- Will anything good come out of this G20 meeting? I don’t think so. The snakes are just setting the framework for their endgame of a One World Currency. They will likely back it with gold or no country will accept it. But once they get full control (ie world government), the gloves will be off and a pretext for microchipping everyone will begin. It will likely be ‘controlling terrorist financing’ or to identify whether a person is vaccinated against a deadly flu….
G-20 on collision course
SEOUL - The United States and China are on a collision course as this week’s gathering of leaders of the 20 most important economic powers threatens to devolve into a meaningless charade amid pressure against a US scheme to cure financial ills by printing ever-more money.
From China to Germany, Brazil to France, the world’s financial wizards are up in arms about the decision of the US Federal Reserve to buy up US$600 billion in Treasury bonds in a move that may make the US the “odd country” out in the Group of 20 (G-20), when they meet in Seoul on Thursday and Friday.
The term for this move is quantitative easing (QE), and the latest round, on top of the earlier purchase of US$1.7 trillion, is dubbed QE2, but it won’t be anything like a cruise on the old QEII, the luxury liner Queen Elizabeth II of a bygone era.
“One of the biggest concerns with this round of quantitative easing is that it will make the already weak US dollar even weaker,” said the Bedford Report in an analysis of the market impact. Lawrence Summers, US President Barack Obama’s top economic adviser, danced around the issue on Tuesday in a teleconference with the Asia Society’s Korea Center in which he said, enigmatically, “You are going to see continuing discussion at the G-20,” but he acknowledged “the imbalances will not be fixed”.
Nor was he at all optimistic about the G-20 reaching some semblance of consensus that might paper over the fissures, more like chasms, of disagreement. All he would say, in the most polite circumlocution, was, “I am confident we will reach a successful outcome at the summit.”
Fed chairman Ben Bernanke is doing some fancy talking of his own to allay concerns, saying that buying up all those bonds, which calls for spewing out tonnes of plain old $100 bills, is “just monetary policy” by another means.
What else can you do, he pleads, with the high number of people out of work in the US , the rate of inflation below expectations and no more room for slashing short-term interest rates. The phenomenon of “a large amount of slack and declining inflation”, he said, was “a signal that more should be done” and “the motivation” for the move.
As far as most of the leaders converging in Seoul for the G-20 are concerned, however, Bernanke is playing an old-fashioned game of voodoo economics, and they see the Fed’s sudden move as carefully timed to undercut arguments for other G-20 nations not to act decisively in revaluing their own inflated currencies.
The Fed’s grandstand play, they predict, will either backfire or have little impact in redressing what all acknowledge are gross “imbalances” in a system in which China and Germany are reaping fortunes in trade surpluses while the US and others have huge deficits.
The US gambit, if nothing else, provides more ammunition for all sides in what Brazil’s Finance Minister Guido Mantega was the first to call “currency wars” for the pushing-and-pulling over currency revaluation. Until the Fed’s move last week, Mantega was the most outspoken among the ministers of the BRICs – Brazil, Russia, India and China – a loose assortment of countries that investors and economists like to describe as “new emerging markets” covering large geographical areas, large populations and growing industries.
He did not hesitate to blame the US for adding to global economic distress by printing ever-more money while failing to bring its trillion-dollar budget deficit under control. “For me, most destabilizing for the global exchange is the devaluation of the dollar,” he has said.
Since the Fed’s latest move, leaders and their financial gurus from a host of countries are joining the chorus, loudly publicizing views that they had been reluctant to express so openly for fear of upsetting the G-20.
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- The sovereign debt crisis is brewing. The Eurozone, UK, Japan and the US are largely bankrupt. Of course, the snakes’ figures look alot better than reality. If you add in all the off-balance sheet items, hidden 2nd set of books, bailouts, social security, Medicare….etc. the conclusion is: the debts will never be repaid. So, for those of you who thinks you can flee the USD towards the safety of JPY or EUD, think again. No major currency is safe. No minor currency will survive when major currencies collapse!
- Bailong out Ireland and Greece means that the ECB will QE to infinity. Do not believe the song and dance the ECB sells you about being concerned with the FedRes’ US$600B QE. It is more smoke and mirror, disinformation, misinformation PR and outright lies. Just propaganda for the sheeple to get them to go back to sleep!
Ireland’s crisis flares as investors dump bonds
DUBLIN – Ireland’s financial troubles loomed large Wednesday as investors — betting that the country soon could join Greece in seeking a bailout from the European Union — drove the interest rate on the country’s 10-year borrowing to a new high.
The yield, or interest rate, on 10-year bonds rose above 8 percent for the first time since the launch of the euro, the European Union’s common currency, 11 years ago.
Bond traders increasingly believe that Ireland soon will be forced to tap Europe’s emergency fund for euro-zone nations facing a threat of bankruptcy. The 16 nations of the euro zone created that euro750 billion backstop in May as the EU and International Monetary Fund provided an emergency euro110 billion loan to Greece.
Another bailout would send more shock waves through the currency union, which has struggled to find ways to keep individual governments from overspending and threatening the currency’s value.
Flaring financial tensions has driven the euro off recent 6-month highs of $1.428 versus the dollar. The euro was trading Wednesday at $1.3760, down from its opening of $1.3773.
The cost of funding Irish debt has risen steadily since September, when the government admitted its bailout of five banks would cost at least euro45 billion, equivalent to euro10,000 for every man, woman and child in Ireland. That gargantuan bill, in turn, has made the projected 2010 deficit rise to 32 percent of GDP, the highest in post-war Europe.
The yield on 10-year Irish notes rose steadily from 7.94 percent and passed 8.4 percent in afternoon trade. As the value of bonds fall, buyers demand ever-higher yields as compensation.
Traders accelerated their offloading of Irish bonds after London-based LCH.Clearnet Group announced Wednesday it would require clients who deal in Irish bonds to increase the percentage of cash deposited up front to 21 percent, compared to a usual deposit of less than 6 percent. The move came on top of decisions this month by the governments of Russia and Chile to stop buying Irish debt.
- This global currency war will get worse. The current G20 meeting will not result in any viable solution. I doubt the Anglo-American Illuminists want a solution apart from their One World Currency, Global Central Bank (likely to be IMF) and by implication World Government. All the propaganda news in the MSM are just smoke and mirrors. The Illuminists will allow the problem to fester and get much worse. They are employing their Hegelian dialectic: Order Out of Chaos methodology. Observe all the manipulated ‘news’ but know for certain that a New Luciferian Financial Hegemony is around the corner.
Currency War Hits Mexico as Carstens Signals Rate Cuts
The peso’s biggest rally on record may prompt Mexico’s central bank to cut interest rates next year to boost exports after other Latin American policy makers raised borrowing costs to cool their economies.
Governor Agustin Carstens signaled during a Nov. 2 meeting with economists in New York that he would consider cutting rates should the peso keep gaining, according to analysts from Barclays Capital, Deutsche Bank AG and UBS AG who attended the meeting. The bank may lower borrowing costs a quarter percentage point to 4.25 percent by March, Mexican futures trading show.
Foreign investment in short-term Mexican notes known as Cetes has risen more than six-fold since the end of 2009 as investors looked for alternatives to near-zero interest rates in the U.S. and Europe. Inflows almost doubled last month to 70.4 billion pesos ($5.78 billion) as international investors anticipated the Federal Reserve would pump additional liquidity into the U.S. economy. China said this week the Fed’s decision to purchase $600 billion in U.S. Treasuries threatens to “shock” emerging markets with “hot money.”
“Mexico runs the risk of being slammed by the markets,” said Alonso Cervera, a Latin American economist at Credit Suisse Group in Mexico City who attended the meeting with Carstens in New York. “If there’s a rally in the peso, we shouldn’t be surprised if they choose to cut rates.”
In seeking to curb the peso’s 7.7 percent advance against the dollar over the past 10 weeks with a rate cut, Carstens would be defending his country’s exports from what Brazilian Finance Minister Guido Mantega has called a global “currency war,” said Jimena Zuniga, an economist at Barclays.
“If the central bank perceives it is left alone in the currency war and the peso is losing competitiveness, then the central bank might consider measures including using monetary policy to discourage inflows,” said Zuniga, who was at the New York meeting with Carstens.
The yield on Mexico’s 9 percent bond due in 2012 dropped 10 basis points the day after Carstens’ meetings with economists and investors.
Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Professor & Former CEO of Nation’s 10th Largest Bank!
The United States is going into stealth, implicit default via QE 2.0, creating money out of thin air to buy its own bonds. No one should doubt that major calamity is dead ahead for America. Because the USD is the world reserve currency, most of the world will be screwed as the global monetary system comes crashing down.
Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Professor &; Former CEO of Nation’s 10th Largest Bank!
(CNSNews.com) – John Allison, who for two decades served as chairman and CEO of BB&T, the nation’s 10th largest bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction.
Allison likened what he sees as the predictable future bankruptcy of the United States to the problems at Fannie Mae and Freddie Mac, whose insolvency he also said was foreseeable to those who studied their business practices and financial situation.
“I think the first thing we have to realize is where we’re going and to face it objectively,” Allison told CNSNews.com, when asked about the trillion-dollar-plus deficits the federal government has run for three straight years, the more than $13 trillion in federal debt, and the $61.9 trillion long-term shortfall the government faces (according to the analysis of the Peter G. Peterson Foundation) if the government is to pay all the benefits it has promised through entitlement programs.
“If you run the numbers, on all those numbers that you just talked about, which I think are accurate, very accurate, in 20 or 25 years, the United States goes bankrupt,” said Allison. “It’s a mathematical certainty.
“It reminds me very much of that story I told you about Freddie Mac and Fannie Mae,” said Allison. “We were running the numbers, and Freddie Mac and Fannie Mae went bankrupt, and we got there. In 20 or 25 years, the United States goes bankrupt.
“Now, countries don’t go bankrupt the way companies do,” said Allison. “They don’t file bankruptcy. They usually hyper-inflate. They print a bunch of paper money, or they become Third World economies like Argentina–unless we change direction. So, we absolutely have to change direction. And the irony of that is it requires an interesting combination. It requires both discipline, but it also requires a focus on growing our economy. And it means a fundamental philosophical change from where we are today, from the idea of redistributing wealth to the idea of creating wealth.”
In his interview with CNSNews.com Allison said that when belonged to the Financial Services Roundtable they examined Fannie Mae and Freddie Mac and determined they were going bankrupt. Congressional leaders, however, did not heed their analysis.
“I was on a committee, a Financial Services Roundtable, for nine years trying to do something about Freddie Mac and Fannie Mae,” said Allison. “You couldn’t help but see it coming,” he said. “You ran the numbers, particularly the last several years, and it was mathematically certain Freddie and Fannie were going bankrupt.”