whiteathlete33
Hall of Famer
We are being told the economy is improving. It's all a bunch of bull. 1.2 million home foreclosures will occur this year. That says it all.
Coming Financial Crisis Worse Than 29?
- Thread starter DixieDestroyer
- Start date
DixieDestroyer
Hall of Famer
We're in a "Depression by design" & the PTB will only intensify the (manufactured) crisis.
U.S. Debt Passes $14 Trillion
Edited by: DixieDestroyer
U.S. Debt Passes $14 Trillion
Edited by: DixieDestroyer
Jimmy Chitwood
Hall of Famer
12 economic collapse scenarios that we could potentially see in 2011 ... sorry for the lengthy quote, but i felt it was worthwhile, as the compiledlist has a lot ofgood info.
Highlander
Mentor
- Joined
- Nov 28, 2009
- Messages
- 1,778
Our government is full of Manchurian Candidates and Manchurian Politicians, not unlike the great 1963 film. They live and breathe to represent China and the Multi-National Corporations and have been doing so for about 15-20 years now. China's GDP recently grew at a smoking 10%. Incredible wealth and prosperity in China, India and much of SE Asia now, almost all of it extracted from the United States and Western Europe with the help of our traitorous politicians. In a few weeks, I'll be over there again and I'm sure my mind will be even further blown away than it already has been over of the past few years going there.
An article entitled "The Coming Financial Collapse of the US"
http://www.davidduke.com/general/the-coming-financial-collapse-of-the-us_22442.html
http://www.davidduke.com/general/the-coming-financial-collapse-of-the-us_22442.html
Colonel_Reb
Hall of Famer
Along with canned food, there are dried foods that can be bought in bulk and stored for long periods of time. There are also MREs, although they aren't the healthiest way to go. I agree about guns and ammo and have been preaching having them ever since I started posting here. It is also a good idea to invest in physical silver (or gold if you can afford it). These will replace the already almost worthless Federal Reserve fiat paper currency that most people rely on. Of many things, one thing I wonder about is, if/when the ultimate collapse happens, will we be able to get money out of the banks.
Jimmy Chitwood
Hall of Famer
coming to the US next? a link at Zero Hedge for a map of the dozens of riots in recent weeks across the globe that can be attributed to price hikes as well as a few price hikes in the US.
on a related note, Budget deficit to hit $1.48 trillion.
on a related note, Budget deficit to hit $1.48 trillion.
white is right
Hall of Famer
- Joined
- Feb 16, 2006
- Messages
- 10,163
The old Bangles song Walk like an Egyptian has a whole new meaning now. This "recovery" could be threatened by Mubarek as he dithers in the Presidential Palace. Oil prices are rising and the experts are fearing a domino effect in the region....http://finance.fortune.cnn.com/2011/01/31/how-egypt-spells-oil-spike/
Jimmy Chitwood
Hall of Famer
many folks have been saying for a long time that none of the economic problems are happening by accident; all of this is planned. well, this article points out how the planners are becoming ever more brazen. the link includes video of Howard Dean saying, "It's the government's job to re-distribute wealth."
it also includes a couple of quotes by our Founding Fathers that put Dean's position in perspective. i'll include their quotes and the Dean video below ...
the beliefs espoused by "our" modern "representatives" in government, courtesy of pmsNBC:
[tube]http://www.youtube.com/watch?v=Z-NxDFGFhIY[/tube]
compare that to the real men who forged this nation:
it also includes a couple of quotes by our Founding Fathers that put Dean's position in perspective. i'll include their quotes and the Dean video below ...
the beliefs espoused by "our" modern "representatives" in government, courtesy of pmsNBC:
[tube]http://www.youtube.com/watch?v=Z-NxDFGFhIY[/tube]
compare that to the real men who forged this nation:
</BLOCKQUOTE></BLOCKQUOTE>
DixieDestroyer
Hall of Famer
The ditching of the (fiat) U.S. dollar is one of the key lynchpins to the forthcoming financial (total) collapse.
IMF calls for dollar alternative
By Ben Rooney, staff reporter
February 10, 2011: 4:37 PM ET
NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.
The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.
SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs
While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.
Dominique Strauss-Kahn, managing director of the IMF, acknowledged there are some "technical hurdles" involved with SDRs, but he believes they could help correct global imbalances and shore up the global financial system.
"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.
The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.
In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.
Oil prices usually go up when the dollar depreciates. Supporters say using SDRs to price oil on the global market could help prevent spikes in energy prices that often occur when the dollar weakens significantly.
The dollar alternatives
Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years.
SDRs, he said, "will further diversify the system."
Dollar firms after starting 2011 weak
The dollar has been drifting lower so far this year as the global economy improves and investors regain their appetite for more risky assets such as stocks and commodities.
After rising above 81 in early January, the dollar index, which measures the U.S. currency against a basket of other international currencies, eased below 77 earlier this week.
However, the dollar was higher Thursday against the euro, pound and yen as disappointing corporate results weighed on stock prices following several days of gains on Wall Street. The rally in the commodities market also cooled, with the price of oil and metals backing off recent highs.
0:00 /4:40Bernanke vs. Ryan: Inflation wars
In addition, renewed concerns about the debt problems facing troubled European economies put pressure on the euro and supported the dollar. The yield on Portugal's benchmark bond rose to a record high Wednesday, and borrowing costs for Ireland, Spain and Greece remain elevated.
"The market is shedding risk, with equities and commodities weakening and the U.S. dollar broadly stronger" said Camilla Sutton, currency strategist at Scotia Capital.
Traders were also digesting comments from Federal Reserve chairman Ben Bernanke, who told Congress Wednesday that despite a strengthening economic recovery, the unemployment rate remains high while inflation is "still quite low."
Those remarks reaffirmed the view that "the Fed would be very slow to tighten policy given its dual mandate of price stability and employment," analysts at Sucden Financial wrote in a research report.
Bernanke also urged lawmakers to come up with a "credible plan" to bring down "unsustainable" federal budget deficits.
"We expect that the outlook for the U.S. fiscal position will weigh heavily on the U.S. dollar in the quarters ahead," said Sutton. In the near-term, however, she said "a strengthening growth profile" could help provide "a temporary period of dollar strength.".
http://money.cnn.com/2011/02/10/markets/dollar/index.htm
Edited by: DixieDestroyer
IMF calls for dollar alternative
By Ben Rooney, staff reporter
February 10, 2011: 4:37 PM ET
NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.
The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.
SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs
While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.
Dominique Strauss-Kahn, managing director of the IMF, acknowledged there are some "technical hurdles" involved with SDRs, but he believes they could help correct global imbalances and shore up the global financial system.
"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.
The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.
In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.
Oil prices usually go up when the dollar depreciates. Supporters say using SDRs to price oil on the global market could help prevent spikes in energy prices that often occur when the dollar weakens significantly.
The dollar alternatives
Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years.
SDRs, he said, "will further diversify the system."
Dollar firms after starting 2011 weak
The dollar has been drifting lower so far this year as the global economy improves and investors regain their appetite for more risky assets such as stocks and commodities.
After rising above 81 in early January, the dollar index, which measures the U.S. currency against a basket of other international currencies, eased below 77 earlier this week.
However, the dollar was higher Thursday against the euro, pound and yen as disappointing corporate results weighed on stock prices following several days of gains on Wall Street. The rally in the commodities market also cooled, with the price of oil and metals backing off recent highs.
0:00 /4:40Bernanke vs. Ryan: Inflation wars
In addition, renewed concerns about the debt problems facing troubled European economies put pressure on the euro and supported the dollar. The yield on Portugal's benchmark bond rose to a record high Wednesday, and borrowing costs for Ireland, Spain and Greece remain elevated.
"The market is shedding risk, with equities and commodities weakening and the U.S. dollar broadly stronger" said Camilla Sutton, currency strategist at Scotia Capital.
Traders were also digesting comments from Federal Reserve chairman Ben Bernanke, who told Congress Wednesday that despite a strengthening economic recovery, the unemployment rate remains high while inflation is "still quite low."
Those remarks reaffirmed the view that "the Fed would be very slow to tighten policy given its dual mandate of price stability and employment," analysts at Sucden Financial wrote in a research report.
Bernanke also urged lawmakers to come up with a "credible plan" to bring down "unsustainable" federal budget deficits.
"We expect that the outlook for the U.S. fiscal position will weigh heavily on the U.S. dollar in the quarters ahead," said Sutton. In the near-term, however, she said "a strengthening growth profile" could help provide "a temporary period of dollar strength.".
http://money.cnn.com/2011/02/10/markets/dollar/index.htm
Edited by: DixieDestroyer
Franco
Newbie
I'm NOT white nor American, but you have my genuine EMPATHY whether you believe me or not. I'm sure you good Americans already know where your country is heading (considering the travesty that's happening in Washington), well this HOUR LONG video might provide further insights into the USA's economic future. Enjoy!
[TUBE]http://www.youtube.com/watch?v=tM-c8PxPZXQ[/TUBE]
[TUBE]http://www.youtube.com/watch?v=tM-c8PxPZXQ[/TUBE]
DixieDestroyer
Hall of Famer
How the middle class became the underclass
Annalyn Censky, staff reporter, On Wednesday February 16, 2011, 4:30 pm EST
Are you better off than your parents?
Probably not if you're in the middle class.
Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.
In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.
Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.
But there's more to the story.
A real drag on the middle class
One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University.
Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said.
But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
"The erosion of collective bargaining is a key factor to explain why low-wage workers and middle income workers have seen their wages not stay up with inflation," Rodgers said.
Without collective bargaining pushing up wages, especially for blue-collar work -- average incomes have stagnated.
International competition is another factor. While globalization has lifted millions out of poverty in developing nations, it hasn't exactly been a win for middle class workers in the U.S.
Factory workers have seen many of their jobs shipped to other countries where labor is cheaper, putting more downward pressure on American wages.
"As we became more connected to China, that poses the question of whether our wages are being set in Beijing," Rodgers said.
Finding it harder to compete with cheaper manufacturing costs abroad, the U.S. has emerged as primarily a services-producing economy. That trend has created a cultural shift in the job skills American employers are looking for.
Whereas 50 years earlier, there were plenty of blue collar opportunities for workers who had only high school diploma, now employers seek "soft skills" that are typically honed in college, Rodgers said.
A boon for the rich
While average folks were losing ground in the economy, the wealthiest were capitalizing on some of those same factors, and driving an even bigger wedge between themselves and the rest of America.
For example, though globalization has been a drag on labor, it's been a major win for corporations who've used new global channels to reduce costs and boost profits. In addition, new markets around the world have created even greater demand for their products.
"With a global economy, people who have extraordinary skills... whether they be in financial services, technology, entertainment or media, have a bigger place to play and be rewarded from," said Alan Johnson, a Wall Street compensation consultant.
As a result, the disparity between the wages for college educated workers versus high school grads has widened significantly since the 1980s.
In 1980, workers with a high school diploma earned about 71% of what college-educated workers made. In 2010, that number fell to 55%.
Another driver of the rich: The stock market.
The S&P 500 has gained more than 1,300% since 1970. While that's helped the American economy grow, the benefits have been disproportionately reaped by the wealthy.
And public policy of the past few decades has only encouraged the trend.
The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts.
A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed.
In 2000, the Commodity Futures Modernization Act also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector.
Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation's richest.
And as then-Federal Reserve chairman Alan Greenspan brought interest rates down to new lows during the decade, the housing market experienced explosive growth.
"We were all drinking the Kool-aid, Greenspan was tending bar, Bernanke and the academic establishment were supplying the liquor," Deutsche Bank managing director Ajay Kapur wrote in a research report in 2009.
But the story didn't end well. Eventually, it all came crashing down, resulting in the worst economic slump since the Great Depression.
With the unemployment rate still excessively high and the real estate market showing few signs of rebounding, the American middle class is still reeling from the effects of the Great Recession.
Meanwhile, as corporate profits come roaring back and the stock market charges ahead, the wealthiest people continue to eclipse their middle-class counterparts.
"I think it's a terrible dilemma, because what we're obviously heading toward is some kind of class warfare," Johnson said.
http://finance.yahoo.com/news/How-the-middle-class-became-cnnm-2876148381.html
Edited by: DixieDestroyer
Annalyn Censky, staff reporter, On Wednesday February 16, 2011, 4:30 pm EST
Are you better off than your parents?
Probably not if you're in the middle class.
Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.
In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.
Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.
But there's more to the story.
A real drag on the middle class
One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University.
Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said.
But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
"The erosion of collective bargaining is a key factor to explain why low-wage workers and middle income workers have seen their wages not stay up with inflation," Rodgers said.
Without collective bargaining pushing up wages, especially for blue-collar work -- average incomes have stagnated.
International competition is another factor. While globalization has lifted millions out of poverty in developing nations, it hasn't exactly been a win for middle class workers in the U.S.
Factory workers have seen many of their jobs shipped to other countries where labor is cheaper, putting more downward pressure on American wages.
"As we became more connected to China, that poses the question of whether our wages are being set in Beijing," Rodgers said.
Finding it harder to compete with cheaper manufacturing costs abroad, the U.S. has emerged as primarily a services-producing economy. That trend has created a cultural shift in the job skills American employers are looking for.
Whereas 50 years earlier, there were plenty of blue collar opportunities for workers who had only high school diploma, now employers seek "soft skills" that are typically honed in college, Rodgers said.
A boon for the rich
While average folks were losing ground in the economy, the wealthiest were capitalizing on some of those same factors, and driving an even bigger wedge between themselves and the rest of America.
For example, though globalization has been a drag on labor, it's been a major win for corporations who've used new global channels to reduce costs and boost profits. In addition, new markets around the world have created even greater demand for their products.
"With a global economy, people who have extraordinary skills... whether they be in financial services, technology, entertainment or media, have a bigger place to play and be rewarded from," said Alan Johnson, a Wall Street compensation consultant.
As a result, the disparity between the wages for college educated workers versus high school grads has widened significantly since the 1980s.
In 1980, workers with a high school diploma earned about 71% of what college-educated workers made. In 2010, that number fell to 55%.
Another driver of the rich: The stock market.
The S&P 500 has gained more than 1,300% since 1970. While that's helped the American economy grow, the benefits have been disproportionately reaped by the wealthy.
And public policy of the past few decades has only encouraged the trend.
The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts.
A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed.
In 2000, the Commodity Futures Modernization Act also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector.
Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation's richest.
And as then-Federal Reserve chairman Alan Greenspan brought interest rates down to new lows during the decade, the housing market experienced explosive growth.
"We were all drinking the Kool-aid, Greenspan was tending bar, Bernanke and the academic establishment were supplying the liquor," Deutsche Bank managing director Ajay Kapur wrote in a research report in 2009.
But the story didn't end well. Eventually, it all came crashing down, resulting in the worst economic slump since the Great Depression.
With the unemployment rate still excessively high and the real estate market showing few signs of rebounding, the American middle class is still reeling from the effects of the Great Recession.
Meanwhile, as corporate profits come roaring back and the stock market charges ahead, the wealthiest people continue to eclipse their middle-class counterparts.
"I think it's a terrible dilemma, because what we're obviously heading toward is some kind of class warfare," Johnson said.
http://finance.yahoo.com/news/How-the-middle-class-became-cnnm-2876148381.html
Edited by: DixieDestroyer
Colonel_Reb
Hall of Famer
Very sobering news, Dixie.
Van_Slyke_CF
Mentor
Silver is over $33/oz. I wish I could've bought more in the last couple of years.
Van_Slyke_CF said:
We have a good thread on silver here: http://www.castefootball.us/forum/forum_posts.asp?TID=12922&PN=1&title=good-investment
It's up almost another 4% as I type this, and up about 25% over the past couple of weeks after taking a dip in late January and early February.
white is right
Hall of Famer
- Joined
- Feb 16, 2006
- Messages
- 10,163
Oil is up 9 dollars since Momar decided to hole himself up like Tony Montana in Scar Face. Let's hope he gets taken out in the same way....http://www.marketwatch.com/story/canadian-stocks-fall-oil-gold-spike-2011-02-22
An article entitled "The Flimsy House of Cards is Bound to Collapse"
http://www.davidduke.com/general/bearish-on-america_23164.html
http://www.davidduke.com/general/bearish-on-america_23164.html
Colonel_Reb
Hall of Famer
Why Dollar's Reign Is Near An End
http://online.wsj.com/article/BT-CO-20110301-714544.html
For decades, the dollar has served as the world's main reserve
currency, but, argues Barry Eichengreen, it will soon have to share that
role. Here's why and what it will mean for international markets and
companies.
By Barry Eichengreen
</pre>
The single most astonishing fact about foreign exchange is not the
high volume of transactions, as incredible as that growth has been. Nor
is it the volatility of currency rates, as wild as the markets are these
days.
Instead, it's the extent to which the market remains dollar-centric.
Consider this: When a South Korean wine wholesaler wants to import
Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with
which to pay the Chilean exporter. Indeed, the dollar is virtually the
exclusive vehicle for foreign-exchange transactions between Chile and
Korea, despite the fact that less than 20% of the merchandise trade of
both countries is with the U.S.
Chile and Korea are hardly an anomaly: Fully 85% of foreign-exchange
transactions world-wide are trades of other currencies for dollars.
What's more, what is true of foreign-exchange transactions is true of
other international business. The Organization of Petroleum Exporting
Countries sets the price of oil in dollars. The dollar is the currency
of denomination of half of all international debt securities. More than
60% of the foreign reserves of central banks and governments are in
dollars.
The greenback, in other words, is not just America's currency. It's the world's.
But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end.
I believe that over the next 10 years, we're going to see a profound
shift toward a world in which several currencies compete for dominance.
The impact of such a shift will be equally profound, with implications
for, among other things, the stability of exchange rates, the stability
of financial markets, the ease with which the U.S. will be able to
finance budget and current-account deficits, and whether the Fed can
follow a policy of benign neglect toward the dollar.
The Three Pillars
How could this be? How could the dollar's longtime most-favored-currency status be in jeopardy?
To understand the dollar's future, it's important to understand the
dollar's past--why the dollar became so dominant in the first place. Let
me offer three reasons.
First, its allure reflects the singular depth of markets in
dollar-denominated debt securities. The sheer scale of those markets
allows dealers to offer low bid-ask spreads. The availability of
derivative instruments with which to hedge dollar exchange-rate risk is
unsurpassed. This makes the dollar the most convenient currency in which
to do business for corporations, central banks and governments alike.
Second, there is the fact that the dollar is the world's safe haven.
In crises, investors instinctively flock to it, as they did following
the 2008 failure of Lehman Brothers. This tendency reflects the
exceptional liquidity of markets in dollar instruments, liquidity being
the most precious of all commodities in a crisis. It is a product of the
fact that U.S. Treasury securities, the single most important asset
bought and sold by international investors, have long had a reputation
for stability.
Finally, the dollar benefits from a dearth of alternatives. Other
countries that have long enjoyed a reputation for stability, such as
Switzerland, or that have recently acquired one, like Australia, are too
small for their currencies to account for more than a tiny fraction of
international financial transactions.
What's Changing
But just because this has been true in the past doesn't guarantee that
it will be true in the future. In fact, all three pillars supporting
the dollar's international dominance are eroding.
First, changes in technology are undermining the dollar's monopoly.
Not so long ago, there may have been room in the world for only one true
international currency. Given the difficulty of comparing prices in
different currencies, it made sense for exporters, importers and bond
issuers all to quote their prices and invoice their transactions in
dollars, if only to avoid confusing their customers.
Now, however, nearly everyone carries hand-held devices that can be
used to compare prices in different currencies in real time. Just as we
have learned that in a world of open networks there is room for more
than one operating system for personal computers, there is room in the
global economic and financial system for more than one international
currency.
Second, the dollar is about to have real rivals in the international
sphere for the first time in 50 years. There will soon be two viable
alternatives, in the form of the euro and China's yuan.
Americans especially tend to discount the staying power of the euro,
but it isn't going anywhere. Contrary to some predictions, European
governments have not abandoned it. Nor will they. They will proceed with
long-term deficit reduction, something about which they have shown more
resolve than the U.S. And they will issue "e-bonds"-bonds backed by the
full faith and credit of euro-area governments as a group-as a step in
solving their crisis. This will lay the groundwork for the kind of
integrated European bond market needed to create an alternative to U.S.
Treasurys as a form in which to hold central-bank reserves.
China, meanwhile, is moving rapidly to internationalize the yuan, also
known as the renminbi. The last year has seen a quadrupling of the
share of bank deposits in Hong Kong denominated in yuan. Seventy
thousand Chinese companies are now doing their cross-border settlements
in yuan. Dozens of foreign companies have issued yuan-denominated "dim
sum" bonds in Hong Kong. In January the Bank of China began offering
yuan-deposit accounts in New York insured by the Federal Deposit
Insurance Corp.
Allowing Chinese companies to do cross-border settlements in yuan will
free them from having to undertake costly foreign-exchange
transactions. They will no longer have to bear the exchange-rate risk
created by the fact that their revenues are in dollars but many of their
costs are in yuan. Allowing Chinese banks, for their part, to do
international transactions in yuan will allow them to grab a bigger
slice of the global financial pie.
Admittedly, China has a long way to go in building liquid markets and
making its financial instruments attractive to international investors.
But doing so is central to Beijing's economic strategy. Chinese
officials have set 2020 as the deadline for transforming Shanghai into a
first-class international financial center. We Westerners have
underestimated China before. We should not make the same mistake again.
Finally, there is the danger that the dollar's safe-haven status will
be lost. Foreign investors-private and official alike-hold dollars not
simply because they are liquid but because they are secure. The U.S.
government has a history of honoring its obligations, and it has always
had the fiscal capacity to do so.
But now, mainly as a result of the financial crisis, federal debt is
approaching 75% of U.S. gross domestic product. Trillion-dollar deficits
stretch as far as the eye can see. And as the burden of debt service
grows heavier, questions will be asked about whether the U.S. intends to
maintain the value of its debts or might resort to inflating them away.
Foreign investors will be reluctant to put all their eggs in the dollar
basket. At a minimum, the dollar will have to share its safe-haven
status with other currencies.
A World More Complicated
How much difference will all this make-to markets, to companies, to households, to governments?
One obvious change will be to the foreign-exchange markets. There will
no longer be an automatic jump up in the value of the dollar, and
corresponding decline in the value of other major currencies, when
financial volatility surges. With the dollar, euro and yuan all trading
in liquid markets and all seen as safe havens, there will be movement
into all three of them in periods of financial distress. No one currency
will rise as strongly as did the dollar following the failure of Lehman
Brothers. There will be no reason for the rates between them to move
sharply, something that would potentially upend investors.
But the impact will extend well beyond the markets. Clearly, the
change will make life more complicated for U.S. companies. Until now
they have had the convenience of using the same currency-dollars-whether
they are paying their workers, importing parts and components, or
selling their products to foreign customers. They don't have to incur
the cost of changing foreign-currency earnings into dollars. They don't
have to purchase forward contracts and options to protect against
financial losses due to changes in the exchange rate. This will all
change in the brave new world that is coming. American companies will
have to cope with some of the same exchange-rate risks and exposures as
their foreign competitors.
Conversely, life will become easier for European and Chinese banks and
companies, which will be able to do more of their international
business in their own currencies. The same will be true of companies in
other countries that do most of their business with China or Europe. It
will be a considerable convenience-and competitive advantage-for them to
be able to do that business in yuan or euros rather than having to go
through the dollar.
U.S. Impact
In this new monetary world, moreover, the U.S. government will not be
able to finance its budget deficits so cheaply, since there will no
longer be as big an appetite for U.S. Treasury securities on the part of
foreign central banks.
Nor will the U.S. be able to run such large trade and current-account
deficits, since financing them will become more expensive. Narrowing the
current-account deficit will require exporting more, which will mean
making U.S. goods more competitive on foreign markets. That in turn
means that the dollar will have to fall on foreign-exchange
markets-helping U.S. exporters and hurting those companies that export
to the U.S.
My calculations suggest that the dollar will have to fall by roughly
20%. Because the prices of imported goods will rise in the U.S., living
standards will be reduced by about 1.5% of GDP-$225 billion in today's
dollars. That is the equivalent to a half-year of normal economic
growth. While this is not an economic disaster, Americans will
definitely feel it in the wallet.
On the other hand, the next time the U.S. has a real-estate bubble, we won't have the Chinese helping us blow it.
Dr. Eichengreen is the George C. Pardee and Helen N. Pardee professor
of economics and political science at the University of California,
Berkeley. His new book is "Exorbitant Privilege: The Rise and Fall of
the Dollar and the Future of the International Monetary System." He can
be reached at -reports@wsj.com.
http://online.wsj.com/article/BT-CO-20110301-714544.html
For decades, the dollar has served as the world's main reserve
currency, but, argues Barry Eichengreen, it will soon have to share that
role. Here's why and what it will mean for international markets and
companies.
By Barry Eichengreen
</pre>
The single most astonishing fact about foreign exchange is not the
high volume of transactions, as incredible as that growth has been. Nor
is it the volatility of currency rates, as wild as the markets are these
days.
Instead, it's the extent to which the market remains dollar-centric.
Consider this: When a South Korean wine wholesaler wants to import
Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with
which to pay the Chilean exporter. Indeed, the dollar is virtually the
exclusive vehicle for foreign-exchange transactions between Chile and
Korea, despite the fact that less than 20% of the merchandise trade of
both countries is with the U.S.
Chile and Korea are hardly an anomaly: Fully 85% of foreign-exchange
transactions world-wide are trades of other currencies for dollars.
What's more, what is true of foreign-exchange transactions is true of
other international business. The Organization of Petroleum Exporting
Countries sets the price of oil in dollars. The dollar is the currency
of denomination of half of all international debt securities. More than
60% of the foreign reserves of central banks and governments are in
dollars.
The greenback, in other words, is not just America's currency. It's the world's.
But as astonishing as that is, what may be even more astonishing is this: The dollar's reign is coming to an end.
I believe that over the next 10 years, we're going to see a profound
shift toward a world in which several currencies compete for dominance.
The impact of such a shift will be equally profound, with implications
for, among other things, the stability of exchange rates, the stability
of financial markets, the ease with which the U.S. will be able to
finance budget and current-account deficits, and whether the Fed can
follow a policy of benign neglect toward the dollar.
The Three Pillars
How could this be? How could the dollar's longtime most-favored-currency status be in jeopardy?
To understand the dollar's future, it's important to understand the
dollar's past--why the dollar became so dominant in the first place. Let
me offer three reasons.
First, its allure reflects the singular depth of markets in
dollar-denominated debt securities. The sheer scale of those markets
allows dealers to offer low bid-ask spreads. The availability of
derivative instruments with which to hedge dollar exchange-rate risk is
unsurpassed. This makes the dollar the most convenient currency in which
to do business for corporations, central banks and governments alike.
Second, there is the fact that the dollar is the world's safe haven.
In crises, investors instinctively flock to it, as they did following
the 2008 failure of Lehman Brothers. This tendency reflects the
exceptional liquidity of markets in dollar instruments, liquidity being
the most precious of all commodities in a crisis. It is a product of the
fact that U.S. Treasury securities, the single most important asset
bought and sold by international investors, have long had a reputation
for stability.
Finally, the dollar benefits from a dearth of alternatives. Other
countries that have long enjoyed a reputation for stability, such as
Switzerland, or that have recently acquired one, like Australia, are too
small for their currencies to account for more than a tiny fraction of
international financial transactions.
What's Changing
But just because this has been true in the past doesn't guarantee that
it will be true in the future. In fact, all three pillars supporting
the dollar's international dominance are eroding.
First, changes in technology are undermining the dollar's monopoly.
Not so long ago, there may have been room in the world for only one true
international currency. Given the difficulty of comparing prices in
different currencies, it made sense for exporters, importers and bond
issuers all to quote their prices and invoice their transactions in
dollars, if only to avoid confusing their customers.
Now, however, nearly everyone carries hand-held devices that can be
used to compare prices in different currencies in real time. Just as we
have learned that in a world of open networks there is room for more
than one operating system for personal computers, there is room in the
global economic and financial system for more than one international
currency.
Second, the dollar is about to have real rivals in the international
sphere for the first time in 50 years. There will soon be two viable
alternatives, in the form of the euro and China's yuan.
Americans especially tend to discount the staying power of the euro,
but it isn't going anywhere. Contrary to some predictions, European
governments have not abandoned it. Nor will they. They will proceed with
long-term deficit reduction, something about which they have shown more
resolve than the U.S. And they will issue "e-bonds"-bonds backed by the
full faith and credit of euro-area governments as a group-as a step in
solving their crisis. This will lay the groundwork for the kind of
integrated European bond market needed to create an alternative to U.S.
Treasurys as a form in which to hold central-bank reserves.
China, meanwhile, is moving rapidly to internationalize the yuan, also
known as the renminbi. The last year has seen a quadrupling of the
share of bank deposits in Hong Kong denominated in yuan. Seventy
thousand Chinese companies are now doing their cross-border settlements
in yuan. Dozens of foreign companies have issued yuan-denominated "dim
sum" bonds in Hong Kong. In January the Bank of China began offering
yuan-deposit accounts in New York insured by the Federal Deposit
Insurance Corp.
Allowing Chinese companies to do cross-border settlements in yuan will
free them from having to undertake costly foreign-exchange
transactions. They will no longer have to bear the exchange-rate risk
created by the fact that their revenues are in dollars but many of their
costs are in yuan. Allowing Chinese banks, for their part, to do
international transactions in yuan will allow them to grab a bigger
slice of the global financial pie.
Admittedly, China has a long way to go in building liquid markets and
making its financial instruments attractive to international investors.
But doing so is central to Beijing's economic strategy. Chinese
officials have set 2020 as the deadline for transforming Shanghai into a
first-class international financial center. We Westerners have
underestimated China before. We should not make the same mistake again.
Finally, there is the danger that the dollar's safe-haven status will
be lost. Foreign investors-private and official alike-hold dollars not
simply because they are liquid but because they are secure. The U.S.
government has a history of honoring its obligations, and it has always
had the fiscal capacity to do so.
But now, mainly as a result of the financial crisis, federal debt is
approaching 75% of U.S. gross domestic product. Trillion-dollar deficits
stretch as far as the eye can see. And as the burden of debt service
grows heavier, questions will be asked about whether the U.S. intends to
maintain the value of its debts or might resort to inflating them away.
Foreign investors will be reluctant to put all their eggs in the dollar
basket. At a minimum, the dollar will have to share its safe-haven
status with other currencies.
A World More Complicated
How much difference will all this make-to markets, to companies, to households, to governments?
One obvious change will be to the foreign-exchange markets. There will
no longer be an automatic jump up in the value of the dollar, and
corresponding decline in the value of other major currencies, when
financial volatility surges. With the dollar, euro and yuan all trading
in liquid markets and all seen as safe havens, there will be movement
into all three of them in periods of financial distress. No one currency
will rise as strongly as did the dollar following the failure of Lehman
Brothers. There will be no reason for the rates between them to move
sharply, something that would potentially upend investors.
But the impact will extend well beyond the markets. Clearly, the
change will make life more complicated for U.S. companies. Until now
they have had the convenience of using the same currency-dollars-whether
they are paying their workers, importing parts and components, or
selling their products to foreign customers. They don't have to incur
the cost of changing foreign-currency earnings into dollars. They don't
have to purchase forward contracts and options to protect against
financial losses due to changes in the exchange rate. This will all
change in the brave new world that is coming. American companies will
have to cope with some of the same exchange-rate risks and exposures as
their foreign competitors.
Conversely, life will become easier for European and Chinese banks and
companies, which will be able to do more of their international
business in their own currencies. The same will be true of companies in
other countries that do most of their business with China or Europe. It
will be a considerable convenience-and competitive advantage-for them to
be able to do that business in yuan or euros rather than having to go
through the dollar.
U.S. Impact
In this new monetary world, moreover, the U.S. government will not be
able to finance its budget deficits so cheaply, since there will no
longer be as big an appetite for U.S. Treasury securities on the part of
foreign central banks.
Nor will the U.S. be able to run such large trade and current-account
deficits, since financing them will become more expensive. Narrowing the
current-account deficit will require exporting more, which will mean
making U.S. goods more competitive on foreign markets. That in turn
means that the dollar will have to fall on foreign-exchange
markets-helping U.S. exporters and hurting those companies that export
to the U.S.
My calculations suggest that the dollar will have to fall by roughly
20%. Because the prices of imported goods will rise in the U.S., living
standards will be reduced by about 1.5% of GDP-$225 billion in today's
dollars. That is the equivalent to a half-year of normal economic
growth. While this is not an economic disaster, Americans will
definitely feel it in the wallet.
On the other hand, the next time the U.S. has a real-estate bubble, we won't have the Chinese helping us blow it.
Dr. Eichengreen is the George C. Pardee and Helen N. Pardee professor
of economics and political science at the University of California,
Berkeley. His new book is "Exorbitant Privilege: The Rise and Fall of
the Dollar and the Future of the International Monetary System." He can
be reached at -reports@wsj.com.
whiteathlete33
Hall of Famer
Another bull article. We all know the unemployment rate is much, much higher.
<div ="hd">
<h1 id="yn-title">Unemployment dips to 8.9 pct., 192K jobs added</h1>
<a href="http://us.rd.yahoo.com/dailynews/ap/brand/SIG=11f589428/**http%3A%2F%2Fwww.ap.org%2Ftermsandconditions" target="_blank">
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Play Video</span> </a><cite ="caption">
CNBC
â€"Zeroing in on US Jobs </cite>
</div>
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Play Video</span> </a>Video:Hope for U.S. Economic Recovery?
<cite>ABC News</cite>
<li ="ult- video">
<a href="http://us.rd.yahoo.com/dailynews/external/ap_av/av_ap3_bs/4ce50a33616f4099db2c6b6d969a5cbf/40508241;_ylt=AnikUiNPrl8Y7FoooapQc61v24cA;_ylu=X3oDMTFiZXZmZGRoBHBvcwM2BHNlYwN5bl9yXzNzbG90X3ZpZGVvBHNsawN2aWQtZXYtdGh1bWI-/*http://news.yahoo.com/video/business-15749628/24411853" target="_blank">
Play Video</span> </a>Economy Video:Unemployment dips to 8.9 pct., 192K jobs added
<cite>AP</cite>
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</a><cite ="caption">AFP/Fileâ€"A jobs sign displayed on the facade of the US Chamber of Commerce in Washington, DC. New claims for US"¦</cite>
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<div ="byline">
<cite ="vcard">
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer</span>
</cite>
â€"
<abbr title="2011-03-04T08:57:10-0800" ="timedate">FriMar4, 11:57amET</abbr></div>
<div ="yn-story-">
WASHINGTON â€" Employers hired in February at the
fastest pace in almost a year, and the unemployment rate fell to 8.9
percent â€" a nearly two-year low.
The economy added a net 192,000 jobs. Factories, professional and business services, education </span>and </span>health </span>care</span></font>
were among the sectors that hired. Retailers, though, trimmed jobs.
State and local governments, squeezed by budget gaps, slashed 30,000
jobs, the most since November. Federal government hiring was flat.
Private employers added 222,000 jobs last month, the
most since April. That shows companies are feeling more confident about
the economy and their own prospects. The job gains bolstered hopes that
businesses will hire aggressively through the rest of the year and
strengthen the economic recovery.
The unemployment </span>rate</span></font>
is now at its lowest point since April 2009. It's been falling for
three months, down from 9.8 percent in November, marking the sharpest
three-month drop since 1983.
"These numbers can be sustained and built on," said Joel Naroff at Naroff </span>Economic </span>Advisors</span></font>. "Businesses are finally taking some of those profits they are earning and putting them back into the work force."
The number of unemployed people dipped to 13.7
million, still nearly double the number before the recession began in
December 2007.
When you include part-time workers who'd rather be
working full time and people who have given up looking for work, the
percentage of "underemployed" people dropped to 15.9 percent in
February. That's the lowest figure in nearly two years.
The Labor </span>Department</span></font>
report had little effect on investors, who had generally anticipated
Friday's data. Many seemed more focused on the rise in oil prices. The
Dow Jones industrial average dropped more than 60 points in morning
trading. The yield on the 10-year Treasury note dipped to 3.52 percent,
from 3.56 percent late Thursday. The yield is a widely used benchmark
for mortgages and other loans.
President Barack Obama's chief economist, Austan </span>Goolsbee</span></font>,
welcomed the positive news. But Goolsbee cautioned that it will take
time to recoup the 7.5 million jobs wiped out by the 2007-2009
recession.
The pickup in hiring coincides with gathering strength in the broader economy.
Americans shoppers are spending more. U.S. exporters
are selling more abroad. Manufacturing is growing at the fastest pace in
nearly seven years. And the service sector, which employs about 90
percent of the work force, is expanding at the fastest pace in more than
five years.
The 192,000 jobs added in February was a sharp
improvement from a revised 63,000 job gains in January. Some of the
increasing came as people resumed work, after dropping off payrolls
because of bad weather in January. Still, the gains were widespread.
Factories added 33,000 jobs. Education and health
care added 40,000, professional and businesses services 47,000. Leisure
and hospitality added 21,000, and transportation and warehousing
reported 22,000.
And construction companies created a net 33,000 jobs,
though a chunk of them reflected people coming back on payrolls after
January's harsh winter weather.
The number of "long-term" unemployed â€" people out of
work for six months or more â€" sank to 5.99 million, a decline of 217,000
from January.
Workers' paychecks were mostly flat in February.
Average hourly earning rose to $22.87 in February, up 1 cent from
January. Workers have little bargaining power to demand big pay raises
because the weak jobs market.
And rising gasoline prices are putting more pressure
on Americans' pocketbooks. Gasoline is averaging close to $3.50 a gallon
nationwide. Higher prices can force consumers to cut back spending on
other things. That has the potential to slow the recovery and hiring.
Even if that scenario doesn't happen, the
unemployment rate is likely to rise later this year as people â€" perhaps
feeling more confident about their prospects to find a job â€" stream back
into the labor </span>market</span></font>.
Unemployment rates often rise when the economy improves and people who
haven't been looking for jobs start hunting again. People who aren't
looking are not counted as unemployed. Some economists say the jobless
rate could edge past 9 percent again.
</div>
<div ="hd">
<h1 id="yn-title">Unemployment dips to 8.9 pct., 192K jobs added</h1>
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CNBC
â€"Zeroing in on US Jobs </cite>
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<cite>ABC News</cite>
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Play Video</span> </a>Economy Video:Unemployment dips to 8.9 pct., 192K jobs added
<cite>AP</cite>
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<td ="first">
<a href="http://finance.yahoo.com/q?s=%5EDJI" target="_blank">
<abbr title="Dow Jones Industrial Average">^DJI</abbr>
</a>
</td>
<td>12,125.98</td>
<td ="negative">-132.22</td>
</tr>
<tr ="ult- ">
<td ="first">
<a href="http://finance.yahoo.com/q?s=%5EGSPC" target="_blank">
<abbr title="S&P 500 INDEX,RTH">^GSPC</abbr>
</a>
</td>
<td>1,318.00</td>
<td ="negative">-12.97</td>
</tr>
<tr ="ult- alternative">
<td ="first">
<a href="http://finance.yahoo.com/q?s=%5EIXIC" target="_blank">
<abbr title="NASDAQ Composite">^IXIC</abbr>
</a>
</td>
<td>2,779.61</td>
<td ="negative">-19.13</td>
</tr>
</t>
</table>
<no>
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<a href="http://news.yahoo.com/nphotos/jobs-sign-displayed-facade-US-Chamber-Commerce-Washington-DC-New/photo//110303/photos_pl_afp/a9dde2e7166f5a249b1ec8b7fa50dba2//s:/ap/us_economy" target="_blank">
</a><cite ="caption">AFP/Fileâ€"A jobs sign displayed on the facade of the US Chamber of Commerce in Washington, DC. New claims for US"¦</cite>
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<div ="byline">
<cite ="vcard">
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer</span>
</cite>
â€"
<abbr title="2011-03-04T08:57:10-0800" ="timedate">FriMar4, 11:57amET</abbr></div>
<div ="yn-story-">
WASHINGTON â€" Employers hired in February at the
fastest pace in almost a year, and the unemployment rate fell to 8.9
percent â€" a nearly two-year low.
The economy added a net 192,000 jobs. Factories, professional and business services, education </span>and </span>health </span>care</span></font>
were among the sectors that hired. Retailers, though, trimmed jobs.
State and local governments, squeezed by budget gaps, slashed 30,000
jobs, the most since November. Federal government hiring was flat.
Private employers added 222,000 jobs last month, the
most since April. That shows companies are feeling more confident about
the economy and their own prospects. The job gains bolstered hopes that
businesses will hire aggressively through the rest of the year and
strengthen the economic recovery.
The unemployment </span>rate</span></font>
is now at its lowest point since April 2009. It's been falling for
three months, down from 9.8 percent in November, marking the sharpest
three-month drop since 1983.
"These numbers can be sustained and built on," said Joel Naroff at Naroff </span>Economic </span>Advisors</span></font>. "Businesses are finally taking some of those profits they are earning and putting them back into the work force."
The number of unemployed people dipped to 13.7
million, still nearly double the number before the recession began in
December 2007.
When you include part-time workers who'd rather be
working full time and people who have given up looking for work, the
percentage of "underemployed" people dropped to 15.9 percent in
February. That's the lowest figure in nearly two years.
The Labor </span>Department</span></font>
report had little effect on investors, who had generally anticipated
Friday's data. Many seemed more focused on the rise in oil prices. The
Dow Jones industrial average dropped more than 60 points in morning
trading. The yield on the 10-year Treasury note dipped to 3.52 percent,
from 3.56 percent late Thursday. The yield is a widely used benchmark
for mortgages and other loans.
President Barack Obama's chief economist, Austan </span>Goolsbee</span></font>,
welcomed the positive news. But Goolsbee cautioned that it will take
time to recoup the 7.5 million jobs wiped out by the 2007-2009
recession.
The pickup in hiring coincides with gathering strength in the broader economy.
Americans shoppers are spending more. U.S. exporters
are selling more abroad. Manufacturing is growing at the fastest pace in
nearly seven years. And the service sector, which employs about 90
percent of the work force, is expanding at the fastest pace in more than
five years.
The 192,000 jobs added in February was a sharp
improvement from a revised 63,000 job gains in January. Some of the
increasing came as people resumed work, after dropping off payrolls
because of bad weather in January. Still, the gains were widespread.
Factories added 33,000 jobs. Education and health
care added 40,000, professional and businesses services 47,000. Leisure
and hospitality added 21,000, and transportation and warehousing
reported 22,000.
And construction companies created a net 33,000 jobs,
though a chunk of them reflected people coming back on payrolls after
January's harsh winter weather.
The number of "long-term" unemployed â€" people out of
work for six months or more â€" sank to 5.99 million, a decline of 217,000
from January.
Workers' paychecks were mostly flat in February.
Average hourly earning rose to $22.87 in February, up 1 cent from
January. Workers have little bargaining power to demand big pay raises
because the weak jobs market.
And rising gasoline prices are putting more pressure
on Americans' pocketbooks. Gasoline is averaging close to $3.50 a gallon
nationwide. Higher prices can force consumers to cut back spending on
other things. That has the potential to slow the recovery and hiring.
Even if that scenario doesn't happen, the
unemployment rate is likely to rise later this year as people â€" perhaps
feeling more confident about their prospects to find a job â€" stream back
into the labor </span>market</span></font>.
Unemployment rates often rise when the economy improves and people who
haven't been looking for jobs start hunting again. People who aren't
looking are not counted as unemployed. Some economists say the jobless
rate could edge past 9 percent again.
</div>
An article entitled "Obama Depression Continues"
http://www.davidduke.com/general/obama-depression-continues_23266.html
http://www.davidduke.com/general/obama-depression-continues_23266.html
white is right
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I couldn't make this up if wanted to. Also if she couldn't hold on to her money who could? This is from Forbes about Patricia Kluge....Morgan Brennan
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The Foreclosure Of Patricia Kluge's (Once) $100 Million Estate
Feb. 22 2011 - 11:32 am | 7,964 views | 1 recommendation | 3 comments
By MORGAN BRENNAN
In 1990 self-made media billionaire, John Kluge, and his third wife, Patricia, called their marriage quits. The divorce settlement doled out a chunk of change to wife number three, which perhaps is not all that surprising since Kluge was, with a more than $5 billion empire, the world's wealthiest man that year. (For more on Kluge, check out my colleague Clare O'Connor's coverage here)
News organizations reported that Patricia Kluge walked away with anywhere from a billion dollars (a number highly inflated and downright incorrect) to the interest on $1 billion, which would have broken down into $1.6 million installments per week. Forbes estimated the settlement at a more modest $1 million in cash per year. But she also snagged some prime real estate: an opulent 45-room Virginia estate called Albemarle.
Last week a new owner took possession of the grand Virginia estate: Bank of America.The bank giant "bought"Â the eight bedroom, 13 bath, 19th century-inspired mansion Wednesday morning on the Charlottesville courthouse steps. It was the top bidder in a foreclosure auction.
The unceremonious handing off of Albemarle came about after Bank of America, Kluge's creditor for the property, filed a foreclosure lawsuit last month alleging that the socialite â€" who hosted everyone from former presidents to international royalty at the estate â€" had defaulted on $23 million in loans.
The bank took ownership for the highly discounted price of $15.26 million.
While distressed sales tend to be the purchasing extravaganzas of bargain hunters' dreams, offering foreclosed upon homes at drastically reduced prices, Albemarle's sale takes the term discount to new extremes.Echoing other recent foreclosure tales of the rich and famous, the 300 acre (give or take) estate, built by the Kluges in 1985, first hit the market in 2009 for $100 million. That extravagant number quickly dropped down to a more humble $24 million, which is where it stayed listed until midnight before the auction. Sotheby's International Realty had the listing.
The Neo-Georgian mansion, which Sotheby's described as both "one of the most important residences created in the United States" and "one of the best known homes," boasts a wine cellar and grotto, a media room, outdoor kitchen, fitness room and steam room â€" even a helipad. The surrounding acres had everything from a guest house to riding stables and a barn. No buyer.
Kluge stopped making her loan payments three months ago and went into default. Bank of America began the final steps of the foreclosure process in January and an auction was scheduled. Albemarle's subsequent unceremonious sale put ownership officially in the hands of Bank of America, at a discount of almost 85% off the initial market valuation.
Real estate billionaire Donald Trump has been rumored to have interest in the estate â€" as well as the hundreds of acres surrounding it which also once belonged to the financially devastated Kluge.His representatives bowed out of the auction, but said that The Donald holds a "right of first refusal" to consider buying the land in the future, according to The Washington Post.
Albemarle is the latest distress sale affiliated with Virgina's society maven, who until recently was also a celebrated wine maker. (Kluge Estate Winery and Vineyard wines graced the tables of Chelsea Clinton's wedding last year.) Last June, Sotheby's Auction House hosted an estate sale of her jewelry, furniture and art, pulling in millions of dollars to pay off creditors. In December, Farm Credit Bank repossessed Kluge Estate Winery and Vineyard in auction, after failed business plans for the vineyard and its surrounding property, which Kluge and current husband William Moses planned to subdivide, develop and sell as a real estate venture, caused Kluge to relinquish ownership.
Lenders like Bank of America have millions of repossessed homes on their books. High end homes likes Albemarle are the types of properties banks like to avoid taking ownership of. They tend to pose more difficulties in reselling because the potential buyer pool is incredibly limited. And until resale occurs, properties like Albemarle are costly to keep since they rack up high property taxes and hefty maintenance bills.
Even so, the foreclosure crisis is trickling up into the luxury end of the market. Celebrities and high net worth home owners have not been excluded. Everyone from Nicholas Cage to Julius "Dr. J"Â Erving to Sergei Fedorov have faced foreclosure law suits and distressed auctions in the past year.
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The Foreclosure Of Patricia Kluge's (Once) $100 Million Estate
Feb. 22 2011 - 11:32 am | 7,964 views | 1 recommendation | 3 comments
By MORGAN BRENNAN
In 1990 self-made media billionaire, John Kluge, and his third wife, Patricia, called their marriage quits. The divorce settlement doled out a chunk of change to wife number three, which perhaps is not all that surprising since Kluge was, with a more than $5 billion empire, the world's wealthiest man that year. (For more on Kluge, check out my colleague Clare O'Connor's coverage here)
News organizations reported that Patricia Kluge walked away with anywhere from a billion dollars (a number highly inflated and downright incorrect) to the interest on $1 billion, which would have broken down into $1.6 million installments per week. Forbes estimated the settlement at a more modest $1 million in cash per year. But she also snagged some prime real estate: an opulent 45-room Virginia estate called Albemarle.
Last week a new owner took possession of the grand Virginia estate: Bank of America.The bank giant "bought"Â the eight bedroom, 13 bath, 19th century-inspired mansion Wednesday morning on the Charlottesville courthouse steps. It was the top bidder in a foreclosure auction.
The unceremonious handing off of Albemarle came about after Bank of America, Kluge's creditor for the property, filed a foreclosure lawsuit last month alleging that the socialite â€" who hosted everyone from former presidents to international royalty at the estate â€" had defaulted on $23 million in loans.
The bank took ownership for the highly discounted price of $15.26 million.
While distressed sales tend to be the purchasing extravaganzas of bargain hunters' dreams, offering foreclosed upon homes at drastically reduced prices, Albemarle's sale takes the term discount to new extremes.Echoing other recent foreclosure tales of the rich and famous, the 300 acre (give or take) estate, built by the Kluges in 1985, first hit the market in 2009 for $100 million. That extravagant number quickly dropped down to a more humble $24 million, which is where it stayed listed until midnight before the auction. Sotheby's International Realty had the listing.
The Neo-Georgian mansion, which Sotheby's described as both "one of the most important residences created in the United States" and "one of the best known homes," boasts a wine cellar and grotto, a media room, outdoor kitchen, fitness room and steam room â€" even a helipad. The surrounding acres had everything from a guest house to riding stables and a barn. No buyer.
Kluge stopped making her loan payments three months ago and went into default. Bank of America began the final steps of the foreclosure process in January and an auction was scheduled. Albemarle's subsequent unceremonious sale put ownership officially in the hands of Bank of America, at a discount of almost 85% off the initial market valuation.
Real estate billionaire Donald Trump has been rumored to have interest in the estate â€" as well as the hundreds of acres surrounding it which also once belonged to the financially devastated Kluge.His representatives bowed out of the auction, but said that The Donald holds a "right of first refusal" to consider buying the land in the future, according to The Washington Post.
Albemarle is the latest distress sale affiliated with Virgina's society maven, who until recently was also a celebrated wine maker. (Kluge Estate Winery and Vineyard wines graced the tables of Chelsea Clinton's wedding last year.) Last June, Sotheby's Auction House hosted an estate sale of her jewelry, furniture and art, pulling in millions of dollars to pay off creditors. In December, Farm Credit Bank repossessed Kluge Estate Winery and Vineyard in auction, after failed business plans for the vineyard and its surrounding property, which Kluge and current husband William Moses planned to subdivide, develop and sell as a real estate venture, caused Kluge to relinquish ownership.
Lenders like Bank of America have millions of repossessed homes on their books. High end homes likes Albemarle are the types of properties banks like to avoid taking ownership of. They tend to pose more difficulties in reselling because the potential buyer pool is incredibly limited. And until resale occurs, properties like Albemarle are costly to keep since they rack up high property taxes and hefty maintenance bills.
Even so, the foreclosure crisis is trickling up into the luxury end of the market. Celebrities and high net worth home owners have not been excluded. Everyone from Nicholas Cage to Julius "Dr. J"Â Erving to Sergei Fedorov have faced foreclosure law suits and distressed auctions in the past year.
Jimmy Chitwood
Hall of Famer
i wasn't sure where to post this, but i guess this thread is as good as any, since it's clearly amoney/power-grabby Big Pharma (aka thefedgov)... FDA suddenly bans drugs that have been on the market for decades.
an excerpt:
an excerpt:
whiteathlete33
Hall of Famer
Well according to our government unemployment has gone down to 8.9 percent from 9.8 percent a few months ago. Imagine that, almost a full percentage point in a few months. Of course the 99'ers and people who aren't looking for work aren't included in those numbers. Obama is making sure to pad the statistics for 2012.
The percentage of non-working people in America continues to rise. That's the important number. The number of people choosing not to work because the welfare benefits are a better life are rising as is our minority population - possible correlation? A... Yah.
A little affirmative action story; my brother in law works with sheet metal and just finished a job. After the job was done they found out that the people on the job were all white - violating some sort of affirmative action rule (must have been a government bid). The company had to hire a black guy to come in and do 160 hours of nothing. I have heard of several similar stories recently from people I know. So even some of the working are non-working.
A little affirmative action story; my brother in law works with sheet metal and just finished a job. After the job was done they found out that the people on the job were all white - violating some sort of affirmative action rule (must have been a government bid). The company had to hire a black guy to come in and do 160 hours of nothing. I have heard of several similar stories recently from people I know. So even some of the working are non-working.
Jimmy Chitwood
Hall of Famer
more signs of the "recovery" that the government assures us is real ... New home sales unexpectedly decline to record low.
"unexpectedly," that's a good one.
and in related news, i think the below video is a concise, accurate analysis of the mental capacity of our fellow countrymen. sadly, it's not complimentary.
[tube]http://www.youtube.com/watch?v=WCxBDDk4Y-M[/tube]
"unexpectedly," that's a good one.
and in related news, i think the below video is a concise, accurate analysis of the mental capacity of our fellow countrymen. sadly, it's not complimentary.
[tube]http://www.youtube.com/watch?v=WCxBDDk4Y-M[/tube]