Who Is Really Printing Money?
Boris Sobolev
www.ResourceStockGuide.com
August 11, 2008
http://www.gold-eagle.com/editorials_08/sobolev081008.html
During a credit crisis which is characterized by a steep slowdown of credit creation, growth of money supply in the financial system slows as well. It is silly to think that the Fed can replace the whole system of commercial banks by creating money itself from thin air. What the Fed can do is influence money supply by adjusting interest rates creating more or less incentive for the fractional-reserve lending by the commercial banks.
Going forward, gold will likely resume its up-trend due to one of two reasons:
(1) Another spell of problems in the financial system will cause gold (and the US treasuries) to once again take the place of safe haven investments, as was the case in the second half of 2007.
(2) Fear of deflation and a further slowdown in the US will spread around the world. As a result, a vicious wave of competitive devaluation will cause not only price shocks (oil, food, etc.) but also spiraling monetary inflation, eventually raising long-term bond yields. This will be the beginning of a real gold bull market when gold outperforms all other major classes of assets including most hard assets.
Saturday, August 16, 2008
How To Conceal Massive Economic Collapse
How To Conceal Massive Economic Collapse
Ellen Hodgson Brown, J.D.
www.webofdebt.com/articles
August 14, 2008
http://www.gold-eagle.com/editorials_08/brown081408.html
Last week, Fannie Mae and Freddie Mac had just announced record losses, and so had most reporting corporations. Unemployment was mounting, the foreclosure crisis was deepening, state budgets were in shambles, and massive bailouts were everywhere. Investors had every reason to expect the dollar and the stock market to plummet, and gold and oil to shoot up. Strangely, the Dow Jones Industrial Average gained 300 points, the dollar strengthened, and gold and oil were crushed. What happened?
It hardly took psychic powers to see that the Plunge Protection Team had come to the rescue. Formally known as the President’s Working Group on Financial Markets, the PPT was once concealed and its very existence denied as if it were a matter of strict national security. But the PPT has now come out of the closet. What was once a legally questionable “manipulator” of markets has become a sanctioned stabilizer and protector of markets. The new tone was set in January 2008, when global markets took their worst tumble since September 11, 2001.
Ellen Hodgson Brown, J.D.
www.webofdebt.com/articles
August 14, 2008
http://www.gold-eagle.com/editorials_08/brown081408.html
Last week, Fannie Mae and Freddie Mac had just announced record losses, and so had most reporting corporations. Unemployment was mounting, the foreclosure crisis was deepening, state budgets were in shambles, and massive bailouts were everywhere. Investors had every reason to expect the dollar and the stock market to plummet, and gold and oil to shoot up. Strangely, the Dow Jones Industrial Average gained 300 points, the dollar strengthened, and gold and oil were crushed. What happened?
It hardly took psychic powers to see that the Plunge Protection Team had come to the rescue. Formally known as the President’s Working Group on Financial Markets, the PPT was once concealed and its very existence denied as if it were a matter of strict national security. But the PPT has now come out of the closet. What was once a legally questionable “manipulator” of markets has become a sanctioned stabilizer and protector of markets. The new tone was set in January 2008, when global markets took their worst tumble since September 11, 2001.
2008 US Election & Quadrupling The Inflation Tax
2008 US Election & Quadrupling The Inflation Tax
Part I
Daniel R. Amerman, CFA
www.inflationintowealth.com
August 14, 2008
http://www.gold-eagle.com/editorials_08/amerman081408.html
Overview
US presidential candidate Barack Obama has proposed increasing the capital gains tax from 15% to 25%. Unfortunately, the biggest component of investment taxes during inflationary times is not taxation of economic income, but taxation of the government’s destruction of the value of its own currency. As we will explore in the article below, the 1-2 combination of higher inflation and higher investment taxes may mean a quadrupling of the effective real tax rate in 2009. This will have the effect of turning the capital gains tax into an effective asset tax, where all real economic earnings plus a percentage of investment principal are taken through taxation – unless investors take self-defense measures.
Please note that this is a nonpartisan article about finance and economics, with no political judgments made, and with implications that go far beyond just the United States. The heart of the problem for the coming years is the bipartisan problem of impossible promises that the United States government has made for Social Security and Medicare – promises with equivalents that are even more impossible in many other developed nations. At some time over the coming years, regardless of who is elected, either:
* Taxes must climb to confiscatory levels; or
* Promises to retirees must increasingly be broken; or
* The currency must be destroyed (through monetizing the deficits without sufficiently raising taxes), or
* All of the above
Part I
Daniel R. Amerman, CFA
www.inflationintowealth.com
August 14, 2008
http://www.gold-eagle.com/editorials_08/amerman081408.html
Overview
US presidential candidate Barack Obama has proposed increasing the capital gains tax from 15% to 25%. Unfortunately, the biggest component of investment taxes during inflationary times is not taxation of economic income, but taxation of the government’s destruction of the value of its own currency. As we will explore in the article below, the 1-2 combination of higher inflation and higher investment taxes may mean a quadrupling of the effective real tax rate in 2009. This will have the effect of turning the capital gains tax into an effective asset tax, where all real economic earnings plus a percentage of investment principal are taken through taxation – unless investors take self-defense measures.
Please note that this is a nonpartisan article about finance and economics, with no political judgments made, and with implications that go far beyond just the United States. The heart of the problem for the coming years is the bipartisan problem of impossible promises that the United States government has made for Social Security and Medicare – promises with equivalents that are even more impossible in many other developed nations. At some time over the coming years, regardless of who is elected, either:
* Taxes must climb to confiscatory levels; or
* Promises to retirees must increasingly be broken; or
* The currency must be destroyed (through monetizing the deficits without sufficiently raising taxes), or
* All of the above
Thursday, August 14, 2008
Housing and Economic Recovery Act of 2008
Crony Capitalism for Dummies: Housing and Economic Recovery Act of 2008. How the Bailout will not Help you and Cost you Money. A Deep Look at the 694 Pages of the Bill.
Dr. Housing Bubble’s Blog
July 28th, 2008
http://www.doctorhousingbubble.com/crony-capitalism-for-dummies-housing-and-economic
-recovery-act-of-2008-how-the-bailout-will-not-help-you-and-cost-you-money-a-deep-look
-at-the-694-pages-of-the-bill/
As you will see in this article when we deconstruct this part of the legislation, very few people stand to benefit from this smoke and mirrors. The more troubling aspect of the legislation is a stealth bailing out of Fannie Mae and Freddie Mac with an almost bottomless pit of financial access. The bill practically guarantees a taxpayer bailout for these two.
The problem with our current politicians is this. Democrats with control of the House should have fought harder to simply come out and nationalize the two mortgage giants. If their mission of providing liquidity to the secondary mortgage market and helping provide affordable housing to the American public is so vital, these two should be nationalized, allow shareholders who knew these were quasi-private enterprises take their hit and move on. Unfortunately, the party had no backbone of standing up for fear of being labeled a “socialist” or for fear of their political life come this November. Incredibly the market is the only thing living up to the original mission of the GSEs; ironically lower prices via this correction are making homes more affordable. That is why we have seen some increased action in sales for the Inland Empire where prices have fallen drastically.
Yet the majority of Republicans are playing even a more clandestine game of politics. What the current administration is playing is verbally acknowledging free market capitalism but in reality, what they are doing is nothing more than crony capitalism. Some have called what is currently going on as socialism but socialism by definition is a redistribution of wealth from those at the highest income brackets to the vast majority of those at the bottom. Simply by looking at how the lower to middle class of our country is being on the verge of financial destruction, there is nothing socialist about this. Bailing out Bear Stearns was a targeted effort at propping up a few big key players. The market still ended up going into bear market territory and now here we stand at passing a bill that the current Republican administration strongly said it would not sign.
Dr. Housing Bubble’s Blog
July 28th, 2008
http://www.doctorhousingbubble.com/crony-capitalism-for-dummies-housing-and-economic
-recovery-act-of-2008-how-the-bailout-will-not-help-you-and-cost-you-money-a-deep-look
-at-the-694-pages-of-the-bill/
As you will see in this article when we deconstruct this part of the legislation, very few people stand to benefit from this smoke and mirrors. The more troubling aspect of the legislation is a stealth bailing out of Fannie Mae and Freddie Mac with an almost bottomless pit of financial access. The bill practically guarantees a taxpayer bailout for these two.
The problem with our current politicians is this. Democrats with control of the House should have fought harder to simply come out and nationalize the two mortgage giants. If their mission of providing liquidity to the secondary mortgage market and helping provide affordable housing to the American public is so vital, these two should be nationalized, allow shareholders who knew these were quasi-private enterprises take their hit and move on. Unfortunately, the party had no backbone of standing up for fear of being labeled a “socialist” or for fear of their political life come this November. Incredibly the market is the only thing living up to the original mission of the GSEs; ironically lower prices via this correction are making homes more affordable. That is why we have seen some increased action in sales for the Inland Empire where prices have fallen drastically.
Yet the majority of Republicans are playing even a more clandestine game of politics. What the current administration is playing is verbally acknowledging free market capitalism but in reality, what they are doing is nothing more than crony capitalism. Some have called what is currently going on as socialism but socialism by definition is a redistribution of wealth from those at the highest income brackets to the vast majority of those at the bottom. Simply by looking at how the lower to middle class of our country is being on the verge of financial destruction, there is nothing socialist about this. Bailing out Bear Stearns was a targeted effort at propping up a few big key players. The market still ended up going into bear market territory and now here we stand at passing a bill that the current Republican administration strongly said it would not sign.
Option ARMs, Who Thought Up these Time Bombs?
Option ARMs, Who Thought Up these Time Bombs?
Trader Mark
August 13, 2008
http://seekingalpha.com/article/90765-option-arms-who-thought-up-these-time-bombs
I read about the option ARM as the cover story October 2006 [Nightmare Mortgages]. Another absolute read.
As to the latter article - what's an option ARM you ask? Well after Alan Greenspan lowered rates to HISTORICAL lows, the golden era of adjustable rate mortgages was birthed. Why adjustable? Because despite historical low fixed rates you could only buy so much house at each income level with fixed rates in the 5% ranges. So we needed to find something more to qualify more buyers and goose home prices.... adjustable rate mortgages were the hot thing. But when adjustables with 10% or 5% down disqualified too many people we moved to a new era - the 0% down adjustable rate mortgage. This was dangerous territory - keep in mind the adjustable rate was many times at a teaser rate far below the "future rate" once it adjusted upward. Now I'm a well read person so I knew about this part - but not until I happened upon the BusinessWeek article did I learn about a new invention - the option ARM. This was for the person they could not qualify at 0% down, with teaser rate. So the Frankenstein was created - a mortgage where you don't even pay enough to pay down interest - at the end of each month, you make your payment, and the difference between what you would pay on a normal mortgage and what you paid on this mortgage is added to the principal. Meaning you OWE more on the house each month. Ridiculous you say? Nope! Not if the home price goes up every month, preferably at an annualized rate at 20% a year as we know all homes do! It's GENIUS. (on Wall Street)
The super cool part is we package these loans, mix them up with a bunch of other mortgages, sell them to "super smart" hedge funds with "sophisticated risk" models - along with institutional buyers across the world - and call it a day. Everyone wins.
Trader Mark
August 13, 2008
http://seekingalpha.com/article/90765-option-arms-who-thought-up-these-time-bombs
I read about the option ARM as the cover story October 2006 [Nightmare Mortgages]. Another absolute read.
As to the latter article - what's an option ARM you ask? Well after Alan Greenspan lowered rates to HISTORICAL lows, the golden era of adjustable rate mortgages was birthed. Why adjustable? Because despite historical low fixed rates you could only buy so much house at each income level with fixed rates in the 5% ranges. So we needed to find something more to qualify more buyers and goose home prices.... adjustable rate mortgages were the hot thing. But when adjustables with 10% or 5% down disqualified too many people we moved to a new era - the 0% down adjustable rate mortgage. This was dangerous territory - keep in mind the adjustable rate was many times at a teaser rate far below the "future rate" once it adjusted upward. Now I'm a well read person so I knew about this part - but not until I happened upon the BusinessWeek article did I learn about a new invention - the option ARM. This was for the person they could not qualify at 0% down, with teaser rate. So the Frankenstein was created - a mortgage where you don't even pay enough to pay down interest - at the end of each month, you make your payment, and the difference between what you would pay on a normal mortgage and what you paid on this mortgage is added to the principal. Meaning you OWE more on the house each month. Ridiculous you say? Nope! Not if the home price goes up every month, preferably at an annualized rate at 20% a year as we know all homes do! It's GENIUS. (on Wall Street)
The super cool part is we package these loans, mix them up with a bunch of other mortgages, sell them to "super smart" hedge funds with "sophisticated risk" models - along with institutional buyers across the world - and call it a day. Everyone wins.
You Can Stiff Some Of The People Some Of The Time
You Can Stiff Some Of The People Some Of The Time
by Captain Hook
August 11, 2008
http://www.safehaven.com/article-10968.htm
But, you can't stiff all the people all of the time. To what do we refer? Answer: The likelihood that once the Beijing Olympics are over, because increasing defaults of US corporate paper / agency debt leave a worsening bad taste on foreigner's palates, demand for domestic sovereign debt is expected to wane at an accelerating rate, which would send bond yields (market rates) higher - possibly much higher. Up until this point, Wall Street bankers think they can flog trillions of worthless CDO's and other toxic junk around the world with no ramifications. They think the world will just adsorb trillions in losses on fraudulent junk paper and keep coming back for more. But I can assure you this is not the case. The seeds of destruction of the Western banking model (globalization) have now been planted, and it's just a matter of time before this next card falls in the destruction of our fraudulent and corrupt monetary system.
Naturally then, this would mean that US borrowers (along with everybody else) are likely to face steadily increasing costs with an accelerating reduction of flows into domestic debt securities, especially with skyrocketing defaults reducing foreigner's appetites for all forms of American debt securities. The most recent TIC data shows no problem today the US's large trading partners, with steadily increasing flows into Treasuries - Japan being the exception. But again, once the need to 'save face' for the Chinese is passed with the Olympics this summer, one does need wonder if they will join Japan and cut back on Treasury purchases, especially if the economy continues to weaken, meaning they simply have fewer dollars to buy anything. In this regard you should know the economy is expected to continue weakening, with slower trade being the result.
by Captain Hook
August 11, 2008
http://www.safehaven.com/article-10968.htm
But, you can't stiff all the people all of the time. To what do we refer? Answer: The likelihood that once the Beijing Olympics are over, because increasing defaults of US corporate paper / agency debt leave a worsening bad taste on foreigner's palates, demand for domestic sovereign debt is expected to wane at an accelerating rate, which would send bond yields (market rates) higher - possibly much higher. Up until this point, Wall Street bankers think they can flog trillions of worthless CDO's and other toxic junk around the world with no ramifications. They think the world will just adsorb trillions in losses on fraudulent junk paper and keep coming back for more. But I can assure you this is not the case. The seeds of destruction of the Western banking model (globalization) have now been planted, and it's just a matter of time before this next card falls in the destruction of our fraudulent and corrupt monetary system.
Naturally then, this would mean that US borrowers (along with everybody else) are likely to face steadily increasing costs with an accelerating reduction of flows into domestic debt securities, especially with skyrocketing defaults reducing foreigner's appetites for all forms of American debt securities. The most recent TIC data shows no problem today the US's large trading partners, with steadily increasing flows into Treasuries - Japan being the exception. But again, once the need to 'save face' for the Chinese is passed with the Olympics this summer, one does need wonder if they will join Japan and cut back on Treasury purchases, especially if the economy continues to weaken, meaning they simply have fewer dollars to buy anything. In this regard you should know the economy is expected to continue weakening, with slower trade being the result.
Why Paper Silver is not as good as Physical Silver
Why Paper Silver is not as good as Physical Silver
By: Jason Hommel, Silver Stock Report
Posted 12 August, 2008
http://news.silverseek.com/GoldIsMoney/1218557976.php
Paper silver is all forms of silver held by another, such as ETF's, 3rd party Vaults, futures contracts, options, certificates, brokers, or even bullion dealers orders in transit
Silver Stock Report
Yesterday, silver hit a low, and was down dramatically to as low as $14.08/oz. I'm sure the dip caused a lot of margin calls on people who owned silver futures contracts, who had to sell out. Perhaps this is a time to review a few more reasons why all forms of paper silver are not as good as owning physical silver.
(1) Default risk. (2) Bankruptcy risk. (3) Broker risk. (4) Exchange risk. (5) Confiscation risk. (6) Buying paper silver diverts demand away from physical. (7) Paper is a promise. Silver is payment. (8) Silver is limited. Paper promises can be created endlessly and have no limit. (9) The entire reason for buying silver is to avoid the failing paper promises of an entire industry. To trust another paper promise is just silly. (10) Fraud is admitted as "standard business practice" among brokers who hold paper silver (not futures contracts) for clients. (11) Storage fees are charged for silver that does not exist, as "standard business practice" in the broker industry. (12) Buying paper silver creates a lower price for silver. (13) Buying paper silver puts "cash" into the hands of the manipulators, and enriches the "enemies" of truth and true value. (14) Leverage risk. (15) Margin increases. (16) Time risk. (17) Gambling risk. (18) Moral risk. (19) Tax risk. (20) Market risk. (21) Real money does not grow on trees, nor is it printed on paper! Money is not only, and not merely, a "medium of exchange". Money is, and must also be, a store of wealth, a unit of account, and a means of final payment (not a promise to be paid!)
By: Jason Hommel, Silver Stock Report
Posted 12 August, 2008
http://news.silverseek.com/GoldIsMoney/1218557976.php
Paper silver is all forms of silver held by another, such as ETF's, 3rd party Vaults, futures contracts, options, certificates, brokers, or even bullion dealers orders in transit
Silver Stock Report
Yesterday, silver hit a low, and was down dramatically to as low as $14.08/oz. I'm sure the dip caused a lot of margin calls on people who owned silver futures contracts, who had to sell out. Perhaps this is a time to review a few more reasons why all forms of paper silver are not as good as owning physical silver.
(1) Default risk. (2) Bankruptcy risk. (3) Broker risk. (4) Exchange risk. (5) Confiscation risk. (6) Buying paper silver diverts demand away from physical. (7) Paper is a promise. Silver is payment. (8) Silver is limited. Paper promises can be created endlessly and have no limit. (9) The entire reason for buying silver is to avoid the failing paper promises of an entire industry. To trust another paper promise is just silly. (10) Fraud is admitted as "standard business practice" among brokers who hold paper silver (not futures contracts) for clients. (11) Storage fees are charged for silver that does not exist, as "standard business practice" in the broker industry. (12) Buying paper silver creates a lower price for silver. (13) Buying paper silver puts "cash" into the hands of the manipulators, and enriches the "enemies" of truth and true value. (14) Leverage risk. (15) Margin increases. (16) Time risk. (17) Gambling risk. (18) Moral risk. (19) Tax risk. (20) Market risk. (21) Real money does not grow on trees, nor is it printed on paper! Money is not only, and not merely, a "medium of exchange". Money is, and must also be, a store of wealth, a unit of account, and a means of final payment (not a promise to be paid!)
The Final Globalization Of The U.S. Banking System
The Final Globalization Of The U.S. Banking System
By Joan Veon
July 8, 2008
NewsWithViews.com
http://www.newswithviews.com/Veon/joan54.htm
The entire financial and business cycle of market highs and lows is controlled by how much money the Feds pump into or glean from the banking system. When they add money to the system, interest rates fall and the market rises and when they take money out of the system, interest rates rise and the stock market falls or corrects. In doing so, this private corporate structure allows for an elite group of people to literally buy low and sell high, thus transferring the wealth into their pockets while those who continue to hold take the “hit.”
The globalization of our financial system goes hand in hand with the need for a global stock exchange and global accounting system to harmonize the cross-border activities of transnational corporations and banks. To facilitate this process is the interdependence, or mutual dependence between countries, which came about as the barriers fell. With a globalized stock exchange, insurance system, and accounting system, we will need a GLOBAL REGULATORY SYSTEM to accommodate the changes from national to international. This will all fit in with recent calls for a global central bank.
By Joan Veon
July 8, 2008
NewsWithViews.com
http://www.newswithviews.com/Veon/joan54.htm
The entire financial and business cycle of market highs and lows is controlled by how much money the Feds pump into or glean from the banking system. When they add money to the system, interest rates fall and the market rises and when they take money out of the system, interest rates rise and the stock market falls or corrects. In doing so, this private corporate structure allows for an elite group of people to literally buy low and sell high, thus transferring the wealth into their pockets while those who continue to hold take the “hit.”
The globalization of our financial system goes hand in hand with the need for a global stock exchange and global accounting system to harmonize the cross-border activities of transnational corporations and banks. To facilitate this process is the interdependence, or mutual dependence between countries, which came about as the barriers fell. With a globalized stock exchange, insurance system, and accounting system, we will need a GLOBAL REGULATORY SYSTEM to accommodate the changes from national to international. This will all fit in with recent calls for a global central bank.
Wednesday, August 13, 2008
On Oil and Manipulation
On Oil and Manipulation
Andrew Horowitz
June 27, 2008
http://www.thedisciplinedinvestor.com/blog/2008/06/27/on-oil-and-manipulation/
In my research, it appears that The Enron Loophole was opened in what seems to be a less than honorable manner by Phil Graham when it pushed in as a last minute attachment to a bill as the Senate was trying to finish up for Christmas break. This is what has been blamed for helping to push oil prices up beyond the simple price/demand levels. In addition, since the loophole was opened, the Intercontinental Commodity Exchange (ICE) has been trading oil futures without U.S regulatory oversight. This is precisely what the CFTC Reauthorization Act was designed to fix.
Just as I thought the bill’s passage has been able to close the door on excessive leverage and other manipulations of the oil futures market, I find out that it somehow does nothing of the sort. The loophole is closed, but only for the natural gas markets! HUH? How did that happen?
http://www.thedisciplinedinvestor.com/blog/2008/06/29/tdi-podcast-63-oil-enron-loophole-greenberger-dvorak/
Guests: Prof. Michael Greenberger and John C. Dvorak discuss the Enron Loophole, the London Loophole and the skyrocketing price of oil. We also find out how closing the loophole could bring the per barrel price of oil down 25%!
Andrew Horowitz
June 27, 2008
http://www.thedisciplinedinvestor.com/blog/2008/06/27/on-oil-and-manipulation/
In my research, it appears that The Enron Loophole was opened in what seems to be a less than honorable manner by Phil Graham when it pushed in as a last minute attachment to a bill as the Senate was trying to finish up for Christmas break. This is what has been blamed for helping to push oil prices up beyond the simple price/demand levels. In addition, since the loophole was opened, the Intercontinental Commodity Exchange (ICE) has been trading oil futures without U.S regulatory oversight. This is precisely what the CFTC Reauthorization Act was designed to fix.
Just as I thought the bill’s passage has been able to close the door on excessive leverage and other manipulations of the oil futures market, I find out that it somehow does nothing of the sort. The loophole is closed, but only for the natural gas markets! HUH? How did that happen?
http://www.thedisciplinedinvestor.com/blog/2008/06/29/tdi-podcast-63-oil-enron-loophole-greenberger-dvorak/
Guests: Prof. Michael Greenberger and John C. Dvorak discuss the Enron Loophole, the London Loophole and the skyrocketing price of oil. We also find out how closing the loophole could bring the per barrel price of oil down 25%!
Oil's Big Dirty Secret as Producers Rake in Hundreds of Billions
Oil's Big Dirty Secret as Producers Rake in Hundreds of Billions
Raymond J. Learsy
Posted August 12, 2008 | 09:44 AM (EST)
http://www.huffingtonpost.com/raymond-j-learsy/oils-dirty-big-secret-as_b_118380.html
The Peak Oil Pranksters are ever ready to carry the message for the oil patch both here and everywhere working near overtime to heighten our anxieties about oil supply, programming us to pay ever more to the oil barons and sheiks.
But wait, suppose, just suppose they are wrong and willfully misleading us. That oil's origins are not, to repeat, not biological, according to the gospel we have been taught to believe. That in effect oil originates from deep carbon deposits dating to the very beginnings of the Earth's formation in quantities vastly greater than commonly thought. The very presence of methane in the solar system is cited as one of the key underpinnings of this theory's seriousness. Then by seepage through the earth's mantle, Abiotic oil becomes in essence a renewing resource migrating toward the Earth's crust until it escapes to the surface (i.e. Canada's tar sands as theorized by some) or trapped by impermeable strata forming petroleum reservoirs.
Much research has been done on Abiotic Theory by a bevy of Russian and Ukranian geologists starting during the Soviet era, most especially by Nikolai Alexandrovich Kurdryavtsev who proposed the modern Abiotic Theory of Petroleum in 1951.
Raymond J. Learsy
Posted August 12, 2008 | 09:44 AM (EST)
http://www.huffingtonpost.com/raymond-j-learsy/oils-dirty-big-secret-as_b_118380.html
The Peak Oil Pranksters are ever ready to carry the message for the oil patch both here and everywhere working near overtime to heighten our anxieties about oil supply, programming us to pay ever more to the oil barons and sheiks.
But wait, suppose, just suppose they are wrong and willfully misleading us. That oil's origins are not, to repeat, not biological, according to the gospel we have been taught to believe. That in effect oil originates from deep carbon deposits dating to the very beginnings of the Earth's formation in quantities vastly greater than commonly thought. The very presence of methane in the solar system is cited as one of the key underpinnings of this theory's seriousness. Then by seepage through the earth's mantle, Abiotic oil becomes in essence a renewing resource migrating toward the Earth's crust until it escapes to the surface (i.e. Canada's tar sands as theorized by some) or trapped by impermeable strata forming petroleum reservoirs.
Much research has been done on Abiotic Theory by a bevy of Russian and Ukranian geologists starting during the Soviet era, most especially by Nikolai Alexandrovich Kurdryavtsev who proposed the modern Abiotic Theory of Petroleum in 1951.
Fareed Zakaria and “The Post-American World”
Fareed Zakaria and “The Post-American World”
By Peter Galuszka
August 11th, 2008 @ 3:06 pm
http://blogs.bnet.com/ceo/?p=1255
Zakaria obviously loves and promotes the U.S. but decries its floundering after the Soviet break-up. Washington did eventually come to play its role as honest broker and cop of last resort during the Clinton Administration in places where the Europeans failed, such as Kosovo and Bosnia.
Yet the Bush Administration came on with a hard, unilateral line that has turned off most of the world. To be fair, Bush was responding to the horrific 9-11 attacks and even Zakaria originally backed toppling Saddam Hussein. As wars in Iraq and Afghanistan progressed, however, the Bush people let their arrogance overcome good sense. In international affairs, they haven’t bothered to build consensus through outreach and are prone to lecture rather than listen.
By Peter Galuszka
August 11th, 2008 @ 3:06 pm
http://blogs.bnet.com/ceo/?p=1255
Zakaria obviously loves and promotes the U.S. but decries its floundering after the Soviet break-up. Washington did eventually come to play its role as honest broker and cop of last resort during the Clinton Administration in places where the Europeans failed, such as Kosovo and Bosnia.
Yet the Bush Administration came on with a hard, unilateral line that has turned off most of the world. To be fair, Bush was responding to the horrific 9-11 attacks and even Zakaria originally backed toppling Saddam Hussein. As wars in Iraq and Afghanistan progressed, however, the Bush people let their arrogance overcome good sense. In international affairs, they haven’t bothered to build consensus through outreach and are prone to lecture rather than listen.
U.S.A. to collapse as U.S.S.R. did in 1991?
U.S.A. to collapse as U.S.S.R. did in 1991?(updated 4x)
by Stranded Wind
Sun Aug 10, 2008 at 11:46:45 PM PDT
http://www.dailykos.com/storyonly/2008/8/11/24021/5119/470/566001
I had already absorbed that things were going to get bad globally due to peak oil but I’d never considered that an outright collapse of the United States might precede this. I find after reading Orlov’s little book that most of his reasoning is quite solid. We have the same sky high debt, the very same unwinnable war, and instead of the Soviet’s collapse three years after local peak oil production the United States stands in the same precarious position three years after the global peak, with Bush having pissed away our global goodwill and convinced everyone we’re no longer qualified to be the global guarantor of stable oil supplies.
Reinventing Collapse: The Soviet Example and American Prospects
Orlov’s book is divided into six chapters – The Soviet Example, Superpower Simularities, The Collapse Gap, Collapse Mitigation, Adaptation, and lastly Career Opportunities.
The initial thesis statement is clear and concise ...
My method is one of comparative analysis, taking the actual pre and post-collapse conditions of the Soviet Union and comparing them to the hypothetical pre- and post-collapse conditions in the United States.
by Stranded Wind
Sun Aug 10, 2008 at 11:46:45 PM PDT
http://www.dailykos.com/storyonly/2008/8/11/24021/5119/470/566001
I had already absorbed that things were going to get bad globally due to peak oil but I’d never considered that an outright collapse of the United States might precede this. I find after reading Orlov’s little book that most of his reasoning is quite solid. We have the same sky high debt, the very same unwinnable war, and instead of the Soviet’s collapse three years after local peak oil production the United States stands in the same precarious position three years after the global peak, with Bush having pissed away our global goodwill and convinced everyone we’re no longer qualified to be the global guarantor of stable oil supplies.
Reinventing Collapse: The Soviet Example and American Prospects
Orlov’s book is divided into six chapters – The Soviet Example, Superpower Simularities, The Collapse Gap, Collapse Mitigation, Adaptation, and lastly Career Opportunities.
The initial thesis statement is clear and concise ...
My method is one of comparative analysis, taking the actual pre and post-collapse conditions of the Soviet Union and comparing them to the hypothetical pre- and post-collapse conditions in the United States.
Credit Card Debt: This Popping Bubble Is Really Going to Hurt
Credit Card Debt: This Popping Bubble Is Really Going to Hurt
By Danny Schechter, AlterNet
Posted August 12, 2008.
http://www.alternet.org/workplace/94701/
While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. You would never know it by watching those slick VISA card ads on the Olympic TV broadcasts.
Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.
You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression.
By Danny Schechter, AlterNet
Posted August 12, 2008.
http://www.alternet.org/workplace/94701/
While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. You would never know it by watching those slick VISA card ads on the Olympic TV broadcasts.
Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.
You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression.
Tuesday, August 12, 2008
US economy still has impact on Malaysia
US economy still has impact on Malaysia
By Shankaran Nambiar
Monday August 11, 2008
http://biz.thestar.com.my/news/story.asp?file=/2008/8/11/business/22028171&sec=business
The Federal National Mortgage Association (or Fannie Mae) and the Federal Home Loan Mortgage Corp (otherwise known as Fannie Mac), both government-sponsored enterprises, were hit hard by the subprime mortgage crisis in late 2007.
The fallout of that problem has required a housing rescue bill, and a rescue plan that might cost the US government anything from US$25bil to US$100bil, depending on whose estimates you look at.
There are legislators who do not agree with this bailout since it encourages irresponsible borrowing and lax lending procedures. It is hard to be stern with Fannie Mae and Freddie Mac, when between them, they own or guarantee a significant portion of the mortgage market, which has been estimated to be close to US$6 trillion.
Besides, Fannie and Freddie cannot be punished at a time when the housing recession is at its worst since the Great Depression, even at the risk of invoking serious moral hazards.
Some reports claim that more than a million Americans have lost their homes.
The rescue package is necessary to extend a hand to homeowners who need cheaper loans, and to curtail massive mortgage foreclosures.
By Shankaran Nambiar
Monday August 11, 2008
http://biz.thestar.com.my/news/story.asp?file=/2008/8/11/business/22028171&sec=business
The Federal National Mortgage Association (or Fannie Mae) and the Federal Home Loan Mortgage Corp (otherwise known as Fannie Mac), both government-sponsored enterprises, were hit hard by the subprime mortgage crisis in late 2007.
The fallout of that problem has required a housing rescue bill, and a rescue plan that might cost the US government anything from US$25bil to US$100bil, depending on whose estimates you look at.
There are legislators who do not agree with this bailout since it encourages irresponsible borrowing and lax lending procedures. It is hard to be stern with Fannie Mae and Freddie Mac, when between them, they own or guarantee a significant portion of the mortgage market, which has been estimated to be close to US$6 trillion.
Besides, Fannie and Freddie cannot be punished at a time when the housing recession is at its worst since the Great Depression, even at the risk of invoking serious moral hazards.
Some reports claim that more than a million Americans have lost their homes.
The rescue package is necessary to extend a hand to homeowners who need cheaper loans, and to curtail massive mortgage foreclosures.
FDIC Fund Strained by Bank Failures May Lift Premiums
FDIC Fund Strained by Bank Failures May Lift Premiums (Update2)
By Alison Vekshin
Aug. 11 (Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601109&sid=a35CvKfLq65Q
"It's going to be a bloody, expensive mess for the banking industry," said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. "Healthy banks are paying for the mistakes made by failed banks."
The pace of bank closings is accelerating as financial firms have reported almost $495 billion in writedowns and credit losses since 2007. The FDIC's "problem" bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion. A revised list is due this month. The insurance fund had $52.8 billion as of March 31.
By Alison Vekshin
Aug. 11 (Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601109&sid=a35CvKfLq65Q
"It's going to be a bloody, expensive mess for the banking industry," said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. "Healthy banks are paying for the mistakes made by failed banks."
The pace of bank closings is accelerating as financial firms have reported almost $495 billion in writedowns and credit losses since 2007. The FDIC's "problem" bank list grew by 18 percent in the first quarter from the fourth, to 90 banks with combined assets of $26.3 billion. A revised list is due this month. The insurance fund had $52.8 billion as of March 31.
Monday, August 11, 2008
8 who saw the crisis coming... and 8 who didn't
8 who saw the crisis coming... and 8 who didn't
By Katie Benner and Christopher Tkaczyk
Fortune
Last updated August 06 2008: 6:26 PM ET
http://money.cnn.com/galleries/2008/fortune/0808/gallery.whosawitcoming.fortune/index.html
One year after the credit crunch began, Fortune looks back at who saw trouble ahead, and who just ended up in trouble.
8 who saw the crisis coming...
1. The Ratings Gadfly: Sean Egan (Egan-Jones Ratings)
2. The Economist: Nouriel Roubini (NYU Stern School of Business)
3. The Analyst: Michael Mayo (Deutsche Bank)
4. The Investor: Robert Rodriguez (First Pacific Advisors)
5. The Regulator: William Poole (Former president, St. Louis Federal Reserve)
6. The Politician: Richard Baker (Managed Funds Association)
7. The Short-Seller (part I): David Einhorn (Greenlight Capital)
8. The Short-Seller (part II): Bill Ackman (Pershing Square)
...and 8 who didn't
9. The Mortgage Czar: Angelo Mozilo (Countrywide Financial)
10. The Hedgie: Jeff Larson (Sowood Capital Management)
11. The Enablers: Moody's, Fitch, Standard & Poor's
12. The Watchdogs: Alan Greenspan (former Federal Reserve Chairman), Ben Bernanke (current Federal Reserve Chairman), Hank Paulson (Treasury Secretary)
13. The Bridge Player: James Cayne (Former CEO, Bear Stearns)
14. The Dancer: Chuck Prince (Former CEO, Citigroup)
15. The Golfer: Stan O'Neal (Former CEO, Merrill Lynch)
16. The Cruz Missile: Zoe Cruz (Former co-president, Morgan Stanley)
By Katie Benner and Christopher Tkaczyk
Fortune
Last updated August 06 2008: 6:26 PM ET
http://money.cnn.com/galleries/2008/fortune/0808/gallery.whosawitcoming.fortune/index.html
One year after the credit crunch began, Fortune looks back at who saw trouble ahead, and who just ended up in trouble.
8 who saw the crisis coming...
1. The Ratings Gadfly: Sean Egan (Egan-Jones Ratings)
2. The Economist: Nouriel Roubini (NYU Stern School of Business)
3. The Analyst: Michael Mayo (Deutsche Bank)
4. The Investor: Robert Rodriguez (First Pacific Advisors)
5. The Regulator: William Poole (Former president, St. Louis Federal Reserve)
6. The Politician: Richard Baker (Managed Funds Association)
7. The Short-Seller (part I): David Einhorn (Greenlight Capital)
8. The Short-Seller (part II): Bill Ackman (Pershing Square)
...and 8 who didn't
9. The Mortgage Czar: Angelo Mozilo (Countrywide Financial)
10. The Hedgie: Jeff Larson (Sowood Capital Management)
11. The Enablers: Moody's, Fitch, Standard & Poor's
12. The Watchdogs: Alan Greenspan (former Federal Reserve Chairman), Ben Bernanke (current Federal Reserve Chairman), Hank Paulson (Treasury Secretary)
13. The Bridge Player: James Cayne (Former CEO, Bear Stearns)
14. The Dancer: Chuck Prince (Former CEO, Citigroup)
15. The Golfer: Stan O'Neal (Former CEO, Merrill Lynch)
16. The Cruz Missile: Zoe Cruz (Former co-president, Morgan Stanley)
Yes, That's $2 Trillion of Debt-Related Losses
Yes, That's $2 Trillion of Debt-Related Losses
Nouriel Roubini, Economist and Professor, New York University
By ROBIN GOLDWYN BLUMENTHAL
http://online.barrons.com/article/SB121763156934206007.html?mod=yahoobarrons&ru=yahoo
AN INTERVIEW WITH NOURIEL ROUBINI: Maybe now somebody will listen. (Video)
LIKE THE EXHORTATIONS OF JEREMIAH TO THE NATION OF Israel before the first temple's destruction, the warnings of economist Nouriel Roubini fell on deaf ears. For the past two years Roubini, a professor at New York University, has cautioned about a huge housing bubble whose bursting would lead to a 20% drop in home prices; a collapse in subprime mortgages; a severe banking crisis and credit crunch; the near-failure of Fannie Mae and Freddie Mac , and a U.S. recession of a magnitude not seen since the Great Depression. So far, this latter-day prophet of doom has been on the mark, though time will tell about the recession part.
A Turkish native who grew up in Italy, Roubini trained at Harvard and later advised the Clinton White House, after his blog on the Asian financial crisis attracted the attention of Washington's economic and political elite. Roubini still publishes the blog -- the RGE Monitor -- and teaches economics at NYU's Stern School of Business. We caught up with him recently at his offices in lower Manhattan, and continued the conversation at Barron's. For his latest predictions, please read on.
Nouriel Roubini, Economist and Professor, New York University
By ROBIN GOLDWYN BLUMENTHAL
http://online.barrons.com/article/SB121763156934206007.html?mod=yahoobarrons&ru=yahoo
AN INTERVIEW WITH NOURIEL ROUBINI: Maybe now somebody will listen. (Video)
LIKE THE EXHORTATIONS OF JEREMIAH TO THE NATION OF Israel before the first temple's destruction, the warnings of economist Nouriel Roubini fell on deaf ears. For the past two years Roubini, a professor at New York University, has cautioned about a huge housing bubble whose bursting would lead to a 20% drop in home prices; a collapse in subprime mortgages; a severe banking crisis and credit crunch; the near-failure of Fannie Mae and Freddie Mac , and a U.S. recession of a magnitude not seen since the Great Depression. So far, this latter-day prophet of doom has been on the mark, though time will tell about the recession part.
A Turkish native who grew up in Italy, Roubini trained at Harvard and later advised the Clinton White House, after his blog on the Asian financial crisis attracted the attention of Washington's economic and political elite. Roubini still publishes the blog -- the RGE Monitor -- and teaches economics at NYU's Stern School of Business. We caught up with him recently at his offices in lower Manhattan, and continued the conversation at Barron's. For his latest predictions, please read on.
Sunday, August 10, 2008
END OF AN ERA?
END OF AN ERA?
Puru Saxena
8 August 2008
http://www.gold-eagle.com/editorials_08/saxena080808.html
BIG PICTURE: Lets face it, the era of easy money and cheap oil has come to an end. And if my assessment is correct, this transformation will have a significant impact on the global economy.
There is no doubt in my mind that since the early 1970’s the global economic boom has been largely financed by an ever-expanding quantity of money and credit. Once gold was removed from the monetary system in 1971, central banks were free to create as much paper currencies as they wanted. This reckless monetary inflation and credit growth has caused the value of “money” to diminish significantly over the past three decades and created a gigantic boom in global asset prices. Each time an asset “bubble” has burst in the past 35 years, central banks have responded by reducing interest-rates, thereby encouraging even more credit growth which has spawned further speculative manias down the road. This time around, in the aftermath of the Anglo-Saxon housing bust, Mr. Bernanke and his comrades are desperately trying to do the same and the trillion dollar question is whether they will succeed.
In the current circumstances, I suspect it will be extremely difficult for the central banks to further expand credit growth, thereby inflating their way out of trouble. Below I present the reasons why I am doubtful about the continuation of the credit bubble:
Puru Saxena
8 August 2008
http://www.gold-eagle.com/editorials_08/saxena080808.html
BIG PICTURE: Lets face it, the era of easy money and cheap oil has come to an end. And if my assessment is correct, this transformation will have a significant impact on the global economy.
There is no doubt in my mind that since the early 1970’s the global economic boom has been largely financed by an ever-expanding quantity of money and credit. Once gold was removed from the monetary system in 1971, central banks were free to create as much paper currencies as they wanted. This reckless monetary inflation and credit growth has caused the value of “money” to diminish significantly over the past three decades and created a gigantic boom in global asset prices. Each time an asset “bubble” has burst in the past 35 years, central banks have responded by reducing interest-rates, thereby encouraging even more credit growth which has spawned further speculative manias down the road. This time around, in the aftermath of the Anglo-Saxon housing bust, Mr. Bernanke and his comrades are desperately trying to do the same and the trillion dollar question is whether they will succeed.
In the current circumstances, I suspect it will be extremely difficult for the central banks to further expand credit growth, thereby inflating their way out of trouble. Below I present the reasons why I am doubtful about the continuation of the credit bubble:
Repel the calls to contain competitive markets
Repel the calls to contain competitive markets
By Alan Greenspan
Published: August 4 2008
http://www.ft.com/cms/s/0/3aaef4f6-623f-11dd-9ff9-000077b07658.html
We may not easily confront or accept the price dynamics of home and equity prices, but we can fend off cries of political despair which counsel the containment of competitive markets. It is essential that we do so. The remarkably strong performance of the world economy since the near universal adoption of market capitalism is testament to the benefits of increasing economic flexibility.
It has become hard for democratic societies accustomed to prosperity to see it as anything other than the result of their deft political management. In reality, the past decade has seen mounting global forces (the international version of Adam Smith’s invisible hand) quietly displacing government control of economic affairs. Since early this decade, central banks have had to cede control of long-term interest rates to global market forces. Previously heavily controlled economies – such as China, Russia and India – have embraced competitive markets in lieu of bureaucratic edict. The danger is that some governments, bedevilled by emerging inflationary forces, will endeavour to reassert their grip on economic affairs. If that becomes widespread, globalisation could reverse – at awesome cost.
By Alan Greenspan
Published: August 4 2008
http://www.ft.com/cms/s/0/3aaef4f6-623f-11dd-9ff9-000077b07658.html
We may not easily confront or accept the price dynamics of home and equity prices, but we can fend off cries of political despair which counsel the containment of competitive markets. It is essential that we do so. The remarkably strong performance of the world economy since the near universal adoption of market capitalism is testament to the benefits of increasing economic flexibility.
It has become hard for democratic societies accustomed to prosperity to see it as anything other than the result of their deft political management. In reality, the past decade has seen mounting global forces (the international version of Adam Smith’s invisible hand) quietly displacing government control of economic affairs. Since early this decade, central banks have had to cede control of long-term interest rates to global market forces. Previously heavily controlled economies – such as China, Russia and India – have embraced competitive markets in lieu of bureaucratic edict. The danger is that some governments, bedevilled by emerging inflationary forces, will endeavour to reassert their grip on economic affairs. If that becomes widespread, globalisation could reverse – at awesome cost.
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