November 7, 2007
Elaine Meinel Supkis
While the US economy burns, Goldman Sachs plays the fiddle. And fiddle-dee-dee says Scarlet in 'Gone With the Wind.' The Goldman Sachs pirates just gave themselves bonuses bigger than the cost of the housing collapse this year! So where is their pain and why is the government protecting them by dropping interest rates? Time to talk about the response to the banking collapse caused by these pirates who run our economy and much of the world's economy.
When Goldman Sachs Group Inc. employees cash their year-end checks, they'll have enough money to buy Bear Stearns Cos.Goldman, the biggest and most profitable U.S. securities firm, set aside $16.9 billion to pay salaries, benefits and bonuses in the first nine months of 2007, according to the company's third-quarter earnings report. The stock market values Bear Stearns Cos., the fifth-biggest firm, at $14.7 billion. Bonuses, the majority of Wall Street compensation, are typically paid after the fiscal year ends this month.
With all the talk of red ink, the fact is, the people working at the top of these financial giants are the real red ink. Even as taxes on incomes below a million dollars stress out workers, taxes on these mega-incomes is very small so they are quite tempted to give themselves a bounty simply because no one can stop them. As America ran up $9 trillion in Federal debts, these guys got a free ride. In the case of Goldman Sachs, they have wormed their way deep into our political and governmental positions where they cut their own taxes while encouraging wild spending. They are directly responsible for working with the Bank of Japan to exploit the concept of 'the carry trade'. They negotiated us into ruinous trade policies that created our monster trade deficits.
The laggard attitude towards our trade deficits, the fiddle-de-dee insouciance to the budget deficits, their indifference about tax havens for their friends, associates and themselves is all due to the desire to give themselves huge bonuses every year no matter how lousy their stewardship. If this was a good year, would they give themsevles a trillion in bonuses?
The infection of dealing with ballooning numbers has overthrown all reason and caution. If the army of Goldman Sachs associates have added endless zeros onto all systems, of course, they will do it with their own incomes. This inflation of their own finances has been drowning the planet with inflation since they control the currencies of several countries.
I keep talking about how the most useless market on earth is the FX money changing pool. Well, it is totally rigged by Goldman Sachs. People make only a slight margin off of playing currency games if the Imperial Currency is solid and steady. But as it collapses, everyone betting on wild currency swings get rich. And one of the many money making schemes for the guys who have actual control over the money making system is to make money betting ahead of events, what relative currency values will be in the future.
So...Goldman Sachs made a ton of loot this year and rewarded themselves quite handsomely by placing bets on which way interest rates would go and the effects of this on global currencies and this was easy as can be for them since they, themselves, CONTROL much of the value of various currencies in the first place. I noted the astonishing story about how Bernake in September had dinner with Goldman Sachs man Paulson, the US Treasury Secretary. And at that lunch, the GS conspiritor demanded Bernanke lower rates to a level that would suit him and the other GS criminals. When Bernake finally assented, Paulson may have run off to call his fellow pirates and give them the head's up about this interest rate drop. They then rushed into world FX and stock markets and made tons of deals, happy with this insider information.
Since then, not a peep from the government about this obvious scandal. The media hasn't attacked the richest men in America, either. The other pirates in the lower tier financial houses are now falling one by one and sailing away with ridiculously big bonuses considering the mess they made and the press will mock them as they depart to golden retirements. But there is yet no frontal assault on Goldman Sachs.
Citigroup Inc., the world's biggest bank, may have losses from asset-backed bonds of as much as $13.7 billion, roughly equal to the company's profit so far this year. The shares fell for a sixth straight day.The bank may have to write down an additional $2.7 billion of subprime mortgage-backed and related securities, CreditSights Inc. said today. Citigroup said on Nov. 4 that securities it holds may have lost $11 billion of value, prompting rating companies to downgrade its credit and precipitating the ouster of Chief Executive Officer Charles O. ``Chuck'' Prince III.
Additional writedowns may balloon to $21.1 billion if off- balance-sheet units are included, according to analysts David Hendler, Richard Hoffman and Pri de Silva in New York. That compares with potential losses of $5.4 billion for Bank of America Corp. in Charlotte, North Carolina, the second-biggest U.S. bank, and $4.1 billion for New York-based JPMorgan Chase & Co., the third-biggest, CreditSights said.
Note that the losses are less than the bonuses being given to the Goldman Sachs pirates! Goldman Sachs didn't have the total melt down the other rival houses had due to the simple fact, they are insiders in this system, not outsiders.
Wall Street would normally resist proposals for shining light on the weird products it produces. Profit margins in such markets are much higher, and the success of securitizations is one reason that an index of investment banking and brokerage stocks has outperformed the Standard & Poor’s 500-stock index in every year since 1998. But that string is on its way to being broken this year.For now, the panic has been restricted to the opaque securitization markets. The more transparent stock market has held its own since the crisis began, albeit with plenty of nervousness. Investors want to believe that the Federal Reserve can cure all problems by cutting the overnight bank lending rate.
*snip*
The old securitization market died because it turned out that what an investor does not know can be devastating. A new one is unlikely to develop unless something is done to make it much easier for professional investors to evaluate the risks they are taking.
This NYT editorial is pure garbage. Investors could have easily seen what was inside those trashy paper products being peddled by Goldman Sachs and the flotilla of piratical investment houses that infest the Seven Seas. They didn't really care what was inside of the treasure chests. All they saw was the flood of money pouring into the laps of these privateers who were privatizing the giant US economy and who were sailing about the planet, making deals which enriched the pirates while devastating huge swaths of industry and commerce. They wanted in on this deal!
But since these poor, pathetic investors were not emotionally or physically married to the pirates, they were just one more flock of sheep to be fleeced so Goldman Sachs executives could get billion dollar bonuses. On top of this, 'professional' investors knew before this year, how to evaluate 'risk'. If they are so stupid that they can't figure this out already then they are not professionals but amateurs. And of course, they joined the pirates in demanding minimum government oversight and minimum rules. Up until August, 2007, they bristled if anyone dared suggest the SEC pry open those pirate chests and examine what is inside. Which, I would suggest, would be a pile of rotting flesh covered with maggots.
They want to believe simple rate cuts in the teeth of obvious inflation will fix the mess they all created because they want funny money and they want to have sex with Risky and not find out they got her pregnant and her baby is Rosemary's Baby, the Devil. So now they are all pretending they are little children who had NO IDEA what they were getting into.
Well, I knew long ago and wrote about this and I was not the only person who did this. I would suggest the government go through all the finanical blogs and articles online and see who predicted the future the best, who gaged the truth the best and then hire people who did this. We can then fix this mess. There are at least a dozen of us, heh.
From the Federal Reserve's news service, Bernanke's latest speech:
The Future of Microfinance in the United StatesAs I have emphasized, microenterprise development programs in the United States are about much more than the extension of credit, though access to credit remains a central concern. Many programs take a holistic approach, offering interconnected services that complement lending activities and are targeted at entrepreneurs at each stage of business development. Services being offered include up-front business training; specialized technical assistance; mentoring programs; sector-specific advice and support; networking opportunities; coordinated sales and marketing programs; and the development of formal links with banks, local community colleges, and other institutions (Edgcomb and Klein, 2005). Of course, many start-up businesses don't make it; that's an inescapable aspect of the risks that small business entrepreneurs face. But the services provided by microenterprise programs offer borrowers a strong foundation in the fundamentals of running a business and give their businesses a better chance to grow and flourish in a competitive marketplace.
OK: we are in the midst of one of the biggest banking meltdowns in the last 100 years and this 100 years includes the Great Depression which was one of the biggest banking melt downs of the previous 100 years, and Bernanke is indulging in this? Micro loans? Teeny, tiny loans? The US just drowned in a gigantic sea of debts and he is chatting about loaning small sums to small businesses?
In Berlin, NY, where I live, we have been hammered by 'free trade'. Nearly all of our former manufacturing giants here that employed hundreds of people are dead and gone, all in less than 15 years. My village was a thriving business community in 1990 and is now being rapidly abandoned today. Huge factories and greenhouses stand empty and virtually all the surrounding farms are gone and fields are going fallow. Yesterday, I was horrified to see yet another small business fold. My local hardware store suddenly gave up and closed. They thanked me for my business but with the vanishing of the local work force, they ran out of customers. If Bernanke gave them a micro loan, this wouldn't bring in a single customer.
Our town used to have three pizza parlors and two grocery markets and a host of small businesses. Only three small businesses are left. The local lawyer just abandoned his offices here and moved to New Jersey, for example. We still have a bank but it hasn't been painted in quite a few years and looks increasingly abandoned which is a bad sign. Our problem isn't due to lack of debt financing. Many people here have plenty of debts!
THe hammer on this anvil was free trade. But the thing that irritates me the most is, Bernanke is not even just rearranging the deck chairs on the US Economic Titanic as it sinks, he is polishing the silver and counting the tea cups! How insane!
Crude oil rose above $97 a barrel in New York to a record as a storm forecast to produce 36-foot waves in the North Sea forced BP Plc and ConocoPhillips to evacuate workers and cut production.
Bernakey's seeming lack of concern about all the red ink in America, about the news that China's stock market has now begun to attract more money than the US stock market, the mess created by the Japanese and how this ravages our own economy due to 'free trade' that is strictly one way with Japan, the fact that world oil is now going to be $100 a barrel before Thanksgiving which astonishes me greatly for I was predicting last August, it would reach this in December. Well, the dying dollar is hammering our wallets here. I notice that the price of gasoline and diesel have soared yet again and all the micro loans on earth won't help if the price of fuel is this destabilized!
This sort of thumb sucking, baby attitude towards economic chaos is a characteristic of criminal activity. The criminals running the US economy and government are quite aware of what is going on but they cannot show this awareness in public. They are not actually rearranging the deck chairs and polishing the silver on the US Titanic, they are LEAVING THIS SHIP FAST! The flow of funds out of the US and into gold, oil futures, other currencies like the loonie or euro, etc. is INCREASING FAST. They are leaving, these rats are getting into their pirate ships and sailing off while we die on the Titanic.
Many readers ask me how to protect themselves from all this. I have to warn them that I cannot advise anyone to betray America and imitate these pirates and haul all the wealth out of the US for this will destroy us further and I am against the destruction of the American people. This is because I feel some resonsibility towards this nation. To lose all this due to a bunch of treasonous rulers pisses me off greatly. For the US should have been the beacon to all people, the shepard of the world, not the three-headed wolf pack devouring the people they were supposed to be protecting.
My little village just had a spirited election. We enjoyed this greatly. Candidates for office visited our mountain and chatted with me and I supported the ones who said things I liked to hear. To lose this sort of democracy irks me greatly.
IndyMac Bancorp Inc, one of the largest independent U.S. mortgage lenders, on Tuesday posted a quarterly loss more than five times larger than it had projected, hurt by mounting delinquencies and a collapse in investor demand to buy its home loans.The third-quarter net loss totaled $202.7 million, or $2.77 per share. It was IndyMac's first quarterly loss since the fourth quarter of 1998. Profit a year earlier was $86.2 million, or $1.19 per share.
One of the biggest scams around is the lie that this entire financial meltdown is due to home owners not able to pay their mortgages. Look at the pathetic numbers here! The losses by both Countrywide and IndyMac are less than the bonus handed to the president of Goldman Sachs! He could pay for these default out of his damn wallet! Indeed, shoving the blame onto the very lowest levels is what power is all about. The people in charge who set up this mess can blame the Little Guys.
This is pure garbage. The world economic system isn't collapsing because a dozen houses in Berlin, NY, are now being auctioned off by banks. The house are in default not because of high interest rates, they are in default because the global free trade economic system killed off our industries and there are NO JOBS here now! Duh! And in many places in the US, for the last 15 years, wages have been reduced or cut as free trade ravages the incomes of the lower working class. The middle class is deep in debt and now taking big cuts. Doctors are being told by the government, their reimbursements from the government is going to be cut 10%. This money can be made up with just ONE executive in Goldman Sachs giving up his bonus!
Here is one of the many emails I get from readers, all of which are quite touching.
Dear Elaine,I enjoy reading your blogs. Thank you for the great service you provide us with. We need to hear the truth. Many Americans live in an illusional world believing nothing may destroy iour great country. I am originally from the former USSR, so I was trained to think and always be careful not to believe propaganda.
After I first arrived to the US 8 years ago, I immediately notice lack of information about world events on TV. I thought many Americans were too optimistic, less concerned about others, just themselves. Too little interest to learn the truth, too much attention to superficial stuff. Well, after a while I myself began to change. I feel inferior when I go to Europe these days. I feel less smart, I think I used to train my brain much more before I moved here, I don't ever feel secure because if I don't pay my bills I'll be out in the street and noone will help me, and I feel poorer with my American dollar when I am in Europe.
I've been a saver all my life. Coming from the fromer USSR where the financial system was based on cash, that is if you don't have money, you are not going to buy, I've been trained to save first and then pay in full. So I have 0 debts, I've been very diligent with my money, economizing on everyting to save to buy a house.
I've lived through the collapse of the USSR, and I remember how the value of the ruble was eroded in a
matter of a few days. I remember hiperinflation, when a pound of cheese cost your whole salary. I don't want to live through those times again. I've bought a little silver and gold, and looking into purchasing currencies like yen and yuan, possibly ruble.I am suspecting our government intentionally works on devaluing the dollar so that the US debt will be easier to repay. Also, the collapse of our economy would be an opportunity for them to establish the
North American Union and bring in the Amero. That's a really scary scenario which would have devastating consequences for the US as well as the rest of the world.What is your opinion on the future of the dollar? Lower housing prices is deflationary, but higher food and oil prices is inflationary. Should I get rid of my dollars and buy more commodities and gold, or should I keep saving dollars to take advantage of the cheeper houses that will be on the market later on?
Do you think it'd be smart for me to think about relocating somewhere outside of the US in the near
future? I am afraid they might lok the borders in case the ecconomy collapses. I am sure you've heard about RFID technology. I came to this country to be a free person. I am afraid our civil liberties may be taken away from us. Or there won't be a place to hide at all and the whole world will be undertaken by the New World Order. It's critical for me to have the right kind of information, so I can make better decisions about how to protect myself and my family in these uncertain times.Thank you.
Anna
When the fine people running for office in Berlin, NY, came to my home and went from door to door, asking for support, we discussed the problems about our collapsing economy here. They all felt pretty helpless about all this and alas, part of this was due to the simple fact that our media and our national leaders of both parties lie about everything and conceal much of everything so they all felt kind of helpless yet they wanted desperately to do something to fix this.
Alas, the solutions offered by the upper classes and the media are all terrible. I have drawn cartoons of Iran kitty explaining the facts of life: we mess with the Cat, the Cat will scratch back both militarily and economically. There is a direct connection between the price of oil and our sabre rattling. The media wants to kill Iran Kitty due to religious/ethnic cleansing activities in the Holy Land and the raging wars engulfing the Muslims are due to battles over the resources they possess.
The West pretends we want democracy in these lands but does all it can to produce dictators who rule despotically while collecting money or being guarded by the Western empires. This is why the military aid and money is pouring into Pakistan as the dictator there rubs out the Supreme Court. Our own rulers assure us that all the other systems in Pakistan are running so there is no crisis there but this is pure insanity. The Muslim revolution continues to bubble and is going to bite us back, hard, if we persist in this sort of aggression.
Look at it! Airy Fairyland! Strengthening our capital markets??? Our capital markets have been collapsing like my great oak. Even as it was growing, it was growing in bad ways and now all the branches sticking out in wild directions are falling off even if the wind isn't blowing at all! We should be having a huge national debate about our direction!
Last night, we had to go do some business with AT&T. The young man in the store is a university student working at night to pay for his schooling. A very intelligent young man who keeps up with the news online. We discussed the economy while waiting for data to be confirmed by headquarters. He is a big supporter of Ron Paul. The Ron Paul partisans are quite enthusiastic unlike the people who seem to be trying to choose between Darth Vader in drag Guiliani or Darth Vaderette Clinton. This enthusiasm pleases me for it means that people are seeking some sort of solution and are still open to rational choices.
I have a host of disagreements with Ron Paul starting with states rights and abortion. But if he is a third party candidate he will force the other people running to talk about reality a tiny bit. One thing that didn't surprise me was, the young man enthusing about Ron Paul was also wanting tax cuts. He hopes this sort of leader will give him something nice. But the sea of red ink won't vanish even if we balance our budgets, this will lead to a lack of liquidity which is why Goldman Sachs is always talking about 'liquidity' which is what lending money is all about. And this is where we are in trouble. Serious trouble.
November 5, 2007
HP-666Treasury Designates Individuals Furthering Syrian Regime’s Efforts to Undermine Lebanese Democracy
The U.S. Department of the Treasury today designated four individuals affiliated with the Syrian regime's efforts to reassert Syrian control over the Lebanese political system.
"Syria has used all means at its disposal – from bribery to intimidation to violence – to undermine the legitimate political process in Lebanon," said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence. "Today's action exposes four individuals involved in such activities and serves as a warning to others who would do likewise."
In August, the Treasury was very intent on cutting Iran off from access to world banking. This month it is worried about Syria. The Treasury seems to be working day and night to attack the banking systems of Muslim countries Israel wants to weaken or destroy. Meanwhile, back home, the loonie of Canada is now $1.09 to the dying dollar! The price of plywood is rapidly climbing even as our housing boom vanishes! The loonie, run by Goldman Sachs, is shooting over our heads like a rocket. Levey is a Jew, by the way. Instead of running up to Paulson and screaming, 'Forget Syria, forget Iran, our own house is on fire!' he is running this Zionist initiative with grim determination. I think he should be thrown out of office or arrested.
November 1, 2007
hp-663Treasury Secretary Paulson Statement on AMT Patch
Washington, DC - The Treasury Department released the following statement today from Secretary Henry M. Paulson, Jr. on passage of an AMT patch by the House Ways and Means Committee:
"While I appreciate the Ways and Means Committee for taking up an AMT patch today, the fact that this legislation raises taxes that would hurt our economy makes it very difficult for a patch to be passed quickly. Since February, we've asked for an AMT patch that does not raise other taxes. I still believe this is the right policy.
Paulson isn't in Congress demanding the Goldman Sachs executives who just gave themselves many billions, yes, BILLIONS in bonuses should see higher taxes. He wants to cut taxes in the teeth of our budget pouring red ink all over the planet. He wants cuts while we go to China for loans for China is our #1 government debt buyer this last year and Japan, #2. The British banks working for the Arabs, #3. This business of going into debt to our trade rivals is pure insanity. And Syria isn't the problem, neither is Iran, it is Saudi Arabia and the Gulf sheikhs. Of course, we do nothing about all this. Indeed, the heavy blanket of inertia and disassociation covers all of DC. The entire Treasury and entire Federal Reserve web pages show NO concern, NO anxiety at all. I can prove this with their latest reports they posted online this week.
From the Financial Stability Forum for the G7 Dwarves:
FSF to examine causes of recent financial market turmoil and make recommendationsThe FSF has sent a preliminary report to G7 Finance Ministers and Central Bank Governors setting out its work plan to examine the underlying causes of recent financial market turmoil and to make appropriate recommendations. To address these issues, the FSF has set up a Working Group on Market and Institutional Resilience. The Group recently met in London to begin its work. It will:
- develop a diagnosis of the causes of recent events;
- identify the weaknesses that merit attention from policymakers; and
- recommend actions needed to enhance market discipline and institutional resilience.
The work of international supervisory, regulatory and central bank committees will play an important role in the Group’s work.
What follows is a PDF report which I pulled just one part out to show how demented all these organizations have become over the years since they accept the idea that the US can run in the red in all ways with no consequences.
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The G7 report: 
Since it is very hard to put PDF stuff up here, I suggets anyone who wants to be depressed can read this report. It is so clueless. And this isn't due to stupidity. Goldman Sachs is making billions in bonuses by running things in this fashion. They are getting tremendously rich off of the present system as it is presently running. They want to keep this status quo going for as long as humanly possible. Despite the horrid side effects like the killiing of my village in NY, they don't care, they don't live here. And the little people being crushed don't matter one bit to them. They are hell hounds, not humans.
In every report I see from our own government there are reassurances that the US is strong, the fundamentals are in great shape and all is well and the underlying structure is sound but there are a few tiny quirks and those pesky little home owners in California and Florida are causing a few ripples in this red ink sea of serenity. This minimizing of the problems means nothing will be fixed at all since the guys earning giant bonuses and opening golden parachutes are doing just great! Why should we worry? My little village is dying rapidly but they are doing just fine, thank you.
The last 3 G7 dwarf talkathons have been increasingly acrimonious and I bet the next one will be total chaos but if Goldman Sachs can take over just a few more positions, they can be talking to each other and all will be well. Of course, they don't run Japan at all. And this is one huge problem, of course, and they hoped to run China but China is gradually taking over Goldman Sachs from the inside and the Japanese are in a panic to do the same. So they will form alliances with GS and take top positions within and use their sovereign national wealth to buy out the others inside of GS.
Right now, the new ruler of France [who is a foreign Jew who ran on an anti-Muslim immigration platform] is visiting Bush and getting along quite merrily even as France is sliding into the rolling strikes and street actions I fully expected when he was elected with the rousing support of world media. This will have a bad ending. France is worried about Muslim dominance but doesn't understand that this is purely birth-rate driven. Like Japan, France's natives don't want to have children anymore and in the end, will vanish due to sheer lack of children. But the addition of France to the financial gang focusing on preventing Muslims near Israel from banking or doing business isn't going to change the course I am talking about here. If France wants to be part of an anti-Muslim alliance that attacks the Ottoman Empire's various states, this changes little and simply confirms that Europe is still trying to run Crusades against Islam.
No longer is France warning the US to not do stupid things, the new ruler is egging us on so we do more dumb things. This is not an improvement any more than baby-dearth Germany going right wing in the hopes that this will stop the tidal wave of Muslims coming into Germany to do the work the Germans seem unable to do themselves. The G7 nations are not united except at the very top and the very top is steering the G7 in the wrong direction and the Japanese aren't even on the same ship or following the same rules.
After more than 15 years of extraordinarily benevolent economic conditions worldwide - cheap oil, cheap money, growing trade, the Asia boom, rising house prices - things are unravelling at bewildering speed. The system might be able to handle one shock; it is undoubtedly too fragile to handle so many simultaneously.The epicentre is the hegemonic London and New York financial system. No longer are these discrete financial markets; financial deregulation and the global ambitions of American and European banks have made them intertwined. They are one system that operates around the same principles, copying each other's methods, making the same mistakes and exposing themselves to each other's risks. Thus the collapse of the American housing market, the explosive growth of American home repossessions and the discovery that 'structured investment vehicles' (SIVs), the toxic newfangled financial instruments that own as much as $350bn of valueless mortgages, are not American problems. They are ours too.
Even if the amount of bad loans is $350 billion, if we taxed all the super-rich in the West just for their bonuses, this would equal the losses. So the losses are SMALL since they are equal to the profits being pocketed by the top executives this year alone! Of course, the whole problem isn't mortgages, these papers represent a very small part of the liquid red ink debt piled onto the planet this last 7 years. These bad loans are a warning sign, not a cause, of the coming collapse. No homeowner made liquidity appear. Bankers did this. The loan companies created money with the connivance of all those Goldman Sachs people infesting our entire poltical and economic system. The central banks created this huge sea of money and they knew this was all red ink and they knew that the reserves were woefully smaller than the money being lent, being created.
When we watched with astonishment as both Europe's bankers and the US Reserves created nearly a trillion out of thin air and this pumped up stock markets but did absolutely nothing about the homeowners facing bankruptcy, we could clearly see that the homeowners are not the problem here at all. The new trillions of dollar created this last 7 years, only 20% or less went to homeowners.
A reader sent me the link to a British article about tax havens and how nasty they are and I found this article to be as clueless and silly as anything published in American media. From the Guardian:
The investigation reveals that large corporations are creating elaborate structures to move profits through subsidiaries to offshore centres such as the Cayman Islands, Bermuda and the British Virgin Islands, to avoid handing money over to tax collectors in the countries where their goods are produced, and in those where they are consumed. Governments at both ends of the chain are increasingly being deprived of the ability to raise tax for development or services.
I have an easy solution for the British people: they can build a guillotine and wheel it to Buckingham Palace and then demand the Queen step down or be terminated with great speed. This ridiculous article could not and dared not name Her Satanic Majesty because they would be put in prison. England not only doesn't have any form of free speech, they have the most noxious laws concerning libel and these laws are used regularly to shred important books or deny important information. These laws are not for the little people, they were designed for Herself. She wants no one talking about Her. So there!
Anyway, all Britain has to do is join the Goldman Sachs US Navy and invade Her islands all over the planet and seize the accounts and records of all the pirates operating under Her ample skirts. She can even denounce them and demand they be arrested. HAHAHA. Anyway, this won't happen and all we will do is yap about it till blue in the face while these pirates party. They run our banking systems and our governments.
OK... Over at the Daily Reckoning, Bill Bonner, had a great description of "deflation" yesterday... Let's listen in to hear what he has to say..."And then, there’s the dollar. Already this year, the greenback is down about 10% against major currencies. The estimate we remember is that all the stocks, property and other wealth of Americans – quoted in dollars – is worth about $50 trillion. Take 10% off that number and you have a loss of “implied wealth” of $5 trillion.
This, dear reader, is flation with a capital ‘D’ in front of it.
Deflation, at least according to our definition, means that people just don’t have as much money one day as they had the last. Then, their whole outlook quickly changes. Where once they were bold, they quickly become fearful. Where once they foolishly trod, they now are afraid to rush in.
Where once they spent, now they leave their money in their pockets."
He is correct. We just 'lost' $5 trillion. This wasn't due to a bunch of homeowners in Detroit or Denver walking away from their mortgages. If we took every default on every mortgage for the last 20 years and added them together, they would not come to $5 trillion. This loss is entirely due to our trade red ink, our government red ink and our carry trade with Japan. This is purely the cause of the sea of liquidity which the Federal Reserve and the Bank of Japan created between themselves since 2000.
And our little ship, the USS Titanic, is sinking in this sea. The homeowners are the second class passengers. The third class passengers are the lower working classes who are seeing food and fuel shoot up in price while their incomes collapse.
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I interviewed for a job with a mega-yacht builder here in the pac NW yesterday: toured a massive 150 foot playtoy of these very type of pirates..... lots of mexicans in plastic suits and respirators climbing around in the huge fiberglass mold while its sistership, almost done, was receiving fine art flourishes. The production manager said they had orders stacked up way into the future. In his own words the whole concept was "bizarre". He said "These are guys who've made their fortunes and I guess it's a ego thing most of all. They don't really travel with the yacht but have the captain move it around and they fly in with guests here and there." He said they have it customized then often tire of it and sell it for a 20% profit since other buyers don't want to sit on the two year waiting list. Frustrating for him was the fact that just when they got the tooling down for one yacht the next had to be redone to the new custom wishes of another tycoon. Pay for the mexicans? $10 a hour. Journeymen? $22 a hour. Sales price? In the mega-millions. Not too foul working conditions but tons of fiberglass dust floating around, noise to the point folks almost have to shout to carry on a conversation, and fumes, fumes, fumes. I was bit sickened at this production for some tycoon to merely use occasionally. Oh well.
Posted by: Roberto | November 07, 2007 at 10:23 AM
I have written before that I do consider emigrating from US as an optional "out" of the future US economic collapse. Certainly not an option for most, but those who've lived abroad, have family other countries, it will be a viable option.
You're right about the US being looted by pirates. These pirates are deeply embedded in this rotten system and know quite well what the future holds. I think the devaluing of the dollar has been a way to make more money and keep the ponzi scheme going. Alas, this too is running its course, so the remaining option is to do what countries in default have always done -- declare war. We are rapidly approaching that scenario. So, I'd say fleeing the U.S. might become a safety issue as well as an economic measure. For even if US were not attacked (I think there will be some sort of attack as a catalyst to action), who'd want to be conscripted into fighting and/or paying for this new, bigger better upcoming war.
While being quite happy with my local government generally, very, very few citizens participate/vote at this level. As aside, 3 bond issues passed here in Charlotte - more taxes levied for borrowing this money. No one connects this to their wallets - it's still spend, spend, spend.
In a larger sense, I think the republic is dead (what have your state rep and senators done on your behalf recently?). Democracy is great with an educated and involved populace. We don't have this and it's become the cult of personality for the mobs. Finally, love Ron Paul and support his big unifying ideas on trade, Fed abolishment, retreat from Iraq etc. He will get the "Dean Treatment" if he becomes enough of a threat to TPTB. He may become the new Goldwater and change the future landscape but I fear it won't. thanks for your insights
Posted by: charlottemom | November 07, 2007 at 11:03 AM
Sorry for the OT post, but the Yen is rocketing upwards against the dollar today, up 1.7% at the moment at about 113.2. I haven't seen any explanation yet as to why.
Posted by: shargash | November 07, 2007 at 12:12 PM
Do have a read on a series of articles by Dmitri Orlov on the collapse of the Soviet Union at the Energy Bulletin website
Posted by: OC | November 07, 2007 at 05:38 PM
China is like the Soviet Union: it can contract much easier than the US which is very over-extended and weakened by living off of much of the world's output for the last 30 years while not working all that hard.
Posted by: Elaine Supkis | November 07, 2007 at 10:14 PM
No, Elaine,
US will be the Soviet of Today.
Posted by: Not Student | November 08, 2007 at 02:35 AM
Excelent, Elaine ! One of the best i have ever read from you.
Posted by: PJSV | November 08, 2007 at 06:54 AM
jealous?
Posted by: Hi | November 17, 2007 at 01:09 PM