US AND JAPAN WANT GERMANY AND CHINA TO GO ZIRP

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The whole ZIRP business is getting pretty ugly. The US is now badgering fellow G7 partner, Germany, to ape the US and Japan. Both the US and Japan are sinking into this mutual depression tar pit. We want the whole world to join us there, I am guessing. Krugman demands Germany to overspend their budget the same way Japan and the US are overspending like crazy. As if that fixes what is wrong! And always, the bankers refuse to divulge any information about what they do with money we give them. They are all Madoff spawn, I guess.

News from The Associated Press

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?

None of the banks provided specific answers.

It seems all the banks are run by the Madoff family, doesn’t it?  Ask no questions!  Or maybe, dead men don’t talk?  Geeze, who do these gnomes think they are?  Humans?  And our government: why doesn’t it ask?  This is public information.  We have a right to know where every single penny of this money goes.  

 

Since all our major banks are now quasi-government entities, the pay and incomes of all the people working at the top should be government regulated and of course, smaller than what the President of the US makes.  Once they pay back the taxpayers, they can resume having ridiculous bonuses, etc.  Until then, no money except the barest minimum.

 

We already know from the clowns running AIG that they will spend this money on exotic trips to expensive resorts, etc.  This is why we have to be snoopy.  And where are our politicians in all this?  Snoozing?  Or counting future donations from the creeps who are sucking down all this loot and refusing to show us the books?

 

Bank of China furious at Deutsche debt move – Business News, Business – The Independent

Investors in bank debt are threatening to boycott lenders that follow Deutsche Bank in breaking an unwritten rule and failing to exercise a call option on subordinated debt.

In a co-ordinated action, angry bond investors are writing to bank treasurers and investor relations heads telling them that any failure to exercise a call option will be considered a breach of trust that could cause all the issuer’s debt to be shunned.

Deutsche stunned the debt market last week by choosing not to redeem €1bn (£932m) of subordinated lower tier 2 bonds because to do so was cheaper than refinancing. But though the move saved Germany’s biggest bank up to €150m, it caused fury among buyers of the debt who worked on the assumption that bonds would always be redeemed at their first call date.

The letter, seen by The Independent, said a bank’s decision not to call debt would be taken to mean “the institution is in such difficulty that it is an impossibility to call the instrument or the institution feels that it is in such a strong position that it can afford to alienate itself from the support of a wide portion of the fixed-income institutional investor community”.

Bank of China, a major buyer of bank debt, has gone further in its communication with issuers. The giant Chinese lender’s Hong Kong operation has told banks that “any non-call by a given institution will result in that institution’s debt (not just lower tier 2 but senior and tier 1 as well) being ineligible for future investment consideration”.

Bank of China added that Deutsche Bank had also been removed from consideration as a counterparty for any credit derivative transaction in future.

A clue to reading this article is in the last sentence: this is all about the Derivatives Beast.  Evidently, Deutsche Bank made many very foolish choices during the heyday of the hedge fund/derivatives swaps/ponzi scheme atmosphere and is now in deep trouble.  The fury of the Chinese is significant.  

 

As I have mentioned in the past, the Chinese are not the Saudis.  We can swindle the Saudis nearly non-stop but their fears of their own people as well as the surrounding nations is so great, they need the US military as their enforcement arms.  The Japanese use us the exact same way, and today, I had proof of this:

 

The Associated Press: Japan in ‘65 sought US nuclear shield versus China

 

AP) — Japan’s longest-serving prime minister — a Nobel Peace laureate — asked the U.S. in 1965 to deploy nuclear weapons against China if war broke out between the Asian rivals, according to newly declassified government files obtained by Kyodo news agency.

During his first trip to Washington as the Japanese leader, Eisaku Sato told then-U.S. Defense Secretary Robert McNamara that American military forces could launch a nuclear attack on China by sea if needed, Kyodo said Monday.

 

I constantly mention this because I have known about it all my life [via my parent's work in Asia].  Japan likes to pretend to be peaceful but it is anything but peaceful.  Anyone who watched Japanese TV a lot and I have, for many years, can see the depth and breadth of the impulse towards militarism and fascism.  Recently, I watched a series called ‘Library Wars’ and it was utterly and totally fascist.  Librarians shooting machine guns, doing military exercises, etc, saluting each other and doing all those sorts of things.  HAHAHA.

 

Well, back in the 1960’s, Japan wanted us to use nuclear bombs on the people they ravaged, raped and enslaved for many years.  A mere 20 years after the US forced the Japanese to surrender.  When we dropped nuclear bombs on Japan, the Japanese army was still butchering and working the Chinese to death.

 

The Chinese, unlike either Saudi Arabia or Japan, have nuclear bombs, submarines, ships, a huge army, etc.  We can sneer at the Saudis who can only cut off their oil.  HAHAHA.  And what are they doing?  Cutting their oil.  They increased their oil production last summer to save our economies in the West.  Now, they will go bankrupt or be killed by revolutionaries because the price of oil is dropping to $20 a barrel, thanks to the Saudis being stupid, like clockwork.

 

China says lending to US will not go on forever -

 

AFP) – China warned Wednesday it would not keep lending money to the US economy indefinitely, even as new data showed it had consolidated its position as the top buyer of American government bonds.

“China’s increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis,” the China Daily said in an editorial.

The warning from the state-run newspaper, an English-language daily that mainly addresses a foreign audience, came after the US Treasury Department reported a steep increase in Chinese holding of USTreasury bonds.

 

Unlike the Saudis, the Chinese issued another warning, this time to the US.  The Chinese are not stupid!  And they know a lot about our systems, our money and our industrial knowledge.  They are very focused on mastering not one system but ALL systems.  Equally.  They have a very motivated population that can do this.  They know they can talk tough now.  Why is that?

 

Well, this is because they are one of the biggest and certainly with the biggest military system, who is a creditor nation!  The US has the world’s biggest, most overextended military on earth but so is our debts.  The US is utterly unable to run a huge military, fight barely-armed civilians in the mountains of Central Asia, and balance either our trade numbers or budget amounts.  China has the whip hand now and Europe, accustomed to riding on the US back just like Japan, is feeling the lash.  And can’t run off to the US for goodies!

 

Indeed, the rage in China is great since Europe joined the US in trying to undermine the Olympics by whining about the air, for example, or especially, the attempt at shattering the Chinese state by helping rioters in Tibet attack Han Chinese.  Now, the Chinese will begin to force everyone to see things their way.  No more games like the ones the G7 played these last two years.

 

Now, back to the topic of Japan and ZIRP.  Seems virtually no one in the US understands totally why Japan has had this curious system going for so long.  Some people even think the Japanese government and Bank of Japan are desperate to strengthen the yen and have some inflation rather than a depression in Japan!  How stupid is that?

 

Did (or Didn’t) Japan Just Reintroduce Quantitative Easing? – Seeking Alpha

Quantitative Easing In Japan

Returning for a bit to the Japanese experience of QE in the early years of this century, we find that the Bank of Japan embarked (back in March 2001) on what was then an unprecedented monetary policy experiment. This experiment, which is commonly referred to as “quantitative easing,” was an attempt to stimulate a Japanese economy which had become stagnant under the dead weight on continuing ongoing deflation expectations and a monetary policy which seemed to have gotten stuck at what had become known as the “zero bound”. The BoJ had come under considerable criticism from a number of academic economists (most notably Ben Bernanke and Paul Krugman, see bibliography below) for failing to respond aggressively enough to the deflation problem in the 1990s.

QE was introduced as a response to what was seen as the failure of earlier monetary policy. As a response to the growing deflation problem following the onset of a sharp recession Japan lowered its overnight call rate from around 0.43% to 0.25% in September 1998. The rate was further lowered to near 0% in March 1999. In April 1999, the BOJ made an initial promise (subsequently seen as inadequate) to maintain a zero interest rate “until deflationary concerns are dispelled” – thus began the so-called zero interest rate policy (ZIRP). Following the application of this policy the Japanese economy appeared to be recovering, although not the price level, since it grew at a 3.3% year on year pace between Q3 1999 and Q3 2000. As a result the BoJ abandoned the ZIRP policy in August 2000, and it was this abandonment which has been the object of so much criticism – especially, and most notably, from Paul Krugman.

 

First, Japan NEVER abandoned the ‘ZIRP’ policy.  They raised the rate to a very feeble level because China and other Asian neighbors demanded this.  Japan had not only a 3+ growth rate in 1999-2000, after a brief fall off due to the US going off the Dot Com cliff, regained this growth rate after 2003 which means, the GDP was not shrinking but growing.  You cannot have a depression and a total of 20% growth rate over a decade!

 

If anyone wishes to eliminate ‘depressions’, all they have to do is strengthen unions, have tariffs and barriers to protect wages and to reward workers and tax the rich very high.  This works!  But of course, the rich want to pay no taxes, have totally open borders and cheap lending.  This eats up the wage base ferociously.  Now, we are going to visit Germany.  Germany is under heavy fire from fellow G7 conspirators.  They want Germany to imitate the US and Japan and have a similar ZIRP program coupled with crushing worker’s benefits and wages.

 

Interview with Nobel Economist Paul Krugman: ‘Merkel and Steinbrück Are Wasting Crucial Time’ – SPIEGEL ONLINE -

Paul Krugman: They are still thinking in terms of the world as it seemed to be a year or two ago, with inflation and deficits the major threat. As a result, they are failing to appreciate the severity of the slump — and are wasting crucial time, for Germany and the rest of Europe. 

SPIEGEL: What could be the reasons for their reluctance?

Krugman: I suspect there is a tendency to view any sort of European expansion as a way to get Germany to subsidize the rest of the EU. And maybe it’s just lack of intellectual flexibility.

SPIEGEL: Germany’s government is worried tax cuts and stimulus packages might just evaporate. Is there any truth to this way of thinking?

Krugman: There’s reason to fear that tax cuts would be ineffective. But that’s a case for a better designed program, not for doing nothing.

 

Mein Gott!  Krugman is beloved by many ‘liberals’.  I think the guy is totally nuts.  How cheeky of this American economist telling Germany how they should bail out of this mess created by the US and Japan!  As I showed earlier this week, England and Germany pulled the US into a global depression in 1930.  The US and Japan are doing this to Germany, today.  

 

Of course, the rest of the EU is desperate to get Germany to bail them out.  And to flatten the landscape so German workers are as bad off as, say, Italian or Greek workers.  Not to mention, Asian workers.  If the entire planet can increase debt as a way out of a depression caused by too much debt…the head spins!

 

HAHAHA.  Yes, it is like they are priests, Krugman et al, and they are chanting, ‘Spend more money and the depression will stop!  Give more liquidity, kill the savers, in the name of the ZIRP, the Derivatives Beast and the Goddess of Inflation, you will LEVITATE!’  Ok.  I got it.  All of economics is basically magic.  Yes, just like in the movie.  The US economy is Linda Blair.  

 

The high priests of academia are joining with the Power Brokers to elevate the economy.  But the economy spits green goo all over them after they burn money as incense.  Then, when they pull out the TARP and try to cover the banks, the monster child’s economic head spins!  Yes.  This is about right, I would say.

 

Interview with Nobel Economist Paul Krugman: 

SPIEGEL: Unlike Americans, Germans tend to spend less and save more. Is there a danger any kind of tax benefits might just end up in saving accounts?

Krugman: Yes, there is. That’s why the focus of a program should be on government spending as much as possible. But the perfect is the enemy of the good — we are in a severe plunge, and must do as much as possible quickly.

 

HAHAHA.  Note that Krugman doesn’t jump up and yell, ‘I was totally wrong!  I worshipped the wrong gods!  I now see the light!’  Well, the Germans SAVE and Americans SPEND so what is the solution?  

 

Have the Germans spend, too!  Anyone who can save today, will, even when under the evil ZIRP regime.  We get NOTHING when we save!  Even so, the hazards of going into debt are too great if everyone is losing jobs.  Germany is under no obligation to go into debt or do dumb things.  Germany loves having a huge trade surplus like Japan. But they don’t want to kill themselves, making themselves the end point for everyone else.  

 

The US can fix this by simply putting up barriers to imports while protecting the wages of the working class and taxing the rich heavily.  This is politically unpopular since many Americans dream of winning the lottery.

 

Interview with Nobel Economist Paul Krugman:

SPIEGEL: What is your outlook for the US economy?

Krugman: If nothing happens, we’d have 11 percent or more unemployment by the end of 2009. Even with stimulus, 10 percent unemployment is possible. And it could well go on for years — even the 2001 recession generated a 30-month employment slump. We need a huge stimulus in the United States — intervention in the mortgage market to lower rates, plus 4 percent or more of gross domestic product in recovery measures.

 

Why have any mortgage rates?  Why not just hand out infinite money for buying houses?  For this is the new game: to keep housing inflated, we will destroy savings utterly and for the foreseeable future.  This way, a shanty can sell for a quarter million bucks in California!

 

Which is absurd!  Houses are grossly overpriced.  Mortgages should be over 5% a year and the principal on houses should be low, not high.  I like low principal overhead!  You can dig your way out of debt faster and end up with a house, free and clear!  But the cheap loans encourage people to re-finance their homes over and over again, upping the principal rather than paying it down!  This is why we are in the present mess.

 

Making it easier to do that is pure insanity.  We have to accept the fact that housing was overpriced and we can’t use it as a perpetual ATM spitting out dollar bills every month. Krugman is a coward.  He wants us to have good times, not cure what is wrong.  As I keep detailing, the fundamental basis of our entire economic system is rotten to the core.  We are now in an inevitable collapse.  We can’t fix it by going deeper into debt or by giving ourselves infinite cheap loans.

 

Did (or Didn’t) Japan Just Reintroduce Quantitative Easing? – Seeking Alpha

To anticipate a little bit what will be argued in this rather lengthy post, there is a fundamental difference between the recent move towards QE taken by the Fed (especially after the end of September as explained by James Hamiltonin this excellent post), and the policy pursued by the BoJ between 2001 and 2006, and this difference concerns the objectives of the policy. While both initiatives have in common that they are strategies to get that “something extra” out of monetary policy in a very low interest rate environment (near the so-called zero bound), they differ in that the Fed’s current objective is to provoke a recovery in economic activity in the US, whereas the BoJ had the objective of provoking a sustained rate of inflation above zero. Obviously the two processes – provoking growth and provoking inflation – are related, but there are also subtle differences in the way the respective banks attempt to achieve these objectives. The Fed is concerned about the liquidity question as part of an ongoing attempt to ease a credit crunch, which it is trying to do by bringing yield spreads (and in particular the so called TED spread) down. No one doubts that once this objective is achieved the Fed will rapidly wind down its balance sheet just as rapidly as it wound it up at the end of September. The BoJ, on the other hand, was concerned to convince market participants that the excess balances would be maintained for a long time interval, beyond the point where the price index simply indicated it might move into positive territory. The BoJ had to convince market participants that they were serious about provoking inflation (that is, what they were really targeting weren’t bank reserve balances as such, since they were simply using the levels of these balances as an indirect tool for influencing inflation expectations) while the Fed (at this point at least, of course on a worst case scenario of outright deflation in the US, I am sure Bernanke has a Japan-style “plan b” up his sleeve) currently has no inflation target beyond its general objective of price stability and is not trying to steer inflation expectations upwards. Not yet, anyway. And with that caveat…

This excerpt shows how muddled people in the US get when they try to understand Japan.  At no time, has the Bank of Japan sought to inflate anything.  Their one and only concern was to keep the yen as cheap as possible vis a vis the dollar and recently, the euro.  They have no other function.  The ZIRP system pleased the BOJ perfectly because it flooded the planet with cheap loans which flowed into countries  to which Japan was exporting finished, high value goods. 

 

The US has been following this ‘rock the boat’ method of balancing a very hideously unbalanced boat, the US Titanic.  Instead of patching the hull, they shove the cargo from one side to the other.  So if the economy collapses, they drop rates fast.  The minute they do this, a bubble forms.  So they raise rates very fast.  Over and over again.

 

The ups and downs are now very close together.  Since the entire point is to increase spending and debts, the ability to have a sustainable bubble is rapidly diminishing.  Will this trigger inflation in the future?  YOU BET IT WILL.  All we need is another war in the Persian Gulf.  Israel itches to do this.  It is only a matter of time.

 

Did (or Didn’t) Japan Just Reintroduce Quantitative Easing? – Seeking Alpha

 

The Bank also decided to temporarily buy commercial paper outright, following in the footsteps of the U.S. Federal Reserve, despite the strong reservations which have been expressed by a number of BOJ officials in the past about accepting such assets with credit risk. In fact the Bank of Japan has long accepted commercial paper as collateral in its fund operations (and indeed such purchases were an important ingredient in the earlier QE experiment) but has up to now resisted calls to purchase them directly from issuers. The terms and conditions for such purchases still have to be decided, while Governor Shirakawa is still voicing his doubts, so in its press release the BoJ simply stated that all that it had done at this point was undertake to examine the range of corporate instruments and the degree of risk taking that are appropriate for the BoJ.

Thus the BoJ has obviously taken an important step, and is clearly open to the idea that such purchases could be a major instrument in monetary policy. We will obviously need to see more of the details, and some indication of the size of the CP-program before we can be clearer about how aggressively the BoJ intends to proceed with the initiative at this point, although evidently, once the door is open the measures can obviously be expanded as the situation evolves.

 

Below is my reply to this goofy article:

 

Did (or Didn’t) Japan Just Reintroduce Quantitative Easing? – Seeking Alpha

This article is totally insane!

Look, at no point has Japan’s leaders in the LDP desired to see an end to the ‘depression’ in Japan. For several years, Japan’s RULING ELITES have enjoyed vast increases in their personal fortunes, a vast increase in profits, a vast increase in global power…during the ZIRP regime!

Not only that, when real inflation was hammering Japanese workers last year, the ONLY country on EARTH that pretended there was less than 1% inflation was Japan….even after data proved that inflation was over 3%.

Far from trying to stop ‘depression’ which always is code for ‘depressing the wages of workers’, the corrupt and totally evil Bank of Japan was in collusion with Toyota and the other export giants to keep Japan in a depressionary straight jacket so they could use the weak yen as tool of aggression.

Note that Japanese corporations are buying up Western corporations or putting them totally out of business! Note that Japan is colonizing the US industrial base! Note that Japan, this week, is out buying foreign businesses, setting up shop all over the place!

The Bank of Japan LOVED the ‘carry trade’ they created with their ZIRP system. Jokers like poor Mr. Krugman and others couldn’t figure out that the appearance of a depression [by threatening Japanese workers with the removal of their jobs to CHINA] was a tool used to further the economic ends of the ruling elites of Japan. 

Even the Bank of Japan’s own statistics shows clearly that it was nearly 100% the depression in worker’s wages that made prices fall. Workers can’t buy much of anything, anymore. One third are stuck in part time/temporary worker hell. The mainstream workers are seeing annual wage reductions.

We are now imitating that! GAH! Giving banks money won’t fix SQUAT DIDDLY. Giving workers pay raises will help a great deal. China has to pass laws, forbidding their workers to have children. Japan, this month, is out, begging someone, anyone, to have babies! But the workers can’t!

This means, the stupid ZIRP/no inflation due to workers starving to death system of the Japanese will end with the Chinese colonizing the islands of Japan by 2050.

Another matter: ruling elites are not so smart as they like to pretend. The ruling elites in Japan have this crazy hope that robots will replace the missing humans. A robot army of silent workers will be all they need or perhaps, cheap American or Chinese labor while the profits flow to Tokyo. 

Japanese animators often fret about this. I see the naked fear that this sort of anti-humanistic system will dominate Japan before the mid-century. Japan was once famous for its love of children. Now, it is famous for its love of robots. 

Recently, a Japanese inventor was in the news because he made this ‘maid/companion’ robot female that could do math and simple chores. He had a heart attack while struggling to create this helpless minion of his dreams, his Coppelia. 

He sits at night at the dinner table and talks to this mechanical doll. He will produce no children, needless to say. The ZIRP system is sucking the lifeblood out of Japan. And trust me, many American ruling elites consider this an optional future for us. Humans are hard to control. Robots are easy to control. Welcome the the world of Gundum.

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Solidarity with Athens: Police Squash Violent Hamburg Protest – SPIEGEL ONLINE -

Scores of German riot police confronted an estimated 950 protesters in Hamburg over the weekend who were expressing their sympathy for student protesters in Greece by marching under the banner of “Solidarity is a weapon.”

Police reported that the protest actions — which allegedly included numerous members of the far-left anarchist scene — were broken up on Saturday after they escalated to rioting, with special police units and journalists being pelted with bottles, iron rods and fireworks. Four police officers were reported injured….

The paper speculated that the attacks might have been motivated by protesters’ hoping to forge links between student protesters in France and the unrest in Greece. In support of this theory, the paper cited graffiti found near the French Institute reading: “Spark in Athens. Fire in Paris. Insurrection is coming” and “France, Greece, uprising everywhere.”

 

Dead of winter riots are a danger sign.  People don’t like to riot in winter.  And this is a very cold winter.  Brrrr.  It is only 4 degrees F here, for example!  The Greek kids even attacked a big Xmas tree and burned it down.  Then, when the gaudy strumpet of a fir was set up again, the kids tried to put plastic bags on it!  Now, it is surrounded by armed police!  Even Santa can’t break through.

 

I roamed Europe during the 1968 uprisings.  Had a wonderful, wonderful time running from tanks in the street, throwing stuff, climbing barricades, swimming rivers to get into another country illegally….Ah!  Fun times!  And you can bet, the young in Europe will egg each other on.  Come spring, I predict a lot of activity there.  I remember how, when I came home in 1969, it took off even here, in America!  I had a bit to do with this happening.  Heh.

 

The youth are being thrown to the wolves by the elders.  They are not graduating and getting rich.  They are facing a major wall here.  How will this be fixed?  Well….through hard work and a reworking of the New World Order so it no longer works!

 

Professor Feteke on ‘Backwardization’

In an earlier article Backward Thinking on Backwardation I explained that backwardation in gold is the flipside of the phenomenon of a drastic contraction of world trade and employment. This brings out the danger in denying the fact of gold backwardation or to belittle its significance, as most observers seem to be doing. I am reminded of the saying of the Swiss educator F.W. Foerster: “if you don’t use your eyes for seeing, later you will use them for weeping.” In this article I want to enumerate the reasons why I believe that permanent backwardation in gold would bring about the descent of our civilization into lawlessness similar to that following the collapse of the Western Roman Empire.

The consensus seems to be that, even if backwardation in gold occurred at one point, it would not be a significant event given the zero-interest environment. Forward thinking on backwardation shows that this is wrong.

Tom Szabo observes (see References below):

“If somehow short-term interest rates were to go into significant backwardation, it should be no surprise that gold and silver may go into significant backwardation. THIS WOULD NOT BE A SIGN OF IMMINENT MONETARY COLLAPSE [his emphasis]. In fact, a pretty strong argument could be made for the opposite – that the negative interest rate is a sign of excessive monetary demand (in relation to demand for capital goods and investments). I’ve looked but have been unsuccessful in finding an historical example of a monetary collapse that occurred while money was actually in high demand. Of course, high demand for money could be extremely deflationary and the only known cure for this is to create a high supply of money, otherwise known as hyperinflation.”

While I would disagree with the use of the word “imminent” in describing the coming monetary collapse, I must maintain my stand that a durable backwardation, such as we have experienced for two weeks earlier this month, is a premonition that there will be repeated episodes of the same kind, ever more frequent, ever deeper, ever longer, each episode significantly weakening the monetary system - regardless of the zero or negative short term interest rate. (Let us leave the question aside that zero or negative interest rates in and of themselves show an alarming pathology of the monetary system!)….

Tom says that he does not see things evolving in the same catastrophic manner as I do. For example, he believes that “there will always be willing buyers and sellers of gold in some quantity if the price is right.” Buyers - si, sellers - no! That’s just the whole point. The lack of credibility of irredeemable currency will be such that no one in his right mind will accept it in exchange for gold, the ultimate liquidator of debt. Previously, people were willing to trade their gold because they could always replenish their supply from Comex warehouses. That means, in other words, that the irredeemable dollar could still be used as a liquidator of debt (i.e., gold still has a competitor). But let them close the Comex gold warehouses. This is a quantum jump; it means that the irredeemable dollar can no longer be used to liquidate debt, e.g., debt incurred by those holding short positions in gold futures. It is essential not to belittle the import of this observation.

Gold is a symptom, not a cause. The stresses that erupted across Europe, Asia, Africa, North and South America in 1968 didn’t cause Nixon to cut the gold standard.  It was the Vietnam War.  A war, we all hated and wanted to end.  And LBJ and Nixon refused to stop fighting.  So it is today; another set of goofy wars.

 

The wars against Muslim peasants rather than Asian peasants.  Wars we can ill-afford.  The negative interest rates are a sign of economic collapse.  The young are the ones who can create the conditions of agitation so governments can’t just do as they please.  Look at how our own government is bailing everyone at the top out of their messes but not punishing anyone, much.  Letting them camp out on 59th Street and Park Avenue pent houses is not punishment!

 

London Fix Historical gold – result

Note how there was a sharp run up in gold prices to a peak in 1980, then it bumbles along, pretty stagnant and then there is this second peak this last summer.  The chances of it bumbling along at virtually the same level as from 1982-2002 is very high, not very low.  With one caveat:  if the Derivatives Beast suddenly stops eating all wealth while ZIRP is still running.  This will happen very suddenly just like when the Beast suddenly began to eat all wealth back in July, 2007.  

 

All I know is, if we look at gold as a fever chart, we can detect fear and loathing.  And the truth is, people are very fearful!  But even as people hoard gold, more are being forced to spit it up.  Like all the people deep in debt, turning in rings, jewelry, etc.  Or those people who invested in Madoff funds.  The price of diamonds and gold will not rise if Saudi Arabians are selling this off now that the oil funds are no longer flowing, just for example.  Depressions don’t make things like gold more valuable.   It just increases the probability that the government will confiscate it.

 

And last of all, an article about just that very thing:  Bailiffs get power to use force on debtors – Times Online

 

The government has been accused of trampling on individual liberties by proposing wide-ranging new powers for bailiffs to break into homes and to use “reasonable force” against householders who try to protect their valuables.

Under the regulations, bailiffs for private firms would for the first time be given permission to restrain or pin down householders. They would also be able to force their way into homes to seize property to pay off debts, such as unpaid credit card bills and loans.

The government, which wants to crack down on people who evade debts, says the new powers would be overseen by a robust industry watchdog. However, the laws are being criticised as the latest erosion of the rights of the householder in his own home.

“These laws strip away tried and tested protections that make a person’s home his castle, and which have stood for centuries,” said Paul Nicolson, chairman of the Zacchaeus 2000 Trust, a London-based welfare charity. “They could clearly lead to violent confrontations and undermine fundamental liberties.”

 

They will break in and enter and take whatever they want.  All governments end up doing this, when desperate.  Note that they also claim, they can’t break into banks and find out how they are spending OUR money!  Also, they are utterly unable to invade all of Queen Elizabeth’s many pirate coves and stop the tax dodging there.  Helpless, when it comes to the rich, all muscle when it comes to you or me.

 

And about chaos, Mexico installed a right wing, free trade US Quisling in a very controversial ‘election’ and he is as charming as Bush. And as inept.  And Mexico is in full-melt down mode:

 

The Associated Press: Mexico honors soldiers beheaded by drug cartels

 

(AP) — The decapitated bodies of the soldiers lined a major boulevard, accompanied by a sign: “For every one of mine that you kill, I will kill 10.” A bag of their heads, some still gagged with tape, was found nearby.

The discovery in Chilpancingo, an hour north of the resort of Acapulco in southern Mexico, marked the most gruesome attack yet against the Mexican army in its half-century battle against drug gangs.

The government honored the dead Monday in a high-profile ceremony aimed at reassuring the nation that it won’t surrender, despite escalating violence that has killed 5,300 people this year and the betrayal of more than a dozen top law enforcement officials accused of accepting money to protect cartels.

 

Chaos is terrible.  We can have this here, too.  If our government doesn’t clean up its act, soon.  This is our own future.  And it barely makes the news in the US.  While our goofy war in Afghanistan is just as bloody and just as futile.

 
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