A BRIC Thrown To President Obama

President Obama had a dream, but when he woke up he found a BRIC had been thrown through the White House window! (See the past opinion piece posting.)

The People’s Republic of China is ramping up the rhetoric. It is calling out the dangers of the world’s reliance on a “single sovereign-sovereign currency”. The danger lies in the “concentration of risk and the spread of the crisis”. Now, if this does not sound like “Reaganistic” Cold War Battle Cries, I don’t know what does!

Instead of the “menace” being the “Red Menace”, ie. Communism, it has become the United States via the dollar. (Read “Wary of Dollar, China Wants Super-Sovereign Currency”, Informationclearinghouse.net; Xin and Buckley, 6-26-09.)

The People’s Bank of China is inferring the U.S. dollar is becoming not only an international concern, and a risky global currency, but also the Boogieman’s currency for all to watch under a global microscope by the planet’s new CSI (‘Currency Scrutinizing Investigators’) forensic headquarters—The International Monetary Fund (IMF).

There is new pressure on the IMF, as they become the organizational body, to perform Timmy Geitheresque Currency Stress Testing on the dollar, as well as other currencies being considered for reserve currency status.

They might ask such questions as, will the dollar hold up under increased financial loads, such as further bankruptcies, to include credit card and commercial loans, further un-underemployment pressures, higher federal indebtedness, expansion of poverty figures, additional military expenditures and entanglements, decreasing private investments, increased personal savings (currently, it reached 6.9% of disposable personal income, and will likely reach 10% in the future), and more.

The sited authors stated “In an essay last March, [China’s central bank’s governor,] Zhou [Xiaochuan] caused a stir by suggesting that the Special Drawing Rights, the IMF’s unit of account, could eventually displace the dollar as the principal reserve currency.” OUCH!

It appears that China’s central bank’s governor, the equivalent of Federal Reserve bank governor Ben Bernanke, has pushed aside the Federal Reserve’s head honcho, and others, as he grabbles his way to the top of the heap in order to claim King of the Hill banker status. The blustery talk of Mr. “X” puts fear into the Dow Jones and forces the U.S. executive branch to go on the defensive. Bernanke ends up looking weaker and weaker on the domestic front, as well as the incompetent head of ‘Banksta Incorporated’ who has placed the U.S. economy into its dangerous tailspin causing a national security disaster.

Mr. “X”, China’s “Dragon Master”, appears to have come out showing he might be able to reduce Beanie Benny Bernanke into a naked pile of carved up flesh shavings. 

China’s Mr. “X” wrote an essay in March referencing a PBOC 670 page report recommending the use of the IMF’s SDR (Special Drawing Rights) currency as the principal reserve currency. The report Mr. “X” referenced said, “ to avoid intrinsic shortcomings in using a sovereign currency as a reserve currency, we need to create an international reserve currency that is divorced from sovereign states and can maintain a stable value over the long term”, as sited in the Xin and Buckley article. Again, these two authors bring more forward.

It seems that China has taken a lesson from the Little Boy Bush Presidential Playbook. In the chapter named Mind Control, and under the subchapter---Make Them Afraid, the Chinese government has raised the “Red Flag” that the “U.S. fiscal and monetary stimulus will generate inflation and drive down the dollar, handing Beijing big losses on its vast portfolio of U.S. bonds”, as was reported by Chinese officials.

The PBOC report, as sited by the mentioned authors, laid claim that much blame can be placed at the feet of poor regulation and supervision. “[There has been] inadequate [attention] paid to the risks.”

Once again, Mr. “X” slaps at “Bada Bing” Bernanke and Timmy “the Titanic” Geithner’s hands, as well as the others culpable as governmental incompetents who are using government positions to serve their financial crime syndicate masters, and accomplices in the theft of America’s wealth for the purpose of derivative gambling via the securities crap tables in order to make the top 10% extremely rich at the expense of everyone else, while bringing the nation to a Code Red National Security Risk level. Where is Tommy “the Tank” Ridge when you need him to dispense the duct tape and sheet plastic.

Team Obama is hoping none of these changes will happen very quickly, but if the U.S. economy continues to erode, falter, and sputter as seen with June’s unemployment figures, there is much for concern. Team Obama thinks it has time on its side because there maybe trouble brewing inside China’s Emerald City. Experts are saying that China maybe creating its own economic/financial bubble, the likes we saw break in 2007.

China is buying up huge amounts of commodities inflating the prices. This is a worry. Chinese lenders are handing out cheap yuan to commodity speculators, while those in the “real” economy are having a hard time getting access to cash.

Team Obama might be waiting to see if such a meltdown occurs inside China, which might defuse the alterations to the dollar as the reserve currency.

China has spent $4T yuan on its stimulus. Bank lending for the purpose of issuing credit has reached $6T yuan since December. “Much of this lending has not been used to support tangible projects but, instead, has been channeled into asset markets”, written by Mr. Andy Xie in his piece titled “Fear the Dark Side of China’s Lending Surge” (found on Bomlat.blogspot.com). Mr. Xie wrote further “The current surge in commodity prices, for example, is being fueled by China’s demand for speculative inventory. Damage to the domestic economy is already significant. If lending doesn’t cool soon, this speculative force will transfer even more Chinese cash overseas and trigger long-term stagflation.”

I believe we have seen this all before. Is China close to what we have already been experiencing with our economy? The flight of cash and investment, as well as the financial economy taking favor over the real economy is all too familiar to the U.S.

The People’s Bank of China’s vice-governor, Su Ning estimated more that $6T yuan of credit lines would be given to investors for the first half of the year. The economy expanded by 6.1% in the first three months, and is expected to grow by 7.0% from April to June.

China has seen significant outflows of capital exiting safe investments, such as money market funds into riskier credit and equity funds, such as emerging market funds.

Found on Bomlat.blogspot.com, Mr. John Lee was sited in his piece “Gloss Cannot Hide Rot in China’s Growth Story”, “Most Western commentators focus on the spectacular success of China’s export sector and the emergence of China as the world’s factory. But the greater contributor to Chinese growth is actually domestically funded fixed investment, which constituted over 50 percent of gross domestic product last year and more than 40 percent of that year’s growth.” “[B]ank loans drawn from citizen deposits funneled into state-controlled banks—constitute around 80 percent of all investment activity in the country.”

WOW!!! Does this sound familiar?

“Despite impressive GDP growth, about 400 million Chinese people have seen their net incomes stagnant or decline over the past decade. The income of the poorest 10% has been declining by 2.4% every year since the beginning of the century.”

Bloomberg News wrote this on 6-25-09: “hidden debt in China’s corporate sector is higher than revealed by official bank-loan data, since 44 percent of corporate capital expenditures in 2008 was financed by money whose source is literally unknowable.” This was the case with U.S. mortgage-backed securities and credit default swaps. The origin of those bonds was literally unknowable, too.

If this actually happens, and the U.S. economy picks up, then Team Obama will look good. But, if China is able to maintain a positive GDP, and avoid an economic meltdown by building its nation from within--domestically, then Team Obama will likely be permanently damaged for the rest of their one-trick pony show presidential term.

How can the United States have a ‘jobless recovery’, which is what the flap jawin’ media is hacking about? The stimulus package will save many government jobs, such as those employed by colleges, universities, junior colleges, and those inside government offices, but where will that lead? From where will the nation’s productivity evolve? How will it increase exports, reduce foreign oil, improve the consumer markets, such as the sales of the New GM? Is Team Obama seeing the purchase of a New GM automobile the end goal? 

What is now being written is that through increased personal saving, the consumer spending frenzy, which was extraordinary, will return to what will be seen as more normal. Yet, what will be normal will require a significant shrinkage in the consumer marketplace, such as fewer retail jobs and the entire supply chain that gets product on the shelf. There will be shrinkage in commercial real estate, and manufacturing, as well.

It sure appears that the shrinkage is not over. I suspect there is much more to come. Now, who will blink first: China or the United States? Will BRIC succeed or fail?

Henry Kissinger said that Obama is playing a game of chess. Those who will continue to suffer are those in the middle and lower classes as their pieces get knocked off the board. Yet, it is clear that the biggest financial banking syndicate: Goldman Sachs and CITI will be standing right behind President Obama pointing out the moves.

Thanks for reading, jerry

NPR's Fresh Air interview of Christopher Dickey on the Iranian Crisis

Once again, Ms. Terri Gross, the host of the Npr.org radio program, Fresh Air, has interviewed journalist Mr. Christopher Dickey, who spoke about the crisis in Iran and the a look into the future! This is extremely interesting.  Listen now.

The Iranian Crisis Discussed By Karim Sadjadpour on Fresh Air

This is a must listen to program!!! Mr. Karim Sadjadpour, a political analyst discusses the current political crisis in Iran with Ms. Terri Gross, host of the NPR radio program called Fresh Air. This discussion is excellent!!! He discusses the challenge President Obama will faced with if President Mahmoud Ahmadinejad is declared the official winner of their current election.

The Coming Economic Cold War Will Be President Obama’s Challenge

For anyone to believe the United States will soon return to a state of economic stability, I am afraid you have not been reading your herbal tea leaves correctly. Not only is there a new American paradigm emerging, but there is a new world paradigm on the horizon. For many Americans it is unlikely that they will ever return to a state of economic stability. And, for others, they may get closer to where they were before the big collapse, but not close enough.

The powerful economic forces in the world are all fighting for recognition as dominant players, while strategizing to become master players through their political maneuvers in order to position themselves in such a way so their currencies will evolve as the major trading reserve currencies above all others. It has become more visible and apparent that the United States has not been fully included in the current Eurasia summit conferences. As a matter-of-fact, we are being excluded, at this time. It not only has to do with the instability of the United States dollar and economy, but equally as much as it involves U.S. dollar hegemony, it is also about how other world powers are now realizing they can finally subdue its domination, without firing a shot, as well as reducing the sphere of influence by the world’s largest debtor nation—the U.S.

This overwhelming paradigm shift will be jettisoned by Russia and China supplanting the U.S. dollar as the world’s major reserve currency with, instead, other sovereign currencies. This dramatic change will be initiated as foreign central banks pull back their purchases of U.S. treasurys, especially those that are considered longer term investments—anything beyond a 10 year maturation.

The days of China and Russia subsidizing U.S. military expansion (approximately half of the U.S. budget) through the purchase of U.S Treasurys is coming to an end. Another way that the U.S redirects it currency back into the budget is by circulating it through the host nation’s central bank via the 737 military bases and installations established around the world. This, too, may be coming to an end. The U.S. may be finding Russia, China, Brazil, Pakistan, India, Iran, and Malaysia removing its pawns, knights and bishops from the world’s chessboard. The nations with budgetary surpluses now have greater control over the one country, which was so willing to destroy its real economy, and replace it with a phony financial-monopoly based economy full of fake securitized debt instruments, which were given fake high AAA ratings, and insured against their failures through Ponzi-style credit default swaps; and, as a result of such foolhardy willingness shown by Reagan, Bush, Clinton, Bush, and now, Obama, the U.S. will more than likely find itself in a continuous decline as it throws more of its economic resources into the burn-barrel of financial institutions.

For President Obama to even think of giving Federal Reserve Chairman, Ben Bernanke any oversight powers, is to give a pyromaniac oversight control of the burn-barrel. And, to allow his voice to structure new regulatory rules over the financial sector would be like letting a bank’s personnel director hire professional bank robbers as night janitors!

Bernanke is culpable in this economic collapse. He has been deeply embedded in the plot by the top 20 banks to take over the Treasury, and the Federal Reserve’s resources.

We have now learned that 10 financial banks want to pay back $68 billion of the $700 billion allocated TARP funds. Now Kevin Hall of McClatchy News has spun propaganda by stating that “the TARP bailout turns out to have been good business for the U.S” in his article of the same name. He says that out of the $68 billion, the U.S government received $1.8 billion in dividends. “That translates to an annualized rate of return of about 4.64 percent on the $68 billion.”

Out of the $700 billion allocated for TARP, there still remains $134 billion still remaining in the program’s account. Subtract the $68 billion, and there still remains $498 billion still outstanding by the remaining 9 financial banks. $566 billion was actually lent out. Only around 15% is now planning to be paid back.

The question is what kind of impact did this $1.8 billion have on the GDP? Or, on the productivity of the country, for that matter? The answer is zero! Did it improve the plight of the suffering working American? NO! I am sorry Kevin, but I don’t see how the bank bailout was good business for the U.S.

Had the banks been allowed to fail, and all the funds that were handed over to the zombie financial banks, including the measly $566 billion out of the $11 trillion total amount of money made available to the zombie financial banks, the U.S. government might have been able to gather a return by investing nothing, but instead, taking control of the bank’s assets, and once taken over through receivership, then the toxic mortgage debt could have been auctioned off for around 22 cents on the dollar. Bank receivership would have been better business for the U.S. in the long run. And, better for working people. In spite of all the party favors given to the financial banks, credit is still frozen because the banks are hoarding the money for their own protection.

Now, had the government made available the $11 trillion to those companies in the real economy, as loans, to, once again, build up a Green and vibrant manufacturing sector, workers would have been hired, who would be paying income taxes, and stimulating the economy through spending. Foreclosures would have slowed months ago. The peripheral economy that surrounds the manufacturing economy, such as services, would hire workers and the nation’s productivity would grow, as well. And, the businesses would be paying back the government in taxes. Such a plan would have been a real stimulus improving the GDP far better than lending money to the hoarding financial banks that were responsible for the economic collapse in the first place!

Another weak aspect of President Obama’s regulatory plan would allow credit default swaps to go unregulated only if they were considered to be “custom” by the insurer—our government protected financial crime syndicate. And, of course, “custom” swaps would be the majority issued. Credit default swaps continue to amount to $30 trillion, and were a major player in the collapse of our economy because they went unregulated. So, for the most part, President Obama wants to continue walking the path toward the Gates of Hell!

The path President Obama has chosen will very likely embolden the neo-fascist Right wing hate-talk media voices doing what they can to bring about a sea change of civil unrest the likes of which many of us have never seen. He will deliver it to them because his decisions allowed for it to evolve. For a person as smart as he seems, he lacks the ability to see the cause and affect, 3 or 4 moves ahead, of his decisions. Some believe the opposite, that he sees moves forward, but I must differ with that observation.

The foreign countries mentioned above are sick and tired of being forced to buy Treasurys through the cycling of dollars they receive from U.S. corporate business sectors buying up their cheap goods and services, and foreign corporations, as well as having dollars circulated into their banks as a result of U.S. military installations situated in their countries, which is then used to further support these same U.S. military bases and facilities they would like to see closed up and moved out.

Foreign central banks don’t have very much they can buy with dollars except Treasurys and American corporations, only when the U.S government permits it.

This change will likely happen. China and Russia have seriously created a plan during their BRIC (Brazil, Russia, India, and China) summit in Katerinburg, Russia. The U.S. was told “No” you are not invited, even as a passive observer.

President Obama’s actions have advanced the Economic Cold War. [Read Dr. Michael Hudson’s enlightening article, “Appointment in Yekaterinburg: The Ending of America’s Financial-Military Empire”, Counterpunch.org, 6-20-09.]

The result of the U.S.’s possible loss of the dollar as the world’s central reserve currency will be hyper-inflation because the Federal Reserve will print much more money. It is likely that there will be more job losses, significant rollbacks with state and local budgets and a shake-up in the way President Obama has been doing business, as well a Republican uprising inside Congress.

In the June 17, 2009 Wall Street Journal, there was an article about how hedge funds are foreseeing inflation with regard to commodity prices in the nation’s future and investors are betting on it happening. Such news materializing would be bad for the average working person. I have my doubts that commodity prices could inflate much more without higher wages being realized. Consumers would just cut back on spending forcing commodity prices to fall. It is a hedge fund gamble.

China, Russia and the other foreign nations realize they cannot kill their consumer export market in the U.S., but will be able to bring it to its knees as they begin to dictate new rules. They will capitulate and continue to buy U.S. Treasurys, but it will be on their terms, as they “negotiate” a reduction in U.S. military expenditures reducing our dominant influence in Eurasia.

Without the U.S government’s ability to borrow from the world’s budget surplus nations, it will not be able to spend and expand its own budget deficits. Government spending reductions will squeeze the economy, and shrink government programs, services, and entitlements, along with contributions to the states. But rest assured, the Bush-Obama bail-out/rescue plan delivered to the financial banking sector occurred as a result of demands they made to be protected from the coming squeezes, such as with luxurious wages, once the economy begins to further fold in on itself. These oligarchs have demanded they be insulated from any of the financial suffering the rest of the population will experience.

Thanks for reading, jerry

Read This

America-Take A Lesson From The Iranian People!

Why is President Obama capitulating to the political right after so many liberal-progressive voters chose him as their candidate and choice for president? By taking such moves, which are not even “center-based”, he has alienated a great many of his supporters. As Bill Maher has stated, “I didn’t vote for this!”

Progressives, liberals, or for that matter, many former-Reagan Democrats have flared up their ire, which is worse than whacking your big toe against a fixed object, when Obama began reversing his support for Democrats who protested against the White House when it decided to rally behind the telecom industry’s subversive Stalinesque use of their technologies to gather intelligence, without warrants, against everyday Americans. Didn’t Little Boy Bush do that?

We call these acts spying! Stalin, Khrushchev, Mao, Castro, Pinochet, Bush, and, of course, Hitler all spied on their own people, and now, Obama has walked that supportive tightrope. Such actions are part of the neo-con battle cry, and Obama has raised a few masts in that direction.

Another sail flapping on the Demo-con's phantom ship has emboldened across its sailcloth is his support for government funded faith-based initiatives. Just because he believes in religious action for people in need, it does not mean that it has to be financially supported through the government’s budget. Why is it that the government cannot directly fund such initiatives without having to go through religious organizations? I always thought there was a separation between church and state, but that belief continues to get whittled away.

The same questions come up over and over again in regards to the Federal Reserve Bank. Why is it that the government borrows money from the Federal Reserve, a private banking organization, in order to operate? The Federal Reserve buys government issued Treasuries, sells them, and then loans the government money. The US government, then in return, pays the Federal Reserve interest on the money it borrows.

Does this make any sense? Why cannot the US government establish its own bank, through the Treasury, and operate it without having to pay interest to itself? Why is the Federal Reserve still operating? It is because the international bankers, who sit on the Federal Reserve board, have incredible power over the government. The Federal Reserve Bank is just one of other international central banks affiliated with the International Bank of Settlements, which is the chief central bank for all these world banks.

Dr. Ellen Brown, of webofdebt.com, wrote about the innovative Bank of North Dakota (BND), which is North Dakota’s state owned bank, established in 1919. It just so happens that North Dakota has a budget surplus because of the way they use this bank. “By law, the state must deposit all its funds in the bank, which pays a competitive interest rate to the state treasurer. The state rather than the FDIC guarantees the bank’s deposits, which are plowed back into the state in the form of loans. The bank’s return on equity is about 25% and it pays a hefty dividend to the state, which is expected to exceed $60 million this year. In the last decade, the BND has turned back a third of a billion dollars to the state’s general fund, offsetting taxes. The BND avoids rivalry with private banks by partnering with them. Most lending is originated by a local bank.”

If this is just fine for North Dakota, then why is it not good enough for the federal government? Why must we have a Federal Reserve, when we can have the USA Bank? And, why is not every state legislature establishing their own state-owned banks to build equity for their state treasuries? It appears that every state can become solvent, and fund their own projects through their own state-owned banks paying itself interest and dividends?

Dr. Brown writes, “North Dakota has also managed to avoid the credit freeze, through the simple expedient of creating its own credit. It has led the nation in establishing state economic sovereignty.” “Only three of fifty states are now solvent, meaning they have the revenues to meet their state budgets; and one of them is North Dakota.”

She discusses that if we had our own national bank, then we could lend operating capital to our newly acquired car company-GM. She says “One advantage of a government-owned bank is that it could fund public projects interest-free or nearly interest-free, cutting production costs dramatically. Interest comprises as much as 77% of the cost of goods and services, such as public housing, that require large amounts of capital.”

Imagine our own government-owned bank creating jobs through the people’s GM company building electric cars leased by the US government, intra-city commuter rail cars, innovative and energy efficient buses, and alternative energy products, such as battery technology. The return on such an investment would generate jobs and real Green Shoots throughout the nation.

There are major concerns burdening working class Americans and government supported domestic spying, or faith-based initiatives are just some of several policies that need to be surgically removed from the cancerous growth spreading throughout the White House. President Obama has seamlessly connected some of the Bush dots into his own matrix.

A declining dollar, rising un-underemployment, stagnant wages, an escalating war in the Middle East, rising consumer prices, and energy costs, unaffordable health care, a mounting debt crisis causing destruction to the economy, and more are the most acute problems facing this nation. Yet, Obama wants to make great speeches addressing issues that are not life threatening, at this time, like the ones just mentioned.

President Obama embeds former president and CEO Edward Whitacre of A.T.&T to the helm of the new government controlled, but with no control, G.M. As we recall during the Bush administration, this telecom company and others were involved in offering up data information about Americans without their consent and had allowed the government to just directly hook up to their phone conversations, emails, and cell phone conversations without warrants. Now, this guy has been dropped into the driver’s seat of the new G.M company.

Wow! Does this not sound like what has been going on with the nation’s corrupt financial banking institutions over the decades? Their former employees have been embedded inside the Obama administration to fix the very firestorm they created as employee/representatives of these banks. And, the Federal Reserve has embedded its own homeboy-Timmy Geithner to make sure that the Treasury continues to do the bidding of the Federal Reserve Bank and its international banking organization.

I have to keep going back to President Obama’s campaign slogan of “Yes We Can”, and “Change We Can Believe In.” As a voter and supporter, if Obama had spoken about embedding Wall-Street bankster Trojan Horses in his economic recovery plan for the country, and said he would hire on former CEOs of corporations that acted against the Constitution, the interests of the nation, and the will of the people, I would have told him, ‘No You Can’t!’ and I cannot vote for that!

We are now seeing the Iranian citizens protesting by the tens of thousands against what they believe is voter fraud. They are willing to get out in the streets and raise their voices in protest, but here in America, the nation’s biggest economy theft and hijack of our economy by a bunch of banker criminals gets no protest. No protest over handing over $14 trillion to replenish the bankster’s losses while Americans go into foreclosure by the millions, with little help, and who have seen trillions of dollars in home value wealth evaporate, as well as their retirement nest-eggs. No protest. Not a peep in the street.

Back on April 3, 2009, the Obama Justice Department filed a motion to dismiss one of the Electronic Frontier Foundation’s (EFF) landmark lawsuits against illegal spying by the National Security Agency (NSA). “The lawsuit was aimed at ending the NSA’s dragnet surveillance of millions of ordinary Americans and holding accountable the government officials who illegally authorized it” as was reported by Tom Burghardt, in his April 13, 2009 article “Obama Administration Endorses Continued Spying on Americans.”

What we are seeing is that this president is not making it simple, nor building the same grassroots momentum behind him that elevated him into the presidency. If there were, then he would have the force to press the Congress and the nation’s elite to accept new policies that would benefit hardworking, middle class Americans without destructive and diluted comprises. He would have the momentum to take the country back from those who stole it away over the last 30 years from the very people that make it function—the middle class.

From all we are seeing and hearing from him is that there is little change we can believe in. The American people are to blame for this. We must harness the same courage to protest as we are now seeing from the Iranian people.