Renowned economist Khazin predicted U.S. financial crisis in 2000

By Yevgeniy Chernyx

November 10, 2008 “KP.RU” – — Five years ago, I ran the cultural section at Komsomolskaya Pravda. Publishing houses used to send me their new releases now and again for review. One day, after digging through the latest shipment of such literature, I stumbled upon a book titled, “Sunset of the Dollar Empire and the End of the Pax Americana.”

I remember reading the title over to myself several times in disbelief. Way back when, Soviet Americanologists loved to debate the collapse of the U.S. financial empire. But this book was published in 2003.

I flipped through the pages, skimming over the text. The conclusions of the author — an economist named Mikhail Khazin — seemed convincing enough. So I gave the book to our economics columnist at KP Jenya Anisimov, who wrote a review and interviewed the author later at our editorial offices.

All these years, I kept Khazin in the back of my mind, and followed his career as he spoke at various conferences throughout Russia. He seemed certain the U.S. was teetering on the verge of an economic collapse, while other analysts were quick to refute his theory. Now, as his once unfathomable prognosis begins to come true, KP contacted Khazin for an interview.

Full article:

http://www.informationclearinghouse.info/article21189.htm

By MIKE WHITNEY

Mike Whitney: The United States current account deficit is roughly $700 billion. That is enough “borrowed” capital to pay the yearly $120 billion cost of the war in Iraq, the entire $450 billion Pentagon budget, and Bush’s tax cuts for the rich. Why does the rest of the world keep financing America’s militarism via the current account deficit or is it just the unavoidable consequence of currency deregulation, “dollar hegemony” and globalization?

Michael Hudson: As I explained in Super Imperialism, central banks in other countries buy dollars not because they think dollar assets are a “good buy,” but because if they did NOT recycle their trade surpluses and U.S. buyout spending and military spending by buying U.S. Treasury, Fannie Mae and other bonds, their currencies would rise against the dollar. This would price their exporters out of dollarized world markets. So the United States can spend money and get a free ride.

Full article:

http://www.counterpunch.org/whitney08292008.html

By Mike Whitney

22/08/08 “ICH’ — – Sharp contractions in the money supply and recession are two spokes on the same wheel. When the money supply shrinks, there’s less economic activity, and the economy slows. An article in this week’s UK Telegraph by Ambrose Evans-Pritchard removes any doubt that a deep recession can still be avoided.

From the UK Telegraph:

“The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months. Data compiled by Lombard Street Research shows that the M3 ”broad money” aggregates fell by almost $50bn in July, the biggest one-month fall since modern records began in 1959.
“Monthly data for July show that the broad money growth has almost collapsed,” said Gabriel Stein, the group’s leading monetary economist.” (Ambrose Evans-Pritchard,”Sharp US Money Supply contraction points to a Wall Street crunch ahead”, UK Telegraph)

Full article:

http://www.informationclearinghouse.info/article20595.htm

By Mike Whitney

19/08/08 “ICH” — – In a matter of weeks, the euro has been pounded into ground-chuck while the dollar has regained much of its former glory. What gives? The mighty greenback has surged 6% in the last month alone. Apparently, the early reports of the dollar’s demise have been greatly exaggerated. The euro is caught in the same recessionary downdraft that is buffeting a number of currencies, all of which are unwinding at the same time although unevenly. Currency markets don’t move in straight lines. But, don’t be fooled, most paper money is steadily losing value due to the wild expansion of credit which started at the Federal Reserve. Investors are moving to cash and hunkering down. Who can blame them? As the massive equity bubble loses gas, balance sheets will have to be mended and lending will slow to a crawl. At present, Germany’s slowdown and Spain’s housing crash are drawing most of the attention but, just wait, the spotlight is shifting fast. Next week it could be shining down on the America’s failing banking system or poor corporate-earnings reports in the US. Then it will be the dollar marching off to the gallows.

Full article:

http://www.informationclearinghouse.info/article20547.htm

The new power brokers: How oil, Asia, hedge funds, and private equity are shaping global capital markets

http://www.mckinsey.com/mgi/publications/The_New_Power_Brokers/

(Requires an initial free registration)

by Raymond Lotta
Global Research, August 5, 2008

What follows is a highly concentrated, though still developing, synthesis of some important trends in the world economy and inter-imperialist relations-and some of the manifestations of this in the structure, functioning, and posture of U.S. imperialism. Some illustrative, benchmark data are woven in.

This is a research essay about changes in global capitalist accumulation, newly emerging relations of strength among imperialist and regional powers, and the force of competitive pressures and tensions. It is about great-power rivalries in a world system based on exploitation. To use an analogy to the complex motions of large parts of the Earth’s crust and upper mantle, this is a discussion of shifting tectonic plates in the world economy: some of their longer-term movements and some of the more sudden and unexpected eruptions.

The analysis builds on the article “Financial Meltdown and the Madness of Imperialism”[1] and is an application, focused on issues of world economics, of Bob Avakian’s conceptualization of this period as one of “transition with potential for great upheaval.”

Full article:

http://globalresearch.ca/index.php?context=va&aid=9747

Bloomberg is reporting Fannie’s Mudd Soothed Asian Investors as Bonds Rose.

Concerns about the financial health of the biggest U.S. mortgage finance company had driven Fannie Mae’s borrowing costs to the highest since March the previous week and its shares had tumbled 45 percent on the New York Stock Exchange. Investors in Asia, the biggest foreign owners of Fannie Mae’s $3 trillion of bonds, were asking the Treasury to bolster the government- sponsored company and its smaller competitor, Freddie Mac, said three people with knowledge of the talks…

The next afternoon, before financial markets opened Monday in Asia, Paulson announced the rescue plan, saying he would seek authority to buy unlimited equity stakes in the companies and their bonds if needed, while the Federal Reserve would lend directly to Fannie and Freddie…

Asian investors were among the most important groups to soothe because central banks, financial institutions and funds in the region own $800 billion of Fannie Mae and Freddie Mac’s $5.2 trillion in debt, according to data compiled by the Treasury…

Karl Denninger wrote a scathing attack of Paulson’s maneuver in Now We Know – There WAS A Threat. My thoughts on the so-called “confidence building measures” of this scheme follow…

Fannie Mae Chief Executive Officer Daniel Mudd called Paulson’s move a “confidence building measure”. Mudd cannot possibly be further from the truth.

Full article:

http://globaleconomicanalysis.blogspot.com/

How to Find and Evaluate a Local Bank

http://www.solari.com/archive/bank_locally/find_local_banks/

Tracking the mortgage mafia…

ORIGINAL BLOGPOST

Sometimes, it helps to step back and see the big picture.

Let’s say that I serve as the depository for a large government and I also own the central bank. I get my partners appointed to run the government’s treasury and key funds on a regular basis so I can also control financial system policies and regulation that help me finance what I want to do and mess up my competitors. Even that is getting cumbersome so I am arranging to move most of the regulatory control over to my central bank because I can control all of it privately.

Frustrated with having to deal with democratic processes, I decide to move a significant amount of money out of the government between 1997 and 2001 for reinvestment abroad. I and my partners and our syndicates engineer a serious of steps to bubble the economy so that when I move the money out the currency is high and because everyone was making money they did not notice that lots of capital was leaving. To ensure no one notices, I suppress the gold price which turns off the financial burglar alarm and shifts gold out of the government into my private control at below market prices.

Full article:

http://www.solari.com/blog/?p=1232

…So again, who exactly are these “wealthy people, or funds, or other entities” that may be manipulating the market of the world’s most important substance? Surely government regulators must know. Aren’t they able to trace market activity to the players involved?

The answer, Johnson said, is no, they can’t:

“The situation now is that the CFTC is sitting there looking at one screen, one piece of the picture, which is whatever is happening on the exchanges. Meanwhile, an increasing volume in dollars is taking place in the form of over-the-counter activity where no one can see it… there is still a blind spot with respect to the true over-the-counter activity that is going on, which represents billions and billions of dollars.”

This trading in what the industry calls “dark pools” amounts to a third of all commodities activity, easily enough for the manipulators to remain hidden. It takes place outside the regular commodities exchanges, where trading activity is relatively transparent. And it applies not only to trading in petroleum futures but also food crops and other vital commodities.

And who is it that has allowed this secret trading to take place? Johnson:

“In 2000 Congress decided that there were certain kinds of high-end investors that were big enough and smart enough that they shouldn’t be constrained to do all their business on the exchanges.”

Full article:

http://dandelionsalad.wordpress.com/2008/08/03/inflation-and-the-new-world-order-by-richard-c-cook/