The Shape Of Things To Come Part – II

On March 14th 2008, this blog talked about how

It is being whispered that Barran Wolfet and his team members, Sorg Goros and Rim Joggers had played a major role in the enhancement of these gold stocks – and the formation of IMAR. Initially named as Global Financial Reserve Authority for Development, the IMAR idea was first tossed out over a dinner at the famous Les Ambassadeurs eatery – which offers a classic cuisine by the Ducasse-trained chef, Jean-François Piege.

The US Electoral outcome

There is (seemingly) harmless speculation that next US President may appoint Warren Buffett as the Treasury chief

The two were asked at the beginning of their second presidential debate who would be a good replacement for current Treasury Secretary Henry Paulson who is standing down at the end of the current administration.

“I think the first criteria, would have to be somebody who immediately Americans identify with. Immediately say we can trust that individual,” said McCain. Buffett, chief of the Berkshire Hathaway holding company, has supported Obama in the race for the White House.

Barack Obama’s chance of a lifetime

If Barack Obama wins on 4 November, as looks likely, he’ll inherit an economic mess rivalled only by the one that faced Franklin Roosevelt in 1933.

Everyone is saying …

There is rising chorus that the new President (whoever it may be) should do what Roosevelt did. What they are not saying, but meaning is, do what Roosevelt did. Krugman, this year’s Nobel prize winner, has also suggested that Barrack Obama should emulate Roosevelt’s actions need.

Among the many things that Roosevelt did, the merits of which are debatable, there is one action that made the US into a super power. If only for a short while of 70 years.

Roosevelt nationalized gold.

Nationalization of gold enabled the US Governments to enter costly wars like WW2, Vietnam War, and now the Iraq and Afghan Wars. This allowed to US to walk into the WW2 with 25,000 tons of gold – and impose Bretton Woods on the world. And the nationalization of gold also impoverished the Americans – apart from the poor.

Gold production (from Ghana, South Africa, Australia, Canada, Papua New Guinea, America, etc.,) was controlled by the Anglo Saxon Bloc – and the world’s largest private reserves of gold, in India were controlled by the British. It is this choke on gold reserves that enabled thes sustenance of US as a superpower.

And now they are trying it again.

The methodology

And how do the US ‘thought leaders’ suggest that new President do it … when victory is within grasp, and Obama Faces A New Choice

The opposite argument is that the political costs of voicing pessimism are prohibitive, that there is plenty of opportunity to prepare voters for drastic action after election day, and that a candidate risks worsening conditions by sounding strong warnings. The classic example to support this case is the 1932 Depression-era campaign of Franklin Delano Roosevelt, who said little or nothing while campaigning in 1932 to indicate the contours of his New Deal program.

What are they pulling over our eyes…

This again very interesting. Roosevelt’s economic plan was surprise. Obama (or McCain, doesn’t matter who), will do something similar. Read this with the Warren Buffet silver play and his (possible) appointment as Treasury Chief, and the game becomes clear.

Nationalize gold again?

But What Was Warren Buffet Doing …

Buffett’s Purchases Push Silver Past $7 an Ounce said the New York Times

Separately yesterday, Phibro, a commodities-trading firm, confirmed that it was the dealer for all the silver purchases by Berkshire. Phibro is a unit of the Travelers Group, in which Berkshire has a major stake. Last week, a Canadian investor filed suit in United States District in New York, contending that Phibro had moved silver from warehouses in the United States to hidden locations in an effort to mislead traders about supplies and push the price higher. A Phibro official denied all the charges yesterday.

How did Warren Buffet buy such a large amount of silver without disturbing the market?

The silver purchases by Berkshire Hathaway were made in London, a center of activity in the silver market. The purchases were done with over-the-counter contracts, in which Mr. Buffett bought silver for delivery at future dates. Since he began he has accepted delivery of 87.51 million ounces, which are apparently now sitting in the vaults of London bullion banks. The remaining 42.2 million ounces must be delivered between now and March 6.

60 days from now … Warren Buffet Handle The US Treasury?

Sometime, back there was speculation that Warren Buffet could be a possible choice of US Treasury Chief. This news was sparsely reported – originating with AFP. Google search showed this up only with a few Indian sites and journals.

What does this mean as possible policy outcome? Do a Quicktake – and then a 2ndlook.

Ben Bernanke says a ‘savings glut is the problem …

Ben Bernanke joins a long list of Western propagandists, who find ‘specious’ ways to blame others for Western problems. His most recent propaganda gem was to blame Asia for a ‘savings glut.’

a satisfying explanation of the recent upward climb of the U.S. current account deficit requires a global perspective that more fully takes into account events outside the United States. To be more specific, I will argue that over the past decade a combination of diverse forces has created a significant increase in the global supply of saving–a global saving glut–which helps to explain both the increase in the U.S. current account deficit and the relatively low level of long-term real interest rates in the world today.

After Ben Bernanke opened the flood gates of such logic with ‘helicopter drop of dollars’ and ‘printing press technology’, and now the ‘savings glut’ – others such ‘economists’ have rushed in to do another tom-tom dance around this logic.

A so called economist, weighed in with two bits, Dani Rodrik: Who killed Wall Street?

…the true culprits lie halfway around the world. High-saving Asian households and dollar-hoarding foreign central banks produced a global savings “glut,” which pushed real interest rates into negative territory, in turn stoking the US housing bubble while sending financiers on ever-riskier ventures with borrowed money. Macroeconomic policymakers could have gotten their act together and acted in time to unwind those large and unsustainable current-account imbalances. Then there would not have been so much liquidity sloshing around waiting for an accident to happen.

The Real Culprits …

Ben Bernanke is not even mentioned even once. Bernanke’s printing press and helicopters are not mentioned even once. The evasion of Federal Reserve on M3 figures is completely ignored. But, Alan Greenspan is mentioned once. China which has funded the US to the extent of US$2 trillion is buried without mention. Japan which has funded the US to the extent of US$1 trillion is ignored.

I rest my case

But Asians countries whose reserves are getting wiped due to dollar depreciation – are instead mentioned as culprits.

Wow.

This is a new level in brazen-ness. Keep it up, Dani boy. This fraud may yet happen. And Warren Buffet may give cover to this fraud.

Greenspan & Bernanke share Nobel for eCONomics

Thus Spake Ben Bernanke

U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press … that allows it to produce as many U.S. dollars as it wishes at essentially no cost. … …the Fed could find other ways of injecting money into the system–for example, by making low-interest-rate loans to banks or cooperating with the fiscal authorities … If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation. Remarks by Governor Ben S. Bernanke, Before the National Economists Club, Washington, D.C. November 21, 2002 (ellipsis mine)

Let The Games Begin

US Debt to GDP Ratio | Morgan Stanley Estimates. Click for a larger image.

In the last 5 years, more than US$10 trillion were printed and the world is awash with dollars. That is a low estimate. US Govt. has stopped revealing M3 money numbers.

Where did this money go? How was this used? “Lendings by US commercial banks in the period 2000 to 2004 soared by altogether USD 1,500bn to USD 6,750bn. In the European Monetary Union lending to the private sector by monetary financial institutions (MFI) climbed from roughly EUR 6,200bn end-1999 to not quite EUR 8,700bn at the end of last year.” – Allianz Report, Dresdner Bank. The recipients of this largesse, mainly Western banks have made (it is whispered) bad loans worth 300-400 billions dollars. I am confident that the actual figure is much higher.

The loans story does not end there.

These loans were in turn sold and re-sold, then packaged and mortgaged, derived and contrived – finally ballooning into the ‘sub-prime’ crisis. Welfare payouts by another name? Who will pay for this “lending”? US Consumers are not repaying their housing loans.

Some one has to!

Billions Are Not Big Anymore

The ICBC IPO received subscriptions of half a trillion dollars! IMF estimates of funds with Sovereign Wealth Funds (SWFs) is US$2-3 trillion – and “foreign assets under management of SWFs could reach US$6–10 trillion by 2013“. The same IMF study also estimates that global financial assets are currently valued at US$190 trillion. Commodity prices are going through the roof.

Very soon, major movements will be measured in trillions – thanks to the humongous printing presses, that the US has used in the last few years. Daily trading volumes total US$1.5 trillion in the Forex Markets. To that add trading volumes of debt markets, stock markets and commodity markets. Combined global trading volumes now cross US$3.0 trillion – and growing.

This degree of hysterical trading had made the US$ into a giant wrecking ball – which goes out of control very few years.

Asians Are Funding The US

Total US debt has crossed 300% of GDP (Federal+State+Corporate+Household sectors).

What this means is that if every income earning member of the US were to assign 30% of their income, every year, for the next 25 years (at current interest rates and borrowing rates) ), US debt will come to possible close to zero level. Government debt in comparison to GDP is fluctuating between 50% to now nearly 100%. Some claim that the debt burden is actually declining.

Who is stuck with this hoard of dollars – getting devalued daily. China (with more than 1 trillion dollars), Japan (another trillion dollars), Russia (400 billion dollars), India (300 billion dollars) are the top 4 countries.

I hereby nominate the US Federal Reserve for the Nobel Prize for Conmanship. They truly deserve it.

Related Articles

• How must Ben Bernanke feel as Alan Greenspan chides U.S.? (theglobeandmail.com)
• The Washington Post Runs An Article Entitled “Five Myths About The Federal Reserve” Authored By An Economist Linked To The Rothschilds (nwoandsecretsocieties.wordpress.com)
• “Bernanke Seeks New “International Monetary System”, Accuses China of Currency Intervention, Warns of Rising Unemployment and “End of Tepid US Recovery” and related posts (globaleconomicanalysis.blogspot.com)
• Rats Desert the Sinking Bernanke (lewrockwell.com)
• Bernanke to Fail in Bid to Use ‘Poison as the Cure,’ Burry Says (businessweek.com)
• Bernanke’s QE2 May Create 700,000 Jobs, But They’ll Be In Mexico, Peru, And China (businessinsider.com)

New Empire Builders – Neo-Cons Sneaking In

This North-South global compact … would consign … despotisms to the obscurity which the old “salt empires” of the Tortuga and Turks islands, critical to … Royal Navy, were reduced once we had overcome our saline dependency. Posted by Shri Brendan Simms (Reader in the History of International Relations at the Centre of International Studies at the University of Cambridge)

Meet The Neo-Cons

The Social Affairs Unit is a what is called these days a neo-con think tank. Unfortunately, it is neither neo nor about thought – but is definitely a con.

And the blog of one of their stars is published at their site. Shri Brendan Simms, a reader in History, I am sure, knows that what he is saying is wrong.

In this post, (linked above) Simms is proposing certain actions that “would consign the Middle Eastern despotisms to the obscurity which the old “salt empires” of the Tortuga and Turks islands, critical to the eighteenth-century Royal Navy, were reduced once we had overcome our saline dependency.”

Oil Prices – Western Democracies Are Being Held To Ransom

Simms, (like most neo-cons), has various problems in life. He starts with his “western capitalist democracies find themselves held to ransom.” Mr.Simms, how many of your glorious Western democracies, have elected a single Black head of state in the last 100 years? Or a Muslim head of State? America, your epitome of a Western democracy, is struggling to nominate a woman Presidential candidate after 200 years of Republican democracy? Or am I being naive in raising these questions?

Coming to the ransom bit, is Simmie-boy getting this feeling because of the price that the Middle East is charging for oil. Simms Dearie, I know the feeling, believe me! We Indians have been through that. It is the similar feeling that we in India, (and developing countries) used to get while negotiating for food purchases (called aid) after the Bengal Famine and while rebuilding collapsed agriculture economies in post colonial India.

All that OPEC wants is a market driven price. Any problems, Simmie? Why does the West not explore and drill for oil along their huge off shore areas and kill their dependence on oil. If the Oil producers are wary of the dollar price due to depreciating dollar, who can you blame.

If the West led by ‘helicopter Ben’ wants to print more dollars, who will pay the price ? The rest of this gullible world? Does Simms think, that oil rich countries will ship out limited oil resources with the same speed that Bernanke prints money – or helicopter drop dollars?

The Saudi Wealth

Simms feels bad that the Saudis “could buy General Motors with just six days of production.” At least, in this scenario, the Saudis are buying US companies with US currency as per the valuation done by US stock markets. It is not based on slave labour, which is what the British operated in the Turks and Tortugas – in the Caribbean.

Millions of captured Black Africans toiled (and died) in the Caribbean, to create wealth and luxury for Britain – the comfort of which he now uses to “consign the Middle Eastern despotisms to the obscurity … of Tortuga and Turks islands, were reduced once we had overcome our … dependency”

What Were The Turks & Caicos Islands

These were slave islands – and part of the Caribbean group of islands which were used by the British Navy to run their slave colonies. To call these ‘despotisms’ is right – but these were British slave despotisms.

The ‘salt colonies’ are not as well known as the ‘sugar colonies’ – Haiti, Cuba, Demerra, Trinidad and other West Indian Islands, and the millions of slaves that were imported and subsequently died. Similarly, millions of local Native American populations were wiped out. And of course, once their usefulness, was over, the European powers walked away.

Of course, some of these islands have become colonies, of the USA, Britain and the people there continue to serve the interests of these Western nations. Haiti, Cuba, Granada have been made an example of by Britain and USA, for trying to make a country of themselves. A lot of such places would be quite happy without the British attention they received – and subsequent ruin that they faced.

Privateers, slave traders and pirates were licensed to operate from these islands, by the British Government to loot – and kill.

Come To The Middle East Despots

After the WW1, the victorious allies carved up the entire Ottoman Empire – which stretched from the Middle East to Central Asia to the Eastern Europe.

Out of the Ottaman Empire, Iraq was carved up and King Faysal was put on the throne. A British amatuer Gertrude Margaret Lowthian Bell made the selection of the King Of Iraq. This new King did not even know his kingdom – and he was taken around by his new makers. Similarly, an amateur like TE Lawrence (never mind the propaganda) was used to determine the fate of the Middle East.

WW1 resulted in the Balfour Declaration, which promised a Jewish homeland, to be carved out of the Ottaman Empire. Saudi Arabia was similarly made up.

By 1916, Britain, France and Russia had signed the secretive Sykes-Picot Pact – a framework for the division of the Ottoman Empire after the future defeat of the Turks. While the WW1 was going on, a civil war broke out in Russia. Kerensky, a member of the moderate Labor party, Lenin, Trotsky et al of the Bolshevik Party, overthrew the Tsar and assumed power in February 1917.

Till 1923, the Russian Civil War continued, to the defeat of Kerensky and his White Army in 1923. Kerensky wished to continue war alongside Britain and France. Lenin broke ranks, and in October 1917, the Russian-Communists started negotiations for a peace treaty with Germany. In 1918 the Treaty Of Brest Litovsk followed. After the end of WW1, Britain and France did not honor Russia’s claim under the Sykes Picot Pact. Russians retaliated and were actively involved in destabilizing the Middle East for the next 50 years, by playing of one Middle East Country against another.

Thus the entire Middle East was put on shaky political ground. Exploitative commercial contracts favoring Anglo Saxon bloc of countries were signed with these puppet governments – and the rest of the story is being played out for the last 90 years. Hobbyists decided fates of million of people.

So Mr.Simms, these Middle Eastern despots, are a creation of Western Foreign Policy – of which you claim a College Readership.

Western Investments

“West invest blood and treasure to make the Middle East a better place” out of the milk of human kindness Mr.Simms? All investments that the west has made is by the loot from Canada, Australia, Africa – and of course, India. Out of magnamity, if we call old accounts quits, current Western investments have been made for reasons of commercial self interest. Sell your Western assets, Mr.Simms, if they are not profitable enough. Possibly, it is equivalent to one hours oil production for the Saudis – and they will buy you guys out.

Regarding the blood in the Middle East, it is the poor Arabs, Palestinians, Iraqis, Kurds, Afghans, Pakistanis who are spilling it. Western blood (whatever little) is being spilt for brazen extortion. The Middle East has become a quagmire after the West decided to intervene.

Saudi foreign policy – Export of extremist Islamist ideology

And what is the foreign policy of the West Mr.Simms. Instability in Africa, Middle East. Every terror hotspot is a creation of the West – and specifically, America. And amongst others, we in India, pay a price for this. When you demonise Islam, they pay a price.

Partnerships With The West?

What partnerships are you talking about, Mr.Simms?

The kind that you has with the Turks and Tortugas? The kind that you had when the West put incompetent Emirs and Shaikhs on the various thrones of the Middle East – and now want to ‘consign to obscurity.’ After they helped you to weaken your Cold War enemy. After they have given you 60 years of luxury – with cheap oil.

Why Wont You Accept Criticism

Now these are the points that I made on your blog, Mr. Simms – 2 weeks ago. Why the hesitation in publishing those comments.

Run you can, Simmie boy, but at least, don’t hide.