Monday, November 15, 2010
Gerald Celente: Scenario set up for next war
Click this link ...... http://www.youtube.com/watch?v=d0SFCPVxmco
« Fed Governor Issues Warning on Bank Dividends and Mortgage Put-Back Risk »
What is interesting about this story is that Tarullo teaches within the same Law faculty (Georgetown) as Adam Levitin, who has spent the last month detailing the nightmare putback scenario for Bank of America and others.
Levitin's thoughts can be found in these 2 stories:
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John Carney has the details...
If you were counting on the big U.S. banks to restore or increase dividends that were pared back or ended during the financial crisis, you might want to think again.
The final portions of a prepared speech by a top Federal Reserve official seemed aimed at pulling-back market expectations that the central bank would soon authorize a resumption of dividends.
The Fed has been preparing guidelines on how banks will be able to change their dividend policies in the first quarter of next year. When that news was reported last week—the Wall Street Journal’s headline was “Fed to Let Banks Increase Dividend” — the stocks of several banks rose.
But Fed governor Daniel Tarullo appeared to be trying to tamper the exuberance over the new Fed guidelines.
- “Although the details of these guidelines are still being finalized, I can say that our approach to considering such requests will be a conservative one.”
- “We will expect firms to submit convincing capital plans that demonstrate their ability to absorb losses over the next two years under an adverse economic scenario that we will specify, and still remain amply capitalized,” Tarullo said. “We also expect that firms will have a sound estimate of any significant risks that may not be captured by the stress testing, such as potential mortgage put-back exposures, and the capacity to absorb any consequent losses.”
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A lesson from China in where power lies
China believes its economic success reflects its superior culture.
President Barack Obama (left) meets Chinese President Hu Jintao for a bilateral meeting in Seoul ahead of the start of the G20 summit Photo: AFP/GETTY IMAGES
The leaders of the G20 group of rich and developing nations met in Seoul this week for what might reasonably be described as their first post-crisis summit. But it also had the feeling of the first post-Western summit. China, the world’s second richest nation and its rising power, believes that the financial crisis was actually a “North Atlantic crisis”. Now that the worst of it is over, Beijing sees little reason to swallow the medicine for someone else’s sickness. The summit therefore broke up – none too amicably – without really addressing the trade imbalances that were one of the root causes of the crisis, or America’s worry that Beijing is gaining an unfair advantage by artificially keeping its currency weak. Instead, China flexed its muscles and got what it wanted: a watered-down statement that will not force it to change course. If President Obama hoped that the G20 would burnish his image as a world statesman after the disaster of the midterm elections, those hopes were disappointed.
It is inescapable that we are witnessing a historic shift of economic power from West to East. David Cameron has certainly taken this on board, judging by the caution with which he and his Cabinet members treated China during their visit earlier this week. The Prime Minister approached the subject of human rights far more obliquely than he did as leader of the Opposition. Whether this was wise judgment or a failure of nerve is difficult to say. Although China treats dissidents with gross inhumanity, the more it is lectured on the subject, the more intransigent it becomes. In a sense, that is convenient for Mr Cameron: if protesting about repression makes the situation worse, then Britain can concentrate on trade with a fairly clear conscience.
Certainly, China is leaving Seoul with even more of a swagger in its step. Its regional ambitions are unchecked: if anything, they have been further provoked by America’s insistence that the resolution of territorial disputes in the South China Sea is a “national interest”.
« Chinese Rating Agency Says U.S. As Creditworthy As Costco, Pegs GDP At $5T (NOT $14T), Downgrades Bernanke »
Bernanke was reportedly downgraded From Triple FFF To 'Unmeasurable' on worries over his sanity in the face of worldwide criticism.
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Scroll down for VIDEO...
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The Chinese rating agency, which hit headlines earlier this year for its AA-view on the United States, is back, with another US downgrade.
From the 10-Page Downgrade Report
The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency. The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S.
Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment. Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors.
The total output value of the U.S. financial services industry is composed of two major parts: one is the transferred production value, most of which comes from value distribution of participating in international production. Another part is the inflated value originated from credit innovation, which belongs to bubble value.
In addition, due to the high economic financialization, more than half of the profits in the real economy come from the returns of financial activities. If we exclude the factor of virtual economy, the U.S. actual GDP is about 5 trillion U.S. dollars in 2009, per capita GDP about $ 15,000. Meanwhile, the total domestic consumption was 10.0 trillion U.S. dollars and government expenditure was 4.5 trillion U.S. dollars.
Dagong Global Credit Rating Company
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Reaction...
Chinese say U.S. as Creditworthy as Costco - WSJ
Taking Dagong’s downgrade at face value, Uncle Sam is now a credit on the level of Costco, based on the big box retailer’s Standard & Poor’s rating. The Treasury can take pride, however, in ranking a notch higher than “Government Sachs,” rated only A by S&P. Fortunately for U.S. taxpayers, who must foot the bill if the federal government’s borrowing costs go up, the market currently puts little credence in Dagong’s A+ U.S. ratings. According to Merrill Lynch, U.S. Treasury debt currently trades at a yield 66 basis points lower than the AAA corporate index.
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From earlier this summer...
Chinese rating agency strips Western nations of AAA status
China's leading credit rating agency has stripped America, Britain, Germany and France of their AAA ratings, accusing Anglo-Saxon competitors of ideological bias in favour of the West.
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The 'Chinese Professor' TV Commercial That Is Causing All The Controversy -- See the alternative version below...
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Which one is more honest...
España tiene mejores infraestructuras que EEUU, según el Foro Económico Mundial
De primera. Así define el Foro Económico Mundial (WEF, por sus siglas en inglés) la calidad de las infraestructuras españolas, situándonos en el puesto 14 de un total de 139 países, por encima de Estados Unidos.
La clasificación se encuadra dentro de su informe anual de competitividad global, difundido por el Instituto de Estudios Ecónomicos (IEE), en el que señala que la calidad de las infraestructuras es uno de los pilares fundamentales a la hora de evaluar a las economías.
El informe establece que el país más avanzado en materia de infraestructuras es Hong Kong, seguido de Alemania y los Emiratos Árabes. Entre los 15 primeros, figuran también siete países europeos: Francia, Suiza, Holanda, Reino Unido, Islandia y Dinamarca.
Igual opinión tiene el presidente del Gobierno, José Luis Rodríguez Zapatero, que aseguró hace tan sólo unas semanas que las infraestructuras españolas están "a la cabeza de Europa y del mundo", a la vez que afirmó que la inversión en esta materia permitirá al país salir "con fuerza" del "bache profundo" en el que está sumido.
Sin embargo, el Ministro de Fomento, José Blanco, anunció el pasado mes de agosto que acometerá un recorte de 5.700 millones de euros en inversión pública en los dos próximos años con el objetivo de reducir el déficit. Además, Blanco invitó a las constructoras españolas a buscar nuevas oportunidades de negocio en el extranjero, dado que, según él, España ya ha alcanzado uno de los niveles de infraestructuras más altos de Europa.
Precisamente eso es lo que hacen las grandes constructoras españolas, siete de las cuales figuran en el "top ten" mundial de los mayores grupos concesionarios del planeta, elaborado por la revista especializada Public Works Financing.
ACS, la constructora que preside Florentino Pérez, lidera el ranking por cuarto año consecutivo con un total de 60 concesiones. Global Vía, filial de concesiones de FCC y Caja Madrid, y Abertis, controlado por ACS y La Caixa, completan el podium, con 45 y 40 concesiones, respectivamente. FCC, Acciona, Ferrovial, OHL y Sacyr Vallehermoso aparecen también en la clasificación.
La constructora de la familia Entrecanales y ACS se apuntaron otro tanto al anunciar el viernes que se han adjudicado en consorcio el contrato de construcción y explotación de una autopista entre Canadá y Estados Unidos por 1.100 millones de euros.
Either pay the national debt with monetary reform or kiss your assets goodbye
In our current debt-based monetary system, we're never going to pay off the national debt.
This article will explain what the debt is, why we can never pay it, and the elegant and obvious solution proposed by Nobel Prize winning economist, Milton Friedman. Please read and understand this crucial information for your responsible citizenry. You literally have nothing more valuable to do.
The US national debt is approaching $12 TRILLION dollars. Of that amount, about 2/3 is owed to whomever among the public purchased US government debt securities (bills up to one year, notes from two to ten years, and bonds of 20 and 30 years) and 1/3 is intragovernmental transfers (US government agency purchases like Social Security surplus and other retirement funds). China and Japan hold about $750 and $650 billion, respectfully.
The reason we have a national debt is because our government "leadership" surrendered to the banking system its power to create money directly for the payment of public goods and services through the Federal Reserve Act and fractional reserve banking. The cost of this transfer is ~$1 trillion every year to the American public. But don't worry. The banks are doing a great job with the responsibility; that's why we collectively bailed them out with up to $12 trillion of our collective money from addictive gambling losses with no change in regulation. But back to our story of national debt.
We won't and can't pay $12 trillion because it's too much money. The population of the US is ~300 million, dispersed among ~100 million households. That means the average household would have to pay $120,000 each. Given the average annual household income is $50,000, your share would vary proportionally. The national debt doesn't include TOTAL US debt, which is ~$70 trillion. These numbers explain why our monetary system is called "debt-based."
The interest payment on this debt last year was $450 billion. That's ~$4,500 for the average household with $50,000 income, with your share varying. If your household earns $133,000, you're paying $1,000 every month on interest to the national debt. This is similar to the US choosing to pay only the interest on a credit card, then borrowing even more money to make the minimum payment on the principal while ever-increasing the total debt.
This debt-based monetary system is a Robber Baron-era structure created by banking oligarchs for their own benefit, not for the American public. The insanity of perpetuating such a system was well-expressed by Wright Patman, Representative in the U.S. Congress from 1929 to his death on March 7, 1976, and Chair of the House Committee on Banking and Currency for 40 years. For 20 of those years, he introduced legislation to repeal the Federal Reserve Banking Act of 1913. This quote is from excerpts of September 29, 1941, as reported in the Congressional Record of the House of Representatives (pages 7582-7583):
“When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money... The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now, under our system, we will sell bonds to commercial banks and obtain credit from those banks. I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue. I make that statement after years of study.”
Here is the elegantly simple and obvious solution: because a nation's government has the power to create money, do so. Instead of rolling-over the national debt as its individual securities come due and are redeemed (paying them by additional borrowing), just pay them with government created money. To avoid inflation, concurrently restrict the banking industry's fractional reserve power to inflate this money through lending by increasing their reserve requirement proportionally. The reserve requirement is the percentage of deposits they cannot create credit from when someone asks for a loan. This ends the debt while maintaining the money supply. The 8-minute video below will explain.
To maintain American's access to credit, we have three basic choices. One is privately-owned banks that lend long-term deposits directly and make fractional reserve banking and its multiplier effect illegal (see my brief for full explanation). The investors who purchased government securities will invest to meet lending demand because its a similar investment to government securities. Two: have a government-owned banking system, like how we manage fire departments on geographic need. The argument for this system is American's minimal borrowing costs and that the creation of credit is relatively simple. The advantage of non-profit lending rates would be mortgages of less than 1% interest. Three: a hybrid of private lending with perhaps government-sponsored 1% mortgages. BTW, current mortgages usually double the cost of buying a home, as you probably know. Given a choice, the public would prefer non-profit lending.
Many of our brightest historical minds have understood the insanity of a national debt and the obvious answer of government-created money rather than bank-created credit, from the writings of Benjamin Franklin and our Founding Fathers to Thomas Edison and today's members of Congress, notably Dennis Kucinich and Ron Paul.
The following 8-minute video from The Money Masters gets to the heart of this solution; I recommend the entire 3.5 hours of viewing and the video at the end of my brief, Money as Debt II: Promises unleashed.
As always, please share this article with all who say they want to be competent citizens. If you appreciate my work, please subscribe by clicking under the article title (it's free).
The worship of Augustus Caesar and the Fall of the American Empire
“After striving in vain to uphold the tottering republic, Cicero lived long enough to perceive that the catastrophe was inevitable and that neither could he retard it, nor Caesar accelerate it. Rome was no longer a small commonwealth of free citizens, rendered more or less equal in rank by a substantial equality of fortune, attainments and political power. It had become a populous and unwieldy empire, composed of many conquered nations and tribes, differing in race, religion, language, history and degrees of social development. The republican constitution, which had sufficiently well fitted the infancy of this state, and which, had the state grown less rapidly, might have been gradually altered to suit its greatly altered manhood, was, under the circumstances, antequated and useless, as a means of repressing disorder, or preserving the peace.”
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