Japan Might Drop US Fiat Dollar Trade Use!

10/9/8

Elaine Meinel Supkis

Shocking news: the US is now the world's #40 banking power. Behind nearly everyone, even El Salvador? Wow! Also, Nikkei News shoots across the US banking prow: they are considering dropping the US dollar as their trade currency!!!! OH MY GOD. Here it comes! The end of the US fiat currency era. The only question is, will Germany and Japan form a deal where the euro replaces the dollar? Or will China step in and finally put us out of our misery? They said to me in 1986, 'I be bank' once they figured out how international banking worked. And I discuss the IMF, IMF riots and China's relations with the IMF. Boy, are we in for a heap of trouble.

Canada rated world's soundest bank system: survey

(Reuters) - Canada has the world's soundest banking system, closely followed by Sweden, Luxembourg and Australia, a survey by the World Economic Forum has found as financial crisis and bank failures shake world markets.

But Britain, which once ranked in the top five, has slipped to 44th place behind El Salvador and Peru, after a 50 billion pound ($86.5 billion) pledge this week by the government to bolster bank balance sheets.

The United States, where some of Wall Street's biggest financial names have collapsed in recent weeks, rated only 40, just behind Germany at 39, and smaller states such as Barbados, Estonia and even Namibia, in southern Africa.

WOW. London and NYC were both vying to be global banking centers. The US and UK were going to dominate global monetary systems. Both were going to be leaders who lead. Instead, after 8 years of Bush/Blair blundering, England is ranked behind EL SALVADOR???? And the US is behind the pirate island of Barbados? And Namibia? What the hell is this? A comedy act? And Germany, once one of the soundest banking nations on earth after several brushes with literal death during the first half of the Twentieth Century, is now ranked 39th? OUCH. How far we all have fallen!

I'm sorry to say, though, that Australia won't be long at the top of this list. All the former British imperial outlets will fall with the Mother Country. Canada has even more vast resources than even Australia and like that small continent, has a low population base vis a vis the huge natural resources. But as the world contracts, both will plunge into the depths just like everyone else. It is just a matter of time. Both, on the other hand, don't have the giant debt burdens that world debt king, the US and its consort, England, carry. Germany and Japan are close on the heels of both the US and UK when it comes to public debt.

Still, the US loves to scream, 'We're number one!' Instead, we should be shouting, 'Hell, we are number 40 and falling!' China, by the way, is above us in this scale....this is bad news on every front. The rescue operations simply show how weak we are. And the entire international trade complex can't force the dying dollar upwards forever. Indeed, the darkest news tonight is the dollar going down in value....even as all commodities...EXCEPT FOR GOLD...rise. This is very significant. It shows that there is very definitely a move to flee to gold in this environment. Just like during the Stagflation Years.

Paulson borrowing a page from Buffet

Treasury likely to get preferred shares in return for capital

(MarketWatch) -- Treasury Secretary Henry Paulson appears likely to borrow a page from billionaire investor Warren Buffet's playbook in the next phase of the financial market rescue plan, experts said.

White House spokesman Dana Perino confirmed that Paulson is actively considering injecting capital directly into banks, a power given in the new bailout bill. Treasury officials said only that they were looking closely at the strategy and other options but no decisions have been made.

In a deal that has been widely celebrated for its business acumen, Buffett invested at least $5 billion in Goldman Sachs by buying perpetual preferred stock issued by the investment bank. The terms of the deal give Buffett the potential to rake in enormous gains if the market recovers. See full story.
This is essentially what Paulson intends to do, experts said.

OK: let's get this particular crime straight. Paulson wants to use our money to buy Goldman Sachs stocks and thus, capitalize HIS corporation? The one he ran for so many years? Isn't this a huge, gaping conflict of interest? Who does he think he is?

Our dictator. Thank you, Congress. You got more pork and he gets to be a pig. Congratulations. And hang Bernanke and Greenspan for driving the US banking system so far off the cliff, we are #40. Yeowch.

I overheard some ladies talking in a restaurant today. They were bitterly denouncing the $700+ billion bank bail out bill. We ended up chatting a while. 'We hate BOTH parties,' these fine ladies, all retired, said firmly. They were outraged that savers were, in less than three years, going to be hammered yet again with extremely punitive 1% or less interest returns on savings. As I keep saying, 'Save the SAVERS or the banking system will die!'

They liked that line and decided they would repeat it to all their friends. God speed them all. There are many people who are dangerously angry this fall. Politicians can't support this status quo forever.

Meltdown of Iceland’s Financial System Quickens

As the meltdown in the Icelandic financial system quickened, with the government seemingly powerless to do anything about it, analysts said there was probably only one realistic option left: for Iceland to be bailed out by the International Monetary Fund.

“Iceland is bankrupt,” said Arsaell Valfells, a professor at the University of Iceland. “The Icelandic krona is history. The I.M.F. has to come and rescue us.”

Prime Minister Geir Haarde, who had warned this week of the threat of “national bankruptcy,” said Thursday that Iceland’s finance minister, Arni Mathiesen, would be in Washington this weekend for the autumn International Monetary Fund/World Bank meetings. He declined to say whether Iceland was seeking a rescue package from the international lender.
*snip*
• State action needs to have a clear objective so that effective oversight of how public money is used is possible.

• National plans need to be comprehensive: they should provide liquidity from central banks, contain guarantees to depositors and assurances to creditors and, most important, include recapitalization of financial institutions.

• Action should be coordinated, at the global level and at regional level, as with the recent coordinated central bank action on interest rates.

• Taxpayers should be able to share upside risks once the crisis passes.

And here comes a nice dragon: the IMF. For years, I have written many stories about the IMF. It is a racist organization that focuses on the Chinese, Africans, South Americans, Central Americans as if they are all idiots or in need of whips and chains so they will behave themselves and not live with huge, gaping trade deficits or massive government overspending...HAHAHA. Stop! I must retch.

Note that the IMF plans to have the taxpayers of the US and UK SHARE the 'upside risks' in the future. They mean to say, we will all be rewarded. Like that has ever happened to ANY nation the IMF takes over!

The IMF is always oh-so-pious about balanced budgets and good trade! Yet the biggest villains in this international fund are the worst violators of IMF protocols: the British/American imperium. All the nations that are part of the US/UK system such as NATO nations and Japan cheerfully violate all aspects of IMF financial protocols. Then they lecture everyone else. So will the IMF severely punish Europe and America for being the authors of the present train wreck? Will all be forced to balance books and cut wild spending?

In a Rato's ass! Rato, the present European tool who runs this bogus international bank, has timidly criticized the US this year but hasn't demanded the US stop its gross overruns in all directions. Nope. Now, it is too late. Here is today's official news bulletin from that ridiculous New World Order entity:

INTERNATIONAL FINANCIAL ARCHITECTURE

Quick, Forceful, Cooperative Action Needed on Crisis—IMF

Problems in the financial markets and in the global economy can be solved "if we act quickly, forcefully, and cooperatively,"IMF Managing Director Dominique Strauss-Kahn said.

He told a press briefing ahead of the IMF-World Bank Annual Meetings that the international financial architecture had failed to adapt to globalized financial markets. World economic and financial authorities are gathering in Washington for the October 13 Annual Meetings after weeks of turmoil in global equity and financial markets. They will discuss possible further steps to solve the crisis.

Strauss-Kahn said the global financial crisis had been marked by important regulatory and supervisory failures in advanced economies, in the risk management frameworks of major private financial institutions, and in market discipline mechanisms. The world is on "the cusp of a global recession," but if countries act together, the world economy would recover, he stated.

On October 8 the IMF unveiled a gloomy forecast for world growth, saying that the world economy is entering a major downturn in the face of the most dangerous financial shock in mature financial markets since the 1930s.

Note how mild this press release is! Just one year ago, the IMF issued one nasty news release after another, attacking Sovereign Wealth Funds of China and OPEC, demanding they open their bank books so the G7 ruling elites running the IMF could poke around, for example. I will note that OPEC and China have turned tables and are demanding the G7 do this, not them! Below are just two of many stories I wrote about the IMF and its colonialist view of the Chinese: Time for us to make an extended visit to past postings at this news service here! All of these stories are important to read all the way through.

Global Crossing's last ad before going bankrupt.

Culture of Life News on the magic number day of 7/17/7: China Is Selling Off US Bonds While US Economic Professors Go Insane

For several years, Japan quietly sold off $65 billion in US bonds. I pointed this out and the fact that China, to keep its currency in par with the US dollar, bought all of them and China was rapidly becoming our banker, the guys who own our government. But the US decided to declare a trade war against China so China dumped...at least $300 million bonds??? Amazing. And who bought these? Take a wild guess starting with nations that begin with a 'J'. And it wasn't the Jamacain bob sledding team.

Culture of LIfe News, July 22, 2007: China's IMF Representative Battles IMF Head

Sometimes very small matters that barely make the news end up determining the fates if billions of people's lives. I sense the arcane banking accords, the Basel II understandings and the Pillar I, Pillar II and Pillar III developments are part of the triggering mechanism that is going to play a key roll in the coming financial and political confrontation of the depressed and dying US and Japanese economic systems. As I keep pointing out, the world's #1 and #2 economies cannot both be running dying currencies simulatneously without explosive results. Today, I am going to compare an interview with the head of the Chinese delegation to the IMF and the head of the IMF itself. Ouch! They tell totally different stories about negotiations!

Culture of Life News, July 22, 2008: IMF Follies Don't Impress Chinese

The IMF and China have been sparring openly for about a year. As the entire G7 banking system goes under the blood red waves of excessive debt, the IMF refuses to humble itself and admit the financial leaders in the world are all really sex-starved gnomes who have no interest in balancing their books. Instead, the IMF struggles to keep itself looking scary to third world nations or at least, project the image of being sober and powerful rather than drunken sots on a binge, in the gutter. And Bernanke, it is revealed, is investing in CANADIAN instruments, not in the things his besotted, stupid bank supports. And good grief, he certainly is NOT holding US Treasuries or debts. Forget Fannie Mae or Freddie Mac. Or even one of the pirates.

Culture of Life News, August 31, 2007:Bush's Speech Is Meaningless But Hu's Speech Is Scary

The news from China is interesting today. They are changing direction. No question about this. The world banking system is still in crisis as bankers pretend they have infinite resources yet they must borrow from each other all over the place as they shift funds like mad trying to give the appearance of liquidity. The Federal Reserve has decided to inflict terrible inflationary losses on all savers as it tries to save the madcap 'consumer society' of reckless American spending.

Culture of Life News, August 25, 2007: IMF Praises Imperial Money Creation By US and Europe

The IMF protects the European and American empire as these entities violate all sorts of IMF rules. Indeed, instead of being forced to use FOREX reserves which the US barely has, both the Bank of Europe and the Federal Reserve were allowed to talk about INFINITE money creation and how they could make merry money forever without any limits! Ever! Why isn't the IMF condemning this and demanding an accounting for the half a trillion + poured into the banking system without a penny or euro coming out of any FOREX reserves? Indeed.

Culture of Life News, Sept. 30, 2007: G7 Dwarf Nations Attack Chinese Dragon For Being Too Smart And Rich

The G7 Dwarves march back, hi ho, hi ho, off to annoy the Dragon we go! They demand the Dragon stop accumulating Sovereign Wealth. And they get pretty steamed about the Dragon's International Debts which are a tiny fraction of the 7 Dwarve's debts! Out of $44+trillion in debts, the G7 dwarves are the majority at about $33 trillion! Yet the yapping at China is rising in volume? HAHAHA. I try to not die laughing but this is getting to be a serious problem here. Someone save me from them! HAHAHA.

This is just from the magic day when the Japanese carry trade began to unwind, 7/17/7 and through September of last year. Oh, how things have changed! The IMF cannot dare focus on OPEC and China for they are scared stiff of both. The IMF has IOUs from the US as its fundamental basis and this is going down the rabbit hole, fast! They need China and OPEC to capitalize the IMF! Oh no! The Chinese and the oil pumping powers are combining forces to force the IMF to hand over power to the real economic powers. This means turning banking power #40, the US, over to the very untender mercies of the rather angry Chinese and pissed off Saudis. Not to mention, Russia.

Russia's markets are in decline right now. All markets except for...GOLD....are in sharp decline. But Russia, China and Japan all have huge FOREX reserves. So they are good even if things fall apart. The US has nothing but a printing press. Note the news coming through today. Below are some very dreadful stories, especially from our trade partner and ally, Japan.

First, here are some interesting maps from the IMF [click on all images to enlarge]:

The bank crisis began here in the US. The contagion of trade collapse is due to the US unable to soak up tons of red ink trade deals. The IMF doesn't mention this vital tidbit of information, of course. Here is a news headline from ten hours ago:

Here is Japan tonight:

Ten days of this and there won't be a Japanese Nikkei! Well, time to look again at the IMF and how Western Europe, the US and Japan dealt with everyone who went under in the past. Any nation foolish enough to act like the US was severely punished. This meant the people had to STARVE to death and live in greatest distress while the government handed over all systems, commodities and such to international pirates in the US, UK and Europe! This, in turn, would trigger terrific riots which we call 'IMF riots'. Here is a list of these from a New York university in Pattsburgh:

Anti-IMF/World Bank Protests in the Global South 1976-2001, (a partial list):

Jul 1976 Peru

Jan 1977 Egypt

Sep 1978 Ghana

Jan 1979 Jamaica

Apr 1979 Liberia

Feb 1980 Philippines

May 1980 Zaire

Jul 1980 Turkey

Jun 1981 Morocco

Aug 1981 Sierra Leone

Jan 1982 Sudan

Mar 1982 Argentina

Oct 1982 Ecuador

Oct 1982 Chile

Mar 1983 Bolivia

Apr 1983 Brazil

Oct 1983 Panama

Jan 1984 Tunisia

Apr 1984 Dominican Rep.

Jan 1985 Jamaica

Mar 1985 Bolivia

Mar 1985 Zaire

May 1985 Haiti

May 1985 El Salvador

Aug 1985 Costa Rica

Sep 1985 Guatemala

Sep 1985 Bolivia

Feb 1986 Mexico

May 1986 Nigeria

Sep 1986 Bolivia

Nov 1986 Yugoslavia

Jan 1987 Zambia

Jan 1987 Sierra Leone

Mar 1987 Poland

Mar 1987 Ghana

Mar 1987 Ecuador

Oct 1987 Ecuador

Nov 1987 Algeria

Nov 1987 Romania

Nov 1987 Sudan

Apr 1988 Nigeria

Jun 1988 Ghana

Aug 1988 Hungary

Oct 1988 Algeria

Jan 1989 Benin

Feb 1989 Venezuela

Apr 1989 Jordan

Apr 1989 Benin

May 1989 Argentina

May 1989 Nigeria

Feb 1990 Ivory Coast

Feb 1990 Niger

Mar 1990 Nigeria

Jun 1990 Zambia

Jul 1990 Trinidad

Dec 1990 Uganda

Dec 1990 Morocco

May 1991 Nigeria

Aug 1991 Iran

Feb 1992 Albania

Feb 1992 Venezuela

Feb 1992 India

Apr 1992 Nepal

May 1992 Zimbabwe

May 1992 Nigeria

Dec 1992 India

Oct 1993 India

Oct 1993 Russia

Jan 1994 Mexico

May 1994 Uganda

Jun 1994 Gabon

Jul 1995 Ecuador

Nov 1995 Kenya

Feb 1997 South Africa

May 1998 Indonesia

Feb 1999 Romania

Apr 1999 Mexico

May 1999 Argentina

Jul 1999 Ecuador

Dec 1999 Argentina

Jan 2000 Ecuador

Mar 2000 Costa Rica

Apr 2000 Bolivia

Apr 2000 Argentina

Apr 2000 Kenya

Apr 2000 Zambia

May 2000 South Africa

May 2000 Turkey

May 2000 Argentina

May 2000 India

May 2000 Malawi

May 2000 Russia

Jun 2000 Nigeria

Jun 2000 Paraguay

Jun 2000 Argentina

Jun 2000 Ecuador

Aug 2000 Columbia

Aug 2000 Honduras

Sep 2000 Brazil

Feb 2001 Ecuador

Mar 2001 Argentina

Mar 2001 Bolivia

Mar 2001 Paraguay

Apr 2001 Argentina

Every one of these nations just itches to do the same to the US. There is considerable rubbing of hands behind the scenes, contemplating the comeuppance of the US/Europe domination of global banking and the punitive nastiness displayed by the richest nations when they were all on top of the world. We were MEAN. Very mean. Americans think we give lots of aid to everyone.

This is MILITARY aid so dictators can crush IMF riots. Or keep pesky people under their boot heels. So the IMF and US can loot their nations. This is why the US is extraordinarily hated across the globe. Here is a sampling of past riots in the news, picked at random:

25 Sept 2000: ANTI-IMF RIOTS SWEEP DEVELOPING WORLD

IMF policies are linked to widespread protests in poor countries

A new report today reveals that protests and riots against the International Monetary Fund (IMF) and its policies, are taking place in poor countries around the world. Since the Seattle protests ten months ago there have been at least 50 separate episodes of civil unrest in 13 poor countries, all directed at the IMF. Half of these protests have ended in violent clashes with the police or military. In one country the protests led to a military coupe.

The report uncovers a previously undocumented pattern of protest against the policies of the International Monetary Fund. It links these policies to a catalogue of riots and civil unrest in poor countries around the world.

The World Development Movement publishes its report, called 'States of Unrest: Resistance to IMF Policies in Poor Countries', on the eve of massive protests against the IMF at its annual meeting, in Prague.

Growing hostility to Argentine government's austerity program

By Margaret Rees
29 June 2000

Backed personally by US President Clinton, Argentina's President Fernando De la Rua is seeking to impose IMF-ordered spending cuts despite a general strike on June 9. About 60 percent of the Argentine work force—that is 7.2 million workers—participated in the 24-hour stoppage to oppose De la Rua' s decree of cuts totalling $938 million, announced on May 29.

The general strike was the biggest industrial action in over a decade. There were no rallies held by the unions, however, and only sporadic demonstrations by workers. Buenos Aires bank workers scattered debris, beat drums and set off firecrackers. A group of unemployed workers set tyres on fire and created traffic jams on two entry routes into the city.

In the provinces, customs workers left their posts at the border with Paraguay. Windows of 40 buses were smashed in Mar del Plata, and in the southwest province of Neuquen, protesters broke into the Spanish-owned Repsol-YPF oil company, smashed computers and set fire to the interior.

Food riots and the IMF
By Gabriel Banda
Friday April 18, 2008

MEN, women and children have been killed and wounded in disturbances following reaction to hunger and lack of access to food. Societies have been disturbed. In Zambia, the food riot waves of December 1986 and June 1990 arose from the harsh IMF and World Bank imposed economic policies. The 1990 food riots led to a military coup attempt against President Kenneth Kaunda's UNIP government.

Around twenty years later, this month, protests and riots in Haiti, including storming of the presidential palace, have led to government and the private sector announcing emergency plans to bring down the price of rice by 15 per cent.

Like we note from Zambia's experience, Christian Aid has linked the Haiti riots to “economic policies that have been required by donor countries.” In May 1987, Zambia's government cut off the IMF programme due to the social insecurity the economic measures had brought but the IMF and World Bank machinery imposed sanctions. Zambia went back to the programme, and to more poverty and social unrest.

Now, back to today's very important news! Total catastrophe for the Japanese! The YEN is STRENGTHENING! It is now, tonight, 98 to the dollar. They absolutely loathe this. This is freaking them out so badly, they are seriously debating dropping the dollar as their international fiat currency!!!!

This is BIG NEWS. I suggest, it is merely a threat. They desperately want the yen to be 120 to the dollar so they can export with supreme ease.

Japan To Propose Using Foreign Reserves For IMF Emergency Loans

TOKYO (Nikkei)--The government will call on the International Monetary Fund to set up a lending program that taps the vast foreign currency reserves of Japan and other cash-rich countries to help emerging nations reeling from domestic financial storms, The Nikkei learned Thursday.
*******************************************************

Japan Firms Rethink Using Dollar As Settlement Currency

TOKYO (Nikkei)--With growing expectations that the dollar will head lower against the yen over the medium to long term, Japanese companies with major overseas operations are re-examining their use of the greenback for settling business deals.
**************************************************

Lackluster Demand Brings Capital Spending Plans To A Halt

TOKYO (Nikkei)--Japanese companies are slashing capital spending plans amid flagging demand both at home and abroad as the financial crisis threatens to kick the legs out from under an already limping global economy.
**************************************************

Govt Mulling Preventive Safety Net For Smaller Lenders

TOKYO (Nikkei)--Alarmed by the risk of small and midsize regional financial institutions falling victim to the financial turmoil that began in the U.S., the government and the ruling parties have decided to create an emergency funding mechanism aimed at shoring up smaller lenders' balance sheets through preventive direct injections of public funds, The Nikkei learned Thursday.

This is very significant! Many a nation is itching to drop the dollar as the world's reserve currency. The ONLY barrier to this is 'which currency do we use?' It has to be a huge economy, not small. It can't be Japan, that insular island. It has to be the money used by global traders with a huge, huge merchant marine. This leaves out the US, Britain, Spain, etc. Dead empires have all surrendered their boats and no longer ply the Seven Seas. The US has a huge military navy but it will be mothballed once we go bankrupt.

If Europe was a nation, they would take back control of world currency values. But they are falling apart, rapidly. Very rapidly. I see the EU disintegrating under the hammer blows of this international banking collapse. The yen has been forced downwards to 99 to the dollar but this is with the biggest financial powers in Japan pulling at their oars hard as possible as they struggle to weaken the yen. The IMF has never criticized this effort or tried to stop the deadly 0% lending of Japan. We will pay dearly for this deliberate blind spot.

So the struggle now will be this: will Germany and Japan stop China from being the world's TRADE currency? Both, combined, might be able to do this. But they are at odds in significant ways. Japan is trapped by its dependence on the US system and Germany is trapped by a sagging Europe. And Germany's banks are collapsing and so will Japan's banks. So this leaves China. Despite its weaknesses, it has significant strengths and the biggest is the world's most gigantic FOREX reserves.

That nation which has huge FOREX savings...RULES THE SEVEN SEAS AND ALL TRADE. This is a massive change coming rapidly as our system collapses here.

China steel cut drives further FTSE dive

Confirmation that four key Chinese steel plants have cut production by a fifth this year drove another wave of equity selling, particularly mining stocks, around the world this morning.

The Chinese also halted trading in copper futures for tomorrow after three days of successive price falls.

The Chinese economy's huge demand for raw materials, such as metals, was seen as one of the key props of the world economy. Steel production was already on the slide in US and Europe.

Time to review the Great Depression. The US was the creditor nation of the planet like China is today. The US had to forgive huge loans of debtor empires of Germany, France and England. England and France clung to their vast empires and fought hard to suppress angry natives so they could colonize and exploit commodities. And have captive markets for their goods. The US came out of the Great Depression a million times more powerful than all of Europe and all of Asia! So declines do hurt but the fundamentals of China are as strong as the US back in 1930. The US, on the other hand, is as weak as Britain back then.

DESCENT INTO THE DEPTHS (END 1931):
The Collapse of International Finance

British Prime Minister Ramsay McDonald nixed any revision of reparations and war debts. FDR, while quick to attack the Republican tariff, was noticeably quiet on the politically sensitive issue of war debts. Already, international bankers, as well as the Federal Reserve Bank, had been forced to make emergency moves to support the Austrian Creditanstalt. More than 20% of the total German gold reserve - approximately $175 million - was drained in a two week flight of capital out of Germany.

In the U.S., economic indicators continued to darken. By mid June, steel production was slipping at a rate of 2 percentage points per week, to 36% of capacity. U.S. Steel reported a drop in unfilled orders of 277,000 tons, in spite of low rates of production. July wheat hit 55 3/4 cents per bushel, as other crops vacillated only slightly above their Great Depression lows. Copper hit 8 cents per pound with a further substantial increase in inventories. Commodity price averages continued slipping at an astounding rate of 2% to 3% per month. 18 small Chicago banks closed their doors in a two day period.

The usual summer business "dip" was acknowledged to be a little early this year.
Hoover Moratorium rally:

Then, on June 19, 1931, Pres. Hoover called for relief for Germany from her reparations burden and for the easing of war debt interest payments. It was the first real effort to address these problems since the Hoover administration wrote off 60% of French war debts in the summer of 1929. Total U.S. investment in German securities was between $2 1/2 and $3 billion. The Young Plan and Dawes Plan loans comprised the largest individual elements of this total. Payments were to be suspended for one year from July 1, 1931.
*snip*
The September, 1931, stock market Crash was the worst monthly percentage decline of the Great Depression. A speculative leader that had been paying $6 yearly omitted its quarterly dividend, triggering the dive. Domestic bonds joined the sell off at a greatly accelerated pace as confidence in even the long term future was finally drained away. Other dividend casualties continuously pummeled the market along with the continuous decline in commodity prices and an almost complete failure of any materialization of the anticipated autumn business revival.

Complete cessation of foreign bond financing in U.S. markets left debtor nations no alternative but to ship gold.
*snip*
By the end of the first week of September, the N.Y. Times average of 40 domestic bonds reached the lowest point since 1924. Second and third grade preferred stock joined the decline. In the next week, nearly a dozen major companies reduced or passed dividends in one day. By 14 September, the N.Y. Times 50 stock average tumbled below its June 2, 1931 low. Few brokers were hardy enough to venture an opinion as to when the Great Depression would "bottom out." Wall Street shuddered over expected third quarter earnings reports.

Back to today's news: the krona is DEAD. Like, 'Weimar Republic' dead. Iceland is begging Russia for salvation. Now, they will be forced by Russia and China to face the full fury of IMF rules! No upper class European power wants the colonial whip applied to THEM! They are all special! Supermen! Gods! Not 'natives' who have to be punished.

Brown threatens Iceland over crisis

Gordon Brown tonight described the behaviour of the Icelandic government over its bank collapses as "totally unacceptable" and said the Government is considering legal action.

His statement came after the Government and the Local Government Association said tonight in a joint statement that councils facing "severe" difficulties after investing in collapsed Icelandic banks will receive "appropriate" assistance,

Mr Brown made his comments as he visited business chiefs in Birmingham to talk about the Government's massive bail-out package that could effectively part-nationalise eight UK financial institutions.

He said: "This is a real problem because we have guaranteed the retail deposits of even Icelandic branches in Britain.

Britain is beating up Iceland because Britain is dying. They can't beat up their own stupid pirates living it up on Queen Elizabeth's islands. No, they attack Iceland. When will they shut down the Palace and do a French Revolution? About time, I would suggest.

Hungary markets slide on liquidity crunch

(Reuters) - Hungary's currency and bonds fell sharply on Thursday as concerns grew over the country's financing and banking system amid the global financial crisis and as the government said it would redraft the 2009 budget.

Liquidity dried up and trading froze in the government bond market, which sent the forint into falls and late rumours, subsequently denied, that the government planned to nationalise its biggest commercial bank, OTP OTPB.BU aggravated losses.

Shares in OTP OTPB.BU, central Europe's biggest independent bank, plunged over 14 percent in late trade on market talk that the government was planning to nationalise it. Both OTP and the government firmly denied the rumour.

"This is absolutely nonsense," OTP Chairman and CEO Sandor Csanyi told Reuters, adding that OTP had all the financing it needed until the end of 2009.

This collapse is like 1873. I will, tomorrow, dig up my older 1873 postings just like I did the older IMF stories. There is plenty here at Culture of Life News. This is so identical to back then, it freaks me out a tad. But then, History is like a dog that snaps at its own tail. Round and round it goes.

GM shares fall to lowest level since 1950

(Reuters) - General Motors Corp shares fell as much as 21.6 percent to their lowest level since 1950 on Thursday amid financial market turmoil and the car maker's report of European sales declines through the first nine months of 2008.

An investment banker who declined to be identified attributed the share decline to elimination of short-selling restrictions on the shares that had put the equity value out of balance with bond and credit-default swaps values.

"It all has to rebalance now," the banker said.

At last, an honest banker! He admits that all has to rebalance. And this seems to mean that we can't run in the red, eh? Or be the top nation while being the #40 banking nation. General Motors played a very stupid game. They wanted to sell bigger and bigger SUVs and monster trucks while knowing perfectly well that global political instabilities will constrict oil sales and cause price hikes. We are not quite at the very top of the Hubbert Oil Peak but if we use too many SUVs and monster trucks, we will be there in no time flat. The lack of foresight and planning is the fault of Washington. But if anyone suggested forcing Detroit to adhere to sane gas use standards, they were hammered, hard.

So now we can say goodbye to General Motors and hello to whichever Chinese/OPEC consortium that ends up owning this. Most likely, the Chinese will take over the whole thing. They have the money. They are now #1 even as their own economy declines in this downturn.

For remember: this is all about RELATIVE VALUES. When all are weakening, the ones with the greatest cushions are the ones to recover the fastest. And the US has no cushion. China has the biggest cushion on earth.

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Comments

[David]

Great summation.

I guess all that is left now is to estimate a timeframe.

Any clue as to when it will happen?

[OC]

David,

Since u start first - I say 5 years to total takeover and resetting of world economic rules unless war gets into the way.

[Fred Bear]

Elaine wrote:

>Both, on the other hand, don't have the giant debt
>burdens that world debt king, the US and its
>consort, England, carry.

I've been reading your stuff for about 2+ years
now. Just a few things that you might not be aware
of.

1) Personal debt in Australia is _huge_. As of
about four years ago, it was around 420 billion.
At the time, this was about $36,000 for every man,
woman and child in the country ( or about half a
million for one in every 15 people ). The Federal
and State governments have avoided debt at all
possible cost but have been quite happy to allow
private citizens to go into debt up to the eye
balls. One bank is Aus to watch : McQuarie Bank.
They have been very heavily in "debt instuments".
You might also remember that Westpac bank bought
out RAMS Building Society a few months back. This
is all pretty much small fry in comparisson to
what's going on Internationally, but as an event
on the local scene here in Australia, it was a
fairly signifigant event.

2) We have had a housing boom that went from about
2000 - 2005. Not as bad as the USA/UK or other
European nations ( Ireland/Spain/Italy ) but
nothing to sneeze at either. We are currently
in a downward correction which started in 2005
and probably won't hit bottom until 2011 - 2012.
Same with the stock market : it won't reach bottom
for at least 2 - 3 years at the current rate.

3) In Sydney ( where I live ) we have ( get ready
for a suprise Elaine ) : large numbers of Japanese.
We also have lots of ethnic Chinese and other
Asians, but belive it or not, we also have a large
number of Japanese people who seem to be there for
extended periods of time ( ie, _not_ tourists ).
They stay pretty much exclusively in the region
around the CBD and don't go into even the
suburbs close to the CBD. Just the CBD. I'm sure
that you can appreciate my curiosity on this point
in view of your various comments on the situation
with Japan.

4) Government in Aus has three levels : Federal,
State and Local Council. It turns out, Aus banks
weren't the only ones who loaded up with CDO's
and other toxic paper. A lot of local council
governments converted their excess cash from the
boom years into, suprise, suprise, CDO's and other
paper assets which are probably too toxic to use
even as toilet paper now.

Anyway : the e-mail address that I have supplied
is fake ( sorry, I value my privacy ). I won't
make any promises but I'll try to check back and
answer any specific questions that you have.

Regards,
Fred Bear

[Jeremy]

This is all very scarey! What will happen next!!

[Buffalo Ken]

Jeremy - Great Question. I second it.

Peace,
Ken

[Buffalo Ken]

Jeremy - Assuming it was a question of course, cause I just noticed you didn't use a question mark (?)!!

Regardless, I have some ideas about what could happen next, but I'm curious what Fred Bear thinks is going to happen next.

Peace,
Ken

[Jeremy]

Dear Group,

My last comment was a question and a statement of being worried. I find all of this economic news to be very scary and overwhelming. I keep wondering "when is it going to become a full blown depression?" and "should I take money out of the bank?" I was born in 1975, and the America that I've always known is changing....QUICKLY changing, and that is scary to the extreme.

[larry, dfh]

Hugo Chavez has been very effective in redducing the burdens of the IMF extortions in Latin America. Another reason he is so villified here. He's been very active in creating a regional alliance of finance, and recently, in military protection.
The current situation with GM may be somewhat to their advantage, as they have huge cash reserves outside their capitalized value, and could use these to buy back their stock at the lower prices. They could be in a better position if this ever imporves...if.

[Theresa]

Fred Bear - do you think Australian banks are safe. I am told that they have AAA ratings but what if people start to panic. Where would you put your money?

[Gary W]

Theresa, I posted earlier about Australia, but dopey Typepad accused me of spamming and sent my comment to Elaine; she either didn't get it (no surprise there) or she's too busy to deal with it (even less surprise).

Our savings are definitely at risk! The Australian government is in the business-as-usual preserve-power-at-any-price camp, and will abandon our savings if perceived to be in its interests, either directly by allowing bank failures or indirectly by additional taxes and stoking inflation.

If you have super, you should have moved your funds to a cash account a year ago :-) You might consider transferring a bank balance to a country where they have guaranteed deposits, although that appears to be coming to Australia: http://tinyurl.com/3k4kg6

Keep plenty of cash on hand! Maybe under your mattress. Or convert it to gold and/or silver and bury it in the backyard (on a moonless night); that worked really well in ancient times, people are still finding these hoards :-)

Treasury bonds are probably more safe than any institutional deposit, but sadly, I don't think any paper can be trusted any more. I'm trying to invest in productive land, tools, skills, and fruit and veges, but that's a bit of a long haul.

Good luck to us all!

[Elaine Meinel Supkis]

PLEASE POST ONLY ONE LINK PER COMMENT. And you can post ten comments, this is just fine with me! I hate the typepad system. Even if I get links, typepad won't let ME post them! This is infuriating.

Alas.

Gary, I still love the links and hope you post them, one at a time.

About land and tools: I have both and believe in survivalism but the best survival tool is still...UNITY and FAITH. Binding together to fight for something.

[Gary W]

I'm afraid my diverted post is lost from here; my computer played up and foolishly, I didn't compose it offline. It was late, and I'm now pretty vague about what I said and what I linked to. Sorry. It was a bit Australia-specific for the readership here.

Agree wholeheartedly about sticking together; that is the only thing that will help us against the divide-and-rule elites and their imperial storm troopers. Indeed, that is the very definition of civilisation. You are lucky that you are deep in that future; well, no, I don't suppose it is luck, since you are so far-sighted. I, on the contrary, still live in one of Australia's largest cities.

For my ONE link this post, let me refer everyone to Charles Hugh Smith and his post on "survivalism"; this is the most insightful commentary I've seen on how our future should be, and must be, otherwise we're all going down the gurgler with the tide of fantasy greenbacks.
http://tinyurl.com/6s2nfw

[Gary W]

Further to the above, I see that the Australian government has now decided to guarantee deposits (now that everyone else is doing it, there was a risk of capital outflow):
"Prime Minister Kevin Rudd has announced that the Government will guarantee all deposits in all Australian banks and other financial institutions for the next three years."
http://tinyurl.com/3pm5jr

[GK]

Love this one.

http://fskrealityguide.blogspot.com/2008/10/proliferation-of-stupidity.html

The Proliferation of Stupidity

A lot of people give me grief whenever I point out someone is pro-State trolling. The term pro-State trolling covers three categories. First, there's someone who's merely clueless or stupid. These people usually give up once you correct them; they'll either learn or get disgusted. Second, there's someone with a professional interest in not understanding the truth. For example, a professional economist usually goes into a state of denial when they read about the Compound Interest Paradox. Finally, there are professional propaganda artists who are intentionally disrupting discussion. These can be direct State spies or someone working for a PR firm, such as a drug company representative censoring negative information on Wikipedia. The last two types of trolls tend to be very persistent. Either they can't admit that their brainwashing is wrong, or they're actively disrupting discussion.

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