A report by A3P on economics
Dr. A. H. Krieg
The entire Western World has gone nuts. In America the four largest banks hold $231 trillion of derivatives transactions on their books. Goldman Sachs 18% - $41.58 billon, Bank of America 21% - 48.50 Billion, Citybank 22% - $50.82 billion, J.P. Morgan Chase the bank that just lost somewhere between $5 and $7 billion, 34% - $78.54 billion all remaining American banks combined 5% - $11.5 billion. The entire American economy is about $15 trillion. Ask yourself this question, how can American banks trade $231 trillion on the percentage of possible increase of investments (a derivative) on an economy of $15 trillion investments, that’s 15 times the actual economic model size? At 3% income on a $15 trillion investment that would produce a maximum profit of $ 45 million dollars, hello is anyone listening? .
What Europeans are doing is just as crazy. The ECB (European Central Bank) has just bailed out Spanish banks with 100 billion euros. 22% of that money came from Italy a nation that is over one trillion euros in debt to the ECB. Spain is 1.78 trillion euros in debt to the ECB. The Italian contribution to the Spanish bank bail out is 22 billion euros to the ECB. Italy had to borrow the funds from, yes; yes you guessed it the ECB at 6%. The loan to Spain was made at 3% so, a country (Italy) that is one trillion euros in debt to the ECB borrows 22 billion euros at 6% to loan to another EU nation Spain at 3% from the ECB. And all the while the ECB is two trillion dollars in debt to the FRS (your taxes at work) are these people Krazi?
The European bond market has reached new heights—German 2 year bonds are now at 0% that means that people in Europe are actually parking their money in Germany because they think it’s a safer place, just like putting cash under your mattress. Ten-year bond yields in Great Britain are 1.64% Denmark 1.09% and Germany 1.26%. Switzerland has had such huge EU investments in the Frank from France, Germany, Austria and Italy that 2 months to five-year Swiss bonds are negative. That’s right; EU members now gladly pay to keep money in Switzerland, in Swiss Franks. Greek citizens are withdrawing $3.5 billon a day out of Greek banks. Meanwhile long lines are forming in Spain, Italy and Portugal, with people trying to convert their euros into Pounds Sterling, US Dollars or Swiss Franks. Europeans think that the Euro will tank and I think they are right.
There is too much debt and far too much speculation in derivatives in the developed world. The entire finacial systems are on oxygen, life support. Real world disposable income is declining. In America the average net worth has fallen 40% in just the last three and a half years. Spain has 50% unemployment in age groups below 25, America 40%. Employment continues to decline, since the election of Obama America has had a net loss of 1.4 million jobs in the last three years, with a total unemployment at 24.3% (ShadowStats). Consumer demand is dwindling, weakening manufacturing in China and the Pacific Rim. This in turn weakens natural and raw material producers like South Africa, Brazil, and Australia.
The Euro will fail before the end of this year. China’s economy will falter because neither Europe nor America will be able to continue purchasing goods at previous rates and because the Chinese real estate bubble will burst. The entire global economy is on the verge of collapse. A weakening international economy, compounded by world wide $800 trillion derivatives market, rising unemployment in each of the developed nations, and a huge private as well as public debt, the reported numbers are mind numbing.
Politicians in Brussels and Washington are content kicking the can a little further into the corner, they follow instructions well. The currencies are not the problem the bankers are the problem. Derivative Day Trader in the big banks are earning millions a week, they and their employers pay off the politicians with some of these gains, the rest they move off-shore or into hard assets, in the end they will own everything and we/us will own nothing. Welcome the Brave New World i.e. The New world Order. The Bilderbergers just met in Chantilly, Virginia last week, they are the bosses of the entire cabal, carefully directing the entire finacial marionette theater, for fun and profit.
Unfortunately most people see the stock markets as barometers of the economy, they are not. Stock markets that are manipulated by derivative traders and the Plunge Protection Team as well as massive short order in the gold and silver markets, serve to produce distorted and false information. The Treasuries Plunge Protection Team has been very active in the past 8 months supporting numerous falling issues.
The worst part of the entire puzzle however is that we have no resolute intelligent political or finacial leadership in Europe or America and none on the horizon in upcoming elections either. We are saddled with self-serving politicians whose only real interst is to stay on government dole and benefits, lie to the people, and slop at the public trough. On the finacial side we have people like Helicopter Ben, our Federal Reserve chairman whose primary occupation lately has been to give self-congratulatory commencement speeches in effort to save his spoiled record. He is the architect of bailouts of bank, Insurance companies, and auto producers not one of which has paid back. In fact in the case of GM, that’s New China Motors to you political novices, it is a simple transfer of GM from Detroit to China. In the last three years 11 assembly plants, and four drive plants and 2,700 dealership have opened up in China and two weeks ago GM announced that they were transferring their R&D department from Detroit to China. Chrysler was sold to Fiat of Italy. AIG the worlds largest insurance company is now a government enterprise.
Taking note of Spain’s catastrophic economy, primarily due to the largest green energy initiative in the world the Obama administration is following suite. Spain has a general unemployment level of 25% and for those under 25, 50%. The American government is hell-bent-for leather to piss the maximum amount of cash down the green rat hole. By April 2012 Dr. Chu’s Energy Department had lost $6.7 billion in failed and bankrupt energy projects, then in May he announced that the DOE will invest another $10 billion, making Dr. Chu the other idiot who keeps doing the same thing over and over again expecting a different result each time.
Read Dr. Krieg and Merlin Miller’s latest book Our Vision for America, from all Booksellers.