ΩΩIt is very interesting to me how economic cycles are so stubborn. Many years ago, people realized that credit bubbles always led to debt defaults which causes government budget deficits, a collapse of global trade and currency devaluations. The solution generally has been ‘protectionism’. The antidote for too much global credit caused by ‘free trade’ is to do the exact opposite which is tariffs and barriers coupled with removing the excess currencies from circulation and thus, raise the value of the currency in hand as the phantom ‘IOU money’ silently vanishes from bank bookkeeping.
ΩΩIt appears pretty obvious that this seems to be the only way to fix a credit bubble. When the Federal Reserve was foisted on us back in 1913, the only excuse for this was the desire to break this easy credit/free trade=>bank collapse/protectionism cycle. The central bank was supposed to restrict easy credit creation via raising or lowering the interest rates to prevent bubbles.
ΩΩThis was turned on its head when the Federal Reserve also promised to create jobs. But of course, job creation requires keeping an eye on free trade and preventing trade deficits. As we see so clearly in the US since 1974, the loss of domestic jobs due to free trade is horrific and getting worse each generation! The only thing that stops the deficit is a loss of income in the US which makes it impossible to buy imports. Aside from this ‘starvation’ method, there is absolutely nothing except very high interest rates protecting us from job losses due to a easy credit/free trade cycle!
ΩΩThe conundrum here is obvious: when interest rates are high, domestic commerce suffers! So, the goal of the Federal Reserve and our government is focused mainly on keeping credit flowing no matter what! This is why our banks are insured by our government: to encourage reckless lending no matter how terrible the economic prospects.
ΩΩThis, in turn, has devalued our currency relentlessly for 35 years. Far from escaping the easy credit/free trade=>bank collapse/protectionism cycle’s tremendous economic damage, we are trapped in a system that provides NO relief AT ALL from the destruction caused by these stupid easy credit/free trade cycles! Instead, we see futile attempts at keeping the easy credit/free trade cycle going to infinity.
ΩΩNothing in the universe goes to infinity. Previously, I posted a story about all of this: Matter And Antimatter In Big Bang: Same Graph As Economic Bubbles. It is a concept that is intellectual but unnatural. Just as the entire universe cycles through creation/collapse into one big black the size of a pin head cycle (at least, we fear this is the case) all natural systems go through cycles of some sort. This was figured out by the Chinese thousands of years ago and they called it the Tao yin/yang cycle.
ΩΩWe are now very much in a yang cycle and will be there for at least the same amount of time we spent in the yin cycle. This is all about balance. For example, Japan went relentlessly upwards from 1960-1990. That is thirty years. Japan has been trapped in a downward cycle from 1990 to today which is twenty years. They have ten years to go.
ΩΩI fear that the US which has been on an up cycle since Reagan (the post WWII up cycle was not totally balanced by a down cycle, we escaped this via debasing the currency by over 50% which created hyperinflation in the seventies) and so we have accumulated a fake 1980-2010 mega bubble of 30 years which means 30 years of money reduction/protectionism as the solution.
ΩΩFirst, some news from the credit/currency markets today and then I will examine the bank panic that created the Federal Reserve by using only news reports from that time frame to show how the people those days thought of all of this stuff: Currency Trading Reaches $4 Trillion a Day, BIS Says (Update2) – Bloomberg.com
Foreign-exchange trading rose to $4 trillion a day on average even as growth in the market slowed in the three years through April, a Bank for International Settlements survey showed.
Trading increased 20 percent, down from a 72 percent pace in the three years to 2007, according to the poll.
ΩΩThis is a……..
ΩΩThe above example is from a previous story of mine, OTC Hockey Stick Problems Of The Derivatives Beast. Currency trading has grown by over 50% per year for the last dozen years due mainly if not totally, free trade and easy international credit. The Japanese carry trade was all about shifting through currency markets to discover ways of creating instant easy credit and the Japanese government loved this since their grinding depression was creating great conditions for the exchange of currencies from ZIRP interest depression economies (Japan) to higher interest rate expanding domestic economies (the US or China, for example).
ΩΩThe Japanese carry trade currency business collapsed suddenly when the US shifted from easy credit/free trade to bankruptcy and loss of domestic earning power which meant, even ZIRP lending was futile. Just as it has been in Japan for twenty years. The US banking system doesn’t see any classic bank runs anymore since people are happy to see the government insure their money but banking collapses are hammering people across the planet including in the part of the world controlled by our imperial storm troopers: From today’s news: Karzai’s brother calls for U.S. to shore up Kabul Bank as withdrawals accelerate
As depositors thronged branches of Afghanistan’s biggest bank, Mahmoud Karzai, the brother of the Afghan president and a major shareholder in beleaguered Kabul Bank called on Thursday for intervention by the United States to head off a financial meltdown.
ΩΩThe corrupt ruler of Afghanistan is identical to all previous corrupt rulers supported by our imperial forces, for example, the Kuomintang in China during WWII. The US gave them US gold certificate money loans to shore up the collapsing Chinese banks but the corrupt Chinese leaders simply used this to hoard gold, not pay their armies to fight Mao. Here is a past story I did about all this: CHINA GOLD CRISIS OF 1949.
ΩΩObviously, we learn nothing from history, at least, the smart guys at the top learn nothing. The US dollars sent to Afghanistan, the trillion dollars we wasted on wars in Afghanistan and Iraq, ended up mostly in…Dubai real estate speculation. This is mainly why that tiny enclave suddenly had a building boom from hell. Karzai’s corrupt brother has been forced to rush home from Dubai to deal with the Americans (ie: threaten our government with decamping to the Maoistic-Taliban who are successfully fighting off the US invaders). His demand is, the US taxpayers pay for all the losses of his bank.
ΩΩThis is the same threatening way our own bankers treated the US public. We were told, if we didn’t save these ridiculous bankrupt banks, why, we would all starve to death, etc. After doing this rescue operation, these same people then said, they must still starve us to death (kill Social Security, etc) to save the banks. Warnings that these bankers would pull this stunt failed to make it into the public discussion about our entry into a deflation cycle.
ΩΩFrom today’s news: Cameron Austerity Makes U.K. Debts World Beater: Credit Markets – Bloomberg.com. The Brits are cutting far more and far faster than Greece. They have to cut public spending by around 30%. There are no starving Brits on the streets…yet. But will be, very soon. Already, there are demands for protectionism, that is, kicking out foreign workers. But this is shoved aside as the knives prepare to slice away huge hunks of the public weal.
ΩΩBond markets approve of this. Who is the ‘bond market’ anyway? Well, it is savers who have capital and in today’s world, many of these ‘savers’ are actually….currency traders as we see here with this news: Gold Rallying to $1,500 as Soros’s Bubble Inflates Bloomberg.com…many of whom are using pirate islands as headquarters (like say, Dubai). Or the major currency traders on earth: government central bankers. The US and UK must peddle these bonds to Chinese or Japanese central bankers and they, in turn, demand balancing the budget. Notoriously, the Federal Reserve does this, too. Demands that we cut out the elderly and starve them comes from the Federal Reserve which has zero interest in protecting actual humans. It exists to only protect bankers and foreign investors.
ΩΩFrom today’s news: China’s bank regulator to curb speculative property investment
Ye’s comments echo those of Zhang Ping, director of the National Development and Reform Commission, who said last Thursday in a report to China’s top legislature the government will “further implement the measures meant to curb excessive gains in housing prices and resolutely restrain speculative property investment in the second half the year.”
Ye also said the CBRC has pushed lenders to test the impact of falling house prices, although the regulator said earlier that hypothetical scenarios examined in stress tests do not herald any change in policy
Housing prices in major Chinese cities rose 10.3 percent year on year in July, slower than the 11.4 percent growth rate in June, according to official figures.
ΩΩIt is obvious, when we do a close reading of historical reports from previous bubble eras, that the most dangerous parts of bubbles is when it causes real estate prices to suddenly climb. A 10%+ annual climb is most dangerous. Previous to this year, the Chinese climb was OK since the economy also was growing at this pace and China is on an upwards climb right now to make up for a 50 year decline cycle. So 50 years upwards is normal.
ΩΩSince all of Europe and much of the British/US empire systems are cutting credit to housing and government spending, China is anticipating a contraction at home. This is what used to hammer the US repeatedly from 1880-modern times. That is, cuts in spending or market/government collapses abroad would swiftly rebound on the rising US economic system. Cycles far offshore would create woe here at home over and over again.
ΩΩA rule of thumb here: the more free trade=>more interdependent economic collapses even of creditor nations as they have to suck down defaults. The US and Germany tried to fix this problem by flooding the defaulting systems with tax-based support. That is, taxes will fix all defaults. But this leads to a tax crisis which is far worse than the credit collapse in housing/free trade bubbles. As the Germans are very aware of and are quite angry about this. They can see what will happen next. The US public cannot.
ΩΩThis brings us back to Oct. 26: GERMANS BLAME ROOSEVELT.; Chief Bankers Think He Has Undermined Public Confidence. This news story comes almost two years after the beginning of the historic 1907 Bear Market. This is a classic bear market in that it developed from a fall in equities into a general banking collapse which featured a total panic rush to the bottom which began on this day in late October (most of these panics happen around Halloween, by the way).
ΩΩRoosevelt wanted to reform the financial and industrial systems and cut the power of the powerful money men who were the top 1% of the nation but who controlled great swaths of the government and fiances. Monopolies meant setting prices at will so bankers could debase the currency at will while the producers could evade the downside effects of inflation by passing on currency losses to their customers. During this time, strikes and fury against foreign workers rose dramatically.
ΩΩOf course, Roosevelt was saving his own fellow upper class members from complete social destruction. Soon afterwards, this did happen in Russia, for example. These efforts were not appreciated by the very rich. They wanted to be richer and richer no matter how destructive this was for all of society. Just as we see today, they wanted to be protected from any downturns while at the same time, the only protections they could get meant starving or destroying the lives of everyone else.
ΩΩThe NYT was all in a tizzy about how offended the Germans were back then because Germany was and still is, a major industrial power and was a major creditor nation (that was destroyed by two world wars). So Roosevelt had to appease the Germans who were OK with monopolies, they had no reforms like Roosevelt wanted here and of course, this meant the rich industrialists of Germany led them straight into WWI and WWII.
ΩΩHere are some statistics that led to the 1907 panic: Top 10 Worst Stock Market Crashes: Current Crash Is A Chart Buster | Leatherhead Matters
3rd Worst Stock Market Crash: 1906-1907
- Date Started: 1/19/1906
- Date Ended: 11/15/1907
- Total Days: 665
- Starting DJIA: 75.45
- Ending DJIA: 38.83
Total Loss: -48.5%
ΩΩThis bubble came on the heels of the Spanish American War. Most bubbles are an integral part of military imperialism. Mr. Nobel realized this which is why he created the Peace Prize which was supposed to go to people who resist imperial military expansion. This prize has been turned on its head and is now rewarded mostly to imperial powers when they finally cease butchering people except in the case of Obama where it was given to him as he BEGAN to butcher people.
ΩΩBack to the old news, the problems caused by a contraction of the easy credit/free trade years. Here is Oct. 27: WORST OVER, PARIS THINKS.; And Now Is Moralizing on Our Need of Monetary bank reforms…
The prevailing opinion in financial circles here is that the worst phase of the crisis in New York is over, if it does not extend to the interior of the country. No skepticism exists regarding the enormous wealth and resources of the country or the solid basis of its prosperity, and the utmost confidence is expressed in J. Pierpont Morgan and the coterie of bankers at the helm.
ΩΩHahaha. First, just like today, the bankers keep announcing an end to the contractions but things get much worse, not better. Over and over again, if we read the news from any contraction period, the economists in the pay of universities endowed by the rich as well as the government join the very rich bankers and industrialists in announcing all is well right before everything falls off a cliff in a panic.
ΩΩGermany and France had a lot of economic power to wield against us back then. Today, Germany happily runs an annual trade surplus with the US which they have run nearly continuously, like Japan, since 1955. Paris, back then and all the way until Nixon, was a major gold hoarder. This is why the Germans tried thrice to seize this hidden hoard by physically entering Paris.
ΩΩOct. 27: PLENTY OF FRENCH GOLD.; Parisian Financial Writer Thinks It Prevented … – Article Preview – The New York Times. The Times reports that further declines in NY hasn’t ruffled French feathers. The French say, they have $560 million in gold bullion which increased by $3 million in just one week so all is well. They claim they are not in any danger because their gold fund which is like modern FOREX holdings, was very large so they were not at the mercy of global gold dealers, etc. Of course, this proved to be false hopes as this business is part of the reason why WWI broke out less than 6 years later.
Remarkably stanch powers of resistance were manifested on the Berlin Boerse last week, amid the cyclonic conditions which prevailed in New York and reached London
ΩΩBack then, economic writers recognized the seeming inevitability of the boom bust cycle and even recognized how this was all about the easy credit/free trade=>bank collapse/protectionism. Both Germany and France were very intent on preventing the US from going protectionist. By 1920, both Germany and France were very, very deep in debt to the US.
ΩΩNote the demand from this article for a new US central bank identical to the ones in Paris, London and Berlin. The bankers in Europe got their ‘reforms’ foisted on the US public and immediately tapped this new bank to fund wars with each other, mega wars that convulsed the entire planet and destroyed European empires.
ΩΩHere is another piece of editorializing on the same day…Oct. 28: “BETWEEN BANKS.” -The New York Times
New York Clearing House – Wikipedia, the free encyclopedia
The New York Clearing House Association, the nation’s first and largest bank clearing house, was created in 1853, and has played a variety of important roles in supporting the development of the banking system in the nation’s financial capital. Initially, it was created to simplify the chaotic settlement process among the banks of New York City. It later served to stabilize currency fluctuations and bolster the monetary system through recurring times of panic. Since the creation of the Federal Reserve System in 1913, the Clearing House has used technology to meet the demands of an increasingly complex and growing banking system.
ΩΩWhat pissed off the rich bankers the most was, they, themselves, had to stop the 1907 panic by drawing on their own wealth! Unlike today where they kept 100% of their own wealth and grew even more powerful after a banking collapse they caused, themselves. The entire reason for the Federal Reserve is to take responsibility for keeping their own banks afloat and shoving it onto the general public. This meant, bankers don’t go bankrupt anymore, they can float along seemingly forever.
ΩΩThe fixes cost the taxpayers a huge hunk of course. And to fix this, the bankers cut social services by 30% or more during times of travail. This is the solution being foisted on the UK today and the GOP/Tea Party goons want to do this to Americans.
ΩΩBack to the present, in the US, housing is still grossly overvalued and here is an example I pulled up randomly yesterday: United States – California – Beautiful Samarkand Tri-Plex For Sale on PropGOLuxury
Beautiful Samarkand Tri-Plex inCalifornia For Sale USD 1,049,000.
ΩΩYikes! This is a tiny hovel! It is ugly. Poorly built. Classic cheap 1950-1970 construction. Postage stamp front yard and the side yard is a narrow driveway. Ridiculous price for a house fit for some lower working class family who naturally, cannot possibly buy this thing at all. Who on earth is buying this pricey junk???? Property values in California have a long, long way to fall before becoming realistic again.
ΩΩBack to 1907….Oct. 28: THE FOREIGN MARKETS.; Money Hardens in London The New York Times
Money for call loans in the market to-day had a hardening tendency. Discounts were strong on the American demand for gold, and the fact that the Bank of England would not discount under 5 per cent., and refused bills of over thirty days, raised the belief there would be an early advance in the Bank’s rate of discount.
ΩΩEngland was being hammered by the US, France and Germany who were all draining gold from the world’s biggest empire. England, like the US today, tried to control the Seven Seas and many countries via military means. This drained the public coffers in relation to global free trade in that the Brits had a huge FOREIGN military obligation that was draining wealth from the system faster than the loot from the empire could come in. The US is in this state today: we take on many IOUs to pay for our expansive empire which is money spent in FOREIGN lands, not here. And worse, to keep allies, we let them ravage our home base via free trade.
Wheat toppled under the dollar level on the Chicago Board of Trade to-day in a savage slump of 4 cents a bushel. A drop of 4 cents a bushel in wheat means a tremendous increase in exports of that cereal. The world’s wheat crop is short, but Europe is not really to pay any fancy price American speculators may choose to demand
ΩΩOops! We see this today! Wheat futures boosted as Russia extends export ban. Russia has a drought. Here on my own mountain, we are also in a drought even as other places nearby are being flooded. It is extremely dry here while a massive hurricane dumps water all along the east coast while a cold front dumps lots of rain to the west of us but the jet stream which usually flows over my mountain during the summer is far to the north this year, leaving me high and hot and dry.
ΩΩAnyway, during times of contractions and protectionism, any shift in farming outcome leads to hyper price inflation in world markets. This is typical. The rise in the price of wheat is all part of the ‘starve the masses’ solution of the bankers. Which is why we have revolutions and wars. Let them all eat cake!
ΩΩIn the case of the news from 1907, a bumper crop in the US led to price DECLINES due to the need to sell to a troubled world in the middle of an international contraction in trade. Instead of importing more expensive US wheat, the European rulers (royalty) mostly decided to make life very hard for the workers. Just as we see today in the UK. This backfired. The solution to rising social agitation was to launch wars against each other and go on looting expeditions. They did NOT expect this to turn into WWI.
Wall Street Principles. NOT MEANT AS A PRECEDENT Federal Judge Believes Creditors’ Interests Demand Preservation of Suspended Firm’s Assets.
ΩΩBack then, note how furious the bankers were about the government shutting them down when they screwed up! No, they wanted PRESERVATION of their ASSETS which are…DEBTS! HAHAHA. Just like today! Back then, the Darwinian forces were allowed to push forwards and kill off overextended bankers unlike today where they are protected and go bankrupt without losing personal wealth.
ΩΩHere are two stories from that same day that amuse me a bit…Oct. 28: PREACHERS EXHORT DEPOSITORS TO CALM; Archbishop Farley, from the Pulpit, Says “I Have Confidence in … and CONFIDENCE IN PHILADELPHIA.; Nothing to Fear Here, Say the Quaker City Bankers — Situation Clear Now.
Philadelphia bankers generally believe that there will be continued improvement in the financial situation and a restoration of public confidence in the coming week. The improvement which marked the close of last week in New York was reflected in this city, though money continued tight and probably will remain so.
ΩΩPray to the gods for wealth protection! HAHAHA. Yes, the gods in the Cave of Wealth and Death will protect us from our own follies as we seek to run out of that dire place with arms filled with loot. The preachers wanted to reassure everyone who had savings (the top 20% of the population) that all was well. This is right on the cusp of a real rush for the exits. Banking panics are FAST.
ΩΩOct. 28: SOUTH HAS PLENTY OF CASH.; Conditions at New Orleans and Other Important Cities Reported Normal. shows that the panic had spooked everyone so false assurances that the banks had plenty of money to give back to savers was issued in a futile attempt at stopping this panic. Oct. 29:BATH TRUST CO. CLOSES.; Lack of Curerncy to Withstand a Run — Control… – - The New York Times. This Bank was only 5 years old. Capitalized with $100,000. All banking bubbles feature new operations that grow like mushrooms after a rain.
Cotton Exchange Only Remains Open and General Conditions Are Hopeful. MANY NEW DEPOSITORS. Trust Co. of America $2,000,000 Richer — None in Line Last Night. NEW KNICKERBOCKER LEAGUE. Samuel Untermyer Has Been Invited to Act for Some Depositors. HARLEM SITUATION NORMAL. Depositors Over Their Fright and Run on Dollar Bank Ceases. SAVINGS BANK CASH RETURNS. Depositors Are Over Their Scare and Business Is Normal Again. A Little Bank Run Soon Over.
NEW ORLEANS, Oct. 29. — Partly as a guarantee for the unhampered movement of the crop staples, speculative activity involving any unnecessary risks in other lines of business was to-day suspended in New Orleans, both local Stock Exchanges closing until Monday.
ΩΩThe international run on banks continues to hammer the UK empire….October 30: THE FOREIGN MARKETS.; Happenings of a Day in London… The New York Times
Gold was withdrawn from the Bank of England, £1.6 million and was transferred to the USA and another £40k shipped to Holland. German markets were suffering liquidations.
ΩΩGold was used for world trade in order to prevent countries printing paper money to make a bank run cease. Any bank can issue endless money in a panic if they could and this could prevent a ‘run’ only this causes hyperinflation. A lesson few Americans want to understand. The only remedy for this is to buy gold and the price of gold is climbing only because there is no bar to printing money in the various empires being hammered by the present contraction in world trade and collapse of a major credit bubble.
ΩΩBack then, Britain couldn’t print its way out of this mess. It was the heart of world trade via imperial control of the Seven Seas and many countries on earth. So it had to eat the losses.
ΩΩOct 29: ASSET CURRENCY TO-DAY. – View Article – The New York Times
ΩΩOne day after writing about Clearing House matters in Manhattan, the NYT had to explain it some more to reassure its readers. These ‘certificates’ are MONEY. Yes, money. Paper money. Which is why everyone suddenly demanded gold overseas from each other. Note the comment that only bonds can be the basis for banknotes.
ΩΩThis is obvious: banks would issue notes to infinity unless there is some curb on it and the one used for centuries was gold holdings but since the mid-19th century the new ‘bond based’ paper notes became insidiously, ‘money’. Eventually, it became the only basis for ‘money’.
ΩΩNote the last sentence of this article: ’Asset currency is DESIGNED to facilitate exchange of goods and services’. Instead of paying in gold, people paid with bank IOUs based on debts held by the banks which is why, when people don’t pay these IOUs, the bank can’t pay out certificates based on this and thus, ‘money’ vanishes from the system. This ‘money’ is actually paper IOUs. Anyone daring to play the paper IOU game to infinity gets hammered by hyperinflation.
ΩΩEven flooding a system with gold can trigger inflation! These things depend on being restrictive to survive. The key is how restrictive should it be. And this is poorly done by greedy humans who can’t resist flooding the system with too much easy credit.
ΩΩThe panic gets much worse despite the preachers and the media…Oct. 29: BANK DEPOSITORS. – The New York Times
During the past few days thousands of bank depositors have withdrawn their cash from the banks in a foolish dismay which prevented their appreciating the full measure of their action. The withdrawal of a dollar of reserve money, which signifies only the cancelling of a dollar of the bank’s debt to the depositor, means the reduction of a bank’s capacity for serving other people many times one dollar.
ΩΩHAHAHA….back then, the news was so blunt and frankly, TRUTHFUL. Today, there is tons of blather which is designed very artfully to delude people. Back the, the Times growled that withdrawing funds makes a bank collapse. But why were the banks collapsing in the first place? Well, people were not paying their debts! So these losses had to come from the funds deposited by savers. Scared of what was going on, everyone wanted to save their savings and convert it all….TO GOLD. Ahem. Just like today.
ΩΩBanks are being starved of savings, the US savings rate is extremely low, but hoarding is rising rapidly which is obvious to see, the price of gold has been climbing relentlessly since the collapse of the Internet bubble economy.
ΩΩIn the middle of the 1907 depression which began a year earlier, we see inflation….Oct. 29: BOARDING HOUSE CRISIS.; Philadelphia Landladies Put Higher Cost of Living on Consumers. Exactly like today. Only our inflation was in oil.
ΩΩThe panic is shutting down all systems…Oct. 29: LEGAL HOLIDAY IN OKLAHOMA.; Acting Governor Suspends Banking Operation
Every bank in Oklahoma City remained closed to-day, in accordance with orders issued by Charles Filson, acting Territorial Governor. The order affects all National banks in Oklahoma and Indian Territory. The action was taken because the banks of Kansas City and St. Louis refused to forward cash to the banks of the Southwest.
ΩΩAnd in all panics, the various thefts and schemes are revealed. Lots of fraud during the bubble times…Oct. 29: AKRON SAVINGS BANK CLOSES.; Suicide of Cashier Reveals a Deficit. Few suicided this cycle due to governments saving all the rich bankers who should have done us the service of flinging themselves out of the 50th floors of their high rise offices.
ΩΩOct. 29: Oct. 30: FINANCIAL MARKETS; Stocks Sell Off Sharply — Call Money Rates, 75@4 %
ΩΩOct. 29: MONEY TIED UP, STOP WORK.; A Pennsylvanian Has $800,000 in Knickerbock… The New York Times
A LOT FROM BUENOS AYRES Bank of England Expected to Raise Its Rate in Order to Protect Its Reserve. Bar gold to the amount of a million sterling arrived today from South Africa, and of this u900,000 was bought for America at seventy-eight shillings and a halfpenny per ounce, this specially high price being mainly due to the necessity of having to hurry on the process of refinement in order to ship the metal by the next steamer
ΩΩFinally, the panic briefly subsides…Oct. 30: DEMANDS ON BANKS GREATLY LESSENING; The New York Times. This is due to the very rich being forced to cough up some of the loot to save their financial empires. JP Morgan promises to pay in advance Norman Pacific dividends and interest on loans. Market is in a panic with many declines. The NYT compares declines in the 1893 panic and says, this one is worse. This article mentions how this process involves draining gold from Europe.
ΩΩAs usual, the workers get hammered…Oct. 30: DENY PENNSYLVANIA LAY-OFF.; Road Has Never Considered the Discharge of 20,000 Men. The same day, angry German bankers force the US do come pay a little visit…Oct. 30: TAFT’S VISIT TO BERLIN.; Taft had to drop his labors in trying to keep our creaky little empire we won in the Spanish American war and had to sail from Manila to Hamburg to chat with major creditors. This is getting to be a long article so I am posting part II later: November 1907—tricking the public into supporting a national bank.
What pissed off the rich bankers the most was, they, themselves, had to stop the 1907 panic by drawing on their own wealth! Unlike today where they kept 100% of their own wealth and grew even more powerful after a banking collapse they caused, themselves.
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completely true… free money socialism is a very new creation of society… if credit and leverage can be dictated to the government and priced in dollars via bank cartels, well i think that undermines democracy and the efforts of the middle class in America who need the money and think its worth something.
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Not that money isnt worth something, just that the people responsible for creating and managing our wealth have a Disneyland view of the market rollercoaster… while they wait for the rest of us to pay off the debt, the TV reminds Americans if we cant figure out a way to fix their bullshit fast enough they will just produce MORE DEBT redirected to their favorite market sectors to help prop up their book key valuations(Banks, Housing, DOW Components, Healthscare)…
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and thats HIGH FINANCE??? me wants cookie??? how much money is bullshit earnings anyways gosh
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give them SDRs and US free speech and political action rallys will just marginalize the middle class as bank cartels will just MOVE ALL THEIR ASSETS INTO SDRS whenever we should be treated like 3rd world ‘whiners’, while the ‘hard working’ chinese communists BOW THE FUCK DOWN
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http://video.google.com/videoplay?docid=-181259944046452879&q=iluminati&total=111&start=0&num=10&so=0&type=search&plindex=4
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says here your economic hamburger
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/03/AR2010090303234.html
Bombing in Pakistan kills 55, prompting fears of rising sectarian violence
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surreal… Islam is a fractured victim of Islam
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i know the jews want to run the world and America has weather control satelites that can pump 10,000 megawats of dispersed energy into the upper atmosphere easily
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but the muslims are killing each other constantly, and thats kind of crazy too…
http://online.wsj.com/article/SB10001424052748704206804575467921609024244.html
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After some time, people must have noticed that the eclipses ended regardless of whether they ran around banging on pots.
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OK SMART GUY… who says that the singularity ever changed
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for all we know our structured reality in all its vastness is surounded by powerful forces of some UNIVERSE bending extra dimensional pull that can change physics tomorrow… i mean wtf dinosaurs… wtf dinosaurs wtf
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time is an illusion created BY THE SINGULARITY no matter how you measure it… maybe it bends space time too
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physics are just part of the mean view of extra-dimensional travel and Einstein is dead
my point being that if the SINGULARITY EVER EXISTED IT IS STILL THERE… everything else is math, physics, or whatever
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smokin’ hot chocolate
This young girl
talks alot of sense but these comments are from a bunch of whackjobs.
The world is doomed; but keep typing.
Damn,
I must be a whackjob
Tony
September 4, 2010 at 12:35 pm
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The world is doomed
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not likely, 1000yrs is a long time… 1 million years is longer… chances are we are really here and have to live with tha’ fact no matter WHAT
reality is so unstable that PEOPLE can literaly CREATE THEIR OWN REALITY
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thx singularity
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your a pal
whatsup with chordog anyways he still think im a fag or what
http://kunstler.com/blog/2010/08/one-lump-or-two.html
Glenn Beck’s sidekick nowadays, Sarah Palin, is exactly the kind of corn pone Hitler that America deserves: a badly-educated, child-like, war-mongering opportunist
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HAHAHAHAHA OMG OMG STOP… HAHA HAAAAAA! noway noway omg omg… HAHAAAAAAA HAAAAAA!
The propoganda spewed by Aldrich & other banking cronies @ the time of the FED creation was to create an “elastic currency” to prevent bank runs-be the buyer of last resort-and make a constant market for government debt securities.
They failed so miserably in their stated claim. Within 20 years of the FEDs creation EVERY BANK IN AMERICA WAS SHUT!!!
So much for preventing bank runs and closures. THE FED IS A DISGRACE & MOCKERY TO ANYONE WITH A BRAIN. Oh wait, Americans don’t have any brains. They have allowed this creature to exist and rob them for nearly 100 years.
“….the Federal Reserve which has zero interest in protecting actual humans.”
Zero interest, ZIRP….Yep, zip empathy for their fellow humans. That was a good play on words that illustrated a concept, Elaine.
“Banks are being starved of savings, the US savings rate is extremely low, but hoarding is rising rapidly which is obvious to see, the price of gold has been climbing relentlessly since the collapse of the Internet bubble economy.”
There you go again, Elaine, intimating that it’s gold hoarders causing the lack of savings being deposited in the banks.
You know better than most it’s ZIRP causing depositors to search for anywhere but a bank to store their savings.
That house pictured above is worth about 30,000 maybe. That’s it. The price on it is delusional and probably there because some banker needs to cover his ass badly.
The house next to mine belongs to Citibank and has an upside down mortgage on it. My hopes of gaining it by adverse possession are dashed. Citibank plans to just let it rot while claiming it is worth something. They sent a man out to pull down the shades on all the windows to hide the mold growing inside after a hot water line break under the house that I stopped.
I noticed in the paper today that houses in a nice area here in town were going for half a million. That is three times what they sold for in the early nineties. They are mansions compared to the hovel above, so California is essentially doomed — economically, socially, and possibly even politically.
A future 97% decline in housing values is basically a curtain call on that state.
Oh, I forgot to add this:
Citibank, along with a bunch of other New York based banks, owns numerous vacant properties here in Lexington. They refuse to pay property taxes or delay them until the last moment, and will not pay any upkeep costs on the houses at all, sticking the full bill to the city.
Lexington city officials have no way to sue them because they are in New York, there is no law yet to allow it, and the banks will pay off those necessary to block any laws that would force them to reimburse the city.
If we are being royally screwed by New York banks, I can only imagine what kind of chaos they are wreaking on California.
The f*ckers will not jump.
They have no honour.
Here´s some consolation.
Or in the 1930´s they said it a bit more nicely.
“Life is just a bowl of cherries.
Don’t be so serious; life’s too mysterious.
You work, you save, you worry so,
But you can’t take your dough when you go, go, go.
So keep repeating it’s the berries,
The strongest oak must fall,
The sweet things in life, to you were just loaned
So how can you lose what you’ve never owned?
Life is just a bowl of cherries,
So live and laugh at it all.”
The Rise of a Green Tea Party
“What’s gone wrong with the US government, argue the Vermonters, is that it has been totally captured by the corporatocracy, corrupted to the core, a lost cause, unreformable. Its laws are written by and for the rich and the powerful, whose predatory business models – Walmart, Monsanto, Goldman Sachs et al – operate against the interests of average Vermonters. It blows Vermont’s precious tax dollars in bailing out insolvent banks and piratical financiers, bombing children in Pakistan, kidnapping and torturing foreigners, slapping military bases on every continent (over a thousand of them across 153 countries), etc. etc. ad nauseum. ”
http://counterpunch.org/ketcham09022010.html
Great post on today’s economic perils paralleling lessons that should have been learned a century ago! Looking forward to reading Part II.
Today’s political situation also mirrors the past to an eerie degree. Today’s Tea Party movement finds almost its exact parallel in the American Protective Association, the turn of the century successor to the Know-Nothings. Then, as today, most of its most virulent movement members were Republicans. In 1896 when McKinley refused to meet with the APA to incorporate their demands in his platform, they spread the completely untrue rumors that he was a secret Catholic with two children stashed in a convent. In the same vein, Pox News has fostered the belief among an astounding 30% that Obama is a secret Muslim working to foist Sharia on the country. Religious distractions and culture wars serve to distract citizens from the puppeteers pulling the strings.
Politicians who conflate Communism, fascism tell an economically battered population that they have a choice between the questionable largesse of a “godless” public sector and Christianity.
An astrologer friend predicts a Tea Party president in 2012. Whether that’s true or not, the Repugs look to reclaim power this term. It’s a choice between two evils, neither of which is “lesser.” When it becomes abundantly clear that the Republicans cannot turn things around, they will go the way of the Whigs and the Know Nothings, but looks like they will be given another chance to drive the final nail in our coffin.
What happens to the social fabric then is anyone’s guess. Seems clear that the U.S’s suicidal policy of global dominance through unending wars and forcing our boom/bust fiat currency on the world is set to waste a few more $ trillions to benefit the elite few.
“Global warming is a fact, and once we quantify methane emissions we will have scientific proof that the substrate on the seabed is melting and leaking methane. If these methane deposits reach the atmosphere, they will deepen the greenhouse effect, which, in turn, will promote further methane release, thus closing the circle and ramping up warming.”
http://www.nature.com/news/2010/100903/full/news.2010.442.html
@wb
Global warming, or cooling, is a function of cosmic rays and cloud creation on earth.
The more cosmic rays get through into earth’s atmosphere, the more clouds created, and the cooler the earth. Fewer cosmic rays equals fewer clouds and warmer earth.
That’s it. Carbon dioxide has nothing to do with Global Warming. Nor does methane gas.
@PLovering
And do you know who came up with that idea ?
“….there has been no correlation between cosmic rays and global temperatures over the last 30 years of global warming.”
It’s the CO2.
http://www.skepticalscience.com/cosmic-rays-and-global-warming.htm
@wb
The antarctic ice cover is expanding.
So now the methane is coming from the seabed under the ice?
When did this bubbling start and why?
This is the thing now when both ice caps are growing not shrinking?
http://nsidc.org/images/arcticseaicenews/20100406_Figure2.png
@Claire Voyant
“Pox News has fostered the belief among an astounding 30% that Obama is a secret Muslim working to foist Sharia on the country.”
But come on, you have to admire the brass neck on them. It is hilarious you can just say what ever you like and millions – billions will believe you: it’s hilarious what people will believe, its hilarious what politicans and journalists will stand up in pubilc and say.
The whole of public life and culture has become a joke. I’ve finished greaving, i’ve been through denial, anger, bartering, and i even left acceptence behind,and have arrived atlast at hilarity.
Sanity, 0
Brainless-Monkey-Men-of-Earth, 4
We live in the richest, most informed, most educated, generation the west has ever known, yet 30% of the pop. thinks the president is a secret muslim, the world began in 4000 B.C. and meanwhile the bankers got scot clean away with it. It isn’t getting any better than this and we’re still shit. I mean let’s just face it, if we weren’t going to start treating people right after the holocaust we weren’t ever going to.
The human species jumped the shark, time to let those nukes fly and leave mother nature to start over with the cockroaches.
@JT
Both ice caps are melting, not expanding.
http://www.vancouversun.com/technology/Canada+majestic+shelves+disintegrating/3455234/story.html
@wb
September 5, 2010 at 9:30 pm
Both ice caps are melting, not expanding.
.
YO! wb i can totally see global warming and modern oil use being borderline anti-life and unsustainable in totality
.
But we subsidize the airlines, arm the Airforce, and have the worlds most powerful Navy… THAT is the real problem, 70% of global consumption is BIG GOVERNMENT POLICY, carbon credits and scientific THEORY should not be considered scientific LAW and tot in school to the children so they can have a fucking carbon footprint…
.
Americans are not bad people because oil is a commodity that has real environmental costs that some economic victim should shoulder
.
Humanity has been using carbon byproduct heat/power sources since before written history… global warming is a total cop out looking to generate revenue for fascist white knuckle power
@wb, “….there has been no correlation between cosmic rays and global temperatures over the last 30 years of global warming.”
Cosmic rays cause Global Warming.
Compromised brain function also causes Global Warming.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7982807/Dangerous-Defeatism-is-taking-hold-among-Americas-economic-elites.html
.
“Bernanke continues to babble on about futile credit easing: neither he nor his staff seems to appreciate the difference between purchases of assets from non-banks and from banks,” said Tim Congdon from International Monetary Research. Crudely, banks sit on the money. Others use it.
.
CREDIT IS DEAD! LONG LIVE CREDIT!
.
seriously the new normal is not normal… our debt was boarderline stoopid in the 90s, now its just an endless series of flushing money down the toilet to keep prices ‘real’
.
credit is bullshit, retirement is bullshit, healthcare is bullshit, government employment is bullshit
.
was joking round the fire on saturday that we should put a wall around WashingtonDC and tell everyone that they cant leave until they pass more laws…. and then just let them
@Colin … indeed, humankind has jumped the shark but I find it hard to smile in the face of such appalling demagogues as the manifestly insane Glen Beck, or the childishly warmongering Sarah Palin. And a media who, instead of calling out the lies and the frauds, treats the whole mess as one big celebrity-watch spectacle.
Where are all the reasonable, rational, educated people of purpose in this country — shouted down by the mob and driven into such quivering cowardice that they can’t speak the truth? Why can’t our leaders act decisively, or even defend themselves against a host of vicious morons in a time of troubles?
Ask W.B. Yeats about what happens when the best lack all conviction and the worst are full of passionate intensity.
The relentless death spiral of Reaganomics continues to expose the emptiness of the system. Consumer demand has eroded to the tipping point … unlike the Japanese ZIRP depression economy (which at least permitted high savings due to massively unbalanced export trade) American workers borrowed to put a roof overhead, then borrowed to maintain their parents’ lifestyle in the face of declining real wages. When Reaganomics ended with a crash, many college graduates face a future with no jobs, many retirees see promises broken with fractional pension plans; the rest of us face un/underemployment, and the prospect of earning 2.5% in 10 year Treasury bonds, buying the junk bonds now flooding the market, or leaving what remains of our cash in savings at a fraction of a percent.
The Fed is out of bullets. It can prop up Wall Street’s lackluster rally by buying up even more worthless assets, perhaps some mortgage-backed toxic securities to goose real estate values. But any money it adds to the system will be instantly sucked up by corporations hoarding cash and other entities closest to the money spigot — little of it will reach the consumer, none of it will add jobs or fix the system.
The Second Coming (W.B. Yeats)
Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches toward Bethlehem to be born?
@ Elaine
Re It is very interesting to me how economic cycles are so stubborn. Many years ago, people realized that credit bubbles always led to debt defaults which causes government budget deficits, a collapse of global trade and currency devaluations…..
Again thank you for another insightful reminisces down memory lane…it is indeed about debt and initial conditions symbolized by establishing the Fed, inept imperial hubris and narcissism.
Steve Keen has several graphs capturing the reasons why the Fed has no more bullets to “cure” the economic depression.
Throwing money into a basically insolvent economy cannot work because consumers, municipalities and corporations are into “Balance sheet de-leveraging” as pioneered by Japan?
Without fixing the underlying problems (credit-fuelled asset speculation, money hoarding by the rich and growing indebtedness of the poor – the only long-term consequence will be the end of USD as the reserve currency AND lower standards of living…
It seems as the Global Financial Crisis is analogous to a “Phase Change” when a complex non-equilibrium system with a myriad of feed back loops adjusts to changing circumstances?
Such as the West debtor status and economic power migrating to China etc?
Systemic logic suggests both accepting loss of USD global reserve status and lowering living standards as a reality and wait for a competent leader (an unlikely prospect in today’s context) to create a unifying vision and purpose to regain healthy living standards for all?
I realize the terribly wrenching human costs implied by the above notion.
A “Phase Change” occurred when the American colonies dumped Tea to become a true Republic?
An existential motivated war to regain US ascendancy will probably extinguish us all.
The only possible solution being the Debtor West creating a ‘Western Economic Union” using the US Republic which is a union of independent states as a template…the EU is an infantile copy?
Perhaps, states with intrinsically high cost factors of production can trade amongst themselves?
It seems we are all fixated like a rabbit in a Mack truck headlights and need to look at what maybe possible as a theme for discussion?
http://epress.anu.edu.au/china_update2010/pdf/whole.pdf
China: The Next Twenty Years of Reform and Development
An Australian analysis of China’s options going forward.
INSIDE JOB Official Trailer
Another look into what when wrong.
Aussie
September 6, 2010 at 12:41 am
@ Elaine
Re It is very interesting to me how economic cycles are so stubborn. Many years ago, people realized that credit bubbles always led to debt defaults which causes government budget deficits, a collapse of global trade and currency devaluations…..
On the Edge with J.S. Kim
Interesting commentary on why Alexander Hamilton the death penalty for debasing currency “1872 Coinage Act”
Correction: Interesting commentary on why Alexander Hamilton the death penalty for debasing currency “1792 Coinage Act”
@wb
That bubbling of methane was in the antarctic. Which has not melted and has not warmed (scientist don´t know why; ozone, weather patterns are suggested as reasons)
Read more: http://www.news.com.au/antarctic-ice-is-growing-not-melting-away/story-0-1225700043191#ixzz0yjWXhT8r
“ICE is expanding in much of Antarctica, contrary to the widespread public belief that global warming is melting the continental ice cap.”
I repeat the question.
Since when has methane bubbling been a problem in the antarctic?
And why?
@PLovering
“Cosmic rays cause Global Warming.”
If you think you can find a correlation between cosmic rays and global warming, go ahead and publish a paper.
@JT
“ICE is expanding in much of Antarctica, contrary to the widespread public belief that global warming is melting the continental ice cap.”
That’s overly simple. The sea ice is melting, the land ice increases in some places, because of increased snow fall.
“I repeat the question.
Since when has methane bubbling been a problem in the antarctic?
And why?”
Research it yourself. That way you might learn.
@wb
I did and it´s full blown fearmongerig again.
Catchphrase “methane is 25 times worse as a greehouse gas than CO2″.
Reality “if all of siberia released it´s methane it´s still meaningless compared to CO2″
Typical climate news. That methane has always been merrily bubbling away at antarctica and has no real meaning in climate change nor does siberian methane.
But fear we must every day in order to obey and pay our climate taxes.
@JT
Do you pay any climate taxes ? If so, what are they spent on ?
You don’t understand the significance of methane emissions.
@nah
“Humanity has been using carbon byproduct heat/power sources since before written history”
You have a strange misconception of history, nah.
When was writing invented ? Maybe 8000 years ago.
When did burning coal begin ? 1709, when Abraham Darby began the Industrial Revolution. Significant use of fossil fuels has only been going on for 200 years.
“Take a look at any measure of the fundamental health of the planetary ecosystem on which we are dependent: topsoil loss, chemical contamination of soil and water, species extinction and reduction in biodiversity, the state of the world’s oceans, unmanageable toxic waste problems, and climate change. Take a look at the data, and the news is bad on every front.”
http://www.energybulletin.net/stories/2010-09-03/world-collapse
@wb
Energy taxws were all distributed evenly among the political parties and their interest groups. All my climate taxes went to large forest owners, the paper mill industry, to large energy consuming companies (2 new nuclear power plants) and to finance the national deficit.
To all the usual suspects.
Why do you ask?
Here all energy taxes were doubled 2010 and beginning of next year.
I´m all for being green and saving energy. CO2 battle has nothing to do with that.
All attempts at reducing CO2 have been a total failure. This is because it is not being replaced, it is being TAXED which is stupid. All this does is hammer the poor.
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@Claire Voyant
You are absoutely right we must shout those dummies down, but i reckon that we’re stuck doing it out of duty to the truth, rather than an honest belief that it will convince them of their turpitude. Oh’ and i still think that their is comic potential in doing it too; it is so satisfing to ANNOY them:
“I ceased in the year 1764 to believe that one can convince one’s opponents with arguments printed in books. It is not to do that, therefore, that I have taken up my pen, but merely so as to annoy them, and to bestow strength and courage on those on our own side, and to make it known to the others that they have not convinced us.” – Georg Christoph Lichtenberg
i’m being the dummy myself this evening, of course the second /their/ should be /there/.