Elaine Meinel Supkis
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.
His words carry weight inside the Fed as well. In a little more than a year as a Fed governor, Mishkin, 56, has established himself as what former Governor Lyle Gramley describes as an intellectual ``powerhouse,'' one of four on the policy-making FOMC.
In part, that comes from the Columbia University economist's three decades of central-banking scholarship, including three years as the New York Federal Reserve Bank's research chief. There are also his ties with Fed Chairman Ben S. Bernanke, which include graduate school and collaborating on research.
``Because he's a close ally of Bernanke, that makes him a powerful figure,'' said Gramley, senior economic adviser at Stanford Group Co. in Washington. He considers the other ``powerhouses'' to be Bernanke, Vice Chairman Donald Kohn and San Francisco Fed President Janet Yellen.
Instead of wild debate, a variety of voices, we see the Federal Reserve filled increasingly with people who are buddies and who are of one mind including the important aspect of religious affiliation. I was once married into a Jewish family in NYC that ran businesses, etc. They love to do business with each other and are so resisting to outsiders, I was very much on the outside even after giving birth to a son.
Just like Mormons or Catholics feel happier interfacing with only each other, so it is here. This unity of minds is, like with say, diamond traders in Brussels, a family affair and outsiders are ruthlessly eliminated or cold shouldered so they don't have any influence. The stellar minds running our national bank are in harmony with the many Jewish traders and financiers and this is a problem, not something to celebrate.
Allowing any system to fall into the hands of any religious group is most dangerous. For example, our airforce has been colonized by right wing fundamentalist End of Times preachers who cluster about the Airforce training centers and who want to literally have their fingers on the nuclear hairtrigger. This frightens me greatly. The US government, instead of eliminating this influence, has encouraged it.
Various religious sectors of dominantion are created with an eye towards world power. The US has fallen prey to this sort of activity. The Federal Reserve clearly shows who they are protecting when they make various moves. The recent move to drop interest rates in the teeth of total global inflation of all necessities is a fine example of the Fed wanting to save Jewish financiers rather than be honest about the reality of our financial woes. Always, when making moves that extend the power and protect these people, the Fed pretends they are doing this honorably in order to save jobs and protect the American economy.
This is a blatant lie. They lie to themselves, I imagine. They want America strong so we can fight Muslims on behalf of Israel. They believe that making America strong involves keeping our military/industrial complex rolling forwards. They don't care if an airforce filled with End of Time believers who think Jesus will come when all the Jews are herded into Jerusalem, controls our nuclear arms. They want this global empire to roar forwards no matter what.
I am of a different mind: our empire is killing us. If we don't drop a number of our pretensions to power and if we don't retract our empire, we will go down in flames and our homes will literally be destroyed in a fire that is a trillion times hotter than the ones in California this month.
Minutes of their last meeting, released Oct. 9, said officials ``saw a risk that tightening credit conditions and an intensifying housing correction would lead to significant broader weakness in output and employment.''
That was foreshadowed in a Sept. 10 speech in which Mishkin said the financial turmoil posed an ``important downside risk to economic activity'' beyond housing. On Sept. 1, at the Kansas City Fed's annual symposium in Jackson Hole, Wyoming, he said in a research paper that the Fed can be more successful by lowering rates ``aggressively'' in response to a deep slump in home prices.
Since the Federal Reserve only cares about harboring and protecting financiers who use tax havens and who exploit Israel's laws that nearly always refuses to return not only economic criminals but outright murderers to the US for trial, we have this crazy system that is eroding our economic base relentlessly. China's bankers and rulers are not serving another nation. Indeed, this would earn a bullet to the back of the head. So they strive to make their empire stronger, not exploit it for other ends. They are united in this regard while the US is very much divided.
On top of the Jewish factor, the US also serves other former empires, the United Kingdom being a top feature of this other force. England has decided the only real industry they have left is to be host to tax havens and to be Switzerland only not neutral. The British banking system with all its many flaws are now deeply embedded within our own system.
Our founding fathers worried about this. They wanted to experiment with various systems to see what would work. The idea was to NOT have a banking system that would make financiers very powerful and very rich at the expense of the people. Quite the contrary. The system was supposed to support the small farmer, the small businessman, it was very much a bourgeosie entity. With the industrial revolution, all this changed.
The first of the very rich and very powerful were the creators and owners of various industrial systems: train lines, steel mills, cotton manufacturing, electricity production, etc. For example, there is the history of Mellon, the man who was considered, like Mishkin, to be a financial genius, but who presided over the long period before biggest economic disaster in US history, the Great Depression:
Andrew William Mellon (March 24, 1855 — August 27, 1937) was an American banker, industrialist, philanthropist, art collector and Secretary of the Treasury from March 4, 1921 until February 12, 1932. He is the only Secretary of the Treasury to have served under three presidents (Harding, Coolidge and Hoover).
Mellon was not Jewish, this was before Jews had full civil rights in America. America back then was very racist and very closed to many religious affiliations. But the interesting thing with Mellon is, all his efforts were focused on making the workers weaker and the financiers stronger. His family was very involved in making profits off of labor and therefore, he wanted labor to get as little gain as possible. The Democrats who held office during WWI were more worker-friendly, the party being an alliance between the South and northern industrial workers.
Mellon and the Republicans were able to take the US system which encouraged small farmers and small businesses and turned it into a means of making money, fast, for fast financiers. This meant ignoring escalating problems in the hinterlands, increasing poverty and indebtedness in the farming community which suffered greatly when Europe was unable to buy produce at high prices anymore. The US industrial workers saw wages fall after WWI production slowed and Europe ceased buying huge quantities of goods due to the huge debt overhang from that war. Instead of focusing on these escalating woes, Mellon looked only at his friends and collegues who were mainly interested in making money making money. And Mellon paid attention to England's central bank which was interested in regaining its financial control of the world and which needed a strong pound no matter what. The story of how the US and England worked on this matter post-WWI is still little discussed or understood.
Mishkin and Bernanke are the products of more recent immigration to the US, post-Civil war. They have made a big splash writing papers on the Great Depression. These papers have a strong thing in common: NO HISTORY. At least, what I call history. It focuses on the causes and effects of the financial mess on financiers and bankers, not on global working conditions. Nor do these papers try to understand the financing of empires and how they work hand in glove with global financiers to tap into funds they can't generate themselves. The result is, all empires can run in the red. It is this ability to ring up near-infinite debts that is so distressing and difficult to comprehend. The sky is the literal limit for financiers funding empires!
Our founding fathers didn't want this. Indeed, in England itself, writers like Gibbons were warning their own people about the hazards of empire. There was considerable discussion about avoiding the fate of the Roman Empire and the Spanish Empire when the Constitution was being written up. During the Industrial Revolution, politicans railed against the biggest banks and accused them of manipulating the currency. The fight over whether our banking system be based on gold or silver raged post-Civil War. The Euro-centric Eastern bankers in NY and Boston wanted gold and the Western mining/expansionist politicians wanted silver to be the basis for financing. But neither gold nor silver won this debate, PAPER won. Sort of like the Japanese game of junken, 'rock/paper/scissors' with gold being the rock, silver the scissors, paper wraps the rock in order to win so paper was attached to gold. I have old gold and silver certificates which were called 'dollars'. Gold certificates were supposed to be better than silver which is why old timers would look carefully at the paper before accepting it. To see if it was 'more' valuable.
In 1933, all this was ended. Basically, paper money's references to either gold or silver was eliminated and all paper after then used 'In God We Trust' rather than referring to something real. The new fiat God-dollars weren't created because the US ran out of either gold or silver, au contraire! We had more of both than any empire on earth! Which takes us back to England: after WWI, they had to turn over a lot of gold to us to secure trillions in war loans. Yet they wanted to pretend their worthless paper pounds were really quite valuable. So they had to manipulate world banking in order to do this and it made the pound stronger than the dollar and so the only way to stop the US from flooding industrial Britain with goods due to the strong pound, they began the process of putting large tariffs on non-imperial trade. So trade from India or Canada would be on a different track from US trade. This constricted US commerce. Not to mention, German.
My point here is, attempts at helping along the financiers who exploit various historic and trade messes to enrich themselves doesn't stop massive economic dislocations, it enables and makes inevitable, these dislocations. And these dislocations are not due to monetary value or schemes but rather, are buried deep inside of economies and can be seen clearly at the lowest levels, where the plow meets the soil and where the hammer falls on the anvil. In our present case, we have a bunch of financier-friendly guys who are interested in keeping the US financial mess rolling along because it benefits the wrong people and who ignore the cries of pain and suffering down below. They aren't interested in people going too deep into debt, they WANT them in debt!
They don't care if they maliciously miscalculate inflation! They WANT this inflation to rage, it makes the financiers richer! Industry and speculation thrives when there is both inflation and debts are shooting up. Servicing and exploiting this dynamic is how the Bilderberg-clones get rich and powerful. Focusing on keeping this power and enlarging it might endanger the lives of billions of people but none of these people get to speak to or influence the men and women setting up this speculative, destructive system. This is why Bernanke and Mishkin will talk to each other but not the host of smart, lucid writers and researchers which can be easily found on the web, for example.
The downfall of Stan O’Neal as chief executive of Merrill Lynch is a useful corrective to the popular idea that the US Federal Reserve has been running monetary policy of late as a kind of lifeboat to preserve the jobs of wealthy bankers.
The swift and unforgiving humiliation for one of Wall Street’s highest flyers in the wake of the investment bank’s eyewatering $8 billion loss announced last week, is an encouraging indication in fact that markets still work.
O'Neal was hired to be a hitman. He played the crazy, wild speculative/inflationary games and was rewarded for this and like at the beginning of the Great Depression, is now being blamed for playing a Risky game. I talked about the yin/yang mirror creatures who inhabit the Outer Darkness in the past. Risky is a little tart of a demon who loves to gamble and take dangerous chances. She rolls the dice and lies about the outcome. She wants us to do obviously bad things because it gives her joy to see the results. Many writers and playwrights have had immense fun talking about Risky and her charming habits. She is extremely destructive and quite patient about it.
Then there is Safety. She is an angel who tries to warn of us dangers. She wants to see the land flourish, the children born, raised and healthy, not sick from leting Mattel import dangerous toys, for example. She wants us to save money for a rainy day and to be prudent. She is no maker of wealth but instead, increases the good things that make life possible. You can't get filthy rich from her. Which is why Risky is so wildly popular with people wanting needless or instant wealth! The more unstable or messed up a system, the greater the opportunities for getting undeserved wealth! So we have this bizarre system that rewards the very worst speculative things while it destroys industry, farming and the health and welfare of the people at large.
More about O'Neal:
Indeed if there is anything useful to come out of the US sub-prime debacle it is that men such as Mr O’Neal and Chuck Prince, his counterpart at Citigroup, who is yet to fall on the sword that has been carefully positioned under him, are starting to be held accountable for the mess they have got us all in.
They didn't get us into this mess. The CENTRAL BANKERS did this. The POLITICIANS did this. The rich speculators who bought our politicians did this! The tax cheats using distant little islands did this to us! O'Neal's job was to take money and turn it into money. If this meant firing all American workers and tranfering the factories to Mexico or China, he was applauded. If this meant driving everyone including our government deep into debt, he was applauded! But he couldn't do this alone. Only if the Federal Reserve officiers lied about inflation and enabled him to do this, could he do anything. The entire banking and economic system has been set up to make it possible to be increasingly Risky due to all the safe guards which exist only as props, not as stoppers. The minute, for example, the speculators needed to end the controls preventing gross, speedy trades on Wall Street via computers comes right on the anniversary of the Great Crash 88 years ago. They need to get rid of this rule in order to act irresponsibly. They wanted this rule only when it didn't matter much.
The people who fired O'Neal want Risky to give them MORE money, they hate Safety with a passion. They need to make more than the rate of return from banks because banks offer rates of return that have little to do with real inflation and everyone knows this. This is why good risks who want mortgages are considered pure poison by these guys while riskier loans were considered great buys due to the higher interest rates! Just this week, a bank sent me an offer for buying CDs at 5% interest. This, while Mishkin and Bernanke are openly lying about true inflation. This would be a great buy if inflation was really 2% a year. But it isn't. It must be around 7% if it were to make me money by parking my money in an account.
From the O'Neal story:
But it is now clear that the Fed is primarily focused not on the immediate financial stress but on the broader effect of a serious downturn in the US housing market.
As they weigh their decision-making, Fed officials are trying to gauge the appropriate stance of monetary policy in what promises to be a turbulent period for the world’s largest economy. Even after last month’s rate cut, at 4.75 per cent the Fed funds rate is still well above a neutral policymaking level.
Current economic models suggest the equilibrium real interest rate – the rate which is neither stimulating nor restraining the economy - is probably around 2 per cent. With inflation a little over 2 per cent that means the current Fed funds rate is still squeezing demand.
This analysis of what is going on clearly shows how selective belief systems enable all sorts of merry games. Today is Halloween. This is when we, in the North, shift from warm to cold. It is the Day of the Dead and is when Risky is firmly shoved out the door by Safety who announces that Winter is neigh and we better put in the food stores and firewood or we shall die. The fraud of fake inflation is a root cause of much of the evolving chaos. The hope that pretending inflation is gone and will thus, save the investment houses that handed out easy loans to all and sundry. The belief that if loans were made cheap enough, people would be able to again, sell at high prices while pretending there is no inflation even as these low loans cause huge inflationary rises in value...is a silly trick or treat game. Just ring the right doorbell and Bernanke and Mishkin will open it and pour candy into the bags of little pirates and three headed hell hounds!
From the O'Neal story at the Times:
But what about all those inflation pressures, you ask – a slumping dollar and oil edging closer to $100 a barrel? As long as rising petrol and home heating costs and higher prices for imports do not bury themselves in general consumer expectations for prices, the inflationary threat remains contained, in most Fed policymakers’ view.
In any case, given the alternative – an unpleasant recession – a little bit of inflation, like a little bit of help for irresponsible investors, is a necessary evil these days. Now if there was a way to punish inflation the way Merrill Lynch punished Stan O’Neal, we might really have achieved something.
You know, having a revolution and literally chopping off the heads of the speculators and financiers would also do the trick, right? If the point is to punish them, why not have the SEC arrest them and charge them with fraud and other crimes? Eh? Why is it, the writers working for the upper classes assume the only way to stop wild Risky lovers from destroying our economies is to make many workers unemployed and homelessa and starving millions of people to death? Eh? And if we want to 'punish' inflation, um, doesn't this mean taking the lash to the Fed and the Bank of England's top officiers? The LAST people on earth punished for all this are these same guys!
And note the stupid fiction that people EXPECTING inflation CAUSE inflation! This is pure 'magic' thinking and is part and parcel of the systems used by the wizards who manipulate things. The connection between magic and money is very strong, stronger than any other force which is why the words 'Gold certificate' or 'Silver certificate' were eliminated and replaced with the invocation to an invisible god. Not only that, the paper itself is covered with magic devices which try to connect it with the Outer Darkness.
Banks shut out of the market for short-term loans are finding salvation in a government lending program set up to revive housing during the Great Depression.
Countrywide Financial Corp., Washington Mutual Inc., Hudson City Bancorp Inc. and hundreds of other lenders borrowed a record $163 billion from the 12 Federal Home Loan Banks in August and September as interest rates on asset-backed commercial paper rose as high as 5.6 percent. The government-sponsored companies were able to make loans at about 4.9 percent, saving the private banks about $1 billion in annual interest.
AARGH. So, bankers who don't have money because they make money by giving out irresponsible, inflationary loans, can't lend to each other, they have to go hat in hand to the Fed and the Fed wants to pretend there is no inflation so it is UNDERCUTTING banks with money (remember to speak Chinese here) in order to keep our system going? And this ia a billion in interest 'saved'? How inflationary is THAT? This is FAKE MONEY. This is MAGIC MONEY. This is the Fed handing out Halloween candy with a vengence! Why bother with these leeches, these go-between bankers? Why not have the Fed be the ONLY source of loans? After all, they pretty much are, already!
As strange as it may seem to the average person, the problem is not a shortage of money -- it's too much money. The world is choking on too many U.S. dollars.
Normally, when a currency gets into trouble as the dollar is now, all the country has to do is raise the interest rates on their bonds and things are fine again. But because of the subprime meltdown, the Federal Reserve can't simply raise or lower interest rates.
In simplified terms, the Fed must keep rates low in order to save the domestic economy. This causes the international economy to dump the dollar by not buying our bonds, which is one reason why the price of gold keeps going up -- it's the true international money. And the rise in its price (and in the price of oil) signals the loss of the purchasing power of the dollar; the world simply doesn't want any more dollars. This is a ripple effect from 1971, when the dollar came off the gold standard.
This article is correct in some ways. It touches on the terrible Horns of Dilemma. But the writer is trapped by the propaganda. The Fed ALWAYS 'simply' raises or lowers interest rates! This is their entire machinery! They decide when to do this based on their own desires and lusts. If they want to help their friends out and they have many friends within their own communities, they will do whatever it takes, to hell with anyone who is punished by their choices. Namely, they don't give a hoot about if inflation is destroying other people. They will deny inflation in order to give billions to bankers! Bankers who need to sell their stocks and bonds on the open market and need to boast that they are doing really well and have profits!
The Fed's low rates NEVER saves our economy! It CREATES INFLATION! Only if there is no inflation, does it not create inflation and since 1974, there has been insidious inflation that flares up hugely whenever there are wars or threats of wars in oil pumping regions. The US is banging the drums for more wars in Iran now and when there is wars in Iran, when foreign powers invade Iran (Iran has invaded no one) then the price of oil shoots up and we have recessions/inflations at the same time. And guess who is inflaming all this?
The USA itself. On behalf of Israel and Saudi Arabia.
BEIJING (AFP) - China said Tuesday it remained opposed to further sanctions against Iran over its nuclear programme, despite the visiting Israeli foreign minister's call for stronger action.
"We consider that the decision to impose sanctions should not be made lightly. At present, the Iranian side is seeking to solve the issue through talks," foreign ministry spokesman Liu Jianchao told reporters.
According to polls, 52% of America is suicidal and wants to kill Iran Kitty. This bare majority have been egged on by our media which is under very heavy influence of pro-Zionists who want us to go to war. Meanwhile, inflation rages due to all this war talk that is clearly irritating all our trade partners from Japan to China to Europe. Russia actually is enjoying this and getting very rich off of this but they also don't want us to start WWIII or invade Iran so they are part of the chorus ordering us to stop. But we won't stop any more than we will stop playing our fake inflation numbers games or increasing our debts in the teeth of our obviously declining economy and dropping wages for the lower levels of the working classes.
Back to the Yahoo Finance article above:
As the global economy continues to gyrate, you'll hear more and more people calling for the Federal Reserve to either lower or raise interest rates. The problem is that the Fed has less and less power to do much.
If it tries to save the domestic economy, the international economy will pound us. If the Fed tries to save the dollar internationally by raising interest rates, it'll kill the domestic economy.
Instead of looking to the Fed to save you, then, I recommend you save yourself by investing in real international money. One way to do so is by purchasing silver. Gold is expensive, but silver is still a bargain even for the little guy. When the recession comes, the ripple effect on your financial future will be immeasurable.
RUN AWAY! Yes, this is the solution. Leave America and go away! Only this is a fool's solution: just as the collapse of the banking system of England and Germany caused the entire globe to go into one of the most grinding and terrible depressions ever, so will this. Many web sites gain popularity by offering all sorts of goofy solutions which I cannot give here. For I am a responsible person. I know what will happen next.
If the US is begging for war in the teeth of rising world oil prices caused by American aggressions already then betting that the End of Time guys in the Airforce won't join with the Israel Firsters to create WWIII is an easy bet: they can and they will. And there is no protection from WWIII except to stop these mad razor wielding nut cases! Aside from this, a recession will not make gold or silver rise in value, since many people are using debts via the carry trade in Japan as well as super-low, fake interest rates, to buy gold and silver and oil, when this finally collapses, so will the value of these commodities. Like real estate, they are prone to bubbles and collapses. And for the same reasons and by the same systems and these are run by the Federal Reserve and their financial buddies.
Housing Starts Tumble 44% In Sept, Biggest Fall On Record
TOKYO (Kyodo)--Japan's housing starts plunged 44.0 percent in September, the sharpest fall on record, to 63,018 units as confusion and procedural delays over stiffer building regulations weighed on the housing market, the government said Wednesday.
BOJ Forecasts Zero Inflation In FY 2007, 0.4% In FY 2008
TOKYO (Kyodo)--Japan is likely to see zero inflation in fiscal 2007 and a 0.4% price rise in fiscal 2008 in terms of the consumer price index, the Bank of Japan said in a key outlook report released Wednesday.
MUFG Cuts Full-Year Outlook On Credit Card Unit, Weak Lending
TOKYO (Dow Jones)--Mitsubishi UFJ Financial Group Inc. (8306) Wednesday slashed its group net profit outlook for the fiscal year ending March in anticipation of big restructuring costs at its credit card unit and weaker-than-expected profits at its domestic lending business.
Forex: Dollar Dives To Record Low Vs. Euro On Expectations Of Fed Cut
TOKYO (Kyodo)--The U.S. dollar dived to a fresh record low against the euro for the fourth consecutive session Wednesday in Tokyo as investors anticipated a rate cut by the U.S. Federal Reserve to dampen the downward pressure on the U.S. economy.
Like the US is now doing, having a weak currency and high debts means more exports for Japan but the downside is now increasingly painfully obvious. Since they can't sell any of the bigger manufactured goods or housing to the increasingly poorer Japanese consumers, they can claim there is no inflation even as the budgets of all Japanese at the bottom are increasingly consumed in paying for sykrocketting world commodity prices. This leads to a collapse in buying manufactured goods not needed for survival and the system ratchets ever-downwards. But exports explode as all manufactured goods are sent outwards due to the weak economy/weak currency/LOW interest rates!
And this is EXACTLY what happened in the Great Depression and the guys running the Fed are supposed to be all so clever about all this, they did a lot of studies of this dislocation without putting their fingers on the core causes. So many people think the Great Depression was caused by 'overproduction'! Not the collapse of imperial finances.
So, Japanese housing is collapsing. Right on the heels of the US housing collapsing. And England is now following along and so it goes: one by one, all the debtor/no sovereign wealth nations will see this collapse while all the money flows like crazy into two places: the oil producing nations and the cheap labor nations. This is a huge imperial collapse since the empires have given up on capitalism and are now pure monetary manipulators hoping to hitch a ride on the planetary trade system.
European retail sales declined for the first time in three months in October as rising prices and the deteriorating economic outlook damped consumer confidence, the Bloomberg purchasing managers index showed.
A gauge measuring retail sales fell to a seasonally adjusted 47.9 from 50.5 in September. The index is based on a survey of more than 1,000 executives compiled for Bloomberg LP by NTC Economics Ltd. A reading below 50 indicates contraction.
Even as the euro rises against the dollar, the distress at the bottom rises. Strikes are breaking out more and more as desperate workers seek to keep up with inflation. This isn't a matter of them being greedy, it is hard to go on strike, there are many risks to this, many costs! So it happens mostly when there is inflation and businesses fix inflation by depressing wages which cuts spending by consumers, a vicious circle that seems to never be fixable at all no matter how things are manipulated.
House prices fell for the first time in two years this month, sending a shudder through millions of homeowners already hit by rising mortgage repayments and more expensive borrowing.
The outlook for homeowners is likely to worsen with news that the wealthy are losing confidence in bricks and mortar as an investment. There has been a big drop in City bonuses being used to buy prime property in Central London and in the popular second-homes areas, triggering fears of price falls in the South West, East Anglia and the Cotswolds.
They are bidding up the price of gold and silver. They are listening to each other and this is the message we see all over the place. This is why gold has shot up in value suddenly in the last 5 years. This is also why currency games are much more volitile today. For playing the FX markets has shot up as everyone tries to get their money into other currencies and seek shelter from the dying dollar, for example, or the very dead yen.
Target Corp.'s advantage may now be a disadvantage: Shoppers who are young and own homes.
That group, which had buoyed the retailer's results, may now be hardest hit by falling house values, and 41 percent of Target's sales come from home goods and clothing, more than double the rate at Wal-Mart Stores Inc. Target's short interest ratio, 5.73 percent, is at the highest rate in more than 10 years. The $62.49-a-share price is also expensive, based on earnings, compared with retailers including Wal-Mart.
Why, just 6 months ago, Target was supposed to supplant Walmart. For a while, Walmart lost shoppers due to its being more like a Soviet distribution point, dirty and poorly staffed, most of the goods being Chinese imports. But now there is a secondary flood of consumers dropping down the economic ladder due to inflation that is far over 2%. At 2%, we would be happy with such inflation! But it isn't, not even slightly. People took on huge debt loads during the super-cheap/fake inflation 7 years of plenty. Now the piper must be paid and we dance to the Grim Reaper's bagpipe wail.
Owens Corning is planning to lay off as many as 160 workers from its building insulation plant in Bethlehem as it shuts down a production line.
The Owens Corning plant, which sits off Route 32 in the town, employs 360.
This is yet another sign of doom, I would hazard. A 50% layoff is not good news. Of course, Bernanke and Mishkin could drop rates back to the Greenspan/Japanese levels of the good old 'there is no recession/we are at war so we must spend like fiends' days of the early Bush tax cut years. Only this magic is finished. It can't be used twice in a row. This is why we have these stupid peaks and valleys over and over again even though Mellon and his ilk pretended the creation of the Federal Reserve would protect us from these very things the Fed itself now creates.
I also received two nice emails I want to share, I do appreciate the time people use to write to me:
Elaine: Been fascinated by your blog recently. You are right-on most days. Keep it up.
My old dad, now deceased, who lived through the 29 crash, told me that US pays for wars with inflation. At the end of Vietnam, I came home, went in debt for a new house and a new car. Dad frowned. I almost lost the car and house because prices on everything doubled as inflation doubled prices and we middle class workers tried to catch up.
In relative terms, if massive inflation causes a huge expansion of the money supply, debt owed for war is proportionally less and eventually not significant.
This bunch of criminals and idiots, however, have destroyed the US middle class with outsourcing and globalization. Usually, the US middle class works harder and creates more wealth during inflationary times. Now, this stupid bunch expects to put our war debt on the backs of Chinese workers, create no real soverign wealth in the US except for the oil we steal for our global conglomerates to sell at high prices, and the rest of us be damned.
I suggest that the Chinese, Russians and others are going along with this mess (loaning us money) for their own benefit as they watch US corruption destroy our country. This gives them time to rebuild their infrastructure and military while the US is occupying itself with foolish wars and North American merger deals to steal natural resources. It is easier for them to buy up our worthless money with goods produced by their masses of (otherwise underemployed) workers than to engage us militarily or even in a head to head economic confrontation.
Unless we face our predicament(which I doubt), The US will have to default on it's FOREX debt. We are creating little or no new soverign wealth. In the end, we will be much poorer, militarily weaker( because we can't sustain continued military spending if we can't borrow) and we will have to struggle to hang onto what we have accumulated through theft and war.
After we default, we would be hard pressed to continue our ultra-expensive military adventures with debt backed by worthless paper (which no one in the entire world will want). (Perhaps, they think issuing a new Amero dollar backed by even more hot air will save us, but I doubt it).
Yes! I think The Empire is teetering on the brink of a sandy cliff, about to begin it's slide down to a crumbled mass at the bottom. It's time to save ourselves and what little we have left.
What are some things the US might do to begin getting us out of this mess? I don't think we can inflate ourselves out of this one.
Thanks for your efforts,
And here is yet another I think is quite interesting.
Hi Elaine, I have been reading Mike Shedlock's ( Mish) global economic trends analysis blog, among the many sites I visit. He claims that even though oil is denominated in dollars it makes no difference because it can be purchased in any currency, the denomination is just sort of a standard. I called him on it, claiming that to my knowledge oil MUST be purchased in dollars, hence the oil producing nations great reserves of dollars. Mish wrote me back, stating that although he's almost certain the oil producers take any currency it doesn't matter because any currency can be converted to dollars (or any other currency) in literally a second - I assume he's referring to electronic transactions - so for OPEC/whoever to price oil in euros or some basket of currencies is idiotic. Claims he's astonished no one understands these things.
So what I'm trying to understand is - I'd assumed to get dollars other nations needed to provide us goods, then instead of repatriating those dollars here by purchasing goods (that we don't even make anymore) or strengthening their own currency by exchanging them , those nations would hoard the dollars to buy oil.
But if dollars can be purchased in some sort of currency exchange market very easily as Mish believes - I would think massive buying of dollars by other nations would massively strengthen the dollar and I don't see this happening. I know Mish is smart and a white male and all, but I'm also thinking he's wrong here but I wanted to check what you think because I have mucho respect for you. Below is a link to his article:
Mish is right in that the dollar is used to PRICE oil but there is no real exchanges of currencies since this is all now totally magical, namely, computers trade numbers. But if the dollar is too volitile and can't retain value but becomes a will'o'whisp currency, out of sheer frustration, the oil pumping nations might change gears and disregard the dollar totally. This is increasingly likely. When this happens, our own economy which depends on 60%+ of our energy as imports, will fall apart as we won't be able to exploit the differential between a dollar's value and all other currencies.