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> Collapse of U.S. Economy Imminent

25 January 2006, 01:56

This is the result of the artificial manipulating of economy since 2000. Feds hold a large quantity of real estates in the case. To keep the value of these estates, they keep the interest rate low so you all have seen an booming housing market. (Because the mortgage rate is low) The market thus lose the function of natural adjustment and reach its dangerous end.

When the dollar is at an unpractical rate for years and debt reaches its historical high, a collapse is inevitable. Beware this government will activate a "terror attack" in the name of Al Qaida. To blame the coming economic crisis to terrorists. The recent Bin Laden’s tape is part of this plot. (to justify the "terror attack" to Al Qaida. Here are messages I wrote about it five months ago.

331. Interest rate (8/2/05)

At first, I thought the "terror attack:" on US would take place in early August. Because Feds arranged a trip for my relatives at that time. The trip will cover New York and Canada from 8/6 to 8/13. Anytime if possible, Feds always arranged a trip in the case because it’s easy to plant to arrest during a trip or murder by an accident. The latest travel Feds arranged was in April. In that plot, H.A. gave a final date to fix garage door on 4/17 which I viewed as action date of Feds. It coincides with the return date of my relatives. That China trip took almost one month vacation date on my relatives so I thought there would be no more trip for them this year. But when Feds needs it, people have to obey, so do the companies they work for. It reflects the eagerness of Feds. (When I use the word "Feds", I mean D.O.J. and its accessories FBI, DEA... , not Federal Reserve.)

Why pick up this time? Because on 8/9, Federal Reserve likely will once again raise the bench interest rate. As I have said, Feds bought a lot of houses in my case, so they desperately try to make the interest rate low to keep the house value high.

What did they do to keep the interest rate low?

1. Intimidation on financial group not to raise the rate too fast. A trick Feds is good at. Despite the covert intimidation, there was an open one in last August(2004) when Feds raised alert of certain financial area to orange code. When people doubted, they said it was from a seized computer of Al Qaida. The seized Al Qaida was finally proved an informant of Feds.

As a result, Federal Reserve collaborated. Greenspan dropped the interest rates from 6.5% to 1.75% in 2001. (A 4.75 drop in 12 months) House market boosted. Now the economic situation forces Federal Reserve to raise the interest rate to anti inflation and housing market balloon and maintain dollar from collapsing. Greenspan raised the rate in a measured (stagnant) step. (A raise of 2.25 in 12 months from 1% to 3.25%)

2. To reduce the employment. A high employment means a hot economy that enterprises will chase capital investment to deal with the increased wage, raw material etc. That will significantly push up the interest rate. .

Bush administration carries out a weak dollar policy which makes merchandise made in US cheaper to the foreign buyers. Dollar depreciates almost 1/3 to Euro and 20% to Japanese Yuen. Bush also cut the tax to let people have more money to spend. (It’s a trick though. He lets people spend on their debt. He has a historical budget deficit. People have to pay off the debt later by paying more tax)

Do these policies work? Yes, it creates demand but does little to boost employment. Because Feds tried their best to reduce the employment. How?

(1) By outsourcing jobs. When it was criticized, they threw out a strange theory that outsourcing will benefit US economy in future.

(2) Stop hiring new workers. Big firms did not hire workers when demand increased. Same workers have to do more job. The result you could see from media in later 2003. When they beat the drum to say "Growth is now super-super strong compared to super strong,’’, "U.S. 3rd-Qtr GDP Grew at 8.2% Rate, Fastest Since ’84". They never mentioned about the jobs. They only said the productivity is increased by a double digit. In another word, 10 workers must do the job originally 11 workers did. For this phenomenon, they invent a new word:"Jobless recovery".

(3) Lay off working people.
Jobless recovery went into year2004. It was an election year. Bush’s economic advisers predicted in early February that the US economy would add 2.6 million jobs in 2004. But that was against Feds’ interest. Then we saw, "MCI to slash 7500 jobs"(5/11/04), "Dupont will lay off at least 2500" (4/9) "Seagate to cut 2,940 jobs" (May or June 04) "AT&T to cut 7,500 more jobs"(10/8) ..... At last, Bush was unable to make it a positive topic in his election campaign.

The explanation from Greenspan was that enterprises still lacked of confidence. That in this economy recovery, enterprises had an unusual conservative attitude to increase new capital investment and hiring more people.

Rare people know all these problem were caused by Feds. Bush’s election, public’s interest are out of consideration. Feds’ interest, how small it is, is always at first place. They control CEO of big firms.(see "291. CEO and company (2/14/05)" and #292) So by outsourcing, controlling hiring and spending, Feds can handle the process of economy. Experts are confusing with the development of interest rate and over-heated housing market. They will understand it if they view it from another angle.

And now you may understand why China can maintain its currency exchange rate without being punished. It’s all about inflation. A low inflation will help the interest rate low. That’s what Feds want.