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Author: Subject: Exploitation of the global economy, the coming collapse
DerAlte
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[*] posted on 5-9-2012 at 09:33



ECB Chief to Propose Unlimited Bond Buying: Report
http://www.cnbc.com/id/48884527

Excerpt: << The euro gained versus the dollar and European stocks got a short-lived boost after a report that Mario Draghi, the European Central Bank chief, would propose unlimited bond buying at a meeting on Thursday. >>

Fed Watching ECB Just as Closely as Markets
http://www.cnbc.com/id/48904422

Excerpts: << The Federal Reserve, which meets next week, will be watching Thursday’s European Central Bank (ECB) meeting just as closely as financial markets as it mulls whether or not to deliver a monetary boost to a fragile U.S. economy….
“What the ECB says on Thursday is important to the Fed because any disappointing news could trigger a fresh bout of market volatility and uncertainty. That in turn could persuade the Fed to deliver monetary easing via quantitative easing at its September 12-13 meeting, especially if any bad news from Europe is followed by weak U.S. jobs data, says Jim Awad, Managing Director at Zephyr Management in New York.” >>

Pimco’s Gross: Fed Is Harming, Not Helping Economy
http://www.cnbc.com/id/48909928

<< “A lender will not easily lend money to an obese over-indebted borrower — that much is clear — but she will also not extend a check when the yield, carry and return on investment is so low that it cannot compensate for historic business model overheads," Gross, who is also the manager of the world's biggest bond fund said. >>

Productivity Posts Sharp Gain as Labor Costs Come Down
http://www.cnbc.com/id/48908539

<< Productivity increased at a 2.2 percent annual rate rather than 1.6 percent, the Labor Department said on Wednesday. Productivity, which measures hourly output per worker, fell at a 0.5 percent rate in the first three months of 2012. >>

Gold Set for Dramatic Fall If Central Bankers Disappoint
http://www.cnbc.com/id/48907220

<< The recent rally in gold, which touched a near six-month high this week, is unlikely to last, say commodity analysts, who forecast prices could fall 10 percent over the next month if central bank actions disappoint….
… The ECB is scheduled to meet Thursday and the Fed next week, and Gilman warns that a sharp fall in gold prices could be coming very soon if the outcome of these central bank meetings disappoints.
“I’m expecting more rhetoric and little in the way of concrete action. The fall in gold could happen as quickly as this week, as we start to see Europe hasn’t been sorting itself out and the solution to solving the debt crisis is not near,” Gilman told CNBC. >>

We are all waiting for you Draghi! Say something sensible...
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[*] posted on 6-9-2012 at 07:00


Ten Major Headwinds to Recovery

1. Boomers heading into retirement have insufficient savings and are done spending.

2. Student debt service holds back home buying, marriage, and family formation.

3. Attitudes towards lending, borrowing, and home ownership have changed. Ability
. and willingness of individuals and businesses to take on more debt has shrunk
. dramatically as paying off existing debt takes precedence, deleveraging in the face
. of contraction and hoarding cash as insurance against uncertain prospects.

4. Bank bailouts at taxpayer expense left banks intact but did nothing for households
. deep in debt which continue to sell off at a loss further depressing an already bad
. market.

5. Tax policy encourages flight of jobs and capital overseas to growing economies.

6. Technology now serves to destroy more jobs than it creates.

7. Untenable pension funding shortfall at the city, state, and federal level can no longer
. be put off.

8. Public unions and collective bargaining are at the heart of the pension mess as well
. as the heart of numerous city bankruptcies.

9. Artificially low interest rates weakens those on fixed income.

10. Commercial real estate bust on top of housing bust limits further job expansion.

Read more at http://globaleconomicanalysis.blogspot.com/2012/09/central-b...

.
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[*] posted on 7-9-2012 at 11:42


The following is a must-read for anyone trying to understand the complexities of Middle Eastern politics and religions. That this important part of the world is essentially in collapse and in a major transitional phase now is patent. To my mind the Middle East, the area where all the connected religions of Judaism, Christianity and Islam were invented, is the prime example of why religion can be in many ways a curse to mankind. Richard Engel is far the best correspondent in the area – he can talk Arabic one-on-one with the common man and has a deep undestanding which is never allowed to flourish under the 2 minute sound bite of the media news. Here he does look at the problems in some depth.

The Arab Spring is dead -- and Syria is writing its obituary: News Analysis
By Richard Engel , NBC News Chief Foreign Correspondent
http://worldnews.nbcnews.com/_news/2012/09/07/13686562-the-a...
……..
Back at the ranch: worth a read:

US health care: It's officially a mess, institute says. By Maggie Fox, NBC News
http://vitals.nbcnews.com/_news/2012/09/05/13689103-us-healt...

Also: http://bottomline.nbcnews.com/_news/2012/04/01/10922752-coun...

Der Alte
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[*] posted on 11-9-2012 at 17:31


In a few more hours from now 9:30 eastern standard time at
around 5:00 am on 12 - 9 - 2012 , this will all be academic.

www.reuters.com/article/2012/09/12/us-germany-court-idUSBRE8...

www.marketwatch.com/story/germanys-top-court-to-decide-rescu...

www.marketwatch.com/story/euro-zones-judgment-day-is-here-20...

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

________________________________________________


and so it goes

www.cnbc.com/id/48998506

www.reuters.com/article/2012/09/12/us-germany-court-idUSBRE8...

www.bloomberg.com/news/2012-09-12/germany-can-ratify-esm-bai...

www.nytimes.com/2012/09/13/world/europe/german-court-backs-e...

________________________________________________


Another FED non-event due tomorrow

www.tfmarketadvisors.com/2012/09/09/fed-holdings-robbing-tim...

http://seekingalpha.com/article/858021-why-qe3-will-not-happ...

http://seekingalpha.com/article/855071-euro-a-good-short-whe...

.

[Edited on 12-9-2012 by franklyn]
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DerAlte
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[*] posted on 12-9-2012 at 22:21


Did anyone shout whoop-de-doo? not yesterday, not in Euroland nor here..

In Franklyn's list, take especial note of his last article re "euro-a-good-short" - it says it all.

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[*] posted on 13-9-2012 at 19:27


http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

www.bloomberg.com/news/2012-09-13/demetriades-says-ecb-may-n...

Coordinated central bank action has spoken.

www.thestreet.com/story/11700221/1/fed-launches-open-ended-q...

www.bloomberg.com/video/markets-on-the-rise-treasuries-on-a-...

www.marketwatch.com/story/treasurys-gain-ahead-of-fed-decisi...

http://video.cnbc.com/gallery/?video=3000115974

Straight from the 5th Dimension , a synopsis of the announced FED policy
( click off the [X] of the annoying on screen add to be able to read the lyrics )
www.youtube.com/watch?v=JsVgSqAwSEI


The close coupling of the EUR/USD rate with FED easing for the meantime
assures the €uro will be buoyed. Already despite continued treasury bond
buying those rates are up substantially. The 30 year is back up to 3 %
( it's been dropping for the last 8 trading days hitting 3.1 % this morning )
and the TLT fund may very well head back down again to the $110 year low.
While I don't pay much heed to this site's forecast it does happen for now
to correlate with the current trend. http://forecasts.org/30yrT.htm
Technical analysis _
http://advisorperspectives.com/dshort/charts/index.html?guest/2012/CK-bondshangingbyanecklinethreadsept13.gif
Finally the chart comparing the TLT treasury bond fund to the FXE €uro fund
shows it has crossed up over the 200 day average , signaling as it had done
twice previously , the passage of the TLT price peak and decline concurrent
with FED easing. http://tinyurl.com/72pyluw
If nothing else regression to the mean and characteristic volatility should close
that gap once more.

I'm looking now at buying TLT - PUT Options for November $ 115 strike price

The market’s seasonal and four-year presidential election cycles have held up
pretty well over time , after a rocky summer , a pre-election rally could carry
over through the winter as it has done since last year to date. As most fund
managers I am playing this with skepticism , having just been wipsawed and
burned. A big correction or even the end of the cyclical bull market that began
in March 2009 is sure to follow by summer next year , as we newly expect
every year , sigh.

.

[Edited on 14-9-2012 by franklyn]
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[*] posted on 16-9-2012 at 06:18


It's a record
http://buzz.money.cnn.com/2012/09/14/fear-greed-record

http://seekingalpha.com/article/867731-what-qe3-means-for-th...

The latest FED policy is already reflected by market prices , which explains why
the effectiveness of each successive operation is shorter each time. Don't buy into
the apprehensions of looming high inflation when the FED stands ready to stop it
at will.
http://ycharts.com/indicators/velocity_mzmv_money_stock
MZM - Money Zero Maturity ( unconditionally available for spending on demand )
is now the lowest it has been in years as a result of debt default destroyed credit.
Remember that credit is counted as real money although it only becomes actual
when it is paid off , hence the need for restocking the supply to keep the bubble
from completely deflating at once. Either that or assets have to be revalued up or
both in combination to again normalize the crash skewed economy.

As I had mentioned before here in the last paragraph back in June _
www.sciencemadness.org/talk/viewthread.php?tid=17281&pag...
" Contingent on the Federal Open Market Committee ( FOMC ) Meeting next
Wednesday June 20 does not yet announce resuming QE .
It appears however that primary dealers in treasuries are holding ,
which naturally means they expect to sell off at a profit soon.
"
www.zerohedge.com/news/primary-dealer-treasury-holdings-soar...

Note how with all of the money the Fed is flooding into the bond markets ,
instead of interest rates going down, they are reversing to go up signaling
a counter trend rally higher within the context of the major trend lower.

Simply explained , banks bought up what treasury bonds that the FED did not
and now are selling those back to the FED for cash money to prop up share values.
Those of course will be sold back to the gullible just in time for the next steep sell off.

www.sovereignman.com/expat/who-has-the-best-line-of-bs-8671
Expect a volatile autumn driven by Europe's cliff hanging drama
www.guardian.co.uk/business/2012/sep/16/greek-protests-menac...
and year end rally here as usual since the market is entirely full of itself and detached from reality.
http://seekingalpha.com/article/869301-emperor-bernanke-3-ca...

Treasury bond rates will continue to climb till then but turn down to test this year's
low sometime in the next year , of that I am perfectly confident. The €uro should
soon be up around $ 1.35 again , it is now over $ 1.31.

_________________________________________


Projections for a growth driven economy ( it ain't going to happen )

excerpted from here _
http://seekingalpha.com/article/869711-by-2015-hard-commodit...

Over the next decade, two things are going to change. The first is increasingly
recognized, that Chinese growth rates will drop sharply. The second is that China
will rebalance its economic growth away from its appetite for commodities.

The consensus on expected economic growth among Chinese and foreign
economists living in China has already declined sharply in the past few years.
From 8-10% just two years ago, the consensus for average growth rates in
China over the next decade has dropped to 5-7%. But the historical precedents
suggest we should be wary even of these lower estimates. Throughout the last
100 years countries that have enjoyed investment-driven growth miracles have
always had much more difficult adjustments than even the greatest skeptics
had predicted.

After all, there were many Brazilians in the late 1970s who worried that Brazil's
growth miracle was unsustainable and would end badly, but none expected
negative growth for a decade, which is what happened during the terrible Lost
Decade of the 1980s. Towards the end of the 1980s, to take another example, a
few brave skeptics proclaimed that the Japanese miracle was dead and predicted
that for the next five or ten years average Japanese growth rates would slow to
3 or 4% (in 1994 the IMF belatedly proclaimed that Japan's long-term growth rate
had dropped to 4%), but no one, even the most skeptical, predicted twenty years
of growth below 1 percent. Finally when the USSR's economy was hurtling forward
in the 1950s and 1960s, and expected to overtake the US within a few decades,
even the most die-hard anti-communists did not expect the virtual collapse of the
economy in the 1970s and 1980s.

Similarly, the current consensus for Chinese growth over the next decade is
almost certainly too high. Even if Beijing is able to keep household income growing
at the same pace it has grown during the past decade, when Chinese and global
conditions were as good as they ever could be, it will prove almost impossible for
the economy to rebalance at average GDP growth rates over the next decade of
much above 3 percent.

Rebalancing means, by definition, that for the next few years consumption growth
must outpace GDP growth, and so also by definition investment growth must be
less than GDP growth. Even if China is able to achieve 5-7% growth rates over the
next decade, which I think is almost impossible, this implies that consumption
growth will rise to 7-10% annually, and so from 25% growth in the last few years
Beijing will be able to allow investment to grow no more than 2-4% annually, and
much less if GDP growth rates are as low as I expect.

___________________________________________


American foreign policy in the middle east.

What's our oil doing under your sand boy ! ?
You best give it here and get it out from there ,
you hear me boy.

The reason while a bit removed from the
common dialog is that after the U.S. gave
up on the gold standard for it's currency ,
another commodity was needed as backing ,
petroleum being the principle article of world
commerce suited the purpose , and so was
born the petrodollar.

<iframe sandbox width="420" height="315" src="http://www.youtube.com/embed/Enm0CBx52g4" frameborder="0" allowfullscreen></iframe>

" For the past 30 years the US Federal Reserve has printed hundreds of billions of
oil-backed petrodollars, which US consumers provide to other nations by purchasing
imported goods. Then those nations use these dollars to purchase oil/energy from
OPEC producers. These billions of surplus petrodollars are recycled from OPEC and
invested back into the US via Treasury bills or other dollar-denominated assets,
such as US stocks, bonds, and real estate."

- A new world order - no not that one.

" China and Russia are talking about reducing their US currency reserves and favoring
the euro. At a recent Economic Forum in Davos, Switzerland the Chinese indicated
they are seeking a “more manageable reference” for their enormous currency
reserves. Russia currently exports 81% of its oil to the EU and 65% of its trade is
in the Eurozone. In 2003, Putin told the German press that he would “not rule out”
invoicing crude oil in the euro. “That would be interesting for our European partners,”
Putin slyly added. Interesting ? Try apocalyptic or a broadside attack against the US
dollar! The largest currency exchange reserves in the world are now held by China
($1.3 trillion), Japan ($914 billion), the EU ($440 billion), and Russia ($411 billion –
called petrorubles in 2007). Who owns what =>
www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
At least 70% of these reserves are in the US dollar, or eurodollars. Add to this fact
the largest oil companies in the world are now lining up against the US. According
to the Financial Times (3/1//07) the new “Seven Oil Sisters” are Aramco (Saudi
Arabia), Gazprom (Russia), CNPC (China), NIOC (Iran), PDVSA (Venezuela),
Petrobras (Brazil), and Petronas (Mal-aysia).

The effect of an OPEC switch to the euro would be that oil-consuming nations would
have to flush dollars out of their (central bank) reserve funds and replace these with
euros. The dollar would crash anywhere from 20-40% in value and the consequences
would be those one could expect from any currency collapse and massive inflation
(think Argentina currency crisis, for example). You’d have foreign funds stream out of
the US stock markets and dollar-denominated assets, there’d surely be a run on the
banks much like the 1930s, the current account deficit would become unserviceable,
the budget deficit would go into default, and so on." ( It could ruin your whole day )


The entire article here _
http://idpconsultinggroup.com/#/petro-warfare/4546619231
http://idpconsultinggroup.com/#/petro-warfare-page-2/4546684...
http://idpconsultinggroup.com/#/petro-warfare-page-3/4546685...
http://idpconsultinggroup.com/#/petro-warfare-page-4/4546685...
http://idpconsultinggroup.com/#/petro-warfare-page-5/4546686...


So how serious is this ? Bill Gross of Pimco has proposed just recently
to sell U.S. treasury issues and buy Italian bonds instead ! - O . M . G

____________________________


and from this site here _
http://goingglobaleastmeetswest.blogspot.com
somewhat like zerohedge.

http://goingglobaleastmeetswest.blogspot.com/2012/09/prepari...

That whole article here _
http://ftmdaily.com/preparing-for-the-collapse-of-the-petrod...
http://ftmdaily.com/preparing-for-the-collapse-of-the-petrod...
http://ftmdaily.com/preparing-for-the-collapse-of-the-petrod...

___________________________________________


And just to make things interesting
www.telegraph.co.uk/news/worldnews/middleeast/iran/9545597/A...

.

[Edited on 17-9-2012 by franklyn]
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[*] posted on 17-9-2012 at 10:31


To late to add this to that last entry above

President of Iran Ahmadinejad is on record as saying that he favors transparency
in the Iranian oil market. As anyone familiar with the City of London and Wall Street
will know, transparency is the enemy of dark pools and private profit. It is this factor
that militates against developing the oil bourse project. Far more importantly is the
propensity for relegating the dollar exchange rate to free market forces entirely out
of the control of U.S. policy and financial circles. 95 per cent of the world’s official
monetary reserves are held in only three currencies: the Dollar, the Euro and the
Pound. Oil traded between Iran and China will be settled in gold, Yuan, and Arial. With
the Europeans out of the mix, in short order none of Iran's 2.4 million barrels of oil
a day will be traded in petrodollars. It seems the real reason tensions are mounting
in the Persian Gulf is because the United States is desperate to cease the movement
away from petrodollars. The shift is being spearheaded by Iran and backed by India,
China, and Russia. Undoubtedly this is enough to make Washington anxious enough
to seek out a pretext to topple the regime in Iran. Remember that Iraq had previously
boycotted the dollar for trading it's oil , this was met by unfounded accusations that
Iraq had weapons of mass destruction , which we now know never existed. In the
same way claims of the intention of Iran to go nuclear are spun into jingoist war rhetoric.

A summary of the threat to dollar as reserve currency
www.atimes.com/atimes/Middle_East/HC10Ak01.html

The end of the petroleum market as we know it.
http://oilprice.com/Energy/Energy-General/Petrodollar-Exitin...
www.worldviewweekend.com/worldview-times/article.php?article...
Interesting turn of events - a competitive market will end the artificial pricing monopoly
www.bloomberg.com/news/2012-09-17/crude-fluctuates-on-middle...
http://seekingalpha.com/article/872051-expect-15-20-near-ter...

www.nytimes.com/2012/09/12/business/moodys-issues-warning-on...
www.bloomberg.com/news/2012-09-11/u-s-rating-may-be-cut-by-m...
www.nasdaq.com/article/egan-jones-downgrades-us-to-aa--from-...
Who will hold onto or buy a Treasury bond paying 3% interest when the American
inflation rate has reached 15 %, 20 %, 25 % ? The smart money will , knowing full
well that the big reset will mean a reprise of the treasury bond appreciation of the
last 30 years.
http://soberlook.com/2012/09/longer-dated-treasuries-touch-a...
That is permanently priced in unlike gold which is subject to price speculation
up and then down as it had been over those same past 30 years.
$ 2,000 oz of gold => old dollar is revalued @ 10 for 1 new dollar =>
your gold is now worth $ 200 an oz ( new dollars ) and so is everything else
of that price , there is no " inflation " profit or net gain.
Those who want to go back to the gold standard ,
be carful what you wish for.

All that is still in the future though.
Who knows , perhaps uranium will spawn the Uradollar
nuclear non-proliferation = nuclear monopoly.

.

[Edited on 17-9-2012 by franklyn]
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[*] posted on 20-9-2012 at 07:45


J E E Z , when are they going to stop feeding these meth addicts.
www.marketshadows.com/2012/09/19/government-debt-held-by-spa...
http://soberlook.com/2012/09/what-really-caused-eurozone-ban...
What is really going on, replacing defaulted commercial loans with sovereign debt.
explained here => www.zerohedge.com/news/new-con-three-card-mario
" The banks borrow from the ECB, they buy the debt of their country, they submit
the sovereign debt as collateral at the ECB or to Target2 for more funding and they
receive the cash back on their balance sheets. Utilizing this circle of borrowing,
buying debt, use of it as collateral and then receiving their money back they have
replicated Eurobonds and have just employed a different strategy to accomplish it.

www.bloomberg.com/news/2012-09-18/deposit-flight-from-europe...
www.zerohedge.com/contributed/2012-09-18/draghi-and-bernanke...
www.bloomberg.com/video/single-best-chart-the-fed-and-long-t...

[file]20228[/file]

www.marketshadows.com/2012/09/18/bond-wars-chinese-advisor-c...
www.telegraph.co.uk/finance/china-business/9551727/Beijing-h...

http://seekingalpha.com/article/871801-quantitative-easing-r...
http://seekingalpha.com/article/872281-the-biggest-mispercep...
http://video.cnbc.com/gallery/?video=3000116244
http://video.cnbc.com/gallery/?video=3000117051

In the last few days since the announced QE3 last Thursday treasury rates have
declined from their initial jolt up , down to 2.9 % from 3.1 % a week ago for the
30 year bond. The TLT increases every opening higher than the previous close
drooping during the day then leveling out , closing higher than the previous close.
I bought an October Call just out of the money on Tuesday correctly anticipating
this move , however although the price of the fund has risen 2 dollars with lowering
volatility I have yet to realize a meaningful profit. It's options expiration tomorrow ,
we'll see. On the top chart below is the TLT fund price , underneath is the 30 year rate.

[file]20230[/file]

FED owned Treasury bonds.jpg - 45kBTLT vs 30 yr Bond rate.gif - 14kB
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[*] posted on 25-9-2012 at 18:58


Petrodollars= the single most compelling explanation for all the promising alternative energy solutions never amounting to much.

Petrodollars= by far the most logical motivation for the various wars waged in the middle east.

Things really make way more sense from the petrodollar lens! I wonder why it hasn't come up in this thread sooner? Is this this one of most important parts of this thread, or am I missing something?

The solution for the US? Plunge the world into (further) war before it has a chance to coordinate against the petrodollar? Divide and conquer while it still can? Does any one see other likely options?




A word to the wise: NEUROFEEDBACK

http://citizenworks.org/corp/dg/s2r1.pdf
http://www.newscientist.com/mobile/article/mg21228354.500-re...
http://www.shadowstats.com/article/no-414-hyperinflation-spe...

"To expose a 15 Trillion dollar ripoff of the American people by the stockholders of the 1000 largest corporations over the last 100 years will be a tall order of business."
Buckminster Fuller

"No problem can be solved from the same level of consciousness that created it."
Albert Einstein
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[*] posted on 26-9-2012 at 10:44


In 2000 Iraq dropped the US dollar and began selling their oil for Euros.
http://www.time.com/time/magazine/article/0,9171,998512,00.h...

It wasn't long before US invaded Iraq and immediately switched oil sales back to US dollars.




Libya did the same and even began an African Monetary Fund to compete with the IMF.
http://beyondmoney.net/2011/11/16/did-libyas-gadhafi-threate...

It didn't take long for Libya to fall.




In 2009 Iran dropped the US dollar.
http://www.cbsnews.com/2100-500395_162-4057490.html

And so now...




http://en.wikipedia.org/wiki/Petrodollar_warfare

[Edited on 26-9-2012 by anotheronebitesthedust]
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[*] posted on 26-9-2012 at 11:39


The treasury market has acted a bit squirrelly the past 2 weeks with interest
rates dropping lower again. I would still look to short the TLT now that it pops
up a bit amid the current unease over Europe. I'm eyeing December PUTs.

I commented on concern of the stability of Spanish government , lower here _
www.sciencemadness.org/talk/viewthread.php?tid=17281&pag...
In the news ,
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...

www.bloomberg.com/video/savage-euro-finding-a-bottom-depends...

The new bull market , same as the old bull market _
www.reuters.com/article/2012/09/26/us-markets-stocks-poll-id...
All is not well , as if it mattered.
http://blogs.reuters.com/macroscope/2012/09/24/an-unpleasant...

______________________________________________


http://seekingalpha.com/article/887781-underlying-disaster-i...
" There are two types of people in the world my friend, those with the loaded guns, and those who dig. You dig "
- Clint Eastwood - in " The Good, The Bad and The Ugly " as " Blondie " speaking to " Tuco " ( Eli Wallach ) near the end.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/...
" Hey ma ! I made it , top of the world "
- James Cagney - in " White Heat ", just as he blows up at the very end.

www.cnbc.com/id/49195244
" We know now we can't beat their machines, we've got to beat THEM..."
- Barry Sullivan - as Dr. Clayton Forrester in " The War of the Worlds ".

.

[Edited on 27-9-2012 by franklyn]
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[*] posted on 26-9-2012 at 22:18


It isn’t worth reading most of these, just read the headline. Added to the shell game going on in Europe, spurious optimism seems to have temporarily arisen recently over verbal claptrap from Draghi and Merkel attempting to sweep the accumulating pile of nonsense under the rug. However,

Just When Investors Thought Europe Was Fixed... http://www.cnbc.com/id/49181265
(Question: what investors?)

Violent Protests Hit Greece and Spain : http://www.cnbc.com/id/49179794

What's Behind Spain's Woes http://www.cnbc.com/id/49179083

…. Same old BS.

But it’s worth taking note of:
http://www.cnbc.com/id/49179175: Greece Is Better Investment Than China This Year.

An extreme view, perhaps, but one has the vague suspicion that more that an inkling of truth lies behind this one. Emphasis added is mine

http://www.cnbc.com/id/49099734
China's a 'Roach Motel'; Don't Trust the Numbers: Chanos

Excerpt
China's economy continues to deteriorate despite the government's efforts to paper over the troubles, making the country's stocks ripe for short-selling, hedge fund titan Jim Chanos told CNBC.

In fact, he warned that investors should not trust the data coming out of the government as well as corporations in the world's second-largest economy, charging that he "would take issue with almost any corporate accounting in China."

"It's destined to suck Western capital into the country and have it never go out," Chanos said during a "Squawk Box" interview. "You're almost in a classic emerging market roach motel, except it's a really big one in that it's very difficult to earn adequate returns for capital and get your capital back as a Western investor."

"China's growth is slowing pretty quickly. That's stated GDP — you're never going to see negative GDP from China year-over-year, I don't think, not under this regime," he said. "But look at corporate profits, look what's happening on the ground. Corporate profits are imploding over there."

Chanos said his "roach motel" remark was directed specifically at the country's "H shares" market — companies based in the mainland but whose shares also trade on the Hong Kong exchange.

"Take a look at the Chinese stock market. It's gone nowhere despite having one of the highest rates of growth of any emerging market, any market," he said. "GDP growth has been 9, 10 percent for 10 years and you've made no money in the Chinese stock market."


The malaise is global. One cannot blame the youth for demonstrating in Greece and Spain, nor for the protests of the Occupiers or Tea Party here in the US, any more than young Arabs for wanting the end of despotism in their countries.

Brought up in an atmosphere of debt driven opulence, in welfare states where personal responsibility is not the PC way, they have not known the bad old days. Welfare is like a drug; proper use in society can be very beneficial but too much produces addiction and reliance. Like drugs, it also costs a lot of money. Only a few countries can afford to manage it successfully, such as the Scandinavian countries, Finland and Germany. It is not sustainable in others.

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[*] posted on 26-9-2012 at 22:33


Sigh!

Bill Nye, "The Science Guy" suggested one of the reasons why the US schools lag so badly in mathematics and science: Quote:

"The Earth is not 6,000 or 10,000 years old," Nye said in an interview with The Associated Press, citing scientists' estimates that it is about 4.5 billion years old. "It's not. And if that conflicts with your beliefs, I strongly feel you should question your beliefs."
Millions of Americans do hold those beliefs, according to a June Gallup poll that found 46 percent of Americans believe God created humans in their present form about 10,000 years ago.

"If we raise a generation of students who don't believe in the process of science, who think everything that we've come to know about nature and the universe can be dismissed by a few sentences translated into English from some ancient text, you're not going to continue to innovate," Nye said in a wide-ranging telephone interview.

Ken Ham, a co-founder of Answers in Genesis, said dating methods used by scientists to measure the age of the earth are contradictory and many don't point to millions or billions of years of time.

"We say the only dating method that is absolute is the Word of God," Ham said. "Time is the crucial factor for Bill Nye. Without the time of millions of years, you can't postulate evolution change."

…………….
The US seems to be in a neo-neolithic age. 25th in mathematics, 17th in science, and 14th in reading, according to
http://www.msnbc.msn.com/id/39154226/ns/us_news-education_na...

Another reason is that poor children, through no fault of their own, carry their parents' and siblings' ghetto outlook into school. If parents do not care a rat's ass, then why should children? Older siblings seem to do well enough - as minor drug peddlers on the corner or as petty crinimals, and sister can always sell herself on the main drag. Peer pressure will force them into a gang, perhaps, sooner or later. This is a self perpetuating social problem.

A third factor, like it or not, is that intelligence, like everything else, is roughly Gaussian distributed. Today's PC education is a foolish one-size-fits-all piece of nonsense crafted by liberal idealists and educational 'theorists' - and to fit all, the lowest common denominator always prevails. You cannot teach a near mentally deficient child in the same class with the same material as a bright child. Both suffer. Levelling is essential. Elitism? No, survival and common sense.

In the US it seems that physics is hardly taught at all in high schools except possibly at AP level and mathematical standards are very low too. I can state this with fair certitude because I have watched three children progress through the public school. I can compare their progress and schedules with my own, some sixty years ago, in a private school in England. There Mechanics (dynamics and statics) was taught starting at ages 14-15 as Applied Mathematics, coincident with calculus which is an absolute necessity for any science. Geometry, elementary algebra and trigonometry had already been completed by then. Now admittedly that was in one of England’s top schools. But younger brothers taught in public schools (grammar schools) did somewhat similarly.

My 3 children, 16 years apart youngest to eldest, all went to US public schools. I was fairly well pleased at #1 son’s progress(1971 – 84). They had levelling then. In high school, I thought his math and science a bit lacking but he was AP standard and got a scholarship to university. He is an MS leading a group in advanced digital test equipment.

The daughter, 4 years younger, went to the same schools (1975 - 88). She got nearly all A's and rarely a B. (She knew how to work the system - how to get grade points above 4.0!) Things had changed, but not too seriously. In high school she claimed she got serously bored. She obtained a scholarship (several, I believe! she knew how to use the system, as I said), went to university, got her BA and later an MA. She home schools her children (guess why?) .

My wife volunteered in the schools from 1976 to 2000, in grades 1-5, helping with reading, writing and arithmetic. She never noticed any decrease in the intelligence of children over that time. She did notice the effect of ethnic background on the incoming general knowledge, but no unwillingness or ability to learn. Of course, children from any background show a range of intelligence. With time the ethnic balance radically changed. Levelling was abolished as not PC. Language problems complicated and slowed the education process. Standards dropped like a lead balloon. Asian students always seemed the best even when saddled with language problems.

With #2 son I ignored my wife's plea to send him to a private school, citing his elder siblings’ performances. Again he attended the same schools. Although his early years did not show any real problems that I could detect (my wife, wiser in such matters, did), his performance dropped off radically around the age of 13 (c. 1996). This persisted throughout high school but he managed to get a scholarship. He decided to ‘prepare’ himself for university by attending a community college. He also decided to avoid the 'mistake' of taking too many classes and leisurely blundered his way to an AA degree.
He did attend the university but dropped out due too poor grades and financial problems. From an early interest in computers he acquired a good competence at sundry IT jobs. He is now a member of a small IT group at a large Texas company. He would be doing well financially but for being saddled with debt for the same reasons many so-called middle class Americans are.

The US needs to look to Asia to revamp its educational system. There it will find an echo of the traditional system as it was once here – one that worked. Ability (for whatever reason, be it innate itelligence, natural talent or just plain hard work) leads to promotion. Stasis or mediocrity will keep you at the same level. Idleness, lack of discipline, and innate poor mental ability, sadly, will cause you to descend down the ladder. No amount of PC claptrap or educational theory can overcome natural laws.

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[*] posted on 27-9-2012 at 00:23


A chart to watch in the coming months: http://www.google.com/trends/?q=petrodollar

Very interesting stuff.

Maybe its just a question of whether we're circling the drain or the "InSinkErater."




A word to the wise: NEUROFEEDBACK

http://citizenworks.org/corp/dg/s2r1.pdf
http://www.newscientist.com/mobile/article/mg21228354.500-re...
http://www.shadowstats.com/article/no-414-hyperinflation-spe...

"To expose a 15 Trillion dollar ripoff of the American people by the stockholders of the 1000 largest corporations over the last 100 years will be a tall order of business."
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[*] posted on 28-9-2012 at 08:38


Below is part of an essay from here, liberally abridged by me.
www.zerohedge.com/news/2012-09-28/operatic-grandeur-more-eur...

Europe is becoming quite strange. The World is becoming quite strange.
A politician gets up and speaks and says nothing, no one listens to what
he said, then he is roundly congratulated for his bold words that were
heard by no one and then everyone disagrees with what they think he
might have said. The Continent seems to be in a dream-state where the
worse it gets; the better it is because bad news is good news, the ECB
will be drawn in and provide liquidity and redemption for ever-after.
Any day, the ECB will buy all of the sovereign debt of Europe and declare
each nation “debt free and without risk.” It will be a gigantic do-over
when the ECB will be re-capitalized by extraterrestrial aliens that we have
not yet met currently residing at area 51.
Because we cannot invest money off-world we are stuck within the
boundaries of what is available and something must be done with the
paper printed by all of the Central Banks but it is getting increasingly
difficult to make much sense of it.

C O R R E C T I O N
The last line of my post before this one
- Gene Barry - as Dr. Clayton Forrester in " The War of the Worlds ".


[Edited on 29-9-2012 by franklyn]
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[*] posted on 28-9-2012 at 09:06


Read the article below and if you have the time watch the video: this one is worth your effort and is well on the topic of this thread. Intelligent philiosophical discussion.

Did Flaws in the Democratic System Cause the Financial Crisis?

http://www.cnbc.com/id/49207755

My own opinion is that the crisis was caused by a tripartite failure, shared equally by the public, the politicians and the financial systems in place, the banks and Wall Street. The public, after all, decides its particular flavor of democracy and elects politicians to taste. If it elects those having a fundamental fiscal recklessness, that is the choice. Further, the public (or a large percentage of the so-called middle class) chose plastic debt as a way of life. Irresponsible banks encouraged this; million dollar mortgages were offered to unsuspecting janitors;Wall Street papered over the cracks in this faulty paradigm with derivatives that allowed this debt to be carefully hidden out of the light of day. Yet the crisis was visible in plain sight for those with vision. I really come from a generation before the Boomers. Pre-welfare, when everbody who could saved instead of incurring debt.

Have you gotten you new Iphone5 yet? Support your local Apple store...

France Targets Deficit Cut With Tax-Hiking Budget

http://www.cnbc.com/id/49206756

Good luck with stale old Socialist methods, Monsieur Hollande. They never worked and they never will.

From Franklyn's post, supra:
Quote:
...something must be done with the paper printed by all of the Central Banks

Use as toilet paper? To light one's pipe?

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[*] posted on 28-9-2012 at 15:42


Quote: Originally posted by DerAlte  
Another reason is that poor children, through no fault of their own, carry their parents' and siblings' ghetto outlook into school

Don't forget that genetics plays a role also. The correlation between lower incomes and poorer school performance could have more to do with lower intelligence (personal motivation and ability to concentrate are also genetic to some degree).

Here is an interesting article about how genetics could influence career choice:
http://www.psychologytoday.com/articles/199909/career-your-d...

There was also the Minnesota Transracial Adoption Study, which examined children from different races adopted at birth into white middle class homes.
Quote:

Korean and Vietnamese babies from poor backgrounds, many of whom were malnourished, were adopted by White American and Belgian families. When they grew up, they excelled in school. The IQs of the adopted Oriental children were 10 or more points higher than the national average for the country they grew up in. Trans-racial adoption does not appear to either increase or decrease performance on IQ tests. "The three-way pattern of race differences in IQ remains.”


[Edited on 28-9-2012 by AndersHoveland]
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[*] posted on 2-10-2012 at 12:04


Taking a macro view

Since I was born in the days prior to WWII, the world population has risen from about 2.3 billion (109) to around 7-8 billion (See http://en.wikipedia.org/wiki/World_population for want of a better reference). Of this the US represents a mere 4.5% and a decreasing fraction, but it seems to most of the rest of the world to be bent on World Hegemony (to use a Chinese phrase once continually used by Radio China, which I used to listen to on shortwave, in my youth; Radio Moscow, too).

This country maintains military bases in ~100 countries 65 years after the end of WWII. It has managed, from a position of economic dominance (now in severe decline) and self-presumed moral rectitude, to alienate many of the world’s largest and smallest nations.

Consider the record of this land after its heroic efforts in WWII. It was drawn into that conflict unwillingly but reacted swiftly after the Japanese provocation. It then helped rebuild a Europe in ruins (Marshall Plan) and established NATO with Western European allies as a bulwark against the perceived threat from the USSR. So far, so good.

Next, with allies, it fought the Korean War to limit the spread of Chinese communism. This was only a partial success; the country was divided in half, like Germany. The southern half thrived and the northern half became a poverty stricken caricature of a long outmoded Communist state, like Stalin’s USSR or Maoist China.

Vietnam was a disaster. I believe (along with much European thought at the time) that the US, reeling from the Mc Carthy nonsense, seeing reds under every bed, severely misjudged the threat of communism for what was merely a struggle aginst colonial dominance by France. Whereas Europeans had aided in Korea, there was a severe reluctance for further Asian adventures and much of the US population did not support it either.The North won what they were after – getting rid of foreign dominance.

This era also saw the virtual dismantling of all European colonies and the transfer of power to native governments, with varying results.

IMO, Vietnam was the start of the misguided political theory of Nation Building. This idea was actually an attempt to persuade foreign nations to reform themselves into the image desired by the US. The buzzwords were: democracy, freedom, etc.; the actuality was riding roughshod over local customs, religions and perceived rights established long before the US existed, and many European states did as well.

Later wars were undertaken under the shadow of the fiasco of Vietnam. The Gulf War (H.W. Bush) was undertaken to prevent the capture of ally Kuwait by Saddam’s Iraq and a general disruption of the now important oil-rich Gulf states area. Diplomatically justified this time, it was a demonstration of the US military power (Shock and Awe) and achieved its end in short order. While hawks brayed for what would have been the destruction of Iraq, the US government wisely left the scene, the honor of its ally Kuwait intact and the ambitions of Saddam thwarted.

The destruction of Iraq was left to G.W. Bush and his minions on a slender pretext and, it turned out, totally inaccurate assessment of the tyrant’s development of Weapons of Mass Destruction. The ‘strategic withdrawl’ from Iraq left it in ruins, and open to infiltration from Al Quaeda and other elements of Islamic Extremism, a far worse condition than it might have been under Saddam. It created a power vacuum in the area – open for Iran and others to fill. So much for Nation Building – more like national destruction.

But prior to the Iraq fiasco, the first reponse to the Sept 11 atrocity was a a lighning strike against Afghanistan. A replica of Shock and Awe, it cost a few hundred US lives and achieved its purpose initially. But since a pointless war has dragged on for a decade and achieved absolutely nothing. A puppet government is in force there. It will collapse once US/NATO forces leave, if not before. Afghanistan will be what it always was, a poverty stricken country living in Middle Ages or maybe earlier conditions. The US has not succeeded in this latest exercise any more than the British Empire could, or the force of the USSR.

Two trillion dollars wasted in two useless wars, leaving destruction behind. Will the US never learn? What will become of that ridiculous Embassy compound in Baghdad? By far the largest in the world. This actions have resulted in a world view of the US as a Paper Tiger (famous Chinese communist phrase). But if the tiger sleeps, don't tweak his tail...

Is it surprising that the world looks on the US with a very jaundiced eye?

Meanwhile world population rises exponentially, and with it the CO2 level. A tenth of this rise could be attributed to that population merely breathing, to say nothing of the domestic animals used to feed (some) of it. The rest can be attributed to the fuel consumed for heating, cooking, industrial processes, etc. To say nothing of the destruction of nature’s CO2 sinks, the forests. Whether this will cause severe climate disruption or not, the rising level is a warning signal. Man has managed to thwart the natural processes that limit population growth, but not for much longer, I fear. Le Chatelier’s principle is inviolable. The equilibrium is currently badly out of whack. Nature will strike back. Nature abhors an exponential and will temper it with something, usually a larger, but negative, exponent.

There is a similar head in the sand approach to the current global financial crisis. Throw money at the problem and it will budge – it hasn’t.

The following are today’s reading.

Rajoy Comments Spark New Spain Bailout Confusion http://www.cnbc.com/id/49252742
… more of the SOS.

Boeing Engineers Reject Four-Year Contract Offer http://www.cnbc.com/id/49252094
IMHO as a retired engineer of 40 years experience, any engineer who feels he needs a union isn’t worth employing. He is not a professional but a paid hack.
……………………..
This one, however, you really ought to read. Mainly it’s just common sense to those who live without believing in the Soma of Political Correctness wafting from right, left (and centre). Wake up before it’s too late, America!
US Is Debt Addict on 'Budgetary Crystal Meth': Gross http://www.cnbc.com/id/49256805

Bond investors should try this one; @Franklyn, watch out for the inflexion points when calls become puts!

Why a Spike in US Bond Yields May Be Coming http://www.cnbc.com/id/49251889
……………………..
Congratulations to Apple on another Must-Have product; you will be out of fashion without it! But:
What Every Apple Investor Should Know http://www.cnbc.com/id/49253311
.. which points out why AT&T and Verizon (own both) will do well in spite of analist’s (sorry, analyst’s) predictions that their revenues will fall since they would have to provide you with your Iphone5. Sorry bud, you’ll be paying, ultimately; free lunches are a thing of the past.

Finally, I shall be watching the debates tomorrow (or will they be debacles?) So, this one is apposite: one thing the US seems to be discovering is that International Swill is not beer:
Boston Beer Founder on the State of Beer—and Mitt Romney http://www.cnbc.com/id/49208194
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[*] posted on 4-10-2012 at 06:05


http://themarketshadow.blogspot.com/2012/10/the-market-climb...
www.profitconfidential.com/debt-crisis/could-this-be-a-trick...
www.marketwatch.com/story/nasdaq-proposing-new-class-of-trea...
http://video.cnbc.com/gallery/?video=3000119228

.
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[*] posted on 4-10-2012 at 06:34


Quote: Originally posted by DerAlte  
This country maintains military bases in ~100 countries 65 years after the end of WWII. It has managed, from a position of economic dominance (now in severe decline) and self-presumed moral rectitude, to alienate many of the world’s largest and smallest nations.
For an excellent exposition on this topic, see Chalmers Johnson's Blowback. The rest of the book, too, is pertinent to the concerns raised.
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[*] posted on 5-10-2012 at 06:42


Just in , it doesn't even pass the giggle test :)
www.cnbc.com/id/49298217

30 year U.S. treasury rate is back up to 2.95 this morning
I vacillated whether to buy PUTs on Wednesday when
TLT fund was over $ 124 , it's down $ 3 now , and
the $ 119 December I was considering is up over 40 %
oh well.
http://themarketshadow.blogspot.com/2012/10/qe-3-is-sham.htm...

_______________________________________________


Capitalism in action :
Although worldwide demand for solar panels and wind turbines has grown rapidly
over the last five years , China’s manufacturing capacity has soared even faster ,
creating enormous oversupply and a ferocious price war. GTM Research , a
renewable energy consulting firm in Boston , estimates that Chinese companies
have the ability to manufacture 50 gigawatts of solar panels this year ( China by
itself represents more than 2/3 's of the world’s capacity ). While the Chinese
domestic market is able to absorb 4 to 5 gigawatts , exports will only take
another 18 or 19 gigawatts. The enormously expensive equipment in solar panel
factories needs to be run around the clock, seven days a week , to cover costs.
China’s biggest solar panel makers are suffering losses of up to $1 for every $3
of sales this year, as panel prices have fallen by 3/4 since 2008. The result is a
looming financial disaster.

From here _
www.nytimes.com/2012/10/05/business/global/glut-of-solar-pan...

.

[Edited on 5-10-2012 by franklyn]
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[*] posted on 5-10-2012 at 23:01


You are forgetting that US has limited and imposed barrier for import of Solar panels from China i think at beginning of this year, to "protect" domestic manufacturers thus keeping prices high.

So much about "free market".

But I see China strong presence all around the world. South America, India, Europe, Africa.... They are expanding their markets rapidly.
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[*] posted on 8-10-2012 at 11:08


Regardless of the political situation, the economic outlook, Euro worries, unemployment numbers, etc., the US Equity market had a banner year since last Sept. If you did not participate, you missed out. Dow up 22%; S&P up 25.8% and NASDAQ 25%.
But 3rd quarter GDP anemic at c 1.9%, earnings expected lower:
Worst US Quarterly Earnings Since 2009. Financial Times: http://www.cnbc.com/id/49323929

Also FT : Favorable Tax Draws Companies to Britain

Last weekend at a party I spoke to a lady of Greek origin who spends four months a year in Greece. She said from her experience that things were very bad there, the worst she had ever seen. She described it as a monument to failed socialist ideas and welfarism.

And if Merkel were to carry out this suggestion, she had better take her own bodyguard – the current mood is very ugly there :
Merkel Should Bury Euro During Greece Visit: Economist http://www.cnbc.com/id/49327704 & http://www.cnbc.com/id/49326804

I rather liked this one, too: Middle Class — Whatever It Is — Targeted by Candidates http://www.cnbc.com/id/49328742

What indeed is this middle class here in US? I have been here 48 years and I know exactly what a blue collar worker and a white collar mean, but the exact meaning of the ‘middle class’ here is completely nebulous to me. Back in the land of my birth (UK) it had a pretty concrete meaning and it did not have that much to do with money. It was an attitude. Nor really did it have that much to do with education – you did not have to go to ‘college’ to qualify, or to private school etc. You did have to speak intelligible English in a suitable accent, but it was not reserved for any particular section of the country. Grammatical correctness was one of the necessary qualifications. Say ‘I ain’t got no...’ and you disqualified yourself – unless you were a famous Rock star. An Edinburgh Scots or a precise Northern accent was no bar, but Scouse or Geordie or Brum was.

I’d be interested to hear from UK members what they consider the term means in today’s Britain. In the US the politicians seem to think strictly in money terms and each has a different sliding window, assumedly on the central 50% of income. The entire campaign has been about this ‘middle class’. What happened to the ‘poor’ this time? Haven’t even heard about the homeless, guess thay don’t vote, yet I still see them. That’s democracy today. “Representative democracy”.

Yet, in the above article, quote:
Still, experts say the term middle class has a cultural connotation that goes beyond the number on your paycheck or tax stub.

Kevin Leicht, director of the Iowa Social Science Research Center at the University of Iowa, said many Americans think of a middle-class life as being one in which you have a stable job, own your own home and occasionally buy something substantial like a new car. You also either went to college or have the aspiration of sending your children to college.
Beyond that, he said, the term middle class invokes the type of person who gets married and has kids, pays their bills on time, doesn’t get in trouble with the law and maybe goes to church.

“In the United States, it’s probably more of a cultural category than an economic one,” he said.


…. Which has the same connotation I have always had. But since when has any job been ‘stable’? Not on my watch, never in the defense industry.

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[*] posted on 9-10-2012 at 20:21


Bretton Woods is a resort in the mountains of New Hampshire that was made
famous by a series of meetings of world leaders and economists in 1944. Nine
months before the last of the V-2 rockets struck Britain , 730 delegates from
the 44 Allied Nations congregated in Bretton Woods to create a new world order.
Under the Bretton Woods Agreement, the world's currencies would be pegged to
the U.S. dollar and central banks would be able to exchange dollars for gold at a
set price of $ 35 per ounce. It was this arrangement that firmly established the
U.S. dollar as the global reserve currency. By the early 1960's , there was wide
spread recognition that the U.S. could never fulfill its commitment to redeem all
outstanding dollars for gold. The issuance of new dollars and gold for dollar
redemptions had reduced the U.S. Treasury's gold coverage ratio to 18%.
Despite this disturbing fact , central banks did not call the Fed's bluff by selling
their dollar reserves. They had become hostage to the system. By the end of
that decade , the problem had intensified to the point that if any central bank
attempted to convert its dollars to gold, its domestic currency would rapidly
appreciate above the levels that were pegged under Bretton Woods , leading
to severe economic slowdowns for any country who challenged the U.S.

[ In 1971 then president Nixon announced that dollars would no longer be
exchangeable for gold , the dollar would hence be bolstered by it's new role
as the sole currency to be used in payment for petroleum , the petrodollar. ]
It was this surplus of dollars held by foreign central banks , and subsequently
invested back into U.S. Treasury securities , that reduced the United States
cost of borrowing and allowed the U.S. to consume and spend wildly beyond
its means as it still does.

The above is excerpted from here _
http://seekingalpha.com/article/914521-return-to-bretton-woo...

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