US Dollar Analysis, Sea Change Coming

 

by Stewart Thomson

Originally posted Monday, 24 August 2009

1. “The people who delivered this problem to us don’t have a whole lot of sanity, except where it reflects their own personal wealth.” – Jim Sinclair.

2. Aprox 65% of all monetary transactions in the world involve US dollars. Think about that very very carefully. If the bankers were to create a “situation of insanity”, where the dollar began to hyperinflate, or even appeared set to hyperinflate, a stampede out of dollars and into gold would take place. Think about the economic ramifications of such an event.  It would be a global economic catastrophe of unprecedented size.

3. It would be the largest wealth transfer in the history of the world, because for every seller there is a buyer, by definition.  Somebody has to be a buyer of all the sold dollars… or the price of the dollar would collapse to zero.

4. I don’t think most investors in the gold community have even a tiny understanding of how much buying support the bankers provide to the gold price in panic sell-offs as the funds and retail investors sell in one panic after another. The size of the comex buys made by the bankers match the fund and retail sells, not the size of some otc or exchange traded gold products they sold clients and are hedging against. Last week’s gold exit involved the bankster-created fear that the gold head and shoulders pattern must fail because so many people know about it. And the gold writers swallowed that fear hook line and sinker.

5. The bankers are already long gold, in Jim Sinclair’s words “up the yin yang”. She who owns the most gold, makes the rules. Never forget that. Those who control gold control the US dollar.

Will the world end on December 21, 2012? The Mayan calendar, the Higgs boson particle and fabric of reality

 

by Mike Adams, NaturalNews Editor
Originally posted Sunday, October 18, 2009

A double article from a visionary that we should all take more seriously…

I DON’T CLAIM TO BE ABLE TO SEE the future through any sort of powers of premonition, but when it comes to December 21, 2012, I’ll offer an armchair prediction that deserves some discussion: The world will not end.
But this doesn’t mean the Mayan prophecies about the end of time are wrong. I think they’re actually right about the ending of one era and the birth of a new one, but it seems far more likely that this transition will take place over a period of time rather than occurring on a single calendar day. (And it may have more to do with an explosion in human consciousness than natural disasters, by the way…)

With the movie 2012 coming out soon (http://www.whowillsurvive2012.com), an increasing number of people are concerned about the world coming to an end on December 21 of that year. A popular website (http://www.december212012.com) even touts itself as the “official” site of 12/21/2012.

Sony Pictures is playing up concerns about the date in some edgy marketing for its 2012 film, hosting a website called the Institute for Human Continuity which asks visitors to vote on who should lead the world after the 2012 apocalypse.
What’s disturbing about this is that people think this fictional movie marketing website is real, and they’re calling NASA to ask if the world will end. Somehow, they think that even though the world is about to end, Sony Pictures is still giving away PlayStations and Webbie cams on their website.

NASA has received so many phone calls at this point – about 1,000 – that they’ve issued a public statement proclaiming the world will not end in 2012. According to the story, “Dr David Morrison, a senior scientist at NASA’s Astrobiology Institute, said he had received more than 1,000 inquiries from worried members of the public.” For real?

Of course, it’s a can’t-lose bet to proclaim the world won’t end in 2012. If you’re right, it’s business as usual and you look brilliant. If you’re wrong, everybody’s dead and nobody’s left to point fingers at you. But it begs the bigger question: Could the movie be right?

The Worst Bill Ever

 

From: Review & Outlook, The Wall Street Journal
Originally posted November 1, 2009

Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all.

SPEAKER NANCY PELOSI has reportedly told fellow Democrats that she’s prepared to lose seats in 2010 if that’s what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a “critical milestone,” may well be the worst piece of post-New Deal legislation ever introduced.

In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.

Yet at this point, Democrats have dumped any pretense of genuine bipartisan “reform” and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be “universal coverage.” The result will be destructive on every level—for the health-care system, for the country’s fiscal condition, and ultimately for American freedom and prosperity.

The spending surge
The Congressional Budget Office figures the House program will cost $1.055 trillion over a decade, which while far above the $829 billion net cost that Mrs. Pelosi fed to credulous reporters is still a low-ball estimate. Most of the money goes into government-run “exchanges” where people earning between 150% and 400% of the poverty level—that is, up to about $96,000 for a family of four in 2016—could buy coverage at heavily subsidized rates, tied to income. The government would pay for 93% of insurance costs for a family making $42,000, 72% for another making $78,000, and so forth.

Gold Price is No Bubble

by James West
Originally posted 4 November 2009

THE PRICE PERFORMANCE OF GOLD recently has all sorts of armchair economists waxing philosophical on the idea that this is the advent of a price “bubble”. While certainly everyone has and is entitled to their opinion, there are other features of humanity that we all possess, and much like many opinions, are best obscured from view.

Declaring that gold is in a “bubble” demonstrates complete ignorance of or disregard for the fundamental drivers of the almost ten year ascent of gold. And saying that the price is forming a bubble implies that, like the real estate bubble, the tech bubble, and the tulip bubble, the price must necessarily “pop” and return to a sustainable long term average.

During each of the bubbles of recent and distant history, the cause of the meteoric price ascents of these various asset classes were all predicated by the same string of events.

Supply was far outstripped by demand because the public perception emerged that the asset class in question was the ultimate asset class at that point in time. Disproportionately high levels of capital were directed to them, and upon the eventual discovery that supply could easily meet and exceed demand, the bubble pops, the price declines, and the herd mentality resumes its frantic search for the next ‘ultimate’ asset class.

Homes, technology and tulips are all a product of effort. With increased effort, more of each of these can be created. Supply can easily be ramped up to meet demand.

Not so much, in the case of gold. The availability of economic concentrations of gold in deposits near to the surface of terra firma is finite. Increased effort might guarantee the temporary increase in supply from known deposits, but each deposit is eventually exhausted, and no amount of increased effort can bring back the gold.

Ben Bernanke’s Wild Ride (and Ours)

by Gary North
Originally posted January 28, 2009

I BEGIN WITH A VIDEO. It is the most persuasive low-cost, home-brew video that I can remember. If you do nothing else today, watch this video. I wish I had produced it. Conceptually, it is a stroke of genius. It sets forth the current banking crisis admirably. The remainder of my report rests on this video.

If you watched it, you now know the nature of the problem, as well as its magnitude.

To say that we are in uncharted waters does not begin to get across the idea of the magnitude of our current situation. America is in a canoe, floating down a river that has never been explored. Most of the passengers are trying to listen to the tour guide. But there is a noise that interferes. It is the sound of a waterfall ahead. The noise is getting louder.

The tour guide is new. It is a new career for him. His first day on the job: January 20. He is a good talker, although it’s clear that he is improvising.

The guys with the paddles are also new on the job. This is their first trip down this particular river. You and I are along for the ride. We were assured that this would be a scenic trip, back when the excursion company, Ben Bernanke’s Slow Boat to China, sold us tickets.

So far, we have gone through two sets of rapids: the first in August 2007, which seemed to end by September, and the other beginning a year later, in August 2008. Since then, the rapids have gotten wilder, and the canoe more obviously not under control by the first crew with the paddles, who left on January 20 and handed the paddles over to the new crew.

The canoe seems out of control. Each set of rapids is worse than the last. We get through one set. The other crew kept telling us that everything was under control after the first set. Then we hit the second set. They abandoned ship, assuming you would call this canoe a ship.

US government report recommends blocking popular websites during pandemic flu outbreak

by Mike Adams, NaturalNews Editor

Originally posted Friday, October 30, 2009

THE US GOVERNMENT HAS ISSUED a new report that recommends blocking access to popular websites during a pandemic outbreak in order to preserve internet bandwidth for investors, day traders and securities clearing house operations. The concern is that a pandemic would cause too many people to stay at home and download YouTube videos and porn, hogging all the internet bandwidth and blocking throughput for investment activities, thereby causing a stock market meltdown.

This isn’t an April Fool’s joke. It’s all based on a public report issued by the Government Accounting Office (GAO), available from their website at http://www.gao.gov/new.items/d108.pdf

In this article, I’m going to explain how a pandemic outbreak could theoretically bring down Wall Street. But to get to that, you’ll first need to find out what the GAO said in its curious report (see below). Parts of this article are presented as satire, but the underlying facts quoted here are all true and verifiable (links are provided to all sources).

This report in question is entitled, “GAO Report to Congressional Requesters, INFLUENZA PANDEMIC” and includes this subtitle: Key Securities Market Participants Are Making Progress, but Agencies Could Do More to Address Potential Internet Congestion and Encourage Readiness.

The Extinction of Ethics in Finance – The Fallout

by Greg Simmons
Originally posted October 13, 2009

I AM WRITING THIS ARTICLE for those of you who suffered losses due to the market meltdown of 2008. So I guess I’m writing this for pretty much – nearly everyone. It’s my sincere hope that you’ve been able to recoup some of your losses considering we’ve just had the greatest bear market rally in history. My aim is to get anyone who will listen to take advantage of the breathing-room this rally has bought us and ask yourself a series of questions.

The two most important questions anyone with any money at risk in the US financial markets should ask themselves at this critical point in economic history are exceedingly simple. One, are you prepared for another market meltdown? And two, what is your new exit strategy when things do go wrong?

Another perplexing question you might ask yourself is this. How did my financial advisor not have a clue that history’s most catastrophic economic storm was brewing in the credit markets? It was blatantly obvious. The canary in the coal mine fell off its perch, dead as a doornail, in February of 2008 when the ‘auction rate preferred’ paper froze (an instrument of 7 to 28 day maturity that the wealthy have historically kept their liquid cash in at 100 basis points higher than money market funds) – a sign that anyone with any knowledge of the financial markets should have known was ominous and would precipitate other catastrophic events.

Will Obama’s Economic Policies Destroy the US Dollar?

by Gerard Jackson

Originally posted 26 October 2009

ONE DOESN’T NEED TO BE AN ECONOMIC genius to see that the US dollar is in trouble. That Americans are hopelessly confused about what is happening to their currency is no surprise. However, before we get to the point of whether Obama’s economics will do the dollar in I think it is important to provide a brief outline of the history behind the economic thinking that is sometimes used to explain exchange rate movements in the hope that this will give readers a better understanding of the current situation.

Economics is not as easy as some people think, particularly those political activists who are passing themselves off as honest journalists. Unfortunately, most of the economic commentariat are not much better informed. Regardless of what some commentators assert a weak currency does not necessarily reflect a weak economy.

More than 80 years ago Mises pointed that those who argue that a strong economy must always mean a strong currency ”…do not understand that the valuation of a monetary unit depends not on the wealth of a country, but rather on the relationship between the quantity of, and the demand for, money. Thus, even the richest country can have a bad currency and the poorest country a good one.” (On the Manipulation of Money and Credit, 1978. The article was first published in 1923).

End of US$ Global Reserve Currency

by Jim Willie CB
Originally posted October 15th, 2009

THE HERALDED END TO THE Petro-Dollar defacto standard completes the loop, the vicious cycle that will work to destroy the USDollar. In a sense, the US$ had to face an end, its sunset guaranteed when Nixon defaulted on its redemption value. The United States served as custodian for the global reserve currency. Naturally, the most damage will be to the US as a consequence of its twilight, especially after the recent era of fraud & counterfeit. Few look back to that date in 1971 as prophetic for declaring the USDollar’s days as limited and finite.

The world will continue to trade the US$ in future years, but it must stand on its own value, based upon its own merit, the result of balancing its supply & demand, from the integrity of its fundamentals. Some climax events have come, or at least are previewed on an unfortunate path.

Never in my memory has USGovt leadership been so disrespected. Never has Wall Street been so culpable for financial ruin, yet still in power running the USGovt finance ministries. The global revolt against the United States has many sides, but the financial aspect is most profound. It is hardly even covered in the US press. The US citizens have little comprehension of the enormity of a lost global reserve currency, with all its privileges, abused for constructing financial engineering towers and funding foreign wars. The direct effects will be felt in higher costs and assured supply, including credit.

America has lost its soul and collapse is inevitable

Death of ‘Soul of Capitalism’: Bogle, Faber, Moore

20 reasons America has lost its soul and collapse is inevitable

By Paul B. Farrell, MarketWatch

Oct. 20, 2009

Jack Bogle published “The Battle for the Soul of Capitalism” four years ago. The battle’s over. The sequel should be titled: “Capitalism Died a Lost Soul.” Worse, we’ve lost “America’s Soul.” And, worldwide, the consequences will be catastrophic.

That’s why a man like Hong Kong contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: “The future will be a total disaster, with a collapse of our capitalistic system as we know it today.”

No, not just another meltdown, another bear-market recession like the one recently triggered by Wall Street’s too-greedy-to-fail banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great “American Economic Empire” for 233 years will collapse, a total disaster, a destiny we created.

OK, deny it. But I’ll bet you have a nagging feeling that maybe he’s right, that the end may be near. I have for a long time: I wrote a column back in 1997: “Battling for the Soul of Wall Street.” My interest in “The Soul” – what Jung called the “collective unconscious” – dates back to my Ph.D. dissertation, “Modern Man in Search of His Soul,” a title borrowed from Jung’s 1933 book, “Modern Man in Search of a Soul.” This battle has been on my mind since my days at Morgan Stanley 30 years ago, witnessing the decline.

Has capitalism lost its soul? Guys like Bogle and Faber sense it. Read more about the soul in physicist Gary Zukav’s “The Seat of the Soul,” Thomas Moore’s “Care of the Soul” and sacred texts.

But for Wall Street and American capitalism, use your gut. You know something’s very wrong: A year ago, too-greedy-to-fail banks were insolvent, in a near-death experience. Now, magically, they’re back to business as usual, arrogant, pocketing outrageous bonuses while Main Street sacrifices, and unemployment and foreclosures continue rising as tight credit, inflation and skyrocketing federal debt are killing taxpayers.

Yes, Wall Street has lost its moral compass. It created the mess, but now, like vultures, Wall Streeters are capitalizing on the carcass. They have lost all sense of fiduciary duty, ethical responsibility and public obligation.

Here are the Top 20 reasons American capitalism has lost its soul:

1. Collapse is now inevitable

Capitalism has been the engine driving America and the global economies for over two centuries. Faber predicts its collapse will trigger global “wars, massive government-debt defaults, and the impoverishment of large segments of Western society.” Faber knows that capitalism is not working, capitalism has peaked, and the collapse of capitalism is “inevitable.”

When? He hesitates: “But what I don’t know is whether this final collapse, which is inevitable, will occur tomorrow, or in five or 10 years, and whether it will occur with the Dow at 100,000 and gold at $50,000 per ounce or even confiscated, or with the Dow at 3,000 and gold at $1,000.” But the end is inevitable, a historical imperative.

2. Nobody’s planning for a ‘Black Swan’

While the timing may be uncertain, the trigger is certain. Societies collapse because they fail to plan ahead, cannot act fast enough when a catastrophic crisis hits. Think “Black Swan” and read evolutionary biologist Jared Diamond’s “Collapse: How Societies Choose to Fail or Succeed.”

A crisis hits. We act surprised. Shouldn’t. But it’s too late: “Civilizations share a sharp curve of decline. Indeed, a society’s demise may begin only a decade or two after it reaches its peak population, wealth and power.”

Warnings are everywhere. Why not prepare? Why sabotage our power, our future? Why set up an entire nation to fail? Diamond says: Unfortunately “one of the choices has depended on the courage to practice long-term thinking, and to make bold, courageous, anticipatory decisions at a time when problems have become perceptible but before they reach crisis proportions.”

Sound familiar? “This type of decision-making is the opposite of the short-term reactive decision-making that too often characterizes our elected politicians,” thus setting up the “inevitable” collapse. Remember, Greenspan, Bernanke, Bush, Paulson all missed the 2007-8 meltdown: It will happen again, in a bigger crisis.

3. Wall Street sacked Washington

Bogle warned of a growing three-part threat — a “happy conspiracy” — in “The Battle for the Soul of Capitalism:” “The business and ethical standards of corporate America, of investment America, and of mutual fund America have been gravely compromised.”

But since his book, “Wall Street America” went over to the dark side, got mega-greedy and took control of “Washington America.” Their spoils of war included bailouts, bankruptcies, stimulus, nationalizations and $23.7 trillion new debt off-loaded to the Treasury, Fed and American people.

Who’s in power? Irrelevant. The “happy conspiracy” controls both parties, writes the laws to suit its needs, with absolute control of America’s fiscal and monetary policies. Sorry Jack, but the “Battle for the Soul of Capitalism” really was lost.

4. When greed was legalized

Go see Michael Moore’s documentary, “Capitalism: A Love Story.” “Disaster Capitalism” author Naomi Klein recently interviewed Moore in The Nation magazine: “Capitalism is the legalization of this greed. Greed has been with human beings forever. We have a number of things in our species that you would call the dark side, and greed is one of them. If you don’t put certain structures in place or restrictions on those parts of our being that come from that dark place, then it gets out of control.”

Greed’s OK, within limits, like the 10 Commandments. Yes, the soul can thrive around greed, if there are structures and restrictions to keep it from going out of control. But Moore warns: “Capitalism does the opposite of that. It not only doesn’t really put any structure or restrictions on it. It encourages it, it rewards” greed, creating bigger, more frequent bubble/bust cycles.

It happens because capitalism is now in “the hands of people whose only concern is their fiduciary responsibility to their shareholders or to their own pockets.” Yes, greed was legalized in America, with Wall Street running Washington.

5. Triggering the end of our ‘life cycle’

Like Diamond, Faber also sees the historical imperative: “Every successful society” grows “out of some kind of challenge.” Today, the “life cycle” of capitalism is on the decline.

He asks himself: “How are you so sure about this final collapse?” The answer: “Of all the questions I have about the future, this is the easiest one to answer. Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.” Success makes us our own worst enemy.

Quoting 18th century Scottish historian Alexander Fraser Tytler: “The average life span of the world’s greatest civilizations has been 200 years” progressing from “bondage to spiritual faith … to great courage … to liberty … to abundance … to selfishness … to complacency … to apathy … to dependence and … back into bondage!”

Where is America in the cycle? “It is most unlikely that Western societies, and especially the U.S., will be an exception to this typical ’society cycle.’ … The U.S. is somewhere between the phase where it moves ‘from complacency to apathy’ and ‘from apathy to dependence.’”

In short, America is a grumpy old man with hardening of the arteries. Our capitalism is near the tipping point, unprepared for a catastrophe, set up for collapse and rapid decline.

15 more clues capitalism lost its soul … is a disaster waiting to happen

Much more evidence litters the battlefield:

1. Wall Street wealth now calls the shots in Congress, the White House

2. America’s top 1% own more than 90% of America’s wealth

3. The average worker’s income has declined in three decades while CEO compensation exploded over ten times

4. The Fed is now the ‘fourth branch of government’ operating autonomously, secretly printing money at will

5. Since Goldman and Morgan became bank holding companies, all banks are back gambling with taxpayer bailout money plus retail customer deposits

6. Bill Gross warns of a “new normal” with slow growth, low earnings and stock prices

7. While the White House’s chief economist retorts with hype of a recovery unimpeded by the “new normal”

8. Wall Street’s high-frequency junkies make billions trading zombie stocks like AIG, FNMA, FMAC that have no fundamental value beyond a Treasury guarantee

9. 401(k)s have lost 26.7% of their value in the past decade

10. Oil and energy costs will skyrocket

11. Foreign nations and sovereign funds have started dumping dollars, signaling the end of the dollar as the world’s reserve currency

12. In two years federal debt exploded from $11.2 to $23.7 trillion

13. New financial reforms will do little to prevent the next meltdown

14. The “forever war” between Western and Islamic fundamentalists will widen

15. As will environmental threats and unfunded entitlements

“America Capitalism” is a “Lost Soul” … we’ve lost our moral compass … the coming collapse is the end of an “inevitable” historical cycle stalking all great empires to their graves. Downsize your lifestyle expectations, trust no one, not even media.

Faber is uncertain about timing, we are not. There is a high probability of a crisis and collapse by 2012. The “Great Depression 2″ is dead ahead. Unfortunately, there’s absolutely nothing you can do to hide from this unfolding reality or prevent the rush of the historical imperative.

by Paul B. Farrell, MarketWatch
Originally posted Oct. 20, 2009

JACK BOGLE PUBLISHED “The Battle for the Soul of Capitalism” four years ago. The battle’s over. The sequel should be titled: “Capitalism Died a Lost Soul”. Worse, we’ve lost “America’s Soul”. And, worldwide, the consequences will be catastrophic.

That’s why a man like Hong Kong contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: “The future will be a total disaster, with a collapse of our capitalistic system as we know it today.”

No, not just another meltdown, another bear-market recession like the one recently triggered by Wall Street’s too-greedy-to-fail banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great “American Economic Empire” for 233 years will collapse, a total disaster, a destiny we created.

OK, deny it. But I’ll bet you have a nagging feeling that maybe he’s right, that the end may be near. I have for a long time: I wrote a column back in 1997: “Battling for the Soul of Wall Street.” My interest in “the soul” – what Jung called the “collective unconscious” – dates back to my Ph.D. dissertation, “Modern Man in Search of His Soul”, a title borrowed from Jung’s 1933 book, “Modern Man in Search of a Soul.” This battle has been on my mind since my days at Morgan Stanley 30 years ago, witnessing the decline.

Has capitalism lost its soul? Guys like Bogle and Faber sense it. Read more about the soul in physicist Gary Zukav’s “The Seat of the Soul,” Thomas Moore’s “Care of the Soul” and sacred texts.