Some Aussie fool was scammed by one of those Nigerian 419 scammers.
I have little sympathy for a guy who has given $1.7m to 419 scammers. Ridiculous. He should have checked Ebola Monkey Man, an hilarious site by a guy who takes on Nigerian scammers – and wins.
This article is simply HILARIOUS!!!!!!!!
Cr Moore has said she wants to encourage a more cosmopolitan Melbourne-feel for the city, but Mr Thorpe, a gruff, straight-talking publican of old, views these Melbourne types with deep suspicion.
“People can sit down, talk about history, chew the fat and gaze into each others eyes and all this sort of baloney but it’s pie in the sky stuff,” he said. “That’s not what Sydney wants.”
Hi kids,
It’s been a while. Sorry. I’ve been flat out. I apologise if my first post in nearly a month is going to be so boring, but it’s VERY important. More important than that rubbish excuse for a Premier Steve Bracks and his useless sidekick John Thwaites resigning only eight months after an election.
More important than the sackings of Denis Pagan and Kevin Sheedy. Good riddance to ‘em both.
Yep. It’s that important. This is about the sacking of the US dollar.
You see for years, the US economy has bubbling away with a triple deficit syndrome. A deficit in Government spending, that is is spends a hell of a lot more than it earns in taxes. A deficit also in trade, where the US imports a hell of a lot more than it sells. A deficit finally in capital – it has such a low savings rate it has to borrow from overseas to fund purchases.
Three deficits. For years this hasn’t been a problem. The US economy hasn’t been too healthy, but it’s been OK. People have spent money as always, importing goods and like by borrowing mainly from Asia. And considering most of those goods are MADE in Asia also, countries like Japan, China and South Korea have been more than happy to lend the US money at stupidly low rates, just so that the US “consumption machine” rolls on.
The big difference in the US is this: of all of the money being borrowed from the Asian countries by US consumers, consumption makes up a massive percentage. Basically, people are borrowing and spending it on iPods, on toys, plastic bags, petrol, plasma TVs – consumable items. Where this is a problem is that many or most other borrowing nations borrow and spend a larger percentage of it on assets – housing, shares, business investment – which provide a return, the US consumers have been borrowing to fund lifestyle. The Asian treasuries love it – they’re lending cheap money to the US so that the Yanks can spend it on cheap Asian products!
There are only a few blunt tools the US Government can use to fix this. It may encourage savings instead of consumption, it may provide incentives for housing investment or for superannuation, it may even raise interest rates/slow money supply growth to discourage careless consumption – but with investment borrowing so low, it would do more harm than good. It’s not an ideal position to be in. Further, of the investment borrowings, much of it is being used for speculative investment. The soon to be Rupert Murdoch’s Wall Street Journal comment that “So-called margin debt, a broad measure of leverage, jumped 11% to US$353 billion at the NYSE in May, up from nearly US$318 billion in April”. Yep, by this one measure, Americans borrowed an extra $35 BILLION in ONE MONTH to INVEST, NAY, SPECULATE ON FINANCIAL MARKETS. Sorry to scream, but it’s quite a lot of debt growth in one month, no?
Where it starts to become a little tricky is when the Government itself goes down that same path. The US Government for years has been borrowing massive amounts of money for policy initiatives, one of the most expensive being the military operations in Iraq and Afghanistan. The Government itself has been spending borrowed money on “consuming” – non-investment, non-infrastructure development.
Now, all of this has been carrying on for years and it’s not been a problem. The reason is simple – Asian Government are more than happy to take a miserable interest rate on US loans because all of that US consumption ensures their factories are booming. Win-win.
However in the last few days we’ve seen something of an incident which could spell the end of the debt-binge in the US. There have been a number of defaults on major US housing lenders. People who are now thinking – do I really want to put my money into something which is so bad, where the return is so low? Those decisions have led to a mini-credit crunch, which has reverberated around the markets globally. All of a sudden, these few small incidents have reminded people that maybe their big loan to the Yanks might be a bit shaky – that maybe all of this spending on consumables is going to end in tears one day and the Yanks might have trouble paying back the rest of the world. Further, all of the US dollar denominated debt assets may decline, which would be a very, very nasty kick in the pants for those Asian countries who hold trillions of dollars of US denominated debt assets.
So what does this mean? If people stop lending to the US, what happens? Well the question is – will they stop lending to the US? Keep your eyes peeled for any shift from the Asian treasuries. If the Chinese, who hold over $US1.2 TRILLION in US debt, or the Japs, who hold over $US614 BILLION in US debt, decide they have enough – their piles of US dollar debt assets are worth less because the US dollar is shrinking and they don’t want to lend any more because it is too risky, then the US will have to go to other existing debtor countries like Germany, or oil exporting nations such as Saudi Arabia, India, Russia or the UAE and beg for dollars. The pressure on those countries will be too much, thus the US dollar will drop like a stone until the “price” of the dollar is enough for the market to bear. Residents and investors of these countries will then find US assets, big name US companies too cheap to pass on. China, India, Russia and even Australia, with our oceans of superannuation savings and Future Fund, will buy US assets like it’s going out of style. Unless of course the Yanks get nationalistic like they did when Dubai Parts Co. wanted to buy a couple of US ports and were rejected in Congress.
In the US, the credit crunch will mean unsold homes will remain empty, weighing down housing markets. People who have borrowed money to buy a house (and remember, because the average American has ZERO savings, most of those borrowings equal the value of the house) will find their mortgage will be worth more than their house – so FORECLOSURE IT IS!
Those still in their homes, leveraged to the gills, will cut back on their consumption. Not only will the US dollar be in decline, which makes it harder for them to import goods, but their consumption will shrivel as they try and put all of their money into paying back their bank, thus Asian factories will slow, growth estimates and forward P/Es across the world will be knocked out, sharemarkets will retreat, banks won’t be able to securitise debt as easily so will internalise their debt, utilising valuable free cash – a mini-credit crunch, consumption decline and, well, possibly a major US recession with the rest of the world feeling pretty shitty at the same time.
As a result, the US may well be forced to take some rash economic medicine. No wars (things are looking much better in Iraq), no consumption, managing debt, shifting habits. Asian economies won’t like it. Pretty much every other economy won’t like it – because while a re-adjustment will be good for everyone, a major US recession is good for no-one!
So, for the next few weeks and months – keep your eye on Asia. It will hold the key to the short-medium term future of the US. And us. And remember, in times of crisis, CASH (and precious metals such as gold) IS KING.
P.S.: I’ll be shocked if Aussie interest rates go up next week. Completely shocked.
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