Hedge funds, international bankers and international exporters are all in a tizzy over the declining dollar. The desire to regain the pre-2007 status quo has not died, it is even stronger than ever. Any attempts at stopping the wild and wooly international money creation system is being fought tooth and nail by international investors and bankers who resent any sovereign nation from interfering with various Ponzi-style wealth creation schemes.
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G-7 Finance Chiefs Push For ‘Strong Dollar’ Before Meeting – Bloomberg.com
Finance chiefs headed for Group of Seven talks in Istanbul pushing for a “strong dollar” amid concern its slide will impede their recoveries from the worst global recession since World War II.
. “Everyone needs a strong dollar,” French Finance Minister Christine Lagarde told reporters in Gothenburg, Sweden today as she met European Union counterparts. “We’ll have a chance to discuss this in the coming days.”…
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…The dollar’s 13 percent fall this year against a basket of seven currencies threatens foreign economies by making their exports more expensive. At the same time, Geithner is being forced to defend its status as the world’s sole reserve currency…. .
…Limiting the G-7’s scope to reverse the decline is the lack of China from its ranks and the G-20’s push in Pittsburgh last week for a narrowing of global imbalances such as the U.S. current account deficit. .
Other policy makers have also expressed concern with the dollar this week. Japanese Finance Minister Hirohisa Fujii said Sept. 29 that the government may act to stabilize the foreign- exchange market and denied he supported a stronger yen. He won’t discuss the yen’s gains at the G-7, Kyodo News reported today.
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HAHAHA. The entire point of the floating currency is, if a country runs in the red both in government spending and trade, the currency declines in value and thus, fixes any red ink problems. Of course, our trade rivals who are interested in dominating the US have screwed this up by artificially supporting the value of the dollar even as the US runs perpetual red ink systems! They need to export to the US so they can increase their industrial and service bases. This is a transfer of capital that has beggared the US even as we appear to be richer due to owning lots of stuff produced by aliens.
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This is a system doomed to collapse. The plan for the trade rivals is to simply move on to new markets as the US dies as a market. So we end up in either economic enslavement to aliens or we get really poor. All our natural resources will flow to these industrial powers while they extract any capital we manage to save in the form of profits. That is, we have to pay aliens for our government debts.
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NO SANE GOVERNMENT SHOULD SELL DEBTS TO ALIENS! The entire South American/Central American people have suffered for over a century under the boot heels of the US due to selling us their debts. When they default, we yank all their social systems out and we make it impossible for them to raise money in international markets. We punish them severely. Now, the boot heel will be stomping our faces as creditor nations tighten the screws on us. Too much debt owed to too many foreign powers leads to revolutions and coups. Coups are usually sponsored by the creditor nations while revolutions repudiate these debts.
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Back in 2005, when I launched my analysis service, none of our trade rivals would openly admit that they manipulated their own currencies so they could export to the US. There were all sorts of goofy excuses as to why the US was drowning in imports. Well, now they are naked about it all. Japan is allowed to openly announce they will weaken the yen so they can flood us with exports from Japan! Back in 2007, they dared not say that since they were siding with Europe in declaring that ONLY China was doing this! Now, there is no more pretending. Japan is absolutely determined to flood us with Japanese manufactured goods no matter what.
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This is why the US can run deep in the red: much of this new debt is bought by trade rivals in the forlorn hope they can keep the dollar strong. This is why world FOREX reserves have built up dollar holdings like mad in the last decade, rising from about one trillion to nearly five trillion dollars.
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G-7 May Break With Currency Tradition as Status Fades (Update4) – Bloomberg.com
Group of Seven finance officials meet this weekend in Istanbul debating whether to surrender the weapon that helped shape currency markets for three decades. .
One week after the Group of 20 anointed itself the world economy’s main policy forum, G-7 finance ministers and central bankers may break with tradition and choose not to release a statement on the global economy and currencies, said officials who declined to be identified. That would deprive traders of the commentary that policy makers frequently use to influence exchange rates.
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YAHAHAHA. Again, they admit that they are MANIPULATING the dollar! Commentary guys trumpet whatever is needed to do the job, for example. I am not published in major media nor does anyone like me very much because I am not working on behalf of anyone at all. No one owns this place but me. And so I am free to comment. This irritates people even people who read me because I won’t march in lockstep with anyone on anything, anywhere.
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The information that flows in the stream of commentary and media is on many levels. The gold bug community, for example, hates me when I correctly analyze gold markets. Ditto, currency dealers. Stock jobbers also want only news that makes themselves richer. This intolerance for real news is not uncommon: people want to be justified, not educated. People want confirmation, not examination.
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The currency markets have swollen in size just like the derivatives business. All the things attached to the uncertainty and caprice of the central bankers has ballooned ever since the last Great Power dumped gold as the gage for monetary value. The money supply expanded but it is mostly running in place. In 1968, I paid $0.28 for gasoline and today I pay $2.80 for gasoline and all this means is, the dollar lost 90% of its value since then.
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But an army of people who do nothing buy shift currency holdings are much, much richer today. This is a total waste of good capital going to stupid ends. It built absolutely nothing, it is a destructive DRAIN on the financial systems of the world which is why I support a limiting/stabilization system such as the eldest of them all, gold holdings being the capital for monetary creations.
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Foreign Minister Katsuya Okada and his Chinese counterpart Yang Jiechi agreed Monday that the two countries will work together toward the creation of an ‘‘East Asian community,’’ with Okada expressing hope that such an initiative will make the 21st century an ‘‘era of Asia.’’ .
During a meeting in Shanghai, Okada and Yang did not discuss details of an East Asian community, such as membership, but Yang said China wants to promote regional cooperation in energy and the environment in that framework, according to a Japanese Foreign Ministry official. Okada and Yang also agreed to advance the two nations’ ‘‘strategic and mutually beneficial relations,’’ and to continue efforts to address pending issues such as food safety and a dispute over gas field development in the East China Sea.
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Up until recently, Japan did all its international relations with China via or alongside the US. But ever since July, 2007, Japan has had to change gears. To recap: in July, 2007, Japan told China, it would flood China with funny money and thus, strengthen the yuan. China said it would strengthen the yen the same way. Ever since then, the yen has gone from 118 to the dollar to 89 to the dollar. At first, Japan got really nasty with China. But after some artful arm twisting, Japan has changed and recognized that China is now the dominant power in Asia, not the US.
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Eventually, Japan will be fully integrated into the rising Chinese NATO-style system. The US cannot stop this. We could slit our own throats and encourage even more Japanese transgressions into our domestic economy but that is stupid. We lost Asia due to letting everyone run trade surpluses with us and we now have to change this and it means no more stuff flowing from Asia to the US. This sounds harsh but it will happen eventually, anyway. Might as well do it before we go bankrupt and have no industries at all!
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Morgan Stanley’s Mack Proposes Single Global Bank Regulator – Bloomberg.com
Morgan Stanley Chief Executive Officer John Mack, who struggled to return the bank to profitability amid the financial crisis, said a single regulator should oversee financial institutions worldwide. .
“A better system would be one uber-regulator,” Mack said in an interview in New York for Bloomberg Television’s “Conversations with Judy Woodruff,” parts of which will air today. “We do need an overall systemic-risk management that everyone buys into. It’s not a U.S. systemic boundary — it’s a global systemic risk manager.” .
A global regulator would ensure that U.S. banks aren’t subject to tighter regulations than the rest of the world, Mack said. A push for regulation during the financial crisis has weakened as the administration of President Barack Obama pursues other tasks, he said.
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Mack the Knife should be arrested for his role in the collapse of international banking. He should also be charged with treason. Of course, he wants the Rothschilds to control banking rules! This way, he can ignore US sovereignty. Of course, a certain communist Asian power has the control of banks firmly in the hands of the Party and not foreign powers! We should emulate our rivals who are successful. Jailing Mack is a first step on the road of regaining our sovereignty.
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Citi sues Morgan Stanley over CDS, claims $245 million | Stocks | Reuters
Citigroup Inc (C.N) sued Morgan Stanley (MS.N) on Friday for breach of contract, saying the Wall Street firm owed it $245.4 million for protection it bought on a loan…..
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…The swap obliged Morgan Stanley to pay Citibank the money as a result of a payment default on the credit facility to the CDO, known as Capmark VI, it said in the complaint. .
Liquidating the CDO collateral did not cover the entire amount, and Citibank said it exercised its right under the CDS to have Morgan Stanley make up for the shortfall, but it refused, according to the complaint. .
Citibank paid Morgan Stanley about $750,000 for the CDS, according to the complaint.
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Citibank got cheap CDS insurance. And then expected to be paid $245 million on such a small sum’s bets! HAHAHA. This is the Derivative Beast in action! Citibank pretended they were insured and this insurance is for about 1% or less of the value of the deal. This is why the Derivatives Beast grew rapidly to over $66 trillion/$450 trillion in size. A tiny amount of money fed an enormous obligations. The plan was for no parts of the systems to go into default. This was FAKE CAPITAL. There was no capital!
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This is why world bankers put sovereign governments into jeopardy to the tune of many trillions in just one year to keep these fake deals from totally collapsing the entire banking system. And this is why it all must be outlawed. There is no way this business is valid. It is fraud every bit as much as any other Ponzi scheme. It is a Ponzi scheme!
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London Bankers Balk at EU Regulation as Lea Invokes Secession – Bloomberg.com
In a Georgian townhouse four minutes walk from Parliament, bankers, lawyers and economists held an off-the-record evening meeting to plot how to fight European Union financial regulation that they deem a threat to London. .
“I am extremely worried about the City of London,” said Ruth Lea, a director at Arbuthnot Banking Group Plc, who agreed after the Sept. 24 meeting at the Institute of Economic Affairs for her comments to be published. “Britain may be able to influence EU regulation, but we won’t be calling the shots. Britain should consider the nuclear option of leaving the EU.” .
Europe is making new laws and institutions that may challenge London’s ability to set the rules in the region’s largest financial center. At meetings across the city, investors are discussing how to respond to Brussels, the EU capital. Where some see the rules as a threat to Britain, others argue that the challenge is to capitalism across all of Europe….
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….“Clearly there’s a political agenda when so many regulators and politicians are saying the Anglo-Saxon model is wrong,” Steven Woolfe, a London-based general counsel for hedge fund Boyer Allan Investment Management LLP said after Hoogervorst spoke. “Why should the U.K. allow its finance industry to be attacked? The French wouldn’t allow their farmers to be attacked like this, and neither would the Germans stand by as their automakers were attacked.”
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The Anglo-Saxon model is flawed because it is based on piracy and irresponsibility and is based on running both the US and UK in the red in all ways. Both the US and UK are running simultaneous trade and government debts that only get bigger and bigger over time. Both are exploiting privileges of being a global empire, first the UK global empire then the US one. This dual eagle system is in very deep trouble because it relies on a naval/nuclear force system to dominate the globe politically so we can run in the red with impunity.
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This is now a very bad model to follow since China is the rising empire and it plans to kick the US out of much of its present sphere of influence. Just like the Boer War showed Germany that Britain was overextended and weak just prior to WWI, so does the Afghanistan war show US weakness to the Chinese today. Britain has merrily destroyed US banking sovereignty via the use of royal islands to remove much of our banking system from our government’s regulations. This is insufferable and should end. And this is why they had the secret meeting in London: to weasel out of fixing the mess they made via these pirate islands!
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Funds Try to Ward Off New Regulations – DealBook Blog – NYTimes.com
Hedge funds, trying to separate themselves from the big Wall Street banks, are stepping up their efforts to head off new regulation from Washington. .
Representatives of the industry’s main lobbying group met on Wednesday with the Treasury secretary, Timothy F. Geithner; Ben S. Bernanke, the chairman of the Federal Reserve; and Mary L. Schapiro, chairwoman of the Securities and Exchange Commission, to lay out their views of President Obama’s sweeping package of reforms to the nation’s financial regulatory system, The New York Times’s Zachery Kouwe reported. .
Of particular interest to the group, the Managed Funds Association, is the possibility that Congress will deem some hedge funds as systemically important to the financial system and subject them to onerous regulation and reporting requirements. The group has been focused for months on persuading lawmakers that, unlike big banks, hedge funds do not pose a systemic risk to the economy. .
“As we have made clear, we were not the contributors to these financial problems and, where hedge funds have met their demise, nobody got any taxpayer money to help bail them out,” Richard H. Baker, the association’s chief executive, told The Times. .
Hedge funds have also been engaged in heading off restrictions on trading credit-default swaps and betting on the decline in a company’s stock price.
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The guys who created the Derivatives Beast didn’t cause the international banking collapse? HAHAHAHA. Of all organizations on earth, the hedge funds using Elizabeth II’s pirate islands are very much at the very heart of this mess! They should not just be regulated, they should be arrested.
Culture of Life News 
If hedge funds genuinely weren’t bailed out, they shouldn’t be treated like the banks. But the truth is, if the banks weren’t bailed out, most hedge funds would now be extinct, and their secret meetings would be less about global financial regulation and more like AA meetings. No ZIRP/ QE/ part-nationalisation of the global banking system, and many more hedge funds would be toast.
It’s the horrible truth about bailouts – they have direct and indirect beneficiaries, all of whom should have been wiped out.
‘Mack the Knife should be arrested for his role in the collapse of international banking. He should also be charged with treason.’
Puhleeez. Mack gave Samberg, the Cayman maven of Pequot Hedge fund fame a bit of inside info, no? SEC had him dead to rights when MS was advising GE on the buyout of Heller Financial, and surprise surprise.. Pequot is way long Heller and short GE right before the announcement and right after a couple of phone calls from Mack to Samberg. Maybe the name Gary Aguirre, the SEC staff attorney rings a few bells. He was forced to resign after he would not drop the investigation under the great Chairman Cox. Then Senate Judiciary questioned Aguirre, and exonerated Mack.
So what the heck makes you think that any living power on Earth can touch Mack?? Because you say arrest them all here?? Bwahaha.
Everybody will print to hell to make the dollar stronger , but the us will continue to print , this death spiral will bring us the World Massive Hyperinflation ! Soon !
It is a very strange thing to hear the French president say “We need a strong dollar”.
One would think that a nation’s leader would promote their own currency over others, but as Elaine has said, they are all “naked” now. They have all completely and utterly dispensed with all pretense regarding their need to flood us with imports.
I still wonder how other countries think we will pay for all this. China will get Taiwan and Korea. What will France get out of our bankruptcy? We already gave them back Vietnam. (It’s theirs if they want it.)
Do they expect us to hand over the Lousiana Purchase?
All of Europe is sitting on billions (trillions?) of worthless paper which cannot even be exchanged for political gains. I really do not understand what they are thinking — other than that they may not be thinking at all.
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ELAINE: Yeah, after hurricanes destroyed New Orleans, we give it all back to France. 🙂
payAttention, you don’t get it! Maybe Mack’s protectors are the current politicians – politicians come and go but the guilt and the blame remains. Maybe no one has been keeping score thus far because we’ve been on a roll with the oil bubble. But wait. And consider the plight of the many deposed dictators who thought they were immune to prosecution only to find their days in the sun cut short by protectors who had aged out as the prosecutors closed in.
justiceatsqualor.. I did get it. We voted for change and got more crony capitalism, free trade and continuing occupation of Iraq and Afghanistan. The same people stay in charge.
ISTANBUL, October 3 (RIA Novosti) – Delegations of economic ministries of Russia and Iceland are set to hold talks in Turkey’s Istanbul, a source in the Russian delegation said on Saturday.
He said that the Russian delegation will be headed by Deputy Finance Minister Dmitry Pankin.
“Iceland turned to Russia for holding talks on its own initiative,” the source said, but did not specify whether the delegations will be discussing Russia’s possible stabilization loan to Iceland.
A delegation from Iceland was in Moscow a year ago for a series of meetings to agree the terms for a loan that would allow Iceland’s government to shore up its shaky national currency, the krona, which collapsed after the country was forced to nationalize its three main banks after they amassed debts of over $60 billion.
With the sub-Arctic island’s population of only 320,000, the banks’ debt last year was equivalent to $187,000 per person.
With debts some 12 times larger than the national economy, which is expected to contract by 10% in 2009, Iceland’s Central Bank said that Russia’s possible loan of some $500 million would bolster Iceland’s foreign exchange reserves, strengthening the stability of the krona in the face of the financial crisis.
http://tinyurl.com/y8ww8ey
I have been to Iceland a few times, but I cannot see much in the blinding snow storms that hit the tarmac as we leave the plane and walk single file to the gift shop, but it is my understanding from talking to Icelanders in Germany that it is basically a fishing island.
Why don’t they just drop kick all the bankers out and terminate the krona along with their bogus debts and just go back to fishing? What are other countries going to do about it? Invade? There’s nothing there.
They’re stupid if they accept these debts.
payAttention, it hasn’t turned yet. . . steady. . .
Iceland is blessed with geothermal energy and all else required for an independent living/support system.
Aluminum ore by the boatload is refined in Iceland because of cheap energy.
An electric car transit system is a given.
Pollution is almost non-existent.
Only takes a few Lizards to fuck up Heaven.
The Anglo-Saxon model is flawed because it is based on piracy and irresponsibility and is based on running both the US and UK in the red in all ways.
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U.S. banking was expansionist marketeering for what was the formation of a direct notion of greatness… U.S. power was ensured by the market and invested capitol provided ownership
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now we have managers getting rich because their boss gambles waaaaay better than fast food…
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Anglo-Saxon model is gay
How vague can you get? Some new jobs could happen supposing you get some form of health care plan passed.
ap
Obama links job growth to health care proposal
I guess these new businesses are bagel shops and pizza parlors.
Over at Denninger: WSJ article:
Rare earths are vital, and China owns them all
http://www.marketwatch.com/story/rare-earths-are-vital-and-china-owns-them-all-2009-09-24
off topic…
Does anyone know if there was a severe recession in 1990?
I found a copy of mr Ravi Batra, called “The Great Depression of 1990”, in which he predicts that there will be a depression (written in 1985).
His analysis is based on an eastern social cycle (“Sarkar’s Law”) combined with the situation of large income inequality (reducing the overal purchasing power) which will than trigger a depression.
Did it happen, or was the japanese zirp regime already in place and avoiding the depression?
or was the book just a hype?
Japan fell into a depression after a huge bubble back then. Still is stuck there.
Fujii May ‘Take Action’ on Yen; G-7 Seeks Currency ‘Stability’
By Mayumi Otsuma and Simon Kennedy
Oct. 5 (Bloomberg) — Japanese Finance Minister Hirohisa Fujii issued his clearest warning yet that his nation is open to intervening in the currency market even as the Group of Seven declined to criticize the tumbling dollar.
“If currencies show some excessive moves in a biased direction, we will take action,” Fujii said Oct. 3 in Istanbul after a meeting of G-7 finance ministers and central bankers. He declined to say if the yen is now trading in such a way.
haha, i found my answer….
http://www.ravibatra.com/Forecasting.html
discussing his old forecasts and the US – Japan relation….
and voila the solution
from http://www.truthout.org/031609A
(where did i hear it before?)
…Freeing the credit markets won’t end the recession, because why would a bank lend money when it’s afraid that it won’t come back? When the borrowers are not creditworthy and have no collateral, why would a bank want to lend them money?
The Obama administration should focus on trying to help the economy grow. The stimulus package will help in the sense that it will slow down the bleeding, but it won’t stop it. If all the policies that led to the growing wage-production gap remain in place, the stimulus package will not end the recession. Balancing trade – reducing the trade deficit to zero – would be a huge step in the right direction. (Is this you Elaine?)
Look at the economic policies of the 1950’s and 1960’s – balanced trade, breaking up monopolies – for example, Exxon-Mobil will have to become Mobil and Exxon; raise taxes on the wealthy and cut them on the poor. Those economic policies will close the wage gap. Those were the decades in which growth was very strong, between four and four and a half percent every year. Since Reagan took over, growth has been three percent or less.
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