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Posts Tagged ‘Smoot-Hawley

Crisis of Fiat Currencies: US Dollar surpluses converted into Gold

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by Bob Chapman
The International Forecaster
Posted originally November 22, 2010

SOMETHING IS GOING ON THAT YOUR GOVERNMENT DOES NOT WANT YOU TO KNOW ABOUT. Very few journalists have written about it and little or nothing has appeared in the mainstream media. The story could be one of major stories of our time. Western powers have tried to destroy gold as a backing for currencies for many years. Presently the major media won’t touch the story and that is understandable.

Something we have been writing about for years is the Shanghai Cooperation Organization known as SCO. Few have been listening and few have been interested in what their mission is and what they have been up to. Some of the members are large oil producers and some, like China, are large oil users. Some have very large US dollar surpluses. As well, some are large commodity and gold and silver buyers.

In fact, members are in a great part responsible for driving these prices higher. It is debatable, but we believe there is a conscious effort to accumulate gold and silver, dump dollars and to back their currencies with gold.

China and Russia are both large gold producers and for a number of years have been buying up domestic gold and silver production, so that it never reaches the market and does not affect prices. If anything the absence of sales tends to push the markets higher. As a matter of fact Russia and India are visible buyers. Even Iran with its oil surplus recently announced that they had purchased 340 tons of gold. Their recent gold purchases are very significant as affiliate members, which have access to the present and ultimate direction of the group. You might say buying gold has been a protective effort to shield members and close observers from the problems generated by dollar policies. They are accumulating gold, as many have been worldwide, for the past ten years, but particularly over the past few years.

This buying, for protection, has served to thwart the efforts of US policymakers, the Treasury, other central banks in Europe and the Fed, from being able to continue the blatant suppression of both gold and silver prices. The malefactors, except for forays into derivatives and futures, which are transitory, have lost control and suppression of gold and silver prices, and it is only a matter of time before all visages of any control will be visible. Since 1988, in August when Present Reagan signed the Executive Order creating, “the President’s Group on Financial Markets” and the subsidiaries that have grown out of that policy, that the Treasury won many if not most of the battles.

The SCO in part changed that and now they and the public are winning the war for a fair and free gold and silver market. The current class action lawsuits, including RICO, are a testament to the market manipulation in silver, which is finally coming to an end. HSBC and JPMorgan Chase, the latter that is the major owner of the Fed, are going to be finally prohibited from rigging these markets. Their officers all belong in jail, but elitists never go to jail; they pay fines, and keep right on robbing the public.

Other SCO members and observers are accumulating gold as well, be it in smaller amounts. We might add that other nations observing Russia and China and their gold purchases are buying as well. These participants must believe that there could be a return to sound money; otherwise they wouldn’t be gold buyers. Buying gold is certainly preferable to holding US dollars, which have consistently fallen in value versus other currencies over the past ten years. Then again all currencies have fallen versus gold over that period, some 19.6% annually. It is nice to see nations are finally waking up to the reality that fiat currencies will all over time deteriorate versus gold. The temptation is enormous to deficit spend.

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Benny tosses Bond Cash on the Fires of Deflation

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by Roger Wiegand
webeatthestreet.com
Posted originally Oct 18 2010

Europe Stops Spending And Moves Toward Saving
Most of the world has stopped spending. The USA continues to accelerate with futile pump priming. Result: As the American dollar weakens on over-printing, what does this do to those installing new and severe austerity reforms in Europe and other nations? This is not going to end well at all. Could QE2 smash the system in 2011? Maybe.

OUR PATHETIC WASHINGTON ADMINISTRATION, INCLUDING MOST MEMBERS OF CONGRESS and the White House have badly failed the American people. The international spillover from their mistakes now threatens to implode the entire world’s economic system of currencies and trade. The US Dollar is going weaker while inflation ramps up.

We are not saying other countries or the GOP have clean hands either, but the root of this mess emanates from the American Capitol and New York global banks. The IMF, World Bank, United Nations, most central bankers and their One-Worlder buddies are playing the same tune in concert. Now that currency and trade disruptions popped-up, we envision a race to the bottom a la Smoot-Hawley Tariffs, price controls and higher taxes.

Our top advisor has named most of these people psychopaths for their permanently disabled minds. They have a serious personality disorder, “Especially one manifested in aggressively antisocial behavior.” He suggests these people are particularly drawn to positions of power as they exhibit as the dictionary says, “Any severe mental disorder, with or without organic damage, characterized by a deterioration of normal functioning, and intellectual and social functioning by a complete withdrawal from reality.”

For new results and a better outcome we suggest they stop digging.
Here we see a derelict steam shovel in Alaska; major components visible include boiler, water tank, winch, main engine, boom, dipper stick, crowd engine, wheels and bucket. This resembles the derelict, congressional political machine. Worn out, busted and broke, these politcal gangsters need a trip to dad’s woodshed or the psychiatrist’s couch. Their American Charter is supposed to be Defend the Nation and operate the US Treasury. All the rest is just noise and waste. They have failed on all counts and its getting much worse. Are you sleeping well these days, trusting America to Nutcases?

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The Worst Bill Ever

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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.

Pelosi2

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.

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Written by aurick

05/11/2009 at 1:23 pm

The Reality of Unreality

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Sep 22 2009 11:42AM
The Reality of Unreality
Hallucinatory, fanciful make-believe government policies and supporting media hype will fool the Sheeple for only so long. New York Banksters and their Washington, D.C. partners in crime are losing a grip. In our weirdest imagination we could not fathom the socialist-commie-bent Obama Gang gaining control let alone being elected. Now the incomprehensible is a fact. The non-existent vision has become real. This outrageous, preposterous, unjustifiable nonsense has become our daily rule. We cannot imagine what comes next.
The American presidency has been reduced to one of being cartoonishly rough, crude, unpolished, and coarse. Our reliable foreign partners are skittish. There is no plan and no direction. As economic danger mounts and fiscal discipline is tossed out a closing window, this ad-libbed presidency, flying by the seat of its torn bankrupt pants is on a Weimar monetary collision of revolution and destruction.
Their alleged reasoning is poisoning trade relations, making new enemies of old friends and encouraging global criminals and dictators of all stripes. Our meandering leadership with fanciful blurred visions of Utopia will soon learn harsh lessons in an attempt to repudiate massive debts through inflation. We had a terrifying near miss in 1987 with a markets’ biblical moment. That one horrified briefly. The next one will be a years’ long nightmare of legendary, unimaginable proportions. This isn’t just FDR revisited. This is FDR to the 10th power with a toxic mix of our worst economic disasters in a re-run. Pick the top ten economic mistakes of the last 50 years and we are repeating them all-right now. Coupled with an empty leadership vacuum, anything can happen; and probably will.
I wondered aloud numerous times over past months that all this noxious action was part of some diabolical plan to destroy the  United States from within by Judas political  enemies of the state. In some ways it’s even worse than that-it’s a naked grab for power.
A new theory, of which I have recently learned, is this: These people are not concerned with any outcome either positive or negative. They are not concerned with the rich or, the poor. Destruction of America and its international neighbors and friends is just collateral damage on a magnificently stupid path to grab power.
Big corporations and banks have been the closet directors behind Obama’s Throne just as with other presidents. America’s Sheeple, tax money, retirement funds, freedom, liberty, way of life, and the very future of this beautiful nation are mere impediments to gaining complete and final control of America. Hence the hip-attached, world-wide political and economic system so dependent on the U.S goes down, too.  Globalists’ have one dream; to make us all live under the same umbrella of one ruler. To achieve this goal, they must first get past 10-20 million angry US men with guns. We say they might give it a go but would vanish into the mist of revolution if they try it.
With Obama puppets at their beck and call, advancement of the One-Worlders’ agenda has moved forward ten years in only six months. Our nation and our world will suffer the consequences. The instigators after a very brief spate of glory shall suffer something far worse. This is history. This is the way of the world. The rude aftermath takes down these enemies of the state by those vastly underestimated. This will be their ultimate demise. Meanwhile, a majority of the innocents are economically and perhaps personally run-over for just existing and being in the way. Sadly, this group contains single mothers, children, the poor and the elderly.
What’s Ahead
The US Government owns controlling interest in the banks, auto companies, credit, and American real estate. They are the only employer offering jobs in any volume as the rest of our nation sinks into retraction, cutbacks, saves pennies, spends nothing and fends for scraps. Unemployment is skyrocketing and will not be stopped for years. Roughly 50% or less of the real damage in phony statistics is acknowledged. If the truth were known, we suspect insurrection would be immediate. Read this:
Cash-for-clunkers was a clunker that ripped-off the auto dealers, and smothered the poor by taking away paid-for but still running old cars and trucks. Now buyer’s remorse has settled in and these folks are stuck with years of new vehicle payments they cannot afford. Further, instead of $1 Billion, Cash-For-Clunkers cost $3 billion and still counting.
The next wave of real estate foreclosures hits in the second quarter of 2010. Coupled with that one we see massive commercial loan foreclosures and failures on paper held by large insurance companies. If you think AIG was fun, watch what comes next spring for those unfortunate insurers thinking they had real estate income for years. Fannie and Freddie, the mortgage buyers of last resort are BK but still purchasing (on paper) billions of new mortgages handing out $8,000 buyer credits to build the next bubble. We’re not over the last one yet and they’re busy creating even more new havoc. These jokers finance 2/3rd’s of USA mortgages and they are broke.
Retail in 2010-2012 is a holocaust. Only a handful of the national chains can survive. The moms and pops are destroyed as Big Box and intermediate-sized retailers drop like flies. General Growth owned over 100 big malls and went BK to the tune of $27 Billion. Competitor Simon Properties is bottom-feeding through their BK mall wreckage for viable gems. We say they are too early and Simon had better have lots of cash or they are toast, too. With the internet, brick and mortar retail for the most part is passe’. Retail got whacked first with competing internet sales then the depression. Now, we go back to small towns and small neighborhood stores who shuffle for nickels and dimes. While this can be a life-style game-changer, for many in small towns life goes on as usual-not all too bad.
The Big Banks are not healed. They just buried 90% of their toxic debt and pretend it’s gone away. It has not gone away and will rear its ugly head again when these Banksters need-demand TARP II, and they can’t get it. More and more people are dropping out of the system providing for themselves; rejecting old paradigms. Small banks cannot compete and big banks are only out of the woods temporarily. Banking is not the place to be for a future. Now the government wants to set wage scales for bankers.
Foreign investors are running from US investments to shed dollars, bonds and notes. For the shorter term they appear to be back “in the game.” This too, is only temporary as investors frantically scavenge for other places to hide or, invest cash where it’s safe from loss. Long term bonds and paper are converting to short term. What if Uncle Sam in all his infinite wisdom over a quiet weekend announced with no recourse that all short term paper is now 30 years long? Talk about mayhem! Anything they do would not surprise me.
With instigation of the old Smoot-Hawley Tariff plan against Chinese tires, this signals the world you had better run, hide and protect your own stuff with your newly imposed tariffs, too. This paralyzes whatever remaining trade and international credit there is, smothering it to a standstill. Old tragic mistakes are made over and over. Beggar they neighbor rides again. These dumbos just never learn.
Japan, for 50 years, one of America’s best allies, is now re-thinking their position. They understand they cannot count on Obama to protect the motherland against external threats any more than Israel can. Their new leaders are proponents of looser credit (inflationary), moving US troops out of Okinawa and eliminating open free entry to in-country Japanese refueling ship stations. This is the early glimmering of a major game changer. Our administration could care less. Soon they will care a lot. Japan will partner more with Australia and China.
Stock markets came back after the Lehman related collapse one year ago. With all the US government aid dumped into our immediate world it had to happen. This is a temporary fix placing band aids on mortal economic wounds. This fall we get either a mild -10% haircut or something worse, which we did forecast. However, even if the fall selling is harsh, in November through May, 2010, we forecast a resurgence of the markets buoyed again by the $8.5 trillion in side-lined cash waiting to re-enter long positions. Gold and silver shares should really rock in this atmosphere. Goodbye deflation. Hello inflation.
Enter they will and we think Mr. Dow and his S&P brother can enjoy a nice  rally run in these forthcoming months before it ends in the spring of 2010.
A belated “Sell In May And Go Away” could turn into a volcano of destruction in June-July, 2010 as several nasty economic elements converge onto that time cycle. That one could be the worst of the worst in this Greater Depression II or perhaps, fall of 2010 might be the ultimate wreckage. One of our very smart and level-headed analyst friends is not only predicting a giant 2010 smash but potential for a 100% complete markets wipeout. As in Dow at ZERO ! We read this one and went immediately pale.
The Chinese are encouraging their citizens to buy gold and silver. Further, they are mining the stuff with both hands and NOT SELLING ANY OF IT. China has an estimated M2 money growth of 28% and the 2009 first half stimulus plan (ALL SPENT) exceeded the entire amount of the US’s TARP approvals. All this wild and crazy spending was dumped into an economy 25% the size of the US’s. Yikes! This is Bubblemania to the extreme.
Most all the primary nations, those leading the world with former top economies and in trading are into “Quantitative Easing.” This is a disguised euphemism for printing the hell out of the money supply with nothing behind it but thin air, hopes and lies. The USA is a terrible abuser but others are even worse. The most incredible case of course is Zimbabwe. This lowers currency values and incites inflation. American inflation is now running at 6% in our view and in the view of our analyst friends-advisors. This winter it goes ever faster. Food and fuel will be outrageously apparent first; then it spreads out with a vengeance.
US GDP annual growth is supposedly running at a negative -4% but our friend and smart statistics guy, John Williams at Shadow Stats says its -6%. This kind of action discourages any new business investment as small business entrepreneurs see no future in an economy with higher taxes, destroyed markets and disincentives from Obama-Land as far as the eye can see. Who will buy? Who has credit? Those with cash refuse to spend.
On the energy front, the US has plenty of domestic property to be drilled. However, the EPA and tree-huggers hold the upper hand wrecking any hopes of drilling new fields in top seeded locations. Next, the Greenies are trying to shut-down existing coal fired power plants to kill-off the source of half of America’s electric power. All energy rates and costs will rise on basic shortages, fundamentals and rabid inflation. Cap ‘N’ Trade would hit each family with costs of $1700+ per year if approved. We think it fails this time. What about later?
Municipalities, cities, towns, counties and states are beginning to fiscally fail in numbers. Those with foresight and rainy day funds can last a little longer but eventually tax income deteriorates and down they go. California is always first; the leader in all things new. Now they are showing us the darker side of these problems being first in line on a massive scale of self-destruction.
Meanwhile, the Obama Health Care Saga goes on like a months’ long migraine headache. Tea parties composing a cross section of the American heartland have had enough. Anger began with the health care plan but lingering disregard for TARP thefts, Cap “N” Trade proposals and a White House full of Commies and socialists throws gas on these fires of discontent. Folks are out for political blood lining-up to disenfranchise their alleged congress people in the 2010 elections. We think that election promises to be super ugly in preliminaries and then succumbs to voter fraud, name-calling; the usual and newly unusual Wild West election happenings. This event should be better than the movies. Florida Chad-Hangers were great fun. What new voting horrors await us next year?
Those in the Sheeple public with little or no education and those solidly among welfare supporters will be crying ever louder for more handouts, give-outs and pay-outs. Millions of them are jobless and many more millions join unemployment and food stamp lines. Rhetoric escalates with cries of “do something” as village idiot politicians scream, finger point and eventually do something. Problem is; it’s always the wrong thing they do.
Inflation breeds ever more inflation. It feeds on itself unless government raises interest rates (no chance Lucy) careening down a path of self-destruction. Own hard assets; not dollars. Buy silver and gold coins.
We say a lot of this stuff is inevitable and some of it may never happen. However, just as in the FDR’s 1930’s, governments make the same mistakes over-and-over again. We think Greater Depression II lasts from 2009 until the next world war. That is sadly the ultimate economic weapon to find depression exit relief. This, we would not wish on any one. Read American and world history from 1776 to the present. This is what we get; all over again.
Financials crashed in fall 2008 with Lehman. Recovery began with TARP May, 2009: During this month of September, 2009 we’re having more of a dead cat bounce with a big smash later this month. While precious metals and their shares are higher this September 22, 2009, for the intermediate term (beginning October 31) most all trends reverse and moves to rallies.
Keep in mind, if you own paid for stuff it will most likely remain in your hands; not in somebody else’s. That includes gold and silver. Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now. My dire fall prediction might surprise us and arrive a little later. Time is short.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog
Roger Wiegand
Editor Trader Tracks

by Roger Wiegand, Editor Trader Tracks
Originally posted Sep 22, 2009

HALLUCINATORY, FANCIFUL, MAKE-BELIEVE government policies and supporting media hype will fool the Sheeple for only so long. New York Banksters and their Washington, D.C. partners in crime are losing a grip. In our weirdest imagination we could not fathom the socialist-commie-bent Obama Gang gaining control let alone being elected. Now the incomprehensible is a fact. The non-existent vision has become real. This outrageous, preposterous, unjustifiable nonsense has become our daily rule. We cannot imagine what comes next.

The American presidency has been reduced to one of being cartoonishly rough, crude, unpolished, and coarse. Our reliable foreign partners are skittish. There is no plan and no direction. As economic danger mounts and fiscal discipline is tossed out a closing window, this ad-libbed presidency, flying by the seat of its torn bankrupt pants is on a Weimar monetary collision of revolution and destruction.

Their alleged reasoning is poisoning trade relations, making new enemies of old friends and encouraging global criminals and dictators of all stripes. Our meandering leadership with fanciful blurred visions of Utopia will soon learn harsh lessons in an attempt to repudiate massive debts through inflation. We had a terrifying near miss in 1987 with a market’s biblical moment. That one horrified briefly. The next one will be a year’s long nightmare of legendary, unimaginable proportions.

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Trade Wars and Protectionism are not Free Trade

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Trade Wars and Protectionism are not Free Trade
Posted by Ron Paul (09-21-2009, 02:21 PM) filed under Foreign Policy
Two weeks ago, both the administration and the Fed announced with straight faces that the recession was over and the signs of economic recovery were clear.  Then last week, the president made a stunning decision that signals the administration’s determination to repeat the mistakes of the Great Depression.  Much like the Smoot-Hawley Tariffs that set off a global trade war and effectively doomed us to ten more years of economic misery, Obama’s decision to enact steep tariffs on Chinese imported tires could spark a trade war with the single most important trading partner we have.  Not only does China manufacture a whole host of products that end up on American store shelves, they are also still buying our Treasury debt.
One has to wonder why this course of action is being undertaken if the administration really believes its own statements about economic recovery.  Why are they still trying to fix something they have supposedly already fixed?  The most troubling thing is the rhetoric about free trade given to justify this.  The administration claims it is merely enforcing trade policies and that this is necessary for free trade.  This sort of double speak demonstrates a gross misunderstanding of free trade, economics and world history.  Yet these are the same people the country trusts to solve our problems.  This sort of thing should remove all doubt about the credibility of the decision makers in Washington.
The truth is this will hurt American consumers by driving up prices of tires and cars.  This will also complicate matters for our already crippled manufacturing and agricultural industries, if and when China retaliates against US made products.  Whatever jobs might be saved in the tire and steel industries here as a result of this protectionist measure will likely be lost in other American industries.  It is even doubtful that those jobs will be saved, as cheap tires can be obtained from other places like Mexico instead.  It is difficult to see any real winners among all the losers where trade wars are concerned.  If Unions think this is beneficial to them, they are being penny-wise and pound foolish.
Free trade with all and entangling alliances with none has always been the best policy in dealing with other countries on the world stage.  This is the policy of friendship, freedom and non-interventionism and yet people wrongly attack this philosophy as isolationist.  Nothing could be further from the truth.  Isolationism is putting up protectionist trade barriers, starting trade wars imposing provocative sanctions and one day finding out we have no one left to buy our products.  Isolationism is arming both sides of a conflict, only to discover that you’ve made two enemies instead of keeping two friends.  Isolationism is trying to police the world but creating more resentment than gratitude.   Isolationism is not understanding economics, or other cultures, but clumsily intervening anyway and creating major disasters out of minor problems.
The government should not be in the business of giving out favors to special interests or picking winners and losers in the market, yet this has been most of what has consumed politicians’ attention in Washington.  It has reached a fevered pitch lately and it needs to end if we are ever to regain a functional and prosperous economy.

by Ron Paul
Originally posted on Sept 21, 2009

TWO WEEKS AGO, BOTH THE ADMINISTRATION and the Fed announced with straight faces that the recession was over and the signs of economic recovery were clear. Then last week, the president made a stunning decision that signals the administration’s determination to repeat the mistakes of the Great Depression.

Much like the Smoot-Hawley Tariffs that set off a global trade war and effectively doomed us to ten more years of economic misery, Obama’s decision to enact steep tariffs on Chinese imported tires could spark a trade war with the single most important trading partner we have. Not only does China manufacture a whole host of products that end up on American store shelves, they are also still buying our Treasury debt.

One has to wonder why this course of action is being undertaken if the administration really believes its own statements about economic recovery. Why are they still trying to fix something they have supposedly already fixed? The most troubling thing is the rhetoric about free trade given to justify this. The administration claims it is merely enforcing trade policies and that this is necessary for free trade. This sort of double speak demonstrates a gross misunderstanding of free trade, economics and world history. Yet these are the same people the country trusts to solve our problems. This sort of thing should remove all doubt about the credibility of the decision makers in Washington.

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Written by aurick

22/09/2009 at 9:38 am