It is nearly never mentioned in the news in the mainstream media but gold has been climbing back to new highs as the financial system’s green shoots are shot to hell. The attempt at faking interest rates in the teeth of impending inflation has now failed. Remember: house loans are long, long term loans, not short like say, auto loans. The long-term rates are now rising rapidly. This is due to everyone seeing the obvious: by printing money, the Fed has handed our affairs back to the Goddess of Infinity and she is very dangerous. The Goddess of Depression at least leaves a base to build on. Goddess of Infinity destroys that base.
And she still leaves us in the grip of the Goddess of Depression. In other words, inflation doesn’t fix a depression caused by too much easy lending. Only capitalization fixes it. And that means, encouraging savings and then using it to ‘grow’ via investing it in productive systems. Not, for example, gambling with it.
Gold is not productive. It is a protection point. It is basically locking profits in a safe and then waiting. Safes got their names because they were supposed to protect profits from being stolen. So, the gold would be safe in the safe until called into action. Investors CANNOT invest if a system is crashing. The term for this is ‘catching a falling knife with your hands’ and leads to bleeding to death.
All investment systems are degraded when anyone is allowed to use DEBT to leverage their way to wealth via speculating. This causes so many dire things, it was outlawed after the 1929 crash. The elimination of these laws is what allowed debt-based speculators—the pirates, hell hounds and gnomes—to run riot. Since they were speculating using debt, this meant, thanks to the system where banks can base loans on a capital base of less than 1%, this opportunity to grant loans to infinity on cheap interest rates thanks to the birth and growth of the Derivatives Beast, they could borrow money to eternity, and then use it to speculate.
This, in turn, led to the buying up of economic and property systems by dumping immense amounts of international debts via the Japanese Carry Trade, on top of everything. If all economic systems could suck down infinite debts, this wonderful debt system would have gone on to infinity. But it can’t. Always, in history, these systems end up revealing themselves as elaborate ponzi schemes and eventually the debts are too great and everything, including solvent systems, crash.
This is why the only thing that works is to PREVENT DEBT SPECULATIONS. It has to be outlawed. On the other hand, capitalist systems are wonderful and work just fine. Only one restriction: you can’t go into infinite wars like the Cold War or the War on Terror. If you want these wars, one has to pay as you go which limits wars. WWI and WWII were nearly unlimited wars because no one had any intention of paying for the messes. When payments were required, like after WWI, it only made things worse. This is why bankers should be forbidden, lending for warfare.
Of course, this is their best lending! This is why I use so many charts and graphs, explaining how wars are at the root of all inflation wild speculative systems. The ruling elites know this, too, which is why they do this. All elitist publications, for example, are very pro-war. They only go anti-war if the wars are losing money or if the wars are causing the populace to notice who is running the wars and are turning on them.
Federal Reserve Chairman Ben S. Bernanke’s efforts to bring down borrowing costs to revive the housing market and help the economy are stalling. Mortgage rates are almost back to where they were in March before the 30-year rate fell to a record and sparked a refinancing boom. Mortgage delinquencies rose to a record 9.12 percent of U.S. home loans and house prices dropped the most on record in the first quarter, industry reports show….
You can go up when things are going down. The US is like a drunk trying to go up the down escalator and staggers wildly about, spilling the drink and shouting, ‘I know what I am doing!’
Rates are rising as President Barack Obama is trying to spur a housing recovery. Obama has pledged to spend $275 billion to help keep as many as 9 million Americans in their homes and stem the rise of foreclosures. His measures also include a tax break of as much as $8,000 for first-time homebuyers that wouldn’t require repayment…
I was just sick to my stomach as the government, for the last 10 years, has tried to remove the requirement that people first save some CAPITAL before borrowing. It should be painfully obvious by now, that people who put no money down, are the first to default.
“People are looking for that magical four percent,” said McGee’s broker, Norman Calvo, chief executive officer of Universal Mortgage Inc. in Brooklyn, New York. “When you get there you have that feeling of ‘Oh my God it’s the best thing, I’ve got to buy.’”…
Why have interest rates? I always ask this. Why bother? Why not have a 100% magical system? Why have a system? Just make it up, all out of Zimbabwean thin air! Print money, hand it out and the devil take the hindmost! Or…we can be adults, understand that the Money Goddess is telling us in no uncertain terms, we have to create capital out of the sweat of our brows and we have to pay up before we get something back. No more free rides. Or we ride to hell with the Goddess of Infinity laughing at us all the way. The central bank of Zimbabwe is no more. Even their links on their website are going into oblivia.
Freddie Mac estimates 73 percent of the projected $2.7 trillion of mortgage originations in 2009 will be for refinancing. In 2005, when the annual rate of home sales peaked, 48 percent of the $3.3 trillion in mortgages were refinancings, according to Freddie Mac. Refinancing originations may rise 145 percent to $1.87 trillion this year, according to a Mortgage Bankers Association estimate, the first increase in four years….
We all want to refinance. But normally, when deep in debt, people pay higher, not lower, rates. This is due to the risk rising. People hate this. They yell, ‘I should be getting lower rates because I am deep in debt and need help!’
But the US doesn’t need help with more money. We insist on running the world’s biggest military and spend more than all nations, at once, together! We haven’t cut one penny out of our wars, we are expanding our wars. Ergo: we need to be taught a lesson.
The central bank’s purchases of mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae had brought down the yields of those securities, allowing lenders to reduce the rates on new home loans and still sell the mortgage securities at a profit. Fannie Mae and Freddie Mac are government-chartered mortgage companies that are being supported by $400 billion of back-up taxpayer capital. Federal agency Ginnie Mae packages low-down payment loans insured by the Federal Housing Administration into securities.
The bankers want the fees and the profits. Ergo: they want infinite loans on a system too deep in debt. Sorry, won’t work in the real world.
Yields on Fannie Mae and Freddie Mac mortgage bonds rose earlier this week, driven higher in part by climbing Treasury rates. The yield on the 10-year Treasury note was at 3.64 percent yesterday, compared with 3 percent the day before the Fed’s March 18 announcement.
The Chinese are aware that the Federal Reserve’s private owners get a 6% bonus. They want this, too. Eventually, they will get this, for they will use their capital to either replace or own the Federal Reserve. The Reserve’s real owners, the Real Rulers, made up this goofy rule, they can’t sell their stocks in the Fed so they can sit on these things for all eternity, happy and secure that none of them will weaken and sell out to the Chinese.
This leaves the other option: killing the dollar so the Federal Reserve is like the Bank of Zimbabwe, unable to even run a simple web page. The ‘taxpayer capital’ mentioned in the article above is 100% debt owed to our creditors. It is NOT ‘capital’ at all. It is future tax revenues.
Treasuries headed for their second monthly loss, pushing 10-year yields up the most in almost six years, as President Barack Obama’s record borrowing spree overwhelmed Federal Reserve efforts to cap interest rates.
Notes, little changed today, also tumbled this week on speculation the worst of the economic recession is over. A private report today will show confidence among U.S. consumers gained in May for a third month, economists said. South Korea’s National Pension Service, the nation’s largest investor, plans to reduce the weighting of U.S. bonds in its holdings, the government said in a statement.
“It’s a disastrous market,” said Hideo Shimomura, who oversees $4 billion in non-yen bonds as chief fund investor at Mitsubishi UFJ Asset Management Co. in Tokyo, a unit of Japan’s largest bank. “I expected yields to rise but not this fast. We will see new highs in yields.”
Our #1 buyer of our public and private debts were the Asian export powers. The #2 and #3 buyers are OPEC and the army of pirates, hell hounds and gnomes operating offshore in tax havens. The fact that gold is pushing towards $1,000, yet again, is more important than the bond news. Money is still floating around, looking still for safety due to uncertainty. The uncertainty being, the health of the US consumer nation.
One of eight U.S. households with a mortgage ended the first quarter late on loan payments or in the foreclosure process in a crisis that will persist for at least another year until unemployment peaks, the Mortgage Bankers Association said on Thursday.
U.S. unemployment in April reached its highest rate in more than a quarter century and is still rising, helping propel mortgage delinquencies and foreclosures to record highs.
According to that graph, this is amazingly fast compared to recent recessions. Already, this recession is the longest since 1982 and soon will be longer. If people are still defaulting faster and faster, there is no way in hell, the banks can lend. This is obviously a hole, not whole, system at work. It is a drain, not a bathtub being filled. The more debt the government takes on, the more the Treasury and Fed Reserve create money out of thin air, the faster it vanished down the drain.
Clue here: the plug that will stop the drain is called ‘capitalism’. Neither party in the US understands this. The bankers refuse to understand this. The industrialists are going bankrupt while they refuse to understand this. All think, cheap lending will save us when cheap lending made the mess worse.
Several policy missteps suggest that investors should stop trusting — and lending to — the U.S. government. These include the state’s pressure on Bank of America Corp. to buy Merrill Lynch & Co.; the priority given to Chrysler LLC’s unions over the automaker’s secured creditors; and the freedom that some banks will regain to supersize executive bonuses by giving back part of the government money bolstering their balance sheets.
Anyone with capital to invest will invest in something safe. We know what that is: gold. This is the Great Unmentionable in the economic news, for the most part.
Currency markets have been in a weird state of what looks almost like equilibrium for the past couple of months. What’s really going on is something akin to an evenly matched tug of war that fails to move the ribbon tied around the center of the rope, giving the impression of harmony while powerful forces do silent battle until someone slips.
Actually, after milling around, after both Russia and China mentioned ‘gold’, we know where this ‘equilibrium’ is going: into gold purchases.
“All currencies are being debased dramatically by their central banks at extraordinary speeds and so in relative terms it appears there is no currency problem,” Lee Quaintance and Paul Brodsky of QB Asset Management said in a research note earlier this month. “In reality, however, paper money is highly vulnerable to a public catalyst that serves to acknowledge it is all merely vapor money.”…
People with capital are NOT being fooled at all. This is why, when oil fell, when all commodities fell, gold did NOT fall. The Goddess, Libra, laughs as she balances her scales. On one side is gold, the other, paper money. Note how the paper side has more and more on it. We call this ‘debasing the currency.’
Those kinds of concerns are starting to surface in a steepening of the U.S. yield curve, driven by an increase in 10- and 30-year U.S. Treasury yields. The 10-year note currently yields 3.23 percent, about 235 basis points more than the two- year security, which marks a near doubling of the spread since the end of last year.
Aren’t we lucky, the Goddesses in the Cave of Wealth and Death have signs all over the place. Mathematics is a system whereby we can track our passage there. We see numbers. We should say, ‘Oh, look, we spent too much money!’ For example. The Cave loves charts and graphs and we see them plastered all over the walls.
Some people look at these and try to anticipate events while ignoring the overall information. I like to look at everything at once. This leads me to some degree of pessimism. ’How stupid can people be,’ I grouse. ’Can’t they see, we are piling on too much debt and we need to return to the Libra Gold Standard?’ Heh.
“When the government parks its tanks on capitalism’s lawns, that spells trouble for those who invest, add value and create jobs,” says Tim Price, director of investments at PFP Wealth Management in London. “Trillion-dollar bailouts do not only leave massive public-sector deficits in their wake, they also leave the presence of the heavy hand of government all over industry and markets, so the outlook for government bonds is less promising than the economic textbooks on deflation would have us believe.”….
Whoa! Wait, dude! The countries with rising capital bases that are now the creditor nations are in this position because they park their tanks on capitalism’s lawns! They don’t let gnomes run riot. They shoot anyone in the communist party who gets too pushy or too corrupt.
We let the ‘capitalists’ run riot and all government regulations that controlled things were tossed aside and look a the mess! Tim Price is an ideologue who thinks, if only he could do as he pleases, he can be filthy rich while the rest of us go deep into debt. They can’t just move jobs offshore, they can’t just move money where ever they wish. They do this, they must leave our nation. And then, we can use our systems to go after them in foreign lands.
WE ARE A NATION. We are in this TOGETHER. No one should be allowed to do as they please if what they are doing is destroying us. This is insanity.
It is undeniable that the U.S. government’s ability to finance its borrowing commitments has deteriorated as its deficit has ballooned. Dropping the U.S. from the top rating grade, though, wouldn’t mean the nation is about to default on its debt obligations; there’s a subtle distinction between ability to pay and propensity to fail to pay. There’s also a compelling argument that no government should be enjoying the benefits of a top credit grade in the current financial climate.
Our fake capitalists who used Japanese carry trade loans as capital for speculation have, along with the military/industrial complex, totally destroyed our social fabric and our nation’s finances. Bribing Congress to ignore reality, all have sailed off the financial cliff. We are Argentina.
Using the definitions outlined by Standard & Poor’s, a one- step cut into the AA rated category would nudge the U.S.’s creditworthiness into a “very strong” capacity to fulfill its commitments, just weaker than the “extremely strong” capabilities demanded of AAA rated borrowers. That seems an appropriately nuanced sanction — albeit one that the rating companies might turn out to be too cowardly to impose.
Do the Chinese look at these dumb ‘AAA’ ratings? HAHAHA. You bet! This is how they track the fully-anticipated ‘ The Rise and Fall of the Great Powers’ program as laid out by Professor Kennedy! Even as goofballs in the US claim, this degrading of our official rating is no big deal, it is an immense deal to our creditors! And who determines what happens next?
The ones who are the creditors, not the US that lost its sterling reputation! Everyone on this planet can see the US is going rapidly bankrupt. They see the collapse of our entire auto industry while Asia rules us at home and abroad as a sign of our collapse. Today, Russia and China just announced a joint space mission to Mars! They are rubbing our noses in our own mess. We are like bad puppies, insisting on pissing on the rug and not going outside.
North Korea rubbed our noses in it, too, and now all of these entities will go to Iran and form an alliance unless we fix ourselves and it is easy: we have to end our empire, now. Not tomorrow, we have to do it today. Pakistan is literally blowing up, the more the military flushes out the Taliban, the more they spread out, spreading destruction and the blowback in Iraq is now killing soldiers every day, the death toll is climbing again. We don’t have 10 years here. The US is planning to build a hyper-big, hyper-expensive embassy in Pakistan that is really an armed camp. Think any of these things will be of any use when we go bankrupt?
Even more pertinent, is China doing this? Russia? Russia tried this in Eastern Europe. It didn’t work. Not even slightly.
The U.S. economy shrank at a 5.7 percent annual pace in the first quarter, capping its worst six- month performance in five decades and reflecting declines in housing, inventories and business investment.
The contraction in gross domestic product was smaller than the government estimated last month, revised figures from the Commerce Department showed today in Washington. The drop was larger than economists had forecast, and followed a 6.3 percent tumble in the last three months of 2008.
Five decades is HALF A CENTURY. The one thing we haven’t exceeded yet, is the Great Depression. If we go bankrupt, we exceed all scales going back to the Revolution. What an arc! From deep in debt Revolutionaries struggling to pay their bills and suffering hyperinflation to the world’s biggest empire and back again to where we started. What’s next? Slavery?
You bet. It is. The cavalier attitude towards debt tells everyone, we are not taking our situation at all seriously, yet. Our creditors are taking note. So are those we are fighting. They know, the goal is to bankrupt America. They applaud our mess. And hope it worsens.
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