We just had yet another election and now Congress is pushing our government off the fiscal cliff. Everyone is focused on this cliff while ignoring the real fiscal cliff: the annihilation of our sovereign wealth. This was caused by military overseas spending, the US imperial work since WWII, free trade causing our trade deficit to soar to incredible levels and the floating fiat currency regime imposed by Nixon one fine Sunday several decades ago. This real fiscal cliff has destroyed our capital base pretty completely so to keep lending money, the bankers rigged up the odious derivative bank and insurance schemes which circumvent the need for real capital. Only, this collapsed.
There have been zero actual real reforms since then. The US still runs immense trade deficits. The dollar has lost a great deal of value since then with inflation in food, fuel and other things shooting upwards rapidly or in the case of fuel, rising and falling in cycles of great disturbance since this is connected to US foreign policies. The agony the US public is seeing is the price we pay for cheap 72″ TVs. We love the cheap manufactured goods from Asia and choose to ignore the damage this is doing to our own capital base.
All the bright minds in our media love to mumble and groan about the economic mess our elites cooked up for us but seem unable to grasp where the real dangers are. For example, they dare not say openly that the entire gigantic $66+ trillion derivatives market is a total fraud. Here is the Bilderberg guy who owns the NYT muttering about how to fix the system: Could A.I.G. Happen Again? – NYTimes.com
While those agencies have made some progress, like requiring derivative trades to be more transparently traded and reported, they have completed just one-third of the rules required by the law. The things regulators have yet to finish include imposing limits on the size of bets investors can make using credit default swaps and other exotic financial instruments, and also requiring investors to maintain sufficient reserves to make good on all of those bets.
Transparent trades of ponzi scheme items doesn’t fix the ponzi scheme’s end result with the pyramid collapsing. Requiring ‘sufficient reserves’ is a hoax, too. The US has no reserves left. We have negative sovereign wealth. Below are some samples of previous articles I have written about sovereign wealth:
Chinese Sovereign Wealth Versus US Sovereign Debt
There Isn’t Enough Sovereign Wealth To Bail Out Entire First World …
Worst Sovereign Debt Countries Cannot Bail Out Global Banking …
Rich Saved Selves Only To See Entire System Begin Collapse …
The infantile inability to talk about money honestly isn’t accidental. It is most deliberate. People have discussed ‘what is money’ and ‘what is wealth’ for eons. Since ancient times, this topic has gone from quite sophisticated to varying levels of barbaric indifference to reality. We had intelligent discussions of gold, silver and capital back in 1890 but not today. Today, we have tons of wishful thinking from the top, middle and bottom while ignoring economic realities that are now hammering us.
Thanks to the floating fiat currency scam, we simply print more money at zero interest rate and have zero capital financing in a deeply in debt culture and pretend this won’t have a bad ending. Here is a prime example showing crystal clear how badly degraded our money system is today: We’re losing $$ by making coins – NY Daily News
A penny costs more than two cents to make and a nickel costs more than 11, but the U.S. Mint’s test of 29 cheaper alloys failed to identify substitute metals.
Here is my comment at the NYT about the AIG article:
First, the US cut the gold standard and instituted the infamous ‘floating currency’ regime. Since the US dollar was the coin of international trade, we began printing money like crazy. This caused real capital to vanish.
The dollar has lost 90% of its pre-Nixon gold severance value. The penny today costs two pennies to mint which shows the inflationary destruction of capital quite clearly.
Capital was replaced by derivatives. This way, banks could lend money with near zero capital. Which they merrily did until they crashed their own system!
The entire derivatives contract market is fraud. It should be terminated, not protected. AIG was a capital-less con operation set up to act as if they had money to give to losers in the derivatives scheme games only they had nothing except other derivative paper entities, no ‘money’.
Meanwhile, both Germany and especially China and incidentally, our ‘ally’ Japan built up huge capital holdings in their FOREX funds and buying bonds and have the greatest sovereign wealth whereas the US collectively has the least sovereign wealth which is actually a deficit, we have zero sovereign wealth while our trade partners have trillions in sovereign wealth.
The loss of this capital for our entire nation is most dangerous and virtually no one talks about sovereign wealth. This is delusional.
It will be a cry in the dark, of course. Instead of sharp alarm that pennies and nickels are devalued in face value by well over 150%, whereby the minting of coins is more expensive than the face value…I saw this before! I remember well how silver became more valuable as melted down metal than as coins back when Nixon cut the gold standard. We collected silver coins and melted these down with our home kiln and sold the metal for twice the value of the coins. So the government made this illegal.
This meant, we had to send our silver coins overseas to do this and silver coins drained out of circulation very fast. This is now the case, again. Is Congress holding hearings about how coins no longer reflect the value of metal? Nope. We hack about the bush, determined to never catch up with the rabbit that has escaped from the magician’s top hat.
Japan is collapsing, too. So the people there go from one inept party to another corrupt party: Abe’s election in Japan will affect America’s Asian pivot – The Washington Post
The LDP victory was more a rebuke of the DPJ than a resounding endorsement of the LDP. Although voters see the LDP as more experienced and disciplined than the DPJ, they perceive that it has done little to reform itself since its defeat in 2009. For instance, all five contenders for the party presidency in October (Abe, Yoshimasa Hayashi, Shigeru Ishiba, Nobuteru Ishihara and Nobutaka Machimura) are the sons of LDP politicians, despite widespread criticism of the LDP’s perpetuation of inbred political dynasties….For the Obama administration, the good news is that Abe is staunchly pro-American and wants to strengthen the U.S.-Japan security relationship. The bad news is that his revisionist views of history and controversial views of Asia could lead him to speak and act in ways that exacerbate tensions with neighboring countries, especially China and South Korea.
Good news: this clown is our friend. The bad news is, he will drag us into WWIII in Asia! Whoopee. He isn’t a friend, he views the US as the Dumb Giant to be used as a tool in Asia to expand Imperial Japan. Great. And we play the Dumb Giant role because we are stupid and very large. And very stupid. And the only problem Japan has is that China and Korea both have used the Dumb Giant the same way minus the imperial angle, of course. This Dumb Giant made both Japanese rivals who hate Japan, much stronger!
Proof that the US 1% rich are insane: Tagg Romney: Mitt ‘Wanted To Be President Less Than Anyone I’ve Met’. Of course, we didn’t want him, either. And the GOP voting base disliked him, too. But this whining by the very rich who thought they could buy our elections is sad, no? Now that he failed to buy the White House, he is whining about how he didn’t really want this. Which is why he ran nonstop for a decade. Yup.
This wretched family should look to see how great wealth bought via playing the derivatives game overseas has rotted their brains. The entire generation of second hand wealth is devolving rapidly into moronic drooling. Far from being astute business people, the looting of America was set up so to be as simple as possible. Heartless disregard for the damage being inflicted was the main qualification for getting rich. They basically took the rich US which was the sovereign wealth capital of the world and turned it, via their hard dedicated efforts into a helpless, deep in debt giant that has minimal manufacturing and an immense loss of sovereign wealth.
We are still stuck in Afghanistan bleeding life blood as well as debt-driven monetary losses: Navy SEAL commander in Afghanistan dies in apparent suicide. Geronimo is laughing somewhere in the afterlife sitting there, cross-legged, drinking cactus juice with bin Laden. Both want their skulls back. I still maintain, the need for no photos and no body of bin Laden was due to the simple reason, the SEAL guys gave his head to the Skull and Bones people here in the US.
They are devotees to black magic and don’t understand how the Outer Darkness works and how their schemes to use the magic power of dead foes is backfiring badly. True, they still get rich and powerful but they are relentlessly destroying the US. Now, the plan of Geronimo and bin Laden was…to destroy US military and financial power. And this is in full operation. Much of the SEAL team that killed bin Laden is also dead. For one of these to shoot himself is dark humor for the Afghanis who are still gunning us down at close range: Afghan Policewoman Kills US Adviser.
Meanwhile, the clowns in DC keeping us in Afghanistan until Hell freezes over is busy in a typical bipartisan move, while we are going over the fiscal cliff, to pass laws that please AIPAC: House Letter: Close PLO, Defund UN to Punish Recognition of Palestine — News from Antiwar.com
A letter pushed by Israeli Lobby faction AIPAC and signed by more than half of the members of the US House of Representatives is demanding that the Obama Administration move against the Palestinian Liberation Organization (PLO) to express “displeasure” for Palestine gaining recognition as a non-member observer status at the United Nations…The letter got its start with Reps. Ileana Ros-Lehtinen (R – FL) and Howard Berman (D – CA), and follows an attempt to add similar language in the NDAA in the Senate, though it never came to a vote.
Typically, our Zionist media suddenly can’t see the news right in front of their own noses. Our media pretends Congress is divided. It isn’t. It does become magically divided the minute it talks about giving something to Americans or saving us or stopping mass murderers. But when it comes to Israel, it is nearly 100% in the pocket of AIPAC.
The UN is too useful to the US so this was a sop to the Zionists to talk about this bill while not passing it. The US pretends, still, to arbitrate there but is clearly entirely run by Netanyahu so there is no arbitration at all. Instead, we keep on spending trillions on wars with Muslims while letting Japan run amok in Asia. We can’t control China but we can control both Israel and Japan very easily. The fact that they control us is the problem and it is part of the problem of how our elections are run via money flowing in, unimpeded by the Supreme Court, into election TV ads that are mostly frauds.
And it seems that all these people are determined to prevent us from understanding what money is and how it works as capital. I say, the US is running an ANTI-capitalist system and this is a very bad thing.
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The state owned corporations of China are in no way different than global corporations which own the sovereign US state and many other sovereign nations through a rigged political process.
The only important distinction is that Chinese state business has an allegiance to China, while global corporations only serve the interests of parasitic global corporatism.
The weak link in this corporate hegemony is the floating currency regime, which is morphing into a competing currency war. Presently, there is strategic maneuvering of currency alliances that don’t rely on the US dollar reserve currency, and the divesting of US dollars acquired through lopsided trade into natural resource reserves for the future.
And yet most Americans are preoccupied any number of distractions of the hour and miss the signs of the times. Thankfully, we have Elaine.
The empire’s spoils of war are lost….
http://www.reuters.com/article/2012/12/20/us-iraq-energy-china-idUSBRE8BJ0ZH20121220
Well, yeah, Elaine
Excellent post–couldn’t have said it better.
Jaime Dimon told congress in a hearing that these bubbles come every 5-7 years and the congress assented. What do they know about economics?
Nothing I’m afraid except the money being stuffed into their pockets.
This thing is going down again and when it does it will cause more pain than the last time.
Happy holidays to you all.
The US is running an ANTI-capitalist system?
I find that a curious statement.
I’ve then been living under the illusion that the once and future U.S. nthed the ponzi schemes of the European elite that goes back to the days before the Magna Carta.
An anti-capitalist system a bad thing? Not as that system stands today. If we see the reduction of the corporate entity from infinite individuals to ten, at most a hundred, yes, then I will vote for it.
Yes, there is no capital involved in our banking system in the classic sense. Normally, no bank can lend with no capital.
US to deploy newest weapons to Asia Pacific:
http://www.spacedaily.com/reports/US_to_deploy_newest_weapons_to_Asia-Pacific_999.html
The Japanese nationalists are just opportunists riding shotgun on US military aggression. They know US military strategy is to contain China.
Another good one , best wishes , at this turning of the sun.
Elaine, fiat money is dying; and in its place, diktat, is rising as money, credit and wealth.
World Stocks, VT, traded lower on the exhaustion of the world central banks’ monetary authority on Monday December 24, 2012.
A global bear market, the worst bear market that humanity will ever know, has commenced as the world has entered into Kondratieff Winter with Dow Theory confirmation coming from Transportation Stocks, IYT, and Industrial Stock, IYJ, both turning lower.
Liberal finance has turned toxic as investors no longer trust the world central banks capability to stimulate global growth and corporate profitability. Seigniorage, that is the moneyness, of the world’s sovereign nations is starting to fail. World stocks, ACWI, are no longer able to leverage higher on Aggregate Credit, AGG, as is seen in their ongoing Yahoo Finance chart.
The risk on momentum rally that came through a Global Zero Rate Interest Rate Program is history as is seen in the following sectors trading lower on Monday, Solar, TAN, Global Real Estate, DRN, Gaming, BJK, Steel, SLX, Global Water, CGG, and Chinese Real Estate, TAO. Country stocks trading lower included Egypt, EGPT, Russia, RSX, and Israel, EIS.
Mexico, EWW, Promotora y Operadora de Infraestructura SAB de CV, PINFRA.MX, is one of the Emerging Market Carry Trade, EWX, leaders, that has benefited from a North American Infrastructure, PKB, safe haven rally away from the European Sovereign Debt Crisis, EUFN, having risen 50%, on a Mexico Peso, MXN/USD, rising 8% over the last year.
Total Bonds, BND, traded strongly lower as well as Long Duration Corporate Bonds, BLV, Build America Bonds, BABS, International Corporate Bonds, PICB, Leverage Buyouts, PSP, and Junk Bonds, JNK traded lower. Thirty Year US Government Bonds, EDV, and Ten Year US Government Notes, TLT, have already traded lower, as have Municipal Bonds, MUB, High Yield Municipal Bonds, HYMB, and Mortgage Backed Bonds, MBB, on a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, rising beginning in early December 2012. The Benchmark Interest Rate on the US Ten Year Note, ^TNX, closed at 1.77%, up from its recent 1.70%.
Competitive currency devaluation is underway on debt deflation as the global debt bubble, that is the global debt trade is history. The US Dollar, $USD, UUP, DYX, is trading higher from its December 20, 2012 low. The World Major Currencies, DBV, Japanese Yen, FXY, Australian Dollar, FXA, Indian Rupe, ICN, Canadian Dollar, FXC, Euro, FXE, Swiss Franc, FXF, Brazilian Real, BZF, and the Swedish Krona, FXS, as well as the Emerging Market Currencies CEW, are trading lower.
The Currency Demand Curve, that is the ratio of the Small Cap Pure Value Shares, RZV, relative to the Small Cap Growth Shares, RZG, RZV:RZG, has turned lower, as is seen in their ongoing Yahoo Finance Chart and in their ongoing MSN Chart, communicates that investors are no longer using carry trade loans to buy revenue shares such as the Small Cap Consumer Discretionary, PSCD, the Discretionary, IYC, and the Small Cap Revenue Shares, RWJ, over the Small Cap Growth Shares, RZG, as is seen in their ongoing Yahoo Finance Chart. Investors are selling the world’s currencies and buying the US Dollar.
Liberalism is being replaced by Authoritarianism as Inflationism is turning to Destructionism, as the Milton Friedman paradigm of floating currencies, introduced in 1971, is failing. Regionalism and Totalitarian Collectivism is the new paradigm providing diktat as money.
Clearly the fiat money system is declining and the diktat money system is rising, as leaders meet in summits and announce technocratic regional governance, where diktat serves as money, credit, and weath.
The iron hegemony of Crony Capitalism and European Socialism, is crumbling, and it its place a Ten Toed Kingdom of Regionalism is rising, as the dynamos of global growth and corporate profit are winding down, and the dynamos of regional security, stability and sustainability are powering up.
Liberalism featured sovereign nation states. Authoritarianism features regional sovereign bodies, such as the ECB, and regional sovereign leaders such as Mario Draghi.
There is no human action, nor are there any sovereign individuals, as perceived by Libertarians. There is only fate, that is destiny, operating sovereignly, to replace the Banker Regime of Liberalism, with result that the Beast Regime of Authoritarianism, is rising up out of the profligate Mediterranean PIGS banking and sovereign debt crisis, which will metastasize, with the result that EU leaders will meet in even more summits, to waive national sovereignty and pool sovereignty regionally, to provide a Eurozone Super State, where leaders in Brussels and Berlin, manage the European economy through public private partnerships, consisting of leaders from industry and government.
theyenguy,
You might want to check out Michael Hudson’s site:
http://michael-hudson.com/2012/12/reality-economics/
That was good , Hudson,.
folks i just have to say it
911 was a MOSSAD job