In a November 2009 article, I forecasted that at the earliest, by the first quarter and the latest by the second quarter of 2010, the global economy would unravel.
Since the second quarter of 2009 and more so in the first quarter of 2010, the Obama administration, the G8, the international mass media, the IMFand the World Bank, all sang the chorus that the global economy is on “the road to recovery” and “the worst is behind us”.
While, the Dow (DJIA) “recovered” from the March lows of 2009 and shot above the 10,000 mark, all major markets were manipulated to give the illusion of recovery. The gullible took it all – hook, line and sinker.
But let me share some common sense logic.
When the so-called economists and financial analysts were trumpeting that there was a global recovery, did you consider what that means in real terms?
If there is an economic recovery, common sense tells us that productive entities, namely companies and national economies must be making money –i.e. firms are making profits and countries are improving their export performance.
And more importantly, if the so-called recovery is a sustainable recovery with economic growth, subsequent policies would no doubt reflect that optimism.
In essence, theory must jive with practice and/or reality.
But, what did we observe? What were the global central banksdoing?
BEIJING—China’s central bankmoved Saturday to head off resurgent international criticism of its currency policies with a pledge to make its tightly controlled exchange rate more flexible, a surprise announcement that was quickly welcomed by the U.S. and others even though the central bank also ruled out a big rise in the yuan.
The People’s Bankof China statement, issued on its website, didn’t announce any specific changes to the exchange-rate regime. But it was seen as a clear signal that China will let the yuan resume a gradual rise against the U.S. currency—possibly as soon as Monday—after nearly two …
All we can hope for is for this to get to trial. And any case which in its brief says: “As American citizens, the Plaintiffs allege the financial and banking system imposed on them by the Federal Reserve Banking sytem is a violation of their Constitutional and Human Rights. That the banking system practiced by the New York Federal Reserve Bank, owned and controlled by the Defendant Wall Street Banks, is the most sinful and evil PONZI scheme man is capable of devising” deserves a hearing.The ratings for C-Span will blow the Superbowl away. A 30 second ad slot will cost exponentially more as the case progresses adversely for the Federal Reserve, and the dollar gets increasingly devalued.
May 10 (Bloomberg) — The U.S. Federal Reserve will restart its emergency currency-swap tool by providing as many dollars as needed to European central banks to keep the continent’s sovereign-debt crisis from spreading.
The swaps with the European Central Bank, Bank of England and Swiss central bank will allow them to provide the “full allotment” of U.S. dollars as needed, the Fed said late yesterday in a statement in Washington. A separate swap line with the Bank of Canada will support as much as $30 billion, the Fed said, and the Bank of Japan said it approved reactivating its U.S. line. The swaps were authorized through January 2011.
The Fed action was a complement to European policy makers’ announcement of an unprecedented loan package worth almost $1 trillion to stop a crisis that threatened to shatter confidence in the euro. The U.S. central bank on Feb. 1 had closed all swap lines opened during the last crisis, triggered by the subprime- mortgage meltdown in 2007.
“If there is one thing the Fed doesn’t like, it is systemic risk,” said Torsten Slok, an economist at Deutsche Bank AG in New York. “Early signs of systemic risk were brewing in the financial system last week, and if policy makers had not taken action this weekend, then this would also have been a threat to the U.S. financial system.”
Stocks surged around the world today after yesterday’s actions, with the Standard & Poor’s 500 Index rising 4.2 percent to 1,157.85 at 11:06 a.m. in New York. The euro strengthened against the dollar, gaining 0.8 percent to $1.2857. The euro traded at $1.5134 in November.
Stress Sign
In a swap, central banks exchange foreign currency with an agreement to reverse the transaction at a later date. The central banks will then lend the dollars at fixed rates to firms in their countries. Dollar liquidity tightened in London last week amid concern financial institutions are holding too many assets of Europe’s most-indebted nations.
“My concern was whether or not the financial concerns for financial institutions in Europe would spill over into the United Statesand affect our incipient recovery,” Philadelphia Fed President Charles Plosser said today in an interview on CNBC. “Hopefully the actions that have been taken will prevent that from happening, and the Fed’s role in this, in renewing the swap lines, was an effort to help ensure that that didn’t happen.”
This WILL be our future unless we get a grip on the Banks, the FED, government and spending…As in Greece, you HAVE to think, “Where is the money going to come from to pay for everything we owe [13 Trillion is a LOT of money]?” We are bailing out banks who then come in with earnings in the Billions [from selling a product to their clients that they then BET on to FAIL~"HUGE"], CEO’s making bank on their bonuses and paid vacations for the upper elite; while at the same time teachers are getting laid off and labor [airlines] has already started to protest! We will continue to slave for those in control until we realize what is being done!
In the end, it comes from the “MAN” [we who work hard for our livings] every bill proposing new legislation to “help” the people by spending is going to come straight out of YOUR pocket. Please; help STOP the spending now!!
The Huffington Post has posted an essay by GATA Chairman Bill Murphy in reply to an essay by banker Warren Mosler posted there this week asserting that central banks lease gold to earn money rather than to suppress gold’s price.
Mosler’s defense of gold leasing was practically the first to be repudiated years ago by central bankers themselves — particularly by Federal Reserve Chairman Alan Greenspan in testimony to Congress in July 1998 and by William S. White, head of the monetary and economic department of theBank for International Settlements in a speech at a BIS conference in Basel, Switzerland, in July 2005.
Greenspan urged Congress not to regulate derivatives, remarking famously: “Central banks stand ready to lease gold in increasing quantities should be price rise”:
White explained that one of the five major purposes of central bank cooperation is “the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful”:
Murphy writes that GATA doesn’t object to gold leasing in itself but rather to the gold price suppression scheme for which leasing has been vastly overused. His essay is headlined “Our Response to Warren Mosler on Gold Lending” and you can find it at The Huffington Post here:
The head of the US Federal Reservehas partially opposed president Barack Obama‘s new rules to regulate financial firms.
Legislation unveiled earlier this week by the Obama administration suggested that the central bank would supervise only the biggest banks in the event of a possible failure.
The Federal Reserve would be limited to supervising banks with more than $US50 billion in assets.
Because the role of the US Federal Reserve is at the heart of the proposed legislation, the Federal Reserve chairmanBen Bernanke has come out to say he wants more control over smaller banks as well.
Mr Bernanke, who during the financial crisis was accused of not seeing it coming, warned that there needs to be a change in culture and structure in allfinancial institutions to make sure everyone does a better job.
Speaking to theHouse Financial Services Committee in Washington, he responded to questions about the Fed’s poor record in forecasting the global financial crisis by saying: “So there were mistakes and problems throughout the system. Other regulators and the Federal Reserve, private sector and even Congress made mistakes in this crisis. We have been doing a lot of soul searching and a lot of changes.”
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By Scott Lanman and Craig Torres
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