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D. F. Facti

Does Fluff have a boy friend?

D. F. Facti

Does Fluff have a boy friend?

DP

Elaine - As always , thanks for your writing. Am happy to say, my wife and I are in a very fortunate situiation at the moment. It hasnt always been that way. And for many years I fell for the Greed is good / Debt is wealth BS.
Just this last week - we decided to bite the bullet ( what with the developing mess upon us all ) and pay off our 2 LARGEST debts. HUGE credit card balances. So large even making more than the monthly payment only served to whet the appetite of the growing beast we created. It was time if we EVER wanted this monkey off our backs.
Very hard to take that cash and do -BUT we decided to do it while it was still actually worth anything. Very liberating.

xerxes

Elaine.....

Congrats on your prior gold call. How do you see gold performing in the coming months. And considering the long centuries of attachment to silver, by the Chinese, how do you see that metal performing. I'm not looking for advice, just your unique perspective...

Anthony

China is bigger than IMF by now. They will hit $2T by the end of the year if current rate stays.

calvino

My compliments for the high quality research, including yesterday's transcripts. The unlimited access to trading power granted to the investment banks is their ability to stifle the innovators through market manipulation. Metabolix was willing to hand itself over to Archer Daniels control was rewarded with a fat IPO that put them on the way to a billion in capitalization and access to capital. Cereplast did not want to play ball, and continues to question its survival on a daily basis, from limited access to industrial consumers and capital markets. This is one example, however I could go on and on. The very best thing for this nation would be to take out wholesale the engorged parasites sitting on top of the money spigot in New York. YOu know their names. I have said this to others, there are no investment bankers in NYC. These are gamers and manipulators, who propser by bribing the corrupt SEC, amongst others. They have no idea what investment banking means, except for about a eight houses in the Silicon Valley that employ a hundred people. This is why rescuing Bear and their piggish brethren is an assault on this country, allowing the failures and the bankrupt to persist through oligarchical corruption, while stultifying the new talent.

hakan with the reindeer

You are brilliant as always Elaine !
Really.

I have been promoting you in any way I can here in Sweden. Slowly, really slowly, people around here start to picking up the 'underground news'.
Sad to say USA is on the very edge of bedoming a jaded mandarin for the rest of us.. why ?
How can that be ?
The land of the brave and the home of the free.
Sadness and confusion is the feeling a lot of us is feeling.

Stay alert Elaine.

Hug
/H

Jim Smith

Elaine: The Chinese are indeed looming ever larger and larger in our world. They now have a method (does it hold any water?) for predicting earthquakes.

http://www.321energy.com/editorials/wong/
wong060308.html

Do you think this is to be taken seriously?

Roberto

Hey.... Dollar general was started by my uncle, in a little Kentucky town, and he and his son grew it to a mega-corp. I remember when it went public and how proud all the family was. He was my uncle by marriage so I never rode any of that honeytrain but to hear they got reamed is sad. My family connections sold a few years ago, I heard, so probably didn't get hurt ( I wouldn't know since I live on a sailboat with no bank account and am considered eccentric and have been ignored by those monied folks). Anyway.... it all connects. Another ball over the fence by EMS. A daily read for me and I've educated myself in macroeconomics (and some other sites as well of course) at her efforts for a few years now.

GK

OK, I admire your brilliant article here but will suspend my disbelief for a few minutes and take the premise that the Chinese will take control of the IMF.

Here are a few questions now.

1. Who owns the IMF?
2. Who controls the IMF?
3. Why did they recently sell 400 tons of gold?
4. What 'transaction' or changes would have to take place to have the Chinese 'own' the IMF?
5. Is it a lucky coincidence that the British empire controlled all the gold for 50 years then lost it to the US, then the US controlled all the gold for 50 years and is now losing it to China in exactly the same pattern of building up capital/empire/manufacturing ability and then losing it all in wars?
6. When the British Financial powers of the British East India company invaded China to force them to allow import of the Opium from India, at what point in time did all the powerful people leave China alone to control their 'own' destiny?
7. How will we know that the IMF is 'owned' by the Chinese?
8. How will the seize control of the world's gold supplies to pull this off? War? Open Market purchase with US Treasuries? Purchase of Gold Mines? Drilling under the US Fed and Bank of England?
9. JP Morgan has acquired the rights to sell Chinese Government debt. If you are correct that they are plan to avoid government debt then this business model is worthless. Do you REALLY BELIEVE that are so 'scared' of debt that they will not be gradually nurtured to sell ENORMOUS quantities of debt to fund various school, business projects, overseas empires and eventually wars?

So to summarized my understanding of your position:
1. Chinese will take over control of IMF
2. Chinese will avoid government debt.
3. The will create gold backed currency.

My position:
1. Chinese will be given powerful voting seats on the IMF, but not control.
2. Chinese will, within 50 years, have $100 trillion in government debt.
3. They will sponsor the new one world currency, the SDR, which will be 40% backed by gold. This currency will then be relentlessly lent to all world development banks and gradually debased to 30% backing and then 0% then infinity and beyond.

Am I summarizing your position correctly or have I misunderstood?

Many thanks for your brilliant intellect to help wrestle with these crazy questions.

Elaine Meinel Supkis

Roberto: I loved Dollar General back when I was very poor. We shopped there all the time. Sometimes they had really neat stuff! I MISS THAT STORE!

And was ticked off that the guys who bought it used it as a dumping ground for debts. They did NOT build it up.

Jim, earthquakes are like other things in the future: we know they will happen. Giving an exact date is nearly impossible. We do make guesses. We know, for example, the middle section of the San Andreas is going to blow in a massive way. The exact day is impossible to tell.

But we can feel it in our sleep. It sort of lurks there like a dragon underground. By the way, the Chinese invented dragons to explain earthquakes.

Sweden: nothing finer than running around the forests on Midsummer's Night [no night!] totally drunk on fine wine and mushrooms! Great fun for a young woman. I learned how the twilight works in northern Germany when I went to school there.

Elaine Meinel Supkis

Gold: the Chinese public and Indian public are losing all their money because food and fuel inflation has hammered them. They use excess funds to buy gold. There is less and less such funds so long as food and fuel shoot upwards.

So gold doesn't go up with inflation. And this is the hard thing here: gold is a guardian of wealth, not a maker of wealth in the long run. And you can't eat gold. This is why inflation often hammers food so hard: it sucks up excess money like a vacuum cleaner. It also causes revolutions.

Anthony

I don't think IMF can sell their gold. (they will need US vote, and US vote will require congress vote... never happens, specially by gold mining lobbyists)

I forget where I read this. But I thin the gist is right.

Robert Sczech

There is one important advantage of a fiat monetary system versus a monetary system based on a 100% gold backup. In the gold system, every coin is actual money and destroying that coin (by dropping it into the sea for instance) does lead to a loss of money in the system. In a fiat monetary system, money can not be lost. This is obvious for money represented by checking account balances. These balance can only be transfered from one account to another, but they can not be destroyed. In other words, the system of daily money transactions is a zero sum game. The total sum of balances does not change. Consider the case of paper currency, say a $20 bill. If that bill is burned, no money was lost since the bill is not actual money it is only a certificate of debt owed by the institution issuing that $20 bill (the Federal Reserve Bank). In other words, burning the $20 bill does not hurt the monetary system since the actual money is held by a bank in form of a digital entry on a computer system representing assets and liabilities. By burning a paper $20 Dollar bill, the credit represented by the $20 bill is transfered from the person burning the bill to the bank issuing the bill in effect canceling a $20 liability on the books of the Federal Reserve Bank.

To say that the banking system is bankrupt does not mean that the money in the system disappeared. That money still exists (if it existed in the beginning) since fiat money can not really be destroyed (unless credits were repaid but then that money did not exist in the beginning). The money owned by the banks has changed only its ownership. It is owned by other people or institutions (Warren Buffett or Sovereign Wealth Funds for instance). Since very little money exists in form of paper currency and all checking account money must always have its ultimate location in a US commercial bank, all the trillions of US Dollars exist as computer entries in US commercial banks.

The present debt crisis where almost everybody and every institution in the US is bankrupt can therefore be viewed as a case of an extremely asymetrical distribution of money among the economic agents in the US. A relatively small number of people and institutions own almost all the money. The rest of society is bankrupt. Elaine is blaming the Fed for creating too much money via interest rates below inflation rate in this way tempting society into the debt trap. However, the present mess can be equally attributed to a failing fiscal policy. It is the ultimate purpose of taxes to prevent one sided distributions of capital in society. The same problem existed during the depression in the 1930's. To rebalance the economy, Roosevelt had to abandon the gold standard by declaring gold money to be illegal. In addition he had to introduce progressive taxation with tax rates in excess of 90% for the top income bracket.

To solve the crisis today, we can not easily raise interest rates or introduce the gold standard simply because the debt levels are too high. However, we can raise taxes for all those people and institutions who hold the title to all the money and capital assets. We could reintroduce tax rates of over 90% for incomes above a certain level (say $1,000,000?). Elaine may remember that president Reagan abolished tax rates of 70% and more in the early 1980's. This was part of his "morning again in America" policies.

To sum up, the failure was not the artificially low interest rates of Greenspan. In fact, Greenspan was right in pushing for lower interest rates. In a sustainable future rates can only be a fraction of 1 percent if they are positive at all. No, the failure was to pursue a low interest policy combined with a fiscal policy aiming at lowering taxes as well. We can not have both in order for the system to be stable. Low interest rates must be accompanied by high taxes and vice versa. Low taxes require high interest rates. If these simple rules are ignored, the system enters a bubble where everybody start to speculate, that is, trying to make money without any real work giving that money value.

However, our ability to neutralize monetary policies by proper fiscal policies is to a certain extent made impossible by transferring so many Dollars abroad. There is no easy way to tax the sovereign wealth funds, although congress would like to do that by calling for regulation of these asset holders.

One more related remark: It is often said that our money system is a debt based system. This is certainly correct. However, the periodic occurrence of large scale bankruptcies creates a large amount of money in the economy which does not have to be repaid. That is, like in gold system, there exists a huge number of Dollars which are not tied to credits or debts. That number of Dollars is the sum of all bankruptcies and debt writedowns which occurred during the life of the monetary system. Clearly, we need to keep the percentage of that money small in relation to the total amount of money in the economy. The only way to accomplish this task is to create new money, that is, create monetary inflation. In other words, bankruptcies require more inflation.

ccq

It's obvious beautiful weaves can be made in the Outer Darkness, but can you find a good massage? Headlights...bubbly...bubbles...guzzle....rrrrrrrrttttsmash...crash. Dern, there goes the C20.

Elaine Meinel Supkis

EVERY depression/crash from 1600 to modern times features a 'gold rush'. Gold vanishes but is still around and can be found. EVEN AT THE BOTTOM OF THE SEA!

Also, gold is NOT a one/one ratio thing. One uses this as reserves. It is a basis for 90% lending. We will also always have credit bubbles and credit crashes.

Not not hyper inflation. Hyper inflation is very dangerous. Zimbabwe is now turning a dollar into a 1,000,000 unit. I have German marks from the great inflation of the 1920s. They kept adding zeros. This is because all of Germany's gold was seized after WWI and there was no basis to limit money making.

Elaine Meinel Supkis

Also, Robert, Greenspan dropped rates to 1% exactly when Bush cut taxes hugely! And the flood of red ink this caused is the DIRECT cause of the present crash/hyperinflation. I do hope you read some of my past postings concerning rampant inflation.

Al

wow - I can get in now ? been trying to post since anthony's several hours ago. probably will get erased too.

Elaine Meinel Supkis

Also, about bankruptcies causing more inflation: the attempts by the central bankers to REPLACE the lost money due to bankruptcies cause inflation. But this also can't keep up with the bankruptcies in a crash. So even as there is inflation of necessities [because we can't put off using food and fuel!] there is a depression in all other things due to less and less money IN CIRCULATION.

Money that isn't being circulated is anti-money. This is why, in the Great Depression, the bankers and governments pleaded with people to not put money under the mattress. In the end, war took the money hidden under mattresses.

Elaine Meinel Supkis

AL! HI!

Typepad has been having problems lately! If you can't get in, please, please email me! If you get a message denying entry, tell me what it says. I have been talking to the webhost about this problem.

Thanks in advance! Elaine

GK

Testing 1,2,3: Time to move off Typepad before you get shut down.

Linked below is one of the most amazing articles I have EVER read.

http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=WorldCh08

http://snipurl.com/2e25s

"And behold at evening tide trouble; and before the morning he is not.
This is the portion of them that spoil us and the lot of them that rob us."
-- Isaiah 17:14

The Rule of The Order
History of the parasitic class and their techniques of control

OC

GK,

Chinese are control freaks: no control at IMF = death to EU + US financial institutions as far as they are concerned. They will then pick up all the pieces and form the new IMF. It's always their way or the highway!!

Have a look at the former USSR: once the economic collapse happens, they lose control over all aspects of their economy and country...within 5 years. It's not 20 years the Chinese will take over...my feeling is that events will force US and EU to hand over everything to them for a song within 5 -8 years.

Gary

This all reminds me of the movie, "Fargo"
where the hapless car dealer,in debt over
his head, just sits at his desk constantly
erasing,penciling in,then erasing again
the hopeless figures on his ledgers. In
the meanwhile the phone calls keep coming
from Detroit asking him when their money is coming.

I wonder if the solution of our Banksters
will be the same as the car dealer. Will
they try to kidnap us using some failed hoods and then try to collect ransom money ?
From whoom ? We're broke,eh?

B.A.

I cannot imagine why China would want to associate itself with the IMF brand. It will eventually have enough resources to set up shop as a direct competitor and you can bet that when it does, it will make a point of not acting in the predatory neocolonial way the IMF is known and despised for. The ChMF, probably sporting some positive name ("China World Prosperity Foundation" or some such), will emphasize actions and policies that maximize positive perception and good will, at the lowest cost and risk, all the while opening markets, guaranteeing resources and gaining privileged relations with the elites and approval of the masses. And why not? All it takes to appreciate the net advantages of such approach is a balanced, patient long term view of international relations, which the arrogant West lacks and China has in spades.

Elaine Meinel Supkis

B.A.---ever hear of 'revenge'? The Chinese think maybe we should taste our own medicine.

Jojo

My eyes will be on China after the Olympics when the dragon will no longer assume the polite accommodating posture of struggling state, and will like, Godzilla, trample those who have been disrespectful and stand in the way of it's goals.
Of all the survival strategies, learning Mandarin should be high on the list. How do you say, "Please pass the crumbs".

Raphael

The only reason Gold doesnt go up with inflation is because Govt, and FED artificially cap gold to suppress inflation expectations! How can anyone debate this. Today, oil is up $5.56 per barrell, Dollar is down big, Euro is soaring, and Gold is down? Please stop being so naive about Gold. The FED's #1 goal is to suppress golds exchange rate. Gold is the FED's enemy. Buy it now while its being subsidized by bernanke and paulson!!!

Elaine Meinel Supkis

Raphael, you are correct. The Fed HATES GOLD. Gold is very dangerous to the Floating Currency regime! This is why dealing with gold is DANGEROUS.

The Fed has in the past, confiscated gold! They do this! They use the government to do this! The battle here is not to hoard gold but to fight in the political arena for the government to return to ancient banking principals! I am a conservative in this regard.

Don

B.A. China is rankling the locals in several of the African countries they are working with. They tend to want total control, so the construction that happens is done by Chinese workers and as much as possible Chinese nationals are performing or at least supervising the resource extraction. They aren't trying to evangelize anyone, they just want the stuff.

The upside for the regimes is that the Chinese aren't going to try to tell them how to run their business. It helps that the Chinese haven't had the opportunity to show off their bad points yet as we've been busy doing on a world stage for the last century.

I wonder if the Olympics might not get ugly. All manner of activist groups are planning on trying to embarrass the Chinese at the games. The Chinese are in a nationalistic mood and feel picked on. I think the police will be firm but well controlled (at least while the cameras are rolling), but mob violence against protesters could break out.

mike

did not know cutting the cats whiskers will partialy blind it.............sorry.......

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