You need to be who you were born to be, not the people we have allowed ourselves to become. Don’t let life and the world shape us. That’s not who we are.”
Source: http://market-ticker.org/akcs-www?post=169761
You're joking, right?
Yesterday the dollar advanced about a percent and a half. The stock market fell by more than 100 DOW points.
Today, the dollar declines by (thus far) 1.32%. The stock market advances by more than 100 DOW points.
Simply put, you're not investing. You're gambling on the movement of the currency, which is a direct function of the actions of The Fed and Congress.
A stronger dollar means your imports get cheaper and your exports more expensive. Your money goes further to buy things you want to import, such as energy.
A weaker dollar means imports get more expensive and exports cheaper. Your labor becomes devalued, since you must buy energy in order to survive, and it is in everything you buy - including most-especially food. We import some 70% of our oil, as just one example.
A weaker currency means your real buying power is diminished. Your prior labor's surplus is effectively stolen. Prices of stocks may appear to rise, but to someone who is investing in Euros they haven't gone up at all - the "increase" in "wealth" alleged is in fact an illusion - and when paraded in front of the public as a reason to "go spend more", it is a fraud.
No nation has ever managed to devalue its currency as a means of achieving or reclaiming prosperity. In point of fact all such attempts have ended in either abject failure or worse, monetary system collapse as capital flight ultimately ensues.
The usual reaction to capital flight, rather than addressing the underlying rot that causes it, is to try to slap capital controls on the firms who have capital invested in the nation. This always backfires as once a nation engages in this nobody in their right mind will invest in a nation where it could become "trapped" in the future. So while you can "trap" the capital that you already have, doing so simply means you'll never get any more.
CNBS is claiming that the dollar is weakening "a bit." 1.3% moves in a day is not "a bit." The bond market is not impressed, driving /ZN (10year Treasury Futures) sharply higher since the dollar began its dive a couple of hours ago.
The instability these currency moves are creating will eventually cause a market collapse. The Dollar/Yen cross is today trading under 81 - a near-historic low - and continues on the trendline we have seen since June, when Bernanke began his threats of devaluation.
These moves trash Japanese profitability. Their Ministry of Finance and Central Bank have threatened to "prevent" disorderly strengthening - but their "intervention" bought them only 2 weeks of respite from an inexorable trend and amounted to flushing billions down the toilet, as the currency simply re-accelerated its declines until it once-again intercepted the trend that had been running for six months. In other words, they were shown to be impotent by the market, which immediately called the bluff and turned them into liars - exactly as has happened in every intervention they ever conducted over the last two decades.
CNBS is once again, this morning, hauling out every useful idiot they can find to pump stocks. This after bringing on David Tepper, who immediately got Tattoed with his holdings in the financial sector after his last pump. One wonders if these guys are unloading into the pops they create with their public touting, thereby attempting to stick you, once again, with the inevitable losses.
This time it was Bill Miller, who, I might remind you, was long up to his neck in stocks in 2007 and 2008 and likewise was "pumpting" stocks then - he got destroyed in the crash. Why doesn't anyone ever point out how much Countrywide Financial he held - all the way down the toilet bowl?
Everyone is talking about how low rates make stocks "cheap."
Does anyone understand how stupid this is? Think back to 2003.
Money was cheap then too. Greenspan told you to buy houses. The price of houses soared due to the cheap money.
But as soon as the cheap money wore off, the ability to afford that house disappeared.
Cheap money can wear off two ways: Interest rates can rise or the currency can depreciate.
Oh wait - they're deprecating the currency, aren't they?
You want to know what forced the serial-refinancing frauds on the market? Here's the reason for it:
Now let's talk about this a minute. The S&P 500 went from 800 in late 2002 to 1576 in 2007. But the dollar went from 121 to 80 - a devaluation of 33%.
The loose lending alone wasn't enough - and that dollar depreciation served to hide real wage declines, that were in fact much worse than published. In "inflation-adjusted" dollars, for all but the super-rich (the top 5%) real wages went down during the 2000 decade.
When adjusted for the depreciation of the currency real wages decreased by about 40% and when adjusted for depreciation of the currency the S&P 500 only reached about 1000 - NOT the previous 2000 highs!
If you want to know why we had a credit bubble, that's the reason. It's what was used to prop up the economy in the 2000s - false prosperity predicated on a rank lie - rising equity and house prices that were not affordable through the purchasing power of economic surplus - that is, what you had left from your earnings after you paid your necessary living expenses.
Ever-looser lending standards "permitted" driving higher equity and house prices through the expansion of credit that could not be paid except through serial refinancing on the back of alleged increases in "value."
Ok, so where are we now?
In deep **** far worse than we were in 2007 when I started writing The Market Ticker.
Why?
Because the credit bubble has not come out.
That is, all that debt is still there, as I have repeatedly shown:
There has been very little contraction in overall debt.
There has also been no appreciable "reset" higher in the currency value (dollar.)
This is exactly what happened in the 1930s. The bad debt was not forced out of the system. It instead was allowed to fester (despite what you were told), and not even a forced devaluation of the currency pulled the nation out of Depression. We in fact had a Depression inside the Depression (1937-38) in terms of GDP although you're not taught that in school. Japan has likewise failed to exit their deflation and regain their stock market's highs despite 20 years of attempting to manipulate their currency and markets for the same reason - they never forced the bad debt out of the system.
The only reason we got out of the Depression in the 40s was that we literally destroyed the productive capacity of 3/4 of the world's industrial economies and killed millions of workers competing for jobs!
In both cases the government and banksters decided to protect those who would be instantly bankrupted by the realization of actual value against their loan books - the big banks and their monied interests.
In both cases the claim was made that the impact on "Main Street" would be "catastrophic" if such recognition were to occur, and thus it "must not happen."
In both cases the economy failed to truly recover as the excess debt remained as a millstone around the neck of the economic and monetary system and since that excess credit is ten times or more the currency base there is no ability to "inflate it away" without causing an instantaneous collapse of the currency.
Unless you're prepared for a global nuclear war the path we are on cannot lead to a prosperous intermediate and long-term outcome. It is mathematically impossible and Ben Bernanke knows it.
Were he to face me in a debate of 30 minutes or longer I could, in fact, force him to admit it or sulk away and concede by silence, using nothing more than publicly available data and a basic charting program such as Excel. That debate will never happen and you will never see Congress do it (even though some of them know it too) because the day it happens confidence disappears and unless that realization comes with a concise and cogent plan to address the problem all markets tied to the United States instantaneously collapse.
Therefore:
We cannot further expand credit, as we're still up against the wall. We never defaulted and got rid of the bad debt - our government and banks hid it instead.
We are not expanding real wages and therefore we are not expanding economic surplus with which to expand consumption and pay down debt balances.
The currency is depreciating due to the actions of The Fed and Government so in purchasing-power-adjusted terms buying power is going down, not up, and prices for energy and commodities will continue to rise.
We cannot devalue sufficiently to fix the problem as the bad debt is some 10x or more the currency in the system. Printing of that amount would take the /DX to roughly 10 and destroy the currency along with everyone's standard of living. That would not exacerbate the Depression, it would lead to immediate privation for more than 200 million Americans and result in an instantaneous "hot" (that is, shooting-style, not political-style) revolution.
THE ONLY MEANS OF EXITING THE PROBLEM SHORT OF A WORLD WAR THAT DESTROYS MASSIVE AMOUNTS OF PRODUCTIVE CAPACITY AND TAKES HUNDREDS OF MILLIONS OF LIVES IS TO FORCE THE BAD DEBT INTO THE OPEN AND FORCE THOSE WHO ARE HIDING LOSSES TO ADMIT TO AND EAT THEM, KNOWING FULL WELL IT WILL BANKRUPT THEM!
In short, we're in worse trouble now than we were in 2007 and yet all the monkeys on CNBS along with the rest of the media are telling you to go out and buy stocks?!
Incidentally, the all-time low in the dollar is that 70.69 print. At the rate we're going we will decidedly violate that, crude oil will skyrocket and purchasing power will collapse. Unable to expand debt the consumer will experience a "foldback" some time in the next 12-24 months and when they do, it will be "lights out" for tax revenues and the general economy.
All the claims that we're "recovering" are lies. None of this is difficult to verify or subject to interpretation - it's all right here in the charts and data in the public domain - but nobody wants to talk about it.
If you're not listening you would be wise to start paying attention to the data and the facts because just as it did in 2007 you will be led straight off the cliff this time as well, and this time they have already spent their rate cuts, legislative games to hide debt, and currency devaluation tricks.
That is, this time they're flat-out of ways to stop it.
This book is a compulsory reading for anyone who concerns over Indonesia’ future as it brings together all the proceeding papers from panel discussions and the material from photo exhibition, film screening and talk show of the PPIA 2008 Conference “The Voice of Indonesian Future Leaders” held on 2-3 May 2008, where a wide pool of Indonesian future leaders voices their thoughts and hopes, and presents their work for a better Indonesia.
The writers and the contributors are students who reach across the different education strata -short course, diploma, undergraduate, and postgraduate -from various universities, such as Victoria University, La Trobe University, University of Melbourne, Monash University, University of Sydney, Australian National University, University of Canberra, Macquarie University, Murdoch University, National University of Singapore, University of Indonesia, University of Gajah Mada, and Klampist Community-Jakarta.
Table of Contents
GENDER AND FAMILY ISSUE
1. The law of the sea and marine scientific research: What lies ahead for Indonesia.
Achmad Gusman Siswandi
2. “Laki-laki itu khan yang mimpin”: Memahami Kaitan Maskulinitas Muslim dengan isu Kekerasan dalam Rumah Tangga
Rachmad Hidayat
3. Culture and Violence against Women Domestic Workers in Indonesia: A Case Study in Java
Evi Eliyanah
4. Towards victim-blaming-free Positive Deviance Programme for Breastfeeding in Indonesia
Astri Juliani Madjid
INFRASTRUCTURE AND TECHNOLOGY ISSUE
1. Saving the Environment or Saving the People : A Critique for Global View of Environment for Indonesia (case study : Forest Conversion for Palm Oil Plantation)
Sandhi Eko Bramono
2. Initial Plan for Sustainable Water Management in Indonesia through the Development of a Water Sustainability Index
Iwan Juwana
DEVELOPMENT ISSUE
1. Pendekatan Alternatif Pembangunan Indonesia
Heni Kurniasih
2. Empowering Urban Poor Women in Indonesia: The Contribution of Suara Ibu Peduli for Indonesia’s Economy
Angga Indraswara Leksono
3. The Multitask BMT (Syaria Microfinance): Poverty Reduction and Financial Sustainability
Bagus Aryo
4. Nasionalisme yang Terlupa
Widodo Ramadyanto
SOCIAL POLICY ISSUE
1. The Importance of Social Policy for the Future of Indonesia
Reni Suwarso
2. Ruang Publik, Batman, Dan Mobil Terbang: Mengembalikan modernitas ke tangan masyarakat dengan kebebasan berekspresi
Arsisto Ambyo
3. Health Care in Indonesia
Richard Husada
4. The State’s Negligence and the Women Impoverishment in Indonesia
Huminca Sinaga
ECONOMIC AND BUSINESS ISSUE
1. Bisnis dan Politik di Tingkat Lokal dalam Era Otonomi Daerah: Studi Perbandingan Batam dan Kutai Kartanegara
Rosa Evaquarta
2. Dampak Ekonomi dari Dua Model Kepemerintahan Lokal: Studi Perbandingan Pada Provinsi Gorontalo dan Sumatera Barat
Yopi Fetrian
3. Entrepreneur Human and Social Capital Determinants of the Export Propensity of Indonesian Small and Medium-sized Enterprises
Diana Sari
4. Corporate Governance In Indonesian State-owned Enterprises: Is It On The Right Track?
Miko Kamal
EDUCATION ISSUE
1. The Participation in Indonesian Higher Education: Do Socio Economic Backgrounds Matter?
Mohamad Fahmi
2. Teachers as leadership figures in English language practices in Indonesian high schools and their investment as English learners impact on their professional identity development
Nonny Basalama
3. Household Size and Children’s Schooling Attendance: Snapshot of the Past and Implication for the Future*
Ekki Syamsulhakim
LEADERSHIP AND LEGITIMACY ISSUE
1. Leadership For Everyone: A Disabled Person’s Perspective
Y. Anni Aryani
2. (Youth And Leader) Contextual Leadership In Indonesia Needs The Ecletical Mind, Leadership And Management Capability
Aulia Mauludi
3. “Kontekstualisasi Idealisme Mahasiswa Menjawab Problematika Bangsa : Aktualisasi Kepemimpinan Kaum Intelektual Menuju Kebangkitan Indonesia Di Era Transisi”
Agung Baskoro
4. Kepemimpinan yang Visioner dalam Memajukan Iptek Nasional
Dedy Saputra
CORRUPTIONS, SECURITY STUDIES AND NATIONALISM ISSUE
1. Corruption Is A Serious Problem In Indonesian Judiciary Do You Agree?
Junaedi
2. “State-owned Legal Bodies (BHMN), is it really a bright future 314 for Science and Technology Development in Indonesia?”
Zubaidah Ningsih
THE SIGNIFICANCE OF THE “NATIONAL AWAKENING” ISSUE
1. Kebangkitan Nasional, Kaum Muda, Dan Prospek Indonesia Pada 2028
Munafrizal Manan
2. 20 Mei: Memperingati Apa? Sebuah kritik tradisi peringatan Hari Kebangkitan Nasional Indonesia
Hikmawan Saefullah
3. Looking Back to the Pioneers: A historical study of Indonesian nationalism in Pramoedya Ananta Toer’s Buru Quartet Novels
Reza Anggara
4. Education As The Backbone Of A National Awakening
Melita Rahmalia
5. A Reflection of Ten Years after Reformation
Elfansuri Chairah
How to Order?
This book is for sale in Indonesia and Australia. To order, contact Mohamad Fahmi via email at mfahmi@fe.unpad.ac.id.
THE Australian dollar reached parity with the US dollar for the first time since the currency was floated in December 1983.
The local currency rose to $U1.00 at 11.18pm (07.18 pm WIB (15/10)) last night in overseas trading.
It was the first time since 28 July 1982 that the Australia dollar has traded about one US dollar.
In afternoon London deals, the Aussie soared as high as $US1.0003, hitting its highest level since being floated 27 years ago. Moments later it pulled back to stand at 99.50 US cents.
Earlier yesterday, the local currency was hovering around 99 US cents ahead of the release of US CPI data, retail figures and a Federal Reserve speech that could indicate how much quantitative easing will take place.
Quantitative easing is a process whereby the US Federal Reserve increases the amount of US dollars in the economy by buying US Treasuries.
The Australian dollar touched a fresh 27-year high of 99.94 US cents overnight, the closest it has been to parity with the US dollar since it was floated in December 1983.
At 5pm on Friday the Australian dollar was trading at 99.28 US cents, down from Thursday's close of 99.61 cents.
Since 7am, the local unit traded between 98.92 US cents and 99.46 cents.
Nomura Australia economist Stephen Roberts said traders had been waiting patiently throughout the domestic session in the absence of any local data.
"It might be a bit of a patient wait for parity, but we will get there," Mr Roberts said.
He said the release of the US economic data and a speech by US Federal Reserve chairman Ben Bernanke would drive the momentum of the local currency.
"Those factors will certainly have some influence," Mr Roberts said.
Mr Bernanke said the central bank was ready to support recovery "if needed".
Speaking in Boston overnight, he gave his strongest hint to date that the US central bank will step in to help the country's fledgling economic recovery with more extraordinary measures to prime the economy.
During the offshore session last night, US retail sales for September are expected to have increased 0.5 per cent and the official measure of US inflation for September is expected to show a 0.2 per cent increase.
Mr Roberts said there could be an initial adverse reaction to the CPI data.
"But then probably we'll go back to the same groove over the next week or two," he said.
"Running towards the next FOMC (US Federal Open Markets Committee) meeting, people are still thinking there's a reasonable chance the Fed's going to start the next process of QE."
Mr Roberts said it was possible the Australian dollar would reach parity with the US dollar mid-way through the European session.
Treasurer Wayne Swan said the milestone reflected the stark difference in the strength of our economy relative to other nations, record prices for our commodities and the effects of diverse and dynamic international currency markets.
"The government supports a floating currency, which has served our nation well as a shock absorber against global events for more than a quarter of a century," Mr Swan said.
"But we know that there are swings and roundabouts, and while the dollar has beneficial impacts for consumers through cheaper imports, it also makes life tougher for some sectors of our economy such as manufacturing and tourism.
"The government has an agenda to strengthen and broaden our economy to increase economic capacity and competitiveness, including by cutting the corporate tax rate.
"We have a fiscal position which is the envy of the developed world, and any suggestion from the Liberal Party that it has anything to do with what we have seen today reinforces their complete lack of understanding of how the international economy works."
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