Infinite Unknown

Investors are fleeing from the U.S. stock market, Sending the Dow to Worst June Since Depression, looking for places to secure their wealth.

There is an unprecedented cash flow of ‘hot money’, which is usually defined as short-term global speculative funds moving among financial markets in search of the highest short-term return, moving into China:
Is China flooded with ‘hot money’ because of an expected meltdown in the U.S.?

Let’s further examine the prospects that we would experience a total crash of the entire financial system:

- Fortis Bank Predicts US Financial Market Meltdown Within Weeks

We have seen the Dow suffering it’s worst 1st half since ‘70 accompanied by a lot of bad news for the economy like:
- US: Big Trouble for General Motors, Crysler and Ford
- America’s Aviation System About To Collapse
- Starbucks to cut as many as 12,000 positions
And now the corporations are cheating you at the supermarkets: America’s Shrinking Groceries

The Dollar is being destroyed by the Federal Reserve, which has created in the last three years 4 Trillion Dollars of new money out of thin air: Ron Paul on Iran and Energy June 26, 2008

Ron Paul is further warning that: This coming crisis is bigger than the world has ever experienced
and that: We are at the beginning of a huge Dollar bubble.

The US Federal Reserve intentionally created inflation and that is why its credibility has fallen “below zero” and that is why Barclays warns of a financial storm as Federal Reserve’s credibility crumbles.

More dire warnings:
- RBS issues global stock and credit crash alert
- Morgan Stanley warns of ‘catastrophic event’ as ECB fights Federal Reserve
- Central bank body warns of Great Depression
- Credit crisis expands, hitting all kinds of consumer loans
- How Low Can The Dollar Go? Zero Value

Investors like Jim Rogers are telling us to “Avoid The Dollar At All Costs” and have told us that the Federal Reserve will fail and that Bernanke should be fired (alhough that isn’t possible because of his contract), because he has created the worst recession in the end and thats why he said: “Abolish the FED” on CNBC 2008.03.12.

The Fed is only doing good for the big corporations on Wall Street. If you would continuously come close to bankruptcy, because you have irresponsibly wasted your money, who will continuously give you billions of Dollars and bail you out, because you might fail? So I agree totally with Marc Faber: ‘Misleading’ Fed Should Let Banks Fail.

Well those corporations are said to be to “Big to Fail”, but they eventually will fail, because the entire system will fail and the Dollar is being destroyed in the process and so the people will end up with nothing, because their life savings are worthless paper. You are already paying the price for this policy, but maybe you haven’t looked at it that way:
The Price Of Food: 2007 - 2008
What inflation really is, is a taxation on monetary assets. And guess who is paying for all of that?

I just love this video. A must see:
The Stock Market and the Monetary System are on the verge of collapse!

Continue reading »

Tags: 9/11, airlines, bank failure, Barclays, Ben Bernanke, bubble, China, Citigroup, Condoleezza Rice, Constitution, crash, Credit Crisis, Dennis Kucinich, Depression, Dick Cheney, Dollar, Donald Rumsfeld, Dow Jones, ECB, Fed, Federal Reserve, Food Prices, G. W. Bush, General Motors, Gold, Government, Great Depression, Hyperinflationary Depression, IMF, Inflation, Iran, Meltdown, Monetary System, Morgan Stanley, mortgage crisis, Mortgages, New World Order, Oil, Oil Prices, Pentagon, Ron Paul, Silver, Starbucks, Stock Market, U.S., Wall Street, War

Related articles and videos:
- Ron Paul: This coming crisis is bigger than the world has ever experienced
- Dow suffers worst 1st half since ‘70
- Fortis Bank Predicts US Financial Market Meltdown Within Weeks
- Barclays warns of a financial storm as Federal Reserve’s credibility crumbles
- Jim Rogers: Avoid The Dollar At All Costs
- Ron Paul on Iran and Energy June 26, 2008
- Marc Faber: ‘Misleading’ Fed Should Let Banks Fail

BEIJING, July 1 (Xinhua) — China has taken a series of increasingly aggressive measures in the past several months to blunt the impact of so-called “hot money,” amid the explosive growth of its foreign exchange reserves, which have soared beyond what can be explained by trade and investment flows.

The inflows have been so massive as to raise alarms over the country’s financial security.

According to the State Administration of Foreign Exchange (SAFE), as of the end of May, forex reserves stood at 1.797 trillion U.S. dollars.

During the first five months of 2008, forex reserves increased by 18.7 percent year-on-year, or 268.7 billion U.S. dollars, SAFE figures showed.

Where is all that money coming from, and where is it going?

HOW MUCH IS “HOT MONEY”?

What caught the attention of analysts was that forex reserves jumped at the same time as the current-account surplus and foreign direct investment (FDI) into the fixed-asset field declined year-on-year.

Set against the increased forex reserves in the first five months of this year, there was the 78.02 billion U.S. dollars represented by the trade surplus, which was down 8.6 percent year-on-year.

Another 42.78 billion U.S. dollars was connected with FDI in the first five months, which soared nearly 55 percent year-on-year. But FDI going into fixed assets (longer-term investment), actually fell 3.5 percent in the same period.

Jiang Zheng, a macro-economist at a Beijing-based securities firm, has closely tracked these figures and analyzed the data.

Deducting the trade surplus and the FDI, there was an unexplained 147.9 billion U.S. dollars in the forex reserve increase figure, which Jiang and numerous other analysts consider to be “hot money”, which is usually defined as short-term global speculative funds moving among financial markets in search of the highest short-term return.

The government doesn’t release official figures on this category of funds; in fact, it doesn’t even use the term “hot money”. So analysts can only make estimates.

Jiang said the “hot money” figures deduced by analysts might even be underestimates. “There is a tricky decline among the FDI figures, i.e. the drop of fixed-asset investment,” he explained.

“Foreign direct investment in the first five months soared about 55 percent. But strangely, fixed-asset FDI in the first five months fell 3.5 percent from last year’s figure,” Jiang said.

Jiang said it appeared that some speculative money had managed to move into China in the guise of FDI.

But there are many other channels for “hot money” to flow into China. These include falsified international trade with over-invoiced exports and underground private banks, according to Jiang.

Jiang and other analysts maintained that as much as 600 billion U.S. dollars in “hot money” had surged into the country, most of it after 2005.

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Tags: China, Dollar, Fed, Federal Reserve, financial crisis, Inflation, Meltdown, mortgage crisis, Mortgages, U.S.

July 2, 2008

Source: YouTube

Tags: Al-Qaeda, Al-Qaida, bailout, bankruptcy, bubble, Bush administration, China, CIA, Congress, Constitution, Dollar, Fed, Federal Reserve, G. W. Bush, General Motors, Government, Inflation, Iran, Israel, Military, Nuclear weapons, Oil, Oil Prices, Starbucks, U.S., Wall Street, War

Citigroup forecasts that “gold is likely to regain $1,000/oz by end-08 and to work higher through 2009-2010.”

In their recent Gold Commodity Update, Citigroup metals analysts John H. Hill and Graham Wark also predicted that “longer term, we believe that gold is capable of doubling or tripling from current levels.”

The Citi global metals forecasts have an upward bias, at $906/$950/1000 average in 2008/09/10.

The analysts said “secular and seasonal factors favor gold” during the second half of this year. “We remain positive on gold, based on macro and supply/demand factors. The forces that have propelled gold for 5 years are firmly in place.”

During the second quarter of this year, gold has averaged $896/oz, up 34% from the same quarter of 2007 and down 3% from the first quarter of this year. “Following a series of downside fundamental tests gold appears to have found a floor, and quietly climbed back to $917/oz.”

“Despite extensive hand-wringing, the ‘floor in the dollar’ has inflicted minimal damage,” the analysts noted. “We believe the drivers of the gold bull market remain intact, heading into a favorable period.”

“We see gold as well-positioned heading into Autumn, when fabrication tends to heighten the market,” they added.

Related articles and videos:
- Dow suffers worst 1st half since ‘70
- Fortis Bank Predicts US Financial Market Meltdown Within Weeks
- Barclays warns of a financial storm as Federal Reserve’s credibility crumbles
- Jim Rogers: Avoid The Dollar At All Costs
- Ron Paul on Iran and Energy June 26, 2008
- Marc Faber: ‘Misleading’ Fed Should Let Banks Fail

The Dollar is being destroyed, Wall Street is collapsing, the U.S. are broke.
Of course Gold and Silver! will double and then triple.
Gold and Silver are the only safe haven in the coming meltdown of the financial markets.
It takes an extraordinary bright analyst to come to that conclusion!
More Information here: World Situation & Solution - The Infinite Unknown

Nevertheless, Hill and Wark warned, “It will be important for seasonal/volatility dampened fabrication demand to recover, before gold can move higher.” However, they added,” Longer term, we would not be surprised to see gold double from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary.”

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Tags: China, Citigroup, Commod, Dollar, Gold, Inflation, Meltdown, Oil, Russia, Silver

LONDON/TOKYO (Reuters) - Soaring commodity costs are denting manufacturing activity in Asia and Europe and the outlook looks bleak as new orders drop off in the face of rising prices, surveys showed on Tuesday.

Manufacturing activity in the euro zone contracted in June for the first time in three years while business confidence in Asia’s largest export markets is buckling and output has likely contracted further in the United States.

Purchasing managers indices showed manufacturing activity in the euro zone fell to 49.2 in June, China saw its index fall to a near three-year low of 52.0 while in Britain it contracted at its sharpest rate since December 2001.

The 50.0 mark separates growth from contraction. Factories worldwide have struggled in the face of soaring raw material and energy costs — oil hit over $143 a barrel on Monday.

Meanwhile, the Bank of Japan’s tankan corporate index of big manufacturers’ sentiment dropped to plus 5, from 11 in March, showing their mood has not been darker since 2003.

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Tags: ABN Amro, China, Commodities, ECB, Germany, Inflation, Japan, Oil, Oil Prices, Recession, Singapore, U.K., U.S.

This is a talk given at the Nassau Club in Princeton by Chris Hedges, former New York Times Middle East bureau chief:

Israel, without the United States, would probably not exist. The country came perilously close to extinction during the October 1973 war when Egypt, trained and backed by the Soviet Union, crossed the Suez Canal and the Syrians poured in over the Golan Heights. Huge American military transport planes came to the rescue.

They began landing every half-hour to refit the battered Israeli army, which had lost most of its heavy armor. By the time the war as over, the United States had given Israel $2.2 billion in emergency military aid. The intervention, which enraged the Arab world, triggered the OPEC oil embargo that for a time wreaked havoc on Western economies. This was perhaps the most dramatic example of the sustained life-support system the United States has provided to the Jewish state.

Israel was born at midnight May 14, 1948. The U.S. Recognized the new state 11 minutes later. The two countries have been locked in a deadly embrace ever since.Washington, at the beginning of the relationship, was able to be a moderating influence. An incensed President Eisenhower demanded and got Israel’s withdrawal after the Israelis occupied Gaza in 1956.

During the Six-Day War in 1967, Israeli warplanes bombed the USS Liberty. The ship, flying the U.S. Flag and stationed 15 miles off the Israeli coast, was intercepting tactical and strategic communications from both sides. The Israeli strikes killed 34 U.S. Sailors and wounded 171.

The deliberate attack froze, for a while, Washington’s enthusiasm for Israel. But ruptures like this one proved to be only bumps, soon smoothed out by an increasingly sophisticated and well-financed Israel lobby that set out to merge Israel and American foreign policy in the Middle East.

Israel has reaped tremendous rewards from this alliance. It has been given more than $140 billion in U.S. Direct economic and military assistance. It receives about $3 billion in direct assistance annually, roughly one-fifth of the U.S. Foreign aid budget. Although most American foreign aid packages stipulate that related military purchases have to be made in the United States, Israel is allowed to use about 25 percent of the money to subsidize its own growing and profitable defense industry. It is exempt, unlike other nations, from accounting for how it spends the aid money.

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Tags: biometrics, Bush administration, China, Dwight D. Eisenhower, Egypt, G. W. Bush, Gaza, Government, Hezbollah, Iran, Israel, Lebanon, Middle East, Military, NATO, OPEC, Palestine, Russia, Surveillance, Syria, U.S., War

Related articles and videos:

- Jim Rogers: Global Economic Outlook

- Jim Rogers: China’s Economic Advance is All But Unstoppable

- Jim Rogers: Bernanke should be fired 2008.03.19

- Jim Rogers says “Abolish the FED” on CNBC 2008.03.12

June 30 (Bloomberg) — Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said investors should steer clear of the dollar as the U.S. economy slows and favor commodities this year.

The dollar has slipped 7.7 percent against the euro and 5.9 percent versus the yen in 2008 as the Federal Reserve cut interest rates to stave off a U.S. recession. Oil prices have doubled in the past 12 months, while gold is up 44 percent.

Avoid the dollar “at all costs,” Rogers, chairman of Rogers Holdings, said in a speech in Shanghai today. “The best investments in 2008 are commodities and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.”

Oil and metal prices in New York have surged as a slumping U.S. currency made them cheaper for non-dollar investors to buy as a hedge against inflation in a slowing global economy. The dollar has stabilized in recent weeks, with currency volatility falling by the most since 1999 this quarter.

The comments from Rogers, 65, come two days after he told investors at a conference in Nanjing not to “give up” on Chinese shares, which have made China the world’s second worst performers this year. Rogers, who first started buying Chinese stocks in 1999, said he hadn’t sold any of his holdings.

Commodity Bull

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Tags: China, Commodities, Dollar, Fed, Federal Reserve, Gold, Inflation, Jim Rogers, Oil, Oil Prices, U.S.

The June 2008 Dow Crash
and the coming first strike attack on Iran
herald the end of dollar hegemony.

BREAK-DOW!

They say that pictures speak a thousand words, so let’s start this with a picture:

Today, the Dow crashed through its eight-year support level at 11,750. There isn’t much below now to keep it from dropping all the way back down to the 7,500-range. What that will do to American investor psychology and worse, consumer confidence, and therefore spending, and therefore the economy, is only too apparent.

The gold-attack on Monday obviously didn’t take. Gold recovered the following day and powered up by $26 the very next day to close in NY at $911. On Friday, gold confirmed its breakout, which means there will be little holding it back - just like there is now very little that’s holding the Dow up.

Unsurprisingly, the US war machinery is in full swing at this time. Troop and military asset movements into the Iranian theater are nearly complete, the Israelis have flown their practice-attack of 100-plus fighter jets over the Mediterranean, and Congress has again prostrated itself before its banking-guild rulers who want total government (and therefore banking) of all economic activity.

Congress did this by passing the FISA Amendments Act of 2008 to give retroactive immunity to telcoms spying for the government, and by proposing a resolution (the already infamous H. Con. Res. 362) by which Congress demands that Bush completely blockade Iran in order to force it to stop enriching uranium. This, naturally, is a perfect setup for unleashing the long-planned bombing campaign on Iran. Congressmen know that Iran will not accede to these international demands.

End result: We will probably get another war because of all this, just like we got one back in 2002-03 when the Dow plunged into the chasm this recently broken support level has bridged for these past eight years (see chart above).

The problem is that this time, it is a bipartisan gang of US war mongers in our Congress who all appear hell-bent on forcing Bush to attack Iran with a preemptive strike, possibly even an unprovoked nuclear first strike - something that human history so far has not had to deal with.

It is also something that will cause the US to forfeit any legitimate claims of world leadership for the remainder of that history.

The War Currency

Wars are rarely fought over national security issues, as political leaders often claim. At rock bottom, they are mostly fought over economic issues.

Iraq and Iran (if Congress and the administration get their way) are the only two countries the US has ever attacked preemptively. They are also the only two oil-producing countries that ever went off the petrodollar. The alleged nuclear ambitions of a terrorist-sponsoring country cannot be the real reason for the planned attack - because terrorist-sponsor North Korea was not only allowed to develop nuclear weapons unmolested, it was even allowed to test-launch a potentially nuclear-tipped ICBM at the US without any military repercussions whatsoever.

There goes the “national security” rationalization for this planned attack.

This fact exposes the attacks for what they really are. tools of US monetary policy. The dollar has no real value internationally, save for the fact that the now militarily enforced necessity for countries to buy dollars in order to buy oil creates artificial demand.

The euro’s existence threatens all of this, now. Oil countries have a dollar-alternative in the euro, and so does the rest of the world. The euro is designed to not be quite as inflationary as the dollar is and has been. This is done by virtue of the ECB’s exclusive mandate of “price stability”, another word for inflation fighting.

Yet Another War Currency

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Tags: China, Congress, crash, Dollar, Dow Jones, ECB, euro, Fed, Federal Reserve, George Orwell, Gold, Inflation, Iran, Iraq, Meltdown, Military, North Korea, Nuclear weapons, Oil, Oil Prices, Patriot Act, Ron Paul, Silver, Stock Market, U.S., Wall Street, War

One gets the impression that there are some people in Washington who believe that Israel or the U.S. can bomb Iran’s nuclear reactors, fly home, and it will be mission complete.

It makes you wonder if perhaps there is a virus going around that is gradually making people stupid. If we or Israel attack Iran, we will have a new war on our hands. The Iranians are not going to shrug off an attack and say, “You naughty boys, you.”

Consider how much trouble Iraq has given us. Some 4,000 dead and 29,000 wounded, a half a trillion dollars in cost and still climbing, and five years later, we cannot say that the country is pacified.

Iraq is a small country compared with Iran. Iran has about 70 million people. Its western mountains border the Persian Gulf. In other words, its missiles and guns look down on the U.S. ships below it. And it has lots of missiles, from short-range to intermediate-range (around 2,200 kilometers).

More to the point, it has been equipped by Russia with the fastest anti-ship missile on the planet. The SS-N-22 Sunburn can travel at Mach 3 at high altitude and at Mach 2.2 at low altitude. That is faster than anything in our arsenal.

Iran’s conventional forces include an army of 540,000 men and 300,000 reserves, including 120,000 Iranian Guards especially trained in unconventional warfare. It has more than 1,600 main battle tanks and 21,000 other armored combat vehicles. It has 3,200 artillery pieces, three submarines, 59 surface warships and 10 amphibious ships.

It’s been receiving help in arming itself from China, North Korea and Russia. Unlike Iraq, Iran’s forces have not been worn down with bombing, wars and sanctions. It also has a new anti-aircraft defense system from Russia that I’ve heard is pretty snazzy.

So, if you think we or Israel can attack Iran and not expect retaliation, I’d have to say with regret that you are a moron. If you think we could easily handle Iran in an all-out war, I’d have to promote you to idiot.

Attacking Iran would be folly, but we seem to be living in the Age of Folly. Morons and idiots took us into an unjustified war against Iraq before we had finished the job in Afghanistan. Now we have troops tied down in both countries.

For some years now, I’ve worried that we seem to be more and more like Colonial England - arrogant, racist, overestimating our own capacity and underestimating that of our enemies. As the fate of the British Empire demonstrates, that is a fatal flaw.

The British never dreamed that the “little yellow people” could come ashore by land and take Singapore from the rear or that they would sink the pride of the British fleet, but they did both.

I suppose no one in Washington can imagine the Iranians sinking one of our carriers in the Persian Gulf. How’d you like to be the president who has to tell the American people that we’ve lost a carrier for the first time since World War II?

Exactly how the Iranians will respond to an attack, I don’t know, but they will respond.

In keeping with our present policy, our attack on Iran would be illegal, since under the Nuclear Non-Proliferation Treaty, Iran has the right to enrich uranium for peaceful purposes.

Who would have thought that we would become the rogue nation committing acts of aggression around the globe? Continue reading »

Tags: Bush administration, China, G. W. Bush, Government, Iran, Iraq, Israel, Middle East, Military, Nuclear reactors, Russia, U.S., War

Vincent Quinones works on the floor of the New York Stock Exchange Wednesday after the Federal Reserve issued a mixed assessment of the economy. Yesterday, the Dow Jones industrial average closed down 358 points. (By Andrew Harrer — Bloomberg News)

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal.

It ain’t gonna happen. Not this summer. Not this fall. Not even next winter.

This thing’s going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We’re caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

Only this will be a different kind of recession — a recession with an overlay of inflation. That combo puts the Federal Reserve in a Catch-22 — whatever it does to solve one problem only makes the other worse. Emerging from a two-day meeting this week, Fed officials signaled that further recession-fighting rate cuts are unlikely and that their next move will be to raise rates to contain inflationary expectations.

Since last June, we’ve seen a fairly consistent pattern to the economic mood swings. Every three months or so, there’s a round of bad news about housing, followed by warnings of more bank write-offs and then a string of disappointing corporate earnings reports. Eventually, things stabilize and there are hints that the worst may be behind us. Stocks regain some of their lost ground, bonds fall and then — bam — the whole cycle starts again.

It was only in November that the Dow had recovered from the panicked summer sell-off and hit a record, just above 14,000. By March, it had fallen below 12,000. By May, it climbed above 13,000. Now it’s heading for a new floor at 11,000. Officially, that’s bear market territory. We’ll be lucky if that’s the floor.

In explaining why that second-half rebound never occurred, the Fed and the Treasury and the Wall Street machers will say that nobody could have foreseen $140 a barrel oil. As excuses go, blaming it on an oil shock is a hardy perennial. That’s what Jimmy Carter and Fed Chairman Arthur Burns did in the late ’70s, and what George H.W. Bush and Alan Greenspan did in the early ’90s. Don’t believe it.

Truth is, there are always price or supply shocks of one sort or another. The real problem is that the underlying fundamentals had gotten badly out of whack, making the economy susceptible to a shock. The only way to make things better is to get those fundamentals back in balance. In this case, that means bringing what we consume in line with what we produce, letting the dollar fall to its natural level, wringing the excess capacity out of industries that overexpanded during the credit bubble and allowing real estate prices to fall in line with incomes.

The last hope for a second-half rebound began to fade earlier this month when Lehman Brothers reported that it wasn’t as immune to the credit-market downturn as it had led everyone to believe. Lehman scrambled to restore confidence by firing two top executives and raising billions in additional capital, but even that wasn’t enough to quiet speculation that it could be the next Bear Stearns.

Since then, there has been a steady drumbeat of worrisome news from nearly every sector of the economy.

American Express and Discover warn that customers are falling further behind on their debts. UPS and Federal Express report a noticeable slowdown in shipments, while fuel costs are soaring. According to the Case-Shiller index, home prices in the top 20 markets fell 15 percent in April from the year before, and Fannie Mae and Freddie Mac report that mortgage delinquency rates doubled over the same period — and that’s for conventional home loans, not subprime. United Airlines accelerates the race to cut costs and capacity by laying off 950 pilots — 15 percent of its total — as a number of airlines retire planes and hint that they may delay delivery or cancel orders of new jets from Boeing and Airbus. Goldman Sachs, which has already had to withdraw its rosy forecast for stocks, now admits it was also too optimistic about junk bond defaults, and analysts warn that Citigroup and Merrill Lynch will also be forced to take additional big write-downs on their mortgage portfolios.

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Tags: Airbus, airlines, Alan Greenspan, bank failure, Boeing, China, Citigroup, Depression, Fannie Mae, Fed, Federal Reserve, Freddie Mac, G. W. Bush, General Motors, Goldman Sachs, hedge funds, India, Inflation, Jimmy Carter, Lehman Brothers, Meltdown, Merrill Lynch, Mississippi, Oil, Oil Prices, Rate Cut, Recession, Stock Market, Unemployment, Wall Street