The man who trades freedom for security does not deserve nor will he ever receive either. – Benjamin Franklin
So Inflation is really the greatest export of the US.
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LONDON (Reuters) – Three days before the last bout of coordinated central bank intervention to calm world currency markets, the International Monetary Fund’s top economist opined: “If not now, when?” Many experts are now asking the same.
As the Bush administration proposes backstopping mortgage giants Fannie Mae and Freddie Mac with a $300 billion line of credit and Congress contemplates another economic stimulus, the question is who will bail out the government?
“People seem to think the government has money,” said former U.S. Comptroller General David Walker. “The government doesn’t have any money.”
A rare consensus has developed across the political spectrum that the government’s own fiscal affairs are precarious, with an astonishing $53 trillion in long-term liabilities, according to the Government Accountability Office.
To put that number in human terms, the debt has reached $455,000 per U.S. household. As that debt grows, the United States increasingly relies on foreigners, including China and Middle East oil producers, for financing.
The American beef industry is in trouble. Though the financial strain of rising fuel and food prices is being widely felt across the U.S. economy, the livestock industry, which consumes about 5 billion bushels of corn annually, is suffering more than most.
Feedlot operators, who fatten their animals on corn before sending them to a slaughterhouse, are losing $150 a head with corn prices near record levels because of demand for corn-based ethanol. In Texas, the country’s largest beef-producing state, a quarter of the once-packed feedlot space is unoccupied. Some operations are shutting their doors, and “liquidation”-the culling of herds-has become a frequent escape hatch for the seriously struggling.
At virtually every link in the nation’s food chain, the cost of oil is pushing expenses ever higher.
Retail bills for some food staples have risen at least 20 percent since 2006, and they probably will continue their upward march. A gallon of gasoline could cost $7 within the next two years, some analysts say.
“If you double the price of oil, I would assume that food would at least double, and it might be more because the cost of oil gets magnified in the food chain,” said Milt McGiffen, a vegetable specialist for the University of California cooperative extension in Riverside County.
SCOTT LINNETT / Union-Tribune Nancy Owens Renner of Ocean Beach expanded her backyard garden last winter in an effort to offset rising food and fuel prices. “I am thinking about how to maximize production in my yard,” Renner said.
By the numbers:
Price increases between May 2006 and May of this year:
53% – Eggs
25% – Bread
25% – Rice
19% – Milk
14% – Coffee
11% – Chicken
Source: Bureau of Labor Statistics
Farmers are paying more money to fill their tractors with diesel for planting and harvesting. They also spend more for fertilizer, pesticides and plastic packaging, most of which are petroleum-based.
When the food is stored and processed, it takes a huge amount of energy, which is linked to the price of fossil fuels as well.
Then, products are shipped using diesel trucks and rail cars that are far costlier to run now than in years past.
The result is bigger and bigger food bills that are causing financial hardship for millions of Americans.
Read moreIf the price of oil doubles, food prices will at least double
“But, realistically, all ordinary people can do today is try to survive, perhaps by working with friends and neighbors in planting food and living within the underground economy. At least people might not then have to starve to death, because hard as it is to believe that “it could happen here,” widespread famine in the U.S. seems a real possibility over the next several years. Nations take such risks when they allow capitalist agribusiness to destroy local agriculture.”
With the economic news of the week of July 14-the continuing crisis among mortgage lenders, the onset of bank failures, the announced downsizing of General Motors, the slide of the Dow-Jones below 11,000-we are seeing the ongoing collapse of the U.S. economy.
Even the super-rich are becoming nervous as cries for an emergency suspension of short selling ring out.
What is really taking place, however, is that the producing economy of working men and women is being crushed by the overall debt burden on households, businesses, and governments that could reach $70 trillion by 2010. The financial system, including mortgage giants Fannie Mae and Freddie Mac, is bankrupt, as the debts it is based on cannot be repaid.
Ron Paul discusses inflation and how it’s really just a hidden tax.
Source: YouTube
Related articles and videos:
Merrill Lynch has warned that the United States could face a foreign “financing crisis” within months as the full consequences of the Fannie Mae and Freddie Mac mortgage debacle spread through the world.
Draining away: The US may struggle to plug its capital gap
The country depends on Asian, Russian and Middle Eastern investors to fund much of its $700bn (£350bn) current account deficit, leaving it far more vulnerable to a collapse of confidence than Japan in the early 1990s after the Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a similar retreat by foreign investors.
Read moreUS faces global funding crisis, warns Merrill Lynch
MOSCOW – Saudi Arabia has offered to buy Russian arms worth 2.4 billion dollars (1.5 billion euros) if Moscow stops supporting Iran, a Russian newspaper reported Tuesday, citing diplomatic sources.
“The kingdom’s government advised Moscow to cease its cooperation with Tehran, and in exchange it held out the prospect of profitable contracts with Saudi Arabia,” the daily business newspaper Kommersant wrote.
The report came one day after Russian Prime Minister Vladimir Putin met with the General Secretary of Saudi Arabia’s Security Council, Prince Bandar bin Sultan.
Citing sources in Russia’s defence industry, the newspaper said Saudi Arabia was ready to buy at least 100 BMP-3 combat vehicles, 150 T-90 tanks and 160 Mi-17, Mi-26 and Mi-35 helicopters.
A subscription to the Wall Street Journal costs several hundred dollars a year, so most people out there don’t get it and DollarCollapse.com rarely posts links to its articles. But everybody should see today’s edition, which probably sets the modern-day record for disturbing headlines. Here’s a sampling of what subscribers read this morning:
On Tuesday, the SEC issued an emergency rule in an attempt to curb naked short selling in 19 major financial institutions, including Goldman Sachs, Morgan Stanley, Citigroup, and JP Morgan Chase and Company.
Related article: – Big Traders Dive Into Dark Pools
We can almost hear that ominous “Jaws” theme music in the background and can see that huge dorsal fin as it slices threateningly through the water – knowing full well that the real terror is hidden beneath the water’s surface.
But this time around, it’s not a “Great White” that’s sparking our fears; it’s a well-capitalized and broadly based series of secret stock exchanges known as “Dark Pools of Liquidity,” “Dark Liquidity,” or just “Dark Pools.”
Most investors have never even heard the term – and are truly shocked to discover these “off-the-books” trading networks actually exist.
But to Wall Street insiders looking to anonymously move billions of dollars in stocks, bonds, and other investment instruments, dark pools are de rigueur – especially when you’re an institutional trader who doesn’t want to reveal your intentions or your actions to the “rest” of the market, until after the fact when the orders are “printed.”
And that makes these dark pools of capital highly problematic when it comes transparency: There is literally none in most pools and only limited visibility in others.
Dark Pools are electronic “crossing networks” that offer institutional investors many of the same benefits associated with making trades on the stock exchanges’ public limit order books – without tipping their hands to others, meaning publicly quoted prices aren’t affected. This is the capital markets’ version of a godsend – especially for traders who desire to move large blocks of shares without the public investors ever knowing.
Some examples of so-called crossing networks include Liquidnet Inc., Pipeline, the Posit unit of Investment Technology Group (ITG), or the SIGMA X unit of Goldman Sachs Group Inc. (GS).
In an era in which “secret” transactions contributed to what’s shaping up to be the largest credit crisis in history, you’d think that any mechanism that allows insiders to trade in complete secrecy and with total anonymity would be scrutinized more closely than a Roger Clemens vitamin shot. But that’s not the case with Dark Pools.
Read moreAre “Dark Pools” Destined to be the Capital Markets’ Next Black Hole?
Iranian President Mahmoud Ahmadinejad with Gazprom CEO Alexey Miller in Teheran, July 13, 2008
Gazprom has signed a memorandum on cooperation in production and transportation of oil and natural gas with the National Iranian Oil Co. The Iranian company, which all other oil companies in the world refuse to work with, is promising Gazprom “a full package of projects.” The memorandum was signed by Gazprom CEO Alexey Miller, Iranian Oil Minister Gholam Hossein Nozari and NIOC managing director Seifollah Jashnsaz. Gazprom will thus have the chance to strengthen its position in the countries with the world’s second largest gas reserves (proven reserves of 28.13 trillion cu. m.).
The U.S. economy is in a recession, possibly the worst since World War II, Rogers said.
“They’re ruining what has been one of the greatest economies in the world,” Rogers said. Bernanke and Paulson “are bailing out their friends on Wall Street but there are 300 million Americans that are going to have to pay for this.”
July 14 (Bloomberg) — The U.S. Treasury Department’s plan to shore up Fannie Mae and Freddie Mac is an “unmitigated disaster” and the largest U.S. mortgage lenders are “basically insolvent,” according to investor Jim Rogers.
Taxpayers will be saddled with debt if Congress approves U.S. Treasury Secretary Henry Paulson‘s request for the authority to buy unlimited stakes in and lend to Fannie Mae and Freddie Mac, Rogers said in a Bloomberg Television interview. Rogers is betting that Fannie Mae shares will keep tumbling.
Goldman Sachs Group Inc. analyst Daniel Zimmerman said the mortgage finance companies’ shares may fall another 35 percent and lowered his share-price estimate for Fannie Mae to $7 from $18 and for Freddie Mac to $5 from $17. Freddie Mac fell 64 cents, or 8.3 percent, to $7.11 in New York Stock Exchange trading, while Fannie Mae fell 52 cents, or 5.1 percent, to $9.73.
“I don’t know where these guys get the audacity to take our money, taxpayer money, and buy stock in Fannie Mae,” Rogers, 65, said in an interview from Singapore. “So we’re going to bail out everybody else in the world. And it ruins the Federal Reserve’s balance sheet and it makes the dollar more vulnerable and it increases inflation.”
The chairman of Rogers Holdings, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, also said the commodities bull market has a “long way to go” and advised buying agricultural commodities.
`Solvency Crisis’
Read moreJim Rogers: Fannie Plan a `Disaster’; Goldman Says Sell
July 14 (Bloomberg) — At an investor presentation in May, Citigroup Inc. Chief Executive Officer Vikram Pandit said shrinking the bank’s $2.2 trillion balance sheet, the biggest in the U.S., was a cornerstone of his turnaround plan.
Nowhere mentioned in the accompanying 66-page handout were the additional $1.1 trillion of assets that New York-based Citigroup keeps off its books: trusts to sell mortgage-backed securities, financing vehicles to issue short-term debt and collateralized debt obligations, or CDOs, to repackage bonds.
Now, as Citigroup prepares to announce second-quarter results July 18, those off-balance-sheet assets, used by U.S. banks to expand lending without tying up capital, are casting a shadow over earnings. Since last September, at least $100 billion of assets have flooded back onto Citigroup’s balance sheet, accompanied by more than $7 billion of losses.
“If you start adding up all the potential exposures, it’s a huge number,” said Sam Golden, a former ombudsman for the U.S. Office of the Comptroller of the Currency who now heads the financial-industry practice for restructuring adviser Alvarez & Marsal in Houston. “The banks will say that it was disclosed. Investors are saying, `Yeah, but it was cryptic. We really didn’t know what you were telling us.”’
U.S. banks already are reeling from more than $165 billion of writedowns and credit losses, so shareholders are wary of unknown obligations that might force them to take responsibility for additional troubled assets. The risks have become so obvious that accounting officials are proposing new rules — some of which Citigroup opposes — that would force many assets back onto balance sheets.
Read moreCitigroup’s $1.1 Trillion in Mysterious Shadow Assets
This is article very important, because…
“The credit crisis has obviously entered into a new phase – the government has one bailout left in them, and this is it,” said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion.
And now all the related articles below make much more sense and here comes the meltdown of the financial markets.
If you do not know how to prepare yourself: Solution
If you want to know more on what is going on: World Situation
Take care. – The Infinite Unknown
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NEW YORK – The U.S. government is signaling it won’t throw a lifeline to struggling financial companies – except for mortgage linchpins Fannie Mae and Freddie Mac – marking a shift to a new and potentially more volatile phase of the credit crisis.
Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies’ earnings reports that are expected to be down a stunning 69 percent from a year ago when all the numbers are in.
Related articles and videos:
– More Than 300 US Banks to Fail, Says RBC Capital Markets Analyst
– Run on banks spells big trouble for US Treasury
– US: Total Crash of the Entire Financial System Expected, Say Experts
– The Dollar is doomed and the Fed will fail
– Fannie, Freddie insolvent, Poole tells Bloomberg
– Foreclosures Rose 53% in June, Bank Seizures Triple
– Small Banks: Billions in Troubled Construction Loans
– Financial market losses could top 1,600 billion dollars: report
– Dow suffers worst 1st half since ‘70
– Fortis Bank Predicts US Financial Market Meltdown Within Weeks
– Barclays warns of a financial storm as Federal Reserve’s credibility crumbles
– Jim Rogers: Avoid The Dollar At All Costs
– Ron Paul on Iran and Energy June 26, 2008
– Marc Faber: ‘Misleading’ Fed Should Let Banks Fail
– This recession could easily tip into a depression
And, for consumers already squeezed by tightening credit standards, it could mean getting a mortgage will become even harder.
Read moreFed: No more bailouts, except Fannie Mae and Freddie Mac
Today I am celebrating my 80th birthday, an age that seems less formidable when one has reached it than when one can see it only from afar.
I was born on July 14, 1928, about 15 months before the American boom of the 1920s came to its rather abrupt end. Like everyone else, I am naturally curious to see whether the global credit crunch is going to be a brief interruption in global prosperity, or the prelude to a longer and deeper depression.
I cannot claim to have clear memories of the 1929 Wall Street Crash, which occured when I was 1year old, or of Britain leaving the gold standard in 1931, when I was 3 years old.
I do however, remember newspaper articles about the later stages of the Depression. In the 1930s, my parents read The Times, the Financial Times and the Daily Mail.
Related articles and videos:
– More Than 300 US Banks to Fail, Says RBC Capital Markets Analyst
– Run on banks spells big trouble for US Treasury
– US: Total Crash of the Entire Financial System Expected, Say Experts
– The Dollar is doomed and the Fed will fail
– Fannie, Freddie insolvent, Poole tells Bloomberg
– Foreclosures Rose 53% in June, Bank Seizures Triple
– Small Banks: Billions in Troubled Construction Loans
– Financial market losses could top 1,600 billion dollars: report
– Dow suffers worst 1st half since ‘70
– Fortis Bank Predicts US Financial Market Meltdown Within Weeks
– Barclays warns of a financial storm as Federal Reserve’s credibility crumbles
– Jim Rogers: Avoid The Dollar At All Costs
– Ron Paul on Iran and Energy June 26, 2008
– Marc Faber: ‘Misleading’ Fed Should Let Banks Fail
I can remember the news stories of the Jarrow march of the unemployed. I also remember discussing with my mother a lead story which reported that farm workers’ pay was to be raised 6d (2p) to what would now be £1.50 a week. The depression was a fact of existence in the North Somerset coalfield up to the outbreak of war in 1939.
Fortunately, there has only been one Great Depression in my lifetime, but there has also been a Great Inflation. In 2006 Pickering and Chatto, which I refounded in the 1980s, had the good timing to publish a three-volume History of Financial Disasters, under the general editorship of Mark Duckenfield.
NEW YORK, July 13 (Reuters) – U.S. banks may fail in far greater numbers following the collapse of the big mortgage lender IndyMac Bancorp Inc, straining a financial system seeking stability after years of lending excesses.
More than 300 banks could fail in the next three years, said RBC Capital Markets analyst Gerard Cassidy, who had in February estimated no more than 150.
Related articles and video:
– Fed: No more bailouts, except Fannie Mae and Freddie Mac
– Run on banks spells big trouble for US Treasury
– US: Total Crash of the Entire Financial System Expected, Say Experts
– The Dollar is doomed and the Fed will fail
– Jim Rogers: Fannie Plan a `Disaster’; Goldman Says Sell
Banks face pressure as credit losses once concentrated in subprime mortgages spread to other home loans and debt once-thought safe. This has also led to investor worries about the stability of mortgage finance companies Fannie Mae and Freddie Mac; IndyMac is not related to either.
Read moreMore Than 300 US Banks to Fail, Says RBC Capital Markets Analyst
TEHRAN, July 13 (RIA Novosti) – A new large oil deposit with estimated reserves of more than 1 billion barrels of crude has been discovered in Iran, the Iranian oil minister said on Sunday.
Gholamhossein Nozari said the oil field, located in the southwestern province of Khuzestan, is believed to contain 1.1 billion barrels of crude, with recoverable reserves of about 220 million barrels.
Iran ranks fourth in terms of crude reserves after Saudi Arabia, Iraq and Kuwait, as well as fourth in terms of oil production after Saudi Arabia, the United States and Russia.
Tehran exports the majority of crude produced in the country.
Iran grossed $70 billion from oil sales over the country’s past solar year, which according to the Iranian calendar ran from March 21, 2007 until March 20, 2008, the oil minister earlier said.
13/ 07/ 2008
Source: Ria Novosti
According to the World Bank’s top economist, Don Mitchell, biofuels had been responsible for three-quarters of the 140 per cent rise in world food prices between 2002 and 2008. It was this that last October prompted Jean Ziegler, the UN’s “special rapporteur on the right to food”, to comment that biofuels could only bring “more hunger to the poor people of the world” and were a “crime against humanity”.
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Yellow peril: while Britain’s farmers are encouraged to turn their fields over to rapeseed for biofuels, the world food crisis has driven people in Ethiopia to the brink of starvation
Rarely in political history can there have been such a rapid and dramatic reversal of a received wisdom as we have seen in the past 18 months over biofuels – the cropping of living plants, such as soya beans, wheat and sugar cane, to generate energy.
Two years ago biofuels were still being hailed as a dream solution to what was seen as one of the most urgent problems confronting mankind – our dependence on fossil fuels, which are not only finite but seemed to be threatening the world with the catastrophe of global warming.
WASHINGTON, Jul 11, 2008 (BUSINESS WIRE) — As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.
The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury’s most recent “Report on Foreign Portfolio Holdings of U.S. Securities.”
FreedomWorks President Matt Kibbe commented, “The prospectus for every GSE bond clearly states that it is not backed by the United States government. That’s why investors holding agency bonds already receive a significant risk premium over Treasuries.”
“A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors.”
“A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics.”
SOURCE: FreedomWorks
Last update: 11:08 a.m. EDT July 11, 2008
Source: Market Watch
IN A modern financial system nothing is more frightening than a run on the bank. The US has now suffered a series of them, and they are escalating in size and scope, posing a serious threat to an already reeling economy.
Rumours swamped financial markets on Friday that the US Government would be forced to step in to aid the mortgage finance giants Fannie Mae and Freddie Mac, which together own or guarantee $US5 trillion ($5.16 trillion) in US home loans.
In Wall Street’s version of a run on the bank, investors drove Fannie Mae and Freddie Mac shares to 17-year lows, signalling a gnawing lack of faith in the companies’ ability to survive rising mortgage defaults without the Government’s help.
Later on Friday regulators took over IndyMac Bank of Pasadena, saying the $US32 billion lender had collapsed under the weight of bad home loans and withdrawals by spooked depositors. It was the second-largest bank to fail in US history.
Friday’s events were felt around the world, knocking the battered US dollar lower and driving up interest rates.
“This is a flare-up in the financial forest fire that is far beyond anything we’ve seen before,” said Christopher Low, chief economist at the investment firm FTN Financial in New York.
It is triggering worries that would have been unthinkable even a year ago, including that the US Treasury’s debt might lose its AAA credit grade because of heavy blows to the nation’s fiscal health from the housing mess.
Four months ago many on Wall Street believed they had seen the worst of the credit crisis rooted in the housing market’s woes. The collapse in March of the brokerage Bear Stearns, a central player in the business of packaging dicey mortgages for sale to investors, was the kind of prominent calamity that has historically marked the end of financial crises.
In this very recent interview with Bloomberg Jim Rogers says Asia is the future, the dollar is a terribly flawed currency and he doesn’t want to own any, oil will certainly pass $200/barrel soon, and the (privately owned) Federal Reserve will disappear within the next decade.
Added: 09 July 2008
Source: YouTube
An agricultural region that produces over 40 percent of Australia‘s fruit, vegetables, and grain is seriously threatened by the country’s ongoing drought, which has been developing into a crisis over the last decade. Scientists say that the two mighty rivers that irrigate the Murray-Darling Basin (an area the size of France and Germany combined) received the lowest amount of replenishing autumn rain since record-keeping began over a century ago.
Neil Plummer, acting head of the National Climate Centre, described rainfall during the southern hemisphere autumn as “an absolute shocker”, and said: “I’m gasping for good news”. Wendy Craik, chief executive of the Murray-Darling Basin Commission, said the river system’s condition was “critical… tending towards flatlining”. She added: “We have got it on life support” [The Independent].
Related articles:
– Drought devastates Iraq’s wheat crops
– Floods may boost world food prices for years
– Floods wipe out US crops
– The Best Farmland in the U.S. Is Flooded; Most Americans Are Too Stupid to Panic
– The Price Of Food: 2007 – 2008
– The U.S. Has No Remaining Grain Reserves
– Nine meals from anarchy – how Britain is facing a very real food crisis
– Time to Stockpile Food?
– Food Riots are Coming to the U.S.
– UN alert: One-fourth of world’s wheat at risk from new fungus
– THE FOUR HORSEMEN APPROACH – FAMINE IS IN THE AIR
– Philippines: Food Shortage Looms – Arroyo Adviser
The degrading ecosystem may cause strife between farmers and environmentalists, as the government has said it might be forced to compulsorily acquire water from irrigators, a move that would anger and devastate farm families [The Daily Telegraph]. Conservationists say the mandatory water buy-backs are necessary to protect the wetland habitat of native birds, turtles and fish.
Read moreWorsening Drought Threatens Australia’s “Food Bowl”
David Icke speaks to the constituents of Haltemprice and Howden about the ‘Big Brother’ election, forced by the resignation of David Davis, and the move towards the global Big Brother enslavement we are all facing. (Official Full Version)
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Every single Metropolitan police officer will be ‘microchipped’….
…there will not be any choice about wearing one.
– UK: Compulsory microchipping of dogs
– U.S. School District to Begin Microchipping Students
So far the RFID chips are only implanted in the schoolbag to monitor the students movements.
– The Microchip is here !!! – New World Order
– The Microchip: Health, Privacy, Civil Rights And Freedom Under Siege
U.K. to Begin Microchipping Prisoners
This video contains a lot of very important information.
I disagree with David Icke on his view of the ancient civilizations.
The elite is abusing the knowledge of these ancient civilizations.
The elite is abusing the universal powerful symbols, that our subconscious mind understands directly, because it is the universal language.
These ancient civilizations have fallen into darkness several thousand years ago and so has their knowledge.
– The Infinite Unknown
Source: Google Video