- The beginning of an article I wanted to complete this
week -- and some important articles on the economy.
-
- "Hi-Yo-Silver!"
-
- I want to share with you some of the suppressed history
of the still ungoing conflict between silver and gold, which is only a
part of the larger struggle between for-the-good-of-all national credit
and the golden debt-slavery yoke of the cosmopolitan Credit Monopoly.
-
-
- You will find, # 4 below, William Engdahl's article suggesting
that the Fed is about to debauch the currency with hyper-inflation. I
respectfully disagree. I believe we are experiencing severe deflation
masked by aggressive monopoly price-setting which has raised prices to
mask the deflationary attack. Remember, the U.S. debt that the Money
Power is owed is denominated in dollars, they are not about to do what
international bankers did in 1921 when they robbed the extensive savings
of the German middle class through hyper-inflation. The object of the
Money Power is to put the U.S. economy back on the gold standard. Creditors
always favor the gold standard after they have gotten everyone completely
in debt with no interest paying savings of their own. (Ron Paul is not
a savior on a white horse -- very much on the contrary! -- and the "Amero"
disinfo operation is simply another scare device to move us in a stampede
over the gold-standard cliff. But before you will be willing to accept
any of that, you must first learn some history.
-
- Anyone forwarding or receiving this message, I assume,
already knows that the framers of our Constitution sought to establish
a bi- metallic curreny system for the republic. Readers also likely know,
despite all efforts to systematically deceive them, that all of the Kleptastrophes
(i.e., all of the carefully planned shocks to the national economy that
redistribute wealth from American households to the Kleptocracy) have
been the work of men who firmly support the gold standard and that most
Kleptastrophes have been designed to force changes in this economy that
brought the Kleptocracy closer to world domination based on gold.
-
- You know that the populist cause of the 19th-century
in the U.S. was lead by William Jennings Bryan who fought for silver-and-gold
bi-metalism against the international gold monopolists. You may also
know that Bryan, in his campaign for the Presidency against McKinley met
English polymath, industrialist and inventor Aurthur Kitson who converted
Bryan to the concept of "national credit," to oppose to the
monopoly credit of the gold-controlling international bankers. Twenty
years later engineer C. H. Douglas would champion and elaborate Kitson's
ideas adding his own brilliant economic and sociological analysis of the
fatals flaw of our credit system that continually places us at the mercy
of the credit monopoly, still- not-well-enough known "A + B"
theorem. [Note: Fellow Social Crediter,Wallace Klinck, in a letter to
me, has described Douglas Social Credit as follows: "...Social Credit
Consumer (National) Dividend the Compensation of retail prices are an
inalienable inheritance due to ALL citizens rich or poor. Under no
circumstances are they to become subject to the arbitrary decisions rendered
by politicians. They fall in the category of a constitutional right
derived from natlural law and are supplementary to earned income which
in a Social Credit
- dispensation would be derived from delivery of goods
and services and not from dishonest practice. 'In Whose Service is Perfect
Freedom.' "
-
-
-
-
- And since I am writing this I make whatever digression
I want, so here is another: Astute sociologists who study American popular
culture may have noticed that the Michigan populist creators of the
"Lone Ranger" radio western character in the 1940's (from which
the 1950's television program was derived) 1) supported himself and his
good work and that of his faithful indian friend with money from a secret
silver mine; 2) rode a mighty white stallion whom he called Silver; and
3) carried bullets only of pure silver as a symbol of his dedication to
justice and his regard for human life. And of course there is the older
tradition from the Balkans, where terrible oppression by the ruling elite
has has ever been a curse, that vampires can only be killed by a silver
stake through the heart.
-
-
-
-
-
- But let us go back to the the battle between silver populists
and the gold-standard credit monopolists.
-
- Here is where I was going to put the history of the battle
between gold and silver -- I have not gotten this research into a readable
story yet -- and don't think I am going to have it ready until after
Christmas. The point is that silver, not gold, dominated, until the international
bankers -- England their headquarters, the City of London being the great
creditor to the world -- adopted a credit monopoly scheme that required
a gold to maintain close control on global credit. -- I am afraid that
I am not in shape to lay all of this out -- unless I merely type out
the various passages from the books I have consulted and let you integrate
it all and deduce, as I have, what really happened. (Needles to say
my wife does not want me on the computer all Christmas vacation.)
-
- In the meantime here are some notes that I was going
to incorporate and that are self-contained enough that I can pass them
on now:
-
- The velosity of money is the key variable of the quantity
theory of money.
-
- MV = PQ when "v" is held (assumed) constant
-
- MV = PQ is of course an identiy when the assumption
about velocity is not being made -- money going one way equals cash register
receipts going the other way. (the triple-line "equals sign"
indicates an identity, i.e., an always true statement.
-
- Any time money purchases new good and services produced
in the US -- whether or not by a U.S. firm -- the G.D. P increases (not
garage sale transactions, or stock transactions, not the sales of good
made by U.S. owned firms abroad that, say, manufacture in China but sell
in Latin America or Europe) the GDP is increased.
-
- An increase of velocity may be accompanied by a decrease
of M or an increase of Q or decrease of P or a combination of the three
and the price level may not necessarily go up. But ceteris parabus ("other
things being equal") it would.
-
- Keynes held velocity constant and renamed "MV"
so it was "C+I+G+Ex- IM" or GNP (American firms output) -- in
recent decades changed to GDP (domestic location firms' output) by economists
who do national income accounting. Either way it is dollars spent on
national product (or, now, on domestic product). He broke it down --
ans Samuelson systemitized it and indoctrinated the nation with it --
so that C is money spent on national product by households, G is money
spent on national product by government, and I is money spent on national
product by firm investing in new plant and equipment etc. This effectively
hid money (and the machinations of money manipulators) from academic and
public view. Thus C+I+G+net exports comes to equal "QP" or
gross national product (or gross domestic product under the modern way
of doing national income accounting) -- while Keynes and Samuelson taught
that "money doesn't matter" and "injections and leakages"
of money were not treated in the system -- so a generations or two of
economists
- were not equipped to even think about the problems of
inflation, stagflation, recession in terms of the good old reliable Fisher
equations of MV = PQ.
-
- However for the social crediter and every really competent
and virtuous economist worthy of the name -- both the quantity theory
and the circular flow of the economy must be considered -- in fact the
neglected "leakages" are where Keynes, Hansen, Samuelson and
all the rest hid the problem of the "A + B" theorem.
-
- Friedman came back with his monetarism to explain inflation
-- but he neglected velocity and gave only a truncated version of the
theory -- relying on his statistical analysis of US economic history
to establish the correlation between money supply and inflation and deflation
and recession.
-
- I was at Texas A & M when Samuelson and Friedman
came to "present" on the same day and on the same stage --
but they refused to debate -- we had two unconnected monologues -- each
pre-prepared statements, not a debate. Afterwards they each went to a
different auditorium where they answered questions from the split-up
audience. I went with Friedman, because I was an anti_keynesian - but
I left the meeting concluding that both Friedman and Samuelson were colluding
in a deception, keeping their "for-show" rivalry going, but
making sure nothing was resolved in a show-down.
- Remember -- the false opposing sides in economics as
in politics (democrats and republicans, for example) are not out to win
their debates with the puppet opposite, but to keep the people hypnotized
by the footwork of the make believe swordplay -- pretending to be intellectual
enemies when they are not. Ron Paul is a similar fraud.
-
- fragment 2:
-
- Remember, we live in a two loop economy.
-
- We undergoe deflation in our loop -- deflation masked
by monopoly pricing of oil during the election, to conceal deflation from
being the issue. The monopoly administered oil prices were lowered after
the election and after the onset of the lower loop depression to confuse
and conceal. We know how the Money Power conceals its crimes.
-
- Yes, while the American people undergoe deflation at
home (our money supply is kept scarce) -- the money supply of the Moneyed
Elite enjoys an inflationary boom.
-
- No one is bailing out "Chrysler" -- what stupidity
-- there is no Chrysler. The company is owned by international speculators.
- There are no "entrepreneurs" -- no American
Henry Fords or Edisons left -- in any corporation that has experienced
restructuring our buyout. These corporations are owned and operated by
international speculators.
-
- And you were told the the Money Power's opinion molders
that loss of US industry didn't matter because the US was not making its
money on a higher plane, that we are a service economy. What they did
not tell you is that a service economy is a slave economy and that the
income going to the service sector was only going to the financial services
portion of the sector and not to any of the others -- as our engineers
and entrepreneurs take on jobs as Wal Mart greeters, and our working class
degenerate into soldiers and prison inmates incarcerated for to make money
growing and selling addictive reality-numbing drugs in competiton with
the Money Power -- the lowest capital startup business next to fingernail
painting, tatooing, massage and, of course, prostitution.
-
- As I was saying, we have deflation and bust for the
national economy -- the lower loop -- and easy money for the international
money power -- the upper loop. Our tight money is measured by M1 --
basically our checkbook money (bank loan money) for buying and selling
goods and buying and selling labor. On the other hand, THEIR money was
measured by M3, but before the Kleptasrophe was released upon us the measure
of their money stopped being measured and reported to the government and
the public. M3 is known and used only to the International Bankers and
their confidence-keeping "insider" minions in our government
(like Secretaries of the Treasury and the head of the New York Federal
Reserve Bank.)
-
- By the way my recommendation that the fed lower the reserve
requirment -- when I said that lowering the discount rate would be useless
and that disaster could only be averted if the Fed lowered the reserve
requirement and allowed banks to use the money to float -- at no additional
interest -- the people in debt -- for surely the Kleptastrophe is caused
only by the starvation of the domestic loop due to contracting purchasing
power. Everyone in economic power knows this -- and the fact that they
have not done so only proves that they are at war with us. The draining
of our wealth (our homes etc.) and our enslavement (big debts with the
"real debt" made ever bigger by deliberate lower-loop deflation
-- regardless of any efforts of households to cut expenditures and pay
off debt. As nominal wages and prices go down and nominal debt stays
the same -- growing real debt crowds out all other items of the household
budget and standard of living falls with purchasing power and loss of
time (time to raise children or maintain the family home economy and culture).
Anyway I warned what would happen and I warned what should have been
done to save the US from the Kleptastrophe -- here is the old article:
-
- 2
-
- From: "Wallace Klinck" <wmklinck@shaw.ca>
- To: "Dick Eastman" <oldickeastman@q.com>
- Subject: Re: industrial "bailouts" in current
financial "crisis"
-
- December 20, 2008
-
- Hello Dick,
-
- ...Social Credit Consumer (National) Dividend the Compensation
- of retail prices are an inalienable inheritance due to
ALL citizens
- rich or poor. Under no circumstances are they to become
subject
- to the arbitrary decisions rendered by politicians.
They fall in the
- category of a constitutional right derived from natlural
law and
- are supplementary to earned income which in a Social
Credit
- dispensation would be derived from delivery of goods
and
- services and not from dishonest practice. "In Whose
Service
- is Perfect Freedom."
-
- Sincerely
- Wally
-
-
- 3
-
- From: Robert Busser
- Subject: [frameup] shadowstats "M3 is exploding"
-
- December 20, 2008
-
- JOHN WILLIAMS' SHADOW GOVERNMENT STATISTICS
-
- Growth Surges/Accelerates in Broad Money Components
-
- Monetary Base Up 97.5% Year/Year
-
- Fed Actions Begin to Kick In - For Better and Worse
-
- U.S. Dollar Remains Key to Markets
-
-
- Bulk of M3 Components Surge an Annualized 63.4% in Latest
Week. The seasonally adjusted data on M2, institutional money funds and
large time deposits at commercial banks (M3 components that account for
roughly 90% of the total measure) have shown a pattern of accelerating
growth for the last three weeks (see the Fed's H.6 and H.8 reports). In
the three weeks ended December 8th/10th, annualized growth was 39.3%,
the annualized growth for the last two weeks was 49.8%, and the annualized
growth in the most recent week was 63.4%.
-
- The growth here reflects a surge in demand deposits (checking
accounts), savings accounts, institutional money funds and resumed growth
in large time deposits. While these measures may reflect some impact from
movement of personal funds out of Treasury bills back into the money supply
accounts, greater impact is likely from some flow-through of the extreme
systemic liquefaction launched by the Federal Reserve, and of increased
bank lending, into the normal stream of commerce. Loans and leases in
commercial bank credit have grown at an annualized 14.6% in the last three
weeks, 9.3% in the last two weeks, and by 28.0% in the most recent week.
-
- The good news is that the system may be starting to return
to more- normal functioning. The bad news is that the cost of systemic
salvation remains higher inflation, irrespective of the sharp, short-term
impact of collapsing oil prices on consumer prices.
-
- Although it is too early for a good approximation of
the SGS- Ongoing M3 estimate for the month December, increasingly it appears
as though the estimated annual growth of 8.9% in November will prove
to be the low of the current cycle. If trends of the last several weeks
continue - still a big "if" - the December annual growth rate
could surge to over 15% or 16%, nearing recent historic highs. Outside
of the current cycle, the last time M3 growth was that high was in 1971,
months before President Nixon closed the gold window and imposed wage
and price controls. The next round of money reports has been delayed until
Monday (December 29th) due to Christmas.
-
- With the broad numbers barely impacted, yet, by the monetary
base, the upside potential for broad money growth remains extremely dangerous
for inflation conditions.
-
- Monetary Base and Reserves Continue to Explode. The St.
Louis Fed's Adjusted Monetary Base in the two weeks ended December 17th
was up 97.5% from the year before, versus a 74.9% annual increase in
the prior two-week period. Those numbers were up from less than 3% annual
growth in August, before the Fed began its latest panicked operations.
When cutting the targeted fed funds to a range of 0.00% to 0.25%, Fed
Chairman Bernanke and the FOMC continued to indicate they would do whatever
it took to stimulate systemic liquidity - broad money supply.
-
- As previously discussed in the Money Supply Special Report
(www.shadowstats.com, right hand column), the effects of money supply
growth can be problematic as to economic activity. The Fed always can
drive the economy into recession and deflation by contracting broad money
growth. The reverse, however, is not true. Excessive money growth does
not assure economic growth, although it always will assure higher inflation.
-
- The surging monetary base - the traditional central bank
tool for controlling the money supply - continued to reflect exploding
growth in total reserves of depository institutions. Required reserves
(seasonally adjusted) in the latest two week period were down 1.2% from
the prior period, but up 32.4% (32.1% unadjusted) year-to-year, versus
29.7% (31.3% unadjusted) in the prior period, and against 5.0% at the
end of August, before recent Fed actions. Growth in required reserves
indicates growth in accounts that have reserve requirements. Excess reserves
continued accounting for nearly all the near-term growth in total reserves,
however, indicative of major ongoing lending issues with banks.
-
- U.S. Dollar Volatility Suggests Changing Environment.
Heavy dollar selling in the last week was countered partially by some
jawboning - if not outright intervention - by the Bank of Japan and others.
Nonetheless, the global financial community is showing increased wariness
in holding what eventually will be a worthless currency. Even with year-end
market distortions, the global system may be stabilizing enough to allow
for increased flight to safety outside the U.S. currency. Beyond extreme
near-term volatility and central bank machinations, the U.S. dollar ultimately
is headed much lower, with resulting upside pressure on the dollar price
of gold and on the dollar price of oil. While oil consumption will decline
as a result of global recession, OPEC appears ready to continue offsetting
much of the demand decline with production cutbacks.
-
- As the flight to safety outside the U.S. dollar intensifies,
such will pressure both the U.S. equity and credit markets to the downside.
The general outlook remains unchanged.
-
-
- 4
-
- http://www.globalresearch.ca/index.php?context=va&aid=11401
-
- Federal Reserve sets stage for Weimar-style Hyperinflation
-
- By F. William Engdahl
- Global Research, December 15, 2008
-
-
- The Federal Reserve has bluntly refused a request by
a major US financial news service to disclose the recipients of more than
$2 trillion of emergency loans from US taxpayers and to reveal the assets
the central bank is accepting as collateral. Their lawyers resorted to
the bizarre argument that they did so to protect 'trade secrets.' Is the
secret that the US financial system is de facto bankrupt? The latest Fed
move is further indication of the degree of panic and lack of clear strategy
within the highest ranks of the US financial institutions. Unprecedented
Federal Reserve expansion of the Monetary Base in recent weeks sets the
stage for a future Weimar-style hyperinflation perhaps before 2010.
-
- On November 7 Bloomberg filed suit under the US Freedom
of Information Act (FOIA) requesting details about the terms of eleven
new Federal Reserve lending programs created during the deepening financial
crisis.
-
- The Fed responded on December 8 claiming it's allowed
to withhold internal memos as well as information about 'trade secrets'
and 'commercial information.' The central bank did confirm that a records
search found 231 pages of documents pertaining to the requests.
-
- The Bernanke Fed in recent weeks has stepped in to take
a role that was the original purpose of the Treasury's $700 billion Troubled
Asset Relief Program (TARP). The difference between a Fed bailout of
troubled financial institutions and a Treasury bailout is that central
bank loans do not have the oversight safeguards that Congress imposed
upon the TARP. Perhaps those are the 'trade secrets the hapless Fed Chairman,
Ben Bernanke, is so jealously guarding from the public.
-
-
- Coming hyperinflation?
-
- The total of such emergency Fed lending exceeded $2 trillion
on Nov. 6. It had risen by an astonishing 138 percent, or $1.23 trillion,
in the 12 weeks since Sept. 14, when central bank governors relaxed collateral
standards to accept securities that weren't rated AAA. They did so knowing
that on the following day a dramatic shock to the financial system would
occur because they, in concert with the Bush Administration, had decided
to let it occur.
-
- On September 15 Bernanke, New York Federal Reserve President,
Tim Geithner, the new Obama Treasury Secretary-designate, along with
the Bush Administration, agreed to let the fourth largest investment bank,
Lehman Brothers, go bankrupt, defaulting on untold billions worth of derivatives
and other obligations held by investors around the world. That event,
as is now widely accepted, triggered a global systemic financial panic
as it was no longer clear to anyone what standards the US Government was
using to decide which institutions were 'too big to fail' and which not.
Since then the US Treasury Secretary has reversed his policies on bank
bailouts repeatedly leading many to believe Henry Paulson and the Washington
Administration along with the Fed have lost control.
- In response to the deepening crisis, the Bernanke Fed
has decided to expand what is technically called the Monetary Base, defined
as total bank reserves plus cash in circulation, the basis for potential
further high-powered bank lending into the economy. Since the Lehman Bros.
default, this money expansion, which rose dramatically by the end of October
at a year-year rate of growth of 38%, has been without precedent in the
95-year history of the Federal Reserve since its creation in 1913. The
previous high growth rate, according to US Federal Reserve data, was 28%
in September 1939, as the US was building up industry for the evolving
war in Europe.
-
- By the first week of December, that expansion of the
monetary base had jumped to a staggering 76% rate in just 3 months. It
has gone from $836 billion in December 2007 when the crisis appeared
contained, to $1,479 billion in December 2008, an explosion of 76% year-on-year.
Moreover, until September 2008, the month of the Lehman Brothers collapse,
the Federal Reserve had held the expansion of the Monetary Base virtually
flat. The 76% expansion has almost entirely taken place within the past
three months, which implies an annualized expansion rate of more than
300%.
-
- Despite this, banks do not lend further, meaning the
US economy is in a depression free-fall of a scale not seen since the
1930's. Banks do not lend in large part because under Basle BIS lending
rules, they must set aside 8% of their capital against the value of any
new commercial loans. Yet the banks have no idea how much of the mortgage
and other troubled securities they own are likely to default in the coming
months, forcing them to raise huge new sums of capital to remain solvent.
It's far 'safer' as they reason to pass on their toxic waste assets to
the Fed in return for earning interest on the acquired Treasury paper
they now hold. Bank lending is risky in a depression.
-
- Hence the banks exchange $2 trillion of presumed toxic
waste securities consisting of Asset-Backed Securities in sub-prime mortgages,
stocks and other high-risk credits in exchange for Federal Reserve cash
and US Treasury bonds or other Government securities rated (still) AAA,
i.e. risk-free. The result is that the Federal Reserve is holding some
$2 trillion in largely junk paper from the financial system. Borrowers
include Lehman Brothers, Citigroup and JPMorgan Chase, the US's largest
bank by assets. Banks oppose any release of information because that might
signal 'weakness' and spur short-selling or a run by depositors.
-
- Making the situation even more drastic is the banking
model used first by US banks beginning in the late 1970's for raising
deposits, namely the acquiring of 'wholesale deposits' by borrowing from
other banks on the overnight interbank market. The collapse in confidence
since the Lehman Bros. default is so extreme that no bank anywhere, dares
trust any other bank enough to borrow. That leaves only traditional retail
deposits from private and corporate savings or checking accounts.
-
- To replace wholesale deposits with retail deposits is
a process that in the best of times will take years, not weeks. Understandably,
the Federal Reserve does not want to discuss this. That is clearly also
behind their blunt refusal to reveal the nature of their $2 trillion assets
acquired from member banks and other financial institutions. Simply put,
were the Fed to reveal to the public precisely what 'collateral' they
held from the banks, the public would know the potential losses that the
government may take.
-
- Congress is demanding more transparency from the Federal
Reserve and US Treasury on its bailout lending. On December 10 in Congressional
hearings by the House Financial Services Committee, Representative David
Scott, a Georgia Democrat, said Americans had 'been bamboozled,' slang
for defrauded.
-
-
- Hiccups and Hurricanes
-
- Fed Chairman Ben S. Bernanke and Treasury Secretary Henry
Paulson said in September they would meet congressional demands for transparency
in a $700 billion bailout of the banking system. The Freedom of Information
Act obliges federal agencies to make government documents available to
the press and public.
-
- In early December the Congress oversight agency, GAO,
issued its first mandated review of the lending of the US Treasury's $700
billion TARP program (Troubled Asset Relief Program). The review noted
that in 30 days since the program began, Henry Paulson's office had handed
out $150 billion of taxpayer money to financial institutions with no effective
accountability of how the money is being used. It seems Henry Paulson's
Treasury has indeed thrown a giant 'tarp' over the entire taxpayer bailout.
-
- Further adding to the troubles in the world's former
financial Mecca, the US Congress, acting on largely ideological grounds,
shocked the financial system when it refused to give even a meager $14
billion emergency loan to the Big Three automakers-General Motors, Chrysler
and Ford.
-
- While it is likely that the Treasury will extend emergency
credit to the companies until January 20 or until the newly elected Congress
can consider a new plan, the prospect of a chain-reaction bankruptcy collapse
of the three giant companies is very near. What is being left out of the
debate is that those three companies account for a combined 25% of all
US corporate bonds outstanding. They are held by private pension funds,
mutual funds, banks and others. If the auto parts suppliers of the Big
Three are included, an estimated $1 trillion of corporate bonds are now
at risk of chain-reaction default. Such a bankruptcy failure could trigger
a financial catastrophe which would make what has happened since Lehman
Bros. appear as a mere hiccup in a hurricane.
-
- As well, the Federal Reserve's panic actions since September,
by their explosive expansion of the monetary base, has set the stage
for a Zimbabwe-style hyperinflation. The new money is not being 'sterilized'
by offsetting actions by the Fed, a highly unusual move indicating their
desperation. Prior to September the Fed's infusions of money were sterilized,
making the potential inflation effect 'neutral.'
-
-
- Defining a Very Great Depression
-
- That means once banks begin finally to lend again, perhaps
in a year or so, that will flood the US economy with liquidity in the
midst of a deflationary depression. At that point or perhaps well before,
the dollar will collapse as foreign holders of US Treasury bonds and other
assets run. That will not be pleasant as the result would be a sharp appreciation
in the Euro and a crippling effect on exports in Germany and elsewhere
should the nations of the EU and other non-dollar countries such as Russia,
OPEC members and, above all, China not have arranged a new zone of stabilization
apart from the dollar.
-
- The world faces the greatest financial and economic challenges
in history in coming months. The incoming Obama Administration faces a
choice of literally nationalizing the credit system to insure a flow
of credit to the real economy over the next 5 to 10 years, or face an
economic Armageddon that will make the 1930's appear a mild recession
by comparison.
-
- Leaving aside what appears to have been blatant political
manipulation by the present US Administration of key economic data prior
to the November election in a vain attempt to downplay the scale of the
economic crisis in progress, the figures are unprecedented. For the week
ended December 6 initial jobless claims rose to the highest level since
November 1982. More than four
- million workers remained on unemployment, also the most
since 1982 and in November US companies cut jobs at the fastest rate in
34 years. Some 1,900,000 US jobs have vanished so far in 2008.
-
- As a matter of relevance, 1982, for those with long memories,
was the depth of what was then called the Volcker Recession. Paul Volcker,
a Chase Manhattan appendage of the Rockefeller family, had been brought
down from New York to apply his interest rate 'shock therapy' to the US
economy in order as he put it, 'to squeeze inflation out of the economy.'
He squeezed far more as the economy went into severe recession, and his
high interest rate policy detonated what came to be called the Third World
Debt Crisis. The same Paul Volcker has just been named by Barack Obama
as chairman- designate of the newly formed President's Economic Recovery
Advisory Board, hardly grounds for cheer.
-
- The present economic collapse across the United States
is driven by the collapse of the $3 trillion market for high-risk sub-prime
and Alt-A home mortgages. Fed Chairman Bernanke is on record stating
that the worst should be over by end of December. Nothing could be farther
from the truth, as he well knows. The same Bernanke stated in October
2005 that there was 'no housing bubble to go bust.' So much for the predictive
quality of that Princeton economist. The widely-used S&P Schiller-Case
US National Home Price Index showed a 17% year-year drop in the third
Quarter, trend rising. By some estimates it will take another five to
seven years to see US home prices reach bottom. In 2009 as interest rate
resets on some $1 trillion worth of Alt-A US home mortgages begin to kick
in, the rate of home abandonments and foreclosures will explode. Little
in any of the so-called mortgage amelioration programs offered to date
reach the vast majority affected. That process in turn will accelerate
as millions of Americans lose their jobs in the coming months.
-
- John Williams of the widely-respected Shadow Government
Statistics report, recently published a definition of Depression, a term
that was deliberately dropped after World War II from the economic lexicon
as an event not repeatable. Since then all downturns have been termed
'recessions.' Williams explained to me that some years ago he went to
great lengths interviewing the respective US economic authorities at the
Commerce Department's Bureau of Economic Analysis and at the National
Bureau of Economic Research (NBER), as well as numerous private sector
economists, to come up with a more precise definition of 'recession,'
'depression' and 'great depression.' His is pretty much the only attempt
to give a more precise definition to these terms.
-
- What he came up with was first the official NBER definition
of recession: Two or more consecutive quarters of contracting real GDP,
or measures of payroll employment and industrial production. A depression
is a recession in which the peak-to-bottom growth contraction is greater
than 10% of the GDP. A Great Depression is one in which the peak-to-bottom
contraction, according to Williams, exceeds 25% of GDP.
-
- In the period from August 1929 until he left office President
Herbert Hoover oversaw a 43-month long contraction of the US economy
of 33%. Barack Obama looks set to break that record, to preside over what
historians could likely call the Very Great Depression of 2008-2014, unless
he finds a new cast of financial advisers before Inauguration Day, January
20. Required are not recycled New York Fed presidents, Paul Volckers or
Larry Summers types. Needed is a radically new strategy to put virtually
the entire United States economy into some form of an emergency 'Chapter
11' bankruptcy reorganization where banks take write-offs of up to 90%
on their toxic assets, that, in order to save the real economy for the
American population and the rest of the world. Paper money can be shredded
easily. Not human lives. In the process it might be time for Congress
to consider retaking the Federal Reserve into the Federal Government as
the Constitution originally specified, and make the entire process easier
for all. If this sounds extreme, perhaps revisit this article in six months
again.
-
- F. William Engdahl is author of A Century of War: Anglo-American
Oil Politics and the New World Order (Pluto Press) and Seeds of Destruction:
The Hidden Agenda of Genetic Manipulation (www.globalresearch.ca). His
newest book, Full Spectrum Dominance: Totalitarian Democracy in the New
World Order (Third Millennium Press) is due out early in 2009.
-
- http://www.globalresearch.ca/index.php?context=va&aid=11401
-
- 5
-
- A weekly excerpt from the subscription issue of The International
Forecaster, taken from Bob Chapman's weekly publication.
-
-
- A Devastating Impact as the Market Unleverages and a
Winter of Discontent
- December 17th, 2008 - Two sets of rules on wall street,
50 billion ponzi scheme by Bernard Madoff uncovered, court case for the
toxic waste coverup, Paulson's efforts are futile, commercial and residential
real estate market alike now frozen, fed is frantic, an elitist engineered
collaps of the U.S, derivative problems galore, and no real debate taking
place in government
-
-
- History Set To Repeat Itself In The Economic Downturn
- December 13th, 2008 - no man on the inside, so nothing
for Detroit but plenty for Wall Street, banking industry set for big changes,
re-inflation is planned, fiat currency creation gone berserk, Congress
continues to support the gangster bankers, dollar freefall coming,
-
-
- Hyperinflation and then The Second Great Depression
- December 10th, 2008 - 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
-
-
- The Purpose Behind The Financial Crisis
- December 6th, 2008 - Rich working to Bankrupt the Middle
Class, world economic system now infected with toxic waste, golden parachutes
for some and hyperinflation for others, a better plan would be to give
a cheque to everybody, plans to help people wont really be implemented,
credit problems thicken.
-
-
- Financial Crisis Only Squandering Our Future
- December 3rd, 2008 - Big rise in monetary base, trillions
in loans all over the world that will never be repaid, many nations very
exposed in monetization crisis, all currencies to fall against gold,
writers running naked, larger corporate failures to come, American condition
to worsen, resentment already smoldering around the world, taxpayer money
still being squandered on bankrupt Wall Street...
-
-
- Debt Upon Debt And Bankrupt Financial Institutions
- November 29th, 2008 - A moment for the big picture, panic
set in to resolve the insolvency crisis now upon us, new moral hazard,
soon an end to the bubbles, toxic waste worth next to nothing, legislative
malfeasance, markets soon to be put under maximum pressure, everyone now
terrified of lending and our way of life is set to change
-
-
- A Climate of Corruption, Bailouts, Currency Rigging and
Unfair Competition
- November 22nd, 2008 - Citigroup's big problems, beggars
in Zegna suits, trade wars on the horizon, Philadelphia Fed report beset
by weakness, record injections of liquidity, jobs slashed on wall street,
a bevy of financial indicators to ponder just how much we have fallen,
market losses trim size of overall economy
-
-
- Manipulations, Corruption And Looting Takes Economy To
The Brink
- November 19th, 2008 - Watching obvious criminal manipulations,
COMEX becomes CRIMEX, Dubai Exchange, economic pundits avoid reality,
eight years that changed America, regulation will protect the elite
|