? It's a matter for the BOJ, not us,'' Aso told reporters in Tokyo. Nakagawa said deciding whether to lower interest rates is ``up to the Bank of Japan, which is completely independent.''

HAHAHA. Aso is lying through his teeth, of course. The Bank of Japan is joined to the LDP by the hip. The Japanese people accept this deal. They have little experience in opposition politics so the country has basically been ruled by the samurai elites for hundreds of years and still is a closed, one party state.

Honda Jumps Most in 34 Years as Yen Falls Against Euro, Dollar

(Bloomberg) -- Honda Motor Co., Japan's second- largest carmaker, jumped the most in 34 years, leading gains by automakers after the yen declined against the dollar and euro, boosting earnings from exports.

Honda rose as much as 19 percent, or 400 yen, its daily trading limit to 2,465 yen and traded at 2,365 yen as of 9:55 a.m. in Tokyo. Mazda Motor Corp., a third owned by Ford Motor Co., rose as much as 30 yen, or 17 percent, to 206 yen, and traded at 196 yen.

The yen was at 125.17 per euro from 124.32 after dropping 7.3 percent yesterday, its biggest decrease since the 15-nation euro's 1999 debut. A weaker yen inflates the value repatriated earnings from Europe and the U.S.

``The yen weakening helps the carmakers,'' said Hideyuki Suzuki, a market analyst at Morningstar Japan K.K. in Tokyo. ``The market is rebounding from its earlier losses.''

I read in the British news that the former imperialist power is terrified that Honda might lay off English auto factory wage slaves! HAHAHA. The US is in the same fix: bit by bit, we are destroying our own industrial base and it is being sold or rebuilt by Asian powers. Honda desperately wants 0% financing. From JAPAN, not the US. Years ago, people got mad at me when I patiently explained that there was no such thing as '0% financing' for autos. This is ridiculously simple: if you pay cash for a car, the price dropped by around $2,000. If you got a 0% loan, you paid $2,000 more for the car! The differential was the interest payments that were set at about 7% per annum. Yet this game fools lots of people. What a shock that is. Heh.

The price we pay for 0% Japanese cars is extremely high: a loss of sovereignty and power. This is why trade negotiators should be hammering Japan about this, not assisting in this fraud.

China Cuts Interest Rates for Third Time in 2 Months

(Bloomberg) -- China cut interest rates for the third time in two months to stimulate growth in the world's fourth-largest economy after the global financial crisis curbed exports and production.

The key one-year lending rate will drop to 6.66 percent from 6.93 percent, the People's Bank of China said on its Web site today. The deposit rate will fall to 3.60 percent from 3.87 percent. The changes are effective tomorrow.

China's expansion dwindled to 9 percent in the third quarter from 11.9 percent in 2007 and industrial production grew at the slowest pace in six years in September as export markets dried up. The Federal Reserve may reduce its benchmark rate today and the European Central Bank has signaled that it's poised for a similar move.

China's 10%+ growth rate is tremendous. And of course, destabilizes global trade, commodity markets and monetary systems. As China swells and grows rapidly, someone else can't. And that someone else is the G7. Including Japan. Japan's colonization of the US and Europe is a desperate move to save themselves from Chinese growth. The Japanese workers get 0% benefits from all this. Quite the opposite. The Chinese workers depress Japanese worker's wages just as certainly as it depresses American worker's wages.

Japanese firms build things in China just like here. I keep pointing out an obvious flaw in this business. Namely, the US and Japan, living under the US nuclear/military umbrella, can menace any nation daring to kick them out of their own factories in foreign nations. But China can and indeed, parts of the secret 50 year plan is exactly that! I explained to the Chinese that if they have enough military power and enough alliances like with say....um...RUSSIA....they can unilaterally seize any and even all foreign factories and systems and resell them all to the Chinese!

History tells us, this is also inevitable. The Chinese were pleased to learn this news. When I warned the State Department about all this, I was told to go to hell. Of course, since the FBI was listening to our phone calls, etc, the government knew about all this but went onwards to do stupid things because our leadership wanted to get rich, quick. Now, on to the last news story on the topic of interest rates and spending sprees:

U.S. Should Enact $400 Billion Stimulus, Roubini Says

(Bloomberg) -- The U.S. government should enact an economic stimulus package of between $400 billion and $500 billion before the end of the Bush administration in January, New York University professor Nouriel Roubini said.

Roubini, who predicted the current financial crisis in 2006, said the economy risks falling into “a self-fulfilling animal spirit recession that is more severe than otherwise” because of the collapse of credit markets and weak consumer and corporate spending.

“The only way to increase aggregate demand is going to be through” government spending on roads, bridges and other infrastructure, Roubini said at a Bloomberg conference in New York. “We need a huge plan, $300 billion is not going to be enough. I think we’re going to need a plan of $400 billion to $500 billion.”

We are taking bids on how much money to shower on the US consumers! I hear a bid for $300 billion! Make that, $500 billion! Any higher bids? How about $1 trillion? Anyone? $500 billion going once. Going twice...wait, I see the Presidential candidates demanding the trillion dollars! Give them a hand!

To explain the stupidity of Roubini, let us return to my own blog:

Back to exactly one year ago at Culture of Life News:

We saw a huge banking collapse last August. It is continuing. Anyone reading the timeline of the Great Depression knows that the collapse of the banking system took over 4 years to complete and the recovery took 15 years before things began to seriously improve. All the gurantors of the system are now in danger because the entire system is in danger and NOT in nations with huge FOREX reserves. I like to put in a lot of seemingly disparate stories to see what comes into focus and today, it is obviously the hidden hand of the FOREX reserves we must look at to see what will happen next.

My prediction: the US will still refuse to understand how FOREX reseserves operate in the New World Order they, themselves, foolishly created. So, unlike China, the biggest reserves holder, we will continue with our super-low reserves regime and thus, will collapse into infamy and destruction. And killing the dollar won't make us richer if the Chinese have all the export manufacturing bases anyway. It just means we get raging inflation at home. Which the Fed will deal with by lowering our reserves even more! We will continue to follow the wrong magic formula while the Chinese follow a totally different formula and the Japanese will lie to us about their magic formula (the carry trade machine).

How tiresome this all is! HAHAHA. Note that Roubini is always in the news. He doesn't wear a red coat and sport a white beard. But he does a good imitation of that ancient gentleman. The Winter Solstice god who is all about the sun dying and then being reborn. The creature of the great Ice Ages. The one that northern people appeal to to save us when things are at their worst.

But Santa Claus extracts his price, it used to be human sacrifices while fires were lit. We call these 'wars.'

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G7 Gigantic Rescue Operation Now Underway

10/28/2008

Elaine Meinel Supkis

The world's biggest economies are dropping interest rates to 0% while the smaller nations are being forced to raise rates to over 18%.  All smaller currencies are dropping against the yen but finally, the G7 got the yen to weaken slightly and this has caused great rejoicing. I examine the flies infesting this ointment.  China and Russia continue to merge.  Russian billionaires continue to buy threadbare British officials.  American banks are using the bail out money to party, give bonuses and buy out each other, not lend.  And the Chinese design a gigantic rabbit shaped pavilion.  Holy Monty Python!

Australian dollar sinks towards US60c

Traders continued to shun the Australian dollar during another weak offshore session overnight as the popularity of high interest rate currencies continued to fall amid fears of a global recession.

The domestic currency hit US60.12c at 7.30am (AEDT), a level last reached in early April 2003, and came close to retesting that low point again two hours later.

I utterly despise the FX markets.  They really took off after the US dropped the gold peg.  The sorts of games the Germans had to play after the collapse of the Reichsmark at the end of WWI are now global.  Everyone is either trying to get rich, quick, by reading the news and goofy graphs or everyone is placing bets on future instabilities so they can protect their profit margins or international trade deals, etc.


This unstable system has become hopelessly destructive lately.  For on top of everything, the central banks of the biggest powers all manipulate their currencies for trade advantages.  Everyone but the US.  The US, being dead center to all international trade, on the debit side, refuses to defend its own borders and industries.  This is causing a huge global bloodbath while the US dies, rapidly.  As we shall see clearly in today's news.


Australia is a scantily populated country compared to say, Japan, the Koreas, China, Malaysia, Indonesia, etc.  These countries are some of the highest population centers on earth.  Australia is mostly a commodity export nation.  It began as a giant prison for excess lumpen proletariat/Irish/Scottish rebels and petty criminals.  The ones who survived brutal conditions became an important part of the British Empire. 


Just as the Siberian prisoners, they opened up vast mineral, animal and plant reserves and made the very same empire that sought to banish them to the Outer Darkness, into a stalward protector of the empire.  The Siberian soldiers who poured into Stalingrad to fight hand to hand, room by room combat with the Germans are a shining example of this dynamic.


Australia was not intended to be an industrial rival to England.  But today, the main trade partners are now Asian, not English.  Australia was a huge funnel for the Japanese carry trade which is now rapidly unwinding.  As the Japanese and other G7 powers struggle to rewind that coo coo clock, Australia suffers currency troubles.  The hope is, when the carry trade resumes, the good times will return to Australia. 


Iceland Central Bank Raises Key Interest Rate to 18%

(Bloomberg) -- Iceland's central bank unexpectedly raised the benchmark interest rate to 18 percent, the highest in at least seven years, after the island reached a loan agreement with the International Monetary Fund.

Policy makers raised the key rate by 6 percentage points, the Reykjavik-based bank said in a statement today, taking the rate to the highest since the bank began targeting inflation in 2001.

``I don't think 6 percentage points will make the krona any more attractive,'' said Henrik Gullberg, a strategist at Deutsche Bank AG in London. ``Basically what we're seeing is a complete liquidation of everything in emerging markets, and Iceland, even in the emerging-market universe, is very vulnerable. Six percent isn't worth a lot if the currency drops another 15 percent.''

Iceland's woes are self-inflicted.  They wanted to be Switzerland.  But they didn't start off with a huge stash of gold.  They did it as if they were the Cayman Islands. Very few people live in Iceland.  Virtually no one lives in the Cayman Islands. The smaller the population base, the easier it was for a nation to become a pirate island.


But the real fault lies in the modern economic/political system set into motion by the US after WWII.  Iceland, for example, was used as a military base to threaten the Soviets.  We overlooked all sorts of things so they would be our allies. 


The British pirate coves run by the Crown are another example of this: they are intensely destructive for the US government because they function as funnels to move wealth out of reach of our government.  This forces our government to run in the red.  Normally, a sane nation would move rapidly to secure and put under government control, these pirate coves.


Instead, since England itself, despite having a huge population base, is trying to be Switzerland.  'We will be a global financial center,' the British declared proudly.


Well, they are a funnel for a host of Crown tax havens like Jersey as well as the Bahamas, Bermuda, Cayman Islands, etc.  And these havens are hostile to the US government which uses US taxpayer money to protect not only them, but also the head of these pirates, Queen Elizabeth II.  England is cutting back on military spending while leaning more and more on US military spending.


Eventually, someone will come along in the US who will understand that allies who destroy our tax base are enemies.  Then he or she will sail a few ships...hopefully before we are bankrupt and have to mothball them...to these islands and take over.  This is a legal invasion since these islands are being used for hostile purposes, undermining state power here.


The world’s biggest hedge fund is undertaking a radical restructuring amid a shake-up of the multi-trillion dollar industry which spells the end for thousands of its smaller rivals.

Highbridge Capital Management, which is majority owned by JP Morgan Chase and has $25bn under management, is axing 10 per cent of its New York-based staff and plans cuts in Europe and Asia.

The volatility in global stock markets has savaged the performance of some of the world’s best-known hedge funds, raising fears of a collapse in the sector, which could cause a fresh crisis in the financial system.

Big names including Deephaven, Marshall Wace, Citadel Investment Corp, Lansdowne Partners, Third Point and Harbinger, have in recent weeks sustained losses of as much as 20 per cent in some funds.

Investors pulled at least $43bn (£25bn) from US hedge funds in September, according to TrimTabs Investment Research. This is nearly five per cent of the global sector’s estimated $2 trillion in total assets.

Pulling out only 5% is causing all systems which were preset to run only on profits, into a tailspin.  The folly of building business models that can operate only forwards and which have no reverse except for stripping the gears and destroying the brakes is obvious, isn't it?  I marvel at the lack of genius here.


Whenever I locate a paper written about these instruments and businesses that are pure financial finaglings, it is perfectly clear that the downsides are always underestimated.  This is because the true dynamics at work in any market is simple herd instinct: things happen because everyone does the same thing, at the same time.


When they create a bubble, they all make the same bets that the same outcome will be profitable to the same degree.  When everyone is in total harmony and feel they don't have to think, all they have to do is have mindless computers automatically 'do x if y happens' sort of deals.  This means, when x is now in reverse from the previous programming, the computer continues to do x when y is happening instead of y when x is happening.


If they all program their computers or have humans follow strict rules for deals, this still happens: sudden reversals occur and no one keeps up with it.  When they do, they all reverse at the same time.  The whole point of being 'smart' is to exit a bubble before it breaks.  But if everyone is equally smart, this simply means they all beat each other's brains out as things collapse and they all rush to the exit.


Hedge funds were a simple fad.  Since they were mostly if not all, connected to pirate cove tax haven schemes, they should be outlawed and shut down, not saved.

Time to check up on our other allies who are undermining us, Japan:

Nikkei Rebounds Sharply On Falling Yen, Short-Selling Ban

TOKYO (NQN)--Tokyo stocks bounced back strongly Tuesday, closing higher for the first time in five business days.

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Nomura Jul-Sep Loss Widens On Global Market Turmoil

TOKYO (Dow Jones)--Nomura Holdings Inc. (8604) Tuesday reported a massive net loss in the July-September period - its third straight quarter of red ink - as the global financial crisis choked its proprietary trading operations, suffocated corporate financing and scared investors away from the market.

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Nakagawa: Plan To Ease Mark-To-Market Acctg Rules

TOKYO (Dow Jones)--Japan plans to let financial companies value illiquid assets in a more flexible manner, partly to cushion the impact of the global financial crisis on the nation's banking sector, Finance and Banking Minister Shoichi Nakagawa said Tuesday.

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Nakagawa: Plan To Ease Valuation Rules For Banks

TOKYO (Dow Jones)--As part of efforts to fight the global financial crisis, Japan plans to allow financial companies to value selected assets more flexibly, Japanese Finance Minister Shoichi Nakagawa said Tuesday.

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Latent Stock Losses Dampen Sanrio 1st-Half Profit Growth

TOKYO (Nikkei)--Sanrio Co. (8136) likely posted a group net profit of nearly 1.2 billion yen in the April-September period, up more than 60% on the year but 100 million yen less than its projection.

Good news for brainless traders!  The yen was weakened slightly last night!   The Bank of Japan worked with all the other goof balls in the G7 and succeeded in preventing the yen from strengthening.  They are also now silent about China's currency.  This is the core of the secret China/Japan central bank accord that was hammered out in August. 


I am just guessing about that meeting's results.  But history, as it evolves, makes it pretty clear, this is what happened.  The Olympics was Team USA's last blow out attempt at unseating the Chinese.  It was a failure.  China took home most of the gold medals as well as the best of the secret deals.  China's markets are in decline like the US.  But China is NOT deindustrializing.  It is shedding the low end businesses and building its true industrial base.  More about that in a minute.


Now to Normura banks: HAHAHA.  Just three weeks ago, they were buying up our banks.  The US has decided to become a colonial third world nation.  Japan boasted that they could take over everything here.  Hello?  Eh?  Anyone alarmed for a minute?  No.  We figure, we will deal with them the same way a hiker deals with a bear: play dead.


I warn everyone, not to try this with DRAGONS.  People playing dead with Dragons get burned to a crisp, anyway.  Dragons have nuclear bombs.  So do Russian Bears.


Well, it turns out that Normura wasn't so hot and is falling apart.  So of course, the Bank of Japan moves swiftly to undo the BIS banking value rules concerning mark to market.  Since the markets are rigged, why not keep them rigged?  After all, this is the underpinnings of the fake cheap yen and the carry trade!  And the G7 is desperate to get that going again!


So 'selective values' for Japanese banking gnomes is the nifty solution.  Now, if I were allowed to restate the value of my own belongings and then burn my house down and then demand a credit default swap insurance value that is 10x reality, I would get real rich, real fast!  Isn't that neat?


And Sanrio: only a 60% increase in profits rather than a 100%?  Oh, the horror!  This is due to the yen strengthening.  Sanrio can't destroy competition world wide without the weak yen backing up their profit margins!  Now, on to the real core of this game, the destruction of the entire US domestic auto industry:

LA Times: The end of the road for U.S. carmakers?

The U.S. auto industry's downward spiral has accelerated dramatically in recent weeks. In a desperate bid for solvency, General Motors Corp. is seeking a merger with Chrysler. Chrysler has talked with Renault and Nissan about partnerships. And now Ford Motor Co., GM and Chrysler -- backed by Michigan lawmakers -- are lobbying Washington to give them cash, implying that failure to provide a bailout could doom the industry to bankruptcy.
*snip*
Some analysts, economists and industry insiders predict a financial cataclysm, while others foresee little more than a shift of the industry to foreign companies such as Toyota Motor Corp. and Honda Motor Co. Some argue that, in the long term, the U.S. economy would be better off moving past automobile making.

"A failure from the Big Three would be a huge, huge hit," said Donald Grimes, a research specialist at the University of Michigan. "But there's a real question about whether there's room for all of them."

Others posit that the failure of just one of the Big Three would send shock waves through the entire manufacturing sector that could devastate suppliers and freeze up the other two carmakers. Hundreds of thousands of jobs would be lost.

GM and Ford have barely half of their workforce or less, in the US.  They are rapidly becoming anti-American corporations that might have headquarters here for a few more years before relocating to Mexico or China.   If they made cars across our borders and then sold them there, it would not be a problem.


But they do NOT do this at all!  These cars are built in cheap labor locations and then imported.  Most of our corporations do this today with the full blessings of the political classes and most of the media and a huge hunk of the economic pundit class.


Note the economist traitor, Grimes: he thinks there is no room for 'three' automakers!  HOW ABOUT JAPAN????  They have multiple automakers and they are now half of our markets here!  We obviously have room for six, and if you include the three big German automakers, nine auto companies!


Why do universities hire economists this stupid?  Eh?  This guy wouldn't last 5 seconds in a debate with me.  Then there are these 'some others' in the article, the economists who think that it would be better for us to 'move past automaking' to what, pray tell? 


We are the major auto buyers in the world.  We should be the major makers of autos!  There is NO REASON to move 'beyond' that!  Tell Japan to move beyond it, instead!  This is why the loss of the tariff tool is so important.  Japan ceased buying American cars long ago.  We didn't retaliate.

This is a dual graph of rapid deindustrialization.  And note the clever craveat at the bottom: these graphs show Canada and Mexico in the US data!  Last time I looked, the mainstream media was mocking the idea of the Amero replacing the dollar.  But it looks to me like the media treats our neighbors as if they are already assymilated by the US. 


If we removed Mexico from these statistics, it would be much, much worse!  A -50% rather than -30%, for example.  Only one other nation is rapidly deindustrializing as fast as the US: Britain.  We are both trapped in the same boat only Britain is also playing pirate.


SEM agrees to issue the Beijing Declaration

(Xinhua) -- The Seventh Asia-Europe Meeting (ASEM) issued a Chair's Statement here on Saturday, agreeing to issue the Beijing Declaration on Sustainable Development. The statement said the leaders held extensive and in-depth discussions on issues of realizing the Millennium Development Goals (MDGs) as well as the sustainable development targets agreed in Johannesburg, strengthening energy security cooperation, jointly addressing the challenge of climate change, and environmental protection, including water resources, forests and air, and improving social cohesion under the framework of sustainable development.

Leaders stressed the importance of mid-term review of the MDGs, and underscored the need for ASEM members to further deepen international development cooperation to meet the IADGs, particularly the MDGs, in a timely manner.

China is busy building the New World Dragon Order.  We can only hope they succeed.  This is because the US version of the New World Order is to spread chaos and destruction coupled with the US shooting at Syria illegally while the UN is totally silent thanks to the G7 control of the Security Council and the US dropping bombs in Pakistan while the Taliban shoot down more helicopters with their missiles.


Oh, they have missiles now.  Maybe we could send in the Germans to attack Afghanistan!  They sat on their base for three years there and didn't leave.  But then, they caused no problems.  If our own soldiers did the same, no more fighting, no more helicopters shot down, etc.  We are rapidly surrendering in Iraq.  The Iraqis use us like we are their garbage men.  And they are taking vast satisfaction in knowing they are killing the US empire dead as a frozen duck after hunting season closes.

Third Sino-Russian economic forum opens in Moscow

(Xinhua) -- The Third Sino-Russian economic forum opened here Tuesday, and Chinese Premier Wen Jiabao and Russian Prime Minister Vladimir Putin addressed the opening ceremony.

Wen, who arrived here Monday evening on a three-day official visit to Russia, spoke highly of the rapid growth of Sino-Russian economic cooperation in recent years.*snip* Sino-Russian trade volume surged by 23 percent year on year in the first nine months of this year to hit 43 billion U.S. dollars, according to Chinese official figures. The two countries set the trade target of 60 to 80 billion U.S. dollars in 2010.

China does over $200 billion in trade surplus with the US.  Russia wants balanced trade with China so it is much smaller trade.  But much, much wiser trade.  Putin and Hu love to negotiate.  Both are canny, clever and cruel.  So they are a perfect fit.  We, on the other hand, send goofy guys who don't seem able to add 2+2 or demand a hard deal and some sort of balance.


This irritates me no end.  The Chinese or Japanese should blanch in fear when we walk in the room, not laugh their heads off.  Europe has to show more respect, too.  Hard to ask them, when we send half-baked wanna be cowboy cowards to negotiate.


One can only hope Obama has more sense.  He certainly has more intelligence.  Even if he is a bastard, if he is a smart bastard, this is tons better than a stupid bastard or in the case of Palin, bastardette.

Tories took donations from Briton linked to Ukrainian billionaire

The Conservative Party has accepted more than £57,000 in cash donations from a British businessman who oversees the assets of a controversial Ukrainian billionaire embroiled in a battle over the control of gas supplies to a large part of western Europe, an investigation by The Independent has revealed.

Robert Shetler-Jones, a 39-year-old property developer who is the chief executive of Group DF – the holding company for the multi-billion pound assets of Dmitry Firtash with offices in Knightsbridge, has made a series of donations over the last two years to Conservative Central Office as a private individual and through Scythian Ltd, a company listed at Companies House as “dormant”.

Isn't it embarrassing that English opposition parties that depend on mindless patriotism of the Queen's subjects [hahaha...inside joke here] are in the pay of get rich quick former Soviets?  And then there is the Rothschild's business: these pay out schemes were cooked on his private Corfu island estates.  And international finances meets history here. 


Foreign money that has island hideaways is being used to undermine democracies.  These people should be arrested, not assisted in holding secret Bilderberger meetings where they all can plot to rule the earth and terrorize all of us.

So When Will Banks Give Loans?

It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual.

Which, of course, it also got thanks to the federal government. Christmas came early at JPMorgan Chase.

*snip*

(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

And stealing stuff.  I was 100% against the bank bail out because it didn't involve arresting lots of people starting with Bush, Cheney and Paulson.  Instead, it was a boondoggle.  And the guys opened yet another door to the celestial bank vault and now are shamelessly demanding more and more bail out money.  And getting it! 


Now, the IMF is saying, they will join the G7 central bankers in piling on the loans by making money out of thin air.  They plan to do this to infinity if this is required to keep the crummy, awful status quo going no matter what.


Whatever sort of revolutionary changes we will witness will be shoved into the future.  But the more we put of reforms, the nastier the revolution will be.  Very explosive.  This is why I don't want to put off reforms.


Time/CNN: How Washington's Bailout Will Boost Wall Street Bonuses

Uncle Sam has a new name on Wall Street — Sugar Daddy. Bonuses for investment bankers and traders are projected to fall by 40% this year. But analysts, compensation consultants and recruiters say the drop would be much more severe, perhaps as much as 70%, had it not been for the government's efforts to prop up the financial firms. "Year-end pay on Wall Street will be higher than it would have been had it not been for the government and mergers," says Alan Johnson, a leading compensation consultant. "You would expect it to be down much more."

Arrest them all!  Every blasted one of them.  Charge them with fraud and treason.



And now for today's most important news:  HAHAHAHA.  I believe in laughing.

Macau unveils jade rabbit design for pavilion

 All of which reminds me of Monty Python's Trojan Rabbit from the Holy Grail: 




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