A financial storm: Bankruptcy Of a Nation !!!

rumors going around financial circles say that China may revalue it's currency slightly upwards against the dollar. That would increase US inflation by making goods of Chinese origin dearer in the US.

Right now China recycles the dollars it earns in trade. In fact, much of the dollars Americans shell out for Chinese goods never leave the US. They are shipped to Washington to buy bonds --which sustains US consumer and federal debt. You could oversimplify by saying China is using the dollars spent in Wall Mart to buy a slice of the USA.

A weaker dollar is inevitably on the cards - sooner or later. But a further slide in the dollar is all about China. Mexican immigration to the US pales in comparison to the arrival of 2 billion Chinese, Indians any other nationalities who have come into into the global work force in recent years. They have economic effects on the US -without ever leaving home.

How is the US responding to the challenge? While China is spending tens of billions of dollars on research and development to lead the world in technology and manufacturing, the US is spending hundreds of billions of dollars --on its military.

Right now the international currency basket is stable thanks to Japan for buying dollars, and to OPEC for not shifting to Euros. But the US has economic Twin Towers -not unlike those of the World Trade Center. One is the towering half-trilion trade deficit and the other tower is the half-trillion budget deficit. A surprise attack could produce a Trade-Center-style collapse in the paper towers of the US economy.

See Also: http://www.lewrockwell.com/north/north242.html

RedChaSiew

Source: Spiegel 14/04]

Banker ROLAND LEUSCHEL in an interview with the German newsweekly Der Spiegel
notes that we are experiencing the biggest speculative bubble of all times.

The recent stock market crash starting in March 2000
has already eliminated $15 trillion in financial asset value,
marking "the biggest financial asset destruction ever."

But that's not the end of the story.

There will be another crash, including on the stock market.

The person to blame is Alan Greenspan, because he turned
markets into liquidity addicts. Therefore, "imbalances in the
world economy are growing by the day. Once the second bubble
burst, we could see a mass panic."

The trigger this time might come from the East, he says.

"Once the Chinese and Japanese stop buying more dollars,
and thereby stop financing the U.S. economy,
the whole structure will fall apart."

Leuschel has just released a German-language book entitled "The Greenspan Dossier."

Debmey

Hahahahahahahaha............. Msia will be dragged down if the US economy collapses.

The fact is, US economy is very strong now. You anti US ppl need to keep updated to reality.

cheers

ariyamusafir

Oh.. under Dr. M's reign in Malaysia, few years ago or if not mistaken last year, Dr. M unveil a budget that would make us less dependable on US economy. Is it because Singapore's economy depends on the US that they now act like a YES man to US????

Debmey

You guys are still very dependent on US economy. You guys are dependent on Singapore economy too. Where you want to run & hide? The moon?

RedChaSiew

Nobody Can Stop This Runaway Train
April 13, 2004
In spite of the persistent refusal of Mr Greenspan to recognise it as such, a number of us identified the late 1990抯 high tech stock market for what it was - a bubble. Even when it began to burst, there was still a persistent reluctance to acknowledge it as such. But with the NASDAQ still down more than 60 per cent from its peak, NASDAQ stocks still at unprecedented valuations, and the integrity of the earnings of this sector in question, it is now generally conceded by most (even the Fed) that a bubble did indeed exist. The fallout from this high tech collapse has been much less according to form. Based on the experience of other financial manias, history suggested that the bursting of this particular bubble would generate a hard landing. It did in the corporate high tech sector globally. But, with an amazing debt-fuelled 6 per cent annualised rate of take off in real US consumer spending in Q4 2001, and the extraordinarily resilient follow through for the past 2 years (culminating in today抯 stunning March retail sales figure, the biggest increase in a year), it appears that the US consumer has weathered the fall in stock prices -but only thanks to the generation of a series of other mini-bubbles, all symptomatic of a global credit system run amok......
http://www.prudentbear.com/internationalperspective.asp

Debmey

If yu believe that article, yu better get ready for recession in Msia.

cheers

RedChaSiew

who cares about recession in msia

Debmey

I don't care, do you?

RedChaSiew

British Accountant Kept Shackled at JFK Airport, Denied Water For 24 Hours By Homeland Security

London Telegraph | April 29 2004

An accountant claims that he was kept for more than 24 hours in "leg chains" and denied food and water after flying into New York's JFK airport with his wife.

David Pattison, 52, of Beeston, Norfolk, was held by US security officials because an Interpol notice alleged that he was wanted in Qatar for debts of up to $10,000 (

Debmey

please read the rules of the forum please

RedChaSiew

don't ask me to do anything - u are not a mod.

go n sit in the corner please

Debmey

Anyone has the right to tell yu off for violating rules of the forum.hahahahahahaha....
BTW,i didn't even bother to read ur cut and paste.

cheers

It's easy to kill the American economy. What U gonna do is hard selling US currencies. Asian central bankers including Japan, China and East Asia are holding enormous amount of US dollars as reserves. They are actually financing US enormous national debt of over US$6 trillion.

What the fund managers did to Asian economies in 1998 can be done to US economy as well by selling off USD currencies and buying euros in exchange. Euro economy is getting stronger after the joining of another 10 member countries. Asian central bankers need to get together to be able to do this.

China is slowly replacing US economy as the main export destinations. Asian share of exports to US is slowly declining. Ultimately, Asian economies will lose dependency on US economy.

The impending boycotting of US economy is not without reason. US economy has absolutely no fundamentals. It has trade deficits of about US$40 billion/month and a federal budget deficit of over US$600 billion. It's a rising trend. There will come a time when holding a USD currency becomes a liability. USD is not backed by gold, unlike the euro. US fed reserves actually has no reserves! In fact, it has a national debt of over US$6 trillion.

So what's holding the USD value? Oil transactions, that's why. Wherever there is demand, there is value. Right now, there is demand for USD because oil is transacted in USD currencies. Once OPEC countries has the balls to sell oil in euros, that will be the end of USD and US economy as a whole. That US$6 trillion debt may easily become US$12 trillion in a short time when USD currency devalues all of a sudden, just like Asian currencies devalues in 1998.

So OPEC must not be allowed to sell oil in other currencies than USD. US must station its army in the Middle East to make sure this does not happen. Israel must be allowed to arm itself to the teeth to counter any Arab defiants. Arab assets in the US must be frozen so that Arabs can't withdraw their billions of USDs out. To do this, Arabs must be blamed for all terrorisms. Sudden withdrawals of cash out of US is like the Asian crisis in 1998.

OPEC could also sell its oil to muslim countries in gold dinars, as proposed by Dr Mahathir. That willl send cold shivers down US spine. But US won't let that happen. Maybe by stationing US army in East Asia will teach these Asians a lesson or two!

The Argentina of US will happen, innevitably. There is nothing much US produces nowadays that is consumed heavily by world populations. Much of "made in USA" products are now being produced by India or China, outsourced to a third world country. So how do U expect US to have trade surplus when US is forever importing more than it exports? US is consuming what the world produces. It does not export because its products are way too expensive due to minimum wage in US.

In short, US has no fundamentals. US is riding on USD currency demand in oil transactions. That's the only thing that is supporting the US economy now.  Well, cars don't run on fuel forever. Factories don't rely on fuel for too long. Technologies dictate that cars will run on other energies other than fuel, like solar or electrical energy. Factories will use alternative energies, like nuclear energy. Which is why these new technologies must be stopped by the US. Those factories that are using nuclear energies must be stopped. They must be blamed for making nuclear bombs, not using nuke as energy. Which is why Iran's nuke energy technology from Russia must be blamed for making nuke bombs. Which is why Iran must be invaded, just like Iraq being invaded for converting USD into euro for oil transactions during Saddam years.

The only asset for the US economy these days are its army. Without the army, US will be long gone.

Debmey

But would anyone be so stupid like salman as to destroy the world's biggest economy?

Sounds like you have no fundamental understanding of world economy.

peace

>>The only asset for the US economy these days are its army. Without the army, US will be long gone.<<<

if you SUPPLY ..you must CREATE DEMAND. nothing like some good old confrontation to use up the old stocks. you can just keep churning the production line without consumption. when smart bombs were rained into B@ghdad - each cost more than a million bucks. and how many thousands have they cast?

The merchants of death... add that to the GDP please

kid

Originally posted by salman at 2-5-2004 01:24 AM:
It's easy to kill the American economy. What U gonna do is hard selling US currencies. Asian central bankers including Japan, China and East Asia are holding enormous amount of US dollar ...

great article Salman, an eye opener! thx

where the heck is this soros guy ..might be too busy shorting a well known currency . not sure if the posters here trade currencies (or white- cut chickens, a hainanese favourite) but i am sure if you do - you are smiling every morning you wake up. don't forget to put some of your earnings into gold. remember that yellow metal whose price has been manipulated by the cabal?

Merry christmas. finally a good fat one./


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www.dailyreckoning.com

VODKA ON THE ROCKS
by Tom Dyson

In Friday's edition of the Rude Awakening, titled 'The Financial Cold War,' your New York correspondent, Eric Fry, shared a speech by a man named Oleg Mozhaiskov, former deputy chairman of the Russian Central Bank.

"The world has come to a paradoxical situation in which the creditor countries are more concerned with the fate of the dollar than the U.S. authorities themselves are..." said the former finance minister. "Under these conditions, the growing interest of investors in real assets, gold in particular, is more than justified."

As usual, Eric's timing was impeccable. No sooner had we mentioned Russia's diversification out of dollars than the Central Bank of Russia does just that.

"Most of our reserves are in dollars and that's a cause for concern," Senior Deputy Finance Minister Alexey Ulyukayev told reporters in Moscow yesterday. His comments moved the forex markets...the dollar immediately sold off against the euro.

"Looking at the dynamics of the euro-dollar rate, we are discussing the possibility to change the reserve structure."

Russia's foreign currency and gold reserves rose to a record $113.1 billion in the week ended November 12. This time last year the Russian gold and foreign currency reserves were just $63.5bn including $58.3bn in foreign currency. That's a 78% increase.

The Russians aren't the only central bankers acting like hedge fund managers. The Chinese, the Indians and the Cubans have all publicly slated the dollar in recent weeks.

China's foreign currency reserves dwarf those of the Russians. The Chinese hold a total of $474 billion dollars of which less than $8 billion is held in gold.

But concern for the dollar is not a preserve of the rich and powerful. Take Ms. Ge, a middle-aged woman waiting with her elderly mother in the lunch hour queue at a bank in Shanghai. "The dollar doesn't mean anything anymore," she complained, while waiting for a wire transfer to hit the bank's books. They immediately converted their money into renminbi, Bloomberg reports.

"The U.S. dollar is weakening. The renminbi is the hard currency now," shouted another middle-aged man. Bloomberg reports that, the very next moment, he turned $10,000 worth of stocks into cash and dropped the entire lump sum into a yuan deposit. "It's the best choice," shrugged the man. "But I would like to ask the U.S. government to please keep the dollar stable."

Back in 1992, The Bank of England tried to keep Sterling stable by raising interest rates twice in one day, from 10% to 12% and then to 15%. Short sellers like George Soros were attacking the pound, and the Bank of England thought higher interest rates would deter them. They were wrong, and the short selling continued...to the point where the authorities cut the pound from its fixing, and let it crash back down to its true free market level.

The same evening, the Chancellor cut interest rates all the way back down to 10% again.

George Soros looked pretty tough after that...but compared to the carnage that'll be released when our central banking friends, including Mr. Greenspan who has already given his blessing to the scheme, decide to attack the dollar's exchange rate with their forex reserves, Soros' sterling adventure will look like the weekly game of penny poker. [Ed. Note : There are ramifications to this ex-dollar diversification. One of which is a bull market in commodities. Check out today's 'Did You Notice,' just below. We've found another example of the Great Chinese resource take away...]

RedChaSiew

"NEW YORK (Reuters) - The dollar weakened on Friday but hovered above record lows against the euro plumbed overnight on comments, later retracted, that China was cutting back on its accumulation of dollar assets.

"The dollar slid to a record low of $1.3329 per euro during overnight trading in Asia after a Chinese business newspaper quoted a member of the country's central bank policymaking committee as saying that China had already begun reducing U.S. dollar assets in its foreign exchange reserves.

""In the state that the market is in right now, where there is a lot of speculation about reserve shifts, the comments from China were taken quite seriously," said Bob Lynch, currency strategist at BNP Paribas in New York.

>snip<

"We have seen no evidence in the market yet that a large shift in Chinese central bank holdings has occurred out of U.S. dollars and into euros. It would be very surprising for this to have occurred without the market's knowledge," said Michael Woolfolk, senior currency strategist at Bank of New York.

"Still, with most analysts expecting central banks to diversify out of dollars over time, even a hint that China might be backing off from Treasuries was enough to roil the market, dealers said.

"When one of your most reliable, solid buyers (China) is cutting back ... one of the horses has bolted," said Richard Franulovich, senior currency strategist with Westpac Banking Corp. in New York.
http://story.news.yahoo.com/news ... nm/markets_forex_dc

this war will be the millstone which hangs forever around her neck.


bush:i  want moreeeeeeeeeeeeeeeeeeeeeeeeeeeee

congress:how much more?

bush:100 billion pleaze

congress:no problemo.

http://www.boston.com/news/world ... ay_hit_100_billion/