China denounces U.S. currency accusation
BEIJING (Reuters) - A Chinese central banker denounced accusations by U.S. Treasury Secretary-designate Timothy Geithner that China was manipulating its yuan currency, calling them misleading and warning against "excuses" for protectionism.
Su Ning, a vice governor of the People's Bank of China, called the comments by Geithner "out of keeping with the facts" and said they were "misleading in analyzing the causes of the financial crisis," the official China News Service reported on Saturday.
Su also warned against trade protectionism.
"We believe that faced with the financial crisis there should be a spirit of self-criticism," Su said while visiting a business newspaper office in Beijing, according to the report.
"The international community is currently working together in actively responding to the financial crisis, and it must avoid exploiting different excuses for renewing or encouraging trade protectionism," Su said, adding that such steps would harm global economic recovery.
http://www.reuters.com/article/newsMaps/idUSTRE50N0TI20090124
Obama touts aid plan's impact on average Americans
"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future," Obama said in a five-minute address released Saturday morning by radio and the Internet.
"In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."
http://biz.yahoo.com/ap/090124/obama_economy.html
Were we not spoon fed the same steaming bowl of bull sh*t by the Mother Of All Liars, Hanky Panky Paulson, while twisting the arms of Congress in an effort to justify the TARP legislation?
This financial freak show is far worse today than it was the day that misguided legislation was passed by the cowering Congress in defiance of the American people who demanded it not be passed. The "Obama Plan" is just more financial folly, and a bigger band aid to slap on the terminal patient in the hope that it will bring the patient back from the dead. Not likely.
Republicans: Obama plan bad medicine
President Obama’s $825 billion economic stimulus plan targets the right problems with the wrong solutions and likely would damage the economy rather than save it, several Georgia Republican congressmen argued Saturday.
http://www.ajc.com/services/content/printedition/2009/01/25/stimulus0125.html
Amen!
Democrats: Stimulus plan no quick fix for economy
WASHINGTON (AP) -- The White House warned Sunday that the country could face a long and painful financial recovery, even with major government intervention to stimulate the economy and save financial institutions.
"We're off and running, but it's going to get worse before it gets better," said Vice President Joe Biden, taking the lead on a theme echoed by other Democratic officials on the Sunday talk shows.
http://biz.yahoo.com/ap/090125/obama_economy.html
A lot worse...worse than he can even imagine. But chalk one up for honesty!
The World Won't Buy Unlimited U.S. Debt
by PETER SCHIFF
As absurd as this may appear on the surface, it seems inconceivable to President Obama, or any respected economist for that matter, that our creditors may decline to sign on. Their confidence is derived from the fact that the arrangement has gone on for some time, and that our creditors would be unwilling to face the economic turbulence that would result from an interruption of the status quo.
But just because the game has lasted thus far does not mean that they will continue playing it indefinitely. Thanks to projected huge deficits, the U.S. government is severely raising the stakes. At the same time, the global economic contraction will make larger Treasury purchases by foreign central banks both economically and politically more difficult.
The root problem is not that America may have difficulty borrowing enough from abroad to maintain our GDP, but that our economy was too large in the first place. America's GDP is composed of more than 70% consumer spending. For many years, much of that spending has been a function of voracious consumer borrowing through home equity extractions (averaging more than $850 billion annually in 2005 and 2006, according to the Federal Reserve) and rapid expansion of credit card and other consumer debt. Now that credit is scarce, it is inevitable that GDP will fall.
Neither the left nor the right of the American political spectrum has shown any willingness to tolerate such a contraction. Recently, for example, Nobel Prize-winning economist Paul Krugman estimated that a 6.8% contraction in GDP will result in $2.1 trillion in "lost output," which the government should redeem through fiscal stimulation. In his view, the $775 billion announced in Mr. Obama's plan is two-thirds too small.
http://online.wsj.com/article/SB123266988914308217.html
The International Forecaster
By: Bob Chapman
BEIJING (Reuters) - A Chinese central banker denounced accusations by U.S. Treasury Secretary-designate Timothy Geithner that China was manipulating its yuan currency, calling them misleading and warning against "excuses" for protectionism.
Su Ning, a vice governor of the People's Bank of China, called the comments by Geithner "out of keeping with the facts" and said they were "misleading in analyzing the causes of the financial crisis," the official China News Service reported on Saturday.
Su also warned against trade protectionism.
"We believe that faced with the financial crisis there should be a spirit of self-criticism," Su said while visiting a business newspaper office in Beijing, according to the report.
"The international community is currently working together in actively responding to the financial crisis, and it must avoid exploiting different excuses for renewing or encouraging trade protectionism," Su said, adding that such steps would harm global economic recovery.
http://www.reuters.com/article/newsMaps/idUSTRE50N0TI20090124
Obama touts aid plan's impact on average Americans
"Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future," Obama said in a five-minute address released Saturday morning by radio and the Internet.
"In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse."
http://biz.yahoo.com/ap/090124/obama_economy.html
Were we not spoon fed the same steaming bowl of bull sh*t by the Mother Of All Liars, Hanky Panky Paulson, while twisting the arms of Congress in an effort to justify the TARP legislation?
This financial freak show is far worse today than it was the day that misguided legislation was passed by the cowering Congress in defiance of the American people who demanded it not be passed. The "Obama Plan" is just more financial folly, and a bigger band aid to slap on the terminal patient in the hope that it will bring the patient back from the dead. Not likely.
Republicans: Obama plan bad medicine
President Obama’s $825 billion economic stimulus plan targets the right problems with the wrong solutions and likely would damage the economy rather than save it, several Georgia Republican congressmen argued Saturday.
http://www.ajc.com/services/content/printedition/2009/01/25/stimulus0125.html
Amen!
Democrats: Stimulus plan no quick fix for economy
WASHINGTON (AP) -- The White House warned Sunday that the country could face a long and painful financial recovery, even with major government intervention to stimulate the economy and save financial institutions.
"We're off and running, but it's going to get worse before it gets better," said Vice President Joe Biden, taking the lead on a theme echoed by other Democratic officials on the Sunday talk shows.
http://biz.yahoo.com/ap/090125/obama_economy.html
A lot worse...worse than he can even imagine. But chalk one up for honesty!
The World Won't Buy Unlimited U.S. Debt
by PETER SCHIFF
As absurd as this may appear on the surface, it seems inconceivable to President Obama, or any respected economist for that matter, that our creditors may decline to sign on. Their confidence is derived from the fact that the arrangement has gone on for some time, and that our creditors would be unwilling to face the economic turbulence that would result from an interruption of the status quo.
But just because the game has lasted thus far does not mean that they will continue playing it indefinitely. Thanks to projected huge deficits, the U.S. government is severely raising the stakes. At the same time, the global economic contraction will make larger Treasury purchases by foreign central banks both economically and politically more difficult.
The root problem is not that America may have difficulty borrowing enough from abroad to maintain our GDP, but that our economy was too large in the first place. America's GDP is composed of more than 70% consumer spending. For many years, much of that spending has been a function of voracious consumer borrowing through home equity extractions (averaging more than $850 billion annually in 2005 and 2006, according to the Federal Reserve) and rapid expansion of credit card and other consumer debt. Now that credit is scarce, it is inevitable that GDP will fall.
Neither the left nor the right of the American political spectrum has shown any willingness to tolerate such a contraction. Recently, for example, Nobel Prize-winning economist Paul Krugman estimated that a 6.8% contraction in GDP will result in $2.1 trillion in "lost output," which the government should redeem through fiscal stimulation. In his view, the $775 billion announced in Mr. Obama's plan is two-thirds too small.
http://online.wsj.com/article/SB123266988914308217.html
The International Forecaster
By: Bob Chapman
Our Treasury is going to have to raise over $2 trillion to fund fiscal needs in the next six months, which will be no easy feat. Will foreigners continue to fund such massive reckless spending? We do not know. We do not believe they want too, but do they have much choice? They are holding 64.5% of their foreign reserves in US dollars. The US Treasury’s needs for funds are enormous and fulfilling those needs will be very difficult. Are US Treasuries still the world’s safest investment? We do not believe they are. Today this is a false perception, as it has been several times in our history. History is replete with other major nations defaulting on their bonds and arbitrarily devaluing their currencies in the last 150 years. The bottom line is there are no safe bonds or currency from any nation. Gold always has been and always will be the only safe option.
Today we have zero interest rates or for that matter negative rates if you consider the loss via real inflation. Owners of US debt are losing at least 10% annually on their investment. Our unprecedented expansionary monetary policy can only end in disaster via hyperinflation and default and devaluation. Even a 10% yield in today’s market cannot compensate for the loss in buying power.
The creation of American debt is totally out of control and there will come a time when foreigners will be forced to say no – no more. They will be under enormous pressure from their own constituents. Besides, who is capable of funding such debt? China and Japan are loaded up. Oil producers are in a bind. England is on the edge of bankruptcy, as are Ireland and Spain. Perhaps Germany and France can help. We do not know who’ll attempt to help, but more than $2 trillion in a year is a lot of money. We do not think it can be done and that means the Fed buys the Treasury’s bonds, bills and notes by creating more fiat money monetizing the debt and sending inflation straight into the stratosphere. That means much higher gold prices are in our future.
There is no flight to the dollar. There has been a flight from other currencies to the dollar for several reasons and those reasons are now history. We could see the dollar again test the upper limits on the USDX at about 88, but that should be it. We expect the dollar to firmly put in a double top. In fact, we may well never get to 88, which often happens in situations like this. The dollar has gone up as much as it is going too. Can you imagine what a dollar at this level will do to exports? It will probably cut GDP ½% to 1%, and at this stage that would be most unwelcome.
The dollar is going lower versus other major currencies, which have all just fallen versus the dollar over the past five months. Next all the currencies will take a bath versus gold.
Today we have zero interest rates or for that matter negative rates if you consider the loss via real inflation. Owners of US debt are losing at least 10% annually on their investment. Our unprecedented expansionary monetary policy can only end in disaster via hyperinflation and default and devaluation. Even a 10% yield in today’s market cannot compensate for the loss in buying power.
The creation of American debt is totally out of control and there will come a time when foreigners will be forced to say no – no more. They will be under enormous pressure from their own constituents. Besides, who is capable of funding such debt? China and Japan are loaded up. Oil producers are in a bind. England is on the edge of bankruptcy, as are Ireland and Spain. Perhaps Germany and France can help. We do not know who’ll attempt to help, but more than $2 trillion in a year is a lot of money. We do not think it can be done and that means the Fed buys the Treasury’s bonds, bills and notes by creating more fiat money monetizing the debt and sending inflation straight into the stratosphere. That means much higher gold prices are in our future.
There is no flight to the dollar. There has been a flight from other currencies to the dollar for several reasons and those reasons are now history. We could see the dollar again test the upper limits on the USDX at about 88, but that should be it. We expect the dollar to firmly put in a double top. In fact, we may well never get to 88, which often happens in situations like this. The dollar has gone up as much as it is going too. Can you imagine what a dollar at this level will do to exports? It will probably cut GDP ½% to 1%, and at this stage that would be most unwelcome.
The dollar is going lower versus other major currencies, which have all just fallen versus the dollar over the past five months. Next all the currencies will take a bath versus gold.
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