Part II

Part II

What Will It Take For North America

To Accept A Single Currency?

AMERO: Out Like The Old Peso, In Like The Euro

Black Monday:

What America's Real Inflation Rate Is

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).

Black Tuesday - 1929
Worst Day in Stock Market History

Sept 28, 2008 (Oct. 04, 2008)
Black Tuesday - 1929
Worst Day in Stock Market History
by Dustin Woodard, for About.com
http://mutualfunds.about.com/cs/1929marketcrash/a/black_tuesday.htm

Black Tuesday-Oct. 1929: "A veritable bedlam of activity reigned in leading stock brokerage houses in Seattle today as the greatest avalanche of security selling known to history was launched on New York exchanges. Executives and clerks, worn by almost constant application to duty for days past, and with little respite gained by the Saturday afternoon and Sunday intermission breasted the great tide of buying and selling orders with philosophical resignation… Curiosity seemed to prompt attendance of the greater part of the milling throngs in the board rooms." (The Seattle Times, October 29, 1929)

By the end of November, investors had lost $100 billion in assets in what was later called "The Great Stock Market Crash." In just two months, September and October, the stock market had lost 40 percent of its value. Black Tuesday usually marks the point where the Roaring 20’s ended and the Great Depression started. The stock market would continue to fall until bottoming out in July of 1932 with the Dow at 41.22, down 89.2% from 381.17 to 41.22. The stock market wouldn’t recover for another 22 years!

Sept. 29, 2008: Monday’s Stock-Market Decline: For the Record

Sept.r 30, 2008
Monday’s Stock-Market Decline: For the Record
THE NUMBERS GUY
by Carl Bialik examines the way numbers are used, and abused.
http://blogs.wsj.com/numbersguy/mondays-stock-market-decline-for-the-record-421/?mod=googlenews_wsj

When reporting on price changes in individual stocks, financial reporters generally include percentage drops, which is as it should be: A $2 drop in a $4 stock is very different from one in a $40 stock. But many reports about Monday’s 777-point decline in the Dow Jones Industrial Average, a composite of stock prices, called it a record decline. That’s true in absolute terms, but not in percentage points. The drop was 6.98%, which doesn’t even crack the 10 worst days, on a percentage basis, in the industrials’ history. The Dow dropped 508 points, or 22.6%, on Black Monday, Oct. 19, 1987. Concerning those three one-day declines of 13%, 12% and 10% over 10 days in 1929? None of them were more than 39 points.

Monday was a very bad day on Wall Street, but not the worst ever in percentage terms. Readers scanning the front pages of many newspapers this morning wouldn’t know that, though, from all the references to record declines, with qualifiers about the percentage decline de-emphasized. That’s partly because records make for more-dramatic headlines, and partly because many papers rely for their financial coverage on the Associated Press, which reported that “dismayed investors sent the Dow Jones industrials plunging nearly 800 points, the most ever for a single day.”

AMERO: Out Like The Peso, In Like The Euro

The Second Peso

Sept. 29 , 2008
Second peso
by Wikipedia

Throughout most of the 20th century, the Mexican peso remained one of the most stable currencies in Latin America, since the economy did not experience periods of hyperinflation common to other countries in the region. However, after the Oil Crisis of the late 1970s, Mexico defaulted on its external debt in 1982 and experienced several years of inflation and devaluation until a government economic strategy called the "Stability and Economic Growth Pact" (Pacto de estabilidad y crecimiento económico, PECE) was adopted under President Carlos Salinas. On 1 January 1993, the Bank of Mexico introduced a new currency, the nuevo peso ("new peso", or MXN), written "N$" followed by the numerical amount. One new peso, or N$1.00, was equal to 1000 of the obsolete MXP pesos. On January 1, 1996, the modifier nuevo was dropped from the name and new coins and banknotes – identical in every respect to the 1993 issue, with the exception of the now absent word "nuevo" – were put into circulation. The ISO 4217 code, however, remained unchanged as MXN.

The 1994 economic crisis in Mexico, widely known as the Mexican peso crisis, was triggered by the sudden devaluation of the Mexican peso in the early days of Ernesto Zedillo's presidency. A week of intense currency crisis was stabilized when US President Bill Clinton, in concert with international organizations, granted a $50 billion loan to Mexico. While the crisis took place under President Zedillo, the causes are usually attributed to Carlos Salinas de Gortari's outgoing administration. Salinas de Gortari partially coined the term "December Mistake" when he referred to Zedillo's sudden reversal of the former administrative policies of tight currency controls, "a mistake." His government's currency policy put a strain on the nation's finances, despite some saying the economic bubble gave Mexico prosperity.

As in prior election cycles, a pre-election disposition to stimulate the economy, temporarily and unsustainably, led to post-election economic instability. There were concerns about the level and quality of credit extended by banks during the preceding low-interest rate period, as well as the standards for extending credit. The country's risk premium was also affected by an armed rebellion in Chiapas, causing investors to be wary of investing their money in an unstable region. The Mexican government's finances and cash availability were further hampered by two decades of increasing spending, debt loads, and low oil prices. Its ability to absorb shocks was hampered by its commitments to finance past spending.

Economists Hufbauer and Schott (2005) have commented on the macroeconomic policy mistakes that precipitated the crisis:

1994 was the last year of the sexenio, or 6-year administration of Carlos Salinas de Gortari who, following the PRI tradition on an election year, launched a high spending splurge and a high deficit.
In order to finance the deficit (7% of GDP current account deficit), Salinas issued the Tesobonos, a type of debt instrument denominated in pesos but indexed to dollars.
Mexico experienced lax banking or corrupt practices; moreover, some members of the Salinas family collected enormous illicit payoffs
The EZLN, an insurgent rebellion, officially declared war on the government on January 1; even though the armed conflict ended two weeks later, the grievances and petitions remained a cause of concern, especially amongst some investors.

What's America's Real Inflation Rate?

If The Rate Is So Low, How come Food And Energy Cost So Much?

March 19, 2008
What's America's real inflation rate?
If rate is so low, how come food and energy cost so much?
By Jerome R. Corsi
© 2008 WorldNetDaily
http://www.wnd.com/index.php?fa=PAGE.view&pageId=59409

Why is it that the federal government says the U.S. has virtually no inflation – less that 2 percent – but everything keeps getting more expensive, especially food and gasoline? Today, gasoline is well above $3.00 a gallon. "Sticker shock" comes not just from the cost of buying a new car, but from the $50.00 or more it costs to fill up the gas tank, even if you don't own an SUV. You're lucky if $100 buys two bags of groceries at the supermarket, even if you avoid the filet mignon. Take a family of four to a movie theater to see a first-run film and it can cost $75 even in the Midwest. You will shell out somewhere between $6 and $9 just for one adult ticket, and you can end up spending somewhere between $65 to $75 total if all you do is spring for the luxury of popcorn and sodas. Still, the U.S. Department of Labor's Bureau of Labor Statistics reported in August 2007 a remarkably low inflation rate of only 1.7 percent.

Solving this riddle – that is, why everything costs so much when the government tells us inflation rates are low – is simple: The Bureau of Labor Statistics lies. Inflation numbers are intentionally manipulated to keep cost-of-living numbers low. If the average chief executive officer cooked balance sheet numbers the way the U.S. Bureau of Labor Statistics calculates the Consumer Price Index, the CEO would be in jail, even without Sarbanes-Oxley reporting standards. Why does the federal government lie about inflation? Again, the direct answer is simple. Telling the truth about inflation would require the Federal Reserve to raise interest rates and that would be bad for economic growth. Besides, hundreds of billions of dollars in government entitlement payment outflows depend on the inflation number. For instance, federal law mandates that Social Security checks increase thanks to "cost-of-living adjustments," or COLAs, that are supposed to compensate for inflation. So, higher inflation numbers cost the federal government millions more in increased Social Security payments.

But when the Bureau of Labor Statistics intentionally rigs the Consumer Price Index calculations to low-ball the inflation rate, Social Security entitlement payments are kept level. As a result, retirees quietly lose billions of dollars that should have been paid out, had the cost of living numbers been reported honestly. But the government saves the expense. How does the federal government manipulate inflation numbers? The Consumer Price Index, or CPI, is the central statistic the federal government uses to calculate inflation. The CPI is a complex government statistic that was introduced in the 1920s to track the market cost of a "basket of goods and services." Beginning during the Carter administration, federal economists cleverly redefined the CPI, with the goal of removing from the index expensive items, including food and energy, that would push the CPI higher.

Today, the Federal Reserve when setting interest rates focuses on a variation of the CPI that measures "core inflation." According to the Forbes "Investopedia," core inflation excludes items such as food and energy because food and energy "face volatile price movements." In other words, since food and energy prices can spike upwards, as they have this year, the Bureau of Labor Statistics calculates "core inflation" without food and energy prices, under the rationale that food and energy price spikes are merely temporary price shocks that would distort the measurement of underlying long-term inflation. To a family faced with paying rising food costs to feed the kids and skyrocketing gas costs just get to work, the definition of "core inflation" at 2 percent is a joke, not at all reflective of the increased dollars the family has to shovel out just to get by.

Even more disturbing, the Bureau of Labor Statistics' calculation of "core inflation" is not limited merely to throwing food and energy prices out of the CPI. The price of any good or service in the CPI market basket prone to spiking can be thrown out, under the rationale that the items with the largest price changes reflect passing market disequilibrium that would distort the measurement of long-term trends. When removing expensive items from the CPI market basket of goods and services was not enough to depress inflation numbers, the Bureau of Labor Statistics innovated even more, changing the "weighted factors" used in calculating CPI statistics, so the results end up under-reporting the true inflation people experience in everyday living.

So, What Are Americans Going To Do About It?

Nothing. Americans will complain but are waiting for someone to do the rescuing. They have been pre-conditioned to accept what is handed out to them, up to a certain point. Just when the bottom looks to be falling out and Americans and Canadians no longer can sustain their standards of living, the US Congress and Canadian Parliament will introduce the Amero to rescue the citizens of North America. Mexico will follow along. How did runaway inflation, which is not officially recognized, become reality? Mexico and its conversion to their new currency is a lesson in history which provides the answer.

1. Pre-election dispositions to stimulate the economy, temporarily and unsustainably. 2. The Mexican government's finances and cash availability were hampered by two decades of increased spending, debt loads, and low oil prices (exportation and government subsidized oil cost the government [since America imports the high cost is the killer in this case for the average household]). 3. Its ability to absorb shocks was hampered by its commitments to finance past spending. 4. Inflation. 5. High spending splurge and a high deficit. 6. Mexico experienced lax banking or corrupt practices; moreover, some members of the Salinas family collected enormous illicit payoffs. 7. In order to finance the deficit (7% of GDP current account deficit), Salinas issued the Tesobonos, a type of debt instrument.

Sound familiar? The same pattern the US has basically followed. Mexico issued a new currency to help relieve the problem. The US restored confidence in the Peso by lending billions of dollars. When the American and Canadian economies come crashing down the answer will be a new North American currency base on the Euro model. The EU may lend billions of Euro's to give credibility to the new currency. Why, that is just one step to a global currency which will be used by the anti-Christ to control his global kingdom.

And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; buy receive power as kings one hour with the beast. These have one mind, and shall give their power and strength unto the beast. (Rev.17:12-13)