http://hat4uk.wordpress.com/2012/05/26/crash-2-next-stage-for-the-sociopaths-magic-circle/
http://www.zerohedge.com/news/guest-post-chinese-chaos-immediate-threat-dollar
Submitted by Tyler Durden on 05/26/2012 16:38 -0400
http://www.zerohedge.com/news/china-and-japan-dropping-dollar-cross-rate-system-will-transact-directly
Submitted by Tyler Durden on 05/26/2012 11:29 -0400
CRASH 2: Next stage for the Sociopath’s Magic Circle.
Official: everything the Greek citizen’s fault, US taxpayers to pay the derivatives bill.
I’ve been on Christine Lagarde’s case for so long now, I’m beginning to feel like Nipper of the Yard in pursuit of the Kray Brothers. Don’t laugh at the parallel: it’s entirely apppropriate. Lagarde is an idiot who manages to combine cranial density with a power-drive so all-embracing, the sounds she makes get more hypocritical with every week.
She’s in the Guardian today, pronouncing on why the Greeks deserve not an iota of sympathy: Lagarde insists therein that the pardy’s the Greeks are just a bunch of softie whiners…..and makes it clear that her IMF “has no intention of softening the terms of the country’s austerity package”. Greek parents, she rants, have to take responsibility if their children are being affected by spending cuts. “Parents have to pay their tax,” she concludes: it’s payback time, the fun’s over, now stop complaining.
Especially when the banks that stand to go under for their criminally targeted stupidity are French, just like me. Especially given how deep in debt France is thanks to tax evasion and wasteful municipal spending there….and all the money I blew while Finance Minister. Especially because my France wants the money it hard-sold you for all those munitions. And finally, because I’ve only just joined the IMF – and I’m not having you greasy, lazy bastards spoiling my cv.
If any reader anywhere has a reasonable level of access to this record-breakingly silly sociopath, I’d appreciate it if you could give her sight of this opener. I’m already on The List anyway, so it doesn’t matter.
Sociopathy knows no remorse – and nor does it restrict its movement according to nationality, ethnicity or gender. According to the Wall Street Journal, last Tuesday the Obama white House began formal steps to stick taxpayers into the position as final paymaster for the upcoming Wall Street derivatives Tsunami. And be in no doubt: this doesn’t mean behind banks that might make mistakes in derivatives markets, but behind the trading itself.
A new US law makes clear that a clearinghouse receiving assistance was not required to “be or become a bank or bank holding company.” To get help, they only needed to be deemed “systemically important” by the new Financial Stability Oversight Council chaired by the Treasury Secretary. Oh my oh my…now it all makes sense. Or rather, nonsense. Last year regulators finalised the ‘rules’ ho-ho for how they would use this new power. On Tuesday, the Financial Stability Oversight Council secretly voted to proceed toward inducting several derivatives clearinghouses into the too-big-to-fail club. After further review, regulators will make final designations, probably later this year, and will announce publicly the names of institutions deemed systemically important.
Even the Journal thinks the idea is cynically nuts. It headlined the piece ‘A Mess the 45th President Will Inherit’.
Can you even begin to imagine the austerity there would have to be in order to pick up this tab? No, I can’t either. I know – let’s give it to Hardline Chrissie, she of the Fit Hissy. She’ll get the sum wrong by at least four noughts, and then everything will be fine.
I know we’ve been here before, but let me make the most of my day in the sun before the financial Ice Age freezes off every gonad outside the lucky 7%. Are you like me – a good-looking, mature man of mystery – in that at one time you would’ve listened to 1970s radicals wittering on about the Military-Industrial Complex, waved a forefinger at your head, and walked away smiling at the paranoia of it all?
Because if you were, then I’m here to tell you that the jerks who came up with all that crap (most of whom are now dyed-in-the-wool capitalists around the world) must take their share of the blame for every Grizzly Geithner, Diabolical Draghi, Depraved Diamond and Beastly Blankfein plotting the poverty of the 93%. You see, had it not been for all those hairies crying wolf forty years ago, the slithering reptiles of 2012 wouldn’t be getting away with it quite so easily today. (Although to be fair, Reagan, Thatcher, Bush, Blair and Brown are all well and truly implicated.)
Are they really sociopathic, or just stupid? For myself, I see it as a mixture of both: by definition sociopaths are stupid, because they imagine themselves to be both inviolate and unstoppable, but they usually aren’t. Not even these obscenely privileged folk will escape alive: the eurocrats, Camerlot, Newscorp, the Met Police, Pasok’s leaders, Goldman Sachs….all will die by the sword they have wielded with impunity those last twenty years, because the demand-free Hell they are pushing us all towards is simply unsustainable.
No: the only ones I worry about are the hidden hobgoblins in their silos: the ISPs, the GCHQs, and the other assorted information gatherers online. These people do not need the limelight. They’re not megalomaniacs, but rather the true Underground. Now they really could succeed in running all our lives in the end.
and....
Guest Post: Chinese Chaos Is The Immediate Threat To The Dollar
Submitted by John Aziz of Azizonomics
Chinese Chaos Is The Immediate Threat To The Dollar
In twenty or thrity years, I expect future monetary historians looking back on this period of history to frequently misquote Ernest Hemingway:
and.....How did the dollar die? First it died slowly — then all at once.The slow death began with the dollar’s birth as a global reserve currency. America was creditor and manufacturer to the world, and the capitalist superpower. People around the globe transacted overwhelmingly in dollars. Above all else, people needed dollars to conduct trade, and they were willing to pay richly for them, and for dollar-denominated debt.By the ’90s America began enjoying a tremendous free lunch — the world provided America with goods, resources and services, and Americans provided the global reserve currency, as well as acting as world military policing global shipping. Why manufacture at home, or produce resources at home when the world wants your currency? To get what you want, all you have to do is run your printing press — which was much easier after 1971, when Nixon ended the gold exchange standard. In a flat free-trade world, supply chains and technology agglomerated wherever the labour was cheapest, which was predominantly Asia. So America let her industrial base and her domestic supply webs degenerate, to enjoy the free lunch that the dollar brought:The next leg of the story is that foreigners realised that actually maybe the necessity of the dollar was an illusion. With America no longer the world’s manufacturer or creditor, who needs America? If you need a consumer, there are billions of people and trillions of dollars, and trillions of dollars worth of resources in Asia, and South America, and Europe. America’s government is deeply-indebted, and its military is bogged-down in difficult conflicts around the world.As Ron Paul noted:We are like a man who used to be rich and is in the habit of paying for everybody’s meals and announces at a lavish dinner that he will pay the bill, only to then turn to the fellow sitting nearby and say, “Can I use your credit card? I will pay you back!”While fund managers continue to refer to the dollar and the US treasury as a safe haven, America’s sovereign creditors seem to feel quite differently.As Zhang Jianhua of the People’s Bank of China put it:No asset is safe now. The only choice to hedge risks is to hold hard currency — gold.The shift away from the dollar has quickly manifested itself in bilateral and multilateral agreements between nations to ditch the dollar for bilateral and multilateral trade, beginning with the chief antagonists China and Russia, and continuing through Iran, India, Japan, Brazil, and Saudi Arabia.So the ground seems to have fallen out from beneath the petrodollar world order.Yet at the same time, the powers moving away from the dollar have a lot invested in the system. The two biggest sovereign holders of US treasuries are Japan and China. China alone holds $3 trillion of US currency, and $1 trillion of debt. They have no reason to crash the value of their own assets. Their planned endgame appears to be a slow, phased and managed transition to a new global reserve currency. China wants to gradually reduce their exposure to America, transferring to harder assets.Yet history rarely turns out how nations have planned, and China itself seems increasingly beset with domestic problems.China’s biggest banks may fall short of loan targets for the first time in at least seven years as an economic slowdown crimps demand for credit, three bank officials with knowledge of the matter said.A decline in lending in April and May means it’s likely the banks’ total new loans for 2012 will be about 7 trillion yuan ($1.1 trillion), less than an estimated government goal of 8 trillion yuan to 8.5 trillion yuan, said one of the officials, declining to be identified because the person isn’t authorized to speak publicly. Banks are relying on small and mid-sized companies for loan growth after demand from the biggest state- owned borrowers dropped, the people said.The drying up of loan demand attests to the severity of China’s slowdown and may add pressure on Premier Wen Jiabao to cut interest rates and expand stimulus measures. The economy may grow in 2012 at its slowest pace in 13 years, a Bloomberg News survey showed last week, as Europe’s debt crisis curbs exports, manufacturing shrinks and demand for new homes wanes.China may be a manufacturing powerhouse, and the spider at the heart of global trade, but its domestic and social order looks in a state of disarray, pock-marked with ghost cities, industrial accidents and ecological disasters. And throwing stimulus money into an economy already recording screeching inflation will be like throwing fuel onto a fire.As the Chinese (and wider Asian) economic picture becomes bleaker, pressure will grow on politicians to take more drastic and rash measures. They may try to rally the disaffected behind them with an increasingly confrontational nationalistic attitude to America. And unable to match America militarily, their major outlet would be economic warfare — competitive devaluation, threats, tariffs, export controls, and an all-out assault on the dollar reserve standard. Additionally, American policymakers also encumbered with huge economic problems may look to economic warfare as policy — the standout example isMitt Romney’s desire to brand China as a currency manipulator for accumulating US treasuries and impose tariffs, even while the Treasury upgrades the PBOC to primary dealer status.This brewing firestorm suggests that rather than the gradual transition that all parties claim to desire we are likely to see a much faster and more volatile one. I don’t know which straw will break the camel’s back, but it is likely to come sooner, rather than later. First slowly — now all at once.
http://www.zerohedge.com/news/china-and-japan-dropping-dollar-cross-rate-system-will-transact-directly
China And Japan Dropping Dollar Cross Rate System, Will Transact Directly
While various three letter economic schools of thought continue sprouting left and right, in an attempt to validate endless spending predicated on one simple thing: transitory reserve currency status, and we emphasizetransitory, reality moves on, oblivious of what economic theoreticians believe its hould be doing. As Yomiuri Shimbun reported last night, China and Japan are set to launch direct currency trading, bypassing the dollar, and the associated benefits and risks, entirely. "But how can that be?" dollar purists will scream. After all, when one bypasses the dollar, one commits blasphemy to a reserve currency. Somehow we think China gets that. From the AP:"Japan and China are expected to start direct trading of their currencies as early as June as part of efforts to boost bilateral trade and investment, according to reports. With the planned step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current "cross rate" system that involves the dollar in setting yen-yuan rates, Kyodo News said on Saturday."
More specifics on how the world's second and third largest economy will just say no to dollar hegemony:
The two governments are eyeing setting up markets in Tokyo and Shanghai, the Yomiuri Shimbun said.The yen-yuan exchange system would help businesses in the world's second- and third-largest economies reduce risks associated with exchange rate fluctuations in the dollar and cut transaction costs, Kyodo said.It will be the first time that China has allowed a major currency except the dollar to directly trade with the yuan, Kyodo said.
As usual, why spend time commenting with words, when a simple chart will suffice.
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