Tick, tick, tick

Greg sends this warning along.  Note the tag line:  Preparing Americans for Hperinflation.  


The financial players who control countries and banks, not through being wise, think they can keep playing cards that have been described as Keynesian tools, when they are, in fact, attempts to avoid losses to the large banks by taking it from you.


They play these cards mechanically and avoid anything approaching a philosophy or even an understanding of human nature. On top of that, they are grievously mistaken about Keynes.  As much as we can hoot him down for the mess we are in, we must admit he allowed for these cards to be played when the budget was near balance, not trillions in the red.


The normacy bias assures us that we can work things out, that our people work hard, that our businesses are vibrant and flexible. This is a good thought, but it is not an axiom, not when unrestrained bureaucrats and bankers keep doubling down. The world is a Madoff scheme


World powers are literally banking on America's ability to create wealth, all the while its administration is trying to reduce the process, apparently intentionally. 


Our goverment is a confluence of children and Goldman Sachs.  Indeed, we are presented with a Supreme Court nominee who was an advisor to Goldman Sachs from 2005 - 2008, having just had a show trial to show how serious the administration is about reigning them in. She owes her career to Larry Summers.  


Over and over:  Harvard and Goldman Sachs.  Can you see how Hitler played his cards to become a fascist leader?  He turned on the power structure, the self-indulgent oligarchs, and led the people against them.


If anything, Goldman Sachs is letting Mr. Obama play president as it runs the world's economy. As noted in the video I sent out today, kings usually don't exist; they front for oligarchs.  


In Albany today, state union members were protesting, having been asked to work a day without pay, each week because their greed has caused the state to become insolvent. Imagine how these hostile socialists will be when their entitlement nation ends. End it must, one way or the other.


Think Greece has nothing to do with us?


Lest we forget:  buy junk silver

May 10, 2010

The World's Fiat Currency System Risks Collapse

On February 12th, NIA released an article entitled, "Greece Distracting from Real Debt Crisis in U.S." in which we said, "We hope that Greece doesn't get bailed out, because a bailout would cause foreign investors to become more irresponsible than ever and create even greater moral hazards. Unfortunately, not only is it likely that Greece will get bailed out, it's possible our own Federal Reserve will get involved. The U.S. Federal Reserve has the ability to make loans to foreign central banks without disclosure to the U.S. public. European banks have already benefited $50 billion from the U.S.'s bailouts of AIG, so it's not out of the realm of possibility that the Federal Reserve will intervene due to euro-zone countries being key U.S. trading partners."

NIA was right, late Sunday evening the Federal Reserve announced the re-establishment of U.S. dollar liquidity swap facilities with foreign central banks, as a part of the European Union (EU)'s nearly $1 trillion bailout plan. The Federal Open Market Committee has authorized swap lines through January 2011 with the Bank of Canada, the Bank of England, the European Central Bank (ECB), the Swiss National Bank, and the Bank of Japan.

While the Federal Reserve may say these swap lines are necessary "to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers", NIA recognizes that this is nothing more than another transfer of wealth from the American middle class to bankers around the world through inflation. This program was originally enacted in 2008 when the Federal Reserve loaned $582.8 billion to foreign central banks without any disclosure of which central banks got the money.

NIA believes it is unconstitutional for the Federal Reserve to make loans to foreign central banks. Most likely, the Federal Reserve was pressured by Wall Street to re-establish the swap facilities because Bank of America, Citigroup, JP Morgan, Goldman Sachs and Morgan Stanley have about $2.5 trillion in exposure to Europe, and Wall Street doesn't want to see their bets go bad.

Not only will Americans now be exposed to the European debt crisis through the Federal Reserve's swap lines, but the U.S. will be giving money away to Europe through the IMF. The IMF is contributing up to 220 billion Euros as a part of the bailout, which equals $283.1 billion at the latest exchange rate. The U.S. represents approximately 20% of IMF funding, which means the bailout is costing U.S. taxpayers $56.7 billion, not including the potential losses from loans made by the Federal Reserve and the inflation it will create.

The moral hazards of the EU bailout are immeasurable. It sets a dangerous precedent that the ECB won't allow any eurozone nations to fail, just like the Federal Reserve won't allow any major financial institutions on Wall Street to fail. Eventually, if you don't allow the free market to punish countries and financial institutions that recklessly speculated and made poor financial decisions, the financial crisis we are preventing will turn into a currency crisis that the western world will never be able to recover from. Although NIA still believes the U.S. dollar will win its race to the bottom with the Euro, we are now at risk of a total collapse of the world's fiat currency system.

Imagine if baseball teams weren't allowed to fail. You probably remember playing t-ball as a kid and at the end of every game, both teams were declared the winner. Think about what would happen if Major League Baseball declared there will no longer be losers at professional baseball games, both teams will be declared the winners of every game. Would you still pay $300 for a ticket to see a Major League Baseball game? Of course not, the value of the tickets would collapse to nothing, similar to how fiat currencies will soon lose their purchasing power if we don't allow countries and financial institutions to fail.

NIA is almost done producing its nearly hour-long documentary 'Meltup'. We spent quadruple the time and money producing Meltup than we did producing our previous critically acclaimed documentary 'The Dollar Bubble', which has already surpassed 710,000 views since November 23rd. We believe Meltup will be the best economic documentary ever produced in world history and a must see for yourself, your friends, and your family.

Last week, NIA conducted an hour-long interview with Gerald Celente, founder of the Trends Research Institute. We can honestly say that our interview with Mr. Celente was the single most shocking, insightful and informative interview we have ever witnessed or heard. NIA will be using footage from our interview with Mr. Celente in Meltup. We highly recommend that you visit Mr. Celente's Trends Research Institute and subscribe to his Trends Journal. We just got done reading his latest Trends Journal and it is one of the most compelling pieces of journalism we have ever come across.

If you would like your friends and family to be the first to see Meltup, please tell them to become a member of NIA for free. 

Our economy, without the panic spin

My major resource, Irene Wolfson, sent me a link from Toronto's Globe And Mail web site. The G&M is an earth is dying/Bush is dumb/Bush is diabolically clever/Americans suck paper with really bad film reviews by nasty, self-important snipers, so the following is intriguing.

Only two comments from me: I told you a lower dollar was good, now we have to stop the fall. Hopefully, you won't start a sentence with "Thankfully." (Or, "Hopefully" lest you missed the sarcasm.)

The coming rust-belt recovery Manufacturing will play a surprise lead role in the turnaround of the resilient U.S. economy

BARRIE MCKENNA, January 26, 2008 at 12:03 AM EST

WASHINGTON — The natural state of an economy is to grow. We work more, we earn more, we spend more and we produce more.

Occasionally, however, economies stall and go into recession. And, for a stretch, perhaps a few months, everything goes into retreat.

Wages, spending and output shrink.

That's what appears to be happening to the mighty U.S. economy.

Thankfully, recessions are a rare and brief event in this country.

Since the Second World War, the United States has experienced just 10 recessions, lasting an average of 10 months each.

Amid the financial gyrations of the past few weeks, it's comforting to know that the foundation of the next growth phase is already being laid. And it could come from the most unlikely of places: the dirty business of manufacturing, and trade.

You can thank the remarkable resilience of the American economy, the largest, most diverse and open economy on the planet.

It isn't easy to keep the United States down for long. The same, often reckless, dynamism that causes this country to repetitively binge — on real estate, technology stocks or some other bauble du jour — is precisely what will pull the economy out the other side.

It's far too early to write an obituary for the U.S. economy.

Just remember: This isn't Japan, which suffered three recessions during its "lost decade" of the 1990s.

Japan's economy was red-hot. And no one thought the boom would ever end. The price of everything from stocks and real estate to a cup of coffee was badly out of whack. So much so, that by 1990 the Imperial Palace in central Tokyo was estimated to be worth more than the entire continental U.S.

When the bubble inevitably burst, Japanese banks and policy-makers were ploddingly slow to acknowledge they even had a problem

And so, during the decade that it took all the bad debts to work their way through Japan's hide-bound corporate structure, worthy borrowers couldn't get loans and the economy stagnated.

Americans are far too impatient to ever let that happen.

They got into their current mess by letting the housing industry run amok. Too much money was pumped into one sector with predictable consequences: overbuilding, loans to people who couldn't afford them and grossly inflated prices.

Brutal and wrenching as it is, the unwinding process is already well under way. Homeowners can't pay their mortgages, so banks foreclose and homes are auctioned off at fire-sale prices. Falling prices make loans turn bad, which causes losses for lenders and their shareholders.

In just a few months, American banks have written off tens of billions' worth of investments. They have also sought out big Asian and Middle Eastern investors to repair their tattered balance sheets.

The light at the end of the tunnel is the U.S. dollar. A steady five-year decline in its value against most other currencies, including the Canadian dollar, is rapidly restoring the United States' competitive place in the world. It has made American products look cheap again, along with American workers.

The United States already has what is arguably the most efficient service economy in the world, an impressive transportation infrastructure and sophisticated financial markets.

Now, the country is poised to reassert itself as a manufacturing powerhouse.

EXPORTING TO CHINA

Consider Richards Industries of Cincinnati, Ohio. It makes valves — pressure valves, control valves, temperature valves. These little machine-tooled devices are what keep modern factories humming and in perfect balance.

The company's business has never been in better shape, thanks to a thriving export business, insists Bruce Broxterman, president and part owner. When he joined the company in 1980, exports accounted for about 2 per cent of sales. Now, with thriving sales to China and other Asian countries, exports make up nearly 40 per cent of its $30-million (U.S.) a year business. And the cheaper U.S. dollar is enabling the company to make big inroads in Europe, too.

"We're doing all the right things operationally," Mr. Broxterman says. "I'm pretty optimistic."

Within five years, more than half its sales will be outside the United States. The company has been aggressively hiring salespeople in key overseas markets to tap the growth.

And even more remarkably, with roughly the same number of employees (125) it had a decade ago, Richards Industries is cranking out more valves than ever.

The company isn't alone. The Merrill Lynch economist David Rosenberg recently predicted a revival of the U.S. rust belt as part of a "renaissance" in U.S. manufacturing. "Dollar depreciation is already redistributing growth back to the United States," he said.

Many experts had given up on manufacturing in states such as Ohio, Pennsylvania and Michigan. In a world of cheap labour, there was very little that you could produce competitively there any more, skeptics argued.

LEARNING TO BE NIMBLE

Well, something remarkable has happened. Overvalued for so long, the U.S. dollar has forced companies to become a lot more productive to survive in the global economy. Manufacturers such as Richards Industries learned to become nimble and agile, rather than just big.

Now, with the lower dollar, they are poised to reap rich rewards.

Suddenly, foreign companies want to put their factories here, not the other way around. The European aircraft-maker Airbus, Craftsman Tools of Britain, the German chainsaw maker Stihl AG & Co. and the German tire-maker Continental AG have all announced U.S. plant expansions in recent months.

In the home market, too, American manufacturers are discovering that they can compete again. A 30 per cent drop in the dollar in the past five years is huge. A European buyer looking at buying a U.S. product priced at $100 needs to come up with just 67 euros, compared to nearly 100 euros before.

Surprisingly to some, the United States makes more manufactured goods today than at any time in its history — three times more than it did in the mid-1950s boom. And since 1980, the value of U.S. manufacturing has tripled to roughly $5-trillion.

Here's a newsflash: The entire manufacturing sector has not up and moved to China or Mexico. With less than 5 per cent of the world's population, the United States accounts for nearly 25 per cent of all manufacturing — No. 1 in the world. Japan, No. 2, has lost ground and is fading. Fast-growing China still accounts for less than 10 per cent.

The catch is that American companies have learned to produce more with fewer, better-skilled workers. The country's factory work force peaked at about 19 million before the 1980-81 recession. It has since shrunk to about 14 million.

And yet the overall unemployment rate, now at 5 per cent, has fallen as factories have shed jobs. This suggests that surplus workers are being absorbed into the rest of the economy.

And manufacturers are successfully selling to the rest of the world.

American exports grew in double digits in 2005 and 2006, and are on track to grow by 13 per cent in 2007. Manufactured exports are at a record high.

Even the embattled U.S. auto industry is showing signs of turning the corner. The Detroit Three auto makers have shown impressive productivity gains. Over the past five years, General Motors has reduced the hours needed to build a car by 15 per cent. Ditto for Ford and Chrysler.

The United States is quietly becoming an attractive place to build cars again — significantly cheaper than in Ontario, it turns out. With the Canadian and U.S. dollars near parity, Canada has become the high-priced location to assemble cars. Experts predict Ontario could lose 600,000 cars of production by 2012, as U.S. production is ramped up.

It's the same for a lot of the other products that the U.S. makes in abundance, including aircraft, steel, power equipment, machinery, food products and pharmaceuticals. Production is rising; exports are up.

Even in Ohio — the centre of the rust belt — there's a bit of a manufacturing revival under way. Since 2000, more than 200,000 manufacturing jobs have disappeared in the state. And yet it's the only state that has increased exports in each of the past eight years.

"The lower dollar has really changed the game, particularly in Europe," agrees Bruce Broxterman of Richards Industries. "I strongly believe in U.S. manufacturing."

Just like the company's valves, other sectors of the economy are now poised to pick up the slack and return the U.S. to its natural growth equilibrium.

There are a lot of people in this country who would not have thought this renaissance possible. All three leading Democratic presidential candidates — Hillary Clinton, Barack Obama and John Edwards — have spoken skeptically about the benefits of trade, while lamenting the "decline" of manufacturing.

And yet to choke off trade, by moving the United States down a more protectionist path, would snuff out one of the key strengths of the economy, based on a badly flawed premise.

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