The dollar's position as the world's leading reserve currency faces increased pressure as the financial crisis allows emerging economies greater influence on the world stage, analysts said.
A report last week in The Independent claiming that China, Russia and Gulf States are among nations prepared to ditch the dollar for oil trades has heightened the uncertainty surrounding the US currency's future.
The dollar slumped against rivals last week in the wake of the British daily's controversial report.
"The US dollar is being hurt by the continued talk of a shift away from a dollar-centric world," said Kit Juckes, an analyst at currency traders ECU Group.
"And finally, as long as the US economy is not strong enough for any rise in interest rates to be conceivable for a long time, the dollar's underlying downtrend will remain in place," added Juckes.
The Independent, under the front-page headline "The Demise of the Dollar", reported last Tuesday that Gulf states, together with China, Russia, Japan and France, were considering replacing the dollar as the currency for oil deals.
"In the most profound financial change in recent Middle East history, Gulf Arabs are planning -- along with China, Russia, Japan and France -- to end dollar dealings for oil," wrote The Independent's Middle East correspondent Robert Fisk.The dollar's position as the world's leading reserve currency faces increased pressure... more
Disclosures that at least six of the 19 big banks undergoing stress testing have been ordered to acquire more capital has not assuaged critics who contend that the tests are dangerously mild.
"This stress test is the equivalent of testing the Brooklyn Bridge by running a single heavy truck on it," Nassim Nicholas Taleb, a scholar of risk and chance at Polytechnic Institute of New York University, told the Huffington Post. "Bring engineers for this stress test, not the economists who failed us."
"The fact that six banks failed the stress test is more indicative of the weakness of the banks than the strength of the stress test. Most analysts thought the stress test was pretty wimpy," said Henry Blodget, president of Cherry Hill Research and CEO/Editor in Chief of Silicon Alley Insider. "If a good number of banks hadn't failed, people would have dismissed the stress tests as propaganda. So from the government's perspective, I'd say they were about right (if any more banks had failed under those wimpy assumptions, people might have been terrified.)"
Two of the institutions told by federal regulators to expand capital in order to be able to absorb additional losses are Citigroup Inc. and Bank of America Corp. The other four have not been publicly identified.
The testing was first announced February 10. The departments and agencies involved in the testing include the Treasury, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Reserve Board.Disclosures that at least six of the 19 big banks undergoing stress testing have been... more
“Premier Wen Jiabao is worried about the amount of debt that the United States owes China”, which is probably why “China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal.” As well, “five major trading cities have got the nod from the central government to use the yuan in overseas trade settlement - seen as one more step in China's recent moves to expand the use of its currency globally.”
When America’s top accountant, US Comptroller General and head of the GAO, David M. Walker resigned in 2008, the US national debt at the beginning of the year was $9.2 trillion. As of 2 May 2009 this debt is now over $11 trillion. These numbers, however, are a little misleading. The American public is largely unaware that the true deficit of the federal government is in fact “$65.5 trillion in total obligations”, exceeding the gross domestic product of the world.
The following 2008 documentary, “I.O.U.S.A. - One Nation. Under Debt. In Stress.,” does an excellent job explaining why the current fiscal policy in the United States is unsustainable, and recommends some very painful solutions to resolve the problem.“Premier Wen Jiabao is worried about the amount of debt that the United States owes... more
WASHINGTON - The economy shrank at a worse-than-expected 6.1 percent pace at the start of this year as sharp cutbacks by businesses and the biggest drop in U.S. exports in 40 years overwhelmed a rebound in consumer spending.
The Commerce Department's report, released Wednesday, dashed hopes that the recession's grip on the country loosened in the first quarter. Economists surveyed by Thomson Reuters expected a 5 percent annualized decline.
Instead, the economy ended up performing nearly as bad as it had in the final three months of last year when it logged the worst slide in a quarter-century, contracting at a 6.3 percent pace. Nervous consumers played a prominent role in that dismal showing as they ratcheted back spending in the face of rising unemployment, falling home values and shrinking nest eggs.
In the January-March quarter consumers came back to life, boosting their spending after two straight quarters of reductions. The 2.2 percent growth rate was the strongest in two years.
Still, the consumer rebound was swamped by heavy spending cuts in virtually every other area.
Businesses cut spending on home building, commercial construction, equipment and software, and inventories of goods. Sales of U.S. goods to foreign buyers plunged as they retrenched in the face of economic troubles in their own countries. Even the government trimmed spending. It was the first time that happened since the end of 2005.
The sharp cuts underscore the toll the housing, credit and financial crises — the worst since the 1930s — are having on the country. The recession, which began in December 2007, has taken a big bite out of national economic activity and snatched 5.1 million jobs.WASHINGTON - The economy shrank at a worse-than-expected 6.1 percent pace at the start... more
The global economy is set to decline by 1.3% in 2009, in the first global recession since World War II, the International Monetary Fund (IMF) says.
In January, the IMF had predicted world output would increase by 0.5% in 2009.
It now projects that the UK will see its economy shrink by 4.1% in 2009, and by a further 0.4% in 2010(!)
But other major economies are predicted to shrink even more, with Germany declining by 5.6%, Japan by 6.2%, and Italy by 4.4% in 2009.
The prospects for the advanced economies are not much brighter in 2010, with an overall forecast of zero growth.
IMF chief economist Olivier Blanchard on the bleak economic outlook
The IMF says this represents "by far the deepest post-World War II recession" with an actual decline in output in countries making up 75% of the world economy.
Currently, output is falling by an "unprecedented" 7.5% annual rate in the rich countries in the last quarter of 2008, and the IMF expects the same rate of decline in the first quarter of this year.
Only a recovery in developing and emerging market countries will propel the world economy back into positive growth in 2010, albeit at a relatively weak level of 1.9%.
The prospects for world trade are even gloomier, with the IMF now forecasting world trade volumes to decline by 11% in 2009, and barely grow at all in 2010.The global economy is set to decline by 1.3% in 2009, in the first global recession... more
Rep. Ron Paul released a video on Sunday offering support for the principles of secession, calling them "very much American." And he described Perry's recent talk about pulling Texas out of the union a discussion worth having.Rep. Ron Paul released a video on Sunday offering support for the principles of... more
April 6 (Bloomberg) -- Joseph Ramelo gave up searching for work in January to return to school, two months after he was laid off as a San Francisco election clerk. Antonio Poe is struggling to get by doing part-time landscaping in Greensboro, North Carolina, after losing his job as an electrician.
While such workers are feeling real pain from the recession that began in December 2007, they’re not represented in the 8.5 percent unemployment rate the Labor Department reported last week. They are part of a broader group that includes those who want a job but have stopped looking for work and those who want full-time positions but have to settle for part-time employment.
A measure of underemployment that counts those people has almost doubled over the past two years, to 15.6 percent, providing a more complete gauge of the labor market’s deterioration. Along with an historic drop in the percentage of the population who are working, and record numbers of long-term unemployed, the figures point to a permanent shift in employment patterns, said former U.S. Labor Secretary Robert Reich.
“We’re seeing many more people who are losing their connectedness to the labor force,” said Reich, who served in President Bill Clinton’s Cabinet and is now an economist at the University of California at Berkeley. “There is a profound weakening of ties to the labor market among a large portion of our working-age population.”
Job Losses
U.S. employers cut 663,000 jobs in March, bringing losses since the slump began in December 2007 to about 5.1 million, the worst in the postwar era, according to the Labor Department. Unemployment exceeds 10 percent in seven states. Michigan’s jobless rate is 12 percent, South Carolina’s is 11 percent and California’s is 10.5 percent.
Job losses in the current recession are more enduring than in previous ones, according to an April 3 research report by Credit Suisse.April 6 (Bloomberg) -- Joseph Ramelo gave up searching for work in January to return... more
These videos will give you an idea of how bad things are and to put you on noticed to prepare yourself, your families and friends to get ready for new changes some good some bad and some we would of never dreamt were possible.
Live Learn Love Grow Evolve, Create-Greatness and give it away...This is a Snowball that won't and can't be stopped!
We have over spent and over... more
"The dangers inherent in the foreign policy advocated by the neo-conservatives are well known. While many Americans have become increasingly aware of those dangers, far less attention has been focused on the dangers of neo-conservative economic policies. This issue is of critical importance right now, because many are mistakenly pointing their fingers at the free market as the culprit behind our current economic plight.
There are only a few in elected office who have any real loyalty to free markets and limited government. The agenda of neo-conservatives in the economy calls for a very active central government. Indeed, while there are some neo-conservatives who continue to use the rhetoric of limited government, and who oppose increases in the federal income tax as a way to maintain the political benefits that apply to those who talk about free markets, it is now the neo-conservatives who promote fiat monetary policies even more than those on the liberal left.
While I have been a strong proponent of cutting taxes on all Americans, and therefore supported the tax reductions offered by President Bush, the neo-cons argue that tax rate reduction alone is the key to “getting the government out of the way” of economic growth. Moreover, they invariably argue for tax reductions targeted toward the wealthy, and toward multinational corporations.
Over the years, I have offered several tax plans designed to assist hard working middle-class Americans to pay for their needs, whether these needs be health-care related, educational or to pay the costs of fuel. A few years back when I introduced one such bill, a prominent Republican approached me on the House Floor and asked, half in anger and half in amazement “why did you do that?” Shortly after that, the committee chairman at the time, also a Republican, sent out a release strongly attacking my tax cut bill.
So, while the liberal economic agenda includes more taxes and spending, the neo-con economic program simply looks to target some tax cuts to preferred groups, but ignore the economic big picture. The neo-con economic agenda is to “borrow and spend” and it is that agenda, even more than the tax and spend ways of many liberals, that has cast us in economic peril at this time.
Simply, on spending, the neo-cons and the liberals share views, just as they share similar views on foreign policy. While each side tries to claim the mantle of change, reality is that more of the same is not change.
The fiat monetary policy we now follow is the most significant factor contributing to our economic peril, and it is central to the neo-con agenda. As we hear new calls to empower the Federal Reserve Board, we should be aware that underlying all neo-conservative policies is the idea of monetary inflation. Inflation is the technique used to pay for the regulatory-state and the costs of policing the world."
Article originally appears at link from Congressman Ron Paul's (R-TX) Texas Straight Talk weekly column.
For more speeches, statements, videos and articles by Congressman Paul click here http://www.house.gov/paul/
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Ron Paul's "Campaign for Liberty"
The mission of the Campaign for Liberty is to promote and defend the great American principles of individual liberty, constitutional government, sound money, free markets, and a noninterventionist foreign policy, by means of educational and political activity.
For more information please follow this link http://campaignforliberty.com/
In 2006, Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital, spoke at the Western Regional Mortgage Bankers Association Meeting in Las Vegas and told over 1000 mortgage brokers that they were about to be out of jobs. The entire presentation is worth watching but most of his comments regarding real estate begin at the fourth video (Above video is the intro and the remaining 7 appear below.)
Mr. Schiff, an advocate of Austrian Economics and former Ron Paul presidential campaign advisor, is the author of "Crashproof: How to profit from the coming economic collapse." He has appeared on CNBC, CNN, FBN, Bloomberg, CBS and other networks. CNBC has called him "Dr. Doom" and he is still criticized by the mainstream financial pundits despite his correct predictions of the tech and mortgage bubbles.In 2006, Peter Schiff, President and Chief Global Strategist of Euro Pacific Capital,... more
In addition to throwing economic fundamentals out the window, Paul points out the peculiarities that mortgage brokers must now be fingerprinted and that credit card transactions will now be reported to the I.R.S. CONgress ≠ PROgress.
The following is excerpted from Congressman Paul's Statement on H.R. 3221:
"Madam Speaker, For several years, followers of the Austrian school of economics have warned that unless Congress moved to end the implicit government guarantee of Fannie Mae and Freddie Mac, and took other steps to disengage the US Government from the housing market, America would face a crisis in housing. This crisis would force Congress to chose between authorizing a taxpayer bailout of Fannie and Freddie, and other measures increasing government’s involvement in housing, or restoring a free-market in housing by ending government support for Fannie and Freddie and repealing all laws that interfere in housing. The bursting of the housing bubble, and the recent near-collapse in investor support for Fannie and Freddie has proven my fellow Austrians correct. Unfortunately, but not surprisingly, instead of ending the prior interventions in the housing market that are responsible for the current crisis, Congress is increasing the level of government intervention in the housing market. This is the equivalent of giving a drug addict another fix, which will only make the necessary withdrawal more painful.
The provision giving the Treasury Secretary a blank check to purchase Fannie and Freddie stock not only makes the implicit government guarantee of Fannie and Freddie explicit, it represents another unconstitutional delegation of Congress’ Constitutional authority to control the allocation of taxpayer dollars. While the Treasury Secretary has to file a report with Congress, the lack of any effective standards for the expenditure of funds makes it impossible for Congress to perform effective oversight on Treasury’s expenditures.
HR 3221 also takes another troubling step toward the creation of surveillance state by creating a Nationwide Mortgage Licensing System and Registry. This federal database will contain personal information about anyone wishing to work as a “loan originator.” “Loan originator" is defined broadly as anyone who "takes a residential loan application; and offers or negotiates terms of a residential mortgage loan for compensation or gain." According to some analysts, this definition is so broad as to cover part-time clerks and real estate agents who receive even minimal compensation from "originators." Additionally, this database forced on industry will be funded by fees paid to the federal banking agencies, yet another costly burden to the American taxpayers.
Among the information that will be collected from loan originators for inclusion in the federal database are fingerprints. Madam Speaker, giving the federal government the power to force Americans who wish to work in real estate to submit their fingerprints to a federal database opens the door to numerous abuses of privacy and civil liberties and establishes a dangerous precedent. Fingerprint databases and background checks have been no deterrent to espionage and fraud among governmental agencies, and will likewise fail to prevent fraud in the real estate market. I am amazed to see some members who are usually outspoken advocates of civil liberties and defenders of the Fourth Amendment support this new threat to privacy."
(End of excerpt)
For more information on H.R. 3221 please visit THOMAS (The Library of Congress) http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.03221: In addition to throwing economic fundamentals out the window, Paul points out the... more
The US economic power horse is running out of ideas and cash as it jostles with a massive national debt, housing and financial crises, rising inflation, and a depreciating currency.
This has all contributed to a growing tendency to live off credit amassed through petrodollars and foreign loans, leaving repayment for future generations.
Today, in much of America, communities and suburbs are dealing with a drastic increase in foreclosures and short sales. This has not been helped by the fact that gas is selling at over $1 a litre ($4 a gallon).
Standard monetary tools such as lowering or increasing interest rates can no longer provide quick fixes to the situation for both economic and political reasons.
Raising interest rates would compound the mortgage crisis while lowering it would drive the value of the US dollar abroad even lower.
But exercising control over the money supply could also damage the US economy: increasing the supply would lower the dollar's value even more, while decreasing supply would exacerbate the loans crisis.
In any case, control over the money supply would be anathema to US economic policy given the country's 'addiction' to deficit financing and run-away consumerism in recent decades.
So the US Federal Reserve is left virtually helpless.
It has, however, tried to help Wall Street by becoming a temporary lender and allow many investment firms the opportunity to avoid bankruptcy. Such an action by the Fed has not happened since the stock market fiascos in the 1930s.
The US government, however, can apply one clear fix to the situation - cut back overspending on a massive scale.
But this option too is off the table in an election year where 'victory' is being promised in endless wars on 'terrorism'.
And it is the recent wars in Afghanistan and Iraq that have contributed the lion's share to sapping America's resources...
Despite a trend by some economists and politicians to blame the current food and energy commodity price hikes on Opec or overpopulation, there is a clear picture emerging of deep structural problems in the world economy.
In particular, the main currency used for global trade in commodities, the US dollar, has been in steady decline not just against the Euro, but also against most other convertible currencies.
According to the US Federal Reserve, the dollar has dropped by around 65 per cent against the Euro, 31 per cent against the British Sterling, 45 per cent against the Canadian Dollar, and by 59 per cent against the Australian Dollar over the eight-year period since June 2000.
While the causes for this slide are debatable (and largely attributed to poor fundamentals in the US economy), the global impact of such a major drop in the value of the dollar is undeniable for two important reasons.
First, most global commodities traders utilise - and favour - the greenback over other currencies, despite a severe decline in its purchasing power.
Secondly, most countries - mainly in east Asia and among the major oil and gas exporters of the Arab Middle East - use the dollar as their reserve currency.
But they are paying the price. Despite their booming economies and elevated public spending, they are experiencing depreciating terms of trade and rising inflation.
More importantly, they have seen the value of their strategic currency reserves drop with the dollar's waning global strength.
(End of excerpt)
Full story at link by Massoud Hedeshi, international development expert, in Vienna// Al Jazeera English The US economic power horse is running out of ideas and cash as it jostles with a... more
The Revolution March will be a "peaceful, non-violent march on the streets of Washington D.C. followed by a rally in support of restoring constitutional government as the founding fathers set forth. A R3VOLUTION that calls upon all Americans who believe in Life, Liberty and the Pursuit of Happiness. By involving as many volunteers and participants as we can, we intend to spread the know-how of mass mobilization and direct- action to the movement. As a peaceful law abiding movement, it is our responsibility to wisely and effectively use our constitutional right to assemble. By inviting ALL Americans, we hope to extend the R3VOLUTION to all people of all backgrounds in the hope of forming a more perfect union."
There are 16 confirmed speakers including:
- Naomi Wolf – advocate of progressive politics and author of "The End of America: A letter of warning to a young patriot". Ms. Wolfe will take a historical look at the rise of fascism, outlining the 10 steps necessary for a state to take control of individuals' lives.
- Michael Scheuer – 22 year veteran of the CIA and bestselling author of ‘Imperial Hubris’ to discuss American foreign policy and its implications on terrorism, security, and Iraq
- G. Edward Griffin – founder of Freedom Force International and author of The Creature from Jekyll Island, shares his in depth research and analysis concerning the Federal Reserve System and the forces behind its inception.
- Ron Paul - to speak about the future of the Revolution.
For more information on the Revolution March please visit http://www.revolutionmarch.com/
* There have also been many Ronvoys arranged from all over the country. They include round trip travel by van and stop at campsites. Cheap lodging has also been arranged in DC. For details please visit http://revolutionarytravel.eventbrite.com/
The Revolution March will be a "peaceful, non-violent march on the streets of... more
The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.
"Virtually nobody foresaw the Great Depression of the 1930s, or the crises which affected Japan and southeast Asia in the early and late 1990s. In fact, each downturn was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived", said the bank.
The BIS, the ultimate bank of central bankers, pointed to a confluence a worrying signs, citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.
(End of excerpt)
Full story at link by Ambrose Evans-Pritchard// Telegraph
Why this web site now? Because we are running out of time. The American people must wake up and face the reality that promises made in the past will soon bankrupt this nation...
"Ross Perot is the father of fiscal charts. PerotCharts.com will help Americans understand the serious fiscal challenges facing our nation. These new electronic charts will also serve to hold elected officials accountable while accelerating needed actions to help ensure that our collective future will be better than our past."
Hon. David M. Walker
President and CEO, Peter G. Peterson Foundation
Former U.S. Comptroller General (1998 - 2008)
Click the following link to view the "Challenges Facing Our Country" presentation from PerotCharts.com http://perotcharts.com/challenges/ Why this web site now? Because we are running out of time. The American people must... more
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.
(End of excerpt)
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Full story at link
By Ambrose Evans-Pritchard, International Business Editor// Telegraph http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml
Image by ReutersThe Royal Bank of Scotland has advised clients to brace for a full-fledged crash in... more
