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I.M.F. Names Replacement as Chief Awaits Arraignment
Hours after its chief, Dominique Strauss-Kahn, was arrested in connection with the alleged sexual attack of a maid at a Midtown Manhattan hotel, the International Monetary Fundon Sunday named John Lipsky as acting managing director.
Mr. Lipsky, the I.M.F.’s first deputy managing director, is a former U.S. Treasury executive and onetime banker at JP Morgan. William Murray, an I.M.F. spokesman, said that Mr. Lipsky, who has been overseeing the logistics of the bailout of the Greek economy, would meet with members of the I.M.F. board in Washington later in the day, according to Reuters.
“In line with standard I.M.F. procedures, John Lipsky, first deputy managing director, is acting managing director while the M.D. is not in D.C.,” Mr. Murray said in a statement. “Mr. Lipsky will chair the informal Board session today.”
Mr. Strauss-Kahn, 62, was awaiting arraignment on Sunday afternoon in Manhattan. The New York Police Department formally arrested him at 2:15 that morning “on charges of criminal sexual act, attempted rape, and an unlawful imprisonment in connection with a sexual assault on a 32-year-old chambermaid in the luxury suite of a Midtown Manhattan hotel yesterday” about 1 p.m., Deputy Commissioner Paul J. Browne, the department’s chief spokesman, said.
Reached by telephone, Benjamin Brafman, a lawyer, said he would be representing Mr. Strauss-Kahn with William Taylor, a lawyer in
Washington.
“We have not yet been able to meet with our client and we may have more to say tomorrow,” said Mr. Brafman, who said he had been contacted Read more…
IMF bombshell: Age of America nears end: China’s economy will surpass the U.S. in 2016
For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.
The Obama deficit tour
The Wall Street Journal editorial page’s Steve Moore critiques the president’s speeches attacking Republican budget plans.
And it’s a lot closer than you may think.
According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.
Put that in your calendar.
It provides a painful context for the budget wrangling taking place in Washington, D.C., right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s hegemonic power.
According to the IMF forecast, whomever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy.
Most people aren’t prepared for this. They aren’t even aware it’s that close. Listen to experts of various stripes, and they will tell you Read more…
12 Warning Signs of U.S. Hyperinflation
One of the most frequently asked questions we receive at the National Inflation Association (NIA) is what warning signs will there be when hyperinflation is imminent. In our opinion, the majority of the warning signs that hyperinflation is imminent are already here today, but most Americans are failing to properly recognize them. NIA believes that there is a serious risk of hyperinflation breaking out as soon as the second half of this calendar year and that hyperinflation is almost guaranteed to occur by the end of this decade.
In our estimation, the most likely time frame for a full-fledged outbreak of hyperinflation is between the years 2013 and 2015. Americans who wait until 2013 to prepare, will most likely see the majority of their purchasing power wiped out. It is essential that all Americans begin preparing for hyperinflation immediately.
Here are NIA’s top 12 warning signs that hyperinflation is about to occur: Read more…
G.E.’s Strategies Let It Avoid Taxes Altogether
A PRESIDENT'S BUSINESS LIAISON In January, President Obama named Jeffrey R. Immelt, General Electric's chief executive, to head the President's Council on Jobs and Competitiveness. "He understands what it takes for America to compete in the global economy," Mr. Obama said.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Read more…
True Obama debt bigger than planet’s entire GDP
 President Obama |
As the Obama administration prepares to finance a Fiscal Year 2011 budget deficit expected to top $1.6 trillion, the American public is largely unaware that the true negative net worth of the federal government reached $76.3 trillion last year.
That figure was five times the 2010 gross domestic product of the United States and exceeded the estimated gross domestic product for the world by approximately $14.4 trillion.
According to the U.S. Department of Commerce Bureau of Economic Analysis, U.S. GDP for 2010 was $14.861 trillion. World GDP in 2010, according to the International Monetary Fund, was $61.936 trillion.
“As government obligations continue to spiral out of control and the U.S. government shows no willingness to make the magnitude of spending cuts required to return to fiscal responsible, the U.S. economy is headed to a great collapse coming in the form of a hyper-inflationary great Read more…
Tsunami of Inflation to Hit U.S. with Japan Crisis
The earthquake, tsunami, and nuclear disaster that hit Japan this past week and the destruction that it caused is nothing compared to the tsunami of inflation that will soon hit the U.S. as a result of this crisis. A tsunami of inflation in the U.S. will mean a complete collapse of our monetary system, which could lead to millions of deaths due to a lack of food and heat. 44 million Americans are now dependent on food stamps, but when the U.S. dollar becomes worthless as a result of hyperinflation, the government will no longer have the power to support these Americans and many of them will simply starve to death.
Japan’s citizens were smart enough to save up $885.9 billion in U.S. treasuries to spend in a situation like it finds itself in today. The U.S. has no such savings and is the world’s largest Read more…
US Treasurys Dumped, Pimco Sees Value In Emerging-Market Bonds
NEW YORK (Dow Jones)–The valuations on U.S. Treasurys are not attractive in a historical context and Pacific Investment Management Co. is moving money toward emerging-market debt, said the fund’s founder Bill Gross in an interview on Thursday with CNBC.
Reports came out on Thursday that the bond-fund giant had dumped all of its holdings of U.S. government bonds. Gross said better valuations can be found elsewhere, where yields are not artificially boost by Federal Reserve purchasing.
“The overvaluation [in Treasurys] has been dependent on the purchasing power of the Fed,” said Gross, who does not believe there will be a third round of “quantitative easing.”
Pimco did not participate in Thursday’s 30-year auction nor Wednesday’s 10-year auction, Gross said, though both were considered well-received.
The fund still owns about Read more…
The Coming Rout QE3
There’s a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%. The trigger will be the cessation of QE II and a multi-month pause before QE III.
This is a reversal in my thinking from the outright inflationary ‘buy with both hands’ bent that I have held for the past two years. Even though it’s quite a speculative analysis at this early stage, it is a possibility that we must consider.
Important note: This is a short-term scenario that stems from my trading days, so if you are a long-term holder of a core position in gold and silver, as am I, nothing has changed in my extended outlook for these metals. The fiscal and monetary path we are on has a very high likelihood of failure over the coming decade, and I see nothing that shakes that view.
But over the next 3-6 months, I have a few specific concerns.
It’s time to build on the idea I planted in the Insider article entitled Blame the Victim (February 28, 2011) where I speculated on the idea that the Fed might be forced to end its Read more…
Middle East Meltdown Could Mean Oil at $300 a Barrel, Pump Prices of $9.57 a Gallon
moneymorning.com [Editor’s Note: U.S. oil prices yesterday (Tuesday) hit their highest levels since September 2008 as investors reacted to fears that Middle East tumult would spread from Libya to such key Organization of Petroleum Exporting Countries (OPEC) as Iran and Saudi Arabia. But never fear: Even if the Middle East melts down and oil prices soar, there are moves you can make to hedge away your risk. We have two suggestions for you here.] By Martin Hutchinson, Contributing Editor, Money Morning The unrest in the Middle East oil patch is roiling the global oil markets on an almost daily basis. 
The events in Egypt, Libya, Saudi Arabia, Oman and other countries are also forcing us to ask that long-dreaded question: What happens if the countries throughout the Middle East region fall to radical governments? The answer is both stunning and surprising. In an absolute worst-case scenario – if the entire Middle East falls under radical control – we could be looking at $300-a-barrel oil and pump prices of $9.57 a gallon. Definitely a stunner. Here’s the surprise: Even such a worst-case outcome would Read more…
Cables show China used debt holdings to press US
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| © AFP/File |
WASHINGTON (AFP) – Leaked diplomatic cables vividly show China’s willingness to translate its massive holdings of US debt into political influence on issues ranging from Taiwan’s sovereignty to Washington’s financial policy.
China’s clout — gleaned from its nearly $900 billion stack of US debt — has been widely commented on in the United States, but sensitive cables show just how much influence Beijing has and how keen Washington is to address its rival’s concerns.
An October 2008 cable, released by WikiLeaks, showed a senior Chinese official linking questions about much-needed Chinese investment to sensitive Read more…
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