Friday, November 7, 2008
The Meltdown Of The Hedge Funds - And Its Effect On The Market – Was Foreseeable
The hedge funds are melting down, and dragging the rest of the markets with them. See this and this. As a Wall Street Journal article from today entitled "Hedge Fund Selling Puts New Stress on Market" notes, "Hedge funds are selling billions of dollars of securities to meet demands for cash from their investors and their lenders, contributing to the stock market's nearly 10% drop over the past two days".
Was the meltdown of the hedge funds - and its effect on the market - foreseeable?
Yes.
In a speech given at NYU law school on April 11, 2007, Fed chairman Bernanke rationalized lax oversight of hedge funds, then warned about what is now unfolding:
"Regulatory oversight of hedge funds is relatively light . . . . the light regulatory touch seems largely justified.Stay tuned . . . the full effect of all of the forced selling and defaults by hedge funds hasn't yet been felt.
However, the growing market share of hedge funds has raised concerns about possible systemic risk. . . . many hedge funds are either highly leveraged or hold positions in derivatives or other assets that make their net asset positions very sensitive to changes in asset prices . . . . leverage also increases the risks to the broader financial system. The failure of a highly leveraged fund holding large, concentrated positions could involve the forced liquidation of those positions, possibly at fire-sale prices, thereby imposing heavy losses on counterparties. In the worst scenarios, these counterparty losses could lead to further defaults or threaten systemically important institutions. In addition, market participants that were not creditors or counterparties of the defaulting firm might be harmed indirectly through changes in asset prices, liquidity strains, and increased market uncertainty."
What Obama Should Ask His CIA Briefers
As President-elect, Obama is already receiving daily briefings from the CIA.
There are many important questions which Obama could ask about, and which "normal" Senators and congress people wouldn't have the power or the security clearance to get answers to.
But I believe the most important question is whether the continuity of government plans implemented on 9/11 are still in effect.
Because - if they are - Obama would not be sworn in on January 20, 2009 as President of the constitutional American government, but rather as the powerless figurehead of an unconstitutional shadow government.
Wouldn't that little difference make it important to find out one way or the other? Wouldn't Obama want to know if he would be the leader of the Executive Branch, or whether Paulson, or Cheney, or Pelosi or somebody else is really calling the shots because they were anointed under COG emergency measures?
Remember, the White House has specifically refused to share information about Continuity of Government plans with the Homeland Security Committee of the U.S. Congress, even though that Committee has proper security clearance to hear the full details of all COG plans.
Obama might be the only person who can find out whether or not COG government is still in effect.
Some might argue that this issue is moot, because Obama will just cancel all unconstitutional activities after he is sworn in. However, if he doesn't get to the bottom of the COG issue, shadowy forces outside of his field of vision may still control events during his Presidency.
Forcing Obama to Fight for Change
Obama spent $800 million to win the White House. Most of that money came from Wall Street, banks, hedge funds, and other financial elite.
Obama's economic advisors are consummate insiders.
Obama has already appointed as his chief of staff someone who is the opposite of change, Rahm Emmanuel. For example, Emmanuel "is the same man who, as the head of the Democratic Congressional Campaign Committee, fought tooth and nail to exclude, marginalize, and demonize anti-war Democrats in the 2006 primary". He was also a director of Freddie Mac during its period of scandalous management.
The only way Obama will fight for change is if We The People force him to do it.
"Any ... change that comes out of an Obama administration is going to happen because we organize and fight for it every step of the way. The effort to get real change enacted is going to need the same organization, the same energy, and the same stamina as the effort that put Obama in the White House. And this time, we’re going to have to do it without Obama’s national and local organizations, without the support of the Democratic party, and – crucially – without their hundreds of millions of dollars."Note: Even if you believe that Obama really wants to change things, you should note that presidents need pressure from people to do the right thing. Why? Public pressure gives them the ammunition and the excuse to fight against politicians and financial interests trying to block change. In other words, if Obama wants change, he would actually welcome pressure from the American people demanding that he make huge changes.
A good starting place is with the youth organizations. The Obama campaign - thanks to the corporate fat-cat donors - organized large numbers of young people across the country, along with an email list with 10 million names on it.
Even though the bit Obama donors have pulled the plug on the youth organizing movement, the young people should stay fired up and keep using their email organizing network to pressure Obama to do the right thing.
Insider: "Obama Will Be a Trustee in Bankruptcy"
Ultimate insider Dick Morris, the most powerful advisor to Bill Clinton, said on Fox News:
“Obama will be a trustee in bankruptcy. He will be like the guy the court appoints to sort out the debts of the corporation . . . . he's the trustee in bankruptcy”Dick Morris is a snake, but he is talking straight on an important fact that Ron Paul and a few others have been trying to warn us about: the U.S. is broke, and will not be able to pay its multi-trillion dollar debts to its creditors.
Thursday, November 6, 2008
Bond Insurers Getting Hammered by Credit Default Swaps
Why are bond insurers MBIA and Ambac getting hammered?
You guessed it: credit default swaps.
As an article today in Bloomberg puts it:
MBIA and Ambac, previously the world's two biggest bond insurers, lost their top AAA ratings earlier this year because of potential losses on credit swaps sold to guarantee CDOs [collateralized debt obligations] backed by home loans. Moody's Investors Service cut New York-based Ambac's bond insurance rating four levels yesterday to Baa1, three steps above junk, because of potential losses on the derivatives.
***
MBIA, the Armonk, New York-based insurer crippled by ratings downgrades earlier this year following losses from such contracts, has said it sold $126.3 billion in guarantees on slices of CDOs backed by corporate bonds, mortgages and other debt. Ambac sold $60.7 billion in guarantees on these so-called tranches, mostly through credit swaps, the company said.
Beyond Fear AND Hope
Many Americans are ecstatic that Obama won. They feel tremendous hope. The emotion is infectious, and is a lot more pleasant than the fear that's been raging across the country.
But there is a bigger picture . . .
Fear Versus Hope
Everyone knows that Bush, Cheney and the boys have used fear as their primary weapon to obtain compliance from people and to justify their imperial agenda. Indeed, the father of the Neoconservative movement, Leo Strauss, who tutored many leaders of the current administration, believed that a stable political order required an external threat and that if an external threat did not exist, one should be manufactured. Specifically, Strauss thought that:
"A political order can be stable only if it is united by an external threat . . . . Following Machiavelli, he maintained that if no external threat exists then one has to be manufactured".And it should be obvious that the Neoliberal Democrats are using hope as their rallying emotion. Obama's entire message, boiled down to one word, is "hope". Bill Clinton did it too. As an example, his campaign repeated over and over that Clinton was from a "Town Called Hope" (his home town of Hope, Arkansas).
The Neolibs' who approach is the "we're kindler, gentler, hope-dispensing people" thing. Its a feel-good salesman approach, in contrast to Strauss' ooga-booga approach.
Beyond Mere Emotion
I - like most Americans - am relieved that the trickle-down emotion du jour has shifted from fear to hope. It feels nicer.
But it is no more real than switching from watching the tv from the horror channel to the feel-good-movie channel.
They are both fiction. Neither the Neocons or Neolibs deliver on their promises.
The Neocons drummed up fear of terrorists, but actually made America less secure, and stomped on our liberties in the process.
The Neolibs promised hope, but gave none. Remember, it was under Clinton that many of the financial laws were repealed, and the dot com speculative bubble created.
Hope is just an emotion. Admittedly, real hope for fundamental and lasting change is important.
But false hope given by polished politicians like Obama and Bill Clinton is less than worthless . . . it is dangerous, for it lulls people to sleep so they won't demand real change.
After the Honeymoon is Over
When the honeymoon between the voters and Obama is over, people will judge him on who he picks to lead his cabinet and what he actually does.
After the honeymoon is over, the only questions will be whether Obama:
- Protected our liberty and restored the Constitution and the rule of law
- Restored the balance of power
- Kept us out of imperial wars
- Otherwise protected our country
Unless the fundamental tyranny, injustice, imperialism and economic foolishness are addressed, then America will have one heck of a hangover when the drug wears off.
Riskiest 40% of Credit Default Swaps Still Hidden
A few weeks ago, apologists for derivatives loudly trumpeted the claim that the Lehman credit default swap pay off was really only $5.2 billion, "proving" that the risk from CDS was overblown.
The Depository Trust and Clearing Corporation (DTCC) has made a big show of publicly releasing some data on CDS, leading people to believe that everything is out in the open.
But an article today in Bloomberg paints a different story:
Indeed, since CDOs are so risky, I would argue that the CDSs which aren't being publicly reported are the riskiest ones. This argument is supported by the fact that the two biggest bond insurers are getting hammered due to their CDO-related CDSs.The most comprehensive report on unregulated credit-default swaps didn't disclose bets in the section of the more than $47 trillion market that helped destroy American International Group Inc., once the world's biggest insurer.
A report by the Depository Trust and Clearing Corp. doesn't include privately negotiated credit-default swaps that insurers such as AIG, MBIA Inc. and Ambac Financial Group Inc. sold to guarantee securities known as collateralized debt obligations. It includes only a "small fraction'' of contracts linked to mortgage securities, according to Andrea Cicione at BNP Paribas SA in London.
New York-based DTCC's data, released on its Web site Nov. 4, showed a total $33.6 trillion of transactions on governments, companies and asset-backed securities worldwide, based on gross numbers. While designed to ease concerns about the amount of risk banks and investors amassed on borrowers from companies to homeowners, the report may have missed as much as 40 percent of the trades outstanding in the market, Cicione said.
The data are "likely to underestimate the amount of net CDS exposure,'' Cicione, who correctly forecast in January that the cost of protecting European companies from default would rise, said in an interview. "A broadening of the coverage to the entire market is what investors really need.''
***Investors hedging against losses on CDOs helped push the cost of default protection to a record last week.
***
AIG first disclosed to investors in August 2007 that it held more than $440 billion of credit-swap trades linked to CDOs. The New York-based company was brought to the edge of bankruptcy in September after the value of the transactions plunged.
***
A market survey this year by the New York-based International Swaps and Derivatives Association, which includes credit swaps on CDOs and other contracts that may not be captured by DTCC's Trade Information Warehouse, estimates more than $47 trillion in gross contracts are outstanding.
***"There appear to be gaps,'' said Henry Yu, a law professor at the University of Texas in Austin who has pressed for the creation of a data warehouse encompassing all privately negotiated derivative trades to offer a better understanding of their risks.
***
Because the DTCC registry captures only commonly traded contracts that can be confirmed over electronic systems, not every swap trade is in the company's report, spokeswoman Judy Inosanto said. Among those not included are credit-default swaps on CDOs, she said.
The War in Afghanistan Is Unwinnable
Veteran journalist Tariq Ali said this morning that the war in Afghanistan is lost.
Specifically, he said that British intelligence has concluded that - no matter how many troops are sent in - the war is already lost and is unwinnable in the future.
Ali also said that, should Obama follow through on his campaign promise to send more troops into Afghanistan, it would be a foreign policy blunder as big as Bush getting us into Iraq.
No one since Alexander the Great has conquered Afghanistan. America and England will not break that losing streak.
Wednesday, November 5, 2008
Is Italy in Trouble?
There are more credit default swaps bet against Italy than any country in the world, except Turkey.
Bloomberg writes:
Spain and Italy are among the European countries worst hit, with government data showing both nations are in the grip of a recession.
"There have been big changes in the credit quality of Spain and Italy, and buying credit-default swaps is a safe-haven bet in a crisis,'' said Philip Gisdakis, a Munich-based credit analyst at UniCredit SpA.
We all knew that Spain was in trouble, due to its crashing real estate market. And I knew that numerous emerging economies were in trouble.
But I didn't know Italy was in so much trouble.
Paul Kedrosky reviews these numbers and writes:
"Apparently the future of the financial world hinges on Italy and Spain not defaulting. Who knew?"
What's up with Italy?
Well, for one thing, its GDP is contracting.
And the Financial Times reported in March that Italy is facing difficulty rolling over €50bn in debt expiring in May, as market conditions have deteriorated.
And if you need a visual to see just how hard hit numerous nations have been hit with widening CDS spreads in the last month, look at this.
China - Instead of Decoupling - is Crashing, Further Hurting World Economy
Many people argued that China would "decouple" from Western economies, weather the financial crisis relatively unscathed, and thus help to give the world economy some stability.
Unfortunately, that is not happening. For example:
- China's GDP has slowed from 12 percent to 9 percent
- The Chinese stock market is down 60%
- Chinese banks are facing a liquidity crisis
- According to Bloomberg: "Decades of state-directed lending left China's four biggest banks with bad loans equal to almost 40 percent of outstanding loans in 1998. They were still sitting on $171 billion of soured debt, or 6.1 percent of total advances, at the end of June"
- Chinese businesses are getting slammed. Indeed, some factory owners are abandoning and simply walking away from their factories
- China's real estate market is facing a slump.
The Telegraph writes:
Hopes that the BRIC quartet (Brazil, Russia, India, and China) would take over as the engine of world growth have proved yet another bubble delusion.And leading economist Nouriel Roubini writes in an article entitled "The Rising Risk of a Hard Landing in China: The Two Engines of Global Growth – U.S. and China – are Now Stalling":China says 53pc of the country’s 3,600 toy factories have gone bust this year. Economist Andy Xie says China is at imminent risk of its own crisis after allowing over-investment to run rampant, like Japan in the 1980s. “The end is near. They’ve been keeping this house of cards going for a long time with bank support,” he said.
China's derivatives exposure may be less than Western nations, and its growth will probably not fall as dramatically as the growth of American, British and other Western economies, but China is still getting hammered by the economic crisis, which will further damage the global economy."For the last few years the global economy has been running on two engines, the U.S. on the consumption side and China on the production side, both lifting the entire global economy. The U.S. has been the consumer of first and last resort spending more than its income and running large current account deficits while China (and other emerging market economies) has been the producer of first and last resort, spending less than its income and running ever larger current account surpluses.
***
The latest batch of macro data from China are mixed but all pointing towards a sharp deceleration of economic growth: official GDP data showing growth down to 9% from the 12% of a couple of years ago; sharply falling spending on consumer durables (autos); falling home sales and sharp fall in construction activity; leading indicators of the manufacturing sector (the Chinese PMI) showing a value of 44.6% (i.e. an outright contraction of manufacturing as a level below 50% indicates a contraction), its lowest level ever since its publication. 9 out of 11 PMI sub indices showed contraction - Output, New Orders, Input Prices, Purchases of Inputs, New Export Orders, Imports, Backlogs of Orders, Stocks of Major Inputs. Output index fell to 44.3 from 54.6 in September, while new orders dropped to 41.7 from 51.3, while the inventory index climbed to 51.4 from 50.5. The decline in total orders has been even stronger than in export orders, thus suggesting a weakening in both domestic and export demand. And the decline in construction activity is without doubt a major contributor to the recent weakness in industrial activity in China.
***
And of course the Chinese equity bubble (P/E ratios reached a ridiculous level of 60 plus late last year) has now gone bust big time with the Shanghai index now having fallen over 60% from its bubbly peak.
There is thus now a growing risk of a hard landing in China. Let us be clear what we mean by hard landing. In a country with the potential growth of China hard landing would occur if the growth rate of the economy were to slow down to 5-6% as China needs a growth rate of 9-10% to absorb about 24 million folks joining the labor force every year; it needs a growth rate of 9-10% to move every year about 12-14 million poor rural farmers to the modern industrial/manufacturing urban sector. The whole social and political legitimacy of the regime of the ruling Communist party rests on continuing to deliver this high growth great transformation of the economy. Thus, a slowdown of growth from 12% to 5-6% would be the equivalent of a hard landing or a recession for China. And now a variety of macro indicators suggest that China is indeed headed towards a hard landing.
***And once Chinese export growth sharply decelerates and net exports sharply fall you can expect a severe fall in capex spending in China as there is already a large excess capacity of exportable goods given the massive overinvestment of the last few years.
***
Can aggressive monetary/credit and fiscal policy easing prevent this hard landing? Not necessarily.
***
Could fiscal policy rescue the day and prevent a Chinese hard landing? The optimists argue yes by pointing out that fiscal deficits and public debt are low in China and that China has the resources to engineer a rapid fiscal stimulus in a short period of time. But the ability of China to implement a rapid and massive fiscal stimulus is limited for a variety of reasons.
***The second engine of global growth – China on the production side – is also on its way to stalling. Thus, with the two main engines of global growth now in serious trouble a global hard landing is now almost a certainty. And a hard landing in China will have severe effects on growth in emerging market economies in Asia, Africa and Latin America as Chinese demand for raw materials and intermediate inputs has been a major source of economic growth for emerging markets and commodity exporters. The sharp recent fall in commodity prices and the near collapse of the Baltic Freight index are clear signals that Chinese and global demand for commodities and industrial inputs is sharply falling. Thus, global growth – at market prices – will be close to zero in Q3 of 2008, likely negative in Q4 of 2009 and well into negative territory in 2009. So brace yourself for an ugly and protracted global economic contraction in 2009."
Is Obama Serious About Protecting Our Liberty?
Obama, a former Constitutional law professor, promised during his campaign to curb the unconstitutional practices of the executive branch.
If he is serious about this, he must appoint vigorous advocates for constitutional principles and the rule of law to serve as heads of the following agencies:
- Department of Justice
- FBI
- CIA
- Treasury (which oversees the Secret Service and - of course - the bailouts)
- NSA
Our first order of business must be to pressure Obama to make decent appointments in these areas, to make sure that liberty is protected.
Obama is already appointing cabinet members, so we must exert pressure now.
The Sec Def should ideally also be someone who respects the rights of civilian populations, especially since army units are being deployed by Bush on U.S. soil.
Tuesday, November 4, 2008
Now That Obama Has Won . . . There is No Excuse
Now that a Democrat has been elected president, the Democrats in Congress have no excuse. They can no longer pretend that they have to "hold back" to win the election.
They have no excuse to delay war crimes charges against Bush, Cheney and company for Iraq.
They have no excuse to delay war crimes charges for torture.
They have no excuse to delay criminal charges for spying on Americans.
They have no excuse to delay criminal charges for 9/11.
Now is not the time for Democratic machine politics. Now is the time to implement true American values - cherished across the political aisle - of liberty and justice.
There can be no liberty in America unless the tyrants who have tried to imprison us and enslave us are prosecuted.
There can be no justice in America unless the high and mighty are held accountable for their actions.
Obama is a former Constitutional law professor. He knows the value of the Constitution and the rule of law. He promised during his campaign to curb the unconstitutional practices of the executive branch.
But that is not enough. Because if the tyrants in both parties who have trampled on the vision of the founding fathers are not held accountable, then future tyrants will learn that they can get away with it, also.
Now that Obama has won, there is no excuse. Those who have trampled on our country and our people must be held to account for the whole world and future generations to see.
Whatever Doubts I Have About Obama, I'm Still Happy An African-American Man Has Been Elected President
My father got beaten up as a kid by a group of African-Americans (he was white, like me).
But my father was a strong and big-hearted man . . . instead of becoming a racist, he volunteered in the South during the 1960's to help black civil rights protestors who were harassed and arrested, and he supported civil rights his whole life.
If he were alive, my father would be very happy that a black man has been elected president.
Whatever doubts I may have about Obama being a polished mouthpiece for the powers-that-be such as the military-industrial complex and financial elites, I am still happy that a black man has been elected president.
Over 1 Trillion Dollars Worth of Credit Default Swaps Against Governments
The Depository Trust and Clearing Corporation made some information public today about Credit Default Swaps.
There are between $33 trillion and $47 trillion or so in CDS still outstanding, even after the Lehman CDS were settled (PNB Paribas estimates that as much as 40% of the CDS market - including much of the market for CDS on collateralized debt obligations - is "off-the-books" and unreported).
Approximately 1.5 trillion of that is CDS concerning "Sovereign / State Bodies", in other words, countries. Some of the countries against which CDS bets are being made, and the amounts of CDS bets, include:
| Reference Entity | Gross Notional Value |
| | $54,898,977,416 |
| | 50,229,525,972 |
| | 4,667,167,370 |
| | 37,704,802,794 |
| FEDERATIVE | 147,282,298,727 |
| | 21,294,685,660 |
| | 34,412,341,491 |
| PEOPLE'S REPUBLIC OF | 18,734,303,665 |
| | 12,370,019,800 |
| | 4,158,419,764 |
| | 2,152,552,000 |
| | 61,362,202,916 |
| | 5,238,151,800 |
| | 16,449,099,545 |
| KINGDOM OF THE | 4,473,401,700 |
| | 15,107,279,147 |
| | 15,755,279,062 |
| | 2,876,548,199 |
| | 30,514,869,250 |
| | 4,119,321,657 |
| | 5,800,607,000 |
| | 2,177,002,324 |
| | 3,696,135,200 |
| | 32,763,644,099 |
| | 8,808,204,575 |
| | 30,459,955,229 |
| | 148,617,213,985 |
| | 23,182,954,247 |
| | 49,254,188,100 |
| | 6,281,734,552 |
| | 3,216,066,342 |
| | 6,554,952,966 |
| | 19,660,717,899 |
| | 16,450,839,456 |
| | 24,272,147,229 |
| | 31,489,780,165 |
| REPUBLIC OF THE | 66,218,347,379 |
| | 188,628,684,750 |
| | 110,068,180,097 |
| | 5,346,498,565 |
| | 5,967,756,774 |
| UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND | 12,130,975,680 |
| UNITED MEXICAN STATES | 74,941,756,398 |
| | 4,759,492,270 |
Monday, November 3, 2008
So Goes the Nation?
There's an old saying: "As GM goes, so goes the nation".
Well, GM is in big trouble. Its sales are down 45% since last year. It has been shut out of the bond market for the fifth month straight. Indeed, GM may go belly up.
The "Baltic Dry Index" is widely believed to be a proxy for the health of the overall economy. The Baltic Dry is down 90% since May.
They said Lehman - like the U.S. itself - was "too big to fail". Lehman failed.
As GM, the Baltic Dry Index and Lehman go . . . so goes the nation?
Despite Taxpayer Bailout, Fed Says Banks Tighten Loan Standards Most on Record
As you probably know, banks are spending taxpayer bailout money to pay executive bonuses, distribute dividends to shareholders, and - with the government's assistance - to buy out their competitors.
You've probably also heard that the banks themselves admit they'll keep hoarding cash.
Now, according to the Fed, even after being handed hundreds of billions in taxpayer loot, the banks have tightened loan standards the most on record.
The head of the U.S. House of Representatives Financial Services Committee said that using bail-out money for anything other than lending will be a criminal offense. But, so far, its all talk and no action (as usual).
The banks have admitted they're going to keep on spending the bailout money on everything under the sun other than lending. Okay Congress, stop talking tough and prosecute, already.
And what about Paulson, who knowingly lied to Congress?
Only a Landslide Is Theft-Proof
If you want Obama to win, you can't take victory for granted.
Even though the polls project that he'll win by a landslide, a lot of racists who say they'll vote for Obama will vote for McCain when they are alone in the voting booth. As former NBA Charles Barkley said:
I think the polls are absolutely useless. I do. Seriously. Most people who are racist, they are not going to answer that question correctly either on the phone call or on camera, so I 100 percent believe the polls are flat out useless. I think this race is going to be neck and neck down to the wire.
And there are numerous, documented, intentional or accidental voting machine errors, lost ballots, and other problems. See this and this. Even the Wall Street Journal is asking: "Will This Election Be Stolen?"
As Robert F. Kennedy, Jr. and award-winning journalist Greg Palast write:
"If Democrats are to win the 2008 election, they must not simply beat John McCain at the polls -- they must beat him by a margin that exceeds the level of GOP vote tampering".
An as Michael Rivero puts it:
"I don't care how much the media tell you your candidate is winning. GET OUT AND VOTE! TURN IT INTO A LANDSLIDE BECAUSE ONLY A LANDSLIDE IS THEFT-PROOF!"Note: I know how much of an imperialist hawk Obama's foreign policy advisor Brzezinski is. I know that Obama sold out on teleco immunity, on the bailout and on many other issues. So if you don't like Obama, I understand.
And I believe we desperately need a third-party president, as the Repubs and Dems are just two branches of the same imperial-corporate party.
But, personally, I think that Obama would be somewhat better than McCain, and that if Obama wins, we can then get to work on pressuring his administration to do the right thing.
Sunday, November 2, 2008
U.S. Is Funding Iranian Nuclear Program
The U.S. is literally funding Iranian nuclear capabilities.
As CNN reports, the U.S. state department has given millions of dollars to two Russian institutes which, in turn, are directly helping to ramp up Iran's nuke capacity at Bushehr and other facilities.
This is especially ironic given that the U.S. has accused Iran of producing fuel for nuclear weapons at Bushehr.
Debunking the 9/11 "Dust" Theory
Some peripheral folks in the 9/11 truth movement claim that exotic high-energy weapons were used to bring down the Twin Towers. The overwhelming majority of credible scientists, engineers and others in the movement do not believe this.
The proponents of the star wars weapons theory argue that video footage shows metal spires "turning to dust", which they think proves that futuristic weapons were used.
Many of us have pointed out that the spires actually fell down, and that dust from the pulverized concrete simply fell off the spires as they were falling, hiding the fact that the spires were falling and creating the visual illusion that the spires were "turning to dust". For example, Reprehensor posted this video clip last year:
(12 seconds into the video)
This video - shot by the same person as the one above - shows that World Trade Center Building 7 did not have any big fires when it suddenly collapsed:
The government's theory that fire alone brought down Building 7 makes about as much sense as the argument that high-energy weapons brought down the Twin Towers.
Saturday, November 1, 2008
Throwing a BRIC Through America's Windshield?
BRIC is the nickname for an economic alliance between Brazil, Russia, India and China. China and Russia are allies because both are communist nations (with a brand of capitalism, as well).
Brazil is China's main supplier of raw materials, and thus an important partner.
India and China are the two most populous nations on Earth, and set to become the 2 powerhouses of the 21st century.
If the BRIC alliance decides to dump the dollar - say at November's G-20 meeting - then the dollar's status as world reserve currency will be over.
Hints
Notwithstanding the current rising value of the dollar, there are numerous hints that the dollar will not remain the world's reserve currency for long:
- Iran is bartering oil for Thai rice, as a way to stay out of the dollar in its trades
- Russia's Putin is suggesting that Russia and China ditch the dollar and use their own currencies in trade deals
- Thailand's Deputy Prime Minister, Olarn Chaipravat, told Bloomberg News:
"The message of this initiative is for China to consider whether or not China would open up its banking system and allow the strongest currency in the world, which is the Chinese yuan, to be the rightful and anointed convertible currency of the world."
- The Wall Street Journal writes that China is being asked to play America's role of being at the center of the world financial system
- Many countries have already stopped using the dollar as their reserve currency or have dropped their currency's peg against the dollar
Throwing A BRIC Through the Window
Thailand, Argentina and other nations have some say in what happens. But it is the BRIC nations - along with America's biggest creditor, Japan - which will decide whether the dollar remains king.
Japan is likely to go along with whatever the U.S. wants. And Professor Chossudovsky persuasively argues that both Brazil and India are run by American allies who will try to protect the U.S. and the "Washington consensus".
On the other hand, China and Russia have already made noises about getting away from the dollar.
So will the BRIC countries and Japan demand a shift away from the dollar at the G-20 summit later this month?
My prediction is that at the G-20 this month, Japan, Brazil and India will drag their feet, and that China and Russia won't turn their bark into a bite.
However, I predict that America's economic meltdown will occur so quickly that the BRIC countries and Japan will force a change in the world reserve currency within the next year.
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