Monday, February 06, 2006

Like The Ferry On The Red Sea, Bush Ignores The Raging Economic Fires

By Elaine Meinel Supkis

The American Ship of State is exactly like the one in the news this week. It caught on fire, the captain ignored pleas to turn it around or call for help, he told everyone, it was under control then when it sank, killing nearly everyone, he took off first in his own liferaft!

From the Wilderness:
China has resolved to shift some of its foreign exchange reserves -- now in excess of $800 billion -- away from the U.S. dollar and into other world currencies in a move likely to push down the value of the greenback, a high-level state economist who advises the nation's economic policymakers said in an interview Monday.

As China's manufacturing industries flood the world with cheap goods, the Chinese central bank has invested roughly three-fourths of its growing foreign currency reserves in U.S. Treasury bills and other dollar-denominated assets. The new policy reflects China's fears that too much of its savings is tied up in the dollar, a currency widely expected to drop in value as the U.S. trade and fiscal deficits climb.

In recent years, the value of the dollar has been buoyed by major purchases of U.S. Treasury bills by Japan, China and oil-exporting countries -- a flow of capital that has kept interests rates relatively low in the United States and allowed Americans to keep spending even as debts mount. Some economists have long warned that if foreigners lose their appetite for American debt, the dollar would fall, interest rates would rise and the housing boom could burst, sending real estate prices lower.
This all was from the Washington Post. Goodie gum drops. They now notice the obvious only because I read Chinese Commie papers, I know the real slush fund is one trillion bucks! And this was their goal. They now have us over a barrel of oil.

From Associated Press:
Russia's foreign minister warned against threatening Iran over its nuclear program Monday after Defense Secretary Donald H. Rumsfeld reportedly agreed with a German interviewer that all options, including military response, remained on the table.

Oil prices rose after Iran ended all voluntary cooperation with the U.N. nuclear watchdog agency, saying it would start uranium enrichment and bar surprise inspections of its facilities. Traders fear the dispute could disrupt supplies from OPEC's second-largest oil producer.
Russia absolutely 100% delights in high oil prices. Unlike the USA, they are a net exporter of oil. Why aren't they eating all their oil like we did? Hmm.

Every Russian isn't tooling around in SUVs, boasting about how big and bad they are. The Russians are happy with high oil prices. The Chinese aren't so oil dependent so they can afford to bid up the price of oil. We are stuck in a ferry filled with SUVs that is on fire and sinking.

The government certified housing loan entity, Fannie Mae, hasn't filed the official yearly financial report all corporations traded on Wall Street must file. From MSNBC:
Fannie's accounting problems also are under investigation by its regulator, the Office of Federal Housing Enterprise Oversight, as well as other federal agencies. The regulator's report is expected by the end of the first quarter.

Due to the investigations and lack of financial reports, Fannie had warned the continued listing of its stock on the New York Stock Exchange was at risk.

But the Securities and Exchange Commission, in a recently posted decision dated Jan. 19, approved a NYSE proposal that allows the exchange to decide in rare circumstances that a company that has failed to file timely financial results remains suitable for continued exchange listing because of its position in the market.
So, coincidental with the elimination on reporting the M3 numbers which shows us how many dollars the Fed prints (ie, the real inflation indicator!) Fannie Mae can't show its underwear anymore because she ain't a virgin, she's been raped.

This is yet another fire burning merrily.

From Marketwatch:
Defense Secretary Donald Rumsfeld said Monday that next year's budget Pentagon request at $439 billion, while the biggest discretionary piece of the U.S. budget for 2007, is historically a smaller percentage of U.S. gross domestic product at 3.7% to 3.8% than it has been in the past. "It is a relatively modest portion of every dollar but it is something that does underpin the freedom, the opportunity and the prosperity that exist for the American people," Rumsfeld said during a Webcast budget briefing on Monday.
As our budget sinks in the Red Ink Sea, Rummy lies about his contribution to the many fires that now are overwhelming our ship. The military budget is gigantic, is is the exact same size as our budget deficit and it is for junk we don't need and that couldn't protect us on 9/11 or hurricane season because nearly the entire kit and kaboodle is overseas! And alot of the miltary procurment spending is there, too! This is how we get "allies" who are really parasites.

The pros are getting very nervous and eyeing the life rafts. From Marketwatch:
"It's a nervous market," said Michael Metz, chief investment strategist at Oppenheimer & Co. "We're getting mixed signals on the economy, and on corporate profits with some big headline disappointments."

Reflecting this nervousness, Prudential chief investment strategist Ed Keon slashed his recommended equity weighting to 55% from 100%, citing unfavorable economic and inflation data, concerns over earnings growth and political tension in Iran.
Well, instead of putting out the fires, the insane captain ordered the crew to throw barrels of oil on it. Naturally, the flames now roar.

From the NYT:
Frustrated relatives of passengers aboard an Egyptian ferry that sank Friday stormed into the offices of the ship's owners earlytoday, looting the place and demanding that the company and the government provide information about of their loved ones.
Again and again. Angry poor people in all sorts of places are showing tremendous anger. Washington, DC is as quiet as a Jr. High School first period. Zzzzzz.

I think we are all in for a very rude awakening but by then, the captain will have rowed to shore and is with daddy Bush, talking about going fishing in their latest speed boat, purchased with funds from Carlyle.

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