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Fri Feb 24, 2012, 10:14 PM

 

Capital Account: Kleptocrat Carry-Trade & A Revolution Against Financial Occupation w/Gerald Celente



A US lawmaker is reportedly planning to introduce the "Sound Dollar Act" early next month. This is legislation that would move the federal reserve from its dual mandate of maintaining price stability (which is anathema to the dollar debasement that it creates through its massive money printing operations) and keeping unemployment low (which it has failed to do...curious...) to just promoting price stability. Hmmm...what would that mean for the Fed's unofficial mandate of trashing the dollar?

And Turkey, the fastest growing economy after China, is being penalized in the credit markets for failing to promote consumer savings, according to bloomberg. What? You mean savings matter!! That's amazing...ummm not to us it isn't. You can't have economic growth without savings, because you can't have investment without capital. Capital comes form savings, and growth comes from investment, but its shocking how many people think money "grows on tress." Can you blame them, when we have a serial money printer at the Federal Reserve, pushing us all into serfdom and neo-feudalism with a policy of perpetual bailouts and zero percent interest rates? Oligarchy here we come!

Finally, with central bank policies of the fed and ECB amounting to --trash for cash -- as economist David McWilliams puts it with his "Punk Economics: Lesson 2," turning "water into wine." These perpetual bailouts are nothing other than an institutional form of wealth transfer. They are nothing but wealth extraction, moving money from the bottom of society, to the top. The money changers. The banksters. The feudal lords. The money chieftains. Call them what you will. They are kleptocrats, and using compounding interest in order to pound society back into the feudal period of landless serfdom.

We speak with our guest, famed trends forecaster Gerald Celente about Greece, the global banking kleptocracy and the attempt by financial oligarchies to occupy the world using paper derivatives index to nothing but wealth extraction.

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Lowest Savings After Ireland Means No Upgrades: Turkey Credit

http://www.businessweek.com/news/2012-02-24/lowest-savings-after-ireland-means-no-upgrades-turkey-credit.html

(Bloomberg) -- Turkey, the fastest growing economy after China, is being penalized in the credit markets for its failure to promote consumer savings. While Turkey’s economy has grown at an average pace of 5.9 percent since 2002 and its bonds are showing the fastest recovery among emerging markets from last year’s rout, its credit ratings are stuck at the same level as Serbia and Guatemala, whose economies are about a twentieth its size. That’s costing the country about $8 million more for every $1 billion it borrows on international markets than Russia, where the bond market is half the size of Turkey’s, according to JPMorgan Chase & Co. EMBI indexes.

The main culprit is a savings rate estimated by the International Monetary Fund at less than 14 percent of gross domestic product, the lowest in the world for any economy larger than $100 billion except for Portugal, Ireland and Greece. An expansion in consumer lending last year of as much as 40 percent has increased indebtedness and expanded the current account deficit to $77 billion, or more than 10 percent of GDP. Goldman Sachs Group Inc. says Turkey is the most vulnerable economy in eastern Europe, the Middle East and Africa.

“Turkish households are increasingly becoming overstretched as the relationship between the pace of indebtedness and savings deteriorates,” Frank Gill, a director of sovereign ratings at Standard & Poor’s in London, said in response to e-mailed questions. “The rapid growth in consumer lending has partially contributed to the unsustainable widening of Turkey’s current account deficit, which is a risk to overall stability.”

Debt Like Jordan

S&P rates debt for Turkey, a European Union candidate, as junk at BB, on a par with Macedonia, Portugal and Jordan and one level above Mongolia and Vietnam. Russia is rated three levels above Turkey at BBB and Poland five levels above at A-. Fewer than 75,000 people in the country of 73 million, or 0.1 percent, account for 47 percent of the total deposits in the banking industry, according to data from the Banking Regulation and Supervision Agency in Ankara. Some 30 percent of loans go to people making less than $575 a month, and 55 percent to those earning less than $1,200 a month. Turkey’s average income per capita is around $10,000 a year, or $833 a month. “The savings rate is one of our most serious problems,” Yavuz Canevi, chairman of Turk Ekonomi Bankasi AS and former governor of the central bank, said in an interview at his office in Istanbul yesterday. “In the last 10 years, it came down from 20 percent to 12 percent, which is very alarming for a country like Turkey.”

snip

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$40 billion in new consumer debt taken on in November and December 2011

http://www.bloomberg.com/news/2012-02-07/u-s-consumer-credit-climbed-by-19-3b-in-dec-.html

Consumer borrowing in the U.S. rose more than forecast in December, driven by demand for auto and student loans. Credit increased by $19.3 billion to $2.5 trillion, Federal Reserve figures showed today in Washington. The gain topped the $7 billion median forecast of economists surveyed by Bloomberg News and followed a $20.4 billion advance the prior month.

snip

The median forecast was based on a survey of 37 economists. Estimates ranged from a decrease of $8 billion to an increase of $15 billion.

The back-to-back increase at the end of 2011 was the biggest since October-November 2001.

Non-revolving debt, including educational and auto loans increased by $16.6 billion in December, the biggest gain since November 2001, today’s report showed. The Fed’s report doesn’t track debt secured by real estate, such as home equity lines of credit.

Source:

http://www.federalreserve.gov/Releases/g19/current/

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That student loan number (which will keep growing as tuition prices surge) is a huge ticking time bomb that will explode into massive defaults, IMHO.

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