Money, Power and Wall Street

[Billy T]

Here: http://www.investorplace.com/2012/05...-are-they-now/ is very informative review of TARP funds. Who got how much, how much has been repaid, how much has been written off as lost, how much is still out for someone to use. AND even that 51 million dollars are not yet placed - can for example, under the law, be used to help underwater home owner before 2017!!!!

The big banks have paid back almost all of what they got but automakers very little. Very interesting stuff and can correct many false statements often made. Take a look.

[Syzygys]

Michael, you might want to read the book, The House of Morgan, specially around page 66.

It explains just how much farmers hated the gold standard in the 1800s (deflation and such), not to mention all the big market crashes occurring in every 10 years or so, because of lack of central banking...The 1907 crash was averted by JP Morgan, who acted as a (you guessed it right) central bank and provided sufficient and otherwise unavailable credit....

Once you realize that it is not the system that is evil but the bad implementation of it, you will sleep better...

[Michael]

Michael, you might want to read the book, The House of Morgan, specially around page 66.

It explains just how much farmers hated the gold standard in the 1800s (deflation and such), not to mention all the big market crashes occurring in every 10 years or so, because of lack of central banking...The 1907 crash was averted by JP Morgan, who acted as a (you guessed it right) central bank and provided sufficient and otherwise unavailable credit....

Once you realize that it is not the system that is evil but the bad implementation of it, you will sleep better...

I'll see about reading the book next month. Or some of it anyway.

I can imagine farmers in the 1800s didn't like deflation - it meant they were getting less for their produce. I think the consumers would have thought something else - they got more for their money. Which ultimately meant we needed less Farmers or if you were to remain a Farmer you needed to sell new produce, reduce your costs, or sell produce overseas or *gasp* you'd have to open a different business. Much like horse whip makers - - some businesses need to go out of the market. Including farms.

I wonder what Farmer's would think about today, when their great great great grandkids don't get to spend any time with their parents because both are at work 40+ hours a week and are making massive Income Tax payments to a bloated US Government and the huge influence that the Banking Cartel has over their great great great grandchild (most probably had to sell their Farm) all while being watched by drones the fly around overhead? Deflation is the last things we have to worry about. The very last.

My guess is, they'd pull their heads in


JP Morgan acted as a "Central Bank" or as a "Bank"? One wonders how JP Morgan got to own so much of the "money"? It's evident that the system in place then was not ideal. What replaced it, was by my opinion, much much worse. The monetary system we have - who created it? Did the Bankers have a role in creating it? Oh, I'm sure 'bankers' were completely fair and made the ideal system in the People's best interest - selfless creatures these bankers are known to be


There were depressions in the 1800s and economic cycles (and still are) but those of the 1800s were short lived and the economy always recovered rapidly. Even the "Long Depression" of the 1800s was under 5 years (which was caused by devaluation of the Greenback). How about the "Great Depression". We barely managed a decade out and these Central Bankers caused the greatest Depression of them all. And it lasted nearly 1.5 decades. Of course they are the very last people to admit THEY caused it - to this day people still think WWII ended the Great Depression. As if blowing shit up creates prosperity.

I heard someone on the radio literally 3 weeks ago saying the Fukushima Nuclear Meltdown was wonderful for the Japanese Economy... what, with all the 'stimulus'.

Paul Krugman (Economic Nobel Prize Wiener) looks at the first-quarter growth results from some developed economies and notes Japan’s strong performance due to the post earthquake and tsunami reconstruction. He then compares it to Italy’s dismal results due to austerity measures (which, as I’ve pointed out here, consists almost exclusively of tax increases, not cuts in spending).

Krugman then says that “there seems to be some kind of lesson here about macroeconomics, but I can’t quite put my finger on it…” Is he really saying that what Europe needs to grow again is a massive earthquake and tsunami? Or maybe a nuclear accident? After all, Krugman once wrote that Fukushima’s “nuclear catastrophe could end up being expansionary” for the economy.

These people are psychopaths.

Did BJ Morgan provide some cash to some farmers 150 years ago? Sure, probably. I'm not happy to live in their servitude because some farmers were pissed they couldn't make enough on their produce due to natural price deflation.

Anyway, minus some sort of WWIII pandemic meteorite slams into total collapse of civilization. We're not 'going back' to the 1800s and I'm not advocating we do. We will need a major overhaul of the monetary system and we should be less Central Banks when (not if) this occurs.


I'm wondering when the new Consumption Tax will add to the many other taxes. Or maybe they'll do like Australians and makeup a tax, like the Carbon Tax. Talk about a joke. And talk about a people easily led around by the nose. It'll be quite interesting to see how well Australians go at speaking Mandarin. The private highschools in Sydney switched from Latin and Greek to Mandarin around 8 years ago. Everyone whines the Chinese are taking our jobs. Well, soon we'll be the ones working for the Chinese - lets see how we like it.

[Carcano]

to this day people still think WWII ended the Great Depression. As if blowing shit up creates prosperity.

Historically, 'blowing shit up' was the primary path to prosperity...at the expense of the opposing party. The Roman empire functioned as criminal gangs do today...prospering through mass murder, extortion, theft, enslavement, etc.

Donald Trump stated publicly not long ago that the US should conduct war as it was conducted centuries ago...as a military exercise in stealing.

Win the war...grab the spoils!

In this case he meant Iraqi and Libyan oil.

[Carcano]

Anyway, minus some sort of WWIII pandemic meteorite slams into total collapse of civilization. We're not 'going back' to the 1800s and I'm not advocating we do. We will need a major overhaul of the monetary system and we should be less Central Banks when this occurs.

One of economic history's 'ultimate sins' was allowing PRIVATE banking...as opposed to a credit union system where the depositors are the shareholders.

[Billy T]

An example of how in modern US economy, controlled by corporations, profits are private (and justify great bonuses for CEOs, etc.) but any losses are transferred to US tax payers:



"... If Uncle Sam sold his 26% stake in the once-mighty car maker {GM} at today's price, the American taxpayer would lose a cool $16 billion. ..."
From: http://www.insideinvestingdaily.com/...=448432&r=Milo

Part of the US bailout of GM did limit the bonuses:
".... GM CEO Dan Akerson, who received a cool $7.7 million in compensation complained that the restrictions "do not permit us to reward our senior executives in a manner reflecting the level of achievement of our business plan." ... {his argument is based on: } Akerson's chief rival, Ford CEO Alan Mulally, {who} hauled in $30 million last year. ..."

From: http://theweek.com/article/index/227...boss-underpaid

[Syzygys]

Donald Trump stated publicly not long ago that the US should conduct war as it was conducted centuries ago...as a military exercise in stealing.

Well, they already do, but I am not sure Donald is supposed to be honest about it...

[Billy T]

Some very rich people are making jobs in the USA, instead of foreign lands, like China, where the rate of return on their investment is 3 or 4 times greater and there is less environmental, etc. regulation:


"... In Marin County, California, where people tend to have money, people in Belvedere tend to have more. Even so, a recent decision by Clark and Sharon Winslow of 337 Belvedere Avenue to buy the home next to theirs for $4.2 million — and then tear it down — might seem extraordinary.

It's not, say locals and real estate professionals. "There are houses being torn down all the time," says Bill Smith, realtor and ex-mayor of Belvedere. In neighboring Tiburon, he says, a buyer not long ago paid $20 million for the home of tennis star Andre Agassi and wife Steffi Graf, then announced his plan to raze it. ..."

See lovely lake view mansion, half destroyed by recently employed US workers at: http://news.yahoo.com/4-2-million-te...ews-money.html

[joepistole]

I'll ask you again Michael, why do you think those bankers and "corporatists" you like to complain about are funding your political movement?

[Billy T]

Has anyone taken time to explore this: http://divinecosmos.com/start-here/d...reat-revealing

It is very long, filled with supporting links, including RonPaul´s webpage, Science, some Swiss Scientist´s just published detailed computer study of corporate interchanges, the Libor scandaland its investigation, Congressional investigation and reports, etc. and claiming world is controlled by few large corporations and seems to say this super conspiracy is now in danger as Government investigations are just starting to expose the "cabal." When I skimmed it on 26July12,I found it already had more than 500 comments added, most very supporting and thanking for the exposure.

It definitely is a different cut on the typical "world is ending! because of global conspiracy" types - I´ll try to give it a more detail look soon, as of yet have not been to any of it documentations site so wonder if anyone at Sciforums has.

[Billy T]

Just some June 2012 debt facts:

Next time data comes out: Fed will still be #1, with at least 11% of US issused debt, Japan #2 & China #3 with Brazil a some what distant #4. This due to ending of operation twist - Fed has few if any short term bonds still to sell, but will Increase the rate of longer term bond buying with assets (now 2.8 Trillion, including mortgages, also know as "toxic trash" the Fed bought) rapidly growing (to 4 Trillion by end of 2013) as buying not being offset by operation twist selling. China and Japan will trade places as China (wisely) is a net seller for two years now and Japan continues to buy as if the dollar were a store of value.

"So who has purchased the $9.3 trillion in new debt issued over the last decade? Pulling from several different sources, here's what I* came up with:"
Note: 1.2 + 4.1 = 5.3 I.e. Foreigners fleed their currency for less ugly dollars.

"None of this should be taken as an attempt to belittle those nervous about the debt. It's a serious issue no one should take lightly. The fact that we rely on foreign investors to finance 44% of our annual deficit is, to put it lightly, not ideal. The kindness of strangers doesn't last forever."

* Both quotes from Morgan Housel in article at: http://www.fool.com/investing/genera...onal-debt.aspx

Note Fed´s US issued assets grew from 6.6 Trillion to 15.8 T since 2002 (the 9.3 T increase) More than doubled, but the fast grow period is just now starting! I.e. Dollar is doomed.

[joepistole]

Just some June 2012 debt facts:



"So who has purchased the $9.3 trillion in new debt issued over the last decade? Pulling from several different sources, here's what I* came up with:"
Note: 1.2 + 4.1 = 5.3 I.e. Foreigners fleed their currency for less ugly dollars.

"None of this should be taken as an attempt to belittle those nervous about the debt. It's a serious issue no one should take lightly. The fact that we rely on foreign investors to finance 44% of our annual deficit is, to put it lightly, not ideal. The kindness of strangers doesn't last forever."

* Both quotes from Morgan Housel in article at: http://www.fool.com/investing/genera...onal-debt.aspx

Note Fed´s US issued assets grew from 6.6 Trillion to 15.8 T since 2002 (the 9.3 T increase) More than doubled, but the fast grow period is just now starting! I.e. Dollar is doomed.

It is not kindness that motivates foreign buyers and holders of US debt. It is a necessary byproduct of huge trade surpluses they have enjoyed with the United States. If you asked China if they would rather have their US trade surpluses and the US debt they hold versus not, well history clearly informs us of their answer to that question.

[Billy T]

It is not kindness that motivates foreign buyers and holders of US debt. It is a necessary byproduct of huge trade surpluses they have enjoyed with the United States. If you asked China if they would rather have their US trade surpluses and the US debt they hold versus not, well history clearly informs us of their answer to that question.

All true, but part I made bold, which tacitly assumes that if China is to have a trade surplus, then it must be gaining dollars is rapidly changing and in less than 3 years will be obliviously false, if current trends continue. I.e. in less than Three years China´s trade with others will GROW by more than its total trade with the US in 2011. Thus even if China sells nothing to the US (and accepts no more green paper in payment for real goods and services) China will still have trade surpluses.

There is already a rapid shift of export sales to other Asian nations (who sell to China, the low value added items China can no longer produce as cheaply because Chinese wages have increased in purchasing power by at least 10% annually for nearly a decade. I.e. Chinese now wear shirts and shoes, etc. made in Vietnam or Indonesia, etc. and China also buy there the components that China builds into high value items China sell, - things like like the fans in computers or cars, resisters, cable harnesses, etc.). China´s sales to suppliers of raw materials (like Brazil, Canada, Australia/NZ, and several African nations) are also growing by double digits.

But Chinese factories are switching to server the growing domestic market too. The growth in Chinese GDP (not the absolute level) was 55% dues to domestic sales! I forget the fraction of the growth that was Capital investment, but was some thing like 25% and export percentage of growth was only ~20%. Don´t misunderstand: domestic sales are still a minor component of Chinese GDP but growing more than twice as fast as either other sector.

As I have posted for 6 or so years, the day is coming when China will tell the US to GO TO HELL.
Saying also we no longer need (or can with the new demands for Chinese products by Asian partners & raw material suppliers) to sell to you and certainly not for green pieces of paper. Obviously, we will no longer finance your deficits. You exploited our people working 12 hour days in sweat shops for two decades so you could pay little for their production and have low inflation.

- Make what you need yourself now (at ~4 times higher sales prices.) or buy from Vietnam cheaply still if China is not buying all they can produce. They need to earn Yuan as we no longer lend our customers the funds with which to buy. They don´t need dollars, as you can produce few if any high tech consumer items, or even simple things like TVs.

[joepistole]

As I have posted for 6 or so years, the day is coming when China will tell the US to GO TO HELL.
Saying also we no longer need (or can with the new demands for Chinese products by Asian partners & raw material suppliers) to sell to you and certainly not for green pieces of paper. Obviously, we will no longer finance your deficits. You exploited our people working 12 hour days in sweat shops for two decades so you could pay little for their production and have low inflation.

- Make what you need yourself now (at ~4 times higher sales prices.) or buy from Vietnam cheaply still if China is not buying all they can produce. They need to earn Yuan as we no longer lend our customers the funds with which to buy. They don´t need dollars, as you can produce few if any high tech consumer items, or even simple things like TVs.

Well that depends, there are too many potential externalities to be able to make that prediction with any degree of certainty. China does want to lessen its dependency on the US but it is far from attaining that goal. The latest predictions I have seen is that the Chinese economy will be larger than the US economy in 2030 if current trends continue. That is decades into the future. Further, if you are going to be a major player in the global economy, you cannot isolate your economy and make it immune to events occurring around the globe (e.g. Europe’s banking crisis). Look at Greece a very small nation with an insignificant economy has threatened to bring down the global economy for the last three years.

[Billy T]

... there are too many potential externalities to be able to make that prediction with any degree of certainty. ... The latest predictions I have seen is that the Chinese economy will be larger than the US economy in 2030 if current trends continue. That is decades into the future. ...

What was the source for that extreme prediction (compared to IMF et al that say by 2016.)?
Your right – Prediction is uncertain, especially if based on false data methods as your “in 30 Years” is (See red text below):

In fact, according to the International Monetary Fund (IMF), the “Age of America” will end and the U.S. economy will be overtaken by China’s economy in real terms by 2016. That’s just five years away, which is simply incredible when you sit and contemplate it, especially considering that the U.S. economy was three times as large as China’s in real terms just 10 years ago.*

Why the big difference compared to other estimates that come up with a 2020 or 2030 date for when China will overtake the U.S. economy? Because those estimates are comparing the gross domestic product of the United States and China at current exchange rates.
But when you analyze the two economies in terms of purchasing power parity — comparing what people earn and spend in real terms in both China and here — you find quite a different result.

Considered for purchasing power parity, China’s economy will expand from $11.2 trillion this year to $19 trillion in 2016, while the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take the U.S. share of the world’s economy down to 17.7%, the lowest in modern times, while China’s would reach 18% and climbing.

… the fact that the IMF now officially thinks the new era will belong to China is a testament to what just about every observer of markets realizes — and that is that the age of American hegemonic dominance is essentially over.

* With a growth rate of 11%, China´s average over last decade, (1/3) becomes (2/3) in 6.5 years. In 3.5 years more that (2/3) increases >50% more to be slightly more than 1.0 - How China trippled its (1/3) in a decade. Now it takes China most of a decade to double again, and be well passed the US, which is barely growing (or will be in deep depression by end of 2016, if my predictions are correct).

The Paris-based Organisation for Economic Co-operation and Development (OECD) said China's economy will be larger than the combined economies of the eurozone countries by the end of this year, and will overtake the US by the end of 2016.

If one includes in the GDP calculation only expeditures that produce items with value lasting more than two years (exclude, tickets to shows, NFL games, expensive latest fashion clothes or hair cuts, etc.) China´s GDP surpassed that of the US about five years ago!

To give a strong example of the false effects of using exchange rate to compare, consider something IDENTICAL: E.g. a 1 km taxi ride in NYC vs in Beijing. –This produced "product" should add equally to the GDPs, but it adds only 10% as much to China´s GDP as it cost (converted by exchange rates) is only one tenth as much in China as in NYC. But in terms of purchasing power parity, these identical products equally contribute to the GDPs. (Chinese taxi driver does not need to pay more than a million dollars for the "medalon" (license) you see on the hood of cab and gets much higher wages needed to live in NYC.)

To show more silliness in US´s GDP calcualtions, note when I sell my two cats to friend Bobby for half a million dollar and buy his dog for same price, the US GDP gets a million dollar boost! - OK that is silly, but no more so than the million dollars boosts the US GDP annually gets from many basketball players add to US GDP for being able to throw a basket ball thru hoop for three points, OR etc. for baseball & football stars, none of that well paid product production has any value only a month later, but 100Km of new ultra high speed rail line will have most of it value even a decade later.

I.e. what is in the GDP is important too. In US it is ~70% for current consumption (valueless in third year). US could boost GDP with a law that required all men to be shaved daily by a profesional barber, but would not be a stronger nation becuase of the new law. My point being that GDP has very little to do with how economically strong a nation is. Low debt to GDP ratio tells that much more accurately.

Note also that the yuan is under valued, so if X yuan at current exchange =$100, then correct exchange rates would make that X yuan be something like $115 or increase China´s GDP by 15%.
SUMMARY: Not only is coversion by exchange rates a very wrong methodology, not even are the exchange rates used true!

[Billy T]

To Joepistole: Perhaps "The Global Trends 2030" is the report your refered to?

By 2030, Asia "will have surpassed the North America and Europe combined in terms of global power, based upon GDP, population size, military spending and technological investment, the report said." "China alone will probably have the largest economy, surpassing that of the United States a few years before 2030," the report said.

It agrees with most others telling China will pass US in 2016 , if "a few years" is 14.
Report says: BEFORE 2030, China will have passed (Mexico + USA+ Canada) + All of Europe combined!

The report is widely read* and produced by DNI soon after each presidental election, in part to aid the new administration, but tends to be optimistic for the US´s future.

*

The Global Trends 2030: Alternative Worlds document, released this week by the U.S. Office of the Director of National Intelligence (DNI), is already the number one seller in Amazon's international relations category and ranked number two among political books sold on the retail site.

Amazing sales, considering you can download it for free at the DNI site!