SUMMARY 28FEB - MARCH 3 2006
Having just recovered from a serious hardware issue caused by Con Edison, I will make obervations about the current trends this weekend.
(02/20) How can the dollar collapse in Iran? An explanation By Rudo de Ruijter
The facts below explain why and how the new euro-enominated oil bourse (opening on March 20, 2006 in Tehran) will cause the collapse of the US-dollar.This is a far more important issue, than the US' allegations about an Iranian nuclear threat. These allegations may well appear to be a smoke-screen.Take 60 seconds to understand the key of the real issue.
1. How, since decades, does the US succeed to import more than it exports?
2. How Saddam spoiled the game?
3. How would the dollar collapse in Tehran?
... to becontinued:
http://real-wealth-society.blogspot.com/2006/02/how-can-dollar-collapse-in-iran_18.html
(tnx in advance for leaving a comment)
THE DIRE SHAPE OF THE AMERICAN ECONOMY
AND
(03/03) Most not ready for retirement
http://money.cnn.com/2006/03/01/retirement/summit/index.htm
America's younger workers losing ground on earnings
http://abcnews.go.com/Business/CSM/story?id=1664971
Consumer sentiment fades
WASHINGTON (MarketWatch) -- U.S. consumer sentiment weakened slightly in late February, according to media reports Friday of proprietary research at the University of Michigan.
Spending in US rises to exceed incomes
Consumer spending jumped at the start of the year, as US households continued to demonstrate a willingness to spend more than their income, while the Federal Reserve’s preferred inflation measure was well-behaved. Personal spending rose 0.9 per cent in January, compared with a 0.7 per cent increase in personal income, the Commerce Department reported. The rise in spending was slightly below the consensus forecast while the income gain was slightly above. The biggest monthly gains in spending and income since last summer pointed to renewed momentum in the economy following the weak fourth quarter.
But the savings rate dropped to minus 0.7 per cent from minus 0.4 per cent in December. Economists expect that declining energy prices, income growth as the labour market tightens and a slowing housing market will all encourage the savings rate to improve.....
http://goldismoney.info/forums/t30518-spending-in-us-rises-to-exceed-incomes.html
(03/01) The Debt-for-Diploma Crunch
The author of Strapped says today's young people emerge from college deep in hock, so it's harder for them to achieve the American dream... Do you think things can get worse?
I think this is going to get worse. The cost of student loans will increase (see BW Online, 01/30/06, "Student Loans: Outflank The Hikes Ahead"), but there hasn't been a big increase in grants, and state tuitions haven't come down. Debt begets more debt. Since young people have to pay out of their paycheck for debts, in addition to all their other expenses, it leaves them without much cushion. If the car breaks down or they need a new suit for an interview, it's bought on credit.
What can we do to fix the situation?
We need to figure out how to help people move up in their fields. We need to end the debt-for-diploma system. The federal government needs to bring financial aid back. Our generation also needs to be more informed. Young people don't follow current affairs, and at the same time, they've been raised to believe that their inability to get ahead is their own fault.
Unlike previous generations, who believed and acted on the idea that the personal is political, this generation doesn't have that in their DNA. We need to realize that what's happening to us financially on an individual level is part of a larger issue in our economy and our society.
Have we made any progress yet?
There's a growing awareness that the current system isn't working. Economic mobility has declined, and people feel that the promise of America -- that if you work hard, you can get ahead –- is breaking. Young people turned out in record numbers to vote in the presidential elections in 2004. But there are a lot fewer of us than the older generations, so we have to turn out in much higher numbers to get our voices heard......
http://www.businessweek.com/print/investor/content/feb2006/pi20060224_185263.htm
(03/03) How long can households sustain negative savings?
http://www.usatoday.com/money/perfi/general/2006-03-01-savings-cover-usat_x.htm
AND... so BIS TOO IS WARNING OF A GLOBAL CASH/DEBT-CRUNCH
(03/03) World’s Biggest Bank Calls for Economic Overhaul
The International Bank of Settlements is calling for a new global financial system to fix the world’s debt problems. The world’s economic and monetary system is broken. Granted, this is not new news for regular Trumpet readers. What is new is that, in an abrupt change of stance, one of the world’s top banking authorities, the Bank for International Settlements (bis), now warns of a dangerously unbalanced world economy and is calling for an “overhaul of the current global economic system” (Telegraph, February 20).
Further, in another radical move, the bis has suggested that many of the world’s nations should abandon their currency and adopt one of a small number of formal currency blocks “based on the dollar, euro and renminbi or yen” (ibid.). For such a major bank to call for such drastic action, it must recognize a big problem.
That problem is soaring debt levels! ....... Since raising taxes and slashing benefits and services are tantamount to political suicide, watch for government leaders to try to take the seemingly easier path out of debt—the path they have already started down—the path that might be hid for a little while longer. The inflationary path!
..... So just where are all these imbalances leading? To a huge crash—the biggest ever...... The U.S. and other English-speaking countries are in financial peril. Will you be caught unaware?
http://www.thetrumpet.com/index.php?page=article&id=2061
AND
(03/03) The Derivatives Mess | Fed Official Warns of Changes (dire warning/derivatives kiss of death)
.... A top Federal Reserve official warned yesterday that the U.S. financial system is evolving faster than the ability of investors, lenders and regulators to evaluate and manage the risks involved...... One source of concern Geithner highlighted was the recent rapid growth in credit derivatives -- financial contracts whose value is linked to corporate bonds and loans. The instruments allow investors to bet on the creditworthiness of a company, while spreading the risk of corporate defaults to the broader market. Some analysts worry that a big default or surprising downgrade of debt could trigger cascading losses to hedge funds and the banks, pension funds, insurers, university endowments and other investors that lend money to them..... Geithner said recent financial innovations have helped the economy absorb various financial shocks, "but they have not eliminated risk." He added, "They have not eliminated the possibility of failure of a major financial intermediary. And they cannot fully insulate the broader financial system from the effects of such a failure." (WPOST)......
MORE
http://www.moneyfiles.org/specialderivatives.html
AND
UPDATE ON THE MASSIVE NAKED SHORT SELLING FRAUD:
(03/01) Who Is Going To Sort This Out?" ... or 8 million + shares that don't exist??
http://www.moneyfiles.org/stockfraud.html
AND... THE HEDGE FUNDS TOO?
(03/03) Man Group says hedge-fund fraud a US phenomenon
http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=131593
AND... DO NOT WORRY, AMERICA/WEST IS OF COURSE NOT ALONE:
(03/01) The Dark Side of China’s Rise |
China’s economic boom has dazzled investors and captivated the world. But beyond the new high-rises and churning factories lie rampant corruption, vast waste, and an elite with little interest in making things better. Forget political reform. China’s future will be decay, not democracy......
http://www.foreignpolicy.com/story/cms.php?story_id=3373&print=1
China's consumers prefer to save
( the great irony, but I am willing to bet with you that chinese folks have better memories than those in the west when it goes about paper money)
http://goldismoney.info/forums/showthread.php?p=188594#post188594
AND TALKING OF CHINA:
(03/01) West's gold vanishing in China once again
..... History offers parallels to the yawning U.S. trade deficit and the resulting accumulation of dollars in China. China sells to American companies almost six times as much as it buys from them, but this is not the first time China has been an export powerhouse. Ancient Rome, for example, found that it had little except glass that China wanted to buy. Nearly 2,000 years ago, Pliny complained about the eastward flow of Roman gold along the Silk Road in exchange for Chinese silk.
Long-distance trade collapsed during the early years of the Dark Ages. But through the next several periods of rapid growth in international commerce - from 600 to 750, from 1000 to 1300 and from 1500 to 1800 - China again tended to run very large trade surpluses. By 1700, Europe was paying with silver for as much as four-fifths of its imports from China because China was interested in little that Europe manufactured.... The same phenomenon has appeared today, as dollars inundating China have resulted in practically no increase in prices for most goods and services - although real estate prices have jumped in most cities. China has an even easier time preventing domestic prices from rising now because modern banking techniques let its central bank buy up the dollars and take them out of everyday circulation. The central bank has accumulated the country's immense foreign-currency reserves in the process.......
http://goldismoney.info/forums/showthread.php?p=185616#post185616
AND
Bank of China will let investors trade dollars directly for gold
http://groups.yahoo.com/group/gata/message/3690
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