Was immer die Politik in Washington nun unternimmt: Es ist eine klassische Insolvenzverschleppung.
Regardless of what politicians in Washington do: It is a classic bankruptcy delay.
Die größte Industrie-Nation der Welt wandelt damit auf den Spuren Griechenlands.
The largest industrial nation in the world is changing to follow the footsteps of Greece.
Die Auswirkungen auf die Psychologie der Märkte dürften von den zerstrittenen Parteien übersehen worden seien.
The impact on the psychology of the markets is likely being overlooked by the conflicting parties
Wenn die Banken jetzt schon Angst vor einem Bank-Run haben, ist das ein äußerst bedenkliches Signal für alle Investoren. Denn auch die US-Notenbank Federal Reserve ist wegen der massiven Aufkäufe von Staatsanleihen faktisch insolvent. Ihre aufgeblähte Bilanz-Summe ist eine Zeitbombe, die es ihr schwer macht, Obama in der Not zu helfen.
If the banks are already fearing a bank-run, then such is an extremely serious signal for investors since the Federal Reserve Bank Note is factually insolvent due to the massive purchases of government bonds. Its bloated balance sheet is a time bomb which complicates its ability to help Obama.
Das System nähert sich seinem Ende.
The system is nearing its end.
High Noon in Washington – und kein Retter in Sicht.
High noon in Washington – and no savior in sight.
Translated from Deutsch Türkische Nachrichten 04.10.13, 10:12
If this is what they really believe then why is anyone even thinking of going along with FATCA. It’s of no benefit even to the U.S.
I don’t see chatter on the markets, or talk of massive movements up or down. It’s pretty weird that markets jump 5% based upon a quarterly jobless report varying (manipulated) by 0,2%. Gold is down. It seems as if every market wants to carry a happy story while the US is shutdown.
Fresh in the press:
Not sure how it’s going to end up. Obama declined the House republicans’ offer and Republicans in the house say they won’t accept anything deal that might be cooked up in the senate if they see that as “surrender”.
They don’t believe or see the horror scenario that is being told. They’d be happy not to raise the debt ceiling to force cuts. That is democracy hijacking. The US is not a democracy anymore.
I am surprised that we don’t hear about demonstrations in the street. Either the media is not covering them, there aren’t many or the people don’t care. But you would think that a week before crashing the entire world’ economy, it would be time for the American people to start demonstrating and ask for their government to show common sense.
I am also surprised that by now, the other 2 credit agencies who haven’t downgraded the US yet haven’t done so. Maybe this week. The last time, the one that did waited till after the crisis. I think they should do it now. It would be deserved and an incentive to act.
So sad to see this country self destruct.
@AtticusinCanada
Fair question. I guess it just means that politicians and those in financial markets see things differently.
On a somewhat related subject, The Pivot to Asia by the U.S. may not be going so wellgot my attention this morning.
I have been following this TPP trade negotiation for a while, as it is one issue that gets opposition in NZ, while FATCA IGAs goes unnoticed. I have often thought it would be good if we could tie FATCA IGAs to TPP opposition in the Pacific, as a strategy to get attention. Even though TPP negotiations operates in secret, it does make the media, unlike FATCA IGAs.
I recommend watching the video embedded in this blog. This comment stood out for me… Sound familiar? 2:47
FATCA is of course even more ambitious, as it wants to take the U.S System and make it the “gold standard” across the globe”, or so says Robert Stack,
Also, note the comments and stories about the establishment of currency clearing houses to bypass the U.S. Dollar, the international reserve currency. Australia and China have already decided to cut out the $$$ in their trade agreements, and bit by bit, with separate agreements being negotiated between various Asian countries and China, the leverage of the reserve currency that the US. is using to hold countries hostage to FATCA is being eroded.
With the U.S. undermining itself with the DC follies, we maybe seeing more stories like this in the future.
Yuan clearing bank in sight in Thailand
China looking at direct yuan trade with Australian dollar
Chinese Yuan Now Trading Against Aussie and Canada
China and Australia start direct swapping of currency
Simply raising the US debt limit will not eliminate the crushing reality of > $16 trillion in US govt. debt.
For now, Federal Reserve banks Quantitative Easing policies have made servicing that debt as easy as possible, with interest rates near zero. The Fed kept short-term interest rates near zero since December 2008 and has been buying $85 billion in Treasuries and housing-backed securities EACH MONTH to encourage investment and hiring. This created the steady supply of cheap and easy US money keeping world markets buoyant.
If the US can’t service its debt, who gets the haircut?
The US Federal Reserve bank holds > $1.8 trillion of US debt; it bought it by issuing more money under the Quantitative Easing programs. China has more than $1 trillion in US debt.
China owns about 22% of the total of the $5.7 trillion in US govt. debt held by foreign countries. The rest of the >$16 trillion US debt is owned by either by the U.S. government, or by the American people themselves through various other agencies, pension funds, mutual funds, insurance plans, banks, etc.
So, outside of the Fed, US government itself holds about $5 trillion in it own debt! Much of that is held by US Social Security – about $2.8 trillion.
Finance Minister Jim Flaherty said he’s not a supporter of the U.S. Federal Reserve’s bond-purchase program and thinks the U.S. should exit from quantitative easing as “quickly as they can.”
“I don’t think they should have done it in the first place,” Flaherty said in Washington at the G20 / IMF meeting a few days ago. “Now that they’ve done it, they should get out of it as quickly as they can.”
Fat chance…
Bonus points question: what effect will FATCA have on the world’s appetite for US debt?
@Mark Twain
The silence is eerie. It feels somewhat how the crew of the Titanic might have felt when they realized they were on a collision course with an iceberg, the iceberg having many parallels with congress – cold with slow and random movements.
Atticus, with the USD being the world’s reserve currency and the USG being the current military world power, no one can object. Not yet. And many other countries have economies that are tied up with, dependent on or in some way compromised by the US’s current economic and monetary woes that when the US cracks open like a rotten egg – it’s going to leave marks on everyone everywhere. In Canada, we are particularly caught because our economy is so dependent on theirs … something that we shouldn’t have allowed to happen and that we aren’t yet in a position to walk away from.
Chris, the credit agencies act after the fact because they are afraid of being a tipping point that causes another economic nightmare. The whole crappy system should have been allowed to sink in 2008 and we should have all taken our lumps then because it will be even worse now for those who haven’t taken proactive steps though just what you can realistically do when the country threatening the entire world’s economy is the reserve currency, I am not certain.
One thing is clear, if the USG again pulls a midnight rabbit out of a hat, they will only be pushing this crisis off a few months at best and we will have to go through this again before the year is over.
Oh, and Chris? Americans aren’t going to take to the streets until after the fact either because they have no real idea of the danger or just how badly they are being governed. They have to be one of the laziest and least involved electorates on the planet because people outside their country know more about US history and current events/politics than they do.
@Wondering
Thanks for laying that out. I have understood the nature of the debt and Fed Reserve QE2, but the man on the street, as YodaGirl says, “one of the laziest and least involved electorates on the planet” understand these facts less they they understand FATCA which is zilch!
@ Chris
The MSM isn’t covering it much (unless in a negative light) but American truckers are doing a run on DC this weekend. The truckers website (rideforconstitution.org) doesn’t download for me but alternative news sites (like beforeitsnews.com) are doing updates. Americans are waking up and they still have the will to protest. More is needed though.
Sunday, October 13, 2013
http://beforeitsnews.com/alternative/2013/10/negative-us-media-coverage-fails-to-stop-constitutional-truckers-and-veterans-in-dc-2792382.html
“From 8am EST, after a man with wire cutters cut through government-imposed barriers at the war monument, thousands of protesters (photo. left) and US Veteran supporters entered the World War II Memorial, with more pouring in. Demonstrators were joined at 9:30am EST by a mile long convoy of #T2SDA + #T4VETS big rig trucks, four-wheel drive and motor vehicles. Despite a blackout in US mainstream media coverage, independent U Stream live video feeds have been up documenting events on the ground there.”
“At 9:00am EST, Metropolitan police vehicles reported to be blocking streets in the immediate area around the WWII Memorial, but no reports of harassment of demonstrators by law enforcement as of that time.”
“According to one veteran on site, former US Marine Will Gonzalez, ‘Police are helping block the roads for us. They are definitely supporting us. There are at least a few hundred people walking from the WWII memorial towards the White House.’”
@Just Me
Sadly, the US govt shutdown prevented the French Finance Minister from signing off on a FATCA IGA. How sweet is that irony.
Did US inability to sign a self-serving deal of its own making somehow warn France to reconsider the wisdom of entering the agreement? No, the French Finance minister simply dismissed the possibility that the budget battle would force the United States into default, stating “A US payment default would be so serious that it is improbable, even impossible.”
Apparently, he believes that because events are “serious” they are also “impossible”! What about the Titanic sinking, genocide in Rwanda, the Holocaust, nerve gas in Syria? Those were real serious – and yet they somehow still happened.
It feels as if no effort is being spared – including the mindless promotion of FATCA – to inflict serious collateral damage upon the global economy.
BTW, one of Canada’s big exports to the US is the IT implementation of Obamacare by CGI. Yes, the Canadian company CGI is the main IT supplier; so if Obamacare crashes, blame Canada!
“The primary Obamacare exchange contract went to the CGI Group, a Canadian consulting company that has also played a role in administering Canada’s single-payer health care system. CGI has been awarded at least $88 million by CMS to build the federal exchange and provide related technical support.”
– Washington Post
http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/09/heres-everything-you-need-to-know-about-obamacares-error-plagued-web-sites/
“Canadian provincial health officials last year fired the parent company of CGI Federal, the prime contractor for the problem-plagued Obamacare health exchange websites, the Washington Examiner has learned. CGI Federal’s parent company, Montreal-based CGI Group, was officially terminated in September 2012 by an Ontario government health agency after the firm missed three years of deadlines and failed to deliver the province’s flagship online medical registry.”
– Washington Examiner
http://www.wnd.com/2013/10/canadian-officials-fired-it-firm-behind-obamacare-website/#T6RMo3cYhwD6Gu41.99
I heart CGI’s incompetence. 🙂 This is one time I’m happy to hear “Blame Canada”.
I returned to the US for a 3 week visit yesterday – and it is a very strange experience – presenting my US passport and being assimilated back into the Borg. Having said this, once back and assimilated, the experience was like I never left – people friendly, clubs/pubs and shopping. A world away from all of these FATCA issues and living outside the US – in fact, a feeling of all of ‘those’ problems so far away. No one has a clue here what the US government is doing. When I raise the possibility of giving up my US citizenship and the reasons, I am looked upon as crazy.
Here is another thought for discussion and consideration – it seems to me that any acceleration of CLNs/renunciations at consulates and the US Embassy in Canada (i.e. making it easier to get appointments) could well be a planned strategy of the US to faciliate FATCA in Canada. The fewer US Persons are in Canada, the smaller the issue/problem for the Canadian government in signing an IGA. The same is true elsewhere but in particular Canada because it is such a large number of individuals.
Yes, indeed on ObamaCare. I think we are seeing the future of the FATCA rollout and compliance…
The NYTimes, not exactly known as an opponent of Health Care reform had this to say today…
It is a 3rd world experience…
Also now notice who the Administration is turning to for help…. Booz Allen Hamilton. Remember that name? Yup, it is who Snowden worked for! Oh, the irony… The Contractors just keep rolling along milking the cow dry…
In looking at the story on CGI being fired by Canada… I noticed this…
John McAfee predicts hackers will empty Obamacare enrollees’ bank accounts
Another future for FATCA auto exchanges..
@Just Me,
Thanks for that about the dangers of hackers and Obamacare as set up – and the parallels with datamining and the dangers of our banking and personal data being compromised via FATCA.
Had a huge hysterical laugh when I found out that the US hired the same company that was behind the failure of ehealth in Ontario http://washingtonexaminer.com/canadian-officials-fired-it-firm-behind-troubled-obamacare-website/article/2537101 http://washingtonexaminer.com/canadian-firm-hired-to-build-troubled-obamacare-exchanges/article/2536805
What kind of due diligence did they do before awarding the contract? The media coverage of the ehealth scandal was huge here. It is not like the Canadian media stories would have been difficult to find with a simple Google search.
“…………..The CMS officials refused to say if federal officials knew of its parent company’s IT failure in Canada when awarding the six contracts.CGI Federal built Obamacare’s Healthcare.gov, which went live Oct. 1 but has since experienced multiple technical problems, including crashes, refusal to load and sign-on, or to provide accurate information.
Read more at http://www.liveleak.com/view?i=dc8_1381506198#dy2d1GUlXksCPg7d.99”
Another reason not to keep US citizenship – double jeopardy – we can pay Canadian taxes and have them wasted by our government here at home – ex. via the ehealth fiasco (or the gas plant scandal), and at the same time be screwed by the Obamacare provisions that include those abroad – who wouldn’t even be able to use Obamacare, and already pay for healthcare where they actually live – outside the US. And we can have our personal data compromised by the government of both Canada and the US.
What irony – the waste of our taxes – to pay for parallel failures of governments both at home in Canada AND simultaneously via the US taxation of those abroad in the same area of healthcare; via the failures of ehealth in (Ontario) Canada AND Obamacare taxes on those living abroad….. and they both hired the same company.
Great example to use to illustrate our complaints about US double taxation when speaking with Canadians.
@Badger….
“What kind of due diligence did they do before awarding the contract?
Obviously none. Ideologues don’t bother with the nitty gritty details. Also note that Wondering also posted that link…
@Badger…
Just saw this, and while it is off subject, thought it might interest you…
From The Economist….American-style anti-government eccentrics have recently taken root in Canada http://econ.st/19qTxBr
@Badger
So, Centers for Medicare and Medicaid Services awarded IT contracts worth $87 million to CGI for Obamacare website work…yet they now refuse to claim knowledge of CGI’s large, recent and very public Ontario eHealth fiasco: a project worth more than $40 million, that Ontario has refused to pay for, and is now subject of a lawsuit!
Who has the words to describe this quality of leadership?
Possibly Henry V’s steadfast Duke of Exeter, addressing the feckless Dauphin:
“Scorn and defiance; slight regard, contempt…”
De-Americanized’ World Needed After US Shutdown: China Media
Beijing. While US politicians grapple with how to reopen their shuttered government and avoid a potentially disastrous default on their debt, the world should consider “de-Americanizing,” a commentary on China’s official news agency said Sunday.
“As US politicians of both political parties [fail to find a] viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” the commentary on state news agency Xinhua said.
In a lengthy polemic against American hegemony since World War two, it added: “Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated.
“A new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.”
From the WSJ today… subscription required
With Standoff Unresolved, Banks Shed Short-Term Treasury Bills
@Just Me
RE “A De-Americanized World” in Xinhua
In the public behavior of Washington’s politicians, their enablers and beneficiaries, and those within their sphere of influence, a threshold has been breached. They no longer even bother to maintain a facade of competence or semblance of reason. No statement is too preposterous or manifestly false. Shameless posturing, blatant falsehoods, mindless platitudes.
That’s my take-away from the comments and articles in this thread above, especially US refusal to discuss prior knowledge of the CGi vs Government of Ontario eHealth non-delivery matter and the French Finance minister basically shrugging off Treasury’s inability to sign off on their its FATCA deal.
@wondering…
Good point!
US cracking down on international wire transfers and check cashing against US currency.
Here in Israel about 10 days ago it became impossible to cash US checks at any of the money changers in the country. There was no advance warning. Apparently the US govt. shut down the clearing house which handles all of these transactions due to increased regulation.
Today I became aware that Chase Manhattan Bank (virtually an arm of the US government) has notified many business customers with small or medium sized business accounts that they will no longer be able to send international wire transfers (some are prevented from domestic wires as well) and that they will have a cap of $50,000 per month for all account activity. Deposits, withdrawals, ATMs, cashiers checks etc. etc.
To see examples of the letters from chase look for the articles post at Drudge Report.
Which is why people outside the USA should not maintain any accounts there. They are not safe. It’s time that people started “cracking down” on the USA by divesting all funds.