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Does OPEC Mull Rejecting Federal Reserve Dollars?
2007-10-08 21:45:00
The Federal Reserve Dollar may be in for another big punch. Gulfnews banking editor Babu Das Augustine has raised the possibility that OPEC may switch from dollars to another currency, furthermore reducing the demand for the Dollar which gets shunned by more and more oil producing countries. Iran only accepts Euros or Yen and Venezuela dumped the greenback while countries in the gulf region move their funds away from it too.According to Das Augustine,"Asset diversification by the Gulf sovereign wealth funds and the possibility that the Organisation of Petroleum Exporting Countries (OPEC) will change the pricing of oil from the dollar to another currency could mean more trouble for the dollar."Quatar and Vietnam announced only a few days ago that they were shifting away from the ailing currency that was never worth less than nowadays.Analysts see the admission by Qatar as a signal that regional state-owned funds are moving away from the dollar.Qatar has admitted that its investment fund


US Congress Knows the Parallels Between 1929 and 2007
2007-10-07 20:03:00
I cannot recollect to have seen this congressional testimony by Robert Kuttner (pdf) from October 2 being reported in the MSM.It again confirms my view that shorting the financial sector and the Federal Reserve (not US!) Dollar as well as all US federal debt and using the profits to buy more precious metals is probably the most prudent investment strategy these days. I am most grateful for your other suggestions in comments.Read Kuttner's testimony in full (all emphasis mine):Testimony of Robert Kuttner Before the Committee on Financial ServicesU.S. House of Representatives Washington, D.C.October 2, 2007Mr. Chairman and members of the Committee: Thank you for this opportunity. My name is Robert Kuttner. I am an economics andfinancial journalist, author of several books about the economy, a magazine editor, and former investigator for the Senate Banking Committee. I have a book appearing in a few weeks that addresses the systemic risks of financial innovation coupled with deregulation
Read more: Congress , Parallels

ECB, BoE Leave Rates Unchanged Despite Inflationary Dangers
2007-10-04 19:00:00
Central banks in the Eurozone and Great Britain have left key interest rates unchanged in their meetings on Thursday.ECB president Jean-Claude Trichet delivered this key paragraph in his introductory statement at a press conference held in Vienna.To sum up, a cross-check of the information identified under the economic analysis with the outcome of the monetary analysis has confirmed the existence of upside risks to price stability over the medium term, against the background of good economic fundamentals in the euro area. Accordingly, and with money and credit growth vigorous in the euro area, our monetary policy stands ready to counter upside risks to price stability, as required by our primary objective. At the same time, given the heightened level of uncertainty, additional information is needed before further conclusions for monetary policy can be drawn. Consequently, the Governing Council will monitor very closely all developments. On the basis of our assessment, and by acting in
Read more: Leave , Rates

Eurozone Inflation Jumps the 2% Barrier
2007-09-28 13:12:00
Higher pasta prices in Italy, petrol for 1.20 Euros and much more per litre, espresso shots for 4 Euros and double-digit raises for communal and federal services finally show up in the Eurozone's official inflation rate - which is laughed at at best in Europe.A first estimate of Eurostat arrived at an annualized inflation rate of 2.1% in September after 1.7% in August.ECB Pumps Up Markets With Another 50 BillionIt won't get any better. Surging food and energy prices are complemented by fresh money from the ECB. According to data on its website the ECB created another 50 billion Euros in a 3-month repo that drew an average weighted rate of 4.63%, significantly above its target rate of 4%.Don't expect to find information on the volume of bids on the site of the "transparent" ECB, which also did not announce this repo beforehand to the wider public. This new transaction reverses almost half of the drain of 114 billion Euros last week. Money created solely for the purpose of supporting
Read more: Inflation , Barrier

There Will Always be Enough "Liquidity"
2007-09-27 22:55:00
Central banks have shored up financial markets again with freshly digitized money. New money that has no corresponding value in the economy and is solely used to support unsupportable prices of illiquid investment instruments.After the give-in of the Bank of England earlier this week, which came to the rescue of financial institutions where managers are obviously not worth their money but still want to cash bonuses before bankruptcies. After this 10 billion pounds stint in the UK the European Central Bank said its discount window has handed out 3.9 billion Euros on Wednesday.According to the Wall Street Journal,the heavy use of the marginal lending facility -- the highest since October 2004, when banks borrowed €7.9 billion -- surprised money-market dealers, as it is regarded as lending of last resort."It is most remarkable, because it happened not at the end of the statement period but in the middle of it," said Jose Alzola, chief European economist at Citigroup.The rate at which ba
Read more: Enough , Liquidity

Treasury Signals Derivatives Mess Is Far From Over
2007-09-26 20:51:00
It appears as if the US Treasury expects a fallout in the derivatives market. Anthony Ryan, the Treasury's assistant secretary for financial markets, said on Wednesday that investors and their fiduciaries must do a better job of evaluating the risks of increasingly complex securitized derivatives products, Reuters reported.Addressing an International Swaps and Derivatives Association (ISDA) conference in New York Ryan reminded his audience on the differences between investing and gambling.Insufficient understanding or failure to perform an independent and adequate due diligence prior to making an investment decision is simply unacceptable. That's not investing - that's gambling.In clear language I assume it means something along the lines of "it is your fault when you bought illiquid crap."According to Ryan the Presidents Working Group on Financial Markets, also dubbed the "Plunge Protection Team," has launched an examination of recent market turmoil, including the impact of securit
Read more: Signals

The Federal Reserve Dollar Loses Its Face
2007-09-25 14:19:00
The Federal Reserve (not US) Dollar slumped to a new alltime low on Tuesday, trading at more than $1.4150 to the Euro.The USD index slid to the new record low of 78.14.PICTURE: Certainly not as good as gold. In 94 years the Federal Reserve Dollar has lost more than 95% of its value. Drawing courtesy of Milt Priggee.


Numbers Speak a Clear Language
2007-09-20 15:37:00
A list of today's records reads like this:HIGHSGold climbs to a 28-year high at $737Oil closes at the all-time high of $83.32LOWSThe Federal Reserve Dollar falls to an all-time low at $1.41 to the EuroThe Canadian Dollar trades on a par with the Federal Reserve Dollar for the first time since 1975Next to this Thursday proved that the 2-hour relief rally in Treasuries after the Fed's rate cut was only such. The 10-year yield raced 15 basis points to 4.67%.Maybe these rapid moves base on first signs that now Saudi Arabia says "bye bye" to the Federal Reserve Dollar, a currency moving closer to its collapse with every day.From The Telegraph:Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East."This is a very dangerous situation for the dollar," said Hans Redeker,
Read more: Numbers , Clear

Nanny Benny
2007-09-18 23:40:00
The kid cried and Nanny Benny was quick to wipe off the tears and say, "everything will be allright."Only problem in the current Fed fairy tale: Both parties involved have forgotten about the burning house!Jim Cramer can uncork a bubbly. His outcry on tout TV was answered swiftly and generously by the Fed. Forget about $81 crude oil and fiscal philandering, let's keep the markets party going at truly all costs.Today's 50bp rate cut to a Fed funds rate of 4.75%, the first in 4 years, will backfire after an initial relief rally.The aggressive move (on the wrong side) after 17 ascending baby steps may appeal to banks suffering from a credit crunch that is rather a credibility crunch. It will also appeal to debtors whose mortgage adjustment will be delayed for another year and may even offer the chance for some to refinance at a better rate. It will also appeal to the big spenders in the White House.But will it also appeal to creditors financing the permanent US spending spree?Let's not


Venezuela Dumps Federal Reserve Dollar for Oil Payments
2007-09-17 12:34:00
Venezuela will not accept Federal Reserve Dollar s for payments of oil deliveries anymore.Venezuelan President Hugo Chavez instructed Petroleos de Venezuela SA, the state oil company, to convert its investment accounts from dollars to euros and Asian currencies to reduce risk, Bloomberg reported.Chavez, speaking in his weekly address on national television, said the U.S. has bought goods from around the world, paying with paper that is "a bubble."The world's oil trading system has primarily used dollars for decades, helping to make the dollar into a global currency. Iran in July requested yen rather than dollars for all shipments to Japan, boosting that currency.Chavez has said in the past that he wants to divert Venezuelan oil sales from the USA to other clients, especially China.Venezuela and China will work together on a $10 billion project to build six refineries and a shipping company to make Venezuela one of China's most important suppliers. Still, the U.S. continues to import 1
Read more: Venezuela , Dumps

Greenspan's Kiss & Tell
2007-09-16 23:16:00
Easy Al will keep 'em forecasts coming. Former Federal Reserve chairman Alan Greenspan will continue to rattle markets with his economic predictions. His successor Ben Bernanke won't be delighted to hear Greenspan repeatedly defending his public comments on the economy, interest rates and whatever else the former Fedhead elects worthy his suddenly very clear speech.Otherwise today's interview on CBS (which was cut short by my cable provider in favor of elegant and silent killer whales after two thirds) informed us that Greenspan prefers, ahem, "interesting" orange wallpaper and reads - surprise surprise - economic stuff at breakfast. Rumours he negotiates a 10-page photo-strip with "Beautiful Homes" have not been confirmed yet. He still wears no logo polo shirts so sponsoring for the right sum should be no problem.Relaxed to the max Mr. Greenspan's economic services firm is prepared to bring paying clients such economic wisdom as there will be severe 2-digit declines in house price


US Mint Suspends Gold Coin Sales Due to Raising Prices
2007-09-14 11:50:00
Is the USA running out of gold?The US Mint has suspended all sales of most bullion coins on Thursday. A visit to its website shows that all golden American Eagle coins are "not available." This info is hidden on the product pages without a corresponding press release. The US Mint had limited bullion coin sales to a maximum of 10 ounces per order earlier. The Mint will reprice these coins by September 27, it said. Confirmed orders will still be shipped.US gold reserves have not been audited in more than 40 years and are valued at $42 in the Fed's publications. The USA does not take part in the central bank gold sales agreement which runs until September 2009 and limits gold sales to 500 tons per year.The info page for the 2007 American Eagle says,"due to the increasing market value of gold, the American Eagle Gold Uncirculated Coins are temporarily unavailable while pricing for this option can be adjusted; therefore, no orders can be taken at this time. We expect products to be availab
Read more: Raising , Prices , Suspends , Sales

ECB Gives Banks Another Fix
2007-09-12 10:38:00
Eurozone banks scrambled for another round of freshly minted money handed out by the ECB in dimensions not seen before.Two weeks after their last extraordinary 3-month repo with a volume of 50 billion Euros the ECB injected another 75 billion Euros into the money market at markedly higher rates on Wednesday after draining 60 billion on Tuesday. This contradicts the calm picture ECB president Jean-Caude Trichet had delivered to the European Parliament only a day earlier.The new 3-month tender was allotted at a marginal rate of 4.35% and a weighted average of 4.52% or 10 basis points lower than the last 3-month repo but still significantly above the ECB's target rate of 4%. The 3-month Euribor was quoted at 4.74% on Wednesday.The ECB website does not offer information about the actual volume banks bid for and in genral does not provide a conclusive overview of its money creation process. The ECB's website also lacks all the statements about the money market handed out to the wire servi


Seven Seas Full of Free Energy
2007-09-12 10:26:00
A cancer researcher has found a way to burn salt water with radio frequencies, exciting scientists about the use of the world's most abundant element to generate energy. In the light of today's new record oil price, quickly approaching the $80 barrier this is a most remarkable innovation. Better hedge those energy stocks.From a Yahoo report:John Kanzius happened upon the discovery accidentally when he tried to desalinate seawater with a radio-frequency generator he developed to treat cancer. He discovered that as long as the salt water was exposed to the radio frequencies, it would burn.The discovery has scientists excited by the prospect of using salt water, the most abundant resource on earth, as a fuel.Rustum Roy, a Penn State University chemist, has held demonstrations at his State College lab to confirm his own observations.The radio frequencies act to weaken the bonds between the elements that make up salt water, releasing the hydrogen, Roy said. Once ignited, the hydrogen will
Read more: Seven , Energy

Look Here For an Inflation Proof Currency
2007-09-12 02:01:00
I knew it. This headline draws attention these days. As the world wakes up to the fact that all currencies are created out of thin air by a simple entry into the electronic ledgers of the world's central banks investors begin to look for investments whose safety does not depend on an agency rating.This chart from the World Gold Council may help your investment decisions.GRAPH: This chart is a very graphic description what happens once nations abolish the gold standard in favor of unbacked fiat currencies. Remember: No fiat currency has existed longer than a human's lifespan and the Federal Reserve Dollar is already a Methusalem at 94 years. Chart courtesy of World Gold CouncilThe accompanying text makes a very important point: In the very long term only gold has proven absolutely inflation proof.The value of gold, in terms of the real goods and services that it can buy, has remained largely stable for many years. In 1900, the gold price was $20.67/oz, which equates to about $503/oz i
Read more: Inflation , Proof , Currency

My Question About 9/11
2007-09-11 11:11:00
If jet fuel burns at 980 centigrades and steel melts between 1,325 and 1,530 centigrades, what really happened to bring down the first skyscrapers by fire in history?A more intense discussion of this physical impossibility would be the best service the world can give to those who perished in this hellfire.My thoughts are with all innocent victims of 9/11 and its worldwide aftermath that leads to a totalitarian world in which peaceful protest will soon become impossible if citizens do not execute their rights.For more on the growing similarities between the Bush administration and the Nazis click here. It has only become worse since.
Read more: Question

Liquidity and Safety Are Two Pairs of Shoes
2007-09-10 08:33:00
Long dated US Treasuries reversed part of their dramatic gains on Monday, dragged down by worries that foreign investors were actually dumping US debt paper in last week's run-up. According to a Bloomberg report America's creditors actively pursue a diversification of their assets, shifting away from the Federal Reserve Dollar. The next Treasury Inflow Capital data will bring more clues about the amounts moved.Investors are correct by doing so. Last week's flight into US Treasuries was a flight into liquidity but certainly not a flight into safety unless one is satisfied with nominal and not real returns.It appears a bit illogic to consider debt obligations from the biggest debtor the world has ever seen as a safe investment. Let us not forget that the AAA rating for US IOU's has never changed since debt has been rated. The paramount difference is, though, that the USA was the world's biggest creditor when it aquired its AAA rating. Now it is the biggest debtor and to keep the US
Read more: Safety , Liquidity , Pairs

Greenspan Suffers From Acute Total Amnesia
2007-09-07 10:39:00
Alan Greenspan takes another step down. After his transformation from "Maestro" to "Easy Al" he now fights for the nickname "Greenshill", at least when one follows his comments from Friday. Alan Greenspan, the man solehandedly responsible for the mortgage mess concluded in a speech to economists that today's turmoil resembles the sentiment before the crises of '87 and '98. According to him the mortgage malaise has infected the rest of the economy. This assessment comes from the man who preferred to douse every monetary inflationary excess with more of the poison that caused all exaggerations in the first place.Greenspan must suffer from acute total amnesia. It was him who once praised the doubtful fact that all Americans could buy a house because there were such financial innovations like zero down ARMs.Greenspan did not turn a nation into homeowners. Greenspan pushed a whole nation into the highest debt ever, be it on the private, communal or federal level.To say now that bubbles c
Read more: Amnesia , Total

Silver Costs 10% More in China
2007-09-06 14:43:00
Attention silver investors. Silver is bought and sold some 10% above the global spot price in China , a Reuters dispatch informs, quoting Ellison Chu, senior manager at Standard Bank London in Hong Kong."There's a huge price difference between the domestic price in China and the international price. The demand is quite strong in China these days.The price in China is 10 percent higher than in the international market."This news is insofar interesting as it raises the question whether the global spot price is valid anymore. Obviously not when such discrepancies occur.A similar gap between the spot price and prices actually paid occurred in late 2006 when silver bullion was bought at prices some 10% higher than spot prices would have indicated in Europe. This was because of a supply shortage as I was told by sellers who predict that the supply problem will only grow in the near future.According to the report demand for silver comes from all corners: Jewellery, photography, industrial an
Read more: Costs

Central Banks Continue on Path of Monetary Inflation
2007-09-06 11:33:00
The European Central Bank donned its two masks again on Thursday. With one hand the ECB decided at its monthly meeting of the governing council to leave the key interest rates unchanged while the other hand continued to create fresh money, showering bidding banks with 42.2 billion Euros in a new overnight tender that drew an average rate of 4.13% or 13 basis points more than the current key overnight rate.The Bank of England (BoE) left its key interest rate unchanged at 5.75% too.In the USA the Federal Reserve allotted a total of new $23 billion in a 1- and 2-week tender besides replacing yesterday's 1-day repo.And they want to make us believe markets are returning to normal. Money market rates tell a very different picture and I rather rely on the data than the propaganda coming from central banks. And in this reality banks are scrambling to borrow funds at rates significantly higher than what the priests of ever expanding credit would like to see implemented.if there were no crisis,
Read more: Continue , Inflation

Full Basket of Worries in the EU
2007-09-04 15:06:00
While the world is focused on the lips of Fed chairman Ben Bernanke, recent European data show that the old world is sliding into a growth problem that could be used by ECB president Jean-Claude Trichet to cut rates at the next governors' meeting.Eurostat released declining GDP growth figures for both the Eurozone and the EU27, stemming from higher consumer expenditures but decrasing business investment. Compared with the second quarter of 2006, seasonally adjusted GDP rose by 2.5% in the euro area and by 2.8% in the EU27, after +3.2% and +3.3% respectively for the previous quarter.Q3 started on a negative note datawise. Eurozone producer prices advanced 0.3% MOM in July after a gain of 0.1% in June. The July YOY figure stands at 1.8%, helped by a decline in energy prices.ECB Pours Markets One MoreThe European Central Bank poured one more for banks suffering from a backlog in clogged deals now believed to hover around the $500 billion mark.It allocated 256 billion Euros in its regular
Read more: Basket

Bernanke: No Bail Out for Lenders or Investors
2007-08-31 12:10:00
Federal Reserve chairman Ben Bernanke delivered a clear message. There will be no bail out of lenders or investors.Markets had rather hoped that Bernanke would indicate he has an interest rate cut up his sleeve but went nevertheless northwards, brushing away a message from president George W. Bush who announced measures to help debtors in preventing a foreclosure, but ruled out assistance to speculators. Except for bonds everything else went up too: oil, foods, the Federal Reserve Dollar and precious metals.In his speech at the Fed's annual equivalent of a summer picknick in Jackson Hole Bernanke briefly touched the Fed's short term agenda before entertaining high calibre guests with a historical timeline of the US housing market.It is not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions. But developments in financial markets can have broad economic effects felt by many outside
Read more: Investors , Lenders

A Few Interesting News of the Day
2007-08-30 12:51:00
Markets were rangebound on Thursday ahead of Fed chairman Ben Bernanke's speech on housing and monetary policy he will deliver on Friday in Jackson hole.Today's release of strong GDP figures for Q2 will not ease the task of the Fed chairman who is expected to hint at lower interest rates in order to shore up markets dependent on daily cash infusions by central banks. The BEA released a preliminary growth figure of 4.0% for Q2 2007 that stems from stronger exports and nonresidential construction and higher government spending, predominantly in the form of defense expenditures and the running costs of the Iraq war.The turmoil in mortgage backed securities currently benefits Treasuries tremendously.GRAPH: 10-year Treasuries have eroded almost all losses, benefitting from the flight from mortgage backed securities. Chart courtesy of Yahoo.A wave of downgradings of mortgage or asset backed securities will make many a pension fund manager sweat these days. According to a Bloomberg story so


ECB Prints More and Changes Its Rules
2007-08-29 14:17:00
Don't let yourself fool by today's relative calm in the markets. Central banks continue to inundate markets with fresh money as predicted yesterday. The European Central Bank today pumped another 50 billion Euros into markets. The 3-month repo is a costly affair though. The ECB accepted minimum bids at 4.56% and reported an average rate of 4.62%. A week earlier a tender with the same volume saw a marginal rate of 4.49% and an average rate of 4.61%.In a different release the ECB announced that it will amend the rules governing its forex management.On 20 July 2007 the Governing Council adopted a Guideline amending Guideline ECB/2006/28 on the management of the foreign reserve assets of the European Central Bank by the national central banks and the legal documentation for operations involving such assets (ECB/2007/6). The Guideline will be published shortly in the Official Journal of the EU and on the ECB’s website.Let's see what this will be about.A look at the ECB's balance sheet
Read more: Rules

Markets Watch the Fed - But What Does the Fed Watch?
2007-08-28 14:41:00
It is a well known fact that market participants watch the Federal Reserve in order to predict future moves. But what is known about the process how the Fed watches the economy?Taking the latest Federal Open Market Committee (FOMC) minutes from the August 7 meeting it appears the FOMC relies heavily on lagging indicators. Reading the minutes results in a lengthy review of the then most recent economic indicators but what is missing is a more intense discussion of the future. Having a bunch of economists at one table whose profession is to forecast the future makes it hard to believe that the FOMC only ticks off recent data and then has a cup of tea.But the minutes leave this impression, especially as there is only one slight hint that would suggest that the Fed knew of the brewing trouble in money markets that would force it to cut the discount rate only 10 days later. Takers at this window of last resort were not to be seen despite some leading banks who grudgingly grabbed $2 billion
Read more: Markets

ECB Drowns Markets In "Liquidity"
2007-10-10 16:15:00
The European Central Bank (ECB) has added 55 billion Euros "liquidity" in its latest regular one-week tender on Wednesday. Bids for 218 billion Euros were accepted at a minimum rate of 4.12% and the weighted average rate came in at 4.16%, still above the reference rate of 4%. In so called "other operations" the ECB drained 24.5 billion Euros. As the ECB website information painstakingly avoids to list its money market operations in chronological order (as the Fed NY does) I am at a loss to explain where this was drained from. Single data points only are not exactly the kind of transparency Europe's high priests of ever expanding credit always like to praise so much.It is ECB policy though. Only a day earlier ECB president Jean-Claude Trichet had told the European Parliament, Euro bankers should apply "verbal discipline." I would say, a sound policy would help more to calm markets which bid cash gold to a new 28-year high at $743.In order to find out how much "liquidity" is currently c
Read more: Markets , Liquidity

FOMC Says Data Has Limited Value
2007-10-10 02:03:00
It appears that Jim Cramers infamous outburst on TV has led the Federal Reserve into a panic action at its latest Federal Open Market Committee (FOMC) meeting. According to the FOMC minutes published on Tuesday policymakers brushed away economic data and preferred to give markets a shot in the arm with its 50bp cut of the Fed Funds rate to 4.75%.Here comes the lengthy explanation from the FOMC that tries to justify a rate cut I still consider most inappropriate in a time when surging commodities prices show that even a downturn in the USA will be offset by continuing strong demand from the economic powerhouses in the Eastern hemisphere.From the FOMC minutes:In the Committee's discussion of policy for the intermeeting period, all members favored an easing of the stance of monetary policy. Members emphasized that because of the recent sharp change in credit market conditions, the incoming data in many cases were of limited value in assessing the likely evolution of economic activity and
Read more: Value

FOMC Rate Cut Will Not Change The Fundamentals
2007-10-29 11:46:00
Who wants to be in the shoes of the Federal Open Market Committee (FOMC) on Wednesday? Escalating market pressure for a rate cut collides with a horrible inflation outlook as exploding oil prices start pushing commodities higher. Will there be enough hawks defending at least stable rates or will the doves led by Nanny Benny cave in to panicking markets and do the worst of all by cutting rates further? Chances are the FOMC will do nothing in a situation that would require a rate hike if fighting inflation is still a predominant concern which can be doubted in the face of the housing and mortgage bust.Alan Greenspan once called gold a very reliable inflation indicator. A study that proves gold's high correlation with inflation can be found here. As the oldest currency in the world has jumped to $795 in Asian trading on Monday it appears the world is headed for markedly higher prices soon. Oil's ascent above $93 is poised to add to the spin of the inflation spiral that can be seen so cl
Read more: Change , Fundamentals

Worthless Billions Won't Solve a Trillions Problem
2007-12-19 13:55:00
Welcome to the inflationist days. Central banks are pouring money in unprecedented amounts into markets reeling from an insolvency crisis that cannot be solved by throwing artificially created bills of credit onto a market while accepting dubious collateral. Just have a look at the explosive growth of "other assets" in the ECB's balance sheet. At the same time European central banks salt away their only asset with alpha performance: gold holdings in ounces keep declining, and this practice has never been questioned by politicians so far. Is it ignorance or incompetence? Watching ECB president Jean-Claude Trichet telling a very empty European Parliament on Wednesday nothing new about the current crisis it enforces my belief that European politicians do not have the faintest idea how grave the situation is."Liquidity" actions by central banks will not help to avoid but only delay the inevitable process of deflating the layers of debt created in this century. After all what is a few hun
Read more: Problem , Solve , Billions

Central Banks in Full Assault on the World's Forests
2008-03-12 00:02:00
In another probably vain effort to stabilize markets reeling from too much leverage six central banks have committed themselves to printing more or less unlimited money in the foreseeable future. The Federal Reserve's announcement to now also accept MBS from private investors as collateral with a volume of up to 200 billion Federal Reserve Notes (FRN's) dwarfs the liquidity measures of the ECB, the Bank of England, the Bank of Japan, the Swiss National Bank, the Swedish Rijksbank and the Bank of Canada. Their statements collectively said that they would provide basically as much freshly digitized money as commercial banks would require in order to try to iron out the mess they created in the first place with their lowered credit standards.Markets are brimming with rumours that the Fed may
Read more: Central , Assault , World

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