Incoming torpedos at the US dollar. The Asian banks are squeezing the Fed like pythons. When China tripled their holdings of gold in their reserves back in the spring, commodities spiked. Which foreign bank will be the first to raise the drawbridge and force the US to live off its own credit? This is the big pendulum swing back from the Asian bailout, and along with the Fed's equity and housing bubbles, could cause a huge recession in 2007. I personally think the Fed is trying to control the forest fire using everything they're able to monetize, to buy their own notes and to buy time to prepare the life boats.

See you in Paraguay, Mr. President.

information clearing house, 10-31-06 wrote:
The Dollar's Full-System Meltdown

By Mike Whitney

The U.S. Dollar is kaput. Confidence in the currency is eroding by the day.

A report in The Sydney Morning Herald stated, “Australia’s Treasurer Peter Costello has called on East Asia’s central bankers to ‘telegraph’ their intentions to diversify out of American investments and ensure an ‘orderly adjustment’….Central banks in China, Japan, Taiwan, South Korea, and Hong Kong have channeled immense foreign reserves into American government bonds, helping to prop up the US dollar and hold down interest rates,’ said Costello, but ‘the strategy has changed.’”

Indeed, the strategy has changed. The world has come to its senses and is moving away from the green slip of paper that is currently mired in $8.3 trillion of debt.

The central banks now want to reduce their USD reserves while trying to do as little damage to their own economies as possible. That’ll be difficult. If a sell-off ensues, it will start a stampede for the exits.

There’s little hope of an “orderly adjustment” as Costello opines; that’s just false optimism. When the greenback begins listing; things will turn helter-skelter quickly.

In September, we saw early signs that the dollar was in trouble. The trade deficit registered at $70 billion but the Net Foreign Security Purchases (NFSP) came in at a paltry $33 billion. That means that our main trading partners are no longer buying back our debt which puts downward pressure on the greenback. The Fed had two choices; either raise interest rates substantially or let the currency fall. Given the tenuous condition of the housing bubble and the proximity of the midterm elections, the Fed did neither.

A month later, in October, the trade deficit hit $69.9 billion but, then, without warning, a miracle occurred. The Net Foreign Security Purchases skyrocketed to a “historic high” of $116.8 billion; covering both months’ shortfalls almost to the penny.

Coincidence?

Not likely. Either the skittish central banks decided to “stock up” on their dollar-denominated investments or the Federal Reserve (and their banking-buddies) is buying back its own debt to float us through the elections.

This is exactly the kind of hanky-panky that people expected when Greenspan stopped publishing the M-3 last March keeping the rest of us in the dark about what was really going on with the money supply.

Are we supposed to believe that the skeptical central banks suddenly doubled up on their T-Bills while they’re (publicly) moaning about the dollar’s weakness and threatening to diversify?

That’s a stretch.

According to the Wall Street Journal the Chinese Central-bank governor Zhou Xiaochuan stated unequivocally that “We think we’ve got enough.” The Chinese presently have nearly $1 trillion in USD and US Treasuries.

“Enough”?

The United States runs a $200 billion per year trade deficit with China. If they’ve “got enough” we’re dead-ducks. After all, it doesn’t take a sell-off to kill the dollar, just unwillingness on the part of the main players to stop purchasing at the same rate.

Whenever you get smoked in a thread you just start a new one to distract. This is funny to me. A strategy you learned from the right, no doubt.

Regarding the other thread (Because I want you to be accountable for your statements regardless of what forum you're in): You're an idiot.

I initially thought that this thread was going to be about an upcoming show of some sort, involving two bands called The Hemorrhaging Dollar and The Crisis Response Team.

Just to spite Clocker Bob, I'm siding with the Fed.

Come on, Bernanke! Show those skeptics that an inverted yield curve don't mean shit.

syntaxfree07 wrote:Whenever you get smoked in a thread you just start a new one to distract. This is funny to me. A strategy you learned from the right, no doubt.

Regarding the other thread (Because I want you to be accountable for your statements regardless of what forum you're in): You're an idiot.

I got smoked? In which thread, the conspiracy phobia thread? I answered all my critics to my satisfaction. Why don't you try and pick apart my responses over there? I haven't left that thread to start a new one, BTW; I'm multi-tasking.

See you wherever you need to find me, little jealous punk with your inadequate mind consumed with your bitter grudge against clocker bob...

Mandroid2.0 wrote:I initially thought that this thread was going to be about an upcoming show of some sort, involving two bands called The Hemorrhaging Dollar and The Crisis Response Team.

The Crisis Response Team did a great job when their van broke down in the desert on tour last month. I hear The Hemorrhaging Dollar never pays rent for their practice space on time, though.

Wood Goblin wrote:Just to spite Clocker Bob, I'm siding with the Fed.

Come on, Bernanke! Show those skeptics that an inverted yield curve don't mean shit.

He is, at least temporarily, but the technical analysis is right and this weight of debt will crush the dollar sooner rather than later. This defiance of the trends is organized by the President's Working Group, headed by Goldman Sach's Henry Paulson, Treasury Secretary.

clocker bob wrote:

syntaxfree07 wrote:Whenever you get smoked in a thread you just start a new one to distract. This is funny to me. A strategy you learned from the right, no doubt.

Regarding the other thread (Because I want you to be accountable for your statements regardless of what forum you're in): You're an idiot.

I got smoked? In which thread, the conspiracy phobia thread? I answered all my critics to my satisfaction. Why don't you try and pick apart my responses over there? I haven't left that thread to start a new one, BTW; I'm multi-tasking.

See you wherever you need to find me, little jealous punk with your inadequate mind consumed with your bitter grudge against clocker bob...

You were belittling a tragedy in the Balkans to serve your interests. It's obvious that you don't care to see the truth. You would rather condense a complicated mess into a conspiracy theory. There is tragedy all over the world. No one person or administration is accountable. It is convenient for you to believe this because it makes you feel as though your smack-talk regarding the government is righteous. You're barely convincing yourself and you have lost sight of more important things.

You're an opportunist. A scavenger. Stop printing the articles' of others'. You're nothing but a mouthpiece. You may as well be denying the holocaust. You eat-up this shit you read on internet-news sites and regurgitate it (as if it wasn't mangled enough, already).

Think about it. Your elaborate theories have made the world very simple for you.

syntaxfree07 wrote: Stop printing the articles' of others'.

The founder of the Gold Anti-Trust Action Committee says the U.S. government's so-called "Plunge Protection Team" is helping prop up the U.S. economy, dollar and stock market ­ until Election Day.

Then, says Bill Murphy, "all hell could break loose" as the government's "strong-dollar policy" completely breaks down and is exposed as nothing more than a "keep-gold-weak policy."

For the last seven years, Murphy says, GATA has pounded the table, insisting to the world the gold market is manipulated, but government leaders, the banking establishment and their captive financial press have refused to debate the issue, dismissing it as "conspiratorial" nonsense.

But Murphy contends "GATA has proof on the public record that central bank gold reserves on deposit are only half of the 32,000 tons they officially claim to hold and are now starting to hit the wall as gold prices keep rising."

Murphy sees a "convergence" coming in the gold market between the rising physical demand for gold and shrinking mining output and supply ­ with the gold price "management" by central banks caught in the squeeze.

The Wall Street Journal reports, "Treasury Secretary Henry Paulson, a Wall Street veteran has reinvigorated the President's 'Working Group on Financial Markets' (PPT), which includes heads of the Fed, SEC and Commodity Futures Trading Commission."

clocker bob wrote:...Fed's equity and housing bubbles...

Brother Bob, you're a doofus. The whole "housing bubble" is crap. My sister is an associate VP of institutional sales at FBR and my brother-in-law is a senior analyst at a hedge fund which spun off of SAC (he was at SAC before he went over to the fund he's at now). I've had numerous discussions about the whole housing bubble thing with them and have done my own homework on it. My sister deals with mortgages all day long.......that's pretty much all she does......and she says that there's no bubble. It's not there....the whole housing boom (not bubble) is so unlike, say, the tech/'net bubble of the gay '90's that it doesn't even bear comparison. So please don't throw terms like "housing bubble" around so carelessly, Captain Kirk.