Living On A Prayer

Euro Rises On Wings Of Inflation Hawks
LONDON - Any hopes that the dollar could regain some of its lost ground against the euro were dashed on Monday as the European Commission warned that it expects inflation within the 15 nation euro zone to rise to 3.2% for the year. This adds to pressure on the European Central Bank to refrain from a confidence-boosting interest-rate cut.
http://www.forbes.com/markets/2008/04/28/europe-inflation-ecb-markets-equity-cx_vr_0428markets12.html

Trichet: Policy Stance Helps Achieve CPI Stability
VIENNA (Dow Jones)--The European Central Bank's monetary policy stance contributes to achieving price stability, but there is no cause for complacency, ECB President Jean-Claude Trichet warned Monday.

The euro is a stable and credible currency and has protected euro-zone economies from external shocks.

"Yet there is no reason to be complacent; the present circumstances continue to be very demanding," Trichet said in the text of a speech to be presented at an economics conference hosted by the Austrian central bank. "I am confident that the Eurosystem, through its stability-oriented monetary policy strategy will stand up to these challenges and be successful in maintaining price stability in the euro area."

Trichet reiterated that anchoring inflation expectations is particularly important during times of financial market turmoil. However, it is important to distinguish between policy and market liquidity operations, and policy decisions will be made on the basis of price stability alone.
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=e07a6d97-a90f-460e-9175-b1982e115db5

Much of the basis for the belief that the US Dollar will stabilize and rise from recent record lows is the belief that the ECB is going to have to cut interest rates in the Euro zone the way the US Fed cuts them in America. Nothing could be further from the truth. The ECB members are steadfast inflation hawks. They will not cut interest rates because of political whim as they have here is the US.

There is also the false hope here in the US that the Dollar will stabilize because of the belief that smaller interest rate cuts by the Fed, couple with a pause in cuts, signals that the "all clear" for the financial hurricane has been sounded. Again, nothing could be further from the truth. Any pause in Fed cuts will be simply because the Fed doesn't have much left in the way of ammo to cut rates further at this time. They have to keep a little of their powder dry just in case of [another] crisis. Perhaps their assurances that the Bush Stimulus Package will stave off a recession, and save the economy, will prove to have been wishful thinking [likely scenario]. Perhaps their assurances that inflation will moderate in the second half of this year will also prove to have been wishful thinking [again, likely scenario]. Perhaps the truth about Alt-a mortgages and commercial real estate CDOs will come to light and accelerate and exacerbate the ongoing credit crisis [very likely scenario]. Or maybe one of these conniving ratings agencies will finally down grade Ambac Financial Group and touch off a bond catastrophe as the truth about Ambac's ability to insure all the bonds it stands behind comes into question. Why this hasn't happened already is one of the greatest untold travesties of this entire credit crisis to date. It is an outrage... Read more about that below in an essay from by Martin D. Weiss, Ph.D.

The Great Bond Insurance Cover-Up
Our nation's largest bond insurers are collapsing as we speak, but Wall Street's leading rating agencies are covering it up while regulators look the other way.

Just last week, Ambac Financial Group, the parent of the second-largest bond insurer, shocked analysts with first-quarter losses of $1.66 billion — on top of $3.64 billion in the previous six months.

And the underlying facts denote a company in a death spiral...

...devastating losses, its entire business model on the rocks, a cash squeeze and even questions being raised about its future solvency — you'd expect Wall Street's rating agencies to immediately announce deep downgrades in one fell swoop.

But they did precisely the opposite. On Wednesday, Standard & Poor's announced that Ambac's triple-A is "solid," and on Thursday, Moody's also reaffirmed its Aaa rating of the company.
http://www.moneyandmarkets.com/Issues.aspx?The-Great-Bond-Insurance-Cover-Up-1707

The essay is a must read. It is sure to piss you off. As each day passes I am more shocked at what the government is not only doing, but condoning, in the name of "the public's interest". Poppycock! The government is colluding with the banking industry to save the banking industry's asses at the expense of the taxpayer. The have no other interest in the public's well being other than to fleece them for all they can. The people elected this government, it's high time they elect to replace them.

The Truth About the Gang of 545
by Charlie Reese
545 People

“Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits?

Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

You and I don't propose a federal budget. The president does.

You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.

You and I don't write the tax code, Congress does. You and I don't set fiscal policy, Congress does.

You and I don't control monetary policy, The Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 300 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress.

In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank.

I excluded all the special interests and lobbyists for a sound reason. They have no legal authority.

They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing.

I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.

Those 545 human beings spend much of their energy convincing you that what they did is not their fault.

They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall.

No normal human being would have the gall of a Speaker, who stood up and criticized the

President for creating deficits.

The president can only propose a budget.

He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of

Representatives for originating and approving appropriations and taxes.

Who is the speaker of the House?

She is the leader of the majority party.

She and fellow House members, not the president, can approve any budget they want.

If the president vetoes it, they can pass it over his veto if they agree to.

It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted -- by present facts - of incompetence and irresponsibility.

I can't think of a single domestic problem that is not traceable directly to those 545 people.

When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it's because they want it unfair. If the budget is in the red, it's because they want it in the red.

If the Marines are in IRAQ, it's because they want them in IRAQ.

If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.

There are no insoluble government problems.

Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power.

Above all, do not let them con you into the belief that there exists disembodied mystical forces like 'the economy,' 'inflation' or 'politics' that prevent them from doing what they take an oath to do.

Those 545 people, and they alone, are responsible.

They, and they alone, have the power.

They, and they alone, should be held accountable by the people who are their bosses - provided the voters have the gumption to manage their own employees.

We should vote all of them out of office and clean up their mess!”

Read more about the mess these 545 people has created here:
Predators and Recession
http://news.goldseek.com/GoldSeek/1209153671.php