Bob Chapman - Financial Survival - August 12, 2011
Bob Chapman - Radio Liberty - 08 Aug 2011 – Dr. Stan
Bob Chapman - Financial Survival - August 10, 2011
Bob with Kerry Lutz
Episode 103: Live with Bob Chapman
By derekdreamer1
US MARKETS
Markets have certainly fallen quickly. It was only on 12,721 on July 21 and now we are looking at a low close of 11.269 after a 500-point PPT arrangement. There is no question investors didn’t like the bill encompassing debt extension, nor the perceived cuts to be made. That was followed by a long awaited fall-in the debt rating of the US by the S&P. At the same time the financial and economic conditions in Europe worsen with Italy officially joining the ranks of near insolvency. These events were accompanied by calls for the president to bypass the Constitution or to use the 14th Amendment to bring about the debt extension. Under a façade of political wrangling as a cover the real impetus for the standoff became obvious. The whole exercise was not only about debt extension that could have been settled in 15 minutes, but about cutting individually paid for plans, such as Social Security and Medicare, which will eventually lead to a corporatist fascist dictatorship. This super-Congress is very reminiscent of the 13th century “Star Chamber”, the Soviet Politburo, or Adolph Hitler’s 1933 “Enabling Act.”
All and all the credit worthiness of the US government has been changed for sometime to come. Confidence no longer reigns regarding America’s fiscal condition. The US government, American citizens and corporate Americans have grown over the last 20 years not by increased production, but by the creation of money and credit and the borrowing and use of financial expediency. This condition was aided over the past few years by very low interest rates. The only exception being credit card lending by shylock banks. Whether Wall Street and banking realize it or not the transnational conglomerates with tax free incentives have all but destroyed America’s industrial base, and there can be no way back economically until that condition changes. That change can come about with the re-imposition of trade barriers on goods and services that served America so well for more than 200 years. If you look at the situation objectively you will see none of this happened by chance, it was planned this way.
There is little doubt that QE and stimulus 2 have been busts. They may have carried the economy this past year, but 1.3% growth is feeble when compared to the $1.8 trillion spent that we know about. Shipping rates for container ships are off about 10% during a peak time for usage. This leaves only one conclusion and that is trade is slowing down. Europe and Asia are seeing the same situation develop. These shipping rates reflected future business and coming on the heals of this GDP growth rates have fallen from 3.1% since December to 0.4% in March and the growth rate is still falling.
In Asia we have seen China and India increase interest rates a number of times, but like many other Asian countries they have far more inflation than they want. Some inflation is internally generated, but rates have been increased some 10 times to offset the inflation being caused by the monetizing of US dollars received from their exports. That has caused real inflation of more than 15%. The same is true throughout Asia to a somewhat lesser degree.
Europe is still mired in its own waste. They are frozen in the headlights. If they let the six problem countries leave the euro and go bankrupt their dream of a permanently united Europe will be over. Yet, the solvent participants now realize the cost of bailout collectively will be $4 to $6 trillion and that will render all the players insolvent. Like the Asians, Europe is paying an inflationary price for doing business with the US and England. Plus, they have been recipients of trillions of dollars from the US, which they haven’t paid back, to stay afloat. Germany and its citizens have vented their anger at the polls that they want out of this euro mess and the EU. They are tired of picking up all the bills.
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