Rumor Mill News Reading Room Archive

FACING THE ABYSS OF DESTRUCTION - GLOBAL HOUSING CRASH

Posted By: economica
Date: Friday, 19-Mar-2004 10:33:01

WITH THE COURTESY OF LE METROPLE CAFE Currencies in ‘FIAT Folly'- Face Abyss Of Destruction Investment Indicators from Peter George -- March 12, 2004 (Excerpt) Scripture: ‘They had as king over them the angel of the Abyss, Whose name in Hebrew is Abaddon, and in Greek, Apollyon.’ (Abaddon and Apollyon both mean Destroyer.) Revelation 9:11 Summary This is a story about the folly of government intervention in free markets. The trail we expose has its source high in the mountains of central bank control and manipulation, driven by a joint determination to protect their ill-fated FIAT money system. The word ‘FIAT’ comes from the Latin word ‘fieri’ and means ‘Let it be done’ or ‘Let there be made’. When combined with the word ‘money’, as in ‘FIAT Money’, it is used to describe: ‘an inconvertible paper currency which is made legal tender by a fiat of government’....... The modern day story of FIAT money begins with a brief history of government efforts to suppress the price of gold, focusing on America’s actions since the founding of the Federal Reserve in 1913. We explain why suppression of gold was pivotal in promoting the US Treasury’s “strong dollar policy” of the past decade. We show why, with the ‘dollar bubble’ recently having burst, central bank gold strategies are increasingly falling into disarray. Suppression of the dollar price of gold is no longer possible. New techniques of intervention must be found to slow the dollar’s slide and protect the US bond market. Failure will allow free market forces to vent their wrath on 22 years of stock market excess and property price exuberance. Then expect the following chain of events. The dollar slide becomes a rout. This in turn precipitates the panic sale of foreign-held US government bonds. The resulting crash in bond prices automatically implies a sharp rise in long term interest rates. In dollar terms bond values will fall more than 50%. The hard currency equivalent could be closer to 80%.............The purpose of this letter is to study the alternatives available for coping with the deflationary consequences of eliminating the US trade deficit and restoring the liquidity of American households. To date the only solution being put forward is one of postponing the evil day of reckoning by keeping the wheels turning. This requires taking on more debt for the US as a nation, more debt for US corporations, and more debt for US consumers. Central banks fearful of a dollar fall and its consequences for their own economies have shied away from addressing the issue of exploding US deficits. To the contrary, those of them anxious to protect their nations’ exports have sought short term relief by supporting the dollar through intervention in the currency markets. In this they have been colluding with a US Administration desperate to maintain economic momentum, as it readies itself for elections in November. Japanese actions over recent months have been a perfect example of this strategy. By printing Yen to purchase dollars, Japanese financial authorities have been able to subscribe for increasing quantities of US Treasuries bills. They have played a key role in sustaining US deficit spending at current levels........ TO BE CONTINUED: http://www.moneyfiles.org/specialgata2.html (IN 4 YEARS, SOUNDS LIKE A VERY OPTIMISTIC VIEW, DOESNT IT? YET AGAIN I AM NO ECONOMIST BUT 20% DOESN'T SOUND RIGHT CONSIDERING THE WMD DERIVATIVES) Global Housing Boom On Edge Of Crash Reuters - March 18, 2004 (business time Asia) THE global housing boom that has propped up the world economy in the face of falling share markets in the past few years is teetering on the edge of a crash, The Economist has concluded after a series of surveys. Any takers?: an interest rate rise could be the trigger for a crash, says The Economist Pam Woodall, economics editor of the British weekly, told Reuters that the global housing surveys and sector research were conducted over the past year. 'House prices look seriously overvalued in Australia, Ireland, Netherlands, Spain, the UK and US and will fall by at least 20 per cent in many economies over the next four years,' Ms Woodall told a conference organised by fund benchmarker the Investment Property Databank on Tuesday........ http://www.moneyfiles.org/housingcrash16.html AND (NEVER MIND, WHO CARES? THEY LEFT THEIR POLICY UNCHANGED ANYWAY -ITS ELECTION TIME!) Central Bank Minutes Show Fed Saw Risk in Holding Interest Rate From Bloomberg News - March 19, 2004 ........... The central bankers voted unanimously at that meeting to leave the overnight bank lending rate at 1%, the lowest since 1958. Minutes of the meeting, released Thursday in Washington, show that the central bankers weighed the possibility that keeping the rate low for too long might eventually spur inflation. "Members acknowledged that there were risks in maintaining what might eventually prove to be an overly accommodative policy stance," the minutes said. ..... "They do seem to be uncomfortable with … their policy," said Christopher Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd........ AND MANY MORE HEADLINES ON: http://www.moneyfiles.org