Wednesday, November 07, 2007


Alan Greenspan, the flimflam man of the century- his role was to periodically adjust two interest rates- the bank rate and the discount rate- which were always very close to each other ( the bank rate= the rate banks within the Federal Reserve charged each other; the discount rate was the rate banks outside the Fed were charged by the Fed, for loans. The Prime rate is something else altogether). The intent was to always keep inflation low, no matter what- so that investors would not see an erosion in the value of their Treasury notes, among other speculations. The workers (globally) be damned- unemployment as a result was considered to be OK. The low interest rates caused the housing bubble.
Greenspan never objected to Bush's deficits or tax giveaways to the rich- this could be offset by cutting benefits to the middle class and limiting social services- and states had to raise taxes in response, anyway. A Chimpanzee picking random numbers out of a hat could have done a better job than Greenspan.

America has to maintain over 730 military bases overseas- we can only do this if our currency is the worlds reserve currency. Once the dollars value drops below a certain point, our debt and trade deficit will wreck our world- our empire will vanish overnight. (Incidentally, China has zero military bases abroad).

A low dollar means= it will be harder (almost impossible, now) for the US to have its debt serviced by foreign countries- they are financing our debt by buying T-bills/bonds. Now other countries are dumping dollars and other US instruments like crazy, because the dollar is almost worthless. Soon, a few banks in Japan and China will dump most of their dollar reserves, and collapse the US economy.
( A low dollar also means that we cannot purchase as much from abroad. China and Japan face a quandary- stop lending to bolster our debt, because they don't want worthless paper...but if they dump their US reserves, we won't be able to buy anything from them at all, their domestic manufacturing base will be hurt- they will have to seek other geographic markets).

Our manufacturing base has been deliberately eroded over a 29 year period, swelling our trade deficit; this has caused a lot of the current crisis-America now just exports: chemicals, grain, telecommunications and auto parts, media, and weapons, mainly- these categories, except the last two, are declining. We can thank our myopic corporate/governmental heads and ignorant voters for the coming economic destruction of America.

Jim Rogers, an associate of billionaire George Soros, has sold all of his homes and earthly possessions so he can purchase China's Yuan.
Billionaire Warren Buffet several years ago dumped most of his American dollars- he saw the writing on the wall....

The future investor ought to consider precious metals, land, and commodities. One can survive the coming storm by being useful to the global elite. Expect high inflation, crushing interest rates, and $6 a gallon gasoline by the end of next year.


Blogger pilgrimchick said...

What the US government, and Greenspan, ought to realize is that they can't control inflasion. The result of these efforts can be seen all over the country in nearly every market right now.

5:13 PM  

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