Paul Craig Roberts has explained what a disaster the passage of the North American Free Trade Act was for Democratic party fundraisers. Because the Democrats and the Republicans voted to send 12 million jobs overseas they no longer had union dues from working people with high paying jobs. Today’s America is a shell of its former self. One in four non-government workers in the USA make less than $10 an hour before taxes. Only 51% of last year’s college graduates have fulltime jobs. And their average wage is $12.27 an hour before taxes. I would not expect that trillion dollars in student debt to ever be paid.
The Democratic party now has to go to Wall Street to raise money and those funds are forthcoming only if the Democrats are willing to allow criminals to steal the pensions of their voters and to sell the US military to Israel. Obama still campaigns as a liberal Democrat. In 2008 he promised to raise the federal minimum wage to $9.50 an hour. It is still $7.25.
Obama allows front running in which Goldman Sachs and others are allowed to hook into the New York Stock Exchange computer trading system ahead of the other traders. This allows them to see an order placed by your mutual fund or pension, step ahead of the order, buy the stock at a lower price and sell it to you for a markup. This lets Goldman Sachs steal 100 million dollars a day from your retirement. This has been known for years by everyone in the Senate and the Congress. Do not expect that robbery to be stopped anytime soon.
Obama continued this NAFTA style de-industrialization policy by giving General Motors 21 billion dollars to send the Cadillac and Chevy Volt plants to China, Brazil and eastern Europe. He wants to pass the Trans-Pacific Treaty that would allow international bodies to be foreign corporation to be exempted from American health, environmental and labor laws while keeping small businesses under the grip of regulators determined to bankrupt both them and family owned farms. A union recently picketed Obama at one of his many fundraisers to protest this treaty. It was to no avail. Because workers with declining wages can no longer donate money here is no justice for them. Obama is Obama. He is not a traditional Democrat.
Paul Craig Roberts argues that with no productive economy left that actually makes things people can use we have no way of investing and making money except to participate in an endless series of Bubbles offered by Wall Street. First there was the Dot Com Bubble in which stocks with no real financial worth or even a business plan that made sense were selling at astronomical prices. It was understood that Alan Greenspan and the Federal Reserve would keep stock market prices high and bond prices low. The FED intervened by creating money to keep bond prices high which also allows rampant speculation with low interest rates. After the Dot Com Bubble collapsed, Wall Street sent us into the Mortgage Backed Securities fraud.
Roberts has said often that the Federal Reserve must manipulate everything because all that is left is fraud. The President’s Plunge Protection Team enters into the stock market to keep prices up. The biggest Bubble according to Roberts is the bond market. The Federal Reserve creates enough money to force interest rates down. Treasury bonds vary inversely with interest rates. By lowering rates they keep the value of bonds up. The FED pays banks not to loan money to small businesses so there will be no Hyperinflation. But they are loaning as much as 7 billion dollars at 0.01% so big banks can buy commodities like corn, soy, wheat and oil to drive up the prices you pay at the store and at the gas pump. This is only moderately inflationary. It does allow a steady transfer of wealth from you to the bankers. But that is what the system is designed to do.
The FED funds banks and brokerages to naked short sell gold and silver to force bullion prices down so the dollar looks good. I have seen screen shots of the FED’s agents selling more silver in an hour than is mined in a year.
The government leases its gold reserves to large banks who are allowed to sell every bar 5 times. That is illegal but who cares about the law when your paper investments will disappear in a flash if they arrested all the crooks in Washington, New York and London? Dr Jim Willie has been told by insiders that 20, 000 tons of allocated gold is not there.
Under the debt based currency systems of the Federal Reserve and the Bank of England you cannot create money without first creating a debt. That is the original source of the problem. By sending manufacturing jobs overseas, the only source of credit creation remaining was mortgage fraud, wars overseas, speculation in oil and food commodities to drive up consumer prices and bailing out the banks. All of this money creation leads to Unpayable Debts being burdened on taxpayers with declining incomes. Previously, I said the GDP is growing at 1.1% but our debts are growing at 21%. We are heading to an economic brick wall which I had hoped would be delayed until after the November 2012 elections. But that is becoming increasingly doubtful.
Spain has enough cash to last until August 20th. Spain also needs bailouts for its banks and its regional governments. Ambrose Evans-Pritchard of the London Telegraph has written authoritatively that Greece will soon be forced out of the euro. The European Union does not have the money to handle Greece and Spain and Portugal. What will they do for Belgium, Ireland, Italy and the eastern Europeans? The Netherlands September elections will be a referendum on withdrawal from the euro. Dr Steve Keen who analyzes debts sees England as collapsing soon. China is building a 1,000 metric ton gold vault will be ready for business in September. Massive money printing if started at the right time and in the proper amount will delay economic collapse and Hyperinflation until after election day. But Romney is their man too so it will cost the bankers nothing to sacrifice Obama and the Democrats. And, if the Republicans capture the Senate in November, Wall Street could get anything they wanted from the new government.
Paul Craig Roberts has also told us how this Bubble will be undone. The dollar is an international reserve currency. If an Australian wants to buy something from Malaysia, he will have to use US dollars. But now people in Japan and China can buy things from each other without using dollars. Ditto for China, Russia, India and Brazil. As usage of the dollar declines, the demand and hence the value of the dollar will also decline. That is one definition of inflation. The only way to raise the value of the dollar would be for the FED to raise interest rates. The Treasury currently pays 535 billion dollars a year in interest payments on the debt. That would increase the deficit to 2 and then 3 and then 4 trillion dollars a year just to fund the interest on the debt. Raising interest rates would also crash the bond market, By lowering the value of bonds, it would take away trillions of dollars in wealth instantly. It would also raise mortgage rates overnight making it impossible to buy or sell a home. Millions of additional homes would be foreclosed. Most of JP Morgan’s 72 trillion dollar exposure in derivatives is a one sided bet against rising interest rates. The Federal Reserve is trapped in low interest rates and has no exit but money printing which is inflationary. That is why Ben Bernanke has been reluctant to print a lot more money.
Michael Hudson wrote Super Imperialism years ago in which he explained how the US funds its wars by printing dollars. This devalues the purchasing power of dollars held by foreigners so they are paying for America to invade their countries. I stopped counting when America had soldiers in ten countries killing locals who do not like Wall Street and Israel. I do not like Wall Street or Israel. Ending senseless wars is one good reason to dump the dollar.
Ben Bernanke would have to create tens of trillions of dollars in currency swaps to bail out the banks and the governments of Europe. That would unleash a Hyperinflation after the November elections. If Bernanke does not do that, then I would expect Spain and Greece and Portugal to collapse. The Credit Default Swaps sold by big banks to insure a loss in value to those bonds would be triggered. The banks would have to default on the CDS. That would be the end of international trade. Bank holidays would be the least of our problems. In case of a bank holiday please be advised that cash will be accepted to pay bills. Checks will not be accepted. And bank cards will probably not be accepted. The government could devalue your dollars and not let you get money out of the bank until it no longer would buy the food you had planned to buy. In Argentina middle class families were reduced overnight to foraging in garbage dumpsters for food.
Bottom Line: Your dollar will soon be a lot less valuable whether it is before or after the elections we cannot say. In any event the days of the unbridled reign of the bankers will soon be over. They will be tempted to burn the entire planet to a cinder rather than lose control of our governments. They are so insane that they believe they will die if they do not have the right to run our governments, steal our pensions and savings, exploit us, bankrupt our small businesses and farms and drastically cut our wages.
Link:
http://vidrebel.wordpress.com/2012/07/27/paul-craig-roberts-from-nafta-to-the-collapse-of-the-bubble-economy/
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