Party like 1999 and 2007; Worldwide currencies war officially begun in September 2010??

2 year anniversary of the near collapse of the US financial system, (Two 500 billions dollars withdrew in the money market fund in less than 30 minutes in October 2008), all the bailouts, government sponsored program, obama stimulus acts and qualitative easing (in laymen term, printing money out of thin air), nothing significant has changed with trillions of dollars being pumped into the economy.

Short Recaps from all these program:

2008 Bush Stimulus $300 to each taxpayer from Treasury, Bear Stearn 30 billions backstops from government sponsored JP Morgan. 2008 Fannie Mae and Freddie Mac 100 billions rescues, AIG 180 billions bailouts, the GM Chrysler Ford bailouts, the 770 billions TARP bailouts, Obama Stimulus 900 billions, Uncle Benny QE I, Cash for Clunker, $8,000 tax credits, Uncle Benny QE II August 2010. ( I cannot name them all, just too many in the past 24 months)

I am not an economist, and I do not have a PHD. just do the math.
If we tallies all these packages, $3 trillions committed, but the main street economy growth is still slow. Let say 3% growth GDP with 2% being pumped by governments and taxpayers. So, we are looking at 1% growth.

Bottom line; the economy is still in sluggish mode and needs more demand from consumers and private sectors to boost recovery back to 2006 – 2007 level. The current valuation of stocks, bonds and commodities are in bubble level.

Here are the results/facts in the market place right now:

-The Dow ran up 1000 pts from recent July low to current level near 11,000.
-US dollar purchasing power losts 6.5% in September. Annualized rate of 78% decline.
-US 10 year note yield at all time low. 2.37%
-Uncle Benny Federal Reserve rate at near 0% ;
-USD/Yen rate: with Japanese central banks intervention, it’s still trading near the 15 year high against the USD. Japan lowered the rate again to zero.
-Gold, silver, platinum all trading at near historical high. Gold all time high. Silver 30 year high.
-Chinese yuan exchange rate at all time high against USD and Euro.
-China is buying Yen to prevent the cheap yen export in the globalized trade environment.

So, in economic 101, everything’s price went up while the US dollar index is heading south. We are in the uncharted territory, only happened first time ever in history that means money printing to suppress the natural cycles of the market by the Uncle Benny Federal Reserve. We are steps closer to possible major currencies war.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8045133/IMF-chief-fears-risk-of-currency-war-after-Japans-zero-interest-rate-move.html


Per analysis by Ticker Forum, one of the original tea party movement members, Karl Denninger, the big money bonds players are pricing US 2 and 10 year note yield in a serious deflationary environment in the future. This yield is the leading indicator of the future stock market valuation. (the lower the yield, the lower the valuation of the stock market) just look at the 2000 and 2007 movement, you would notice the difference.

“The bigger the top, the bigger the drop”

let the pundits at CNBC and Bloomberg continue pumping more stocks and about federal reserve led 'money printing recovery'. Throughout history, printing money will not lead to a prosperous ending. Just look at the 1920s Germany and 1990s Japan. One ended in hyperinflation currency collapse while electing a future warlord dictator and the other has been in recession almost 20 years with its stock market index trading at 75% off from the 1989 peak.