G-7 Leaders Meeting Sets Course For State Corporatism Rule Over Capital Markets And The World's Population
Saturday, 12. April 2008, 22:48:14
I. The Facts Come From World Socialist Barry Gray, who relates, "that the IMF's Global Financial Stability Report states that the world banks and financial institutions face potential losses of nearly $1 trillion as a result of the bursting of the US housing and credit bubbles. The report says that banks will suffer more than half of the estimated $945 billion losses, with the rest hitting insurance companies, pension funds and other investment firms."
Jaime Caruana, the head of monetary affairs and capital markets at the IMF, said, “The deterioration in credit has moved up and across the entire spectrum.” Alluding to the epidemic of speculation on borrowed funds that led to the crisis, he said there had been a “collective failure to appreciate the extent of leverage in the financial system.”
Acknowledging the potentially catastrophic implications of the credit collapse, Malcolm Knight, the general manager of the Bank for International Settlements, often referred to as the central bankers’ central bank, told the Wall Street Journal that the current turmoil is “probably the most serious financial turbulence in the advanced countries since the Second World War.”"
Dominque Strauss-Kahn, the IMF managing director, told a press conference on Thursday that the current financial turmoil posed the greatest financial crisis since the 1930s, and called for coordinated intervention by governments around the world. He echoed a call made last week by the Institute of International Finance, an association representing big banks, which said there was a “growing case” for government intervention.
Strauss-Kahn directly broached the issue of direct government bailouts of the banks with public funds, saying, “With respect to the banks, if capital buffers cannot be repaired quickly enough by the private sector, use of public money can be examined.”
He dismissed assertions that the credit crisis could be largely restricted to the US, saying, “The crisis is global. The so-called decoupling theory is totally misleading,” He added that so-called developing countries such as China and India would be affected.
The US has already moved in the direction of using taxpayer money to bail out the banks and investment houses. Last month, the Federal Reserve Board engineered the rescue of the investment bank Bear Stearns, BSC, guaranteeing $29 billion of its failing mortgage-backed assets as part of a takeover of the bankrupt investment house by JPMorgan Chase, JPM.
At the same time, the Fed opened up its discount window to provide loans to other investment banks, the first time such a measure had been taken since the banking collapse of the 1930s. In effect, the Fed signaled that it would step in to prevent the failure of any major banking firm, with the cost to be paid ultimately by US taxpayers.
Since last August, the Fed had pumped $300 billion into the US banking system. (With the result that 34% of the Fed's Balance Sheet is now junk, Richard)
According to an April 11 article on the Wall Street Journal web site, the Fed is currently considering contingency plans for expanding its ability to lend money to the banks. These include direct infusions of public funds onto the Fed’s balance sheet from the US Treasury.
These emergency measures have not, however, resolved the underlying crisis of solvency in the financial system, and inter-bank loan rates remain extraordinarily high as banks demand premiums to lend to their counterparts, while their ability to extend credit is reduced by the massive losses they incur from bad bets on subprime mortgage-backed securities and other high-risk investments.
At the same time, the hundreds of billions of cash pumped into the US financial system by the Fed further undermines the value of the US dollar which hit new lows this week against the euro and the Chinese currency. The cash infusions and dollar crisis, in turn, fuel rampant inflation in commodity prices. This week, oil futures hit a new high of $112 per barrel. (In as much as gold trades inversely of the US dollar, the price of gold is continually inflated upward, Richard)
In an extraordinary speech delivered Tuesday before the Economic Club of New York, former Fed Chairman Paul Volcker chided current Fed Chairman Ben Bernanke for going to “the very edge” of the central bank’s legal authority, and criticized bank executives and government regulators for creating “a demonstratively fragile financial system that has produced unimaginable wealth for some while repeatedly risking a cascading breakdown of the system as a whole.”
Asked whether he still predicted a dollar crisis, Volcker said, “You don’t have to predict it. We’re in it.” (I've written extensively about banks being insolvent, and how the Fed's actions have created a run on both the US Dollar, and also US Treasury bonds, Richard)
The credit crunch is increasingly impacting the so-called “real economy,” producing a spreading slowdown in economic activity, which, in turn, exacerbates the financial crisis.
The Financial Stability Forum, a body representing financial ministers and regulators from around the world, presented a report Friday to the Group of Seven financial ministers meeting calling for more disclosure and better risk management by financial institutions and a greater exchange of information between central bankers and regulators. It recommended requiring institutions to hold more capital and maintain larger cash reserves, but proposed no significant increase in government supervision of the banks.
The report is expected to be approved by the G7, but this is little more than window dressing meant to conceal sharp divisions among the member states. While the Fed has dramatically cut its target short-term interest rate since September, bringing it down from 5.25 percent to 2.25 percent, the European Central Bank has held its rate steady at 4 percent, and again this week refused to follow the Fed’s lead and reduce the eurozone rate. The divergence in policy has intensified the dollar crisis, as speculators and investors shift their holdings from dollars to euros. (The shifting to the Euro, FXE, along with the rise of the Yen, FXY, has been the lever driving down the US dollar and the raising the price of gold, Richard)
On Wednesday, the US responded to the IMF economic growth report by publicly disavowing its projections for the US economy as “unduly pessimistic.” US Treasury spokesmen also rejected Strauss-Kahn’s call for government intervention on a global level to deal with the financial crisis.
II. An analysis comes from Austrian Economist Mike Mish Sheldon, who questions "What Exactly Is The Fed's Plan" and answers, "Careful review shows there is no plan other than lies, deceit, and what best suits those who caused the problem".
III. Another analysis comes from farmer and builder Elaine Meinel Supkis, who relates that :The G7 Meet To Plot Return To Old Status Quo" and shares that: "I constantly watch the G7 news because this imperialist collection of nations is at the heart of the banking collapse. They and only they have been hard at work, trying to flood the world with more red ink in a benighted attempt at bringing 'liquidity' to the vast seas of red ink they, themselves, created. Even as China tries to sop up this red ink in its FOREX reserves which are racing towards $2 trillion, the entire focus of the G7 is for more red ink. Even as 'money' vanishes as 'assets' collapse in value in the West, the 'cure' is more red ink. So today, we look at some debt statistics and past banking law changes in the US. And how the US uses debt to create money. The great wellspring here is government debt. Indeed, England and the US are in competition to see who can go the deepest into debt. This happens to be the same imperial complex that has ruled the world for the last 200 years. And the British half has teetered on bankruptcy more than once during this reign.
The cruel reality of devolution can't be stopped by any government or banking system. This money MUST vanish one way or another. If necessary, by being literally blown up. Note how the US is egging on World War III. We are harassing Iran mercilessly. The latest hearings about our noxious and utterly illegal invasion of Iraq has now focused its irate eye upon Iraq's neighbor who was invaded by Iraq in the past: Iran. And this is driving up world oil prices which now sit at over $111 a barrel and rising. And this is destroying the wealth in the Cave of Death!
The connection between wars, debts, government refusal to tax so as to avoid debt lies not in politics but in the banking realm: debts from the governments is RICHES for the bankers! (Yes, the Federal Reserves' actions privatize profits and socialize risk and leveraged debt onto the taxpaying people, Richard)
The global banking crisis launched by reckless lending by Britain and the USA is taking its toll in the bond markets. As the Fed frantically drops interest rates well below the real rate of inflation, essentially giving away money to the top banks and now, to J.P. Morgan, at normal bond markets, the cost of finance has shot up higher and higher and the spread has rapidly widened between what the bankers bid for these bonds and what the Fed is feeding these same bankers to keep their reserves from collapsing. (With the result also, that now 34% of the Fed's Balance Sheet is junk, starting a run both on the US Dollar as well as the US Treasury Bonds; it is only a trickle now, but will soon become a raging river, Richard)
This bizarre approach to economic rescue will end with the Fed gaining ever-more power from frightened politicians in the pay of the biggest investment bankers. We look dolefully upon the sight of all the chickens begging the foxes to save them.
It is not fixing anything at all. And if the G7 reassert the status quo, this means the fearful $600+ trillion Derivatives Beast. will grow even bigger and nastier! And will eat us all up. Isn't that something to look forwards to?
IV. Analysis of the Financial Stability Forum Report by Jesse is that it is only so much foo-foo-dust.
V. Richard's Analysis
A. Bernanke Has Acted To Nationalize The Profits, Socialize The Losses, And De-Lever Loans Onto The US Taxpayers.
Jeannie Aversa of the Associated Press reports that Wall Street brokerages are borrowing $38.1 billion a day from Federal Reserve; and now Tom Bawden and Dearbail Jordan of the Times Online report that Federal Reserve staff has moved into offices of investment banks to monitor activities.
The truth is that capitalism, as it has been known died when the Federal Reserve underwrote the took over of Bear Stearns, BSC, by JP Morgan, JPM: we have a pre Bear Stearns Capitalism; and a Post Bear Stearns State Corporatism; here a plato oligarchy, announces Framework Agreements, and rules over the finance, commerce and trade sectors of the North American continent.
Congress has definitely had a hands' off approach to the Fed's and OFHEOs announcements; and, none of the senators suggested that the heads of major Wall Street firms should be held accountable for, in effect, using the banking system as a giant casino during it's April 3, 2008 investigations; furthermore, Congress has its own Orwellian provisions in the The Foreclosure Prevention Act, which is newspeak, for the Bank and Builder Bailout Act.
The SEC has abandoned enforcement of the mark to market provision of FASB 157, so we now have mirage accounting in the investment banking, banking and real estate sectors.
B. The Real Investment Risk Is Not Depreciating Stocks And Bonds, But Rather Access To One's Capital Should A Systemic Financial Meltdown Occur.
I've been recommending that one go short UYG, UWM, or KBE, but no more, as a dramatic one day fall in value was reported on October 24, 1929 where according to the New York Times: "in the most sweeping and farreaching decline of the year, and one which was made on a tremendous volume of liquidation, the market crumbled yesterday afternoon, most stocks breaking through the "old low prices" of the October break, and some to the year's minimum points".
Such a one day investment collapse, could easily happen again; and this time one may not have access to one's one's securities, or even money market accounts. One may be frozen out or put out.
Frozen out as Maria Slade reports in her March 13, 2008 article, in the NewZealand Herald that broker, ING, suspended withdrawals for 8,000 from two of its funds, the $353 million, ING Diversified Yield Fund, and the $168 million, ING Regular Income Fund.
Or put out, as Herb Greenberg relates in his March 17, 2008, Moneywatch Blog article where he doesn't want to cause panic, but says: "One thing that is getting little in the way of attention here is the question of whether investors should have investments in their name or street name. Many brokerage accounts are automatically opened as margin accounts, or with margin features, which means if a brokerage runs into trouble, you become just another creditor".
C. Dollar Cost Averaging An Investment At Bullion Vault Is Warranted So As To Preserve And Protect One's Wealth.
If one believes that gold and gold alone is the sole means of wealth preservation and management, the two greatest risks now to the investor are: one, not having 100% access to one's cash or money wealth in a system wide financial emergency, and two, the risk of investing in gold and seeing it depreciate in value until it rises again due to a hord of investors seeking safety in hard metals.
Roy Martens relates in Safehaven.com article 'A Golden Bottom': "we have to be cautious at this point, because there could be some more selling pressure in the coming month. The RSI, DMI (selling power) and MACD are all in selling mode, and a further drop towards the $850 support could be next before a new wave higher can begin. However, should Gold manage to rise back above the MA's and especially the last (B) high around $965, we will be handed our first clear signs that the correction has run its course."
Mike Paulenoff writing in Safehaven.com article Gold Highs, Dollar Lows Not for Long sees a "need another downleg to complete a larger correction off of their March 17 high at $1,033."
I recommend a mini-max investment strategy of minimizing risks and maximizing potential: I recommend that one 'dollar cost average' buys of gold at BullionVault.com.
VI. Related Articles
Ron Paul Lectures Bernanke: U.S. Moving Towards Fascism by Tradencheese
Bank Rescues Means Exact Replication Of Great Depression by Elaine Meinel Supkis
Rich West Sells Gold; Asian Nations Sell Dollars? by Adrian Ash
Jaime Caruana, the head of monetary affairs and capital markets at the IMF, said, “The deterioration in credit has moved up and across the entire spectrum.” Alluding to the epidemic of speculation on borrowed funds that led to the crisis, he said there had been a “collective failure to appreciate the extent of leverage in the financial system.”
Acknowledging the potentially catastrophic implications of the credit collapse, Malcolm Knight, the general manager of the Bank for International Settlements, often referred to as the central bankers’ central bank, told the Wall Street Journal that the current turmoil is “probably the most serious financial turbulence in the advanced countries since the Second World War.”"
Dominque Strauss-Kahn, the IMF managing director, told a press conference on Thursday that the current financial turmoil posed the greatest financial crisis since the 1930s, and called for coordinated intervention by governments around the world. He echoed a call made last week by the Institute of International Finance, an association representing big banks, which said there was a “growing case” for government intervention.
Strauss-Kahn directly broached the issue of direct government bailouts of the banks with public funds, saying, “With respect to the banks, if capital buffers cannot be repaired quickly enough by the private sector, use of public money can be examined.”
He dismissed assertions that the credit crisis could be largely restricted to the US, saying, “The crisis is global. The so-called decoupling theory is totally misleading,” He added that so-called developing countries such as China and India would be affected.
The US has already moved in the direction of using taxpayer money to bail out the banks and investment houses. Last month, the Federal Reserve Board engineered the rescue of the investment bank Bear Stearns, BSC, guaranteeing $29 billion of its failing mortgage-backed assets as part of a takeover of the bankrupt investment house by JPMorgan Chase, JPM.
At the same time, the Fed opened up its discount window to provide loans to other investment banks, the first time such a measure had been taken since the banking collapse of the 1930s. In effect, the Fed signaled that it would step in to prevent the failure of any major banking firm, with the cost to be paid ultimately by US taxpayers.
Since last August, the Fed had pumped $300 billion into the US banking system. (With the result that 34% of the Fed's Balance Sheet is now junk, Richard)
According to an April 11 article on the Wall Street Journal web site, the Fed is currently considering contingency plans for expanding its ability to lend money to the banks. These include direct infusions of public funds onto the Fed’s balance sheet from the US Treasury.
These emergency measures have not, however, resolved the underlying crisis of solvency in the financial system, and inter-bank loan rates remain extraordinarily high as banks demand premiums to lend to their counterparts, while their ability to extend credit is reduced by the massive losses they incur from bad bets on subprime mortgage-backed securities and other high-risk investments.
At the same time, the hundreds of billions of cash pumped into the US financial system by the Fed further undermines the value of the US dollar which hit new lows this week against the euro and the Chinese currency. The cash infusions and dollar crisis, in turn, fuel rampant inflation in commodity prices. This week, oil futures hit a new high of $112 per barrel. (In as much as gold trades inversely of the US dollar, the price of gold is continually inflated upward, Richard)
In an extraordinary speech delivered Tuesday before the Economic Club of New York, former Fed Chairman Paul Volcker chided current Fed Chairman Ben Bernanke for going to “the very edge” of the central bank’s legal authority, and criticized bank executives and government regulators for creating “a demonstratively fragile financial system that has produced unimaginable wealth for some while repeatedly risking a cascading breakdown of the system as a whole.”
Asked whether he still predicted a dollar crisis, Volcker said, “You don’t have to predict it. We’re in it.” (I've written extensively about banks being insolvent, and how the Fed's actions have created a run on both the US Dollar, and also US Treasury bonds, Richard)
The credit crunch is increasingly impacting the so-called “real economy,” producing a spreading slowdown in economic activity, which, in turn, exacerbates the financial crisis.
The Financial Stability Forum, a body representing financial ministers and regulators from around the world, presented a report Friday to the Group of Seven financial ministers meeting calling for more disclosure and better risk management by financial institutions and a greater exchange of information between central bankers and regulators. It recommended requiring institutions to hold more capital and maintain larger cash reserves, but proposed no significant increase in government supervision of the banks.
The report is expected to be approved by the G7, but this is little more than window dressing meant to conceal sharp divisions among the member states. While the Fed has dramatically cut its target short-term interest rate since September, bringing it down from 5.25 percent to 2.25 percent, the European Central Bank has held its rate steady at 4 percent, and again this week refused to follow the Fed’s lead and reduce the eurozone rate. The divergence in policy has intensified the dollar crisis, as speculators and investors shift their holdings from dollars to euros. (The shifting to the Euro, FXE, along with the rise of the Yen, FXY, has been the lever driving down the US dollar and the raising the price of gold, Richard)
On Wednesday, the US responded to the IMF economic growth report by publicly disavowing its projections for the US economy as “unduly pessimistic.” US Treasury spokesmen also rejected Strauss-Kahn’s call for government intervention on a global level to deal with the financial crisis.
II. An analysis comes from Austrian Economist Mike Mish Sheldon, who questions "What Exactly Is The Fed's Plan" and answers, "Careful review shows there is no plan other than lies, deceit, and what best suits those who caused the problem".
III. Another analysis comes from farmer and builder Elaine Meinel Supkis, who relates that :The G7 Meet To Plot Return To Old Status Quo" and shares that: "I constantly watch the G7 news because this imperialist collection of nations is at the heart of the banking collapse. They and only they have been hard at work, trying to flood the world with more red ink in a benighted attempt at bringing 'liquidity' to the vast seas of red ink they, themselves, created. Even as China tries to sop up this red ink in its FOREX reserves which are racing towards $2 trillion, the entire focus of the G7 is for more red ink. Even as 'money' vanishes as 'assets' collapse in value in the West, the 'cure' is more red ink. So today, we look at some debt statistics and past banking law changes in the US. And how the US uses debt to create money. The great wellspring here is government debt. Indeed, England and the US are in competition to see who can go the deepest into debt. This happens to be the same imperial complex that has ruled the world for the last 200 years. And the British half has teetered on bankruptcy more than once during this reign.
The cruel reality of devolution can't be stopped by any government or banking system. This money MUST vanish one way or another. If necessary, by being literally blown up. Note how the US is egging on World War III. We are harassing Iran mercilessly. The latest hearings about our noxious and utterly illegal invasion of Iraq has now focused its irate eye upon Iraq's neighbor who was invaded by Iraq in the past: Iran. And this is driving up world oil prices which now sit at over $111 a barrel and rising. And this is destroying the wealth in the Cave of Death!
The connection between wars, debts, government refusal to tax so as to avoid debt lies not in politics but in the banking realm: debts from the governments is RICHES for the bankers! (Yes, the Federal Reserves' actions privatize profits and socialize risk and leveraged debt onto the taxpaying people, Richard)
The global banking crisis launched by reckless lending by Britain and the USA is taking its toll in the bond markets. As the Fed frantically drops interest rates well below the real rate of inflation, essentially giving away money to the top banks and now, to J.P. Morgan, at normal bond markets, the cost of finance has shot up higher and higher and the spread has rapidly widened between what the bankers bid for these bonds and what the Fed is feeding these same bankers to keep their reserves from collapsing. (With the result also, that now 34% of the Fed's Balance Sheet is junk, starting a run both on the US Dollar as well as the US Treasury Bonds; it is only a trickle now, but will soon become a raging river, Richard)
This bizarre approach to economic rescue will end with the Fed gaining ever-more power from frightened politicians in the pay of the biggest investment bankers. We look dolefully upon the sight of all the chickens begging the foxes to save them.
It is not fixing anything at all. And if the G7 reassert the status quo, this means the fearful $600+ trillion Derivatives Beast. will grow even bigger and nastier! And will eat us all up. Isn't that something to look forwards to?
IV. Analysis of the Financial Stability Forum Report by Jesse is that it is only so much foo-foo-dust.
V. Richard's Analysis
A. Bernanke Has Acted To Nationalize The Profits, Socialize The Losses, And De-Lever Loans Onto The US Taxpayers.
Jeannie Aversa of the Associated Press reports that Wall Street brokerages are borrowing $38.1 billion a day from Federal Reserve; and now Tom Bawden and Dearbail Jordan of the Times Online report that Federal Reserve staff has moved into offices of investment banks to monitor activities.
The truth is that capitalism, as it has been known died when the Federal Reserve underwrote the took over of Bear Stearns, BSC, by JP Morgan, JPM: we have a pre Bear Stearns Capitalism; and a Post Bear Stearns State Corporatism; here a plato oligarchy, announces Framework Agreements, and rules over the finance, commerce and trade sectors of the North American continent.
Congress has definitely had a hands' off approach to the Fed's and OFHEOs announcements; and, none of the senators suggested that the heads of major Wall Street firms should be held accountable for, in effect, using the banking system as a giant casino during it's April 3, 2008 investigations; furthermore, Congress has its own Orwellian provisions in the The Foreclosure Prevention Act, which is newspeak, for the Bank and Builder Bailout Act.
The SEC has abandoned enforcement of the mark to market provision of FASB 157, so we now have mirage accounting in the investment banking, banking and real estate sectors.
B. The Real Investment Risk Is Not Depreciating Stocks And Bonds, But Rather Access To One's Capital Should A Systemic Financial Meltdown Occur.
I've been recommending that one go short UYG, UWM, or KBE, but no more, as a dramatic one day fall in value was reported on October 24, 1929 where according to the New York Times: "in the most sweeping and farreaching decline of the year, and one which was made on a tremendous volume of liquidation, the market crumbled yesterday afternoon, most stocks breaking through the "old low prices" of the October break, and some to the year's minimum points".
Such a one day investment collapse, could easily happen again; and this time one may not have access to one's one's securities, or even money market accounts. One may be frozen out or put out.
Frozen out as Maria Slade reports in her March 13, 2008 article, in the NewZealand Herald that broker, ING, suspended withdrawals for 8,000 from two of its funds, the $353 million, ING Diversified Yield Fund, and the $168 million, ING Regular Income Fund.
Or put out, as Herb Greenberg relates in his March 17, 2008, Moneywatch Blog article where he doesn't want to cause panic, but says: "One thing that is getting little in the way of attention here is the question of whether investors should have investments in their name or street name. Many brokerage accounts are automatically opened as margin accounts, or with margin features, which means if a brokerage runs into trouble, you become just another creditor".
C. Dollar Cost Averaging An Investment At Bullion Vault Is Warranted So As To Preserve And Protect One's Wealth.
If one believes that gold and gold alone is the sole means of wealth preservation and management, the two greatest risks now to the investor are: one, not having 100% access to one's cash or money wealth in a system wide financial emergency, and two, the risk of investing in gold and seeing it depreciate in value until it rises again due to a hord of investors seeking safety in hard metals.
Roy Martens relates in Safehaven.com article 'A Golden Bottom': "we have to be cautious at this point, because there could be some more selling pressure in the coming month. The RSI, DMI (selling power) and MACD are all in selling mode, and a further drop towards the $850 support could be next before a new wave higher can begin. However, should Gold manage to rise back above the MA's and especially the last (B) high around $965, we will be handed our first clear signs that the correction has run its course."
Mike Paulenoff writing in Safehaven.com article Gold Highs, Dollar Lows Not for Long sees a "need another downleg to complete a larger correction off of their March 17 high at $1,033."
I recommend a mini-max investment strategy of minimizing risks and maximizing potential: I recommend that one 'dollar cost average' buys of gold at BullionVault.com.
VI. Related Articles
Ron Paul Lectures Bernanke: U.S. Moving Towards Fascism by Tradencheese
Bank Rescues Means Exact Replication Of Great Depression by Elaine Meinel Supkis
Rich West Sells Gold; Asian Nations Sell Dollars? by Adrian Ash
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