Heads up...global financial crisis developing....

[junker]

I am not known here, and do not intend to bore y'all with my bio, suffice it to say that I am an old, old hand at following things economique' both Amerucan and elsewhere on our watery planet. This is just a heads up to you young'uns out there to get your financial house in order.

1) buy gold or silver coins if you have any cash at all. get gold or silver bullion, the presumed 'extra' value of a numismatic coin will not matter in the short order, merely its metal content. So just straight gold (maples, eagles, krugs, philharmonics, panda's, et al) and any pure silver coin.
2) buy storable food that will hold nutrition for many months. Do it now. Get as much put aside as you can.
3)Be aware that the dollar is cratering and a huge, perhaps, fatal, global financial system crisis is developing. This is not just my opinion

many, many others see the same thing coming, y'all are a bunch of optimists here, so I thought to bring a bit of global reality to the table.

What follows is merely one of 11 different indicators of a pending crisis which will reveal itself over the next 10 or so days.

> Profound Change?
> Bob Hoye
> November 19, 2003
>
> Friday's edition of Pivotal Events started with "Change" as a title and,
> at 6 pages, was lengthy. Once the change is in, we hope to return to the
> 4-page format. Over the weekend and the past two days, significant
> change seems to have started. Because it includes a good weighting in
> banks, we have followed the Topix as a proxy on the Tokyo stock market.
> The high for the Topix was 1106 on October 20 and, at 972, it's down 12%
> from a tested high. In so many words, it is in a modest "Stair-Step"
> downtrend. However, within this, Topix banks have set a big head and
> shoulders top, from which it is breaking down. The Topix construction
> index has suffered a rapid plunge. As we have been noting, there has
> been a significant change in Thai bonds relative to U.S. treasuries.
> Since October 7, this spread has widened from 49 bp under to 87 bp over
> treasuries and that is a fast move. Since August, net money flows into
> the U.S. have decreased from $49.9 billion to only $4.19 billion for the
> latest report (September). Within this, there was $38 billion in as the
> Bank of Japan was supporting the U.S. dollar. You don't need a CFA to
> calculate that, without that feckless operation, it would have been a
> net outflow. The dollar index has slipped below "support" at 91. The
> Baltic continues its plunge and, at 4046, is down 11% from the high on
> October 30. Meaning: The widening of representative Asian spreads and
> the breakdown of the Tokyo bank index suggests that another financial
> crisis is brewing up. Sharply diminished flows into the U.S.
> equivalently diminished liquidity. Given the remarkable speculation over
> the past 13 months, another global financial crisis is developing. Bob
> Hoye Institutional Advisors

[Goldmund]

1. I'm ready to believe that our financial system, as it is...

...can't survive on a long term. But 10 days? Get cans of SPAM, duck and cover? What makes you think that the collapse is so dramatically imminent?

[papau]

39. A pump and dump for gold - on DU - Desperate brokers out there!

:-)

[lotteandollie]

60. Y2K Leftovers

He's looking to move rid of his 4 year old canned goods and an unused generator.

[La_Serpiente]

2. We ain't optimists either

we share your sentiments that there is an impending global crisis coming. It is only a matter of time. If Bush is re-elected, it is over. We cannot sustain this. We already have massive debts, spending, and tax cuts. This is going to be ugly.

[La_Serpiente]

3. However, I think the crisis will be coming

a little later than 10 days.

[Maple]

4. Gold salesmen

are showing up on every chatsite this week.

It's free advertising for them, and they do the 'word of advice' or 'gosh I have a question' routine.

[Qutzupalotl]

5. And they advise us to buy SPAM, too.

How appropriate.

[junker]

6. Sorry, I have no agenda. I do not sell gold...nor spam

I am in fact a vegetarian and do not consume nor promote flesh as food.

However,I do know what the hell is going on....and I said that the crisis would manifest in 10 days. It will take approximately 5 months to get to the Argentina meltdown stage. I expect by spring that the mobs will be howling as whole industries shut down...

I do offer that the dollar is toast, and denigrading me and/or gold does not address the underlying issues that have existed since Rubin undertook the 'strong dollar policy' and IMPLEMENTED IT BY SUPPRESSING THE PRICES OF COMMODITIES. As well as manipulating the market including all the major indices.

I do not care if you believe it or not. However in 10 days or less when the dollar suddenly plummets several dozen points against the basket (currently dropped through 91 which was heavily defended support) then I will expect an apology....

I do not know about you, but I resent having to use a currency (the US DOLLAR) which is owned/controlled by a private bank whose MAJORITY shareholders are British 'royals'......

AND the real reason kennedy was killed was due to an executive order doing away with the Federal Reserve Bank and restoring money production to the states.

[Code_Name_D]

7. Sorry, but you are going to have to back up your claims.

I find myself a pesamsit too, and have given a proediction of 5 to 10 years, if the war contiues. And I have (and am prepared to argue) why I beleive this.

But in 10 days? Markets crash over night, economeys do not. Not even under the most violaent and voiltile of changes. And while the dollor could crash in the next 10 days (some would even say likly) it will be at least one qurter before these changes ripple througnh the whole of the economey.

Still, it is good to error on the side of caution. And to be prepared. Unfortuanly, I am not realy sure what one can do to prepare? Gold will help preserve wealth, but will it help in day to day activity?

Ironicly, if a Crash dose hit, altertnitive curinesys such as the bread dollar and the ithica dollar may be the only way to maintain basic economic activity, as these secondary curinsyes can function even without dollars.

[junker]

8. Sure.....no worries..

I am not saying that the economy of the globe will crash, rather that the financial system will crash. Argentina still has an economy, albeit a seriously altered one, but no financial industry to speak of...

this has to do with the
1)global price suppression of gold (an illegal activity which will come out due to 2 or more of the recently arrested FOREX criminal traders singing the real tune and naming names)
b) the crashing dollar due to the lack of foreign inflows....bear in mind that our 'economy' by which I mean the dollar reserve financial system that we have sold to the globe DEPENDS on 2.123 BILLION DOLLARS A DAY in new purchases of US financial paper BY FOREIGNERS.

Now, in case you had not noticed...and it is a bit esoteric...that inflow has ceased since August of 2003 having fallen below critical levels since the US invasion of Iraq. Recent geopolitical problems for the US are being blamed, but in reality the trend has been developing since the crash of the dot coms, and the subsequent FED actions including the pumping of consumer credit to try to 'reflate'.

3) also in case you had not noticed, the FED has been pumping the money supply like there is no tomorrow for the dollar. Unfortuneately for all of US/us, there is no tomorrow (in the long term sense -say months) for the dollar. But the FED is going to 'reflate or die'. Problem is that they will 'reflate and then die'.

And we will suffer. In the next 10 days there will start to appear two seemingly contradictory phenomena....one is inflation starting to soar (watch copper and the CRB), and the repatriation of hundreds of billions of dollars worth of US treasury paper. This latter will lead to a deflationary (FED calls it 'disinflation') trend for yields and will kill ANY FUTURE OFFERINGS OF US GOVT BACKED TREASURIES OF ANY FORM....why is this?

Because 2/3rds (that is correct, two thirds) of all the dollars in existance are outside the US of A. In the hands of foreigners....who have already started to sell those dollars for real value items/gold/commodities/food to try and retain some value as the dollar starts its horrific plunge against the basket of world currencies.

Much of the action will be played out against a background of the FOREX criminal activities which will reveal the Clinton/Rubin implementation of the 'strong dollar policy' on the backs of gold owners and every citizen of the US of A as they suppressed the price of gold through both paper market manipulation and the 'leasing' of the American People's Gold reserve.

Again, look for small articles to start to appear in the press over the next 10 days about the empty vaults at Ft. Knox, and other US of A gold reserves. Further, it will be exposed that the current holders of the office have egregiously used the ESF/PWGOM to support their buddies in the financial biz sell out of the market....

did you know for instance that B. Gates is selling massively over the last month? And that insider selling trends have breached all previous records in the last month?

It snow balls from there. First the US and parts of the globe will suffer hyperinflation of staggering proportions. Imagine taking one hundred US dollars to buy a euro....or a mexican peso (which will rapidly be one of the best currencies in the world when mexico backs their currency 100% with silver). That is the idea. One hundred bucks to the peso....or five hundred bucks per six pack.

During this period which will last perhaps 2 months, large numbers of industries will simply shut the doors inspite of govt trying to ram through new 'dollar support legislation'.....

we be screwed.

ALL FIAT (PAPER) currencies will inevitably return to their true worth, that of paper. Voltaire

We happen to be living in years in which the 4th paper currency in America will melt down and go out of business. That is correct. The US of A has had 3 currencies (not counting confederate states script) meltdown and now the dollar will follow suit.

I can support my position...I really need only cite Warren Buffet who won't hold dollars and figures the dollar is toast. He owns hundreds of millions of ounces of silver WHICH HE HAD MOVED OUT OF THE COUNTRY fearing attempted govt seizure.

So does B. Gates. And he owns 5 silver mines now.....get the idea?

As to the timing...just wait for it...won't be long now...you can hear TPTB dripping away with the dollar, decreased each and every day...

btw: some clients of mine bought gold on my recommendation (they asked so I recommended, I do not sell pm's nor any financial stuff), and they bought at $252 per ounce....several thousand ounces... now nearing $400 an ounce they look like geniuses to their friends...
all of whom are betting on the dollar by keeping their money in stocks and 401ks denominated in dollars...

but do as you please. It is your life and financial risk after all.

One last thing, a cheeky quote
'those who don't see destiny coming, get run over by fate.'

One of my associates, Old Man Moon over at halfpasthuman.com.

If you think I am bleak...

[junker]

9. thisis the kind of thing I am talking about ....asian press reports

here is a pertinent snip there are hundreds of such articles everyday if you care to look....

for discussion purposes...

Business Times - 20 Nov 2003


Falling US$ fuels Asian bond market urgency

Market players across the region now appear as keen as government officials are to get the market up and running

By ANTHONY ROWLEY
IN TOKYO

FOR years, Asian policymakers have talked of developing a regional bond market but little emerged by way of tangible results - until recently, that is, when a deluge of official initiatives occurred.

Market players now appear as keen as do government officials to get the market up and running, and the key to why this is so can be found in the fact that the US dollar has plunged to new lows against the euro and the price of gold has risen above US$400 an ounce for the first time since 1996.

Central banks and other investors in Asia are feeling dangerously overexposed to the dollar and vulnerable to major capital losses if it continues its downward trajectory, which it almost certainly will.

and this

Some small reasons for concern might include China's recent contemplation of a non-dollar peg for the yuan. Zhou Xiaochuan, governor of the People's Bank of China, said in September '03 that there was room for debate on whether the yuan should be tied to a cocktail of currencies. What should one make of the September sale of $3 billion of US Treasuries by China, Korea, and Thailand, as noted by Stephanie Pomboy (MacroMavens 10/24/03)? Was this just a subtle reminder to the visiting US Treasury Secretary Snow of who held the cards in the currency debate or were they just testing the water? It seems inconclusive. With a far smaller stake in the debate, perhaps Russia was able to speak more freely when Deputy Finance Minister Alexi Ulyukayev said "he wants the structure of reserves to change to reflect the structure of the nation's foreign debt and trade contracts." This could be accomplished by reducing the portion of its $63.8 billion reserves held in dollar-denominated assets by 3 to 5 percentage points in favor of euros.

[rapier]

10. notes

The financial system is the economy.

The US financial system is the worlds financial system.

While a panic of some sort is possible it isn't probable. The timing of one is unknowable. I say that as a permabear.

I hope I'm wrong about a serious decline in the standard of living of most people. If it happens then no financial advice given here will do anyone a bit of good. Let's say your panic develops and gold becomes the only safe haven and goes to stratospheric heights, while paper 'investments' go to hell. Who here can buy enough gold, next week, to materially change their balance sheet for the long term. None.

The most likely path to my prediction of economic decline is not one giant panic but a stair step down.

My optimistic outlook is for a flat period over the next decade.

I fully accept I may be wrong on both counts. Maybe growth for the period will be average, or even above. Nobody knows.

[NoKingGeorge]

14. Please see the post in LBN about Barrick gold.

Thank you for your well reasoned insights. Would I be correct in saying that Barrick's announcement, de-hedging, is meant as this company planning to take advantage of the gold run up?

[junker]

15. Perhaps, but Barrick is in volved as a 'supplier' for ESF/PWGOM (PPT)

Barrick is involved with the 'bad guys' in the suppression scheme and there is now a federal suit which has been allowed to go to discovery which will reveal both the extent and the depth of the scheme these last few years.

So, having had some coffee and vegeburger, I will divert for a minute, but the ignorance of anyone reading this is not my responsibility so any terms other than the real arcane will NOT be explained and you'll have to do a google if you don't understand them.

Note that in the Kondratief winter is when all the scandals that built up in the boom period of the summer are revealed. Further, and usually not considered, is how they are revealed....they go bad. This is what is currenty happening with the MASSIVE short position with gold and silver. Not so much the other PGM's (platinum group metals, there I go violating my own rule about not 'splaining terms...anyway) as these were scammed out a few years back with the catalytic converter platinum screw up by the auto industry (when they hoarded metals required and drove up demand and costs as a self-fullfilling prophecy).

So now a couple of things have happened and the timing is very unique. If anyone knows a good astrologer, invite them to speak about timing and waves of activity that all 'complete' at a particular point in history. In any event, at the moment, we have a huge, massive, ain't-ever-been-this-big-before short position on both gold and silver just as we have 1) the natural rise of the need for gold and silver as weath stores against a deflating dollar near the end of its lifespan and almost 99.99% encumbered with debt;
2) the occurance of the Kondatief winter for both the US economy and the fiat currency the dollar (down 20% this year alone)just as the current management of the Fed has decided to ReInflate NO MATTER THE COST which equals hyper-inflation;
3) the occurance of the Kondatief winter for the global tech/industrial wave;
4) the rise of china as a consumer nation
5) a huge increase in the use of silver as a strategic industrial metal;
6) the passing of Peak Oil (a la hubbert - in 2001);
7) war in which the US is argueably going to loose if not already has lost;
8) and among many other items, one of primary importance, the beginning of the commodities peak cycle (a 22 through 33 year cycle).

There are a lot, lot more indicators of really nasty times regarding the dollar. However, this is also very exciting times to be alive as such fundamental and potentially earth altering changes are occurring. We may yet see vast riots on the east coast next spring as millions upon millions are put on the street as industries shut down in quantities. Imagine all the problems of the first 4 years of the previous Great Depression of 1930's all wrapped up into one really bad spring and magnified by incessant 24 by 7 TV. However, there are those in the cognesenti who will say that the govt will shut down the electrical grid more or less permanently if the riots get too bad. That is if too many bankers/financiers are hung in the street.

Now bear in mind we are speaking of a brief period of chaos soon (next 9 days) followed by all kinds of larger chaos over the next few months as we repeat the performance of Argentina though probably without Bush resigning....

anyway, the up-shot is that we will see a cratering currency, preceded (as has already happened) by massive intervention from the govt into all the finanacial markets causing strange behavior with large swings (volitility) and a cascading loss of confidence globally in the dollar (already happened) leading to an increasing rate of repatriation of the dollars held outside the US which inspite of Fed efforts will bring HUGE hyperinflation back to the US until such a point that the dollar becomes worth less than the paper it is printed on.

And for those that think this process to take years of small steps, might I remind you that it has been happening slowly since 1997 and the LTCM bailout by the fed. And note that since 1987 with A. G ascending the Fed throne, the global financial system has had a major crisis every 3 years. And that each crisis is worse than the one before, and that the last 2 damn near took down the system (LTCM 1997, and DotBomb 2000). Also note that we are now 3 years past the last crisis, and we have a dollar fiasco, a pres fiasco, a war fiasco, a wall-street cime fiasco.....need I go on?

As to the timing? Well, let us say that I have many friends in low places and they are all jumpy as mice at a cat show.

Of course, I could be inaccurate as to time, though not outcome, and the worse that can happen from being prepared for this developing new future is that a person would have some food and gold for coming hard times.....

let the sanguine and dollar believer readers act as they wish, but be advised, denial is not a really good way to operate in this universe. It leaves one very vulnerable to circumstance. Those who see circumstances arising can go meet their destiny, those fishing in de'nile are gonna be slammed by fate.

c'est la vie.
Bona fortuna in nova annum omnes.

Got Gold?
Got Silver?
No? Then got squat and the paper to use while there.


And for any of the true-believers in a dollar future with retirement and 401ks and such, should really go read at www.gata.org, and take a clue from a two week free trial at www.lemetropolecafe.com.

And also note that those who are dismissive and label such opinions as being the rantings of an obvious gold bug, I should like to note two things. I am an old fart and have only purchased gold since 1998, and point two, BOTH Warren Buffet and Bill Gates are mega-buyers of gold/silver and mega-sellers of dollar denominated assets. So note that gold-bug now applies to the head of Microsoft. AND the most successful investment manager ever. Damn fine company. And as we all love to say, 'damn feels good to be a gangsta'......

[cosmicaug]

18. Dismissive

If anyone knows a good astrologer, invite them to speak about timing and waves of activity that all 'complete' at a particular point in history.

If astrology is involved with your prediction, it does not help your credibility.

And also note that those who are dismissive and label such opinions as being the rantings of an obvious gold bug, ...

Actually, I'm fascinated by your prediction. I definitely wouldn't bet on it (assuming I had anything to bet with in the first place), but I'm nevertheless, fascinated. Unlike other predictions, this could very conceivably be based upon information which you are seeing which others are not seeing (or the significance of which is being overlooked --though, if this is astrologically based, I must say I've wasted my time giving any attention to this thread).

What most fascinates me is not that you see signs of bad times ahead (for one thing, having the current reality challenged administration in charge is not a sign of happy days ahead, in my opinion); but rather that you somehow see these signs as indicating some sort of financial chaos within the next ten days (nine now). Why 9 days and not 12 days or three years or some other time span?

Anyways, it would be that much more fascinating to have some specifics listed with regard to what you regard as the financial chaos which is coming within the next 9 days. Without specifics, frankly there's the potential that your prediction is not going to be seen as terribly impressive (short of a clear black whatever day of the week type event).

I don't want to put words into your mouth, but you seem to be suggesting a depreciation of the dollar within the next 9 days. How is this depreciation to be measured (against the Euro, against an index of some sort, what?) and what extent of depreciation are you predicting? Also, do you have any other specific predictions?

TIA

[Code_Name_D]

22. Much of his information is valid,

Or at the very least, has compeling arguments backing them. Much of this has already been disgused here before. However, it is his conclusion one must take issue with.

The nature of economeys is not condusive to suden events. So even it this doom list exploded as I right this, it would in fact be months before we would even know it. And at least a qurter before numbers could objectivly record it. More over, some of these evennts hapens to already be taking place.

Another problem with his conclusion is the argument that buying gold will some how spare you from this comming calamity. This is difcult to beleive for one who is living from pay check to pay check.

There seems to be three prevailing predictions around here. One is "the recovery" is just around the corner. (Pff, yay, right.) But by far, the heavist argument I have seen backs a "masive corection" position. That the dollar will lose some 60% to 40% of its total value relitive to 2001. Acompnayed with hyper deflation, as the masive public debt starts to default, and landing on the banks books.

I subscribe to a more doom sayers argument that the dollar shall fall completly. But more from a phylisofical position, rather than one of substance. But I am not alone with this argument.

Who is right? (Well, we know one isn't.) Truly, only time will tell. , for no one can predict the fucher. But we can draw certain boundries. And one is rather clear that the eceonomey will not end in 8 days. The market can crash in that time, but economyes can not.

[cosmicaug]

24. Much of his information is valid

Much of his information is valid,

It very well may be. It's not like I'm an optimist in these matteres (though I'm not qualified in any way to judge such things so it really doesn't matter what I think). What fascinates me about his post, however, is the time period given. I find it curious that he's so certain something is happening in eight days.

Another problem with his conclusion is the argument that buying gold will some how spare you from this comming calamity. This is difcult to beleive for one who is living from pay check to pay check.

I'm not buying gold any time soon, das ist for sure!

[Code_Name_D]

26. Agreed N/T

:)

[junker]

32. Nope no astrologers involved....only existent economic reality

I merely mention the astrologers as they will usually have a cogent spiel on 'timing'.

The reason that that is important is that there are indeed 'forces' of history which manifest through our combined lives and actions. Such forces account for the development of such things as Elliot Long Wave Theory....(go to http://www.depression2.tv/week/index.html for all you would ever want to know about this and for a huge collection of links to real economic/financial discussion)....

Now bear in mind that timing is everything... so when one sees about 20 or more visible cycles completing all at once, it is a real heads up.

And I have been doing this economic sheeit as an unaffiliated interested party for over 15 years and have 'read' for the oxford u. course in economics which has a tendancy to sensitise one to the issues invovled.

Check out some of the links at the page referenced above.

The only reason that astrologers were referenced is that I know many a bank with a resident astrologer.

[Qutzupalotl]

84. Sorry, junker.

I was too quick to dismiss your prediction. Guess your screen name made me think of Michael Milken.

Although your timeframe may have been off, I have been reading about the Barrick antitrust case, and it could lead to a gold spike soon. Whether that will lead to global economic chaos is another question, but a possibility, I suppose.

BTW, gold is at $406:
http://www.kitco.com/charts/livegold.html

[kalian]

11. Some merit to what you are saying...

but...I do not believe that it will happen within the next ten days.
There will need to be a series of financial events that are profound
and while the dollar is tanking it still hasn't completely fallen
flat on its face.

I will agree with you on one thing: within the foreseeable future
America (and most likely the world as a whole) will be changed. I've
been dreading this for quite sometime...but its at hand...

[cosmicaug]

12. I have not the patience for prophecy

Interesting!

I have not the patience for prophecy, but ten days? Ten days is a time frame I can live with (barring being unexpectedly run over by a bus and that sort of thing).

Could you provide various specific benchmarks and what you expect will happen to them in 10 days? Don't make it "you'll see signs within 10 days" because anyone who looks hard enough can probably see signs any time they look. I'm sure there are folk who read this who can comment on the significance (or lack thereof) of these benchmarks (though I'm not one of them).

Though obviously I can't make you provide anything that you don't want to provide, it would please me if you did a couple of things:

• First of all, the aforementioned list of benchmarks. Please be as specific as you can. If you wish to provide some context or further expand upon your predictions, feel free to do so (i.e. where the benchmarks have been, where they will be going in after the 10 days, why you expect them to do what you expect them to do, maybe a historical context, etc.).
  
• Secong of all, the gloating (or not so gloating) "I told you so message" examining how your specific predictions have actually fared against reality. Would 1/Dec./2003 be a good date for this message? I'll try to send you a reminder, if it's O.K.
  

August Pamplona

[TrogL]

13. Where's my goldbug swatter?

Yes, the greenback is sinking, but gracefully like an abandonned rowboat filling with water, rather than the plunge you are predicting.

The asian economies have tanked before and while they've certainly taken notice, other economies haven't come crashing to the knees.

However, you've ignored China, job losses to India and the Euro.

[happyslug]

16. Ignores domestic factors, and time lag to ship

Remember, the US still produces 38% of its oil (and that goes up to 60% if you include Canadian and Mexixan oil as "Domestic". In many ways you should, for as the US Econmy goes so does the Canadian and to a lesser degree Mexico's economy).

The US is a food EXPORTER (thus capable of earning Euros).

The US economy (and I have to includes Canada's economy with the US) is very "self -centered" while production has gone over seas, and mot goods in the stores are made over seas. A good amount of items are still produced in the US (For example in High Tech, most manufactuers keep a US factory going so to adjust to demand quickly. You have a 3-6 month delay in having a change done in the Chinese Factory, so most companies keep SOME US production).

Thus unlike some other countries, the US had a "bottom" that is much higher than Argentina for example.

Furthermore given the lag time in shipping, a drop in the Dollar may take months to take affect. For example if China leaves the yuan go up in value, the first goods to reach the US based on the higher Yuan may not hit till Easter (at whichj point the price of the item will go up).

Oil is similar, oil is purchased in the Mid-east, takes almost four weeks to reach the US Market, thus any radical increase in oil prices will hit over a 4 week period not 10 days.

Thus while the Dollar may drop in a one day period (and I can see it go from its present price in euros to $5 per Euro in a Dau) the true effect will not hit for about a month.

Thus between domestic production and the delay do to shipping, any radical drop in the Dollar will take over a month to fully hit the public.

[junker]

17. sorry to dis-agree with your citation....

however, if you will note, while the US is a net exporter of food, it is only so 1) marginally, and 2)if you include feedgrains (for livestock).

If however, one were to examine the stats for actual products consumed by humans in the US of A, we are a net importer of food, and have been since 1994 and have been increasing our importation such that now we are 'in the hole' some 28 per cent of total human consumed calories. I get my stats from WHO, and EU and USA commodities boards (states, and federal and private). I do my own summations. However the same conclusion is reached by many who make their living off the com-trade. Check it out.


Also, note that most of our foods are banned in the EU for GM reasons. Same in many S. American countries.

As to the oil...who cares at this stage.
I am discussing the financial system collapsing. That is not the same as the economy although it will likely feel the same for those most affected, the middle class who will be wiped out.

The mathematic point of support for the dollar will progress from the major indices 85 (where it sits now, its lowest point ever) to under 65. Some where around 75 to 70 in the progression, a frenzy of selling of US assets (treasuries, stocks, funds, what have you) from asia will begin. Once begun, it will rapidly spread to the EU and then to the USofA itself.

Anyone here old enough to remember 1987?

Anyway, it actually started back a few years, but the outcome is certain, though some parts of the impact may vary in your area.

[cosmicaug]

20. Looks like a prediction! Have any more?

The mathematic point of support for the dollar will progress from the major indices 85 (where it sits now, its lowest point ever) to under 65.

This looks like a concrete testable prediction. Can you tell us where to find this index?

Here's another index I've been able to find, would it be acceptable?

http://finance.lycos.com/qc/stocks/quotes.aspx?symbols=CEC:DX03Z

Apparently, it is derived as follows:

USDX = 50.14348112 × EURUSD^-0.576 × USDJPY^0.136 × GBPUSD^-0.119 × USDCAD^0.091 × USDSEK^0.042 × USDCHF^0.036
(Information from http://www.akmos.com/main/forex/usdx.html)

If the indices are close to being equivalent, your drop in whatever index you're using from 85 to 65 should be roughly equivalent to a fall from 90.75 to 69?

Is that a prediction? The index at http://finance.lycos.com/qc/stocks/quotes.aspx?symbols=CEC:DX03Z going below 70 within the next 9 days?

Please feel free to substitute your index (and tell us where it may be found or how it's calculated), I just don't know where to find this sort of information since I'm not knowledgeable in financial matters and so I was just going with what I could find.

And please, could you also supply other predictions (unless the phenomenom you're predicting within the next 9 days is restricted to the value of the dollar).

TIA

[Petrodollar Warfare]

21. Notes about US oil pproduction....

..which I have been studying quite a lot lately. Since peaking in 1970, US domestic oil production has been in a permanent state of decline. What is relevent is that current production of 9 billion barrels per day (US) is about to *end* for economic reasons. Many oil analysts believe that in 2005 the energy required to extract 1 barrel of US domestic oil will exceed the energy required to extract that same barrel. The testing of EROEI (Energy Return On Energy Invested) is about to become a reality. The laws of economics will soon clash with the laws of physics...and I'll place my bets on physics...specifically the first law of thermodynamics.

In other words, the laws of dimishing returns re US domestic energy extraction will take effect very shortly. That leaves Iraq, in which the oil extraction process costs for "sweet crude" is estimated to be about $1 per barrel. I will have much much more to say about this in the near future, but I would not underestimate the impact of this issue on the dollar and macroeconomics/geostrategy....

...the other issue intially addressed in this thread was the diminishing inflow of foreign capital to sustain our current account (US) imbalances. With only $4.2 billion net inflow in September(!), it will be extremely important to analyze Oct foreign capital inflow data. If they mirror the Sept inflows (ie. < $5 billion), I think the dollar will fall much more. BTW, I bought a couple of more ounces of gold last month, as I see a +$400 p/oz by Thanksgiving as a likely possability...and a 1.20 euro seems imminent...I'm no goldbug, but like Warren Buffet, I just don't see any viable investments...

[Code_Name_D]

23. A question for you.

In other words, the laws of dimishing returns re US domestic energy extraction will take effect very shortly. That leaves Iraq, in which the oil extraction process costs for "sweet crude" is estimated to be about $1 per barrel. I will have much much more to say about this in the near future, but I would not underestimate the impact of this issue on the dollar and macroeconomics/geostrategy....

I have been following your essays with grate intrest. But the above paragrave had me wondering if you have considered other cost to extracting the oil, namly security and the rebuilding of infrastructure.

History is repleat with fallen empires that attempt to use military force to secure and extract wealth. The problem is that while this looks like an attractive deal. In sum, the military ependitures must also be taken into acount when computing the cost of extraction. And it dosn't take a lot to see that vary quickly, more economic recorses is spent trying to secure and extract wealth & recorses, than is returned.

Of course, what dooms empires is that this is an "invisable" cost. Invisable in that the powers do not realize the expense, until the debts had landed on the balance sheat.

[Petrodollar Warfare]

34. Costs of Empire, controling oil and US military overextension....

<<<History is repleat with fallen empires that attempt to use military force to secure and extract wealth.>>>

Yes, and that is the principal issue that the necons fail to accept. Think-tank theoricians and armchiar generals with no conception re the limits of military power and the economic reprucussions of unilateralism is a danger combination. The facts on the ground in Iraq are refutting their ridiculous theories as I write. Well, since we spend $400 billion a year on the miulitary, and we are not too concerned about an invasion by Mexico or Canada, neither are we in the Cold War paradign, it would appear the national security state is immensely expensive. $400 billion is the sum total of military expenditures of the next 20 nations, so it is hard to estimate the hidden costs of military expenditures re oil, but I would take a wild guess of about half or more (ie. $200+ billion).

<<<I have been following your essays with great intrest.>>>

I have not been posting as much on this forum lately as I am preoccupied with other projects...as I am busy writing and working. In fact, you and others might be interested in my upcoming book, to be released in the fall of 2004. Below is some information from the book proposal. I will post more on this next year as needed...(the title is a sort of a "secret", but I'll post it when the time comes..for those with inquiring minds...)

Book Synopsis:

September 11th, 2001 was an historic event. Unfortunately, rather than utilizing that event to stimulate debate regarding the means to strengthen our nation via energy independence, it has been instead exploited to reaffirm the United States position as the global imperialist hegemon. This unprecedented unilateralist framework was outlined by the neoconservatives years in advance; consequently, the outpouring of world sympathy following 9/11 has been squandered in pursuit of the US administration’s militant imperialism. As such, 9/11 represents a missed opportunity for debate and policy reforms.

March 19th, 2003 was similarly an historic event. The unprovoked US led invasion of Iraq was in large part an oil currency war. One of the core reasons for the war was this administration's objective toward preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, preemption of such OPEC moves required securing geostrategic control of Iraq, along with its 2nd largest proven oil reserves. The other convergent factor driving the war is the recent analyses by leading geologists – such as Colin Campbell – that suggest the world may be approaching the Global “Peak Oil” phenomenon. This secondary issue will be addressed in the context of current US geostrategic goals regarding Iraq. The main themes of the book will discuss dollar hegemony, unsustainable macroeconomics of ‘petrodollar recycling,' and the unpublicized threat to US dollar hegemony from the euro as an alternative oil transaction currency. Secondly, the geostrategic importance of the Persian Gulf with regard to “Peak Oil” will be explored (predicted to occur around 2010).

This text will review monetary reforms as suggested by international economists (including Hazel Henderson, Robert Mundell, and others), which could potentially create a more balanced monetary system as well as reduce future oil currency warfare. Suggestions regarding the global monetary system will include a dollar/euro currency ‘trading band’ with reserve status parity as well as a dual currency OPEC oil transaction standard. According to various economists, the most equitable option to provide balance within the monetary system would include a third reserve currency option – an East Asia bloc consisting of a yuan/yen reserve currency.

Additionally, it appears inadvisable that the world remains totally dependent on the US economy as the solitary engine for economic growth, especially given US structural debt levels. If policy makers can implement monetary reforms via an orderly, gradated approach, this would create a more balanced system for the global economy. Secondly, the impending “Peak Oil” phenomenon and the need for energy reform will also be contextualized as regards the Iraq war. The two coalescing factors of the euro currency and a desire to secure the 2nd largest oil reserves before “Peak Oil” led to the US invasion of Iraq. However, without changing course, the American Experiment will end the way all empires end – military overextension and economic decline. Monetary and energy reforms should be negotiated within the framework of multilateral accords; otherwise, the beginning of the 21st century will quite likely include further US vs. EU currency warfare and increased frequency of war over hydrocarbons.

Objective:

To educate my fellow Americans about the genuine but unreported macroeconomic issues underlying the Iraq War. The US media has not and will not discuss the dollar vs. euro and OPEC pricing issues. Therefore, I will discuss concerns about the structure of the US economy and the militant imperialism of the current administration’s decision to use Iraq as a military solution to our structural obstacles. Additionally, I will review the current literature regarding the depletion of hydrocarbons (”Peak Oil”), and how the current administration is forcing a paradigm shift in the post World War II geopolitical alliances. A disconcerting European/Russian/OPEC geopolitical alliance could be forming as a counter to US militant imperialism.

Furthermore, I will discuss the EU and its enlargement plans, as well as the euro currency, all of which are changing the global monetary dynamic for the first time since the end of the Second World War. I will advocate that our economy adapt to this new currency. In order to regain some of the international “good will” that we have lost, the next US administration will probably need to compromise on monetary issues and make policy changes that accommodate new economic and energy realities. At the end of the book, recommendations from various economists regarding global monetary reform will be briefly discussed, and comments on energy reform that will ideally reduce future conflict over hydrocarbons/oil currency will also be explored.

Ultimately, my goal is to stimulate debate within my country and hopefully within the US/EU policy-making arena regarding potential reforms to the current global economic structure, energy depletion, and US foreign policies. I will conclude with the observation that the US cannot live up to its founding principles of freedom and liberty unless it undertakes some difficult reforms. Movements away from the US dollar are already taking place, and as such we need to reexamine our fiscal and foreign policies. This text will challenge the neoconservative agenda, considering the unrealistic idealism of the US as ‘Global Empire’ appears unsustainable.

GENERAL BACKGROUND:

This book proposal is a rather innovative work of literature. It will attempt to synthesize the macroeconomics of the US dollar, depleting hydrocarbons/energy supplies, stated US geostrategy, and how this led to the 2003 Iraq war. The book will conclude with monetary and energy recommendations that address reduction of oil dependence/oil currency warfare. The unique selling point of the book is that it will provide a synthesis illustrating how the Iraq war relates to the complex issues of US dollar supremacy. The Iraq war will be the conduit via which to introduce “regular people” into the large and complex issues of dollar vs. euro reserve currency conflict, depleting hydrocarbons, and the political agenda driving the neoconservative movement. Suggestions regarding a suitable course for US monetary and foreign polices will be addressed. These issues will synthesize into the broader theme of preventing the US from becoming an authoritarian empire. Based on the hundreds of supportive emails that I have received from my Internet essay it appears that people in the US and from all over the world are very intrigued by my research regarding Iraq. The book will offer something unique and stimulating – the unspoken issues behind the Iraq war, and the factors driving US imperialism: depleting oil, threat of an ascending euro/EU, and the neoconservative quest for global dominance. I will advocate the US swiftly alter course if we wish to ‘Save the American Experiment’ and return to the enlightened principles of the founding fathers.

(Hopefully that will suffice at the moment...;-)

[Code_Name_D]

35. Sadly, I do not think it will.

But I guess I will have to waite any way. Good work. B-)

[cosmicaug]

25. Oil

Many oil analysts believe that in 2005 the energy required to extract 1 barrel of US domestic oil will exceed the energy required to extract that same barrel.

That soon? Any references?
And then, of course, there are those optimists out there who think the Canadian tar sands are going to save us (as I understand it they're very expensive now and become more expensive yet if the costs of oil rise)

That leaves Iraq, in which the oil extraction process costs for "sweet crude" is estimated to be about $1 per barrel.

Which would be about what extracting oil is supposed to cost from Saudi Arabia; but I've read somewhere that costs in Saudi Arabia might be much higher than they're letting on. Since you've been studying this quite a lot, what do you know about this?
Also, any possibility that the Iraqi reserves might be less than thought or more expensive to extract than though (actually, the latter has to be the case for as long as things aren't going well over there)?

[interceptor]

27. Saudi oil

Is staying very cheap. My dad works for Saudi Aramco. I'll put it this way, they're not worried about competition from Iraq.

[kalian]

28. Not unless "something" happens in Saudi Arabi...

:eyes:

[mhr]

29. Peak Oil Can Be Investigated Through These Links

Websites of interest include:

http://www.oilcrash.com/
http://www.wolfatthedoor.org.uk/
http://www.asponews.org
http://www.gulland.ca/depletion/depletion.htm
http://www.dieoff.org/
http://www.oilanalytics.org/
http://www.greatchange.org/
http://www.oilcrisis.com/
http://www.after-oil.co.uk/
http://www.hubbertpeak.com/
http://hubbert.mines.edu
http://www.museletter.com/archive/cia-oil.html

Energy Resources
http://groups.yahoo.com/group/energyresources/

Alas Babylon
http://groups.yahoo.com/group/AlasBabylon/

Running on Empty
http://groups.yahoo.com/group/RunningOnEmpty2/

[Petrodollar Warfare]

36. Saudi oil, Ghawar and Peak Oil...

<<<Which would be about what extracting oil is supposed to cost from Saudi Arabia; but I've read somewhere that costs in Saudi Arabia might be much higher than they're letting on.>>>

The world's largest oil field, Ghawar (in Saudi Arabia) is having some difficulty in producing its previous volumes. It is my understanding that for each 4.5 million barrels extracted, it is taking 1.0 million gallons of sea water injected into the bottom of the field to extract that oil (ie. that is everyday). While their is still a lot of oil in Ghawar, that field may be "watering out" so to speak. For political and financial reasons Saudi and the rest of OPEC do not publish accurate data re their reserves. The only country that may have worthwhile "unproven" reserves re Peak Oil is Iraq, but it will probably take a year or so to find out if 112 billion barrels is correct, overstated or understated. Quite a scamble is taking place over the past 2 years to find oil....

These global oil production figures are interesting, and suggest that Peak Oil may have occured in 2001, or we have reached plateau:

1995: 69,876 (barrels produced in billions)
1996: 71,045
1997: 73,665
1998: 75,133
1999: 74,142
2000: 77,002
2001: 77,031
2002: 76,330 (as best as I can tell)
2003: Anxiously awaiting...

(FYI: According to Dick Cheney and his famously secretive 2001 energy plans, the demand for oil in 2020 will be 100 billion b/day. Based on everything I've read...that simply ain't gonna happen. My question? Will the 2003 production totals, despite mitigating factors in Iraq, be above or below 76 billion barrels...best to keep the American Sheeple dumb, fearful, and preoccupied with the so-called "war on terrorism" - just so they can carry out their imperialist plans. The problem of course is that Empire abroad results in tryanny at home....and thus we should heed the wisdom of the Founding Fathers and reject the temptation for Empire)

Anyhow, as for US oil extraction costs exceeding EIOER, I'll look for the url link, but perhaps the best analysis was the May 2003 report by Jean Laheerre, a consultant for Petroconsultants (it's a little technical and 40-pages long, but extremely informative. FYI: According to Deffeyes the rumor is that the CIA uses Petrocultants data to obtain the most objective analysis re Global Peak Oil...the "publically" available data by OPEC et al is political and inaccurate). Here's an informative link:

"Future of oil supplies" (May 7, 2003 conference in Zurich)
http://www.hubbertpeak.com/laherrere/zurich.pdf

Also, Matthew Simmons, who advised Cheney re the 2001 US energy strategy has some real concerns about Saudi oil, here's a link:

'Revising the forecasts for Saudi oil'
http://www.dailystar.com.lb/opinion/17_11_03_c.asp

"Simmons believes this traditional image of Saudi Arabia as a perpetual gusher of cheap oil is wrong. He’s finishing a book documenting his argument that in the future, Saudi oil will be scarcer and more expensive than many people expect."

"To maintain its high production level, Saudi Arabia since the 1970s has used a recovery technique known as “water injection” ­ in which heavy, salty water is pumped into the reservoirs to push oil toward the surface. According to Simmons, the Saudis are now injecting about 7 million barrels a day of seawater through three big pipelines.

“Water injection gives the appearance of eternal youth,” says Simmons. “That’s why the Saudi fields look so robust.” But he argues that injection can damage wells and create unpredictable flows underground, sometimes known as “rogue water,” that prevent full recovery of reserves.

The decision to pump water into the Saudi reservoirs worried the CIA enough that it commissioned a special study in the late 1970s. But the practice was urged by Exxon, the leading Aramco partner at the time, which argued that it was essential for prudent management of reserves. The CIA eventually agreed.

But CIA worries about Saudi production capacity returned in the early 1990s, when the first Gulf War halted Iraqi and Kuwaiti production. Again, the agency concluded that the Saudis had the necessary extra margin. Saudi surge capability was tested once more early this year. Saudi production briefly spiked above 10 million barrels, but some industry experts believed it was not sustainable at that level without more investment.

[junker]

31. Note that Iraq AIN'T producing

whistlebutt and his crafty crew thought that they could bring Iraq back on line. Nope.

If it is not the daily attacks on the pipeline, it is the HUGELY inflated estimates for actual, Recoverable, oil.

Turns out that Iraq may be a net looser as an oil site. That is, the easily extracted (and thus cheap to produce) oil is gone. THat is why SH could not increase the rate of smuggling (or really afford to implement those nasty wmd programs)...he was basically riding failing production down to zero.

And it does not relate to the crappy infrastructure, as will be discovered though who knows if it will be announced. It is the type and nature of the oil fields under Iraq.


And now that we have committed our children to a debt to
'pay' for iraq, we have really screwed ourselves. If we add in the 203 billion that will be required to be put into Iraq over the next few years as a real cost of doing business there, and then calculate in the actual costs for recovery of Iraq's remaining oil, then each barrel of oil we get out of Iraq will end up costing nearly 198 of today's dollars over the course of the next 8 years pumping.....

pretty damn expensive gas if you ask me....say about 25 dollars a gallon.

So there is absolute peak, and then there is peak as relates to real costs and the ability to debt load the dollar any more than it already is..

[Code_Name_D]

33. I agree with this.

From what I have read, not only has the production capacity been over estimated, but reconstruction and re-activation costs have been grosly understemated.

Under the sanctions, much of the oil infrastructure was canblized for be used with other system. Pipe, well walls, and drilling riggs were scavaged for bridge trussles and roofing beems. Wireing has has also been scavaged. Other key matirals scavages were ball barinds, glass windows, brick and morters, lumber, nails, electronics. Any thing of value was taken to be used else where, as parts were so hard to come by.

In short, the intire infrastructure must be re-built, practicly from scrach. And this of coruse requires huge infusons of cash from the tax payer.

But the danger here isn't that the money will run out, but that Haliberton and other compnayes will go the way of Enron. The Start of Enron's problems began when huge investments made in privitised British water, and the Indeain power plant fell through. The dept from the projects then began landing on Enron's books. We know know that this problem started to manefest itself in late 2000. So Bush gave Enron California, and this staved off colasp for about a year.

The 87 billion dollar "Iraq investemtn" (More like bail out) is money intended to staff off colasp of Haliberton and other US compnayes heavly exposed in Iraq. But its only a stop gap. Soon another 87 bill, if not more, will again have to be sunk into "Iraq reconstruction."

(Seven days to go.)

[happyslug]

37. You missed my point

My Point was NOT that there will be a fall of the Dollar (It is overdue) but that its affect on the "real" economy will be limited and take at least 30-60 days to work its way through the “real economy”.

First let me define what I mean by the “Real Economy” which is how the economy affects people’s life day to day. The Dollar is only a symbol of Finance and the Collapse will be a FINANCIAL Collapse NOT a collapse of the “Real Economy”.

Now the “Real Economy”, Wall Street (i.e. stocks and bonds) and the value of the Dollar are inter-related, but are also NOT the same thing. To illustrate, a person’s income is NOT the same as what he can spend. So much of his income has to go to taxes, to savings, to paying outstanding bills, in addition he can increase his short term spending by borrowing. Thus what a person can “Spend” and what a person “Earns” are NOT the same, closely related (and inter-related), but not the same. The same with Finance and the “Real Economy”. The Collapse of the Dollar will affect people’s day to day activities (But only long term, not short term, i.e. in 30-60 days NOT at the time of the Collapse of the Dollar). People will go on living, buying and selling even if the value of the Dollar would fall to nothing. This will be a “brake” on any fall of the Dollar, for transactions in America will continue to be in Dollars, long after the value of the Dollar is worthless.0

Second, the delay inherent in transport will delay any affect on the Collapse of the Dollar on the Real Economy for deals made before the Collapse will be in Dollars, and will be paid in Dollars after the Collapse. A whole bunch of people will lose a lot of value (and that will affect the Real Economy) but the same buyers and sellers will adjust the price of everything after the Collapse and only than will the affect of the Collapse start to hit people and thus the “Real Economy” (For example, I see a 4-8 weeks increase in the price of fuel, not a 1-2 week increase before the price of fuel stabilizes after the Collapse of the Dollar) .

Third, while I can not disagree with you as to foodstuffs (and I suspect you are correct, given the number of Canadian and Italian pasta I have seen in my local food store, AND the increase in Mexican Vegetables and Fruits in the same store, and even the Chilean Grapes that are in the store come Spring) the fact we are still a NET exporter (including feed-stores) mean we can shift (over time) to a more domestically based economy. Thus our ABILITY to produce more food and to be self-sufficient is another brake on the fall of the Dollar. We can still exchange feed-stores (and other grains) for Fuel and other imports.

In a nutshell the point of my comment was NOT the Dollar will Collapse, but the EFFECT of that Collapse will be felt over a 30-60 day period. I expect protests and problems during that time period (look at Argentina for example, took about 30-60 days for the collapse of its currency to work its way through its economy, it turned ugly down there during that time period, but only REALLY ugly as the affect of the Collapse finally hit Argentina’s Real Economy. I believe it is up to four Presidents since the Collapse and finally one most Argentineans seem to accept. How will the US withstand a similar Collapse of its currency?

[Petrodollar Warfare]

38. Question for you about dollar and oil...

<<<<In a nutshell the point of my comment was NOT the Dollar will Collapse, but the EFFECT of that Collapse will be felt over a 30-60 day period.>>>>

I have been studying the effects of petrodollar recycling for the past 15 months. Based on my analysis, the US dollar simply can not collapse as long as dollars are the international currency for oil pricing and oil transactions (within OPEC and non-OPEC producers). In otherwords, as long as 190 nations continue to use dollars to pay for their monthly oil/energy/survival bill in US dollars, their will always be a demand for dollars, regardless of how messed up our econony really is. Let's look at some simple facts and math to explain why the dollar can not collapse for financial/economic reasons. The dollar's collaspse would occur if the geopolitical situation changed and the monetary/matter/energy paradigm changed, to a "petroero" for example. (The most likely outcome - IMO)

Under the normal rules of economics, the dollar would have been greatly devalued a long time ago due to our massive trade and current accout deficits, along with our $6+ trillion national debt. However, as long as the demand curve for oil/hydrocarbons increases on a global scale, and the dollar is the monopolgy currency for international oil sales, the US has an almost unlimited debt toleration. Due to this petrodollar recycling arrangement, the US economy is *immnue* to the laws of economics in many respects. Likewise, the US has *no* currency risk for oil with regard to the dollar's valuation on the international markets.

Theoretically, if the dollar's value went down by 50%, or went up by 50%, our price for gas as the local gas station says the same, about $1.50 to $1.70 - No currency risk for energy/gas prices is unique to America, and the benefits are obvious - annually we consume 25%-28% of the world's energy. However, the EU wants to enjoy this phenomenon too, and they believe the euro should be equal to the dollar with regard to oil/energy purchases/pricing. From a purely economic perspective, the EU economy and euro currency is technically a much stronger currency than the US dollar due to the EU's relative lack of debt, and their small but positive trade account surplus. (The fact that the EU does not threaten other nations with war and works through the UN and International Law adds some geopolitical advantages for a transition to petro-euros, etc.)

Consider this: A production OPEC barrel is 42 gallons of oil. OPEC price range is $22-$28 dollars per barrel. The Japanese can not give yen to OPEC for their oil, the Chinese cannot give yuan to OPEC for oil, and with the exception of Iran (& formerly Iraq, but with soon to be replaced with Russia and Venezuela), you can not pay for oil in euros. What this also means that a US dollar is worth between 1.5 and 1.9 gallons of crude oil. We don't have a gold-backed currency, but an "oil-backed" currency. No other hard currency in the world is directly convertible into 1.5 to 1/9 gallons of crude oil (Unless you are currently buying from Iran, or from Iraq circa Dec 2000 to Feb 2003...or perhaps in the near future from Russia and/or Venezuela..)

Here's another analogy:
Water is not a "mere commodity" for human consumption. It is essential for our survival. Likewise, Oil is not a "mere commodity" for consumption. Water is required for survival at the individual level, and oil is required for survival at the nation state level. It is a fact that 95 to 97% of global transporation - the glue of the entire capaitalist/industrial superstructure - is dependent on this finite resource, and no substitutions will be avaiable for a long time...and the peaking of global oil production is the greatest challenge of the 21st century. The question is between a desperate war or international cooperation to find alternatives - asap. Remember this axiom: "Life is nothing more than competition for energy." (That applies to everything from single-cell amoebas to nation states)

Current oil production is 76 billion barrels per year. Using a "mean" price of $25 p/ barrel, that equates to approx. $1.9 Trillion US dollars used per year for oil purchases. This necessitates all countries who import oil to use some of their surplus dollars from trade sales and buy dollars for their monthly oil/energy/survival bill. A large part of those $1.9 trillion dollars are recycled back into the US Federal Reserve system.

Saudi Arabia did us a BIG favor in 1974 and secretly agreed to sell oil in dollars only, and invest all those surplus dollars back into US financial instruments (T-bills, etc). At the time their was some movement for oil to be purchased in a basket of currencies including the dollar, D-mark, Franc, and yen. The US gets its energy by the printing press, and thus we own the world's oil supply in some respects. (But we don't control the oil, and that's why the "war on terror" was needed - to allow the neocons to pursue an imperial concquest of the middle east, which has resulted in an incredible increase in global anti-Americanism)

So, the US did not want to lose it's dollar hegemony/superpower status in the early 1970's when Nixon broke the dollar-gold standard. We blocked that movment within OPEC and since 1974 we have recieved a very healthy subsidy from OPEC. Iraq's switch to the euro in Nov 2000 for oil transactions and payments was a threat to dollar supremacy, so war plans were created. The imminent Global Peak Oil was the original driver for invading Iraq (going back to atleast 1997), but Iraq's switch to euros added even more urgency to the situtation circa 2001. So, we had a war in 2003 to grab the oil and (hpefully) prevent anymore movement by OPEC towards the euro. In order to enforce dollar supremacy, our gov't is now having to rely on brute military force in the Middle East, (or covert force in Venezuela, etc). This is a poor strategy in a globalized world, and it will eventually fail.

I have written extensivley on this subject elsewhere. Yes, the dollar is heading downward, but an Argentina style currency collapse is simply not possible due to the petrodollar recycling phenomenon. The Federal Reserves biggest nightmare? An OPEC switch to euros. Extremely unlikely to occur at once in that it would collapse both the US and global economy. A gradual transition to a "petro-euro" recycling arrangement seems to be outcome of all this, but the US energy-military-industrial conglomerates will use every avaiable method to prevent such an occurance. Welcome to the "red pill" world of US geostrategy and oil currency warfare...(analogy from the original Matrix movie - where 95% percent of folks/sheeple are still in the cozy, fantasy "blue pill" world...)

[happyslug]

40. A move has been afoot to price Oil in Euros

It started with Iraq under Saddam, but has increase since our troops are now tied up in Afghanistan and Iraq. The troops were a threat to any country in the world as long as they were NOT committed to any one country. Now that the Troops are committed, they are no longer a threat to any OTHER country. This is one of the hazards of using troops.

Thus Russia, Iran and Saudi Arabia may be planning to switch to the Euro. This switch to the Euro MAY be the cause of the change noted above as to the price of the Dollar. Putin knows the former Soviet Union was NOT defeated military, but economially. Switching to the Euro strengthen Western Europe and weakens the USA.

Moscow maybe waiting for Thanksgiving Day (or more accurately, the day AFTER the market closed i.e. Wednesday) Putin knows that the America Government closes down between Thanksgiving and the opening day of Buck Season in many states (December 1st, in Pa, first day of Buck season is ALWAYS the Monday after Thanksgiving in PA). Thus you can have FIVE days before the US may be able to respond and by than it may be to late (and you have the additional pleasure of spoiling someone’s holiday).

As to Russia
http://www.moscowtimes.ru/stories/2003/10/10/001.html

As to Saudi Arabia

http://www.guardian.co.uk/saudi/story/0,11599,778380,00.html

http://www.scoop.co.nz/mason/stories/HL0208/S00119.htm

As to Iran
http://www.thehindubusinessline.com/bline/2003/06/17/stories/2003061702380500.htm

[Petrodollar Warfare]

41. Are you suggesting a "Thanksgiving Surprise" from Putin?

I appreciate your commentary, and thanks for the links (one of them I was not familiar with). Iran is already *requiring* payment in oil from its EU customers (much to their delight), but is still pricing oil in dollars. What is lacking is an international pricing mechanism in euros. The East Texas crude marker will always be priced in dollars, but the Brent crude marker may not. If Sweeden had adpoted the euro in Sept 03, then Norway and Denmark would probably have followed the Swedes lead, and voted to accept the euro sometime in 2005-2006. At that point the Brent Crude marker would then become euro-based, and the UK would then come under pressure to adopt the euro too. However, it will probably be 2007-2010 when these events pan out - unless a dollar crisis occurs before then...

One Russian oil executive has suggested a Russian 'crude oil marker' pricing scheme, which could be in euros, but I have not heard anything on that topic except that one off-hand remark. Anyhow, do you have any *non-speculative* reasons to believe that Russia might re-denominate this week? If you do, please share - thanks. (I think they will go to petroeuros if the neocons don't let them have some rights to Iraqi oil, but I don't think this would occur in 2003).

BTW, according to the ECB, pricing oil in euros is "sensible"...seems this important debate is moving slowly into the open...(but *not* in the corporate controlled US media - must keep the sheeple scared, but borrowing and spending, must keep the sheeple scared, but borrowing and spending...ad nauseum)

http://www.themoscowtimes.com/stories/2003/10/14/041.html

[happyslug]

42. In the past I have been told I have a Criminal mine.

And if I was Putin, I would do the shift on Thanksgiving day. It will put the US at least 24 hours behind Europe, Russia AND Japan (and the rest of the world). The delay may be up to five days, but that 24 hour delay may be deadly. Can you see Greenspan, Bush and Snow getting a call from their office telling them of the Shift AND THE WORLD WIDE FINANCIAL MARKET RESPONSE TO IT? At 6:00 AM Thursday?

Even if Bush, Greenspan and Snow do respond on Thursday, the US Market will be closed and thus they will have to go (i.e electronically NOT personally) to Europe and Japan to defend the Dollar.

Hitting late Wednesday, will give Russia's European customers time to react. Before the Market open up in the US, people in Japan, Saudi Arabia, Iran and Even Russia would have had a day’s jump on the move. Given that “Black Friday” is a terrible day to do business (other than retail, and even retail the Saturdays closer to Christmas tend to bring in more business for even Retail sales) the US market will NOT br able to fully respond till Monday. Furthermore more AMERICANS make plans around Thanksgiving than any other holiday (expect Christmas), thus you spoil a lot of four day AMERICAN holidays (and NO European, Japanese or Arabic Holidays - Ramadan ends on Tuesday).

Thus Wednesday night would be a good time to make the switch, with Saudi Arabia and Iran following at the same time or a day later in “response” to the Russian adoption of the Euro (The delay will hit the US twice, first as Russia does it on Wednesday, ruining Thanksgiving for the Americans, and than Friday will be ruined by Saudi Arabia’s and Iran’s adoption of the Euro late Thursday. This will kill any attempt at any bounce as the market hits bottom from the Russian move (i.e. as the market hits bottom do to the Russian adoption of the Euro and the Dollar starts to climb from its fall, the Dollar gets hammered again by the Iranian and Saudi Arabian adoption of the Euro).

If I was to attack the US Economically, that is how I would do it, if I can convince Iran and Saudi Arabia to go along with me. Thus I think that is Putin’s plan (and even if Iran and Arabia backs out, you still have the affect of the Russian Adoption of the Euro to gloat about during Christmas).

[cosmicaug]

43. Iraq, finishing the job

Iraq's switch to the euro in Nov 2000 for oil transactions and payments was a threat to dollar supremacy, so war plans were created.

If you are correct, Iraq happened in anticipation of Iraq turning to the Euro not because of Iraq turning to the Euro.

The neocons had been advising "finishing the job" in Iraq back to the Clinton administration. And it has been noted by many media sources that the planning to attack Iraq began on Sept. 11.

By the time Iraq turned to the Euro the die had already been cast on the invasion/pre-emptive strike/liberation.

[Petrodollar Warfare]

45. The order is certainly arguable.

<<<By the time Iraq turned to the Euro the die had already been cast on the invasion/pre-emptive strike/liberation.>>>

Yes, I would agree, but the euro added much urgency in 2001 in that Iran was already making noises about a petro-euro, whereas Iraq beat them to it. My opinion is that something in the 1995 Petroconsultant's report on world oil production must have addressed the imminent peaking of global oil during the following decade (this decade) - which probably got some wheels turning (at the CIA, etc). I don't know what exactly that $32,000 report said, but apparantly due to the media reports it addressed the issue of Global Peak Oil. Whether it suggested 2002, 2005, 2010 or beyond I do not know - yet. However, all of the Persian Gulf states have been throughtly explored and documented, with the sole exception of Iraq...

Iraq, not having been throughly explored since the 1970s due to the 1980-88 war with Iran, the 90-91' war over Kuwait, and followed by a decade of UN sanctions made it impossible to know if Iraq's reserves were greater or less then reported, but the hope seems to be they are underestimated. Some believe it might have 200 billion barrels of cheap, sweet crude. The Caspian Sea region was also thought to have that amount of oil in the mid-late 1990s, but subsequent exploration has shown that this region has much less oil, it's scatterd about as opposed to a large field, and has it lots of sulfar (about 20%), making it very expensive to extract. (It does have lots of natrual gass through)

That realization about the Caspian Sea is not good, as Cheney's 2001 energy plan obviously centered on this region to reduce our dependence on the Persian Gulf oil. Some believe that 9/11 and the subsequent US campaign in Afghanistan regarding pipelines and access to hydrocarbon resources in the various "stans" are related. Based on the new US military bases over the last few years, I tend to agree that Afganistan is indeed part of the 'New Great Game.' However, Iraq is now generally regarded as the last potential black gold mine, and the only one that could possibly keep the Peak Oil plateau going for a few more years. The neocons had war plans re Iraq in 1997/1998...but were out of power.

IMO, the euro transition was the *final nail* in the coffin for Saddam, and added some urgency to his overthrow. FYI: Iran has been discussing a petro euro since 1999, but wanted to wait until the euro was at parity to the dollar. Note: Iran supposedly has 9% of the world oil reserves, and Iraq 11%, so had those two worked in tandem, 20% of the entire world's reserves of oil would denoimiated in euros - and that was not acceptable, so we overthrew Iraq, and have lots of US soldiers parked on Iran's border to send a message. But, Iran acted on their own and starting selling their oil to the EU in euros duirng April or May 2003 - much to the chagrin of the neocons...)

Also, Iraq was supposed to go to the euro 1-week before the 2000 election, Nov 1, 2000. However, the UN needed a extra week to make the needed changes, so Monday, November 6th is the reported date of the transition - this was the day before the 2000 election. The timing is interesting. As for Rummy's (and no doubt Cheney's) planning to invade Iraq right after 9/11, I suspect it was a combination of these two coalescing factors: a US oil grab before Peak oil, and the unexpected threat to dollar supremacy from the euro. Things this complicated are rarely due to one factor.

Well, perhaps 20 years from now when Peak Oil is fait accompli, someone might declassify some obscure CIA documents that answers the exact sequence of events, but the above scenario seems to the be the most reasonable analysis of currently known facts.

Below is one pertinent fact that is not discussed in the US media re US/UK UN Resolution 1483, introduced on May 9 2003, and passed on May 22, 2003, which created the Iraqi Assistance Fund. Two weeks later the US now controlled Iraqi oil - including that had been in storage - and was offered on the international markets - denominated in dollars - not euros. Regardless of the WMD decpetions, this administration was anxious to get whatever Iraqi oil on teh markst - and to make sure it was known that dollars were the accepted payment - not euros. The haste at which this was accomplished is quite remarkable - IMO.

'Iraq returns to international oil market' (June 5, 2003)
http://www.thedossier.ukonline.co.uk/Web%20Pages/FINANCIAL%20TIMES_Iraq%20returns%20to%20international%20oil%20market.htm

"The tender, for which bids are due by June 10, switches the transaction back to dollars - the international currency of oil sales - despite the greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq's oil be sold for euros, a political move, but one that improved Iraq's recent earnings thanks to the rise in the value of the euro against the dollar."

[rapier]

19. notes

The topic was a financial crisis. That is something seperate, at the start, from an economic crisis. Trade balances are already way out of whack . Being able to supply enough oil and food for an economy running at 70% or so of the current levels is besides the point. By that time massive dislocations in millions of families lives will have taken place. Survival will be probable. Physical and politial security will be a distant memory for many by then.

A financial crisis springs from inbalanaces in the financial markets themselves. The 87 crash was a particular event having to do with so called 'portfolio insurance' which caused the then new stock index futures to lock limit down as everyone headed for the exits at the same time. (The end of that crisis was thru the direct intervention of someone, who steped into the stock index pits and started buying.) The futures cratering caused massive selling at the NYSE, and a feedback loop developed.


The 29 crash was quite simple. Massive amount of buying was done on margin (loan) by unsophisticated speculators, called investors now. The sudden downmove caused the margin holder to have to sell, which begat more margin calls and then more selling and on and on. Crash. All having to do not with any fundmental thing but rather the internal dynamics of a highly leveraged centralized market.

The amont of leverage in the financial system today is gigantic. Not in stocks so much but in those derivatives you hear about, particularly the biggest class of them, credit derivatives. Highly leveraged thinly capitalized entites from FannieMay to the so called credit insurers like MBI to myriad special purpose entities run by corporations to hedge funds, many loacted offshore in see no evil enclaves like the Bahamas, are suppling the grease for the endless no down payment credit offers to minimum wage slaves at the local Best Buy and used car lots.

An accident is always possible in this world. An accident where everyone starts to head for the exits at the same time. All the holders of dubious credit may at any time want to or be forced to unload their deteriorating positons at any time. It might never happen, it well could. Nobody knows.

The amount of risk in the sytstem is huge, and ignored. Ignored or pasted with a happy face by Greenspan himself who always goes out of his way to laud the reduction in systematic risk affored by the new world of unlimited credit creation divorce from prudent bankers and any sort of reserve system at all. It is absolutely positively wrong on his part to tout a reduction in systematic risk. By his account risk is being transferd to those willing and able to accept it. Willing yes, able no. The brushing aside of risk by him has created the largets moral hazard in the economic world since John Law in that he has pushed down short term interest rates relentlessly and then virtually promised they will stay that way so that leveraged players can contine to borrow short and lend long f or a handsome profit. Systematic risk is rising exponentially, along with total outstanding credit.

A seize up in the financial markets will be far more important now than 87 as most 'profit' for corporations is now from financial gamesmanship. GM made all its 'profit' last year from mortgages and other credit. GE isn't a manufacturer. It is a bank lending to all sort of people, often its own customers who when they get in trouble repaying are bought out by GE itself, financed by 'low risk' credit they float into the system. Virturally all retailers and everyone for that matter are allowe to book the profits today for things that won't be really paid off for years and years.

Suppse the payments stop. Suppose the borrowing to pay off old debt, think mortgage refinancing ends.

All this is an outline of how a finacial crisis could develop, Not will, could. I make no prediction. I just watch the show.

[junker]

30. Another take on the same data yields same conclusion - doomer doug macinto

The article below is from Portland OR's own doomer doug mcintosh.
He uses foreign inflows and other predictors....note that the collapse actually started in Sept as the inflows fell to a net outflow of funds....we need nearly 2.2 BILLION dollars a day to come back in the form of purchases of US paper financial instruments in order to keep running....jig is up....foreigners are selling our debt and dumping the dollar like used toilet paper.

anyway, the rumours from deep in the dark corridors that are under the halls of power is that TSHTF on 24th.....in so far as the gold price and the scandal links......some say the recent FOREX raids have yielded GOLD trails in that the computers involved have data all about pres Bush cheney and snow and the market manipulations.....

also note that foreign press are telling their readers to dump/sell dollar denominated securities quick...I could 19 major papers in EU alone with that message in articles in their financial sections for today....

and you ought to read what is being written up in HK and Shanghai.

anyway, included as Doug don't care about pass arounds....

*************************
The Tentacle's Caress

Doug McIntosh

I am old enough to remember when the original Star Wars movie came out in the summer of 1977. In one memorable scene, our heroes have rescued Princess Leia and then promptly gotten trapped in the mother of all garbage compactors. Hans Solo, watching the bubbles swirl around his feet sees a huge tentacle reach up and grab Luke Skywalker. Knowing something else is coming, the creature drops Luke. Someone comments it can't get any worse. Hans Solo replies, as the walls start to squash them, "It's worse." I know the feeling.

Having avoided the tentacle's caress, the USA economy is now about to be squashed by something few people even comprehend. It's not like capital inflows into the United States normally generates much interest. Until now that is. It seems the Mr. Magoo, Clinton/Bush economy is solely based upon massive capital inflows to sustain the fig newton of our illusions. What corporate profits exist have come solely through outsourcing, cannibalizing structure and stock manipulation. American corporations haven't made money in about five years. What they have done is cut expenses, rigged their stock prices and played games with the accounting rules. The Federal Government has been bankrupt, using commonly accepted accounting rules, for at least a decade. State and local governments have become bankrupt since 2000 as they cannot deficit spend like the Feds. At any rate, our entire economic system, at all levels, is dependent on debt, fiscal liquidity and massive capital inflows from overseas to finance our $500 billion federal budget deficit, our $500 billion trade deficit and our $7 trillion federal debt. The role of the media elite, the governmental elite, business elite and education elite has been to deny any of this economic reality. Their job is to maintain the profitability of the status quo, along with their perks.

We have seen the collapse of Fannie Mae and Freddie Mac as foreign investors dumped 3.2 billion dollars in their bonds in October alone. The US fiat dollar reached record lows against the Euro this week. The price of gold, that much maligned canary, is now over $400 an ounce. From both an historical and economic point of view, the USA economy is in an interesting position. In order to deal with the Federal budget deficit Mr. Magoo must sell nearly 40 billion in bonds every single month. If he cannot do this, then federal spending as we know it will cease to exist. And in the run up to an election year to boot. Obviously, Mr. Magoo will move printing presses to the top of Mt. Sinai to see this doesn't happen. Unfortunately for Mr. Magoo and his elite buddies, foreign investors are starting to realize the light at the end of the tunnel is a train headlight. The headlight of the newly derailed US entitlement gravy train. The USA gravy train gave its last gasp with the prescription drug bill just passed. The total defense budget of $400 billion and the $100 billion prescription drug plan do not exist in economic reality. Their entire amount equals this years budget deficit. A nation that gets to the point when its defense budget is financed out of thin air is obviously in economic delusions.

It is simply beyond current economic theory to explain what happens when any nations attempts to finance both a trade, or current accounts deficit, and a federal budget deficit nearly ten percent of its economy. Adding in state and local budget deficits, corporate deficits, personal deficits; well, you get the idea. Perhaps one of the really smart economists as www.gold-eagle.com can explain things better. I know I can't. All I can say is to watch for signs in the real world things starting to fall apart.

Over in the United Kingdom, the Financial Times ran an article called, "Investors Flee US Treasuries-$50 bn Down to $4.2 bn- Dollar hits record low against Euro." The article was dated 11-20-03. It may be due to the chaos of Bush in London, or the recent terror attacks, but I don't think so. What my gut tells me is this. For several years I have been waiting and watching, making predictions based upon my certainty the current economic fraud would come crashing down. What I see now, is I had it wrong. I also assumed the coup de grace would come from an internal American economic collapse. I see now the blow will be external and it will be either due to a confidence collapse in the fiat US dollar, or terror related. The point of the terror attacks, like the one today against the British bank is to destabilize our economies. Once our economies are destabilized, our imperial pretensions will collapse due to lack of money. Whatever Bush says, the USA faces the real possibly of a unilateral collapse in our overseas military, political and economic due to lack of money. Assuming the fiat dollar loses most of its value, which I think is credible, the USA will come back home with its fiscal tail between its leg. It costs money, real money to play at being an Empire. The irony is the USA doesn't seem to understand how vulnerable it's economy is. I don't think the powers that be have understood Osama Bin Laden's primary target has been the economy of the western power. He is going to spend us to death.

In August 2003, the USA conned foreign investors into loaning us 50 billion dollars. Less than a month later, they gave us less than five billion. The article says this reflects concern about our $45 billion a month current account(trade) deficit and our ability to deal with it. In plain economic terms, we ate $40 billion out of last months $45 deficit. Eating such a diet is not healthy for long, especially once Mr. Magoo gets going with the printing presses.

The article goes on to talk about looming trade wars with both China and Europe. The report also noted that foreign direct purchases of Mr. Magoo's bonds dropped to the lowest level of the year at $5.6 billion in September. In August they bought $25.1 billion. We have seen nearly sixty billion in foreign financing evaporate in less than one month. The death knell was sounded when the report concludes that the sixty billion was not spent on the US stock market, which were net losers of $6.3 billion in September, except for Japan which is buying heavily now.

The report assures us this is only coming from private accounts and hedge funds and not central banks, which "continue to favor US bonds." What we are seeing is the first faint lapping on the shore of the tidal wave. Foreign investors have made the judgment the USA is a loser nation. They regard us as arrogant jerks rushing around the world bombing innocent people. They judge President Bush to be an idiot, Cheney to be evil and our system and people corrupt, lazy and greedy. As they execute those judgments in the economic sphere our debt riddled economy will wither into nothingness. To paraphrase Paul Revere, "The foreigners are coming." It's really painfully simple from an economic perspective. The USA has to import massive amounts of global financing to make the fiat funny money system stay together. Soon, Mr. Magoo will have to start raising interest rates. Soon the value of the dollar will begin to impact daily life in the USA. And soon, gold and precious metals will skyrocket as the only alternative to the worthless scrap of paper called the Federal Reserve Note.

You cannot run 1 trillion dollars in budget and trade deficits and then finance them from a non existent internal savings rate. You then must finance them by conning foreign investors into providing you the economic "fix" your credit and debt addicted casino economy needs. If you cannot get the financing, your entire economic system will implode, just like it nearly did in the fall of 1998 due to the Russian bond collapse. Where's the money going to come from Mr. Magoo? That's the question. America should clearly understand there are groups in the world, terror groups, the Russia, China and European elite, who view the collapse of the fiat dollar as a good thing. Indeed, they view it as the only way to curb our Imperial pretensions. If war is diplomacy by other means; then, economics is a legitimate target for war. Americans in general, and American leadership in particular, have failed to realize that a war against our economy has been underway for at least a decade. If you accept, as I do, there are groups on this planet who want to gut the USA like a fish, then it is clear these groups intend to destroy our economy as a way to do that. The goal of these groups is to exploit the class, economic and racial divisions in our society in the context of a general economic collapse. After the period of chaos is over, these same groups will end up on top of the manure pile. I'm not sure these groups can pull it off. I am sure they intend to try. I am also very sure many Americans and all of our leadership lack the moral virtue, integrity and character to deal with such a scenario.

We are told we are in good times in the USA. Even as the stock market closes in on 10,000 the Mutual Fund industry is shown to be corrupt. The entire business class of the USA, from our toga wearing Tyco chief on down are moral failures. The judgment is in. The judgment is as Isaiah says in 3:13-15, "The Lord takes his place in court; he rises to judge the people. 14 The Lord enters into judgment against the elders and leaders of his people. "It is you who have ruined my vineyard; the plunder from the poor is in your houses. 15. "What do you mean by crushing my people and grinding the faces of the poor?" declares the Lord, the Lord Almighty."

A very good question for American society, since the society those verses were directed at, the ten tribes of the Jews, met a brutal fate. Of course, here in America we don't believe any type of history repeats itself. We've been printing funny money for nearly a century now. Being a superpower lets you bully anyone you want, at least for a while.



24 November 2003

[cosmicaug]

44. DOLLAR INDEX WATCH

Dollar index watch:

From http://finance.lycos.com/qc/stocks/quotes.aspx?symbols=CEC:DX03Z

It's at 91.60 . When I started looking at it (the point at which this thread started --I might have started a day late) it was at 90.75 .

I'm guessing that would not be considered a drastic movement and it is going in the general direction (return to mean) one would expect if nothing else was afoot. Actually, one data point is pretty meaningless (so I shouldn't be taken seriously on my "return to mean" observation) other than in showing that nothing extremely drastic is taking place... yet.

[junker]

48. dollar index used to be at 140....now everything on track

currency crises developing as projected. Dollar is under real pressure and that is why all the 'good' news about the economy is being shrugged off.

Also note that the measure of GDP that Al. G and his Fed buddies put out is really a measure of how fast the money they loan into existance is flowing through the system. So all you Democrats who are 'disheartened' by the numbers coming outta bushies admin, take note, they are all bogus....

by the time we get into spring, the economy will be the largest topic, only topic (including IRaq where the tone will be 'how do we pay for it').....

*currency crisis underway
*mutual fund scandal underway
*gold price suppression/equity market manipulation scandal about to be disclosed (due to the bust of the FOREX crooks....several are singing like they were auditioning for the opera)
*geo-political, dollar impacting crises unfolding in Georgia (rusky), Germany and France *(busting up EU due to desperate need to run budget deficits as the dollar implodes)
*Enron scandal about to drag in the bushies
*energy scandal about to drag in Cheatin Cheney
* several monetary scandals emerging from various state govt's.


and more...every thing on schedule....


oh, and where is the typical, thanksgiving market rally?

[cosmicaug]

51. DOLLAR INDEX WATCH

Dollar index watch:
From http://finance.lycos.com/qc/stocks/quotes.aspx?symbols=CEC:DX03Z
It's at 90.83. It has gone down a bit from when I looked three days ago but nothing terribly dramatic (still slightly higher than what it was when I first looked).

I guess if shit really hits the fan it might have to wait for the weekend.

[cosmicaug]

53. DOLLAR INDEX WATCH

Dollar index watch:
From http://finance.lycos.com/qc/stocks/quotes.aspx?symbols=CEC:DX03Z
It's at 90.28. It's gone down a little bit more. It's even lower than the first quote I posted! Now it only needs to drop 20 points over the weekend to be at ~70 or less by Monday and Junker's prediction will have come true!

P.S. Sorry about the bad link before in a previous message. The DU2 software thinks the above URL is a smiley so it won't work unless one turns off smileys before posting (which I forgot to do).

[shrike]

46. Well, in five days it'll be ten days

We'll see if junker knows what he's talking about.

[kalian]

47. No kidding...

:D

[toddzilla]

49. 3 days left..

I'm an economic newbie, so i've just been lurking. seems interesting, but a little overly optimistic in the timetable.

[toddzilla]

50. my question would be..

will gold skyrocket, or will the dollar just become useless while gold maintains its value? or will it just be a combo?

[kalian]

52. Gold skyrockets...with worthless currency...?

:shrug:

Seriously...the gold's value is being tacked to the US currency.
Never quite understood that part.
So, technically...one ounce of gold is worth MORE in Euros than in
dollars... ;)

[Code_Name_D]

54. But how would we know.

Just a reminder to folks. Just becase "nothing happend" in the next few days. Dosn't mean it didn't happen. Especualy given how badly this admin fakes the data.

But I would like to know by what critirea will we know weather the dolalr crisses is under way, or not.

[cosmicaug]

55. I asked

But I would like to know by what critirea will we know weather the dolalr crisses is under way, or not.

That is a very good question which I did ask and didn't get an answer. This means that, indeed, weaseling out will be very possible (I venture to guess, even probable --forgetting about the 10 day thing, he'll point to a bunch of bad indicators that have been bad as of late which nobody will have any argument about and pretend that's what he meant all along).

The closest Junker came to a specific measurable prediction was when he wrote that:

The mathematic point of support for the dollar will progress from the major indices 85 (where it sits now, its lowest point ever) to under 65. Some where around 75 to 70 in the progression, a frenzy of selling of US assets (treasuries, stocks, funds, what have you) from asia will begin. Once begun, it will rapidly spread to the EU and then to the USofA itself.

I don't know what index he was talking about. I asked that too and he didn't answer. Under the (possibly incorrect) assumption that all dollar indexes are roughly the same, I suggested a metric based on his statement and on the dollar index I found (which seems to be the one people refer to when they speak of the 'Dollar Index' --but what do I know?). He hasn't responded to that either.

Of course, if the Dollar Index drops down 20 points in the next day, he'll come back and say "I told you so". Conversely, if it doesn't come down 20 points he'll come back and say that he wasn't talking about that particular dollar index. This will be true (I suppose); but no one here was preventing him from getting specific regarding what what he was talking about in the first place.

Summarizing, if shit happens (any shit) he'll come back and say "I told you so". If shit doesn't happen, he'll come back and say shit did indeed happen but we weren't looking in the right places to see it.

This is why I won't be impressed. However, he could have impressed simply by getting into specifics to benchmark his prediction (assuming there really had been something to this "in 10 days" thing of his).

And notice that none of what I wrote precludes people to eventually come to the conclusion that we really are in a dollar crisis. The problem is that Junker suggested some drastic turmoil was happening within 10 days of his post. That is quite different from folk looking back and possibly saying that in the past 2 months the dollar has been looking pretty bad or whatever. That is, of course, unless there really was a crucial, drastic fall located within the 10 day period which Junker brought to our attention (and so far, that doesn't look like it's happening --it started pretty low and it pretty much stayed there).

[rapier]

56. Dollar Index

Here are the basic facts about the Dollar index, a futures contract created by the New York Board of Trade.
http://www.nybot.com/specs/dx.htm


I don't know how long it has traded. Here is a long term chart.


The index just went below the low of 1997 which occured at the time of the LTCM crisis. Going forward this suggests a couple of things. The easy conclusion is that all is clear now to test the all time lows near and a tad below 80. The thing to watch for however might be a reversal. I for one can't think of a single reason why it would reverse, which is usually a good sign that it will.

One historical note. Look at the plunge at the center of the chart, which is from about 84 to 87. That 87 low was coincident with the crash of that October. Quite a coincidence it seems. Meaning they were related. Subsequently the dollar had some struggles for several more years but the rally right after the stock maarket crash played a role in the mostly benign resolution of that crisis.

If the trend lower continues it will be a source of stress on the financial system.

The world is awash in dollars. Here is a chart up till 2000.

Since then the M's (and the debt too, an intimately related issue) have curved upward at even higher rates. I think M3 is now twice as big as it was in 1995. Think about it. From about 95 to now as many dollars were created as were since 1787 to 1995.

No market in history, to my knowlege, has ever risen strongly in the face of what seems to be unlimited supply. Admittedly currencies are a bit weird because no other currency has, theoreticaly, any limit on it's supply either. This is part of the foundation of the Gold Bugs case. Personally I hate the hard money gold bug case, which often becomes an ideology. However the system as it now exists has clearly gone nuts.

[rapier]

57. Dollar Index

Here are the basic facts about the Dollar index, a futures contract created by the New York Board of Trade.
http://www.nybot.com/specs/dx.htm


I don't know how long it has traded. Here is a long term chart.


The index just went below the low of 1997 which occured at the time of the LTCM crisis. Going forward this suggests a couple of things. The easy conclusion is that all is clear now to test the all time lows near and a tad below 80. The thing to watch for however might be a reversal. I for one can't think of a single reason why it would reverse, which is usually a good sign that it will.

One historical note. Look at the plunge at the center of the chart, which is from about 84 to 87. That 87 low was coincident with the crash of that October. Quite a coincidence it seems. Meaning they were related. Subsequently the dollar had some struggles for several more years but the rally right after the stock maarket crash played a role in the mostly benign resolution of that crisis.

If the trend lower continues it will be a source of stress on the financial system.

The world is awash in dollars. Here is a chart up till 2000.

Since then the M's (and the debt too, an intimately related issue) have curved upward at even higher rates. I think M3 is now twice as big as it was in 1995. Think about it. From about 95 to now as many dollars were created as were since 1787 to 1995.

No market in history, to my knowlege, has ever risen strongly in the face of what seems to be unlimited supply. Admittedly currencies are a bit weird because no other currency has, theoreticaly, any limit on it's supply either. This is part of the foundation of the Gold Bugs case. Personally I hate the hard money gold bug case, which often becomes an ideology. However the system as it now exists has clearly gone nuts.

[junker]

58. sorry, things happening, been busy....but

as to responses....

it don't matter which dollar index one wants to use. They are all telling the same story.

Monday/Tuesday (necessarily a messy time as it is a 24 hour market) watch gold and silver and oil prices. This is the start of the financial system derivative meltdown...though cascading cross default is actually more like the mechanism....which will result in a lock-up of the system, but since there is now so much political crapola flying around, and since all parties are hurting, the Fed will NOT be able to break open a release mechanism this time, leading to a public inter-country banking feud.

What we are looking for is the beginning of the derivative meltdown/implosion. This is financial system core prop that has gotten so extreme as to be vulnerable to many different points-of-failure (POF). The POF has come in the form of the following
*net outflows of foreign investment in USofA financial instruments (since sept) which will cause the dollar to continue to fail/fall.
* sudden and surprise rate increase coming now that the Fed realizes that the housing market has died (refi's off 89% since peak in summer)
* net outflows of mut-funs as crisis deepens
* global loss of confidence in USofA leads to a loss of confidence in dollar/buck and thus repatriation....

and if you want to say I am incorrect, then please do so....however, note that the impacts of the global financial crisis will dominate your world for the next few years....

[cosmicaug]

59. I don't want to say you're incorrect.

Actually, it would be nice to say you're incorrect if it meant that you're completely wrong in everything you say and the economy is actually quite rosy indeed, but that's not the point.

it don't matter which dollar index one wants to use. They are all telling the same story.

I know the numbers are low. The point is that, so far, the numbers stayed right where they were when you made your prediction; whereas, reading what you've written, one would expect almost a 24% reduction in the value of the index. This doesn't seem to have happened yet.

Monday/Tuesday (necessarily a messy time as it is a 24 hour market) watch gold and silver and oil prices.

I'll give you Monday (being that the 10th day, today, falls on the weekend) with regard to the Dollar Index; but Tuesday is definitely beyond your timeline. As to concrete predictions with regard to the prices of gold, silver and oil (how far up will the prices go, does a correcct prediction mean 1 out of 3, 2 out of three or all three, etc.) I won't even bother since time is pretty much over.

and if you want to say I am incorrect, then please do so....

Paraphrasing somebody (I don't remember who) it's not the possibility that you might be wrong which I'm trying to point out; rather it's the possibility that (because you've failed to offer specifics that can be checked*) you might not even be right! That is, with the exception of your statement regarding the dollar index, there you might be right or wrong (and since you're the one doing the prognostication and not me, I'll wait until tomorrow to say whether you're wrong or right with regard to that**).

however, note that the impacts of the global financial crisis will dominate your world for the next few years....

You better believe it! One could leave the country and one would still be feeling it.

* Sorry, I'm not very bright when it comes to these things. No fuzzy logic, you've got to spell it out and give clear benchmarks.
** Which might seem pretty bone headed to be able to argue such things only when the numbers are actually in front of me; but, like I say, I'm not very bright when it comes to these sorts of things.

[rapier]

62. notes

I just popped in to talk about the dollar index above because someone asked about it.

Me, an inverate bear, has kept out of this thing because it is stupid. Unless you claim clarivoiance there is no fundamental news nor particular technical analysis which would or should lead one to expect a crash tomorrow.

Your 4 bullet points while sort of valid in a general way say nothing about time, and this thread is all about time. The two weeks is about up.

As to watching gold and silver and oil, they are but a minute sliver in the gigantic collosal stupendous daily money flows thru the world financial system. Their portion of the derivatives behmouth is even less than a sliver.

If the system is under stress on a short term basis, in a sort of out of sight way, then today,12/1, was a perfect example of what seems to always happen when that stress rises, the stock market melts up. Yes, it does seem that we are making new milestones in dollar liquidity asset inflation madness but this is a trend one may date from 10, 20 even 40 years ago. A crash would not shock me but more likely now seems to be a replay of 1999.

[junker]

61. It happened. Today.

TPTB lost control of the commodities rigging game today. So the financial meltdown has started. The top five banks, those that are the primary financiers of both the govt, and the ruling clique and are essentially owned by the 1percentile (89% of which is republican) which owns the rest of paper assets in the USofA, will now begin to show that they are failing. Thus freaking the Fed into all sorts of odd behavior.

As we will note in the coming weeks, today was the pivotal day as the last gasp of commodity rigging from TPTB (ESF/PPT) was expended, and they lost control on multiple fronts today.

You see, oh' econ student of world domination, the key is multidimensionality....so what if the DOW is up, the tao is the rest of the universe screaming MELT DOWN! Allthe commodity groups wrested free of TPTB control today, gold was their last gasp. Both gold and silver were slammed by the cabal, and both fought back to new highs.

One element breaking loose from cabal control is to be expected as an operating parameter, but today they lost control of most of their strings. The puppets have seized control of the stage, and the puppeteers are in disarray. The only thing they control any more is happy-speak media, and paper/digital assets.

Over the next few weeks, in spite of the Bushites screaming "Happy days are here again" at the top of their lungs on all channels, the multidimensional hell of financial collapse will manifest.

Commodities first, then bonds/interest rates/derivatives, then banks, then general govt. debt. Then the currency goes. It took Argentina 2 months from this stage..how long for the USofA?

[happyslug]

63. Gold at $404 an oz and the Euro exceeding $1.20

Lets see what the Asiatic and European markets will do with this:

http://www2.marketwatch.com/news/newsfinder/newsArticles.asp?guid=%7BEB35B8AD%2D5F5D%2D4BEB%2DA570%2DAF4EF15141AF%7D&doctype=2005&siteid=mktw&selCount=50&value=gold&property=word&

[happyslug]

64. Here a place to look at 24 hour gold prices

I do not vouch for its accuracy but it is one I found on the net:

http://www.forexdirectory.net/gold.html

Please note, one of the keys will be when the Euro, Yen, Swiss Franc etc hold their own in terms of Gold, but the Dollar falls in terms of Gold.

[cosmicaug]

65. TIME'S UP!

Dollar index watch:
From http://finance.lycos.com/qc/stocks/quotes.aspx?symbols=CEC:DX03Z
It's at 90.44.

For whatever it's worth, the Dollar Index has not crashed as predicted.

[will work 4 food]

66. Here is an important article (SafeMoneyReport)

Here is an important article (SafeMoneyReport)
A Falling Dollar Could Spell Trouble Ahead 12/01

Stocks rallied again today, despite the fact that the U.S. dollar, the world's reserve currency, crumbled to an all-time low against the euro. Bond prices followed the dollar lower, pushing yields higher, while gold rose to a near eight-year high. The Bush administration seems pleased that the dollar is heading lower. It is helping to push a "little inflation" into the economy. But because the U.S. relies on others to fund its runaway spending, pushing the dollar lower can be dangerous. We could be getting closer to the danger zone than most now realize.

Over the past year, foreign central banks have increased their holding of U.S. securities by a whopping $150 billion, to $918 billion. The $150 billion increase now funds about 27% of the estimated $550 billion US current account deficit. That is double the amount funded by foreign holders just a year ago. And yet despite all this fresh money flowing to the dollar, it continues to fall lower and lower. Yikes!

Now think about this logically. You are a foreign central bank, holding billions and billions in U.S. assets denominated in dollars. Each day the dollar falls in value, you loose millions and millions in value on your U.S. holdings. At some point, as a foreign central bank, with a fiduciary duty to guard your own country's assets, you will have to "cry uncle." Enough is enough.

So instead of recycling all the dollars back into U.S. securities, imagine the damage to the dollar if those banks decide to buy euro- or Swiss franc- or Australian dollar- or yen-denominated bonds instead. It really is a frightening scenario -- the dollar would fall like a stone and U.S. bond prices would follow -- that would jack up interest rates. The stock market would crumble.

If the dollar continues its slide, that scenario may unfold for us all to see.
http://www.safemoneyreport.com/

[happyslug]

67. I liked how their spin this

Bob Lynch, currency strategist at BNP Paribas in New York

"Keep in mind that speculative positions are heavily short the dollar. It is reasonable to expect a dollar rebound ahead of year-end as the strong economic data may prompt those speculators who are short the dollar to rebalance their portfolios, resulting in some dollar buying,"

In other words he is expecting the dollar to stablize and those investors betting the Dollar will drop will buy up Dollars when it does not drop. The problem is investors expect the Dollar to drop, and have plan their investments on that belief. Unless something comes along that shows them that their belief is in error (i.e. the Dollar will go up) they is no need for them to buy Dollars. Spin, Spin and more Spin that no problem exists for the Dollar.

[Frodo]

69. The problem with that theory

Is that the news day in and day out lately has been positive for the US economy. Tomorrow (or wed?) we're now expecting to get "surprisingly good" unemployment figures. If this is all a blip along te long slow road downhill, then those gambling agains the dollar will turn out to be right. If, on the other hand, we get a few more weeks of these upward surprises - the dollar will continue to strengthen.

I suspect this will be delayed as strong stock performance drives disintermediation into stocks and drives bond prices down. The increased rates hold the dollar down overall while it is "day-to-day" trading, but the overall strengthening of the US economy (especially ahead of the european economy) should strengthen the dollar. And once "speculators" realize they are losing money they dump that position as quickly as they can (leveraged positions can lose you a fortune FAST if you don't limit them).

The end result? Speculation and trading activity and governmental support all come in a distant second place to real economic activity. IF the economy continues to be weak things could get bad (though the "sell the children and buy GOLD" craze is ridiculous). If the economy is on the upswing in a big way? Betting against the dollar is a mistake (and gold could cost you).

Junker points out that gold hasn't been this high since 1996... If you had purchased gold at that time you would have lost a third of your money in the next three years and only now be getting back to what you started with - zero return for seven years.

At noon, the Federal Reserve Bank of Philadelphia may report its regional manufacturing index showed growth for a sixth straight month, according to a separate survey of economists. The index probably registered at 25 for November after 28 in October. Readings greater than zero indicate expansion; the October index was the highest since July 1996. http://www.irnnews.com/news.asp?action=detail&article=361

Where did gold go from there?

On edit (took awhile to find) - And where was the dollar at that point? According to "prudentbear" (about the most pro-gold site you will find) it was little LOWER than it is today. And foreign ownership of US bonds had just taken off a year or two later.

Was 1996 a good time to buy gold?

[Code_Name_D]

70. Some rather intense denile going on.

Yes, the news has been awash by economic data detailing the "new boom" as I heard one say today. The problem is that the data they put out is basicly non-bankable. That is, no one makes money on it. The good news has one function, and one function only, talk up the market. A market that is openly manipulated by the PPT. But as "unemplyment drops" no one is still highing.

But the dropping dollar is bankable. Its effects are felt every time a transaction is made. It DEFINES how much wealth one is holding in their acounts.

Currently, US investers are doing the happy dance. Becase Bush has given us the "weak dollar policy." They want the dollar to go down, and declare victory every time the dollar plumets. But eventualy they will have to look at the reality staring them in the face. Faith in the dollar has colasped internationl. Soon, it will collaps at home as well.

Soon, the gov will not be able to aquire the cappital it needs to fund its operations. Especualy as the defisit is now estimated at 800bill/yer. So instead of being payed in dollars, the contracters that work on US contracts will find them selves being deliverd IOU's. Mean while, real capital will rise to the top such as Halibertian to contiue to prop up there operations. The contracters will try to spend these IOU's like ordinary money.

But this has the undesirable effect of effectivly printing more dollars, leading to inflation. Which ironicly Bush has recently said is desirable. Ha ha. Even risking hyper inflation.

There is a responce Bush could do, riase intrest raites. This could even stem the fall in the dollar. But it will kill the housing boom that has just stalled, and pop the bubble that it was built on. And relistate crashes tend to be perticulery painful.

Another huge crash will deal yet another blow against public confdence.

[Frodo]

71. Bankable?

The stock market has been steadily rising for the last several months. People make money there don't they?

And US companies make money when other countries buy our goods (months ago it was dropped that we were going to LET the dollar fall to stimulate US exports).

The "fed chairman" of Germany just said today that he was worried about the future of the Euro.


The housing boom stalled? You seen the latest figures? Refi's are not the same thing as construction (which is still up)

[mhr]

72. Frodo, There You Go Again With This Strong Employment Bull!

For professionals, the economy has NOT turned the corner.

Just because some holiday hiring for part-time low-end jobs has happened does not mean that we are fast approaching the full-employment salad-days of the 1990s.

Of the 20 professionals I correspond with in Dallas, only ONE has found employment in the last year. Of this group, all have or were out of work for a year or more.

To see how far the BFEE is behind its own projections on job creation visit www.jobwatch.org . The BFEE results so far, sickening!

Frodo, for professionals it just isn't happening.

'nuff said.

[Frodo]

73. I just call 'em like I see 'em

I think we are suffering from "political bent blindness". We've got plenty of people who, in a neutral environment, could easily read economic figures and see which way the wind is blowing. But we're too easily blinded by our political bent. Buhs just HAS to be beaten, and we know that the easiest way to do that is for the economy to look like his daddy's. Of course, our pundits shout from the rooftops about what an awful job he's done (and that ain't hard) and we are secretly praying that things still look bad a year from now (especially if we ARE in an upswing, since we will get to take credit for it if it holds off).

But we're seeing too much of what we want to see. So much so that qualified people who otherwise wouldn't be so ridiculous have taken to calling every single number a fabrication even when the administration has no control over the source (some university sources can be presumed to have the opposite inclination).

And I have no problem in continuing to "spin" it that way to the media - that's part of the game. But if we keep shouting "what about the jobs" and unemployment drops to 5.3%-5.5% by next August-September? We're going to look awfully foolish putting our eggs in that basket.

The website you linked makes a good case for how bad things HAVE been. They don't deny the "good news" they just say "it should be better". If we've seen the bottom and started back up THAT won't be good enough. And almost every single indicator in the last few weeks says things are moving up. When the 7.2% GDP growth figure was released everyone said "it'll be revised downward and next quarter will be closer to 4%" well a month later it was revised UPWARD (8.2%) and now some economists are publicly speculating that maybe next quarter WILL be higher than expected. Just wait for a month and a half. If the Q4 figure comes in at 6% (which I still can't believe), holiday sales are up and unemployment is at 5.8% this issue will be DONE for us. (And a certain person on this thread will wonder why he didn't sell gold at $400 when he had the chance).


I'll give you a "for instance" from the bottom of that website. They make the point that the Treasury Secretary is trumpeting "2 million new jobs by the next election." Their comback is not "there won't be any jobs" it's "but you promised us 3 Million if we passed the tax cuts". While both statements are true... do we really think that will sell? If there are 2 million fewer unemployed next Fall will we say "well there should have been more"??? Either way, that isn't the same as being able to say that things are still moving in the wrong direction. "Not good enough" doesn't sell as well as "getting worse"

I never said employment looked good. It simply looks better than it did last month, and that was better than the month before, and it looks like it is continuing to get better. The question is "how much better" will it look in ten months?

[Barkley]

121. Re: Why Bush Won't Run on the Economy, but "War" and "Terrorism"

I don't think Bush will run on the economy for several reasons:

1. In 2000, the economy was in pretty good shape: we had low unemployment, low interest rates and economic expansion. Given those circumstances, Bush should have been trounced. Gore did in fact win the election. But it should not have been that close.

2. The mid-term elections of 2002: The economy was in a lot worse condition then than in 2000. Democrats had plenty of opportunity to make the economy/ jobs an issues and a few did. Ususally the party in power loses seats in midterm elections; But this time the Republicans were able to gain seats with a poor economy. True the Demos were inept; but they really folded when Bush raised the spector of war in Iraq.

And if the 2004 race starts getting close, Bush can silence the Demos (or at least divide them) with air strikes against Syria. The reasons for such attacks are unimportant; the point is that the Demo will fold. Sharon hit Syria w/o much response from the Demos, Arabs, UN, why can't Bush do the same.


3. As many have already pointed out the so-called 'recovery' isn't all that real and many people know it; especially in the states that Bush won in 2000. Whom ever is the Democratic nominee will be wise to campaign hard in those places in 2004.


4. With the economy there are too many associated issues that that a competent Bush opponent can point out such as economic inequality, low wages, health care, etc. that could take much of the luster off a 'good' economy. Besides, Bush doesn't really have any economic policy for health care, or long-term unemployment or depletion of good jobs overseas. The only economic policy he has is tax cuts for the wealthy.


5. Interest rates may be higher in 2004; which will put a damper on housing loans and consumer spending (e.g. credit cards).

[junker]

74. precisely what IS happening

So instead of recycling all the dollars back into U.S. securities, imagine the damage to the dollar if those banks decide to buy euro- or Swiss franc- or Australian dollar- or yen-denominated bonds instead. It really is a frightening scenario -- the dollar would fall like a stone and U.S. bond prices would follow -- that would jack up interest rates. The stock market would crumble.


this above snatched from article. This is precisely what is happening. All this will unfold as predicted over the course of the next few months.


Got food?
Got PM's (precious metals?) If'n you are poor, go buy a pure silver, bullion coin. Will cost less than 7 dollars (no need to buy american eagles or canadian silver maples, just pure silver bullion rounds)...these will be worth several hundred dollars within a brief year...

[BeHereNow]

79. Thanks Junker-

I have learned a great deal from this thread.
I currently have two stock investments,one in silver mining
the other in a Canadian oil company. Both have been VERY
profitable, but my gut is telling me to take the money and
run... to silver coins.
It is going to get very interesting indeed.
Best-
BHN

[Petrodollar Warfare]

68. junker - please explain TPTB and five banks you referred to...

..in your post as I am not familiar with that acronym nor have I read news re which 5 banks you are referring to (I have an idea re 3 of them...) I agree that a major restructuring is imminent/on the horizen - but I really don't know when. Can you give us some links or more specific data as to why you believe things are going to unravel this rapidly?, thanks!

[junker]

75. TPTB = The Powers That Be

no reason you youngsters are likely to know this term, TPTB, usually used in conservative forums and money/econ forums.

The banks currently owned (excuse me, RUMORED to be owned)by the FED due to basic insolvency are
Citibank
BankofAmerica


the other banksters include
JPMorgan

rather than have to provide you with an indepth and length education, especially since your ignorance is not my responsibility, I would direct you to do the following....
Obtain a free 2 week trial subscription to Lemetropolecafe.com,
and read the daily postings by LePatron at the JamesJoyce table. WIthin the two weeks of reading the daily commentary, you will be provided with huge numbers of things to go and look up which will do more to explain the world (especially politics which really = money) than will any amount of socratic conversations we might have here.

Then, after 2 weeks, with that base level under your belt, we might really get some value from a socratic journey through the World Economique' and its soon to be manifest control of all facets of your life for the next 10+ years.... (during the crash of the dollar, ALL things are intimately related to money/wealth/economy or who-the-fluck-cares about it.....

There are still things that one might do to prepare a bit for the developing crash, but be advised, that just cause the economic ground under your feet isn't yet shaking, don't mean that the earthquake hasn't started.....

Really though, lemetropolecafe.com is a huge collection of very wise (*mostly old, and wealthier) dudes quite happy to help educate the young'uns....

and no, just cause a few here, in their embrace of ignorance and worship of the status quo, calls such people 'gold bugs' does not make the information that can be learned there any less valuable. And such 'labelers' are really merely empty minds seeking ammunition for their position rather than information for their future.....

anyway, it is up to you to cure your own ignorance....I have more than enough to do relieving mine.....


bona fortuna omnes in nova annum.

[toddzilla]

76. lol

arrogance is such an ugly trait in a person.

we are all ignorant in many areas of expertise, the enlightened of us don't flaunt our knowledge of one discipline as superiority in general.

personally, i think you're full of shit.

[junker]

77. I am full of....

shit, but that don't make me wrong.


Basically, why should I be someone's google? And are they not better served gathering information from other sources such that they both learn to research effectively to the level of knowledge that they wish to acquire, and that they have other sources with which to better weigh and judge any conclusions that I may present? Note, if they only rely on my conclusions then they are more full of shit than I am and a fool to boot. And I don't tolerate fools at all. What life I have left is too damn short for that.

So, perhaps you are correct in both points, that I am full of shit, and am arrogant as well. However, it still does not negate that their ignorance is their own to relieve. Of course, my opinion that in order to gain from my hard won knowledge you must engage my attention with interesting questions, necessarily makes me a 'bad guy' in this age of the spoon fed non-education that one receives at schools. Again though, why should I care?

I am a hard case. No doubt about it. I like humans who can think and analyze, and do for themselves once pointed in the correct direction, not merely parrot the latest buzz. When we such fellow travelers find each other, real learning takes place. Fundamentally Socratic, such a learning process demands work from all parties. You get that? Work is the operative word....

They asked, I respond as Universe made me. Arrogant? That is not for me to judge.

But, I will judge your post to be arrogant far beyond mine because you seemingly are arrogantly demanding of Universe that everyone act as you bid them in your pious view of being the controller of all persons. Talk about arrogant. Perhaps you might contemplate letting each respond from their own nature, and not get in the way of a bear educating a fellow with a stick....eh?

[toddzilla]

78. By your participation in this discussion forum

You have already opened yourself up for being someone's "google". Suggesting reading material is a simple act, doing it with a holier-than-thou attitude is uncalled for. You can spout platitudes all you want, but the supposed reason you are here is to inform us of a financial crisis that is at hand. So I would agree that just because you are full of shit, and arrogant, does not make you wrong. It does, however, make it much harder to learn from you when you dictate in such an elitist, patronizing tone. I did sign up for the website you mentioned, and aside from the poor layout, it seems to contain quite a bit of information. The vast majority of it is new to me, but i'll keep reading and assimilate it to whatever degree i can given my limited background in the subject at hand.


You should not assume that because I find you arrogant, or full of it, that I am opposed to listening or doing any work to further my knowledge. I'm shooting the messenger because he can't deliver his message in such a way that encourages as well as enlightens.

[BeHereNow]

80. I disagree-

Junker, I find you neither F.O.S, nor arrogant.
On the other hand, I have found your participation
in this forum to be intelligent, articulate and gracious.
I hope you continue to generously share your knowledge
and recommendations as I know your intention is sincerely
based in the effort to help others through a very serious time
in the history of our world.
Bless You Junker-
BHN

[Petrodollar Warfare]

81. Ummmm, your derisive tone was not needed or appreciated.

Junker,
We are all ignorant of certain things, but to inquire as to the meaning of TPTB and which 5 banks you beleive are in jeopardy of failure, I don't think qualifies me for your disdainful comments about "my ignorance." I do think a major correction is going to occur within the next 1-2 years, but I was curious to know what information you read that *specifically* suggested a financial crash within 10 days. Not an unreasonable request, IMO, inquiring minds want to know...

Anyhow, I will read Lemetropolecafe, in fact one of my essays on macroeconomics and geostrategy was posted there earlier this year, but your comments about "my ignorance" was not appreciated. I have done quite a lot of reading this year on econ matters, and I am currently writing a book partly on such subjects, and an academic paper too. As an FYI, here are a list of books on the bookshelf beside my computer..(I have read all of them this year except Sornette's book, which is interesting but a somewhat difficult read)

-The Dollar Crisis (Duncan)
-Concquer the Crash (Prechter)
-The Great Unraveling (Krugman)
-Tomorrow's Gold (Faber)
-Why Stock Markets Crash (Sornette)
-The Coming Crash in the Housing Market (Talbott)
-The Boom and the Bubble (Brenner)
-SuperImperialism (Hudson)
-The Party's Over (Heinberg)
-In Praise of Hard Industries (Fingleton)
-The New Imperialism (Harvey)
-Financial Reckoning Day (Bonner & Wiggin)
and last week I read Soro's "The Bubble of American Supremacy." (plus many books on international relations & peak oil)

In other words, I am well into my journey of economic understanding, and I don't need Lemetropolecafe to 'cure me of ignornance'. The title of my upcoming book? 'Petrodollar Warfare' Cheers.

[begeegs]

82. Don't think so

If the US economy sinks, certainly it will effect other markets, however that isn't going to sink other economies.

If you are going to invest in something, make certain that it is the euro.

[Frodo]

83. Hey newbie.

Welcome to DU

To add tou your thought. This whole thing is rpedicated on the value of the dollar, which is always in relation to the other currencies of the world. If there was truly a global effect, their currencies would also be hit... but we can't all go down at the same time.


But I'm not sure investing in the Euro at these heights is appropriate. Especially with the economy over there being so much worse than over here for the next year or two (it takes awhile for the deficit to hit us).

[toddzilla]

85. sooo...

i know the dollar is sliding, but it's been nigh on 20 days and i don't see any result of a major meltdown here. i wish i hadn't bought those 12 cases of potted meat.. :freak:

[aneerkoinos]

86. OPEC not happy with Dollar, going Euro or basket

"Today, December 9, OPEC Secretary General Alvaro Silva told the Venezuelan news agency Venpress "that OPEC is evaluating trading oil in euros or a basket of currencies other than the dollar to compensate for the recent decline of the US currency."

According to Silva, "There is talk of trading crude in euros - it is one of the alternatives."

Silva suggested OPEC might also consider pricing its crude to a basket of currencies. This could be similar to the system used by Kuwait to peg its dinar prior to 2003."

http://market-flash.com/vnews3/news.php?id=746555797&mid=


IMHO the question is not if, but when. I think Junker maybe very correct predicting a very very bad springtime for the Casino of US.

[Code_Name_D]

87. Credit for this would actualy have to go to GoreN4 as well.

He has been arguing and exploring the dangers of this for a while now. It looks like his book comming out will prove to be extremly profetic and present.

I agree. The more the dollar slids, the more intense the presure to switch. But even just to here them consider this, is bound to push the dollar down. I suspect that when the switch if fainly made, the dollar will make a violent colaps, losing a signifcant portion of its value in one day, and not just %1 a day.

[Petrodollar Warfare]

88. OPEC, the euro, the dollar, the news...

<<<It looks like his book comming out will prove to be extremly profetic and present.>>>>

Yes, you might be right about my upcoming book. The fact that OPEC is openly discussing this is going to cause further devaluation of the dollar. I think a gradual transition by OPEC will occur, but the currency markets are so volatile, and the dollar is under so much pressure from our strucutal imbalances that the outcome re the dollar is unknown. My concern about the book? - what I have written by next month will be overtaken b/t events between the final manuscipt and actual publication in the fall of 04.' However, that is the risk in all things literary re current events. Woe is us.

BTW, now that neocon Wolfowitcz has officially "blackballed" Russia from any of the Iraq reconstruction contracts, I expect Russia may make the switch to petroeuros in 2004....Damn these neocons for not understanding diplomacy or compromise. How can they be so arrogant and oblivious to what they are creating? (Economic 'blowback' to US militant Imperialism.)

[CaptainClark23]

89. Release date?

More info on your book, please.

[Petrodollar Warfare]

90. Info on book -"Petrodollar warfare"

Release date is not set, as I am still writing the manuscript...which I will finish within the next 6 weeks. More to come as needed, but in the meantime this should give you some appreciation as to the subject matter...

Synopsis:

September 11th, 2001 was an historic event. Unfortunately, rather than utilizing that event to stimulate debate regarding the means to strengthen our nation via energy independence, it has been instead exploited to reaffirm the United States position as the global imperialist hegemon. This unprecedented unilateralist framework was outlined by the neoconservatives years in advance; consequently, the outpouring of world sympathy following 9/11 has been squandered in pursuit of the US administration’s militant imperialism. As such, 9/11 represents a missed opportunity for debate and policy reforms.

March 19th, 2003 was similarly an historic event. The unprovoked US led invasion of Iraq was in large part an oil currency war. One of the core reasons for the war was this administration's objective toward preventing further OPEC momentum towards the euro as an oil transaction currency standard. However, preemption of such OPEC moves required securing geostrategic control of Iraq, along with its 2nd largest proven oil reserves. The other convergent factor driving the war is the recent analyses by leading geologists – such as Colin Campbell – that suggest the world may be approaching the “Peak Oil” phenomenon. This secondary issue will be addressed in the context of current US geostrategic goals regarding Iraq. The main themes of the book will discuss dollar hegemony, unsustainable macroeconomics of ‘petrodollar recycling,' and the unpublicized threat to US dollar hegemony from the euro as an alternative oil transaction currency. Secondly, the geostrategic importance of the Persian Gulf with regard to “Peak Oil” will be explored (predicted to occur around 2010).

This text will review monetary reforms as suggested by international economists (including Hazel Henderson, Robert Mundell, and others), which could potentially create a more balanced monetary system as well as reduce future oil currency warfare. Suggestions regarding the global monetary system will include a dollar/euro currency ‘trading band’ with reserve status parity as well as a dual currency OPEC oil transaction standard. According to various economists, the most equitable option to provide balance within the monetary system would include a third reserve currency option – an East Asia bloc consisting of a yuan/yen reserve currency.

Additionally, it appears inadvisable that the world remains totally dependent on the US economy as the solitary engine for economic growth, especially given US structural debt levels. If policy makers can implement monetary reforms via an orderly, gradated approach, this would create a more balanced system for the global economy. Secondly, the impending “Peak Oil” phenomenon and the need for energy reform will also be contextualized as regards the Iraq war. The two coalescing factors of the euro currency and a desire to secure the 2nd largest oil reserves before “Peak Oil” led to the US invasion of Iraq. However, without changing course, the American Experiment will end the way all empires end – military overextension and economic decline. Monetary and energy reforms should be negotiated within the framework of multilateral accords; otherwise, the beginning of the 21st century will quite likely include further US vs. EU currency warfare and increased frequency of war over hydrocarbons.

Objective:

To educate my fellow Americans about the genuine but unreported macroeconomic and geostrategic issues underlying the Iraq War. The US media has not and will not discuss the dollar vs. euro and OPEC pricing issues. Therefore, I will discuss concerns about the structure of the US economy and the militant imperialism of the current administration’s decision to use Iraq as a military solution to our structural obstacles. Additionally, I will review the current literature regarding the depletion of hydrocarbons (”Peak Oil”), and how the current administration is forcing a paradigm shift in the post World War II geopolitical alliances. A disconcerting European/Russian/OPEC geopolitical alliance could be forming as a counter to US militant imperialism.

Furthermore, I will discuss the EU and its enlargement plans, as well as the euro currency, all of which are changing the global monetary dynamic for the first time since the end of the Second World War. I will advocate that our economy adapt to this new currency. In order to regain some of the international “good will” that we have lost, the next US administration will probably need to compromise on monetary issues and make policy changes that accommodate new economic and energy realities. At the end of the book, recommendations from various economists regarding global monetary reform will be briefly discussed, and comments on energy reform that will ideally reduce future conflict over hydrocarbons/oil currency will also be explored.

Ultimately, my goal is to stimulate debate within my country and hopefully within the US/EU policy-making arena regarding potential reforms to the current global economic structure, energy depletion, and US foreign policies. I will conclude with the observation that the US cannot live up to its founding principles of freedom and liberty unless it undertakes some difficult reforms. Movements away from the US dollar are already taking place, and as such we need to reexamine our fiscal and foreign policies. This text will challenge the neoconservative agenda, considering the unrealistic idealism of the US as ‘Global Empire’ appears unsustainable.

[CaptainClark23]

91. Excellent.

Please let us know when you go to print, so we might support your efforts.

In the meanwhile, keep away from small planes and windows on upper floors..

[aneerkoinos]

92. Venezuela

I would like to hear your opinion on the following.

Venezuela is a major player in the currency war, with it's own agenda of course, which I think is simply to bring imperialistic US down on it's knees. I think Chavez would enjoy very much to tell US to pay in euros if they wan't to keep buying Venezuelan oil. ASAP.

The big question is power play inside OPEC. Iran, the 2nd biggest producer, is natural ally for Chavez. Russia is game too. Now Saudis want to raise the price of crude basket from 22-28 perhaps somewhere around 30. Surprise surprise, Venezuela opposes lifting prices and wants other solutions, like... euro. We remember Saudis have been pulling their money back from dollar assets. But old habits die slowly, and there's that US military presence in neighboring countries.

So, things may happen very soon. Not only Russia sometime in 2004, as you predict, but OPEC telling in February they will change to currency basket some time before summer...

[Code_Name_D]

93. Didn't Chavez already switch?

I think that was the resone why the CIA tried to cuep him out of power this year.

[toddzilla]

94. you could be right.

The switch to euros was yet another undiscussed reason for the iraq war, and our subsequent presence in the area. you can't point to one thing, because there are so many factors to take into consideration. I don't have any savings or anything so all this talk is really just academic to me anyway. but my father is retired with pretty much all his holdings, about 150K, in the market. he's really quite inept at managing his money and i worry that he'll be left high and dry by all this.

[Code_Name_D]

95. But...

Ven is also still pegged to the dollar. So any savings they might make from selling oil in Euros is accedemic. We need to explore this more.

[Rainbows]

96. Also Barter Agreements

I also read five or six months ago Venezuela was sidesteping the OPEC requirment of purcsase in greenbacks by arranging barter agreements with twelve central and south american governments as well as in the Carribean. This all takes money out of the dollar hegemony game. This came out just preceding the general strikes, which I believe was the second attempt of a CIA traceable coup.

[54anickel]

97. China is using it's dollars to stock up on oil, was in the news couple of

days ago. While I was looking for the news article I came across this interesting op-ed.
http://www.lewrockwell.com/north/north233.html

Noland reports that China is no longer buying U.S. bonds. Instead, the country is using its dollars to buy oil.

Although still intervening heavily in the foreign-exchange market, in the last few months China has radically scaled back its purchases of United States bonds. In September, Chinese institutions were actually net sellers of U.S. government and agency debt by $2.8 billion, even though foreign reserves rose by $19 billion. Now, economists and market strategists are beginning to wonder what Beijing is doing with all the dollars it is buying. Chinese state media provided a partial answer in early December, reporting that Beijing plans to build up a 90-day, 50-million-tonne strategic oil reserve. At current crude prices of around $30 a barrel, that will cost China $10 billion. Bankers and brokers in Hong Kong predict further large purchases of strategic materials, together with the possible acquisition of equity stakes in overseas suppliers over the coming year. If pursued, China’s diversification away from U.S. government bonds will be bad news for Washington, which has relied heavily on China’s debt purchases to fund its fiscal and current-account deficits. In Asia, some economists even say Washington had it coming, suggesting that the switch is subtle retaliation for current U.S. trade pressures on Beijing.

[aneerkoinos]

119. Saudis: no to euro

http://biz.yahoo.com/rb/031213/energy_saudi_1.html

snip:

"When asked if Saudi Arabia would consider selling oil in euros instead of dollars, Naimi, who was in Cairo for a meeting of ministers from Arab oil exporting nations, said: "No." "Nobody is talking about the euro... As far as I know I have never said anything about the euro," Naimi said, adding that OPEC (News - Websites) would not discuss the issue of switching sales to the European currency when the cartel meets on February 10.

Outgoing secretary-general of the Organization of Petroleum Exporting Countries, Alvaro Silva, had earlier said producers might debate such a move to counter the dollar's decline.

But Naimi's view on the euro was echoed by other Arab OPEC ministers meeting in Cairo.

OPEC President Abdullah al-Attiyah of Qatar earlier dismissed the idea saying OPEC could not afford to make the move only to find the currency market favoring the dollar again."

more...

Like I thought, Saudis and majority of other Arab producers seem to stick to dollar, against the euro crowd of Venezuela, Iran and perhaps some others. Anyone knows how decisions are made in OPEC? Anyone care to bet what OPEC desides in February?

[rapier]

98. capitualtion

Sorry old boy but it looks like the crisis you felt has been avoided. All of us bears get these feelings from time to time.

You did sense a good possible time for things to get dicey but the center held. The dollars drop has been unpanic like and may well reverse for awhile. Gold and silver shot up but those too may be ready for a reversal. Stocks have held their own and have zero thrust to the downside. Japan did bail out that bank and reports that the Japanese central bank is broke have been greeted with yawns.

Even I am getting compacent now. Maybe that is a good contrary indicator. My sense is that we may well launch stocks into the end of the year. In which case from my technical cyclical oriented position means that the bear is dead. How, I don't have a clue.

This is inseperable from Bush's and the GOP's fortunes by the way.

I also sense that bonds will hold, metals will tank and the dollar will rally. The worst of all possible worlds for bears. The stake is out and they can put it thru our hearts now. That means the same for us progressives as well.

[junker]

99. Was not refering to capitulation - IT WILL NOT OCCUR this time

Unlike previous 'business cycles' which all educated (not necessarily the schooled) persons we know that the 'cycle' is merely the waxing and waning of FED monetary supply and aggregate M status, this crisis at this time WILL NOT involve Equity Market Capitulation as a primary indicator. That capitulation will come is certain, BUT, this will not lead.

The crisis (perhaps interlinked-crises would be better descriptor) results from the death of the dollar. As such it will not follow any previous examples of 'biz cycle' including the 1929 -1947 period, but rather will resemble those previous 3 times in USofA history where the currency has collapsed.

As this is a currency collapse (like, dude, the dollar be gone and all USofA residents reduced to barter/euros/pms), capitualtion of the equity markets are meaningless. Further, as we know that the FED uses permanent and temp REPO options to manipluate the DOW/NADAQ indeces, these will hold up all the way down, so no use looking to them.

Basically, we will will bubble along with the currency crisis being sub-critical (though it started only one day after my 10 day prognostication), until it ain't, sub-critical that is. At that point, the buck-collapse will suddenly happen within a course of a couple of days. Though it might take the better part of a week to be fully 'visible' the crash will be surprisingly swift.

Bear in mind, Mssr. Bear-dude, that the market collapses of the past still had the underlying support of a reasonably valued dollar. As the 'strong dollar' is no longer true, when the dollar is of no value as evidenced by the huge and increasing net out-flows of foreign holders of USofA paper, then a single, small, exo-genic event will take out the hole house of cards.

Admittedly, since the dollar is a global reserve currency, its particular death-throes in specifics are basically unknowable as we (citizens of earth) have never had a planetary currency collapse before. However, all currencies have crashed and brought about significant, and long lasting, social change.

I understand what you are saying, but I do not base my predictions/prognostications/future viewing on 'feeling' nor specifically sensing. Yes, of course an emotional component exists, however, it is analysis and math and arithimetic that makes up the bulk of my insight.

So, I stand by my position, a number of days ago, a crisis began that will collect and aggregate all the other crises de economique'. We will be able to see this crisis unfold in a variety of ways, but at the beginning of it, fueling it, and ending it will be the collapse of the dollar.

Basically, looking to the DOW/Nasdog, and putting feelings about them to it, will not reveal the real degradation. Note also that so what if the DOW reaches 12000 next year? Twelve thousand times nothing is still nothing.....

and to all 401k holders, that will be what remains in the portfolio in 2004, i.e.....a load of bucks, each of which is worth nothing.

As Voltaire (I know it is against DER FADERLAND Security directives to quote a Frenchmen, but Voltaire is expemt as he is dead) observed in 1789, 'all paper currencies return to their intrinsc worth...nothing'.

As will be seen in early 2004, Voltaire may be french, and dead, but that don't make him wrong.....


And as a personal note, watch out for 'feelings' being added to 'money' as the result is never good.

Bona fortuna omnes in nova annum.

Support the troops, bring them home.

[54anickel]

100. Hey junker, I think most people feel something has to give, just

not sure what. Lots of folks have faith that the Fed can fix this like each time they have in the past. But these certainly are different times we live in.

As far as your claim that 401Ks will be worthless, I tend to agree. The values are simply inflated, looking like a bull market much the same as real estate has been.

I came across this editorial that I thought was interesting. Do you have any thoughts on it?

http://www.financialsense.com/fsu/editorials/ti/1204.html

[BeHereNow]

101. From Junker's original post:

"1) buy gold or silver coins if you have any cash at all. get gold or silver bullion, the presumed 'extra' value
of a numismatic coin will not matter in the short order, merely its metal content. So just straight gold
(maples, eagles, krugs, philharmonics, panda's, et al) and any pure silver coin.
2) buy storable food that will hold nutrition for many months. Do it now. Get as much put aside as you
can.
3)Be aware that the dollar is cratering and a huge, perhaps, fatal, global financial system crisis is
developing. This is not just my opinion"

I think Sol and Junker are saying pretty much the same thing!
I am listening- selling off my stocks and heading to Monex with the
cash to buy mostly silver, but also some gold.
I think this thing is gonna smack people out of oblivion- FINALLY.
Americans are so complacent and uneducated as a rule
and they pretty much ignore the rest of the world and its people.
Well I think they are about to find out just how it is for others.
We have gone along for decades, oblivious to what our government
has done in our name. As long as we can graze at the mall, buying
crap we don't need, and jump in our gas guzzlers to drive three
block to the local Starbucks to smirk and slurp with the other
spoiled Americans, we don't give a damn about how people
in other countries are doing...I do believe that the plastic flag
waving idiots are about to wake up, NOW that THEIR comfort
zone is about to go up in smoke.
Long overdue, and it 'aint gonna be "purty."

[CaptainClark23]

102. A sellable story.

Over the past few days, I have mentioned to my direct family members and closest, oldest friends, my intention to buy up silver (and some gold, hopefully), and quickly.

Since I've never been one who had a head for investment or long term planning, they of course inquired as to how and why I was taking these steps.

With just a brief overview of some of the more salient points which I became aware of here, and through subsequent research, each of them was convinced enough to start asking how and where they could buy PMs.

I was amazed to see how quickly and easily they were able to take the jump in seeing the viability of even some of the worst case scenarios I put forward (and I definitely soft-peddled back from some of Junker's more dire predictions for us)

I'm no salesman, and certainly not gifted with a great fiscal sense, but in a few minutes I was able to convince people who know I failed 10th grade math about this "radical" idea that the dollar could collapse.

My two closest friends, and our immediate families, are now pooling resources so as to take advantage of better pricing on larger volume lots.

Something to consider for those of us who do not have alot of capital to invest, and still pay the rent.
Now

[54anickel]

103. I've been pondering the thought for a few months now, doing a

lot of research. I am not going to convert ALL my savings, much of it is tied up in 401K as I fell for the "great idea" that was. Now finding that was just a ploy to get the little guys money stuck in the markets.

There has been intervention for years to keep Gold down, but I do believe they are running out of tricks. We may see it drop a bit again as even the gold bugs have been so conditioned to the intervention bringing the price back down that many are selling.

Saw a report from a recent gold show (trying to find it), and most of the gold bugs were selling, thinking that the PTB will intervene again and wanting to cash in since they've been holding a long time. I think they are mistaken not to hold.

[54anickel]

107. BHN, thought you'd be interested in this. Remember Barricks

announcement that it was going to stop issuing "hedges" (can't remember the exact term from the article).

This may explain a bit. Seems the PTB are loosing their ability to manipulate the gold market as well.

http://www.lemetropolecafe.com/img2003/memoformotiontodis.pdf

[rapier]

109. notes

The capaitulation I was refering to was my own, as the long time house economic bear on this page.

I will repeat first my criticism of your "crisis in 10 days" idea which started this thread, on Nove 20th. In general a broad economic crisis is at best a once in a decade occurance. Picking any ten day period for it to occur is impossible. You've already missed.

While I can agree with most of the issues identified in your rants, and I have nothing against a good rant since I rant constatnly here about the credit bubble and fake capitalism that is now acendent and the corruption endemic in our financial markets, none of that is much good for making preditictions about markets or even the economy. As I mentioned in post #98 it sure looks like the current 'crisis' will lead to a melt up in the financial markets. Yesterday they did. Score one for me. If that persists for today or the next month I don't know but it is a distinct possiblitly and if it does it will be a stake in the heart of all of us ranting bears.

That isn't to say a panic of some sort can't develop in the markets 60 seconds from now. It could and I am on top of every possible way it could which including the things your talking about. However I also believe that the current trends may persist and even accelerate as the liquidity explosion goes worldwide. DOW 16000 now seems just a likely to me as does 7500.

[cthrumatrix]

104. Junker...Listen to this "Institutional Mgr. Call" on the dollar and gold.

A very interesting way of looking at the currency issue and his view of the "outcome"...the "triangulation of currency" going forward:

* the Eurozone
* the Dollarzone
* and the Yenzone

It's about 25+ minutes...it will only be available for another 24 hours.

I encourage all to listen and post thier comments. Very interesting indeed.

http://www.jonesheward.com/commentary.cfm

The presenter is:
Don Coxe is Chairman of Jones Heward Investments Inc., and Chairman and Chief Strategist for Harris Investment Management in Chicago. In addition to his frequent speaking engagements around the globe and his regular column in Maclean's magazine, Don hosts a weekly conference call with institutional investors and analysts discussing his unique views and outlook on the major issues of the day as they relate to the global capital markets.

[happyslug]

105. Just like post WWI world - a Divided world based on such zones.

World Trade peaked in 1913 and did not raise back to that level till the early 1950s. Between WWI and WWII the world basicly divided itself into economic zones. You had the Dollar Zone, the US and Latin America, the Pound/Franc Zone, Europe and Africa and than areas outside these Zones, China, Japan, Russia.

WWII has ben explained as a fight between those Zones.

For example, Germany was paying reparations during the 1920s, and thus was in the Pound/Franc Zone, but had a problem raising the needed Pounds and Francs to pay the reparations. Germany thus was forced to fight to develop its own economic zone i.e. a Mark zone but to do so put it in conflict with the Pound/Franc Zone in Eastern Europe (Which lead to the Start of WWII) and the Dollar Zone (The Soviet Union had in the 1920s done more and more dealings in Dollars and thus drawn into the Dollar zone, but only on the Fringe of the Dollar Zone).

Germany’s Invasion of Poland was thus a fight to convert Eastern Europe from the Pound/Franc Zone to the Mark Zone. The fight with the Soviet Union was to Force Russia also into the Mark Zone (and out of its Dollar/Pound/Franc/ Barter system zone).

As to Japan, its fight with China was to force China into the “Yen Zone” and out of the Dollar Zone. The Japanese Expansion can be seen as an attempt to put a barrier between the emerging “Yen Zone” and the “Dollar Zone”.

Now there are other explanations for WWII (Hitler’s racial policies being among them) but control of one’s own Country’s economy (and neighboring countries economies) was a factor.

If such “zones” develop again, expect to see any fights on its margins, for example if Venezuela should adopt the Euro for its Oil Exports, the US will do everything it can to change Venezuela back to dealing in Dollars (maybe even war). Russia will be part of the Euro Zone, but China and Japan will be in conflict in their emerging Yuan-Yen Zone Through that may be resolved like the British and French did with their Post WWI Pound/Franc Zone).

Britain will be absorbed by the Euro Zone (unless the “City” of London decides that being a member of the Dollar Zone would be better, the problem with that is England does more trade with Europe than the US and thus the pull of the Euro will be to great for Britain NOT to join the Euro Zone).

Africa will become part of the Euro Zone, but the Yuan/Yen, Dollar and Euro Zone will come in conflict in the Middle East (mostly do to the oil all three zones need).

Maybe the fundies may be correct, Mog (the Soviet Union) was all over the Middle East from the 1960s till 1990 and than withdrew. Now you have the attack of the “Country of the South” i.e. US invasion of Iraq (The invasion is from the South of the Middle East for the US is a Naval Power and our attack was naval based and thus from the South). When will Europe (the Kingdom of the West) attack? And what will China do if Europe does attack its oil supply? Will this happen AFTER the US suffers a major economic collapse? If the US does suffer such a fall, the US will have to pull out of the Middle East, leaving it open to Europe and China (Thus fulfilling the prophercy that New Babylon will cut of trade with the world and the world's traders will miss the trade with mighty new Babylon).

I do not study the Bible (and especially Revelations) enough to see any errors in the above, but that is how the Middle East is shaping up, and the world falling into three Economic Zones may be the first step on that trip, just like the world falling into such zones in the 1920s lead to WWII. The fight between these zones will be in the one area where all three MUST get their oil from and that is the Middle East. Bush's invasion of Iraq is just the first part of this fight between these economic zones.

[54anickel]

108. Very insightful. Thank you for posting.

[54anickel]

106. I listened to this when you posted it in the Market thread. Must listen

It was interesting and yes I agree that the dollars day as the worlds reserve currency are numbered.
When that time comes, things could become quite hectic for sometime. You will need to be able to protect yourself and assets as best you can to be able to ride out the storm.
It is the uncertainty of HOW the system will crash that causes the fear and anxiety.

[Frodo]

111. A one line summary

"If you bought a gold stock because you were expecting $1,000 gold in three months because of the end of civilization as we know it... then I recommend you not own it anymore"

[Emillereid]

110. I think both Michael Belkin and Warren Buffet

said to withdraw from the stock market, warned of a coming dollar crisis and said the proverbial doo doo was going to hit the fan in December. Anybody out there remember this from about a month ago. Wonder if all the countries we've pissed off re: Iraq contracts might decide to stop call in their IOUs regarding the extravagant US debt?

[Rainbows]

112. Don't remember this particular statement but...

Soros and Buffet and other very large money has been shorting the dollar for quite some time. Bill Gates I have heard thinks so much of the dollar he is heavily invested in silver mines.
The crisis Junker speaks of will be brought on by individual and institutional speculative greed run out of control and could happen quite fast, as every one at once tries to cover their individual and collective asses at once, as paper assets and debt catch fire and burn.
Though it rarely works this way, reasoned minds, would not intentionally precipitate our total and rapid meltdown, but rather slowly devaluate our economy by 30% or more over 3-5 years, as it appears is happening now, so far without the element of panic. It is in the big money of the global economy's best interest to keep the largest consumer nation in the world, to some degree consuming, or they all will sink their ship with ours.
How all this plays out is anybodys guess, but we certainly are teetering on a precipice of economic destruction both national and global, with little rational control of the outcome. Flip a coin and cover you arse.

[papau]

114. Derivatives "shorting the dollar" are expensive but have done well

And with no solution to anything Bush leading us, 4 more years will get me into 190 day straight shorts (expensive but what the heck!
:-)
!

[Code_Name_D]

117. So the dollar isn't just slipping.

We are facing a speculitive attack.

[Rainbows]

118. Thats my take and one other thing ...

I've been thinking a lot about the 'zoning of currencies' about ten posts above this one and have been wondering ... It is obvious the administration is worried about the petro-euro becoming a reality, or plan B OPEC cutting production and raising the dollar price and in doing so, in effect it would mean countries heavy into the euro as a reserve currency the raise in price is minimal but dollar based national banks pay more for their oil.
What I am wondering is a new alignment of zoning taking place with the dollar/yen/quan, to counter this as all are most reliant on the other rather than the euro or pound. What no one has mentioned is that little meeting the White House had last week with the Chinese ambassador and the next day the stock market starts another rubbish rally shooting above 10,000, after Greenspan affirms no near future hikes in the interest rates while Japan covers the dollars ass with 10 billion yen. Same time Wolfie pisses on 'old'Europe and Russia with Iraq reconstruction contracts. I'm wonder if a little deal was made with China to not divest any more securities in return for Taiwanese considerations or perhaps something else, like cheap non OPEC Iraqi oil to sooth Japan and China's oil starved economies. It all seems to cute in a tit for tat sort of way. What do you think?

[Code_Name_D]

120. An intresting thought.

Especualy as not the asministration is back to the strong dollar policy. As if they never had a weak dollar policy I might add. And there was a short rally on the dollar. Acording to the marketires in the LBN room, two things happend at the same time.

The fed's "holding intrestre raits steady" line pushed down the dollar, incuraging what they call a "dead cat bounce." Time that with the BoJ sudnen sleerping up dollars, and you "manufacture your floor" as they call it.

But the marketires are NOT impresed. Suspecting that the dollar would resum its drop this munday. Well, as you no doubt know, that captured Saddam. Perhaps the admin is thinking this will boost the dollar again, stringthening the man made floor. Certainly, the Stock Market is going to shoot up. (Also explanign the rise last friday as insiders buy in on the deal.)

There may be something to your zone argument. (Though I am not all together familer with it.) But the thing that bothers me is all hands basicly serve the dollar, regardless of wich currensy you are under. US sells masive amounts of debt, and the conties are expected to buy it. And Iraq is a clear example of why you don't chalange the US dollar hygeminy.

[Rainbows]

122. Isolating the Euro, Strong Dollar, Suppressing PM's

Interesting the shift in attitude from weak to strong dollar without acknowledging the shift, just pretending everything is as it always has been. It fits well if zoning is taking place when I think about it. Three of the largest economies the US, Japan, and emerging China join hands in common need (strong dollar that is sliding), in effect isolating the strongest competitor (the euro). If it were to work and the dollar gains strength (ficticiously on paper)that would suppress the gains PM's are making at the same time.

Basically trying to bluff our way out of the present crisis. Though it is agreed 'all hands serve the dollar', that is what is fueling the present crisis, that being the world no longer buying therefore not covering our debt.

In the case of Europe it would not be acceptable to just starting letting the bombs fall as on Iraq. So the cat and mouse deflection away from the current trend, is one of the only alternatives. Add the Saddam bounce to the stock market you mentioned and the lining up of insider trading from Friday and into Monday the market soars for a couple of days while PM's dip, providing tempory momentum.

It will be a most interesting week a coming to see how long it takes for the realization to hit home that nothing has really changed, the debt is still there, the resistance in Iraq alive and active, and the market even more inflated and ripe for the dive.

Prediction: Temporary slump for PM's but total recovery with possible gains by Friday, then back to status quo as everyone awaits news of the report on the Oct. inflow of debt servicing foreign capital. If the Market retains its gains look for a major correction if and when the Oct. report is negative. If there is no correction with a negative report, then insider money has knowledge of insider zoning mentioned above.

[Code_Name_D]

123. But will it work.

As already noted, some high end players have not only shorted the dollar, but are selling back onto the dollar by the new trades. An afore mentioned currsiney attack.

If this is so, than the zoneing effect will fail to stablize the dollar becase trading intrests are in fact seaking to explote the slid in the dollar with there speculations trade. A slipping dollar and rising Uero is a perfict climent for a cursiney attack.

This would seem consistant with some observations made on the Market room as they noted that buys in the dollar are cerculated right back into the system the very next day. Doing little more than slowing the dollar's slide, while at the same time incresing the downward presure.

For the unaniceated: A speculitive attack is a type of trade designed to explote a slidding curensy. In this case, against the dollar. Here is how it works.

Dealer takes out a loan in US dollars from a US bank, say, $5,000us. The dealer then takes the money he gets from the loan, and sinks it into Uero CD's. A day later, the dealer cashes the CD's and trades them back into dollars. During this time, the daller will have slid against the Uero. So when the dealer converds it back into dollars, his profit margen will be the % the dollar slid against the Uero.

The Dealer then payes off the loan, paying off very little intrest as he has only had the money for a day. But keeping the profits from the trade. Then switching it back to a safe harber. He then repeats the prosses.

It is tandamount to free money. But it sucks wealth out of the system because the banks have an incresingly hard time meeting the needed luquidity to fund the loans. As a Speculitive attack is driven purly by greed, there is no known economic force that can slow or reverse it. If there is a speculitive attack taking place against the dollar, than its days are truly numberd.

[Rainbows]

124. Probably Not ..

No, I don't think it will work if zoning is indeed happening. And I don't think the currency speculation you speak of will cause an immediate crash as much as a constant drain on the dollars value. I think the biggest immediate threat is servicing the debt with in flow of foreign capital, and that translates to confidence and stemming the political power game element. Let's wait for the investment inflow figures. If negative again, zoning could delay the inevitable flight from on dollar based securities, but without correcting the fundementals of cause, the influx of Chinese debt sevicing will only camoflage the lack of confidence for a short period. This is all of course if zoning is indeed happening, and all in course IMHO.

[54anickel]

113. I did a google search and found some interesting stuff

Much of what I haven't sifted through yet. Search on: gold reserves central banks.

Here is one article I thought worth sharing, but there are so many interesting ones out there.

http://www.findarticles.com/cf_dls/m1571/6_19/98415810/p1/article.jhtml

edit to remove redunancy

[papau]

115. A squeeze works better if there is an industrial use for gold.

And there is not.

So this is all crowd psychology - as to gold.

But dollar movement is very real.

[54anickel]

116. I tend to agree. It is once again the fear this misadministration

continues to dole out. The fear leads to a lack of confidence in the fiat dollar, fear of the future, which sends those seeking a store of value to gold.
If owning a few gold coins helps a person to sleep a little better at night, I have no issue with that. It is the ones who create the panic and cause folks to trade their lifes saving for gold that cause me concern.

on edit add this link to another point of view.
http://biz.yahoo.com/rm/031206/metals_gold_panizzutti_1.html