Socio-Economics History Blog

Socio-Economics & History Commentary

Depression, World Currency and Digital Gold

  • Bob Chapman of International Forecaster gives his opinion on the upcoming world currency :
     
    Depression is now a fact, banks positioning to deal with devaluations of fiat currencies, Digital gold, Washington now under a different sent of elitists, Adjustments postponed mean more difficult times down the road, Foreclosures now soaring, billions for bailouts continue to be dispensed, Time to tax the super wealthy.
     
    Our Treasury secretary Timothy Geither on Wednesday warned that the global recession was deepening and urged strong actions by all major nations. That must mean we are in depression.
     
    Federal individual tax payments fell 64% yoy, and withholdings fell 16% yoy. This is a disaster – revenue is totally collapsing. That $2 trillion shortfall fiscal loss for 2009 could be $2.5 to $3 trillion.
     
    We believe the Fed started buying new Treasury instruments directly from the Treasury about four months ago. Recently Fed Chairman Bernanke put us on notice that he was going to use all the tools available to revive economic growth. We believe there will soon be news that the Fed is officially buying US Treasuries from the Treasury.
     
    That means overnight loans between banks will range from zero to 0.25%. The US will almost triple its debt sales this year to over $2.5 trillion. Perhaps next year bonds will be a great short or maybe even later this year.
     
    We are hearing more and more about digital gold as a private-bank solution to potential devaluation of fiat currencies. The May/June issue of the CFR’s, Foreign Affairs magazine, Brenn Steil a senior fellow and director of International Economics, who has been on loan from the parent Royal Institute in London since 1996, says digital gold, “although a niche business at present, gold banking has grown dramatically in recent years in tandem with the dollar’s decline.” Mr. Steil was the Illuminist who drew up the plans for the North American Union and the Amero. If there is digital gold out there somewhere we haven’t heard about it.
     
    The new approach to a world currency obviously will be digital gold. This way they can introduce a one-world currency backed by gold to make it acceptable to the world public. The digital nature means government would know every aspect of your financial life and would control you and your country. The gold storage would, of course, be controlled by the Illuminists. The elitists have come to the conclusion another fiat currency is not going to be acceptable. This is why JP Morgan Chase, Citicorp and Goldman Sachs talk in terms of $2,000 gold and UBS projects $2,500. Historically such benchmarks are usually and normally exceeded by prices from $3,000 to $7,000.
     
    Steil says countries should abandon monetary nationalism and embrace a world currency. Washington’s latest approach hasn’t worked and the CFR-London Institute approach is in trouble as well.
     
    The Keynesians are beating their chests again in behalf of our elitist superstructure, as to why we shouldn’t raise trade barriers to finally protect workers from foreign competition. They believe trade will play an important part in the world’s recovery. This is the trade at which we lose $2.5 billion a day and that cost American workers more than 6.3 million jobs over the past eight years.
     
    Protectionism has already begun by our friends and allies via subsidies and pushing down the value of their currencies. The US government doesn’t say anything about that because to cheapen currencies the country doing so buys dollars, which are used to buy US Treasuries and the process makes goods cheaper that are shipped into the US, which keeps inflation down.
      
    Russia has already increased import barriers on cars, farm machinery and a host of other products. The EU has reintroduced subsidies on dairy products and Europe, Brazil and India have raised tariffs on imported steel. In England the nationalized banks are giving preference to local loans.
     
    Mr. Obama’s trade representative, Ron Kirk, appears ambivalent about the value of free trade and we understand the Mexican truck program into the US has been scrapped. It looks like the administration will walk away from the South Korean free trade deal because it is unfair. He wants to open a public discourse with the public on whether the trade agreements awaiting ratification, with Colombia, South Korea and Panama, are a good idea. Due to strong labor connections he doesn’t want another round of WTO negotiations.
     
    The days for collective action are really over. China’s exalted trade position is history. What we are seeing in Washington under a different set of elitists is a continued expansion of the failed policies of the Bush administration. Team A has replaced Team B.

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March 17, 2009 Posted by | Economics | , , , , | 5 Comments

Britain Heading Towards 1930s-Style Depression!

  • Is Britain heading towards a depression? They are already in one.  The Telegraph reports :
     
    Britain is showing signs of sliding towards a 1930s-style depression, the Bank of England says today for the first time. 
      
    The country is displaying early symptoms of being trapped in a so-called “debt deflation trap” where families find themselves pushed further and further into the red every month, according to a Bank report published today.
     
    The stark warning will cause serious concerns, since it was this combination of falling prices and soaring debt burdens that plagued the US in the 1930s.
     
    The Bank is using its Quarterly Bulletin to highlight the threat posed to the economy by deflation – where prices fall each year rather than rise.
     
    Although inflation is currently in positive territory, it is expected to become negative in the coming months. The Bank is worried that this may combine with high levels of indebtedness to squeeze families further.
     
    It says that families with high debts could fall prey to the debt deflation trap. This means that the cost of their debts, which are fixed, would rise compared to average prices throughout the economy. While inflation erodes debts, deflation makes them relatively higher.
     
    The Bank’s paper suggests that Britain is particularly at risk because there is a high proportion of families with significant levels of debt, and many of them are on fixed mortgage rate, which means they will not benefit from rate cuts.
     
    Britons’ total personal debt – the amount owed on mortgages, loans and credit cards – is, at £1.46 trillion, more than the value of what the country produces in a year.
    Total personal debt has risen by 165 per cent since 1997 and each household now owes an average of about £60,000. The Conservatives claim this is the highest personal debt level in the world.

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March 17, 2009 Posted by | Economics | | 1 Comment

The Rise of Fascism in Austria?

  • We are just a few months into this 21st Century Great Depression. But already we are seeing alarming signs that the world may be headed to another world war.
     
  • The conditions that are brewing are pretty much like those in between the 2 world wars. Fascism is on the rise again. People who are caught up in it will never see themselves as doing wrong. Black is white and good is evil ! The world seems to have turned upside down when all the fascist demagogues are let loose.
     
  • The Daily Mail reports :
     
    In Austria’s recent general election, nearly 30 per cent of voters backed extremist right-wing parties. Live visits the birthplace of Hitler to investigate how Fascism is once again threatening to erupt across Europe. 
      ……
    This is a neo-Nazi gathering and in the crowd are some of Austria’s most hard-faced fascists. Among them is Gottfried Kussel, a notorious thug who was the showman of Austria’s far-right movement in the Eighties and Nineties until he was imprisoned for eight years for promoting Nazi ideology.
     
    Today he cuts a Don Corleone figure as he stands defiantly at the graveside. His neo-Nazi acolytes make sure no one comes near him and our photographer is unceremoniously barged out of his way.  Ominous-looking men with scars across their faces whisper to each other and shake hands. These are members of Austria’s Burschenschaften, an arcane, secretive organisation best known for its fascination with fencing, an initiation ceremony that includes a duel in which the opponents cut each other’s faces, and for its strong links to the far right.
     
    Incredibly, standing shoulder to shoulder with these hard-line Nazi sympathisers are well known Austrian politicians. At the graveside, a speech is made by Lutz Weinzinger, a leading member of Austria’s Freedom Party (FPO), who pays tribute to the fallen.
     
    This is a gathering in memory of an Austrian-born Nazi fighter pilot, who during WWII shot down 258 planes, 255 of them Russian. Such was Major Walter Nowotny’s standing at the time of his death in 1944 that the Nazi Party awarded him a grave of honour in Vienna’s largest cemetery, close to the musical legends Mozart, Brahms and Strauss.
      
    But in 2005 that honour was revoked and his body moved to lie in an area of public graves. The decision infuriated the far right and made their annual pilgrimage an even greater event. Today, the anniversary of Nowotny’s death, also coincides with Kristallnacht, the ‘night of broken glass’ in 1938 when 92 people were murdered and thousands attacked across Germany as stormtroopers set upon Jews in an outpouring of Nazi violence.
     
    Some 70 years on from that infamous pogrom, the world faces a similar financial crisis to the one that precipitated the rise of Hitler and, in chilling echoes of Thirties Europe, support for far-right groups is exploding. Hitler’s birthplace has become the focus for neo-Nazis across the world. And so I have come to Austria to investigate how Fascism and extremism are moving, unchecked, into the forefront of its society. 
     
    Last September, Austria’s far right gained massive political influence in an election that saw the FPO along with another far right party – Alliance For The Future (BZO) – gain 29 per cent of the vote, the same share as Austria’s main party, the Social Democrats. The election stirred up terrifying memories of the rise of the Nazi Party in the Thirties.
     
    And just as the Nazis gained power on the back of extreme nationalism and virulent anti-Semitism, the recent unprecedented gains in Austria were made on a platform of fear about immigration and the perceived threat of Islam. FPO leader Heinz Christian Strache, for example, described women in Islamic dress as ‘female ninjas’. Emboldened by the new power in parliament, neo-Nazi thugs have desecrated Muslim graves. Recently, in Hitler’s home town of Braunau, a swastika flag was publicly unveiled. 
     
    The FPO wants to legalise Nazi symbols, while its firebrand leader has been accused of having links to far right extremists. After the FPO’s election victory, Nick Griffin, leader of the British Nationalist Party (BNP), sent a personal message to Strache.
     
    ‘We in Britain are impressed to see that you have been able to combine principled nationalism with electoral success. We are sure that this gives you a good springboard for the European elections and we hope very much that we will be able to join you in a successful nationalist block in Brussels next year.’
     
    The message followed on from a secret meeting last May in which a high-ranking FPO politician paid a visit to London for a meeting with Griffin. The relationship between the FPO and the BNP becomes more worrying as I learn of the strong links between Austria’s political party and hard-line Nazis. 
     
    Herbert Schweiger makes no attempt to hide his Nazi views. At his home in the Austrian mountains, the former SS officer gazes out of a window to a view of a misty alpine valley. Described to me as the ‘Puppet Master’ of the far right, Schweiger, 85, is a legendary figure for neo-Nazis across the world. ‘Our time is coming again and soon we will have another leader like Hitler,’ he says.
     
    Still remarkably sharp-minded, Schweiger was a lieutenant in the infamous Waffen SS Panzer Division Leibstandarte Adolf Hitler, an elite unit originally formed before WWII to act as the Führer’s personal bodyguards.
     
    This is his first interview for four years and the first he has ever given to a journalist from outside Austria. It happens a few weeks before he is due to appear in court charged with promoting neo-Nazi ideology.
     
    It will be the fifth time he has stood trial for breaking a law, the Verbotsgesetz, enacted in 1947 to halt the spread of fascist ideology. He has been found guilty twice and acquitted twice. It quickly becomes apparent that little has changed in Schweiger’s mindset since his Third Reich days.

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March 17, 2009 Posted by | EndTimes, GeoPolitics, Social Trends | , , , | Comments Off on The Rise of Fascism in Austria?