A New Trick

This week the focus has been about the road to Socialism, a disastrous ride from a free market system to one that only a very small group of people have control over everything. Everyone else is there to work the system. As part of this, there is no more ownership of private property. Americans, whether they are aware or not, are well on their way down this road. The internet has certainly changed the way society works, because information passes much more freely than corporate controlled media. This may be the only vehicle left to stop the US from going down that road to Socialism.

That being said, the manipulators do not want a total breakdown of the system. If that happens, too many things are unpredictable such as a revolution. They slowly and methodically control the movements of the economies in their favor, so that they can reap the benefits and have more power and control.

This week has seen some truly remarkable occurrences in the financial markets. To me, this is clear evidence that the manipulators are still calling the shots. Going back to the post on Friday, August 1, 2008 (The Government's Answer), the US banking industry is on the brink of financial collapse. With the bank failure of IndyMac, the insolvency pressures on Fannie Mae and Freddie Mac, and the SEC's decision to prohibit the naked short selling of 17 high profile financial institutions, all of these factors signify that they are losing control on the system. The financial 'wind shear' of inflation (rising prices) and deflation (shortage of liquidity due to the credit crunch) was threatening to tear the economy to pieces.

So, they come up with a new trick. No longer can they play games with the federal funds interest rate by the Federal Reserve (currently at 2%, the lowest since 2004), they began to play more with the price of oil to affect the economy and the global currencies. I ask you, what has transpired in the last three weeks that would cause oil to drop from $147 all the way to $115?

[If the Fed lowers the interest rate, that would bring more inflationary pressures on the economy. If the Fed raises the interest rate, the decreased liquidity could stall the economy completely, compounded with the credit crunch and the depressed real estate market.]

Crude oil fell to a three-month low, dropping to $115.15 per barrel. This eases the inflationary pressures on the economy and in effect, offers all mobile Americans an incentive stimulus package to continue spending. Crude oil, precious metals and crop prices all fell yesterday as the dollar climbed, reducing the appeal of commodities as a currency hedge. Oil dropped to a low of $115.06 a barrel since touching the record of $147.27 on July 11. Gold fell to $857.50 per ounce, Silver dropped all the way to $15.37 per ounce from $17.53 last week.

Meanwhile, the European Central Bank (ECB) also does not change their interest rates but ECB's President Jean-Claude Trichet said Aug. 7 economic growth will be "particularly weak'' through the third quarter. This had a disastrous effect on the value of the euro, which dropped the most in more than three years this week, pushing the currency to a six-month low against the U.S. dollar, as traders pared bets the European Central bank will raise interest rates as the economy slows. The currency fell the most in almost eight years on Friday, dropping below $1.50 for the first time since February. The currency tumbled 2.08 percent yesterday, from $1.5336 touching $1.499, in what the second biggest one-day decline since the introduction for the euro in 1999.

Since reaching a record high of $1.6038 on July 15, the euro has dropped 6.4 percent. The so-called trading envelopes, which measure how far from the mean a price has strayed, show the euro's decline has doubled the typical changes versus the dollar in the past 20 days. This is truly a remarkable occurrence.

"The most important aspect of the dramatic collapse in the euro dollar is the absence of confirmation from other markets,'' said David Woo, global head of currency strategy at Barclays Capital Inc. in London yesterday. "None of the typical drivers of the euro-dollar in the past couple of years could have accounted for the magnitude of this move, which leads one to conclude that this is a technical-driven (controlled) move. From that point of view, we do not think that this move is sustainable.''

So between the drop in the price of oil and the weakening of the European currencies, the US dollar rose remarkably in strength reaching 75.90 yesterday, a gain of 2.5 index points, the highest since Feb. 21. This is steepest weekly rally by the US Dollar Index since January 2005. This action spurred the S&P 500 to its biggest weekly gain since April. The S&P added 2.9 percent to 1,296.32, the highest since June 25. The Dow Jones Industrial Average increased 3.6 percent to 11,734.32.

Every American is starting to breathe a little easier at the news and will likely resume their spending habits, exactly as the manipulators expected.

Do you feel more relieved because of the lower prices? Or, do you feel more manipulated than ever and want things to change? Are you just a cog in the system, or do you want economic and political freedom that this country was founded on?

As always, the choice is yours.

They dress the wound of my people
as though it were not serious.
"Peace, peace," they say,
when there is no peace.

Are they ashamed of their loathsome conduct?
No, they have no shame at all;
they do not even know how to blush.
So they will fall among the fallen;
they will be brought down when they are punished,
says the LORD.

" 'I will take away their harvest,
declares the LORD.
There will be no grapes on the vine.
There will be no figs on the tree,
and their leaves will wither.
What I have given them
will be taken from them. Jeremiah 8:11-13 (NIV)


If you have questions or comments, please feel free to contact me at the address below.
Email: DeltaInspire@panama-vo.com