The Coming U.S. Stock and Bond Market Crash of 2013-2014 — The Stock and Bond Big Bubble Burst — Central Banks Buying Gold! — Videos

Posted on April 27, 2013. Filed under: American History, Banking, Blogroll, Books, Business, College, Communications, Computers, Constitution, Crime, Demographics, Diasters, Economics, Education, Employment, Energy, European History, Federal Government, Federal Government Budget, Fiscal Policy, government, government spending, Health Care, history, History of Economic Thought, Immigration, Inflation, Investments, Law, liberty, Life, Links, Literacy, Macroeconomics, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Private Sector, Public Sector, Radio, Rants, Raves, Regulations, Resources, Security, Strategy, Talk Radio, Tax Policy, Taxes, Technology, Television, Transportation, Unemployment, Unions, Video, War, Wealth, Wisdom | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

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Great_recessionGreat_Depression

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fed-dollars-2003-2012fed-balance-sheet-2016

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BREAKING 2013 Economic Collapse Peter Schiff

Overdose: The Next Financial Crisis

David Stockman: We’re in a Monetary Fantasy Land

Ben Bernanke Is The Most Dangerous Man In US History

US BOND BUBBLE’S READY TO BURST!

Max Keiser: Propped Up Bond Market Set To Burst In April

U.S. Government Bond Bubble to Burst, Faber Says 

James Grant and James Turk discuss gold, the Fed and the fiscal situation of the USA

USA Will Die – Economic Collapse 2013 – Jim Rogers

JIM ROGERS – 2013 to Be Bad, ‘God Knows What Will Happen in 2014′

Jim Rogers Predicts Global Depression In 2013-2014

Peter Schiff on Max Keiser – Stopping the Global Financial Crisis

Keiser Report: Psyops & Debt Diets

Max Keiser: Will the next crash be on Bonds?

MAX KEISER: Colossal Collapse Coming! Keiser Report

MAX KEISER: Colossal Collapse Coming! Keiser Report

ALEX JONES & Max Keiser 2013, Year of The GREAT CRASH!

Peter Schiff – Dollar Could Collapse This Fall 2013

Peter Schiff – Economic Collapse 2013

Fed Will Keep Printing Until The Dollar Collapses~ Jim Rickards

Jim Rickards  Gold is Money ($7,000 Gold Price)

James Rickards Predicts US Inflation in 2013 due to the Devaluation of the US dollar

Currency Wars: Jim Rickards

Financial Pearl Harbor’ is a Real Threat Warns a Pentagon Adviser

CNBC Global Recession Is Coming – Marc Faber

Dr. Marc Faber – US is in 50-100 trillion worth of debt!

Marc Faber ‘We Are in the End Game’ Part 1

Marc Faber  ‘We Are in the End Game Part 2

Marc Faber – We Could See a 1987-Like Market Crash – Be Prepared and Get OUT!

Marc Faber-No Government Complies With Anything

Total Economic Collapse, Death of the Dollar, Impovershment, WWIII, Marc Faber Interview

Gerald Celente Deal Or No Debt Deal, The Debt Still Exists

Bill Gross: Economy Faces Structural Headwinds, “I Think We Are Facing Bubbles Almost Everywhere”

ECONOMIC CRASH WORLDWIDE STARTING

Harry Dent predicts global economic crash in 2013

Planned Economic Collapse 2013-2014

Background Articles and Videos

Meltdown (pt 1-4) The Secret History of the Global Financial Collapse 2010

Meltdown (pt 2-4) The Secret History of the Global Financial Collapse 2010

Meltdown (pt 3-4) The Secret History of the Global Financial Collapse.2010 

Meltdown – pt 4-4 The Secret History of the Global Financial Collapse (2010) 

The Fall of Lehman Brothers

Goldman Sachs: Power and Peril – Documentary

The Ascent of Money: A Financial History of The World by Niall Ferguson Epsd. 1-5 (Full Documentary)

The Fall of the Dollar – The Death of a Fiat Currency part 1

The Fall of the Dollar – The Death of a Fiat Currency part 2

The First 12 Hours of a US Dollar Collapse

LIFE HIDDEN TRUTH 2013 GLOBAL FINANCIAL CRISIS

 

Billionaires Dumping Stocks, Economist Knows Why

 

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.

Unfortunately Buffett isn’t alone.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.

Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.

So why are these billionaires dumping their shares of U.S. companies?

After all, the stock market is still in the midst of its historic rally. Real estate prices have finally leveled off, and for the first time in five years are actually rising in many locations. And the unemployment rate seems to have stabilized.

It’s very likely that these professional investors are aware of specific research that points toward a massive market correction, as much as 90%.

One such person publishing this research is Robert Wiedemer, an esteemed economist and author of the New York Times best-selling book Aftershock.

Editor’s Note: Wiedemer Gives Proof for His Dire Predictions in This Shocking Interview.

Before you dismiss the possibility of a 90% drop in the stock market as unrealistic, consider Wiedemer’s credentials.

In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.

The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.

A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”

The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”

And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”

In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.

Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.

It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.

“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

Read Latest Breaking News from Newsmax.com http://www.moneynews.com/MKTNews/billionaires-dump-economist-stock/2012/08/29/id/450265?PROMO_CODE=110D8-1&utm_source=taboola#ixzz2RhO2R5ey
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The Growth Gap Widens As U.S. Heads Into Another Recession: Real Gross Domestic Product Down From 3.1% in Third Quarter to .1% in Fourth Quarter 2012! — Videos

Posted on February 28, 2013. Filed under: American History, Banking, Blogroll, Books, Business, College, Communications, Demographics, Economics, Education, Employment, Energy, Federal Government, Federal Government Budget, Fiscal Policy, history, Inflation, Language, Law, liberty, Life, Links, Macroeconomics, media, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Psychology, Quotations, Raves, Regulations, Reviews, Tax Policy, Taxes, Unemployment, Video, Wealth | Tags: , , , , , , , , , , , , , , , , , , , , , , , |

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Gerald Celente Predicts Economic Recession

Gerald Celente – Yahoo!’s The Daily Ticker – February 20, 2013

Gerald Celente: World Bank, Banksters, Coming Collapse.

Peter Schiff – Economic Collapse 2013

Peter Schiff: It’s Going To Hit The Fan During Obama’s Second Term – Fox Business

Peter Schiff: Wall Street’s rising back thanks to the taxpayers

Jim Rogers Asks Whether Obama Is ‘Delusional’ Or ‘Lying’

Chairman Kevin Brady presents his Opening Statement During JEC Hearing

Congressman Paulsen questions witnesses during Hearing on State of US Economy

Rep, Campbell during Joint Economic Committee Hearing on State of US Economy

Bill Gross Warns of Fed Easing ‘Irrational Exuberance Has Unduly Escalated Asset V

Harvey Golub on Fed Monetary Policy: We’re Creating a Series of Bubbles

Marc Faber Odds of World Heading Into Global Recession By 2013 Is 100% Certainty

JIM ROGERS – ‘If You Are Not Worried About 2013, Please – Get Worried’

Jim Rogers author of “Street Smarts” sits down w Glenn Beck on The Blaze TV re.

US to go into recession: Danielle Park

fiscal policy & automatic stabilizers

Austrian Economics versus Mainstream Economics | Mark Thornton

Econ Crisis 2 – Recessions

Old School Macro

Fiscal Policy

Deficits & The Debt

How Do Banks Work?

Central Bank & Monetary Policy

EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, THURSDAY, FEBRUARY 28, 2013
BEA 13-06

* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.

Lisa S. Mataloni: (202) 606-5304 (GDP) gdpniwd@bea.gov
Recorded message: (202) 606-5306
Ralph Stewart: (202) 606-2649 (News Media)
Jeannine Aversa: (202) 606-2649 (News Media)
National Income and Product Accounts
Gross Domestic Product, 4th quarter and annual 2012 (second estimate)
      Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 0.1 percent in the fourth quarter of 2012
(that is, from the third quarter to the fourth quarter), according to the "second" estimate released by the
Bureau of Economic Analysis.  In the third quarter, real GDP increased 3.1 percent.

      The GDP estimate released today is based on more complete source data than were available for
the "advance" estimate issued last month.  In the advance estimate, real GDP declined 0.1 percent.  The
upward revision to the percent change in real GDP is smaller than the average revision from the advance
to second estimate of 0.5 percentage point.  While today’s release has revised the direction of change in
real GDP, the general picture of the economy for the fourth quarter remains largely the same as what
was presented last month (for more information, see "Revisions" on page 3).

      The increase in real GDP in the fourth quarter primarily reflected positive contributions from
personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed
investment that were partly offset by negative contributions from private inventory investment, federal
government spending, exports, and state and local government spending.  Imports, which are a
subtraction in the calculation of GDP, decreased.

	The deceleration in real GDP in the fourth quarter primarily reflected downturns in private
inventory investment, in federal government spending, in exports, and in state and local government
spending that were partly offset by an upturn in nonresidential fixed investment, a larger decrease in
imports, and an acceleration in PCE.

_______

FOOTNOTE.  Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified.  Quarter-to-quarter dollar changes are differences between these published estimates.  Percent
changes are calculated from unrounded data and are annualized.  "Real" estimates are in chained (2005)
dollars.  Price indexes are chain-type measures.

      This news release is available on BEA’s Web site along with the Technical Note and Highlights
 related to this release.  For information on revisions, see "Revisions to GDP, GDI, and Their Major
 Components".
_______

      Final sales of computers added 0.10 percentage point to the fourth-quarter change in real GDP
after adding 0.11 percentage point to the third-quarter change.  Motor vehicle output added 0.19
percentage point to the fourth-quarter change in real GDP after subtracting 0.25 percentage point from
the third-quarter change.

      The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 1.5 percent in the fourth quarter, 0.2 percentage point more than in the advance estimate; this
index increased 1.4 percent in the third quarter.  Excluding food and energy prices, the price index for
gross domestic purchases increased 1.1 percent in the fourth quarter, compared with an increase of 1.2
percent in the third.

      Real personal consumption expenditures increased 2.1 percent in the fourth quarter, compared
with an increase of 1.6 percent in the third.  Durable goods increased 13.8 percent, compared with an
increase of 8.9 percent.  Nondurable goods increased 0.1 percent, compared with an increase of 1.2
percent.  Services increased 0.9 percent, compared with an increase of 0.6 percent.

      Real nonresidential fixed investment increased 9.7 percent in the fourth quarter, in contrast to a
decrease of 1.8 percent in the third.  Nonresidential structures increased 5.8 percent; it was unchanged in
the third quarter.  Equipment and software increased 11.3 percent in the fourth quarter, in contrast to a
decrease of 2.6 percent in the third.  Real residential fixed investment increased 17.5 percent, compared
with an increase of 13.5 percent.

      Real exports of goods and services decreased 3.9 percent in the fourth quarter, in contrast to an
increase of 1.9 percent in the third.  Real imports of goods and services decreased 4.5 percent, compared
with a decrease of 0.6 percent.

      Real federal government consumption expenditures and gross investment decreased 14.8 percent
in the fourth quarter, in contrast to an increase of 9.5 percent in the third.  National defense decreased
22.0 percent, in contrast to an increase of 12.9 percent.  Nondefense increased 1.8 percent, compared
with an increase of 3.0 percent.  Real state and local government consumption expenditures and gross
investment decreased 1.3 percent, in contrast to an increase of 0.3 percent.

      The change in real private inventories subtracted 1.55 percentage points from the fourth-quarter
change in real GDP, after adding 0.73 percentage point to the third-quarter change.  Private businesses
increased inventories $12.0 billion in the fourth quarter, following increases of $60.3 billion in the third
and $41.4 billion in the second.

      Real final sales of domestic product -- GDP less change in private inventories -- increased 1.7
percent in the fourth quarter, compared with an increase of 2.4 percent in the third.

Gross domestic purchases

      Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- decreased 0.1 percent in the fourth quarter, in contrast to an increase of 2.6 percent in the
third.
Current-dollar GDP

      Current-dollar GDP -- the market value of the nation's output of goods and services -- increased
1.0 percent, or $40.2 billion, in the fourth quarter to a level of $15,851.2 billion.  In the third quarter,
current-dollar GDP increased 5.9 percent, or $225.4 billion.

Revisions

      The "second" estimate of the fourth-quarter percent change in GDP is 0.2 percentage point, or
$9.2 billion, more than the advance estimate issued last month, primarily reflecting an upward revision
to exports, a downward revision to imports, and an upward revision to nonresidential fixed investment
that were partly offset by a downward revision to private inventory investment.

                                                                     Advance Estimate             Second Estimate
                                                                       (Percent change from preceding quarter)

Real GDP.......................................                            -0.1                         0.1
Current-dollar GDP.............................                             0.5                         1.0
Gross domestic purchases price index...........                             1.3                         1.5

2012 GDP

      Real GDP increased 2.2 percent in 2012 (that is, from the 2011 annual level to the 2012 annual
level), compared with an increase of 1.8 percent in 2011.

      The increase in real GDP in 2012 primarily reflected positive contributions from personal
consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment,
and private inventory investment that were partly offset by negative contributions from federal
government spending and from state and local government spending. Imports, which are a subtraction in
the calculation of GDP, increased.

      The acceleration in real GDP in 2012 primarily reflected a deceleration in imports, upturns in
residential fixed investment and in private inventory investment and smaller decreases in state and local
government spending and in federal government spending that were partly offset by decelerations in
PCE, exports, and nonresidential fixed investment.

      The price index for gross domestic purchases increased 1.7 percent in 2012, compared with an
increase of 2.5 percent in 2011.

      Current-dollar GDP increased 4.0 percent, or $605.8 billion, in 2012 to a level of $15,681.5
billion, compared with an increase of 4.0 percent, or $576.8 billion, in 2011.

	During 2012 (that is, measured from the fourth quarter of 2011 to the fourth quarter of 2012),
real GDP increased 1.6 percent.  Real GDP increased 2.0 percent during 2011.  The price index for gross
domestic purchases increased 1.5 percent during 2012, compared with an increase of 2.5 percent during
2011.

                                            *          *          *

      BEA's national, international, regional, and industry estimates; the Survey of Current Business;
and BEA news releases are available without charge on BEA's Web site at www.bea.gov.  By visiting
the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

                                           *          *          *

                             Next release -- March 28, 2013 at 8:30 A.M. EDT for:
                Gross Domestic Product:  Fourth Quarter and Annual 2012 (Third Estimate)
                              Corporate Profits:  Fourth Quarter and Annual 2012

gdp_large

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Currency Wars–Go Global–Ground Zero Iran–Videos

Posted on October 14, 2012. Filed under: American History, Banking, Books, Business, Communications, Diasters, Economics, Employment, European History, Federal Government, Fiscal Policy, Foreign Policy, government, government spending, history, Inflation, Investments, Law, liberty, Life, Links, Macroeconomics, Microeconomics, Monetary Policy, Money, People, Philosophy, Politics, Programming, Psychology, Public Sector, Raves, Regulations, Resources, Talk Radio, Unions, Video, Wealth, Wisdom | Tags: , , , , , , , , , , , |

Currency Wars

Currency Wars Explained ~ Economy and Trade

  

FIAT REWARD FOR EUROPEAN FIAT MONEY SYSTEM! 

Devaluation and debasement key to U.S., China currency wars 

USG War on Iran:  Hot or Cold, it’s All War

Iranians protest currency nosedive 

Iranian rial on rebound against US dollar 

Alex Exposes The Covert Financial War Against Iran 

Background Articles and Videos

The currency war on Iran

A collapse in the rial, greeted with glee by some, is a cause not for celebration but for fear

Peter Beaumont

“…The continuing currency crisis in Iran, which has seen the rial go into freefall, has been cited, with some celebration in certain quarters, as proving that US-led sanctions are “working” against Tehran. Increasingly shut out from international banking and struggling to sell its oil, Iran has been forced to sell more cheaply while buying raw materials at a higher cash price. This, in turn, has led to currency speculation that the government has done nothing to halt, and to sharp devaluation.

But what does “sanctions are working” actually mean? Some hawks have read it as the possible beginning of the end for Iran’s nuclear programme and the collapse of the clerical regime. For others, including those anxious to avoid conflict over Iran, it has been seized on as a suggestion that the crisis might be resolved through negotiation and non-military pressure.

The reality is that the political, economic and social impact of sanctions can produce very different results from those allegedly desired, more often than not hurting ordinary people. And there is a third scenario, in which sanctions might actually make the confrontation with Iran more dangerous still.

The increasing popularity of economic sanctions, as Britain’s former ambassador to the UN, Sir Jeremy Greenstock, has observed, is due to the perception that no other tool exists “between words and military action if you want to bring pressure upon a government”.

When three academics – Gary Clyde Hufbauer, Jeffrey Scott and Kimberly Ann Elliott – examined the history of sanctions between 1914 and 1990, in Economic Sanctions Reconsidered they determined that out of 115 cases that they looked at, only a third had seen any measure of success. The US political scientist Robert Pape has challenged even this measure, claiming that of the 40, only five can be determined genuine successes for sanctions.

As Pape argued in his essay, Why Economic Sanctions Do Not Work, “The … case that we should expect sanctions to be more effective in the future is also flawed, because it relies on the expectation that economic punishment can overwhelm a state’s commitment to its important policy goals.” Rather, he argues, at times of sanctions, the opposite is often true: “Pervasive nationalism often makes states and societies willing to endure considerable punishment rather than abandon what are seen as the interests of the nation.”

Even in cases where economic sanctions are generally considered to have had a positive impact – bringing about the end of white minority rule in South Africa and Rhodesia – there is disagreement over how decisive sanctions alone were in effecting that change. And if there is a disagreement over the efficacy of sanctions, what is also obvious is that they can come at a high price in terms of the impact on populations, and the risk that, far from undermining the legitimacy of regimes, they can entrench power – in a short term at least – around the regime elites being targeted. For Saddam Hussein’s Iraq, which lived under a sanctions regime from August 1990 until 2003, that meant a sharp increase in childhood mortality for infants under five years old, even as Saddam’s regime used money earned from avoiding sanctions to reward supporters.

There is evidence too that states under sanctions have been able to use the cover provided by them to put the heaviest burden on unpopular groups and minorities.

But one thing should be clear to all from the experience of global recession, ensuing austerity programmes, and recent global disturbances prompted by high grain prices. While it is easy to predict that people may become angry as they feel rapidly poorer, in such times of febrile politics how they will react is far harder to predict.

So to those celebrating Iranian pain, be careful what you wish for in desiring a crisis. It was hyperinflation under a regime of reparations that contributed to the collapse of the Weimar Republic. Few foresaw then what might occur. And few, now, are considering what a sanctions-triggered economic crisis might really mean for Iran and the region. …”

http://www.guardian.co.uk/commentisfree/2012/oct/02/the-currency-war-on-iran

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Cracking Communist Chinese Currency–Float The Yuan/RBN or Devalue Your Currency Via U.S. Dollar 10% Per Year For Next Five Years Or Face U.S. Import Ban–No Pressure–Your Choice–Videos

Posted on October 14, 2010. Filed under: Blogroll, Communications, Demographics, Economics, Employment, Fiscal Policy, Foreign Policy, government spending, Investments, Law, liberty, Life, Links, media, People, Philosophy, Politics, Rants, Raves, Security, Taxes, Technology, Video, Wisdom | Tags: , , , , , , , , , , , |

“The valuation of the monetary unit depends not upon the wealth of the country, but upon the ratio between the quantity of money and the demand for it, so that even the richest country may have a bad currency and the poorest country a good one.”

~Ludwig von Mises, The Theory of Money and Credit, page 278.

“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.”

~Friedrich A. Hayek,  The Use of Knowledge in Society

September, 1945, American Economic Review. XXXV, No. 4. pp. 519-30. American Economic Association

http://www.econlib.org/library/Essays/hykKnw1.html

Capitalism in China: Should We Trade With Them? – Ayn Rand Center for Individual Rights

Dr. Milton Friedman speaking about Free Trade

The looming China-U.S. showdown

Battling over the Yuan – F24 101001

China’s Wen Jiabao: ‘Dont pressure us to raise RMB rates’

 

Lee Says China Will Appreciate Yuan to Prevent Trade War: Video

 

Eurozone troika urges ‘broad-based’ currency appreciation in China

 

Inside Look: China Currency Controversy

 

China Currency and Trade Wars

Peter Schiff – June 21 2010 – Appreciation Of The Chinese Currency Means The Implosion Of The Dollar

Mar 24 10 Hearing on China’s Exchange Rate Policy, Niall Ferguson Opening Statement

 

Mar 24 10 Hearing on China’s Exchange Rate Policy, C. Fred Bergsten Opening Statement

 

Mar 24 10 Hearing on China’s Exchange Rate Policy, Clyde Prestowitz Opening Statement

 

Mar 24 10 Hearing on China’s Exchange Rate Policy, Philip Levy Opening Statement

 

The U.S. and China (Ted Galen Carpenter)

 

Government intervention into markets always requires even more government intervention to correct past mistakes.

The central bank of the People’s Republic of China (PRC) would be well advised to just let their currency freely float against the currencies of the world.

This would mean the PRC’s official currency the  renminbi or RMB and its unit of currency the yuan  would rise in value against both the U.S. dollar and the Euro.

Yes, this would mean the PRC’s export goods would be more expensive for both Americans and Europeans and conversely American and European goods and services would be cheaper to purchase for the PRC.

The result would be a decline in the growth of exports to the United States and Europe. 

The Chinese people need to be able to increase their level of consumption and reduce their savings rate to absorb the production that currently goes almost entirely abroad as exports.

Should the PRC implement such a strategy, it would be advised to stop purchasing United States Treasury debt and as the U.S Treasury obligations mature use the dollar payments to purchase natural resource assets in the United States.

In other words diversify your portfolio out foreign government obligations into natural resources that your economy needs to manufacture goods.

As a second best solution, gradually appreciate the renminbi against the U.S. dollar at 10% per year for five years and then freely float the yuan.

Since the U.S unemployment rate is expected to exceed 8% for at least the next three years, the appreciation of the renminbi at 10% a year for five years would lead to a decline in U.S. unemployment due to increase in U.S. exports and and a rise in the demand for Chinese exports as the U.S economy recovers from the recession.

Absence an improvement in the U.S. employment situation, demand for Chinese exports would be flat or even decline.

Therefore, it is in the interest of both countries  governments to have an appreciation of the renminbi.

The U.S. Federal Reserve should also abandon its practice of intervening in the  U.S money market by attempting to set target Federal fund rates to expand the money supply and in turn credit.

Will any of the above actually happen?

Not likely.

The ruling classes of United States and the People’s Republic of China actually believe they are have the intelligence and knowledge exceeding that of free markets.

Both ruling classes are only fooling themselves.

Both are wrong.

Let the currency wars begin.

Let the ruling class of both parties demonstrate they care less for the welfare of their people.

Let the  American and Chinese people determine the fates of their ruling class.

Increasing  unemployment in both countries will lead to a revolution and the overthrow of both ruling classes.

The free market will over time prevail and the ruling class control freaks with their failed government interventionist economic policies will be replaced.

Power of the Market – How to Cure Inflation 1

 

 

Power of the Market – How to Cure Inflation 2

 

Power of the Market – How to Cure Inflation 3

 

 

“We shall not grow wiser before we learn that much that we have done was very foolish. “

~Friedrich A. Hayek

“Perpetual vigilance on the part of the citizens can achieve what a thousand laws and dozens of alphabetical bureaus with hordes of employees never have and never will achieve: the preservation of a sound currency.”

~Ludwig von Mises, The Theory of Money and Credit, page 495

 

 

Background Articles and Videos

 

China’s Economy in the Post-Crisis World

 

Obama Pressed On New Global Currency At Presidential News Conference

 

Related Posts On Pronk Palisades

Chinese Communist State Company–China National Offshore Oil Corp.(CNOOC)–Invests In Texas Oil–Videos

Printing More Money (Quantitative Easing) and The Coming Currency War and Decline In The Purchasing Power of The U.S. Dollar–Robbing The American People–Videos

The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,000,000!–Run-Away Inflation Coming Soon!

 

 

 

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