Talking Junk Economics and Eating Caviar - International Social/Political

While the lives of the majority are reasonably stable you could read them Alice in Wonderland and they could care less; however, the next economic plunge threatens to upset the tenuous grip Wall St fantasy has over economic reality. The next economic plunge, to occur soon after the World’s Reserve/Central Bankers return from their ‘secret’ crisis talks in Sydney, promises to be a doosey!

Not even the most insular middle class delusionist or illiterate red-neck is safe. Reality dictates that it’s all down hill from here – printing toilet paper money, ‘STIMULUS,’ is NOT a substitute for PRODUCTION!

None of the lies issuing from Wall St stand up to the slightest scrutiny or analysis, for example; Wall St continues to assure us all that we’re out of the recession and into recovery – in whose dream is that codswallop a reality, I’d like to know?

It is as plain as day that the GLOBAL economy is about to plunge deeper into ‘recession.’ The principal indicator of recovery, as every real economist is aware, is the level of P-R-O-D-U-C-T-I-O-N. It is production that drives all the wheels of a HEALTHY economy. What we see instead of production is what is laughingly called “stimulus;” does it really make a difference to a corpse?

The economy as we have come to know its devolution over the past half century remains in a terminal state; DEAD in other words; that is the REAL state of the GLOBAL economy.

No body in this universe is able to revive what has been so effectively DESTROYED by corrupt, thieving, lying cheating and bludging, Wall St bankers, financiers and mega-corporate CEOs!

When the economy shifted from a production-savings model to a debt/credit-fuelled frenzied consumerist model the dye was cast, collapse was inevitable! We are experiencing that collapse now and it has only just begun!

Where do our elected leaders stand in times of crises, especially their attitude to those rogues and criminals responsible for the collapse? Obama’s recent statement to Bloomberg media sums up the political position of all Western lackey leaders:

Of late, I have been reading articles -- some of which I have posted to the website -- suggesting that Greece would be the trigger for the 2nd wave of the Global Tsunami. Obviously, if Greece defaults and goes belly up, it will have a disastrous effect, but not in the way that I see it.

There may be some manipulated “flight to safety to US dollars,” which itself is a dumb thing to do in the short term. How can the greenback be a currency haven when its value is total junk – toilet paper?

Such a so-called “flight to safety” is a reflection of the intensity of the on-going currency wars, principally between the Dollar and the Euro and skirmishes between the Dollar and the Yuan. But, this manipulation by the US global banks cannot continue and will be exposed for what it is – a global scam!

Since July last year policy makers and so-called experts have relied on economic recovery in Asia to spur global growth and the resumption of the good times. Such thinking reflects a muddled mind.

Every economy in Asia is export-orientated and the domestic economies are just too small to take up the drastic fall in exports.

Following Bernanke’s reckless lead, they have all jumped on the bandwagon of 'quantitative easing' – the printing of massive amounts of fiat monies (electronically or otherwise). Inflation has soared!

In an earlier posting, I have indicated that there is a weak link holding up the Asian economies, and it is not China.

It is Singapore - touted by her US financial masters as an island of prosperity and financial stability. This is one of the biggest hoaxes since the collapse of Lehman Bros!

Singapore’s ratio of debt to GDP is a whopping 99.2 percent.

But no one seems to be taking any notice. Why are they making so much fuss over Greece, when Singapore is worse off?

If Singapore goes belly up, forget about any substantial growth in Asia to spur global recovery. Anyone who knows about the way business is done in the ASEAN region knows too well that if Singapore defaults, Indonesia will be the first to sink, followed rapidly by Thailand and Malaysia. The contagion will then spread to the rest of Asia. China will not be able to put out the fire.

China will survive the turmoil, but barely.

This is my nightmare scenario. The second Tsunami is coming. When?

After the failure of Europe to solve the problems of Greece, Spain and Portugal!

Author retains copyright.

Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.

It is not clear whether China’s motive is simple risk aversion in the wake of a sharp widening of corporate and mortgage spreads during the past two weeks, or whether there also is a political dimension. With the expected termination of the Federal Reserve’s special facility to purchase mortgage-backed securities next month, some asset-backed spreads already have blown out, and the Chinese institutions may simply be trying to get out of the way of a widening. There is some speculation that China’s action has to do with the recent deterioration of US-Chinese relations over arm sales to Taiwan and other issues. That would be an unusual action for the Chinese to take–Beijing does not mix investment and strategic policy–and would be hard to substantiate in any event.

© 2010 Asia Times Online (Holdings), Ltd.

Topics

Other Press

Cleaves on Disc/Stick