America's Financial Crisis

[Armenian]

Re: America's Financial Crisis

You know the worrying proposition that comes with a potential US collapse, is the starting of conflicts much more dangerous than Iraq and Afganistan. America may become desperate, and when such giants fall they fall hard and they crush others as well. America has more conventional firepower then probably the rest of the world. America has enough nuclear capacity to blow up the world 3 times over. Dangerous times.

Excellent point, Skhara. I have been saying this in my posts. Their fear of loosing their wealth and power will force them to react in violent and unpredictable manner. The wars in Iraq and Afghanistan are inherently tied to their desire to protect their global hegemony. But that was only the start.

I just found this.

REAL REASON WHY USA & ISRAEL WILL ATTACK IRAN http://www.youtube.com/watch?v=EEpp9...eature=related

[North Pole]

Re: America's Financial Crisis

Here's what Ron Paul said during CNN interview:

"We cannot afford 700 billion dollars in protecting an Empire. It has to come to an end because the truth is we are flat out broke and we have to borrow every single penny to fight that war from the Chinese."

Source: http://youtube.com/watch?v=EF37-9OGblw


Fannie and Freddie taken onto US government books

”Meanwhile, the federal debt will grow at an unsustainable rate, which means more borrowing from China, more borrowing from Japan, and more borrowing from oil exporters like Saudi Arabia,” Conrad said.

http://www.ft.com/cms/s/0/e30472a6-7e79-11dd-b1af-000077b07658.html

[North Pole]

Re: America's Financial Crisis

The Almighty Ruble

Source: http://www.nytimes.com/2007/08/08/bu...=worldbusiness

Buy Rubles.

The Central Bank of the Russian Federation (Bank of Russia)

External and Public Relations Department

12 Neglinnaya Street, Moscow, 107016 Russia; tel: (7 495) 771 4417, 771 4669; fax: (7 495) 771-4932

http://www.cbr.ru/eng/pwe.aspx?file=/eng/press/080918_112721eng_res.htm

http://www.cbr.ru/eng

[North Pole]

Re: America's Financial Crisis

USA is going down big time....

Morgan Stanley To Be Sold To Communist China?

Morgan Stanley Said to Be in Talks With China's CIC (Update1)

By Christine Harper

Sept. 18 (Bloomberg) -- Morgan Stanley, the second-biggest independent U.S. securities firm, may sell a larger stake to China Investment Corp. and is in talks about a possible merger with Wachovia Corp., a person familiar with the matter said.

Morgan Stanley pared its loss on the New York Stock Exchange after the person said China's state-controlled fund may buy as much as 49 percent of the New York-based investment bank. The person declined to be identified because the talks aren't public and may end in no agreement.

Morgan Stanley, led by Chief Executive Officer John Mack, and Goldman Sachs Group Inc., the biggest U.S. securities firm, tumbled the most ever yesterday as the deepening credit crunch fueled concern their funding sources are drying up. Morgan Stanley shares plunged 42 percent this week as Lehman Brothers Holdings Inc. filed for bankruptcy protection and Merrill Lynch & Co. sold itself to Bank of America Corp.

``John Mack certainly needs the stability of the core deposit base at Wachovia at this point, so I can see some of the broad outlines of such a deal, but I think investors would greet that one with some incredulity,'' Nancy Bush, founder and analyst at NAB Research LLC, said in an interview on Bloomberg Television. ``This is a very extraordinary time.''

Morgan Stanley's shares fell $1.46, or 6.7 percent to $20.29 in New York Stock Exchange composite trading at 10:14 a.m., after falling as much as 14 percent earlier today. Wachovia rose 8.4 percent to $9.89.

Gao Xiging in U.S.

China Investment Corp. bought a 9.9 percent stake in Morgan Stanley in December after the firm reported a quarterly loss. CIC's president, Gao Xiging, is in the U.S. with Wei Christianson, who runs Morgan Stanley's business in China, the Financial Times reported today.

Mack addressed employees this morning in a crowded meeting in New York, saying the firm's earnings and balance sheet were sound, according to people who attended or watched the firm-wide video broadcast. He said Morgan Stanley was in stronger shape than Lehman or Bear Stearns Co., which was forced to sell itself to JPMorgan Chase & Co. earlier this year.

Two of the attendees, who declined to be named because they weren't authorized to speak to the press, said he sounded upbeat and confident.

Mark Lake, a spokesman at Morgan Stanley in New York, declined to comment.

READ MORE -- http://www.bloomberg.com/apps/news?p...eJw&refer=news

[yerazhishda]

Re: America's Financial Crisis

The continued Bolshevik-style nationalization of America...we're in deep sh*t here people; this is only the beginning.

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With Fed’s $85 Billion Loan, A.I.G. Starts to Calculate a Measured Sell-Off

September 18, 2008
By MARY WILLIAMS WALSH

A day after the Fed’s stunning takeover of American International Group, its new managers began contemplating a breakup of the insurer’s far-flung empire and selling it off in coming months.

They are not under pressure to act quickly and settle for fire-sale prices. The purpose of the Fed’s $85 billion loan, after all, was to buy time for A.I.G. so it would not have to dump its healthy companies in a chaotic market. Even so, A.I.G. is borrowing the Fed’s money on expensive terms, and it must pay it off within two years. So A.I.G. also has an incentive to sell off subsidiaries and pay off its costly loan early.

Many questions remain to be answered about the process. The Fed oversees the banking system and has no experience dismantling a gigantic insurance company with global reach.

A committee of state insurance regulators is being formed to oversee the sale of A.I.G.’s life and property-casualty insurance companies, considered the xxxels in its crown.

source: New York Times

[Azad]

Re: America's Financial Crisis

Dangerous times.

You can say that again and again. With all the billions that the west is pumping into "liquid" confidence is getting even worse. All these billions are nothing but future economic promises that they can not fulfill. The turning point of all of this mess goes to one point in history.... when Tsar Putin locked Khodorkovsky. It was one of the smartest moves by the Russians.

[Armanen]

Re: America's Financial Crisis

You know the worrying proposition that comes with a potential US collapse, is the starting of conflicts much more dangerous than Iraq and Afganistan.

America may become desperate, and when such giants fall they fall hard and they crush others as well. America has more conventional firepower then probably the rest of the world. America has enough nuclear capacity to blow up the world 3 times over.

Dangerous times.

But I would expect that to occur whether the decline is rapid or even immediate such as with the soviet union, or if it's more drawn out.

No one can say what route america will take, it could go the way of rome and be destroyed or look more like the u.k. which until 1918 was the world's hegemonic power. Plus with the changing demographics in the u.s. it would be a suprise to see a split among the union shortly before or after the crash.

All of this is interesting to discuss, but we shouldn't overlook the power the u.s. has and will continue to have, even if this is not going to be her century.

[skhara]

Re: America's Financial Crisis

You know the worrying proposition that comes with a potential US collapse, is the starting of conflicts much more dangerous than Iraq and Afganistan.

America may become desperate, and when such giants fall they fall hard and they crush others as well. America has more conventional firepower then probably the rest of the world. America has enough nuclear capacity to blow up the world 3 times over.

Dangerous times.

[Sip]

Re: America's Financial Crisis

The situation in the US may be bad but that doesn't mean other places are enjoying great prosperity. The entire world is in very shaky situations and I wouldn't be surprised if for example China under goes a MASSIVE restructuring in the coming decades.

Personally I am not too pessimistic on the US ... at least no where near what these rather biased views in this thread try to paint. The main hurt in the US is the housing market which will inevitably bounce back. There are sectors that are in huge troubles (for example automobile and air travel) and one would have to live under a rock not to realize that manufacturing jobs have been moving to china.

But much like the "tech outsourcing" and the "oh everything is going to India" ended up being mostly an empty scare, I think the manufacturing will also correct itself over time. There was a time where "made in USA" really said something about the quality ... and the way China has been going, I don't think it'll be long till we see similar days again. After all, people will only tolerate so many dead babies and pets before taking a second look at China and reevaluating things a bit

[Armenian]

Re: America's Financial Crisis

One of the ways to defeat an otherwise mighty empire is to undermine its financial system. The following news articles underscore the sound strategy of moving away from the US Dollar at a time when other currencies are on the rise. It is now beginning to seem as if Iran, Venezuela and Russia have gradually begun to implement such measures, albeit in limited form. If China and oil producing Arab states within the Persian Gulf region join them in their move against the US dollar, that is precisely when the US will fall into utter ruin. We may already be witnessing the beginning stages of an America's decline. Alarmingly, the danger that is being posed to the dollar from overseas is coming at a time when the US economy is suffering a serious crisis and a time when America's national debt is running in the tune of trillions of dollars and fast rising. Needless to say, an organized attack on the US dollar can potentially have an utterly devastating impact upon the US. As a result, I believe that US policy makers in Washington will attempt everything and anything in their powers to prevent such a thing from occurring. Consequently, this may either result in drastic reversals in Washington's foreign policy formulations, or it may simply result in additional military confrontations around the world. Nonetheless, Americans today are finally waking up from their American Dream... only to find themselves in an American Nightmare.

Armenian

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The Almighty Ruble

The ruble got no respect. During the cold war, it symbolized the backward Soviet economy. After the U.S.S.R. collapsed, it was an avatar of instability. Even plumbers in Moscow often preferred to be paid in bottles of vodka rather than rubles — the bottles did not lose their value. No more. Lifted by high oil prices and a wave of foreign investment, the once humble ruble is showing its muscle, and fueling a consumer boom. After gaining 20 percent in value against the dollar in the last few years, the ruble is even starting to displace the greenback as Russians’ currency of choice for both saving and spending. As the ruble increases in value — not just against the dollar, but against brawnier currencies, too, like the euro — imported goods are becoming cheaper for Russian consumers. Now ruble notes, once handed over by the fistful for a loaf of bread, are being used to purchase Mercedeses, flat-screen televisions and European beach vacations. Of course, the party could be short-lived. Russia takes in roughly $530 million a day from oil, its most lucrative export. If the price of oil declines, so will the ruble. And even if the price of oil does not fall, an oil-fueled boom brings dangers of its own. In many countries, an over-reliance on petrodollars has led to underinvestment in businesses outside oil and gas, and a subsequent withering of other domestic industries. To deal with such downsides of the ruble’s rise, Russia is salting away oil money in a rainy day fund, called the Stabilization Fund, which holds more than $120 billion. In January, Moscow will split it into two funds: the Reserve Fund and the Fund of National Prosperity, the latter intended for state investments.

Together with the Central Bank of Russia’s foreign reserves, Russian authorities have a currency reserve of $413 billion, the largest per capita foreign currency reserve of any major economy, including China’s. In an oil downturn, authorities could spend that reserve to protect the ruble. In the meantime, the reserve adds an aura of stability to the economy for investors. “Excluding a couple of oil countries where the money belongs to the local ruling family, which is something different, Russia has surpassed all the newly industrializing Asian countries,” in foreign currency reserves, Kenneth S. Rogoff, an economics professor at Harvard, said in a telephone interview. Analysts say Russia’s underlying fundamentals are good, too. First, oil exports are not the sole source of the ruble’s rise. That was the case before 2007, but now foreign investment has become a significant factor. Private capital flows into Russia increased roughly 360 percent in the first six months of this year, compared with the same period last year. Only about 30 percent is attributable to oil and other extractive industries, according to the State Statistics Committee. Analysts also point to what they call Russia’s sound macroeconomics. President Vladimir V. Putin’s government has managed inflation, though certainly not eliminated it. And through its tight control over politics and society, the regime has kept demands for social spending in check — a leadership approach reminiscent of the authoritarian “Asian model” of economic development.

[...]

Source: http://www.nytimes.com/2007/08/08/bu...=worldbusiness

Iran: Almost Dollar-Free

Iran is trumpeting its success at shifting away from the use of dollars in its oil trade. Such a shift is not easy, and generates little but costs. Mohammad-Ali Khatibi, an executive in Iran's National Iranian Oil Co., said Oct. 2 that after two years of effort, Iran uses the U.S. dollar in only 15 percent of its oil transactions, with 20 percent being carried out in Japanese yen and 65 percent in euros. Insisting upon non-dollar payment really only creates rhetorical ammunition. So long as the global system -- and the energy industry in particular -- is dollar-denominated, any non-dollar payments for oil subtract the exchange rate costs from the payments. Put simply, Iran's insistence on anything but dollars translates into a small transaction fee loss on every oil sale. So while Iran can stand proud and bite its thumb at Washington, proud that it has played a small role in reducing demand for the dollar and thus making the currency slightly weaker, the process racks up a hardly inconsequential cost. In the first quarter of 2007, a 1 percent transaction cost would have cost Iran $500 million, a significant sum for a country wracked by inflation and dropping living standards. Once the payments are done, keeping the proceeds in non-dollar currencies could make more sense. For the past few years the U.S. dollar has been weakening, so the relative value of non-dollar holdings has gradually increased. Such logic is more obvious for euros, where gains have been impressive, than for the yen, whose real appreciation has been only marginal.

[...]

Source: http://www.stratfor.com/products/pre...ected=Analyses

Are Iran, Russia, China behind dollar's free-fall?



Some see 'Currency Cold War' meant to bring U.S. to its knees

The hottest selling book in China right now is called "Currency Wars," which makes the case that the U.S. Federal Reserve is a puppet of the Rothschilds banking dynasty and it has persuaded some top officials Beijing should resist America's demands to appreciate its own undervalued currency, the yuan. This might not be news of concern to most Americans if the U.S. dollar were not in precipitous free-fall, having reached record lows against the euro yesterday. What would it mean if China ever threw its economic weight around by dumping dollars in a major way? Suffice it to say it is referred to in some quarters as China's financial "nuclear option," because it would be the economic equivalent of detonating a thermonuclear weapon in the world's financial markets. But the American dollar's fate is hardly in the hands of the Chinese alone. Other foreign parties suspected of participating in a new "Currency Cold War" are Iran, Russia and Venezuela. Diane Francis, a financial reporter for the National Post in Canada, says it plainly and boldly: "There is a Currency Cold War being waged by Russia, Iran and various allies such as Venezuela." The grand strategy being engineered by Vladimir Putin, she writes, is to force the use of euros as the international monetary standard as a transition to the Russian ruble. "This is simply a monetary version of the old Cold War, minus the missiles," she writes.

Experts don't see any short-term reprieve for the falling value of the dollar. Kathy Lien, chief currency strategist with DailyFX.com in the US, told Bloomberg she expects the American dollar to slide even further, forcing more lending rates cuts in the U.S. to stave off recession. "It seems like every single passing day we have a new record low in the dollar, and a new record high in the euro, and it's driven by the fact that U.S. data is continuing to deteriorate," she said. If other nations do not follow the U.S. in cutting rates, the slide in the value of the dollar would most likely continue. If the dollar trend continues spiraling downward, the risk is that nations like China – or Japan or Saudi Arabia – which have been buying U.S. Treasury bonds and thereby funding America's deficit, would stop that practice. That would be the nuclear option. China, with $1.3 trillion in foreign exchange reserves as a result of the massive and growing $260 billion U.S. trade deficit, has taken huge losses with the falling dollar, given that some 80 percent of China's $1.3 trillion in foreign reserves is held in U.S. dollar assets, largely in U.S. treasury securities.

[...]

Source: http://www.wnd.com/news/article.asp?ARTICLE_ID=57936

Russia Quietly Starts to Shift Its Oil Trade Into Rubles

Americans surely found little to celebrate when the price of oil settled above $100 a barrel last week. They could, though, be thankful that oil is still priced in dollars, making the milestone of triple-digit oil prices noteworthy at all. Russia, the world’s second-largest oil-exporting nation after Saudi Arabia, has been quietly preparing to switch trading in Russian Ural Blend oil, the country’s primary export, to the ruble from the dollar. Industry analysts and officials, however, say that this change, if it comes, is still some time off. The Russian effort began modestly this month, with trading in refined products for the domestic market. Still, the effort to squeeze the dollar out of Russian oil sales is yet another project notable for swagger and ambition by the Kremlin, which has already wielded its energy wealth to assert influence in Eastern Europe and former Soviet states. “They are serious,” said Yaroslav Lissovolik, the chief economist at Deutsche Bank in Moscow. “This is something they are giving priority to.”

Oil trading is nearly always denominated in dollars. When Middle Eastern oil is sold to Asia, for example, the price is set in dollars. Similarly, Russia’s large trade with Western Europe and the former Soviet states in crude oil and natural gas is conducted in dollar-denominated contracts. Gazprom, the natural gas monopoly, set the price of gas in Ukraine at $179 per 1,000 cubic meters in 2008, for example. There are no proposals yet to switch gas pricing away from dollars. As a result, companies and countries that buy petroleum products are encouraged to hold dollar reserves to pay for their supplies, coincidentally helping the American economy support its trade deficit. Russia would like to change this practice, at least among its customers, as a means of elevating the importance of the ruble, a new source of national pride after gaining 30 percent against the dollar during the current oil boom. In a speech on economic policy this month, Dmitri A. Medvedev, a deputy prime minister and the likely successor to President Vladimir V. Putin in elections on March 2, said Russia should seize opportunities created by the weak dollar. “Today, the global economy is going through uneasy times,” Mr. Medvedev said. “The role of the key reserve currencies is under review. And we must take advantage of it.” He asserted that “the ruble will de facto become one of the regional reserve currencies.”

Other oil-exporting countries are also chafing at dealing in the weakening dollar. Since 2005, Iran, the world’s fourth-largest oil exporter, has tried to open a commodity exchange to trade oil in currencies other than the dollar. The Iranian ambassador to Russia said Iran might choose rubles to free his country from “dollar slavery.” To be sure, some economists have dismissed the project as improbable, given the exotic nature of a security — oil futures contracts denominated in rubles — that would blend currency risk with the dollar-based global oil market. Ruble-denominated futures contracts for Ural Blend, the main Russian grade, would be attractive only if the dollar continues to depreciate, said Vitaly Y. Yermakov, research director for Russian and Caspian energy at Cambridge Energy Research Associates. “There is a big distance between the desire to trade commodities for rubles and the ability to do so,” he said. All this has not stopped the Kremlin from trying. “We are in Russia, and the currency is rubles, not euros, not dollars,” he said. “We don’t want to depend on the rise or fall of the dollar.” “We will trade in rubles, to strengthen the ruble,” he said.

Source: http://www.nytimes.com/2008/02/27/bu...=worldbusiness

United Russia backs ban on "dollar", "euro" terms among MPs

The pro-presidential United Russia faction backs a proposal by the head of Russia's Public Chamber to ban MPs and officials from using the terms "dollar" and "euro" in domestic economic debates, a faction top official said Friday. "This is a very timely initiative," Vyacheslav Volodin said commenting on the initiative voiced by academician Yevgeny Velikhov Thursday. "We believe we should use only the word 'ruble'." "If today government members [and] deputies calculate expenses and revenue in foreign currency, speak and think about foreign currency, we will never establish our national currency," he said. "We need to start with ourselves, to convince society that our ruble is the most stable currency, and that it's strengthening," Volodin said. Volodin said the lives of Russians could improve if officials dealing with finance and economics were to begin counting everything in rubles.

Source: http://en.rian.ru/russia/20060414/46423009.html