Wednesday, November 24, 2010

Strike against austerity cuts brings Portugal to a halt

From the BBC:

Portuguese rail, air and other services have ground to a halt as workers strike over the Socialist government's planned cuts to ease the debt crisis.

Rail services were paralysed from the north to the south, with nearly 80% of trains not running, and the national airline TAP cancelled most on

End of Empire - The 1st Ammendment and Press Freedom is DEAD

End of Empire - Yuan begins trading against the Rouble

This is the sleeper story of this decade, in a 100yrs time this event will feature prominently in the text "Rise and Fall of the American Empire". The exact same thing happened at the start of the fall of the Roman Empire, due to increasing levels of currency debasement (QE) the outlying Roman vassal states (UK, Ireland, etc) started to reject the coin of the empire and started trading in local currencies. Rome tried to stamp out the practice but it found it's mercenary army (contractors) rejected payment in debased Roman currency and went back to their farms.

Now we are in 2010 and the world's largest holders of proven oil and gas reserves (Russia) are trading with the world's second largest oil and gas consumer (China) with both rejecting the US Empire's debased currency as the means of exchange. I would say this is the thin edge of the wedge but this is more the sledgehammer than the wedge - the US$ has just been shot in the head.

From the China Daily:

SHANGHAI - China started allowing the yuan to trade against the Russian rouble in the interbank market from Monday as policymakers promote the currency's use in global trade and finance.

The move will help "facilitate bilateral trade between China and Russia and help develop yuan trade settlements," according to a statement published on the website of the China Foreign Exchange Trade System (CFETS), a subsidiary of the People's Bank of China.

The central bank calculates the daily reference rate by taking an average of quotes from commercial banks designated to act as market makers, the statement said.

"The pace of internationalizing the yuan is accelerating," said Zhao Qingming, a senior analyst in Beijing at China Construction Bank Corp, the country's second-largest lender.

"The direct trading between the yuan and the rouble will help expand trade settlements in the two currencies."

China is allowing greater use of its currency for cross-border transactions to reduce reliance on the US dollar, after Premier Wen Jiabao said in March he was "worried" about holdings of assets denominated in the greenback. Purchases of US currency to contain yuan gains contributed to a $194 billion increase in the nation's foreign-exchange reserves in the third quarter, boosting the total to a record $2.65 on

Obama - North Korea is a serous threat

From the BBC:

US President Barack Obama has strongly condemned North Korea's shelling of Yeonpyeong island in South Korea and said the US would defend South Korea.

Mr Obama told ABC News that North Korea was "a serious and ongoing threat that needs to be dealt with".

The attack near a disputed sea border was also denounced by Russia, Japan and the European Union.

South Korea returned fire and threatened missile strikes if there were "further provocations" on

Keiser Report - The Silver Revolt

Mike Maloney & Max Keiser - Part II "Off with their Heads!!"

Band-Aid Solutions

By Puru Saxena

BIG PICTURE - Lets face it, governments always try to 'kick the can down the road'. Rather than deal with economic issues in the here and now, they prefer to postpone the pain. Unfortunately, in their attempt to avoid painful economic recessions, the policymakers sacrifice the purchasing power of their currencies and they end up creating even bigger troubles for the future.

Look. The 'Great Recession' in the developed world was brought about by excessive debt and consumption. In the boom years, millions of Americans borrowed copious amounts of money to buy real-estate; they used their homes as a source of funding (home equity withdrawals) and spent way beyond their means. In those heady days, everyone was convinced that real-estate prices could not decline on a country wide basis. Unsurprisingly, the bankers gladly supported this misconception by providing cheap fuel to the raging speculative fire. The end result was that unworthy debtors were able to purchase several properties and real-estate prices appreciated on


Richard J. Greene
When Ronald Reagan became President of the United States some people were surprised that an actor could reach such a high level of government service. Do you think maybe it could work in reverse and that these two in government "service", Ben Bernanke and Timothy Geithner, could make it in the acting business? They certainly have had some on the job training and I guess you could say their ongoing screen tests have passed with flying colors.

Most recently, Geithner stated, "It is very important for people to understand that the United States of America and no country around the world can devalue their way to prosperity, to (be) competitive" and "It is not a viable strategy and we will not engage in it." His ability to voice these words with a straight face, admittedly, was most impressive yet the fact that the Federal Reserve has been employing this strategy for the past 97 years with the American people remaining oblivious, take a little away from his performance. Apparently Americans believe professional wrestling is the real deal also. Yet Geithner has every reason to remain optimistic because if the American people ever wise up Geithner's performance before Chinese college students should still give him hope. When Geithner proclaimed in a speech to Chinese university students that the US believes in a strong dollar policy they literally laughed him off the stage which bodes well for Geithner's possibilities as a comedic actor. He could easily be the next Steve Martin or John Candy. Maybe even Abbott & Costello as Bernanke has shown outstanding ability as a straight on

Ben Bernanke Has Made A Very Dangerous Bet

Graham Summers
21 November 2010
The Fed's Quantitative Easing 2 announcement of $600 billion in additional Treasury purchases is literally a "bet the farm" move. True, the Fed had already engaged in an unbelievable amount of bailouts both known and unknown. However, the Fed's previous moves were all made when 1) the world financial system was teetering on the brink of collapse and 2) other countries were engaging in similar practices.

In contrast, the Fed's new QE 2 announcement comes at a time when the consensus is that the US economy is recovering (I don't buy it, but most analysts/ commentators do) and other central banks have publicly declared they won't be engaging in additional easing (the ECB and UK) or are outright tightening credit and raising interest rates (China and Australia) on