As our nation goes off the fiscal cliff, the disputes in DC rise in hysteria with the entire GOP yelling that they didn’t lose the election. To hammer home how bitter they all are, here is Jon Stewart: Have Republicans Hit ‘Rock Bottom’ With Failed United Nations Disability Treaty?…they voted to veto a treaty with the UN concerning disabled people. Kick Tiny Tim in the shins! Meanwhile, the real problems with our economy are being ignored.
Here is one typical example: Battery maker that received stimulus money could be sold to Chinese company. The US can’t compete with China. China has something the US doesn’t have. That is, a huge population of peasants eager to work very hard. The US has lost nearly every trade round with China since 1990. China has something the US doesn’t have: capital. They use it to buy up industries. Duh.
The above graph shows another huge problem the US has: capital losses. Why is the Federal Reserve holding all the ‘bank liabilities’? This is a tricky question. You see, banks consider capital requirements to be pure evil. They dearly love being able to lend with no capital to support the loans they cheerfully hand out like candy on Halloween.
They hate holding their own loans! Even though banks consider loans to be ‘capital’ they hate holding these because they can go delinquent. This is bad and eats up the capital base so they palmed all of this off onto the Federal Reserve and have parked BAD liabilities with the Federal Reserve!
This graph is a mirror image of the above graph: ALFRED Graph – ALFRED – St. Louis Fed all bad loans causing bankruptcies to balloon:
Yup, the Federal Reserve has been used as a giant toilet to flush down all these bad loans made by the bankers who continue to reward themselves with huge bonuses while their zombie banks continue to suck down our collective capital and then refresh their own accounts by selling off everything to the Chinese.
So, here is one solution to the fiscal cliff: Could the ‘platinum coin option’ solve the U.S. debt crisis? – The Washington Post
Under this scenario, the U.S. Mint would make a pair of trillion-dollar platinum coins. The president orders the coins to be deposited at the Federal Reserve. The Fed moves this money into Treasury’s accounts. And just like that, Treasury suddenly has an extra $2 trillion to pay off its obligations for the next two years — without needing to issue new debt. The ceiling is no longer an issue…
In theory, this is much like having the central bank print money.
No, not in theory, in ACTUALITY it is the same as printing money. Duh! I am astonished at the childishness of commentary about what money really is and why restricting money creation is key to preventing rampant inflation. Stuff in grocery stores which once cost pennies now costs dollars, for example. Raging inflation hits hard at home.
Japan and the US have been in this raging war that is hidden from view except we see the resulting inflation. That is, to devalue the currency so trade is more positive for the US, we have debased our own currency like mad even as the Japanese do the exact same thing. So far, the US is ahead of Japan in this game but this is due to Japan being hammered by another Strong Quake Shakes Northern Japan.
Japan now runs a trade deficit with the world and mainly with China so the rulers there tried to fix this by starting a battle over some isolated islands which caused the Chinese to boycott Japanese goods which made their own trade deficit even worse overall! Fatal choice, ney?
The present bailout of the bankers has taken a huge toll on the Fed Reserve books. Here is the Federal Reserve floating…underwater: ALFRED Graph – ALFRED – St. Louis Fed
Ignorance about the hazards and stupidities of the floating fiat currency regime, the US presses onwards with a huge trade deficit and loss of US taxpayer-jobs to other nations playing this stupid game with us, the Fed’s rescue of the very rich is a disaster as they, themselves, faintly admit today: Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion – Bloomberg
Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit — increasing the risk that a jump in interest rates would crush the economic recovery.
Duh. This wild gyration business is predictable. Yes, the theories of how water works in nature operates in finance. Finance is all magic numbers and assessing positions but it works like water in its dynamic movements. And of course, it is restrained by the iron rules of nature that says Climbing Mount Everest: Infinity Means Death.
In more than one article, I harp on this subject because economists are quite childish about this major issue. Here is another example from my own past postings: Infinity=Death: Economics On The World Chess Board.
And proof the professors can’t comprehend the obvious: Dr. Krauss Struggles To Understand Infinity And Nothingness…And …
Back to the Fed, here is a graph of the reserve balance at the Fed: ALFRED Graph – ALFRED – St. Louis Fed. It has grown seven-fold! This has leveled out after Obama was elected. Note that 50% of this growth happened in the year before Obama took office. And 90% of it happened under Bush Jr:
None of this is mentioned by the hysterical stable of right wing pundits on TV or online. They ignore their massive contribution to this happening in the first place.
Three top officials at the Securities and Exchange Commission announced this week that they plan to leave the agency, following the lead of SEC Chairman Mary L. Schapiro, who plans to step down Dec. 14…
In this case, the transition should not be too bumpy for now, because the incoming chairman, Elisse Walter, has served on the commission since 2008 and spent many years on the SEC staff before then…
And this office will be handed over to another woman. I will note that women are being asked to clean up this mess. HAHAHA. But it can’t be cleaned up if the US insists on free trade, offshoring of jobs that once paid Federal income taxes and all the other messes created by this stupid New World Order that insists we rule the planet with an iron fist on behalf of US billionaires who want to offshore our jobs to China…speaking of which:
China to continue to make ties with Russia a priority: Wen – Xinhua news. Yes, China, as I predicted years ago, is forging a strong alliance with Russia who is the other major nuclear power on earth. The US has Israel, a troublemaker, as our junior nuclear partner but they create enemies faster than we can kill them.
China is smart. They know that Russia is a huge territory and thus, like Canada, is a stronger nuclear potential power. Japan, for example, is mainly concentrated in the Tokyo area and one nuke will eliminate the country nearly entirely. Whereas Russia and China are big and have a long reputation of retreating deep into the interior when under attack. Japan and Europe don’t have this power. Nor does Israel. The US and Canada do have this power.
And it is about all we have left! This is beyond sad. We should have kept our noses out of Muslim affairs after the end of the Vietnam war instead of going into the Deep Muddy of dry Afghanistan which continues to merrily destroy our government’s finances.
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