So
The
so-called Global Financial Crisis is a term so widely used that it has
earned its own acronym of GFC. When first seen, it seemed like girl
friend club or some such, since many friends use GF loosely to refer to
sweethearts. The GFC is falsely
named, since it is more accurately described as a global monetary war
with the USGovt vigorously defending its franchise in the USDollar for
crude oil and trade settlement, and for bank reserves management.
Take either away, and the other departs quickly, leaving the United
States vulnerable to a quick ticket to the Third World marred by price
inflation and supply shortage, even isolation in ring fences. On its own
devices, the US is in as bad shape as the worst of the PIGS nations.
The USGovt debt is above 100% of GDP finally. The annual deficit of $1.5
trillion could not be financed in normal methods. So the USFed is the
adopted buyer of last resort, purchasing over 80% of new and recycled US
debt issuance. The Interest Rate Swap tool acts like a hydraulic
howitzer, in pushing down the long-term interest rates by creating false
artificial demand. Without the IRSwap contract, a Morgan Stanley
specialty, the US interest rates would be 6% to 7% just like Spain and
Italy. The USTreasury Bond is not a safe haven, but rather a place where
Weimar printing press operations persist, where decisions like SWIFT
code rules are enforced like a illicit weapon, where billboards are
painted to attract embattled investors of impaired toxic sovereign bonds
from Southern Europe to retreat to the supposed safe haven of USTBonds.
WEAPON FOR INFLICTION
The USDollar has become the Weapon of Mass Self-Destruction.
Three years ago, the Jackass made a statement frequently, that the
first nations to depart from usage of the USDollar for exclusive trade
and reserve bank operations will be the leaders in the next chapter.
That list of insurgent nations is being defined right here and now.
Those who remain committed to the US$ in trade and banking will put
themselves at risk of systemic collapse and on a direct path on a
slippery slope to the Third World. As the pace of capital destruction
continues from the US$ conduit, lifting the cost structure as the debt
monetization continues, the global economy will continue to falter. In
the West witness the economic recession. As the USGovt raises the
pressure on rebels on the world stage that refuse to comply with the
USDollar Club, supported by the USMilitary that seems never to question
the wisdom of directives from on high, the stress level to the entire
global financial and monetary system is shaken severely. In the East
witness the stall from the Western drag. The biggest blind spot among
economists, whom the Jackass has unabashed bold disdain toward, has been
that the ultra-low near 0% official rate has been the steady persistent cause of capital destruction and a guarantee for recession.
How
tragic that economists cannot comprehend either capital formation or
capital destruction under their arrogant noses! They talk of tax tweaks,
of currency manipulation charges, of stimulus packages that lack
effective elements, of focus on the wrong sides like consumption and
retail spending. They focus on soft fluff such as inflation
expectations, when the Treasury Investment Protection Securities are
actually monetized by fresh money output in QE sidebar programs. No
protection there! They focus on a CPI distorted to the extreme, as
though it contained a shred or legitimacy. The
frequent calls for more USFed bond purchases is heard, as if it is the
core cure for financial market stupor. The QE bond purchases are the
cancer in the body financial. The US economists are a lost bunch.
The USEconomy is not the site of capitalism and economic development. It
is the site of the Fascist Business Model put to practice, where
preservation of large corrupted insolvent banks is given a national
priority, where liquidation of insolvent broken systems such as certain
financial markets and big banks is avoided at all costs. The US is the
site of chronic asset collateralization and credit extension in order to
support consumption to the point of systemic breakdown. Home equity
raids were followed by home foreclosures, a shock to the clueless
economist crew. Economists have little comprehension of economics, as
seen by the clown hack Paul Krugman receiving a Nobel Prize. He is the
absurd foppish captain of a doomed ship, elevated before its sinking.
The USGovt debt, like most US State debt, like most big US bank balance
sheets, like Fannie Mae debt, like AIG debt, is unsustainable, broken,
in a process of collapse, all supported by the constant and high volume
output of the monetary press managed by the US Federal Reserve.
Gold is becoming the Device of Financial Self-Determination, since it is free from debt and counter-party risk.
The value and role of Gold has become well recognized in the last few
years, especially since the financial crisis broke wide open in the
summer 2007. It seems strangely obvious that Gold is money and the
USDollar is not. As money flees for safety in Europe, England, and the
United States, the story not told is that the monetary system is
crumbling. The process has been underway since Greece broke down in
December 2009, following the Dubai World debt bust. For
two years, the Hat Trick Letter has been warning that Greece was simply
the much smaller opening act. The real climax events in Europe would be
Italy and Spain, whose government bonds are also captive wards of the
Euro Central Bank state. The EuroCB acts more and more like an elite
independent state, even with occasional defiance to the Germans and
their Bundesbank stellar central bank, chock full of integrity,
expertise, and tradition. Unfortunately, the Bundesbank signed on with
the European Monetary Union as the Clydesdale horse without a side horse
partner of equal strength and durability to pull the Euro stagecoach.
Therefore, the ill-designed team in front steered left into the ravine.
Next comes the abyss without the horse of Teutonic breed at all.... Read more>>
