Watchout! The dollar bubble bursts… December 22, 2008
Posted by tetrahedron in Uncategorized.Tags: bank of america, bernanke, bill gross, bloomberg, Bubble, forex, goldman sachs, the fed, treasuries, us dollar
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In “The New Bubble: Cash“, I argued that there was a bubble in U.S. dollars and treasuries.
Bill Gross, co-chief investment officer of the world’s largest bond fund, now says:
“Treasuries have some bubble characteristics . . . The government and the Fed cannot continue to talk about trillions of dollars of financing and expansion of the Fed’s balance sheet without the dollar going south”.
Many others are saying the same thing.
But how do we know when the dollar bubble will pop? In other words, when should we get out of dollars?
An article in Bloomberg might provide some insight:
The biggest foreign-exchange strategists and investors say the best may be over for the dollar after a four-month, 24 percent rally.***
“The dollar will go to new lows as the U.S. attacks its currency,” said John Taylor, chairman of New York-based FX Concepts Inc., which manages about $14.5 billion of currencies.
Citigroup Inc., Goldman Sachs Group Inc., BNP Paribas SA and Bank of America Corp. predict further weakness. Last week was the first time in almost a month that consensus estimates for the dollar against the euro through 2009 fell, according to the median forecast of 47 strategists surveyed by Bloomberg.
Taylor, whose firm manages the biggest hedge fund focusing on foreign exchange, said while the dollar may strengthen next year, it will fall to a record low against the euro in 2010 and to a 13-year low of 80 per yen as soon as 2009.***
“We’re at a turning point in terms of dollar dynamics,” said Jens Nordvig, a New York-based strategist at Goldman Sachs, the biggest U.S. securities firm to convert to a bank. “The dollar shortage has been addressed and we’ll see people start to focus on other things and those are all dollar negative.”***
Robert Sinche, the head of global currency strategy at Bank of America in New York, the third-largest U.S. bank, says the dollar is bound to weaken because investors are starting to focus on traditional measures of value such as relative interest rates, budget deficits and trade balances.
As more loans are repaid, there is less need for dollars, forcing investors to value the currency on metrics such as relative interest rates, budget deficits and trade balances. By those measures, the greenback should weaken, according to Sinche.***
Like Goldman Sachs, London-based Barclays Plc, the U.K.’s third-biggest bank, forecasts the dollar will weaken to $1.45 per euro by the end of 2009, according to data compiled by Bloomberg. New York-based Morgan Stanley strategists Stephen Jen and Spyros Adreopoulos, who in August advised clients to buy the dollar, said in a Dec. 11 report that the currency may strengthen in the first half of 2009, before “underperforming most other currencies” as the global economy recovers.
Bernanke and Paulsen Pimped America… December 22, 2008
Posted by tetrahedron in Uncategorized.Tags: bernanke, bretton woods, China, global credit, it is so stupid, paulson, russia, trillions, us dollar
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It Is So Stupid To Borrow US Dollar “Toilet Papers” For Trade Finance.
There Can Be Only A Credit Crunch For Dollars If You Are Stupid Enough To Want To Be Paid And To Pay In Dollars.
Otherwise, There Is Only An Illusion Of A Global Credit Crunch.
This Is The Global Con Game By Bernanke, Paulson,.
It may have made some sense, post-World War II to dollarise international trade when the so-called “Free World” was supposedly threatened by the “Communist Bloc” and the Imperial United States was offering “protection” in exchange for financial dominance.
The imperial design for financial dominance was the Bretton Woods dollar reserve currency scheme.
Since those days, the US has been abusing its financial power by the use of its greatest invention, the “toilet paper printing press” (now, the modern “electronic printing press”) to issue irredeemable fiat money.
Now the world is flooded with trillions of this toilet paper, namely US dollars.
The US Superpower is at the very precipice of the abyss and a wrong move will plunge it into the black-hole of financial Armageddon.
The world will not face Armageddon, only the US. The rest of the world will suffer pain, deservedly so, for being so stupid in believing in the use of US toilet papers as money!
To avoid this catastrophe, Ben Bernanke and Paulson as directed by their Shadow Money-Lender masters have devised an insidious scheme. The ultimate con-game!
Basically, what they have done is to try to turn a weakness into perceived strength.
Let me explain.
Countries have been so used to trading in dollars that they cannot think otherwise. They continue to borrow dollars to finance their imports. Their corporations continue to borrow dollars to finance their business expansion. It is as if the world is addicted to dollars, as a drug addict is addicted to cocaine and or crack!
The world has been brainwashed into thinking that without the US toilet paper, their global economy would come to a grinding halt.
How stupid!
Yet this is exactly the state of mind of governments and central banks all over the world. China is a case in point: blind reliance on the US dollar. But fortunately, they have other strengths which will see them through this painful period.
Taking advantage of this temporary idiotic global mindset, the Fed and the US Treasury have deliberately triggered a credit crunch for US dollar denominated toilet papers. The major global banks are hoarding the toilet papers and with-holding cross-border financing of every kind.
There is an ocean of toilet paper (literally in the trillions) but there is now created, a deliberate shortage of these very same toilet papers.
But where is the money? There is no money. It is an illusion!
What a ridiculous contradiction. But that is the present reality. The Fed has stated that they will pump US$8.5 trillion to resolve the crisis! You have to give credit where credit is due. This is indeed a brilliant con-game and the whole world has fallen for it hook, line and sinker – almost the whole world!
I refuse to accept this state of affairs.
Yet, the Nobel Laureates in economics have missed this stark reality by a thousand miles and are coming up with all kind of theories for the present global credit crunch of US toilet paper. Alternatively, it may be that as paid-scribes, they have been directed to spew economic nonsense to confuse other economists.
How was this illusion set up?
This happened when all of a sudden, and in total connivance, Brazil, Mexico, South Korea and Singapore got into the act by entering into swap facilities with the FED, each requesting a hefty US$35 Billion to “overcome their liquidity problems.” These countries could not get enough toilet papers! Wow!
Even the great magician Houdini would not have come up with this grand illusion of shortage in currency when there is an ocean of funny money. But it is an illusion and a stupid one at that.
So now, Bernanke and Paulson is advertising to the whole world, that they are prepared to do anything and use all financial weapons, including financial nuclear weapons to defeat the crisis.
For those countries that are short of toilet papers, the US will be the global guarantor and will be willing to lend trillions of toilet papers to help them weather the financial crisis and the credit crunch. How generous of the FED and the US Treasury. But there is a catch.
The catch being – countries must continue to use the worthless toilet papers in global trade.
In one masterful stroke, the US has created an artificial demand for dollars thereby rescuing in the short term the plunging value of the dollar.
Since the global banks are not willing to lend and are insolvent, the mighty FED, the nasty and abhorrent creation of the global Shadow Money-Lenders, will be the lender of last resort to the whole world. It will be business as usual. That is what they hope. This is their final gambit. The last magic show!
And as I have written earlier, this is the OBAMA’s GAMBLE!
Countries need not trade in dollars, as after all, they are not even BUYING “MADE IN AMERICA GOODS”. AMERICA IS A NET IMPORTER, NOT EXPORTER.
So central banks of the world, especially the Third World, and the emerging powers of China and Russia: you have no need for US toilet papers when you sell your national products to countries other than the US.
And in so far as the U.S. is concerned, why are you demanding to be paid in toilet papers? Why are you not demanding payment in your own currency?
China and Russia are at the present moment on the wrong course. They hold trillions of US dollar denominated debts but act as if they are at the mercy of the US, fearing that if they do anything unfavourable to US or cahllenge the hegemony of the greenback, there will be a massive slump in the value of the dollar.
But that is a given in any event. So why play a game that has been rigged in the favour of the global Shadow Money-Lenders.
There is no reason why Russia and China should be in a recession or experience slower growth. They are suffering from the present so-called credit crunch because they continue to manage their economies in dollar terms and in a dollar mindset.
The US is playing suicide poker and calling one last card. They have nothing on the table but toilet paper.
The US will collapse in a minute, if not sooner if China and Russia were to categorically call the US’s bluff and say:
1) Close down the derivative casino now!
2) Buy back all the toxic wastes which you have unloaded on the unsuspecting global economies with currencies of our choice!
3) Since the US is in debt, the US must now borrow in the currencies of our choice to repay past debts and new loans!
Failure to comply will result in a credit crunch to US banks and companies. US can continue to use domestically their worthless toilet papers (to wipe the shit off the ceiling fans, if there are any left hanging from the ceilings) but there will be no more credit in toilet papers. Period. There will be loans only in other currencies.
This is the checkmate. .
So China and Russia should wake up and do what is necessary to save their economies as well as the global economy or their economies will end up in the shit hole as they are now playing the US / UK rigged game.
I am not surprised at the present state of mind of Chinese and Russian bankers. They have sent some of their best brains to be trained in Harvard etc., and by the fraudsters in Goldman Sachs, JP Morgan Chase, Merrill Lynch, Citigroup etc. They have all been infected with the Ponzi disease and as such cannot think otherwise. Otherwise, how do you explain their mental paralysis?
This is a simple financial puzzle.
There is no credit crunch. There is only a false or an illusion of credit crunch for US toilet papers.
Once there is no demand for dollars, there will be no credit crunch for dollars. The Shadow Money-Lenders con-game will be exposed for what it is – a giant fraud. Not unlike that of Bernard Madoff, only a thousand times more insidious and toxic.
I hope that I have made myself absolutely clear to the financial officials in Russia and China.
If China and Russia and the third world continue to stand pat, these economies deserve to be in the dog house.
Bernanke and Paulson are going to destroy the US and the global economy so as to fulfil the grand design of the Shadow Money-Lenders. Stop them before it is too late.
The Count-down has started!
Where’s the 2 trillion dollars? December 21, 2008
Posted by tetrahedron in Uncategorized.Tags: 700 billion, ben bernanke, bloomberg, financial crisis, freedom of information act, paulsen, TARP, the fed, the great depression, treasury
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Dec. 12 (Bloomberg) — The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.
The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.
“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.
The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP.
Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA.
‘Been Bamboozled’
Congress is demanding more transparency from the Fed and Treasury on bailout, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had “been bamboozled.”
Bloomberg News, a unit of New York-based Bloomberg LP, on May 21 asked the Fed to provide data on collateral posted from April 4 to May 20. The central bank said on June 19 that it needed until July 3 to search documents and determine whether it would make them public. Bloomberg didn’t receive a formal response that would let it file an appeal within the legal time limit.
On Oct. 25, Bloomberg filed another request, expanding the range of when the collateral was posted. It filed suit Nov. 7.
In response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” in which “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”
Data Provider
The Fed supplied copies of three e-mails in response to a request that it disclose the identities of those supplying data on collateral as well as their contracts.
While the senders and recipients of the messages were revealed, the contents were erased except for two phrases identifying a vendor as “IDC.” One of the e-mails’ subject lines refers to “Interactive Data — Auction Rate Security Advisory May 1, 2008.”
Brian Willinsky, a spokesman for Bedford, Massachusetts- based Interactive Data Corp., a seller of fixed-income securities information, declined to comment.
“Notwithstanding calls for enhanced transparency, the Board must protect against the substantial, multiple harms that might result from disclosure,” Jennifer J. Johnson, the secretary for the Fed’s Board of Governors, said in a letter e-mailed to Bloomberg News.
‘Dangerous Step’
“In its considered judgment and in view of current circumstances, it would be a dangerous step to release this otherwise confidential information,” she wrote.
New York-based Citigroup Inc., which is shrinking its global workforce of 352,000 through asset sales and job cuts, is among the nine biggest banks receiving $125 billion in capital from the TARP since it was signed into law Oct. 3. More than 170 regional lenders are seeking an additional $74 billion.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system.
The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg lawsuit, filed in New York, doesn’t seek money damages.
‘Right to Know’
“There has to be something they can tell the public because we have a right to know what they are doing,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press.
“It would really be a shame if we have to find this out 10 years from now after some really nasty class-action suit and our financial system has completely collapsed,” she said.
The Fed’s five-page response to Bloomberg may be “unprecedented” because the board usually doesn’t go into such detail about its position, said Lee Levine, a partner at Levine Sullivan Koch & Schulz LLP in Washington.
“This is uncharted territory,” said Levine during an interview from his New York office. “The Freedom of Information Act wasn’t built to anticipate this situation and that’s evident from the way the Fed tried to shoehorn their argument into the trade-secrets exemption.”
The Fed lent cash and government bonds to banks that handed over collateral including stocks and subprime and structured securities such as collateralized debt obligations, according to the Fed Web site.
Borrowers include the now-bankrupt Lehman Brothers Holdings Inc., Citigroup and New York-based JPMorgan Chase & Co., the country’s biggest bank by assets.
Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group, said in an interview last month.
‘Complete Truth’
“Americans don’t want to get blindsided anymore,” Mendez said in an interview. “They don’t want it sugarcoated or whitewashed. They want the complete truth. The truth is we can’t take all the pain right now.”
The Bloomberg lawsuit said the collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression.”
In response, the Fed argued that the trade-secret exemption could be expanded to include potential harm to any of the central bank’s customers, said Bruce Johnson, a lawyer at Davis Wright Tremaine LLP in Seattle. That expansion is not contained in the freedom-of-information law, Johnson said.
“I understand where they are coming from bureaucratically, but that means it’s all the more necessary for taxpayers to know what exactly is going on because of all the money that is being hurled at the banking system,” Johnson said. Let me hear your comments.
The Big 3–Scam Artists Gone Wild! December 6, 2008
Posted by tetrahedron in Uncategorized.Tags: auto makers, Big 3, bush, CEOs, country, economy, hybrids, money, oversight, paulson, president, regulatory, scam, TARP, tax dollars, Wall Street
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Hello Mr. President and Vice- Hope you guys are watching what you eat and getting good physical activity in…Oh! about that pickup game:). Anyway, I want to suggest about the Big-3 auto industry; or the now scam artist gone wild. Now that we’ve solved that problem by not allowing them to continue going against what the new administration wants and what President Obama has been wanting to bring in to fruition, I applaud you. These ceo’s have played their games long enough and now the party’s over and they don’t know when to stop drinking as though they’re not drunk enough. This is the best way to get these Hybrids out there on the road and at the same time create that job market by building those hybrids and fixing the ozone and all that jazz; its falling right in to your hands Mr. President, now let the chips fall where they may. The taxpayer wants to see all of the things your platform represented during the long grueling CRUSADE:) come forward, we say let them go so that we can reconstitute our economy by building from the ground up as you said. The Bush administration has really broken this country by destroying the small business/ mainstreet economy. We can get it back right now…by not giving any more anymore TARP ( our tax dollars) to these money grubbing, lying, cheating,theiving bastards of the human race. We seriously need to stick to the plan. Wallstreet should have never been allowed to get that money, and paulson should be investigated…no strings attached,no oversight , no regulatory or trust agreement, just here you go and there it it went and we as taxpayers can’t even get a loan or any kind of help. Now, my grandmother taught me that two wrongs don’t make a right. Congress screwed up when they gave money to Wall Street, they screwed up when they gave money to AIG, they screwed up when they gave money to Bears & Stearrn and now they are getting ready to screwup again in considering to bail out the 3 automakers. If the CEOs returned the equivalent of 50% of their $16 million multi-annual compensation, they would have the money needed to do (WHAT??) to save their companies. It’s not their companies they want to save, it’s their lifestyles and those of their stockholders that they’re trying to save. This money won’t save the jobs of the auto ASSEMBLERS ( I say assemblers and not makers because the cars are not MADE in America, they are only ASSEMBLED in America), as evidenced by the recent announcement of thousands of pending layoffs.
