1:54 pm April 12, 2009 “Game… over!” Humm… uncharted waters indeed! wrote: Dear Readers, you are looking dow-down the double barrel of a loaded shot gun (((W))) and the US Government has pulled the trigger! (*IT) is right in front of your eyes and you are too close the ABYSS to see (*IT) for what (*IT) really is! This Global over Hedging of Growth to Collateralized Debt to Savings is repeating the Ozs Time Machine of your future! At a going ratio of over 10-12 / 1 in the Spring of 2007 just on a much larger scale of what happened in 1929 the US Treasury and Fed $MuckMoney is now in control of your TV Set you have just re-entered the Twilight Zone of April 1933 - (April 2009)! Does the below sound any where familiar to your ears!  Debt deflation Main article: Causes-of-the-Great-Depression Debt-deflation  Crowd gathering on Wall Street after the 1929 crash.Irving Fisher argued that the predominant factor leading to the Great Depression was over indebtedness and deflation. Fisher tied loose credit to over-indebtedness, which fueled speculation and asset bubbles. He then outlined 9 factors interacting with one another under conditions of debt and deflation to create the mechanics of boom to bust. The chain of events proceeded as follows:  Debt liquidation and distress selling  (2008 Treasury / Fed Induced Intervention) Contraction of the money supply as bank loans are paid off  (US Debt increases) A fall in the level of asset prices  (Equity falls by almost 38% - 45% 2007-2009) A still greater fall in the net worths of business, precipitating bankruptcies (Ya Think?) A fall in profits ( US (19) Mega Banks and Mega Corporations Dow-Down by 54%) A reduction in output, in trade and in employment (Global average down by 23% -35%) Pessimism and loss of confidence (Now who would have guessed this?) Hoarding of money: (You Think)!  A fall in nominal interest rates and a rise in deflation adjusted interest rates. During the Crash of 1929 preceding the Great Depression, margin requirements were only 10%. Brokerage firms, in other words, would lend $9 for every $1 an investor had deposited. When the market fell, brokers called in these loans, which could not be paid back. Banks began to fail as debtors defaulted on debt and depositors attempted to withdraw their deposits en masse, triggering multiple bank runs. Government guarantees and Federal Reserve banking regulations to prevent such panics were ineffective or not used. Bank failures led to the loss of billions of dollars in assets. Outstanding debts became heavier, because prices and incomes fell by 2050% but the debts remained at the same dollar amount. After the panic of 1929, and during the first 10 months of 1930, 744 US banks failed. (In all, 9,000 banks failed during the 1930s). By April 1933, around $7 billion in deposits had been frozen in failed banks (as of April 2009 that figure is close to $2 Trillion US Dollars) or those left (STILL licensed after the September 2008 Bank Holiday.  Bank failures snowballed as desperate bankers called in loans which the borrowers did not have time or money to repay. (2008 the 19 Chosen Ones we re-liquefied with US 66.6% Tax Payers Savings)! With future profits looking poor, capital investment and construction slowed or completely ceased. In the face of bad loans and worsening future prospects, the surviving banks became even more conservative in their lending. Banks built up their capital reserves and made fewer loans, which intensified deflationary pressures. A vicious cycle developed and the downward spiral accelerated. The liquidation of debt could not keep up with the fall of prices which it caused. The mass effect of the stampede to liquidate increased the value of each dollar owed, relative to the value of declining asset holdings, (You only have to look as to the current price of the US Dollar, as (*IT) stands today April 2009)! The very effort of individuals to lessen their burden of debt effectively increased it. Paradoxically, the more the debtors paid, the more they owed. (Geeee I think Ive heard this before somewhere?) This self-aggravating process turned a 1930 recession into a 1933 great depression.  Macroeconomists including Ben Bernanke, the current chairman of the U.S. Federal Reserve Bank, have revived the debt-deflation view of the Great Depression originated by Fisher.  Breakdown of international trade: Main article: Causes-of-the-Great-Depression#Breakdown-of-international-trade Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade. Most historians and economists partly blame the American Smoot-Hawley Tariff Act (enacted June 17, 1930) for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries. Foreign trade was a small part of overall economic activity in the United States and was concentrated in a few businesses like farming; it was a much larger factor in many other countries. The average ad valorem rate of duties on dutiable imports for 19211925 was 25.9% but under the new tariff it jumped to 50% in 19311935.  In dollar terms, American exports declined from about $5.2 billion in 1929 to $1.7 billion in 1933; but prices also fell, so the physical volume of exports only fell by half. Hardest hit were farm commodities such as wheat, cotton, tobacco, and lumber. According to this theory, the collapse of farm exports caused many American farmers to default on their loans, leading to the bank runs on small rural banks that characterized the early years of the Great Depression.  Turning point and recovery In most countries of the world recovery from the Great Depression began between late 1931 and early 1933. Economic studies have indicated that just as the downturn was spread worldwide by the rigidities of the Gold Standard, it was suspending gold convertibility (or devaluing the currency in gold terms) that did most to make recovery possible. What policies countries followed after casting off gold and what results they got varied widely.  In the United States recovery began in the spring of 1933. There is (((no consensus among economists regarding the motive force for the U.S. economic expansion that continued through most of the Roosevelt years))) (and the sharp contraction of the 1937 recession that interrupted it). (((W))) 2009! According to Christina Romer, the money supply growth caused by huge gold inflows was a crucial source of the recovery of the United States economy, and that fiscal policy and World War II were of little help. The gold inflows were partly due to devaluation of the U.S. dollar and partly due to deterioration of political situation in Europe. ((*ITs) now coming to America in the summer and fall of 2009 in a very, very, very big way ya think) In their book, A Monetary History of the United States, Milton Friedman and Anna J. Schwartz also laid the recovery to monetary factors, and contended that it was much slowed by poor management of money by the Federal Reserve System. Current Chairman of the Federal Reserve Ben Bernanke agrees that monetary factors played important role both in the worldwide economic decline and eventual recovery. Bernanke, also sees a strong role for institutional factors, particularly the rebuilding and restructuring of the financial system, and points out that the Depression needs to be examined in international perspective. (((All Uncle Ben has done is to speed up the process with Smoke and Mirrors, supplied by none other that the US 66.6% Tax Payers non-wealth of non-savings and non-equity in the Stock Markets that have been wiped out!))) Many economists, exemplified by Harold L. Cole and Lee E. Ohanian, believe that the economy should very quickly have returned to normal except for continued depressing influences, and point the finger to the lack of downward flexibility in prices and wages, encouraged by Roosevelt Administration polices such as the National Industrial Recovery Act. Some economists have called attention to the expectations of RE-flation and rising nominal interest rates that Roosevelts words and actions portended.
Wells Fargo: The giant bank told the world this week it expects earnings of $3 billion. Not only would that handily beat Wall Street estimates, it would be a record for Wells.