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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (30703)	3/10/2008 8:28:25 AM
From: elmatador	Respond to of 217738

Paul A. Volcker presided over a Fed that would raise rates as high as 20 percent to end the stagflation crisis of the 1970s, according to Seth Plunkett, a bond fund manager at American Century Investment Management in Mountain View, California. The firm manages $20 billion. Yes, they fleeced Brazil. Washed it. Dry clean it. Pressed and then folded. We kept the US afloat. And I have recorded everything in my book to end all the other books. This time we are ready Mr. TJ! Bring the crisis on. Bring it. Bring the collapse. Bring the screeching stop of moolah! We want to see who is going to be left standing This is how it happened: Jacked up interest rates. Caused major recession. Commodities plummeted. Capital flew com gusto. ...when the worldwide recession of the early 1980s brought plummeting commodity prices and dou¬ble-digit interest rates, the cost of servicing the debt sharply increased. Banks abruptly cut lending to most developing countries, leaving many nations on the brink of default. According to a World Bank report: Mexico tops the league with $26.5 billion in 1979-1982, almost half the total capital inflow during the period. Venezuela is second with $22 billion in the same period, when only $16,1 billion officially entered the country. Argentina is third with $19.2 bil¬lion, while Brazil capital flight is estimate at a relatively modest $3.5 billion. “Much of the money being borrowed abroad was funnelled straight out again...In such cases, foreign borrowing was a recipe for disaster,” the report says. “With citizens of the fifteen largest debtor countries now holding at least $340 billion in ‘flight capi¬tal’ abroad, Treasury Secretary Nicholas F. Brady says winning some of this treasure back would be a ‘major opportunity’ to ease the third world debt crisis.” ... ...when the worldwide recession of the early 1980s brought plummeting commodity prices and dou¬ble-digit interest rates, the cost of servicing the debt sharply increased. Banks abruptly cut lending to most developing countries, leaving many nations on the brink of default. The commercial banks had a concerted action. The IMF and World Bank acted together. The G-7 nations also act together. LDCs borrowers were a disparate bunch with different interests and different levels of leverage. “...at 10% rates , a dollar of interest relief is worth ten times as much as a dollar of principal relief. The Economist, Apr. 8, 1989. p. 94. Since most of the loans are based on floating rates, a decline in U.S. interest rates could help ease the debt-service burden. No matter how much lip service is paid to the debt crisis; with the G-7 acting more as a currency cartel a decline of interest rates isn’t going to happen. A decline interest rates could help ease the debt-service burden but governors of central banks in LDCs do not take into consideration LDCs when changing interest rates. As the U.S. government running budget deficits totalling $1.3 trillion over the past seven years, it has to rely on heavily on foreigners to provide the capital it needs to operate.

To: TobagoJack who wrote (30703)	3/10/2008 9:07:30 AM
From: elmatador	Read Replies (2) \| Respond to of 217738

By looking on what happened on the past and understand all the implications, one can make a prediction of an outcome. I made a effort in 1987 to 1991 to understand where we were. Then I plotted a track. Everything I looked upon that period, pointed to a collapse. I just could not imagine that it would happen because I imagined people wouldn't be that irresponsible to throw away what they had achieved. I plotted a slow going down and gliding to a soft land. The whole thing would act that way. By 1992 I had very little to learn about the beast. It was just a matter of time. Then Clinton came up with strong dollar and tech bubble. That I can tell you, confused me a lot. But bingo! There the fleece came as before. The Asian Crisis, Russia Mexico and Brazil. I lost faith on my beliefs between 2001 and 2003. It could not be imagine by anyone that the whole thing would reach the level of irresponsibility it had reached. Now all that is history. The inevitable cannot be postponed. People are saying: well, this is a boat where if the left side sinks, the right side goes down two... No. It is not. It is a boat here, thither, on the Titanic OECD deck, the band plays on. We can't be blamed. We tryed North-South dialogue, new world economic order, cut subsidies, use WTO... To no avail. No one listened. Therefore I don;t feel guilty for fate of the soon to lose thier shirts. Oh by the way, in the event that I had to return to shirtlesshood, ask me if I am worrying. Ask me!