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This is not the worst yet. (The oil producing countries are promising $150-170 by late summer)

so the full economic effect will be brutal in winter, when people really don't have money for holiday spending. Retail will get hammered.


Oil hits record over $140 as Libya mulls cuts

Elaine Meinel Supkis

Yup. We are brutalizing Muslim nations like crazy and boy is it paying off big time... for the oil guys.


Holy Sh*t! I'm scared. I was kind of hoping all of my own doom and gloom talk really was the result of a personal problem, a symptom of my own sad case of paranoia. That would have been nice-- or at least better than what we're going to collectively experience in coming years.

8 1/2 years after the Y2K peak of 11,700 and we are again below 11,700...Unprecedented in history. We are already in deep, deep doo doo and I can't help but think this is just a small sign of much deeper doo doo to come.


The carry trade is holding. amazing. look at the proportion of exchange rate between china, US, Japan and europe.

It's like Asia and Bush doing blinking contest in europe plus US banking.

this is going to get very ugly when it snaps.


obama is officially a whore now:


Elaine Meinel Supkis

The carry trade is teetering on the edge of a cliff. Yen is up against the dying dollar. While oil and gold go up and up and up.


bunch of chart (old analysis from 2007) trying to guess what makes USD so weak/inflationary.)

the charts are interesting. comparing various big countries.


Interest Rates, Sentiment, Currency Pegs, Carry Trade

So if dollar weakness is not related to housing, the trade deficit, US printing, or M3 (the latter because every country but Japan is doing the same thing), then what is it? The remaining factors to consider are interest rate policy, currency pegs, the carry trade, and sentiment.


The carry trade is being conducted through le euro and the overnight swaps that Tricky John at the ECB and our own bearded rat at the FEd had set up in December, and expanded in March. Le euro is at its all time highs, incredibly. While Germany could not care any less about Italian soup kitchens and the real estate hurricane about to hit Spain, this discounts the political effects in an economically incapacitated country. While Italy can not export a Fiat to Germany, except as a joke, they can export both communism and fascism to a country where the REd Brigades are not such a distant memory. Tricky is now playing with fire that the etarques can not fit into their econometric models with eighty variables. Is the cretin trying to bring back open class warfare, what is his problem? Europe can not hold up interest while the yen is a freely convertible currency available at one half percent interest. This is not absorbing inflation, or prudent policy. It is economic suicide. I repeat, cut the interest rate one hundred basis points tomorrow and promise another cut at the next meeting. Tell Spain and Italy and France and Greece to issue bonds and let ECB buy them. This will destroy the carry trade, the McMansion economies and put an end to Bank of Japan's colonization of Western industry. That Tricky Jean is a cretin is only my personal opinion and the Helicopter Ben is a bearded rat is also a personal opinion, and not a libelous statement of fact.

Buffalo Ken

calvino, this is a separate thread, so I'm going to post here.

I defy anyone to come up with a model based on 80 variables.

The error will overwhelm any supposed conclusion.

I like your way of characterizing the "playas".


Ken, eighty are actually not the new sophisticated models. Last I remember, Wharton econometrics was plugging double that number of variables. If anyone knows exactly, or if I am wrong, please correct me.

El Johnny


When cash and credit become scarce we enter the zone of a deflationary period. For the last 6 weeks I have had an earnest money contract on my residence. The lender is Bank of America. The buyer has a FICA over 800 and 10% down. BOA has no closing costs. We are unable to close because BOA has not the cash to fund the closing. BOA has no cash to continue their mortgage business for the time being. Rather than admit this issue, they prefer to act as if all is well. Cash and credit ARE drying up. Soon prices will decline. Soon cash will be king again.


Incredible. Only the paranoid survive. And now, even I'm gonna die.

The only ones who will survive this holocaust will be some subsistance farmers in the Third World and the central bankers and their kissing cousins.

Everyone else is fucked.


Not everyone in Asia is without cash or gold or manufacturing industries....Russia is still pumping oil & gas to them.

Is it possible that Asia will experience depression like US in the 30's and US + EU will experience hyperinflation like Weimar Germany?

Elaine Meinel Supkis

El Johnny, I was wondering what was up with you! So, your legitimate sale collapsed?

This is exactly what happened in the Great Depression! NORMAL banking/lending collapsed after wild, abnormal banking collapsed. So normal, healthy behavior is useless thanks to wild lending to irresponsible people crashes.

About Europe: raising rates fail in Free Trade/Floating Currency systems! If Japan and the US totally ignore not only the real rate of inflation but even their own fake inflation rate statistics, then ALL OTHER SYSTEMS FAIL. As I keep saying the top 2 or 3 economic world powers, if they do anything, they set the rules. The #1 and #3 economies, if they both have near zero interest rates so they can deliberately kill their currencies, then all others must do the same or be destroyed by world trade wars.

The G7, as I keep saying, are NOT in concert with each other. They are at each other's throats while simultaneously pretending to be good friends and allies of the US so they can export to us. But Europe will cease exporting to us at this rate!

The US hegemony of the earth is ending. Using Japanese trade tactics is a sign of weakness, not strength. And we can't imitate Japan if we also want to militarily rule the earth. Period. Japan has no military, so to speak. Ours is gigantic. Ditto Europe, they have very little military, we are gigantic. So each entity is different and Japan has a lock on the Fortress Japan/weak yen/huge trade advantage/huge FOREX business.


Here are some factors which lead me to believe in the Volcker Interest Rate Rise plan.

I will allow you to draw your own conclusions as to whether I agree with Elaine that this will save the USA or instead think it will be used to destroy it.

Everyone knows that when Interest Rates rise, the value of bonds go down. If interest rates go from 5% to 15%, how much would you pay for a bond still paying 5%?!

1. Federal Reserve is DUMPING T-Bills (Just very 'safe' Bonds from the Treasury backed by the US military) which pay low interest rates by giving (swapping) them to Member Banks.

2. Fed is swapping those T-BILLS for HIGH INTEREST RATE SUB-PRIME debt that looks like junk garbage, but their plan is to get it backed by the government and tax payers so that it will soon be VALUABLE. (they get title to a majority of peasants 'property' too.)

3. US BANKS are COLLAPSING because insiders know that the value of all those 30 YEAR FIXED RATE MORTGAGES are going to be SAVAGED and plunge in price when the interest rates go from 5% to 15%.

Once interest rates go up to 15%, bond/tbill/oil/gold markets will crash, as Elaine correctly notes, and then banks will collapse due to people not being able to afford to buy debt or anything.

Then housing will complete the ongoing collapse. All houses not owned 100% in cash will be repossessed. If the banks miss a few, the IRS/State will seize the rest for failure to pay property tax. Now people can be herded into cities for easy control and less fuel consumption so it can be sent to factories, cars, trucks and trains in CHINA.

Now the IMF can come in and 'rescue' the US by demanding new Euro-like Amero currency, metric system and more 'free-trade' ie open up remaining ULTRA-CHEAP post GREATER DEPRESSION assets to be sold to COMMUNIST CHINA and the WWII AXIS OF GERMANY AND JAPAN.

The mental model I use for this analysis is to think of the news as a play-by-play reporting of a game of pool (or snooker) between the Rockefeller and the Rothschild gangs.

A gentleman's game played ruthlessly for enormous stakes, but at the end of the game the funds change hands and a few cigars and snifters of brandy are enjoyed with a hearty laugh.

But if Volcker is able to raise interest rates AND return to a sound banking system without a private central bank, then I will switch to a more favorable opinion as to the consequences.

Buffalo Ken

Nobody knows the future, but there is power in numbers and the numbers are with the People - you know, the "regular folk". There is no power in "ill-gotten gains"....only a gnashing of the teeth and a dwindling of the mind.

When you get down to the bottom we are all human animals and the "Rocks", "Childs", "Bushes/Pierces", "Walkers", "Harry-men" and the "Chains" (and I could add more) are all skin and bone just like the rest of us. We are all going to get our due. Don't you think? We are all going to die and then what happens next is a grand mystery but I think the way you treat others will make a big difference. You know didn't someone once say...."whatsoever you do to the least of my brothers/sisters that you do onto me" -- seems like this is simply saying that we are all connected. We are all related. Duh.

Sorry to be so "smoky" with this note, but I'm not sure how else to express something so simple yet so long obfuscated...

Its time for a new day.

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