U.S. Banks have a solid incentive, dipped in gold, to keep people in a perpetual state of paying rent on debt while not saving a shiny penny. In fact, their ideal state of financial equilibrium for Americans would be one in which people spent every single penny from their earnings reaching the end of the month like a pauper showing snake eyes in their savings account. This unfortunate banking structure has also been fostered by decades of government banking welfare for an entrenched corporatacracy. Now it is no responsibility of the government or banks on how people choose to manage (or mismanage) their money but when taxpayer money is used to subsidize the banking structure it is important to setup a system that is both fair and beneficial to the overall economy. That should be a minimum requirement. Today’s current system is designed to penalize savings and creates perverse incentives. (more)
Friday, March 19, 2010
The Anti-Savings Model – Offer 0.1% APY on Savings Accounts and Charge 15% on Credit Cards
U.S. Banks have a solid incentive, dipped in gold, to keep people in a perpetual state of paying rent on debt while not saving a shiny penny. In fact, their ideal state of financial equilibrium for Americans would be one in which people spent every single penny from their earnings reaching the end of the month like a pauper showing snake eyes in their savings account. This unfortunate banking structure has also been fostered by decades of government banking welfare for an entrenched corporatacracy. Now it is no responsibility of the government or banks on how people choose to manage (or mismanage) their money but when taxpayer money is used to subsidize the banking structure it is important to setup a system that is both fair and beneficial to the overall economy. That should be a minimum requirement. Today’s current system is designed to penalize savings and creates perverse incentives. (more)
Deficits making U.S. military nervous Will Obama have enough money left for national security?
With the Obama administration pressing for a government takeover of one-sixth of the U.S. economy to grant health-care benefits to all Americans, the U.S. military is worried that the United States is already losing the ability to afford national defense.
The deteriorating international trade position of the U.S. as documented by the CIA is a national security concern by the U.S. military, according to the Joint Operating Environment 2010 report, or JOE 2010, released Monday by the United States Joint Forces Command, or USJFCOM. (more)
Debt doom By The Mogambo Guru
I got a disturbing e-mail from Bianco Research which showed a chart of "Private Credit Market Debt" which they say shows "Total credit market creation not including Treasury Debt, Municipal Debt and Agency Debt".
It is actually a horror that the level of private debt in the United States peaked last year at about US$36 trillion, which is certainly a lot of money, especially since total gross domestic product (GDP) of the Whole Freaking Country (WFC) is only $14 trillion (and falling!).
In some kind of bizarre "good news/bad news" joke, total private debt has now actually fallen by a couple of trillion dollars to $34 trillion, which is bad news for an economy that depends on consumption, but is good news in that people have lighter debt burdens. (more)
It is actually a horror that the level of private debt in the United States peaked last year at about US$36 trillion, which is certainly a lot of money, especially since total gross domestic product (GDP) of the Whole Freaking Country (WFC) is only $14 trillion (and falling!).
In some kind of bizarre "good news/bad news" joke, total private debt has now actually fallen by a couple of trillion dollars to $34 trillion, which is bad news for an economy that depends on consumption, but is good news in that people have lighter debt burdens. (more)
Pimco: Threat of Sovereign Debt Crisis Underestimated
Governments, investors and economists don’t realize the full extent of the havoc that the sovereign debt crisis can wreak around the world, says Pimco CEO Mohamed El-Erian.
“Our sense is that the importance of the shock to public finances in advanced economies is not yet sufficiently appreciated and understood,” he says.
“Yet, with time, it will prove to be highly consequential. The sooner this is recognized, the greater the probability of being able to stay ahead of the disruptions rather than be hurt by them,” he recently wrote in the Financial Times.
For now, experts are focusing narrowly on Greece, El-Erian explains. (more)
“Our sense is that the importance of the shock to public finances in advanced economies is not yet sufficiently appreciated and understood,” he says.
“Yet, with time, it will prove to be highly consequential. The sooner this is recognized, the greater the probability of being able to stay ahead of the disruptions rather than be hurt by them,” he recently wrote in the Financial Times.
For now, experts are focusing narrowly on Greece, El-Erian explains. (more)
Siegel: 'Extremely Cheap' Stocks Will Only Soar
Renowned stock expert Jeremy Siegel says the market’s 70 percent rally during the past year has a lot further to go.
"This is an extremely cheap market," he says.
Others claim that price-earnings (PE) ratios using 10 years of earnings data show the market is overvalued.
But Siegel says that argument is bunk thanks to the huge losses suffered by banks and other financial companies in 2008-09. Those losses are highly unlikely to be repeated, he points out. (more)
"This is an extremely cheap market," he says.
Others claim that price-earnings (PE) ratios using 10 years of earnings data show the market is overvalued.
But Siegel says that argument is bunk thanks to the huge losses suffered by banks and other financial companies in 2008-09. Those losses are highly unlikely to be repeated, he points out. (more)
Preparing for Civil Unrest in America Legislation to Establish Internment Camps on US Military Bases
The financial meltdown has unleashed a latent and emergent social crisis across the United States.
What is at stake is the fraudulent confiscation of lifelong savings and pension funds, the appropriation of tax revenues to finance the trillion dollar "bank bailouts", which ultimately serve to line the pockets of the richest people in America.
This economic crisis is in large part the result of financial manipulation and outright fraud to the detriment of entire populations, leading to a renewed wave of corporate bankruptcies, mass unemployment and poverty. (more)
Author Lewis says Wall Street reckoning is coming
Lewis, promoting his latest book "The Big Short: Inside the Doomsday Machine" about the crisis, predicted a war will be waged in Washington as Senate Banking Committee Chairman Christopher Dodd tries to revamp U.S. financial rules.
"Things can be busted up. I really think there is this collision coming that is just starting to happen with the Dodd bill," Lewis said. "There is a war that is about to happen over not just who regulates Wall Street but what the rules are."
"To put it in the crudest possible way, these firms have to be smaller and less profitable," Lewis told Reuters. "If they were regulated properly and the rules of their game were sane, it would be less profitable to be a trader at a big Wall Street firm ... It is really a war over money." (more)
Iran’s Natural Gas Riches: US Knife to the Heart of World Future Energy
The scheduled start of drilling this month by China National Petroleum Company (CNPC) in Iran’s South Pars gas field could be both a harbinger and explanation of much wider geopolitical developments.
First of all, the $5 billion project – signed last year after years of foot dragging by western energy giants Total and Shell under the shadow of US-led sanctions – reveals the main arterial system for future world energy supply and demand. (more)
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