Beyond The Age Of Usury - The Great Deleveraging Scam
As you read this, the American bailout is reaching epic and fatal proportions of more than 8 trillion and the worst is not over yet.
Actually, the current trends are already much worse than depression, though because of some banking toxic tricks and frauds, risks are being constantly shifted down the social ladder deteriorating the consumers purchasing power forever. There's nothing that can rescue the system as the crisis was built into the system itself.
Read *Money and the Crisis of Civilization
Although this has not been aired on any major TV broadcast, when the world Leaders got together to discuss our fate last, they admitted to being incapable of doing anything.
That we are all screwed. Global wealth destruction amounts to $27 trillion, and that is far from over.
Among many other terrifying recent events, discount window borrowing (from the Fed. Reserve) averaged a record $437.5 billion per day, and that is not included in the cumulative trillion package. Read *trillion package!
In a debt-based economy, competition translates into a great crash enhancer. Take this housing bubble, its engineers, which couldn't do anything to stop the infectious exuberance, figuring that market saturation would eventually have the last word.
This didn't prevent them from firmly believing that prices had some room to run up, and everybody competed to get the very last piece of the pie.
What is truly outrageous is that we boarded onto the Titanic because Credit Rating Agencies sold us triple AAA rated JUNK BONDS.
(Complex securities concocted by math geniuses and PhD types. The only problem is that they didn't have any data to rely on, and they did not go away because the profit stakes were too huge - the more triple AAA debt rated products on the market the more business they would get.)
The Federal Reserve Usury System
The global leverage is about $400 TRILLION or so, and the world Gross Domestic Product is less than $70 TRILLION.
This big picture helps uncover the hidden goal of fractional banking and its ensuing elementary conclusion: that Fiat money, which is backed by confidence only, is designed to eliminate competition, one step at the time.
Now the new scheme is the global currency, which is going to consolidate the field of banking even further during/after the Great Deleveraging. By the way, deleverage is again one of those convoluted terms invented to mask reality. Deleverage means (partial or complete) destruction of the debt-vortex unfolding with a domino effect.
Intended Massive Bank Failures
These days, capitalism bashing runs high on the agenda of many pundits, and for which they blame in the name of evil - deregulation.
This real estate bubble, now bringing the financial system on its knees, was made possible with the intended failure of regulation. It was regulated to be this way.
Yes, this was an original intent and it becomes crystal clear in
this Financial Crisis, that the elites have the habit to design laws for themselves; that is why the people get fooled every time they put faith into a ruling body. Every civilization's collapse precisely occurs because of that; yet people would rather think that what goes up must go down theory is beyond their control.
The delusion consists in persisting that hope is key for a real change. Indeed, did we really have to wait thousands of years to find ourselves confronted to with the current events, and finally admit why hope did absolutely nothing; that We The People neglected throughout the milennia to teach a generation to the next why debts and consumerism' aren't bedfellows.
Obviously politicians never made it a specific educational platform for high school students.
Instead they institutionalize blind speculation and spending when times are good and then implement the bailout of their bankrupt thinking.
It thus becomes greatly ironic to listen to Sir Evelyn de Rothschild calling for action since the latter doesn't provide any solutions but altruistic half-truths and rants. For how long will this cynicism continue .
Sir Evelyn de Rothschild talks about the GLOBAL FINANCIAL CRISIS ...
Important Online Books
Charles Mackay described in his 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, that what is happening today is nothing new.
Read it online ...
*Extraordinary Popular Delusions and the Madness of Crowds
Read the views of
*Harvard's Kenneth Rogoff who has identified 148 crises since 1870 in which a country experienced a cumulative decline in gross domestic product (G.D.P.) of at least 10 percent.
Read Online ... *The Economic Consequences of the Peace by John Maynard Keynes 1919
The Wall Streeters viewed themselves smarter that we are in this giga-mess. They banked on gullibility and it worked out as usual. Exactly, as usual. Charles Mackay described in his 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, that what is happening today is nothing new.
There have been 148 crises over a 140 year period and people don't still get it? How couldn't this be an incentive to warn populations when bubbles are forming? Should we really believe Greenspan when he says the Fed can only identify a bubble when it has popped and only then intervene to clean up the mess?
The crowds are just too mesmerized by the 'Golden Boys' way of life to see the trap they keep falling into every now and then - confusing debts with assets and otherwise.
Now that it all becomes clearer, who will give charity WHEN 60% of the population becomes poor overnight and another 30% can barely survive? Meanwhile Businessweek praises the 50 Top American Givers without even asking where did charity lead us since the U.S Government found out that child hunger rose 50%. We are now staring into the abyss?Stumble It!
"The most hated sort of wealth getting and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest. And this term interest, which means the birth of money from money is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth, this is the most unnatural." - Aristotle (1258b Politics)
Chinese Prepare For Unrest
From one extreme to the other: in the sweatshop parallel universe.
*Chinese ready themselves for mass social unrest.
In a blunt statement, the chairman of China's largest sovereign wealth said that China won't rescue Western banks. There too, the government has decided to embark on a spending highway with £373 billion bail-out package, and this may also imply the eventual dumping of the nefarious US dollar already affecting the rich city of Dubai where speculators are throwing in the towel as a lending drought bursts the 'Desert Bubble'.
The most comedic element in this grand scale drama is the story of Donald Trump who sues the banks for $3 BILLION for having failed to foresee the housing collapse that is now damaging his reputation in order to avoid the $40 Million he owes in banking interests.
In the Vanity Fair December issue, a columnist wrote an extremely well articulated piece, which also reveals the latest estimate of jobs New York is going to lose, both on and off Wall Street, amounting to 160,000 to start with. Michael Shnayerson's intro reads like a hook scene:
... Even many of the wealthiest players are retrenching. Others, like the Lehman Brothers bankers who borrowed against their millions in stock, have lost everything. Hedge fund managers try to sell their luxury homes, while trophy wives are hocking their jewelry. Pain is being felt on St. Barth’s and at Sotheby’s, on benefit gala committees and at the East Hampton Airport, as the world of the Big Rich collapses, its culture in shock and its values in question.
Last week Bernanke said that he was not against the possibility to drive interest rates down to near zero if necessary but urged decisive action to protect the economy... the meaning of this can be found in the reason why Bernanke contemplates radical plans to inject cash directly into the economy - the nuclear option - to be used only when interest rates approach zero; an action seconded by President of the European Central Bank Jean-Claude Trichet, hinting in the press conference to announce the ECB's 75 basis point rate cut that it may also consider "nuclear options".
The term "nuclear" ought to be taken literally in this particular case. If a well known market guru such as Marc Farber didn't let himself be duped, it should scare the hell out of you.
In a recent CNBC interview, an outraged Farber calmly explained what the stakes were, as concluding that world central bankers were merely imploding the world economy...
Marc Faber - 2009 To Be Catastrophic
For Global Economy Videos Part1 & Part2
Beyond The Age Of Usury
Because the very premise of usury creates endless inflation, which in turn reduces the purchasing power, extreme materialism dismantles the fabric of societies: everybody prioritizes the need for cash to the detriment of communities, neglecting friends and family. This causes the goods and services to multiply endlessly since people are too busy to chase money - but what for in the end?
Predictions Come True (2002-2009)
As for the corporations, they do not see any incentives in creating long-term perspectives: when loans are so easily available and knowing that more voracious competitors will borrow to take over whatever natural resources there is no time to lose!
Polluting nature, cartelizing the means of production, human exploitation, bribery, collusion to maximize earnings are not diseases but symptoms. This all highlights the gap between people's creativity and their needs.
We are truly heading toward a terrifying and inevitable crisis of civilization and this is our very last warning before being plunged into an era where money and food will be scarce for many years to come.
Wars may well be the only weapons of unethical governments if civil unrest on a large scale threatens their very existence; they will resort to armed conflicts which will have been financed by their taxpayers.
Yes, you got it: usury also allows killings and destruction to be a lot more devastating. Contrary to the popular belief, money is not the root of all evil but usury is.
To be continued!
Monday, January 05, 2009
The American Pipe Dream & Why Obama Will Fail
Obama The American Prayer Song
Prediction - Failed Economy Under Obama
The current crisis is not just a passing storm, but the prelude to a dramatic sea change in economic conditions. That is the new normal.
With the bursting of history’s biggest credit bubble — one that spans the far reaches of the globe — has come a deflationary tsunami that is moving much faster than authorities attempts to fight back through reflationary sandbagging.
Moreover, because the surge is hitting so many countries at once, even if the U.S. government (and others) are throwing around cheap credit and taxpayer bailouts like its Halloween candy, it’s still no match for aggregate level of wealth destruction taking place in a globalized world.
*Fear of Deflation Lurks as Global Demand Drops
As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years. The word for this is deflation, or declining prices, a term that gives economists chills.
World Wide Deflation
Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the heart of Japan’s so-called lost decade after the catastrophic collapse of its real estate bubble at the end of the 1980s — a period in which some experts now find parallels to the American predicament.
With economies around the globe weakening, demand for oil, copper, grains and other commodities has diminished, bringing down prices of these raw materials. But prices have yet to decline noticeably for most goods and services, with one conspicuous exception — houses. Still, reduced demand is beginning to soften prices for a few products, like furniture and bedding, which are down slightly since the beginning of 2007, according to government data. Prices are also falling for some appliances, tools and hardware.
Only a few months ago, American policy makers were worried about the reverse problem — rising prices, or inflation — as then-soaring costs for oil and food filtered through the economy. In July, average prices were 5.6 percent higher than a year earlier — the fastest pace of inflation since 1991. But by the end of September, annual inflation had dipped to 4.9 percent and was widely expected to go lower.
The new worry is that in the worst case, the end of inflation may be the beginning of something malevolent: a long, slow retrenchment in which consumers and businesses worldwide lose the wherewithal to buy, sending prices down for many goods. Though still considered unlikely, that would prompt businesses to slow production and accelerate layoffs, taking more paychecks out of the economy and further weakening demand.
The danger of this is the difficulty of a cure. Policy makers can generally choke off inflation by raising interest rates, dampening economic activity and reducing demand for goods. But as Japan discovered, an economy may remain ensnared by deflation for many years, even when interest rates are dropped to zero: falling prices make companies reluctant to invest even when credit is free.
Through much of the 1990s, prices for property and many goods kept falling in Japan. As layoffs increased and purchasing power declined, prices fell lower still, in a downward spiral of diminishing fortunes. Some fear the American economy could be sinking toward a similar fate, if a recession is deep and prolonged, as consumers lose spending power just as much of Europe, Asia and Latin America succumb to a slowdown.
American policy makers have tools to avert the sort of deflationary black hole that captured Japan. Deflation fears last broke out in the United States in 2003, but the Federal Reserve defeated the menace with low interest rates that kept the economy growing. This time, the Fed is again being aggressive, dropping its target rate to 1 percent this week. And the government’s various bailout plans have also pumped money into the economy.
If you print enough money, you create inflation.
But even as American authorities unleash credit, the threat has intensified. Not since the Depression have so many countries faced so much trouble at once. The financial crisis has gone global, like a virus mutating in the face of every experimental cure. From South Korea to Iceland to Brazil, the pandemic has spread, bringing with it a tightening of credit that has starved even healthy companies of finance.
We’re entering a really fierce global recession.
A significant financial crisis has been allowed to morph into a full-fledged global panic. It’s a very dangerous situation. The danger is that instead of having a few bad years, we’ll have another lost decade.
Global economic growth has flourished in recent years, much of it fertilized with borrowed investment. This raised kingdoms of houses in Florida and California, steel mills in Ukraine, slaughterhouses in Brazil and shopping malls in Turkey.
That tide is now moving in reverse. Banks and other financial institutions are reckoning with hundreds of billions of dollars worth of disastrous investments. As they struggle to rebuild their capital, they are halting loans to many customers, demanding swift repayment from others and dumping assets — homes sold out of foreclosure, investments linked to mortgages and corporate loans. Selling is pushing prices down further, making the assets left on balance sheets worth less, in some cases prompting another round of sales.
You get this adverse feedback loop where assets keep falling in value. You’re essentially putting big downward pressure on the global economy.
In past crises, like those that devastated Mexico in 1994 and much of Asia in 1997 and 1998, weak economies managed to recover by exporting aggressively, not least to the United States.
But American consumers are battered this time. After years of borrowing against homes and tapping credit cards, consumers are pulling back.
Global Appetite Shrinks
From Asia to Latin America, exports are slowing and should continue to do so as the global appetite shrinks. This is spawning fears that major producers like China and India — which vastly expanded production capacity in recent years — will have to dump products on world markets to keep factories running and stave off unemployment, pressing prices lower.
Earlier this year, some analysts suggested that American businesses might continue to prosper, even as consumers pulled back at home, by selling into foreign markets. Caterpillar, the construction equipment manufacturer, might suffer declining sales in the United States, the argument went, but huge projects from Russia to Dubai required front-end loaders. Australia and Brazil needed earth-movers to expand mining operations as they sent iron ore toward smelters in Northeast Asia.
China has long been at the center of claims that the world could keep growing regardless of American troubles. China has been importing cotton from India and the United States; electronics components from South Korea, Malaysia and Taiwan; timber from Russia and Africa; and oil from the Middle East.
But many of the finished goods China produces with these materials have ultimately landed in the United States, Europe and Japan. When consumers pull back in those countries, Chinese factories feel the impact, along with their suppliers around the globe.
Fewer laptop computers shipped from China spells less demand for chips. Last week, Toshiba — Japan’s largest chip maker — said it lost $275 million from July to September, blaming its troubles on a world glut.
Lower demand for flat-screen televisions means less need for flat-panel glass displays. This month, Samsung, the Korean electronics giant, said a global oversupply in that item caused its biggest dip in quarterly profits in three years.
Now, a glut of products may be building in the United States. Orders for trucks used by business have plummeted. Investments in industrial equipment are declining. Yet inventories have grown.
The Mother of All Budget Deficits
Obama is betting heavily that massive government spending will create millions of new jobs. Still, it must be asked: Why does Obama prefer a fiscal policy geared toward increased spending rather than the tax cuts he promised ad nauseam during his campaign?
The answer is painfully simple – and illustrates the Bush-crafted box Obama finds himself in. Beleaguered consumers would probably not spend any new tax cuts but rather pay off debts – or stuff them under the figurative mattress.
That’s why Obama is taking a cue from Franklin Roosevelt and planning to invest massively in public-works projects, such as repairing the nation’s crumbling roads and bridges, expanding broadband access, and creating “green” jobs.
Yet even this ambitious plan – a product of the Keynesian belief in government efforts to induce spending and investment – may not achieve its intended result.
First, and foremost, there is the matter of how Obama’s mother of all budget deficits will be financed; there’s talk now of a Trillion dollars or more in new spending over the next two years. There are only two politically feasible ways: sell bonds or print money (raising taxes is off the table.)
The government cannot spend the economy into prosperity because all government spending is a burden on the economy. The only thing the government can do is empower individuals to become prosperous on their own.
Obama often points to the public works projects started by FDR and Eisenhower as examples of how his policy could work. In those instances government spending was still a burden on the economy, but it was a burden that resulted in a net gain for the country as a whole. Essentially, new infrastructure that increased mobility and the availability of goods and services. Better roads. More power plants. These things are what stimulated the economy under FDR and Eisenhower (Eisenhower more so than FDR), not the spending itself.
"... The old metro design was based on a hub-and-spoke system — a series of highways that converged on an urban core. But in an age of multiple downtown nodes and complicated travel routes, it’s better to have a complex web of roads and rail systems.
It’s also before the spending drought that is bound to follow the spending binge. Because we’re going to be spending $1 trillion now on existing structures and fading industries, there will be less or nothing in 2010 or 2011 for innovative transport systems, innovative social programs or anything else.
Before the recession hit, we were enjoying a period of urban and suburban innovation. We could have been on the verge of a transportation revolution. It looks as if the Obama infrastructure plan may freeze that change, not fuel it. "
Read more ...
*This Old House
Ultimately, whether we like it or not, we’re just going to have to bite the bullet, and admit that the only thing we can do is let the economy take its course.
Businesses are going to fail. People are going to be out of work. But if during that time government lightens its tax and regulatory burden on the country, the rocky economic times will be a lot more short-lived than they could be.
But there is no way to avoid those rocks altogether, however much politicians may wish they could sell Americans on that pipe dream.
- 01/03/09: President-elect Obama's Weekly Address - Join the Discussion: Economy -
*The next crisis: The Economy
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