Sunday, September 12, 2010

Yen Roars To New 15 Year High Off Of 1995 Pivot - The Risks To The "Free Trade" Donkey

When Wall Street was slobbering with arrogance, in other words before the world changed forever, we wrote that there were two investments we liked. That was dollars and yen. The Yen is now hitting a 15 year high. It's interesting how that 1995 pivot we keep talking about comes into play across so many financial variables. It's big juju from the medicine man.

I'm going to tell you a little secret you won't read anywhere else. But it's our secret not to be shared. Just like all of our other secrets on here. :) Japan's economy was on the verge of a serious crisis in the 1990s after its bubble burst. The United States Federal Reserve helped the Bank of Japan manipulate the currency markets such that Japanese banks, who were in serious trouble, could replenish their balance sheets by devaluing the yen against the dollar. That act pushed massive amounts of Japanese banking money into the United States. That currency exchange gain and substantial interest delta yielded in dollars helped recapitalize Japanese banks for some period of time. At the same time, this scheme helped recapitalize a bankrupt Wall Street after the massive financial fraud in the United States in the late 1980s to early 1990s financial crisis. In other words, it recapitalized the U.S. Ponzi scheme to live another day. (For those who believe we will have a protracted global deflation like Japan has experienced, forget it. Japan's lengthy deflation was only possible because of many global economic dynamics that are not repeatable. 2008 was the beginning of the end. We are going to have crises galore with currencies, economies and political messes. Unlike Japan's 1989 bubble collapse, which was contained for decades, the world is now burning within a cycle of volatility.)

This 1990s manipulation of the currency markets by the Bank of Japan and the U.S. Federal Reserve is what fueled the dollar bubble heading into 2000. It was also the primary rocket propellant that ignited the massively corrupt Internet bubble in the U.S. And once it began, other foreign financial firms piled on, creating one hell of a mess we now call the golden economic years under Bill Clinton. All of that bullshit the media and Wall Street pumped about American innovation in the 1990s and how strong our economy was under the absolutely horrific economic policies of Bill Clinton and Algore is a massive lie. That's right. Propaganda. Oh sure, the people who pumped this bulloney were true believers in their own self-deceit just as Wall Street and Washington believed it. It fed their own arrogance and ego. Americans were deceived by the endlessly corrupt and incompetent corporatist polity and Wall Street. But you are waking up to reality aren't you? The more you understand about truth, the more confidence you have in yourself and the less confidence you have in our leaderless corporatist political engine. That's good. We need a revolution of the mind to change our country. Part and parcel to that revolution of the mind is repudiating the mouth piece of Wall Street and political idiots - the mainstream media. It was the mainstream media who fed us all of the bullshit about an incredibly vibrant U.S. economy under what may be the worst President in American history, Bill Clinton.

The United States economy was collapsing under Clinton. And it can easily be proven quantitatively. Math doesn't lie. But politicians do. If the Federal Reserve was transparent and democratic instead of a corrupt cabal of cronies and thugs, we would have known what was going on at that time and people would have exposed the unintended consequences of their stupidity.

We made remark many years ago as to why oil was at $10 and gold was at $250 under Clinton. These markets were signaling coming economic collapse. How can oil be at $10 and gold at $250 if there is ample economic demand for energy and ample money creation in the economy? The most important measurements of money supply were imploding and so was sustainable economic demand for energy. We knew ages ago that this day would come. This is not some unpredictable event. I do share eventually. Not everything remains a mystery or a puzzle on here. :)

The Internet boom is most likely the broadest and most accepted lie of our time. Even greater than anthropogenic global warming, because every Wall Streeter and Washington politician believed it. It was the fraudulent Internet boom which still entrances Washington political idiots with undying belief in Wall Street's magical economic influence. But the reality is Wall Street doesn't know their ass from a hole in the ground. Contrarily, Wall Street killed America. And listening to them today is why we are continuing to our spiral of death. Just remember that when you vote in 2010. Which party supports Wall Street's austerity plan? Republicans. You have two false positives to choose from - tax our way into irrelevance with Dummycrats or embrace Republikaaner sponsored austerity and associated cuts to necessary social programs to ensure we can pay off Wall Street's massive choke hold of government debt. It's all a fascist corporatist cabal controlled by the two party political system. The Marching Morons. And it should be no surprise that both political parties are in fact massively crooked corporations.

All of those companies that came public during the 1990s Internet "boom" who never even had a business plan let alone any chance of making a profit was all as a result of massive banking fraud on Wall Street. Massive. Unprecedented. Complete corruption. Heinous evil to line the pockets of Wall Street with investment banking fees. All while simultaneously lining the pockets of cronies and idiots who were bringing companies public that had less of a written business plan than I have on a Post-it for my weekly home projects. And who choked down all of that toxic vomit? Mutual funds, pension funds and the American public who experienced the worst investment losses since the Great Depression. We took the losses. The American citizens.

Wall Street has become what might be the the most corrupt evil America has ever faced. Or as a popular idiom states, a fish rots from the head first. Wall Street could teach the Roman elites a few new tricks about bringing down a nation.

How many bloggers and economists have said the housing bubble was because rates were taken low after the mild recession in 2000 and 2001? And that didn't need to happen because it was such a mild recession. Baahaa. Every single economist and blogger I have ever come across. Pure bulloney. Contrarily, how many times have we written that the U.S. economy has been collapsing for more than a decade? And that 2000 was a seminal event.

The world is seldom as it appears. Question everything you believe. It's almost all a myth, unsubstantiated theory or outright lies. Question every single thing a politician tells you because it's almost guaranteed to be a self-serving lie or a manipulation of the truth for their own ego-driven purposes.

At some point in time I would expect that there is going to be substantial statist backlash between nations as it pertains to currency markets. We have written of an anticipation of this currency dynamic for some time. Especially as it pertains to the yuan eventually collapsing or being devalued - whichever comes first. This is part of the rising nationalism we have been talking about since starting the blog. Japan's economy cannot manage a yen of this strength. It couldn't in the 1990s and it sure as hell can't in the global economic implosion that is developing today. Yet if Japan acts unilaterally to devalue the yen, it will set off a wave of neoliberal sabre rattling from political idiots around the globe of either howling about Japan cheating free trade through protectionism or it would provide other nations a rationalization to attempt to devalue their own currency as a self-interested response.

"Free trade" - Nazi Germany's Ministry of Propaganda would be proud. The elites have been working outside of the view of democracy to bilk our nation for decades. And now it is all being exposed. As Buffett has famously remarked, you only find out who has been swimming naked when the tide rolls out. The emperor has no clothes. There is no way we will ever return to the way of life over the last twenty or thirty years. Those times are long dead. The final nails are being put into the coffin. And with it the final nails are being driven into the coffin holding its belief system. Now we build a new belief system. It will take time. And the fight for the mind to determine that belief system is well underway. There will be many charlatans and false prophets of political and economic ideology during that process. All contributing to volatility.

Behind the scenes the rising cauldron of volatility and pent up backlash between nations continues to swell. All courtesy of the state.

The cycle of volatility continues.

posted by TimingLogic at 9:19 AM

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