This epic crash of the G7 credit and banking systems has pulled under all the alliances that were fed into this system so we see the entire European banking and government spending credit systems head towards disaster while the US and Japan sink ever deeper into a null-factor negative system where everyone has to devalue their currencies vis a vis each other while the price of oil shoots upwards, causing further grief and difficulties…made worse by demands to terminate Iran’s oil business.
The downgrading of debt continues and surprises no one. Of course, the reason this is happening is due to the previous credit bubble itself! When Japan had a monumental credit bubble in the late 1980’s, we see clearly that this is still a huge problem with Japan mired in this negative credit system for 20 years. The EU credit bubble is not as great as Japan’s wild exuberance but it was grossly overgrown and more insidious: Moody’s warns may downgrade 17 global banks, securities firms | Reuters
Down 3 grades:
UBS (UBSN.VX) (UBS.N)
Credit Suisse (CSGN.VX)
Morgan Stanley (MS.N)
Down 2 grades:
BNP Paribas (BNPP.PA)
Credit Agricole (CAGR.PA)
Deutsche Bank (DBKGn.DE)
HSBC Holdings (HSBA.L)
Goldman Sachs (GS.N)
Down 1 grade:
Bank of America (BAC.N)
Over 40 Spanish and Italian banks were degraded.
From April 1, 2009: THE DERIVATIVES BEAST AND GOLDMAN SACHS | Culture of Life News
These graphs here which were in all previous OCC reports is now gone! They kept other graphs but not the ones I really liked, naturally! They do have this graph from the last quarter’s report: http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq311.pdf
We see that HSBC has been ditching its derivatives positions while JPMorgan has increased its position. Goldman Sachs has been diminishing the growth rate of its position but it still is increasing in size.
Gold and precious metals are all up, these contracts are for one year or less, that is, short term speculation. Iran evades US sanctions by paying with gold – CSMonitor.com which shows the utility of gold: the empires of the EU and US working with the corrupt and very cruel, despotic and repressive Sunni regimes, has imposed a financial boycott on Iran so they are buying things with gold.
Gold is a reserve of known value to be used mainly in times of war and unrest. It is durable, can’t simply be burned or ripped up and it is easy to carry compared to its value in weight. A few ounces go a long ways in a world where all the major trade empires are devaluing their currencies due to an international trade war that is now raging nearly out of control.
Here are some of the top US derivative contract holders with the banks in trouble and being degraded next week in red:
Here is an EU report about the crisis that tries desperately to explain the housing and government credit collapse but can’t figure out any solution except to crush the workers and savers and then make them all pay dearly for this mess: Alert Mechanism Report 2012 En
This Alert Mechanism Report (AMR) marks the first step in implementing the newsurveillance procedure for the prevention and correction of macroeconomic imbalances (hereafter called the Macroeconomic Imbalance Procedure – MIP). This report also contains the final design of the scoreboard of indicators (presented in Table 1 and Section 2). Surveillance to prevent and correct macroeconomic imbalances under the MIP is a new instrument of the strengthened framework for economic governance in the EU. It was adopted as part of the so-called ‘six-pack’ governance package which also provides for asignificant reinforcement of surveillance on fiscal policies. Surveillance on macroeconomic imbalances under the MIP forms part of the “European semester” which takes an integrated and forward looking approach to the economic policy challenges facing the Union in ensuring fiscal sustainability, competitiveness, financial market stability and economic growth.
MIP: HAHAHAHA…so, the world’s top elites want to have macroeconomic controls! More and bigger and presumably, better! The gross failure of all the dominant imperial systems was due to it not being a big enough imperial system with some kindly emperor at the helm, no? HAHAHA. We live and never learn.
What this is all about is dictatorship: who gets what is the question here! The elites who drove us all off the economic cliff want more power. They then solemnly swear, they will be prudent and careful. But we know from present experience, they are not prudent. They are terminally greedy! They want this, they want that and we better give it to them, or else.
The recent orchestrated invasion of Libya is the most recent example: NATO bombed, then hosted an invasion/uprising and then stole all the central bank holdings that were overseas and then seized the oil wells and are now draining the oil into NATO countries while Libya, one of the nations with the best life statistics in Africa, goes into chaos, death and destruction. Gangs run riot, shooting, kidnapping and torturing and then, of course looting. Things are getting worse and worse and NATO simply shrugs and moves on to the next looting victim.
These war criminals want to run the global economy entirely so they can ‘fix’ it? We may as well ask the Yakuza and Mafia. Would probably get better results. Here is a graph from the Elites Run Macroeconomic Systems Report:
Household indebtedness is closely linked with housing market developments:
growth in credit to households and house price increases went hand in hand during the decade preceding the crisis. The house price cycle in the EU was particularly pronounced, with an average cumulated growth in prices of over 40%. For example, house prices more than doubled during the period of upswing in a half of the Member States.
Moreover, in around two-thirds of Member States, the average pace of real house price increases exceeded 6% annually and in some cases the average annual growth rates were as high as 20% to 35%. While the lengthand the speed of this expansion has shown significant variations across countries, house prices peaked in a vast majority of Member States in 2007/2008. Expectations of continued house price increases also facilitated increases in size of the construction sector. Indeed, high residential investment went hand in hand with the increase in house prices for many Member States, like Denmark, Spain, Lithuania, Malta, Sweden and the United Kingdom.
Housing credit bubbles are easy to see. All we have to do is note the rate of growth in value. 6% a year is very much ‘hockey stick graph’ territory. In just 10 years, it shoots to the moon suddenly and then blows up. An annual growth rate of 35% a year is insane and obvious. But what a joy, while it happens! All bubbles are champagne fun! This is why stopping these out of control bubbles is so difficult.
Especially for the rich. They love to see things suddenly rise in value! They encourage this. They need this for their sense of infinite greed. This is why they always, always fail to stop bubbles. What is needed is strict banking laws. We had this for a while but no one like these because it stopped people from making fortunes on idle speculations.
Here is an elite banker telling us the obvious theft that is going on: Mervyn King: helping savers would push Britain back into recession – Telegraph
The Governor was speaking amid growing public and political unease about the impact of the Bank’s emergency measures – pumping £325 billion of new money into the economy and Bank rate at a historic low – on savers and pensioners.
Those policies have cut the returns on savings and annuities to record lows. Saga, a campaign group, estimates that more than 1 million pensioners have retired with permanently lower retirement incomes because of the impact of the Bank’s quantitative easing programme.
Savers have also been hit by high inflation, though the bank predicted that inflation will fall back to 1.8 per cent by the end of 2014, easing the recent squeeze on household budgets.
Japan has had ZIRP rates for decades now. The savers of Japan have been hammered into the ground. The government still pretends they are selling government debt at ZIRP rates to the elderly but this is a naked lie. The Bank of Japan like the Federal Reserve, lies about inflation which is enormous for the elderly who get hammered by vast hikes in food and fuel, while life savings makes no headway against the theft of inflation fueled by the central banks and government spending causing inflation.
How on earth is ‘inflation’ in England going to drop by 2014? First, England has to say no to all oil boycotts, especially Iranian oil. This is killing the elderly in the US and England and so far, our rulers don’t care, quite the opposite: they feel the elderly are freeloaders but dare not say this in public. In Japan, they are beginning to say this in public!
As the biggest imperial complex, the NATO/Japan/US system disintegrates and collapses, China will take over the helm. They, too, have elites. And looting. And greed. But so far, are not suicidally interested in looting China and enriching other countries and forcing the Chinese people to die in distant religious wars. I wish we were led this way, too. But gnomes rule us and they don’t give two figs for any of us.
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