Federal Reserve Is 100% Cause Of Global Inflation

Free trade, the Fed printing money like there is no tomorrow and the Derivatives Beast are all in the news as China gloats over the obvious fact that the RMB will replace the dollar in world trade in the not-too-distant future.  The US continues to ape Japan by trying all of the stupidest ways of escaping a depression.  It is all very depressing, watching our economists struggle with the fact that their beloved free trade/floating fiat currency model is collapsing.  They won’t admit this is the case, even now.

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ΩΩHere is proof there are people who we can certainly call ‘elites’ who must operate in secrecy due to being creeps who suck the life out of nations and who keep power even if this means death to the peasants, quite literally:  Royal Family granted new right of secrecy – Home News, UK – The Independent

 

• The Royal Family is to be granted absolute protection from public scrutiny in a controversial legal reform designed to draw a veil of secrecy over the affairs of the Queen, Prince Charles and Prince William. Letters, emails and documents relating to the monarch, her heir and the second in line to the throne will no longer be disclosed even if they are in the public interest.

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ΩΩThe peasants have no right to know anything.  They are enjoined to pay for the royals and to salute them and support an army of royal spawn but have no right to know how the money is spent. A whiff of revolution scared Prince Charles the other day when his convoy brushed up against agitated commoners.  No surprise to see the royals demand increased powers.

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ΩΩThe army of people going after Wikileaks for revealing secretive information reminds us that rulers universally prefer to operate in the dark.  Anyone struggling to understand the elites of Europe and America have to remember the core group, including the even older monarchy of Japan, are royals.  All others attached to this core elites come and go with the Rothschilds being one of the oldest families to survive as elites for more than 100 years.

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ΩΩThe elite rulers of China were killed off by the Europeans and Chinese revolutionaries.  China still very much remembers the past.  Today, China is a growing power and is flexing its muscles.  Last year, discussions of ending the US fiat floating currency regime was periodic but now the Chinese are carrying weekly news stories about the impending end of the US dollar regime:  Xinhua News– UN senior advisor envisions three-pillar monetary system

 

• U.S. dollar’s role as the single global reserve currency didn’t have direct link with present European debt crisis as it’s a crisis of “credit link” instead of “monetary links”, Sachs noted but meanwhile underlined this role has made “reserves going up all over the world” because “you are pegging to the dollar” and “the Fed is very expansionary.”

 

• “What’s missing is that the countries have a choice off the dollar. The euro is in crisis,but it will get out of the crisis, I believe, so the euro will be a good robust alternative, but there is no Asian alternative right now, so what I believe where really ahead is RMB or some kind of Asian cooperative arrangement will be the third pillar of the system,” he said.

 

• The U.S. economist showed much optimism in a three-pillar system, reckoning it useful to cater for different needs. “If you are an outside country of that, and U.S. continues to be very irresponsible about the currency policy, you’ll move more close to Renminbi, euro and other bases, and the ability of the Fed to determine the monetary policy of so many countries will certainly diminish along with the weight of the U.S. in the world, ” he concluded.

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ΩΩThe Chinese communist government is actually quite pleased that US economists are predicting the triumph of the RMB.  For that is the triumph of the communist reformers in China.  It shows that China’s government was right and the US government was wrong in policies for domestic growth.  What pleases the Chinese even more which is why this story was featured in their news, is the US economists openly stating that this new troika monetary system will lead to less US power and more Chinese power.

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ΩΩOf course, the Pentagon is ripped over this news.  The mainstream news continues to attack China and claim that China is seeing diplomatic power fall because of the Chinese economic triumphs.  Well, of course, Japan is very annoyed by the rise of Chinese power and is using the over-bloated US military system to fight the Chinese.  Of course, China is no longer playing the nice guy with aggressive (yes, Japan is tremendously aggressive in market wars!) neighbors but the US analysis that China is aggressive (yes, China is equally aggressive as Japan in trade!) is a fraud since these stories leave out the vital information that Japan, India and South Korea are all tremendously aggressive and of course, this is due to our media ignoring the vital news that we lost the trade wars decades ago and are now in decline due to this terrible defeat.  Defeated by our closest allies who are now cynically using our military to expand market powers.

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ΩΩHere is some amusing news:  China bans inexperienced reporters from covering securities, futures news.  HAHAHA.  I guess only Bloomberg News will cover Chinese market news?  I can live with that.  Of course, the wretched record for news analysis by US economists means they can’t cover Chinese bond and stock news conferences.  I hope they are banned.

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ΩΩFor some odd reason, some US mainstream media has bits and pieces of the truth these days.  Two years of a Great Depression is waking up a handful of reporters:  Global Oil Prices Are Soaring Again. Is the Fed to Blame? – TIME (HAHAHAHAHA)

 

• The current spike in oil futures, say Birol and Jakob, is a product of excess supply — of speculative dollars, billions of which are flowing into U.S. commodities markets. “The investors are using their cards to their benefit,” Birol told TIME on Thursday. “The way they’re reading the market, they feel that when the U.S. recovers there will be a strong demand and a tightness” in oil supplies.

 

• Commodities investments in general have soared since August, when Federal Reserve Chairman Ben Bernanke announced the quantitative-easing program to boost the supply of investment capital. “Before the Fed announcement, net interest in crude oil was fairly neutral, but it has now climbed to the highest level ever,” says Jakob. “The U.S. Fed is injecting about a trillion dollars into the economy in six months, and that liquidity has to go somewhere. Some of it has gone into commodities.”

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ΩΩMy only debate with this excellent article is the title.  It should be, ‘The Fed is to Blame for Global Oil Prices Soaring (and food inflation!)’.  Let’s point fingers exactly at who is responsible here.  The next thing is to hang Helicopter Bernanke who told us repeatedly that the only way to fix a depression is to print trillions of dollars and have inflation.

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ΩΩThere are ancient curses such as, ‘May your wishes come true,’ which warn us that wishing for things can lead to very disastrous consequences.  There is no barrier to printing paper money.  None what so ever.  Anyone can do it.  A total fool can degrade any valuable currency system by merely printing more and more and more money.  Printing more and more money doesn’t make everyone richer in the long run. But at the beginning of this irresponsible action, speculators get very rich and they know what is going on so they translate their sudden easy wealth into solid goods like gold, land and infrastructures that can give them rent money over time via tolls and taxes.

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ΩΩSpeculators blew up several bubbles in the last decade.  They created bubbles in stocks, real estate bonds, buy up bonds and now commodities and now the last bubble, government debt bonds which got in a very bad way due to bailing out the previous bubbles.  They have no real capital. All of these bubbles were built on debt.  Example: if Goldman Sachs wanted to fund the take over of a major international corporation, they would use the Caribbean pirate islands to get loans from Japan and then use this to lend to speculators in their own hedge funds (all offshore) to buy up a corporation and then dump all of this Japanese-generated debt on the corporation at a much, much higher interest rate and then pay off the Japanese loan.  This was called ‘the carry trade’ by GS and JPM.

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ΩΩThen, the corporations would have to fire lots of people to make room for steep debt payments.  This was naked looting of corporations and paradoxically, it destroyed real capital.  The nature of capitalism is simple: profits from manufacturing are based on increasing the real goods via mass production which leads to greater profits due to fewer people making more things.  This resulting wealth can then be reinvested to build more factories, etc.  Fake capital is when central banks print money and hand it to speculators who run off and dump tons of debt on functioning manufacturing systems so they cease being profitable unless they cut worker’s wages ruthlessly.

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ΩΩThis, in turn, reduces the ability to buy mass manufactured goods and reduces profits.  It is a vicious circle.  In Japan, it has reached fatal proportions as more and more workers are locked out of a capitalist system which is cannibalizing the economy leaving the government very deep in debt and the workers unable to even reproduce themselves, much less, live comfortably.

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ΩΩThe Fed, after feeding the fat speculators until they bust, is blandly saying the money printing will continue until the cows come home:  Bernanke: 4-5 years to reach normal unemployment – Yahoo! News

 

• Federal Reserve Chairman Ben Bernanke sketched a more optimistic view of the economy Friday but said the Fed’s $600 billion bond-buying program is needed because unemployment will likely stay elevated for up to five more years.

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ΩΩEver since free trade was imposed on us, it doesn’t matter what the interest rate is or how much money the Fed pumps all over the planet. None of this creates any jobs at home.  This is because of free trade.  The Fed pretends these ZIRP lending practices will create jobs.  But when we look at Japan’s ZIRP system, we see zero job creation there, too.  And Japan runs a trade surplus!  Instead, this simply feeds the rich who can access these free loans.  The lower classes continue to pay 20%+ interest on loans.  And  can’t buy houses due to lack of income or declining incomes.

 

Here from the Japan is an example of how domestic production relentlessly is removed, step by step, from the countries of origin thanks to free trade:  Haneda airport may help Tokyo artisans leap beyond sea ›

 

 

• Metal spinning company Kitajima Shibori Co is one of some 4,000 such businesses in the area, which have had to survive waves of decreasing orders stemming from the slumping economy and a strong yen….Though the company’s high domestic reputation has helped it to survive the economic downturn, Kitajima feels the need to find clients overseas amid shrinking demand in Japan.  ‘‘Major Japanese companies are not only moving out but also procuring parts overseas. As we cannot beat foreign companies in terms of personnel costs and product prices, we will compete on making high-quality products fast,’’ he said.
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ΩΩSee?  Free trade moves jobs out of Japan.  As demand inside of Japan shrinks, everyone is forced to export more and more.  To compete with cheaper goods overseas, they must reduce wages more and more.  This is a very vicious cycle.

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ΩΩInterest rates on mortgages are vicious if wages are falling.  Even 1% interest is huge if wages are falling.  If wages fall 2% a year and a mortgage is 4% and won’t drop, too, the spread is 6% and getting worse each year.  The homeowner eventually goes bankrupt.  This is why rising wages are so important.  Especially if the Fed is deliberately making inflation.  Rising wages will not happen so long as we have free trade.  Even with this dire news staring in our faces via the knowledge that Japan can’t dig out of a depression via exporting more and more goods, our media won’t connect free trade with massive job losses.

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ΩΩAs usual, Bloomberg new has interesting stories about what is going on in the gnome community:  Goldman Sachs Says It May Sell, Hedge Facebook Stake .  Goldman Sachs hedges ALL the paper stuff they foist on the little guys!  This is how they get rich!  They are con artists and should have been put in prison quite a while ago.

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ΩΩThe NYT has a good story about how stupid the entire concept of the paper derivatives market really is:  Lehman Bankruptcy Shows U.S.-British Divide on Derivatives Trades

 

• In the Lehman case, we’ve already seen two issues decided in conflicting fashion in London and New York, although to be fair the first did not directly involve the derivatives trade group’s documents. This was the issue concerning “flip” clauses, provisions in derivatives that purport to “flip” the parties’ priority rights in collateral if the senior party files for bankruptcy.  The New York Bankruptcy Court held that such a clause violated the Bankruptcy Code, while courts in Britain upheld the clause as permissible under English law.

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ΩΩThe derivatives market was a device to fund farmers who have to get ‘loans’ for the next harvest based on expectations of this harvest.  Capitalists funded manufacturing futures via the stock markets.  Farmers used the Chicago Exchange to fund themselves.  This was better than going to banks for loans.  When this form of borrowing money moved to Wall Street, it ballooned bigger than any balloon in the history of economics.

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ΩΩAnd it is totally insane and utterly detached from reality!  There is no agreement as to what these pieces of paper really represent.  It is hard enough for mere humans to understand that paper money is actually a contract between traders and the government.  To understand darker derivatives is impossible for traders, lawyers and governments.  It is all phantoms and the main function is to play ‘hot potato’ long enough for someone to extract their fees and profits from the deals and run off and buy some gold.

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ΩΩSince these international derivative deals can’t be enforced nor even agreed as to what they are, they should be declared ILLEGAL.  A fraud.  You can’t turn a fraud into a secure product.  It is like kissing a frog and turning it into a prince.  You kiss the Derivatives Beast and it eats you.

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ΩΩLast of all, Obama’s changes in the White House is mainly a Wall Street coup.  Free traders and freebooters from Goldman Sachs and JP Morgan are taking over and will guide us into a Japanese solution to gross domestic mismanagement:  Gene Sperling 101 – NYTimes.com

 

• On the ideological spectrum, Mr. Sperling falls between centrist and liberal Democrat. It’s probably fair to say he’s to the right of Robert Reich (the prolific writer who was Mr. Clinton’s labor secretary) and to the left of Timothy Geithner (the current Treasury secretary).

 

• Starting in 2001, Mr. Sperling took on a variety of jobs, mostly part time, including a position at the Brookings Institution, as a columnist for Bloomberg News and as an adviser to Goldman Sachs. For much of this period, he worked for the Council on Foreign Relations, where girls’ education around the world was one of his main interests.

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ΩΩThese guys love to do social engineering while engineering the total collapse of the US working class and our entire financial system!  Why didn’t Obama bring in Robert Reich, for crying out loud????  Note too, this clown is a CFR goon.  As is Obama and the Clintons.  I think that is one think tank that should be put in special ed classes until they learn how the real world works.  They love to impose their own edition of ‘what is real’ on the entire planet.  And the reality is, you can’t print money and buy the world.  We printed money and the world is buying us out.

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ΩΩAnd we can’t print RMB unless we counterfeit it illegally and this would lead to a war, of course.  Our days of printing money and exporting this is ending.

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