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Utencil
Junior tranceaddict



Registered: Sep 2008
Location: Suffolk County
Does the EU want America to Fall?

quote:
America is on the ropes. Pummeled by the historic failure of its financial center, its economy is on the verge of collapse. America is now pleading with the world for assistance. But is there anyone to come to the rescue?

U.S. Treasury Secretary Hank Paulson is clearly in panic mode. On Friday, 119-year-old Washington Mutual, the largest U.S. savings and loan, bit the dust and was taken over and sold off by the government. Then yesterday it was announced that Citigroup would be “purchasing Wachovia, the fourth-largest bank in America, to keep it from collapsing. To facilitate the deal, the fdic agreed to accept $12 billion worth of Citigroup stock in exchange for insuring hundreds of billions in near-worthless Wachovia-owned mortgages. These two failures join a list of sensational tragedies that now include: Bear Stearns, Indy Mac Bancorp, Lehman Brothers, Merrill Lynch, aig, and Fannie Mae and Freddie Mac.

“It’s all hands on deck,” says Richard Yamarone, director of economic research at Argus Research. “Any and every entity, Treasury, the Fed and all central banks around the world are being summoned to right the potentially sinking ship.”

Thus Paulson, President Bush and Federal Reserve Bank Chairman Ben Bernanke have pushed for what will be the biggest intervention in the financial markets by a U.S. government since the Great Depression—a multi-hundred-billion-dollar taxpayer check to purchase toxic mortgages and cover speculative derivative exposures that are imploding U.S. financial institutions.

Furthermore, Paulson has appealed to America’s “friends” in Europe for assistance in bailing out the U.S.-led global financial system. “We are talking very aggressively with other countries around the world,” he said, “and encouraging them to do similar things, and I believe a number of them will.”

Unfortunately, Paulson is living in a dream world. Many of America’s European “friends,” if not already openly revolting against the U.S. financial system, certainly seem to be moving in that direction.

America’s plan is “not a call for assistance; it’s a scream for help,” writes Germany’s Spiegel. “Some countries are planning to help. But the German government has answered this call quickly and clearly: no” (emphasis mine throughout). Chancellor Angela Merkel slammed greedy American finance, criticizing the U.S. administration for not listening to German calls for tighter regulation. Finance Minister Peer Steinbrueck slammed America too, saying, “there will be shifts in terms of the importance and status of New York and London as the two main financial centers. State-owned banks and funds, as well as commercial banks from Europe [and elsewhere], will close the gaps, creating new centers of power in the financial world,” and “the International Monetary Fund should become the controlling authority for the application of worldwide financial market standards.”

Actually, German media from all across the political spectrum was extremely heavy in its criticism of the U.S. For example, the conservative Frankfurter Allgemeine Zeitung wrote:

As soon as the storm has died down, one will have to talk about the rules of the game. Central banks must intervene sooner to tackle price bubbles in asset markets rather than closing their eyes to them and then footing the bill at the cost of taxpayers.

Center-left Süddeutsche Zeitung wrote:

The downfall of the investment banks has hit America at its core. It shows that the country’s boom was to a large extent founded on self-delusion.

And the left-leaning Frankfurter Rundschau wrote:

The Americans are exposing the world to a highly dangerous experiment. … Who would voluntarily lend an American bank money these days? All the authorities in Europe can do now is try to calm the markets with soothing words—and hope.

But Europe’s biggest economy is not the only one disdaining America.

“It’s a rare day,” noted the Los Angeles Times, “when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street.”

Even UK Prime Minister Gordon Brown says America’s financial markets should be subordinated to a set of global rules and global regulators.

But French President Nicolas Sarkozy was perhaps the most critical. He said that the U.S. economic system was dead. And as a result, he said, it is “necessary to rebuild the entire global financial and monetary system from the bottom up, the way it was done at Bretton Woods after World War ii.”

That is a statement with huge implications, coming from another of America’s supposed allies. In July 1944, the Bretton Woods agreement tied the Western democratic economies to America, established the U.S. dollar as the world’s reserve currency, and helped usher in America’s economic superpower status.

A rejection of Bretton Woods is a rejection of America!

“Sarkozy is building to make the crisis a wider struggle between Europe and the U.S.,” reports the Guardian.

The European Union is trying to set itself up as the alternative to the now-defunct U.S.-centric economic system.

When the EU finance ministers met in the south of France on September 14, they publicly ruled out a U.S-style major stimulus package to ward off recession. Jean-Claude Juncker, finance minister and chair of the Eurogroup, said that U.S.–style interest rate slashing, spending increasing, and tax cutting only saddled economies with debt and otherwise had few positive effects.

Juncker wished America luck, saying Europe tried those methods back in the 1970s, and it pretty much ruined their respective economies.

The European Central Bank (ecb) also seems to be setting itself up as an alternative to the Federal Reserve System.

As the Fed has drastically whipsawed interest rates and injected billions of dollars into the financial system to prop itself up, it has done so at the expense of the dollar, rising inflation, and financial system credibility. In contrast, the ecb has been much more conservative, instead focusing on stability and protecting the reputation of the euro. Whenever a central bank makes money too easily available, it undermines the value of the currency and erodes confidence in the system.

But the point is that America and its European “allies” are on drastically different economic courses. And the losses the world has sustained because of the fraud-ridden financial investments that U.S. banks marketed to the rest of the world as aaa-safe investments are causing unparalleled resentment around the globe.

The current banking crisis in America has left America discredited and distrusted. Europe is rapidly setting itself up as the alternative to the U.S. system. And the euro, with all its own problems, has one big thing going for it: It is not the dollar.

The world is about to be introduced to a new economic superpower.

With America in free fall, the world is about to shift its confidence and its money elsewhere. Europe is about to inherit the global economic crown by default.


Old Post Sep-30-2008 18:54  United States
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pmoisse
Supreme tranceaddict



Registered: Oct 2001
Location: Amsterdam, NL (formerly Montreal QC)

All of this blends into the last few years' debates over selling oil in dollars etc. since there were signs that the dollar might not be as strong as everyone was hoping.

The reference to Bretton Woods is also fitting since it was the deal that moved everyone away from the gold standard and allowed the US to print more money without incurring the usual inflation, was it not?

Since the US can't print enough money to bail itself out without incurring absurd inflation, it needs to call onother sources to continue to buy it's currency at current market values. It will be interesting to see who steps up to the plate since there are so many diverse off-shore interests at stake. The problem cannot be solved within it's own borders precisely because the dollar is the global reserve currency and countries with large dollar holdings either must bail on it (and fast) or try and save it for fear of losing all of the value of their reserves.

I personally don't really agree with the corporate bailout since it rewards the bad judgement and greed of a relative few who were / are still making huge sums while other people lose everything.

By saying that "other people lose everything" I'm not only referring to over-extended homeowners. They shit that bed themsselves by not doing their research and allowing themselves to be sold a predatory mortgage they couldn't afford. Who I feel bad for are the people who's pensions were invested in these companies and who worked all their lives to contribute and now they are on the brink of losing it all.


___________________
Paul

Old Post Sep-30-2008 19:07  Canada
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NeoPhono
Übermensch



Registered: Sep 2003
Location: In Orbit

It's looking to me that it's almost the other way around now.

The US has safeguards in place to prevent a depression in the order of the "Great" one, but things might be tough for a little while. But, in just the two days since the House turned down the bailout plan, look at the dollar and look at other currencies. The Euro has dropped considerably (biggest two day drop against the dollar since its conception), Yen has also dropped and oil is below $100 a barrel.

European governments are bailing out European banks (some of whom bought up US mortgage securities like hot cakes) devaluing the Euro. European markets are hoping the US bails out their own investment banks so the US dollar will be equally (or more so) devalued. If the US decides not to go through with the bailout, leading the US into the oft-heralded and much over-hyped economic implosion, while the EU continues bailing out its banks, why would the dollar not continue to gain strength?

Old Post Oct-01-2008 01:38  United States
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George Smiley
Supreme tranceaddict



Registered: Jan 2004
Location: 9 Bywater Street, Chelsea, London

Does the EU want America to fall?

No. What a load of rubbish (sorry, garbage!)

Our economies are in turmoil because of the economic downturn in the American markets, that means the further America "falls", the further we do as well, so no, nobody wants America to fall...

Old Post Oct-01-2008 08:29  England
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Lemonad
Senior tranceaddict



Registered: Nov 2005
Location: big ol Sydney

That's the problem of having only one superpower.

I guess this is what it looks when history has seen the fall of every superpower.

Old Post Oct-01-2008 11:21  Australia
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Trancer-X
mutatis mutandis



Registered: Jul 2001
Location: Shambhala

Of course. Then they can step in and play savior.

quote:
A Plot For Economic Crisis

Maurice Strong believes--or says that he believes--the world's ecosystems can be preserved only if the affluent nations of the world can be disciplined into lowering their standard of living. Production and consumption must be curtailed. To bring that about, those nations must submit to rationing, taxation, and political domination by world government. They will probably not do that voluntarily, he says, so they will have to be forced. To accomplish that, it will be necessary to engineer a global monetary crisis which will destroy their economic systems. Then they will have no choice but to accept assistance and control from the UN.

This strategy was revealed in the May, 1990, issue of West magazine, published in Canada. In an article entitled "The Wizard of Baca Grande," journalist Daniel Wood described his week-long experience at Strong's private ranch in southern Colorado. This ranch has been visited by such CFR notables as David Rockefeller, Secretary-of-State Henry Kissinger, founder of the World Bank Robert McNamara, and the presidents of such organizations as IBM, Pan Am, and Harvard.

During Wood's stay at the ranch, the tycoon talked freely about environmentalism and politics. To express his own world view, he said he was planning to write a novel about a group of world leaders who decided to save the planet. As the plot unfolded, it became obvious that it was based on real people and real events.

Wood continues the story:

Each year, he explains as background to the telling of the novel's plot, the World Economic Forum convenes in Davos, Switzerland. Over a thousand CEO's, prime ministers, finance ministers, and leading academics gather in February to attend meetings and set economic agendas for the year ahead. With this as a setting, he then says: "What if a small group of these world leaders were to conclude that the principle risk to the earth comes from the actions of the rich countries? And if the world is to survive, those rich countries would have to sign an agreement reducing their impact on the environment. Will they do it?... The groups conclusion is 'no.' the rich countries won't do it. They won't change. So in order to save the planet, the group decides: Isn't the only hope for the planet that the industrialized civilizations collapse? Isn't it our responsibility to bring that about?"

"This group of world leaders," he conntinues, "form a secret society to bring about an economic collapse. It's February. They're all at Davos. They aren't terrorists. They're world leaders. They have positioned themselves in the world's commodity and stock markets. They've engineered, using their access to stock exchanges and computers and gold supplies, a panic. Then, they prevent the world's stock markets from closing. They jam the gears. They hire mercenaries who hold the rest of the world leaders at Davos as hostages. The markets can't close. The rich countries..." And Strong makes a slight motion with his fingers as if he were flicking a cigarette butt out the window.

I sit there spellbound. This is not any storyteller talking, this is Maurice Strong. He knows these world leaders. He is, in fact, co-chairman of the Council of the World Economic Forum. He sits at the fulcrum of power. He is in a position to do it.
"I probably shouldn't be saying things like this," he says.

- G. Edward Griffin, The Creature from Jekyll Island, pp 532-533

Last edited by Trancer-X on Oct-01-2008 at 17:42

Old Post Oct-01-2008 17:02  United States
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pkcRAISTLIN
arbiter's chief minion



Registered: Jul 2002
Location:

oooh, is trancer displaying his lack of economic nous again? someone pass the popcorn!


___________________

Old Post Oct-01-2008 22:52  Australia
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Trancer-X
mutatis mutandis



Registered: Jul 2001
Location: Shambhala

Definitely grab the popcorn because there's a lot more to the story.

quote:
Chapter Twenty-Five

A Pessimistic Scenario


The future portrayed as a continuation of present trends including a hypothetical banking crisis, massive inflation, collapse of the economy, domestic violence, the issuance of a new UN money, the arrival of UN "Peacekeeping" forces, and the final merger into the New World Order, a form of high-tech feudalism.


- G. Edward Griffin, The Creature from Jekyll Island, pp 537


quote:
Summary

A pessimistic scenario of future events includes a banking crisis, followed by a government bailout and the eventual nationalization of all banks. The final cost is staggering and is paid with money created by the Federal Reserve. It is passed on to the public in the form of inflation.

Further inflation is caused by the continual expansion of welfare programs, socialized medicine, entitlement programs, and interest on the national debt. The dollar is finally abandoned as the defacto currency of the world. Trillions of dollars are sent back to the United States by foreign investors to be converted as quickly as possible into tangible assets. That causes even greater inflation than before. So massive is the inflationary pressure that industry and commerce come to a halt. Barter becomes the means of exchange. America takes her place among the depressed nations of South America, Africa, and Asia - mired together in economic equality. Politicians seize upon the opportunity and offer bold reforms. The reforms are more of exactly what created the problem in the first place: expanded governmental power, new regulatory agencies, and more restrictions on freedom. but this time, the programs begin to take on an international flavor. The American dollar is replaced by a new UN money, and the Federal Reserve System becomes a branch operation of the IMF/World bank.

Electronic transfers gradually replace cash and checking accounts. This permits UN agencies to monitor the financial activities of every person. A machine readable ID card is used for that purpose. If an individual is red flagged by any government agency, the card does not clear, and he is cut off from all economic transactions and travel. it is the ultimate control.

Increasing violence in the streets from revolutionary movements and ethnic clashes provide an excuse for martial law. The public is happy to see UN soldiers checking ID cards. The police-state arrives in the name of public safety.

Eventually, all private dwellings are taken over by the government as a result of bailing out the home-mortgage industry. Rental property is also taken, as former landlords are unable to pay property taxes. People are allowed to live in these dwellings at reasonable cost, or no cost at all. It gradually becomes clear, however, that the government is now the owner of all homes and aoartments. People are living in them only at the pleasure of the government. They can be reassigned at any time.

Wages and prices are controlled. Dissidents are placed into work armies. There are no more autos except for the ruling elite. Pubic transportation is provided for the masses, and those with limited skills live in government housing within walking distance of their assigned jobs. Men have been reduced to the level of serfs who are subservient to their masters. Their condition of life can only be described as high-tech feudalism.

There is no certainty that the future will unfold in exactly that manner, because there are too many variables. For example, if we had assumed that there will not be a banking crisis...


- G. Edward Griffin, The Creature from Jekyll Island, pp 562-563

Old Post Oct-02-2008 04:58  United States
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pkcRAISTLIN
arbiter's chief minion



Registered: Jul 2002
Location:

is that the one and only reference you have?

you keep posting it, despite the fact that it has virtually NO support from the world at large.


___________________

Old Post Oct-02-2008 05:20  Australia
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Trancer-X
mutatis mutandis



Registered: Jul 2001
Location: Shambhala

quote:
USA's balance of payments deficits is so strong and irreversible, that we must accept that at some future date there will be a run against the dollar. Probably the kind of disorderly run that precipitates a global financial crisis.

- Dr. Paul A. Samuelson, Nobel Prize winner in Economic Sciences

Old Post Oct-02-2008 05:26  United States
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Trancer-X
mutatis mutandis



Registered: Jul 2001
Location: Shambhala
Buy gold while it's still under $1000/oz

quote:
US Mint suspends sale of 24-karat gold coins
Friday September 26, 2:57 pm ET
By Martin Crutsinger, AP Economics Writer

US Mint forced to suspend sales of American Buffalo 24-karat gold coins due to heavy demand

WASHINGTON (AP) -- The U.S. Mint is temporarily halting sales of its popular American Buffalo 24-karat gold coins because it can't keep up with soaring demand as investors seek the safety of gold amid economic turbulence.

Mint spokesman Michael White said Friday that the sales were being suspended because demand for the coins, which were first introduced in 2006, has exceeded supply and the Mint's inventory of the coins has been depleted.

The Mint had to temporarily suspend sales of its American Eagle one-ounce gold coins on Aug. 15 and then later that month announced sales of the American Eagle coins would resume under an allocation program to designated dealers.

White said the Mint expected to soon start distributing available Buffalo gold coins through a similar allocation program.

Through Thursday, the day the Mint suspended sales of the American Buffalo, the Mint had sold 164,000 of the coins this year, up 54 percent from the same period a year ago.

"People are scared. Gold has become a safe haven," said Michael Maroney, a vice president of sales at gold dealer Monex Precious Metals in Newport Beach, Calif.

Maroney said that demand for the one-ounce American Eagle coins was "through the roof." He said Monex still had American Buffalos available Friday because the company had recently stocked up on them.

With the financial crisis gripping markets in recent weeks, investors have rushed to safe havens such as gold and Treasury securities. Demand for three-month Treasury bills last week pushed their yields down sharply to levels not seen in decades.

Investment advisers, however, caution that the volatility often seen in gold prices could make investments in this area more of a risky decision if gold prices suddenly begin to fall sharply.

As the financial crisis unfolded in the past few weeks, American Gold Exchange Inc. saw demand for coins go up about 50 percent, according to Bill Musgrave, a vice president of the Austin, Texas-based gold dealer.

The Mint introduced the American Buffalo gold coin, the country's first 24-karat gold coin, in 2006. Congress authorized production of the coin in an effort to capture a portion of the global market for pure gold coins, competing with such coins as the Canadian Maple Leaf.

Associated Press business writer Candice Choi contributed to this report.

http://biz.yahoo.com/ap/080926/mint_gold_coins.html

Old Post Oct-02-2008 05:31  United States
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jerZ07002
Supreme tranceaddict



Registered: Dec 2006
Location:

quote:
Originally posted by Trancer-X


if the dollar gradually loses its value then imports lose their advantage in the US and exports gain advantage around the world. At some point the trade balance would move closer to import/export parity. there will never be a 'run' on the dollar because the balance of payment number will never move wildly out of control as to where it is unexpected (a factor needed to have a run on an institution). It will always be gradual movement allowing people and the economy to adjust.

Old Post Oct-02-2008 05:31  United States
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