The lies begin right in the headline of the American Public Transportation Association’s annual press release patting the industry on the back for carrying heavily subsidized riders last year. “Record 10.5 Billion Trips Taken On U.S. Public Transportation In 2012,” claims the press release headline.
The text reveals that it wasn’t actually a record at all, but merely the “second-highest ridership since 1957.” When was the first highest? In 2008, meaning the headline would have been more accurate if it had read, “Transit Ridership Falls Since 2008.”
Of course, as a lobby group, APTA is paid to promote the transit industry. Reporters are also paid to see through lobbyists’ lies, but unfortunately many of them simply modestly rewrite the press release while others add their own questionable analyses.
The Bright Future of Gold: The Final Solution of the 2008 Monetary Crisis
December 28, 2012, at 7:48 pm
by Jim Sinclair
Let’s keep things very simple:
1. The future of gold will not be determined by the USA.
2. The present manipulation in gold is purely Western, and any other thought is rank nonsense. This event is both short term and very short sighted in terms of people’s published analysis.
3. The triumvirate of Euroland, Russia and China will determine the future of gold as financial power has shifted from the West towards the East.
4. The strategy of the flushing of Lehman Brothers was to initiate a transfer of failed and to fail debt and debit, producing obligations in all forms from the balance sheets of international banks and investment banks onto the only entity that could mechanically accept them in infinite amounts, the balance sheet of Western central banks. To avoid a total and terminal collapse of Western finance, the US Fed had to take the entirety of the problem onto its balance sheet in exchange for newly created electronic bank wired funds.
5. This cash then simply filled an empty hole that was not visible to a general public because of the willingness of FASB to allow these institutions to call what was worthless as full value.
6. The means of the transfer is presently and was QE.
7. QE was a total success in stopping an absolute economic collapse of the West in an unprecedented economic proportion.
8. QE was for the banks and not for anything else. It filled a black hole made invisible by FASB capitulation to political pressure allowing fraudulent computer valuations. This gave birth to the large equity rally off the bottom in early 2009 within two weeks of the FASB’s capitulation.
9. Because of the nature of QE, the only real economic stimulant was the wealth effect of a roaring equity market. That left Main Street totally out of the equation and did nothing to reverse the long term bull trend in unemployment.
10. Any consideration of an exit formula for the Fed to reduce the size of its balance sheet must take into consideration the quality of the assets that QE has purchased, which is known to have a strong emphasis on paper that truly has and will never have a market. For those assets that do have a market, sales of the dimension of the purchase would certainly impact interest rates in a most alarming way because of the lack of international buying of US Federal debt. All debt markets affect all other debt markets from the loan shark to the US treasury.
11. So there must be a way of doing the necessary in order to compensate for the weak asset expansion of the balance sheet of the Fed and other central banks because there is no exit strategy despite the over-educated academics that would try and convince you otherwise.
12. I am the most practical market related writer in this field. I assure you all talk of an exit program is based on a full recovery to opulent economic times that QE is not designed to produce, nor can.
13. Because the problem at the time of Lehman Brothers was so great, there wasn’t even a good estimate of its size so that QE had to be to infinity. I stated that many years before Bloomberg.
14. Therefore the solution to the present problem that must take place before there is any chance of real economic recovery is that central banks must balance their balance sheet in an economic condition as present and predicted here to remain about the same or worse that permits absolutely no exit strategy.
15. That means that the price of gold as the other central bank asset must rise in the free market significantly so that the balance sheets of the Western world central banks begins to heal and maybe even balance.
16. The mathematics of the price of gold are well in excess of the two magnets now functioning at $2111 and revolving around $4000.
17. Marry this concept to the recent memo of CIGA Belgian and you have the total solution to the present problem that no other mechanism can produce. This will be initiated not by the USA, but by Euroland, Russia and China.
Now add the text of the discussion of earlier this week on the ascendancy of the euro as we enter the final chapter of the Monetary Crisis of 2008 caused by the fraud of OTC derivatives, a crime with many millions of victims and potentially a lost generation. Not one of the major perpetrators suffered corporal repercussions.
Jim Sinclair’s Commentary
This is a brief of discussions within a private self financed research group in Holland.
It demands respect and my gratitude for their contribution of this ever more complicated subject, Gold.
They can be reached at goudstudieforum.com
The Asian wealth producers (physical economy) and the major oil and gas owners, sympathize with the euro goldkoncept, that concept being, the market revaluation of gold without any link to any currency. (Remember the Duisenberg Speech.)
Gold, the wealth reserve (so not as a currency), shall be freely valued at the world’s gold auctions. The demise of the old dollar standard and rise of the Gold value standard and reserve.
Real value should be priced in and exchanged for a currency that also values, recognizes and promotes gold as a value standard. That currency is not the dollar, but the € (€ system and regime).
This (brilliant) idea/concept is not new. The early pioneers were Jacques Rueff and Triffin. Read: The Monetary Sin of the West.
Both wanted, but disagreed, to a free-floating gold price (value) during the London Gold Pool period (sixties). Their (Reuff and Triffin’s) point was:
Financial, monetary, and economic global stability by introducing not co the Gold Value Standard. The Dollar-regime (system) refused and forced the acceptance of the absurd SDR (paper gold).
But the two-tier gold market was born:
Monetary ($)gold and non-monetary gold. Oil and Asians keep accumulating physical gold and the € currency (€-system) that favors Free Floating Gold Value. Stability means that value should be exchanged for value. Currencies that recognize the value of gold as a wealth reserve are worth to buy valuable oil and products. The owners and producers of wealth get the assurance that their wealth can be safely stored as a reserve in free floating gold value, the only appropriate store of wealth.
That’s the running transition out of the non-wealth $-system.
Conclusion to both briefs:
You have all the mechanical parts of the solution to the problem. The progress toward resolving this mess will again make huge profits for the “Good ole boys club,” particularly the Yalies.
Gold will move up in the free market and that is what this reaction is all about. The Canadian Dollar, Swiss and Euro will all benefit. Gold will not be confiscated because it becomes a major asset of the insiders. Gold producing companies with low cost operation will enjoy the leverage common to that industry in what is about occur. The amount of bearishness now developing in gold and certainly in good gold shares is the ultimate contrarian’s dream about to come true.
This is the golden stage. It is so simple it is almost silly, but few if any, really get it.
Statistics: Posted by DIGGER DAN — Sat Dec 29, 2012 4:55 am
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July 31, 2012, 12:04 a.m. EDT
The Real Crash is dead ahead as 2008 is forgotten
Commentary: Ironically, you’ll win by buying banks now
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — “Facebook will become the poster child for the current social-media bubble,” warns economist Gary Shilling in his latest Forbes column, “just as Pets.com was for the dot-com bubble.” Yes, Wall Street is repeating the 2000 dot-com crash as today’s social-media bubble crashes and burns.
Think history folks: Remember 2000-2002? The economy suffered a 30-month recession and a brutal bear market. The Dow Jones Industrial Average peaked at 11,722, then crashed, losing over 4,000 points dropping below 7,500, down more than 43%, with massive losses of more than $8 trillion in market cap.
Pets.com sock puppet.
But it gets worse: Shilling’s bluntly warning: “If we aren’t already in a recession, we’re getting very close.” Yes, he’s more reserved than Nobel economist Paul Krugman, whose latest book goes beyond hinting that the America economy is repeating the 2000-2002 recession, His title says it all: “End This Depression Now!”
But the scariest fact is that America’s warring politicians, CEOs and Super Rich can’t even see the obvious link between the 2012 social-media bubble and the 2008 Wall Street credit bubble that nearly bankrupt our monetary system and forced Congress and the Fed into bailing out our too-big-to-manage banks to an estimated $29.7 trillion in cash, credits, cheap money loans and debt relief.
But, unfortunately, the banks still haven’t learned the lessons of history. Instead, they dug in their heels, spending hundreds of million on lobbyists, fighting all reform efforts, went back to business-as-usual, sabotaging America and ultimately themselves.
Déjà vu: here we are four years later. Again mired in another presidential election, right back where we were in the summer of 2008. In denial, trapped in lies and mean-spirited theatrics, ignoring warnings, blinded, obsessed about the smell of election victories no matter the cost, even if it triggers a recession.
Yes, déjà vu all over again. Four short years. We forget. We’re back repeating the same buildup scenario to another meltdown.
Worse, bankers, politicians and billionaires just don’t seem to care. And you get the foreboding feeling that it really doesn’t matter who wins the election. This war will go on till 2016: For one party and their billionaire super PACs will do anything to hold on to the presidency, and the other, backed by their billionaire super PACs, will do anything to regain it.
Politics is now a deadly blood sport that reminds us of the “Hunger Games.”
As if 2008 never happened, creating the granddaddy of all bubbles
Yes, another crash is coming soon because we’re back playing the same speculative games as we did for years prior to the 2008 crash. Nothing’s changed. And when we collapse, it will be because America’s leaders never do learn the lessons of history. And never will, if you get the meaning of economists Carmen Reinhart and Kenneth Rogoff who surveyed “800 Years of Financial Folly” and saw nothing but repetitive cycles.
In a BusinessWeek editorial, Peter Coy and Rouben Farzad described the latest cycle in this eternal drama of the bubbles:
“It’s as if 2008 never happened. Once again the worlds investors are pumping up bubbles that will probably explode in their faces. After the popping of a real estate bubble led to the first global recession since the 1930s, world markets are frothing like shaken Champagne. Pundits claim to have spotted price increases that are unsupported by economic fundamentals in assets ranging from U.S. farmland to Israeli biotech to Australian housing to Chinese cemetery sites. Commodities have soared. Global junk-bond issuance hit a record … this is the granddaddy of them all, an almost-encompassing bubble right at the heart of monetary systems.”
Yes, for the past four years our great free-market system has been blowing many new bubbles, like the Facebook bubble that we saw coming months ago. It will soon halt Chairman Bernanke’s nonstop printing press. This bubble will sink like a mafia stiletto deep into the “heart of the monetary systems” worldwide, proving something Nassim Taleb said about Bernanke when Obama reappointed him in 2009: “He doesn’t even know he doesn’t understand how things work,” that his methods make “homeopath and alternative healers look empirical and scientific.”
Warning, the Real Crash is dead ahead, will bankrupt America
That’s also what economist Peter Schiff, CEO of Euro Pacific Capital, predicted recently when interviewed on Fox Business about his new book, “The Real Crash: America’s Coming Bankruptcy.”
“We’ve got a much bigger collapse coming, and not just of the markets, but of the economy … like what you’re seeing in Europe right now, only worse … when we hit our real fiscal cliff” and a meltdown more severe than the Crash and Great Recession of 2007-2010.
Schiff was one-upped during the same NewsmaxWorld report by Robert Wiedemer, author of the 2006 “America’s Bubble Economy” and recent “Aftershock” book about the “Next Global Financial Meltdown.” He warns that “the data is clear, 50% unemployment, a 90% stock market drop, and 100% annual inflation,” starting this year.
Yes, it sounds like overkill to drive home the message, but maybe not. Maybe this is déjà vu 1929. Maybe the Real Crash is dead ahead. And maybe nobody wants to see it, like 2008.
Big secret, buy banks? Yes, if Wall Street doubles down, splits up
That signal comes from no less than former Citigroup president Sandy Weill. Imagine, the man responsible for building the first too-big-to-manage mega-bank, and killing the 60-year-old Glass-Steagall separating commercial and investment banking back in 1999, now saying:
“I think what we should probably do is go and split up investment banking from banking. Have banks be deposit takers, make commercial loans and real estate loans. And have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.” What a game-changer.
Huffington Post columnist Mark Gongloff notes that Weill is “not doing it out of the goodness of his heart.” But the truth is banks haven’t been doing well since 2008, in spite of controlling politicians and regulators: “The banks themselves, including the abomination he created, Citigroup, would be worth a lot more if they were broken into smaller pieces.”
Since 2008 “the market has turned against the big banks,” investors have been “doing the government’s dirty work for it.”
De facto Glass-Steagall? Yes, split and get richer on two bank stocks
Weill must also sense that with all the relentless political fears about the government’s out-of-control debt, plus the real possibility that the American economy could in fact go over a Fiscal Cliff in 2013 and into a long recession, or even a depression, the appetite for another taxpayer bailout will be zero, forcing a bank breakup anyway.
So Weill’s brainstorm makes a helluva lot of sense: Take command. Get ahead of the coming slowdown. Shilling warns the social-media bubble will keep deflating.
Forget them, seize this opportunity. Refocus on new bank stocks. Besides, if insiders control a split-up into a commercial bank and an investment bank, it’d be on terms more favorable to bank insiders, executives and shareholders than if Washington did it.
And you can bet the smart money’s on Weill’s strategy. For example, The Wall Street Journal quotes Phillip Purcell, former CEO of Morgan Stanley: “From a shareholder point of view, it’s crystal clear these enterprises are worth more broken up than together.”
Yes, deniers are claiming it’ll never happen, especially Jamie Dimon, who publicly doubled down on loving his too-big-to-manage $2.3 trillion bank. But Gongloff and the Journal note that Dimon’s reshuffled organizational chart suggests otherwise.
Moreover, you know bank CEOs like Lloyd Blankfein are motivated more by their own personal wealth than by firm assets under management. Ultimately, if they can make more money and get more control of their destiny by owning two bank stocks, you can bet they’ll plan a de facto Glass-Steagall revival in a New York minute. They can make more … and so can America’s 95 million Main Street investors like you.
Bottom line: if you are a risk-taker, maybe you can beat the market to the punch, before The Real Crash overwhelms Wall Street, like it did in 1929 and in 2000 and in 2008. Because next time, even though our too-big-to-manage banks expect they’ll get bailed out, the reality is that they’ll go begging for bail-out billions and Congress won’t do it again, without forcing a newer, tougher Glass-Steagall law on the banks.
Statistics: Posted by yoda — Tue Jul 31, 2012 3:37 pm
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In 2008, taxpayers spent $38 billion on food stamps. In 2013, that figure will be $82 billion.
Since 2007, the number of Americans on food stamps has skyrocketed 70 percent to 45 million people–or one out of every seven people living in America.
According to the Wall Street Journal, the U.S. is experiencing a "food stamp crime wave," as the program is now rife with fraud, abuse, and waste.
As Rev. Jesse Jackson has stated, President Barack Obama should consider it "an honor to be a food stamp president."
Statistics: Posted by yoda — Sun Apr 22, 2012 1:58 am
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Central Banking Was Responsible for 2008 Meltdown – Nothing Else
Tuesday, March 20, 2012 – by Staff Report
The meltdown explanation that melts away … Although our understanding of what instigated the 2008 global financial crisis remains at best incomplete, there are a few widely agreed upon contributing factors. One of them is a 2004 rule change by the U.S. Securities and Exchange Commission that allowed investment banks to load up on leverage. This disastrous decision has been cited by a host of prominent economists, including Princeton professor and former Federal Reserve Vice- Chairman Alan Blinder and Nobel laureate Joseph Stiglitz. It has even been immortalized in Hollywood, figuring into the dark financial narrative that propelled the Academy Award-winning film Inside Job. Bethany McLean is a contributing editor at Vanity Fair, and co-author with Joe Nocera of "All the Devils are Here: The Hidden History of the Financial Crisis." Her first book, "The Smartest Guys in the Room," co-written with Peter Elkind, became an Academy Award-nominated documentary. – Reuters
Dominant Social Theme: The meltdown was a catastrophe. It was caused by regulations … taxes … leverage … big business … big government … mortgage products … derivatives … greed … Satan … but one thing is for certain, it wasn’t caused by fiat-monopoly central banking. We know that for sure. Central banking had nothing to do with it ….
Free-Market Analysis: Following the 2008 global economic crash on an almost day-to-day basis, as we have, we’ve regularly made the argument that it was caused by central banking monetary inflation and that its result is bound to be the eventual demise of the dollar reserve system.
We believe we’re being proven correct on both points. We’ve also pointed out that the crash itself was predictable and that the top elites that put this global central banking system in place know full well that cyclically it creates crashes, recessions and now depressions.
But of course there is plenty of pushback. Seems everybody has an opinion about what caused the 2008 crash. And most of these opinions, played out in the mainstream media, are focused eagerly on causes that have nothing to do with central banking.
In other words, these theories are PROTECTIVE of central banking and the damage that monetary stimulation can do. Inevitably, when we read these theories, we tend to notice that those advancing them are apologists for the system as it is. The system of monopoly fiat. The system that crashes regularly and ruins peoples lives as part of its foundering.
This article, a long one (excerpt above), posted at Reuters goes into incredible detail about an obscure rule change that the SEC allowed in 2004. This supposedly allowed big banks to increased leverage that led to the crash. The article sets out to disprove it.
This article is a clever kind of dominant social theme, in our view. Why? Because in debunking a silly argument about why the 2008 crash occurred, it provides readers with the impression that Reuters is a really sophisticated and hard-hitting newswire.
The idea is that Reuters – which is actually a mainstream media mouthpiece for the power elite – would provide us with an article arguing that the removal of regulation was NOT cause of the meltdown illustrates that top Reuters writers are truth seekers.
The power elite that is trying to set up world government is having a bad go of it. The Internet – what we call the Internet Reformation – is slicing away at its fear-based promotions. Many lucid thinkers that use the Internet for reading and writing don’t believe mainstream media articles anymore.
The mainstream media is badly in need of a credibility "pick-me-up." Thus, we argue, articles like this begin to appear. They are very well written, economically literate and academically argumentative. They are meant to impress you and leave you thinking that Reuters itself is a credible and clever place.
Those who publish these kinds of articles are using them as a kind of glorified PR. They are good articles and those at the top of Reuters are hoping their goodness adds a larger luster to mainstream media brands tarnished by the Internet Reformation.
But because it is Reuters doing the writing and editing, these articles – no matter how good they are – inevitably leave stuff out. For instance, we would less trouble believing that if the article mentioned central banking as the cause. But the article, in thousands of words, never gets to central banking. Coincidence?
The article does do us the favor of debunking a certain argument about leverage. But it doesn’t take the next step and explain what really DID happen. Too bad.
The article, as we mentioned, does do us the favor of debunking one widely accepted reason for the meltdown, having to do with regulatory induced leverage.
We never believed it to being with, of course. One reason we knew right off the bat that it wasn’t true was because the financial media maven Simon Johnson was a proponent of this theory.
Anything that Mr. Johnson proposes, in our humble opinion, is likely to be incorrect or at least implausible. He is always trying to hide the culpability of central banking. He is incredibly brilliant person and great writer, but in our view, he is an apologist for power. You can see some of our articles about his theories here:
EU Continues to Stagger
The Quiet Coup
The author writes thousands of words to refute the hypothesis of Simon and others. In fact, she could do it in a few sentences, as follows: "Monopoly monetary inflation is the proximate cause of economic ruin and has ruined economies large and small for thousands of years. There is no need to blame anything else. When power over-prints money, as it inevitably does, the result will be the eventual demise of the civilization in question."
See? That’s not so complex. And it’s the truth. Monopoly central banking systems are entirely unstable. Even non-monopoly systems offering pure fiat are likely unstable because they will generate price inflation. But within a competitive monetary environment, people should have the ability to choose – even clearinghouses that print money.
The REAL problem is when bankers use mercantilism to create and sustain monopoly money printing. Mercantilism is the bane of free-market economies. When bankers pass laws to provide themselves with legal support for their own interests, that economy is on its way to ruin.
This is why central banks are NEVER entirely private entities from what we can tell. Some apologists claim central banks are entirely private but a quick look at almost any central bank shows that certain government laws are necessary to their existence and continued operation.
The Fed, for instance, has been called a private bank, but it took an Act of Congress to establish the Fed and even today, Congress holds hearings and makes appointments to the Federal Reserve Board.
The Fed, like other central banks, is not private. It is mercantilist. It derives its power from the de facto endorsement of the government it helps to fund.
A purely PRIVATE central bank would be a great improvement, in fact, because such a bank would LOSE (or never have) the right to print monopoly fiat. It is this MONOPOLY that is so detrimental to the larger system. And by definition, legal monopolies are generated via government approbation.
How murderous mercantilism is! In a mercantilist monopoly environment, fiat money is like poison. It builds up in the system until it ruins it. This is an ineluctable occurrence. Nothing else is needed. As top bankers print too much money – and they always do within a monopoly fiat regime – the money causes first a great boom and then a great bust.
People lament, for instance, the demise of Glass-Steagall that allowed commercial banks and merchant banks to re-merge. But those same commentators never address the issue of WHY Glass-Steagall was re-addressed.
It was re-addressed because the MANIA surrounding the marketplace mandated that the "business cycle has finally been abolished." In other words, central bank money manias ALWAYS affect regulatory prescriptions. It is almost impossible to stand in the way of a bull market.
Thus, it is only after the fact that the finger-pointing starts. If only this or that regulation hadn’t been abolished or changed, we wouldn’t have had this terrible disaster.
But in fact, it is the mania generated by central banking money printing that sweeps away regulatory barriers the way a raging tidal wave sweeps away all obstacles in its path.
Of course, we are not making an argument for regulation in any case. Regulation can make business worse and more impractical. It can NEVER make things better. Why? Because all regulations – all law – is a price fix, transferring wealth from people who have generated it to people who have not.
This is the dirty secret behind Western regulatory economies, the secret that is never discussed. And thus, once a crash has taken place, the paid sophists come up with all sorts of reasons why "capitalism" failed.
But they will never explain the truth – capitalism there may be, but free-markets don’t exist, nor can they so long as money is retained as a government monopoly.
Money is the most important stuff. It is the lifeblood of an economy. If the blood is poisoned is poisoned by monopoly fiat, then the corpus will be poisoned too.
It is impossible to have a free market within the context of monopoly fiat. Inevitably, you end up with economies that waste wealth on false schemes that are initially seen as viable only because of the wild, false optimism created by crashing waves of monetary fiat. Paper ticker money is like crack. Here’s some more from the article excerpted above:
As Blinder explained in a Jan. 24, 2009 New York Times op-ed piece, one of what he listed as six fundamental errors that led to the crisis came "when the SEC let securities firms increase their leverage sharply."
He continued: "Before then, leverage of 12 to 1 was typical; afterward, it shot up to more like 33 to 1. What were the SEC and the heads of the firms thinking?" More recently, Simon Johnson, a former chief economist at the IMF, said last November that the decision "by the Bush administration, by the SEC to allow investment banks to massively increase their leverage … in terms of the big mistakes in financial history, that’s got to be in the top 10."
It is certainly true that leverage at the investment banks zoomed between 2004 and 2007, before the near collapse. And this narrative of the rule change has plenty of appeal — it serves up villains. Stupid SEC people! Greedy bankers! It also suggests regulators were in the pockets of the big banks, and it offers support for the narrative of financial deregulation that many put at the center of the crisis.
There’s just one problem with this story line: It’s not true. Nor is it hard to prove that. Look at the historical leverage of the big five investment banks — Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley.
The Government Accountability Office did just this in a July 2009 report and noted that three of the five firms had leverage ratios of 28 to 1 or greater at fiscal year-end 1998, which not only is a lot higher than 12 to 1 but also was higher than their leverage ratios at the end of 2006. So if leverage was higher before the rule change than it ever was afterward, how could the 2004 rule change have resulted in previously impermissible leverage?
Of course, it wasn’t leverage per se that destabilized Wall Street and caused the entire financial economy to collapse. What occurred was that an overabundance of money printed over the past 30 years or so eventually created an entirely phony economy.
At some point a tipping point is reached. The financial economy of the West remains the biggest bubble ever blown in the history of humankind. The world is not merely overbanked, it is drowning in financial services and products.
The "market" realized this in 2008 and the system locked up. It took something like US$50 TRILLION in liquidity to unlock it. This will never be admitted by the power elite’s mainstream economic historians and theorists. But it is true.
The world is now not only drowning in dysfunctional and worthless financial facilities, it is drowning in as-yet-uncirculated money that – once it DOES circulate – will tend to destabilize what is left of the system further. The price inflation that will result from all this monetary inflation is fairly inconceivable. This is why we write the dollar reserve system is likely finished … kaput.
One can come up with all sorts of theories as to why there was a crash in 2008 that continues today. But the real reason is because central banks have a monopoly over money and the elites that work for the dynastic families that apparently control these central banks can – and will – always overprint money.
What happened is very simple. The system froze up because so much money printing diverted real energy and resources into wasteful banking enterprises, houses that didn’t need to be built, factories that didn’t need to produce unnecessary and redundant junk, etc.
When the market itself recognized this, the system stopped working and needed tens of trillions of artificial liquidity to galvanize it again. It is still is not producing jobs properly however, because the system itself is distorted and the jobs that it tends to produce are unnecessary ones.
We don’t expect much from the mainstream media anymore. In fact, over time we expect less and less. But it is worth repeating (to your friends and neighbors) that the economy worldwide is not complex. Get rid of monopoly fiat money printing, allow money to compete in the free market and many if not most of the modern economic tragedies will be avoided.
Conclusion: It’s not complicated. But people don’t understand because there is an entire industry of sophists and wily ones dedicated to generating confusion at the expense of truth.
Statistics: Posted by yoda — Tue Mar 20, 2012 12:37 pm
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Former Icelandic Prime Minister Geir Haarde is to go on trial at a special court on charges of negligence in his handling of the 2008 financial crisis.
The country’s three main banks collapsed during economic turmoil.
The failure of Icesave, which hit thousands of savers in the UK and Netherlands, led to a dispute over compensation, which remains unresolved.
Mr Haarde rejects the charges as "political persecution", saying he would be vindicated during the trial.
The proceedings will be held at the Landsdomur court, a special body to try cabinet ministers, which has never before heard a case.
Some Icelanders see the trial of Mr Haarde as scapegoating, while others argue that public accountability is essential following the country’s financial collapse.
Iceland was plunged into a deep recession following the collapse of its three banks, including Icesave’s parent company Landsbanki, in autumn 2008.
Mr Haarde, 60, led the Independence Party government at the time.
He is accused of being negligent because he had not ensured financial safeguards were in place.
The former premier says he was only doing what he thought was best for the country at the time.
When Icesave collapsed, the then UK Prime Minster Gordon Brown accused his Icelandic counterpart of "unacceptable" and "illegal" behaviour after Iceland said it could not give a guarantee to reimburse UK customers of the online bank.
In response, Mr Haarde accused the UK government of "bullying" and bringing down one of its other banks after the Treasury froze the assets of Icelandic institutions in the UK.
Statistics: Posted by yoda — Sun Mar 04, 2012 8:59 pm
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For The Economic Horror Show That Is Coming
The people out there that believe that the U.S. economy is experiencing a permanent recovery and that very bright days are ahead for us should have their heads examined. Unfortunately, what we are going through right now is simply just a period of "hopetimism" between two financial crashes. Things may seem relatively stable right now, but it won’t last long. The truth is that the financial crisis of 2008 was just a warm up act for the economic horror show that is coming. Nothing really got fixed after the crash of 2008. We are living in the biggest debt bubble in the history of the world, and it has gotten even bigger since then. The "too big to fail" banks are larger now than they have ever been. Americans continue to run up credit card balances like there is no tomorrow. Tens of thousands of manufacturing facilities and millions of jobs continue to leave the country. We continue to consume far more than we produce and we continue to become poorer as a nation. None of the problems that caused the crisis of 2008 have been solved and we are even weaker financially than we were back then. So why in the world are so many people so optimistic about the economy right now?
Just take a look at the chart posted below. It shows the growth of total debt in the United States. During the financial crisis of 2008 there was a little "hiccup", but the truth is that not much deleveraging really took place at all. And since the recession "ended", total credit market debt has gone on to even greater heights….
So what does this mean for the future?
Well, if a small "hiccup" in the debt bubble caused so much chaos back in 2008, what is going to happen when this debt bubble finally bursts?
That is something to think about.
Sadly, most Americans seem oblivious to all of this.
If you go out to malls in the wealthy areas of America today, people are charging up a storm. In all, Americans charged a whopping 2.5 trillion dollars on their credit cards during 2011. Way too many people have already forgotten the lessons that we all learned back in 2008.
Of course some Americans pay off their credit cards every month, but way too many Americans are not doing that. In 1980, Americans were carrying 54 million dollars in revolving credit balances. Today, Americans are carrying 794 million dollars in revolving credit balances.
And student loan debt is an even bigger bubble than credit card debt is. As I have written about previously, total student loan debt in America is rapidly approaching a trillion dollars.
So it looks like U.S. consumers have not learned to stay away from debt.
That is not good.
Well, what about the banks?
Has the financial system learned any lessons since 2008?
No, not really.
Sadly, the "too big to fail" banks are now even bigger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011. If they were to fail today, they would be even more of a threat to our financial system than they were back in 2008.
And our major banks continue to be very highly leveraged. In fact, major banks all over the world are absolutely swamped with debt.
The following statistics come from Zero Hedge….
The U.S. banking system is leveraged 13 to 1.
The Japanese banking system is leveraged 23 to 1.
The French banking system is leveraged 26 to 1.
The German banking system is leveraged 32 to 1.
These are insane levels of leverage, and they are just inviting another major financial crisis.
Do you all remember Lehman Brothers? The fact that they were leveraged so highly is what did them in back in 2008. When the value of their holdings declined by just a little bit they were totally wiped out.
Well, during this next financial crisis large financial institutions are going to be wiped out all over the world. Major banks all over the globe are going to be crying out for more bailouts when things take a turn against them.
They are making the exact same mistakes that they made before, and they are going to be expecting more government handouts when things go bad.
Will we ever learn?
So obviously the banking system has not learned any lessons.
What about the federal government?
Well, if you follow my blog regularly, you know that I love to write about how horrific U.S. government debt is.
Unfortunately, over the past four years things have gotten so much worse.
Back in 2008, the U.S. national debt crossed the 10 trillion dollar mark.
Just recently, it crossed the 15 trillion dollar mark.
So now we are in a much weaker position financially to respond to another major financial crisis.
Just check out the chart posted below. This is a recipe for national financial suicide….
During fiscal 2011, the Obama administration stole close to 150 million dollars from our children and our grandchildren every single hour.
At the moment, the legacy of debt that we are passing on to future generations is sitting a grand total of $15,351,406,294,640.49.
But keep in mind that it is going up every single hour.
Meanwhile, our ability to service that debt is declining. We are rapidly getting poorer as a nation.
During 2011, the amount of money that left the United States exceeded the amount of money that entered the United States by more than a half a trillion dollars.
This gap is called a trade deficit, and it is absolutely ripping our economy to shreds.
For a moment, imagine Uncle Sam standing next to a giant pile of money on a map of the United States. Then imagine a half a trillion dollars being taken out of that pile every single year.
So why haven’t we totally run out of money yet?
Well, it is because we borrow those dollars back. In order to maintain our false standard of living, our federal government, our state governments and our local governments have to go out and beg the rest of the world to lend us our dollars back.
Sadly, our government schools have "dumbed-down" the population so much that most of them don’t even know what a "trade deficit" is anymore.
Meanwhile, our economic infrastructure is being gutted like a fish.
Look, I know that I go over this point over and over and over, but it is absolutely imperative that we all understand this.
The half a trillion dollars a year that leaves this country every year could have gone to support businesses and jobs inside the United States.
But instead it is going to support businesses and jobs on the other side of the world.
The consequences of this are absolutely devastating.
According to U.S. Representative Betty Sutton, an average of 23 manufacturing facilities a day closed down in the United States during 2010. Overall, more than 56,000 manufacturing facilities in the United States have shut down since 2001.
Even many so-called "American companies" have been bought up by the rest of the world. The following comes from a recent article posted on Economy In Crisis….
RCA is now a French company, Zenith is a Korean company. Frigidaire is a Swedish company. IBM’s Personal Computer Division—with its 500 patents—is now a Chinese company. Westinghouse Nuclear Energy’s major shareholder is Toshiba—a Japanese Company. Lucent Technologies, a former research division of AT&T, along with all the patents acquired from the beginning of the phone system, is now a French company. In 2008, Brazilian-Belgian brewing company InBev purchased the iconic American brewer Anheuser-Busch, makers of Budweiser. With the sale of these manufacturing companies, the future profit and technologies all belong to foreign entities.
We once had the greatest economic machine in the history of the world.
Now it is being dismantled and bought up by foreigners.
When America’s economic infrastructure declines, that means that there are less jobs available for all of us.
As I wrote about the other day, the employment situation in this country is not getting better and we have never even come close to recovering from the recession that started back in 2008.
During 2008 and 2009, the U.S. economy lost millions of jobs. Since the beginning of 2010, the percentage of the U.S. population that has had a job has remained very stable….
ormally, when a recession ends the percentage of Americans that have a job bounces back pretty dramatically.
So considering the fact that the employment situation has never recovered from the last financial crisis, what is going to happen when the next financial crisis hits?
And most of the jobs that have been "created" during this so-called "recovery" have been low income jobs. In fact, if you look closely at the employment numbers that were released last Friday, you will find that the vast majority of the "new jobs" were part-time jobs.
But you cannot pay a mortgage and support a family on a part-time job.
Sadly, the truth is that median household income in America has been steadily dropping over the past several years. Tens of millions of American families are deeply struggling and more Americans than ever are falling into poverty.
Back in the year 2000, about one out of every nine Americans was living in poverty. Today, about one out of every seven Americans is living in poverty.
All of this is causing a great deal of anxiety in America today. Large numbers of Americans know that something has fundamentally changed, even if they don’t understand the specifics. That is one reason why sites such as this one have become so popular. People want some answers.
And once people get some answers about what is really happening, they tend to want to prepare for the hard times that are coming.
In a few days, a new series on National Geographic entitled "Doomsday Preppers" premieres. The mainstream media is starting to take notice of the growing "prepper" movement in America today. It is estimated that there are at least 2 million "preppers" in the United States at this point. Of course people are "prepping" for a whole host of reasons, but the number one concern among most groups of preppers is the economy.
As the economy crumbles, more Americans than ever have decided that it is not a good thing to be 100% dependent on the system.
Back in 2008 and 2009, millions of Americans suddenly lost their jobs. Because they did not have any finances stored up, large numbers of them also lost their homes. Many went from being solidly middle class to being out on the street in a matter of months.
That doesn’t have to happen to you. Instead of blowing your money on frivolous things, do what you can to set something aside for the difficult times that are on the horizon.
A lot of those "in the know" are quietly making their own preparations. For example, legendary film director James Cameron (Avatar, Titanic and Terminator) has purchased more than 2600 acres of farmland in New Zealand and he is getting out of the U.S. for good apparently.
Unfortunately, most of us do not have the resources for something like that. But what most of us can do is we can change our priorities and start focusing on the things that will help us survive the hard times that are coming.
So are you ready?
Statistics: Posted by yoda — Sun Feb 05, 2012 5:23 pm
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