Record investment inflows will overwhelm this market and send it significantly high as the economic, financial and soon to be monetary crisis unfolds further.”
-Peter Spina, http://www.goldseek.com/email/lt/t_go.php?i=1445&e=MjAwNTg=&l=-http--www.goldforecaster.com/
Probably the most over used phrase by the financial boob tube, and the financial media in general is "things are worse in Europe than they are in the US". But are they, really? Never lose sight of one simple fact: The global financial catastrophe was bread, conceived, and born in the USA. It is the country's #1 export. The US Federal Reserve and it's mountains of Monopoly Money are its progenitors.
"The Federal Reserve Is the Culprit!
Watch Ron Paul's statement before congress on February 25, 2009 here:
Text of Congressman Paul's statement:
Statement of Congressman Ron Paul
United States House of Representatives
End the Fed
February 25, 2009
United States House of Representatives
End the Fed
February 25, 2009
The Federal Reserve’s low interest rate policy is a big mistake; it is not a panacea.
Artificially low interest rates are achieved by inflating the money supply. Low interest rates penalize the thrifty and those who save are cheated. It promotes consumption and borrowing over savings and investing. Manipulating interest rates is an immoral act. It’s economically destructive.
The policy of artificially low interest rates caused our problems and therefore cannot be the solution. The market rate of interest is crucial information for the smooth operation of the economy. A central bank setting interest rates is price fixing and is a form of central economic planning. Price fixing is a tool of socialists and destroys production. Central bankers, politicians, and bureaucrats can’t know what the proper rate should be. They lack the knowledge and are deceived by their own aggrandizement.
Manipulating the money supply and interest rates rejects all the principles of the free market. Ironically free markets and sound money generates low rates, but unlike the artificially low rates orchestrated by the Fed, the information conveyed is beneficial to investors and savers. The Congress, by conceding this authority, conveys extraordinary economic power to the elite few. This is a power that has been abused throughout history. Only the Federal Reserve can inflate the currency, creating new money and credit out of thin air, in secrecy, without oversight or supervision. Inflation facilitates deficits, needless wars and excessive welfare spending.
Debasing a currency is counterfeiting. It steals value from every dollar earned or saved. It robs the people and makes them poorer. It is the enemy of the working man. Inflation is the most vicious and regressive of all forms of taxation. It transfers wealth from the middle-class to the privileged rich. The economic chaos that results from a policy of central bank inflation inevitably leads to political instability and violence. It’s an ancient tool of all authoritarians. Inflating is never a benefit to freedom loving people. It destroys prosperity and feeds the fires of war. It is responsible for recessions and depressions. It’s deceptive, addictive and causes delusions of grandeur with regards to wealth and knowledge. Wealth cannot be achieved by creating money by fiat. It instead destroys wealth and it rewards the special interests.
Depending on monetary fraud for national prosperity or a reversal of our downward spiral is riskier than depending on the lottery.
Inflation has been used to pay for all wars and empires. And they all end badly. Inflationism and corporatism engenders protectionism and trade wars. It prompts scapegoating: blaming foreigners, illegal immigrants, ethnic minorities, and too often freedom itself for the predictable events and suffering that result. Besides, the whole process is unconstitutional. There is no legal authority to operate such a monetary system. So let’s stop it. Let’s restore a policy of prosperity, peace, and liberty.
The time has come. Let’s End the Fed.
Ron Paul Introduces Bill to Audit the Fed
February 26, 2009
I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.
Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.
Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed’s susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests.
The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed’s negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates.
More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.
The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.
But I digress, are things really worse in Europe than they are in the US? Hardly! In fact, with the release this past Friday of the US "preliminary" GDP numbers, Europe looks like the belle of the ball next to the slovenly US, the purveyors of global financial destruction. 4th Quarter 2008 GDP in the Eurozone, announced February 13, 2009 came in at -1.5%. US GDP just announced came in at -6.2% for the 4th Quarter 2008. No I'm no math genius, and I won't pretend to be one on Blogspot, but folks, things sure look a whole lot worse in the US than they do in Euroland.
For you skeptics that might "think" Euroland has a smaller economy than the US, think again: According to figures published in October 2008. If the European Union were a single economy, it would be the largest in the world. According to the International Monetary Fund, Global GDP in 2007 was $64,903,314 TRILLION. Of that total, the European Union contributed $14,712,369 TRILLION, and the US contributed $13,843,825 TRILLION. For the sake of argument, we will consider the two economies of the European Union and the US equal in GDP.
Make no mistake, the European Union has it share of issues to deal with in the face of this US induced global financial catastrophe. They can not attempt to buy their way out of the problem by printing money the way the US Federal Reserve can and is. And the sum of it's parts may be it's biggest weakness. But as a single currency based economy, it is certainly the lone rival of the US.
The European Unions "strongest" member economy, Germany [5th overall globally], reported 4th Quarter 2008 GDP of -2.1%. Not to shabby when you put it up against the all powerful US economy's drubbing in the 4th Quarter.
Obviously, the economy in the US is collapsing faster than the economy in Europe. Why then are we being bombarded by the talking heads on Financial Sesame Street TV with an unending eruption of disinformation regarding the economy in the European Union? Last time I checked, interest rates were higher and offering a better return on the Euro than the US Dollar. Could it be that the financial media are pawns for a powerful and manipulative short position against the Euro, in a feeble effort to prop up the US Dollar with a misguided "safe haven message"? Anything is possible in this screwed up World.
Euro zone GDP dips 1.5%
February 13, 2009: 7:10 AM ET
BRUSSELS (Reuters) -- The euro zone suffered its deepest contraction on record in the last quarter of 2008 with its main constituents -- Germany, France and Italy -- all faring badly, casting severe doubt on any nascent recovery hopes.
Gross domestic product in the 15 countries then using the euro shrank 1.5% from the previous quarter, worse than forecasts for a 1.3% drop, statistics office Eurostat said on Friday.
"These are huge contractions in Europe, the largest in living memory in most cases," said Ken Wattret, economist at BNP Paribas.
U.S. economy shrank at 6.2 pct rate in Q4
Fri Feb 27, 2009 9:03am EST
NEW YORK (Reuters) - The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday, as exports plunged and consumers cut spending by the most in over 28 years amid a severe recession.
The Commerce Department said gross domestic product, which measures the total output of goods and services within U.S. borders, fell at an annual rate of 6.2 percent in the October-December quarter, the deepest slide since the first quarter of 1982.
The government last month estimated the drop in fourth-quarter GDP at 3.8 percent. The weaker GDP estimate reflected downward revisions to inventories and exports by the department.
These numbers certainly shoot holes in Fed Chairman Ben Bernanke's case for a "second half recovery". The Pied Piper continues whistling past the graveyard. These numbers should open the eyes of Global investors. In spite of all its warts, I maintain that the Eurozone, and Germany in particular, are a better bet for near term recovery than the US. The European Union, and the rest of the world's largest economies are the victims of this catastrophe. They will write off their losses faster, and recover quicker for this fact alone. And as the rest of the World recovers, they will see to it that the US is punished for the century of "Dollar Hegemony" that has handcuffed true global growth, as the US stole the savings of the world through inflation and bad debt.
Bernanke: Contradicting Soros, Roubini, Volcker, Reality
By James West
The wheels of the perception management apparatus are turning at full speed, as evidenced by the audacious spin chief propaganda-meister Bernard “Tokyo Rose” Bernanke put on more bad economic news following another disastrous day in global markets.
He says the recession will end this year.
The utter ridiculousness of such a statement in the face of rising global unemployment, massive monetary inflation, and collapsing banks is testimony to the fact that the self-delusional government and financial industry psychology that incubated and unleashed the present financial catastrophe is alive and well. As long as these arrogant economic narcissists man the helm of our common financial ship, any hope for real solutions and genuine reversal is dim at best.