Guest guest Posted January 25, 2006 Report Share Posted January 25, 2006 S Wed, 25 Jan 2006 07:07:54 -0800 (PST) Financial Concerns http://www.safehaven.com/showarticle.cfm?id=4484 & pv=1 ======================== US Policymakers Sleepwalking into Currency Crisis by Steven Lachance nywxc182 " The exchange rate of the US dollar is bound to decrease eventually and could potentially do so in a way that destabilizes the global economy. Policymakers' persistent failure to respond appropriately to clearly unsustainable trends adds to concerns over future developments. " William White, Monetary and Economic Department Head, Bank for International Settlements, January 2006 Crying uncle over Uncle Sam's dollar exports Unbridled credit expansion and asset inflation in the US are the direct cause of excessive consumption by American households and the near total loss of global competitiveness by domestic industries producing consumer goods. The effect is a current account deficit of $800 billion per year, which the International Monetary Fund estimates will reach almost $1 trillion in 2007. This tidal wave of dollars flowing out of the US is recycled by foreign, mostly East Asian, central banks back into dollar assets in an ad-hoc arrangement known as Breton Woods II. In the brief period in which this arrangement has held, the balance sheets of the Bank of Japan and the People's Bank of China have each been weighed down by nearly $1 trillion in dollar-denominated assets, and officials in Beijing and Tokyo have become visibly skittish about further accumulation. Viewed from the left side of the Pacific, Breton Woods II is simply a mechanism to transmit inflation from the US to other economies. hina has long experienced breakneck economic growth and is waging an increasingly futile struggle to prevent overheating. Soaking up another trillion dollars is clearly a risky proposition for a government keen to maintain economic and social stability. Even Japan, which most international observers assume welcomes inflationary impetus with open arms, is by no means a bottomless reservoir for the rising flood of dollars. While the Bank of Japan cites consumer prices as the benchmark for ending monetary easing, policymakers keep a wary eye on asset prices with memories of the late 80s bubble debacle still fresh in their minds. A nearly 50% run-up in the Topix stock index in the second half of 2005 and, more importantly, double-digit annual price appreciation for prime Tokyo real estate are indications that Japan's dollar absorption threshold may be lower than many think .. Groping for an exit The East Asian product vendors and financiers face two challenges for a repudiation of the Breton Woods II arrangement: 1) finding alternative buyers for their industrial output; and 2) procurement of raw materials, particularly energy sources, without dollars. Fortunately for China, Korea, and Japan, a potential alternative market is readily available: Asia itself. The region's consumers have the world's highest savings rate and around two-thirds of the total global savings pool. For the most part, their incomes are also expanding robustly. From a lender's perspective, this makes them attractive credit risks, certainly a better option than lending indirectly to consumers without liquidity or income growth. China is rapidly building a consumer credit infrastructure while Japanese banks, solvent again, are sending staff eastward in search of borrowers. Japan and China are already each other's largest trading partners and inter-region trade now dwarfs trade flows across the Pacific. Procuring raw materials without dollars is a much more difficult and politically sensitive challenge. Unsurprisingly, Japan has taken a very low profile approach, enhancing energy efficiency at home while its corporations expand stakes in raw material suppliers overseas. In contrast, time is a luxury China does not have much of. It is being inundated with dollars just as its economy is on the brink of overheating. As a result, it has become much more aggressive, particularly in trying to secure oil and gas through agreements with such suppliers as Russia and Iran. The benefits for China are obvious; immediately useful materials in exchange for industrial output instead of IOUs with unpredictable future value. For suppliers, yuan acquired either directly or by conversion through euro can be used to procure essentially any type of consumer good, a trade that helps their governments buy the support of mostly impoverished populations. From MAD to SAD These efforts amount to East Asia attempting to alter the stakes of repudiating Breton Woods II. At the outset, the region had found itself locked in a relationship of mutual dependence with the US, comparable to the Mutually Assured Destruction (MAD) doctrine of the Cold War. Led by China, the region is trying to shift away from MAD toward a situation that could be described from the US perspective as Singularly Assured Destruction (SAD). With the US unwilling or unable to restrain its imbalances, East Asia is running out of time to alter the stakes. Given the vulnerability of its economy to further inflation, China will almost certainly be the first to have to make the inevitable choice: Certain economic collapse as a result of overheating or a chance, however slim, that the result of the end of Breton Woods II will be SAD for the US, rather than MAD for both the US and itself. A repudiation of the Breton Woods II arrangement by either Beijing or Tokyo would be the seminal event that ends the post-war era. Not only would it terminate the global currency system constructed on the dollar as the international reserve unit, it could also terminate the dollar itself by triggering cascading cross-defaults in the US through a spike in interest rates. Whether this event proves consistent with either the MAD or the SAD doctrine, the outcome for the US would be a sharp contraction in consumption with catastrophic implications for employment and living standards. You would expect a threat of such proportions to elicit an appropriate response by US policymakers. Zoned out The present Secretary of the Treasury, John Snow, is fond of quoting Dick Cheney: " deficits don't matter " . Alan Greenspan insists the exchange value of the dollar is not the Federal Reserve's responsibility and his successor, Ben S. Bernanke, is best known for threatening to drop dollar bills from helicopters. Recent meetings of the G7 finance ministers and central bank governors discussed aid to Africa, Islamic fundamentalists, and the price of heating oil. It is highly unlikely that the central banks of Japan and China will absorb another trillion dollars worth of inflation from the US, yet the issue is not even on the agenda. At the most basic level, Breton Woods II is a short-term vendor-financing scheme, capable of nothing more than buying time, which US policymakers appear intent on squandering. Steven Lachance Tokyo, Japan http://bellaciao.org/en/article.php3?id_article=10012 ========================= Homeland Security To Confiscate Bank Safe Deposit Box Contents 97 comment(s). BANK OF AMERICA & COMPASS BANK MANAGERS WERE TOLD HOMELAND SECURITY WILL CONFISCATE SAFE DEPOSIT BOXES by notepad While all the other points I mentioned in a previous post are fairly well documented and discussed elsewhere on the Internet, the bank information I reported is not. This information is from my own experience and research. I discovered the disturbing news quite by accident - and by virtue of its importance, I decided to post my findings here and on a few other forums. What did I hear? A family member from Irvine, CA (who's a branch manager at Bank of America) told us two weeks ago that her bank held a " workshop " where the last two days were dedicated to discussing their bank's new security measures. During these last two days, the workshop included members from the Homeland Security Office who instructed them on how to field calls from customers and what they are to tell them in the event of a national disaster. She said they were told how only agents from Homeland Security (during such an event) would be in charge of opening safe deposit boxes and determining what items would be given to bank customers. At this point they were told that no weapons, cash, gold, or silver will be allowed to leave the bank - only various paperwork will be given to its owners. After discussing the matter with them at length, she and the other employees were then told not to discuss the subject with anyone. The family member has since given her notice to quit the bank. I found the news alarming and decided to find out more myself. On a trip to my bank here in Houston, I remarked to a young bank employee (who's new there), " well I guess you've been told all that stuff by the manager and the Homeland Security about what to tell your customers " - and to my amazement, the young woman came right out and said yes she'd been through all that, then whispered to me across the counter, " but we're not supposed to talk about - I could lose my job. " Why haven't you heard more about this? First of all, since maybe only banks' upper management is privy to the new " rules " , the information doesn't trickle down so easily. Also keep in mind that employees have been told NOT to say anything about this, that it's a matter of National Security (with an allusion toward arrest if they do). They face possibly losing their job too. Another reason is that bank employees may not think it's important, or they believe they're a unique part of the effort towards curtailing " terrorism " and helping America's internal defenses. It is also important to realize that not everyone's a writer, or Internet savvy - even if the employees moved beyond their banks' warnings & constraints, most people don't know how to get their experience published on the Web in the public domain - it's a mystery they are not familiar with so you never hear their story. How to get the information yourself: Visit your bank, ask a few well-worded questions, being careful not to arouse suspicion - if that doesn't work, talk to friends and other family members - maybe they've heard something - or as a last resort, just point blank call the bank manager in private and demand to know what's all this business with the Homeland Security deciding what I can have from my safe deposit box - tell me now or I'll close my account today. I'll bet if you put forth the effort you'll get the answers you want. What should you do with this information? I'm not trying to " scare " anyone - just providing some news I think is relevant to Americans. Each must find his way through this dark forest - you will do with this information what best suits you and your loved ones - me personally, I see this as another indicator of how the criminals in charge over our lives intend to fleece U.S. citizens completely then dispose of them as only refuse. Be prepared. http://lonepatriot.com/archives/daily_post/index.html#a000150 ====================== Denial Isn't A River In Egypt! As we continue in our quest to connect the dots, it's becoming very apparent the American people are in a huge state of denial. I'm seeing reports and new information come in daily discussing the looming financial chaos drawing ever so closer. I'm seeing foreign ex-intelligence agency members spilling the beans about past, present and coming attractions. I'm seeing road signs all around telling us the bridge is out ahead. The fact of the matter is that it appears everyone knows what's coming except Americans. Now I can somewhat understand this thought process as our national obituary has been written more than once by those that would love nothing else than to see the fall of America. We've heard these stories before and we've become callous to the sound. No longer does the boy crying wolf garner any attention. That is what the conspiracists are banking on. It may appear as if I'm talking to much lately about economic conditions and tell-tale economic signs. This being because I believe these are the tools used by the globalist to usher in their agenda. When the FED decides to start hiding the M3 money supply numbers, I'm worried and have to ask what these private cartel members are hiding. The real problem is that the international community will have no accurate figures in which to monitor the United States money supply; getting out of dollars becomes almost essential for any investor that values their holdings. Is this by design? But I digress, back to the topic at hand. We as a country are in a state of denial and are about to get a cold douse of reality. We often tell ourselves and anyone that will listen that if there was a conspiracy to bring about the events that you claim are on the way, we would have heard people talk. Keeping a secret on such a large scale would never work. We've told ourselves this enough times that we now believe it. Tell a lie long enough and we come to believe it as the gospel truth. Let's review recent history. We have literally hundreds of ex-military and government officials from both sides of the political spectrum that have spoken out, oftentimes at the peril of their lives. The problem is that when they do so, if they are heard to loudly or are effective at getting their message out, the media merely turns it into a partisan attack and we 'happy -go-lucky' Americans take the bait over and over and over again. If they are a democrat, conservatives write-off what they have to say. If they are a republican, liberals write-off the message as well. If it sounds to unbelievable, both sides write it off and ignore. The fact of the matter is that nothing is a total secret, it is right before our eyes in plain site. Not only have many from within the 'beast' tried to warn us, those in control the 'beast' have told us as well. Documenting statements by the globalist isn't even a challenge anymore as they have told us repeatedly what they intend to do. I'm not even sure they really care anymore about utter secrecy as the American masses brain-washing has been so complete and all encompassing. The other item difficult for Americans to fathom is that such a conspiracy could actually work as the details and amount of work would be so massive. That couldn't be farther from the truth. Just as you and I go to work, have hobbies, play sports and engage in recreation and entertainment to relieve stress and enjoy life; so do these globalist, elitist or whatever you want to call them. The only difference is how they spend their waking hours. They spend every waking hour at work. Their job is to further their agenda. Accumulating wealth is great, however they have more than they can spend in 100 lifetimes. So what does one do that has all the wealth they could desire? They crave the need step on up the ladder to utter control and domination. Sure, the money can buy up the armies and purchase favors, but that is only a means to the end. It is the power and control over mankind that wets their appetites and feeds their lust. As I've indicated many times, this is Satan's ultimate mission. My heart aches for my country and what many good people with have to endure. The war which began in heaven and has continued on this earth is about to be stepped up a notch. The only question that remains is, when will we finally figure out that our current state of denial is the enemies greatest tool and wake up? When will Americans and good Christians finally decide to be an actual participant in the battles that really matter? Posted by John at 03:14 PM | Comments (5) ================ http://lonepatriot.com/archives/daily_post/index.html#a000146 ================ Economic 'Red Alert' I avoid making predictions on this website. Unless one has an in with the economic manipulators that pull the major strings, all we can do is attempt to warn those interested in listening of what is going on and what signs to look for. I recently read a economic newsletter, a somewhat humorous, yet chilling quote was made by Doug Casey. He said, " As some of you already know, there are a multitude of reasons why I believe the broader stock markets are about to meet a financial Freddy Krueger. " 2006 promises to be an interesting year, one that behooves each of us to set our financial house in order sooner rather than later. Let's review our current situation. We have a housing bubble that many are warning of a near bust. Bottom-line, the lower and middle class can't afford homes in many markets and that list is growing. It has been reported that Americans owe 7 trillion dollars on their homes, twice as much as only 10 years ago. As income has only grown moderately, this burden is becoming a huge drag on the economy. Another quote recently caught my eye. " The banking industry has done a great thing, says another smug economist from the American Banking Association. By encouraging people to borrow against their houses, it has helped people 'free up illiquid assets.' In 2005, they helped people 'free up' $200 billion worth of illiquid assets. Surely, they should get a Nobel Peace Prize for that. Imagine all those poor people who have been liberated from their own houses. Last year, they owned a roof over their heads, or 'illiquid asset.' Now they own last year's hit CD's and fond memories of last year's vacations in Las Vegas. Of course, they now have a deeper, more meaningful relationship with a lending institution. " While most have less to spend moving into 2006, they have fewer options or places to go to obtain capital. The rising gas and home heating oil markets will further squeeze the average American. Not only is the American homeowner in hock up to their eyes, they have taken their Que from Uncle Sam. The deficit is growing rapidly and already we are hearing discontent from overseas markets as to the viability of the dollar as a international trading unit. We are still involved in the UN police action in Iraq against an unknown and faceless enemy. Bush has told us that we will accept nothing less than total victory. I guess that begs the questions, what is considered a victory? Which of these nameless and faceless enemies will sign the surrender papers and how will they know that they've been defeated? I could go on with numerous other major problems, but I believe I would be providing information most of you already know and understand. Predicting the coming financial crisis really involves no brains at all, it is imminent and unavoidable. The only question to ask, is when will the puppet masters pull the strings. If U.S. Treasury Secretary, John Snow's recent statement indicating that " the U.S. Government is on the verge of collapse " isn't a wake-up call, I'm not sure what is. It is this authors opinion that the time is very close, many are waking up to a sense of their awful situation and realizing that things just aren't right. The puppet masters are becoming more open and daring, as well as concerned that too many people may be coming to grips with their agenda. No, I'm predicting Armageddon or the end of the world as we know. I'm predicting economic turmoil that will play a part in each of our lives and devastate many. This turmoil will last years and lead to a further reduction of our liberties and freedoms. The puppet masters have accomplished just about as much as they can without escalating the stakes for them and for us. Hang on to your investments, protect them, get out of debt if at all possible. Be prepared, be prepared, the roller coaster is approaching the peak and it's a steep slide to the bottom. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.