On the other side we have the international bankers.  They have gleefully crashed the credit market since September of 2008.  Credit destruction is the exact same thing as monetary destruction.  After all, debt = money and money = debt.  The only difference between the two being who is the master and who is the slave.  The bankers have our nation in an economic stranglehold, and a deflationary spiral.  Massive Federal government spending has been the only thing pretending to keep us out of a very real depression.

What happened over the last few days?

A Republican candidate won the US Senate seat of the late Ted Kennedy.  This has thrown the whole health care debacle into a tailspin.  Blue-dog Democrats are running around with their tail between their legs, scared to death that the voters will kick them out of their plush surroundings in Washington.

The Federal government is toast unless it can figure out a way REALLY fast to spend LOTS of money.  I don’t think that they can do it.  And I don’t believe that Barack Obama thinks they can either.

So what is President Obama’s reaction?  What does a habitual narcissist do when faced with utter defeat?  He lashes out, and he lashes out hard.

President Obama Wants Big Restrictions on the Nation's Biggest Banks. I don’t say this very often about Mr. Obama, but I FULLY support his plan to place huge restrictions on the trading practices of the big banks – assuming the legislation is strong and straightforward.

What are the opponents in this economic war thinking?  Big Banks Have Already Figured Out The Loophole In Obama’s New Rules. You see, the bankers run the economy, not Mr. Obama…not the US Senate…and not the House of Representatives.  They play by their own rules, and they have bought off enough politicians in Washington D.C. (mainly Republicans, sorry to say) to keep pesky legislation at bay.

The US Supreme Court handed the banks another victory today by declaring that corporations can spend money on political campaigns to their hearts content.

The pathetic thing about all of this is that these two entities have declared war on each other, but the US citizen ends up losing, no matter who the victor is.  That’s because we’re still stuck with the exact same debt-based economy that lets tyrants turn us into servants and slaves by attaching their spending to our future labor.  We can only have economic liberty and freedom with an economy that is based upon obtaining money from completed labor – that has no other future labor encumbering it.

Maybe this war needs to have a third opponent.  Maybe the American people need to rise up and show the international bankers and the Federal government who really performs the work in this country!

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Watch for these indexes to drop:

Chinese Shanghai Composite Index: 3,158.86 (change of 3.31% from July 20, 2009 base value of 3,266.92)
Shenzhen Stock Exchange Component Stock Index (SSE): 12,917.15 (change of 3.47% from July 20, 2009 base value of 13,381.22)
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Here are today’s numbers for the economic indicator:

1) Gold = $1,093.10
2) Silver = $17.37
3) Dollar Index = 78.18
4) Oil = $76.09
5) S&P 500 Index = 1,116.48
6) 3-month Treasury Bill yield = 0.04
7) 3-month OIS = 0.15

HEI = 29.00

(A value of under 100 indicates deflation, while over 100 indicates inflation – as referenced to Sept. 12, 2008…the day before Lehman Brothers collapsed)



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Here are the numbers for the day:

Dollar Index adjusted indexes:
Dow = (10,389.88) x (0.7818) = 8,122.81
S&P 500 = (1,116.48) x (0. 7818) = 872.86
Nasdaq = (2,265.70) x (0. 7818) = 1,771.32

3-month Treasury: 0.04

2-year Treasury: 0.82

10-year Treasury: 3.59

30-year Treasury: 4.49

2-yr vs. 10-yr Spread (Target > 273): 277 basis points – (Danger Zone)

2-yr vs. 30-yr Spread (Target > 369): 367 basis points

3-month LIBOR: 0.25

3-month EURIBOR: 0.67

3-month OIS: 0.15

TED Spread: 21 basis points

LIBOR/OIS Spread: 10 basis points

Dollar Index: 78.18

Volatility Index: 22.27

JPY-EUR Exchange Rate (Target < 115): 127.167

JPY-GBP Exchange Rate (Target < 145): 145.8906

JPY-USD Exchange Rate (Target < 90): 90.017

USD-EUR Exchange Rate (Target < 1.25): 1.4127

USD-CNY Exchange Rate (Target > 7.0): 6.8270

Warmly,

Brad

Comments or questions?  brhamill@hamill.com

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