Arab central banks move assets out of dollar

[bishop]

article

Middle Eastern anger over the decision by the US to block a Dubai company from buying five of its ports hit the dollar yesterday as a number of central banks said they were considering switching reserves into euros. The United Arab Emirates, which includes Dubai, said it was looking to move one-tenth of its dollar reserves into euros, while the governor of the Saudi Arabian central bank condemned the US move as "discrimination". Separately, Syria responded to US sanctions against two of its banks by confirming plans to use euros instead of dollars for its external transactions. The remarks combined to knock the dollar, which fell against the euro, pound and yen yesterday as analysts warned other central banks might follow suit. Last week the US caused dismay after political opposition to the takeover of P&O by Dubai Ports World forced DPW to agree to transfer P&O's US port management business to a "US entity" . The governor of the UAE central bank, Sultan Nasser al-Suweidi, said the bank was looking to convert 10 per cent of its reserves, which stand at $23bn (£13.5bn), from dollars to euros. "They are contravening their own principles," he said. "Investors are going to take this into consideration [and] will look at investment opportunities through new binoculars." Hamad Saud al-Sayyari, the governor of the Saudi Arabian monetary authority, said: "Is it protection or discrimination? Is it okay for US companies to buy everywhere but it is not okay for other companies to buy the US?" Syria has switched the state's foreign currency transactions to euros from dollars, the head of the state-owned Commercial Bank of Syria, Duraid Durgham, said. Last week the White House told US financial institutions to terminate all correspondent accounts involving the Commercial Bank of Syria because of money-laundering concerns. Mohammad al-Hussein, Syria's finance minister, said: "Syria affirms that this decision and its timing are fundamentally political." The euro rose a quarter of one percentage point against the dollar to a one-week high of $1.1945, although it retreated in later trading. Monica Fan, at RBC Capital Markets, said: "The issue is whether we will see similar attitudes taken by other Middle Eastern banks. It is a question of momentum." Middle Eastern anger over the decision by the US to block a Dubai company from buying five of its ports hit the dollar yesterday as a number of central banks said they were considering switching reserves into euros. The United Arab Emirates, which includes Dubai, said it was looking to move one-tenth of its dollar reserves into euros, while the governor of the Saudi Arabian central bank condemned the US move as "discrimination". Separately, Syria responded to US sanctions against two of its banks by confirming plans to use euros instead of dollars for its external transactions. The remarks combined to knock the dollar, which fell against the euro, pound and yen yesterday as analysts warned other central banks might follow suit. Last week the US caused dismay after political opposition to the takeover of P&O by Dubai Ports World forced DPW to agree to transfer P&O's US port management business to a "US entity" . The governor of the UAE central bank, Sultan Nasser al-Suweidi, said the bank was looking to convert 10 per cent of its reserves, which stand at $23bn (£13.5bn), from dollars to euros. "They are contravening their own principles," he said. "Investors are going to take this into consideration [and] will look at investment opportunities through new binoculars." Hamad Saud al-Sayyari, the governor of the Saudi Arabian monetary authority, said: "Is it protection or discrimination? Is it okay for US companies to buy everywhere but it is not okay for other companies to buy the US?" Syria has switched the state's foreign currency transactions to euros from dollars, the head of the state-owned Commercial Bank of Syria, Duraid Durgham, said. Last week the White House told US financial institutions to terminate all correspondent accounts involving the Commercial Bank of Syria because of money-laundering concerns. Mohammad al-Hussein, Syria's finance minister, said: "Syria affirms that this decision and its timing are fundamentally political." The euro rose a quarter of one percentage point against the dollar to a one-week high of $1.1945, although it retreated in later trading. Monica Fan, at RBC Capital Markets, said: "The issue is whether we will see similar attitudes taken by other Middle Eastern banks. It is a question of momentum."

[bishop]

interestingly enough, our current account deficit hit a new record today. it increased by some 21% in just 3 months' time.

once again, economists are talking about a run on the dollar.

article

So far, foreigners have been happy to sell Americans their crude oil, cars and computers and take U.S. dollars in payments. But economists worry that the trade deficit has grown so large that foreigners may balk at holding so much of their investments in U.S. assets such as stocks and bonds. If they began dumping their U.S. assets, it could send the value of U.S. stocks and bonds plunging, pushing up American interest rates and weakening the value of the dollar. If the disruptions were severe enough, it could push the country into a recession. Former Federal Reserve Chairman Alan Greenspan said last year that the growth of the current account was unsustainable, but he predicted that market forces would drive an adjustment to a smaller deficit without serious disruption to the U.S. economy. For 2005, the $804.9 billion deficit reflected a huge jump in the deficit in goods to $781.6 billion, compared to $665.4 billion in 2004. America's surplus in services such as banking, insurance and tourism increased to $58 billion, up from $47.8 billion in 2004. However, the surplus in investments shrank to $1.6 billion last year, down from $30.4 billion in 2004. Economists said this surplus will eventually disappear altogether, reflecting the fact that the country is now the world's largest net debtor nation with foreigners owning more in U.S. assets than Americans own in foreign assets.

looks like there's some stormy waters ahead of us....

[Osborn F Enready]

That some of us have been calling for at least 2 years now.......

Here is a verbatim post I made in 2004 about the logical end we are now seeing.
http://www.land-o-tv.com/forum/viewtopic.php?id=2027

Alan Greenspan is saying the economy is being badly mismanaged:
http://www.latimes.com/business/la-fi-g … 6835.story
or truthout: http://www.truthout.org/docs_04/112104D.shtml

QUOTE
Foreigners will eventually sour on U.S. bonds and the dollar because of America's bulging trade and budget deficits, posing significant risks to the nation's economy, Federal Reserve Chairman Alan Greenspan said Friday in remarks that rattled financial markets.

Greenspan told a banking conference in Frankfurt, Germany, that international investors were likely to either unload their dollar-denominated investments or demand higher interest rates. Either scenario would present problems for an economy that is heavily dependent on foreign capital to fuel its free-spending ways.
<snip>
The Fed chief's concern about the deficits is not new, but his remarks were interpreted by some traders as a warning that a day of reckoning was drawing closer. And they came against the backdrop of the dollar's continued weakness in international currency markets.
-----------------------------------------------------------------------------------
Do the Administration's plans have any chance of keeping the US economy out of the tank?

Osborn predicts.... no.


The writing has been on the wall since 1913, and every year since has been creating a bigger hold to fall into.

Hope you all have parachutes.....

[Osborn F Enready]

Alan Greenspan has been a major player in this, though he claims to have always been in the opposite camp, he has struggled to balance the mess that is the Reserve system.

His own words said it long ago.....

http://www.restore-government-accoun...n-on-gold.html
"Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.”
-- Alan Greenspan


On April 19, 1993, after his speech to the Economic Club of New York, I asked Chairman Greenspan whether he still agreed with his reasoning and conclusions as cited below. He said "Absolutely," and added that he had recently reread the article.

I asked him in that case why he didn't speak out, and he said "Some of my colleagues at the institution I represent do not agree with me." At which point I said "But you know where all of this is leading to." He gave me a pained look and walked on.

This confirmation by the Fed Chairman is an important insight to interpreting much of what he has written and spoken about in the last few years.

Larry Parks, Executive Director
FAME

This article originally appeared in a newsletter called "The Objectivist," published in 1966

It was reprinted in the book Capitalism, the Unknown Ideal by Ayn Rand, with additional articles by Alan Greenspan and Robert Hessen, Signet Books 1967, pages 96ff.. This book is still in print at popular bookstores and can be ordered from Amazon.com

A quote from M. Greenspan: But the opposition to the gold standard in any form -- from a growing number of welfare-state advocates -- was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale. Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which -- through a complex series of steps -- the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

[Boetie]

Royalty for centuries has always known that investment in other currencies can be profitable.

To put it in simple terms it works like this: Say you take your dollars and convert them to pounds. The pound is valued less than the dollar. Your pounds are in a British bank earning interests. If the dollar drops to second and the pound goes up to first. You convert the pounds into dollars. The results is that you could end up earning up to 20 percent on your investment.

It's the little guy that gets screwed because he is locked into the currency of his country.

Also if you go for a long shot, such as a currency that ranks fourth of fifth and that currency goes up, you could realize a killing that you can never realize in the stock market.

[bishop]

greenspan's said a hell of a lot more than these pro-gold statements that people constantly cite.. gold is only tangentially relevant to this topic.

(i'm looking forward to reading his upcoming book.. i think that since he's retired from the central banker biz, that he's interested in giving us a clearer look into his own views..)

anyway... this is quite a precarious situation right now.. rising interest rates, rising inflation (which a depreciating dollar will only make worse)..

Quote by: osborn Do the Administration's plans have any chance of keeping the US economy out of the tank?

it is unavoidable imo... short of a miracle (a balanced budget), we should expect to see further deterioration in our financial imbalances.. one big issue is that if we should adopt protectionist measures to "correct" our problems, a solution that many laymen seem to support, this could end up causing other countries to dump their dollar assets.. china's the perfect example... our exposure and vulnerability to economic "warfare" is the greatest it has been in our nation's history - and it will be the straw that breaks the imperial giant's back. once countries like china and india develop into strong consumer markets such as our own, they won't need to rely on the american consumer like they used to.. once they begin to really dump their dollar holdings, assuming that we continue to ignore our massive deficits/debt, we should expect to see hyperinflation akin to germany prior to ww2..

german hyperinflation

[Sonart]

.


Scary thing is, the thing keeping us from defaulting on our massive national debt has been foreign investment. If that starts going away.... :eek:


.

[RickSp]

Quote by: bishop it is unavoidable imo... short of a miracle (a balanced budget), we should expect to see further deterioration in our financial imbalances.. one big issue is that if we should adopt protectionist measures to "correct" our problems, a solution that many laymen seem to support, this could end up causing other countries to dump their dollar assets.. china's the perfect example... our exposure and vulnerability to economic "warfare" is the greatest it has been in our nation's history.

All we need is a 21st century round of Smoot-Hawley type tariffs to set it off. Seventy years ago protectionism crippled globalization, prolonged the Great Depression and laid the groundwork for world war. We may be seeing history repeat itself.

[bishop]

yup....

this article represents a true doomsday scenario.. i don't think it's very likely that it will come to fruition, but it IS possible that it could:

http://www.asianews.it/view.php?l=en&art=5564


and for all the dumbassed pleebs living in the land of milk and honey, who think that we'll never have any problems, this is what happened during germany's bout with hyperinflation:



notice the huge jump between 1922-1923, and then how their monetary system completely broke down thereafter.. the system can crumble in a heartbeat.


fear of that situation becoming our reality is why i've advocated raising taxes on the rich, ending all of our unnecessary wars and foreign aid, eliminating all pork from the budget and ammending the constitution so that balanced budgets are mandatory.. and i'd use as much money as possible to pay down our debts because debt reduction also reduced the threat we face from countries that could run on the dollar.. the problem isn't fiat, it's corrupt politicians, an ignorant public and the lack of laws that prohibit deficit spending.

[bishop]

[Osborn F Enready]

Bishop, i'm in agreement for the most part, I just alledge this is merely writing on the wall.

What is happening now is the LOGICAL conclusion that the anti-federalists have been saying since the day the federal reserve was created.

They pointed it out all along the way as every recession was "created", and every penny of inflation was added.

This is further proof of who really runs the world, and why, and it clearly shows how we lost our economic freedom in 1913. Part of that inflation Germany saw was changes in the world economics market, and the changes in the recognition of gold affected by the U.S. intrest in the market.

Bishop said: fear of that situation becoming our reality is why i've advocated raising taxes on the rich, ending all of our unnecessary wars and foreign aid, eliminating all pork from the budget and ammending the constitution so that balanced budgets are mandatory.. and i'd use as much money as possible to pay down our debts because debt reduction also reduced the threat we face from countries that could run on the dollar.. the problem isn't fiat, it's corrupt politicians, an ignorant public and the lack of laws that prohibit deficit spending.

I agree with everything you say there, except the part about fiat. (that is another thread)

Would you or would you not say however, that SINCE the creation of fiat, which has ALLOWED the creation of wealth DIRECTLY by government, corruption of the system is what has caused this obvious end?

Do you not think it is obvious that this ability to create "un-accountable" monies by the goverment "strangely" coincides with the corruption of our laws of incorporation, our "interpretation" of application of individual rights in law to the states and fed being perverted, and the base building of the bi-partisan monopoly we see today?

This is a designed failure in my opinion, by those who already have the money with actual value, which is gold, diamonds, oil and information.

[bishop]

Quote by: osborn Would you or would you not say however, that SINCE the creation of fiat, which has ALLOWED the creation of wealth DIRECTLY by government, corruption of the system is what has caused this obvious end? Do you not think it is obvious that this ability to create "un-accountable" monies by the goverment "strangely" coincides with the corruption of our laws of incorporation, our "interpretation" of application of individual rights in law to the states and fed being perverted, and the base building of the bi-partisan monopoly we see today?

yes.. it's obvious that the current situation could never have happened had we decided against fiat.

however, fiat offers significant advantages over a true gold standard (i've repeatedly mentioned these in the many debates we've had about gold vs. fiat).. the problem is that our country's leaders have completely abandoned all sense of fiscal responsibility..

i'm about to go on a tangent, but it's relevant...

http://www-personal.umich.edu/~kathrynd/debtisgood.pdf

in the 70's, franco modigliani and merton miller challenged the notion of fiscal responsibility in corporate finance. before their groundbreaking research/conclusion, all corporations were extremely averse to having debt. they all wanted their balance sheets as free from debt as possible - this idea/philosophy was also widely shared by representatives in the federal government. miller and modigliani showed how debt isn't necessarily a bad thing, and that it could actually make a corporation stronger and more competitive.

the article i cited explains their theory in greater detail.. it also shows how we're seeing greater instances of corporate bankruptcies because of companies that adhere to the miller-modigliani theory (which essentially says that debt is a good thing).

given that these dipshits in government are all part of the corporate world, in one way or another, this can explain why we've seen such a deterioration in our country's fiscal position over the past 30 years - i.e. since the miller-modigliani theory was first introduced... this theory was like a wet dream to the elite, and provided them with far greater freedom than keynes's deficit spending theory could have provided. as time passed, and the government grew more corrupt, politicians increasingly supplanted keynes with the miller-modligiani theory and ramped up our deficits big time...


that's just my theory of how the country's finances seemed to completely unravel over the past 30 years... (personally, i happen to think that it's better than most.) as i said, for years before miller-modligiani, this country was VERY fiscally conservative for the most part (kennedy being the most glaring exception to the rule)...

while deficit spending and trade imbalances have certainly increased our standard of living, it's not a situation that can go on forever - which is precisely what greenspan has said.. a little bit of debt is fine, but too much sinks the ship...

to circle back, yes, we are in this situation because of fiat - but more accurately, imo - we are in this situation because congress has not imposed any checks and balances on spending. and since we have a lot of corrupt, miller-modligliani cultists in power, they are not nearly as averse to debt/deficit spending.


when/if the system crashes, it really won't matter what you own.. own all the gold you want - good luck if you can find someone who will actually accept it as a form of money... in times of crisis, essential commodities are the things that hold true value.. gold is just a useless rock, just as fiat is a piece of paper with fancy ink markings... oil has real value, so too does food.



just one other addition.. the original article mentioned a selling about $20 billion in dollar-denominated assets.. those are some VERY small potatoes. the problem is if other middle eastern countries decide to dump dollars themselves..

[PatrickHenry]

What happens on the day that Chicken Little has it right? When the sky falls?

Ancient prophecy: Revelation 18:7-19

Bring her flaunting and wild ways to torment and tears. Because she gloated, "I'm queen over all, and no widow, never a tear on my face," In one day, disasters will crush her-- death, heartbreak, and famine-- Then she'll be burned by fire, because God, the Strong God who judges her, has had enough. "The kings of the earth will see the smoke of her burning, and they'll cry and carry on, the kings who went night after night to her brothel. They'll keep their distance for fear they'll get burned, and they'll cry their lament: Doom, doom, the great city doomed! City of Babylon, strong city! In one hour it's over, your judgment come! "The traders will cry and carry on because the bottom dropped out of business, no more market for their goods: gold, silver, precious gems, pearls; fabrics of fine linen, purple, silk, scarlet; perfumed wood and and vessels of ivory, precious woods, bronze, iron, and marble; cinnamon and spice, incense, myrrh, and frankincense; wine and oil, flour and wheat; cattle, sheep, horses, and chariots. And slaves--their terrible traffic in human lives. Everything you've lived for, gone! All delicate and delectable luxury, lost! Not a scrap, not a thread to be found! "The traders who made millions off her kept their distance for fear of getting burned, and cried and carried on all the more: Doom, doom, the great city doomed! Dressed in the latest fashions, adorned with the finest jewels, in one hour such wealth wiped out! "All the ship captains and travelers by sea, sailors and toilers of the sea, stood off at a distance and cried their lament when they saw the smoke from her burning: 'Oh, what a city! There was never a city like her!' They threw dust on their heads and cried as if the world had come to an end: Doom, doom, the great city doomed! All who owned ships or did business by sea got rich on her getting and spending. And now it's over--wiped out in one hour!

America the Generous has been replaced by America the Cruel. Should we be surprised by her destruction?

[Protostar]

Quote by: bishop article

And this is EXACTLY what America deserves as a result of all this xenophobic fear mongoring about the US port situation. I don't blame them. I'd stop investing in the US as well. The fearmongoring socialists, threatening to intervene in the free market, have fucked up once again and now we will all suffer for it. Wonderful. :rolleyes:

[Osborn F Enready]

Bishop said: to circle back, yes, we are in this situation because of fiat - but more accurately, imo - we are in this situation because congress has not imposed any checks and balances on spending. and since we have a lot of corrupt, miller-modligliani cultists in power, they are not nearly as averse to debt/deficit spending.

I say:
While I agree with your summation, and a good one at that, I alledge that this that you are describing was part of the "logical progression" of the Keynes theory(of which I am no expert, so I tread here with an admitted lack of knowledge of the full Keynes theory.)

I have read enough of Keynes theory to put him in the same class as Marx, Lenin, Ceasar.

Here is one of many links I have found to summarize Keynes contributions to economics and world order.
http://cepa.newschool.edu/het/profiles/keynes.htm

Notice the list of Keynes work at the bottom, and the general trend towards socialism.


Keynes "Open Letter to President Roosevelt"
http://newdeal.feri.org/misc/keynes2.htm

I love his closing paragraph, and signature:

With these adaptations or enlargements of your existing policies, I should expect a successful outcome with great confidence. How much that would mean, not only to the material prosperity of the United States and the whole World, but in comfort to men's minds through a restsration of their faith in the wisdom and the power of Government!

With great respect,
Your obedient servant

J M Keynes

This, was the begginning of American Socialism in my opinion. A quick review of history shows you exactly where it has led, several great nations of great wealth, balanced on a theory of public disinformation, lies, and an underlying mission to reduce all nations to global servants to a national elite bank, that controls all labor, resources, and trade. This entire pyramid of power if followed through, will disenfranchise ALL people from government that are not already a part of it, and those a part of it will graduate to global power seats, of the global ruling elite class. If this pyramid (which is built upside down, point down) has its lies, misinformation and concealed mechanisms exposed, it will fail, and people will be forced back to the way nature intended, which is each man shall trade according to his own values, needs, and abilities at the OUTSET, and the market will compensate through observing demand based on ACTUAL market indicators.

Keynes did say one thing right..... his system would WELL SHOW the power of government, and that power is that if left allowed to, it will surely become as corrupt as the public will bear until revolt consumes the nation. Perhaps that is exactly the field they have been getting rich from causing, and fixing, repeatedly, by design?

Bishop said: when/if the system crashes, it really won't matter what you own.. own all the gold you want - good luck if you can find someone who will actually accept it as a form of money... in times of crisis, essential commodities are the things that hold true value.. gold is just a useless rock, just as fiat is a piece of paper with fancy ink markings... oil has real value, so too does food.

I say:
Oil has value, if you are trading oil to a refinery for food. Gold has value, and will always have value the world over, because of its inherant natural properties, and the uses those properties allow. Food, will ALWAYS have value, as it is fuel for humans, and we all need fuel at any price, which is one of the reasons food has been the biggest lever in the market "coercion" and tariffs.

This system has created madness, and corporatist anarchy where a solid system, with some shortfalls ONCE stood, and stood well. Yes, the old system had some recessions, some problems, and some shortcomings, but inflation was kept in check overall, and recessions of the time served a market purpose. Todays recessions are falsely created, their impact in situations like this can cause NATIONAL FAILURE, and an absolute loss of faith in the entire nations money and markets.

Bishop said: just one other addition.. the original article mentioned a selling about $20 billion in dollar-denominated assets.. those are some VERY small potatoes. the problem is if other middle eastern countries decide to dump dollars themselves..

I say:
I understand exactly what you are saying. This is the smallest tip of the missile that is poised to sink nations sticking through the surface of the silo in its launch proceedings.

One of two things can happen, in my opinion.

1)The U.S. can refire its markets and production abilities through hemp legalization and the removal of ridiculous farm subsidies, it can stop the war on drugs, and all of its spending except on drug education. IT can then set about preceedings to declare a national motion of impeachment on all seated elected representatives from either of the two major parties, based on their failure to execute their oaths when they signed in the Patriot Act without reading it, and then we can have a national re-election for all seats at the end of 2006, and start trimming government fat and aid programs in order to try to re-balance the budget. We should remove the IRS, go back to apportionment tax, and remove the income tax all together. We should seriously restructure property tax, and remove all Sin taxes, luxury taxes, gas taxes and all other non-essential taxes. We need to privatize the entire educational system. We need to cut demand for public services THROUGH EDUCATION and explain the need to cut all services that are NOT essential to government, and balance the budget on this principle.

We need to break up the national Corporate monopolies, re-institute anti-trust oversight and privatize all markets in the U.S. with the only regulation being on monopolization through mergers and other loophole systems that (must be) repaired, until repaired.

In this scenario, it would be hard, it would be painful, and it would probably cause some civil unrest, but it would be Constitutionally justified, and backed by our original intentions and basis of economic and poltical liberty, and would once again provide the basis for the free market to expand and re-establish this as the greatest trade market on earth.

2)OR, we could hope to balance out the market slowly, staying within the system we currently have, fending off the inevitable collapse a little longer as we watch inflation again take an upward spiral that has never, and will never return to near its base starting point. We can watch as the game plays out of national favors in politics for support of dollars in trade to float the system to the next generations, so THEY can deal with it. We can watch as the power monopolies (global, not national) increase their power, and control through manipulation of information, and rigged voting machines, and corporatist propaganda paid for by the Fortune 500.


In my opinion:
We first need to regain political power, and then we need to regain economic power. Then the people, not the government, can decide which path most suits THEM, through intelligent debate unmarred by corporate money and biased corporate bought and paid for media.

We are in dire need of sweeping reform, and a return to Constitutional Government. The question is to me, will the people see this as the clear, everpresent sign that it is?

[gr8fuldaniel]

Quote by: PatrickHenry What happens on the day that Chicken Little has it right? When the sky falls? Ancient prophecy: Revelation 18:7-19

Heres an interesting "de-coding" of the same verse.

[bishop]

good response osborn, thanks..

as far as keynes goes, his ideas have been some of the most misunderstood and abused out of any economist i can think of.. at their core, all true economists do not look at the world through skewed ideological lenses.. they look at the numbers, how they change when other variable change, etc.. keynes was hardly a socialist - but he did live and think during a period of time when millions of people began to seriously doubt capitalism as a viable economic system. the fact that the public repeatedly voted for FDR is a testament of that reality. it's a shame that so much damage has been done to keynes's good name - a man who predicted german hyperinflation btw.. all too often, people tend to look at political decisions based off of portions of keynes's overall theory, rather than looking solely at keynes's words without political bias.. fdr manipulated keynes's ideas as did jfk, reagan, bush jr... keynes's biggest fault was trusting that politicians could be competent leaders and practice prudent fiscal discipline.

i don't think the current situation is the logical progression of keynes's policy primarily because congress was averse to deficits long after his death - but things quickly began to change after miller-modigliani.. but i would agree that this is a logical progression under the assumption that human nature destines us towards corruption.

Quote by: osborn We are in dire need of sweeping reform, and a return to Constitutional Government. The question is to me, will the people see this as the clear, everpresent sign that it is?

we certainly are... there was a nice jousting match today between sec. snow and chairman bernanke on the subject of our debt ceiling that needs to be increased next week. snow recommended that congress should simply pass legislation to raise the debt ceiling without attaching any ammendments... bernanke said that congress SHOULD attach ammendments in order to reduce spending and get our house in order..

congress doesn't seem to have any appetite for fiscal responsibility... the dems want their pet programs, the republicans want their wars and tax cuts (and their pet programs like the medicare drug plan)..

i've always been a bit pessimistic about the future outlook.. things will collapse in some fashion before we see true reform. there is no other way imo - especially with half of the public voting against the other half (rather than for candidates with the best ideas who they have faith in)..

[rmnunez]

The sky is falling, the sky is falling! How come? Because the UAE is moving a tenth of its foreign holdings from Dollars to Euros (which fell against the Mexican Peso yeasterday) and Syria is "confirming plans" to make its relatively insignificant purchases in Euros. I thought Arab banks would actually be actually selling dollars wholesale, the UAE and Syria count as 1 and a half Arab banks. I hope critical lefties start selling their Dollars too, buy some Euros while they're still cheap!