Posts Tagged ‘gold’

Asset prices and prices are falling rapidly as the impact of globalization credit permeates the global economy. Newspaper columnists are beginning to warn against the dangers of deflation.

What happens during deflation?

It’s important to understand that what happens during deflation is not a result of deflation itself. Rather, deflation itself and what happens during deflation are results of the same cause: a change in mass social mood.

Beyond the price effects of deflation, what happens during deflation can fill entire books. In his two-book set, Socionomics: The Science of History and Social Prediction, Robert Prechter dedicated several sections to what happens during deflation. The topic of what happens during deflation also inspired Prechter’s best-seller Conquer the Crash.

The same mass psychology that initiates the change from inflation to deflation and depression also regulates what humans do, feel and produce during deflation. Here’s a short list of what happens during deflation:

• Investment strategy moves toward less-risky investments, like cash. Fashions move from risqué toward conservative.
• People seek the safety of groups and organizations; religion becomes more popular.
• People have less sex and therefore fewer babies.
• Formerly adored leaders and icons see their popularity reversed.
• Bull market sports see their popularity decline in favor of bear market sports.
• Company buyouts and mergers slow and sometimes stop altogether.
• Social conflicts like riots and wars break out.
• Incumbent political leaders in democratic countries are thrown out and replaced by their challengers.
• Political leaders in non-democratic countries are targets of coup attempts; entire government structures are overthrown.
• Legislators vote for stricter regulations.
• Shocking swindles like the Enron and Bernie Madoff scandals are uncovered.

Postponed expenditure

A concern is that consumers postpone spending when prices fall.

Deflation has other insidious traits. It causes buyers to remember. They expect lower prices. Once this psychology takes a handful, it may gradually put on a self-feeding spiral that is difficult to stop (Ambrose Evans Pritchard, Daily Telegraph).

It encourages people to postpone spending until prices drop. This in turn forces down the price – as retailers cut prices in a vain attempt to attract buyers. As retailers cut prices, the same manufacturers, who have less money to invest in new technologies, equipment and especially the staff.

Salaries begin in the fall, which is psychologically very damaging for consumers, even those who retain their jobs. As they fret less about money in their pockets and their employment prospects, they have more to defer expenses, from the deflationary spiral once again (Harry Wallop, Daily Telegraph)

These statements are nonsense. Falling prices do not stop consumer spending. Computer prices have declined over the last twenty years, but spending on computers has never ceased. While prices of most electronic devices have fallen dramatically over the past decade, sales have increased significantly. The reason is that when prices fall, more people can afford to buy, the sales increase.

The advantage of lower prices is that consumers can buy things when it suits them. During inflation, people rush into buying before you can afford it, because they are afraid that prices will rise. They often have debts, trying to beat rising prices. Inflation forces people to make purchases at the wrong time.

Falling prices eliminate this problem. People are not subjected to unnecessary pressure to buy. They can save for something they need to know that price increases will not grow beyond their reach. People are free to purchase large items, the time is right for them. Falling prices increase freedom.

The benefits of lower prices is that people have access to better quality (so the theory goes). While waiting a little longer, they can get a later model, the same price. This makes them better off.

Borrowers are Punished

Another concern of the columnists is that deflation punishes borrowers.

A prolonged period of deflation may have a pernicious impact on the economy. The other main reason for deflation can cause as many problems, it is used to make debt more expensive. Here’s why. If you borrow £ 1,000 at the beginning of the year to pay for a new sofa, the cost of the loan does not change throughout the year. It remains to be £ 1,000. But the couch is falling in price. Thus, at the end of the year – if you are still repaying the loan – you are finished take £ 1000 to pay for a sofa now worth £ 900 and £ 800. Think of it as negative on a large scale, spread across the consumer credit. Of course, in theory, there are winners: savers (Harry Wallop, Daily Telegraph).

The scourge of deflation is that it increases the burden of debt. Revenues fall: the debts remain the same. In this way, is … suffocation. The great credit bubble of the past 20 years has pushed debt levels in Britain, the United States and other Western societies, to unprecedented levels … Our sensitivity to debt deflation is greater (Ambrose Evans Pritchard, Daily Telegraph).
This is twisted thinking. The curse of the debt has been replaced by the curse of deflation. Evil is good. The lie is the truth. Reviewers hate deflation, because it rewards those who save and punishes those who borrow. The falling price of redistribution of wealth – the wrong direction. Enjoy savings, which is good for those who have saved. The income is transferred from those of the debt to those. Revenues are transferred from the borrower and the speculators who were responsible. In the strange world of debt and leverage that is considered bad.

Discover The Biggest Threat To Your Money Right Now

If inflation is a quiet thief, then deflation is an armed burglar. You wouldn’t invite either into your home, yet chances are that one of the two is stealing your money right now.

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The free 8-page report is adapted from Bob Prechter’s New York Times best-seller, Conquer the Crash, which was published far before the latest headlines warned of inflationary and deflationary dangers.

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The media and business community has been feverishly hyping and trumpeting the economic crisis that started in September as if they were blindsided by it like a drunk crashing into a crowd full of people on a friday night drive. What God commands Christians regarding alcohol is to avoid drunkenness (Ephesians 5:18). The Bible condemns drunkenness and its effects (Proverbs 23:29-35). While the common person may be fooled by the economists and mainstream media gurus, the knowledgeable person knows that this economic crisis has been a long time in the making.

The reliance on credit, loans, mortgages, and imaginary money was not always so prevalent as it is in today’s society. Back in the day, people actually used to save, nations used to produce and consume at a somewhat level rate, and countries were composed of somewhat homogeneous populations accounting for a relatively stable society and economic system. As it now stands, however, many people are in debt, so there are a few ways for people to try to get out of the hole:

1) Get a consolidation loan

A consolidation loan can do a lot of sense. Getting a loan to repay all your debts and many have only one payment to make. The new loan usually has a smaller payment and lower interest rates.

2) Get a second job

Use the money from this job to pay your debts. List your debts, noting that the interest rate. Pay the debts with the highest rates and the work of your first run of the list.

3) Put your credit cards on hold

One of the best steps to get out of debt is to immediately stop using credit cards. At the very least destroy all your cards keeping only one card for emergencies.

Have your credit analyzed and conclusions derived from the data to obtain an accurate credit history and future potential of getting out of debt by securing lower interest rates.

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4) Set up a repayment plan

Reduce your expenses and / or use free cash to pay your debts, pay debts with the highest rates and the work of your first run of the list.

5) Use your existing assets

If you have assets with some significant equity, such as a house or a car, you May be able to use them to take control of your debt. For example, you can get a loan on your home sufficient to pay your debts. You could save a considerable amount of money on interest if you pay high interest debt credit card in exchange for lower cost debt.

If you have a car, sell, pay debts and buy a cheaper car. You do not want a “cheaper” car that will cost you a fortune in repair costs.

6) Sell your existing assets to lower debt load.

Yes, lowering your debt load will help you considerably in paying off existing loans. In lowering your debt load, you may also be able to bargain with creditors to lower your monthly interest payments to stem the bleeding.

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The recent spread of the potentially pandemic swine flu discovered in Mexico that spread across the world in the past few days could give world governments the ammunition they need to further increase already heightened levels of government intervention in already severely disrupted economic systems caused by the faulty monetary and financial system.

Governments might, in the short run, have an easy alibi to curtail so called free trade flows and other measures which are the last lifeline of the economy and could further degrade slumping trade between countries. Giving credence to the often used mantra that “governments should never waste a good crisis,” this swine flu, the so called war on terror, and the economic and financial collapses certainly give governments an excuse to “use crises to further their agendas.”

The World health organization, an arm of the “unholy trio” of the World Bank, International Monetary fund,. And the World trade organization, has already pushed its doctors to warn governments to contain the spread of this deadly new swine flu that has already claimed the lives of more than 100 people in Mexico and spread to many other countries of the world courtesy of fast human transportation systems.
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World economic markets have already reacted erratically to this news of a potentially new pandemic, and some politicians have already called for closing of borders to stem the spread of it. Rep. Eric Massa (D-N.Y.) said the border should be closed until the threat is resolved. “The public needs to be aware of the serious threat of swine flu, and we need to close our borders to Mexico immediately and completely until this is resolved,” Massa said in a statement (The Hill, 2009).

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The problem here is that markets have not had an overly negative reaction to this new swine flu, but if government intervention becomes increased, and likely will, it may cause markets to adverse extremely negatively due to the big hand of government stepping in to destroy markets further than they already have since the economic crisis and the government central bank interventions around the world.

Indeed, public debt has increased exponentially in many countries after all of the easy public money that was dumped into dying markets and companies. Japan had a similar problem in the early 1990s where the government intervened and created “zombie companies” that never recovered.

Also, if we were to see an increase in the severity of this new swine flu, and if it were to increase to a pandemic, analysts say this would cause a repeat of some of the government intrusions that worried many investors last year. From the introduction of controls to contain capital leaving countries, to the nationalizing of banks in the US and the fall of many previously stable companies, we are seeing some nasty government intervention indeed. The swine flu’s economic impact has already been felt in mexico where they saw their peso drop 3 per cent on Monday.
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John Raines, deputy director of political risk at London-based consultancy Exclusive Analysis, said even if swine flu was controlled and no more destructive than the SARS outbreak, it would likely further hit trade particularly in agricultural products.

“At the very least, I would expect them to use it as a way of supporting their domestic pork industries,” he said. “Trade is always the first to go and it is an easy excuse for protectionist measures. But if it became a true pandemic, affecting millions, then all bets are off.”

However, trade restrictions prompted by public health emergencies like the swine flu outbreak are permitted under international law, if they are only maintained as long as necessary, White & Case law partner Brendan McGivern said.

Totally unexpected “black swan” events such as the outbreak of the First World War — when investors suddenly had to adapt to the prospect of global conflict in a matter of weeks — have sometimes prompted draconian intervention and have had a seismic economic impact (Alertnet, 2009).
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Could Plagues Be God’s Punishment?

The Plagues of Egypt (Hebrew: ???? ?????, Makot Mitzrayim), the Biblical Plagues or the Ten Plagues (Hebrew: ??? ?????, Eser Ha-Makot) are the ten calamities imposed upon Egypt by God in the Bible (as recounted in the book of Exodus, chapters 7 – 12), in order to convince Pharaoh to let the poorly treated Israelite slaves go. The Plagues of Egypt are recognized by Jews, Christians, and Muslims.

Could the decadence and immorality of the world finally be at a breaking point; so much that plagues and various other so called natural disasters could be on their way to destroy humanity. Indeed, the 10 plagues were not just punishment to the Egyptians. He uses plagues to chasten and discipline people for their disobedience and faithlessness. This is what has happened to the world today.

Indeed, it was Dr. Henry Kissinger who wrote: “Depopulation should be the highest priority of U.S. foreign policy towards the Third World.” “Dr. Henry Kissinger proposed in his memorandum to the NSC that “depopulation should be the highest priority of U.S. foreign policy towards the Third World” (Rense, 2004)

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Will Pandemic Protectionism Kill Off Globalization?

Protectionism is rapidly replacing free trade as the political, if not the economic, orthodoxy. Lord George Bentinck would have loved it (Dizzy was only along for the ride during the Corn Laws debacle, as his subsequent embrace of free trade demonstrated). Globalisation is in retreat. Recessions do funny things like that; and it gets worse as it deepens into full-blown depression, as this crisis will do.

Globalisation has failed. The chief reason for this failure is not the current recession – that is only the occasion – but the neglect of governments around the world to respond to it fiscally and culturally. Now it is too late. Every time demonstrators against foreign contractors appear at factory gates, the local MP has to support them. (Gerald Warner, 2009).

Given the fact that manufacturing jobs and industries account for only one fifth (1/5th) of economic output of countries in the OECD, it is important to realize potential impacts this shift from tangible output driven economies to a more service oriented one, and the pundits’ chants that it is an advantageous phenomenon. Some questions to consider are: is the contraction of manufacturing in developed economies a result of so called manurity in economies or is it that the forced of globalization, speerheaded by government trumping corporations in search of cheap labor?
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Economists and gullible financial analysts, not to mention mentally disabled laymen touting the end of manufacturing as good thing, miss some central points concerning losing manufacturing:

The key fact is that manufacturing is the back bone of an economy because this sector is the one which actually produces tangible items. Some might say that intangible items like financial services, computer programs, and the like are products, but the reality of the situation is that these activities can be done almost anywhere in the world by anyone. What will stop these industries from fleeing just as manufacturing did? Indeed, they would flee even faster due to their nebulous nature. We have seen are only in the infant stages of the off shoring phemonenon of industries such as financial services and computer programming by large multi national companies.

Pundits will gather that this is the natural occurance of economies in that it drifts from an industrial boom to a post-industrial, so called information age and transforms into a mainly service sector based economy based on research, development, and management, but this is the theory that the economists push on behest of government to brainwash populations into accepting their fate of accepting lower wages, lower job security (if at all), and reduced spending.
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Let us explore this theory and implementation of this paradigm for a short while. Post-industrial really doesn’t mean “after industry”, it just really signifies the new industries that have come into being along side of traditional factory production. These new industries are computer technology, telecommunications, media and information processing (to name a few. Try and think of some more). These industries function unlike traditional industrial industries (auto, machine, building, textile, etc) because:

• a) their product is different (ie, non-tangible goods and services)
• b) some of the post-industrial professions involve more educated workers (white-collar as opposed to blue-collar) and
• c) production can take place in a number of different places (ie, not in a factory).

The problem Westerners and industrialized countries have is that the economists and political pundits hired by their respective governments have slowly but surely been brainwashing the financial, economic, and general population and trying to sell them on the idea that the next phase of an industrial economy is the incremental loss of manufacturing industries because “this is the way” as if it were some biblical law.
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Indeed, economics has become a religion into its own with paradigms such as so called “free trade” being pushed down peoples’ throats when in fact this idea is a fiction because all trade agreement are managed unless what you were aiming for was world government, and it just so happens this is what the politicians have been instructed to do.

Straight from the horse’s mouth, the International Montary Fund describes this phenomenon: During the past 25 years, employment in manufacturing as a share of total employment has fallen dramatically in the world’s most advanced economies, a phenomenon widely referred to as “deindustrialization.” The trend, particularly evident in the United States and Europe, is also apparent in Japan and has been observed most recently in the Four Tiger economies of East Asia (Hong Kong, China, Korea, Singapore, and Taiwan Province of China). Not surprisingly, deindustrialization has caused considerable concern in the affected economies and has given rise to a vigorous debate about its causes and likely implications.

The real cause of deindustrialization is corporations’ constant attempts to find the cheapest possible labor and price, but at what cost? The Western world has some of the highest and stricted labor, environmental, and health regulations in the world which provides safe, healthy, and reliable products.

While the contraction of manufacturing employment has often been compared to that of agriculture, it does not apepar that non-homothetic preferences hahve played a similarly important role in deindustrialization. Indeed, if services are “superior” goods, then consumers would increase their relative demand for services as per capita incomes increase. This would in turn cause a decline in output and employment in the manufacturing sector.

There is, however, little evidence that shifts in the pattern of expenditures between services and manufacturing can explain the secular shift of employment out of manufacturing into services (Saeger, 1997).

However, corporations and governments really do not care about any of these three pillars of human dignity, therefore seek out the cheapest possible price to make the quickest buck. This is not a long term, sustainable relationship, but an extremely chaotic one with the ultimate goal of world government. While this may seem an unbelievable statement, if you were to realize that if all governments were eliminated, there wouldn’t be a need for things like tariffs and taxes or borders to regulate trade and commerce, but this is a fiction in an ideal world. What the powerful policy makers of the planet wish to do is create a one world government controlled by themselves as demonstrated by Dr. John Coleman:

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What Jesus Had to say about deindustrialization:

James 5:1-6, Go to now, ye rich men, weep and howl for your miseries that shall come upon you.

Your riches are corrupted, and your garments are motheaten.

Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days.

Behold, the hire of the labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of sabaoth.

Ye have lived in pleasure on the earth, and been wanton; ye have nourished your hearts, as in a day of slaughter.

Ye have condemned and killed the just; and he doth not resist you.

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You can download a very interesting e-book here that explains the phenomenon of globalization, the loss of manufacturing in developed economies, and the results these effects have on the socio economic dynamics in these victimized countries.

Written by EconoChristian.com

In an addendum to previous posts regarding China switching currencies, it looks like it is going to happen sooner than later. Indeed, China has proposed using copper as their hard currency to dump from the dollar’s instability. Frightened by run away dollar debts, increasing trade deficits partially caused by Chinese devaluation and manipulation of its economy and currency, and the financial crisis occuring in the United States, is making the Chinese government think twice about accepting anymore dollars.

It looks terribly bad for the US dollar as the hegemon of the world financial system these days as five countries plan to ditch the dollar in favor of more stable choices. As we’ve all seen in the last few years, the US dollar has been more unstable than a Christian drunk on one too many alcoholic beverages. God commands Christians to avoid drunkenness (Ephesians 5:18). The Bible also condemns drunkenness and its effects (Proverbs 23:29-35).
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Christians are also commanded to not allow their bodies to be “mastered” by anything (1 Corinthians 6:12; 2 Peter 2:19). It is obvious the world has become addicted to cheap oil, and since we know the US dollar is traded in oil, such a relationship can not be sustained for such a long time with countries like Iraq, Iran, and China wanting to trade oil in other currencies from other superblocks like the Eurozone’s “Euro” currency released in 1999.

By Ambrose Evans-Pritchard
Last Updated: 2:41PM BST 16 Apr 2009

China’s State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan’s TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

“China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years.”

“The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources,” he said.

The SRB has also been accumulating aluminium, zinc, nickel, and rarer metals such as titanium, indium (thin-film technology), rhodium (catalytic converters) and praseodymium (glass).

While it makes sense for China to take advantage of last year’s commodity crash to restock cheaply, there is clearly more behind the move. “They are definitely buying metals to diversify out of US Treasuries and dollar holdings,” said Jim Lennon, head of commodities at Macquarie Bank.
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John Reade, metals chief at UBS, said Beijing may have a made strategic decision to stockpile metal as an alternative to foreign bonds. “We’re very surprised by Chinese demand. They are buying much more copper than they will need this year. If this is strategic, there may be no effective limit on the purchases as China’s pockets are deep.”
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Zhou Xiaochuan, the central bank governor, piqued the interest of metal buffs last month by calling for a world currency modelled on the “Bancor”, floated by John Maynard Keynes at Bretton Woods in 1944.

The Bancor was to be anchored on 30 commodities – a broader base than the Gold Standard, which had caused so much grief in the 1930s. Mr Zhou said such a currency would prevent the sort of “credit-based” excess that has brought the global finance to its knees.

If his thoughts reflect Communist Party thinking, it would explain the bizarre moves in commodity markets over recent weeks. Copper prices have surged 49pc this year to $4,925 a tonne despite estimates by the CRU copper group that world demand will fall 15pc to 20pc this year as construction wilts.

Analysts say “short covering” by funds betting on price falls has played a role. But the jump is largely due to Chinese imports, which reached a record 329,000 tonnes in February, and a further 375,000 tonnes in March. Chinese industrial demand cannot explain this. China has been badly hit by global recession. Its exports – almost half GDP – fell 17pc in March.
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While Beijing’s fiscal stimulus package and credit expansion has helped lift demand, China faces a property downturn of its own. One government adviser warned this week that house prices could fall 50pc.

One thing is clear: Beijing suspects that the US Federal Reserve is engineering a covert default on America’s debt by printing money. Premier Wen Jiabao issued a blunt warning last month that China was tiring of US bonds. “We have lent a huge amount of money to the US, so of course we are concerned about the safety of our assets,” he said.

This is slightly disingenuous. China has the world’s largest reserves – $1.95 trillion, mostly in dollars – because it has been holding down the yuan to boost exports. This mercantilist strategy has reached its limits.

The beauty of recycling China’s surplus into metals instead of US bonds is that it kills so many birds with one stone: it stops the yuan rising, without provoking complaints of currency manipulation by Washington; metals are easily stored in warehouses, unlike oil; the holdings are likely to rise in value over time since the earth’s crust is gradually depleting its accessible ores. Above all, such a policy safeguards China’s industrial revolution, while the West may one day face a supply crisis.

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Beijing may yet buy gold as well, although it has not done so yet. The gold share of reserves has fallen to 1pc, far below the historic norm in Asia. But if a metal-based currency ever emerges to end the reign of fiat paper, it is just as likely to be a “Copper Standard” as a “Gold Standard”.

Brought to you by EconoChristian.com with help from Telegraph.

If there was ever a maxim that lived throughout the ages of investing, sticking with “what everyone needs” certainly rings true today as it did 1000 years ago. That is, what “everyone needs” is basic necessities such as housing, food, clothing, healthcare products, and such items that people cannot live without for more than a few days. In economics we call this kind of item “demand inelastic,” which means that the demand for these kinds of items remains relatively the same as income decreases or increases compared to other items like cars, computers, and other luxury items like televisions and so on.

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The problem the US and Canada are facing is that a large portion of their manufacturing base has been off shored or sent to other countries in the past 20 to 30 years as so called trade agreements such as NAFTA, World Trade Organization, and other so called free trade instruments have been established which gave companies incentive to send middle class jobs to other countries which effectively stripped the parent coutnries of their bread and butter jobs, which eliminated or significantly reduced the spending power of the middle class.

Countries like Japan have, since the 70s to 1980s, pegged their currency to the dollar to take advantage of the manufacturing sector which gave incentive to US and Canadian producers to relocate to Japan or to allow more imports from Japan to be dumped into the US. Now we have a different problem: China, Mexico, Thailand, and Vietnam, but mainly China and its huge population base, extremely low standards, and manipulated currency.

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Since it is predicted that a large portion of the manfuacturing industry we have offshored in the past 20-30 years will return probable best way to attack this is to go back to Standard &Poor’s sector data for the time. However, it won’t be a very fine analysis as it would likely miss emerging industries. It is known that electronics were hot investments as the 1930s wore on– particularly radio, which was state-of-the-art at the time. Zenith Radio emerged as a leading producer: its stock languished until 1935 when it went from the range of 2-2 5/8 at the beginning of the year to 13 1/2 at the end of the year.

Many items, including stocks, reached a historic low in the early 30s.
Some never recovered, but others doubled from their low before the end of the thirties. Therefore we could be in a good buying position later this year, but it is assumed that large increases are unlikely from today’s position. Selling short would be smart before a crash later this year, but there is a fair chance weak prosparity will continue several more years, resulting in large losses for short sellers. So many things have changed since the 30s, and it is thought we won’t learn much, except that a disasterous crash is possible.

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Precious metals are where you can never go wrong since Canada has a large reserve of natural minerals, metals, elements such as uranium and paladium used in nuclear reactors and catalytic converts, respectively (not to mention other uses). Specifically, food and food production is pegged to become the next “big thing” in the United States as the world’s producer of food, or so the prediction goes.

In mainstream economics, the theory is that the primary sector is agriculture from where the development cycle begins for any country. After that comes the secondary sector (manufacturing) and then the tertiary one (services). USA is now sitting at the tertiary sector at the top of this value chain and China seems to be enjoying its manufacturing status. India just jumped from primary to tertiary because of its’ hopping on the information technology bandwagon.

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All one has to do is look at Canada and see fields of gold for there is tremendous potential in the prairies and the agricultural areas of the country including areas like Southwestern Ontario where there are areas full of tomatoe and other plant growing regions such as Leamington. In areas like this you will find millionaires already reaping the rewards of demand for quality produce that Canadian health standards enforce. It would be wise to agree with Mr. Roger’s views that farmers will become the next millionaires because as the previous paragraph explores, the economic theory is that the US and Canada are poised to shift back to an agricultural demand driven economy.

In addition to investing in commodities such as those found in the agricultural industry, the best additional bets would be to invest in essential metals like gold, silver, copper, and paladium because these metals will always be in need and will likely raise in price as the world consumes more of the latter two metals. Indeed, copper and paladium are increasingly being used in electronics and other modern applications.

Written by EconoChristian.com

Here is an interesting piece I ran across which I thought I’d share with you instead of proving my own analysis of the economic situation. Of course, I will add that this economic crisis has been in planning for decades especially since the US was brought off the gold standard and since the World Trade Organization and other unconstitutional “agreements” were signed both in the US and Canada.

What this article really doesn’t touch upon is how banks were pretty much forced to loan billions and billions of dollars to fund mortgages for minorities and other “marginalized” groups who couldn’t afford a home otherwise. Why couldn’t they afford a home like anybody else? Officials will tell you it’s because of their skin color or some other hogwash. Yes, there are discriminatory practices all over the world. If you are white trying to get a mortgage in South Korea, for instance, you will probably be turned down faster than a Korean with money because you are white. Yes, there is racism there much more than in the West.

“My own understanding, however, is that the cause can be traced to pressures of “political correctness” in America: Financial institutions, habitually reluctant to take the risks involved in lending to minorities – particular black and Hispanics – were charged with racial discrimination. They came under pressure to prove their enlightened credentials by lending to minorities on equal terms. Gradually succumbing to such pressure, they upgraded the creditworthiness of minorities, Soon hundreds of thousands of houses were being built as mortgage lenders became emboldened to lend 90 per cent or more of the purc hase price of houses sold to minorities, whose employment prospects were uncertain and whose incomes were relatively low.” E.J Mishan For The Straits Times – Tuesday 17 March, 2009.

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These people (the U.S. government) need to be stopped. Every time we get ourselves into an economic mess, there’s usually some milestone idiocy we can point back to as the government action that made the meltdown inevitable.

Take the current housing crisis that has now spread to the financial markets in general. The cause was too-easy credit that fueled a massive increase in housing prices as people bought houses they couldn’t afford with mortgages they weren’t able to pay off.

In 1999 there was roughly $5 trillion in total U.S. mortgage debt. That number ballooned to $12 trillion by 2007, and we know what happened from there (data is from the U.S. Office of Federal Housing Enterprise Oversight). To put this into perspective, total U.S. GDP is about $11 trillion annually, and U.S. government debt is around $9 trillion. If the housing market really falls apart (meaning more than conservative estimates of a 20% drop), there’s no way the government can simply cover these losses.

Why did it happen? Let’s go back to 1999, when Fannie Mae, the nation’s biggest underwriter of home mortgages, was under pressure by the Clinton administration to find a way to get more loans to “borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans.” A pilot program was launched, which soon became general policy. Money flowed to people who couldn’t afford to pay it back.

These new policies came on top of previous changes in the 90’s that let consumers get zero-down payment loans.

In a 1999 article that now looks absolutely insane, the New York Times reported on the easing of credit terms. Fannie Mae Chairman Franklin Raines, who’s quoted in the article, was all sunshine and roses as he threw away the financial future of millions of Americans. But at least one person. Peter Wallison, had a good idea of how this would all play out:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
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”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Too bad nobody listened to that guy. (TechCrunch, 2009).

What Jesus Said About the Crisis
What Jesus says about the Wall Street crisis:

Revelation 18 1 After this I saw another angel coming down from heaven, having great authority, and the earth was made bright with his glory. 2 And he called out with a mighty voice, Fallen, fallen is Babylon the great!
She has become a dwelling place for demons, a haunt for every unclean spirit, a haunt for every unclean bird, a haunt for every unclean and detestable beast.

3 For all nations have drunk the wine of the passion of her sexual immorality, and the kings of the earth have committed immorality with her, and the merchants of the earth have grown rich from the power of her luxurious living.

4 Then I heard another voice from heaven saying, Come out of her, my people, lest you take part in her sins, lest you share in her plagues;
5 for her sins are heaped high as heaven, and God has remembered her iniquities.

6 Pay her back as she herself has paid back others, and repay her double for her deeds; mix a double portion for her in the cup she mixed.

7 As she glorified herself and lived in luxury, so give her a like measure of torment and mourning, since in her heart she says, I sit as a queen,
I am no widow, and mourning I shall never see.8 For this reason her plagues will come in a single day, death and mourning and famine,
and she will be burned up with fire; for mighty is the Lord God who has judged her.

9 And the kings of the earth, who committed sexual immorality and lived in luxury with her, will weep and wail over her when they see the smoke of her burning. 10 They will stand far off, in fear of her torment, and say, Alas! Alas! You great city,you mighty city, Babylon!
For in a single hour your judgment has come.

11 And the merchants of the earth weep and mourn for her, since no one buys their cargo anymore, 12 cargo of gold, silver, jewels, pearls, fine linen, purple cloth, silk, scarlet cloth, all kinds of scented wood, all kinds of articles of ivory, all kinds of articles of costly wood, bronze, iron and marble, 13 cinnamon, spice, incense, myrrh, rankincense, wine, oil, fine flour, wheat, cattle and sheep, horses and chariots, and slaves, that is, human souls. 14 The fruit for which your soul longed has gone from you, and all your delicacies and your splendors are lost to you, never to be found again!

15 The merchants of these wares, who gained wealth from her, will stand far off, in fear of her torment, weeping and mourning aloud,
16 Alas, alas, for the great city that was clothed in fine linen,
in purple and scarlet, adorned with gold,with jewels, and with pearls!
17 For in a single hour all this wealth has been laid waste.

And all shipmasters and seafaring men, sailors and all whose trade is on the sea, stood far off 18 and cried out as they saw the smoke of her burning, What city was like the great city?

19 And they threw dust on their heads as they wept and mourned, crying out, Alas, alas, for the great city where all who had ships at sea
grew rich by her wealth! For in a single hour she has been laid waste.
20 Rejoice over her, O heaven, and you saints and apostles and prophets, for God has given judgment for you against her!

21 Then a mighty angel took up a stone like a great millstone and threw it into the sea, saying, So will Babylon the great city be thrown down with violence, and will be found no more; 22 and the sound of harpists and musicians, of flute players and trumpeters, will be heard in you no more, and a craftsman of any craft will be found in you no more, and the sound of the mill will be heard in you no more, 23 and the light of a lamp will shine in you no more, and the voice of bridegroom and bride will be heard in you no more, for your merchants were the great ones of the earth, and all nations were deceived by your sorcery. 24 And in her was found the blood of prophets and of saints, and of all who have been slain on earth

Since EconoChristian.com is a huge fan of gold and solid assets, we’ve decided to share an interesting article with you.

By Darryl Kelley
MidasLetter.com
Tuesday, April 7th, 2009

And there are other telltale signs that gold is about to take a Great Leap Forward.

Foremost amongst them is the fact that the AMEX HUI Goldbugs Index is foreshadowing a jump with its habit presaging enhanced interest in gold with a sharp drop followed by a sharp rise. (The rise part of the equation has yet to form).
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Secondly, the engineered ‘positive sentiment’ by U.S. media and financial elements has now served its purpose, which is to lend a mantle of credibility to the G20 process by allowing participants and leaders to point to robust markets as proof that their collective actions embodied in 15 pages of summary were in fact successful.

Third, there is the deluge of corporate earnings to be unleashed pre and post Easter weekend, which are almost uniformly awful. S&P 500 companies are expected on average to decline 37 percent, the eighth straight quarter of double digit losses in quarterly earnings.

And finally, analysts (to use the term loosely) have seemed to arrive at the unanimous conclusion that the IMF’s planned sales of gold to raise $50 billion will have no meaningful impact on the gold market. Maybe that’s because, as GATA will tell you, they don’t have it.

Brought to you by EconoChristian.com and Midas Letter.

SOURCE: Midas Letter

Inflation is on its way and we’re not prepared for it, says establishment shill economists and financial analysts Kevin Phillips and Nouriel Roubini, who both published books within the last 2 years predicting the rise of this insidious evil lurking around the corner in economies where government plays a nefarious intrusion in the lives of private citizens.

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For those green to the term, inflation occurs when the money supply is increased and “chases” prices of goods and services; much of which all people in countries use and consume on a daily basis. When this happens, prices often skyrocket but are not matched by increased sums of income for purchasing power. Essentially it hurts the savers, low income people, and those with high debt loads on their backs because these groups of people are not able to comfortably absorb price shocks as those with no debt and/or high incomes and large amount of wealth.

A year ago, Kevin Phillips, an ex advisor to the Nixon administration, warned of a the pending explosion of a 25-year “multibubble” that started in the 1980s, when the financial sector accounted for 10 percent to 12 percent of the U.S. economy had started metastasizing into an “arguably crippling” 20 percent to 21 percent by the middle of this decade (Reuters; Daniel Trotta, 2009).

Indeed, all of the government manipulation of the US economy — not to mention the governments and economies in the rest of the world — is starting to come home to roost. All of the overleveraging and “easy credit” was bound to create a disaster all of which can be blamed on U.S. Treasury Secretaries all the way back to the Nixon administration, but more prevalently during the Clinton and Bush regimes.

The fact is that central bank manipulation — government manipulation — is the prima facie for the financial bubbles which have been plagueing economies of the world for quite some time since the introduction of central banks in the early to mid twentieth century when the Federal Reserve (a quasi-private institution) was established by international bankers in the 1930s in the United States.

The US economy — already suffering from bank failures, insane trade deficits, and astronomical public debt — has not seen the full effect of these facts and is about to encounter further hardship from areas ordinary Americans rely on day to day; that being credit card debt and personal loans. Since the banking sector has essentially restricted loans to those with previously good credit ratings, many businesses relying on cheap credit are being held in the mud. In a corollarily to the housing bust that occured in the past year, the US economy has yet to witness the fruition of other sectors that have relied on previously cheap credit manipulated by the central bank, those being the commercial and industrial real estate markets.

What economists, politicians, and pundits do not mention is the poignant fact that the entire monetary system of the world — having been essentially taken over by the Federal Reserve through the forced creation of central banks in each country around the globe — has enforced the creation of fiat, or government issue money. This fasci of money has throughout history been the target of control and manipulation of all politicians, dictators, and despots. Convincingly, Rome fell mostly because of their issuance and debasement of their currency.

In fact, at the end of the Roman empire, their mercernary legions refused to take Roman currency. “Whenever a nation slips from wealth creation to wealth preservation, it becomes increasingly difficult to sustain the prior level of wealth. As the cost of maintaining the Legions went up, the ROI on having them declined. In order to pay the cost of preservation, Rome debased its currency multiple times. Debasement is a way to pay today’s bills with tomorrows worthless coins. That led to incredibly high rates of inflation. Payment in kind often substituted for worthless currency” (Newsvine.com, 2009). It surely seems the United States economy is on this very same route since the US dollar is bring printed out of existence as we speak to pay for a tripled debt (now currently approximately 15 trillion dollars) — a debt already unsustainable during and previously to the Clinton administration. “What has been will be again, what has been done will be done again; there is nothing new under the sun.” is stated in the Holy Bible in Ecclesiastes 1:9.

With Canada being such a close neighbor with the United States, and sharing such a huge amount of trade volume with its neighbor, it will surely experience a severe bout of inflation to match the economic pain being experienced in the United States. “Finance Minister Jim Flaherty said Friday (April, 2009) the Canadian economy is likely to “accelerate” out of what he deemed a “mild” recession – although warning that the next problem policy-makers may face is inflation” (Financial Post, 2009). The primary problem, however, is not trade issues, but debt incurred by the “financial stimulus” that Canada’s political elite are pushing on the Canadian populous as the economic savior. Keynes himself would be so proud.

The Obama Administration will not save us

For those thinking the Obama regime has the answers the solutions, please think again for the same people who worked for previous administration are working for this administration. At the helm of the newly created “economic recovery board” is Paul Volcker, a Nixon and Carter-era economist who was the former Federal Reserve Chairman at that time. It doesn’t stop there for the Federal Reserve Chairman in this term is Ben Bernanke, a former Bush administration Federal Reserve Chairman. How can things change when things stay the same? Indeed, Einstein told us that insanity is when you do the same things and expect different results.

Government intervention is now in such an elevated state that the entire banking system is at risk of being nationalized. Many major banks have already been taken over by the US government and many more are in danger of being usurped as well. It is obvious the current ‘crisis’ has been engineered to put the economic reins of power into the hands of ‘dear government’ who will guide us toward a socialist paradise with a controlled economy.

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The Obama Deception is a hard-hitting film that completely destroys the myth that Barack Obama is working for the best interests of the American people. The Obama phenomenon is a hoax carefully crafted by the captains of the New World Order. He is being pushed as savior in an attempt to con the American people into accepting global slavery. We have reached a critical juncture in the New World Order’s plans. and only by exposing the con can we help to save freedom in America. The Obama Deception is not about Left or Right: it’s about a One World Government. The international banks plan to loot the people of the United States and turn them into slaves on a Global Plantation. Covered in this film: who Obama works for, what lies he has told, and his real agenda, and how his initial appointments and actions prove he serves the corporate oligarchs, not the American people. If you want to know the facts and cut through all the hype, this is the film for you.

Article written by EconoChristian.com with references to various sources stated herein.

The LETS is a cooperative common currency that has been talked about in freedom circles for many, many years, and it appears that something similar to it has been catching new ground as the US dollar begins its slow decline into obliteration and imitation of every currency that has been printed and debased out of existence by a tyranical federal government.

Local Exchange Trading Systems (LETS) also known as LETSystems are local, non-profit exchange networks in which goods and services can be traded without the need for printed currency. In some places, e.g. Toronto, the scheme has been called the Local Employment and Trading System.

A Brief History Of Currency in Jesus’ Time

In the time of Jesus the coins current in Israel were Roman, Greek, Syrian and Jewish. However, the Jews were allowed to issue coins only in bronze.

Large sums were expressed in talents and mnas. The talent equaled about $2,000 in US currency. The mina was 1/60 of a talent, or about $35.00.

The silver coins mentioned in the NT are: The Syrian stater (about 50 cents), the Roman denarius (about 20 cents), the Greek drachma, equivalent to the denarius. The stater was accepted as equal to the Jewish shekel, 1/50 of a mina (about 65 cents), which was the Temple tax for two persons. The denarius was the usual day’s wage for a laborer in the field, and it was the coin of the tax to the Emperor.

The bronze coins referred to, are the Roman assarion (one cent), and quadrants (1/4 of a cent), the Jewish perutah or lepton, which was worthy only 1/8 of a cent, was the coin of the “widow’s mite.”

Where LETS started

Michael Linton originated the term “Local Exchange Trading System” in 1983 and, for a time ran the Comox Valley LETSystems in Courtenay, British Columbia.[1] The system he designed was intended as an adjunct to the national currency, rather than a replacement for it,[2] although there are examples of individuals who have managed to replace their use of national currency through inventive usage of LETS.[citation needed]

LETS networks use interest-free local credit so direct swaps do not need to be made. For instance, a member may earn credit by doing childcare for one person and spend it later on carpentry with another person in the same network. In LETS, unlike other local currencies, no scrip is issued, but rather transactions are recorded in a central location open to all members. As credit is issued by the network members, for the benefit of the members themselves, LETS are considered mutual credit systems (Wikipedia).
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A small but growing number of cash-strapped communities are printing their own money. Borrowing from a Depression-era idea, they are aiming to help consumers make ends meet and support struggling local businesses.

The systems generally work like this: Businesses and individuals form a network to print currency. Shoppers buy it at a discount — say, 95 cents for $1 value — and spend the full value at stores that accept the currency.

Communities print their own currency to keep cash flowing

Workers with dwindling wages are paying for groceries, yoga classes and fuel with Detroit Cheers, Ithaca Hours in New York, Plenty in North Carolina or BerkShares in Massachusetts.

Ed Collom, a University of Southern Maine sociologist who has studied local currencies, says they encourage people to buy locally. Merchants, hurting because customers have cut back on spending, benefit as consumers spend the local cash.

“We wanted to make new options available,” says Jackie Smith of South Bend, Ind., who is working to launch a local currency. “It reinforces the message that having more control of the economy in local hands can help you cushion yourself from the blows of the marketplace.”
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About a dozen communities have local currencies, says Susan Witt, founder of BerkShares in the Berkshires region of western Massachusetts. She expects more to do it.

Under the BerkShares system, a buyer goes to one of 12 banks and pays $95 for $100 worth of BerkShares, which can be spent in 370 local businesses. Since its start in 2006, the system, the largest of its kind in the country, has circulated $2.3 million worth of BerkShares. In Detroit, three business owners are printing $4,500 worth of Detroit Cheers, which they are handing out to customers to spend in one of 12 shops.

During the Depression, local governments, businesses and individuals issued currency, known as scrip, to keep commerce flowing when bank closings led to a cash shortage.

By law, local money may not resemble federal bills or be promoted as legal tender of the United States, says Claudia Dickens of the Bureau of Engraving and Printing.

“We print the real thing,” she says.

The IRS gets its share. When someone pays for goods or services with local money, the income to the business is taxable, says Tom Ochsenschlager of the American Institute of Certified Public Accountants. “It’s not a way to avoid income taxes, or we’d all be paying in Detroit dollars,” he says.
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Pittsboro, N.C., is reviving the Plenty, a defunct local currency created in 2002. It is being printed in denominations of $1, $5, $20 and $50. A local bank will exchange $9 for $10 worth of Plenty.

“We’re a wiped-out small town in America,” says Lyle Estill, president of Piedmont Biofuels, which accepts the Plenty. “This will strengthen the local economy. … The nice thing about the Plenty is that it can’t leave here.”

Brought to you by EconoChristian.com but written by Marisol Bello of USA TODAY.