I almost forgot to publish this story, it got lost in the shuffle here. The far right is rapidly gaining ground in Europe in this depression exactly like they did in the previous Great Depression. History is repeating itself, as usual. This is due to human inability to shift ideological positions to tack with the wind, a metaphor, by the way. Due to the desire to keep a status quo going despite its utter failure, we see people sail straight ahead despite wind, waves and lightning. The US and the UK are prime examples of ‘full speed ahead’ while ignoring the people trapped in the engine rooms or the third class passengers.
Brown is literally chewing off his fingernails due to stress and fear. He really should leave office just to save his digits from being digested:
Well, anther minister resigned. Brown’s hope is fading for an economic miracle to save him from the mess created by Blair and others stretching back to the fall of the British Empire after WWII. The British remnants of imperial power has caused that nation to pretend they are not a small island group. This fantasy world was also enabled by the fortuitous discovery of the North Sea oil. This turned England into a defacto member of OPEC.
Now, the oil is failing much, much faster than previously predicted or hoped and it illustrates very clearly how the Hubbert Oil Peak geological business can operate. Namely, the fall in production can be extremely steep, not gradual. But then, the collapse of many systems in nature as well as even imaginary systems like monetarism, tend to be very steep, steeper than the climb upwards.
The Tories have heavily profited by the fact that Labor can’t fix the unfixable. But the Tories really have no solutions, either. They are riding on public anger about things like breaking into houses to collect council taxes, all the CV cameras set up all over the place in Big Brotherland, used to spy on the people and fine them for various infractions. This funds the government, of course.
What will the Tories do? Cut taxes and fines? And then what? Will they fund their government via tariffs? HAHAHA. No. Once upon a time, Britain was the world’s biggest manufacturing export power on earth. This, not the empire, was Britain’s true strength. Over time, other powers arose like Japan, Germany and the US. Since WWII, both the US and UK jointly have experimented with a system whereby they both deindustrialize while Japan and Germany industrialize. This has led to the death of the US and UK as functional economic world powers.
Time to review this pressing question: who won the struggle for economic dominance after WWII? The answer is clear. The Tories will fix nothing. The British will have a brief party where they run around, yelling happy stuff while piling on even more debts, deficits and losing more power to their creditors and eventually, will be colonized by outsiders who will run all the systems. Happy, happy peasants: this is the future for Britain if they don’t wake up, not that we, in the US are any different!
GATHERED around a table in one of the Bank of England’s grand meeting rooms, the select group of Britain’s top gold traders could not believe what they were being told. Gordon Brown had decided to sell off more than half of the country’s centuries-old gold reserves and the chancellor was intending to announce his plan later that day. It was May 1999 and the gold price had stagnated for much of the decade. The traders present — including senior executives from at least two big investment banks — warned that Brown, who was not at the meeting, could barely have chosen a worse moment. In the room, just behind the governor’s main office, they cautioned that gold traditionally moved in decades-long cycles and that the price was likely to increase. They added that even if the sale were to go ahead, the timings and amounts should not be announced, as the gold price would plunge. “The timing of the decision was ludicrous. We told them you are going to push the gold price down before you sell,” said Peter Fava, then head of precious metal dealing at HSBC who was present at the meeting. “We thought it was a disastrous decision; we couldn’t understand it. We brought up a lot of potential problems at the meeting.” Martin Stokes, former vice-president at JP Morgan, who was also present, said: “I was surprised they had chosen the auction method. It indicated they did not have a real understanding of the gold market.”
Why did Brown do this stupid thing? We can have many conspiracy theories. And guess what? The probability of any of these theories being correct is rather high, not low! I have my own personal opinions about all this. I assume that Brown, like all his predecessors, went to those super-secret meetings where they discuss ‘honestly’ what they intend to do to their own countries. Since they have little to zero patriotism, they often decide to do really awful things in the hopes they will gain the support and power of the real power brokers.
This gold sale was right at the same time money was pouring into the Dot Com Stock Bubble in the US. Not into gold. Gold gains value in depressions, loses relative value compared to say, stocks, in easy credit times. Inflation of equities hurts gold prices, depression of equities and inflation of food and fuel raises gold prices. This seems to be the present model. Back in 1999, this was pretty obvious. Since credit was ludicrously easy to obtain, there was no pressing need for the continuously running in the red government of Britain, to sell the gold.
So, I am assuming that Brown sold the gold because he was told to do this at one of the secret meetings. After all, Switzerland did this too. And now, regrets doing this stupid thing. For many years, the heads of the debt-raddled systems in the US and UK were putting down gold as a valuable monetary balancing system and were most anxious to get rid of even the smallest influence of gold on monetary systems. The public demonstration of contempt for gold holdings was a propaganda point set into motion to get everyone to divest themselves of gold so all systems could run on paper ground out by governments controlled by the elites. Who go to these secret meetings, of course.
A thorough drubbing of European leaders was the order of the day in elections across the continent, as voters spooked by the economic collapse registered their dissatisfaction in European Parliament and local polls that saw a sharp swing to the right….
News was grim for Socialists in recession-ravaged Hungary, where they lost ground to the right-leaning Fidesz party; in Spain, where the center-right People’s Party pulled ahead of the ruling Socialists; and in the Netherlands, where socialist support fell from 24% in the last go-round in 2004 to just 12%. The extreme-right Party for Freedom, the party of wild-haired nationalist Geert Wilders, came in second place in the Dutch poll.
All of the far right parties are big on protecting borders, strengthening local control over economic systems and rejection of international controls of the courts, politics and banking. This is the natural impulse of any population subjected to the bizarre controls and systems imposed on them by foreign powers who are mostly people who meet secretly and plot how to control the planet’s financial and economic systems! Duh.
Traditionally, going back to Marx, the left is ‘internationalist’ and this means, gets weaker during trade downturns like depressions. Even the Marxists running Russia resorted to strengthening nationalism [the Trotskites were internationalists] and pulled into its own shell. Many right wing activists tend to become imperialists because they want to control their neighbors while their neighbors should be prevented from controlling them. This is why right wingers tend to cause very nasty wars with all neighbors.
Sane preventions of credit bubbles including government overspending bubbles, creating balanced systems is very vital to prevent nationalist wars of expansion or internationalist bleeding of open societies. Time to visit the government and to see their ‘Public Debt News’ which they publish ever month:
Now, look at what I found at the Government Debt webpage where they describe how we can buy the bonds issued by the Treasury:
Institutions must complete and submit the following forms:
- Submitter Agreement
- If you do not have both a securities and funds account in the Federal Reserve system, your institution must also complete an Autocharge Agreement.
Mail the completed forms to:
The Federal Reserve Bank of New York
Attention: Treasury Auction Staff
33 Liberty Street – 9th Floor
New York, NY 10045
Now, there is something funny going on here: the Treasury needs funding for overspending like crazy. But the money used to buy these debts goes to the Bank of New York which is the most powerful of the Fed system compared to the other regional banks. The NY Fed is the one most directly connected to international financiers who meet in secret with the leaders of the G7 nations.
Below are some pie charts from the Treasury department:
Debt held by the public is far greater than intergovernmental holdings. But the interest on these debts: the public gets far less than the intergovernmental holdings! What’s up with that? Is this the result of the perpetual 6% earnings the Federal Reserve gets? Funny, the web page with these startling pie charts doesn’t explain what ‘intergovernmental holdings’ are, just for example. I often get rather angry at this lack of information at many government websites. They simply present us with these obvious riddles and then sit back and let us struggle to make heads or tails of the data. At least, they still give us some data.
Russian PresidentDmitry Medvedev questioned the U.S. dollar’s future as a global reserve currency and said using a mix of regional currencies would make the world economy more stable. Russia may consider ruble-yuan swaps.
The dollar “is not in a spectacular position, let’s be frank, and its prospects cause various questions as do the prospects for the global currency system,’’ Medvedev, who today hosts an international economic forum in St. Petersburg, said in an interview published by the Moscow-based Kommersant newspaper. Regarding the global financial system, “therefore our task is to make it more mobile and at the same time more balanced.’’
The ruble-yuan swap is like the Brazilian currency deals with China. This stems from China’s desire to not use its US trade dollars to settle other trades. Perhaps, China is doing this to make the yuan weaker against the dollar while still not losing its value vis a vis other trade partners. BRIC is shorthand for ‘Brazil/Russia/India/China’ and these nations are now in the driver’s seat when it comes to international finance and trade. The US thinks it is in the driver’s seat but this is an illusion. No debtor nation ever runs things, it reacts to things.
The BRICs are buying dollars at the fastest pace since before credit markets froze in September, protecting exports even as leaders of the biggest emerging markets consider alternatives to the U.S. currency.
Brazil, Russia, India and China increased foreign reserves by more than $60 billion in May to limit currency gains as the first global recession since World War II restricted exports, data compiled by central banks and strategists show. Brazil bought the most dollars in a year, India’s reserves gained the most since January 2008 and Russia added the most foreign exchange since July.
See? I started writing about this last night and this morning, Bloomberg news confirms what I have been saying for quite a while. The goal of all out trade rivals is to make their currencies weaker so they can export to us. Duh.
Two- and 10-year U.S. Treasury yields hit seven-month highs in Asia on Monday as Treasuries extended losses after last week’s jobs data stirred talk that the Federal Reserve may raise interest rates later this year.
U.S. short-term interest rate futures, which track market expectations on Fed rate policy, made their first meaningful move in months on Friday — advancing the possible timing of the first Fed rate hike to late 2009 from early 2010.
That caused the two-year yield to jump 34 basis points on Friday, its biggest single-day jump since September, and contributed to the largest weekly jump in benchmark 10-year yields in about six years.
“Both (investment) portfolios and the market overall had been thinking that it was safe to take long positions in the short-end,” said a trader for a U.S. financial institution.
Friday’s moves were a surprise for market players and a harsh one at that, the trader said.
A good number of traders were not surprised. I suspect, the BRIC players expected this. US rates must go up because we are overspending like crazy. Far from not being in a bubble, we went from a stock market credit bubble that ran from 1996-2000, we then jumped into a housing bubble from 2003-2007 and then jumped immediately into a government spending bubble from 2005-2009. Overspending has shot upwards and the borrowing has increased greatly.
So the credit bubbles continue. The Great Depression saw an abrupt end of the series of credit bubbles that began in 1914. And the cycle was about 20 years. This includes the government spending bubbles that popped up in 1930 all over the planet. These prolonged the bubble system until 1945. So it was nearly half a century long, this series of bubbles. Once most of the planet’s manufacturing base outside of the US was nearly completely destroyed, we started the credit cycle all over again.
Inflation is returning. The government credit bubble is now going to filter into the rest of the economy. Traders expect this which is why the Treasury yields saw some wild trading this last week.
An uprising that began in Vladivostok is now spreading to European Russia. Last Tuesday some 500 people in the small town of Pikalyovo blocked the federal highway to St Petersburg, 170 miles (270km) away, after their local cement factory shut down, leaving 2,500 people out of work. Two other plants in the town have also closed. The protesters have demanded their unpaid salaries, and have barracked the mayor, telling him they have no money to buy food. They have refused to pay utility bills, prompting the authorities to turn off their hot water. Demonstrators then took to the streets, shouting: “Work, work.” Putin visited Pikalyovo on Thursday and administered an unprecedented dressing-down to the oligarch Oleg Deripaska, throwing a pen at him and telling him to sign a contract to resume production at his BaselCement factory in the town. He also announced the government would provide £850,000 to meet the unpaid wages of local workers. “You have made thousands of people hostages to your ambitions, your lack of professionalism – or maybe simply your trivial greed,” a fuming Putin told Deripaska and other local factory owners. But Deripaska had had little choice but to shut his factory, since Russia’s construction industry has now virtually collapsed.
Hitler restarted the cement factories via building freeways. After WWII, this is how Eisenhower dealt with rising unemployment and a recession after the Korean War was stopped. Note that this is also how many nationalist governments deal with recessions. We will see lots of roadwork here, too. Already, it is picking up pace, fast. This is a desperate measure to keep economies going. In the US, a stupid thing to do since the US doesn’t need more roads, it needs railroads.
Obama promises more than 600,000 stimulus jobs – Los Angeles Times is a typical headline. We have lost more than that, per month, this depression. This will help, of course. But not if the outsourcing business continues. More about that later.
The state took another hard shot Thursday when the Michigan Department of Transportation announced it has canceled more than 137 road and bridge projects — totaling $740 million — due to Michigan’s inability to match federal dollars. Michigan’s portion of the federal match for road construction will now go to other states…
Under the funding formula, the federal government pays for 80 percent of road projects and requires each state to come up with the remaining 20 percent. Michigan relies on fuel and registration taxes for its transportation funding, but those revenues have fallen steadily over the past several years because Michigan motorists are driving less and buying fewer new cars.
The money won’t help the places that need it the most. Though, I might suggest, Michigan doesn’t need more roadwork in the first place. It needs tariff protections. When someone finally rises up and starts talking about how we need to protect our industries, I will be quite grateful. But no one will do this since Americans are taught, we are stupid idiots who can’t manufacture stuff. Um…this is seriously bad, you know. Shameful, even. What ails us? Why do we accept this line of thought? Talk about self-defeating! And we won WWII? Thanks to our equipment we designed and manufactured?
(CNNMoney.com) — Michigan officials said Friday that the state is closing three prisons and five prison camps in hopes of narrowing a $1.4 billion budget gap for fiscal 2010.
The state, which has been hammered by the auto industry meltdown, estimates that it will save $120 million by shuttering the eight facilities. None of the 4,149 prisoners in the facilities will be released early, but up to 1,000 workers may lose their jobs.
Prison jobs has, thanks to the idiotic war on drugs, been a mainstay of many ‘economies.’ Just like in the Soviet Union, it makes for lots and lots of fun jobs, manufacturing nothing [unless the prison is a factory which it is in some cases, though less so than in the Soviet Union or Nazi Germany]—actually, this reminds me of something: both the far right and far left believe in using prisoners to make profits. In the US, we don’t do this. We add the prison business to our red ink departments.
The US is worse: the GOP privatized the prison system so private contractors make lots of loot, running goofy prisons to hold people who want to get stoned and zone out! Talk about insanity! Then, there are our many very expensive gulag prisons like Gitmo which we seem unable to close. But then, we are wasting trillions on wars and prisons all over the planet earth. This is not making us richer, it is bankrupting us. Duh. And we can’t stop them.
The United States will step up intelligence efforts aimed at stemming the illicit flow of drugs, guns and cash across the border with Mexico, according to a White House strategy paper soon to be sent to Congress.
The strategy, drawn up by the Office of National Drug Control Policy, calls for wide-ranging improvements to intelligence gathering and analysis that can be used by law enforcement units.
“Agencies should consider deploying additional intelligence analysts from headquarters-type roles into frontline operational organizations to facilitate the linking of intelligence to operations,” the report said.
See? The US invaded Afghanistan and singlehandedly revived global heroin smuggling. Duh! And this floods the banking system with drug profits! And since the US won’t allow this, the drug money flows to pirate islands in the Caribbean or other offshore pirate coves! Duh, again! Whose owners, the gnomes, go to secret meetings where they have frank discussions about how to fleece everyone on earth. Duh, again! This is enough to drive anyone insane.
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