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RobG

Over at Mish's site (http://globaleconomicanalysis.blogspot.com
/2008/04/fed-uncertainty-principle.html) he outlines some excellent observations of what we learn from the latest actions of the FED:

#1 Fed Uncertainty Principle:
The fed, by its very existence, has completely distorted the market via self reinforcing observer/participant feedback loops. Thus, it is fatally flawed logic to suggest the Fed is simply following the market, therefore the market is to blame for the Fed's actions. There would not be a Fed in a free market, and by implication there would not be observer/participant feedback loops either.

Corollary Number One:
The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn't know (much more than it wants to admit), particularly in times of economic stress.

Corollary Number Two: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Corollary Number Three:
Don't expect the Fed to learn from past mistakes. Instead, expect the Fed to repeat them with bigger and bigger doses of exactly what created the initial problem.

Corollary Number Four:
The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it's easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.

Bear of Little Brain

Have to get this off my chest:

Just watched Geithner and friends testifying. What a loathsome piece of sh*t Geithner is. All mouth and hands and slime. He isn't fit to be selling second-hand cars. Yuk, yuk, yuk.

And aren't the New York Fed and JP Morgan just different parts of the Rothschild multi-headed monster?

Aaaaaagh!

Sorry.

rockpaperscizzors

Here's an interview of Lynn Forrester de Rothschild and her support of Hillary Clinton

by Kentroversy
Just as I have been telling people through my writings and interviews -- Hillary Clinton is the Global Elite's choice for President of the United States in the 2008 election.
On October 5, 2007, a member of the oligarchical Rothschild family -- Lynn Forrester de Rothschild had gushed incessantly about how great Hillary will be for America "and her fellow capitalists."
http://kentroversypapers.blogspot.com/2007/10/rothschild-family-supports-hillarys.html

Richard

You write: "One can stop it in its tracks by raising interest rates every time the bankers get tempted to hand out endless free loans. This system was the system set up eons ago to stop wild banking."

The government bond market place is doing what the Federal Reserve has failed to do; while the Fed liquifies basically insolvent banks, the marketplace independent of Federal Reserve action just now has started to call Treasuries lower and interest rates higher.

A run on the US Treasury Bonds has commenced; it is just a trickle now, but will become a brook, then a running river

The investment application is to be long gold, GLD and with margin credit while it is still cheap, short Treasuries by being invested in the Rydex bear Treasury mutual fund RYJUX.

PLovering

A contemporary of Greenspan and one of Wall Street's wise men, being interviewed on TV, said Greenspan was a well-known putz -- even before Greenspan was fired from his job on Wall Street.

Rosco

An old funny expression:


Good Judgement comes from Experience
and
Experience comes from Poor Judgement

Elaine Supkis

Rosco, only if one learns from experiences. Some people are incapable of this.

Everyone else: yes, yes, and more yes. I agree with you all.

GK

I believe Richard is correct. The Rothschild control the worlds governments primarily via the bond markets. They operate under 50 year plans. WATCH THE BOND MARKETS.

Elaine, do you know why RYJUX dropped 66% between Feb 7 to Feb 16 2003?

http://finance.google.com/finance?q=RYJUX

Phase 1: Drop interest rates, load world up on debt. Crush savers and push them into soaring stock market.

Phase 2: Credit Crunch. De-leveraging starts collapse of stock market. Crush stock investors and scare them into cash and gold.

Phase 3: Massive Short of gold market. Crush long gold investors and scare them out of gold into safe treasuries.

Phase 4: Crank up Interest rates. Crush treasury investors and scare people into world war with China.

Phase 5: Lend China billions (trillions?) of dollars to fight war with US.

Phase 6: De-industrialized and depopulated world rebuilt from remaining industry in China under hybrid fascist/capitalist/communist/one electronic currency/secular humanist model.

But I could be wrong.

Bear of Little Brain

Just toddled over to soon-to-spontaneously-combust Karl Denninger's blog. He mentioned that Jamie Dimon is on the board of the NY Fed. Didn't believe it could possibly be true, but

http://www.newyorkfed.org/aboutthefed/org_nydirectors.html

IT IS.

Where does this corruption and collusion end?! This cannot end well.

Bear of Little Brain

So there was Geithner and Dimon, testifying as if they had only the demise of Bear and the good of the People in common, and acting oh so goody-goody.
In the UK, in common parlance, we call it, "taking the piss".

Bear of Little Brain

Sorry to be so crude, but I'm getting quite angry about all this. It's not just in the US. It's the same, but different, here in the UK.

Wildly off-topic but:

In January, Parliament voted for the EU Reform Treaty, by-passing any requirement to hold a referendum, which a Constitution would have required, as per past promises. The PTB know they would lose a referendum here, so they are dodging around it.
January 1, 2009, the UK is effectively subjugated to the EU. A quick skim through the Treaty seems to give a lot of Power to someone designated "The High Representative of the Union for Foreign Affairs and Security". A title which is a bizarre mix of Flash Gordon and George Orwell. "Reichs Chancellor" is so much more succinct.
As this stuff is drawn up by the usual dissembling lawyers, it is easy to overlook the fact that it makes it quite possible for any state that chooses to secede to have its fate decided by a panel from which that state is specifically excluded. I have a vision of an impoverished and rebellious UK population being repressed by German and French EU troops. My forefathers will be turning in their graves.
In the meantime the pound is headed for parity with the Euro, probably deliberately, to make it acceptable. Time to leave, me thinks.
BTW, Elaine, Elizabeth R (who is German, of course) signs off on all this.
Sorry to veer of-topic

Bear of Little Brain

GK:

My gold is on the CFR's proposal to have a world currency based on some claim on gold (no doubt "Albrecht" Rothschild has plenty to contribute, so it will suit him/them). See Benn Steil's essay:

http://www.foreignaffairs.org/20070501faessay86308/benn-steil/the-end-of-national-currency.html

After your prediction for gold and the recent sell-off in gold and silver, I'm feeling a little anxious. Still, maybe Crazy George will get on and bomb Eye-ran soon, so maybe I'll just hold on and hope for the worst! (No, I'm not serious. If Worldwide Peace and Love break out tomorrow, I'll happily see gold collapse. But I'm not holding my breath.)

Time for bed, diddly-dum.

Oh, on Greenspan: Marc Faber once said he worked with Greenspan; that he was a hopeless economist; and was an incompetent colleague. I think he said he worked with him "until he was sacked", but I'm not sure.

Bear of Little Brain

"until he was sacked". By "he" I meant Greenspan, not Faber. Must be getting tired.

OC

US lost control of Basra - that means oil will not be flowing out of Iraq into US hands. The recent fight demonstrated that Iran has control over all militias in Basra. When the Kitty said stop - all the militias stop.

The Kitty has been mulling to cut a deal with Dragon in return for protection. Now it can go to the Dragon's cave to cut a deal like Putin.

Only oil from SA and Gulf states remain under US control for now. The rest will go to the Dragon.

Anthony

http://www.financialsense.com/Market/wrapup.htm

Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain control 40% of the world’s proven crude oil reserves. And the recent commodity price boom has swelled the coffers of governments that control commodity exports or heavily taxes the revenues earned by private commodity exporters. As a result, the assets managed by Persian Gulf sovereign wealth funds (SWF’s) have ballooned to roughly $2.5 trillion from $472.5 billion in 2004.

Funds derived from oil and gas export revenues account for roughly two-thirds of the total assets held by sovereign wealth funds (SWF’s), with the rest controlled by Asian surplus exporters. Saudi Arabia is planning a SWF for $900 billion, and the Abu Dhabi Investment Authority controls $875 billion. The Kuwait Investment Authority oversees $213 billion, and the Qatar Investment Authority had an estimated value of $60 billion at the end of February.

By 2015, the Persian Gulf SWF’s could grow to $6-7 trillion. If Chinese, Russian, and Korean SWF’s are taken into account, the total global SWF value could top $12 trillion, or nearly the size of the US economy. One has to wonder what direction the Persian Gulf SWF’s will take, if the Illinois senator Barack Obama wins the US presidency in November, and hastily withdraws US troops from Iraq.

GMG

Dear Elaine,

Much of what is taking place as it relates to the crisis in the financial world is outlined in Naomi Klein's book "Disaster Capitalism". I haven't read it yet, however I've listened to at least one of her interviews. In her book, she documents how many policy,securtiy, and market failures throughout our history has allowed the government to usurp civil liberties and personal freedoms. I want to find the time to read this.

Thank you,

GMG

Elaine Supkis

England tried to hang onto its oversized empire after the disaster and bankruptcy of WWI. It was laughably easy for Japan and Germany to prove that rule to be a paper tiger.


So it is with us today. China just stabbed Iran in the back today. But this was after Paulson made some sort of deal. As my cartoon showed. The deal is secret, of course. But I can venture a guess. Non-interference in Asia in exchange for us running riot in the Middle East.

China's view: we will bleed to death there as we try to steal everything. China gets all of Asia. We can't take the oil in the middle east, we can only protect is so it can flow to Europe. Europe is KILLING us in global trade of manufactured goods.

Both Japan and Europe got HUGE deals this week for, all together, around $150 billion! And the US has HUGE trade deficits with both entities. So we will be the soldiers to protect Japan and Europe's oil.

With Chinese blessings. Ouch.

Carli

rockpaperscizzors, you may have the wrong Rothschild, it looks like McCain is it. Read this article:

http://www.washingtonpost.com/wp-dyn/content/
article/2008/03/14/AR2008031403897.html?
sid=ST2008031404122

rockpaperscizzors

Carli, I checked my source and (Lady) Lynn Forester (de Rothschild) married Sir Evelyn de Rothschild (his current 3rd wife), "When 67-year-old British banking scion Sir Evelyn Rothschild first set eyes on 44-year-old Lynn Forester at the 1998 Bilderberg conference—the matchmaker was none other than Henry Kissinger—she was already a woman of major means."
http://www.portfolio.com/views/columns/the-world-according-to/2007/10/05/An-interview-with-Lady-de-Rothschild

Here's the one supporting McCain: Nathaniel Philip Victor James Rothschild, born July 12, 1971, is a British financier who is Co-Chairman of Atticus Capital LLC, a 2004 Young Global Leader, and a member of the prominent Rothschild banking family of England.
http://en.wikipedia.org/wiki/Nathaniel_Philip_Rothschild

Probably in-house fighting...just like the Pritzker's


rockpaperscizzors

Elaine, thought you would enjoy Businessweeks Ed Wallace's commentary. Imagine, he's as fed up with the liars in charge as well.

There Is No Gas Shortage
But Washington, Wall Street, and ethanol and oil and gas companies want you to think there is, says automotive expert Ed Wallace

"They see speculation in the market, I see decline in global inventories. I don't think this is a big surprise, that we've had a jump in price when there has been a decrease in crude inventories."— Energy Secretary Sam Bodman, Bloomberg News, Mar. 5, 2008

"It should be obvious to you all that the [gasoline] demand is outstripping supply, which causes prices to go up." — President George W. Bush, Associated Press, Mar. 5, 2008

One wonders if verifiable facts ever get in the way of this administration's statements on issues that are critical to the average American's wellbeing. After all, last time I checked, when politicians are elected to public office, or appointed, as is Energy Secretary Samuel W. Bodman, they must take an oath to the American people before assuming their new positions. How can they forget a sacred oath so quickly? Were they daydreaming when they took it, so it never meant anything to begin with? Maybe it's just another promise you have to make to get into office: When you're securely incumbent you can ignore even solemn oaths you took....
Gasoline reserves on hand are at the highest levels since the early 1990s, which is remarkable considering the nation's refineries have been cutting back on the production of gasoline because their margins have declined. In fact, average gasoline reserves on hand have risen since this past October, while oil reserves in this country have gone up virtually every week this year—and only fog in the Houston Ship Channel that kept oil tankers from unloading their crude one week kept it from being every week. ....

As for the speculators, in 2000 approximately $9 billion was invested in oil futures, while today that number has gone up to $250 billion....

Possibly just to ensure oil prices don't respond to real-world market conditions, Goldman Sachs (GS) forecast on Mar. 7 that turbulence in the oil market could cause oil to spike as high as $200 a barrel. This flies in the face of all known information—but then again, Goldman Sachs is the world's biggest trader of energy derivatives,
http://www.businessweek.com/lifestyle/content/apr2008/bw2008041_945564.htm

Anthony

people are still trying to figure out what chinese is saying in AEIA, but probably just disclosing what they are exporting to Iran. Who knows, let's see if the Iranian goes banana against the chinese.

http://www.armscontrolwonk.com/1840/ap-china-passes-iran-nuke-intel-to-iaea

— hass · Apr 2, 10:44 AM ·

Once you get past the media spin, this isn’t terribly interesting news. China gave the IAEA info on its nuclear deals with Iran — which were already covered by the IAEA. The suggestion that this intel had something to do with nuclear weapons is added by the reporter, obviously to suggest that something incriminating has been found.


Dutch

Hold on Rock, what happens when inflation hits the fan? Everyone goes on a buying spree! I agree there is no shortage of oil, but what needs examined here is "contracts". The question I believe is WHO owns these contracts? Once again war rears its ugly head.

Elaine Supkis

Oil speculators are bidding against each other. When there is something else going up, they rush there and continue the same.

There is EXCESS FINANCES out there in the greater world. The US and Japan both continue to pump out deficit spending and easy lending to the big players. So even as money 'vanishes' it is being engineered very swiftly.

This is a hazard, bad hazard. it is the system we have lived under since Kennedy was shot.

Dutch

Especially the big players, we have been squeezed out.Deflation on our end?
Credit=Inflation
Cash=Deflation
Capitol Credit Banking System- I believe we have been a cashless society far longer than we realized or even knew.

Dutch

Speaking of the fed, I saw the helichopper man on TV today, did you notice the shakiness in his voice? And where was Ron Paul? Also did you notice the head of HUD resigned?

Elaine Meinel Supkis

Yeah, I got the tail end of it. I was outside nearly all day digging up the Big Old Tree Stump. It was at least 200 years old. And hard as rock.

And Ron Paul: he is the Invisible Man as far as TV is concerned. TV is the Eye of the Insane. I avoid it as much as possible, frankly.

And yes, the head of HUD resigned in disgrace. How unusual. Heh.

Jim B

Any Rothschild ever been on Charlie Rose? NO!!

Kissinger yes, for the hour, more than once, and fed questions AND answers by Bohemian Grove MC, Mr. Rose. Gore Vidal treated kindly on the show, the opposite of Noam Chomsky (who's been getting a lot of print for what it's worth as a left gatekeeper). In fact, I've never seen Charlie rude, except in the case of Noam.

Lynn and Evelyn got hitched in time to watch the Towers from their ringside seats. (Thanks again to GK for the heads-up).

Night, all...

EL JOHNNY

The USA's powerful eltie is greasing up the levers and gears of media power, getting ready to open the ole trap door. Guess who's back? I saw that Andrea Mitchell, Allan Greenspan's wife, has returned working as a correspondent for NBC, I believe it was.

Her job, when Alan was the chairman for the Fed, was to be the Fed's bag lady for bribes to the media giant's high senior executives, i.e., to flatter, gain, and maintain the nation's trust in the Fed by means of the media's pabulum portrayal of the Fed.

I am somewhat startled to meet people everyday who do not realize that the Fed is a private, unaudited bank, whose biggest stockholders remain unknown to the country. A big sucess for Allan and the boys. Thanks Andrea for pitching in.

Watching those lying banking and committee sacks of shit on TV these past couple of days, deceiving the public with their arcane language is a big insult to the nation that placed their trust in these institutions.

The committee politicans questioning the Fed folks appear to know very little about what they are supposed to be ascertaining regarding the source of this financial chaos on behalf of and for the benefit of the nation. Many act so dumb.

No one appearing on this Howdy Doody show even got close to the beast of the derivatives. They refuse to say the word and elucidate on it. How appalling and insulting. It appears that the corruption of DC and NYC is so thoroughly complete and insidious that civil unrest, revolt, and war is inevitable when the truth finally worms it's way down to the average man.

I am selling my homestead and I must declare that this sub prime financing of 106 percent financing is still going on in the FHA mortgage market.

This crack cocaine like addiction to easy money is soooooo hard to break. Its like saying, "It felt so gooood when I was doing it, but now I feel so dirty, so I am going to be recedivestic and keep doing it".

E's perceptions of the world are so easy to understand and so right on the money that she should be a re hab counselor for the scoundrels on TV.

THROW THE BUMS OUT! POWER TO THE PEOPLE!

Bear of Little Brain

Rock:
Come on , man, "sacred oath" is what we are supposed to abide by. Not them. That's how they screw us.

Anthony

Well, big companies start downsizing. This will hit hard down the road.

Motorola to cut another 2,600 jobs
http://www.engadget.com/2008/04/03/motorola-to-cut-another-2-600-jobs/

Dell to cut even more jobs as it reduces costs
http://www.engadget.com/2008/04/03/dell-to-cut-even-more-jobs-as-it-reduces-costs/

Elaine Meinel Supkis

HUD is the home for political corruption. All my life, I have seen people go into HUD and then get caught doing something lousy.

Derek

The first infusion was the Greenspan attempt at giving Bush a 'good' economy right after he stole the election.

The first infusion was a year prior to the election, to stave off any Y2K bank runs. De Facto interest rates went to 1% for a short time, like they did again right after 9/11, and then officially a year later.

Anthony

China-Iran nuke sutff. This is interesting. So

we have Tibet- wedging Iran/China - Paulson trip. I smell a job being done by the neocon because china doesn't want to vote attacking Iran.

surprisingly, the chinese seems to play defensive instead of sharp jab. (direct counter attack, dumping dollar, hinting major money move, etc) So they really try to be good with Olympic going on. At least they got a friendly taiwan regime now.

http://chinamatters.blogspot.com/2008/04/china-surprise-for-iaea-iran-dossier.html

There’s nothing in the article implying that the Chinese dished to the AP’s business reporter in Vienna, George Jahn.

I waited for Presstv to pull or modify their report, but they never did.

In fact, they repeated the assertion that Chinese diplomats were responsible for the leak in three followup articles, including the one containing the Chinese government’s formal denial that any communication took place:

Chinese Foreign Ministry spokeswoman Jiang Yu said Thursday that the report was "totally groundless and out of ulterior motives.'' The Chinese official did not provide any further details.

On Wednesday AP quoted two senior Chinese diplomats, who spoke on condition of anonymity, as saying that China has provided the IAEA with classified intelligence to use in its probe into Iran's nuclear program.

China has repeatedly opposed the imposition of further sanctions on Iran, in the United Nation Security Council, and has constantly called for a diplomatic solution to Iran's nuclear standoff with West.

Reimund from Berlin

Hello Mr. Soros, anyone home?

What is regulated by what?

1.: financial authorities ... they regulate have been guided by market ...
2.: authorities believe markets are self-correcting

Aha.

Because regulators -- guided, i.e. regulated by market -- which regulate the market have failed, there will be what?

More authorities because authorities, i.e. regulators believe markets are self-correcting!

Great.

Not.

shargash

IMO, one of the most dangerous attitudes on the planet right now is that there is plenty of oil around. Crude oil production peaked in 2005. It has been generally flat, on a bumpy plateau, ever since. Global demand is still rising. If you have flat production and rising demand, prices go up. That's econ 101.

Production from the world's largest oil producer (Russia) has been down every month this year. OPEC is pumping flat out, and their production was down in March. Saudi Arabia is investing 10s of billions of dollars trying to get two new fields online, but the projects are behind schedule and over budget. Mexico is down. Venezuela is down.

Why is this attitude dangerous? Because there are going to be oil shortages in the upcoming months (or a few years at the latest). Failure to recognize that we are past Hubbert's peak and that global production is declining is going to cause people to draw the wrong conclusions and do the wrong things. When OPEC's production inevitably starts to drop, people will blame OPEC for "hoarding" oil. To some extent this a reasonable response, because the oil producers have been lying about how much oil they have. However, it is based on a serious misunderstanding of the fundamentals of oil. It will cause people to propose solutions that will only make the problem worse.

We need a massive effort to get off oil, but the big oil producers, the shills for the oil companies, and the Bush administration don't want us off oil, so they lie. People believe the lies, so we don't do what needs to be done.

Blaming speculators is a red herring designed to divert attention from the real problem -- a dangerous addiction to oil. It is true that there is a lot of speculative money in oil markets. However, the long money and the short money are very nearly in balance. Most traders don't believe in Hubbert's Peak, so there are many, many traders who are shorting oil.

In addition, less than 10% of the world's oil is sold on oil futures markets. Anyone who thinks oil futures are too expensive can simply refuse to buy expensive futures and buy the actual oil, where there is NOT ONE CENT of speculator money.

The tiny bit of oil sold on the futures markets is "marked to market" on expiration day. When they expire, the price is set to the spot price.

Yes, there is some arbirtrage that can have a temporary effect on actual oil prices. But futures contracts are derivatives, which means they derive their price from actual oil, not the other way around. This is fundamentally different than stock price speculation. You simply can't have more than a temporary effect on the price of a commodity by bidding up futures contracts. If there is actually a glut in supply, the people who bought expensive long contracts will get hammered and futures prices will collapse. That this has not happened is proof that there is not "plenty of oil."

Whatever oil prices do in the very short term, they are going up medium term and longer. The wealthier countries, and countries that have locked in "right of first refusal" contracts (hint: a certain dragon, and not the US), will not see shortages at first. But the poorer countries will; this is already happening.

Eventually oil exports will start dropping like a rock. Russia is the biggest oil producer, but it is not the biggest exporter, because they have a big economy. That economy is growing, so their domestic use of oil is going up even as their production is going down. Do you think Putin is going to sell oil to the rest of the world and strangle his own economy? Even Saudi Arabia, which is the world's largest exporter, has been reducing exports even as it's production stays flat. It has a growing economy too (all that oil money), and it's exports will decline, even if their production does not.

This is a very dangerous situation. It is going to develop in a very few years. And most of the world is in denial.

Elaine Meinel Supkis

A speech I made back in 1973: 'The window of opportunity to retrofit our society to deal with the Hubbert Oil Peak will begin to close on our fingers after 2000.'


Yes, we should have started back then when the oil crisis was war driven and purely political.

But we chose the easy road. Now we will hit the Old Tree Stump.

Carli

rockpaperscizzors, thank you for that link it was good to read as it gave a very good indication as to where the elite are placing their bets.

That family has always gambled on both sides of the fence, remember the Napoleonic Wars? They made it really big playing both sides. However, I am curious to see which side of the family bet on the winning horse in this case. Sadly, I don't think it will make much difference for they all take their orders from the same set.

Dutch

I appoligize Elaine, it was FHA , sorry I dont know about HUD. (Does it matter?)HAHA

Peak Oil is bullshit these guys can say what they want. Peak is as phoney as Gore's globlal warming bullshit. Go dig a hole you will see the oil is still there.

new homes for sale

Generally, with this investing model, people invest into things which they think the value will go up with time. Commonly, people would buy up and invest into real estate with the hope that it will appreciate and they can sell it off for the profit later on. However, there is no guarantee that real estate you own will appreciate. The price can go down! I have seen it with the houses of my relatives and my friends. They are stuck with it, for selling it would incur a loss.

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