US economy to go from bad to worse in nearest future
20.09.2007
Source: Pravda
The dollar sank to a record low against the euro on speculation Federal Reserve Chairman Ben S. Bernanke will tell a congressional hearing that the U.S. housing slump threatens to slow economic growth.
The dollar fell against 15 of the 16 most-active currencies as traders bet the Fed will cut borrowing costs again after the first reduction since June 2003 on Sept. 18. The U.S. currency was also pushed lower by speculation that Saudi Arabia and some of its neighbors may abandon their pegs to the dollar following the Fed decision.
“One thing that should be clear is that this is not a dollar-friendly Fed,'' said Jim McCormick, the London-based global head of currency research at Lehman Brothers International. "The biggest focus going forward is going to be the monetary policy expectations."
The U.S. currency fell to $1.4065 against the euro, the lowest since the European single currency's inception in 1999, and traded at $1.4039 as of 7:31 a.m. in New York. It was at $1.3957 late yesterday. McCormick predicts the dollar may tumble to as low as $1.45 in the next few months. The dollar was also lower against the yen at 115.16, from 116.10 yesterday.
Saudi Arabia may drop its dollar peg, London's Daily Telegraph newspaper reported today, without citing anyone. The country failed to lower its interest rates in line with the Fed, which may pave the way for the desert kingdom and its neighbors to scrap their currency pegs as a weak dollar stokes inflation, Bloomberg reports.
Pravda.Ru has asked Andrew Jakabovics, Associate Director Economic Mobility Program, to comment on the recent interest rate cut.
“The cut in the federal fund rate is likely to help the segment of American homeowners who have adjustable rate mortgages (ARMs) that are indexed to treasuries or to the Prime rate. Americans who are most at risk of losing their homes to foreclosure, however, are those borrowers with subprime ARMs.
Three-quarters of those borrowers have loans that are indexed to the London Interbank Offered Rate (LIBOR), which is higher today than a month or a year ago, are unaffected by the Fed's actions. While there may be some loosening of the credit crunch and increased liquidity for banks and other investors holding mortgages, it is by no means clear that the rate cut will translate into new mortgage lending activity.
Without a willingness to make new loans, the backlog in unsold houses continues to grow. The overall slowdown in housing markets across the country has wider impacts for the economy as a whole, as we have seen a dramatic cutback in new residential construction (down nearly 20 percent this August versus last August) that is likely to continue for some time.
Historically, we have used the housing sector to restart economic growth during slowdowns, but the Fed rate cut is unlikely to be that catalyst. Instead, we need a focused intervention by the White House and Congress to strengthen the housing market, secondary mortgage markets, and, ultimately, the economy as a whole,” says Andrew Jakabovics.
Michiyoshi Kato, a senior trader at Mizuho Corporate Bank, echoed the view, saying the Fed's decision to lower the Fed funds rate by 50 basis points may have spurred concerns over the outlook for the world's largest economy.
"Some players are wondering if the Fed's decision suggests that the U.S. economy will go from bad to worse in the near future," Kato said. "If that is the case, it's very difficult to buy the dollar now."
The Bank of Japan, as widely expected, left interest rates unchanged in its policy board meeting ended Wednesday — a move seen as helping the American currency regain some of its early losses.
Against other regional currencies, the dollar was lower, falling to 1.5078 Singapore dollar from 1.5092 the previous day, and to 45.560 Philippine peso from 46.050. It dropped to 926.4 South Korean won from 930.7, iht.com reports.
Source:agencies
Prepared by Alexander TimoshikPravda.Ru
The dollar fell against 15 of the 16 most-active currencies as traders bet the Fed will cut borrowing costs again after the first reduction since June 2003 on Sept. 18. The U.S. currency was also pushed lower by speculation that Saudi Arabia and some of its neighbors may abandon their pegs to the dollar following the Fed decision.
“One thing that should be clear is that this is not a dollar-friendly Fed,'' said Jim McCormick, the London-based global head of currency research at Lehman Brothers International. "The biggest focus going forward is going to be the monetary policy expectations."
The U.S. currency fell to $1.4065 against the euro, the lowest since the European single currency's inception in 1999, and traded at $1.4039 as of 7:31 a.m. in New York. It was at $1.3957 late yesterday. McCormick predicts the dollar may tumble to as low as $1.45 in the next few months. The dollar was also lower against the yen at 115.16, from 116.10 yesterday.
Saudi Arabia may drop its dollar peg, London's Daily Telegraph newspaper reported today, without citing anyone. The country failed to lower its interest rates in line with the Fed, which may pave the way for the desert kingdom and its neighbors to scrap their currency pegs as a weak dollar stokes inflation, Bloomberg reports.
Pravda.Ru has asked Andrew Jakabovics, Associate Director Economic Mobility Program, to comment on the recent interest rate cut.
“The cut in the federal fund rate is likely to help the segment of American homeowners who have adjustable rate mortgages (ARMs) that are indexed to treasuries or to the Prime rate. Americans who are most at risk of losing their homes to foreclosure, however, are those borrowers with subprime ARMs.
Three-quarters of those borrowers have loans that are indexed to the London Interbank Offered Rate (LIBOR), which is higher today than a month or a year ago, are unaffected by the Fed's actions. While there may be some loosening of the credit crunch and increased liquidity for banks and other investors holding mortgages, it is by no means clear that the rate cut will translate into new mortgage lending activity.
Without a willingness to make new loans, the backlog in unsold houses continues to grow. The overall slowdown in housing markets across the country has wider impacts for the economy as a whole, as we have seen a dramatic cutback in new residential construction (down nearly 20 percent this August versus last August) that is likely to continue for some time.
Historically, we have used the housing sector to restart economic growth during slowdowns, but the Fed rate cut is unlikely to be that catalyst. Instead, we need a focused intervention by the White House and Congress to strengthen the housing market, secondary mortgage markets, and, ultimately, the economy as a whole,” says Andrew Jakabovics.
Michiyoshi Kato, a senior trader at Mizuho Corporate Bank, echoed the view, saying the Fed's decision to lower the Fed funds rate by 50 basis points may have spurred concerns over the outlook for the world's largest economy.
"Some players are wondering if the Fed's decision suggests that the U.S. economy will go from bad to worse in the near future," Kato said. "If that is the case, it's very difficult to buy the dollar now."
The Bank of Japan, as widely expected, left interest rates unchanged in its policy board meeting ended Wednesday — a move seen as helping the American currency regain some of its early losses.
Against other regional currencies, the dollar was lower, falling to 1.5078 Singapore dollar from 1.5092 the previous day, and to 45.560 Philippine peso from 46.050. It dropped to 926.4 South Korean won from 930.7, iht.com reports.
Source:agencies
Prepared by Alexander TimoshikPravda.Ru
American spy satellite downed in Peru as US nuclear attack on Iran thwarted
20.09.2007 Source: Pravda
Russian Military Intelligence Analysts are reporting today that one of the United States most secretive spy satellites, the KH-13, targeting Iran was 'destroyed in its orbit' with its main power generator powered by the radioactive isotope Pu-238 surviving re-entry and crashing in a remote region of the South American Nation of Peru, and where hundreds are reported to be ill from radiation poisoning.
Western media reports are stating that the US spy satellite debris hitting Peru was caused by a meteor, but which, according to these reports, would be 'impossible' as the size of 30-meter crater, if caused by a meteorite, would have hit the ground with about as much energy as 1 kiloton tactical nuclear weapon, and which would have been recorded by the seismic stations around the World.
Most astonishing about these reports, however, are that they state that it was the Americans themselves who destroyed their own spy satellite with the attack upon it being made by the United States Air Forces' 30th Space Wing located at Vandenberg Air Force Base in California. This incident further fuels the intrigue involving the United States War Leaders plans to attack Iran in their attempt to engulf the entire Middle East in Total War, but, against which, according to Russian Military Intelligence Analysts, a 'high ranking and significant' faction of the American Military Establishment is opposed to.
This can be further evidenced by this past few weeks unprecedented announcement by the United States Air Force that 6 nuclear armed cruise missiles were removed, without authorization, from their secure holding facility, located in North Dakota at the Minot Air Force Base, and flown to Barksdale Air Force Base, located in Louisiana, where they were left 'unattended' for 'nearly 10 hours'.
It is interesting to note, too, that Barksdale Air Force Base is where the United States President was 'ordered' to report to on September 11, 2001 by the United States Air Force Strategic Command prior to his being 'transferred' under 'armed escort' to Offutt Air Force Base Strategic Command Center near Omaha, Nebraska, where the first 'truce' between Americas War Leaders and its Military Forces was 'negotiated' by billionaire Warren Buffett as intermediary between the rival power blocs.
Though the rival American power blocs do seem to have maintained their uneasy truce, and which have, to date, prevented further attacks within the United States itself, these latest events, according to these reports, appear to show that this truce is now breaking down over threats and planning by the American War Leaders to attack Iran, and which Russia has warned would be 'catastrophic'.
What remains unknown to us, at this time, is what counter-planning the American War Leaders have in store for furthering their war aims against Iran as the United States Military have 'clearly signaled' that it will not allow nuclear weapons to be used, even to the extent of denying to their War Leaders one of their most prized spy satellites used to guide their nuclear cruise missiles to their intended Iranian targets.
As the American peoples desire for war appears to be exhausted, and with new polls showing their President and Congress' approval ratings at 'record lows', these reports paint a frightening picture of an American War Leadership determined to engulf the entire World in Total War in order to perpetuate their hegemony.
Not since last century's German Nazi and Japanese Empire's has the World seen such naked aggression towards the capture of the Earth's resources, and which caused the deaths of nearly 100 million people, but which the United States and its Western Allies now seem determined to see through to its brutal, and bloody end.
By: Sorcha Faal, and as reported to her Western Subscribers
Iran challenges US backyard
25.09.2007 Source: Pravda
Following an active diplomacy in the region, President of Iran Mahmoud Ahmadinejad is expected in South America later this week, after his participation in the United Nations Annual Assembly. The Iranian leader is scheduled to meet presidents of Bolivia, Evo Morales and of Venezuela, Hugo Chavez, two critics of Washington foreign policy.
Ahmadinejad will sign agreements on energy and industrial aid as the three leaders seek to stengthen ties. Two months ago, President Chavez visited Iran and pledged to unite the Caribbean and the Persian Gulf. Mr. Chavez and Mr. Ahmadinejad also launched the construction of a joint petrochemical plant on Iran's Gulf coast.
Ahmadinejad swing through Washington’s “backyard” comes after Tehran deployed a very active diplomacy in the region in the last years, something that have caused concern amid US and Israeli governments. President Ahmadinejad visited Venezuela earlier this year as part of a Latin America tour that took him to Nicaragua and Ecuador as well.
Last month, Tehran announced the signature of two protocols to boost trade with Cuba and Venezuela, after recent visits of Commerce Minister Masood Mir-Kazemi to the two Caribbean nations. These deals are being carefully watched by Washington and Tel Aviv.
In August, an Israeli diplomatic source told local newspaper Haaretz that Tel Aviv was concerned over the intensive activity of Tehran in the region. According to Haaretz sources Tel Aviv experiences some hostility coming from some Latin American nations. Israeli officials mentioned the six visits of Chavez to Tehran and bilateral projects aimed at boosting cooperation in sensitive issues as nuclear development.
Chavez has repeatedly said that Iran has the right to a peaceful atomic energy industry because it is a sovereign state. Presidents of Bolivia, Ecuador and Nicaragua has expressed a similar view.
However, Tehran’s president does not enjoy the support of many other Latin American nations. Argentina has filed charges against half a dozen of former Iranians officials acussed of plotting the bombing of a Jewish club in Buenos Aires in 1994.
According to Buenos Aires, Tehran does not cooperate to bring this men to courts, since Argentine prosecutors last year charged former Iranian government officials with directing Lebanese militia group Hezbollah to attack the Jewish Community Center, injuring 300 in addition to the 85 killed.
Iran's top diplomat in Buenos Aires, Mohsen Baharvand, said accusations that Iran isn't cooperating would create the impression Argentina favors war against Iran, Clarin reported Sept. 21.
Argentine president Nestor Kirchner is expected to address the issue in his last address to the UN General Assembly before leaving office.
Hernan Etchaleco
Ahmadinejad will sign agreements on energy and industrial aid as the three leaders seek to stengthen ties. Two months ago, President Chavez visited Iran and pledged to unite the Caribbean and the Persian Gulf. Mr. Chavez and Mr. Ahmadinejad also launched the construction of a joint petrochemical plant on Iran's Gulf coast.
Ahmadinejad swing through Washington’s “backyard” comes after Tehran deployed a very active diplomacy in the region in the last years, something that have caused concern amid US and Israeli governments. President Ahmadinejad visited Venezuela earlier this year as part of a Latin America tour that took him to Nicaragua and Ecuador as well.
Last month, Tehran announced the signature of two protocols to boost trade with Cuba and Venezuela, after recent visits of Commerce Minister Masood Mir-Kazemi to the two Caribbean nations. These deals are being carefully watched by Washington and Tel Aviv.
In August, an Israeli diplomatic source told local newspaper Haaretz that Tel Aviv was concerned over the intensive activity of Tehran in the region. According to Haaretz sources Tel Aviv experiences some hostility coming from some Latin American nations. Israeli officials mentioned the six visits of Chavez to Tehran and bilateral projects aimed at boosting cooperation in sensitive issues as nuclear development.
Chavez has repeatedly said that Iran has the right to a peaceful atomic energy industry because it is a sovereign state. Presidents of Bolivia, Ecuador and Nicaragua has expressed a similar view.
However, Tehran’s president does not enjoy the support of many other Latin American nations. Argentina has filed charges against half a dozen of former Iranians officials acussed of plotting the bombing of a Jewish club in Buenos Aires in 1994.
According to Buenos Aires, Tehran does not cooperate to bring this men to courts, since Argentine prosecutors last year charged former Iranian government officials with directing Lebanese militia group Hezbollah to attack the Jewish Community Center, injuring 300 in addition to the 85 killed.
Iran's top diplomat in Buenos Aires, Mohsen Baharvand, said accusations that Iran isn't cooperating would create the impression Argentina favors war against Iran, Clarin reported Sept. 21.
Argentine president Nestor Kirchner is expected to address the issue in his last address to the UN General Assembly before leaving office.
Hernan Etchaleco
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