Now, OPEC is falling which is OK with China. China imports oil, after all. Time to look deeper into the clashing crashing banking/trade schemes and why the Chinese will probably win this particular battle.

Like 7/7/7 last year, this year's big magic number day is 8/8/8. This was the big Olympics high point. The US lunged for Russia's throat and failed to make a kill. The Chinese leadership has successfully strangled a too-hot market and fended off the Japanese who tried to flood China with Japan Carry Trade hyper-inflation. Now we are in a strong deflationary cycle. WHICH CHINA WANTED. Neither the US nor Japan wanted to stop inflation, they wanted to export it to China and OPEC. Now, OPEC is falling which is OK with China. China imports oil, after all. Time to look deeper into the clashing crashing banking/trade schemes and why the Chinese will probably win this particular battle.

U.S. Must Buy Assets to Prevent `Tsunami,' Gross Says

(Bloomberg) -- The U.S. government needs to start using more of its money to support markets to stem a burgeoning ``financial tsunami,'' according to Bill Gross, manager of the world's biggest bond fund.

Banks, securities firms and hedge funds are dumping assets, driving down prices of bonds, real estate, stocks and commodities, Gross, co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., said in commentary posted on the firm's Web site today.

``Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami,'' Gross said. ``If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury.''

Gross is a big guy in the economic pundit universe. Yet his often childish take on the dynamics of economics means he ends up talking like a little boy who anxiously awaits Santa Claus to give him his base ball and mitt so he can play ball in spring training. This desire to have the world handed on a silver platter with a golden spoon is tremendously strong. The richer the commentator, the more he or she is constipated over anticipation of something, anything coming along and saving them from the messes they have created, themselves.

Gross should retire. Learn to grow potatoes or tomatoes. I can teach him. Typical of a la-de-da Californian airhead, he talks about a campfire turning into a forest fire. Hey, hate to tell him this, but the wall of flames are roaring up the canyons straight to his big, airy mansion! What he wants, basically, is to sell all his investments to Uncle Sam and Santa Bernanke. These parties will then pay him real cash for worthless junk. This little spoiled brat can then skip off to play base ball with a happy heart. La, la, la!

I have lost SIGNIFICANT funds in down markets! This is why we have to prepare for the possibility of taking on losses. These losses I experienced in the past meant I had to live in a tent so I wouldn't lose my present property where I built my own house. This is what 'eating what Mother serves you' or 'paying the piper' really means. I didn't demand Greenspan and Bill Clinton buy my property in a down market and give me cash! I had to live with what was the consequences. And they were SEVERE. But I chose to fight the battles that opened before my feet and with all my heart and soul, I make things work in the end. And loved it and fondly remember the struggles as a great time, a pinnacle in my own life.

LOSSES ARE NOT ALWAYS EVIL. We not only learn valuable lessons during these times, we learn about our own selves. No one is enlightened in a mansion. One learns about cosmic and great things when in tents or lying in the forest, surrounded by howling wolves.

The entire spoiled brat super-rich class is screaming themselves hoarse, demanding our deep-in-debt government bail their PRIVATE speculations out! This is beyond disgusting. They don't want to pay taxes. They don't want to be patriots. They want to float about us all, amassing huge, historic levels of wealth and power. Then, as they crash to the earth as Pegasus spreads his wicked white wings high above, they tumble down into the dark abyss. And they want to be saved. They refused to save our nation when it began to run in the red. They refused to save their fellow humans who begged for help, for mercy for money. But now, despite owning too many mansions, too many private jets and huge yachts, too many fast cars and too many fast women, these same clowns want ME to save THEM.

I say, seize their palaces, their hussies, their roadsters, their boats and floats, take it all away and give them a damn TENT to live in like I lived in. Then I will teach them all about survival in the real world. And perhaps they might learn about reality, love and death and become humans rather than adult babies.

Exponential Money in a Finite World (Part 1) by Chris Martenson

Within the next 20 years the most profound changes in all of economic history will sweep the globe. The economic chaos and turbulence we are now experiencing are merely the opening salvos in what will prove to be a long, disruptive period of adjustment. Our choices are to either evolve a new economic model that is compatible with limited physical resources or risk a catastrophic failure of our monetary system – and with it, the basis for civilization as we know it today.

In order to understand why, we must start at the beginning.

While it was operating well, our monetary system was a great system, one that fostered incredible technological innovation and advances in standards of living, two characteristics I fervently wish to continue. But every system has its pros and its cons, and our monetary system has a doozy of a flaw.

It is this: our monetary system must continually expand, forever.

Another simplistic view of the Cave of Death where the Goddesses create wealth and then destroy it. Where Inflation and Deflation live, the two Gorgon sisters who are sisters to the dead one who gave birth to Pegasus. These dire daughters of the Dawn are very ancient. They guard the place where bankers make their magic money. For the money that fuels our planet's finances is ultimately made up out of thin air. They are DEBTS. And the Goddesses decreed that only those who can resist the temptation to make infinite money by making infinite loans, will prosper. Any time anyone exceeds the natural limits to making lending possible ends up creating either rampant inflation that eats the value of these loans faster than they can be lent. Or deflation when the ability to make loans suddenly vanishes because there are no savings to base it on.

The present system in the G7 is a hybrid: it is supposed to have limits but the US wants to spend to infinity so the limits are sporadic at best. This causes the famous 'see saw' action of the US Fed suddenly hiking interest rates and then equally rashly dropping them as fast as possible. This action is increasingly destabilizing any notion of adjusted common values between all commodities and trade goods. The instability introduced in 1974 when the US ended the gold standard is causing increasing flood/drought monetary market systems.

The main cure for inflation which the Bank of Japan and the Federal Reserve have chosen is a very cruel tool: to drain wealth from the working class. To hammer them with commodity inflation and then depress wages and prices fall but workers have less to spend so commerce falls. The cure for the downside of doing this has been to lend to the working class in the US so they would buy foreign trade goods. Now that the US trade deficit is nearly a trillion dollars a year, this is failing due to the US public unable to take on more debt during declining wage cycles.

Representatives from Boeing Co. and the Machinists union met with a federal mediator Thursday as the clock ticked on an unusual two-day contract extension after union production workers soundly rejected a contract offer and voted to strike.

Members of the union representing 27,000 aircraft assembly workers at the aerospace giant voted overwhelmingly Wednesday to strike for an unprecedented second time in three years, then learned both sides had agreed to a 48-hour contract extension at the request of Washington Gov. Chris Gregoire and federal mediators.

Boeing spokesman Tim Healy said Thursday that the mediator was trying to help the two sides find middle ground, but he had no information on the progress of the talks.

Most of our manufacturing trade deals that our government boasts about are with Boeing. Our trade partners who are destroying our economy will throw a sop to us by buying a few jets every year. One of the last functioning unions is the Boeing workforce. Already, all our trade partners are pushing hard for Boeing to remove factories from here and move them to Japan, China and Taiwan. Indeed, this is increasingly being done.

Workers to pay more for health care

Get ready for another hike in copays and deductibles. A survey being released Thursday by the Mercer consulting firm found 59 percent of companies intend to keep down rising health care costs in 2009 by raising workers' deductibles, copays or out-of-pocket spending limits.

On average, health care costs will go up by an estimated 5.7 percent next year for both workers and their employers, the study found. That repeats this year's 5.7 percent hike and a 6.1 percent jump in 2007.

The growth of health care costs has hovered at around 6 percent since 2005, according to Mercer. While that's down from the double-digit growth in previous years, it's still moving at a faster clip than inflation or workers wages.

Like termites eating a house from the inside out, medical costs are shooting up faster than inflation and this is one of the main reasons the US consumer is facing a dire brick economic wall. This cannot continue as a dynamic forever on this tangent. I will note here that the super rich bastards who want Uncle Sam to buy up all their bad investments for cash are also trying to persuade us that we need to strangle US health care systems and destroy all our social spending systems. Isn't that darling of them?

Private investments must be protected by public money that the rich refuse to pay in the form of taxes while public health and public transport, for example, are to be ditched? This is why elections matter. The grave weakness of Ron Paul is his refusal to understand this dynamic. He wants the good old days when 'Negroes' had to either die in the fields or homes or be buried in pine boxes. He wants the good old days when we had to have orphanages for all the children who were abandoned or lost their mothers to diseases or childbirth.

Americans' productivity soared in the spring while labor costs declined, two welcome outcomes that should relieve concerns that inflation is getting out of hand.
The Commerce Department reported Thursday that productivity, the amount of output for every hour of work, jumped 4.3 percent at an annual rate in the April-June quarter, a full percentage point higher than economists expected.

Productivity is merely a fancy way of saying, 'Workers can't tap into the profit stream anymore'. This is NOT a good sign. For the last 15 years, 'productivity' has soared and wages have dropped behind inflation. Now, it is hideous. My husband and I are on a fixed income. We are hurting, badly. Thanks to food and fuel inflation. We are not alone. Many, many people are on 'fixed' incomes: few wages have gone up! I know professors who have seen only 2% rises in income for the last 5 years. This is 'productivity' from hell.

Lehman May Shift $32 Billion of Mortgage Assets to `Bad Bank'

Bloomberg) -- Lehman Brothers Holdings Inc. may shift about $32 billion of commercial mortgages and real estate to a new company that will be spun off in a move similar to the good-bank-bad-bank model used in the 1980s banking crisis, two people briefed on the discussions said.

The bad bank, nicknamed Spinco for now, would have about $8 billion of equity coming from Lehman, the people said, speaking on condition of anonymity because the plan is one of several under consideration. Spinco would borrow the remaining $24 billion from Lehman or outside investors. The New York-based bank would replace capital put into Spinco, whose shares would be owned by current Lehman shareholders.

HAHAHA. How can Lehman create a 'bad bank' when ALL the banks are bad???? This is the entire problem: they all went off the same cliff at the same time and for the same reason. They all made way too many bad loans to deadbeats and others who can't pay up and there is no future finance stream to feed more lending frenzies. So the bankers basically want to start it all over with no penalty! How childish is that? Hey, Santa Claus, give Johnny a brand new bank to peddle around the neighborhood since he wrecked his last bike this summer, trying to go downhill fast while keeping his hands off the handlebars.

The Spinco proposal would enable Lehman to dispose of 80 percent of its commercial mortgages, the people said. Under another plan, the firm would establish a company capitalized and managed by outside investors to buy some of its mortgage assets. The Spinco plan would enable Lehman's shareholders to benefit from a turnaround in the mortgage market.

Korea Development Bank has been in discussions to buy a 25 percent stake in Lehman for $6 billion, according to the people familiar with the talks. That would replace most of the capital Lehman would put into the bad bank.

The deal must be structured to guarantee enough cash flow from the mortgages being put into the spun-off entity to repay outside lenders, Reed Smith's Bleier said. That would force Lehman or another bank using the model to disclose much more detail about the mortgages and the securities, he said.

This is like turning their bad investments into a scape goat. Scape goats in ancient Israel were burdened magically with the sins of the community and then let loose in the desert. Usually, smart people who were not Jewish would capture these goats and eat them. The Jews would then gloat that bad luck would come. The difference between today and 3,000 years ago is very stark: there is no difference. Humans are the same. The bankers want to drive a goat into the desert but don't want it to come back. The best thing to do is to drive it into the US Treasury where the goat will eat all the paper money. Honestly, I have had goats. They really do eat paper.

The goat is also a magic icon representing Satan. Which reminds us again about how all things monetary end up being all about the Cave of Death and Wealth. Which we enter with fear and dread.

Australian, New Zealand Dollars Slump to 2-Year Lows Versus Yen

(Bloomberg) -- The Australian and New Zealand dollars slumped to their lowest levels in more than two years against the yen as a slide in U.S. stocks spurred traders to sell higher-yielding assets financed in Japan's currency.

The currencies also fell to their weakest in more than a year against the U.S. dollar as concern global economic growth is slowing pushed down prices for commodities the nations sell. The Australian and New Zealand dollars declined the most since March against the yen as the Standard & Poor's 500 Index tumbled the most in three months, discouraging so-called carry trades.

``They're incredible moves, everything is working against the Australian and New Zealand dollars,'' said Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney. ``There's U.S. dollar strength across the board, equity market weakness so carry-trade sentiment is poor, and because this means downward revisions to global growth, as commodity currencies they're also suffering.''

And the Japanese Carry Trade is DYING! All major efforts of the G7 since 7/7/7 have been to restart this bizarre business. The Bank of Japan has cranked out more 'wealth' than anyone on this planet. This was packaged into loans that were plopped down onto every conceivable destination: properties, business mergers, buy ups and buy outs, commodity future speculations, buying gold and silver. Now, it is gone and dead. There are no loans anymore. The whole system is now becoming a big, black hole. This is why fearful deflation is entirely possible.

This money, created between international bankers playing Forex games with international floating currencies and interest rate differentials created this huge, massive monster I call 'the Derivatives Beast.' This thing didn't exist until just 30 years ago. Since then, it has grown from one trillion dollars to an astonishing quadrillion dollars. It doubled in size every year. This was utterly, insanely unsustainable. And the rich people who fed and nurtured this monster knew this but did it anyway. In hopes of getting filthy rich.

They do not deserve to be saved. Not at all. Let them live in tents.

Author Elain Supkis blogs at Culture Of Life News