ORIMONEY

What is money? A personal perspective.

2011-06-02T14:00:00.000-07:00

I am really flabbergasted by the amount of nonsenses that is spread in our media circus about the causes of our current economic and financial troubles! Our so-called experts continue to spew their ignorance about basic economics and common sense logic to the point where I, despite my obvious skepticism with regard to their knowledge, ends up as confused as most people. Yet, I am willing to fight that virus, the virus of misinformation and mis-education and misunderstanding. To get to the point, our problems are quite simple and easy to understand and to fix. Our problem is our monetary system and the establishment that has abrogated itself with the " right" to issue it!

Money is a medium of exchange, a standard of value and a mean of economic calculation. It arises " naturally" by the choosing of the different individual entities that are engaged in the process of exchange. Individuals in a society consequently vote for their best tool of economic exchange, not the State or a bureaucratic elite. Money is simply a commodity, a good that has been chosen through a simple process of natural selection as the better mean of exchange for other goods and services within a confined society. Historically, money has varied from wheat in ancient egypt, to iron bars in western africa, and tobacco in the early colonial Americas. But, throughout our 5000 years history, Gold and Silver have won out as the best and most efficient monies! Consequently, despite their various application in metallurgy, healthcare and dentistry and even new technologies, Gold and silver are primarily " MONIES", the best and most efficient monies! It this consequently beyond shocking when the so-called academic call deride gold as a relic! The sky might as well fall on our head for such " intellectual nonsenses"!
The problems we are witnessing across the globe are simply due to the abandonment of the historic natural monies and the abusive consequences of government monopolies of monetary policies through the measure of monetary inflation that are used by the state to services the needs of the government and financial and corporate plutocrats above those of other market participants.
Simply put, the government and its connected agency have " stolen" away from the general population its tool of independence for it is impossible to have a just and equal society with a corrupted monetary system that serve a few people while destroying the purchasing power of the general population.

Real money is gold, no matter what the government say, no matter the amount of gibberish that is pushed in and out by the corrupted academic establishment that has an entrenched interest in maintaining the status quo. Sound money is freedom, sound money creates wealth and it is by no accident that the Nations that have a relatively " hard monetary" history are also the most dynamic and wealthy society in the world today.

From a trading and investment perspective, due to the current monetary distortion aimed at saving the systematically bankrupted financial monsters like Bank of America, Barclay, a currency and commodity trader should understand the important paradigm of real value. Our values have been distorted by the corrupte financial and economic establishment:
The institutions that should be subservient to the needs of people are now controlling the policies and it is by no accident that poverty and misery is spreading among the once wealthiest and most productive parts of the world while a connected group of bankers and speculators are benefiting. This imbalance must be stopped and its parasitic element discarded with. We have reached a tipping point, a point of non return where paper fiat money will eventually be destroyed and all the pseudo-collectivist monetary union will end up in flames. Gold and silver are the eternal monies and the only incorruptible medium of exchanges.

Buy Gold and silver, always!

The Lehman Bros plan!

2011-05-25T19:37:00.000-07:00

People often ask me, "What do you think the government should do instead of QE inflation?" My stock answer is that the government should not try to fight the depression with government spending and cheap credit. Trying to stop the market from correcting the errors of the past only delays the consequences and makes them much worse.

Government should balance its budget. There should be no new credit expansion by the Federal Reserve. Most importantly, government should not meddle in markets to try to soften the consequences of the correction. Specifically, that means no bailouts, stimulus packages, or new public-works projects. Do not prop up wages. Allow competition to lower the prices of land, labor, and capital. The only positive steps for government to take are implementing tax cuts and spending cuts, eliminating regulations, and allowing free trade.

Now, I have a name for this policy. It's called the "Lehman Bros. plan," after Lehman Brothers, the large financial firm on Wall Street that was allowed to go bankrupt in September 2008. This plan relies on allowing big firms to fail. Had this policy been followed from the beginning, I have little doubt that the crisis would already be over and we would not have added to the debt problem.

Henry Lehman got started in business in 1844 with a dry-goods store in Montgomery, Alabama. After his two brothers joined him a few years later, they named the business Lehman Brothers. They accepted raw cotton in exchange for their goods. This increased the volume of their business because people had more cotton than money, and it increased their profit margin because they made money selling the goods, and then they made more money selling the cotton. They later opened an office in New York and helped start the New York Cotton Exchange in 1870. Later, they joined the New York Stock Exchange and helped take companies such as Sears, Macy's, B.F. Goodrich, Woolworth's, and Studebaker public by selling their initial public stock offering. It was a great American success story from Dixie.

Zimbabwe to the Dollar: Who is laughing now?

2011-05-23T09:43:00.000-07:00

The central bank says the country must consider adopting a gold-backed Zimbabwean dollar, warning that the US greenback's days as the world's reserve currency are numbered.

The government ditched the Zimbabwe dollar in 2009 after it had been rendered worthless by record inflation levels, and adopted multiple foreign currencies with the US dollar, the South African rand, and the Botswana pula being the most widely used.

Finance minister Tendai Biti says the country needs at least six months of import cover and a sustainable track record of economic growth, inflation, stability and above 60-percent capacity utilisation in industry before the Zim dollar can be brought back into circulation.

However, central bank chief Dr Gideon Gono said the country should consider adopting a gold-backed currency.

http://www.newzimbabwe.com/business-5127-RBZ+urges+gold-backed+Zim+dollar/business.aspx

The Fed is all talk and no deeds!

2011-05-19T06:07:00.000-07:00

The Federal Reserve said last month that the economy is gradually improving and began discussing how it would reverse policies adopted during the recession that pumped billions of dollars into the economy.

Some members said the Fed might need to start boosting interest rates this year to guard against inflation. Any effort to tighten credit would lead to higher rates on some mortgages, credit cards and other consumer loans.

Fed policymakers didn't commit to taking any action at the April 26-27 meeting, according to minutes released Wednesday. But they agreed that if the economy continued its steady growth, the Fed would need to pull back on its massive stimulus programs and take steps to prevent consumer prices from getting out of control.

The officials generally agreed that the first step should be for the central bank to stop reinvesting money earned off its holdings of mortgages and Treasury securities. That's consistent with comments made by Federal Reserve Chairman Ben Bernanke at a news conference after the April 27 meeting. But that would have only a limited impact on the rates Americans pay on loans.

The Fed is playing a psychological game with the markets by trying to manipulate investors sentiments into dumping commodities in order to reduce the effects of its monetary inflation that have led to higher prices across the board ever since it began to engage in quantitative easing policies. Ben Bernanke is an archi-Keynesian who believes that increasing liquidity to stem the effect of deflation is the way to go. He and many economists surrounding him believe that the great depression was caused by the then cautious federal reserve and, he intend not to repeat the same mistake of his predecessors. We conjecture however that such an understanding is utterly flawed because what the economy actually needs is a clearing mechanism that allows bad debts to be liquidated in order for the economy to be reset on a much sounder footing. The Fed and the government have to reduce spending and allow the zombies banks to actually go bankrupt thus clearing the field for a newer generation of cautious entrepreneur and investors. Ben bernanke recipe will eventually lead us to disaster by destroying the value of the dollar and spreading misery and poverty across the US and the entire world. Consequently, depending on how investor greet the Fed tightening rumors, we think that the market might eventually fall drastically around June; but, right around the fall, the Fed will eventually come up with a new plan to save the economy by engaging in another set quantitative easing policy. There is no way the the people at fed are ready to engage in a long term across the board tightening and deleveraging. The investor must therefore be careful not to fall for the what is nothing but a con game by the fed to knock down price inflation across the board for the short term.

Peter Schiff's takes on the economy and the dollar.

2011-05-17T17:04:00.000-07:00

Max Keiser: Ireland

2011-04-19T15:17:00.000-07:00

Part 2

Micheal Burry: The last voice of reason!

2011-04-17T07:03:00.000-07:00

Micheal Burry, in my humble opinion, is simply one of the rarest and brightest mind in America's finance for his understanding of the insanities permeating our current financial and economic paradigm and for profiting from it.

Is Gold in a bubble?

2011-04-14T06:27:00.000-07:00

Gary North has an answer for ya!

If you did what Bill Bonner and I have been recommending for a decade, you own gold. Bonner began promoting the purchase of gold in the year 2000. I strongly promoted this for my subscribers after September 11, 2001, when the Federal Reserve began pumping up the monetary base in earnest. Neither of us has ever stopped recommending holding money in gold.

I have stressed holding coins, especially tenth-ounce American gold eagles.

I am writing this for those who did what I recommended, have quadrupled their money (on paper and in digits), but who may be getting cold feet.

There are good reasons for buying gold. But you should have an exit strategy in mind.

We are told by the mainstream financial media, which never told investors to buy gold over the last decade, that gold is in the final phase of a bubble market. But how can any market be a bubble market when the mainstream financial media are not running report after report on the bubble, telling readers and viewers about how much money people are making.

What mainstream financial outlet warned investors loud and clear, issue after issue, in 1999 that the dot.com market was a bubble? I told my subscribers in February and March of 2000 that it was, and that they should get out. But I published a newsletter. I was not mainstream.

What major outlet warned people in 2006-2007 that the real estate market was a bubble, that wise investors were getting out? I did in November 2005.

Bubbles always continue for months or even years after old timers say they will pop. Old timers have trouble estimating the fear of the buyers at being left out and the fear of lenders at being left out. The two sides — debtors and lenders — keep the dance of doom going much longer than old timers can imagine possible. But eventually the dance ends.

I spoke at Lew Rockwell’s conference. One of the speakers is a banker. He lives in Las Vegas. He was taught by Austrian School economist Murray Rothbard. He earned a masters degree in economics. Then he went into banking.

As an Austrian School economist, he understands the business cycle. He understands that the Federal Reserve system has pumped money into the economy, creating a housing bubble since 1996. He knows this boom will bust.

He has no illusions about this housing market. Compared to him, I have been Pollyanna. He spoke of the mental outlook of the builders in Las Vegas. They all know it can’t go on, but they are determined to party until it does. “Then they will declare bankruptcy and start over,” he said. This is their exit strategy.

He was correct. It happened. He lost his job as a Las Vegas banker. He is now the president at the Mises Institute.

I went on to write the following:

I think a squeeze is coming that will affect the entire banking system. The madness of bankers has become unprecedented. They have forgotten about loan diversification. They have been caught up in Greenspan’s counter-cyclical policy of lowering the federal funds rate. Now this policy is being reversed. Rates are climbing. This will contract the loan market. Banks will wind up sitting on top of bad loans of all kinds because the American economy is now housing-sale driven.

Full story with Gary North

"Senate panel slams Goldman!" What about JAIL?

2011-04-14T04:50:00.000-07:00

This article is a classic " tell me something I didn't know already" story. Of course everybody knows that Goldman and the other Wall Street thugs have profited from the boom and bust side of the last real Estate mania. The real issue heretofore is if any of these charge carried against the " big guns" on wall street would lead to potential criminal pursuits, heavy fines and potential liquidation. These are the same parasitic institution that made tons of money during the boom years but also managed to get free loans money from the Fed in the aftermath of the crisis. It is clear to all that these institutions are holding the US economy hostage and that's why we can can wonder if ANYONE AT GOLDMAN WILL BE LOCKED UP!

Carl Levin, chairman of the Senate Permanent Subcommittee on Investigations, one of Capitol Hill's most feared panels, has a history with Goldman Sachs.

He clashed publicly with its Chief Executive Lloyd Blankfein a year ago at a hearing on the crisis.

The Democratic lawmaker again tore into Goldman at a press briefing on his panel's 639-page report, which is based on a review of tens of millions of documents over two years.

Levin accused Goldman of profiting at clients' expense as the mortgage market crashed in 2007. "In my judgment, Goldman clearly misled their clients and they misled Congress," he said, reading glasses perched as ever on the tip of his nose.

A Goldman Sachs spokesman said, "While we disagree with many of the conclusions of the report, we take seriously the issues explored by the subcommittee."

The panel's report is harder hitting than one issued in January by the government-appointed Financial Crisis Inquiry Commission, which "didn't report anything of significance," Republican Senator Tom Coburn said at the briefing.

More than two years since the crisis peaked, denunciations of Wall Street misconduct are less often heard on Capitol Hill, with lawmakers focused on fiscal issues. But Coburn joined Levin at Wednesday's bipartisan briefing, firing his own sharp attacks on the financial industry.

"Blame for this mess lies everywhere -- from federal regulators who cast a blind eye, Wall Street bankers who let greed run wild, and members of Congress who failed to provide oversight," said Coburn, the subcommittee's top Republican.

"It shows without a doubt the lack of ethics in some of our financial institutions who embraced known conflicts of interest to accomplish wealth for themselves, not caring about the outcome for their customers," he said.

The Levin-Coburn report criticized not only Goldman, but Deutsche Bank, the former Washington Mutual Bank, the U.S. Office of Thrift Supervision and credit rating agencies Moody's and Standard & Poor's.

"We will be referring this matter to the Justice Department and to the SEC," Levin said at the briefing, though he did not elaborate. A spokesman later said, "The subcommittee does not intend to reveal the specifics of any referral."

The report offered 19 recommendations for reform going beyond changes already enacted after the crisis in 2010's Dodd-Frank Wall Street and banking regulation overhaul.

Case studies from the go-go years of the real estate bubble formed the bulk of the report, which said a runaway mortgage securitization machine churned out abusive loans, toxic securities, and big fees for lenders and Wall Street.

It cited internal emails by Wall Street executives that described mortgage-backed securities underlying many collateralized debt obligations, or CDOs, as "crap" and "pigs."

Continue reading at reuters

BRIC dumping the dollar?

2011-04-14T04:32:00.000-07:00

The BRICS group of emerging-market powers kept up the pressure on Thursday for a revamped global monetary system that relies less on the dollar and for a louder voice in international financial institutions.

The leaders of Brazil, Russia, India, China and South Africa also called for stronger regulation of commodity derivatives to dampen excessive volatility in food and energy prices, which they said posed new risks for the recovery of the world economy.

Meeting on the southern Chinese island of Hainan, they said the recent financial crisis had exposed the inadequacies of the current monetary order, which has the dollar as its linchpin.

What was needed, they said in a statement, was "a broad-based international reserve currency system providing stability and certainty" -- thinly veiled criticism of what the BRICS see as Washington's neglect of its global monetary responsibilities.

The BRICS are worried that America's large trade and budget deficits will eventually debase the dollar. They also begrudge the financial and political privileges that come with being the leading reserve currency.

"The world economy is undergoing profound and complex changes," Chinese President Hu Jintao said. "The era demands that the BRICS countries strengthen dialogue and cooperation."

In another dig at the dollar, the development banks of the five BRICS nations agreed to establish mutual credit lines denominated in their local currencies, not the U.S. currency.

The head of China Development Bank (CDB), Chen Yuan, said he was prepared to lend up to 10 billion yuan to fellow BRICS, and his Russian counterpart said he was looking to borrow the yuan equivalent of at least $500 million via CDB.

Continue reading at Reuters.

Peter Schiff was right, AGAIN!

2011-04-13T17:24:00.000-07:00

Part 2

Is the US housing market making a comeback?

2011-04-13T06:55:00.000-07:00

The always prescient Bill Bonner ask!

Buenos Aires is beautiful. We have been blessed with good weather.

The city is booming, too. Strong agricultural prices have done what they always do in Argentina – they’ve set off a boom.

“Property prices are up about 30% over the last 3 years,” says our BA-based colleague, Rob Marstrand. “But this is such a funny place. I love living here, because you see everything. If not in the present, certainly in the past…or the future. Booms, busts, corruption, inflation – everything.

“Only about 6% of properties are sold with mortgages. So this is a real boom – where people are paying cash. But, where does this cash come from? Much of it comes from the bull market in farm products. Argentina is one of the world’s top producers of cereals, for example. But there is probably a lot of money coming from the government too. The inflation rate is about 25%.

“Now, you’d think that a country with a 25% inflation rate would have a currency that is falling through the floorboards. But no. The authorities have been supporting the peso; it actually went up 4% against the dollar. Put the dollar’s drop and Argentine inflation together, and you get a loss of dollar purchasing power of 30%.

“People want to protect themselves. And here, they do it by buying real estate.

“Americans might want to think about it too.”

Prices are down 30% nationwide in the US. In Florida, Nevada, and most of California, they’re half off. Even if they might go down a bit more, there are some very good deals available now. A friend of ours is able to buy apartment buildings for little more than 5 times rent income. If upkeep and taxes take half of that, that still gives him a 10% return. But it could be much better. Suppose he takes out a 30-year, fixed rate mortgage. Now, suppose inflation goes up. Every percentage point that consumer prices rise is another percentage point of yield for a fully-mortgaged investor.

Rob also is in charge of our Family Office investments.

“I don’t see any way that they can unwind all this debt and spending without causing even more problems,” he says. Investors might get some protection from real estate or stocks. But the best protection is gold.

Continue reading at here

Criminal finance ahoy!

2011-04-13T06:16:00.000-07:00

I knew that the financial system was completely corrupted and subservient to the interest of the Wall Street thugs; but, I must admit that I had not pictured how far these people had taken their ponzi scheme of monetary inflation! Just imagine the strings of financial abuses that have been perpetrated over the 100 years of existence of the US central bank and all other world central banks! The real function of central banking comes to light with the strings of revelation that are slowly making their way into the mainstream and the many others yet more shocking and explosive stories that will be unleashed not only in the US but in any part of the world where there is a central "Gang"! Thanks to honorable individuals like Rep Ron Paul and others Fed enemies at Bloomberg, the truth is finally winning and hopefully may we live to see a world free from such a "diabolical" institution.

America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we're broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year's retirees from the IRS, the SEC and the Department of Energy.

Why Isn't Wall Street in Jail?

Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.

This article appears in the April 28, 2011 issue of Rolling Stone. The issue will be available on newsstands and in the online archive April 15.

Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loanseach to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."

Wall Street's Big Win

But if you want to get a true sense of what the "shadow budget" is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn't seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches.

Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division. Neither woman appears to have any serious history in business, apart from a few philanthropic experiences. Yet the Federal Reserve handed them both low-interest loans of nearly a quarter of a billion dollars through a complicated bailout program that virtually guaranteed them millions in risk-free income.

RS Politics Daily: Political news and commentary from Rolling Stone writers and editors

The technical name of the program that Mack and Karches took advantage of is TALF, short for Term Asset-Backed Securities Loan Facility. But the federal aid they received actually falls under a broader category of bailout initiatives, designed and perfected by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner, called "giving already stinking rich people gobs of money for no fucking reason at all." If you want to learn how the shadow budget works, follow along. This is what welfare for the rich looks like!

Read Matt Taibi's full article at RS!

Invest in Sweden!

2011-04-13T05:36:00.000-07:00

Sweden predicted a budget surplus and raised its economic growth forecast for the next two years, allowing Europe’s fastest-growing economy to cut taxes while the rest of the region struggles through austerity cuts.

The largest Nordic economy will expand 4.6 percent this year, compared with the 4.8 percent predicted last month, the government said in its spring fiscal policy bill released today in Stockholm. The government raised its forecast for growth in 2012 and 2013 and predicted a widening surplus over the next four years as unemployment falls.

“In a situation when many other countries are experiencing austerity and weak economies, Sweden’s economy is growing stronger,” Finance Minister Anders Borg said. “We must use this to ensure that more people find work and that welfare initiatives can be implemented.”

Prime Minister Fredrik Reinfeldt’s government, which won another four years in office in September, said yesterday it plans to reduce taxes for a sixth consecutive year in 2012 as other nations such as the U.K. slash spending to pare deficits. The Swedish economy grew 5.5 percent in 2010, the most since 1970, as exports recovered from the global financial crisis.

Continue Here

Entrepreneur: Steve Job.

2011-04-12T02:06:00.000-07:00

Part 2, Part 3, Part 4, Part 5

Pimco short US debt!

2011-04-12T01:46:00.000-07:00

The world's largest bond fund began betting against the United States last month by taking short positions on its debt on expectations the nation's shaky finances will drive interest rates higher and imperil its triple-A rating.

Bill Gross, PIMCO's oft-quoted co-chief investment officer, in January warned that "mindless" U.S. deficit spending could result in higher inflation and a weaker dollar.

He has also been raising alarms about a lack of buyers for Treasuries once the Federal Reserve ends its own bond purchase program, also known as quantitative easing, in June.

The portion of PIMCO's $236 billion Total Return Fund held in long-term U.S. government debt, including U.S. Treasuries, declined to "minus 3" percent in March from zero in February and 12 percent in January, according to PIMCO's website (www.pimco.com).

"They are one of the largest investors in the Treasury market, so yes, it is significant," said Gary Pollack, a portfolio manager with Deutsche Bank Private Wealth Management in New York.

"They have the ability to move the market, that is something that makes me a little nervous."

Investors in exchange-traded funds and futures have mirrored the PIMCO trend in recent weeks.

PIMCO expects the lingering U.S. budget deficit and the Fed's easy monetary policy will fuel faster inflation and hurt the dollar.

Gross' shorting of Treasuries in March preceded Washington's narrowly averting a government shutdown after Democrats and Republicans agreed late on Friday to cut $38 billion in spending for the fiscal year.

The 11th-hour compromise probably had little impact on the investment strategies of Gross, who said in an April newsletter that the U.S. government was "out-Greeking the Greeks," a reference to Greece's out-sized government debt that forced the country to ask for a bailout.

"We are smelling $1 trillion deficits as far as the nose can sniff" if the government fails to address the biggest entitlement programs: Medicare, Medicaid and Social Security, Gross said in his outlook.

Investors have pulled money from PIMCO's Total Return Fund, which registered $1.59 billion of outflows last month, according to Lipper. That was the fifth straight month of outflows, the longest streak of net redemptions since Lipper began tracking the data in 2004, totaling $18.05 billion of withdrawals.

Continue here

Asian central banks to add Yuan reserves

2011-04-12T01:39:00.000-07:00

Asia’s central banks want to diversify their growing foreign-exchange reserves into yuan- denominated debt issued by China’s government, according to Bangko Sentral ng Pilipinas Governor Amando Tetangco.

Tetangco, who met with People’s Bank of China as part of an economic road show, said Asian central banks have agreed to “look for new avenues for diversification,” according to an e- mailed from the Philippine Department of Finance. “Given, however, the traditional investment constraints of central banks, I suggest that the Chinese government may consider issuing more yuan-denominated bonds,” he was quoted as saying.

Premier Wen Jiabao is seeking to promote use of the yuan as an alternative to the dollar in global trade and investment, while avoiding a buildup of speculative capital. Cross-border transactions in the yuan totaled $58.7 billion in 2010, 13 times the amount a year earlier, Xinhua News Agency reported April 1, citing the State Administration of Foreign Exchange.

Tetangco’s “comments are ground-breaking as this is the first time that a regional central bank openly stated the intention of emerging Asia to diversify foreign-exchange reserves into yuan-denominated assets,” said Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB. “This is a coup for China, which has been working hard to internationalize its currency.”

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The secret of great men: It's all about practice!

2011-04-11T02:51:00.000-07:00

Studies show that greatness and excellence aren’t “a consequence of possessing innate gifts [and talents]“. Rather greatness is the result of years and years of enormous amounts of hard, painful work. Ted Williams spent hours hitting baseballs, and Carnegie spent his entire adolescence learning how to network and developing his prodigious memory, skills that would turn him into a mind-boggling wealthy captain of industry.

Studies have demonstrated that young prodigies excel not because of some kind of mystical innate talent but on the merits of pure hustle. Mozart wrote his first masterpiece at 21. That’s pretty young. But people often forget to mention that he had spent the previous 18 years of his life studying music under the tutelage of his father. Mozart had been paying his dues since he was three years old, and it paid off big for him.

In short, great men aren’t born; great men are made, and they’re made through the process of deliberate practice.

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Entrepreneurs: Marc Zuckerberg

2011-04-11T02:02:00.000-07:00

Part 2

Iceland's lesson on capitalism: Profit and Loss!

2011-04-11T01:36:00.000-07:00

For the second time, Icelanders voted down a deal to repay Britain and the Netherlands billions of euros lost in the island nation's 2008 financial collapse—at once a bold popular rejection of the notion that taxpayers must bear the burden for bankers' woes and a risky outcome that will complicate Iceland's efforts to rejoin global markets.

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Agence France-Presse/Getty Images

People celebrate while watching the results in a referendum on whether to approve a renegotiated deal to compensate Britain and The Netherlands over the 2008 collapse of Icesave bank at a bar in Reykjavik on Sunday.

The money in question, about €4 billion ($5.8 billion), was placed by British and Dutch depositors in an Icelandic Internet bank called Icesave, and then lost when Icesave's operator, Landsbanki Islands, collapsed along with the rest of Iceland's big banks in October 2008.

Nearly 60% of 175,000 voters rejected a plan to compensate the British and the Dutch governments, who had stepped in to pay their own Icesave depositors when Iceland's deposit-insurance scheme ran out of money.

The deal was the result of months of negotiation that saw Iceland win far better terms for the repayment. An earlier agreement was demolished—93% of voters said no—in a another referendum, in March 2010.

But Iceland's president, Ólafur Ragnar Grímsson, in February vetoed a Parliamentary bill that would have sealed the new deal. That triggered Saturday's referendum. Mr. Grímsson's role is largely ceremonial and vetoes are extremely rare.

Both Britain and the Netherlands expressed disappointment and indicated they would fight it out with Iceland in court. "The time for negotiations is over," said Jan Kees de Jager, the Dutch finance minister.

Sunday, Mr. Grímsson said Iceland had, again, spoken clearly. "The leaders of other states and international institutions will have to respect this expression of the national will," he said. He pointed out that the U.K. and the Netherlands would, despite the rejection, receive "immense sums" from Iceland because the countries hold claims to Landsbanki's estate.

Iceland is a member of the European Economic Area, which means it has signed up to many of the European Union's financial and trade rules—among them a requirement that countries maintain deposit-insurance systems.

The EFTA Surveillance Authority, a body that polices the EEA agreements in Iceland, Norway and Liechtenstein, has already started legal proceedings against Iceland. The authority says Iceland violated rules by not backing Icesave depositors—and by reimbursing domestic depositors before foreigners.

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Influence of character!

2011-04-11T00:54:00.000-07:00

Character is one of the greatest motive powers in the world. In its noblest embodiments, it exemplifies human nature in its highest forms, for it exhibits man at his best.
Men of genuine excellence, in every station of life-men of industry, of integrity, of high principle, of sterling honesty of purpose-command the spontaneous homage of mankind. It is natural to believe in such men, to have confidence in them, and to imitate them. All that is good in the world is upheld by them, and without their presence in it the world would not be worth living in.

Although genius always commands admiration. character most secures respect. The former is more the product of brain-power, the latter of heart-power; and in the long run it is the heart that rules in life. Men of genius stands to society in the relation of its intellect, as men of character of its conscience; and while the former are admired, the latter are followed.

Great men are always exceptional men; and greatness itself is but comparative. Indeed, the range of most men in life is so limited, that very few have the opportunity of being great. But each man can act his part honestly and honorably, and to the best of his ability. He can use his gifts, and not abuse them. He can strive to make the best of life. He can be true, just, honest, and faithful, even in the small things. In a world, he can do his Duty in that sphere in which Providence has placed him.

Commonplace though it may appear, this doing of one's duty embodies the highest ideal of life and character. There may be nothing heroic about it; but the common lot of men is not heroic. And though the abiding sense of duty upholds man in his highest attitudes, it also equally sustains him in the transaction of the ordinary affairs of everyday existence. Man's life is ' centered in the sphere of common duties'. The most influential of all the virtues are those which are the most in request for daily use. They wear the best, and last the longest. Superfine virtues, which are above the standard of common men, may only be sources of temptation and danger.

" Character", Samuel Smiles; chapt 1: " Influence of character".

Banksters and Gangsters: Sweet marriage!

2011-04-04T12:39:00.000-07:00

At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were "the only liquid investment capital" available to banks on the brink of collapse. "Inter-bank loans were funded by money that originated from the drugs trade," he said. "There were signs that some banks were rescued that way."

Wachovia was acquired by Wells Fargo during the 2008 crash, just as Wells Fargo became a beneficiary of $25bn in taxpayers' money. Wachovia's prosecutors were clear, however, that there was no suggestion Wells Fargo had behaved improperly; it had co-operated fully with the investigation. Mexico is the US's third largest international trading partner and Wachovia was understandably interested in this volume of legitimate trade.

José Luis Marmolejo, who prosecuted those running one of the casas de cambio at the Mexican end, said: "Wachovia handled all the transfers. They never reported any as suspicious."

"As early as 2004, Wachovia understood the risk," the bank admitted in the statement of settlement with the federal government, but, "despite these warnings, Wachovia remained in the business". There is, of course, the legitimate use of CDCs as a way into the Hispanic market. In 2005 the World Bank said that Mexico was receiving $8.1bn in remittances.

During research into the Wachovia Mexican case, the Observer obtained documents previously provided to financial regulators. It emerged that the alarm that was ignored came from, among other places, London, as a result of the diligence of one of the most important whistleblowers of our time. A man who, in a series of interviews with the Observer, adds detail to the documents, laying bare the story of how Wachovia was at the centre of one of the world's biggest money-laundering operations.

Martin Woods, a Liverpudlian in his mid-40s, joined the London office of Wachovia Bank in February 2005 as a senior anti-money laundering officer. He had previously served with the Metropolitan police drug squad. As a detective he joined the money-laundering investigation team of the National Crime Squad, where he worked on the British end of the Bank of New York money-laundering scandal in the late 1990s.

Woods talks like a police officer – in the best sense of the word: punctilious, exact, with a roguish humour, but moral at the core. He was an ideal appointment for any bank eager to operate a diligent and effective risk management policy against the lucrative scourge of high finance: laundering, knowing or otherwise, the vast proceeds of criminality, tax-evasion, and dealing in arms and drugs.

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Is anybody watching you on the Internet?

2011-04-04T10:46:00.000-07:00

I think so. I mean, I feel like it!

What makes Marc Faber run against the grain?

2011-04-04T10:23:00.000-07:00

At the end of the following article on Dr "Doom" Marc Faber, the author asks: " What made Marc Faber run against the grain? I conjecture that it has to do with his intellectual school of analysis: Austrian economics! It is the unique economic paradigm that has distinguished him for many years from the crowd of wall street and it is the unique approach that enables him to stand above the propagandas and the lies and deceits perpetually thrown at the masses days in and days out.

The thing about predictions is that if you make enough of them, eventually they’ll start to come true. Being a good enough prognosticator to hold the investor community’s attention most of the time is an entirely different matter.

Axel Griesch | ASFM | Getty Images

Dr. Marc Faber

That’s what economist and market forecaster Marc Faber has clearly become. But even he isn’t perfect. His best prediction of all time, he says, was also the worst investment call he’s ever made.

“That was the prediction that the tech bubble would burst,” which he made in 1998. “But it came two years too early.”

Like good comedy, the secret of forecasting is timing – only less funny if you’re the butt of the joke. The Nasdaq more than doubled after he made the call, before crashing in March 2000, so Faber still lost money shorting tech stocks.

Identifying market lows is much easier than calling market highs, Faber believes. Bubbles always seem to blow up further than expected. “I have always underestimated the madness of the investment community,” he says.

In terms of timing, his best bet was to recommend selling stocks a week before the 1987 crash. But even that had more than an element of luck. “It was a coincidence that it happened a week later,” he admits.

Still, it’s those kinds of calls that have made Faber a favorite board member, panelist and prognosticator. Subscriptions to his monthly “Gloom, Boom & Doom Report” run as high as $1,500 per year, or $300 for an abbreviated market commentary.

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Ron Paul and the Fed disclosure!

2011-04-01T04:41:00.000-07:00

Why overseas bankers receiving billions of dollars from the US Fed while the country is in a deep recession?