Saturday, August 11, 2007

[crunch time] cat toying with mice

Which one are we?

I tell you it's induced, I've spelt out the agenda in many posts and I state further that this is a trial run just now. Who baled the banks out this time?

A credit crunch has been averted with the help of world banking 'super-friends', but stock-watchers are divided on the wash-up.

And this:

The Fed promised to provide whatever funding was needed to ensure that banks were able to continue lending to each other at its desired interest rate of 5.25 per cent and pumped $38bn (£18.8bn) into the system in three separate open market operations.

And this.

Yet at the October 25th FOMC it was noted that:

The President recently signed the Financial Services Regulatory Relief Act of 2006, which gave the Federal Reserve discretion, beginning October 2011, both to pay interest on reserve balances and to reduce further or eliminate reserve requirements.

And this:

This amounts to the most extensive liquidity support operation undertaken by the US central bank since the 9/11 terrorist attacks and follows similar steps by the European Central Bank and Japanese central bank in the past two days. Among the main central banks, only the Bank of England has declined to inject extra cash into the markets.

In layman's terms, the problems are soft GDP, rampant consumer debt, sluggish housing market and inflation. Even a non-economist can draw conclusions from that.

Now, add to that the factor of China [hat tip Wolfie]:

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Add to that the suicidal consumerism in recent decades, the drop in the real value of the monetary unit against key commodities and the tightening of government control of all aspects of people's lives to an unprecedented peacetime level plus the European "feelers" from Merkel on gearing-up for war and the surreptitious pushing through of the Euro treaty and what have we got?

Above all else, whilst you consider this, also consider who is actually at the helm. Which men and women are actually running the economy? Do you trust a CFR or European financier to act in your best interests, come the credit crunch?

There are therefore a series of recommendations, all but one posted here before:

1] Quietly get out of any credit arrangement within the next two years or any other mechanism where you are in thrall to a financial body;

2] Take legal advice on the status of your private property and ensure the title is secure in your name;

3] In the case of a mortgage, be prepared to have the balance called in by 2012, i.e. be prepared to concede the loss of your property when the 2nd Fed induced crash comes;

4] Therefore have some fallback living facility somewhere, even if it's only a beach house with a garden.

5] "You've got to have cash," says Roger Montgomery, managing director of Clime Asset Management.

10 comments:

  1. Now you are really scaring me.I wanted to get into property developing ( short term) . Are you saying that's a bad idea?
    I know that housing bust is coming in UK similiar to the early 1990's.
    I blame the Americans and the Iraq war.

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  2. Uber, there are always profits to be made in a crisis if you have enough money - question is whether you'll be the one making them.

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  3. Your rather detailed knowledge of events and consistency is tarting to wear on me. I now find myself thinkgin about how to try and do some of the things you suggest.

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  4. I thought of your previous posts on this whilst watching the news last night. No. 1 is very difficult to do, though.

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  5. I've been convinced for ages not only that we're due a massive economic crisis any time soon, but also that, although unpleasant, it might be the best thing that could happen to us. Economic depression, for instance, is the only thing that looks remotely likely to curb our carbon emissions anything like quickly enough to ensure the long-term viability of human life on this planet.

    I finally paid off the last of my debts earlier this year, and while so many people around me are planning to get mortgages or bigger mortgages, my ambition is never to get into debt again.

    Living on as little as you can is quite a fun project, when you're not forced into it by actual poverty.

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  6. I know nothing about economics. However, us basing our monetary value on our faith in our economy, as opposed to gold is a foolish idea.

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  7. I'm selling all my extrinsics except the flat but am prepared to have that just go. Passport is the next question.

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  8. Conspiracy theorising is a journey into a dark continent full of wild men, but "risk assessment" is rational and you don't have to specify an enemy.

    Have you considered that real estate is a kind of hostage? Look at the fertile ground of property taxes. Governments keep their powers fluid, and like their subjects to be fixed.

    I've often wondered about selling all, buying a mobile home and pretending to everyone that we're just going on holiday, or just returning home. Don't take drugs, don't sport tattoos and keep your hair reasonably short. Become a secret Old Age Traveller - you won't get hassled like New Age Travellers.

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  9. I like "risk assessment" and "old age travelling" very much. I'm already working to dispossessing myself and making my home mobile. Well said, Sackerson.

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