America's Financial Crisis

[KanadaHye]

Re: America's Financial Crisis

The only problem with the USA is that special interest groups control everything. These groups use the control to get what they want which is often counter to whats good for the nation. This problem is almost nonexictent in China thus it is growing and prospering and will continue to do so so long as those governing keep China's interests in mind. In the USA you have religious nutts, apac, oil, corporate and many other powerfull lobbies which have taken away the power from the people and have enoughf of it to influence government. One can argue that having a strong centralized government which has the countries interests at heart is better at runing the country then lets say what we have today. Once special interests start telling you what to do (like they do today in America) you can kiss that country goodbye.

I'm not really sure it's much different now than back in the days that Americans fought wars for banana's to protect the interests of the United Fruit Company. Fundamental brainwashing (misleading the people) has always been and will always be a way to persuade the lower class to fight wars for the rich since the lower class is usually less educated and will buy whatever B.S. they are fed. Even now with all the internet communication, etc.... citizen's still believe the propaganda that is heard through their media and government over the information they can find on the internet and other independent sources. America has survived through enslaving people before and even though it will take generations to pay back the current debt, the working class will have no choice but to put in the time and work the country out of debt. The people of the Republic of China have no debt, they already worked for every penny they earned. You know what they say, paybacks are a bi!tch.

[Haykakan]

Re: America's Financial Crisis

I'm not really sure it's much different now than back in the days that Americans fought wars for banana's to protect the interests of the United Fruit Company. Fundamental brainwashing (misleading the people) has always been and will always be a way to persuade the lower class to fight wars for the rich since the lower class is usually less educated and will buy whatever B.S. they are fed. Even now with all the internet communication, etc.... citizen's still believe the propaganda that is heard through their media and government over the information they can find on the internet and other independent sources. America has survived through enslaving people before and even though it will take generations to pay back the current debt, the working class will have no choice but to put in the time and work the country out of debt. The people of the Republic of China have no debt, they already worked for every penny they earned. You know what they say, paybacks are a bi!tch.

The big difference between todays and yesteryears in the forces controling the USA government is that the interests of these forces today are not aligned with the interests of the country. Sure brainwashing and propogaanda existed then to but it was done to make the nation stronger even if it meant doing terrible things, today these terrible things are being done but they promote the interests of the special interests and often hurt national interests.

[Armanen]

Re: America's Financial Crisis

Those of you who are concerned about the long term economic health of this nation would do well to watch the following video reports, in particular the current episode of the Keiser Report on RT, especially the second half of the show starting at 13:30.

Armenian


"Many in American government are becoming increasingly concerned about the hundreds of billions, almost trillion dollars in US treasury bonds that China owns and this is giving them perhaps too much leverage over US policy."

"Well, yeah... they are making US policy... China and Israel. China makes America's financial policy, Israel Makes America's political policies and foreign policies. Those are the two countries running America. There's nobody inside Washington running America..."
Stacy Herbert and Max Keiser on RT


Keiser Report №22: http://www.youtube.com/user/RussiaTo.../8/3WRsLXOTtt0

Webster Tarpley: Bankers in slump plot against euro to save dollar: http://www.youtube.com/user/RussiaTo...12/8XRFII9AiQc

Marc Faber on US Bubble, 'worthless' dollar & Gold 'the Savior': http://www.youtube.com/user/RussiaTo.../3/pAJeZaFdbJA

Max Keiser: Dollar to be buried way before 2018: http://www.youtube.com/user/RussiaTo.../1/D7dH4e8HYFA

[Armanen]

Re: America's Financial Crisis

Americans today and those effected by America's cultural hype around the world suffer from a severe form of collective hypnosis. The American Empire's greatest achievement has been to fool its citizenry into thinking that the nation is democratically run; its greatest achievement has been to fool people worldwide into thinking that it was a universal force for good, the policeman of the world; its greatest weapon has been Hollywood, MTV and Jeans.

This deception of the masses worldwide was made possible in part by anti-Communist and anti-Fascist propaganda fed to the so-called "free world," consistently and persistently since the Second World War. The depth and scale of this of this weapon of mass deception was simply astounding. However, the cold reality of the matter was that the American political/financial system was no different in essence and perhaps more corrupt than most nations run by so-called "oligarchs" today. If you and I had a better life in the US it had nothing to do with a wonderful system, or because of what some Americans want to believe - divine intervention. Americans enjoyed a good life, or what was known as the "American Dream", only because of the unprecedented wealth brought upon by war loot, past slavery, genocides and a global financial system that was designed by it to serve it.

This is what made the empire immensely rich, where the even crumbs that fell of the banquet table of the financial elite in America was enough for individuals like you and I to have a decent life. The fundamental problem here, however, is that the masses today don't know how to assess and/or evaluate this reality.

Which brings me to a funny thing called "democracy". True democracy, the notion that the naive/ignorant masses can effectively rule themselves has never existed in practice. Even in the ancient Greek city-states and the Roman Empire, those who had the right to vote were essentially the nation's intellectual, military, spiritual and financial elite. One day we may just realize that the West's so-called "democracy" is just as flawed and unnatural as the East's "communism". Just think for a moment, we are required to obtain higher education, a good vocational training and/or a government issued license for doing practically anything of importance in the civilized world. Correct? Then why is it that the most important task of electing a nation's leadership is somehow expected to be entrusted to the masses? When this practice is imposed by the West on developing/third world nations it usually and predictably ends up in chaos, for obvious reasons.

Since the Second World War, the concept of democracy has often been used by the political elite in the West as a destructive weapon against nation's whose governments are not complaint or subservient to it.

The fact of the matter is, for better or for worst, the world has always been ruled by a financial/political elite, it's no exception today and it's no exception in the West. The elite in advanced nations of the world generally get around this democracy dilemma by having politicians on both sides of the fence work for them. Many are only now beginning to realize that in America, Republican and Democrat parties are essentially two sides of one coin. If the Soviet Union was run by one party with multiple factions, America is run by two parties of one faction. Therefore, whoever wins an election in America - the financial/political elite wins. But do we the people really understand this process? Sadly, thus far the answer seem to be no.

I vividly recall when "yes we can" Obama was running for the presidency, a majority of Americans (including us Armenians) were convinced that by their electoral participation they were making a "change" for good in the US. My suggestions to these people at the time that nothing would change in the country by the elections because American presidents today are nothing by representatives of special interests was often dismissed by the sheeple.

We the people desperately need to realize that when we see a Clinton or a Bush or an Obama, or whoever else they are going to be appointing next in the White House, he or she is ultimately responsible not to the people - but to the financial/political elite (also known as oligarchs in former Soviet states) that made it all possible for them. Nevertheless, the American people's complacency and ignorance of the world is now catching up with them. As they slept, the once great republic was sold to the highest bidders. And now, political analysts, historians and intellectuals alike are discussing not 'if' the American empire will fall but when...

Armenian

Like Rome Before the Fall? Not Yet


Paul Craig Roberts on US crumbling economic power
http://www.youtube.com/watch?v=eNs6dhU75Zs

VICE PRESIDENT JOE BIDEN complains that he is being driven crazy because so many people are betting on America’s demise. Reports of it are not just exaggerated; they are, he insists, ridiculous. Like President Obama, he will not accept “second place” for the United States. Despite the present crippling budget deficit and the crushing burden of projected debt, he denies that the country is destined to fulfill a “prophecy that we are going to be a great nation that has failed because we lost control of our economy and overextended.”


Mr. Biden was referring in particular to the influential book “The Rise and Fall of the Great Powers” by Paul Kennedy, a British historian who teaches at Yale. Published in 1988, the book argues that the ascendancy of states or empires results from the superiority of their material resources, and that the wealth on which that dominance rests is eroded by the huge military expenditures needed to sustain national or imperial power, leading inexorably to its decline and fall. The thesis seems a tad schematic, but Professor Kennedy maintains it with dazzling cogency. In any debate about the development of the United States, one would certainly tend to side with the detached historian rather than the partisan politician.



All too often, however, students of the past succumb to the temptation to foretell the future. For reasons best known to himself, for example, the eminent British historian A. J. P. Taylor predicted that the Second World War would reach its climax in the Spanish port of Vigo. Equally preposterous in its way was Francis Fukuyama’s claim that the conclusion of the cold war marked the end of ideological evolution, “the end of history.” When indulging his own penchant for prophecy, Paul Kennedy too proved sadly fallible. In his book, he wrote that Japan would not stagnate and that Russia, clinging to Communism, would not boom economically by the early 21st century. Of course, Professor Kennedy did not base his forecasts on runes or entrails or stars. He weighed the available evidence and extrapolated from existing trends. He studied form, entered suitable caveats and hedged his bets. In short, he relied on sophisticated guesswork. However, the past is a map, not a compass. It charts human experience, stops at the present and gives no clear sense of direction. History does not repeat itself nor, as Arnold Toynbee would have it, does it proceed in rhythms or cycles. Events buck trends. Everything, as Gibbon said, is subject to “the vicissitudes of fortune.”


Still, history is our only guide. It is natural to seek instruction from it about the trajectory of earlier great powers, especially at a time when the weary American Titan seems to be staggering under “the too vast orb of its fate.” This phrase (loosely taken from Matthew Arnold) was used by the British politician Joseph Chamberlain to depict the plight of his nation in 1902. The country had indeed suffered a severe setback during its South African war and its global supremacy was under threat from mighty rivals in the United States and Germany. Yet the British Empire was at its apogee. Paradoxically, the larger great powers grow, the more they worry about their vulnerability. Rudyard Kipling wrote this elegy to the empire, of which he was unofficial poet laureate, to mark its most spectacular pageant, Queen Victoria’s Diamond Jubilee in 1897.


Far-called, our navies melt away;

On dunes and headlands sinks the fire;

Lo, all our pomp of yesterday

Is one with Nineveh and Tyre!


Aptly quoting these lines exactly a century later, when Britain gave up its last major colony, Hong Kong, this newspaper’s editorial page noted that the queen’s empire had been relegated to the history books; the United States had become the heir to Rome.

Now doom-mongers conjure with Roman and British analogies in order to trace the decay of American hegemony. In so doing they ignore Gibbon’s warning about the danger of comparing epochs remote from one another. It is obviously possible to find striking similarities between the predicament of Rome and that of Washington (itself modeled on classical lines, incidentally, because it aspired to be the capital of a mighty empire). Overstretch is common to both, for example: Rome defended frontiers on the Tigris, the Danube and the Rhine; America’s informal empire, controlled diplomatically, commercially and militarily, girdles the globe.


But the differences are palpable. The Roman economy depended on agriculture whereas the United States has an enormous industrial base, producing nearly a quarter of the world’s manufactured goods, and dominates the relatively new invention of the service economy. Rome was prone to internecine strife whereas America is constitutionally stable. Rome was overwhelmed by barbarians whereas America’s armed forces are so powerful as to prompt dreams of what is known in military doctrine as “full spectrum dominance.” Even in an age of terrorism and nuclear proliferation, it is hard to visualize an attack on America as devastating as that inflicted by Vandals, Goths and Huns on Rome.


Similarly, the British Empire was a weak empire. It was acquired thanks to certain temporary advantages, and run on a shoestring. It governed the multitudes of India with 1,250 civil servants, and garrisoned its African colonies with a thousand policemen and soldiers, not one above the rank of colonel. The thin white line often broke under pressure.

Then Britain lost a whole generation of empire-builders during the First World War, and was virtually bankrupted by the Second. It was bailed out by the United States, which briefly sustained the British Empire as an auxiliary in the cold war. But its status as no more than a client was amply demonstrated in 1956, when President Dwight D. Eisenhower cracked the whip and stopped the Anglo-French invasion of Suez. The empire was quickly dismembered, its ghost surviving as the Commonwealth.

Stemming from a tiny island, the British Empire was once described as an oak tree in a plant pot. American dominion, by contrast, is rooted in a bountiful continent. But does not the organic metaphor imply that states, like other living things, will inevitably deteriorate and die? This suggestion was convincingly denied by Lord Palmerston, the champion of the Victorian “gunboat diplomacy” that brought China to its knees. To compare that country to a sick man or an old tree was an “utterly unphilosophical mistake,” he said, since a nation could adopt mechanical means of self-renovation. This, needless to say, China has done.

Despite its grave problems, there are some relatively simple steps America could take to recover its position. It could bring its military commitments into line with its resources, rely more on the “soft power” of diplomacy and economic engagement and, as George Washington said, take advantage of its geographically detached situation to “defy material injury from external annoyance.” Such a policy would permit more investment in productive enterprise and pay for butter as well as guns, thus vindicating Joe Biden’s faith in the recuperative capacities of the Great Republic. On the other hand, Paul Kennedy may well be right to predict that the United States will shrink relatively in wealth, and therefore power, as its Asian and European rivals grow. Such contractions can be traumatic, as suggested by the experience of Britain, which, as Dean Acheson said, lost an empire without finding a role.


However, the British now tend to echo the historian Lord Macaulay, who said that the end of their physical empire would be the proudest day in their history if they left behind “the imperishable empire” of their arts and their morals, their literature and their laws. In other words, national self-esteem should not stem from global might but from cultural values and achievements. Faced by the prospect of decline, Americans could hardly do better than to cling to the noblest traditions of their own civilization.

Source: http://www.nytimes.com/2010/02/25/op...%20fall&st=cse

[Armanen]

Re: America's Financial Crisis

Britain Grapples With Debt of Greek Proportions

Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets. The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape. The slide in the pound followed a sharper decline on Monday after polls released over the weekend indicated that the opposition Conservatives had lost their clear lead in the election race.


Without a strong political majority to tackle Britain’s lumbering fiscal problems, investors could start to make it greatly more expensive for the government to raise funds, setting the stage for a potential double-dip recession, if not worse. “If you really want a fiscal problem, look at the U.K.,” said Mark Schofield, a fixed-income strategist at Citigroup. “In Europe, the average deficit is about 6 percent of G.D.P. and in the U.K. it’s 12 percent. It is only just beginning.” Since the Labour government’s intense fiscal intervention in 2008 and 2009, yields on British government debt have soared to among the highest in Europe. And on a broader scale, which includes the borrowing of households and companies, the overall level of debt in Britain is the second-largest in the world, after Japan’s, at 380 percent of the country’s gross domestic product, according to a recent report by the consulting company McKinsey. In recent weeks, the focus has been on debt scofflaws in Europe like Greece, Portugal and Spain, countries where borrowing costs have shot up in line with their growing deficits as investors demanded higher rates to compensate them for the added risk of lending the governments money.

But the recent plunge in the value of the pound below $1.50 and the gradual move upward of Britain’s benchmark 10-year borrowing rate on gilts to above 4 percent suggest that investors are now getting ready to reassess the country’s fiscal condition. Britain is not in the 16-nation euro zone and, unlike Greece and other struggling countries that use the currency, it retains control over its monetary policy. As a result, it has benefited so far from a huge bond-buying program undertaken by the Bank of England — proportionally, the largest in the world — that has kept mortgage rates and gilt yields at unusually low levels. That means the government and its citizens have been able to continue to borrow at interest rates that do not reflect their true financial situation. Indeed, the increase in private and government debt here contrasts sharply with the deleveraging that has been going on in the United States. British household debt is now 170 percent of overall annual income, compared with 130 percent in the United States. In an echo of the United States’ rush into subprime mortgages with low teaser rates, millions of homeowners in Britain have piled into variable-rate mortgages that are linked to the rock-bottom base rate.


As for the British government, it has been able to finance a budget deficit of 12.5 percent of G.D.P. — equal to Greece’s — at an interest rate more than two full percentage points lower only because the Bank of England bought the majority of the bonds it issued last year. “It’s not just ‘basket cases’ like Greece that can be considered candidates for sovereign crises,” said Simon White of Variant Perception, a research house in London that caters to hedge funds and wealthy individuals. “Gilts and sterling will continue to come under pressure as scrutiny of the U.K. fiscal situation intensifies.” Adding to this concern is the precarious condition of the British consumer. As interest rates have hit new lows, the popularity of variable-rate loans has grown. At the end of December, 40 percent of new mortgages were tracking the government’s base rate. Despite comments from Mervyn King, the governor of the Bank of England, that he might restart his quantitative easing program in light of current economic weakness, the view among investors is growing that interest rates here will rise further, along with higher inflation and Britain’s increased risk profile.


In a speech this year, Andrew Haldane, the executive director of financial stability at the Bank of England, warned about how vulnerable Britain was to a rate increase, pointing out that an increase of one percentage point would cause debt service costs relative to income to double, to 13 percent. “This is a ticking time bomb,” said Nick Hopkinson of Property Portfolio Rescue, a company that assists overleveraged homeowners. “There are over 400,000 people who are in arrears with their mortgage rates the cheapest they have ever been. When rates increase, a lot of people will be tipped over the edge.” As a result, those counting on the British consumer to take up the slack from any scaling back of government borrowing could be in for a shock. Consider Sheridan King, a sales manager who is struggling to pay off his £32,000 ($47,075) in nonmortgage debt. Far from thinking about going shopping, his first priority is keeping clear of his creditors. And even though his variable mortgage of about £100,000 carries a very low rate, interest costs are already chewing up a substantial portion of his pay, and he is deeply worried about the future. “If rates go up, it will be a very dangerous situation for me,” Mr. King said. “It might lead me to consider bankruptcy.”

For the time being, at least, the British government faces no such threat. Despite its borrowing and spending excesses, Britain still maintains a triple-A credit rating and much of its debt is long term. But with 29 percent of British bonds held by foreigners, Britain, like Greece, remains highly vulnerable to the vicissitudes of outside investors. Since early this year, foreign holdings of British bonds have fallen from 35 percent, a trend that has tracked the pound’s decline and contributed to the increase in the yield on its 10-year gilts. As to which political party he thinks is best placed to handle these challenges, Mr. King takes a skeptical view. “We are just struggling to get by with all this debt,” he said. “It’s time the government got its house in order.”


Source: http://www.nytimes.com/2010/03/03/bu...ound&st=Search

[KanadaHye]

Re: America's Financial Crisis

Doesn't look like Greece will be getting a bailout... this might start a domino effect across the EU.

[hipeter924]

Re: America's Financial Crisis

Doesn't look like Greece will be getting a bailout... this might start a domino effect across the EU.

There is already a domino effect, it started with Iceland and Greenland, and now its hit Greece, Hungary and the rest.

[KanadaHye]

Re: America's Financial Crisis

There is already a domino effect, it started with Iceland and Greenland, and now its hit Greece, Hungary and the rest.

Kinda makes you wonder how the collapse of the twin towers which represents the centre of the financial world became a self fulfilling prophecy. Hmmmmm.

[hipeter924]

Re: America's Financial Crisis

Kinda makes you wonder how the collapse of the twin towers which represents the centre of the financial world became a self fulfilling prophecy. Hmmmmm.

Well the economic policies were developed before 9/11 so perhaps.

[KanadaHye]

Re: America's Financial Crisis

MetLife set to buy AIG's Alico unit: sources

NEW YORK (Reuters) - AIG (NYSE:AIG - News) was closing in on a deal on Sunday to sell its foreign life insurance unit to MetLife Inc (NYSE:MET - News) for about $15.5 billion in cash and stock, leaving it with a substantial minority stake in MetLife, sources familiar with the matter said.

MetLife is expected to pay American International Group about $6.8 billion in cash and about $8.7 billion in equity, which includes convertible preferred, common shares and common equivalent securities, for the unit, American Life Insurance Co (Alico), one of the sources said.

The common stock and securities equivalent to common shares would give AIG about 14 percent ownership in MetLife, while the convertible preferred is expected to be liquidated before it converts, the source said.

With the convertible preferred stock, though, AIG's stake would go above 20 percent, according to the sources.

A deal, which has been approved by both boards, could be announced as soon as Monday, the sources said, declining to be named because it is not yet public.

Alico would help MetLife, the largest publicly traded U.S. life insurer, expand its presence in international markets, especially in Japan.

The unit, founded in 1921 and based in Wilmington, Delaware, sells life insurance and retirement products to 19 million customers in 54 countries.

A deal is expected to close by the end of this year, and MetLife estimates it to be accretive by 45 cents per share to 55 cents per share in 2011, excluding one-time costs, one of the sources said.

The deal would be the second major business sale by AIG in a week and will allow the insurer to repay billions it owes to the U.S. government after a September 2008 rescue, which has since swelled to $182.3 billion.

The insurer agreed to sell its Asian life insurance unit, American International Assurance (AIA), to Britain's Prudential Plc (LSE:PRU.L - News) last Monday for $35.5 billion, the largest insurance deal ever.

Deals for AIA and Alico will allow AIG to repay the government around $32 billion in cash when they close, with more expected as the insurer sells Prudential and MetLife stock over time.

AIG, which is nearly 80 percent owned by the U.S. government, declined to comment. MetLife was not immediately available for comment.

METLIFE STAKE

The equity component of the purchase price includes about $3 billion in convertible preferred, and the rest in common stock and temporary securities similar to common shares, the sources said.

AIG will hold below 20 percent of MetLife as a result at closing, a stake that is expected to increase to above 20 percent -- but below 25 percent -- later, after MetLife's shareholders approve the conversion of the temporary securities to common stock, these sources said.

But one of the sources said AIG's actual ownership would never go beyond 14 percent because it cannot convert the convertible preferred stock for several years, "and it will end up being liquidated before that."

The stake that AIG will get also carries restrictions on voting, the source said.

The shares will be voted in the same proportion as all other MetLife shares on any matter put to a shareholder vote, the source added.

The number of common stock being given to AIG is fixed and so the precise deal value fluctuates with change in MetLife's share price, the sources said.

The cash component of the consideration is expected to be used to pay down the $9 billion preferred interest that the Federal Reserve Bank of New York holds in the unit, the sources said. The equity will be sold over time to redeem the remaining interest, they said.

LONG NEGOTIATIONS

A sale comes after months of negotiations and became possible after the New York Fed, advised by Morgan Stanley (NYSE:MS - News), agreed in March 2009 to swap its debt into equity in special purpose vehicles that AIG created to hold AIA and Alico.

The Fed's aggressive bet has paid off in spades, allowing AIG, which has been advised by Blackstone Group (NYSE:BX - News) throughout this process, to get much higher values for the two businesses than it was drawing in the months after the bailout.

Early last year, MetLife had offered about $11 billion for the unit, but the price went up in the months after March 2009, as the Fed's move gave AIG more time to sell these businesses.

AIG is being advised by Citigroup Inc (NYSE:C - News) and Goldman Sachs (NYSE:GS - News), according to several sources.

Credit Suisse (VTX:CSGN.VX - News) served as the lead adviser for MetLife. The insurer was also advised by Barclays Capital (LSE:BARC.L - News), Bank of America Merrill Lynch (NYSE:BAC - News), Deutsche Bank (XETRABKGN.DE - News) and HSBC (LSE:HSBA.L - News).

Under the terms of his contract, AIG Chief Executive Robert Benmosche, a former MetLife chief and current shareholder, cannot be involved in AIG's discussions to sell Alico to his former employer.

Benmosche, however, played a major role in negotiations in the AIA deal with Prudential.

http://finance.yahoo.com/news/MetLif....html?x=0&.v=4

Hmmmmm.....

It seems AIG is being advised by Citigroup Inc and Goldman Sachs, according to sources.

So, three of the biggest and baddest, which all had to have bailout money... are now taking advise from each other. Doesn't seem to make too much sense now does it? lol. Goldman always has it's dirty hands in any and every deal... and in every financial collapse.

Bend over and reach for your ankles.... something tells me, we are all about to get screwed.