Economic Collapse

Another great interview by King World News with Harry M. Markopolos on the corruption of Madoff and the SEC. Great insights into the inner workings of the financial reality of today and the collapse and economic and political revolution yet to come.

The Chinese continue to move out of the US fiat paper currency and into real money, gold. India purchased 200 tones last year. As the saying goes “he who owns the gold makes the rules” this furthers the process already in the making for decades - the financial center of the world will move from the US to China and Asia.
http://english.pravda.ru/business/finance/25-02-2010/112369-china_gold-0

- “You should be in wealth-protection mode, not in trading mode”
John Williams

Very good audio interview with John Williams of Shadowstats.com released today. Listen carefully:
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/2/6_John_Williams.html

As many of you know Peter Schiff is now running for Senator in the State of Connecticut. Schiff is an American economist of the Austrian School, author, commentator and popular video blogger who regularly appears in the role of a bearish pundit on numerous financial news networks. He predicted the Dotcom crash of 2000 and the Housing crisis of 2007/2008 and like the author of this blog he belives that the US Dollar is heading for hyperinflation. He is a licensed stock broker, the president of Euro Pacific Capital with a 100 employees who successfully protect their clients wealth by moving out of the US dollar and into real money such as gold etc.

If you want a crash course in the problems with the US economy, watch this. A good hour well spent with a lot of information and humor. Enjoy.

Disclosure: I have no vested interest in Euro Pacific Capital nor do I receive any payment for writing this.

Perhaps slightly off-topic but still within the scope of this blog: This will open the flood gates and corrupt the Hill even more. This comic says it all.

This can only lead to much more of this:

…and this:

Here’s a great commentary by Peter Schiff on the low-lights of Obama’s State of the Union address held on the 27th January 2010.

Cutting the federal deficit is the only way back to a sound economic recovery and job creation. You can’t keep spending money you do not have forever. The fact is that the US is broke. Until the federal deficit is turned back to a surplus the Fed will keep printing money through “quantitative easing” which should more appropriately be called “massive worsening” leading to hyperinflation and the death of the US Dollar. Obama plans to “cut spending” with a total of 250 billion US Dollars over 10 years. Yes, 10 years. Thats 25 billion each year at the same time the official expected federal deficit is 1.35 trillion. Thats 1 350 billion. Obama just announced “savings” of less than 2%. I guess its a start…

India buys 200 tonnes of Gold from the IMF for 6.7 billion US Dollars. Thats more than 7 million ounces and half of the announced IMF gold sale of 400 tonnes. Who will buy the other 200 tonnes? My bet is China. Why are they doing this? They want to get rid of their US Dollars and into hard assets. Gold is the money of kings. Debt is the money of slaves. Just look at the rate of decline in foreign purchases of US debt: Read the rest of this entry »

As expected for a long time now, CIT filed for bankruptcy yesterday. This is huge for small and medium sized businesses in USA as Reuters reports “CIT failure to leave small businesses floundering”:

The company’s long-term prospects are uncertain and the bankruptcy could leave more than one million small and medium-sized businesses looking for another source of funding, lawyers said.

“This could have a devastating effect,” said Jerry Reisman, a partner at law firm Reisman Peirez & Reisman in Garden City, New York, who has been working with many of CIT’s factoring clients.

These clients — about 2,000 small companies — are in a particular bind when it comes to finding alternative financing since CIT is by far the biggest provider of factoring services.

CIT’s factoring business, worth about $42 billion in 2008, is estimated to be at least five times the size of its closest competitor, Wells Fargo & Co (WFC.N), followed by other smaller companies such as GMAC Inc and Rosenthal & Rosenthal. It is not clear if these rivals have enough capacity to take on all of CIT’s existing customers.

Reuters reports:

U.S. authorities seized nine failed banks on Friday, the most in a single day since the financial crisis began and the latest stark sign that substantial parts of the nation’s banking industry are being crippled by bad loans.

The move brought the total number of failed banks in 2009 to 115 — their highest annual level since 1992 — with analysts expecting more to come. Among the lenders seized Friday was Los Angeles-based California National Bank, in what was the fourth-largest U.S. bank failure this year.

The largest institution to fail in the current financial crisis was Washington Mutual, which boasted $307 billion in assets when it was shuttered in September 2008.

U.S. Bancorp on Friday acquired the nine banks that had been held by FBOP Corp, picking up $18.4 billion in assets and $15.4 billion of deposits.

So another 15 billion to handle by the FDIC. They will need more funds very soon. From whom you ask? From you, dear taxpayer! This will be done through Bernankes printing press and you will pay for it through the further debasement of your currency. Trick or treat?