The financial system established in England after 1688, based on usurious lending to the state by private bankers, is reaching its final blowout in the form of a series of devastating bubbles and a massive bailout of the financiers with public money. But the issuance of money doesn’t have to be in the hands of a private consortium: another credit system is possible.
China: Carpe Diem!
Axel Merk, December 9, 2008 Merkfund
China has a unique opportunity and responsibility to shape not only its own future, but also that of the global economy. While China is by no means responsible for the plight the world faces, it has played an important role in allowing global imbalances to be built. If China decides to help prop up the world economic model that got us into trouble in the first place, we may face the same challenges again a few years down the road. Except then, China may not have $2 trillion in reserves to rescue its economy, and could face severe challenges. China will ultimately act in its own best interest, but prudent she must be. The time for China to act is now. Read the rest of this entry »
Spiegel
Global Crisis Hits Shipping Industry
Freight and charter rates have plunged, jobs are being cut, and many ships are being parked for months at a time
By Thomas Schulz
Shipping benefits from globalization more than almost any other sector. But this has also made it more vulnerable to the global economic crisis. Freight and charter rates have plunged, jobs at shipping companies are being cut and many ships are being parked for months at a time. Read the rest of this entry »
Plunging shipping costs send grains globetrotting
By Lisa Shumaker
Reuters iht
Monday, December 8, 2008
CHICAGO: Ocean shipping costs have plunged to 22-year lows, skewing global grain-trading patterns to the point where hog farmers in the United States are importing wheat from Britain and Japan has shunned American corn in favor of supplies from Ukraine. Read the rest of this entry »
LONG BEACH, California (Reuters) – From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation’s worst auto market in more than 25 years.
December 6 (LPAC)–The bailout, as presented, is addressing the wrong problem by the wrong methods, and is making the situation worse, not better.
Caught in the grip of an accelerating panic, the financial world is demanding that the world’s central banks and governments turn on the printing presses and flood the system with money, far beyond what they have already done. It’s not working, they scream, so we need more, more, more!
5/12/08 Networknews
There is no other leveraged commodity market where short sellers increase their positions, materially, as the price rises, and increase them even more when prices are exploding, except gold and silver. The reason traders don’t normally do that is that it exposes short sellers to unlimited liability and risk. Yet, in both March and July 2008, and on countless occasions over the past 21 years, vast numbers of new gold and silver short positions were temporarily opened up, with the position holders seemingly unconcerned about the fact that precious metals had just risen exponentially, and that there was a very real potential they would bankrupt themselves with unlimited upside potential. Normal traders would not expose themselves to such unlimited risks. Read the rest of this entry »
December 2, 2008, was a landmark in the saga of the collapsing international monetary system, yet it did not deserve to be reported in the press: gold went to backwardation for the first time ever in history. The facts are as follows: on December 2nd, at the Comex in New York, December gold futures (last delivery: December 31) were quoted at 1.98% discount to spot, while February gold futures (last delivery: February 27, 2009) were quoted at 0.14% discount to spot. (All percentages annualized.) The condition got worse on December 3rd, when the corresponding figures were 2% and 0.29%. This means that the gold basis has turned negative, and the condition of backwardation persisted for at least 48 hours. I am writing this in the wee hours of December 4th, when trading of gold futures has not yet started in New York.
According to the December 3rd Comex delivery report, there are 11,759 notices to take delivery. This represents 1.1759 million ounces of gold, while the Comex-approved warehouses hold 2.9 million ounces. Thus 40% of the total amount will have to be delivered by December 31st. Since not all the gold in the warehouses is available for delivery, Comex supply of gold falls far short of the demand at present rates. Futures markets in gold are breaking down. Paper gold is progressively being discredited. Read the rest of this entry »
I must be getting old. I keep thinking about things I used to think about 40 years ago and can’t remember the name of the person I met two minutes ago or what I had for dinner yesterday. It’s ok; there are alternatives to getting old and they are all bad. Read the rest of this entry »
If anyone doubted that a class war is in progress, hidden beneath a variety of euphemisms, like ‘bail out’, ‘downsizing,’ ‘outsourcing’ and ‘NAFTA’, their doubts can now be given the decent burial that they deserve. There has been no more blatant act of class antagonism in recent memory than the apparent willingness of Congress and Wall Street’s appointed grifter, Henry Paulson, to let a major part of the American manufacturing sector die.
The effects of the global credit crunch are forcing British politicians to re-evaluate the benefits of the UK adopting the euro, according to European Commission president Jose Manuel Barroso.
“We make money the old fashioned way. We print it.”
– Art Rolnick, Chief Economist for the Minneapolis Federal Reserve Bank
The $700 billion that was arm-twisted from Congress by Treasury Secretary Hank Paulson in October was evidently just the camel’s nose under the tent. According to a November 24 Bloomberg report, the Paulson/Bernanke team is now prepared to pay $7.76 trillion to rescue the financial system.[1] Prepared to pay how? Congress has not raised its debt ceiling to anywhere near that level; but the approval of Congress, which originally voted down the controversial $700 billion bailout, is apparently no longer necessary. The door has been opened, and the Treasury Secretary and Fed Chairman feel they can now pledge whatever they want. Perhaps they are inching up a zero at a time just to see what the public’s tolerance is for unrepayable debt. The new sum – $7.76 trillion – represents $25,000 for every citizen in the country, or half the value of everything produced in the nation last year; yet it’s not clear that a mere half of our net worth will rescue the financial system. One bankrupt bank after another has been bailed out with public money, in a futile effort to prevent a collapse of a massive multi-trillion dollar derivatives pyramid created by the banks.[2] But according to the Comptroller of the Currency, U.S. commercial banks now carry over $180 trillion in derivatives on their books. The public is liable to be bankrupted before this mess is resolved. Read the rest of this entry »
In These New Times 