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U.S. Financial Crisis

U.S. Financial Crisis

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Published by Kregener
What Can Average Americans Expect to See in Near Future?
What Can Average Americans Expect to See in Near Future?

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Published by: Kregener on Jul 31, 2008
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05/09/2014

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By Mike Finch
M
any prominent economicanalystsarepredictingbear markets, recession and even possibly a global de- pression in the years to come because of  banking and federal mismanagement.“We think that the markets could de-cline 50 or 60 percent. We hate to saysomethingsosomber,butit’snotthetimeto be optimistic or pessimistic, it’s thetime to be realistic. Our whole systemhas been built on credit expansion—wehave to grow credit year after year inordertokeepthingsgoing.Theeconomyis not going to grow, it’s going to suffer recession,andonceitentersrecessionit’sgoingtocascadeonitself,DavidTiceof Prudent Bear Fund said in a 2007 televi-sion interview.The market has not yet come close tothe 50 to 60 percent devaluation mark, potentially because of the maneuveringsoftheFed.ButTiceprimarilyblamestheFederal Reserve for the devaluation of the dollar.“TheFedscrewedup,”Ticesaid.“Thefed should not have kept interest rates solow in the past. We should have experi-enced some mini-recessions along theway. Right now the bubble has gotten so big...thatit’sgoingtobeverytraumatic[when it bursts].”Billionaire financial commentator and Ron Paul supporter Jim Rogers also predictedarecessionina2007interviewwith the
Financial Times
. He had been predicting a big recession for about 10years (as hasAFP), and is finally seeinghis predictions come true. He blames boththefederalgovernmentandtheFed-eral Reserve.“The U.S. dollar is a terribly flawed currency. As recently as 1987 the U.S.was a creditor nation. We are now thelargest debtor nation the world has ever seen. In only 20 years we owe the world over 13 trillion—with a ‘T’—dollars.That’s a bad number, but what’s worse isour national debt is increasing at the rateof one trillion every 15 months. It’s sim- plearithmeticathowfastitsgoingtogoup, but its pretty terrifying arithmetic,”Rogerssaid.“Itdoesnottakeageniustofigure out that it’s a currency that isgoingtobegoingdownforsometimetocome.”Rogers’ outlook has not changed since 2007; in fact it has gotten worse.“I’m extremely worried,” Rogers said in a February interview with CNNMoney. “I have been for a while, but I just see things getting much worse thistime around than I expected.”Rogers said that the Fed’s attempts tosave the country from a recession are infact making things worse.“Conceivably we could have just had recession, hard times, sliding dollar, in-flationetc.,butI’mafraidit’sgoingtobemuch worse,he said. “Bernanke is printing huge amounts of money. He’sout of control and the Fed is out of con-trol. We are probably going to have oneof the worst recessions we’ve had sincethe Second World War. It’s not a good scene.”Rogers looks at the Fed’s willingnesstoaddliquiditytoanalreadyinflationaryenvironment and sees the history of the1970s repeating itself. One example of an area of the Fed’s mismanagement ishowtheyaredealingwithbailingoutthehousing lenders.This month Bloomberg.com brokedown Rogers most recent interviewabout an example of the Treasury De- partment’s mismanagement and moneycreation.“TheU.S.TreasuryDepartment’splan
A N A M E R I C A N F R E E P R E S S S P E C I A L R E P O R T
 The U.S. Financial Crisis:
WHY WE ARE WHERE WE ARE AND WHAT WE CAN DO ABOUT IT
Y
ou can save big bucks onyour house with loosechange. Round figures will be used here. Say you pay$300 a month on a 30-year mortgage.Your amortization schedule shows that,on your first payment, $287 goes to in-terest and $13 to equity. So, write acheck for $313 and you have knocked an extra month’s payment off your bal-ance. Do this every month and your house is paid for in 15 years, not 30.Of course, as the months and yearsgo by, the share of your payment that isapplied to the loan grows as the interest portion drops.That’s why it’s best to dothis early in the game.As homebuyers grew wise to this,some banks inserted a clause in their loan agreements that rendered early payments moot for the first one or twoyears. So, in settling on a home pur-chase, ask if the lender has such a ruleand how long does it apply.Ifyou are already paying fora home,ask your bank the same question, getanamortization schedule and start making“extra” payments.
FormulaSavesBigBucksonMortgage
What CanAverageAmericansExpect to See in Near Future?
See
EXPERT’S SEVEN-POINT 
, page B-6
FED CHAIRMANBEN BERNANKE
 
B.2
AMERICAN FREE PRESS • August 2008
By Pat Shannan
W
hencurrencyexchangerateschange,busi-nesses must adapt quickly. In this era of international trading, knowing how aweakerAmerican dollar is likely to affectone’s business may avoid some critical mistakes.The dollar has shown continued weakness againstother currencies as well, including the British pound,Australian pound and Japanese yen. However, the mostdramatic losses have occurred against the euro. From itslow of 84 cents in July 2001, the euro has risen steadilyin value, stopping just short of $1.60 on July 11, 2008.When it rose to the then-record of $1.29 on Jan. 13,2004, Jean Claude Trichet, European Central Bank (ECB) president, signaled mounting concern over theeuro’s rapid rise by saying “brutal moves” in the dollar and “excessive exchange rate volatility were not wel-comeandnotappropriate”andthatEurope’spolicymak-ers were concerned. His remarks and those of other European officials triggered a sharp fall in the euro.However,observersnotethattalkwithoutsupportingac-tion usually produces only short-term results, and thedollar continued to trend downward in value.In recent years, Ferrari, the Italian sports car maker,reported that it is losing money on each car it sells in theU.S., its largest market, because of the falling value of the dollar. Other European carmakers, including BMW,Volkswagen and Porsche, have seen their profits plum-met as they have tried to absorb some of the loss rather than pass through the price increases to consumers.AfewEuropeanshopsandrestaurantshaverefusedtoaccept dollars from American tourists this summer be-causethebusinessownersdon’tknowwhattheexchangewill cost them when they go to the bank the next morn-ing. Others have simply added an extra 5% tariff over and above the known exchange rate of that day in order to protect against that unknown of tomorrow’s rates. Insome countries in the last century, the hyper-inflatingcurrency got so out of hand that people were paying for their restaurant meals at the time they ordered, fearingthatthecostwouldincreasebeforetheycouldfinisheat-ing.This brings to mind an anecdote from the 1923 post-WWIhyperinflationinGermany.Awomanwasstandingin line outside the grocery market holding a bushel bas-ket full of deutschmarks, waiting to buy bread and a fewotherstaples.Suddenly,herfour-year-oldchildbrokeand ran from the sidewalk into the dangerous street. Theyoung mother set down her basket full of cash and ranafterthechild,grabbing and scolding him.When shere-turned only a half minute later, her paper money wasdumped on the sidewalk, and someone had stolen her  basket.This is the ultimate result of any paper currency un- backed by something of intrinsic value, and no
fiat 
cur-rency in the history of this planet has ever survived.Theterm “sound as a dollar” is gone with the wind becausethere no longer is anything behind it to keep it sound,and no
fiat 
currency is any more intrinsically valuablethan another.Richard Russell, who is sensitive to changes in mar-ket sentiment, commented on his web site July 7, 2008:
To start with, my instinct tells me that we aremoving into an era of momentous events. I believethat huge changes are being thrust upon us. I don’tthink these changes are being recognized as yet. I believe that underlying those changes will be thesubject of fiat money and the importance of central banks throughout the world. The creation of “wealth” through the mechanism of fiat money is basically irrational and yes—immoral.You cannotmandate prosperity through the process of printingmoney.Yet nations and their politicians and central banks have been doing this since 1971. My guessis that we are fast moving toward the period inwhich “the piper will be paid.” That’s the big pic-ture as I see it.
The U.S. dollar index was 120 seven years ago. It isnow 72, a decline of 40 percent. Market participants be-lieve that the dollar will continue to fall against theeuro. Forecasts that the euro will continue its increasearerampantastheoncegreatAmericandollarcontinuesits decline. U.S. firms that export their products to Eu-rope can look for another banner year. U.S. firms thatimportfrom Europe should protectthemselves by hedg-ing in foreign exchange markets, say the experts. And whataretheimplicationsforU.S.citizens?Onefinancialwriter put it this way: “Have you ever seen the Grand Canyon?Consider yourself forewarned.
#
The U.S.Dollar vs.the Euro:Predicting How LowWill it Go
MONEY:
THE12TH&FINALRELIGION
UTHORR.DUANEWILLING
gives you the key to understanding why the illumi-natedonesoftheNewWorldOrderneedtosubstitutesecrecyforjustice.LearnhowGod Moloch, devoid of any capacity for either mercy or forgiveness, is moving with bruteforce for world control behind the myth called Israel.The Moloch myth conceals the invention of credit based money. Belief in money drives the human condition to prey on the planet and its in-habitants.MoneycreationhasBiblicalconsequencescalledusury.Thekeytousuryishiddeninthelegend of the Holy Grail. The covenant obligation to take dominion and prosper in harmony withnature is subverted by secretive organizations.There is talk of Bilderbergers, and various councilsandglobalistcorporations.Asifbydesign,thecollectivemindremainshypnotizedbytheirMolochmagicof centralbankingwithitsperpetual(national)debts,moneyatinterestandstockexchangesand income taxes.
 Money:The 12th & Final Religion
Softcover,193pages,#508,
$17
.TBR subscriberstake10%offpriceabove.OrderfromTBRB
OOKS
,645PennsylvaniaAvenueSE,Suite100,Washington, D.C. 20003. Inside U.S. add $3 S&H. Outside U.S. add $10 S&H. Call 1-877-773-9077 toll free to charge toVisa/ or MC.
ALL-NEW BOOK FROMTHE BARNES REVIEW
A
Is Money the 12th and FINAL Religion?What Does the Bible Teach About Money?
Pat Shannan is the assistant editor of 
American Free Press
. See morefrom Pat at www.patshannan.com or www.AmericanFreePress.net. He isthe author of 
One in a Million:An IRSTravesty
fromAFP. Softcover, 270 pps., $20. Call 1-888-699-NEWS toll free to charge toVisa/MC.
THE U.S. FINANCIAL CRISIS: A SPECIAL REPORT FROM AFP
 
 August 2008 AMERICAN FREE PRESS
B.3
By Pat Shannan
F
ollowing on the heels of the surge of small business closings all over the country, dozensof chain stores have announced massive cut- backs and closings of less productive outlets.Amongthelargerchains,HomeDepotsaiditisclosing15 stores due to the slumping economy and poor housingmarket.This is the first time the world’s largest home im- provementchainhaseverclosedanoutletforperformancereasons, and the move will affect over 1,300 employees.Shoe seller Foot Locker announced a year ago that ithad begun drastic clearance sales to move out the inven-tory of 250 of its stores prior to closing the doors, and CEO William Dillard II announced earlier this year thatDillard’s Inc. will continue to focus on closing underper-formingstores,reducingexpensesandimprovingitsmer-chandise in 2008.Late last year the Bombay Company closed all 384 of itsU.S.-basedstores.Thecompany’sonlinestorefronthasdiscontinued operations as well.The clothing industry, especially women’s apparel,seems to be suffering the worst impact of the recession.Eddie Bauer, established in the northwest in 1920, hasshuttered27storesalreadyandhasearmarkedatleasttwomore for shutdown by the end of the year. Ann Taylor isclosing117nationwide;theownersofLaneBryant,Fash-ion Bug, and Catherine’s have earmarked 150; Women’sretailer Cache announced “20 to 23”; Talbots knocked about 78 last year and will close 22 more this year; Pa-cific Sunwear of California, having closed 74 outlets in2007,hasnowannouncedthattheremaining154aretogoaway in 2008.Gap Inc. is closing 85 stores. In addition to its name-sake chain, Gap also owns Old Navy and Banana Repub-lic.Thecompanysaidtheclosures—allplannedforfiscal2008—will be weighted toward the Gap brand.Both Levitz and Wickes, longtime furniture retailers,are going out of business. Wickes, a 37-year-old retailer that targets middle-income customers, filed for bank-ruptcy protection last month. Richard Levitz opened hisfirst furniture store in Lebanon, Pa. in 1910, and the nextgeneration introduced the warehouse-showroom conceptto its customers in the 1960s.Another furniture retailinggiant, Ethan Allen, is closing 12 of its more than 300stores in an effort to cut costs.Both Sharper Image, known for its high-tech noveltygadgets,andLillianVernon,whichsellslow-costgiftsand gadgets through it catalog and website, have filed for  bankruptcy.Other store names, some better known to Americansthan others, that have closed, are closing or are in a “cut back mode” are Zales and Piercing Pagoda from the jew-elry industry;Walt Disney, Children’s Place and KBToysfor children; Sprint/Nextel and CompUSA in the com- puter and electronics market; Macy’s Department Stores;MovieGalleryandHollywoodVideostores;Wilson’sand the Leather Experts; Lowes and Office Depot.Even the great department store chain, reborn in the1930s through the efforts of one of its founders, JamesCashPenney,followingthecrashof1929,isscalingbacinanefforttoavoidanotherwipeout.J.C.Penney’srevivalwas one of the great business success stories of the De- pression Era. Now it could be over.Meanwhile, the Bush administration and Ben Ber-nanke at the Federal Reserve Bank continue to insist thattheeconomyisstable.Andthey’llkeeptellingyouthataslong as you’ll believe it.
#
RetailStoreClosuresSymptomaticofAilingEconomy
By Pat Shannan
A
mazing how $4 a gallon gas has madeevery politician in the country ready tohelp solve the energy crisis, isn’t it? Well,not quite everyone. Nancy Pelosi and theDemocratic leadership in the House of Representativesarerefusingtoallow afloorvoteonleg-islation to allow drilling in theAlaska wilderness or off-shore.The solution to this so-called energy crisis was beingdiscussed 30 years ago, and the answers are still thesame. Everyone who can read knows that there’s oil buried under the oceans and the arctic tundra. We maynot know exactly how much. We can, however, be fullyconfident that it’s more than we’re getting now. Mean-while,any chance offinding how much there is and get-ting our hands on it is being blocked by Nancy Pelosiand her cohorts in the Democratic leadership.Ofcourse,thisisnotanenergycrisisbutaleadershipcrisis, and we have to think back a long way to remem- ber when there was a worse example of “leadership” inCongress.This is the most blatant betrayal ofAmerica’sinterests—andtheclearwishesofanoverwhelmingma- jority of theAmerican public—that’s happened in years.Once again, we’re permitting Congress to stick it tous, and just how much more evidence do we need to seethat the crisis is contrived.For the past 30 years or more, former Alaskan pipeline Chaplain Lindsey Williams has been citing theUnited States government-mandated policies that wereabsolutely guaranteed to create an energy crisis in thiscountry. Consider:We prohibited new drilling off the Atlantic and Pa-cific coasts.We went apoplectic at the thought that anyone would disturb the caribou in the remote northern corner of Alaska by trying to drill for oil.We refused to allow any new refineries to be built intheU.S.—eveninplacesthatweredesperatetohaveone.We also refused to build any new nuclear power  plants—even though the evidence is overwhelming thatnuclearisthesafest,mostefficientwaytogenerateelec-tricity that has ever been invented.We’ve also refused to allow any new pipelines to be built, to import natural gas from Canada. Now,GeorgeBushisgettingheadlinesforfinallylift-ing the Presidential ban on offshore drilling. “It’s allCongress’s fault,” the White House declares—hypocrit-icallyignoringallthattheadministrationhasdone—and is still doing—to prolong the energy crisis.Why didn’t the White House lift the ban seven yearsago? Why doesn’t it release some of the billions of dol-lars worth of oil and gas that are locked up in its “strate-gic reserves?”Ifyouwanttolowerprices,theresnobetterwaytodoit than by increasing supplies.In regards to the energy crisis, the United States hastwo choices, and only two choices, before us today.• We can determine to do everything possible to pro-ducemoreenergyhere.Despitethenegativelamentsyouhear from Washington, there’s a great deal we can do,starting here and now, to increase domestic energy pro-duction. Specifics to follow.• We can face the terrible consequences of doingwithout. Remember the last time we had gas lines and fuel shortages and more than a few people muttered,“will folks be freezing to death in the dark?” Before thiscrisisisover,thatdirewarningcouldliterallycometrue.There is no third choice.We cannot purchase enoughoil or gas from other countries, no matter how muchwe’re willing to pay (with shrinking “dollars” manydon’t even want), to preserve and protect our presentlifestyle.Ourpresentpoliciesarecostingusafortune.Theyarereducing our standard of living.And they are financingthe enemies offreedom.Isn’titlong pasttime to changethem?Where are we going to get the energy we need? Hereare three places we can start:Coal.TheUnitedStateshasrightlybeencalled“TheSaudiArabiaofCoal.Wehaveenoughoftheblackstuff underground to supply a major chunk of our energyneeds for at least another century. Let’s figure out better waystoextractitandcleanerwaystoburnit.Sixtyyearsago, Germans invented technology to turn coal into oil.Why can’t we do it today?Nuclear.Thereisabsolutelynoquestionthatnuclear  power is the cleanest, safest, most efficient way to pro-duce energy that we’ve ever discovered. Why have weallowed a handful of hysterics to keep us from buildingone new power plant in the past 30 years?• Oil and gas. It is absolutely insane not to encouragethepeopleandthecompanieswhocanproducemoreen-ergy for us to go out and do so. Instead, we permit ahandful of demagogic grandstanders in Washington totreat the oil companies like criminals. Instead of prom-ising to seize all their so-called windfall profits, howabout we give them incentives to produce more energy?InsanityoutofWashington?Whatelseisnew?It’sal-most like the whole thing has been planned for a longtime, isn’t it?
#
CommonCentsSolutionsExisttoU.S.EnergyCrisis
THE U.S. FINANCIAL CRISIS: A SPECIAL REPORT FROM AFP

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