Kia Ora,
Be very aware of what your governments are up too.
Not just governments but groups there supposedly to protect you. In the US the SEC which sets the rules for such things as investors has made it legal for institutions to freeze investors funds & are targeting pension funds to pay for loans to the big banks that were bailed out, to buy the smaller banks that are going under.
In 2008 25 banks went under in the US, 141 in 2009 & so far this year 41. Recovery? Yeah right.
It has also being realised that in the US that social security this year will cost more than the amount of money taken in by the US government. That was a line that they had forecast they would not reach until 2016.
Governments around the world are trying to think of ways to pay for the interest payments they have to pay their central banks for borrowing the money, the banks print for them.
That is the reason you pay tax to pay for the interest on the borrowed money.
That is why you have some governments taking austerity measures to try & cut back on expenditure & others with just borrowing more & more to give an impression of things are normal.
In the US there has just being an extra US$400 billion given to Freddie Mac, Fannie Mae & Ginnie Mae to keep the housing market at least looking not as bad as it is.
All the banks bailed out are paying back as required, but these are getting rid of of their bad mortgages which are then bought with the money given to them by the above agencies.
In the meantime the big bubble in derivatives looks more rocky with its quadrillions in investment & they try to begin new markets.
What new markets? ETS (Emission Trading schemes for a start) to supposedly make the world greener, but only a way of creating money out of nothing. There were reports that Al Gore & cohorts are the ones most profiting from these schemes.
Tuesday, March 30, 2010
Monday, March 29, 2010
Things are right now. Yeah right.
Kia Ora,
Greece is being bailed out so it is all alright or is it?
First issue that arises is, what about the others in the Euro zone who are in the same situation? What about the UK & US who are in an even worse state.
Here are some points that have come in over the last week or so.
In Illinois they are repossing police cars. Now that is embarrassing. They are also refusing inmates as there is claims people are not being paid to to look after them.
California (the worlds 8th biggest economy) is looking at releasing prisoners to save costs. That is before Obama's health care programme add's US$2-3 billion to the bill they already can't pay.
No wonder there is soem very short fuses in the US. Now some are arguing that government's can never do it as good as the private sector.
That depends. Here in NZ we used to have a world class, cheap health system that was free & run by the government or as one radio DJ put it, a cardigan wearing little man who made sure the planning was done.
What happened was then one government decided to make it user pays, but the back lash was so great that when they reverted the damage was done & now we have a overworked health system, that can't keep up & is getting more & more expensive.
So they can, but only if someone keeps it efficient & someone else doesn't try to fix what isn't broken.
But back to the US & the Obama Health care plan. One of its claims had being that it would save the country US$138 Billion. It now appears from the same unit who released those figures that it will cost an extra US$566 Billion.
That is a discrepancy of a lazy US$ 700 Billion. Sounds like they have being getting lessons from NZ IRD (Equivalent to IRS).
The other issue is 14 States in the US sued the Ferderal government at virtually the moment it passed its vote.
In other news Portagul was downgraded by a rating agency (the same guys(as in rating agencies. why do we listen to them?) who said ENRON was AAA just prior to it crashing) & the US warned it was close to being downgraded.
Of course in reality the US is now about a C rating but if they even drop it, it will cause major issues around the world. So expect the US to be AAA until the day after it all goes down the out house.
China is reportedly selling its commitment to US Bonds or debt & it seems is using much of it to buy assets such as resources & commodities as well as agriculture.
This has lead one commentator Eric Fay to just have a look when governments have ever defaulted on debt they owe.
By using google he put in words Government & default & got 160 million results, so he then changed it to Government default on debt to which he got only 10 million results.
So he looked at the results to do a bit of digging into when & why governments have defaulted, devalued or reneged on payments.
He quotes several results like the French government after the First World War, the US devaluing their dollar at anothe point & didn't mention how when bonds were growing in value during the 'Great Depression' & the US government defaulted on them then banned US citizens from owning gold in breach of their own constitution.
That is why people who see the economy about to get worse are saying buy gold or silver as even when the government bans you from owning it people still hold it & it is the only thing people trust.
He also pointed out that it took 15 months from the first hints at a financial crisis before it really hit in US.
His prediction is that as things tend to follow patterns that 15 months after the first sovereign debt crisis issue in Greece was mentioned, the real sovreign debt crisis will hit so by May 2011. It maybe earlier because the first hint at sovreign debt crisis was Dubai, not Greece.
Some are predicting it will hit a lot earlier.
The Interest payments owed by the US are now allegedly greater than the taxes taken. Sounds like there is about to be a tax rise.
Greece is being bailed out so it is all alright or is it?
First issue that arises is, what about the others in the Euro zone who are in the same situation? What about the UK & US who are in an even worse state.
Here are some points that have come in over the last week or so.
In Illinois they are repossing police cars. Now that is embarrassing. They are also refusing inmates as there is claims people are not being paid to to look after them.
California (the worlds 8th biggest economy) is looking at releasing prisoners to save costs. That is before Obama's health care programme add's US$2-3 billion to the bill they already can't pay.
No wonder there is soem very short fuses in the US. Now some are arguing that government's can never do it as good as the private sector.
That depends. Here in NZ we used to have a world class, cheap health system that was free & run by the government or as one radio DJ put it, a cardigan wearing little man who made sure the planning was done.
What happened was then one government decided to make it user pays, but the back lash was so great that when they reverted the damage was done & now we have a overworked health system, that can't keep up & is getting more & more expensive.
So they can, but only if someone keeps it efficient & someone else doesn't try to fix what isn't broken.
But back to the US & the Obama Health care plan. One of its claims had being that it would save the country US$138 Billion. It now appears from the same unit who released those figures that it will cost an extra US$566 Billion.
That is a discrepancy of a lazy US$ 700 Billion. Sounds like they have being getting lessons from NZ IRD (Equivalent to IRS).
The other issue is 14 States in the US sued the Ferderal government at virtually the moment it passed its vote.
In other news Portagul was downgraded by a rating agency (the same guys(as in rating agencies. why do we listen to them?) who said ENRON was AAA just prior to it crashing) & the US warned it was close to being downgraded.
Of course in reality the US is now about a C rating but if they even drop it, it will cause major issues around the world. So expect the US to be AAA until the day after it all goes down the out house.
China is reportedly selling its commitment to US Bonds or debt & it seems is using much of it to buy assets such as resources & commodities as well as agriculture.
This has lead one commentator Eric Fay to just have a look when governments have ever defaulted on debt they owe.
By using google he put in words Government & default & got 160 million results, so he then changed it to Government default on debt to which he got only 10 million results.
So he looked at the results to do a bit of digging into when & why governments have defaulted, devalued or reneged on payments.
He quotes several results like the French government after the First World War, the US devaluing their dollar at anothe point & didn't mention how when bonds were growing in value during the 'Great Depression' & the US government defaulted on them then banned US citizens from owning gold in breach of their own constitution.
That is why people who see the economy about to get worse are saying buy gold or silver as even when the government bans you from owning it people still hold it & it is the only thing people trust.
He also pointed out that it took 15 months from the first hints at a financial crisis before it really hit in US.
His prediction is that as things tend to follow patterns that 15 months after the first sovereign debt crisis issue in Greece was mentioned, the real sovreign debt crisis will hit so by May 2011. It maybe earlier because the first hint at sovreign debt crisis was Dubai, not Greece.
Some are predicting it will hit a lot earlier.
The Interest payments owed by the US are now allegedly greater than the taxes taken. Sounds like there is about to be a tax rise.
Wednesday, March 24, 2010
Weapons of Mass Destruction.
Kia Ora,
Warren Buffett once called derivatives used in trading "Weapons of Mass Destruction".
It is now becoming more apparent why.
The US is now officially allowed to have US$14 trillion dollars of debt, but off book it already has US$120 Trillion.
What is a trillion? Well someone put it like this to count a million dollars at one dollar a second would take 12 days, a billion 32 years & a trillion 32,000 years.
So I would hate to think what a quadrillion would take. But the derivatives market is now trading in a shadowy banking world to the tune of quadrillions & things are not looking good.
A well informed source tells me that recently ETF's (Electronically Traded funds) that have until now allowed to be redeemed in what commodity you were trading in have recently be quietly changed to say they can not now be redeemed for gold or silver.
That sort of thing usually happens when someone is expecting things to change.
One of those reasons is likley the exposeure that is sure to come from the court case to expose the fact that there never has being the gold or silver available to cover those ETF's.
The same with the claim that the US holds the most gold in the world. it does but it doesn't. The IMF holds a caveat or lien over that gold for debt owed.
Apparently this was only discovered when Gold hit its highs in 1980 & Ronald Reagan looked to go back on the Gold standard. Encouraged by his wife Nancy because of rumours they were hearing he instigated a report to be done on the state of the US Gold reserves.
There weren't any so to speak as it really now belongs to the IMF.
Meanwhile in the land of smoke & mirrors does anyone know why they pay tax?
Essentially it is to pay off the interest to the central banks on the money governments have borrowed to run the government.
Most developed countries are now in the region where the interest payments are now greater than their GDP (what the country makes in a year from exports & the like).
Much of it until now has being in the private sector or personal debt (which is still extremely high in Aussie & NZ, but the local banks have loaned heavily offshore so they are about to be hit with rises in interest rates from offshore), but has being replaced a lot by the government bail outs, so public or government debt. Therefore more money has had to be borrowed (printed) & therefore the interest bill is rising.
That is going to result in tax rises everywhere & then you have the US increasing its healthcare bill. Good reasons but it will raise the countries debt.
So what does all this mean? Just look at Greece. demonstrations, riots & now bombings aimed at immigrants as they might be seen to be taking locals jobs.
In the US the vote over health care has become very emotional. The secret service reports even before that the amount of anti government turned anti Obama plots has risen dramatically.
It will only get worse as the depression we are now in gets worse.
Warren Buffett once called derivatives used in trading "Weapons of Mass Destruction".
It is now becoming more apparent why.
The US is now officially allowed to have US$14 trillion dollars of debt, but off book it already has US$120 Trillion.
What is a trillion? Well someone put it like this to count a million dollars at one dollar a second would take 12 days, a billion 32 years & a trillion 32,000 years.
So I would hate to think what a quadrillion would take. But the derivatives market is now trading in a shadowy banking world to the tune of quadrillions & things are not looking good.
A well informed source tells me that recently ETF's (Electronically Traded funds) that have until now allowed to be redeemed in what commodity you were trading in have recently be quietly changed to say they can not now be redeemed for gold or silver.
That sort of thing usually happens when someone is expecting things to change.
One of those reasons is likley the exposeure that is sure to come from the court case to expose the fact that there never has being the gold or silver available to cover those ETF's.
The same with the claim that the US holds the most gold in the world. it does but it doesn't. The IMF holds a caveat or lien over that gold for debt owed.
Apparently this was only discovered when Gold hit its highs in 1980 & Ronald Reagan looked to go back on the Gold standard. Encouraged by his wife Nancy because of rumours they were hearing he instigated a report to be done on the state of the US Gold reserves.
There weren't any so to speak as it really now belongs to the IMF.
Meanwhile in the land of smoke & mirrors does anyone know why they pay tax?
Essentially it is to pay off the interest to the central banks on the money governments have borrowed to run the government.
Most developed countries are now in the region where the interest payments are now greater than their GDP (what the country makes in a year from exports & the like).
Much of it until now has being in the private sector or personal debt (which is still extremely high in Aussie & NZ, but the local banks have loaned heavily offshore so they are about to be hit with rises in interest rates from offshore), but has being replaced a lot by the government bail outs, so public or government debt. Therefore more money has had to be borrowed (printed) & therefore the interest bill is rising.
That is going to result in tax rises everywhere & then you have the US increasing its healthcare bill. Good reasons but it will raise the countries debt.
So what does all this mean? Just look at Greece. demonstrations, riots & now bombings aimed at immigrants as they might be seen to be taking locals jobs.
In the US the vote over health care has become very emotional. The secret service reports even before that the amount of anti government turned anti Obama plots has risen dramatically.
It will only get worse as the depression we are now in gets worse.
Tuesday, March 16, 2010
The games of smoke & mirrors continues.
Kia Ora,
Well the games of smoke & mirrors continues.
On the surface it looks like the Euro is on the edge with Greece jsut being the leading contender to crumble. Meanwhile more money moves to the UK & US, but in reality they are in worse shape than anyone in Europe & Iceland has now said it will refuse to pay back loans to British & Dutch banks.
China has said it will not take part in the auction of gold by the IMF which people took to mean that things might be getting better. Did this contribute to the pull back of gold or is it part of a strategy?
Well seems China has being keeping a strategy of its own. Over the past year it has mined the most gold but it has also bought the most gold. Its own & more. Over 400 tonnes.
It has also being buying resources around the world including gold mines.
The big question at the moment is what is going to happen when the US officially ends its policy of Quantitive Easing (or printing money by hitting the computer button). Most likely at first is deflation, so assets will fall in value.
But for how long? With the amount of money that has being printed it is likely to then turn to inflation & high inflation. In other words cash may buy more for a short period, but when inflation kicks in then that cash will buy less & less.
Of course the likely reaction in the US at least, by those who are in charge of the economy is to print more money which in the long run is likely to result not just in high inflation, but hyperinflation.
At present as the news in Europe & Britain gets worse, investors are turning to the old faithful of precious metals in particular gold, which is expected to do well in any likely scenario.
Well the games of smoke & mirrors continues.
On the surface it looks like the Euro is on the edge with Greece jsut being the leading contender to crumble. Meanwhile more money moves to the UK & US, but in reality they are in worse shape than anyone in Europe & Iceland has now said it will refuse to pay back loans to British & Dutch banks.
China has said it will not take part in the auction of gold by the IMF which people took to mean that things might be getting better. Did this contribute to the pull back of gold or is it part of a strategy?
Well seems China has being keeping a strategy of its own. Over the past year it has mined the most gold but it has also bought the most gold. Its own & more. Over 400 tonnes.
It has also being buying resources around the world including gold mines.
The big question at the moment is what is going to happen when the US officially ends its policy of Quantitive Easing (or printing money by hitting the computer button). Most likely at first is deflation, so assets will fall in value.
But for how long? With the amount of money that has being printed it is likely to then turn to inflation & high inflation. In other words cash may buy more for a short period, but when inflation kicks in then that cash will buy less & less.
Of course the likely reaction in the US at least, by those who are in charge of the economy is to print more money which in the long run is likely to result not just in high inflation, but hyperinflation.
At present as the news in Europe & Britain gets worse, investors are turning to the old faithful of precious metals in particular gold, which is expected to do well in any likely scenario.
Monday, March 8, 2010
Soverign Debt crisis
Kia Ora,
Well thought I would resurrect this blog as so much is going on.
First we had the debt crisis, now we have the sovereign debt crisis.
As the world talks about recovery (is it really) other forces have being at work.
Iceland's banking system crashed & now the people are voting to not pay off the British & Dutch banks who got them there.
Then came Dubai saying it would delay payments on debt owing.
Now we have the PIIGS(Portugal, Ireland, Italy, Greece & Spain) in trouble. Most focus has being on Greece. The problem here is as part of the Euro they can't print their own money to get them out of trouble. In the last week or so the Greek People have being protesting with chants of "burn the banks".
But is Greece or any of the other European countries in that much trouble. If it wasn't for the inability to print their own money we wouldn't even be mentioning them.
In even worse state than them are the UK & US who are heading the direction of Japan. At some stage Japan is expected to enter into hyper inflation they have printed so much money over twenty years trying to stimulate their economy.
The UK & US have being following suit in particular the last few years. Question being asked are they going to stagnate for 20 years like Japan or go into a deflationary depression before turning & becoming a hyperinlfaitonary depression. Either way it is not good if you are not prepared.
Now people are talking about the end of the China boom. But on theother side people are talking of China selling those US bonds they own (recently they sold $34 billion in one day). China has being buying these to keep their own Yuan down against the US Dollar so they could export.
But now the US is not buying as many exports anymore, China is now looking to dump the US bonds to lift the Yuan so their own people can now purchase their own produced goods.
As they sell those bonds it weakens the US Dollar & in fact China are no longer the biggest holders of US bonds. Japan is, but even they are looking to sell. This requires the US Federal reserve to print more money to purchase more bonds there fore weakening the US dollar even more.
At some stage no one will buy US Bonds (apart from patriotic Americans) & that is likely to signal the end of the US dollar as it stands. Before that though we are likley to see the demise of the Euro, maybe the British Pound & it could all happen very quickly.
Well thought I would resurrect this blog as so much is going on.
First we had the debt crisis, now we have the sovereign debt crisis.
As the world talks about recovery (is it really) other forces have being at work.
Iceland's banking system crashed & now the people are voting to not pay off the British & Dutch banks who got them there.
Then came Dubai saying it would delay payments on debt owing.
Now we have the PIIGS(Portugal, Ireland, Italy, Greece & Spain) in trouble. Most focus has being on Greece. The problem here is as part of the Euro they can't print their own money to get them out of trouble. In the last week or so the Greek People have being protesting with chants of "burn the banks".
But is Greece or any of the other European countries in that much trouble. If it wasn't for the inability to print their own money we wouldn't even be mentioning them.
In even worse state than them are the UK & US who are heading the direction of Japan. At some stage Japan is expected to enter into hyper inflation they have printed so much money over twenty years trying to stimulate their economy.
The UK & US have being following suit in particular the last few years. Question being asked are they going to stagnate for 20 years like Japan or go into a deflationary depression before turning & becoming a hyperinlfaitonary depression. Either way it is not good if you are not prepared.
Now people are talking about the end of the China boom. But on theother side people are talking of China selling those US bonds they own (recently they sold $34 billion in one day). China has being buying these to keep their own Yuan down against the US Dollar so they could export.
But now the US is not buying as many exports anymore, China is now looking to dump the US bonds to lift the Yuan so their own people can now purchase their own produced goods.
As they sell those bonds it weakens the US Dollar & in fact China are no longer the biggest holders of US bonds. Japan is, but even they are looking to sell. This requires the US Federal reserve to print more money to purchase more bonds there fore weakening the US dollar even more.
At some stage no one will buy US Bonds (apart from patriotic Americans) & that is likely to signal the end of the US dollar as it stands. Before that though we are likley to see the demise of the Euro, maybe the British Pound & it could all happen very quickly.
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