Global showdowns: Dollar vs Asia and EU speculators vs Germany

Posted on May 18, 2009 by stacyherbert| 55 Comments

Stacy Summary: The standoffs grow more tense. Which sides are going to win?

China & Japan growing increasingly worried about US dollar devaluation policy

China’s gold reserves may back yuan internationalization (h/t snoopdiddy)

Gold at $930 a bargain

Europe waits for Germany to come to the rescue

This entry was posted in Headlines and tagged eu, germany, gold, us dollar. Bookmark the permalink.

55 Responses to Global showdowns: Dollar vs Asia and EU speculators vs Germany

harry_w | May 19, 2009 at 1:42 pm |

Further to Liu on international trade in dollars versus local currencies:

http://ftalphaville.ft.com/blog/2009/05/19/56020/chop-chop-chop-the-dollar/

[b]Chop, chop, chop the dollar[/b]
Posted by Izabella Kaminska on May 19 15:50.

The FT reported on Tuesday that Brazil and China have come one step closer towards dropping the dollar in trade transactions in favour of their own currencies. Brazilian president Luiz Inácio Lula da Silva is currently visiting Beijing on a state visit.

The news follows a Reuters report on Saturday that Russia and Turkey have also discussed the possibility of switching to national currencies for the purpose of bilateral trade. As Reuters points out, Russia is Turkey’s largest trading partner, while Turkey is the fifth largest trading partner for Russia.

The Chinese/Brazil move, meanwhile, was originally discussed by Brazilian President Lula da Silva and Chinese president Hu Jintao during the G20 summit in London last month. …
——————————————-

http://www.businessweek.com/
China and Brazil: Dump the Dollar

Posted by: Dexter Roberts on May 19

It is just the latest sign that China and other developing nations are increasingly ready to challenge the currency status quo.
…

…while economists say the likelihood of a real competitive alternative to the supremacy of the dollar remains far off, that doesn’t mean that agreements like the one being bruited between China and Brazil won’t emerge sooner. China for its part has already made clear its dissatisfaction with the currency situation. The first blast came on March 13 when China’s premier took a swipe at the U.S. “We have lent a huge amount of money to the United States,” Wen said at a press conference in Beijing’s Great Hall of the People. “I am a little bit worried. I request the U.S. to maintain its good credit, to honor its promises, and to guarantee the safety of China’s assets.” China, of course, has built up the world’s largest foreign reserves, totaling $1.95 trillion, with some two-thirds of that held in U.S. assets, mainly Treasuries.

That was followed by a March 23 call by China’s top central banker Zhou Xiaochuan to dump the U.S. dollar in favor of what he called a new “super-sovereign reserve currency.” The goal, Zhou wrote, is to “create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run.”
—————————————-

The Liu article above explains why developing countries must make this break to avoid working for ever depreciating paper, and why I think workers in developed countries should support them to avoid being undercut by dollar wage slaves in the developing world.
snoop diddy | May 18, 2009 at 9:23 pm |

a case of backdating options:
SEC Charges Monster Worldwide Inc. for Backdating Scheme
http://www.sec.gov/news/press/2009/2009-113.htm
Don (Joe bag O chickens) | May 18, 2009 at 8:49 pm |

@Snoop D.

I followed along with the AU mining boom and subsequent bust. I know exactly what you are talking about in regards to the ASX and the companies as I still own stock in two ventures.

I would not be surprised at all to see much much more Chinese involvement in AU minerals especially U3o8.

The Chinese bought up some lousy Canadian gold mining companies that were probably mining the market TSX more than anything else, and as soon as the funds flowed in those junior gold companies became junior U3o8 prospectors and they began buying up claims in the US. I can not remember the companies (my investigation was 3 years ago) but the point seemed clear to me that the Chinese will need a lot of fuel for their anticipated 20 reactors that they have planed to bring on line by 2020.

South Korea has a very direct “we want your deposit” approach
They have sent reps around the world to talk with junior mining companies and the big boys too. This is weird considering 99% of all reactors purchased mined u3o8, not the “pounds in the ground”.
Matt Smyth | May 18, 2009 at 8:13 pm |

GB

It sounds like you are talking about Canadian dollars, I have lots of those. You make it sound like the world will stop turning if its mandated that central banks reserves are held in a certain percentage of gold.

I wish the FIAT dream that defies the laws of economics were true too. Then we could all wake up in the morning, jump on the computer and add money to are bank accounts. But only Ben Bernanke can do that.

I wish I lived in Zimbabwe, then the price of my gold would be vewy vewy high.
harry_w | May 18, 2009 at 5:46 pm |

The Ambrose Evans_Pritchard piece, including the reference to navy battle groups, reads as a very crude threat of default to the exporters of Asia (also Germany and oil exporters), who provide the credit necessary for debt-based consumption in the ‘Anglo-sphere’ and Club Med.

Ironically, he’s trying to exploit the international trade component of a crisis of capital which Marx outlined — arising from of an economy based on debt, creating fictitious wealth which suddenly collapses at the turn of the business cycle (or when attempts to thwart the business cycle using debt eventually fail):

Ch. 30: Money-Capital and Real Capital. I
http://www.marxists.org/archive/marx/works/1894-c3/ch30.htm

There is and was no ‘savings glut’ in Asia, it’s a Fed fiction. Higher rates of personal savings are necessary where there’s no social security, healthcare, free education, state pensions:
————————————————————-
http://www.atimes.com/atimes/Global_Economy/JA26Dj06.html
Jan 26, 2008
THE ROAD TO HYPERINFLATION
Fed helpless in its own crisis
By Henry C K Liu
Myth of poor folk over-saving…
Central banks support fleecing…
Greenspan blames Third World – not the Fed…
————————————————————-
The accumulation of most of these foreign currency reserves is not the result of ‘saving’ by individuals anyway. It’s a consequence of accepting dollars for exports.

This piece, written pre-crisis, precisely describes how the debt-based US has come to face the same ‘deflation’ as global-creditor Japan. It also describes how wage deflation pumped up profits and fed into rampant asset inflation, used to secure even more debt and further speculation creating asset bubbles, and why Japan’s talk of Samurai bonds is so critical.

What Asia needs is more local currency reserves to raise local trade between productive economies, and higher consumption within the region, based on rising wages. It even takes a tilt at ‘productivity’, the term Max despises. If you think it’s too long, just scroll on, or try wading through the full piece (if only there were a forum):
————————————————————-
http://www.atimes.com/atimes/Global_Economy/HA11Dj01.html
Jan 11, 2006
Of debt, deflation and rotten apples
By Henry C K Liu
Neutral interest rate and income disparity
The Fed’s below-neutral interest-rate policy between 2000 and 2004 produced stealth inflation, by pushing price appreciation to the asset side while prices of consumer goods were kept low by US corporations aggressively exploiting global wage arbitrage. Domestic wages in the US have been kept low with the threat of more offshore outsourcing of jobs. The money that would have gone to domestic wage rises went instead to corporate profits, which have also been magnified by low debt-service cost, leading to widening income disparity between owners of capital and sellers of labor.

Alan Greenspan, outgoing chairman of the Federal Reserve Board of Governors, explained this distortion of income parity with the magic of rising US productivity, …The lower wages fall and the higher unemployment rises, the more corporate profit rises, and the more Greenspan marvels at the miracle of US productivity.

Mounting debt levels have enabled the United States to celebrate sky-high productivity increases by simply working less. To keep consumer demand up, the public is taught to trade off wage income for dividend income, which has been boosted by tax cuts and exemptions on dividends, augmented also by one-time cash-out refinancing of ever bigger home mortgages reflective of ballooning price appreciation. Instead of moving to a bigger house made affordable by rising income, the same house is providing consumers with windfall cash to support consumption even as income stagnates.

This unsustainable blood-letting cure for a sick economy is celebrated by neo-liberal economists as a happy boom from free trade. The trade apple is kept shining on the outside by sucking nutrients for a slowly depleting, rotting core, eaten away by a growing debt worm, turning a sick economy into a terminal case.
…

Global savings glut is only a dollar glut
There is another factor that distorts the historical term structure of interest rates, …Fed chairman-designate Bernanke argued in a speech last March 29, while still a Fed governor, that a “global savings glut” has depressed US interest rates since 2000. …Bernanke argued that over the past decade a combination of diverse forces has created a significant increase in the global supply of savings, in fact a global savings glut, which helps to explain both the increase in the US current-account deficit and the relatively low level of long-term real interest rates in the world today. He asserted that an important source of the global savings glut has been a remarkable reversal in the previous flows of credit to developing and emerging-market economies, a shift that has transformed those economies from borrowers on international capital markets to large net lenders.
…
Foreign countries with dollar trade surpluses with the US increased reserves by issuing local-currency sovereign debts to withdraw the trade-surplus dollars in their economies, thereby, according to Bernanke, mobilizing domestic savings, and then using the dollar proceeds to buy US Treasury securities and other dollar assets. In effect, foreign governments have acted as financial intermediaries, channeling domestic savings away from local uses and into international capital markets. What Bernanke neglected to say was that much of this money belonged to off-source subsidiaries of US corporate parents. These US corporations achieve profitability by cross-border wage and benefit arbitrage through outsourcing. The net effect of lowering dollar interest rates by outsourcing also reduces interest income for US pension funds, dealing a double blow to American workers.
…
The so-called global savings glut is hardly the result of voluntary behavior on the part of foreign central banks. It is the coercive effect of dollar hegemony that has left the trading partners of the United States without a choice.

The US trade deficit is denominated in dollars, which can only be recycled into dollar assets. Local-currency sovereign debts are issued by foreign treasuries to soak up the current-account surplus dollars. That foreign central banks end up holding larger dollar reserves can hardly be viewed as national savings.
…
The glut Bernanke refers to is only a dollar glut that in fact impoverishes the exporting economies. There is no global savings glut at all. While the exporting economies continue to suffer from shortage of capital, having shipped real wealth to the US in exchange for paper that cannot be used at home, their central banks are creditors holding huge amounts of dollar-denominated debt instruments. It is not a global savings glut. It is a global dollar glut caused by the Fed printing money freely to feed the gargantuan US appetite for debt.
…
What has happened to Japan for the past decade is a terrifying warning to Greenspan. The fundamental problems separating the US and Japanese economies are structurally different, yet the financial symptoms of economic imbalance are strikingly similar. Japan, with its huge trade surplus denominated mostly in US dollars, is the world’s greatest creditor nation externally, but the world’s greatest debtor nation internally. The United States, the world’s greatest debtor nation externally, is the world’s greatest sovereign creditor through dollar hegemony. What happened to Japan was that even with the world’s largest holding of dollar reserves, the country was unable to ward off a protracted deflationary financial crisis caused structurally by exporting wealth for paper that is useless in Japan. The more dollars Japan earns, the more its domestic sovereign debt expands, along with the expansion of its foreign-exchange reserves, causing more sever domestic deflation.

For the US, even when the Fed can print dollars at will, it will be unable to ward off a debt crisis; in fact the more dollars it prints, the more seriously it adds to the crisis. At some point, even paper debts cannot be repaid by printing more paper because of the exponentially ballooning interest spiral. Paying interest on unpaid interest will soon accelerate the debt crisis. Debt, if not repaid by gold, must be repaid by work; and the Fed, by printing more paper money, actually destroys what little real productive work is still available in the US economy.
…
As shown by the Japanese example, deflation is damaging to the financial health of the banking system. An operative central banking regime depends on functioning links between monetary policy and banking policy. With deflation, interest rates are forced to become very low – close to zero, or even negative – below neutral. Yet near-zero interest rates only postpone, not eliminate, the need for banks to deal with problem loans, because, notwithstanding Milton Friedman’s famous pronouncement that inflation is everywhere and anywhere a monetary phenomenon, deflation, the reverse of inflation, is not everywhere and anywhere just a monetary phenomenon. Deflation is a problem that cannot be cured by monetary measures alone, as Japan has found out and as the United States is about to. Global deflation can only be cured by reforming the international finance architecture to allow international trade to be replaced by domestic development as the engine for growth. Global trade under dollar hegemony drains domestic currency in the exporting economies with domestic currency sovereign debs to enable the central banks to accumulate dollar reserves. This causes domestic deflation.
…
In the era of industrial capitalism, a low interest rate was a stimulant. But in this era of finance capitalism flirting fearlessly with debt, lowering rates creates complex problems, especially when most big borrowers routinely hedge their interest-rate exposures. For them, even when short-term rates drop or rise abruptly, the cost remains the same for the duration of the loan term, the only difference being that they pay a different party. While debtors remain solvent, investors in securitized loans go under. Credit derivatives have been the hot source of profit for most finance companies and will be the weapon of massive destruction for the financial system, as Warren Buffet warned.
…
The rounds of global deflation in the 1990s were caused by financial crises resulting from the systemic effects of dollar hegemony as sustained by a global central-banking regime regulated by the Bank of International Settlements (BIS). The neo-liberal globalization of trade and finance prevented all non-US-dollar economies from effectively increasing their local-currency money supply for domestic development.

To avoid speculative attacks on their currencies aiming to remain below market exchange rates to compete for export market share, all increases in local-currency money supply must be channeled to fuel export for trade surplus in dollars. This is a self-neutralizing game. As trade surplus mounts, market pressure increases to revalue the currency upward. To deal with this market pressure, the central bank needs to soak up more dollars from the domestic economy to hold as foreign-exchange reserves.

This shrinks the exporting economies’ own-currency money supply while adding to the dollar money supply to fuel the dollar economy at the expense of non-dollar local economies. Consumers in non-dollar economies are robbed of purchasing power because low wages are necessary to compete in the global export market to accumulate trade surpluses in foreign currencies, mostly US dollars. At the same time, sovereign credit cannot be used to finance domestic development to raise domestic income, for fear of inducing speculative attacks on the local currencies.
…

Export for dollars not a viable national purpose
…it is quite possible to make the export sector earn yen instead of dollars. A yen trade surplus would contribute to curing deflation in Japan. But it will still not solve Japan’s export-based economic malaise because the US will not be able to buy Japanese goods if it cannot pay for them with dollars. To get yen, the US might actually have to work for money instead of merely turning on the printing press.
…
The fact is that Japan, and really the whole world, cannot solve its financial problems without facing up to the reality that no free market or deregulated markets exist now for foreign exchange, credits or even equity anywhere. Arbitrary, secretive and whimsical intervention on a massive scale hangs as an ever-present threat over the global system of financial exchange. Individual self-preservation moves and short-term profit incentive will bring the global system crashing down some Tuesday morning. This is what Alan Greenspan means by the need of central banks to provide “catastrophic insurance”.
————————————————————-
That is why exporters must demand payment in their own currencies, to stop providing endless credit which impoverishes their own people, and ultimately workers all over the world.

It’s proven better than any pre-crisis forecast I’ve seen, explaining events right up to today.
Giuseppe Bagodonutti | May 18, 2009 at 4:40 pm |

Matt,

intellectual depletion comes from apathy.

Belief in a FIAT representation of Energy and Resource, is no different than believing in the Big Electric Daddy in the Sky.

And being a Privateer Gnome of Zurich,
is not much different.

And despite the possibly deluded optimism of the “bear denier”,
or the pessimism of the “ready for the frontier” gold prospecting whisky pounding gunslingers,
the world still wants a DOLLAR.

If the world is not going to shake its dependence on commerce by currency, and adopt a more enlightened view of social organization, then who am I to stop the machine.

Use the system,
before it uses you.
The path to enlightenment begins
With the first step of a “fool”.
Matt Smyth | May 18, 2009 at 3:19 pm |

GB

I would argue that believing in Obama greenbacks is scientifically . intellectual depletion.
Giuseppe Bagodonutti | May 18, 2009 at 1:55 pm |

GOLD GOLD EVERYWHERE,
and not an ounce to hold…

@Matt Smyth, the Harper Circus wants your SIN so they can track WHO has all the gold, in case they need to “collect” it in the event of econo-war.

But I digress,
GOLD from a scientific perspective is anachronistic.
It does have some application, however…
(besides a Gold Speculator’s hedge bet)

I like Platinum and Palladium…
Why?
They are the main elements utilized in the creation of FUEL CATALYSTS…
I’m surprised that Max and Stacy don’t “invest” more heavily in those.

Here’s an article from Jon Nadler of Kitco (I’m starting to like the way this guy thinks…) discussing a recent discovery that augments the output of Fuel Cells by 5 times…

The TECHNOLOGY IS COMING… be patient…
After all,
Necessity is the Mother of Invention…

http://www.kitco.com/ind/nadler/may182009A.html
Mep | May 18, 2009 at 1:41 pm |

Paul Krugman has been making the rounds in Asia. He recently blogged about the US-China relationship:

http://krugman.blogs.nytimes.com/2009/05/15/china-and-the-liquidity-trap/

Is he right? (It doesn’t seem right to me that China avoiding Treasury bonds is good for the US. Also doesn’t seem right that a weaker dollar is good for us.)
Phil | May 18, 2009 at 12:32 pm |

FYI…

Gold Holds Tight as China-Brazil Begin “Explosive” Talks, Fed Buys “Bear Market Rallies” in Treasuries
…
… Brazilian president Luiz Inacio “Lula” da Silva meantime travels to China this week, and “the outcome could be quite explosive,” says Steven Barrow, also at Standard Bank.

Having blamed the global financial crisis on “blue-eyed bankers” at this April’s G20 summit, “Lula has already said that he will suggest to China’s leaders that bilateral trade is conducted in local currencies, not the US Dollar,” Barrow notes….
…
http://www.goldnewswire.net/gold-holds-tight-as-china-brazil-begin-explosive-talks-fed-buys-bear-market-rallies-in-treasuries
sharon | May 18, 2009 at 11:28 am |

@ Phil
Re: Do they sell 1 Kg. bars ?
I think so, I know they sell 500g bars.
Kjr | May 18, 2009 at 11:17 am |

“The third component of the economic hurricane is the euro itself. In its first decade of existence, the euro contributed to continental Europe’s growth by allowing Spain, Greece, Portugal, Ireland and Denmark to run enormous current account deficits and enjoy housing and mortgage booms far more extreme than anything seen in Britain or the US. These booms provided markets for Germany’s production of cars and other consumer goods.”

This is BS. Housing booms don’t create consumer goods markets. They kill them. Housing booms are only boom for financial capital and property speculators. For real economy, housing boom means just destructive deflation.
Matt Smyth | May 18, 2009 at 10:48 am |

Max seems to have all the savvy with how the gold market is being manipulated, maybe he can elaborate on it.

I heard on GATA that the US is having so much problems controling the price of gold that it is allowing it to increase in value by 15% a year. They will do what it takes to stay under that.

Another smartass that I read about ( http://www.deepcaster.com ) is so convinced that he knows when the oligarchs will order another hit on the gold price. He just says to buy mining stock on the hits and sell on the breakouts. You wouldnt need to do that with a normal market of course.

Day trader nation! what a joke.
Brandon | May 18, 2009 at 10:11 am |

The idea of a $50,000 gold price is not something I like. However with all these central banks printing money like crazy a much higher gold price maybe $5,000 seems almost certain. The FED isn’t the only central bank debasing it’s currency.
Phil | May 18, 2009 at 10:02 am |

@sharon
Thx Sharon.. I’ll pass it on .
Ot’s not too far away from Gloucester, sounds fine.
Do they sell 1 Kg. bars ?
sharon | May 18, 2009 at 9:56 am |

@ Phil

There are loads of places you can buy gold in the UK and it’s VAT free. You don’t go to the banks, you go to gold retailers. In Birmingham there’s a huge area called the Jewellery Quarter with 100′s of shops selling gold, diamonds, etc.
Phil | May 18, 2009 at 9:38 am |

@Brandon .. ” a 50,000 Gold price would wipe out all world debt.”

And the need for new 128 bit computers to count the money would spur the economy on !

Great idea !
Brandon | May 18, 2009 at 9:31 am |

a 50,000 Gold price would wipe out all world debt. It makes sense for the Central banks to reset the gold price much higher in the future. The current system we have had since 1971 is falling apart, we need a new system.
M | May 18, 2009 at 8:05 am |

In short: the government is way to intrusive in economics. Something that is constitutionally forbidden, as governments are allowed only a “fair” amount of power over individuals.
M | May 18, 2009 at 8:03 am |

@Snoop

I agree. The goverment is way to large and has too much influence.

In Europe (the Netherlands) way over fifty cents on every euro goes to the government.

Now there is a law that states that part of the task of the legal power is to prevent citizens against too much intrusion from the government. With a tax level of over 50% I would argue the governmental influence in not legally sustained. If I were a lawyer I would try to make a case and charge the government with asking unlawful tax amounts and exercising an illegal amounts (economic) power- unfortunately I’m not.
Phil | May 18, 2009 at 7:58 am |

@M ” And why did gold get hammered big time in such a small time period today? ”

We ask ourselves this question every Monday morning !
Nothing new !
( backed up by UK MSM propaganda .. the GBP is saved .. hooray )
snoop diddy | May 18, 2009 at 7:58 am |

Because Goldman Sachs wished it.
M | May 18, 2009 at 7:56 am |

And why did gold get hammered big time in such a small time period today?
M | May 18, 2009 at 7:49 am |

…The whole point of the IMF coming into those countries is to help them not collapse, but they are forcing them to adopt policies that make the recession worse…

…As an example, Latvia’s economy is due to contract by 12% because the IMF has forced it to adopt contractionary policies. Such negative growth will translate in hundreds of thousands of job losses. When Latvia deviated from the imposed policies, the IMF denied it the second tranche of bail-out money…
M | May 18, 2009 at 7:47 am |

Any of you guys already seen this article: http://www.atimes.com/atimes/Global_Economy/KE19Dj05.html

It argues that the IMF is using this crisis for achieving it’s own goals – increasing the need for their criminal organization.

CAPE TOWN – The International Monetary Fund (IMF) is attempting to reinvent itself with the global financial crisis, in the process using the opportunity to promote policies that exacerbate the recession by shrinking rather than growing economies…

…Before the economic crisis struck, the IMF was on the brink of becoming redundant as lending dropped to its lowest level in 25 years….
snoop diddy | May 18, 2009 at 7:45 am |

M,

the govt creates money out of nothing and puts interest on it. The degree of seperation from the source determines the mark up of that printed money. where would you rather be? Close to or part of the the govt sectoror or further away in free enterprise? Govt gets bigger over time because of this concept I believe.
It contributes to the smash and grab CEOs who dont give a damn about the company becuase as boom and busts happen the govt sector just keeps on growing while the private sector doesnt have the luxury (apart from those ‘too big to fail’ of course who are quasi govt companies anyway). The govt just keeps on getting bigger and penny pinching as it gets bigger like Max and Stacy have mentioned. And regulations and laws make it harder all the time on private enterprise.
Danny | May 18, 2009 at 7:42 am |

@ Phil

I have the same problem with my sister sibling in regards to gold. Shes constantly berating me, “WTF you buying all that gold for!!” ….and she just lost €30,000 on a house that fell through. What can you do? some of this is just too big for some people

@Stacy

oooooooooooo!!!- marc faber. looking forward to it. Already been on press tv’s back about there slowness in uploading the show.

Refering to how easy it is to buy gold/silver; ITS A DISASTER IN IRELAND. There’s only a very limited selection from the central bank in dublin- coin shops? forget it. I get mine from overseas.
I envy those in Canada/America/mainland Europe for gold accessibilty and ease of purchase/sale

@Mike

you’re too funny mate-– 18/18 liverpool and UTD. oh no!!
M | May 18, 2009 at 7:35 am |

@Snoop

That article about the system being designed to be totalitarian is nonsense.
It is correct that bubbles cause some to lose and some to gain. Even under a strict gold standard bubbles can emerge – be it at the cost of the rest of the economy. However, the people that stand to gain in such a bubble are the ones who understand the market. By amassing wealth by understanding the market they increase their influence on that market, leading to a situation where the smart people are in control over the guys that have manoure for brains. This will most likely be rather beneficial to society as a whole.

I would however agree to someone argumenting that nowadays the system is corrupted. This is largely due to the unprecedented (financial) power of (central) banks and governments (who are held hostage), not by the capitalistic system in itself.
snoop diddy | May 18, 2009 at 7:34 am |

Well Duh!

Obama says U.S. Debt is Unsustainable
http://economyincrisis.org/articles/show/2885
Phil | May 18, 2009 at 7:23 am |

@Mother Earth ” Catherine Austin Fitts ”

Great lady !
IRTA Conference 2008 … must listen !
Mother Earth | May 18, 2009 at 7:21 am |

If I had resources I’d stop accepting any currency for them, but would ask goods or land in return.

I am suspecting the US from pretending it still has stockmarkets, while in truth there are only ‘animators’.

Imho even all these antics are themselves a distraction, waving hands in the face of society, causing confusion and misdirection, pushing back effective measures against climate change and making the industry appear the saviour while it continues to kill our planet. There is so little one can do while the world population is made so dependent and remains mesmerized by money. Who started calling a bunch of paper ‘capital’ anyway? Call it ‘Crapital’ !

It is the hostage taker providing the hostage with the ransom money when he abducts them: If the hostage squanders it in captivity, the money will have to come from somewhere else, and amazingly the hostages keep doing just that!

I call for a ‘Technostrike’. Use the overlap between brains and power, ie the nerds in the engineering department and IT. Let them put a stop to this. As Catherine Austin Fitts said: Start your own conspiracy. What if those that understood climate change all went on strike. The world would grind to a standstill, because it is the smart people that are ultimately at the controls.
Phil | May 18, 2009 at 7:19 am |

@Matt Smyth … ” I wonder WTF that is all about. ”

Hope it’s not what I think !
Matt Smyth | May 18, 2009 at 7:16 am |

Here in Canada I can buy all the bullion I want. The Bank of Nova Scotia stocks gold bars and all the popular coins at the main city branches. I needed to disclose my social insurance number in order to buy gold. I wonder WTF that is all about.
Phil | May 18, 2009 at 7:15 am |

@snoop diddy … ” spot gold and silver prices at the side of the page. ”

Free RealTime charts FWIW …

Nice RT Gold JAVA charting
http://www.netdania.com/Products/live-streaming-currency-exchange-rates/real-time-forex-charts/FinanceChartPopUp.aspx?symbol=XAUUSDOZ|comstock_lite&name=Gold

Gold live chart
http://www.finanslinker.net/dukascopy/gold.html

Light Oil live chart
http://www.finanslinker.net/dukascopy/light.html

US$ Index
http://quotes.ino.com/chart/?s=NYBOT_DX&v=d3

Currency – use the menu “Tools” / “Currency charts”
http://www.xe.com/
Mike2liverpool | May 18, 2009 at 7:13 am |

But Max proimsed, so did Jim …….I await the “Thing of beauty”.

Oh Hum
Mike
Matt Smyth | May 18, 2009 at 7:10 am |

Manoj,

Your way out to lunch on this one. 50 years from now, China might be in the same state as the US. Then what ?
snoop diddy | May 18, 2009 at 7:06 am |

and have a look at the opening for the NYMEX on the spot gold and silver prices at the side of the page.
Phil | May 18, 2009 at 7:03 am |

@Mike2liverpool … ” UK £ ROCKETTING STACY!!!! ”

… the last squirms before it’s death probably !
Be careful .. you DO know that the MSM is NOT on your side !
snoop diddy | May 18, 2009 at 7:03 am |

thans Stacy, looking forward to it
snoop diddy | May 18, 2009 at 7:02 am |

The Uk Pound rising might be a symptom of deleveraging again as people get out of the markets in prep for the next leg down… maybe?
stacyherbert | May 18, 2009 at 7:02 am |

@snoop – it’s on; every friday. Will try to get it on youtube. Guest for this week’s episode is Marc Faber. Yeeha.
Phil | May 18, 2009 at 7:01 am |

@stacyherbert … ” Oh and he hates Germans so much, ”

Coming to Germany in the early 1970s was in fact a “culture shock” … but they have moved on since then .
There are good and bad sorts in every country, and in almost every country, the bad sorts are usually the politicians

I have to hand it to the Germans AFA Gold is concerned…
You can buy Kgs. of Gold at any German local bank without any raised eyebrows …. and you do NOT pay any VAT !
My sister in the UK phoned all the banks she knew in the UK, and none of them had any idea where you could buy Gold ( which is why she ended up with those NationalSavingsBonds I mentioned a few days ago )
snoop diddy | May 18, 2009 at 7:00 am |

@Stacy… and the word about ‘On the Edge’ is…?
Mike2liverpool | May 18, 2009 at 6:53 am |

My Plan, my PLAN!
I had it all worked out…………………and now my hopes are dashed DASHED.
Mike
Mike2liverpool | May 18, 2009 at 6:52 am |

UK £ ROCKETTING STACY!!!!
Slap Max when he awakes!
Mike
snoop diddy | May 18, 2009 at 6:46 am |

another good article:

The Nature of the Current Financial Crisis: The System is designed to exert Total Control over the Lives of Individuals
http://www.globalresearch.ca/index.php?context=va&aid=13551
snoop diddy | May 18, 2009 at 6:44 am |

It’s definitely been a big issue in Australia Don. Most of our miners were throwing their and investors money around during the boom. When it crashed they were suddenly trying to offload tenements and sell off parts of the company to Chinese interests to pay off debts e.g OZL Minerals
stacyherbert | May 18, 2009 at 6:44 am |

Oh and he hates Germans so much, it also clouds his judgment. He really really hates nations that don’t go into debt or don’t have citizens that are irresponsible consumers. Just look at the way that he berates the Germans and their government and not the Irish, Spanish or Baltic states for abandoning working for a living in favour of property speculation frenzies in the first place?
stacyherbert | May 18, 2009 at 6:43 am |

@M – yes, I agree with you re: Ambrose being full of it. He has this oddly religious belief in only British and Americans can consume with a mystical ability that defies all physics of finance and monetary policy. Only they can consume for the world. Strange. Plus, he has a maniacal faith in neoliberal ponzi schemes, too. But he does ferret out some good info and quotes though.
Don (Joe bag O chickens) | May 18, 2009 at 6:40 am |

This is not to say that the Chinese are creating a “gold standard”
Maybe Australia will sell out its resources after all. 3 years ago they laughed at the Chinese for their offer to buy all resource deposits. Now they are probably courting the idea.

I Wonder where I can learn Chinese in Wyoming?
M | May 18, 2009 at 6:39 am |

Ambrose is so full of crap. Clearly he’s an intelligent guy who’s been hired by the “people in power” to provide credibility to the current system.

He does make me laugh though!
snoop diddy | May 18, 2009 at 6:15 am |

Geithner’s gift to Wall Street
http://money.cnn.com/2009/05/18/news/economy/geithner-talf.fortune/index.htm?section=money_latest
Mike2liverpool | May 18, 2009 at 5:59 am |

Keiser!
YOUR FIRED!
http://www.bloomberg.com/apps/news?pid=20601087&sid=aONnLxtAeU6Q&refer=home
Mike
snoop diddy | May 18, 2009 at 5:58 am |

Gold backing of the rmb would be a way to protect against USD hegemony.
Manoj | May 18, 2009 at 5:49 am |

Well there is no need for gold backing for Chinese Renminbi .It is backed default by huge productivity of the nation .That is the whole concept of fiat .Money of nation is suported by the total productivity and assets its has . As money chases all these goods services assets and investments .China has huge productivity so there is no need for any *backing* as such .In the current world resrve system of dolar .Sadly the dollar is backed by the entire worldsproductivity natural resources and assets .As basically dollar is exchanged for everything .So the entire globe’s productivityis backing the U.S.D and sadly not the productivity of U.S.A