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|Mr Geithner is on a two-day visit to Beijing, America’s biggest creditor|
US Treasury Secretary Timothy Geithner has told the Chinese government its investments in the US are “very safe”, despite a growing budget deficit.
Mr Geithner is on his first official visit to China, the biggest foreign investor in US treasury bonds.
Ahead of meetings with President Hu Jintao and Premier Wen Jiabao, he said the US and China must work together to fix the global economic system.
Mr Geithner said the US would move swiftly to get its debt under control.
In a speech at Beijing University at the start of his two-day visit, Mr Geithner reassured his Chinese hosts that they need not worry about the estimated $770bn (£475bn) they have invested in US treasuries, a class of US government debt.
“Chinese financial assets are very safe,” he said, drawing laughter from the audience.
He will be hoping that China’s president and premier take his reassurance more seriously, because America needs China’s confidence, and its money, says the BBC’s Quentin Sommerville in Beijing.
BEIJING, May 31 (Xinhua) — On the first day of U.S. treasury secretary Timothy Geithner’s visit to China, the Beijing-based Global Times published a survey of 23 famous Chinese economists on Sunday, saying that the majority of them deemed the vast holding of U.S. bonds “risky.”
Among the 23 experts polled, 17 said they believed that U.S. equities pose great risks to China’s economy.
Geithner will begin his first visit to Beijing as US treasury secretary in an attempt to assure the U.S.’ biggest creditor that its large holding of purchased US bonds is safe.
The visit also highlights Geithner’s comments made earlier this year alleging that China has manipulated its currency.
Li Wei, an expert with the Institute of Ministry of Commerce, and Tian Yun, a scholar at the China Macro Economics Institute, expressed concerns over the risks, saying that the United States may export its deepening crisis to China “by printing U.S. dollar notes uncontrollably.”
Geithner Pledges to Cut Deficit Amid Rating Concern
May 21 (Bloomberg) — Treasury Secretary Timothy Geithner said the Obama administration is committed to reducing the federal budget deficit after concerns rose that the U.S. debt rating may eventually be threatened with a downgrade.
“It’s very important that this Congress and this president put in place policies that will bring those deficits down to a sustainable level over the medium term,” Geithner said in an interview with Bloomberg Television. He added that the target is reducing the gap to 3 percent of gross domestic product or smaller, from a projected 12.9 percent this year.
The dollar, Treasuries and American stocks slumped today on concern about the U.S. government’s debt rating. Bill Gross, the co-chief investment officer of Pacific Investment Management Co., said the U.S. “eventually” will lose its AAA grade.
Geithner, 47, also said that the rise in yields on Treasury securities this year “is a sign that things are improving” and that “there is a little less acute concern about the depth of the recession.”
Benchmark 10-year Treasury yields jumped 17 basis points to 3.37 percent at 4:53 p.m. in New York. The Standard & Poor’s 500 Stock Index fell 1.7 percent to 888.33, and the dollar tumbled 0.8 percent to $1.3890 per euro.
Gross said in an interview today on Bloomberg Television that while a U.S. sovereign rating cut is “certainly nothing that’s going to happen overnight,” financial markets are “beginning to anticipate the possibility.”
Britain saw its own AAA rating endangered earlier today when Standard & Poor’s lowered its outlook on the nation’s grade to “negative” from “stable,” citing a debt level approaching 100 percent of U.K. GDP.
It’s “critically important” to bring down the American deficit, Geithner said.
By Bob Chapman
(Mr. Chapman is 72 years old. He was born in Boston, MA and attended Northeastern University majoring in business management. He spent three years in the U. S. Army Counterintelligence, mostly in Europe. He speaks German and French and is conversant in Spanish. He lived in Europe for six years, off and on, three years in Africa, a year in Canada and a year in the Bahamas.
Mr. Chapman became a stockbroker in 1960 and retired in 1988. For 18 of those years he owned his own brokerage firm. He was probably the largest gold and silver stockbroker in the world during that period. When he retired he had over 6,000 clients.)
Suckers rally in the markets, Dow will be driven down again, market gyrations motivated by insider greed, bank acquisitions point to a greater agenda, despite what economists and institutions are attempting, the economy will remain in a spiral
In the first three weeks of April this year, insiders for NYSE listed companies sold 8.32 times more stock, by dollar value, than they purchased. What does that tell you? We won’t insult your intelligence by answering. If ever there was an indicator to identify a sucker’s rally, this would be it. This is the ongoing Big Sting Two as strength is created by the PPT for insiders to sell into as our economy collapses under a dollar-busting juggernaut of fiat paper, aka Federal Reserve notes, being monetized at light speed as our President and Congress go on a spending spree that makes the spending habits of a Saudi sheik’s entourage look like those of a group of Welsh penny-pinchers. So much for “beloved” Emperor Obama’s promise to put an end to legislative pork and fiscal profligacy.
Author Bernard Lietaer, a former central banker, writes in “The Future of Money:”
“Your money’s value is determined by a global casino of unprecedented proportions: $2 trillion are traded per day in foreign exchange markets, 100 times more than the trading volume of all the stock markets of the world combined. Only 2% of these foreign exchange transactions relate to the “real” economy reflecting movements of real goods and services in the world, and 98% are purely speculative. This global casino is triggering the foreign exchange crises which shook Mexico in 1994-95, Asia in 1997 and Russia in 1998. These emergencies are the dislocation symptoms of the old Industrial Age money system.”
These emergencies are also the hallmark of the transnational crime syndicate manipulating the global economy through financial terrorism. Collapsing healthy economies with currency speculation, fabricated debt and naked short selling, these vultures have swarmed across the globe devouring the assets of one nation after another with coordinated “privatization” schemes. The US is their current victim.
When Benjamin Franklin was called before the British Parliament in 1757 and asked to account for the prosperity in the American colonies. He replied, “That is simple. In the colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one.”
It was the struggle for financial sovereignty that precipitated the American Revolution when the (Rothschild) Bank of England forced the colonies to give up their Scrip and intense poverty followed.
That war never ended.
Throughout their political lives Thomas Jefferson, James Madison and Andrew Jackson fought off the European bankers who intermittently controlled the nation’s money supply through privately-owned banks. When Abraham Lincoln issued ‘greenbacks’ that deprived private bankers of their monopoly control of the nation’s money supply he was assassinated. The European bankers battled for more than a century to establish a private central bank in the United States with the exclusive right to print their own paper notes and exchange them for government debt. They succeeded in 1913 with The Federal Reserve Act, a coup that authorized a private cartel to create money out of nothing, lend it to the government with interest and control the national money supply, expanding or contracting it at will. Representative Charles Lindbergh called the Act “the worst legislative crime of the ages.” Fifty years later, President John F. Kennedy defied the central bankers when he issued debt-free Treasury Notes. He too was assassinated.
By Bob Chapman:
Big bank money bombs will blow up money supply, economic data distorted beyond recognition, Fed magically conjures money, dollar set to lose its status in world currencies, zombie banks suck in healthy banks, just like in the movie, mark to market rules still hiding trillions in losses
Many of you may recall that there was a tulip mania in Holland in the 1630’s that has become synonymous with asset bubbles. Just to give you an idea of how over-the-top this mania became, the price for a single tulip bulb at one point during this mania was in the tens of thousands of dollars in terms of today’s prices. And believe it or not they were writing futures contracts on tulip bulbs! Now, courtesy of our new Treasury Secretary, Kissinger protégé Little Timmy Geithner, who is on loan from the Federal Reserve Bank of New York, and Little Timmy’s sidekick, Buck-Busting-Ben, chairman of the privately owned Fed, we are about to experience a hyperinflationary money bubble as Little Timmy and Buck-Busting-Ben create and unleash a money supply mania. That money supply mania will cause many other manias, including gold and silver manias, as tangible asset prices skyrocket.
Several sources say Max Keiser’s BBC show ‘The Oracle’ has been suspended.
Max Keiser on France 24’s ‘Face Off’ talking about bankers’ bonuses.
The liberal backlash against President Barack Obama has begun with many prominent left-leaning economists in the US attacking the administration’s plans to bail out the banks.
Paul Krugman describes the toxic asset purchase plan as “cash for trash”. Jeffrey Sachs calls it “a thinly veiled attempt to transfer hundreds of billions of US taxpayer funds to the commercial banks”. Robert Reich depicts Tim Geithner, Treasury secretary, as a prisoner of Wall Street while Joe Stiglitz says the plan “amounts to robbery of the American people”.
On the blogosphere and beyond, Democratic economists accuse Mr Obama – along with Mr Geithner, and Lawrence Summers, the president’s senior economic adviser – of taking dictation from the same financiers who have brought the economy to the brink of depression.
A “funny” thing is happening just as Treasury Secretary Tim Geithner seems to have finally found a scheme to deal with banks’ toxic debt: Some big banks are aggressively bidding for toxic debt in the open market.
Specifically “Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary market,” Mark DeCambre of The NY Post reported earlier this week.
Friday, DeCambre joined Henry and me to discuss the story in the accompanying video.
The banks contend they are helping to bring liquidity to the “frozen” mortgage-backed-securities market, as per their “marching orders” under the TARP program, DeCambre notes.
Furthermore, the banks’ buying of toxic assets may be on behalf of clients rather than for their internal accounts.
A less generous interpretation is that Citi and BofA (among others, no doubt) are attempting to “front run” Geithner’s program, which presumably will result in banks being able to unload these assets at prices above the current “depressed” market levels – leaving taxpayers on the hook for future losses.
Furthermore, having put their franchises – if not the entire global economy – in jeopardy by gorging on MBS securities the first time around, do Citi, BofA and other TARP recipients have any business jumping back into that (still) toxic pool?
Posted Mar 27, 2009 12:24pm EDT
by Aaron Task in Investing
Source: Yahoo Finance
March 26 (Bloomberg) — U.S. Treasury Secretary Timothy Geithner said regulation of the U.S. financial system needs a broad overhaul to heal a crippling lack of confidence caused by the credit crisis.
“To address this will require comprehensive reform,” Geithner said at a House Financial Services Committee hearing. “Not modest repairs at the margin, but new rules of the game.”
Geithner’s proposals would bring large hedge funds, private-equity firms and derivatives markets under federal supervision for the first time. A new systemic risk regulator would have powers to force companies to boost their capital or curtail borrowing, and officials would get the authority to seize them if they run into trouble.
This is how the Reuters homepage linked to this article:
Government seeks wider takeover powers
Treasury Secretary Timothy Geithner and Fed Chairman Ben Bernanke told lawmakers that the government needs authority to shut down troubled institutions like AIG to avoid future bailouts.
The Financial Times reports:
Fed chief seeks new powers:
The Obama administration joined forces with Ben Bernanke on Tuesday to press Congress for stronger powers to intervene in troubled financial institutions, as moves to strengthen the regulatory system gained pace on Capitol Hill.
So more powers for the government and the Fed is proposed as the solution, when in reality it was the Fed and the government that caused the entire crisis.
WASHINGTON (Reuters) – The Obama administration on Tuesday mounted a full-scale push for government authority to shut down troubled institutions like insurer AIG to avoid the need for future bailouts.
U.S. Treasury Secretary Timothy Geithner, testifying before lawmakers still fuming about big bonuses for executives at bailout recipient AIG, called on Congress for new powers to take over big non-bank financial firms that run amok.
Federal Reserve Chairman Ben Bernanke strongly backed Geithner in testimony before the same committee, and President Barack Obama took the case public in remarks to reporters.
“In the absence of that capacity you end up with the situation we’ve been in … an institution that poses systemic risks to the system but a lack of capacity to close it down in an orderly fashion, renegotiate contracts, sell off bad assets,” Obama said.
HONG KONG (Reuters) – The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.
“The Geithner plan is very badly flawed,” Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.
U.S. Treasury Secretary Timothy Geithner’s plan to wipe up to US$1 trillion in bad debt off banks’ balance sheets, unveiled on Monday, offered “perverse incentives”, Stiglitz said.
The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.
“Quite frankly, this amounts to robbery of the American people. I don’t think it’s going to work because I think there’ll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer.”
FORT LEE, N.J., March 12 /PRNewswire-USNewswire/ — The National Inflation Association today released the following statement to its http://inflation.us members:
“The United States today is in a short-term deflationary phase caused by forced liquidations, de-leveraging, going out of business sales, and other temporary factors.
It is our belief that the monetary policies of the Federal Reserve and United States Treasury will soon put an end to this deflationary phase, and we will see massive inflation in the U.S. that could ultimately lead to Zimbabwe-style Hyperinflation.
Media Alert: Hyperinflation Is Big Risk for U.S. Economy in 2010 — But That Could Be Good News for Investors, Says Forex Expert, Wayne McDonell (msnbc):
PEACHTREE CITY, GA – Hyperinflation, the scenario in which prices skyrocket while the value of currency falls, could be the next in a series of risks to the U.S. economy — but it would create opportunities for traders, says a forex expert. It would give these traders the opportunity to profit by selling the U.S. Dollar (USD) and the Japanese Yen (JPY) — the two currencies most likely to be devalued.
Total funds allocated by the Federal Reserve and United States Treasury during the financial crisis have now reached $10.3 trillion. Although only $2.6 trillion or 25.5% of these funds have so far been spent, it is our belief that the Federal Reserve has been taking worthless assets onto its balance sheet. Not only is it possible that the whole $10.3 trillion will be spent, but this could be just the tip of the iceberg.
The United States currently has an $11 trillion national debt which it has no way of paying back. Sure, we have an annual GDP of $14 trillion, but most of this comes from consumption and not production.
WASHINGTON — Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.
The Connecticut Democrat’s effort — which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner — would give the FDIC access to more money to rebuild its fund that insures consumers’ deposits, which have been hard hit by a string of bank failures.
Last week, the FDIC proposed raising fees on banks in order to build up its deposit insurance fund, which had just $19 billion at the end of 2008. That idea provoked protests from banks, which said such a burden would worsen their already shaken condition. The Dodd bill, if it becomes law, would represent an alternative source of funding.
Mr. Dodd’s bill could also give the FDIC more firepower to help address “systemic risks” in the economy, potentially creating another source of bailout funds in addition to the $700 billion already appropriated by Congress.
“Mr. Obama doesn’t understand that he is making things much worse.”
“Mr. Bernanke has never been right. He has been in the government for six or seven years, he has never been right.”
“It is astonishing to me that Mr. Obama ran on a platform of change and he has brought in people who caused the problems and are there now supposed to resolve the problems.“
On the bailouts: “This is horrible economics and it is outrageous morality.”
March 1, 2009
(Adds background on Geithner bank plan, analyst comment)
WASHINGTON, Feb 21 (Reuters) – U.S. financial regulators will soon launch a series of “stress tests” to determine which of the largest U.S. banks should get bigger capital cushions in case of a deeper recession, a person familiar with Obama administration plans said on Saturday.
In 2009 we’re going to see the worst economic collapse ever, the ‘Greatest Depression’, says Gerald Celente, U.S. trend forecaster. He believes it’s going to be very violent in the U.S., including there being a tax revolt.
RT: The fragile U.S. economy has been met with bank bailouts and stimulus plans. So what’s to come in 2009? Joining me now to answer that question is Gerald Celente, founder and director of the Trends Research Institute. Thank you for joining me.
Gerald Celente: My pleasure.
RT: How would you define the economic trend that you have forecasted for 2009?
The high ethical standards which Barack Obama set for his administration have hit a bump on the road, after revelations that his choice for Health Secretary, Thomas Daschle, waited nearly a month after being nominated before revealing to the President that he was a tax delinquent.
Mr Daschle, one of Mr Obama’s earliest backers, only paid the back taxes totalling $140,000 (£97,000) on 2 January and told the White House about it two days later. The money covered tax owed on additional income from consulting work, undertaken for a wealthy New York investor, as well as the exclusive use of a Cadillac limousine complete with driver.
The Senate finance committee meets today to discuss Mr Daschle’s nomination. He is the second of Mr Obama’s cabinet picks to have found themselves scrambling to smooth out their financial records. Tim Geithner’s confirmation as Treasury Secretary was delayed after it was discovered he had failed to pay $34,000 in taxes.
If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.
– New York Post
When CNN wants to know about the Top Trends, we ask Gerald Celente.
– CNN Headline News
There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about. – CNBC
Those who take their predictions seriously … consider the Trends Research Institute.
– The Wall Street Journal
A network of 25 experts whose range of specialties would rival many university faculties.
– The Economist
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17. Januar 2009
– Iceland’s prime minister resigns (Financial Times)
– Obama Presses Lawmakers on Stimulus, Accountability (Bloomberg):
Jan. 23 (Bloomberg) — President Barack Obama pressed congressional leaders to reach a consensus on an $825 billion stimulus plan, warning the country may be facing an “unprecedented” economic crisis.
– Geithner Hints at Harder Line on China Trade (New York Times):
WASHINGTON — Timothy F. Geithner, who moved closer to confirmation as Treasury secretary on Thursday, told senators that President Obama believed China was “manipulating” its currency, suggesting a more confrontational stance toward that country than under the Bush administration. (More change!)
– China prepares for the Year of the Slump (Guardian)
– Sterling plunges to record lows (Financial Times – 23 Jan 2009)
– Recession figures heighten the gloom (Independent)
– Just The Early Stages of Economic and Financial Collapse (The International Forecaster)
– Boston Scientific Founders Bash Baby on Lehman Bets (Bloomberg):
Jan. 23 (Bloomberg) — The men who built Boston Scientific Corp. into the world’s biggest seller of heart stents have dumped $484 million in shares to repay loans after other assets were frozen by the Lehman Brothers Holdings Inc. bankruptcy.
– Bank deposits at ECB drop sharply (Financial Times):
Deposits have now fallen by €171.5bn over the past two days and are almost two-thirds down from the record €315.3bn reached less than a fortnight ago.
– Where You Won’t Shop In 2009 (Forbes)
– Microsoft’s days as an unstoppable force are over (Telegraph)
– Samsung suffers its first quarterly loss (Financial Times)
– GE profit falls 43% to $3.9bn (Financial Times)
– Australian wine exports collapse (Telegraph)