The man who trades freedom for security does not deserve nor will he ever receive either. – Benjamin Franklin
Source: YouTube
Source: YouTube
Gerald Celente, and analyst renowned for accuracy on forecasting trends, explains why the impending economic collapse, next escalating to a serious retail and commercial real estate collapse, will be greater than the Great Depression of 1929; speaking on the Lew Rockwell Show.
Remember?!
Fortis Bank Predicts US Financial Market Meltdown Within Weeks (28 Jun 08)
Source: Bye bye dollar, bye bye Treasuries…
Deflation? “Sure!” Just wait and see.
– The Neo-Alchemy of the Federal Reserve by Ron Paul
– Interview: Peter Schiff still grim on future
– Interview with Peter Schiff (12/13/08)
This is ‘the worst financial crisis‘ because every institution is doing its best to make it worse.
Bank of Spain governor Miguel Fernandez Ordonez
MADRID (AFP) – The governor of the Bank of Spain on Sunday issued a bleak assessment of the economic crisis, warning that the world faced a “total” financial meltdown unseen since the Great Depression.
“The lack of confidence is total,” Miguel Angel Fernandez Ordonez said in an interview with Spain’s El Pais daily.
“The inter-bank (lending) market is not functioning and this is generating vicious cycles: consumers are not consuming, businessmen are not taking on workers, investors are not investing and the banks are not lending.
“There is an almost total paralysis from which no-one is escaping,” he said, adding that any recovery — pencilled in by optimists for the end of 2009 and the start of 2010 — could be delayed if confidence is not restored.
Ordonez recognised that falling oil prices and lower taxes could kick-start a faster-than-anticipated recovery, but warned that a deepening cycle of falling consumer demand, rising unemployment and an ongoing lending squeeze could not be ruled out.
“This is the worst financial crisis since the Great Depression” of 1929, he added.
Read moreWorld faces “total” financial meltdown: Bank of Spain chief
Added: December 18, 2008
Source: YouTube
As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is “just a start,” more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.
The updated total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months. This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Dumping money on an economy, as they have been doing, is not the same as dumping wealth. In fact, it has quite the opposite effect.
One key attribute that gives money value is scarcity. If something that is used as money becomes too plentiful, it loses value. That is how inflation and hyperinflation happens. Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation. Most of the founding fathers did not want a central bank. Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system. It gives one entity far too much power to control and destabilize the economy.
A future out of control, bankrupt financial institutions trying to hold on, limitation on credit severely limits ability of the economy to start up again, debt totally embraces our lives, handouts a state secret, soon cash infusions wont work for banks anymore, banks hold too much toxic garbage to even know if they are solvent. We are now 17 months into a credit crisis that continues to expose the corruption and incompetence of government, banking, Wall Street and transnational corporations. The situation has not stabilized and it won’t anytime soon. All we see are sweetheart deals for elitist corporations for which American taxpayers will pay for years to come. The future of our nation is totally out of control. For the last eight years our economy has been running on something for nothing, lies and deceit. The result will be hyperinflation and then the Second Great Depression.
Read moreHyperinflation and then The Second Great Depression
Buy physical Gold and Silver first to really insure your finances. Everything else might turn out to be an illusion in the future.
Source: Forbes
And I still say we will see hyperinflation very soon. The current policies of the Fed are doomed.
Just look who profits the most of these interventions….and suddenly the greater picture suggests that the Fed wants to destroy the dollar and the economy (especially the middle class) intentionally.
Do some research – if you not already have – on who created the Fed and find out the ulterior motive of this monster from Jekyll Island. You may watch Zeitgeist, The Movie, Final Edition especially Part III of the movie which starts at 1:14:30 .
The Fed is creating ‘the worst case scenario’ and it is absolutely correct that “we are beyond the extremes of the 1930s.”
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We are beyond the extremes of the 1930s. The frontiers of monetary policy are being pushed to limits that may now test viability of paper currencies and modern central banking.
You cannot drop below zero. So what next if the credit markets refuse to thaw? Yes, Japan visited and survived this policy Hell during its lost decade, but that was a local affair in an otherwise booming global economy. It tells us nothing.
This time we are all going down together. There is no deus ex machina to lift us out. Certainly not China, which is the most vulnerable of all.
As the risk grows, officials at the highest level of the British Government have begun to circulate a six-year-old speech by Ben Bernanke – at the time of its writing, a garrulous kid governor at the US Federal Reserve. Entitled Deflation: Making Sure It Doesn’t Happen Here, it is the manual of guerrilla tactics for defeating slumps by monetary means.
“The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost,” he said.
Critics had great fun with this when Bernanke later became Fed chief. But the speech is best seen as a thought experiment by a Princeton professor thinking aloud during the deflation mini-scare of 2002.
Read moreDeflation virus is moving the policy test beyond the 1930s extremes
Zimbabwe’s tragedy defies the world to look away
The townships of suburban Harare once boasted water and sewage systems that were the envy of Africa. They are now as broken as Zimbabwe itself. Raw sewage spills from manhole covers and is pumped into the city’s main reservoir. Thousands depend on the generosity of “water samaritans” lucky enough to have their own boreholes. Where even the poorest had taps and toilets of their own, people are queueing up at hand pumps, one engineer laments. “Civilisation has gone in reverse.”
People are also dying. A cholera outbreak that has killed more than 500 people could infect 60,000 by March, according to Oxfam. The outbreak is spreading four times faster than usual for want of transport to take victims to hospital, and basic medicines for those who get there. To contain the epidemic the Health Minister has advised Zimbabweans to stop shaking hands, but it has already spread to South Africa.
In Zimbabwe’s rural hinterland five million people will soon need food aid that the World Food Programme cannot afford to distribute. The Government is powerless to count the number dying of hunger, much less hand out food itself. But aid workers have seen children foraging in rubbish dumps alongside wild animals, and in Matabeleland one story encapsulates the despair of a nation – the story of a woman who, unable to feed her children, fed them and herself a fruit that she knew was poisonous. They were buried together.
Such are the tragedies that lend meaning to Zimbabwe’s statistics; to its 90 per cent unemployment, its 230 million per cent inflation and its average life expectancy of barely 40 years. In 1990, Zimbabweans could expect to live to 63.
This is important. Watch it. Peter Schiff has been right, is right and will be right in the future.
Forget about deflation that is nonsense, that is like Bush or Paulson telling us that ‘the economy is sound’.
Source: YouTube
“But this monetary expansion thing is the stuff of nightmares, too, and one day soon you will wake up screaming in the middle of the night, bathed in sweat, jolted out of a nightmare of financial misery and suffering that is all but unimaginable…”
The astonishing news to me was that the Fed has pledged to plow $540 billion into the money market, which is composed of very short-term debt, which is, as I already said, pretty astonishing since the total money market is about $3.5 trillion, and which has had (according to Doug Noland in his Credit Bubble Bulletin) “a y-t-d expansion of $423bn, or 16.8% annualized”. And in an odd bit of symmetry to the just-pledged $540 billion, he goes on to report that “Money Fund assets have posted a one-year increase of $566bn (19.1%).” And now they need half a trillion dollars? Half a freaking trillion?
And since we are talking about things that are astonishing, get this: Total Fed Credit jumped by another $63.2 billion last week! I was going to try and add up the astonishing amounts of credit that the Fed has cooked up in the past month or so, but I am so Scared Out Of My Freaking Mind (SOOMFM) at what I might find that my hands are shaking too much to handle a calculator. That’s my excuse, anyway, and it’s a lot of work, besides.
After the panic in the financial markets, the government might panic also ensues. (Rolf van Melis/Pixelio)
GERMANY-Hard-Cash investor Walter K. Eichelburg, predicted the mortgage bubble bust and insolvency of Fannie Mae and Freddie Mac in the United States in an early 2007 Epoch Times interview. He made himself available for another interview with The Epoch Times.
Epoch Times (ET): Mr. Eichelburg, what can we learn from today’s crisis?
Pedestrians leave the Central Bank of Iceland in Reykjavik, Iceland, on Oct. 7, 2008. Photographer: Arnaldur Halldorsson/Bloomberg News
Oct. 28 (Bloomberg) — Iceland’s central bank unexpectedly raised the benchmark interest rate to 18 percent, the highest in at least seven years, after the island reached a loan agreement with the International Monetary Fund.
Policy makers raised the key rate by 6 percentage points, the Reykjavik-based bank said in a statement today, taking the rate to the highest since the bank began targeting inflation in 2001.
“I don’t think 6 percentage points will make the krona any more attractive,” said Henrik Gullberg, a strategist at Deutsche Bank AG in London. “Basically what we’re seeing is a complete liquidation of everything in emerging markets, and Iceland, even in the emerging-market universe, is very vulnerable. Six percent isn’t worth a lot if the currency drops another 15 percent.”
The central bank is raising rates as Iceland, the first western nation to seek financial help from the IMF since the U.K. in 1976, faces an economic contraction, coupled with possible hyperinflation and rising joblessness. The economy will shrink as much as 10 percent next year, the IMF forecasts. Iceland will receive about $2.1 billion from the Washington-based fund, according to a deal struck on Oct. 24.
Read moreIceland Central Bank Raises Key Interest Rate to 18%
Ben and Hank have both told you that the critical issue for the economy is for “lending to resume”, stating that it has dramatically contracted.
If this was the truth, then Ben and Hank would have come to you for $700 billion in the TARP, but instead of TARPing the money, they would have asked for permission to use it to capitalize 10 new banks which would be immediately IPO’d off to the public with the stake being in the form of some kind of super-senior debt that held a coupon high enough to encourage immediate (or nearly-so) replacement with private capital.
This would have resulted in an aggregate of seven trillion worth of new lending capacity in the economy, an amount that, incidentally, would allow the full replacement of Fannie and Freddie as holders of housing debt with about $2 trillion left over for credit cards, auto and business loans.
That would have immediately solved the “credit freeze” problem.
So why wasn’t this proposed?
This is the reason:
In short, it wouldn’t have done anything because the economy only grows at a rate of about 20 cents for every dollar of debt taken on. That is, it takes five dollars of debt to generate one new dollar of GDP.
The bad news is that once you reach the “$1 for $1” level you are no longer able to finance growth with debt, and it becomes inevitable that you will begin to finance debt with debt.
That, of course generates no GDP at all but precipitously tightens the spiral.
We crossed that Rubicon roughly around 1968, and you have had this fact concealed from you.
Congress, please listen:
The Truth is that we now require about $5 of debt to generate $1 of GDP.
Read moreCongress: What Bernanke and Hank Aren’t Telling You
Added: October 25, 2008
Source: YouTube
Bush was probably equally shocked when he found out that invading other countries causes US soldiers to die.
The Fed under Greenspan and Bernanke has caused this mess in the first place.
Ron Paul warned years ago of exactly this financial crisis.
Now the dollar looks good again – and many say all points to deflation, which is a ‘understandable’ misunderstanding – but very soon you will see hyperinflation and the total destruction of the dollar and the US economy. The US are broke and the US will ‘fail’ in the not too distant future – but there will be no bailout.
And like magic – like the Fed creates dollars out of thin air – there will come forward a new ‘post dollar’ currency. Everything is already set up for that.
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Former Chairman of the Federal Reserve Alan Greenspan testifies before the House Oversight and Government Reform Committee on Capitol Hill in Washington October 23, 2008. REUTERS/Kevin Lamarque
WASHINGTON (Reuters) – Former Federal Reserve Chairman Alan Greenspan told Congress on Thursday he is “shocked” at the breakdown in U.S. credit markets and said he was “partially” wrong to resist regulation of some securities.
Despite concerns he had in 2005 that risks were being underestimated by investors, “this crisis, however, has turned out to be much broader than anything I could have imagined,” Greenspan said in remarks prepared for delivery to the House of Representatives Committee on Oversight and Government Reform.
“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity — myself especially — are in a state of shocked disbelief,” said Greenspan, who stepped down from the Fed in 2006.
With a general election looming November 4, U.S. lawmakers were sharply divided along political lines in either blaming regulators or bickering for failure to prevent the crisis that has gripped financial markets around the world.
“The reasons why we set up your agencies and gave you budget authority to hire people is so you can see problems developing before they become a crisis,” Committee Chairman Henry Waxman, a California Democrat, told a panel that included Securities and Exchange Commission Chairman Christopher Cox and former U.S. Treasury Secretary John Snow.
“To say you just didn’t see it, that just doesn’t satisfy me,” Waxman said.
Added: Oct. 13, 2008
Source: YouTube
Legendary investor Jim Rogers warned during a CNBC interview this morning that global central banks are creating the environment for an inflationary holocaust by their ceaseless overprinting of currency, a measure that isn’t even successful in stabilizing the stock market.
Rogers said that the only solution to the market crisis was to let failing banks and speculators go bankrupt and stop pumping endless amounts of liquidity into the system, labeling it outrageous that responsible investors and taxpayers are being made to bail out crooks on Wall Street.
The way to solve this problem is to let people go bankrupt, Rogers stressed, All of this pumping money into the system is not going to save it – see what the market is saying, its saying we dont buy that, let people go bankrupt, he added.
Then you will hit bottom and then you start over. The people who are sound will take over the assets from the people who arent sound and we will start over. This is the way the world has worked for a few thousand years, said Rogers.
Added: Oct: 12, 2008
Source: YouTube
When the precious metals were smashed out of nowhere and the dollar started climbing this summer I became very worried. I didn’t question my conviction that commodities are in a bull market, or that precious metals in particular are undervalued. I felt something sinister was at work. Neither move was justified on a fundamental level. I assumed that something very bad was about to happen and the metals needed to be brought lower in advance of the bad news.
Now we have a glimpse at the ugly consequences foreseen by the Treasury Department and the Federal Reserve. In early September, Fannie Mae and Freddie Mac were nationalized with a financial commitment of USD$200 billion from the taxpayers. Incredibly, the loan limits at the former GSEs were raised from $417,000 to $729,750 in March when it was more than obvious these institutions needed to be reined in. Like most bailouts and bank failures, this one was announced on a weekend to limit the impact on the stock markets.
As I mentioned in last month’s issue, Treasury Secretary Paulson was under severe pressure to act, as the Chinese started selling Fannie and Freddie bonds while threatening further retribution. Common shareholders were left with nothing, while bondholders like Pimco and Asian central banks benefited. The small investor was stung again, as taxpayer dollars were used to bail out foreigners and wealthy Americans in a policy that Jim Rogers terms “socialism for the rich.”
Unfortunately, $200 billion is just the tip of the iceberg. As the government has assumed responsibility for Fannie and Freddie’s $5.4 trillion in liabilities, the Congressional Budget Office correctly states that these institutions “should be directly incorporated into the federal budget.” The Bush Administration has strongly opposed this move.
At a bank in Harare, Zimbabwe, this week, the police directed customers trying to withdraw their nearly worthless savings. (Associated Press)
HARARE, Zimbabwe: Long before the rooster in their dirt yard crowed, Rose Moyo and her husband rolled out of bed. “It is time to get up,” intoned the robotic voice of her cellphone. Its glowing face displayed the time: 2:20 a.m.
They crept past their children sleeping on the floor of the one-room house – Cinderella, 9, and Chrissie, 10 – and took their daily moonlit stroll to the bank. The guard on the graveyard shift gave them a number. They were the 29th to arrive, all hoping for a chance to withdraw the maximum amount of Zimbabwean currency the government allowed last month – the equivalent of just a dollar or two.
Zimbabwe is in the grip of one of the great hyperinflations in world history. The people of this once proud capital have been plunged into a Darwinian struggle to get by. Many have been reduced to peddlers and paupers, hawkers and black-market hustlers, eating just a meal or two a day, their hollowed cheeks a testament to their hunger.
By MIKE WHITNEY
“One bank to rule them all;
One bank to bind them…”
These are dark times. While you were sleeping the cockroaches were busy about their work, rummaging through the US Constitution, and putting the finishing touches on a scheme to assert absolute power over the nation’s financial markets and the country’s economic future. Industry representative Henry Paulson has submitted legislation to Congress that will finally end the pretense that Bush controls anything more than reading the lines from a 4′ by 6′ teleprompter situated just inches from his lifeless pupils. Paulson is in charge now, and the coronation is set for sometime early next week. He rose to power in a stealthily-executed Banksters’ Coup in which he, and his coterie of dodgy friends, declared martial law on the US economy while elevating himself to supreme leader.
“All Hail Caesar!” The days of the republic are over.
Section 8 of the proposed legislation says it all:
“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Right; “non-reviewable” supremacy.
As a trader, I stopped getting disgusted at government manipulation of markets several years ago, didn’t pretend it wasn’t happening, just tried to find when it was coming. I decided to develop an indicator that would tell me when the probability was extremely high that the Master Planners would intervene. That approach has served us well, and that indicator is known as the Plunge Protection Team (PPT) Indicator. It flashed a new “buy” signal Monday, September 15th at the close, rising above positive + 20.00, warning that the decline from August 11th was terminal. The Industrials have risen 565 points since that buy signal. When this measure rises above positive + 20.00, it is usually early, but very right, an early warning indicator telling us to enjoy the decline for a few more trading days but get ready for a spike rally.
The current government market intervention (“manipulation” is probably a more appropriate word) that transpired the past two weeks, reaching crescendo Thursday on a rumor, and Friday on an announcement, is one of the most dramatic since the 1930’s. It really puts into question the notion of U.S. markets being under capitalism, not socialism. The government nationalized Fannie Mae and Freddie Mac last week, announced its intent to nationalize AIG, a component of the Dow 30, this week, and then pulled out all the stops with the Paulson manifesto Friday. Not sure why he didn’t nationalize Lehman Bros, unless it was personal, as he came from competitor Goldman Sachs, and enjoyed watching them declare bankruptcy. Okay, maybe I am a bit cynical — maybe.
Before getting into market performance and the forecast, let’s cover what we know about this historic redefining of the rules of the game that Paulson has placed on the table for Congress to consider next week:
Read moreThe Paulson Manifesto Will Fail Because It Fails American Households
It was when “official government-approved” inflation figures were released that I really lost it last week, as that particular rate of inflation is now a staggering 5.6%. This is – as you can probably tell by the look of panic and terror on my face – Terrible, Terrible News (TTN).
And when you look at what John Williams at shadowstats.com calculates as inflation, according to the time-honored method of actually looking at real prices instead of the “qualified estimates” that are used today, you will see that annual inflation in consumer prices is actually running at over 13%! Some of the worst in American history! We’re freaking doomed!
Read moreInflation in consumer prices is actually running at over 13%!