April 20, 2008
Elaine Meinel Supkis
McCain, a very wealthy man, wants to have us never pay taxes to fund our spending. We must face the truth: the US ruling elites are tax cheats. They promise to cut spending but they generate wars so spending is always rising. The US is going bankrupt and the media loves anyone who suggests we cheat on our taxes! Oil prices will now rise rapidly as OPEC has decided to slit the US throat, they have a new friend called 'China'. But no worry: the Japanese carry trade is resuming with a vengeance and the flood of funny money will cause double global inflation. And few people seem to understand this dynamic. Bush wants to sign a free trade agreement with South Korea. Just what we need. More trade red ink. And the media has been very eager to call this 'recession' over and done with. More money=fun times ahead, the status quo returns.
Republican John McCain said Sunday that cutting taxes and stimulating the economy are more important than balancing the budget, and accused both Hillary Rodham Clinton and Barack Obama of supporting tax hikes that would worsen the impact of a recession.
"The goal right now is to get the economy going again," the GOP presidential nominee-in-waiting said on ABC's "This Week," adding that he would put the country "on a path to a balanced budget" by attacking wasteful spending.
First off: anyone who dares, at this point in our history, suggest we not pay our way should be taken to Yankee Stadium, stood on the pitcher's mound and then whacked with a baseball bat. This is a very serious breach in ruling our nation. Anyone who dares to suggest this should be viewed as a traitor. When Bush proposed we ignore paying our bills, he actually said, revenues were greater than the budget so why not 'give it back'? He explained that paying our debts would ruin the banking system [which is pure 100% unadulterated debts]. So he 'fixed' this by giving taxpayers huge cuts. All of which caused the budget to go very deep in the red. And then there was our many wars: this pushed us deeper in the red. Now, we have doubled our national debt thanks to Greenspan and Bush devaluing the dollar very rapidly while running huge deficits. The Treasury would hand over to the Fed a fistful of IOUs which the Fed called 'assets' which then allowed the Fed to lend money to banks at 1% interest. This, in turn, fed the housing boom as well as wild speculative stock market merger games.
This debt merry-go-round was a huge bonanza for the bankers and elite investors. They got tremendously rich and paid little taxes on this windfall. Now we are going bankrupt. Anyone running for office, talking wildly about the US spending freely, is either insane or a traitor or possibly, in McCain's case, both. No sane person wanting to protect America would dare suggest we spend wildly for another 7 years. We can't double the national debt every 7 years for 100 years. This is physically impossible so we may as well stop while we have a dim chance of avoiding bankruptcy.
This venal, foolish, dangerous warmonger really believes he will win popularity if he says we can spend and spend and pay no attention to the bottom line. If America did this from day one, we would be an outpost of Mexico by 1900. Instead, our ancestors agonized over how to balance the budget and still run a good economy. This task is difficult. But I would hope we have enough smart people around to be able to figure out how to do this. Or we can ask the Germans.
"Oil prices, there is a common understanding that has nothing to do with supply and demand," al-Badri said on the sidelines of an energy conference in Rome.
Oil prices reached a new high Friday at $117 a barrel.
A host of supply and demand concerns in the U.S. and abroad, along with the dollar's weakness, have served to support prices, even as record retail gasoline prices in the U.S. appear to be dampening demand. Crude prices have risen as much as 4 percent last week.
The US doubled its embargo of Iran last month. The pin heads who run our State Department for Israel crowed that we had Iran cornered and Iran would fall like a ripe apple. But Iran is a kitty cat, not an apple. And it has claws and a bad temper. This cat has a long record of scratching the noses and eyeballs of anyone who tries to grab it. So here we are: world oil prices are shooting upwards. We claim, our embargo of Iran is to save Saudi Arabia. The King is rolling about his palace, snarling with joy as he counts the flood of money that is pouring in, thanks to this stupid embargo. He is worried that Iran will join the Shanghai Pack and be allied with Russia and China. So he is negotiating with both to see if they can find common cause. Since the US insists on stealing little mud huts and bent, old olive trees in the Holy Land, this is driving the King into the embrace of the Dragon of China. Who can't wait to snag this goodie.
And they will, in the end. For the simple reason, they have no desire to steal anything in the Holy Land. It isn't Holy to them. It could drop off the face of the earth and vanish as far as they are concerned. They do want all that oil. With the dollar getting weaker as the US picks the wrong solution to this financial riddle we are stuck in, the chanced of the Chinese winning Saudi Arabia is very high right now. The US, if is runs bigger budget OR trade deficits while dropping interest rates to the cellar, will have an ever-weaker dollar. No matter how this infuriates Germany who don't want any inflation at all, the US will cheerfully follow the old trail that took us down to hell. We will assist Japan in restarting the carry trade! No matter what! Talk about TOTAL SUICIDE!!!!
The yen fell against the euro and dollar after the biggest weekly gain in U.S. stocks in almost three months gave investors confidence to buy higher-yielding currencies with funds from Japan.
The yen declined to 164.34 per euro at 7:54 a.m. in Tokyo, from 163.96 in New York on April 18 when it reached 164.68, the lowest level since Dec. 31. The Japanese currency dropped to 103.98 per dollar from 103.67. The yen weakened to 97.10 per Australian dollar from 96.89 and 207.88 per British pound from 207.13. The dollar was little changed at $1.5810 per euro.
In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between them. Japan's benchmark rate of 0.5 percent is the lowest among major economies and compares with 7.25 percent in Australia.
Japan desperately wanted to restart the weak yen. The billionaires who rule America have been in hysterics since August due to the carry trade ending. Now, it will restart. To their intense joy. They flooded this planet with red ink and then wailed about 'no liquidity'. Now, we will get 'liquidity' with a vengeance. The US plans to overspend our budgets nonstop. And the Japanese will supply us with infinite red ink. And remember this: INFINITY IS DEATH. The whole point is to stop these forces that aim to go to infinity. We can't overspend forever. We must pay the piper! We can't devalue the yen and the dollar, the world's top two economies cannot both do this all the time forever. And if we have China and Germany doing the opposite, they will rule the earth in 25 years. Or sooner if we are very stupid. Already, they are both #1 and #2 in key areas of international trade and industrial development. How is that for a disaster for the US? We can't go to the past. We must look to the future. And the future is dark if we paint it in red ink.
Our only salvation is to kill the Japanese carry trade and imitate China and Germany, not imitate Argentina. Or the Roman Empire.
(Bloomberg) -- The Bank of England will today announce a plan to swap about 50 billion pounds ($100 billion) of government bonds for mortgage-backed securities to lower credit costs, people familiar with the matter said.
The plan will ``unfreeze the situation we've got at the moment,'' Chancellor of the Exchequer Alistair Darling said yesterday in an interview with the BBC, without specifying how much would be made available. ``What the Bank of England will do is, in effect, lend the banks that money. In the meantime, the Bank of England will take a security.''
Prime Minister Gordon Brown's government is trying to encourage lending after a surge in borrowing costs prompted banks to withdraw their best mortgage offers, threatening to exacerbate the worst housing downturn since 1992. The plan is a change of approach by the Bank of England after three interest-rate cuts since December failed to ease the logjam.
Last month, the British were exclaiming that their housing market was strong, unlike the US. The flood of funny money has been sopped up by British homeowners. This is true in many nations. So much carry trade red ink was created, it flooded into whatever real estate markets there were and all went shooting upwards due to this. Now, it has fallen. Will reflooding it work?
I say, no. For housing prices outstripped incomes. And the deadly side effects of free trade have so hammered the G7 industrialists sectors, we see no rise in people's incomes. And since the carry trade money can't flow into housing anymore, it is flowing into speculation on COMMODITIES. This is why the King of Saudi Arabia mentioned that speculators are to blame for this week's rapid inflation in oil prices. The King knows the funny money buying his hard substance that fuels world civilization is losing value due to the resumption of both the carry trade and wild lending by the G7 central bankers. He knows he must park this loot somewhere fast before it loses even more value as the inflation machine grips the earth in its boney, hard skeletal hands. What if he invests it in China? Gads. The mind reels. Or will he invest it in the US stock market which is now soaring due to happiness over the resumption of the evil carry trade red ink flood?
Are we there yet? That's what investors want to know as they search for a bottom after six punishing months for stocks. People are understandably eager to be done with this downturn and see markets move forward.
It's a tough wish at a time when the U.S. economy is clearly contracting and likely in recession. The good news is that stocks typically recover several months ahead of the economy. The bad news is that we're probably closer to the beginning of this slump than the end.
"People are just stunned by what's going on in the economy, by their finances, by the stress," said Bernard Baumohl, managing director of The Economic Outlook Group, a forecasting firm. "We're in the belly of the recession beast, and we're going to have to get used to it."
Easier said than done. Debate rages about what stage our economic crisis is in. Some are optimistic that the government's moves to flood the economy with liquidity means a shallow recession or none at all; others believe Washington alone can't repave deep potholes on Wall Street and Main Street, and are braced for a long, bumpy road ahead.
Remember that the stock market will show signs of bottoming well before every bit of bad economic news is wrung from the headlines. These milestones won't be obvious or appear at once, and keep in mind that just because stocks stop going down doesn't mean prices will roar to new records. The damage to the economy is done, and will take time to repair.
Like little babies, the US investing public demands an end to the bad times. To fix these bad times, all they need is LIQUIDITY. And as the Fed sucks up all the bad debts and parks it in their vaults, as the Japanese carry trade resumes, we will have infinite liquidity. Which has to be parked somewhere. The Wall Street betting houses is a great place to restart this game. So what if the US is going under in debt? So what if we can't pay our bills or save money? So what if oil shoots higher in price, food becomes nearly impossible to buy and the working classes suffer terrible crushing loss of income? LET THEM EAT CAKE!
The federal funds rate is the overnight rate at which banks and other deposit-taking institutions lend to each other. The Federal Reserve has lowered fed funds during the credit crisis to bring down short-term interest rates. That strengthens the financial sector, as banks can borrow money cheaply and lend at higher rates, which stimulates the economy.
The two-year Treasury note, meanwhile, is the short-term rate that investors classically embrace when they're nervous about the future and aren't comfortable in higher-risk securities.
Demand pushes up bond prices and depresses yield. In this credit crisis so many investors flocked to two-year Treasurys that its yield slipped below the fed funds rate. "That's not a sign of a healthy economy," said Baumohl, the Economic Outlook Group strategist.
As I keep on saying, why have interest rates? Japan has done wonderfully without them. When they tossed interest rates out the window, and they are wildly talking about reducing the 0.5% rates down to 0.25%, their industries boomed, their exports shot through the roof, profits for Toyota shot upwards. True, their workers are dying, but so what?
TOKYO (Nikkei)--With farmers aging and having a hard time finding successors to take over their land, engineers are developing robots to aid with the more laborious work and help enhance productivity. A strawberry-picking robot developed by a start-up firm is one of them.
They don't need them! The very real hope of the upper classes in Japan is to have an army of robots do all the chores the underclass did. This is their Brave New World or rather, like the all-robot planets of Asimov's 'Foundation' series. Eventually, humans couldn't stand each other and lived alone with their armies of robots who eventually eliminated even the very last of them.
April 19 (Bloomberg) -- President George W. Bush, meeting with South Korea's Lee Myung Bak, said he'll push for congressional approval of a free-trade agreement between the two allies and vowed to maintain pressure on North Korea to dismantle its nuclear-weapons program.
``The Korea free-trade agreement is a priority for this administration, and we will press hard with the United States Congress,'' Bush told reporters today at Camp David, Maryland, as he concluded a two-day meeting with Lee, the first South Korean leader to visit the presidential retreat.
And our robotic ruling elected leaders are stupidly marching off the same cliff over and over again. Everywhere we turn, we see more 'free trade'. This is pure insanity! How on earth can red ink America run more trade deficits? Every single one of these things increased our trade deficits. And then, we are told, by weakening the dollar, we can regain our losses over the long run. So what, if this means we can't drive our cars or eat? Die, bothersome workers, die! And this is the long range plan: to have us imitate the Japanese who are thoughtfully ceasing to reproduce. Eventually, the earth's problems will be solved. The ruling elites will live in a robotic paradise! This is the long range plan.
Addressing Weaknesses in the Global Financial Markets: The Report of the President's Working Group on Financial Markets
In recent months, the Federal Reserve has been intensely focused on the continuing strains in financial markets. Healthy, well-functioning financial markets are essential to sustainable growth. In particular, much experience shows that economies cannot perform at their full potential when financial conditions are such as to restrict the supply of credit to sound borrowers. We are addressing these financial strains and their potential economic consequences with a number of tools, including the provision of extra liquidity to the system and reductions in our target for the federal funds rate.
Even as we have worked to resolve the current crisis, however, the Federal Reserve has also been part of a national and international effort to draw at least some preliminary conclusions about the sources of the current turmoil as well as the implications for public policy. In my remarks today I will discuss some of these conclusions and, in the process, identify some measures that should be taken to strengthen the global financial system in light of the recent experience.
As I noted earlier, the turmoil in financial markets has also revealed significant weaknesses in the risk-management practices of some large, globally active financial institutions; these weaknesses have exacerbated the problems in the markets by compromising the abilities of these key firms to absorb risk and serve as intermediaries. Prudential supervisors in the affected financial markets began joint work late last summer to identify common deficiencies on which they and the firms should focus. The supervisors concluded that the firms that suffered the most significant losses tended to exhibit common problems, including insufficiently close monitoring of off-balance-sheet exposures, inadequate attention to the implications for the firm as a whole of risks taken in individual business lines, dependence on a narrow range of risk measures, deficiencies in liquidity planning, and inadequate attention to valuation issues. To be sure, firms varied in the degree to which they were subject to these weaknesses, with better performance on these dimensions generally being reflected in better financial performance.
Correcting these weaknesses is, first and foremost, the responsibility of the firms' managements and they have powerful incentives to do so. But prudential supervisors, including the Federal Reserve, must also review their existing policies and guidance to identify areas where changes could help firms strengthen their risk management--a process that is already under way. Two areas of focus in this review will be capital and liquidity, the principal buffers that firms have against unexpected shocks. Regulators should adopt policies that lead financial institutions to hold capital and liquidity cushions commensurate with their firm-wide exposures to adverse market events. The PWG also will be asking U.S. regulators, working together and through international groups such as the Basel Committee on Banking Supervision, to enhance their guidance in a variety of areas in which weaknesses were identified. I expect, for example, to see work forthcoming on liquidity risk management, concentration risk management, stress testing, governance of the risk-control framework, and management information systems.
Off-balance-sheet vehicles have been singled out for attention because of the pressures they have put on financial firms' capital and liquidity during the current episode. The PWG made a number of recommendations on this topic, including urging regulators to require financial institutions to provide more detailed and comprehensive disclosures about off-balance-sheet commitments. The PWG also recommended that the Financial Accounting Standards Board (FASB) evaluate the need for further modifications to accounting standards related to consolidation and securitization, and that FASB and the International Accounting Standards Board achieve more rapid international convergence of accounting standards in this area.
This man is insane. The reason the entire US banking system from top to bottom, collapsed, is not because it was strong and hale and hearty. It was dying. And is still dying. It is dying because it tried to create infinite debts. And lending has to stop since it must stop. If it is restarted artificially, this means the whole wretched mess will collapse even worse once all this red ink Bernake and the Bank of Japan are creating, drowns us like rats. The pitiful regulations he is proposing won't fix the Japanese carry trade. The problem isn't here at home any more than the problems that created the Great Depression were not brewed here at home. This is international. This is why the US must break with the G7 and step back from ALL its allies and rethink what the hell we are doing.
Playing this game to the end means certain death for our nation.