Rooikrantz 2008
Even veteran Fed-watchers were caught off-guard by Chairman Bernanke's performance before the Senate Banking Committee on Thursday. Bernanke was expected to make routine comments on the state of the economy but, instead, delivered a 45 minute sermon detailing the afflictions of the foundering financial system. The Senate chamber was stone-silent throughout. The gravity of the situation is finally beginning to sink in.
For the most part, the pedantic Bernanke looked uneasy; alternately biting his lower lip or staring ahead blankly like a man who just watched his poodle get run over by a Mack truck. As it turns out, Bernanke has plenty to worry about, too. Consumer confidence has dropped to levels not seen since the 1970s recession, real estate has gone off a cliff, credit-brushfires are breaking out everywhere, and the stock market continues to gyrate erratically. No wonder the Fed-chief looked more like a deck-hand on the Lusitania than the monetary-czar of the most powerful country on earth.
Mike Whitney | "You are all Dead Ducks"
Rooikrantz 2008
It was a discreet, almost hush hush affair, but after almost three years of stalling and endless delays, it finally happened. Now more than ever, it may also signal a true geoeconomic earthquake – way beyond a potentially shattering blow to US dollar hegemony. This Sunday, the Iranian Oil Bourse – the first-ever oil, gas and petrochemical exchange in the Islamic Republic, and the first within OPEC – was launched by Iran’s Oil Minister Gholam-Hossein Nozari, flanked by Minister of Economy and Financial Affairs Davoud Danesh Ja’fari, the man who will head the bourse.
The bourse’s official name is Iranian International Petroleum Exchange (IIPE), widely known in Iran and the Persian Gulf as the Kish bourse. Kish island is a free zone (declared by the Shah) in an ideal laissez faire setting: lots of condos and duty-free malls, no Khomeini mega-portraits and hordes of young honeymooners shopping for made-in-Europe home appliances.
There was frantic speculation all over the world that the bourse would start trading in euros. But according to Nozari transactions at this early stage will be in Iran’s currency, the rial. Anyway the Iranian ambassador to Moscow Gholam-Reza Ansari has already advanced that "in the future, we'll be able to use the ruble, Russia’s national currency, in our operations". He added that "Russia and Iran, two major producers of the world’s energy, should encourage oil and gas transactions in various non-dollar currencies, releasing the world from being a slave of dollar". Russia’s first deputy Prime Minister Dmitry Medvedev said last week that "the ruble will de facto become one of the regional reserve currencies."
Pepe Escobar | Slouching Towards Petroeurostan
Rooikrantz 2008
In the last few days, gold has spiked to $950, a new high, while oil futures passed the $100 per barrel mark. The battered greenback has already taken a beating, and yet, Fed chairman Bernanke is signaling that there are more rate cuts to come. The prospect of a global run on the dollar has never been greater. Still, Bernanke will do whatever he can to resuscitate the faltering banking system, even if he destroys the currency in the process. Unfortunately, interest rates alone won't cut it. The banks need capital; and fast. Meanwhile, the waning dollar has sent food and energy prices soaring which is leaving consumers without the discretionary income they need for anything beyond the basic necessities. As a result, retail sales are down and employers are forced to lay off workers to reduce their spending. This is all part of the self-reinforcing negative-feedback loop that begins with falling home prices and then rumbles through the broader economy. There is no chance that the economy will rebound until housing prices stabilize and the rate of foreclosures returns to normal. But that could be a long way off. With housing inventory at historic highs and mortgage applications at new lows, the economy could keep somersaulting down the stairwell for a full two years or more. Only then, will we hit rock-bottom.
Mike Whitney | It's Time to Dump the Federal Reserve
Note: The above Rooikrantz ledge is not that most frequented by fishermen. The ledge on which this lavatory was built — by the selfsame fishermen, no doubt — is all but inaccessible, proving anything is possible.
