Wednesday, November 24, 2010

The Shanghai Cooperation Organization Makes Its Move-Obama Dithers

The Shanghai Cooperation Organization has finally made its move, decoupling its two largest economies from domestic exchange in the world reserve currency US dollar. The death knell has finally and irrevocably sounded for the USD as the Federal Reserve proceeds at breakneck pace toward inevitable hyperinflation and the ultimate devaluation of the US currency. This watershed action taken in St. Petersburg between Russian prime minister Vladimir Putin and his Chinese counterpart Wen Jiabao promises to fuel creation of a de facto new world reserve currency the massive repercussions of which will be felt through the coming months throughout the world financial system.

The recent attack on North Korea by the South and the ensuing NK shelling of the Yeonpyeong border island in the Yellow Sea following months of US naval exercises and the launch of a Chinese ICBM some 30 miles off the western coast of the US portends escalating confrontations in the near future as the US economy continues to slide into Depression and a floundering administration, reeling from one of the most disastrous mid-term elections in US history and a stinging rebuke from the rising ASEAN nations at the recent G20 meeting in Seoul, seeks recourse in the patented last resort of US foreign and domestic policy failures- military adventurism. see also The Precipice and the Abyss on Kushmonster

We have noticed one little addendum here in our perusing of internet sources which we feel might be of some significance in the global shift towards the SCO. Pakistan has petitioned for full membership in the Shanghai Cooperation Organization as of 11/25/ 2010. With the present full scale US military and mercenary presence in Pakistan, we can only surmise that the battle lines are being drawn for a predicted and now imminent US/ China confrontation in the Chinese client state. India, the recent beneficiary of a state visit by the lame-duck American president, will undoubtedly be drawn into the currents of this perilous and destabilizing geopolitical brinksmanship . http://news.in.msn.com/international/article.aspx?cp-documentid=4626637


Liberte said...

I've only just begun to study this but I have some questions regarding inflation and deflation.

From what I understand hyperinflation would function as a back-door jubilee. Absolving everyone in the nation of their debts. In this arrangement the banks take the hit.

If interest rates and lending standards were raised, ever so slightly, wouldn't that precipitate a deflationary depression, where debts are maintained, welfare/warfare infrastructer is maintained, and the banks take little or no loss.

Given my limited understanding, despite the money printing currently going on, I can't imagine it being allowed to continue to the point of hyperinflation.

My understanding suggests that:

Hyperinflation = yard farming and back to basics living.

Deflation = debtors camps, police state, raids on yard farmers, repo's, forclosures.

I am not boldly claiming this to be truth so much as asking for clarity; your thoughts on this?

Liberte said...

Edit to above. Happy Thanksgiving.

yardfarmer said...

I believe your analysis is quite perceptive and displays a basic understanding of a very complex phenomenon about which even economists cannot quite agree (Plus, I appreciate your rather wry sense of humor รก la "yardfarming")

As I understand it, inflation has two different aspects:1.comprising a demand/pull effect which means rising prices driven by a natural delimitation of supply and corresponding demand induced rise in prices, and 2. a cost/push phenomenon which is primarily currency based and which results from efforts we are witnessing now in the Federal Reserve's desperate attempt to "re-inflate" a credit collapse deflationary spiral as the successive credit inflated bubbles collapse with increasing velocity.

As to any form of "back door jubilee" due to hyperinflation as you express it, there is a great
deal of skepticism. The example of Wiemar Germany is the most obvious and egregious precedent among many others. Absolving everyone of their debts according to the established Hebraic biblical injunction seems an admirable and even desirable outcome.

Yet the present situation admits of no such easy or sanguine resolution. Any liquidation or more appropriately "transference" of debt will be more than offset by higher taxes, elimination of basic services and the massive and extreme social dislocations. This is in keeping with the oft repeated mantra "socialization of losses and privatization of profits"

As is the case presently with the Bank of America, some banks are definitely going to take a large hit. But as we have seen ever since the initial stages of the credit crisis, the large banks are essentially insolvent and as the "zombies" they are, only exist, much like the equity markets, because of the extraordinary infusions of trillions of digital electronically created "dollars" entered into their ledgers.

In the meantime the exorbitant executive bonuses, CEO golden parachutes and wealth transference from the public to the private sector will more than compensate the fraudsters banksters and economic hit men for the minor inconvenience of a failed bank.

Indeed it has been expressed that even a marginal increase in interest rates would utterly collapse the economy.This is only the case because the lion's share of the multi trillion dollar TARP program is now presently hoarded at the Federal Reserve earning interest paid by the taxpayers, basically free money lining the bankster's pockets and unavailable to the American public because the banks are no longer lending.

They know they are insolvent with a massive overhang of toxic assets, a shadow housing inventory of more than two years and most importantly the glut of more than 1200 trillion dollars in OTC derivative counter party obligations.
The end is coming and this they know too. That's why they keep rolling over the impossible debt with the active collusion of their government bag men until the entire economy blows up and they can escape to their foreign villas and their offshore bank accounts in the Cayman Islands just ahead of the angry mob screaming for blood.

As to your understanding:1.hyperinflation- we are already in a rapidly accelerating inflationary economic environment with all signs pointing to a sudden hyperinflationary firestorm which will descend with a vengeance wiping out savings and paper assets, driving prices to astronomical and unsustainable proportions.(check out John Williams Shadow Stats) 2.deflation-you might have the worst of both worlds here as housing prices see another 50% decline in addition to surging fuel and energy prices and widespread shortages in basic needs sectors. Police state? already here. debtors camps? how about those tent cities. repo's, foreclosures? done deal and soon to get worse. thanks for your thoughts, Liberte. get some gold and silver, stock up on at least six monist of all the basic provisions and find a reliable supply of potable water. I am. Happy Thanksgiving to you too!

Anonymous said...

Liberte, check out this link for a more informed opinion on this: http://www.24hgold.com/english/news-gold-silver-preparing-for-the-big-one-coming-soon.aspx?article=3228659892G10020&redirect=false&contributor=Deepcaster&mk=1

Liberte said...

Thank you both for the elucidation.