How could the Washington Post have such a foolish article, falsely claiming the whims of traders are causing world oil prices to rise when this is obviously not the case? The traders quoted all talk about the US threatening wars as their reasons for bidding up oil prices! Many people read only headlines or the first 3 paragraphs of a story. The TV news usually gives important stories about 3 minutes time. The only way people learn to understand anything is for it to be in the headlines or blasted from every media, every day, for months. Then the lesson penetrates the public's mind.

In this case, the headline should read, 'Due to US War Threats, World Oil Prices Continue To Soar Ever Higher.' Then, people here will waken from their slumber and realize the facts of cause and effect. Instead, since the WP wants war, they bury this important information deep inside the article even as the reporter contradicts this in the previous text.

When dollar falls, European exporters count their bruises

So if Hermann can eliminate a pocket on a garment without sacrificing the integrity of its design, she will.

"I have never been as careful as I am now to look at the entry-level price of a product," she said. "Because I know that currently in the U.S. the market is driven by that, and, to a greater extent, by this currency problem."The euro's rise and dollar's slide are squeezing European exporters' profits or multiplying their losses, prompting layoffs and plant closings. Companies are not only curbing production of goods headed to U.S. buyers but also rethinking the way they do business.

The euro recently passed the record $1.47 mark, gaining 11.5% since the beginning of the year against the greenback. It closed Friday at $1.46; a dollar bought 0.68 euro.

Europe is quite guilty in egging the US on in its wars against all Islamic leaders who support the Palestinians. Saddam was a big supporter of them fighting Israel. The chief reason he was removed was due to this alliance. Iran supports Hezbollah so they are treated with the same hostility. The US then pays for this via higher energy prices. This is causing the dollar to drop. This then means oil must rise in price or the dropping value of the dollar would translate into ipso-facto profit losses for the oil pumping nations.

Despite declarations that OPEC will continue to price itself as if the dollar were a stable currency, the truth is, OPEC nations are no longer holding dollars but divesting themselves of these dollars as fast as possible. It doesn't matter what they use to price oil, what matters is, how long they hold these dollars. Both China and Japan still hold dollars they receive via trade. But they can't stop the slide of the dollar vis a vis all other nations. The US wants China to fix this via cease holding dollars. This is entirely too stupid for words. They can hold whatever currencies they want. If the US wants to raise the value of the yuan, all we have to do is hold yuan. But we won't do this, of course.

Meanwhile, the battle for dominance in Asia has now moved into the euro arena. Both Japan and China have figured out, the $500 billion in foreign currency reserves held by Europe are not protecting the euro from being driven ruthlessly upwards. Add to this, the fact that currency traders, hedge funds and rich investors all over the planet are holding euros and selling dollars, the only solution left to Europe is to do the opposite. Instead of taking the US dollars they earn via their huge trade surplus with the US and holding these, they are acting like the oil pumping nations. So the euro will continue to rise and rise.

Europe has a central bank but kept their FOREX reserves sovereign. So they can't coordinate any holdings of currencies. For the last 2 years, they have followed this foolish policy of yelling at China in lieu of a realistic FOREX trading protocols. They do NOT want to hold dollars, period. So they will suffer more until they finally figure this out.

The G20 nations finish meeting in Africa by yelling at Asians:

The Group of 20 nations said some Asian countries need to allow their currencies to appreciate more after European and Canadian officials stepped up pressure on China in the past week.

The G-20 agreed on the need for "greater exchange-rate flexibility in a number of surplus countries" in "emerging Asia," according to a statement released after two days of talks in Kleinmond, South Africa. The G-20 groups the largest developed countries, including the U.S., France and Canada, with emerging markets such as China and India.

G-7 officials have strengthened their rhetoric on China as concern mounts the country isn't shouldering enough of the dollar's slide, garnering an unfair advantage for its exporters. French Finance Minister Christine Lagarde said today the yuan is "causing tensions" and Canada's Jim Flaherty said yesterday China and other Asian countries "need to do more."

The G7 absolutely refuse to take their own trade surplus and park it in a FOREX reserve. They have decided, collectively, the best route is to blame China for global trade problems. The Europeans loved 'free trade' because, due to the euro being much weaker than the dollar back when it was created, it fell from a one to one parity to 25% less, allowing Europe to flood the US with imports. I remember when our grocery stores became filled with European delicacies and manufactured food products, for example. Also, the price of German cars fell! Whoopee. Europe was ecstatic with joy. Their trade surplus was a big part of the US trade deficit with the world which, since the creation of the euro, was nearly a trillion a year.

The Europeans want this! Desperately! They feel, if only they can get China and maybe India [Japan, thanks to the .5% loan carry trade is always exempt!] to hold more dollars, they can happily export to the US forever and ever.

The US should not allow this to continue, of course. Not just Asia but Europe has a trade surplus with us. We should be yelling at EVERYONE about this! Hahaha. But then, this is how we fix our own native inflation caused by our oil wars and irresponsible Federal Reserver banks! We import everything because it is still cheaper than having Americans manufacture or grow things.

Oil and food continue their massive inflation.

The price of oil has surged 58 percent in the past year and wheat prices have increased 60 percent in the same period. European inflation accelerated to the fastest pace in two years last month and Chinese inflation matched the quickest pace in a decade.

The statement said G-20 nations agreed that easing lopsided trade and investment flows is a "shared responsibility." While Asian nations need to maker their currencies more flexible, the U.S. needs to boost saving, European governments must take measures to spur economic growth and Japan must undertake "further structural reforms."

Ahem. The US Federal Reserve as well as many other G7 nations have all conspired, yes, conspired to pretend there is no inflation in food or energy by simply decreeing, these things are unimportant and should be ignored. So we get global inflation of these two specific items that has raged ever higher since 1990 when this tricky and dishonest way of gaging inflation was first introduced.

Note how both Europe an China have inflation but not dear old Japan. Japan's global trade surplus seems to not bother Europe. Nor the US. The queer fact that the world's #2 FOREX reserve holder and #2 export power is also utterly immune to inflation troubles me a lot. But not the guys negotiating global trade. This meeting of 20 was supposed to be a platform for the US, Japan and Europe to rage at third world nations who are exploiting free trade to enrich themselves. I remember the pious talk, pre-free world trade, where the ruling empires of Europe and the US claimed this would make the third world nations much richer.

Now that it is, the G7 dwarves are howling like wolves at a vegetarian bar. They want desperately to have their cake and eat the third world, too. Exploiting cheap labor while ravaging the economies of the third world: this was the real goal! But thanks to the FX markets created in the collapse of both the Bretton Woods II Accords and the Plaze Accords, the third world finally found a monetary tool to use against the great empires.

This amuses me no end because the people who showed this tool and how it works were the Japanese! Long ago, I advised the Chinese to look at the Japanese, not the Americans, and watch how they negotiate things, bribe politicians and use their banking systems. The minute China figured out the sudden desire of the Japanese to hold dollars in their FOREX reserves, back in 1997, the Chinese began a similar program. Their currency isn't at the present level due to them being tricky. It is simply this due to them playing the Japanese FOREX games we allow Japan to use.

If the G7 want to change the rules, they can have global meetings about this. Then the Chinese will unveil their ultimate demand: they want 25% of world resources. The US right now consumes this amount. The Chinese will demand this reverse. Imagine the hell this will cause us! We want cheap oil, for example? Then we must stop importing oil! Etc.

The G7 knows this and the US knows this which is why they talk and talk and yell and bang about the world at meetings, throwing temper tantrums but will not change the FOREX reserves nor stop the wild importing by the US.

U.S. Economy: Production Unexpectedly Fell in October

Factories, mines and utilities reported a 0.5 percent decline in output, the biggest since January, after a 0.2 percent gain in September, the Federal Reserve said in Washington. Capacity utilization, which measures the share of maximum potential used, fell to 81.7 percent from 82.2 percent.

The figures suggest the biggest housing slump in 16 years is starting to spill over to other industries. The drop also reinforces forecasts for slower growth this quarter.

Already, our economy is shrinking. Our ability to export to Europe is growing. Note that the Europeans HATE this. But they can't order us to let them import here. So they beg us to make the dollar 'stronger'. This is impossible unless we cut our trade surplus. To do this, we must export to Europe more and in turn, cease consuming European trade goods. Over the next 20 years, this will correct the trade imbalance and all will be even keel. And our merry ship can sail safely. Which is the last thing the Europeans want.

The only tool the US has been able to use in the last 40 years for correcting our trade woes has been to slit our economic wrists and have a grinding recession. Indeed, the latest theory circulating in economic circles is the concept of regular recessions. 'Make it fast and make it deep, then it will be "V" shaped and the pain is shorter in duration,' is the logic here. In other words, we raise interest rates real fast and economic activity collapses. Then imports stop.

This moronic policy places ALL the pain on the workers. They get fired and lose their homes but then, hey, afterwards, they can pick up the pieces, the ones that survive suicide, child abuse and murder, and start all over again, a few steps lower than before. This reliance on destroying the lives of the working class is OK with many economics professors who have tenure. They never expect to be downsized and thrown into the streets. My economic analysis, by the way, is informed by my life experiences. I have been rich and poor and I have been hammered by global markets. So I live by my wits. Which means I think about things ignored by professors who are safe in some Ivory Tower.

This reliance on slamming the workforce into the wall in order to keep an even keel is dangerous. The working class can get very nasty if this goes on and on. There is a much simpler tool: tariffs and barriers. We do have them! Sugar and organge juice are protected this way. But not honey. I have bees, of course, and had to terminate my honey sales due to collapsing prices. Now we have collapsing hives.

I had sheep. Made good money off of them. No more. Due to free trade, the value of my flock fell from $150 a head to $50 a head. The wool became worthless. So free trade is as guilty as free monetary trading when it comes to the collapse of our situation here in the USA. Now Europe will feel the whip and about time. After all, the Europeans have been pushing this 'free trade' and 'monetary values' business as much as the US!

Fed's Kroszner Says `Rough Patch' Won't Warrant Cuts

"The current stance of monetary policy should help the economy get through the rough patch during the next year, with growth then likely to return to its longer-run sustainable rate," Kroszner said today in a speech in New York. Data consistent with such growth "would not, by themselves, suggest to me that the current stance of monetary policy is inappropriate."

The comments represent the most explicit message from a Fed policy maker since the Oct. 31 rate cut that the central bank is reluctant to lower borrowing costs further. The view among officials is in conflict with investor expectations, as futures prices on the Chicago Board of Trade suggest an 84 percent chance of a quarter-point cut at the Dec. 11 meeting.

I would like to talk to the Captain and the Purser of the USS Even Keel. WE ARE SINKING. Thank you. How on earth can we have 'sustainable growth' when we are running everything in the red, inflation is burning out of control and everyone is in debt up to their eyeballs? And this is a 'correct monetary policy'? Let them eat cake!

Note also, the investors who besiege the Federal Reserve are betting their temper tantrums will get Santa Claus Bernanke to rev up his helicopter and drop them more dollars.

Fannie Mae Declines on Concern About Credit Losses

Fannie Mae had its biggest two-day decline since 1987 after executives at the mortgage-finance company failed to ease investor concern that it may have downplayed credit losses.

Fannie Mae fell $2.35, or 5.5 percent, to $40.69 today in New York Stock Exchange composite trading. The shares were pushed down 10 percent yesterday after a Fortune magazine article said Washington-based Fannie Mae altered how it measures the impact of mortgage foreclosures in a way that understates losses. *snip* Fannie Mae shares traded above $77 in September 2004 before regulators began revealing the accounting errors, and fell below $42 by October 2005 because of the uncertainty surrounding earnings and a regulatory crackdown. The stock had rebounded this year to above $70 in intraday trading in August. They are now at their lowest level since April 1997.

The US recession is now pretty obvious. The collapse of all the housing-related indexes is very important because this is our main industry aside from our military complex. All the other systems depend on the housing and military industrial complex. If one or the other contracts, the entire economy contracts. True, we export more if we use dollars as the denomination to track this trade. But this is inflationary dollars so any rise in export value has to be taken with a huge grain of salt. Namely, we should look at VOLUME rather than monetary value.

Thanks to the Europeans having a stronger currency than the yen, yuan and dollar, the top three economic powers are flooding Europe with trade goods. But this won't fix our own internal economy. For the US has sold many of its export businesses to the Europeans! So even if they have a trade reversal, this is simply many Europeans importing cheap-labor stuff from the US. They, not us, still profit. And this is often ignored.

The PROFITS from manufacturing and production are just as important as trade! And ignored at our peril which is why it is ignored, of course. Meanwhile, the race to the bottom continues. Europe is being wracked by riotous workers demanding to hang onto 150 years of labor relations gains while we all slide towards Asian-style poverty within the working class. Inflation is hammering the workers of Europe while the need to kill inflation in Japan has led to the increasing destruction of working families there. Suicide, harsh living conditions and a drop in births that is most amazing, the country literally dying right before our eyes, this is our collective fates if we follow the free-trade/monetarist economic model.

Darling to extend Rock lifeline

The Sunday Telegraph has learned that advisers to Alistair Darling, the Chancellor, are working on plans that would allow all or part of the £25bn lifeline that has already been extended to Northern Rock by the Bank of England to continue indefinitely.

Although European Union rules block the bank from receiving state aid beyond February 17, lawyers are drafting documents that could change the status of the funding to "restructuring aid". This would allow the Bank of England to continue providing funding to Northern Rock - and aid any takeover of the bank.

Both the US and England's banking systems continue to collapse. England had the same real estate bubble the US had and the origin was the same. The Bank of Japan flooded the world's banking systems with their awful carry trade loans. This gigantic expansion of debt had to be attached to something so it was loaded onto real estate and buy-ins, buy-outs in the business world. Far from building factories or expanding economic systems that would strengthen the economy, most of this was spent frivolously. Indeed, the minute a business was bought out with these Japanese loans, they would FIRE people and SHRINK facilities! So the more they did this, the more things contracted and here we are, in a recession. Who would have imagined this? HAHAHA.

America's vulnerable economy

In 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America, but the profession's pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession.

Granted, GDP grew by a robust 3.9%, at an annual rate, in the third quarter. Granted also, revisions may well push this figure up. But that was the past. More timely signs suggest that the economy could stall in this quarter. By early next year, output and jobs could be shrinking. The main cause is the imploding housing market. Experts said that house prices could never fall nationwide. But fall they have, by 5% in the past 12 months. Residential investment has collapsed, but a glut of unsold homes means that prices have much further to drop. Americans' spending is likely to be dented much more by a fall in house prices than it was in 2001 by the stockmarket's collapse. With house prices lower and credit conditions tighter as a result of the subprime crisis, households can no longer borrow against capital gains to support their spending.

Finally, a sensible article from the Brits. Thank you, kind sirs. Only one big, big gripe: this contraction isn't due to the housing bubble popping. Note that after the bubble popped in 2005, the economy GREW rapidly! Indeed, as soon as the Bank of Japan funds couldn't flow to US housing debt markets, it went to England, to Spain, to all of Europe. Drove everyone into debt. Meanwhile, here, Wall Street shot up, not down!

Since the market not only didn't suffer when the housing bubble burst, it benefited from this for more than a year. The funds flowed like a gushing oil well into businesses, commercial real estate and FX trading. We had a huge bubble right after the housing bubble popped.

No, this recession is due to high energy prices and workers laid off when the major businesses went on this binge of putting huge mountains of debts on top of any and every business they could find. And in classic fashion, they also built huge office towers all over the planet WHILE FIRING OFFICE WORKERS or demanding pay cuts from them!

So, what is causing this recession again? Eh?

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