Begin forwarded message:
From: [EMAIL PROTECTED]
Date: July 10, 2008 2:25:24 PM PDT
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED]
Subject: Laughing to Keep from Crying -- The U.S. "Economy" Is a
Really Sick Joke
From the bad to the really sinister
Richard Daughty
http://atimes.com/atimes/Global_Economy/JG08Dj01.html
The first half of the year is over, and now all those brokerage
accounts and retirement accounts will be sending out statements to
hapless account holders, and it is bad news in spades.
This is why (I assume) the Plunge Protection Team (composed of the
US Federal Reserve, the Treasury and bank insiders) tried to drive
the stock markets up on Monday, June 30 -- to make those account
statements look not quite as bad, and, hopefully, prevent people
from dumping all of their stock and bond holdings in a desperate
attempt to save something before the whole idiotic, fiat-currency,
unlimited-fractional-banking thing just collapses.
Perhaps this drop in the market averages (as demand overwhelms
supply) is what prompted John Williams at shadowstats.com to
write, "Overhanging the markets for a number of years has been the
question as to when the major holders of excess US dollars in the
global financial system might look to dump those holdings. An
opportunity for that dumping is at hand."
The reason is that "Most central banks know that their unwanted
dollar hoards are going to generate long-term losses, but the oil
markets have opened up an opportunity to mitigate some of those
losses. For the rest of the world, dollar dumping now would reduce
inflation risks outside the United States."
This means that "Over the longer term, US equities, bonds and the
greenback should suffer terribly, while gold and silver prices
should boom."
And it is not just him and me that are so gloomy, but a new study
from the Bank for International Settlements (BIS) noted that a
plunge in the dollar "may happen", as the dollar has slid 14%
against the euro in the past year, handing foreign investors in US
dollar assets "big losses measured in dollars, and still bigger ones
measured in their own currency", and which is making people so
nervous that "a sudden rush for the exits cannot be ruled out
completely."
Bob Janjuah, analyst at the Royal Bank of Scotland, has also advised
clients that "A very nasty period is soon to be
upon us - be prepared," which goes along with that bank's warning
that inflation has paralyzed the world's central banks, and that of
a full-fledged crash in global stock and credit markets over the
next three months looks more and more likely.
And the stupid banks (always the cause of all of economic troubles)
are suffering from their own stupidity, and Bill Buckler of The-
Privateer.com newsletter notes that "US banks have
suffered US$391 billion of losses and write-downs from mortgage-
related securities since the start of 2007, according to the data
compiled by Bloomberg. US banks could lose another $300 billion on
real estate loans during the year ahead."
What makes this $691 billion loss so special is that "such losses
could jeopardize balance sheets because the US banking system had
only $1,350 billion of equity capital".
Hahaha!
They've lost two-thirds of all their banks' capital!
Hahaha!
Morons!
Since all things are connected to all things, he says, "The sum of
it all is that the entire US banking and financial system is so
threadbare, fragile and short of capital that a collapse or crash in
one place could knock the underpinnings out from under several other
US financial sectors which would take even more down with them. A
systemic crash -- at any time -- is today a distinct possibility."
This is all in addition to the fact that morons who have kept
investing in the American stock market are suffering losses, proving
once again that the majority of investors must
lose money over the long term. Spengler at atimes.com notes that
when he says, "American equity markets show no real capital gains
since 1997. That is, an American who bought the equivalent of the
Standard & Poor's 500 Index at $954 in January 1997 and sold today
at $1,278 would have exactly the same number of inflation-adjusted
dollars."
Mr Spengler concludes, "My advice to individual investors? Invest in
some popcorn, because the next six months will be something to
watch." (See How to stop the Great Crash of '08, Asia Times Online,
July 1, 2008.)
Jim Sinclair of jsmineset.com is more humorously laconic when he
says, "You can be sure something really stupid is about to happen."
He might have been referring to me, but I am usually stupid to start
with, and so why would he just be mentioning it now?
So, I think he means something more sinister. Much more sinister.
And ugly.
Richard Daughty is general partner and COO for Smith Consultant
Group, serving the financial and medical communities
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