The Coming Financial Tzunami by W. Curtiss Priest, Ph.D. 31st July 2007

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The Coming Financial Tzunami

W. Curtiss Priest, Ph.D.
Center for Information, Technology & Society
466 Pleasant Street Melrose, MA 02176
E-mail: BMSLIB @ MIT.EDU, Voice: 781-662-4044, FAX: 781-662-6882

July 31, 2007

Public Issue #129:

CITS DEBT WATCH

"The Unraveling: Described by Hyman Minsky, provided by Roubini"

Commentary by Dr. W. Curtiss Priest, Director:

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Previous issues of the CITS DEBT WATCH:
http://groups.google.com/groups?q=cits+debt+watch&hl=en&scoring=d

The entries appear in reverse chronological order, with the
most recent, first.

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I appreciate Roubini's caution that "it is always risky to call
an equity market peak."

Indeed, I believe Ravi Batra's prediction of a depression
starting in the late '80s was sorely confounded by:

1. a very innovative group of "new financiers" and their
ability to outfox the regulators

2. a nation-wide rise in house prices, the likes of
which we have never witnessed, coupled with the insanity
of lenders, sub-prime, "re-fi," "cash-out," and by
various other disguises by which "upright American
citizens" "sold the farm" and then some

We shall not subscribe to the notion that, just because the
event did not occur when Batra (and many others) sensed
the precariousness of our financial house of cards, that the
event was "not to occur." Rather, we do subscribe to the
writings of Davidson and Rees-Mogg, that, by delaying the day
of reckoning, that reckoning will only occur with greater,
hurricane-like forces.

It is much like thunderstorms. If daily showers dissipate the
sun's energy, we have fairly calm storms. However, if the
energy is allowed to accumulate, and come all at once, we
expect to see many trees struck and torrential rains and
considerable flooding.

So, we expect, soon I believe, to see many houses as if
struck by lightning, and an unfolding of debt/credit recalls
that will reveal the magnitude of the storm.

What I appreciate about Minsky's description about this is
his distinction between three groups. Those who have the
resources to cover debts, those who are "speculative borrowers"
who can only service debts out of cash flows, and then those
who are Ponzi-like, needing ever increasing debt burdens to
finance and repay prior debts.

So, this view tells us precisely how the next stages will play
out. While the stages will not be sequential, but rather,
tightly coupled, we know that the Ponzi-like folk are already
causing an implosion. Now, those who depend on incomes to
service debts will be directly affected as they find that
the whole class of Ponzi-like debtors can no longer afford
goods and services, and those depending on an income stream
will see their streams diminish, and thus force many of them
to default. Finally, we get to the point where even the
borrowers with best intentions are hit. We get to a point
where FDIC can no longer pay for all of these failures, and
so FDIC insured, "safe," money is unavailable. Surely, some
day, maybe some decade, FDIC will finally make good on their
insurance, but, with much less than $1 for every insured $100
dollars, the system is not designed for catastrophe.

Meanwhile, by Executive Order, George W. Bush will convert
all 90 day treasuries into 30 year bonds. I've been told
he has the authority to do this. So, everyone holding treasuries
are simply holding IOUs, which the US Federal government can
get around to covering over 30 years. But, ohmi, so much
damage can occur in even ten years.

Now we take the nearly $100 trillion in Federal liabilities
and obligations (including FDIC, medicare, medicaid, new
prescription benefits, pension guarantees, etc.) and, as
Walker, head of the General Accountability Office, has been
politely trying to inform people, even in the best of times,
that there is no money to cover all of these liabilities
and obligations. Now imagine the worse of times.

W. Curtiss Priest, Editor
CITS Capital & Debt Watch

P.S. my thanks and gratitude for:

PinHawk NewzDigest

and their review of financially relevant blog material

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We have been accused of being anti - Jewish because we had posted an excerpt from James von Brun's book: Kill the Best Gentiles! http://loveforlife.com.au/node/6054 in which he blames Jews for the problems of the world. Obviously this is not our view because of what we have stated above. We do not hate anyone, whatever religion they follow. We are always open to talk to any religious leader or politician and meet with any judge, member of the Bar, experts, academics, educators etc to share the remedy we offer that heals all the divisions between MAN and MAN, and MAN and the EARTH.

Today, a representative of the New South Wales Jewish Board of Deputies is threatening to close the website down, because they have decided it is anti - Jewish and that we promote racism. What has the New South Wales Jewish Board of Deputies done to end the suffering in the world? Can they show that they are concerned with the suffering of ALL men, women and children AND ARE SEEN TO BE DOING SOMETHING ABOUT IT or are they only concerned with Jewish affairs? If so, they, along with all the other religions that only care for their own, are part of the problem, not part of the solution. The man who rang Arthur today was only concerned with Jewish affairs; he was not interested in our intentions or in anybody else, just as most Christians, Muslims, Sikhs, Catholics, etc, are only interested in their own. While we separate ourselves into groups, dividing ourselves from others with rules, regulations, rituals, procedures and conditions, we will never solve our problems.

No matter what we in the Western World Civilisation of Commerce have been promised by our politicians, religious leaders, scientists, educators, philosophers, etc, for the past two hundred years, all we have seen is ever-increasing destruction of men, women and children and the earth. None of the so-called experts and leaders we have been taught to rely on are coming up with a solution and none of them are taking full-responsibility for the fact that they can't handle the problem. All religious books talk about end times full of destruction and suffering but why do we have to follow this program when there is an alternative to hatred, mayhem and death? Why are our leaders following the program of destruction and death rather than exploring the alternatives? It seems that any mainstream politician, priest or academic are only interested in supporting the RULES OF THE DIVIDE, that maintain the haves and the have nots. For 200+ years, 99% of the world population have been so trained to pass on their responsibility for themselves, others and the earth, that the 1% of the population that make up the leaders of the rest of us are making all the decisions leading to the destruction of all of us and the earth. Let's not forget the education system that brainwashes the 99% of the population that we are free and have equal rights while, in fact, we are feathering the nests of those at the top.

At the root of all our problems is self-centredness, an unwillingness nurtured by the Establishment that keeps us concerned only with our own needs rather than the needs of others around us and the Earth. Instead of creating and releasing acts of love for those around us as gifts to benefit them and the earth, we take, take and take, until there is nothing left. The whole point of the Love for Life website is to show people the root of all our problems and to share the remedy. The extensive research library is there to attract browsers and to provide access to information not available through mainstream channels. If the New South Wales Jewish Board of Deputies can, after careful examination of our work, prove that anything we are saying is wrong, we will be happy to accept their proof. If they cannot, and they are still insistent on closing the website down, they will be showing themselves to be traitors to MAN because they are not interested in pursuing any avenue that can end the suffering in the world.

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Conscious Love Always
Arthur and Fiona Cristian
Love For Life
17th June 2009