The Death Of Paper Money:
The US Economy Engineered To Fall
Acceptance Of A One World Currency On The Books
That No Man Might Buy Or Sell,
Save He That Had The Mark...
And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six (Rev. 13:16-18).
“United States shed twice as many jobs in July as expected
added to worries about the economic recovery.”
“Obama's pledge to retain more hi-tech jobs in the U.S.: train workers, including 3,000 specialists in IT and related functions, in South Asia.”
"It's just not safe to hold dollars. Quantitative easing is back on the table…”
Obama Launches New Program To Help Corporations
"Take Advantage Of Low Labor Costs" Abroad
August 06, 2010
Obama Launches New Program to Help Corporations
"Take Advantage of Low Labor Costs" Abroad
By David Sirota
http://www.informationclearinghouse.info/article26102.htm
August 06, 2010 "Open Left" -- In recent months, President Obama reversed his campaign promises on trade issues - first by dropping his pledge to renegotiate NAFTA and then by pushing to pass NAFTA-style trade agreements with South Korea, Panama and Colombia. Now, with the unemployment crisis persisting, the key jobs question is once again front a center in American politics. Specifically: How do we create jobs here at home and build our most valuable 21st century industries?
The first and foremost answer is that our government should stop doing stuff like the program described in this stunning new report from Information Week: U.S. To Train 3,000 Offshore IT Workers. Despite President Obama's pledge to retain more hi-tech jobs in the U.S., a federal agency run by a hand-picked Obama appointee has launched a $22 million program to train workers, including 3,000 specialists in IT and related functions, in South Asia. Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent's low labor costs...
The outsourcing program (is) sure to draw the most fire from critics. While Obama acknowledged that occupations such as garment making don't add much value to the U.S. economy, he argued relentlessly during his presidential run that lawmakers needed to do more to keep hi-tech jobs in IT, biological sciences, and green energy in the country. Now look, I'm all for a robust foreign aid budget - we don't do nearly enough to help the developing world. However, using foreign aid money to specifically help private corporations "take advantage of low labor costs" in the developing world - that's not "aid," that's rank taxpayer subsidization of for-profit exploitation.
Right now, even if we do not reform our atrocious trade policies that incentivize the ongoing wage-cutting race to the bottom, the least we should be doing is investing every single available dollar we have in job training and job creation here at home. Doing the opposite - actually using public dollars to intensify that wage-cutting race to the bottom - is grotesque. George W. Bush's administration was rightly criticized by progressives for publicly endorsing job outsourcing, and Obama's administration should be similarly taken to task for now putting taxpayer funds behind the previous administration's endorsement.
Dollar Nears 15-Year Low Versus Yen
Aug 6, 2010
Dollar nears 15-year low versus yen
By Vivianne Rodrigues
http://www.reuters.com/article/idUSTRE6713HB20100806
NEW YORK (Reuters) - The U.S. dollar approached a 15-year low against the yen on Friday and fell against the euro after news that the United States shed twice as many jobs in July as expected added to worries about the economic recovery. Analysts said the weak jobs report, combined with a recent string of poor data may lead the Federal Reserve to renew Treasury and mortgage bond purchases to jolt the economy. That would drag U.S. Treasury benchmark yields even lower and further dampen returns in dollar-denominated assets. "It's just not safe to hold dollars. Quantitative easing is back on the table and it will push yields even lower," said Douglas Borthwick, head trader at Faros Trading LLC, in Stamford, Connecticut. "There are very few reasons out there to buy it."
While U.S. employers did add 71,000 private-sector jobs in July, that was below forecasts for a 90,000 gain, helping to push the euro to a three-month high above $1.33. Total non-farm payrolls fell as temporary government jobs to conduct the census dropped. The dollar fell as low as 85.03 yen, its lowest level since November and near a 15-year trough beneath 85. Sterling hit a six-month high near $1.60. The jobs report "is really going to deepen concerns about the health of the labor market, and that increases the odds of the Federal Reserve having to implement fresh stimulus measures to jump-start the recovery," said Joe Manimbo, analyst at Travelex Global Business Payments in Washington.
The data also drove two-year U.S. Treasury yields to the latest in a string of record lows, further undermining the dollar's yield appeal. Analysts said things don't look likely to get better for the greenback ahead of the Fed's next policy meeting on Tuesday. William Reekstin, a director with Direct Access Partners, in New York, said the dollar is in a consolidation mode against its counterparts and that the euro will find resistance to further gains at 1.3416.
Watching The Yen
The dollar was down 0.7 percent at 85.26 yen. It was near a 15-year low of 84.81 yen and its all-time trough below 80 yen, according to Reuters data. Support around 85 yen has held despite a number of assaults on the level. Boris Schlossberg, director of research at GFT Forex in New York, said the dollar will eventually break that level, "if not today, then early next week, as currency traders price in declining yields in the U.S. bond market." A dip below 85 yen could increase volatility and push Japanese officials to try to talk down the yen. Several lawmakers have warned that action may be warranted to weaken the yen and restore Japanese trade competitiveness, though analysts think it would take an extremely rapid rise to trigger outright intervention.
Euro, Sterling Rise
The euro was last up 0.6 percent at $1.3267 after earlier hitting $1.3333, its highest level since May. A weekly close above $1.3125, the 38.2 percent retracement of the euro's November-to-June slide, looks likely and, strategists said, would be a bullish sign pointing to more euro gains. Sterling rose 0.5 percent to $1.5961, its best showing against the greenback since February. Traders said that $1.5910 was now seen as support should the pound retreat. The dollar rose against its Canadian counterpart after data showed Canada's economy shed 9,300 jobs in July, compared with forecasts for a 15,000 gain.
IMF Blueprint For A Global Currency
Aug 5, 2010
IMF blueprint for a global currency
Financial Times
http://www.blacklistednews.com/news-9999-0-13-13--.html
An IMF paper--April, 2010, authored by Reza Moghadam, director of the IMF’s strategy, policy and review department, discusses how the IMF sees the International Monetary System evolving after the financial crisis. We’ll cut to the chase and draw readers’ attention to the final bubble…. Which means, in the eyes of the IMF at least, the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency (See UN Wants New Global Currency To Replace Dollar Solving The Problem Of Instability In International Financial Relations Viola, The Kingdom Of The Anti-Christ Has The Answer. Also, see Get Ready For A World Currency (Economist; 01/9/88, Vol. 306, pp 9-10) The Phoenix Dollar Advantage Russia Proposes Creation Of Global Super-Reserve Currency).
And that, the IMF says, is largely because sovereigns — as they stand — cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves. The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF. Or as they put it: The global crisis of 2008/09, for all its costs, has not jeopardized international monetary stability, and the IMS is not on the verge of collapse. That said, the current system has serious imperfections that feed and facilitate policies—of reserves accumulation and reserves creation—that are ultimately unsustainable and, until they are reversed, expose the system to risks and shocks that a reformed system could minimize.
All in all, the IMF believes there has simply been too much reserve hoarding going on: Reserve accumulation has accelerated dramatically in the past decade, particularly since the 2003-4. At the end of 2009, reserves had risen to 13 percent of global GDP, doubling from their 2000 level, and over 50 percent of total imports of goods and services. Emerging market holdings rose to 32 percent of their GDP (26 percent excluding China). Twenty-seven of the top 40 reserve holders, accounting for over 90 percent of total reserve holdings, recorded double digit average growth in reserves over 1999-2008. Holdings have also become increasingly concentrated, with over half the total held by only five countries. These numbers exclude substantial foreign assets of the official sector not recorded as reserves, including in sovereign wealth funds (SWFs), and yet invested in liquid, dollar denominated financial instruments, that have grown even more in recent years.
Of course, in the first instance, the solution probably lies in closer collaboration between sovereigns, most likely via the more active use of such things as special drawing rights, says the IMF. But in the end, a global currency makes the most sense, the paper concludes — especially since the SDR is currently just an accounting tool that draws on the freely usable currencies of member states, not an actual currency itself. As they summarize: 48. From SDR to bancor. A limitation of the SDR as discussed previously is that it is not a currency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions.
And though an SDR-based system would move away from a dominant national currency, the SDR’s value remains heavily linked to the conditions and performance of the major component countries. A more ambitious reform option would be to build on the previous ideas and develop, over time, a global currency. Called, for example, bancor in honor of Keynes, such a currency could be used as a medium of exchange—an “outside money” in contrast to the SDR which remains an “inside money,” But before you get ready to burn your fiat currency, it’s not actually a turnaround the IMF sees being executed any time soon. As they conclude: It is understood that some of the ideas discussed are unlikely to materialize in the foreseeable future absent a dramatic shift in appetite for international cooperation.
The Death Of Paper Money
July 25, 2010
The Death of Paper Money
By Ambrose Evans-Pritchard
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7909432/The-Death-of-Paper-Money.html
Federal Reserve chairman Ben Bernanke, himself a scholar of the Great Depression, has indicated he would consider extra stimulus for the economy…. As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974. During the inflationary crisis of Weimer Germany, grand pianos became a currency of sorts, according to an account of the period. Ebay is offering a well-thumbed volume of "Dying of Money: Lessons of the Great German and American Inflations" at a starting bid of $699. The crucial passage comes in Chapter 17 entitled "Velocity." Each big inflation -- whether the early 1920s in Germany, or the Korean and Vietnam wars in the US -- starts with a passive expansion of the quantity money. This sits inert for a surprisingly long time. Asset prices may go up, but latent price inflation is disguised. The effect is much like lighter fuel on a camp fire before the match is struck. People’s willingness to hold money can change suddenly for a "psychological and spontaneous reason," causing a spike in the velocity of money. It can occur at lightning speed, over a few weeks. The shift invariably catches economists by surprise. They wait too long to drain the excess money.
"Velocity took an almost right-angle turn upward in the summer of 1922," said Mr. O. Parsson. Reichsbank officials were baffled. They could not fathom why the German people had started to behave differently almost two years after the bank had already boosted the money supply. He contends that public patience snapped abruptly once people lost trust and began to "smell a government rat." Some might smile at the Bank of England "surprise" at the recent jump in British inflation. Across the Atlantic, Fed critics say the rise in the US monetary base from $871bn to $2,024bn in just two years is an incendiary pyre that will ignite as soon as US money velocity returns to normal. Morgan Stanley expects bond carnage as this catches up with the Fed, predicting that yields on US Treasuries will rocket to 5.5pc. This has not happened so far. 10-year yields have fallen below 3pc, and M2 velocity has remained at historic lows of 1.72.
As a signed-up member of the deflation camp, I think the Bank and the Fed are right to keep their nerve and delay the withdrawal of stimulus -- though that case is easier to make in the US where core inflation has dropped to the lowest since the mid 1960s. But fact that O. Parsson’s book is suddenly in demand in elite banking circles is itself a sign of the sort of behavioral change that can become self-fulfilling. As it happens, another book from the 1970s entitled "When Money Dies: the Nightmare of The Weimar Hyper-Inflation" has just been reprinted. Written by former Tory MEP Adam Fergusson -- endorsed by Warren Buffett as a must-read -- it is a vivid account drawn from the diaries of those who lived through the turmoil in Germany, Austria, and Hungary as the empires were broken up.
Near civil war between town and country was a pervasive feature of this break-down in social order. Large mobs of half-starved and vindictive townsmen descended on villages to seize food from farmers accused of hoarding. The diary of one young woman described the scene at her cousin’s farm. "In the cart I saw three slaughtered pigs. The cowshed was drenched in blood. One cow had been slaughtered where it stood and the meat torn from its bones. The monsters had slit the udder of the finest milch cow, so that she had to be put out of her misery immediately. In the granary, a rag soaked with petrol was still smouldering to show what these beasts had intended," she wrote.
Grand pianos became a currency or sorts as pauperized members of the civil service elites traded the symbols of their old status for a sack of potatoes and a side of bacon. There is a harrowing moment when each middle-class families first starts to understand that its gilt-edged securities and War Loan will never recover. Irreversible ruin lies ahead. Elderly couples gassed themselves in their apartments. Foreigners with dollars, pounds, Swiss francs, or Czech crowns lived in opulence. They were hated. "Times made us cynical. Everybody saw an enemy in everybody else," said Erna von Pustau, daughter of a Hamburg fish merchant. Great numbers of people failed to see it coming. "My relations and friends were stupid. They didn’t understand what inflation meant. Our solicitors were no better. My mother’s bank manager gave her appalling advice," said one well-connected woman. "You used to see the appearance of their flats gradually changing. One remembered where there used to be a picture or a carpet, or a secretaire. Eventually their rooms would be almost empty. Some of them begged -- not in the streets -- but by making casual visits. One knew too well what they had come for."
Corruption became rampant. People were stripped of their coat and shoes at knife-point on the street. The winners were those who -- by luck or design -- had borrowed heavily from banks to buy hard assets, or industrial conglomerates that had issued debentures. There was a great transfer of wealth from saver to debtor, though the Reichstag later passed a law linking old contracts to the gold price. Creditors clawed back something. A conspiracy theory took root that the inflation was a Jewish plot to ruin Germany. The currency became known as "Judefetzen" (Jew- confetti), hinting at the chain of events that would lead to Kristallnacht a decade later. While the Weimar tale is a timeless study of social disintegration, it cannot shed much light on events today. The final trigger for the 1923 collapse was the French occupation of the Ruhr, which ripped a great chunk out of German industry and set off mass resistance.
Lloyd George suspected that the French were trying to precipitate the disintegration of Germany by sponsoring a break-away Rhineland state (as indeed they were). For a brief moment rebels set up a separatist government in Dusseldorf. With poetic justice, the crisis recoiled against Paris and destroyed the franc. The Carthaginian peace of Versailles had by then poisoned everything. It was a patriotic duty not to pay taxes that would be sequestered for reparation payments to the enemy. Influenced by the Bolsheviks, Germany had become a Communist cauldron. Partakists tried to take Berlin. Worker 'soviets' proliferated. Dockers and shipworkers occupied police stations and set up barricades in Hamburg. Communist Red Centuries fought deadly street battles with right-wing militia. Nostalgics plotted the restoration of Bavaria’s Wittelsbach monarchy and the old currency, the gold-backed thaler. The Bremen Senate issued its own notes tied to gold. Others issued currencies linked to the price of rye.
This is not a
picture of America, or Britain, or Europe in 2010. But we should be careful
of embracing the opposite and overly-reassuring assumption that this is a
mild replay of Japan’s Lost Decade, that is to say a slow and largely benign
slide into deflation as debt deleveraging exerts its discipline. Japan was
the world’s biggest external creditor when the Nikkei bubble burst twenty
years ago. It had a private savings rate of 15pc of GDP. The Japanese people
have gradually cut this rate to 2pc, cushioning the effects of the long
slump. The Anglo-Saxons have no such cushion. There is a clear temptation
for the West to extricate itself from the errors of the Greenspan asset
bubble, the Brown credit bubble, and the EMU sovereign bubble by stealth
default through inflation. But that is a danger for
later years. First we have the deflation shock of lives. Then -- and
only then -- will central banks go too far and risk losing control over
their printing experiment as velocity takes off. One problem at a time
please (See
Get Ready For A World Currency (Economist;
01/9/88, Vol. 306, pp 9-10) The Phoenix Dollar Advantage Russia Proposes
Creation Of Global Super-Reserve Currency).
And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name. Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six (Rev. 13:16-18).
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