China Freezes Business Lending To Stop Bubble

11/19/7

Elaine Meinel Supkis

China tries to suppress investment bubble while US tries desperately to inflate the same bubble here. But the US is making inflation worse as well as destroying the dollar. Time to yell at China again! Also, California's job losses grow steeper as the real estate markets decline even steeper. Movie revenues fall 30% from last year. We are certainly in a recession. And time to visit Japan yet again to examine the growing economic problems of Japan and how this impacts on the US. Also, the costs of turning all of these supposed 'international borderless' empires into replicas of the Soviet Union are very costly in many ways. We mustn't forget, the Soviets went bankrupt trying to insure 'security.'

China Curbs Bank Loans To Cool Investment Fever

Chinese authorities are slamming the brakes on bank lending, in one of their boldest attempts yet to curb the runaway investment that is threatening what is soon to be the world's third-largest economy.

In recent weeks, regulators in China have quietly ordered commercial banks to freeze lending through the end of this year, according to bankers in several cities. These bankers say that to comply, they are canceling loans and credit lines with businesses and individuals.

A China Banking Regulatory Commission official in Shanghai confirmed that local and Chinese subsidiaries of foreign banks have been requested to ensure that loans outstanding at year end don't exceed the levels on Oct. 31. The official described it as "guidance aimed at supporting the macrocontrol measures being implemented."

When the US was deep in the buy-up, buy-out frenzy whereby several trillion in dubious loans were rung up in order to play this game, the Fed did little to stop this. Indeed, the only tool used by our government has been to raise or lower interest rates. On top of this, the US encouraged this futile, dangerous game because it made the stock market roar like a lion. This pleased all the big investment firms, the speculators and the many rich people who buy our politicians and have an undue influence over our government.

The chief thing is to keep things hot here. The US gets all puffed up like Mr. Toad driving a pre-WWI car whenever the stock market shoots upwards. Examining why this is happening isn't part of the game here. I was furious while the stock market soared right when the housing boom collapsed. This happened before, from 1927-1928. The housing speculative boom in Florida and California collapsed. The office building boom continued until 1929, this is just like today. But when the housing speculative market fell, this simply moved over to the stock market which, like this one, shot up.

The huge difference between then and now is, back then, there were new industries and inventions like the radio or the new way of building cars by Ford, using the assembly line where the car moved down an aisle while workers put on parts as they passed. The technology boom that drove stocks up to the heavens in 1999-2000 was more like the Roaring Twenties. The housing and take-over boom that followed this classic crash was totally fake and is directly responsible for our economy tanking today.

China knows that fostering and helping huge bubbles is a disaster and they try to contain this, not encourage this. The flow of money is defeating them. The Japanese recently boasted, they would flood China with investment loans and this is happening. The grinding battle between the Bank of China and the Bank of Japan is getting nastier, not nicer. Japan has escaped censor yet again at the recent G20 meeting while the G7 at that meeting hammered yet again on China. The yen is growing stronger against the dollar which irritates the Japanese no end. Yesterday, China's television service actually asked people to buy yen and euros and sell dollars!

And interesting twist in this game. When we were students in the 1960s, those of us who had access to computers back then liked to play this game we called 'What would happen if a billion Chinese do something at the exact same time?' For example, would this change the rotation speed of the earth if everyone in China collected into one area about 500 sq miles and simultaneously jumped up and down? Or what if everyone were to return Coke bottles at the same time? Would this cause a run on the banking system as stores try to pay them the fees? Well, we will find out what will happen when a billion Chinese suddenly play currency games!

Of course, most don't have money for this and the people with money don't have all that much but the Bank of China has the most money on earth and if they are joined by all the lesser monetary holders and do this all in one day, the dollar will vanish as a tradeable commodity. I don't think the Fed takes this seriously enough.

Wall Street Plans $38 Billion of Bonuses as Shareholders Lose

Shareholders in the securities industry are having their worst year since 2002, losing $74 billion of their equity. That won't prevent Wall Street from paying record bonuses, totaling almost $38 billion.

That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.

The bigger bonus pool derives from a record $9 billion of fees for arranging acquisitions and $5 billion for underwriting initial public offerings and sales of junk bonds, the most lucrative securities, Bloomberg data show.

Talk about chutzpah! First, they sell junk as triple A. Then they sell worse junk, toxic tranches, at triple B and tell everyone, this is more profitable than the triple As they were peddling. Then the poor pension funds and others discover the triple As are triple Cs and the Bs are all XXX and no good for anything, only gyrating in some plush, red hell. So everyone is clamoring for justice and instead of returning their ill-gotten gains, these guys will rush out the door and laugh and have big parties and sneer at everyone and then whine that they need lower interest rates so they can make more 'deals' which involves dumping more debts on businesses.

Arrest them for fraud. Seriously, these con men and women told gullible investors, their new-fangled CDOs were better than true, secure bonds because the risk had been spread. Namely, the put into every possible bond combination, a huge pile of really poorly secured, uninvestigated, ridiculous loan packages and thought this would never appear on any bottom lines at the end of the year because no one would notice a couple billion missing. Right!

Since these losses were obvious to outside observers like myself, the fact that these guys kept packaging these toxic bonds and lying about their security level means they conspired to lie about a fundamental matter. They even paid Moody's and others to lie about the ratings. Everyone knew this was madness but it made money for them all so they continued to lie. Either they be arrested or they be fired for incompetence and these fees returned to the investors who trusted them.

"Beowulf" tops box office, boosts Hollywood hopes for 3-D films

The 12 top-selling movies took in a combined 94.6 million dollars this weekend, down 29.2 percent from that in the same period a year ago, as ticket sales have been down in eight of the past nine weekends, according to Los Angeles-based box office tracking firm Media By Numbers.

A classic way to judge a recession is the volume of movie tickets at the very beginning of the holiday season. Down almost 30% is hysterically bad. Hollywood executives, hit by the script writer's strike, are now tearing their toupees off and wailing with despair. On top of all this, Broadway stage hands are striking due to the high cost of living and stagnating wages as well as cuts in staff. So this looks like a rather gloomy Christmas season. I used to take my children to the opera, ballet and Broadway shows every Christmas. And the ability to buy tickets depended very much on the state of the economy.

FedEx cuts its quarterly outlook on rising fuel prices

Shares of FedEx Corp. struck a 21-month low on Friday after the country's second-largest packaging transporter lowered its fiscal second-quarter forecast due to rising fuel costs.

For the November quarter, the Memphis, Tenn.-based shipping company lowered its earnings outlook to $1.45 to $1.55 per share from $1.60 to $1.75. The company also dropped its full-year earnings estimate to $6.40 to $6.70 per share from previous guidance of $6.70 to $7.10.

Just before the Great Crash in the 1920s, rail shipping fell dramatically. So it is here. Like the movie ticket sales, this is a classic forward sign of impending stock crashes. The other is, stocks start wavering and over a course of three months, keeps trying to regain the peaks via one more thin mint of a deal. But failing. So it is here. The deals set for this summer were terminated by a near total collapse of international banking between Europe and the US due to currency fluctuations and the rise of the euro versus the dollar. Since then, the banking system has limped along, barely, and had to have continuing infusions of emergency funds that were implemented just this last Friday, the biggest Fed intervention since 9/11 to try to drive down overnight interbank interest rates.

But the dense economic data underpinning all this is very dire. Oil is still heading towards $100 a barrel, a price our economy can't sustain for long unless we all get pay raises and this will cause inflation and oil will rise further since we want the yuan stronger and China wants this oil. The horns of dilemma strike us yet again. The US and Japan are both being impaled by these horns on several levels. This means, we are trapped within our own paradoxical systems. Any one easy solution causes all the other problems to get much worse.

California lost 15,800 nonfarm jobs in October

The crumbling housing market took a toll on California employment in October, and forecasters say more pain is likely in the months ahead.

The state lost 15,800 jobs outside the farm sector during the month after smoothing out the numbers for seasonal variations, the Employment Development Department reported Friday. Construction and finance, the two sectors most closely tied to housing, led the way down.
*snip*
"Job losses in construction and financial activities are intensifying," said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. "The ripple effect of these two sectors is showing up in every sector."

California appears to be headed for a recession, defined as two consecutive quarters of job losses, Adibi said.

The recession is already well inside of most of California's economic house. It is tromping around with muddy boots in the livingroom that has been tastefully redecorated and put up for sale. A huge number of Californians have decided to become real estate agents or play the real estate markets as speculators. One of my nephews who wanted to surf more often than weekends dropped his computer job and became a real estate player. The minute he announced this at the end of 2005, I said, 'The market is going to die rapidly.' For this is a classic sign, a bubble is about to burst. Namely, real goofballs with no experience or talent in investing suddenly flood the market, seeking easy money and easy times.

Following economic data and making smart choices is very difficult and time consuming. Most of the professional investors I have known do this with tremendous devotion. They are very anxious to be well-informed and spend endless hours at this. Far from more playtime, they have less. Same with good real estate agents. They don't have free weekends and in hot market times, are busy 100% of the time, in bad markets, have to sweat blood to close any deals at all. Not for the faint of heart or lazy.

When taking the commuter trains from the suburbs around NYC, one can easily see who are the money makers on Wall Street as well as in publishing or the computer industries in New York. They have their laptops or communication devices of various sorts out and are working away, as the trains race towards the towers of Manhattan, doing business. This constant dynamism coupled with the reality of overnight international business means only workaholics need apply for these positions.

This is also why I know that when the biggest players on Wall Street pretend to be clueless, this is a fake front. They are endlessly curious about what is going on and can, like myself, put 2x2 together. But they won't let the gullible know this fact. What I surmise is, they fall into temptation, seeing all the billions in fees they can get as bonuses if they lie or at least, play dumb, while scheming to sell turkeys to people expecting golden geese.

The headline in the financial futures market these days says Federal Reserve Chairman Ben S. Bernanke is withholding some vital information: The economy is so bad the central bank will have to lower interest rates at least three-quarters of a percentage point to avoid a recession.

Bernanke's two rate cuts since September failed to reassure the bond market, where volatility has risen four of the past five weeks, according to Merrill Lynch & Co.'s MOVE Index. Yields on Treasury bills, the haven for bond investors in times of turmoil, are near their lows of August, when losses on securities backed by subprime mortgages froze credit markets.

The entire mess we are in was due to Greenspan dropping rates because the over-inflated Dot Com bubble broke. Unlike in China, the US encouraged this bubble and when it burst, moved heaven and earth to revive it. And they succeeded in creating two new bubbles. The housing as well as Wall Street bubbles. The national debt as well as business and personal debts, shot to the roof in this last 7 years because this was all a balloon based on interest rates in Japan and the US being well below the real rate of inflation. This dishonest scheme to inflate the world's #1 and #2 economies by lying about inflation and having much lower rates than called for, has caused global inflation due to the fact that both economies are huge.

Add to this, China finally rebuilding after 200 years of destruction and we get the present mess. The rising volatility in the markets is due to the dynamism of adding huge sums of 'money' rapidly. The classic way of adding money is to generate loans but this works only so long as markets are also expanding rapidly. Otherwise, the new loans will fail as we see in the US. There is no safe haven from collapse. Neither the commodities markets, gold, oil, government bonds, stocks or CDs. The need to prevent total collapses of a system is of utmost importance. And the only time and way this can be done is to not let bubbles take over in the first place. The Chinese are trying to insure their own systems by forcing everyone to hold more and more reserves. The government itself holds the world's biggest reserves.

The US has refused to do this at all. China encourages savings unlike Japan, for example, by raising the interest rate. The US and Japan have killed interest rate benefits so no one is bothering to save and bank reserves drop lower and lower. As China struggles to contain an amazing boom, both the US and Japan try every trick in the book to reenforce global inflation.

As workers struggle to swim ahead of this cyclone of inflation, all governments are cutting back on domestic values such as vacation time, pay raises and benefits. Our own benefits have been under siege by the state of New York, we got a letter yesterday about medical benefits telling everyone, the previous choices are now reduced to just one HMO. In New Jersey, the Gov. Corzine of Goldman Sachs has ordered a de facto post-Thanksgiving vacation day is no longer a paid holiday. In industry and elsewhere, workers are being nickled and dimed to death. Back in the 1990's with global free trade, the cuts didn't hurt because oil was the cheapest in the last 40 years and the cost of buying manufactured goods fell like a rock so everyone felt richer.

Few people listened to those of us who warned that this was temporary and would end with the US being quite anemic and eventually would lead to both inflation as our giant trade deficit destroys our purchasing power as well as a drop in wages due to deindustrializtion. Now, Europe is trapped in that same dynamic of free trade killing industry as the euro makes buying ever cheaper, temporarily. Already, wages and benefits are being cut and workers laid off all over Europe in a futile attempt at making profits while the entire continent slides into the same mess the US is now in. Just as Germany and Britain dragged the planet into the Great Depression, so will the US drag everyone into a similar hole.

Canadian Shoppers Demand Wal-Mart Price Cuts as Loonie Soars

Christopher Smith, co-owner of a bookshop in Ottawa, says his customers got angry when the Canadian dollar hit parity with the U.S. currency. If the two were of equal value, they complained, the same book shouldn't cost 30 percent more in Canada than in the U.S.

The chaos surrounding the dollar isn't China's fault. The dollar's collapse vis a vis all our trade partners is caused by American policies. The Federal Reserve and the Treasury have this dishonest program about lying about inflation and lying about how they desire a stronger dollar while doing the opposite. Just because everyone can see these lies doesn't change the morality of lying. This tragic and silly game is like a child closing its eyes and saying, 'YOU can't see ME now!' Children actually do this. It is part of the growing up process when they discover this isn't so. But evidently, it is still being done by adults, all the time. This is a part of the 'emperor who has no clothes' business. The instability of the dollar has now caused total chaos in pricing exports and imports and is quite unsustainable. In all markets, this instability is wrenching all other systems out of whack. And is is building up anti-American forces which we can ill afford.

Chinese Premier Wen Jiabao and his Singaporean counterpart Lee Hsien Loong reached important common understanding on enhancing mutually beneficial bilateral cooperation during their talks on Sunday, according to a Chinese Foreign Ministry spokesman.
*snip*
China and Singapore have also kept close contact and coordination on regional issues, he added.

"We highly appreciate that the Singaporean government has repeatedly stated its one-China policy and its opposition to 'Taiwan independence' activities," Wen Jiabao said.

China is making friends with former rivals or enemies. This is the essence of diplomacy. The US crows whenever it can get nations that are long-term allies to join us in our adventures. This isn't diplomacy. This is childish. China continues to build up it long-range economic and diplomatic ties and it is in a hurry because the system is about to break down and they don't want to be caught in the mess just like Europe is, trying to please the US.

The Asian economic powers know perfectly well, if the US goes off the cliff, they follow. They are very anxious to protect themselves from this and hope to find some sort of solution to this problem. I don't know if they will succeed this time around but the next cycle will not be dominated by the US markets. This is why we can't be so vain and imagine Asia will prop us up forever. There is a definite time limit on this.

Sales tax hike economic cure or curse?

Policymakers have waged heated debate in recent months over how to reduce Japan's mounting fiscal debt as the yearend deadline for compiling the government's next fiscal year budget nears.
*snip*
Now the outstanding national debt is expected to reach ¥547 trillion by the March 31 end of the fiscal year. This means a ¥4.28 million debt per capita.

It is ballooning every year due to the interest on the government bonds and increasing social welfare spending amid the aging population.

Particularly in 2009, the state's financing of the basic pension program is scheduled to rise to half from the current one-third.

$5 trillion in debt doesn't seem all that much until we consider the fact that Japan's population is much smaller than our own so it is more then our debt, per capita. It would be as if we were $15 trillion in debt. At the rate we are going, we WILL be $15 trillion in debt in just another 10 years, alas. This is unsustainable. The world's biggest economic powers can't also be the world's biggest beggars. Japan does have a trade surplus as well as trade profit surplus. #2 and #1, respectively. But this doesn't flow into government coffers sufficiently to keep bankruptcy at bay. The government is solving this by cutting back on services in Japan just like Japanese businesses ruthlessly cut back wages and benefits. This deflationary cycle is set into motion to avoid bankruptcy but this means fewer sources of tax revenues. A classic horns of dilemma moment.

But critics feel this move will further curb consumer spending.

They say the already matured economy has little scope for further growth especially in the face of a decreasing population. Even reduced state spending would also probably be limited due to rising social welfare outlays.

According to the health ministry, social welfare costs ran ¥82.8 trillion in fiscal 2006 and are expected to increase to ¥143 trillion in fiscal 2025.

Japan is the leading edge of the mature economic system woes that are besetting most industrial nations. The collapse of family building, the rise in elderly without a large family to support them in their old age, the costs of a modern welfare state built on an industrial base, government overspending on things that don't fix the problems at hand, the costs of running increasingly Sovietized security systems for controlling the population, a sense of weariness that overtakes societies that have an overburden of elderly, political corruption by corporate entities, etc. No one has a solution to all this. Or rather, the classic solution is for barbarians to pour in across the borders and set everything to flames and kill off the elderly and rape the women, etc.

Experts say a sales tax hike is the most effective way to raise tax money. If income taxes are raised, this would prompt high-income earners to move abroad.

But any consumption tax hike promises to be contentious because this would hurt low-income earners unless the government keeps the levy on daily goods and foods low.

With world trade and world citizenship for the upper classes, yes---they do flee high tax homelands and move to nicer places. They continue to run their corporations and to bribe politicians to do their dirty work. They will manipulate governments and the courts to do their bidding while using tax havens as their home base. This piratization of privatization is one of my key themes. Normally, when rich people try this, the Crown or Emperor goes after them and seizes their valuables. The chief function of the State is to loot. But the globalization movement is all about evading state controls and taking advantage of the American empire to live where ever one chooses while flaunting paying taxes to any empire. Our own empire is ruled by these tax evaders. And where ever they get the upper hand, we see the same thing. Governments running in the red, them getting rich off of this in various ways while everyone blames the elderly and other social programs. This is true of all these economic problems. It is always the fault of the people at the end of the line. The little people. This is why they love blaming the present collapse which began with Greenspan and the Bank of Japan dropping interest rates to historic lows.

Akihabara's awful truths

Seikai no Radio Kaikan: Usually simply called the "Raido Kaikan," this otaku-only shopping center located just across from the station's JR exit has managed to remain unscathed by the massive changes going on around it. It's a minicity unto itself of candy toys, capsule toys, model kits, action figures, life-size pillows shaped like anime characters, and more.

Highlights include the creepy Volks superstore full of expensive and alarmingly lifelike dolls that customers receive in marriage-style ceremonies, and K-Books, which is home to some of the dirtiest porno comics — and customers — in the world. Like it or not, this is Akihabara as the natives dig it. And what did you expect, really?

1-15-16 Soto-Kanda, Chiyoda-Ku

This is a sign of despair, not hope. When the human animal has to regress in this fashion, it is a sign of severe social distress. In South Korea, the rate of children and youth hooked on playing internet games is so great, it is causing a 30% rise in delinquency rate as children oversleep and miss school due to playing all night. The hyper-competitive, hyper-study Asian engine for the future is breaking down. And the social pathologies caused by the collapse of hope for the future, the inability of thinking about building a family, the inability to socialize with the other sex, is a growing menace.

Not so welcome to Japan any longer

Japan is the only country apart from the United States to resort to fingerprinting foreigners, but Tokyo is carrying it further and targeting almost everyone, including people with permanent, work or spouse visas, as well as short-term visitors. In the U.S., all permanent residents are exempt. In Japan, only children under 16, diplomats and special-status, mainly Korean, permanent residents will escape the lines and the tedious procedures.

In a statement that was smug and arrogant, and either dishonest or dangerously deluded, Naoto Nikai, an immigration bureau official, declared that the fingerprinting and photographing of foreigners "will greatly contribute to preventing international terrorist activities on our soil."

Cheek to jowl with free trade and open borders as well as total freedom to yank profits out of a host nation and run off to tax havens rides this business of turning all our security systems into expensive versions of the Soviet Union. When I was young, I actually defied Russia and told the East Germans, I would sneak into East Germany just to prove I could do it. The West German police monitoring the phones arrested me and handed me over to the American embassy, I being well under the age of adulthood [thank god they did this, of course]. Today, it is getting increasingly like Europe back in the 1960s when the Soviets built the Berlin Wall, for example. This is expensive and ridiculous considering that toxic toys can easily travel into whatever countries they wish.

This false globalization is now beginning to irritate the upper classes which is why many countries are now instituting new systems whereby the rich can bypass security and go about the planet as kings and queens while we ordinary people must stand in long lines and get searched and scanned and detained or tasered to death when things go wrong or we lose our tempers. The list of people restricted from travel is quite long and impossible to get off of even if it is unfair. And this is increasing tensions within the greater US/UK/EU empire as well as in Asia.

Now passengers need ID to travel within Britain

Passengers on domestic flights and ferries between mainland Britain and Northern Ireland will be required to carry identity papers for the first time from next year.
The move will effectively establish a highly controversial internal border within the UK and could pave the way for identity checks on all domestic flights and ferries in Britain.

This is another example of how internal as well as external travel is being monitored. In the US, if you want to buy a train ticket with cash, they demand identification, first, for example. Several incidents in the past have occurred when the government was playing internal war games and went onto buses and demanded ID and people understandably resisted. We used to have a constitutional right to move about our own country without being forced to show identification without cause. The police used to have to suspect a crime in order to do this. Now they can simply walk up and demand ID and if refused, taser people. There have now been 280 deaths since tasers became the favorite torture instrument. This is a huge number especially since a good number of these people were not really violent criminals at all. In one recent case, a man passed out from diabetic shock and instead of calling an ambulance the police tasered him to death.

In the past, I never heard about the cops shooting people to death who were passed out!

And so ends the experiment in free trade and internationalism. In a welter of Soviet-style states going bankrupt like the Soviets, doing really stupid things.

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Comments

[Goldman]

Hi Elaine,

New article in the NYTimes about Goldman making proifts due to the mortgage crisis. Check it out.

http://www.nytimes.com/2007/11/19/business/19goldman.html?hp

[Teddy]

Elaine, Japan's debt is to themselves, ie, they owe it to themselves. And a lot of that internal debt is from the carry trade. If and when the carry trade reverses, they can party like its 1999 which would increase their service economy and GDP. And if China sells dollars or yuan, or whatever to buy yen to make the yen rise, so what. This purchase (Is it Chinese savings or Chinese inflation?) causes the inventory of worldwide yen to go down or be sterilized. Japan can play ping pong with China by just creating yen out of thin air, thus desterilizing, and purchase yuan thereby increasing their reserves of yuan and lowering the yen or they can lend this money (the carry trade) to the US or elsewhere by selling the yuan for yen and loaning it out thereby causing the yen to go down.

[Teddy]

That last sentence should read "selling the newly created yen for yuan" and loaning......

[Elaine Supkis]

The Japanese wanted the yen to be 130 to the dollar by October. I read this in the Nikkei news.

Today, it is 109 to the dollar and rising. This isn't because the Japanese want this to happen, this drives them NUTS. Totally. Go check out the Nikkei news if you doubt me.

[Carlos]

Elaine, how can the geniuses at Goldman expect the Arab states to keep propping up the dollar by pegging their currencies to it when they come out and shoot down US companies they have huge investments in?

U.S. Stocks Retreat After Citigroup Downgrade, Lowe's Forecast
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=ajGvswXrzYUM

This may be a good thing for the smaller investors with life savings to know, but the big picture is starting to look like it's every man for himself on Wall Street and no one is listening to Ground control anymore. Certainly a very bad sign.

[Elaine Supkis]

Yup.

I just put up a story about all this.

[Not Student]

Teddy,

The problem with the Japanese system is that if they lost the export market, the whole carry trade will unwind and the debt cannot be repaid, since people are not getting any work.

And Japanese import is so dependent on foreign currency, their whole economy could collapse if the current international system unwind.

In that sense, it's the Japanese who needed to play the currency game, not the Chinese. The current rise of Yen must have been caused by the Japanese dumping Dollars. Seems to me they are abandoning US as a market. Don't forget, Yen hasn't strengthened at all vis-a-vis Euro and Yuan.

[Teddy]

Savings, savings, savings, savings, ad infinitum all over the world! Maybe it's "only" the equivalent of 1 trillion in US forex reserves here, but there are loans via the carry trade and investments in New Zealand, Australia, Europe, China, and on and on. And as a brilliant old miser what to do with it, especially since lately you've been making the loans directly in yen, not converting them yourself to make the loans and investments! And oh! What if your savings comes back to you via the unwinding of the carry trade doubled since Bernanke and the Fed's job is to be the lender of last resort and to prevent the US money supply from going down? And as a Barron's article 3 years ago stated, the US at that time had a trade deficit with China not just with low value added products like clothing, but also high tech. Same article stated that Japan had built factories in China to assemble their value added products and did not transfer high end technology. So the old and aged miser will have to adapt and build factories around the world with his new found wealth and start spending and partying like it's 1999. Hey, in tough times, as the old adage says, neither a borrower nor lender be.It's tough on everyone, but I'd rather be the creditor.