There's a candidate for governor of Maine running on a PO platform. His name is Chris Miller. His site is: http://www.mainecommonwealth.com/
Maybe TOD could get an interview with him or something.
I took a look at the candidate's site. He has a link to us here at TOD! Cool! It's a long way until Peak Peak Oil Awareness. PPOA is a lagging indicator of Peak Oil, of course.
And in Nigeria, a group is protesting the incessant power outages, using the motto Let there be light.
During the protest, the groups prayed that any staff of the nation's sole energy supply outfit, PHCN, who had a hand in the unimpressive power situation in the country, should die.
Members of the protesting groups carried placards, some of which had inscriptions like, "Say No to Darkness", "Say No to Crazy Bills," "Fight the Monster: End the Darkness" "Light is Wealth", "No light: No Life" etc. Others wore uniform T-Shirts with inscriptions that read, "No Light; No Job." "The Siege is over," No light: No Nation," No Light, No Progress."
Lagos would be a very interesting place to be with no light at night. Lagos crime rate is high as it is, but imagining it with the city in darkness at night is quite chilling. Povery, population density, failed promises of oil wealth all together with failing electricity adds up to a frightening picture.
This looks like Richard Duncan's "Olduvai Cliff" beginning. Is it reasonable to imagine this as a syndrome that will creep through the world's impoverished mega-cities in the near term?
Matt, dc
IMHO, inflation will be the major issue on people's minds this Summer. Consumer prices rising, spooked investors, asset deflation, and the average American worker will find they are largely powerless to demand higher wages to compensate.
Only a week ago, the Dow Jones industrial average was on the verge of a record high. Without much fanfare, the Dow -- the best-known indicator of the stock market's performance -- seemed about to regain all that had been lost since the spectacular 1990's boom came to an end. .... For investors, the biggest concern is that rising oil prices will feed into the cost of goods and services dependent on oil. So far, the main impact is on gasoline pump prices, which averaged $2.79 a gallon in April and $2.97 a gallon in May, according to Energy Department surveys.
An indirect effect is evident in rising air fares, in surcharges on overnight air freight, and in a few chemical products made from petroleum. But those increases are still isolated.
When will the second shoe drop? The 214-point nosedive in the Dow yesterday was again blamed on the impact of high oil prices, and signals what will happen whenever it finally sinks in that this problem is not going away and will wreak unfathomable havoc on the U.S. and global economy.
The domino effect of the "peak oil" crisis facing the globe is what sends market investors scurrying, even if up until now it has been only in fits and spurts. Yesterday, for example, a higher-than-expected rise in the core consumer price index (CPI) was interpreted, in Wall Street's usual lemming-like fashion, to mean that high oil prices are, indeed, reverberating throughout the economy. The core CPI does not include direct energy costs, and its rise was interpreted as indicating the effect of rising energy costs on the rest of the economy.
Investors have suddenly figured out that this will drive up prices everywhere, and will cause the Federal Reserve to have to raise interest rates faster than previously thought in order to tame its inflationary impact.
That, in turn, will mean access to capital will become harder for businesses to retain their expected rates of growth, and the conclusion to draw from that, of course, is that it may suddenly be time to pull out ahead of the resulting downward curve.
Maybe the current price of crude has very little to do with "peak' at this moment. Fiat money is being funneled into commodities causing the prices to inflate [i.e. Housing], in the case of oil, before any actual peak. We are being set up for a real hard landing here folks. Total absorption of a financially ruined United States into the New World Order...
"Will the coming world order be the American universal empire? It must be that.... The coming world order will mark the last phase in a historical transition and cap the revolutionary epoch of this century. The mission of the American people is to bury the nation states, lead their bereaved peoples into larger unions, and overawe with its might the would-be saboteurs of the new order who have nothing to offer mankind but a putrefying ideology and brute force. It is likely that the accomplishment of this mission will exhaust the energies of America and that, then, the historical center of gravity will shift to another people. But this will matter little, for the opening of new horizons which we now faintly glimpse will usher in a new stage in human history.... For the next 50 years or so the future belongs to America. The American empire and mankind will not be opposites, but merely two names for the universal order under peace and happiness. Novus orbis terrarum."
~Strausz-Hupé, 1955 "The Balance of Tomorrow,"
So, what we've had, is this kind of speculative system, which is integral to this operation with getting money back into these bankrupt banks, through bundling of Fannie Mae-type and Freddie Mac-type mortgages, this system was going to blow! This is a bubble, this is a classical John Law-style bubble, as John Law from the early 18th Century. You had one in England, you had one in France. South Seas Island bubble, and the Mississippi bubble. Same kind of thing. It's a ponzi scheme. It's a pyramid club scheme--same kind of thing. But a pyramid club scheme betting on a pyramid club scheme, betting on a pyramid club scheme--off into the stratosphere.
Now, the money is being printed, which is generally registered under the category M3. And notice that you can't find out what M3 is, any more. They officially decided to hide the figure! Because, if the figure were published, it would show you how much money is being printed, printing-press money by the Federal Reserve System, and being pumped into the system now, to bail out and fund these financial interests.
Anyone knows this, who knows the system: When you build up this kind of bubble, a super-John Law bubble, layer upon layer--this thing is going to pop. Then, if you're a smart banker, what're you doing? How are you going to get out of the bubble, which you are going to cause to pop? Why aren't you going to go down with the bubble? You have to find a landing place outside the system. What is that landing place? Gold, silver, iron, zinc, copper, petroleum!
These are physical assets, so-called natural materials, these are assets which will be marketable in the future. So what you do, is, you corner the market in possession of these materials. You raise the price to the sky, because you're bidding against each other to grab these materials, and trade them back and forth, day after day. It's all done by this bunch of financiers. That's where you get that curve! So, when you look at the curve of inflation, don't look at the groceries--you will get grocery inflation very rapidly; you're already getting it, as many of you know. It's going to get serious, like housing inflation has been. Hmm? But this inflation, is where the powers of the future intend to be: They will control these assets; they will control the real estate; they will control the water systems; they will control the water. They will control the food. They will own you, and decide which of you lives and which dies.
This is not oil companies trying to "gouge the public"--oh, they do that all the time! But, this is nothing new; that part's nothing new. What they're doing that's new, is, they plan to sink the whole world economy, into a breakdown crisis, from which they will emerge, where governments are bankrupt and powerless, and they will emerge as the owners of everything in sight. And their banking systems will come--not the government!--but they will come, and foreclose on you. And there'll be nothing to protect you. That's the game.
Isn't M3 "long term" money which is driven by long term loan demand growth which the Fed "satisfies" by creating more money? So wouldn't M3 actually decline when housing and other long term capital investments decline? Wouldn't "hiding" M3 actually hide the fact that the economy would at some point be collapsing?
The Fed can create, or contract, the money supply in many different ways. Read up on The Mandrake Mechanism: http://tinyurl.com/mxnzb
That doesn't even cover derivatives, assurances and all the other silly debt games the central banks play.
They have reached a point where they have to monetize debt to cover their obligations. There is no way out. Hyper inflation is just around the corner...
I don't have time to read all that stuff. I just want to know, now that M3 is hidden, is it your contention that (1) M3 is expanding because there is rampant private sector borrowing, or (2) M3 is expanding because the Fed is borrowing from banks?
Wait since when does the Fed borrow from commercial banks? I thought the Fed was the lender of last resort. How does it even go about "borrowing" from a commercial bank?
I think the point to this is that the Fed is monetizing debt at a large rate! They buy securities - that is debt, and in turn put it down on the books as an asset. Problem is this "asset" is in turn a liability against the American People. Once this fake cash starts being spent by our fair govt, it is deposited into banks and a small part is held as reserves and the rest is loaned out and it goes to another bank and the process repeats itself.
Right! So if the Fed is buying debt then wouldn't M3 fall not rise. M3 is an indirect measure of long term borrowing by private entities from banks isn't it? Further then, if the Fed wanted to hide monetizing actions then the Fed would cancel its requirement that banks report M3 for publication.
The "assets" are already an obligation to somebody. If the Fed buys those assets, thereby giving money to a financial entity, that financial entity might then cover their eurodollar contracts -- no need for the liquidity if the related transaction has been transferred to the Fed, right?
First the FED did cancel publication of the M3 figure and that has all the money people up in arms.
When the FED buys the debt they are giving fake "cash" for a piece of paper. So the FED gives money for a piece of paper, so they are increasing money in the system, not decreasing.
You also must keep in mind that they are buying debt. They buy 10 year T bills, which are debts of the people of the US. Then they take this DEBT and on paper change it into an asset of the bank. Now do you understand that our lender of last resort (the biggest bank in the world), is using the US debt as a basis to expand the money supply.
Don't mean to double post, but I didn't answer part of your question.
The only assets I am talking about are repurchase agreements, repo's, and those are done with other governments or our government.
T-Bill's not sold to public ---> Congress takes these to the FED and the FED writes a check ---> On the FED balance sheets, this debt is now a securities asset ---> the government deposits the money into commercial banks through issuing checks to various people agencies, etc. ---> those banks receiving the money only needs to hold a fraction of what was deposited so this orignal govt money has been re deposited up to nine times and up to 9 banks lend of 80-90% of whatever was deposited ---. so they loan out the rest and it cycles.
The world didn't want to take on the debt of the US, but when the FED assumes the debt (enters in a repo agreement with the govt) it is in effect, creating money from debt. Thinking only in terms of off setting debits and credits in accounting terms won't let you see the bigger picture.
I think we may be talking about two different things. I'm talking about how it's supposed to work normally, and you may be talking about some nefarious Fed actions. Allow me quote something here which may be of use:
"One of the trademarks of perma-bears is to blame all the World's ills on a hyper-active Fed whose policy shifts endanger the state of our economies and the value of financial assets. But is this a fair indictment? Judging Fed policy by the growth rate of the US monetary base, we find that the US monetary base has been growing fairly steadily and in line with US GDP growth.
In fact, if one wants to blame a central bank for volatility in global monetary aggregates, one should instead turn to Japan. Looking at the past thirty five years, we find that the Japanese monetary base has been allowed to double over short periods (i.e.: less than three years) three times.
Another interesting fact is that, following the large 2001-2004 expansion in the Japanese monetary base, the Japanese monetary base is now larger than the US'. That is quite impressive for an economy less than half the size."
The creation of money, or credit, or debt (they are all one and the same, just different columns of the ledger) is the source of inflation, in the textbook sense of the word. This inflation is also reported as "growth" in the GDP.
Think about it....money was "created", so of course it is reported within GPD growth, in much the same way as your pay is reported on your paycheck.
That is why they are in line with one another (and growing fairly steadily, I might add, or was until fairly recently).
GDP can grow above and beyond the inflationary amount, but in order for that to happen more goods and services have to be 'created' than money/credit/debt is created. Very little of that has happened. The US does not actually "make" much of anything anymore, after all.
The US Federal Reserve has created more money, via the issuance of more debt, since 2000, than was in the system total prior to that year. Our debt load more than doubled in that time. As mentioned before, inflation is the result. A $1USD today buys only a fraction of what it did a few years ago.
Japan is a totally different case, one of a slow deflationary collapse over a nearly 20 year period that has been carefully controlled by the Japanese.
Ah yes, good news for you, your existing fixed-rate student loan debt will be monitized, right along with the US federal debt. One day, you'll come home from work and can pay it all off with a single paycheck. Too bad you (all of us Americans, really) probably won't be able to afford much else.
In Japan they lend money @ 0% interest. No one spends money, so American companies for years have siphoned Yen out of japan (basically for free) & turned it into USD. Once they did that they could put it anywhere and make a pure profit. This only happens in the largest investment banking houses (JP Morgan, Goldmach Sachs).
"One of the trademarks of perma-bears is to blame all the World's ills on a hyper-active Fed whose policy shifts endanger the state of our economies and the value of financial assets. But is this a fair indictment? Judging Fed policy by the growth rate of the US monetary base, we find that the US monetary base has been growing fairly steadily and in line with US GDP growth."
Ya that might make sense if the GDP numbers, make that any official economic numbers, the government reports were REAL. The numbers are a joke so judging anything based on the economic numbers is a joke. Here is a mainstream article pointing out the lies. It is probably worse than this:
I've heard all the critcisms of CPI, govt numbers, etc. But if people just thought of CPI as a measure for people who rent apartments, buy used cars, and have a government job which provides for all their health care needs, then CPI is an ok measure. Rents were going down relative to incomes during the housing boom, and used cars were similarly in oversupply after 9/11 created 0% new car financing. It's just that a lot of wall street types a while back thought CPI was measuring some sort of overall deflation!
"
The "assets" are already an obligation to somebody. If the Fed buys those assets, thereby giving money to a financial entity, that financial entity might then cover their eurodollar contracts -- no need for the liquidity if the related transaction has been transferred to the Fed, right?"
Does this answer your question?
"Because the Federal Reserve can be counted on to "monetize" (convert into money) virtually any amount of government debt, and because this process of expanding the money supply is the primary cause of inflation, it is tempting to jump to the conclusion that federal debt and inflation are but two aspects of the same phenomenon. This, however, is not necessarily true. It is quite possible to have either one without the other.
The banking cartel holds a monopoly in the manufacture of money. Consequently, money is created only when IOUs are "monetized" by the Fed or by commercial banks. When private individuals, corporations, or institutions purchase government bonds, they must use money they have previously earned and saved. In other words, no new money is created, because they are using funds that are already in existence. Therefore, the sale of government bonds to the banking system is inflationary, but when sold to the private sector, it is not. That is the primary reason the United States avoided massive inflation during the 1980s when the federal government was going into debt at a greater rate than ever before in its history. By keeping interest rates high, these bonds became attractive to private investors, including those in other countries. Very little new money was created, because most of the bonds were purchased with American dollars already in existence. This, of course, was a temporary fix at best.
Today, those bonds are continually maturing and are being replaced by still more bonds to include the original debt plus accumulated interest. Eventually this process must come to an end and, when it does, the Fed will have no choice but to literally buy back all the debt of the '80s -- that is, to replace all of the formerly invested private money with newly manufactured fiat money -- plus a great deal more to cover the interest. Then we will understand the meaning of inflation."
This may be the reason the Fed suspended the M3 because they are beginning the process to "buy back" all the private debt plus interest from the 80s and early 90's. The ponzi scheme is coming to an end, there is no way out. It was fun while it lasted...
There is also some evidence that over the last few years, the Treasury department (or the Fed) has been buying up it's own unsold bonds, via Carribean intermediaries, in an attempt to prop up the system.
Financial sense had the best article and it was dated a year ago almost exactly. It's funny that within the year from that article the FED has stopped publishing M3 stats, but there is a clear indication that this is spiraling out of control.
The FED is quoted as saying they will take unconvential means to maintain the dollar. It pointed out that our trade deficit was like 55B in APR 05, yet Net Foreign Investment was only 45B. So who are we getting the other 10B from? I say we're printing money, though not with any presses, unless it's the press of a button.
In other words, when the bubble bursts, it'll explode like an asteroid hit. The national debt is the mother of all weapons of mass destruction. And BCR is determined to detonate it.
"Wait since when does the Fed borrow from commercial banks? I thought the Fed was the lender of last resort. How does it even go about "borrowing" from a commercial bank?"
Did you ever here of The Bank for International Settlements?
A banker's bank, the BIS does no direct business with individuals, governments, or corporate entities. Instead, it deals solely with member nations' central banks (most of which are privately owned). There are 55 of them at present, and the list includes every central bank of consequence in the world.
All members are owners and have voting privileges, in proportion to the number of shares they have. (Private citizen ownership was originally allowed, and comprised about 14% of shares outstanding, but in 2001 all of those were bought out by the central banks.) We were unable to pin down the exact present share structure, but it can be assumed that the founding members have the most clout.
The founders were the central banks of Belgium, France, Germany, Italy, Japan and the U.K., all of which got an identical number of shares. The U.S. Federal Reserve was not an original shareholder; however, three American banks (J. P. Morgan, First Bank of New York, First Bank of Chicago) each got the same number, giving the U.S. three times the voting power from the outset.
Management's inner circle is of course the Board of Directors. There are six ex officio (i.e., permanent) members, the central bank governors of Belgium, France, Germany, Italy, and the U.K., plus the chairman of the Fed. These six appoint six others of their own nationality, and then there can be up to nine more elected members (there are five at the moment, representing Canada, Japan, the Netherlands, Sweden and Switzerland). Ben Bernanke has thus just replaced Alan Greenspan as the U.S.'s ex officio rep, and his appointed American sidekick is New York Bank President Timothy Geithner.
So, what does the BIS do these days? According to the bank's website, "BIS . . . fosters international monetary and financial cooperation and serves as a bank for central banks . . . by acting as: a forum for discussion and decision-making among central banks and within the international financial and supervisory community; a centre for economic and monetary research; a prime counterparty for central banks in their financial transactions; and agent or trustee in connection with international financial operations." http://tinyurl.com/epa8d
It seems simple enough to me that the Japanese and Chinese have recycled a lot of the money that they've made into Treasuries. The fact that the Fed has a variety of complex ways to create money isn't surprising to me. We've received cheap "vendor financing" -- why blame the Fed for this?
We won't/can't pay the foreigners back at fair value. So what if the Chinese cancelled our debt in exchange for us relaxing our policy on the defense of Taiwan? And the Japanese cancelled our debt in exchange for grain export guarantees after peak oil? Or a bunch of nukes for their new army? Or both of them on some other political deal? We can't pay them back, and as Bob Dole would say, "You know it, I know it, they know it, we all know it.".
http://www.mainecommonwealth.com/
Maybe TOD could get an interview with him or something.
Meanwhile, Uruguay limits night sports events due to energy crisis. A drought has affected their hydroelectric dams.
And in Nigeria, a group is protesting the incessant power outages, using the motto Let there be light.
This looks like Richard Duncan's "Olduvai Cliff" beginning. Is it reasonable to imagine this as a syndrome that will creep through the world's impoverished mega-cities in the near term?
Matt, dc
NY Times: Inflation Rising, Markets Tumble
Are Investors Waking Up?
Nothing to see here! These aren't the problems you think they are. Move along! Move along!
(Apologies to George Lucas.)
:)
"Will the coming world order be the American universal empire? It must be that.... The coming world order will mark the last phase in a historical transition and cap the revolutionary epoch of this century. The mission of the American people is to bury the nation states, lead their bereaved peoples into larger unions, and overawe with its might the would-be saboteurs of the new order who have nothing to offer mankind but a putrefying ideology and brute force. It is likely that the accomplishment of this mission will exhaust the energies of America and that, then, the historical center of gravity will shift to another people. But this will matter little, for the opening of new horizons which we now faintly glimpse will usher in a new stage in human history.... For the next 50 years or so the future belongs to America. The American empire and mankind will not be opposites, but merely two names for the universal order under peace and happiness. Novus orbis terrarum."
~Strausz-Hupé, 1955 "The Balance of Tomorrow,"
==AC
The Greatest Economic Crisis in Modern History
http://tinyurl.com/emg2g
So, what we've had, is this kind of speculative system, which is integral to this operation with getting money back into these bankrupt banks, through bundling of Fannie Mae-type and Freddie Mac-type mortgages, this system was going to blow! This is a bubble, this is a classical John Law-style bubble, as John Law from the early 18th Century. You had one in England, you had one in France. South Seas Island bubble, and the Mississippi bubble. Same kind of thing. It's a ponzi scheme. It's a pyramid club scheme--same kind of thing. But a pyramid club scheme betting on a pyramid club scheme, betting on a pyramid club scheme--off into the stratosphere.
Now, the money is being printed, which is generally registered under the category M3. And notice that you can't find out what M3 is, any more. They officially decided to hide the figure! Because, if the figure were published, it would show you how much money is being printed, printing-press money by the Federal Reserve System, and being pumped into the system now, to bail out and fund these financial interests.
Anyone knows this, who knows the system: When you build up this kind of bubble, a super-John Law bubble, layer upon layer--this thing is going to pop. Then, if you're a smart banker, what're you doing? How are you going to get out of the bubble, which you are going to cause to pop? Why aren't you going to go down with the bubble? You have to find a landing place outside the system. What is that landing place? Gold, silver, iron, zinc, copper, petroleum!
These are physical assets, so-called natural materials, these are assets which will be marketable in the future. So what you do, is, you corner the market in possession of these materials. You raise the price to the sky, because you're bidding against each other to grab these materials, and trade them back and forth, day after day. It's all done by this bunch of financiers. That's where you get that curve! So, when you look at the curve of inflation, don't look at the groceries--you will get grocery inflation very rapidly; you're already getting it, as many of you know. It's going to get serious, like housing inflation has been. Hmm? But this inflation, is where the powers of the future intend to be: They will control these assets; they will control the real estate; they will control the water systems; they will control the water. They will control the food. They will own you, and decide which of you lives and which dies.
This is not oil companies trying to "gouge the public"--oh, they do that all the time! But, this is nothing new; that part's nothing new. What they're doing that's new, is, they plan to sink the whole world economy, into a breakdown crisis, from which they will emerge, where governments are bankrupt and powerless, and they will emerge as the owners of everything in sight. And their banking systems will come--not the government!--but they will come, and foreclose on you. And there'll be nothing to protect you. That's the game.
http://tinyurl.com/mxnzb
That doesn't even cover derivatives, assurances and all the other silly debt games the central banks play.
They have reached a point where they have to monetize debt to cover their obligations. There is no way out. Hyper inflation is just around the corner...
==AC
I meant "expand", or contract...
==AC
I think the point to this is that the Fed is monetizing debt at a large rate! They buy securities - that is debt, and in turn put it down on the books as an asset. Problem is this "asset" is in turn a liability against the American People. Once this fake cash starts being spent by our fair govt, it is deposited into banks and a small part is held as reserves and the rest is loaned out and it goes to another bank and the process repeats itself.
The "assets" are already an obligation to somebody. If the Fed buys those assets, thereby giving money to a financial entity, that financial entity might then cover their eurodollar contracts -- no need for the liquidity if the related transaction has been transferred to the Fed, right?
When the FED buys the debt they are giving fake "cash" for a piece of paper. So the FED gives money for a piece of paper, so they are increasing money in the system, not decreasing.
You also must keep in mind that they are buying debt. They buy 10 year T bills, which are debts of the people of the US. Then they take this DEBT and on paper change it into an asset of the bank. Now do you understand that our lender of last resort (the biggest bank in the world), is using the US debt as a basis to expand the money supply.
The only assets I am talking about are repurchase agreements, repo's, and those are done with other governments or our government.
T-Bill's not sold to public ---> Congress takes these to the FED and the FED writes a check ---> On the FED balance sheets, this debt is now a securities asset ---> the government deposits the money into commercial banks through issuing checks to various people agencies, etc. ---> those banks receiving the money only needs to hold a fraction of what was deposited so this orignal govt money has been re deposited up to nine times and up to 9 banks lend of 80-90% of whatever was deposited ---. so they loan out the rest and it cycles.
The world didn't want to take on the debt of the US, but when the FED assumes the debt (enters in a repo agreement with the govt) it is in effect, creating money from debt. Thinking only in terms of off setting debits and credits in accounting terms won't let you see the bigger picture.
"One of the trademarks of perma-bears is to blame all the World's ills on a hyper-active Fed whose policy shifts endanger the state of our economies and the value of financial assets. But is this a fair indictment? Judging Fed policy by the growth rate of the US monetary base, we find that the US monetary base has been growing fairly steadily and in line with US GDP growth.
In fact, if one wants to blame a central bank for volatility in global monetary aggregates, one should instead turn to Japan. Looking at the past thirty five years, we find that the Japanese monetary base has been allowed to double over short periods (i.e.: less than three years) three times.
Another interesting fact is that, following the large 2001-2004 expansion in the Japanese monetary base, the Japanese monetary base is now larger than the US'. That is quite impressive for an economy less than half the size."
Think about it....money was "created", so of course it is reported within GPD growth, in much the same way as your pay is reported on your paycheck.
That is why they are in line with one another (and growing fairly steadily, I might add, or was until fairly recently).
GDP can grow above and beyond the inflationary amount, but in order for that to happen more goods and services have to be 'created' than money/credit/debt is created. Very little of that has happened. The US does not actually "make" much of anything anymore, after all.
The US Federal Reserve has created more money, via the issuance of more debt, since 2000, than was in the system total prior to that year. Our debt load more than doubled in that time. As mentioned before, inflation is the result. A $1USD today buys only a fraction of what it did a few years ago.
Japan is a totally different case, one of a slow deflationary collapse over a nearly 20 year period that has been carefully controlled by the Japanese.
Prior Fiscal
Years National Debt
09/30/2006? $est 8.5T
09/30/2005 $7,932,709,661,723.50
09/30/2004 $7,379,052,696,330.32
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/28/2001 $5,807,463,412,200.06
09/29/2000 $5,674,178,209,886.86
OUCH! This will be interesting to see how this spirals...
http://www.timesonline.co.uk/article/0,,3-2170099,00.html
Ya that might make sense if the GDP numbers, make that any official economic numbers, the government reports were REAL. The numbers are a joke so judging anything based on the economic numbers is a joke. Here is a mainstream article pointing out the lies. It is probably worse than this:
The numbers behind the lies
http://tinyurl.com/rqzje
It is worth reading the PDF report referenced in the article
:
http://tinyurl.com/meq6s
==AC
The "assets" are already an obligation to somebody. If the Fed buys those assets, thereby giving money to a financial entity, that financial entity might then cover their eurodollar contracts -- no need for the liquidity if the related transaction has been transferred to the Fed, right?"
Does this answer your question?
"Because the Federal Reserve can be counted on to "monetize" (convert into money) virtually any amount of government debt, and because this process of expanding the money supply is the primary cause of inflation, it is tempting to jump to the conclusion that federal debt and inflation are but two aspects of the same phenomenon. This, however, is not necessarily true. It is quite possible to have either one without the other.
The banking cartel holds a monopoly in the manufacture of money. Consequently, money is created only when IOUs are "monetized" by the Fed or by commercial banks. When private individuals, corporations, or institutions purchase government bonds, they must use money they have previously earned and saved. In other words, no new money is created, because they are using funds that are already in existence. Therefore, the sale of government bonds to the banking system is inflationary, but when sold to the private sector, it is not. That is the primary reason the United States avoided massive inflation during the 1980s when the federal government was going into debt at a greater rate than ever before in its history. By keeping interest rates high, these bonds became attractive to private investors, including those in other countries. Very little new money was created, because most of the bonds were purchased with American dollars already in existence. This, of course, was a temporary fix at best.
Today, those bonds are continually maturing and are being replaced by still more bonds to include the original debt plus accumulated interest. Eventually this process must come to an end and, when it does, the Fed will have no choice but to literally buy back all the debt of the '80s -- that is, to replace all of the formerly invested private money with newly manufactured fiat money -- plus a great deal more to cover the interest. Then we will understand the meaning of inflation."
This may be the reason the Fed suspended the M3 because they are beginning the process to "buy back" all the private debt plus interest from the 80s and early 90's. The ponzi scheme is coming to an end, there is no way out. It was fun while it lasted...
==AC
The FED is quoted as saying they will take unconvential means to maintain the dollar. It pointed out that our trade deficit was like 55B in APR 05, yet Net Foreign Investment was only 45B. So who are we getting the other 10B from? I say we're printing money, though not with any presses, unless it's the press of a button.
Did you ever here of The Bank for International Settlements?
A banker's bank, the BIS does no direct business with individuals, governments, or corporate entities. Instead, it deals solely with member nations' central banks (most of which are privately owned). There are 55 of them at present, and the list includes every central bank of consequence in the world.
All members are owners and have voting privileges, in proportion to the number of shares they have. (Private citizen ownership was originally allowed, and comprised about 14% of shares outstanding, but in 2001 all of those were bought out by the central banks.) We were unable to pin down the exact present share structure, but it can be assumed that the founding members have the most clout.
The founders were the central banks of Belgium, France, Germany, Italy, Japan and the U.K., all of which got an identical number of shares. The U.S. Federal Reserve was not an original shareholder; however, three American banks (J. P. Morgan, First Bank of New York, First Bank of Chicago) each got the same number, giving the U.S. three times the voting power from the outset.
Management's inner circle is of course the Board of Directors. There are six ex officio (i.e., permanent) members, the central bank governors of Belgium, France, Germany, Italy, and the U.K., plus the chairman of the Fed. These six appoint six others of their own nationality, and then there can be up to nine more elected members (there are five at the moment, representing Canada, Japan, the Netherlands, Sweden and Switzerland). Ben Bernanke has thus just replaced Alan Greenspan as the U.S.'s ex officio rep, and his appointed American sidekick is New York Bank President Timothy Geithner.
So, what does the BIS do these days? According to the bank's website, "BIS . . . fosters international monetary and financial cooperation and serves as a bank for central banks . . . by acting as: a forum for discussion and decision-making among central banks and within the international financial and supervisory community; a centre for economic and monetary research; a prime counterparty for central banks in their financial transactions; and agent or trustee in connection with international financial operations."
http://tinyurl.com/epa8d
==AC
Knowledge comes from understanding.
We won't/can't pay the foreigners back at fair value. So what if the Chinese cancelled our debt in exchange for us relaxing our policy on the defense of Taiwan? And the Japanese cancelled our debt in exchange for grain export guarantees after peak oil? Or a bunch of nukes for their new army? Or both of them on some other political deal? We can't pay them back, and as Bob Dole would say, "You know it, I know it, they know it, we all know it.".