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Iran, petrodollars, petroeuros, M3 and the Amerikan War Machine

economics
here are some articles just posted on the pending (within days)
economic change ... keep in mind that the US just started the
biggest military operation since the invasion of Iraq in Samarra. I
wonder how far Samarra is from the major oil lines near Mosul (just
pondering out loud)?

I would strongly advise all to entrench NOW. Talk to friends,
family and those you can rely on. Forget the debt.. it will be
pointless soon if everyone else is going under too. Start pushing
peope to think "outside the box" .. stop living through the old
rules because those rules will not apply (Hell they actually do not
apply now and they even hinder us from liberation right now).



two articles with URLs which talk of the M3 discontinuation and the
pending crises:


USA-Dollar-Iran / Confirmation of Global Systemic Crisis end of
March 2006

Written by LEAP/E2020
Friday, 17 March 2006
Nine indicators prove that the crisis is unfolding:

Nine indicators developed in this month's GlobalEurope Anticipation
Bulletin N3, which I coordinated, out of which 5 are presented in
this public communication, enable LEAP/E2020 to confirm the
beginning of a global systemic crisis by the end of March 2006. The
recent international trends that particularly affect the
international financial system, and the preoccupying trends in the
US, namely as concerns the reliability of statistics on the US
economy[1], have brought our research team to conclude that this
global systemic crisis is already unfolding.


M3[1] is really the decisive indicator…
As illustrated by most of the 5 indicators developed in the present
communication, the last weeks have confirmed how decisive is the US
Federal Reserve's decision to stop to publish M3[2] on March 23,
2006. LEAP/E2020 is now convinced that this decision anticipates a
period of acceleration of money-printing by the US, concealed behind
public declarations of inflation handling, that will result in the
collapse of the US Dollar and in the monetarisation of the US debt
(public and private), which a growing number of US experts now
estimate that it will never be reimbursed[3] considering its
gigantic amount in constant growth (the US public debt now
represents more than 8,000[4] billions dollars, i.e. about 4 times
the federal budget in 2006[5]). According to the very conservative
Heritage Foundation, if we take in consideration the consequences on
the budget of recent decisions made by the Bush Administration
regarding health and pensions, the real debt is of 42,000 billions
dollars, i.e. 18 times this year's federal budget, and 3 times the
US GDP in 2005[6].
… as well as Iran
Thus confirming the catalyst role of the opening of an Oil Bourse
priced in Euros by Iran (recent Iranian allegations[7] suggest that
in case of an aggravation of the crisis, the Iranian authorities
could simply decide to proceed to their international transactions
in euros, thus following the example provided by Syria[8] which
decided a few weeks ago to adopt this policy) and/or that of a US
and/or Israeli attack on Iran – probably a surprise-attack not
supported by the UN Security Council[9] -, the scope of the reaction
to the publication of last month's LEAP/E2020 Alert has revealed a
deeply-rooted anxiety among a significant part of the actors of the
financial system, individual actors mostly. This impact was
particularly important in the US from where comments reached us
mainly focused on the question of M3, the real-estate bubble, US
deficits and the reliability of figures on the US economic
performance. These reactions have led LEAP/E2020 to concentrate this
second communication on these aspects of the global systemic crisis,
all the more since a number of very preoccupying facts appeared in
the last weeks.


The real-estate bubble starts collapsing …
Some of the predictions made by LEAP/E2020 already became true such
as the collapse of the real-estate bubble in the US (for the first
time in 5 years, new-home sales slid 5% in January 2006 compared to
January 2005; and the stock of homes for sale languishes up to 6
months, a figure never reached since 1988[10]). The end of the real-
estate bubble will progressively affect the consumption of US
households, one highly depending on their growing debt due to
mortgage loans calculated on the basis of their home's value[11]. In
parallel, the slow-down in the housing-related sector will directly
affect employment, knowing that this sector alone has been providing
40% of private job creations these 5 last years in the US.
… currencies of emerging countries are really the first ones to be
affected by the unfolding crisis…
During the week of February 20, 2006, Iceland's Krona was downgraded
by a credit rating agency calling the country's credit deficit
unsustainable. The National currency instantly plummeted 10%,
causing emerging market currencies such as the Brazilian, South
African, Mexican and Indonesian currencies[12], to decline due to
the speculative positions taken by operators acting on those
markets. During the week of March 6, 2006, it was the turn of
Central and Eastern European currencies[13] to plummet as a result
of excessive deficits and of the implementation of new policies
(increased interest rates and/or removal of liquidities) by the
European and Japanese central banks. Finally, since March 14th 2006,
Arabic stock markets are crashing down[14], including of course in
Saudi Arabia and the Emirates (with a loss of already more than 15%
and local experts predicting final losses up to 50% or 60%).
… and the crisis of confidence in the US economy really plays a key-
role in the release of the global crisis
Among the aspects suggesting that the crisis is already beginning,
there is the scope of the impact of LEAP/E2020's February 2006 Alert
itself, which indicates a high level of worry worldwide. According
to LEAP/E2020, the international financial system, and in particular
its dollar-base[15], now mostly rely on two interconnected pillars:
on the one hand, the trust actors put in the system itself; and on
the other hand, the statistics describing the systems' trends.
Regarding the second pillar, the impact of the LEAP/E2020 Alert is a
significant indicator itself worth the analysis[16]: with dozens of
millions of page views, hundreds of thousands of individual visitors
on www.europe2020.org , spontaneous translations of the paper in
some twenty languages, being posted on hundreds of websites, medias
and blogs worldwide, and the popularity of the analysis in the US
themselves, all these elements reflect a growing worry about the
system's trends. This element is indeed an integral part of the
global systemic crisis given that psychological factors, such as
confidence, have become central in the system.


Five out of nine indicators suggesting an acceleration of the
process of crisis
These are five out of the nine indicators proving, according to
LEAP/E2020, that the system crisis is unfolding:
1. the US government operates in technical default since mid-
February 2006, the debt ceiling authorized by the Congress has been
reached since then. Since this date, the US government has suspended
sales of the State and Local Government series (SLGS) non-
marketable Treasury Securities designed to enable the printing of
Treasury Bonds[17]. According to US Treasury Secretary John Snow, if
by mid-March, the Congress has not voted a rise of the statutory
debt ceiling by 800 billion dollars (i.e. 10% of the current ceiling
of 8,200 billion dollars, which was already raised twice in the last
3 years), the technical default will become very problematic.
2. Unexpected resignation of the Fed's vice chairman, Roger
Ferguson, in charge of crisis management, one week after the
publication of our Alert while he had 8 years left to serve[18].
Roger Ferguson had won high marks for his handling of the Fed's
initial response to the Sept. 11, 2001 attacks, which occured while
Greenspan was in Europe. His opposition to the strategic choices
made by new Fed's chairman, was notorious.
3. Bank of China's decision to allow investors to buy and sell gold
using their USD in order to diversify its holdings, today mostly in
USD[19].
4. Continued increase of US public and trade deficits in 2006
(respectively $119 billion in February et $68,5 billion in January)
showing that current trends are not handled: on the contrary the
drift accelerates. The deficit of the monthly budget review is the
highest ever recorded. Washington no longer tries to mention
improvements, but prefers to explain that these deficits do not mean
anything because "the economy has changed". This type of explanation
was used too on the eve of the collapse of the Internet bubble,
referring to the new economy .[20] For information, along these
last five years, the US borrowed more money from the rest of the
world that they did in their cumulated history going from 1776 to
2000[21].
5. Growing doubts in the US themselves on the reliability of US
economic statistics[22], leading to counter-analyses showing that in
the last three years, the US GDP is in fact decreasing and not
increasing[23], and that the real inflation today rates between 6
and 12% (with direct consequences of course on the real
profitability of the various types of investments).


Three different measures of the consumer price index: in blue, the
method used under the Clinton-presidency, in orange, the method used
by the Bush administration, and in yellow, the method currently
elaborated by US authorities.


Anticipation is therefore really required in order to limit the
damage
A systemic crisis expands like a tsunami progressing through an
ocean and hitting different coasts at different moments. When the
wave hits a coast, the tsunami has been formed already long ago. An
early information is clearly the only way to take some safety
measures. In any event, considering the nine indicators developed in
GEAB 3, it is now clear for LEAP/E2020 that the crisis is entering
its release phase.

Considering the significance and the convergence of the trends
confirming the anticipated systemic crisis, only trends as powerful
could reverse the evolution described by LEAP/E2020. Until today,
LEAP/E2020 was not able to identify the smallest of such reverse
trends. Contrary to what some may say, crises happen even when
they are not of collective interest (WWI or the 1929 crack already
proved that). The Iran crisis, the Irak civil war, or the
deterioration of US deficits prove that our international leaders
have no hand over the events. It is vain to hope that they will in
the last minute appear as deux ex machina and solve problems
that they contributed to develop in the last decades. Lastly, in
case a crisis occurs, and contrary to what happened in the last
decades, the Dollar will not act as reserve currency anymore due to
the fact that the loss of confidence in the US and in their currency
(including for the Americans themselves) is precisely one of the
characteristics of this new crisis.


Apart from the analyses detailed in its monthly bulletin, LEAP/E2020
would like to give two clear advices to the readers of this public
communication:
- during the unfolding of a global systemic crisis, the main
strategy to adopt consists in diversifying as much as possible one's
holdings, because given the unpredictability of the unfolding, only
a diversification can limit the loss. It is important to bear in
mind the following aspect: in a context of general crisis, the aim
is no longer to gain more but to avoid losing too much.
- as regards currencies, LEAP/E2020 noticed that its strategic
analyses and advices concerning the Euro were largely read and
commented at the highest level of the Eurozone governance system.
This reinforces our feeling that Euroland will be in the coming
months the only monetary area capable of resisting to a Dollar
crisis. Decision-makers have grown aware in the proper timing of the
measures to take on D-Day.


LEAP/E2020
Franck Biancheri, Director of Studies

<< Read the previous article: March 20 to 26, 2006: Iran-USA,
beginning of a major world crisis
>> Lire l'article en franais: USA-Dollar-Iran / Confirmation of
Global Systemic Crisis end of March 2006


[1] Source MSN Money, 6/03/2006
[1] Source Communiqu LEAP/E2020 Fvrier 2006
[2] Source US Federal Reserve
[3] Declaration by Brian Riedl, the Heritage Foundation's lead
budget analyst
[4] Source US National Debt Clock
[5] Source Budget Explorer
[6] Source Heritage Foundation
[7] Source AFP, Vienna &#150; March 9, 2006: Iran "will not use the oil
weapon for the time being because we are not seeking confrontation
with other countries. But if the situation changes, we will be
compelled to change our attitude and policy , declared Javad Vadi,
vice chairman of the Supreme national security council, in an
addresse to AFP.
[8] Source Al Jazeera 14/02/2006
[9] Russia and China confirm their opposition to economic sanctions
as well of course as to any military action against Iran (source
AP/Nouvel Observateur, 13/03/2006). The CDU/SPD coalition in power
in Berlin would explode in case Berlin would support a military
operation against Tehran. In France, the public opinion being
overwhelmingly against such intervention, the government would in
the end be compelled to clear itself from this option, being in no
position to take part unless running the risk of a major political
crisis in the country. Time therefore plays in favour of Tehran
which maintains its oil and monetary (euro) threat.
[10] Source USA Today, 28/02/2006
[11] Source GlobalEurope Anticipation Bulletin Nr2
[12] Source Forex, 26/02/2006
[13] Sources : Warsaw Business Journal & Budapest Times
[14] Source : GulfBase, 15/03/2006
[15] International rating agency Standard & Poor's, has just
informed that 2006 conveyed a serious risk of collapse of the dollar-
value compared to European currencies. Source Standard & Poor's
European Economist Forecast 2006
[16] A few factual information may help to take the full measure of
this impact over a month - an impact which was a surprise for our
team itself:
. europe202.org rocketed to the top 1000,000 worldwide websites
ranked by Alexa.com since the publication of the Alert
. over 10 million page-views on europe2020.org (source Alexa.com )
. similar traffics recorded on newropeans-magazine.org, a website
which published at an early stage the LEAP/E2020 Alert paper (source
Alexa.com)
. free translations of the Alert available from the net in more than
20 languages (including Russia, Arabic, Chinese&#133;)
. posting of the Alert in English or French on hundreds of websites
and blogs
. over 4,000 susbcription to the free Europe 2020 newsletter, of
which about one half came from the US
. comments (80% positive ones), 2/3 of which came from the financial
community or from private investors, including major investment
banks.
[17] Source Bureau of the Public Debt &#150; United States Department of
Treasury
[18] Source
 link to www.cjrdaily.org
[19] Source China View &#150; Xinhua &#150; 03/03/2006
[20] Between 2002 and 2005, the estimation of the net wealth of US
households increased by 13,000 billion dollars, i.e. by 33% over
three years, a figure surpassing by far the 11,000 billion USD
increase previous record of this same wealth between 1997 and 1999&#133;
i.e. on the eve of the collapse of the Internet bubble &#150; Source : US
Federal Reserve &#150; Z1
[21] Source SFGate &#150; San Francisco Chronicle &#150; 27/11/2005
[22] Source Gillespie Research
[23] Source JWSGS February 2006 Edition

Found at  http://www.newropeans-magazine.org/index.php?
option=com_content&task=view&id=3612&Itemid=85


The Fed's New Secret Could Mean Big Trouble
Thursday, March 16, 2006




The Federal Reserve Bank's decision to discontinue publishing M3
money totals is an inflationary omen.

The money supply (M3) is such a boring topic that most people don't
bother to pay any attention to it.

In fact, outside of economists, stock and bond investors and
bankers, not too many people care about how many U.S. dollars are in
the world.

However, a recent decision by the U.S. Federal Reserve regarding the
M3 will likely have serious ramifications that none of us will be
able to ignore. Here is why.

The United States is a nation of debts and bubbles. U.S. debts,
deficits and unfunded promises total in the tens of trillions&#151;USA
Today says it is close to $53 trillion for just the future benefits
promised under Medicare, Social Security and government pensions.
And each year the problem gets worse as the government continues to
borrow money to fund current spending.

As the nation sinks further into debt, and as more of the $53
trillion in unfunded promises comes due (the first of it starting in
2008), America will rapidly find it more difficult to pay its bills.

The United States has already proven that it is unwilling to cut
services or raise taxes in any meaningful way. Instead America's
leaders have chosen to continue to borrow more money to pay for the
standard of services America has become used to. The last time the
United States actually paid some of its national debt was in 1960,
and even then it was a miniscule amount.

While the debt's growth has shown no signs of slowing, the housing
market's growth now looks like it has. Several major metropolitan
cities across the U.S. now show negative or zero price growth. But
the U.S. cannot afford a slowing housing market, let alone a housing
bubble bust.

"Cash-out" refinancing, provided by soaring real estate prices, has
enabled much of the voracious consumer spending over the past few
years. Since consumer spending now accounts for over two thirds of
U.S. economic activity, if spending falters, so does the economy.

Furthermore, over the last few years, the housing boom has accounted
for about 40 percent of all new American jobs created in the private
sector.

So what does M3 have to do with debts and housing bubbles?

In general terms, M3 is the only number the Federal Reserve
calculates that shows how many dollars are in the system. By
watching this number, economists and investors can determine the
growth of money in the financial system.

However, as of March 23, 2006, the Federal Reserve Bank will no
longer publish M3 figures.

Why would the Fed do this? The Federal Reserve Bank's official
reason is "that the costs of collecting the underlying data and
publishing M3 outweigh the benefits." However, this explanation
sounds questionable because M3 is a number that many economists and
financial analysts study, and is also a number that the Bank of
Canada, the rest of the G7 nations and many other European countries
rely heavily on. As financial analyst David Chapman of Bullion
Marketing Services reports, "[O]f the Fed's monetary numbers only M3
was of major importance &#133;" (www.bmsinc.ca, Nov. 10, 2005).

There is, however, a more likely reason for M3 discontinuance: that
is, dollar devaluation.

A crisis is coming. America is facing huge debts, and the economy,
which has become largely reliant upon the housing bubble, looks
increasingly like it is about to pop.

There is only one way the government will be able to keep up with
its debt (at least in the short term)&#151;and only one way that the
government will be able to get enough money to mop up the housing
bubble bust that is coming.

That way is to print the dollars that will be needed.

By no longer publishing the M3 statistics, the Fed can hide how many
dollars are being created.

Of course, as more dollars are created beyond demand, they
eventually become worthless. By hiding how many dollars are in
circulation, it appears the Fed is trying to prolong the dollar's
value.

LEAP/E2020, a European economic think tank, says that "[f]or some
months already, M3 has significantly increased (indicating that
[money printing] has already speeded up in Washington) &#133;."

In fact, LEAP/E2020 thinks this is such a huge event that it is one
of two factors (the other being the proposed Iranian oil bourse)
that will have a negative impact on the U.S. dollar "comparable to
the impact of the fall of the Iron Curtain in 1989 on the `Soviet
Bloc'" (ibid.).

Considering the Federal Reserve Bank's decision to stop publishing
the M3 data, American consumers can expect to see a growing trend of
dollars devaluing, savings becoming less valuable, and having to pay
hyperinflationary prices for basic needs.

The Bible shows that the U.S. is facing an economic crash in the
near future. For more information on why this crash is coming,
please refer to our book The United States and Britain in Prophecy.

Found at  http://www.thetrumpet.com/index.php?page=article&id=2075