- 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.
- 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.