next point of reference appearing - currency controls....= wage/gold price

[junker]

it is now starting to leak out of the fed and gov that 'currency controls' MIGHT be needed in the immediate future should the dollar slide continue (like what's to stop it?). These 'currency controls' are gov-deception-speak for wage/price controls with special focus on gold/pm's and other national currency 'prices' in dollar terms. This is one of the last/worst signs of immediate hyper-inflation. It does look then that the 'brains' at the Fed will inflate-to-hyperinflation and then die off. Just be advised. In spite of gold price manipulation on a day to day basis, the paper markets are crumbling and things are starting to fray very rapidly at the 'key' points. So within a month it will become apparent to the masses (via the media whores) that a 'dollar crisis' is upon us which may require Central Planning a'la communism to 'stabilize' the dollar.

Those on the outside (of the Fed) see a big drop as the last of the dollar bridges are breaking down. This big drop might be on the order of 50% in a week.

THE trigger for this will be the expanding problem with interest rate derivatives and the long term bond market.

Plus, Japan is about to give up dollar intervention and go 'float'. That will reduce the dollar 20 per cent in 24 hours.

[nadinbrzezinski]

1. I remember the term

currencny control, Mexico mid 1980s, if this is the case strap on, this is going to be a VERY BUMPY ride and can we all say DEPRESION

[rapier]

2. notes

Please give something to back up the assertion that Japan will stop their intervention.

Your missing the important stories which are appearing almost daily which will keep things going along as they are. China just bailed out a huge brokerage firm, probably using their excess dollars. Result, everyone comes out whole and the idea is reinforced that there is NO risk.

A bigger story is this. China will bail out 2 state owned banks with $45 BILLION dollars, again from their exchange reserves, to get this, clean up their books so they can go public with stock offerings.
http://www.nytimes.com/2004/01/06/business/worldbusiness/06CND-BAIL.html


Parmalat in Italy went belly up in a few days two weeks ago. Fruad and decit were endemic there to cover up mounting losses for several years. The government will bail them out.

The message again. There is no risk. Governments the world over will bail out every incometent and corrupt bussiness, as long as it is big enough. THe results are two. Further injections of liqidity into the financial markets particularly stocks. The further inflation of those assets begetting even more inflation in stocks.

Every 'crisis' since 95 has caused similar bailouts, liquidity injections, moral hazard increases and market melt ups. Again, there is NO objective way to see when this will end.

The dollar will bounce soon, without overt extraordinary measures. Count on it. Later perhaps direct intervention and suspension of inconvenient markets could happen. For the former I have no proof. The latter is also conjecture. Much like your $900 gold call.

As to the candidates, much less citizens. There is no possible response. The candidates have no clue.

[kalian]

3. I think what Junker is trying to say is....

that the "behind the scenes" meddlings are starting to surface.
Remember, what gets to the press is what has already been "approved"
and/or has been going on for quite some time.
I believe that "something big" is also coming down the pike and
personally, I believe that its a runaway train. While the media
talking heads continue to pom-pom the "recovery" the real deal is
going to broadside us.

Just look at gold...and how the dollar continues to slide.

[rapier]

4. Dollar buying stops?

Dealer estimate that Japan's Ministry of Finance bought $5 billion on Monday and $2.5 billion Tuesday. That would be bought dollars. They have said they are willing to spend hundreds of billions this year.

I just read an estimate that total central bank dollar buying Monday and Tuesday was $20. Yes the dollar contiued to fall but that buying is just creating more liquidity. Most of which stays inside the financial system so round and round and UP we go.

Yes it is insane. No matter. It's music to Greenspans and everyone elses ears.


I will admit that something could happen to throw us into some sort of panic. I say again however that every panic, every accident ends up being a panic to the upside as unlimited liquidity floods the world.


Thre is a liquidity seize up of sorts going on in that the broad money supply is shrinking as money is abondoning the money market. Yet short term rates remain pegged at the bottom. There is no outward sign in the markets of any liquidity problems. Spreads up and down the credit market from the worst junk to agencies and short term bills still are falling.

It is so important to understand that the liquidity created over these past few years is so gigantic, so stupendous that it defies comprehension and to a large extent analysis. That liquidity, and the willingness of governments to print over ANY problem says the predicting the end is impossible.

In our erstwile democracies the citizens don't understand nor care for the most part and those who do are the most powerless of all. This is a war and the beneficiaries now own the governments in a very real sense. Governments now are the market. It's a new kind of socialism. Capitalism is defeated. Markets now by fiat go only up. Nobody much liked that old up and down of the bussiness cycle, which was really the credit cycle.

[abelenkpe]

5. I don't understand

Are you saying that if there is a crisis one government or another will simply print more money and bail the system out? That markets are manipulated to only go up? If that is the case, why are so many middle class and working class Americans tightening their belts? It seems that no company has a real pension plan anymore and instead offer 401k plans for their workers, so that every one of us is tied into the success of the market. Yet the average 401k seems to have remained steady or lost money over the past three or four years (at least among my co-workers) so that many don't feel like they are adequately saving for their future retirement. Those that I know who have purchased property are paying over 50% of their monthly salary in mortgages and student loan payments and absolutely cannot afford to lose their work. Basically, I don't see people feeling more secure about the economy and their position in it, so I'm wondering why you seem so optimistic. Are you saying we have nothing to worry about, or do I misunderstand? Please help. I'm just an arteest trying to get a grip on economic issues.

[rapier]

6. notes

Sometimes governments will just "print' up the money but more often they borrow it. From who you may ask?

It's a long story but here is how it sometimes works. This is an extremely crude example but it contains the essence of what is happening.

Short term interest rates are 1% in the US and essentially zero in Japan. Longer term interest rates are higher, 3% to say 5%. So if you are a giant financial institution, a bank or brokerage or pension plan you borrow short term and buy the long term debt, in large amounts. The return seems low, 2% or so but the beauty is you don't use any or much of your own money. 2% of a billion dollars is a nice peice of change for just essentially shuffling paper. Often these 'profits' can be claimed in total immediately for accounting purposes. No matter that they will come in over a period of years because remember, there is no risk. Or so they have been trained to belive.

Keeping pension plans solvent and 401K perking is contingent upon stocks rising. If they do rise everyone will feel more secure and 'invest' more and they will go up more and so on and so on. Surre 50% of the population has no real stake in this, perhaps a few thousand dollars but we can forget about them. Homeland Security will take care of them in future. I am not kidding.

Oh, where has all that risk gone that fianancial players no longer have to worry about it. Well it has been theorized by some wags that it has been sent into outerpace. And low and behold some of it has just been spotted by the Mars lander.


http://www.capitalstool.com/forums/index.php?showtopic=4537

[ozymandius]

7. "Homeland Security will take care of them in future"

What do you mean? Thanks.

[rapier]

8. the enemy within

I mean poverty is rising fairly quiclky and will accellerate further. While even this weird sort of economic growth isn't a zero sum game the lower class is going to grow as people drop out of the middle when debt and loss of jobs overtakes them. Besides crime in the future we will likely see some poltical restivness from the have nots. They will be added to the enemy within.

[rapier]

9. collapse report

THe Treasury auctioned $16 billion in 5 year notes today. Foreign central banks took half. (This item is of paramount importance and shows things are going just great)

The dollar index rallies a half point. Treasury Sec. Snow said he supported a strong dollar but by that he said he didn't mean its price but rather that it couldn't be counterfitted. (except by the out of control credit system that is)

Gold off slightly.

Half hour before the close DOWis off a bit but select NASDAQ speculative issues are heading to the moon dragging the index up. Earlier in the day the broad market was down strongly but as has been the case for a year program buy programs, now accounting for half of all volume, kicked in producing mulitple 1000+ tic readings. Huge buy programs now follow any dip. By many internal measures this stock market is the strongest in history. THe lack of ANY downside action has led to the lowest volatility readings and lowest option fear measures in all history. TOday is day 36 since the DOW was off .5% or more, a new record. There is no fear since stocks can only go up.


All excess dollars floating around the world will be lent back to us to support our world takeover or to participate in our casino stock market.

[junker]

10. Eyup...right on schedule....

quote
THe lack of ANY downside action has led to the lowest volatility readings and lowest option fear measures in all history. TOday is day 36 since the DOW was off .5% or more, a new record. There is no fear since stocks can only go up.

unquote

the issue is also the volume *WAY the hell up to 2+ billion shares on Nasdog....

and the NYSE volume is up....

but quess what? The floor traders are dying. Really, they are making NO money as the trading range is so tight there is no room for them to skim any profit, there is no volitility and they live in the froth of trading. And they are losing out to program trades which take huge chunks of the volume away from the floor-commits. So brokerages and seat holders are eating it, 'big time'. They mostly can't last another 3 months at this level of no-profit without lay-offs, and biz alterations.

There is no fear, and stocks are only going up, but the dollar is getting dumped world wide.

The reports of the Chinese dumping their dollars on to their bankrupt banks as a bail-out is very very ominuous. It means that they see the end of the dollar as being imminent. That is, they know that the huge amount of dollars dumped into these banks are going to fly over-seas and out of their coffers in a jiffy. The ONLY reason to bail out the banks at this point is to get maximum value from their bucks before they are not worth much of anything. You see the chinese central bank has had these bankrupt banks in the same state for 8 years through the modernization. They have had sufficient dollar reserves to do this bail out for the last 4 years. So why now? Look to their stealth dumping of dollars on the commodities markets.....

The issue is how do foreign holders of large amounts of dollars get value for their holdings? Especially as the 'value' of the buck is vanishing daily....

they cannot continue to buy treasuries as these are dollar backed....and are really just more paper debt. The foreigners are restricted from what types and how much of our actual country they can buy, so they are buying commodities globally and using dollars to pay for them. The chinese alone are buying 600% more US wheat this year (and paying for it in devalued dollars). They are buying brasilian soybeans, columbian coffee and copper....you name it, if it is a real 'thing' that one needs to do work, they are buying it and using dollars. Pretty soon, those dollars will try to come home.

Remember also that as of the year 2000 more than two-thirds of all dollars are outside the US of A. When they come back home, we are suddenly awash in 200 per cent more dollars circulating within the system.

[rapier]

11. notes

THe dollar recycling game is ADDING liqidity to the financial makets. All central banks, all nations, or at least their leaders, have learned the game. Print, jam, tout, feed the financial markets.

One must not discount that nationalism itself and national interests, for better or for worse, has been co-opted by the ability of insiders to garner personal wealth.

Wages and thus the price of finished goods remain low. The majority get poor slowly, the top get rich quick.

While I don't dispute your basic ideas the timing has absolutely no basis in my opinion. I have been following this stuff for 3 years and calls for The End, The Big One, I have seen over and over, only to be proved wrong by the ability of the system to produce ever greater feats of liquification. Buing dolars by printing their own currencies is the name of the game. It's adding to the flood of liquidity which in turn jacks up financial assets, in a circle.

Of course all currerncies are becomming toilet paper. That is obvious and has been since 73.

Snow today said a strong dollar was not based upon price, but rather the difficulty in counterfitting it. Talk about moving the goal posts. The weak, by price, dollar is a GOOD thing in the creation of liqiudity. A dollar rally now may well cause a sell off in stocks, for complicated reasons. The weak dollr is not bad, you've gotten it totally wrong there. The dollar means nothing. What counts is the paper of and issued by corporations.

Money itself has become meaningless. Financial assets, particularly stocks of corporations (obviously) have become the new money. The Super Money.

This is going way off thread into outerspace but the modern bussiness corporation is I think the most successful method of organinzation of all time. Now on the cusp of superceeding government itself. As I said our government has been captured to a large degree by corporations. Citizens not attached to corporations are NOTHING.

The Fed and the Treasury are now new overt partners in propping up or should I say creating the new paradigm, as is their duty to their new constituentsies.

Voters can be conrolled by bashing faggts and niggers and enemies of God and the state, which of course are one and the same, so the pretense of democracy prevails.

The only question now is can employment and AVERAGE incomes keep a sort of pace. If not then maybe, just maybe, in 6 months or 6 years the debt bomb could explode. The bullhorning of the 'recovery' is meant to placate the populace. If enough bad news continues to emanate from this sector of the 'real' but losers economy then something might give.

[aneerkoinos]

12. gold and currencies and other things

>>> Of course all currerncies are becomming toilet paper. That is obvious and has been since 73. >>>

You maybe right, maybe not, but this time only dollar is becoming toilet paper fast. What globalization is doing and has done, USA and dollar are not anymore the center of the world, some mostly East Asian Central Banks are just keeping up the appearance for various reasons.

What is often forgotten is that Gold in euros has been unchanged for the time I've been watching, couple of years. Any links to historical gold graphs in gold and in other currencies?

So It is foolish to say that euro or is rising, it is just dropping much more slowly (2%) than dollar (5-15%?). And only thing dropping fast is dollar. And gold, is it really rising? So far it's been only dollar dropping against gold. Question: how likely do people think that gold will break parity with euro? Probably depends on what happens with Washington agreement. February will be extremely interesting.

The worldview in these discussions is centered on USA and dollar, very understandable, but IMHO it is limited view because the financial world is now multipolar, not unipolar like it was still five years ago. The pundits of "orthodox" economics are crying that ECB should drop interests and join the game of who's inflating the currency fastest. Not gonna happen. Euro inflation is 2.1%, 0.1% over the target, and ECB has one single priority: keep the inflation reigned. Considering that UK and Australia CBs have lifted their interests, ECB maybe more likely to do the same than do what the pundits (and some governements) are telling.

So why is dollar dropping? Debt. The unpayable US debt. It's politically much easier to monetize the debt and inflate currency than to do the responsible thing and kill all bubbless, bad business, overproduction and especially overconsumption with tight interest policy. It is also more inefficient and much more risky. I don't have to spell out what the risks are.

But my question is: how much rest of the world is at risk? Rest of the world exports real stuff for US consumers and gets soon worthless paper back. Not much sense in the long run, and if and when the financial house of cards crumbles, it will hurt lot of business and people for a while, but nobody is absolutely dependent on the US market, ecologically the world will be better without big USA mouth. In the long run US market is peanuts compared to the growing markets of China and India. After US has dropped 30%-50% in 10-25 years from it's standard of living and pulled back all its soldiers, the new slim US will be hopefully again a strong player and contributing member nation of the Globe.

The world will face a big crisis, but the fundamentals are OK outside US. The biggest threat is that people of US and their leaders go absolutely grazy and try military might to guarantee close to normal level of consumption when they still can afford to, during the next presidential term.

The real question is, who long can the PTB keep up appearences of the faith based economy and hide the real rate of US inflation? Maybe until the election if everything goes perfect, but hopefully not, after that nobody cares. Dean wants to be compared to FDR, if he gets elected, he will find that he has even bigger task than FDR had, peak oil on top of everything...

[rapier]

13. notes

TOKYO, Jan 7 (Reuters) - Japan, worried that a strong yen could hurt an export-led recovery in its economy, spent about three trillion yen ($28.3 billion) in the first two days of this week to hold the currency down, a market source said on Wednesday. That figure compares with some 20 trillion yen ($188 billion) spent on yen-selling currency market intervention in the whole of 2003. The source said the Bank of Japan, acting on behalf of the Ministry of Finance (MOF), sold about 2.6 trillion yen on Monday. Despite the massive intervention, the dollar (JPY=) hit a three-year low of 106.06 yen later that day.

About 400 billion yen was spent on Tuesday when the dollar touched a low of 106.09 yen, the source said.

In late Tokyo trade on Wednesday, the dollar was holding just above that level, at around 106.20 yen.

The Japanese authorities are thought by some analysts to be desperate to prevent the dollar from falling below 105 yen, since that would trigger heavy options-related selling of the U.S. unit, but traders say it is only a matter of time before it breaks through 106 yen.

In a move to secure more intervention funds, the MOF announced last month that it would raise the borrowing limit on its currency intervention account to 140 trillion yen in the fiscal year starting next April from 79 trillion yen.

As a stopgap measure to avoid a funding crunch before parliament approves the raising of the borrowing limit, the ministry has arranged a repo deal with the Bank of Japan in which it can get funds by selling foreign bonds to the central bank, buying the paper back at a later date. ($1=106.18 Yen)
----------------

Most won't understand but the repo deal between the Ministry of Finance and the BOJ is a money printing scheme beyond compare.

This thing puts a stake in the heart of Junkers idea that Japan will stop propping up the dollar. The propping may fail but damnit, they will try and the result will be more tidal waves of liquidty to flood the financial markets.

We are on the cusp of a bubble that will make 1999 look pathetic.