6/22/2008
Elaine Meinel Supkis
The world's working classes are being told to eat all the banker's inflation. Savers are being told to eat the inflation created by the Bank of Japan and the Federal Reserve. The US government is supposedly unable to overspend much longer but they will so long as Asia buys US Treasuries. And this feeds inflation! The more our government overspends on useless wars and occupations of foreign lands, the worse inflation will be. We are in a dynamic that will bring global hyperinflation unless we kill off many millions of people who are slated to starve to death or die in even more wars.
London Times: Japan offers a helping hand to world banks
Japan has given its official blessing to a new mood of aggression in its banking sector as the country's powerful financial institutions turn their sights on deals with the outside world.Yoshimi Watanabe, Japan's Minister for Financial Services, told The Times that because the nation's biggest banks had so far emerged from the sub-prime crisis relatively unscathed, they were well-positioned to adopt a bolder stance over deals with Western counterparts.
Speaking only hours after it was revealed that Barclays is negotiating a 100 billion yen (£480 million) capital infusion with Sumitomo Mitsui Banking Corporation, Mr Watanabe said that the new aggressive attitude of Japanese financial institutions “is a change that should be very much welcomed”.
Amid rising foreign criticism of standards of corporate governance in Japan and accusations by senior European trade ministers that the country was “closed” to foreign investment, Mr Watanabe also declared that the banking sector would not be subject to any restrictions on foreign capital.
For several years now, I have detailed how Fortress Japan operates. I used statistics, graphs and charts to show that the 'depression' there is artificial and manufactured so as to give Japan a banking advantage over all the other banks in the world. Instead of being honorable and paying a realistic return on savings for the Japanese people, the entire nation has endured and still lives under this bizarre sub-1% regime that is totally ahistorical and frankly, impossible.
Even now, as inflation rages in Japan, the Bank of Japan sails onwards. The key is obvious: THEY HAVE NO NEED FOR ANY SAVERS IN JAPAN! They want FOREIGN money that comes in via the 'carry trade'. They want foreign money that comes in via high Japanese export of high-value added trade goods! This money has also filled the Japanese FOREX reserves to the tune of over a trillion dollars. And as we shall see below, the Japanese also hold the lion's share of US government debts. This is unheard of except for dying empires. All dying empires that are going bankrupt are in debt to foreign powers, even those which they have battled bitterly in the recent past. After all, there are still many people alive today who fought the Japanese in WWII.
Japan is now performing a banking coup which I accurately predicted. The only thing that prevented this was China. And after China forced the value of the yen to go up and up last summer, killing the Japanese carry trade and throwing a monkey wrench into global finances, Japan has settled all their external affairs with China in a series of both public and extremely private meetings. When the top bankers of Japan and China met in a series of incredibly important meetings last winter, I suggested they would resolve the issue of who owns what oil reserves that lie between Japan and China as well as banking issues such as forcing the other G7 nations to shut up about the yuan being too low in value.
Note that since then, Japan has not said a thing about Chinese finances. Nor did Japan join in the fracas when the US and UK worked with the Dalai Lama to overthrow the government of Tibet and break up China into increasingly smaller pieces. I see in the news this week open talk from the same CIA mouthpieces in the press, talk about splitting apart Pakistan that is already been shattered when East Pakistan became Bangladesh, for example. Now, we want to sneak agents in to the hinterlands and encourage insurrections there.
Back to the news about Japan: Japan has NOT really surrendered in WWII. The desire to forge a Co-prosperity Sphere with Japan ascendant is still ongoing. Only they have had to switch gears. The US is weakening rapidly and is barely functional now. While China is a growing power and a true menace. Japan has to forge tight relations with China or perish with the US when we go bankrupt. They have made it clear, they will not sink when our own ship goes down.
Back last August, by the way, I accurately predicted that the Japanese were not going to be much affected by the Western banking collapse. Indeed, in August when the US and Europe were screaming and running in circles, Japan pretended to scream too. Then, by the end of September, Japan shrugged and said, 'Ah....we were faking it. We are doing well thanks to our giant FOREX reserves and we think we will talk to the solvent Chinese....hahahaha.' Last January, Japan even announced they would replace England as the center of global banking. Well, this certainly seems to be true, eh?
Tiny Shetland island declares independence
(Reuters) - The owner of a tiny island in off Scotland declared its independence from the United Kingdom on Saturday, saying he wanted the territory, population one, to be a crown dependency like the Channel Islands.In a declaration on his Web site, Stuart Hill, who owns the 2.5 acre island of Forvik in the Shetland Islands in the North Sea, said he no longer recognised the authority of the government or the European Union, and cited a centuries-old royal marriage dowry deal as the basis for his claim.
"Forvik owes no allegiance to any United Kingdom government, central or local, and is not bound by any of its statutes," Hill wrote.
We lived in a tent for ten years. So it amuses me to see this guy doing the same. Maybe I should declare my little mountain to be a kingdom like say, Lichtenstein. After all, my family came here back in 1680. Then I can be a pirate banker. After all, this is the true banking system these days. When I look at banking statistics, some of the biggest banking entities are tiny pirate islands with virtually no buildings and no business, just post office addresses. Like the Japanese carry trade which is dark matter, these places are dark pools which can churn out 'credit' and 'liquidity' with ridiculous ease. Making magic Funny Money™ is a cinch if no one can tell where it is coming from or if it is worthless. Note that we now have global inflation....!!!!
Brokers threatened by run on shadow bank system
Regulators eye $10 trillion market that boomed outside traditional banking
(MarketWatch) -- A network of lenders, brokers and opaque financing vehicles outside traditional banking that ballooned during the bull market now is under siege as regulators threaten a crackdown on the so-called shadow banking system.Big brokerage firms like Goldman Sachs , Lehman Brothers , Morgan Stanley and Merrill Lynch , which some say are the biggest players in this non-bank financial network, may have the most to lose from stricter regulation.
The shadow banking system grew rapidly during the past decade, accumulating more than $10 trillion in assets by early 2007. That made it roughly the same size as the traditional banking system, according to the Federal Reserve.
While this system became a huge and vital source of money to fuel the U.S. economy, the subprime mortgage crisis and ensuing credit crunch exposed a major flaw. Unlike regulated banks, which can borrow directly from the government and have federally insured customer deposits, the shadow system didn't have reliable access to short-term borrowing during times of stress.
Why would they 'lose' if there are rules? HAHAHA. They are creating money and doing it dirty. Instead of following stodgy old banking rules that have been painfully hammered out over the last 1,000 years if not the last 12,000 years, instead of this, they created a pirate system that is dark, dank and straight out of the Cave of Death. This stupid thing they created isn't smart. It isn't good. It isn't sane. And it doesn't preserve wealth or protect savings. It is LOOTING. It is DEADLY. And it is rapidly destroying the entire Floating Currency system.
Which is wickedly unstable and stupid to begin with! A Floating Currency is like a log rolling down a river. We are supposed to jump from log to log and keep them stable and prevent log jams. Like we are seeing today. Why is this?
A zillion, quadzillion logs are now rolling in the river! They have created a massive log jam. And the fix these busy beavers have come up with is to put MORE trees into the river! Gads. I work very hard to come up with new picture stories explaining all this. It is amusing and annoying at the same time. For we still see the beavers hanging out with pirates, hell hounds and gnomes and all of them are weeping and screaming, 'We need MORE! MORE! NOW!' And this is exactly what we can't have now.
After all, China, Mexico, Canada, Australia, Europe, many lands are raising interest rates. But not Japan nor the US. Both are flooding the world with more liquidity. Both are chewing up the entire forest and dumping the trees into the log jam. Both are fanning the flames of inflation.
"The shadow banking system model as practiced in recent years has been discredited," Ramin Toloui, executive vice president at bond investment giant Pimco, said.
Toloui expects greater regulation of big brokerage firms which may face stricter capital requirements and requirements to hold more liquid, or easily sellable, assets.
The LAST THING these gnomic piratical hell hounds want to do is HOLD THE LIQUIDITY they are creating! They need to get rid of it as fast as possible so they can create more. The world is drowning in this liquidity and they do not want to have this stop. They want us to eat the inflation while they get to live like princes and princesses.
In the next semester indeed, all the components of the crisis (financial, monetary, economic, strategic, social, political… ones) will converge at the height of their intensity (1). Avoiding to repeat a description of the various sequences already anticipated in the previous editions of the GEAB, our researchers have decided to describe the trends that will be at work in the world's main regions in the next six months. Therefore they analyse eight fundamental processes that will mark the next semester and affect decisively the years 2009-2010,
I like to read Leap 2020. They have good analysis and this is a precious thing. The pie chart here is amazing: it shows clearly that the US has been selling its debts to the same characters who are ravaging us with trade excesses. And very emphatically, there is Japan, at the top! The US is frantic to cut trade with China but not Japan but these two should be viewed as two sides of the same coin. We have no allies anymore in Asia. We have OWNERS.
US Steelmakers Land Blow Vs. China
U.S. steel pipe manufacturers, who have been battling a surge in imports from China, won a major victory Friday when the International Trade Commission cleared the way for the imposition of stiff penalty tariffs for the next five years.The commission voted 5-0 that the U.S. industry was being harmed by the import of circular steel pipe. The decision marked the first time a U.S. industry has won a decision to impose tariffs on a Chinese product based on the argument that the Chinese government was unfairly subsidizing a Chinese industry.
The ruling means penalty tariffs ranging from 99 percent to 701 percent will be imposed on Chinese imports of circular welded pipe, a form of pipe used in a variety of construction jobs, such as home plumbing and sprinkler systems.
For more than two decades, the U.S. government had refused to consider subsidy cases against the Chinese government because China was classified as a non-market economy.
Pipe is NOT high-value added goods. Cars are. Japan is flooding us with cars. China is not. Nearly all of China's trade is at the cheaper level stuff of are outsourced work for US or Japanese corporations such as computers, for example. China will retaliate for this, by the way. It depends on their intentions. Since the US Congress and all Presidents now and future want to run huge budget deficits, we need the Chinese to buy our debts. China won't do this unless we make a deal. We will make the deals. This pipe thing is a sop. China is preparing to flood us with cars. We have to figure out how to stop free trade before it kills us. But it may be too late. No one listened to my past warnings about this.
http://www.bloomberg.com/apps/news?pid=20601213&sid=a5IgwR.6DR0s&refer=home
Hedge Fund Managers in Monaco Say Credit Crisis to Worsen
(Bloomberg) -- The credit market contagion that led to record losses at some of the world's largest financial institutions may be far from over, according to hedge fund managers gathered in Monaco this week.``These times will get worse before they get better,'' said Christophe Aurand, head of European operations for York Capital Management LLC, a $13 billion fund manager preparing to invest in distressed debt. He spoke at the GAIM International conference, Europe's largest annual hedge fund gathering.
More than 80 percent of the fund managers, investors and hedge fund service providers at the event said they expect the credit crisis will continue, a survey found. Almost a quarter said they expect the situation ``will deteriorate significantly.''
Banks worldwide have reported $397 billion of writedowns since the start of the U.S. subprime crisis last year. John Paulson, the founder of $33 billion hedge fund Paulson & Co. who made billions betting on a drop in the value of subprime loans last year, estimated banks are only about a third of the way through $1.3 trillion in writedowns and losses.
Monaco is a tax cheat haven hardly much bigger than my farm. Perhaps I should open a gambling casino here as well. Our little town of Berlin has been nearly totally destroyed by free trade. We could become a kingdom and set our own rules. Have the US military protect us while we pay nothing. A great thing, this empire stuff is, if you don't have to pay for it!
And note the hell hounds are giving up on persuading investors that all is well. They are now bears. They are also using their dark pool of Funny Money™ to flood the commodity markets especially diesel hoarding. They are trying to eke this trillion dollars off of the stuff we need to ship goods from China to the US. This way, they tap into international trade and get profits. This is killing world trade but these hell hounds cheerfully slay many a golden goose for their eggs.
Mexico Central Bank Raises Rates, Ignoring Calderon's Remarks
(Bloomberg) -- Mexico's central bank unexpectedly raised its benchmark interest rate, ignoring suggestions by President Felipe Calderon that borrowing costs were too high.The decision to raise the rate a quarter percentage point to 7.75 percent signals the bank doubts Calderon's measures to freeze some food prices will do enough to reduce prices. Mexico joins Chile, Brazil, Vietnam, Turkey and banks around the world in raising rates to fight inflation driven by food and energy.
All major nations aside from the US and Japan are desperate to dry up liquidity so inflation stops. And they will fail. So long as the world's #1 and #2 economies are playing this alternative game, all other attempts at stopping global inflation will fail. Not until the US goes into a full scale collapse. Then we will end this inflation. Japan is hysterical about preventing us from not shopping. They very much desire we buy their export products! They will give us whatever liquidity we need to keep on going into debt. This is why we are deep in debt! Duh. Then we send this money to Mexico for manufactured goods and oil. And Mexico finds this money increasingly worthless.
China's Zhou Examines `Stronger' Inflation Policies
(Bloomberg) -- China's central bank Governor Zhou Xiaochuan said his bank may formulate ``stronger policies'' to tackle inflation exacerbated by the government's latest fuel- price increases.``Surely higher energy prices will send some pressure to the consumer price index, so we may have stronger policies against inflation,'' Zhou told reporters in New York today before a meeting with U.S. business groups. Zhou didn't elaborate.
The world's second-biggest oil consumer after the U.S. yesterday unexpectedly raised gasoline and diesel prices by at least 17 percent from today, and increased power tariffs to rein in energy consumption. Crude oil prices are 91 percent higher than a year ago. China's retail fuel prices are about half the levels of the world's benchmark, Wang Qing, chief China economist at Morgan Stanley in Hong Kong, wrote in a June 6 report.
China just may give us a blow to the economic forehead if we don't stop making liquidity faster than they can store it away. They also want us to stop the oil wars, stop boycotting Iran, stop talking about blockading Iran, stop all this WWIII talk. Then oil prices will fall. Russia is happy as a pig in mud over all this.
BBC: Darling calls for pay restraint
Chancellor Alistair Darling says pay rises for people "from the boardroom to the shopfloor" need to be "consistent" with the 2% inflation target.
He told BBC One's Andrew Marr show the need to keep inflation under control "applies to each and every one of us".
*snip*
Mervyn King was speaking at the Mansion House dinner and made it clear that inflation was set to rise, while growth and house prices were likely to fall. Mr King also warned that real take-home pay would stagnate, making life difficult for some families. His words came as Chancellor Alistair Darling said the Bank would have new powers over UK financial stability. This would be in addition to its objective of setting interest rates, he told the annual dinner of business leaders.
How sweet of Darling to ask everyone to EAT THE DAMN INFLATION. Then it will stop. The incomes and savings of everyone will vanish but not the bankers who caused all this. And what if the Bank of Japan continues to create new money via the carry trade? And what if the US continues to do the same with nearly as low rates as Japan? What then?
Well, the British people can die. Many millions of people will die thanks to this inflation eating diet. It will work in the end, eventually, after enough people are driven to total poverty and then starve to death. Isn't that charming?
And this is why such advice leads to street violence and revolutions. 'Let them eat INFLATION!' says Marie Alistair.
New President Won't Have an Easy Time Paying for New Initiatives, Fiscal Experts Say
Economists expect the deficit to top $400 billion when the fiscal year ends Sept. 30, rivaling the all-time high of $413 billion set in 2004. Meanwhile, Congress recently adopted a spending plan that projects a $340 billion deficit in 2009 -- a number likely to grow, lawmakers say, as the cost of the Iraq war rises, the economy weakens and the flow of revenue slows.Against that dour financial backdrop, the next president will have to decide what to do with President Bush's signature tax cuts, which are due to expire at the end of 2010. Obama and McCain have both promised to keep at least some of them, but that would increase the deficit by $150 billion a year or more. Preventing the alternative minimum tax, or AMT, from expanding to the middle class would add billions more.
HAHAHA. The GOP's plan was always to drive up the debt to a point, no one could use credit to keep the peasants here in the US alive in an economic downturn. The whole point of this and the philosophy of the landed gentry is, 'Starve those bastards to death or force them to emigrate!' This is a very dangerous plan. What if the peasants wake up and figure out they were cheated? And then they attack? A serious problem indeed. The Praetorian Guard are paid to keep the peasants at bay but half of them are overseas trying to keep raging peasants at bay everywhere. This is why history is funny about uprisings: they happen in the heart of empires and kings and despots can die in these revolutions.
America hopes to sell this debt. And to whom? Why, Japan and China! Of course. And we are starting a trade war with...China? HAHAHA. Right! We have to balance our budget. To do this, we pull back our imperial overreach.
Treasuries Gain as Traders Scale Back Bets on Fed Rate Increase
(Bloomberg) -- Treasuries rallied, posting their second weekly increase this month, as traders pared bets the Federal Reserve will raise interest rates before September amid signs that stress is returning to financial markets.Demand for the safety of government debt rose as the cost of protecting corporate bonds from default increased to the highest in two months. Lehman Brothers Holdings Inc. forecast Fannie Mae and Freddie Mac, the two largest sources of U.S. home loans, may lose more money in the second quarter as the housing market deteriorates, and Merrill Lynch & Co. said regional bank stocks are in ``capitulation mode.''
The banking crisis continues. Not all our national debts are held by the Asians. The pirates and hell hounds own us too. Note how they get away with murder, even with suggesting we eat inflation for them so they can make money like mad.
Bond Sales Soar in Europe as Companies Plan for Slump
(Bloomberg) -- Companies in Europe borrowed more money from bond investors in the past three months than in any second quarter on record, paying the highest interest costs in a decade on concern credit conditions may deteriorate further.Sales jumped to 252 billion euros ($391 billion) from 227 billion euros in the same quarter of 2007 and from 149 billion euros in the first three months of this year, according to data compiled by Bloomberg. Bouygues SA, the world's second-biggest construction company, and U.K. phone company BT Group Plc led this week's sales of 18.4 billion euros, 43 percent higher than the weekly average for the past year.
Bonds are for bears. And we are in a contraction that has to get worse if the consumers and workers have to eat inflation which means they can't buy anything except bare necessities.
Large U.S. banks' stocks in capitulation mode: Merrill
(Reuters) - U.S. large-cap regional banks' stocks now appear to be in "capitulation mode" and will likely trade below fair value in the near term as more dividend cuts and capital raises, high credit risk and an uncertain earnings outlook all weigh on their share prices, an analyst at Merrill Lynch said. Analyst Edward Najarian said he does not expect credit metrics to recover until 2010 and forecast more dividend cuts and capital raises at banks, including Bank of America Corp (NYSE:BAC - News) and Wachovia Corp (NYSE:WB - News), in the second half of this year.
Back last year, actually, in 2006, I warned that all downturns take a while to go through. The 'short' one of the Dot Com collapse never was 'fixed.' The markets never returned to full strength when you factor in inflation. Manufacturing is still below where it was in 1999, for example. Housing shot up but now it is below where it was in 1999. The brief 'hysterical happy bubble' era was really a period of decline. For the US rang up Federal deficits to the tun of over $5 trillion and over $6 trillion in trade deficits. This $11 trillion in red ink is on top of the housing red ink which is another $11 trillion. This was not a period of capitalist prosperity.
It was 100% pure debt. Which has to be eaten as inflation. Thank you, Greenspan.
Interesting article. Has some nice info in it.
Thanks for posting! Will use it in school.
Posted by: claire | July 21, 2008 at 11:37 AM