Cyprus banks to steal DEPOSITOR'S money

Again, that's what the PEOPLE want. They want roads, and wars, and health care, and mortgage bailouts.

When you ask them, they all want to cut spending and lower taxes. But when you get specific, they all want to cut OTHER people's programs. They don't want their programs cut. And that's how they vote - "keep my programs and lower taxes." And they get what they ask for.

Conservatives in the US? Sure, they want to cut welfare to drug addicts. But you better not TOUCH military spending! And veteran's benefits. It would be horrible to cut the benefits that our American heroes deserve.

Liberals in the US? Sure, they want to cut spending on unnecessary wars. But you better not TOUCH the money that's keeping all those senior citizens alive! Don't kill Grandma!

They are listening very well. "Cut other people's spending and save mine!" Multiply that by millions of voters and you get lots of spending and very high deficits.

This is demonstrated in a recent poll:

====================
Support For Budget Cuts Increases, But Cuts Remain Unpopular

02/11/11 03:40 PM ET

According to a new survey released Thursday, public support for cutting specific areas of the federal budget is higher than it was in 2009, but such cuts remain unpopular overall.

The Pew Research Center poll found an across-the-board increase in support for cutting budget areas that it asked about both in the new poll and in their previous survey conducted in June 2009. Even after the increase in support for cuts, however, no specific budget cut proposed in the Pew poll found majority support.
===================

Translation - everyone wants cuts, no one can agree on what to cut.

 

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You seem to contradict yourself. You say no country can and then refer to the “honest hard working countries” that do. Which “honest hard working” countries would those be, exactly?

You have a lot of vague generalities in that statement. How do you know governments are not reducing spending where possible? And it appears you think the only legitimate role of government is to reduce spending. And that is clearly not the case. The role of government is to serve the needs of those it represents.

Let’s look at what happened in the US over the course of the last 13 years. We began with a nice budget surplus in 2000 and with budget surpluses predicted for every year for the next decade. What actually transpired? A new president was appointed by the US Supreme Court rather than through the normal electoral process – a violation of the US Constitution.

That president started two wars one of which was for completely baseless reasons and bungled/mismanaged both of them for nearly 8 years and put them both on the nation’s credit card adding trillions of dollars to the nation’s deficits and debt for many decades to come.

In the years prior to 2003 senior citizens were leaving the country in increasing numbers to purchase their prescription drugs in other countries like Canada and Mexico as drugs in every country outside the US are cheaper, same drug, same manufacturer, but cheaper because of a national border. Prescription drug companies tried to stop the practice as it threatened their profits. First they cajoled countries like Canada and Mexico --threatening to withhold prescription drugs from countries which continued to sell prescription drugs to Americans. It didn’t work. Enter plan B, get Congress to buy prescription drugs for American seniors and make it illegal for Americans to purchase prescription drugs in other countries like Canada. The American pharmaceutical industry teamed together with the American health insurance industry and you get Medicare Part D passed by Congress and signed into law by that same Republican President – again unpaid for. Congress and that president created the program and the spending but didn’t offset the increased expenses with spending reductions in other programs or new income. Why would Congress act so irresponsibly? Simple, special interest money, money from American pharmaceutical and insurance companies, there is a name for this, it’s called corruption. It’s all legal, but corruption none the less.

http://en.wikipedia.org/wiki/Medicare_Part_D#Criticisms

Then we have the special interest legislation that deregulated the financial industry in the US which allowed private interests to profit immensely by gambling at the expense of everyone else. It resulted in The Great Recession of 2007-2009 which was very expensive for governments around the globe. The recession greatly reduced government revenues, less income means less revenue for governments. And higher unemployment means higher expenses for governments. Governments need to take care of those unemployed people. If you throw the unemployed out on the street, then you have trouble with crime and increased police and incarceration costs and you degrade the quality of your workforce. People will steal to put food in their bellies and to care for their kids. The children of the now homeless unemployed are not getting educated. So they will be less qualified for employment down the road.

So there you have it. The reason for the US debt and deficits are:

1) 8 years under an incompetent president appointed to office by a partisan supreme court
2) 8 years under an incredibly corrupt congress
3) And the greatest recession since The Great Depression nearly a century ago.

If you want to fix that, then you need to fix the US Congress by reducing corruption and changing the election process to ensure a better informed voter and reduce the influence of special interest money on government and you probably need to fix the US Supreme Court too.

Good government is possible. We have seen it many times. You might be surprised to know that the US deficit has been reduced by half since President Obama was sworn into office. Congress could save 100 billion dollars a year in Medicare by eliminating the drug price protections in the Medicare Part D law, allowing government to negotiate prescription drug prices just like Canada and Mexico and our Veterans Administration.

 

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I´ll help buddha12 out.

Brazil is one, desipte the US´s currency war against it. To be responsible and hold infaltion down* despite the US´s "export of inflation" via false low interest rates Brazil has held its basic interest rate high (now 7.25%) not near zero as in the US. Also Brazil struggles and does not always succed, especially now with a far left of center government in power, to keep the debt to GDP ratio low enough for growth to lower later. China does even better but they have currency controls and a sort of closed economy still. The US is slowly destroying its self with flood of printing press money as its debts (growing by 1 trillion per year) can only be paid by destroying the value of the dollar.

* US has currently even lower infaltion rate, but only because the three or so trillion in recently created money is not circulating. It will evententually. Then US will have inflation like Brazil once had - prices increasing a few percent each week or perhaps worse.

 

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First, the US is not conducting a currency war against anyone including Brazil, nor is the US exporting inflation. The only currency war Brazil has been fighting is the one it has been fighting with itself. Two, Brazil is a developing economy. The US is a developed economy. Brazil should be growing faster than the US, but it hasn’t been and is not growing faster than the US economy.

http://www.forbes.com/sites/kenrapoza/2013/03/01/worst-might-be-over-for-brazil-economy/

Interest rates are lower in the US than in Brazil even to the point where investors in US Treasury obligations are willing to accept negative real yields on their Treasury investments. Inflation is less in the US. And has been pointed out to you on numerous occasions, the Federal Reserve can simply reverse what it has been doing to control inflation. Instead of buying assets, it can sell those assets. The inflation is Brazil in real and not imagined and more than double the US inflation rate. Further, Brazil’s government spends more money as a percent of GDP than does the US.

http://en.wikipedia.org/wiki/Government_spending

 

Taking advice from Pharaoh's dream, we need to put by money in the fat years
to help us when times grow thin.

 

You don´t seem to understand that although stated to be a stimulus, US is making a currency war against more responsible governments.
Here is an old post (http://www.sciforums.com/showthread...ments-stable&p=3052080&viewfull=1#post3052080) that may help you understand:

 

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I still bet that some of this "liquidity" will come from Russia, but perhaps not openly. There is too much resistence in EU land to bailing out "a banking hot spot for Russian (RSX) oligarchs." This quote from same source.

Later by edit:Just minutes ago this story broke: ".. European indices as well as U.S. futures have moved higher on rumors of an initial agreement with Russian investors to buy Cyprus Popular Bank. This could be viewed as a first step in the resolution of the bank recapitalization plans."
Quote from: http://www.stateofthemarkets.com/re.../1/0/dc8725000bb21cb28eff9862de4ee307286f17d0

There is also some speculation that Cyprus may sell some of the nearby small islands. I suggested this 2+ years ago as a way for Greece out of its mess. Greece has more than 1000 islands it could sell. You can see some of the larger ones in the map above.

 

I now think that it was a small scale experiment to see how people would react.
There is no other rational explanation for the gross stupidity of it.
It hasn't gone down too well.
(above is an example of English understatement)

US equivalent:
Let's bring back slavery, but just in Rhode Island.
It's only little. Perhaps people won't notice.

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First Slave Yacht arrives in Rhode Island Harbour to.....erm help the American economy.



Pub Quiz question.
Which is larger, Cyprus or Rhode Island?
No checking before you answer.

 

Oh but I do understand. The US stimulus does not a currency war make. The stimulus was a much needed remedy to a very severe macroeconomic event. And if the US is waging a currency war against the Brazilian Real, it is losing. Before The Great Recession a Brazilian Real would buy .62 American dollars. Today, that same Brazilian Real will buy .5 American dollars. Brazilian Reals are getting cheaper, not more expensive. And the US dollar is getting more expensive.

 

Come off it Joe.
I disagree with Billy that the stimulus will necessarily result in US inflation.
Not while the US Dollar is a world wide currency
But the stimulus is still part of the international Race-to-the-bottom.


While countries worldwide allow the corporates to play them against each other,
they will have less and less power.
And as corporates are non-democratic organisations
ordinary people will have less and less power.

 

That, your unjustified assertion, is contradicted by the finance minster of Brazil who invented the term "currency war" and leaders of China and also by lack of any detailed reply to quote in post 26, which explains in detail, via an example exactly how US´s historically low and very expensive (85 billion per month of thin air money printed) interest rates are driving funds from the US to where they gain, by double digit factor, higher safe bank interests. What part of the example do you thinks is not true?

Yes that is the stated reason but ignores the side effect of making the currency war and exporting inflation, both explained in quote of post 26. The longer than this year effect of the flood of dollars into China, Brazil etc. seeking higher return returns is that more modern factories are being built out side of the US instead of in it. Thus, the US grows ever less competitive and when the Fed stops pumping 85 billion into the economy each month, that will be exposed with the collapse of US economy. You no doubt disagree that will happen, so please explain how the newest and best factories being built outside of the US, with exported US funds, helps the US.

The value Brazil´s Real is set mainly by the demand for the commodities it sells (soy, iron ore, etc.). Currently that demand has decreased so the value of the Real has too. For example, iron ore commands only about 60% of the price it did when Real was stronger (0.62$ required to buy a Real). E.g. when China buys more iron ore, that tends to increase the price and then because of both the higher volume and the higher price, China needs more Real. That increased demand for Real, naturally makes the Real more have value. Now that the Chinese demand is less, its value is less too.

SUMMARY: Give more than your assertion. Something explaining why global leaders of various countries financial systems are wrong to call the extremely low interest rates in the US a "currency war."

 

To clarify my POV: Yes I do expect that when the 3+ trillion of Fed created thin air money actually circulates* it will cause sever inflation in the US. The inflation being exported now via the currency war is happening in more responsible countries like China and Brazil which fight to control this exported inflation. In Brazil´s case with very much higher interest rates (7.25% now vs. less than 0.25% in the US. - That is more than 29 times higher, call it 30 times higher).

China has a more controlled economy and uses restrictive controls on the influx of dollars more than interest rates to fight the currency war flood of dollars that would like to participate in China´s rapid growth. Buffett did some how get about 15 billion dollars into China to expand and modernize the BYD car company and now owns slightly more than 10% of it. Sometimes China lets funds in as they bring more modern technology with them. I.e. the currency war, (excuse me Joe the stimulus) is making US´s future competitors more efficient. For example, now China´s Chery car sells more in Brazil than all makes of US cars. The US will never recover this market it has lost.

* It is now mainly invested in Treasury bonds with some setting at the Fed as "excess reserves." (Only they earn interest. The mandated 10% of deposit reserves do not earn any interest. The US does not call this confiscation of some money, like Cyprus was considering, but that is essentially what it is - an asset of the bank´s taken by law with no payment.) When bond prices start to fall, it will be a self accelerating process as many try to sell before taking even greater losses. Fed buying 85 billion of treasury bonds and mortgages each month is like having a tiger by the tail. - If Fed stops buying to hold interest low (turns the tiger loose) then interest rate rise and the non-Fed owners of bonds and mortgages try to quickly sell. - That may be the trigger of the run on the dollar I predicted 7 years ago to happen by Halloween 2014 but there are other triggers too. One being related to how I picked that date so long ago: As I knew way back then, everyday for a decade, 10,000+ baby boomers will be selling various assets or drawing down savings (which bank don´t much use to make loans, but use more to buy bonds). This baby boomer selling (both directly and indirectly by decreasing their savings) is steadily growing and an economic force cancelling out a ever increasing part of the Fed´s buying of bonds etc.

A well known economic/ stock market saying is: "Don´t fight the Fed." but that is exactly what the increasing selling of assets by baby boomer is doing and the end they will dominate (or Fed prints so much thin air money that dollar collapse with all knowing that the growing US debt can never be re-paid except by destroying the value of the dollar). Interesting to me, is that the Fed is now projecting it will throw in the towel about Halloween 2014, of course the don´t say it that way. They say their QEs will be no longer needed with the more healthy economy then.
But note that each QE has cost more than the prior one and that QEternal (QE3 to some) will costs slightly more than a trillion dollars per year! Even the Fed can not forever keep "doubling down" on it losses.

 

Let's cut through the chaff Billy T. The bottom line here is that your claim that the US is or has waged a currency war with Brazil is fiction, not fact. The evidence says the US has not waged a currency war against Brazil. And Brazil has not been damaged by the US stimulus. That is what the numbers say Billy T. If the US was devaluing its currency, its currency wouldn’t be appreciating in value as it has been, and you don’t have to be a rocket scientist to figure that one out. The US inflation you have been complaining about and prophesizing for the last 7+ years has failed to materialize.

The US Dollar has been appreciating in value against the Brazilian Real, the Euro, the Yen and several other currencies. If anything Brazil has benefited from the US stimulus, the US is Brazil’s second largest export destination. A collapse in of the US economy would have devastated Brazil. China stimulated its economy to a far greater extent than did the US but you remain amazingly mum on the Chinese stimulus.

 

Still just your assertion. Give some of that "evidence"

Yes it has been. Why the Finance minster is complaining about the currency war, but let me tell how I have seen the damage:
My wife spends hours shopping in the NYC Macy almost ever July. They are putting on sale the going out of season summer clothes but they are just coming into season in Brazil. I have learned that the only place I can sit and read while waiting without sales people asking if they can help is in the ladies shoe department. About 10 years ago I ran out of reading material and started picking up shoes to see where they were made. About 2/3 came from Brazil, which is natural as Brazil has the largest cattle herd in the world producing very cheap leather. Now almost all the Brazilian shoe factories that exported have closed. Back then the Real was quite weak. I got more nearly 100,000 Real for the 20,000 dollars my wife and I could move to Brazil with no forms to fill. I.e. better than 4 R$ /$. Now the dollar has become much weaker (or R$ stronger) and you don´t quite get 2R$ for a dollar. Effectively if the shoe for export were still made, they would cost the foreign buyers more than twice what they did back then but they are not completive anymore due to the currency war, so those factories have closed.

We in Brazil call the damage done mainly by the depreciation (over any 12 months you want to pick) dollar in the currency war "de-industrialization." Brazil is ever more and exporter of low value added commodities, thanks mainly to the declining dollar value (Yes you can fined period of even a few month when dollar has appreciated, but the multi year trend for more than a decade has been for the US to depreciate the dollar´s value - only way the debt can be paid, but no it is too large without more rapid and painful for Americans destruction of the dollar.

No you have to cheery pick the two dates, usually less than a year apart, which you compare to show that the value of the dollar is not in long term decline. The troubles in EU land have halted that decline some what as the dollar is less ugly than the euro for recent year or so and wealthy European have moved funds into dollars.

You will not find post with me doing that. I have always said the inflation in UDS will become quite serious when the 3+ and growing fiat money Fed has created begins to circulate and even recently in this thread told that it will circulate when bond interest begins to rise - Most holders of bonds will try to sell them at nearly the same time to stem their losses. - a self acceleration decline in bond and dollar values as all run for the exit door.

Relative to GDP that is true, but not very directly comparable as China still has a closed economy and a population that if they get more disposable income they, like US banks, don´t let it circulate but save it (about 50% of the money they not need to pay for real needs they save!)

SUMMARY: Try to find a graph showing more than a decade of dollar´s real value, purchasing power, of how dollar has appreciated as you claim - you won´t be able to as dollar has, and is, declining in value with fluxuations up for a few months, typically, or half a year at most. I recently read that dollar has lost 80% of it value since it became a pure fiat currency (no tie even to silver) in 1971 as I recall. It is late (past my bed time). Perhaps I will post some real data on dollar decline tomorrow. I quoted it in post in last day or two.

 

https://www.google.com/#hl=en&sclie...98,d.b2I&fp=a423c833da5f2123&biw=1140&bih=519

I am not cherry picking. Four years of data is not cherry picking.

http://www.tradingeconomics.com/united-states/currency

http://www.tradingeconomics.com/brazil/currency

 

Yes it sort of is. You have taken the period where dollar did not delcline because funds from EU were flowing into US. Here is the dollar´s decline over 10 year period showing what was happening prior to the trouble in Europe:

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This is end of longer decline shown in my 3d graph.

Here is the Brazilian real (wrt the dollar)for that same 10 year period. Note the Real was steadily growing stronger wrt the dollar until the troubles in Europe begin. Then both curencies grew stronger wrt to a basket; but wrt to each other, they had "range bound" variations (0.4 to 0.6 and now the Real equals $0.50 dollars)

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Note the Real was growing stronger till end of 2008 and recession start.


My claim, however was that the dollar was being devalued to make it possible to pay the fixed dollar part of the debt, Below is dollar´s value over much longer period than my 1st graph in terms of a basket of currencies, but they too are being devalued - just not as fast as the dollar is. I.e.
The US is winning the currency war (or race to the bottom for its currency value):

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Dollar NEVER had lower basket value!


Here is the text given with this last chart (found at: http://www.tradingeconomics.com/united-states/currency):

"..The United States Dollar Index or DXY measures the performance of the dollar against a basket of other currencies including EUR, JPY, GBP, CAD, CHF and SEK. This page includes a chart with historical data for the United States Dollar Index (DXY). .."

 

You try to sit and read in shops?
And then you wonder why sales staff bother you?
You sit and read in the ladies shoe department?
No wonder you are so rich!
Try this radical solution:
Sit in the cafe. Buy a coffee.

 

Yes, some years for 4 hours! but that department soon learns I´m not a bumb as wife keeps bringing purchases for me to hold while she shops for more.

 

The US stimulus did not occur until 2009. So your allegation that the stimulus was part of a currency war against Brazil is just not borne out by the evidence.

 

I don´t recall saying or implying the stimulus was the only cause of the dollar´s more than two decade decline wrt a basket of currencies. However, there were more and wilder ups and downs before the stimulus and Fed´s cheap money caused the term "currency war" to be created.

It was only coined a few years ago when US´s cheap money begain to do significant damage to others. - I.e. when Fed made interest rate 20 or more times lower than US had had historically so Americans could borrow cheaply and gain 15 times more just with deposits in foreign banks, as I did. Another name, and priviously used, before "currency war" existed was "dollar flood" - I´m cerainly guitly of being small part of that, but I do live in Brazil too, so perhaps don´t need to feel bad about it.