How about quantitative easing for the people?

The one economic benefit of QE has been to help governments finance the huge deficits caused by recession without having to raise taxes, slash public spending or face Greek-style bankruptcy. In this sense, QE has certainly prevented the U.S. and Britain from suffering worse outcomes, but it has failed to stimulate employment or economic growth. This is exactly what Japan has experienced for 20 years – and as in Japan, additional rounds of QE now will merely act as an anesthetic, perpetuating stagnation but discouraging more effective stimulus measures.

One such radical measure is too controversial for any policymaker to mention publicly, although some have discussed it in private: Instead of giving newly created money to bond traders, central banks could distribute it directly to the public. Technically such cash handouts could be described as tax rebates or citizens’ dividends, and they would contribute to government deficits in national accounting. But these accounting deficits would not increase national debt burdens, since they would be financed by issuing new money, at zero cost to government or to future generations, instead of selling interest-bearing government bonds.

Giving away free money may sound too good to be true or wildly irresponsible, but it is exactly what the Fed and the BoE have been doing for bond traders and bankers since 2009. Directing QE to the general public would not only be much fairer but also more effective.

Suppose the new money created since 2009, instead of propping up bond prices, had simply been added to the bank accounts of all U.S. and British households. In the U.S., $2 trillion of QE could have financed a cash windfall of $6,500 for every man, woman and child, or $26,000 for a family of four. Britain’s QE of £375 billion is worth £6,000 per head or £24,000 per family. Even if only half the new money created were distributed in this way, these sums would be easily large enough to transform economic conditions, whether the people receiving these windfalls decided to spend them on extra consumption or save them and reduce debts.
http://blogs.reuters.com/anatole-kaletsky/2012/08/01/how-about-quantitative-easing-for-the-people/

CSPAN Rep Paul Kanjorski Reviews the Bailout Situation
http://www.youtube.com/watch?v=pD8viQ_DhS4&feature=player_embedded

IRS Fraud: There Is No Law That Requires You To File A 1040!

http://www.youtube.com/watch?v=Wj_PTqtzqro&feature=related

Bill Still address the Libertarian Nation on 11 important issues
http://www.youtube.com/watch?v=7gzbq-rZiIQ

How Cheap Money Will Destroy the World

Leverage is an essential part of the financial system, and when used properly it allows businesses to borrow funds to invest in growth and expansion, offers opportunities for reasonably priced housing, and much more. But current imbalances in the ways in which leverage is being used by the rich and powerful in the United States and abroad have led to an alarming situation that threatens to shake the global economy to its core.

In Leverage: How Cheap Money Will Destroy the World, well-known market commentator Karl Denninger literally follows the money, tracing the path it has taken through history and discovers a shocking truth—the power to control a nation's purse strings is addictive, and when that power falls into the hands of only a select few, they will pull the levers of government and policy to enrich themselves at the expense of everyone else.

History is littered with the stories of collapsed monetary systems, and in every case the debasement of the currency in question, and the disasters that followed, can be directly blamed on excessive leverage, deployed in ill-intentioned and fraudulent ways by the elite.The current Great Recession is no exception to this rule. It was no accident, and the politicians and monied interests responsible knew that it was coming.

Special interests and other influential individuals have always used leverage to enrich themselves while looting the population at large. Eventually the bill always comes due and then we all have to pay.With Leverage in hand, we can avoid this disaster, and Denninger shows how. With practical, realistic ideas for fixing the financial system, devising sound energy policies, and more, the book stands between us and a debt we simply can't afford.
http://www.financialsense.com/node/7345

The Lost Science of Money- Stephen Zarlenga

One of the factions that controls nearly every moment of our lives is hardly understood by the large majority of the population. To gain an understanding of today's topic deepens our understanding of the world and how it works and exactly what we can do to effect change when and where needed. Our deepening investigation into the freedom of consciousness cannot go without a deeper understanding of what we all use for exchange or trade - money.

Exactly how we define the word 'money' defines our very society and affects nearly every facet of our lives. It also tells us exactly what we can expect from our political representatives. All we need is to understand the language of money. Beginning today in this detailed two part series we begin to look into the fundamental concepts of money: What is money and how is it defined? What is the history of money?

How does it tie to religion, government and private business?
What is the difference between credit and money?
What is FIAT money? Is there a difference between private versus nationalized banks and how they operate? And why is any of this important to YOU?
And how could it possibly affect YOUR life?

Stephen Zarlenga is the founder of the American Monetary Institute (AMI) - the leading American monetary think tank for monetary history, theory and reform.

An economic historian and author, Zarlenga provides us the clearest picture of how money and monetary systems work in his incredible 2002 tome The Lost Science of Money, and he's also the author of the American Monetary Act, submitted to congress by Dennis Kucinich in March of this year. http://www.monetary.org/

Part 1
http://www.youtube.com/watch?v=1l3OxMAF7Rk&feature=related

Part 2
http://www.youtube.com/watch?v=h_2Wo0RRkQU&feature=related

Keiser Report: Debts & Slavery

This week Max Keiser and co-host, Stacy Herbert, talk about 'capitalist gangbangs,' JP Morgan's 'way forward,' and why 14 trillion no longer scares us. In the second half of the show, Max Keiser interviews Satyajit Das about the conservation of debt and slavery, extreme money and #occupywallstreet
http://www.youtube.com/watch?v=zu0wDv1LJ4k&feature=player_embedded#!

Bank of England starts another round of QE

Zero Hedges comments:

As many expected, the Bank of England has followed in Bernanke's footsteps and proceeded with extra QE, 75 billion extra, or about 25 billion more than consensus - this is the first expansion in the British QE since November 5, 2009 when it did the latest £25 billion expansion.

Unfortunately, this is just the beginning: much more global QE is coming down the line as the "monetary authority" realizes it only has itself and its printers to rely on in a world rapidly reentering recession.
http://www.zerohedge.com/news/bank-england-expands-qe-%C2%A375-billion-total-%C2%A3275-billion-keeps-rate-unchanged

Credit card interest rates surge as spending drops

Single mom has to try to survive on foodstamps as consumer credit dries out and interest on Credit Cards reaches in exsess of in average 19%.

INTEREST rates on credit cards are at the highest levels they have been for more than a decade, a new report shows.

Average interest rates for making a purchase on your plastic have now hit 19pc -- the highest rate in 13 years.
Credit card providers have pushed interest rates up by 2pc in the first few months of this year alone, according to research by market research group Mintel.

http://www.independent.ie/business/personal-finance/latest-news/credit-card-interest-rates-surge-as-spending-drops-2819892.html

This as Wall Stret now is guaranteed near zero interest rates for at least the next two years.
http://online.wsj.com/article/SB10001424053111904140604576498380497149042.html

Then as banks not are in liquid out of cash but in fact insolvent they now use this free money to promt up their balance sheets in order to try to repaire what in fact are losses at historical levels. Not a dime of this money therefore is then transfered from these large banks to the real economy.

As leading bank analysts Meredith Whitney states "the top U.S. financial institutions have become zombie banks that will need a decade to adjust their businesses to the new realities in the industry."
http://intheendwerealldebt.blogspot.com/2011/08/financial-giants-turning-into-zombie.html

The whole idea is now to try use time in order to try to mend what in fact really is broken by transfering real welth from the real economy and the taxpayers to a phony casino fake economy based, not on market values but rather so called "book value".

The ONLY result out of this is welth transferred to an unpresidented extent from the taxpayers and the real economy to the financial elites by throwing real good money on what in fact is nothing but a black economic hole. As long as this is allowed to continue (and in the cards this is something now they see happening for decades) the economy and the consumers will become more and more depressed.

In fact what really is at stake here is the whole middle class - as we know it. These people have NO political representation anywhere in the system as all funding to politicians has been made by either of oligarchs and or big business. The result is evident - austerity for the people and corporate wellfare to big business.

But here is a thought - how in the world does this parasiting big business beleive it can survive withiout any future economy based on real consumers? Mayby they think is enough just to led the FED hand them out printed money, shortcutting any consumers...?

There is a war going on
http://www.youtube.com/watch?v=Tq1zpHF0J04

Money to The People - NOT to Banks
http://www.youtube.com/watch?v=nA54cgkvc_w&feature=related

Bill Still's "The Secret of Oz" movie review
http://www.youtube.com/watch?v=Plk82fK0tAM&feature=related

George Carlin Doesn't vote
http://www.youtube.com/watch?v=xIraCchPDhk

Urgent need for austerity measures for the finance sector

Really poor economic European outlook going forward

Quarterly growth in Germany slowed to 0.1 per cent; in France it has stopped. There is no easy way to restart the eurozone's economic engine. Lex's Edward Hadas and Vincent Boland discuss the problem, and the lack of a complete solution
http://video.ft.com/v/1112099070001/Eurozone-economic-engine-stalls

then what people discuss as a part of a "solution" its said is these Eurobonds (read Economies not able to get deacent financing on their own as they are in such a complete and utter economic distress will be ably to get fundings via Germany). Viable ... anyone?

So with poor economic growth outlook, indebtness as far as the eye can see one can but wonder why financing debt in any weay even should be discussed as part of any solution? Time to reverse this charade. Austerity for the Finance sector and let the banks fail and clear off the debt is whats in fact urgetly needed. Thats the ONLY way to ensure economic growth anytime in the future. If not well have decades of what only can be described as the Japanese disease of anemic growth.

Iceland sure has made progress and should in this regard be seen as the role model approach going forward.

Nationalise the Banks - Clear the Debt

http://video.cnbc.com/gallery/?video=3000039237

Clear out and reboot

Hi Bernanke,

how's it going? Not to well for all to see. One thing I can't figure out is how low interest rates will clear all bad debt primarely in the derivatives market. I do agree were in a recession (in fact within a depression) but the result of more dire economic outlooks is we sure can expect a whole lot of leveraged positions to really start blow to bits these coming weeks. Is that why we hear QE3 is about to happen within three weeks in order to try to save these banks?

Are the banks solvent?
http://www.youtube.com/watch?v=PD0YCSNdo8w&feature=related

The banks' big lie
http://www.youtube.comhttp//www.youtube.com/watch?v=Jy9yluyizGo&NR=1/watch?v=Jy9yluyizGo&NR=1

So far not wery many are happy with how this has turned out since 2007 and people seems to take to the streets almost everywhere. Do you se how this is linked with the policys you have implemented last couple of years? I know people are voicing out their frusration by violence as the economic deterioration accellerates. I guess whats really at stake here is the belife were living in a democracy.

Do we still live in a democracy
http://www.youtube.com/watch?v=Lj0aETOwxbw&NR=1

This black hole unregulated derivatives mess how do you intend to now go about and fix it? Its all about three men that destroyed the world - as we know it. How about your lecagy? Do you really wanna be part of that team in our histrory books? Theres still time to repent and do whats actually good.

The warning
http://www.pbs.org/wgbh/pages/frontline/warning/

Now its time to call a spade a spade and start by implementing proper accounting meassures again so that all is booked according real market value and not set at fictisiouse levels. Bottom line insolvensy can not be solved by more liquidity and even though you acedemic credetials sure are impressive, really what you have dealt with in your analysis is the issue related to lack of liquidity in the system in order to fight deflation as was the case during the great depression.

As we all know writing of bad debt is deflationatry but it has to happen as othervice that bad debt will remain for ever and hinder any possibility of economic growth. There are so much bad debt in our system it has to be clreared out. Throwing good money at bad never was a good ide.

Insanety is continue doing something that has shown not to work. I dont think many of us beleive Q1 and Q2 has made us better of now? Then for the sake of all people of the worlds well being pls close the FED and suggest the treasuries issue interest free loans to be used in the real economy, building real infrastructure and puting people to work and pay tax. Thats the stimuly that would counter the deflation cased by writing of debt.

Cheers

$1 Billion bet in July of US downgrade brings questions of insider information

In late July, a mystery investor or hedge fund made a nearly $1 Billion bet that the US would lose their AAA credit rating, and on August 5th when S&P issued its downrade to AA+, that investor now stands to make a return of 1000%, and leads to serious questions of who the mystery trader is, and did they have insider information well before hand.

In 1992, George Soros nearly destroyed the British Pound, and made a profit of $1 Billion by betting agains the currency. The British government had been propping up the Sterling for some time, and this led to a weakness that Soros was able to exploit when rejection of the Maastricht Treaty led to a massive devaulation of the Pound, and a huge profit for his bet.

That belief, or perhaps knowledge of events is very similar to the bet placed against the American credit rating just two weeks ago.

While the identity of the 'mystery investor' remains unknown, many indicators do point to George Soros as the principal benefactor. First, Soros has been tied to the Obama administration since the 2008 elections. In February of this year in fact, a Soros investment fund profited well on President Obama's new green energy policies. Secondly, right about the exact same time as the $1 Billion bet took place on the US credit rating downgrade, Soros made public the move to divest his management fund of outside investors, and quietly go private. This move allows him to make trades and investments without being required to notify the SEC under the new Dodd-Frank act passed in Congress last year.

Of course, this mystery bet could have been made by any Hedge Fund that followed Soro's course of action, and went private on their own. However, very few people have the inside contacts with the Treasury Department and Obama administration that Soros does, and the historical evidence does point strongly to this bet being one that he has done in the past.While the point here is not necessarily who made the bet on the a US downgrade, but rather, the question is how much was known by the Obama administration and Treasury Department in advance of a downgrade coming? In April of this year, an interview with Secretary Tim Geithner led him to say unequivocally that there is no chance of the US being downgraded, and assuredly, the government has close communication with the ratings agencies through the Treasury and the Fed. This downgrade did not come as a surprise to the government, only the timing of it may have been unwanted.

There is a saying when it comes to theft in America. If you steal $100, you go to jail, but if you steal $1 Billion dollars, you work on Wall Street. The SEC and American justice system has been a process that picks and chooses whom it prosecutes for insider information, and the higher up you are in the banking system, the less likely you are to be investigated, or prosecuted. Since the 2008 credit crisis, small fish such as Bernie Madoff were made public scapegoats, and brought to trial, but larger names such as Angelo Mozillo of Countrywide simply got a slap on the wrist, and a large retirement.

The timing of a massive bet of nearly $1 Billion dollars on the US losing its AAA rating just two weeks before S&P made the call on August 5th is eerily similar to what took place in 1992 on the British Pound. There is no doubt that someone had insider information that a ratings downgrade was coming, and only time will tell if the mystery investor is ever revealed who just made $10 Billion dollars off the investment.

Continue reading on Examiner http://www.examiner.com/finance-examiner-in-national/1-billion-bet-july-of-us-downgrade-brings-questions-of-insider-information#ixzz1UXZAVufW

Warren Buffet owns parts in Moodys. These rating institutes work on behalf of the Oligarchs. Soros for sure has good enough connection within these structures as does many others. Thats why crashing economies is such a very good business, justt as war is as well. Same end result - a hurting civilian population.

Soros is the guy not only responsable for the Pounds demice he also very activly interveined against the Swedish Krona some three decades ago. Same end results Sweden joined the European Union and austerity to the people.

Next Wave 2.0

The rating company S&P assigned AA+ scores to securities in the $2.9 trillion municipal bond market including school- construction bonds in Irving, Texas; debt backed by a federal lease in Miami; and a bond series for multifamily housing in Oceanside, California. Olayinka Fadahunsi, an S&P spokesman, said he couldn’t provide a dollar figure on the affected debt. “It’s expected, but nobody is happy about it,” Bud Byrnes, chief executive officer of Encino, California-based RH Investment Corp., said in a telephone interview

Matt Fabian, a managing director of Concord, Massachusetts- based Municipal Market Advisors, a financial research company, said in a telephone interview that he expected “hundreds and hundreds of municipal downgrades,” which may hurt investor confidence. “Treasuries may be able to shake off a real impact from the downgrade,” he said. “Munis, I’m less sure about." That's ok, while nobody has any idea what is coming, that won't stop 99.9% of those on Comcast's financial comedy channel from opining anyway.

Sure, just like the Fukushima explosion had no impact on the lift expectancy of those surrounding it back in March. Perhaps we should all check back with population in the immediate vicinity in a few years... And then do the same for debt issuers in the US.
http://www.zerohedge.com/news/sp-cuts-aaa-rating-thousands-municipal-bonds

South Korea Joins Greece In Banning Short Selling
Yesterday Greece, today Korea, tomorrow the world. The traditionally last ditch attempt by a regulator losing control of events: making short selling illegal, is starting to appear in random places, first showing up in Greece, and now in South Korea, where the capital markets commissioner just said no most shorting for 3 months.

South Korea’s Financial Services Commission will also temporarily ease daily limit on amount of shares companies can buy back. This latest short selling ban has put many on edge, and following Italy's move to ban naked short selling several weeks ago it is now expected that at least several more European countries will follow in these footsteps, further eliminating price discovery and destabilizing market confidence and more.
http://www.zerohedge.com/news/south-korea-joins-greece-banning-short-selling

Japan econmin: should think more about QE steps
Japanese economics minister Kaoru Yosano said on Tuesday that Japan should give more thought to the range of quantitative easing steps it uses, as the country struggles to deal with a strong yen.

"We need to consider whether we can give somewhat more thought to the range of quantitative easing (steps used in Japan)," he told a news conference.

He also warned that economic risks are on the rise globally, adding that the global economy could fall into an emergency situation if governments take the wrong course on policy. (Reporting by Yoko Kubota; Editing by Joseph Radford)
http://uk.reuters.com/article/2011/08/09/japan-economy-yosano-idUST9E7J100I20110809

Next wave
http://intheendwerealldebt.blogspot.com/2011/08/next-wave.html

Clearly our master all over the world indeed are very keen to give away our money for free in order tro "save the world from disaster". As a thank you very much then the taxpayes are given austerity withing just a very short while thereafter.

Thats whats now on the verge to happen in the US as well as even in Germany (if this EFSF idiocracy is allowed to continue there). The Japanece QE has resulted in several decades of decay. And yet theire politicians are eager to pump out more.. of their citicens money.

The QE game actually was invented in Japan and now its coming back home again to roost.

A National Debt Of $14 Trillion? Try $211 Trillion

Kotlikoff explains that America's "unofficial" payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially.

"If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap," he says. "That's our true indebtedness."

To eliminate the fiscal gap, Kotlikoff says, the U.S. would have to have tax increases and spending reductions far beyond what's being negotiated right now in Washington.

"What you have to do is either immediately and permanently raise taxes by about two-thirds, or immediately and permanently cut every dollar of spending by 40 percent forever. The [Congressional Budget Office's] numbers say we have an absolutely enormous problem facing us."
http://www.npr.org/2011/08/06/139027615/a-national-debt-of-14-trillion-try-211-trillion?ft=1&f=1001

Were coming to a point US imperial overstretch will have to be dealt with. This is not a deficit problem only dealing with having to reduce healthcare, Medicaid, medicate and so forth. As some 50% of every tax dollar today in the US goes directly in one way or the other in what can be describes as corporate welfare to the military industrial sector that then is where the significant cuts has to be taken. Even cleares as som 40% of all the cost associated to finance the current US war undertakings is taken out of the defecit.

The Geopolitical environment is changing and changing fast. New alliance is forming and question then how long before the petrodollar i dead? For how long will resource rich countries accept more and more debased $us as compensation for their e.g. oil?

In the midst of all of this one also has to remember that the US today is the world primary food producer. It produces e.g. wheat, corn, Soy that is exported all over the world.

As dependent that food production is on oil well then its fair to expect higher future prices. Add to this growing world populations and increasing food demand. Question then would be in what currency would Americans want to be paid in order to export?

Clear is that demand for corn has been soaring. Export of corn to china is expected to quadruple from here combined with a high demand for ethanol.
http://www.marketwatch.com/video/asset/markets-hub-us-corn-to-china-export-quadrupled/24B8B2D2-5897-494D-A94C-45771CC603A2#!24B8B2D2-5897-494D-A94C-45771CC603A2

The nearby chart, based on data from the Department of Agriculture, shows the remarkable trend over a decade. In 2001, only 7% of U.S. corn went for ethanol, or about 707 million bushels. By 2010, the ethanol share was 39.4%, or nearly five billion bushels out of total U.S. production of 12.45 billion bushels. Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed.
http://online.wsj.com/article/SB10001424052748703396604576088010481315914.html

So there is a decision to be made here - produce food or ethanol. In any case corn prices will increase putting even more pressure on poor countries that need to import food.

Wheat is the primary food in North Africa and in the Middle East but the highest consumer per capita is in fact Denmark. But the primary use of wheat in Denmark is in fact as animal feed. Some 80% of all wheat in Denmark is used for that purpose. After China, India the US is the World’s third largest wheat producer. Clearly the unrest in the Middle East can be related to the fact whet prices have been soaring.

10-year commodity price chart for Wheat, US, HRW
http://www.mongabay.com/images/commodities/charts/wheat.html

Meanwhile the Chinese are voicing out what only can be described as significantly more aggressive signals to the US in regards of it US Treasuries holding. There clearly is a political geopolitical aspect to this as in fact the very first rating institute to downgrade the US not was S&P but in fact a Chinese rating institute.

The Chinese now clearly try to put some hard pressure on the US and in fact these Communists favors austerity. "For the people By the People"?

NEW YORK (MarketWatch) — China used Standard & Poor’s decision to downgrade the U.S. credit rating to issue a sharply-worded rebuke of the U.S. government on Saturday, saying Washington can no longer borrow its way out of trouble.
http://www.marketwatch.com/story/china-rips-us-on-debt-rating-downgrade-2011-08-06

And Russia as well is loud about their dissatisfaction with the way US manages its financial affairs. In fact Putins views the US now as nothing more than parasites.

What Did Putin Call the U.S.?
http://www.realclearworld.com/2011/08/02/what_did_putin_call_the_us_126215.html

In reality the US is under severe attack domestically as well as overseas. The US needs oil and imports some 2/3rds of all oil it consumes. The world need food and the US here really is a key player internationally. Just imagine what would happen if that US supply for some reason would not make it to the markets?

Are we beginning to see a new food for oil rather than dollar approach as part of the future US strategy? I do think however that militarily the US will have but limited ability to secure its interest internationally and combine then this with a less and less attractive dollar trade and its clear foods important as a geopolitical weapon will increase.

Problem with food, in the way food production today is structured and organized, is that in all aspects its totally dependent on the availability of oil. On average it takes some 10 calories of energy to get one energy calorie on your plate.

Netherlands joins Germany in opposing bigger EFSF

AMSTERDAM -(MarketWatch)- The Netherlands joined Germany Monday in warning against boosting the volume of the euro zone's rescue fund, saying it won't solve the problems in the currency area, and it even may hurt the solvency of guarantornations.

In a letter to lawmakers, Finance Minister Jan Kees de Jager said that an increased European Financial Stability Facility is "no panacea" to solve the mounting troubles in the euro zone. "Any significant increase of the EFSF can...have consequences on the creditworthiness of guarantor nations," he said.

A bigger EFSF therefore shouldn't be seen as an alternative to achieving structural reforms and debt sustainability, he added.

His comments echoed those of German officials, who earlier Monday voiced similar statements. A spokesman for German Chancellor Angela Merkel said the fund will stay as agreed at a July 21 euro zone summit. "The EFSF will remain what it is, and keep the volume it had before July 21," he said at a press conference, removing hopes of a more robust EFSF.

The positions of Germany and the Netherlands clash with the European Commission, which has called for a massive increase in the EFSF's current lending capacity of EUR440 billion guaranteed by euro-zone governments.

Market watchers have said a new volume of up to EUR1.5 trillion or more might be needed to reassure investors that the fund can offset threats to the solvency of governments.
http://www.marketwatch.com/story/netherlands-joins-germany-in-opposing-bigger-efsf-2011-08-08

'Euro on edge, will collapse by November if no new crisis plan'
http://www.youtube.com/watch?v=T1Qd-oohi5c&feature=player_embedded

SDR .. anyone..?

Next Wave

Now in the midst of the turmoil related to the US downgrade and as both Italy and Spain are under pressure forcing the EFSF to act decisively were beginning to see also France and Belgium as possible new targets. The ratings institutes of course will dictate this as to when it will happen.

Downgrading France would be the first step and as this then creates great market volatility it opens up for the hedge funds to really go in for the kill. The rating institutes are in fact the storm troops allowing the real big buck to be earned by the highly leveraged hedge funds derivatives actions. The rating institutes are so in bed with the financial sector and only care about their relationship with them. They hear their masters call -now its time to transfer wealth from the people to the few but first lets earn a bundle.

In fact these rating institutes are outright owned in many cases by the Oligarchs. Moody’s as an example is one of Buffets holdings. So there you have it blatant for anyone to see.

The ammo then used by these Hedge funds was in reality given to then during the 70ties, when worldwide and for some very obscure reason the financial markets where "deregulated" allowing for more and more leverage and the creation of new financial instruments such as derivatives.

That’s ammo, we the people very easily and if we really want to, could take back. Again "a problem well stated is a problem half solved" and as long as we allow talking heads, economic "analysts" (that almost exclusively represents the banks) without anyone ever opposing them to define this as "a PIIGS problem" and where they claim austerity, as absurd as it is closing schools, selling of vital parts of the society to private interests, laying of firefighters, closing prisons, reducing benefits and heal care, withdrawing pensions etc, actually is the way to go well then you’re just where these people want you to be.

The underlying problem of it all instead is the deregulation f the financial markets. The financial sector needs first of all downsizing and that where the real austerity needs to be focused at. This lazy, complaisant, greedy and destructive sector allowing for severe miss allocation of recourses needed in society, short term interests, mispricing and outright fraudulent behavior is in fact what needs to be severely cut.

Some people are now starting to wake up of this bad dream and for example Greece has just recently banned short selling. As preventive measures thats then what Italy, Spain and France needs to do asap. And while they’re at it then also ban derivatives and foreign hedge funds in their countrys.

Then it’s also clear more and more banks are getting distressed. BOA , Citigroup, MS if these guys are to survive they need liquidity because they cannot manage on their own. In fact they’re insolvent and have been for a while.

So bottom line more countries getting in distress and more banks and financial institutions under pressure. Now this is in fact worse than what was the case when the first bailout was made. Now we see how well that has played out and how much better off were now because of it.

Unfortunately the powers at be – your Oligarch – wants more stimuli and they are going to get it. Problem is clear EFSF is soon to become exhausted as there is no way they (Germany) will be able to hold up not only Italy and Span but in addition France for any significant amount of time.

Equally clear is that the US, having tried this approach now since 2008 is on a verge of collapse and simply cannot take on more debt, were now entering in to new territory.

We’re now seeing money that could have been used in the real economy go to waste. It’s nothing but outright capital destruction as has been the case beginning with the bailouts 2008.

That’s why the leaders in Davos came up with the number $100 trillion of injection, or perpetual QE, needed to the financial system. Sure that is what you need if your intent is to so save all what’s in fact rotten but isn’t it better to just clear it out once and for all? Clear is that in conjuction to the implementation of the SDR preciuos metals will be demoneytised via severely restricting trading options, limits etc making conficastion a thing of the past. You can have your physical gold as much as you want but it will be useless as there is no way you could trade it.

This is a really great and perfect time for the SDR!
http://intheendwerealldebt.blogspot.com/2011/08/this-is-really-great-and-perfect-time.html

But clear is that the real solution would be to instead clear all bad debts, let insolvent institutions fail and then to counter debt reductions deflationary forces counter strike with real investments in the real economy building real infrastructure, improve schooling and heal care.

Even if from an economists perspective it may be good business to burn down the forest, plant fast growing grains, deplete all natural recourses and then get out of there it doesn’t make it a viable model. That approach surely is nothing but insane as the real, actual costs are staggering. Oddly enough we have allowed for a thinking called economics where all the real cost simply doesent show up on the balanse sheet. That analogy then is exactly the same in regards of a country. Even if hedge funds can gain short term and huge profits it doesn’t justify the fact the result is less education, less healthcare, less salary, more taxes etc. Add to that the facts that it is immoral.

Now is the time to stop this blatant up your face oppression. Reregulate the financial sector, put the rating institutes people behind bars for the crimes they committed in regards of the subprime rating, put GS in jail for cooking the books in Greece etc, ban naked shorts selling immediately as well as the use of derivatives.

RIG-anomics. GOP Ignores Ronald Reagan's Trickle-Down Economics Failures
http://www.youtube.com/watch?v=63LrW-0Cv2M

QE what is it good for?

John Maynard Keynes had one idea he referred to as the “liquidity trap”. The condition is characterized by an economy in which interest rates are so low that consumers, business and investors don't care if money is in cash or in interest-paying investments.

BNY Mellon was reacting to a run to the bank by companies fleeing even U.S. Treasury bills for the safety of the bank. When they announced big corporations had to pay a fee rather than to pay them interest when depositing money on their account.

As long as consumers and businesses hold cash instead of spending or investing it because they expect the economy to be weak, the economy will be weak.

It makes the Federal Reserve's usual monetary policy impotent. Cutting interest rates below zero is (almost) impossible. Printing money to buy bonds creates sterile bank reserves but not much additional lending or spending.

In order to get out of a liquidity trap according to classical Keynesianism is that the government borrows and spend it on real infrastructure and create real jobs. This is what should have been done in the first place rather that bailing out insolvent (very important I’ll come back to that later) banks and most certainly in Obama’s follow up attempt. Frankly there wasn’t very much bang for the buck from the Obama fiscal stimuli at all.

Now and as actually deficit cuts talks has become all of a sudden the main topic in Washington, maybe adding another round of stimuli that would further add on the deficit may not be what the treasuries holders would like to hear?

Yet another way actually proposed by the Swedish mega theorist Lars O. Svensson is to devalue the currency.

Lastly creating the idea that inflation is a problem and that the objective with fiscal policy in fact is to create inflation would be another way to get out of the liquidity trap as people then surely would not like to horde cash but rather put it in to circulation.

This is what Harvard Economist Kenneth Rogoff says: "The only practical way to shorten the coming period of painful deleveraging and slow growth would be a sustained burst of moderate inflation, say, 4% to 6% for several years." Incomes rise with inflation, debts wouldn't, and they'd be easier to pay off.

http://www.project-syndicate.org/commentary/rogoff83/English

Then what if the cause isn’t a liquidity problem? What if the real underlying problem is a solvency problem? Throwing good money trying to save insolvent banks isn’t then going to solve anything.

Most likely well get nowhere until the $600 worth of derivatives has been neutralized, disarmed and cleared out.

Then and my view is that there will be no progress as long as the financial sector in any way, shape or form is the beneficiary of any stimuli. Now that in fact would be a real deflationary process clearing all of that debt clean. But that could then be managed in a situation like this by allowing the treasury generate new interest free loans aimed 100% at new infrastructure, get people in real jobs, so that they can pay tax as well as consume.

This way the deficit gradually will be paid off and all issues in the economy related to insolvency managed.

Are the banks solvent? Part of a talk by David Malone, author of The Debt Generation
http://www.youtube.com/watch?v=PD0YCSNdo8w&feature=related

The Banks Big Lie
http://www.youtube.com/watch?v=Jy9yluyizGo&NR=1

CSPAN Rep Paul Kanjorski Reviews the Bailout Situation
http://www.youtube.com/watch?v=pD8viQ_DhS4

The BIS review is a good way to grasp the dimensions long term monetary expansion has brought upon us. A net risk of $14 TRILLION compares with the annual GDP of the USA. Nobody, absolutely nobody can afford this tab in the case of an unorderly unwinding of this market that is roughly 12 times the size of the global economy
http://seekingalpha.com/article/99674-coming-soon-the-600-trillion-derivatives-emergency-meeting

Now that’s why the leaders in Davos came up with the number $100 trillion of injection, or perpetual QE, needed to the financial system. Now that’s then if you intend so save all what’s in fact rotten but isn’t it better to just clear it out once and for all?

This is a really great and perfect time for the SDR!
http://intheendwerealldebt.blogspot.com/2011/08/this-is-really-great-and-perfect-time.html






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The infinite force of central planning meets the immovable object of capital markets

Yu Yongding, a former member of the Monetary Policy committee of the Chinese Central Bank has just said

"the situation is ultimately unsustainable. The longer it continues, the more violent and destructive the final adjustment will be. "

He is referring to the relentless recycling of Chinese trade surplus in the form of US paper which is increasingly looking like it will never get repaid. His chief rhetorical question is key: "The question is: what losses is China willing to bear in its foreign exchange reserves in order to slow the pace of the renminbi appreciation?"

His conclusion:

If there is any lesson China can draw from the US debt ceiling crisis, it is that it must stop policies that result in further accumulation of foreign exchange reserves. Given that many large developed countries are simply printing money (and the recent rumours are that the US might return to quantitative easing) China must realise that it can no longer invest in the paper assets of the developed world.

The People’s Bank of China must stop buying US dollars and allow the renminbi exchange rate to be decided by market forces as soon as possible. China should have done so a long time ago. There should be no more hesitating and dithering. To float the renminbi is not costless. However, its benefits for the Chinese economy will vastly offset those costs, while being favourable to the global economy as well.
http://www.zerohedge.com/news/former-pboc-member-situation-unsustainable-longer-it-continues-more-violent-and-destructive-fin

Meanwhile the Japanese are now supposed to act tomorrow in order to support the dollar:

Just out from Bloomberg: Finance ministers and central bankers are preparing a statement to release before the open of Asian markets, the Nikkei newspaper reported, without citing anyone. Japan may intervene in currency market if dollar falls. G-7 finance ministers, central bankers expected to express confidence in dollar, pledge liquidity. U.S. to explain fiscal rebuilding efforts." [so no more sniping at S&P and actually doing its job eh?] "Japan to express intention to maintain Treasury holdings. G-7 expected to show support for EU fiscal efforts."

As is the ECB in order to support Italian and Spanish bonds:

And while the G7 is about to realize that when faced with a $100 trillion (equities plus debt) market onslaught its printing powers are next to laughable, Dow Jones reports that the "ECB is weighing Italian, Spanish bond buying on a massive scale." Two take homes: i) the Fed has just lost its competitive advantage of doing idiotic things on a massive scale as the world wake up to tits trickery (unless of course the Fed resumes said thing on a massiver scale, which it will), and ii) tomorrow is the day when the infinite force of central planning meets the immovable object of capital markets. We will find out who blinks first in a few hours.
http://www.zerohedge.com/news/g7-preparing-statement-support-dollar-eu-fact-everything-would-otherwise-collapse-tomorrow-asia

Guess who told em to..? Yupp our friends Goldman Sachs:

As expected, Goldman, who came up with the promptly imploding plan of using the EFSF as a EUR rescue mechanism, is now scrambling to come up with yet another Eurozone rescue plan. Below is the full text of what Francesco Garzarelli just released as a prompt to Trichet. Gone are the days of nuance: the note is titled brutally enough Europe Should Say That BTPs Are ‘Cheap’.

Just in case anyone is confused of course. We expect the ECB head to pretty much read from this note to "clients" verbatim. In a nutshell, Goldman's view is that, "Italian government bonds are fundamentally attractive, but we have reached a point where only the European authorities can credibly signal this is the case. Secondary bond market purchases by the ECB are needed to stabilize markets in the near term. The 10-yr BTP spread to Bunds could fall back to around 200-250bp in such a scenario." Sure. It will work. For a week or so. Then what?
http://www.zerohedge.com/news/goldman-scrambles-tell-ecb-what-say-later-today

And then of course well see what FED has up its sleve.. Q3 anyone?

Isn’t these interventions the sign a wonderful free market and the natural work of the market forces and invincible hand? Or am I missing something? Fact is 80 years of soviet central planning coulden't acheive anything even remotley - well planned...

Personaly I really do think Germany - sorry EFSF takes on a very substatial risk by getting involved in these Italian and Spanish endevours.

Anyway seems to be intervention week starting Monday?

Sinclair on Gold and Oil

Jim Sinclair interviewed by James Turk
http://www.youtube.com/watch?feature=player_embedded&v=IF24atvNkSo

I’m scared to death right now when I look around and see the people out of work. I’ve got both husband and wife working for me to give you an idea of the problems that families have had. If you don’t think that civil unrest won’t find its way to the United States as it has found its way to Ireland, to France and to Italy and the Middle-East, you’re whistling dixie.

Today the sentiment is negative but truthfully the fundamental of today is the most positive fundamental you could possibly get as weakening economic figures demand QE2, QE3, QE4 and so forth.

At the same time the change in the Middle-East is a world change. It’s not this spontaneous explosion of democracy. Those guys that are fighting in Libya, take a look at them. They are wearing bandoliers of 51 caliber around them, this is not exactly your store owner and farmer who is rebelling. And you’ve got to ask who will benefit the most from what is going on?

This is organized, planned, designed, and anti-west, over which Iran will come out the most powerful entity in the Middle-East. What that means is that oil will trade at $150, possibly $200 (per barrel). And if you add into that the fact that we have passed peak oil which was a concept that you would look at 15 and 20 years out, because of peak oil added to that equation.http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/3/10_Jim_Sinclair_-_Gold_Explosion%2C_Oil_%24150_to_%24200%2C_Continued_QE.html

ROUBINI: QE3 Has Begun

With markets tanking, and the economy weakening, buzz about the Fed doing QE3 has really heated up.

The FOMC meets next week, and the Jackson Hole conference (where QE2 was announce) happens soon thereafter.

But arguably, the next round of general easing has begun.

Yesterday at 3:00 AM the Swiss lowered interest rates to stem the rise of the Franc, and last night Japan intervened to make its currency weaker.

And then today, the ECB confirmed more bond buying, so however you slice it, the central banks are back into easing mode.

On Twitter, Nouriel Roubini declares that the latest currency interventions from Switzerland and Japan represent the start of QE3, ultimately ending in more Fed easing.
Read more: http://www.businessinsider.com/roubini-qe3-has-begun-2011-8#ixzz1UM2oTZUj

“We seem to be entering a new stage of the currency wars where it’s not just the emerging markets that are responding to broad dollar weakness,” said Callum Henderson, global head of currency research at Standard Chartered Plc in Singapore, who has written books on currency markets. “Expect much more intervention in the future and further acrimony in terms of how the U.S. dollar is doing.”

Currency Intervention Revived as Odds of Fed Easing Escalate
http://www.bloomberg.com/news/2011-08-04/currency-wars-enter-new-stage-as-chances-of-fed-asset-purchases-escalate.html

U.S. Will Roll Out QE3 After S&P Rating Cut, Li Daokui Says

I certainly believe this will happen as well and I do believe I have said so on a number of occasions. QE3 is in the works. As the US has the printing press it is able to print new money out of this air and use it to finance its debt by buying their own short term low interest bonds.

Actually they are then taking all that space of treasuries purchase previously done by private as well as foreigner investors and thus shortcutting any attempt for the bond vigilantes to dictate any terms relevant for new purchases.

Issue – there is nothing in this worlds as inflationary as printing new money and then use it to buy your own bonds. Look for further devaluation of the US$.

Heads up - just the notion by all current holders of long term US treasuries that this is what the FED intends to do and even if they don't may be enough for currendt holders of bonds to sell of their holdings. This is the warning from China. In both scenarios (QE or foregin sell off) the dollar get debased. Question is what would happen to interest rates at point of a sell off and could that likely interest hike then be managed somehowe via more QE?

The U.S. Federal Reserve will extend its program to purchase the nation’s debts and stabilize long-term interest rates after Standard & Poor’s downgraded its credit rating, according to an adviser to China’s central bank.

The Fed will roll out quantitative easing 3, a tactic to purchase treasuries, Li Daokui, an adviser to the People’s Bank of China, wrote in his microblog weibo.com. Institutional investors will be forced to sell long-term U.S. debt, which may cause financial turbulence, he wrote.
http://www.bloomberg.com/news/2011-08-06/u-s-will-roll-out-qe3-after-s-p-rating-cut-li-daokui-says-1-.html

and maybye it can start quite soon?

"The whole world is mad" - so says Marc Faber when beginning his latest observations of the markets in the attached Bloomberg TV interview. "Stocks will be dropping 30%, then rallying 20%, and dropping another 30% - that's going to be the pattern. And whoever can't live with that shouldn't be buying equities at all." And while the publisher of the Gloom, Boom & Doom report, said "there is a case to be ultrabearish about everything, and markets are going to go lower" he notes that markets are "extremely oversold" and he expects a "snap-back" rally in the U.S. Standard & Poor's 500 Index of about 40-50 points. That said, Faber sees no new highs in 2011. He concludes that he can already smell QE3, and that the "next week will be important to see if Bernanke is a true money printer or an amateur, and if he is a true money printer he will start printing soon."
http://www.zerohedge.com/news/marc-faber-next-week-we-will-see-if-bernanke-true-money-printer-or-just-amateur

Then look at this chart. Clearly you se a very surprising correlation between longer term Treasury and QE. Everytime during QE rates increase and then they get lower in between.

Impact Of Quantitative Easing On Yields
http://www.businessinsider.com/impact-of-quantitative-easing-on-yields

So during a QE program aimed at the short term Treasuris, where the FED can buy at low interest rates, longer Treasuries interest rates increases. QE raises the appeal of risk assets. When there's no QE, the appeal of risk-less assets (bonds) rises.