New World Order University Forum

Stock markets around the world have rallied off their March lows. The talk on financial TV is about having avoided a Depression, green shoots, a sustainable recovery. Other key phrases of the financial conversation include the steepening yield curve (good for bank profits), the stress test, the possible housing bottom, the commodity boom, and demand for new iphones. Many reputable economists are forecasting worldwide economic recovery in 2009. Paul Krugman, a globalist Keynesian who unfortunately is a respected economist, stopped a sharp stock market decline last Monday with his forecast that the U.S. economy would revive in the next few months.

OK, so far so good for the economic recovery. NWOU is not wishing for bad economic times or widespread pain that forces change. Our area of expertise is history, not economic forecasting. Still, we have a unique perspective on the big picture of world events. Now that the global financial system has crashed, the New World Order conspiracy is out in the open for everyone to see. Still, most people can’t see it, even when politicians talk openly about it, and most people depend on the mass economy. We are here to dig behind the scenes to find the global forces shaping our futures. However, we don’t have access to the private thoughts of the inner cabal of controllers, so we have to read between the lines and make educated guesses.

One thing we can say with certainty is that the chorus of positive thinking about the economic recovery is a propaganda arm of the Obama administration. We can identity these salesmen on TV financial channels, and we hope you can also. They seem to be pretty effective.

So what is really going on? Let’s start with an update on California. Reasononline has picked up on the idea that California is at the cutting edge of the crisis due to its irresponsible spending. The problem with the proposed federal bailout of California is that the federal government is even more deeply in debt. NewsMax has the latest news on California.

MSNBC reports on the budget deficits of various individual states. Notice that there is a trend of declining tax revenues that forces state legislatures to play “catchup” as revenue estimates constantly decrease. Without the federal stimulus money, many states would be forced to make drastic budget cuts. Texas and North Dakota are in the best financial shape. Take note if you are looking to make a move.

In California the state’s Democratic legislators are still resisting Governor Schwarzenegger’s planned cuts. The Democrats are determined to find new revenue sources to prop up inflated state and city salaries and pension benefits. We are not exactly sure why the Democrats are being so irresponsible, but we must take note of their determination to suck more money out of the state’s citizens so that they can prop up their favored constituencies. The Left has always made war on the rest of us, so nothing new here.

CNN surveys state and local unemployment rates. The highest unemployment rates are in California’s central valley. Oregon and Michigan also have high unemployment rates.

So far we’ve seen little reporting on the people suffering the most. This crisis doesn’t have a human face. We have heard about tent cities springing up, but the police quickly close them down. Instead we get statistics and a lot of optimistic talk.

We also notice that none of the big criminals has been prosecuted, or even criticized. As time goes by, those who caused the crisis will be forgotten. We also note the lack of reform proposals to close the loopholes that allowed the smart crowd to leverage up and write bad debt.

At National Review, Kevin Williamson has a nice article on Real Estate Nation. Until we can arrive at some national consensus on housing policy, various special interest lobbies are going to fight to maintain special privileges that enrich them as they manipulate real estate. Reinflating the real estate bubble without reform means going through the same cycle all over again.

Globaiism isn’t working out too well for Britain’s banks. The Telegraph reports on a banker revolt in Britain over collecting taxes on American accounts for the IRS. Building that global financial machinery to ensnare everyone isn’t as easy as it looks.

The most amusing financial story occurred when Treasury Secretary Timothy Geithner traveled to China to assure the Chinese that their holdings in U.S. debt were safe. Geithner’s audience laughed at him.

“In his speech, Geithner renewed pledges that the Obama administration would cut its huge fiscal deficits and promised “very disciplined” future spending, possibly including reintroduction of pay-as-you-go budget rules instead of nonstop borrowing.”

Hmmm, why would the Obama administration decide to start being responsible now instead of being responsible a few months ago? We recently heard similar rhetoric from Governor Schwarzenegger, who said it was time to scrutinize spending carefully and make savings wherever possible. This simply indicates how irresponsible the government has been with our money.

If you are interested in discussion of financial news, The Big Picture discusses TARP repayment, Bank of America versus the Fed, commercial real estate foreclosures, debt statistics, foreclosure maps, General Motors’ bankruptcy, etc. from a logical critical perspective.

Washington’s blog has some interesting quotes on the global financial crisis. Entertaining.

OK, let’s get to the New World Order perspective. China, Japan, and the United States have been reflating the world economy by issuing liquidity swaps. World Politics Review tracks the loan amounts and the countries involved. We are sure the countries need the credit, but the important point is the competition involving liquidity swaps means China and Japan are serious about moving away from the dollar. And not just China and Japan, the whole rest of the world.

The value of the dollar is at center stage at this moment because the Federal Reserve and the Treasury are now in a bind. The U.S. Treasury has so much debt that each bond auction arouses speculation regarding investor support. The federal deficits are projected at over $1 trillion per year into the distant future. Will U.S. bonds run out of buyers?

The Federal Reserve’s policy of quantitative easing has not resulted in low interest rates. The Fed must choose between two alternatives, a declining dollar or higher interest rates. The bond vigilantes have recently forced higher interest rates across the spectrum. If the Fed cannot keep interest rates low, mortgage rates must rise, and economic recovery (reinflation) is threatened. But if the dollar falls, nations around the world (and investors inside the United States) are prepared to flee from the dollar for other assets. This would probably mean an end to the stock market rally in the United States and a big rise in inflation.

One advantage of these liquidity swaps is that Singapore and Korea do not have to rely on the International Monetary Fund for loans. Countries around the world are wise to IMF corruption and manipulation. This means, the G20 agreement bolstering the IMF as the lender of last resort is not going to hold together. Countries are going their own way, finding their own sources of loans independent of the global financial machinery. This can only be a good thing.

The world is looking for alternative stores of value. Gold, oil, the yen, the yuan, anywhere they can find it. This is good for the world and bad for the imperial globalist United States financial manipulators.

The article “China Is Now in Firm Control of U.S. Debt Markets” at SeekingAlpha is required reading for understanding the real situation and cutting through the Obama happy talk. As U.S. tax revenues decrease, the government is forced to send more money out of the country each month. This is an unsustainable situation that will lead to the bankruptcy of the U.S. government. Meanwhile, China is buying assets around the world with its profits. It is just a matter of time until China buys assets inside the United States.

The recent runup in oil prices is due to China’s purchases of oil assets, plus speculation by hedge funds, not increased global demand signaling economic recovery.

The U.S. Treasury needs to finance $1 trillion worth of debt each quarter. At the moment, demand is sufficient to sell these bonds, though yields may rise. What happens when the buyers don’t show up? Answer: a really nasty bond market crash, followed immediately by a stock market crash, accompanying a dollar crash.

The big event may be in our future. The governments, state and federal, simply have to stop deficit spending. Recall the rather simple conclusion from the Reason article cited at the beginning of this post. The federal government is in worse shape than California and should not be spending more to bail out the states. Now you have a better understanding of why this situation is so serious.

NWOU believes we are now entering a new stage of the global financial crisis, not exactly recovery but a more sober period in which we can evaluate the size of our predicament. We expect more reasoned criticism from all quarters, perhaps even from the Obama administration. Add your voice to the chorus. This is serious. Our Treasury has been emptied. Happy talk of a recovery is premature. More pain lies ahead as the pressure mounts on the Fed from the various interest groups affected by its policies. The Fed’s policy of quantitative easing has not worked to keep interest rates down. The rest of the world is laughing at the United States. Communist China is in control of the world economy. The slide downhill from here could occur very suddenly and very fast. The real issue in this debate is, who is going to bear the pain?

Let’s try to end on a lighter note. Parag Khanna at Foreign Policy has figured out that globalism might fail. His default alternative is a “new medievalism.” Funny phrase. He seems not to have noticed global Communism. Oh well, at least he’s not trying to prop up the global order. And, we’ve had enough Renaissance, thank you anyway, that’s what got us into this fix in the first place. Khanna probably thinks “Renaissance” is a placeholder for “scientific progress.” Actually, it’s a placeholder for “occult secret societies that want to rule the world.” Either way, we don’t need any more Renaissance. We need to escape from universalism and scientism in all its forms, and we’ll take a “new medievalism,” if only we could find it. Nice try, no cigar, read a little further.

Tags: Federal Reserve bank, global financial crisis, state budget deficits, Timothy Geithner in China, U.S.bond market

This entry was posted by Director on Thursday, June 11th, 2009 at 4:12 pm and is filed under California politics, Global Economy, U.S. Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.