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Obama Warns World Not To Rely On US Consumers Any More
It is now beyond question that not only Bernanke, but now Obama, will do anything and everything they can to accelerate the disembowelment of the US currency (Tiny Tim in the bathroom with nose-hair trimmers) and America's middle class, for the benefit of the 2 or 3 Wall Street banks that have over $10 trillion in roll risk in the next 5 years, and the 5 algos which are still trading the occasional oddlot of SPY here and there, thus creating the perception that America still has a functioning capital market (another one for Tim Geithner's Sesame Street media whirlwind tour).
And speaking of media popularity tours, as part of Obama's (who else) recent trip to Asia, his latest announcement is a stark one: in essence, the world will have to grow on its own, and stop relying on the US consumer. Thus China, Obama makes expressly clear, needs to grow its own middle class. Oh, and if possible, could it please finally appreciate the Renminbi? Cause you see, Bernanke's best friends on Wall Street need a dollar that is about 50% lower from where it is to have any sort of chance at surviving for more than a couple of years (that and a few hundreds billion more in unmarked non-consecutive $100 million bills for when the plebs finally realize they were lied to, robbed and left for dead by the DC-Wall Street oligarchy).
From the WSJ:
"The president will continue to be clear that one of the lessons of the
economic crisis is that growth driven by U.S. consumers is not
sustainable in the 21st century," said Ben Rhodes, a senior official in
the White House National Security Council and Mr. Obama's lead foreign
policy speech writer.
Mr. Obama will press his push to "rebalance" the world's economy,
urging China to adjust its economic policy to spur domestic consumption
as the U.S. encourages less consumption, more savings and more exports.
Mr. Rhodes would not say whether the president would push concrete
policy changes to cement his "rebalancing," such as convincing China to
allow its currency to appreciate on the international currency market.
A more valuable Chinese yuan would give Chinese consumers more buying
power while making Chinese exports more expensive.
Of course, by "rebalance" Mr. Obama means he can't wait to see his face finally grace the brand new $1 million dollar bill. The tradeoff: that little pesky country called Tibet, which the US once upon a time pretended to care for, but now, when there are political and financial favors to be demanded, not so much:
The U.S. president is also downplaying the issue of Tibet, as he tries
to navigate the balance of acknowledging Washington's differences with
Beijing while not upsetting a government critical to floating the
federal budget deficit. He is likely to mention instead his "commitment
to rights and freedoms that we believe all people have," mentioning
Burma but leaving the Tibetan issue open to interpretation.
And no, the world "hypocrite" most certainly is not applicable here. Although the words "Rosetta Stone" most certainly are, as Obama launches on a campaign to allow the US to be seamlessly annexed by the Chinese politburo, a formal decision is expected at the next 5 year Beijing communist party plenary session. It is now time to learn the official language(s) of America's new overlords.
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This time it is different we will just bypass the consumer balance sheet.
Famous last words.
The next balance sheet to go down is the last balance sheet ... the Federales unless the American consumer ultimately bails everyone out.
Yet, the system seems determined to trash the consumer .. animal spirits focused on driving the markets to the point where J6P becomes the greater fool.
Or perhaps as recently gasped by the WSJ and Bubblevision the markets, that are from a Euro perspective so debased that they are dirt cheap, will get the whole damn world to be the greater fool.
I had a dream. That a progressive intellectual liberal from Chicago would institute proper reform.
We had an opportunity. There was no need to insert the long finger of instability into the 'free' markets and exacerbate the status quo.
For insolvent banksters, we could have wiped out the commons and preferred and then gone up the capital structure and equitized until future equity participants either saw economies of scale or saw the need to break up the entity into smaller pieces. Perhaps the government could have taken a convertible debenture position, or equity participant notes , warrants etc.. as in previous bailouts so that there would in some situations be a return on the government's investments as the entity is put into some form of run-off. The process would be transparent in that taxpayers would know how their money was being spent, as in previous crises.
Instead we have no idea who got what for what and we have translated insolvent companies reimbursing a small part of our total largesse as proof they are vibrant concerns that can make tons of money in FICC when the money is easy and free.
And the new burgermeisters, just like the old...
The secret sauce of 'enhanced government productivity reporting mixed with overinflated GDP and underreported inflation' has spiced the witches brew of currency debacement that masquerades America's wealth exporting machine and is promulgated by our leaders as an exceptional example of America's resiliency.
It's not just that no country in the history of civilization has transformed its' way to greatness by debasing its' currency folks...
What you need to focus on is that when they destroy the currency THEY ARE DESTROYING YOUR STANDARD OF LIVING.
Nationalizing the fradulent banksters is difficult with 50 Trillion in CDS. Considering that swaps are probably not subject to automatic stays, it may have triggered the kind of avalanche that buries everyone. Unfortunately, TBTF is reality. It is the reason for everything that his transpired subsequently. We are on a path to dollar devaluation. The question is when we will have to revalue our debt in the new "basket" reserve currency. When the USD ceases to be the reserve currency our ability to reflate our way out of debt ceases as well. I give it 2 to 3 years.
That's awesome.
Aren't DEAD presidents and individuals printed on US currency? Just sayin...
ah -- marla spank.
-10^10^10^10^10^10
The U.S. encourages less consumption .....??
Then why the Cash Fors .......??
Hypocrisy is the currency of these politicians. Just wear the bright tie when you gotta' lie.
World Warns Obama Not To Rely On Foreign Creditors Any More
Now THAT would be a headline....
Oh so you mean no need for the Chinese and the ROW to buy our junk debt and finance our profligate ways?
Jim Rogers has been saying forever that we ought to all learn Chinese...or at least our kids. Hell, lets just move to Singapore ;-)
And thus will the murder-for-hire of the US Middle Class be bought-and-paid-for by their very own oligarchs, with their own government serving dual roles as both bag man and the doer of the dirty deed.
Awesome.
The oligarchs are paying for nothing in this "murder-for-hire of the US Middle Class." The book on how to do this efficiently and profitably was written by the Nazis with their "system" of extermination.
All the assets and property (and even gold fillings) that were ripped from the Jews more than paid for their own extermination, with plenty left over to be split up as "spoils of war".
We just have the luxury of not being held at gun point when it's done to us. At least not yet. Give it time, they're working on the endgame as we speak. You don't really think this will end with everything back to normal, do you?
As I write this, CNBC has splashed across the bottom of the TV screen "Downsizing The American Dream." It's right in front of us, in plain sight for all to see. We just need to open our eyes.
You don't really think this will end with everything back to normal, do you?
CD, what in Heaven's Name gave you the notion that I thought anything like that?
But fair enough - they've had 40-years (longer? since 1914?) to devalue our standard of living to the point that all has already been paid for, perhaps several times over.
docj, if you've been reading me for any length of time, you know I rarely respond directly to the commenter but simply use what they say as an excuse to beat my breast in indignant self righteous anger.
Please don't take what I say as directed at you. You were simply the springboard for my narcissistic self centered temper tantrum on ZH.
Sorry about that, CD. I'm recovering from H1N1+pneumonia at the moment, so I've lost a little zip off my fastball. Still, I should have had enough moxie to catch your MO here. No worries.
Cheers -
Don't worry docj--- CD Tells it straight..We are all in a funk, in one form or another..
It's amazing what is happening,, the slow and remorseless, relentless, realization that the end is at hand for the U.S.. We are now embarking on yet another stimulus, over, and over, and over ,,,folks, there's nothing left, factories gone, rail beds gone, trillions of capital wiped out, with no regimented workforce willing to work in factories for $1.00.hr to compete with the Chinese.....WHATEVER.Need 25 acres of arable soil,with artisan well,solar panels,,E-Foods direct $1,550.00 one adult 1year food supply...I can't believe this is happening to us... Be strong all, think family friends...
You may think this is drama,but I'm really feeling shitty right now..I need to change my avatar.
Relax, geopol. Just remember these two things:
That'll do ya.
Thankx nicholsong,,
I feel warm all over
At least when everything finally does come to a catastrophic collapse and there is rampant and widespread suffering you will have the pleasure and satisfaction of knowing you were right, and be able to tell numerous people "I told you so".
Indeed. I will tell many, many that I told them so. And then I will cry.
I don't remember the author but he was talking about the lack of resistance from many Jews in the Nazi death camps when he wrote the following, which is paraphrased. Remember that the camps were the last indignity on a long and exhausting road of indignities.
While many people will say I'm over the top with this, I ask us all, when will enough be enough? At what point will we say stop, no more? Tell me which outrage by what entity will be the breaking point for us? Or are we going to nickel and dime our resistance away? Will we barter away this (fill in the blank) for a few more days? Will we accept Trillion dollar deficits because they are threatening us with tens of Trillions if we don't comply?
Otherwise rational men and women will walk quietly and meekly into a gas chamber if only you will allow them to believe it is a bathroom.
I ask us all, when will enough be enough? At what point will we say stop, no more?
CD, From what I'm observing around the country,,,I have no answers. I can only guess that as a nation we had it too easy, and are not capable of the incredible effort and sacrifice it will take to rebuild this society..
The District of Criminals has really fucked us this time.. I guess it's our fault.
Endgame: FEMA interment camps. So don't make too much trouble.
http://www.bibliotecapleyades.net/sociopolitica/esp_sociopol_FEMA02.htm
http://sianews.com/modules.php?name=News&file=article&sid=1062
http://liberty.hypermart.net/cgi-bin/blogs/voices.php/2008/08/11/p27662
Too late.......
Awesome indeed!
Even though my wealth is held in Swiss francs and gold, I will say that this great country will be better off with a low dollar. If you guys want manufacturing to flourish, then the low dollar is a must.
For example, do you think VW would be building a new plant in Chattanooga if they were not certain that the dollar is going to plunge in value? Hell, they can export those VWs from here to all over the world! It's time for Tennessee to take advantage of this new "world economy".
Obama is right and wrong at the same time when he says the world should not depend on our consumers anymore. Our consumers will spend, but they will be buying the lowest cost, cheapest products possible from Walmart. On some fine day, Walmart may actually be selling a significant amount of products which are "Made in the USA" because they will be lower cost than the same products import from China.
Just quit bitching and move your wealth away from the dollar. You will be OK and America will be OK with a low dollar. End of Story.
-- Phil
In Nutshell, we have to downgrade America into China or India. What is going to happen to 401k.
What do you think is going to happen to 401k?
You didn't think putting your money in the market via 401k was a retirement plan did you? It's gambling. Always was.
...put your 401k into foreign equities, gold mines, commodities.
+1 and already done!
Good to see the DC and NY Cartel looking out for the regular folks....
401k? WTF
Die at your desk, at your job, on the unemployment line, on the line at the bank run, whatever. With any luck you will get some "end of life counseling" before you drop.
With Trillions in debt, a weaker dollar won't do us any good. We would only work like slaves to pay interest. This system needs to die ala bankruptcy reorg and a new credit system needs to be put into place.
It wasn't too long ago that Walmart bragged everything they sold was "Made in the USA". We should have gone on the gold standard then, while the dollar was still strong, instead of buying gold and destroying the dollar by removing important regulations. Your right about cheap products. Cheap is what you get. What is wrong with quality.
Production capacity will resurface only when our business environment is competitive with China's, which depends not only on the the yuan-dollar de-peg, but also on the US getting rid of the restrictive regulations and taxes which sent jobs overseas to begin with.
In the meantime, after they de-peg but before trade can balance out, the flow of dollars from US to China will reverse, prices will increase across the board, and China will be using those dollars to buy from the US things that were made in China, because we have no production capacity.
The place in the equation where we write [miracle happens] is where we somehow become savers with capital to invest.
"getting rid of the restrictive regulations and taxes which sent jobs overseas"
Yeah, like the restrictions that require one to actually put milk in baby formula, to not massively contaminate an entire city with lead waste, and on and on and on. We also need to get wages here down to where, for example, an airline pilot makes $760/month.
Right now, we accomplish this using "remote labor." It's much, much cheaper than maintaining even a slave here in the US:
http://www.youtube.com/watch?v=Eo-1W_8otS4 (possibly not safe for work)
Yes ... in order for the US to be able to manufacture stuff cost effectively the American standard of living will have to go down -- because that's what happens when wages go down.
Thanks Phil for the casino you helped build. Gee ... I wish you had told me to be in gold before you changed the laws and retired.
Its purely a coincidence Obama is leaking his State of the Union pitch to "wage a war on the deficits" two and a half months ahead of time and is leaking news that he's telling federal agencies their budgets will be frozen or cut 5% on the eve of his trip to Shanghai. Purely a coincidence.
And here I've been told for months by the Keynesians that the government must spend spend spend to get us out of this depre/recession. I'm starting to wonder if all that spending was really just payback to all Obama's Democratic constituencies. Hrmmm ... surely he wouldn't do that would he?
From Jim Sinclair:
This story is not completely true, but it is close enough for examination.
1. You cannot manipulate anything except in the direction it wishes to go in the first place. Call that a Seligman/Livermore rule.
2. Recall that many of the firms mentioned here are related to the Seligmans and therefore to Bert.
3. Yes you can play the price and the volume in the manipulative manner discussed.
4. In the final analysis the price of energy will be a product of the US dollar.
5. The price of US equities in the final phase will also be a product of the US dollar.
6. The bullies cannot continue what they are doing because it is being done in a zero sum game.
7. When 10 fat sharks get in a feeding frenzy the end result is one fat shark. Then what does that shark have left to eat?
8. So will go the dark pools until they implode for reason number 7.
9. This is why if you try to trade for a living from your homes you are bonkers if you think you can do better than break even.
The story he refers to:
http://seekingalpha.com/article/172797-the-global-oil-scam-50-times-bigg...
I am Chumbawamba.
Obama is only stating a fact. Now that most of America is broke, we can't buy very many Chinese-made toys. Besides, those toys have a 33% chance of not working in a few months--like most of our population. Real unemployment is probably 20% and rising. As usual, the really rich and professed libertarians see some guy laying in the street and just step over him and keep walking. After all, they've got theirs, so why bother helping anyone in need?
"Whatever you buy from Walmart has a 33% of not working within three months...just like yourself."
Love it! Let's coin that phrase.
"After all, they've got theirs, so why bother helping anyone in need?"
Well, if someone is laying in the street, it's going to take a lot more than a few alms in the jingling Wendy's Frostee cup to help that person out.
Compassion is a wonderful human virtue in practice and principle, but the stark reality is that 99.8% of the population (not just "the really rich and professed libertarians") aren't going to be willing to actually take that guy laying in the street and put him up in their own homes and provide room and board until his personal situation improves, regardless of how sorry they might feel for them. In fact, the poor--not the rich dude or the "professed libertarian," whatever that means--will be just as likely to rob that guy as to help him out.
After all, they've got theirs, so why bother helping anyone in need?
First of all, that's an inaccurate assessment, but secondly and more important, even if all the guys laying in the street across the country were helped to get back on their feet, this would not do anything to solve the economic crisis. And so the next day, twice as many people would be laying in the street.
I don't think the President needs to worry about "encouraging less consumption." Lower consumption and higher savings certainly weren't the result of "government policy." What is his expert/speechwriter talking about? I suppose that Obama, bringing along that October P&L from the Treasury that TD posted yesterday is in a lather to demonstrate that we've gotten religion on fiscal responsibility. Whatever you need to be today, Prez. Anyway, maybe he can learn to tell dirty jokes about the Dalai in Mandarin.
I think that it was meant to be a soft threat to the Chinese of increased trade barriers in the event that they stop buying our treasury bonds.
...and they'll be all like "good luck with that."
Shaping up to be a banner day for the GS robots!
Of course the politburo is going to hurt as much as we are, when they have a huge bonfire in tiennamen square fueled with worthless cash and t-bonds... think how long and hard their citizens have worked, only to see all that wealth go up in smoke... Oops - should have demanded collateral, instead of relying on the "word" of the US Government - same thing goes for us.
Pesky thing about governments is that even if they don't demand collateral in advance, some of them obnoxiously demand it later on when their investment doesn't work out so well. When the debtor refuses to pawn their jewels, well then things can get ugly.
True - fair play is generally not a desideratum of those in power.
John Gerzema puts a refreshing spin on the deleveraging US consumer in this EXCELLENT video:
http://www.ted.com/talks/john_gerzema_the_post_crisis_consumer.html
Urgent Press Release: Gideon Gono appointed to Federal Reserve.
ha, at first I thought it was "Gordon Gano".
http://www.telegraph.co.uk/finance/newsbysector/epic/rbs/6549472/RBS-hea...
As is the new policy with strong negative expressions of anger or displeasure:
http://www.djspooky.com/photos/pathisprologue/gagged.jpg
Tell me who in their right mind wouldn't party when we fools (or in this case the British) keep handing you good money after bad? We are the chumps at the poker table and even though we know it, we continue to play.
And we thought Lloyd had some nerve working that God thing. These RBS boyz have balls made of steel. Cat can't scratch 'em.
Post of the day!
he's right about `consumers' not spending, at least this one. it would take 13 men and a strong boy to shoehorn a nickel from me, unless you're selling me gold or silver.
Yes world, heretofore America is now servant to, and consumer of the Oblame order.
Obama is right on this one. The US cannot pay for the welfare world economy any longer.
Huh? you need to reread the article, Dude. Buying crap for your living room and garage is welfare? Simply stop buying, Doosh.
First, the FED turns the consumer into a credit junkie with the "heroin" of artificially low interest rates...
consumer almost O.D.'s.. but now gets the "savings religion"...
and now the desperate FED is dangling the Heroin again to re-inflate the bubble...
Obama didn't tell the world anything. China knew this a long time ago. That's why so much focus is on building a middle class and production for domestic consumption. This administration is scary if only for the reason that they think they're so much smarter than everyone. Trust me. When you have university students laughing at the US Treasury Secretary, virtually everyone in the country, all 1.2 billion of them, have it figured out. The anointed one is making an ass out of himself.
Did anyone notice how many pallets of Treasuries were being loaded onto Air Force one?
Ha. More savings. During devaluation/inflation/hyperinflation, the last thing you do is sit on your cash. You buy two left shoes if you have to, just to avoid the depreciation. What a complete fucking joke.
ZH, your captcha is BROKEN. 36 - 32 is not 4? WTF? 133-68 is not 65?? ...dude...
This is a new math that is used on Wall Street. The product
of any two numbers is something other than what traditional math would yield.
And ONLY Lord Blankfein, Jamie Dimon and Joe Cassano know the answer they want.
Yes, ZH's captcha has been mirroring the market for some time....unlike the market, it usually works after the fourth correct response is entered.
And btw, YES, I am using RobotTrader's a** as my new avatar!
More. Meat. Indeed.
"Obama Warns World Not To Rely On US Consumers Any More"
That's because our Marxist in Chief knows that his policies will destroy them.
The content of what he is saying is true. The world economy can't rely on the U.S. consumer any longer. They're tapped out. The spin that this warning is tough talk is the typical U.S. centric attitude on display. It's the bark of a retreating dog after a fight...a toothless threat.
http://4.bp.blogspot.com/_76xUgRgjZYM/RyZxkBr7_EI/AAAAAAAACRE/di7eoA7UMJ...
Though there are many "contributors" I wish they kicked off of here, MsCreant is one of the most annoying. Her posts seem to consist mostly of inane briefs comments, or even worse, links to stupid pictures...I know, I know, I should just skip past them from now on...but in a perfect world she's kicked off.
the captcha was broken for some time if not from the start... just press "save", eventually you gonna get it to agree with you
Chinese is a really hard language to learn. Multiple dialects. I suggest Cantonese over Mandarin as that what seems to be used the most around Beijing the last time I was there . Then again, that was 20 years ago, Tianjin had a airport with 1 Working 737 to serve 9 Million people and the airport itself seemed to be without electricity and heat. Flying over Tianjin seemed loke a joke. It looked like one huge abandoned factory complex.
Black Bicycles last seen here in the 50s, were the favored means of transportation and the entire Politburo was on edge because Romania had just fallen .I think the part where Ceau?escu was executed probably had much to do with it seeing as how Tainiamen square was only 6 months in the history books. . I always wondered if it the desperate promise Ceau?escu made to raise their salary to $4.00 a month a few days prior to his untimely death, might have been the proverbial straw ( a 5% raise) that caused he and wife to die from three service revolvers.
Either way, the Chinese Politburo was exceptionally nervous that Christmas. That's when you could get a 5 star hotel room for $49.95.That was also the last time I went there. I see pictures now and I'm amazed. I wonder how low they'll go on that empty city?
Lot to be said there for technology transfer/theft. I have never seen so much progress in 20 years. Their biggest problem when they were running full out was the mattress money, One thing the Chinese people had firmly entrenched from generations back was a distrust of their govt, ( something many of the Americans are finally starting to understand) so they saved 33% of their take home under a mattress. Chinese officials were up nights sweating. Imagining 1.3 billion people all wanting to buy "stuff" at the same time.
Inflation is a real worry there , but not for the same reasons we have. At any rate, we can be encouraged that our new overseers have nurtured a strong middle class of around 10% of the population. The other 89% or so? We just have to hope we aren't going to be part of that.
Huh?
Yes we finally stangled the Golden Goose.
Hey Barack Obama, You have destroyed domestic jobs creation, run up massive, record-setting budget deficits, while adding even more unfunded social social programs.
What are you going to do now?
"I'm going to Disney, er... Ordos".
Rosetta Stone! Bwahahahaha. Great one Tyler. Maybe Michael Phelps can teach Geithner and/or Obama (who would want to put up with Michelle for eternity?) how to pick up strippers in Mandarin.
Rosetta Stone definitions, US Government edition.
Mandarin - Respectful Agreement = English - Riotous laughter.
"Let's face it people. You fucked up. You trusted us."
Signed, The Feds
This sure doesn't jive with Geithner who constantly says; “It’s very important to the United States that we continue to have a strong dollar…We’re going to do everything necessary to make sure we sustain confidence.”
Confirmed again; " Politics always trumps economics"
It's very important to me that I bag hot chicks when I go out to the bar. Time and time again, I end up bringing home fat chicks. But, on principle, I say everything necessary to sustain confidence that hot chicks are the way to go. I guess I'm not much different then my government, after all. I take what I can get, and talk about what I want other people to hear.
The message continues apace.
Don't believe what you see, believe what we tell you.
I believe that as long as the U.S. consumer continues to buy their stuff China will continue to buy our bonds, all the while buying real assets with the dollars they hold which are continuously dwindling in worth. This screwed up mess can go on far longer than anyone can imagine because it is in in the interest of the power brokers for the status quo to persist as long as possible. Believe no one. Stick with technical analysis and profit from the trends in the market - no matter the reason for their occurrence. What else can you do?