OVERDRIVE
America is stretched to breaking point: watch the markets
Thanong Khanthong

BANGKOK: -- The United States is now battling on four fronts - squaring off against Russia over the Ukraine crisis, bombing ISIS in Syria and Iraq, grappling with a threatened Ebola pandemic at home, and trying to prevent its stock market bubbles from busting. Each of these crises arose from dubious circumstances and long-standing developments.

In his recent speech to the UN, President Barack Obama named Russia as a threat to the world. This followed a series of US and EU sanctions against Russia in response to the Ukraine crisis that aimed to destroy its financial and economic stability. Russian President Vladimir Putin has hit back by warning of nuclear consequences if the West and its partners continue to "blackmail" Russia.

"We hope that our partners will realise the futility of attempts to blackmail Russia and remember what consequences discord between major nuclear powers could bring for strategic stability," Putin told Serbia's Politika newspaper on the eve of his visit to the Balkan nation on Wednesday.

Putin said that Obama had identified Russian aggression in Europe as one of the three "major threats facing humanity", alongside the Ebola virus and ISIS.

"Together with the sanctions against entire sectors of our economy, this approach can be called nothing but hostile," Putin said.

"How can we talk about de-escalation in Ukraine while the decisions on new sanctions are introduced almost simultaneously with the agreements on the peace process?" he said. "If the main goal is to isolate our country, it's an absurd and illusory goal."

Obama has finally authorised bombing against ISIS in Syria and sending troops to Iraq to counter the rise of this militant group. Other Arab countries have joined the military campaign against ISIS, while some 40 countries have pledged support. The bombing of ISIS in Syria amounts to a declaration of war against that country, whose government, led by Bashar al-Assad, the US, Saudi Arabia and other Arab allies would like to topple. The war is not likely to end anytime soon. This being the case, it could spill over to other countries in the Middle East and North Africa and eventually become a full-blown regional, if not global, war. Russia, Iran and China are not likely to sit still while the US and its allies try to regain control over the Middle East and North Africa, with its abundant energy resources. The US has once against demonstrated its appetite for the doctrine of unending war. The campaign against ISIS is merely an excuse to exert greater US influence in the region.

Ebola panic is now spreading through the United States after an infected visitor from Liberia, Thomas Duncan, died while he was being treated in a Texas hospital. Two nurses contracted the disease while treating Duncan. The US Centres for Disease and Control and Prevention and other authorities involved have badly mishandled the crisis by failing to issue travel bans for the countries in West Africa that are the source of the outbreak. Hospital protocols were also lax, resulting in the transmission of Ebola in Texas. Scientists are still researching how Ebola is transmitted. If there are as-yet unknown vectors of transmission, millions could eventually die of the disease. The epidemic has been linked to dubious research and development of the virus by US researchers in West Africa. In this age of globalisation, outbreaks such as this one are difficult to contain and are thus a real threat to humanity.

Finally, the US stock market might be running out of steam after six years of the US Federal Reserve's "easy money". In August 2007 when the subprime crisis hit the US market, the Fed had plenty of firepower. Fed fund rates stood at 5.25 per cent and the Fed's balance sheet was only $850 billion. After the Wall Street crash in 2008 the Fed engineered a massive bailout, at one time printing $16 trillion to rescue the US and other global banks. Interest rates were cut sharply, to 0.25 per cent, a level unchanged now for seven years running. And the Fed launched the quantitative easing (QE) programme to buy out mortgage-backed securities from banks so as to keep the banks and the US government afloat.

We all know that what goes up must come down. The US stock market has benefited from the QE programme, which uses easy money to trigger speculative buying of equities. Now, seven years later, there are fears that US stocks can't continue to rise forever, as judged by the swing of equity prices over the past week or so. The trouble is that this time the Fed has run out of ammunition. The interest rate, which is almost zero, can't be brought down further. If a crisis were to hit the US market again, and it will, the Fed will be caught without any rescue tools. Some say the market could crash 50 per cent. Others, such as "The Death of Money" author James Rickards, argue that it could collapse by 70-80 per cent. When will it happen? Nobody knows for sure about the timing. What is certain is that the US is engaging in several battles all at once, each posing huge risks to global stability.

Source: http://www.nationmultimedia.com/opinion/America-is-stretched-to-breaking-point-watch-the-m-30245613.html


-- The Nation 2014-10-17

half a dozen people in the US with ebola does not make a pandemic... talk about fear mongering..

" The epidemic has been linked to dubious research and development of the virus by US researchers in West Africa. ".

Now the conspiracy theory is in the news as news.

It is a financial impossibility for the US to survive a financial crash. 17 trillion in debt, an expensive "war on terror" that has lasted more than 10 years and protecting big financial firms. Where is that money coming from? It has to blow, nowhere else to go. Hey! It rhymes!

That piece is really quite sensationalist. Wow. Sounds like a bunch of irrational American bashing. Yes, markets go down sometimes especially after they've gone up a lot for a long time.

Yes, that is one of the most biased reports I've seen about America. In my mind I pictured the journalist at a party with other American bashing revelers raising their glasses and celebrating Americas impending downfall.

looks like the OP has a bone to pick with the US

one can see why the author is published on thaivisa. He seems way out of touch with reality.

Go the Aussie dollar!

Typical America bashing. They are not the only country engaged in the war on terror, as the article itself states, "Other Arab countries have joined the military campaign against ISIS, while some 40 countries have pledged support."

As to a stock market bubble, let's not forget to mention that Japan's Nikkei is down more than 10% from recent highs, as is the FTSE in the U.K., and the broad based Stoxx Europe 600 which measures the performance of markets across the European Union. We also have both Japan and the ECB engaged in quantitative easing just as the U.S. has pulled the plug on its easy money, so we need to factor this in to the equation as well. And let's not forget that the USD has been rallying, and considering the monetary policy in Europe and Japan, and a slowdown in Chinese growth, it is likely to continue doing so for some time (years perhaps). All these things are inter-related and the above article ignores all these inter-related data points to produce an article that is short sighted and lacks any real substance.

The OP is simply stating what many others have already written about...the US has run up a debt that can never be repaid...printing money like there is no tomorrow which will someday end badly...

Americans and the world are being sold a multitude of lies concerning the US economy...unemployment...and the so-called recovery...

Any one of many events now going on in the world could be the tipping point to send the US economy...stock market...and US dollar into a tail spin...

This is not bashing...consider it a warning...prepare yourself...a day of reckoning is coming...

I don't think Google is the author's friend.

The OP is simply stating what many others have already written about...the US has run up a debt that can never be repaid...printing money like there is no tomorrow which will someday end badly...

Americans and the world are being sold a multitude of lies concerning the US economy...unemployment...and the so-called recovery...

Any one of many events now going on in the world could be the tipping point to send the US economy...stock market...and US dollar into a tail spin...

This is not bashing...consider it a warning...prepare yourself...a day of reckoning is coming...

I think your tin foil has holes in it.

When I see an increase of "The USA is Doomed" articles, I start browsing the most beaten down (US) stocks and pick up some bargains

" The epidemic has been linked to dubious research and development of the virus by US researchers in West Africa. ".

Now the conspiracy theory is in the news as news.

I like it when they remove the word "theory" from that phrase and call it what it is...

Go the Aussie dollar!

China just imposed new import duties on coal, which is, wait for it, the primary export from Australia to China... Sorry, but time to short the Aussie dollar...

http://www.reuters.com/article/2014/10/09/china-coal-idUSL3N0S41QP20141009

Go the Aussie dollar!

China just imposed new import duties on coal, which is, wait for it, the primary export from Australia to China... Sorry, but time to short the Aussie dollar...

http://www.reuters.com/article/2014/10/09/china-coal-idUSL3N0S41QP20141009

Go the Kiwi dollar!

The OP is simply stating what many others have already written about...the US has run up a debt that can never be repaid...printing money like there is no tomorrow which will someday end badly...

Americans and the world are being sold a multitude of lies concerning the US economy...unemployment...and the so-called recovery...

Any one of many events now going on in the world could be the tipping point to send the US economy...stock market...and US dollar into a tail spin...

This is not bashing...consider it a warning...prepare yourself...a day of reckoning is coming...

Dream on. In the lastest side by side debt to GDP figures the World Bank had:

The US was 93.8%

The UK was 103.2%

Japan was 196.5%

LINK

The US has the world's largest economy by far. LINK

The US has the most usable land of any country, the most natural resources, is fast gaining on the world's largest oil producers and will pass them, and is leaps and bounds ahead of other countries in technology.

Don't hold your breath.

When I see an increase of "The USA is Doomed" articles, I start browsing the most beaten down (US) stocks and pick up some bargains

Many are doing just that. Along with the likes of Warren Buffett. He's increasing his equity stake substantially.

Go the Aussie dollar!

China just imposed new import duties on coal, which is, wait for it, the primary export from Australia to China... Sorry, but time to short the Aussie dollar...

http://www.reuters.com/article/2014/10/09/china-coal-idUSL3N0S41QP20141009

Go the Kiwi dollar!

Kurnell....Your 2 posts gave me my morning laugh...thanks.

Sometimes it appears that everyone over at The Nation is drunk all the time, or maybe dementia has crept in. Years ago, it was a half-decent paper.

Who writes these articles?

Whoever it is.. needs to get their head checked.

- Ebola panic is a non issue...Jeesh.. a few cases. Panic? Really? Its a 1 week story...dragged on by reporters for a month.

- Russia.. that story is over. Russia just moved all their troops off the border. The Actions by the USA worked.. and Russia backed off some. Good news is that Russia's Economy sucks now..and oil prices are dropping dropping. Russia lost that round.

- US QE was very successful..and nobody is blaming that for the last 2 day stock market stumble. By the way, this stumble has been world wide. Fact is, USD is now much stronger against the Yen, Baht, Ruble & Euro since QE was put into place, so if anything, it shows the further weakness in other economies, not the US. US is slowly recovering certainly now as we wish, but is it better.

-

When I see an increase of "The USA is Doomed" articles, I start browsing the most beaten down (US) stocks and pick up some bargains

Many are doing just that. Along with the likes of Warren Buffett. He's increasing his equity stake substantially.

It wasn't so pretty Wednesday morning when the markets opened and the Dow dropped 460 pts in the first 30 minutes...

All 3 indexes have broken their 200 day moving averages and are in bearish territory... The likelihood of a deeper correction warrants caution right now...

Go the Aussie dollar!

China just imposed new import duties on coal, which is, wait for it, the primary export from Australia to China... Sorry, but time to short the Aussie dollar...

http://www.reuters.com/article/2014/10/09/china-coal-idUSL3N0S41QP20141009

Go the Kiwi dollar!

Kurnell....Your 2 posts gave me my morning laugh...thanks.

You should hear my chocolate rabbit story

When I see an increase of "The USA is Doomed" articles, I start browsing the most beaten down (US) stocks and pick up some bargains

Many are doing just that. Along with the likes of Warren Buffett. He's increasing his equity stake substantially.

It wasn't so pretty Wednesday morning when the markets opened and the Dow dropped 460 pts in the first 30 minutes...

All 3 indexes have broken their 200 day moving averages and are in bearish territory... The likelihood of a deeper correction warrants caution right now...

Stock market corrections, although painful at the time, are actually a very healthy part of the whole mechanism, because there are always speculative excesses that develop, particularly during the long bull market.

Ron Chernow

America's future looks very bright.

The OP is simply stating what many others have already written about...the US has run up a debt that can never be repaid...printing money like there is no tomorrow which will someday end badly...

Americans and the world are being sold a multitude of lies concerning the US economy...unemployment...and the so-called recovery...

Any one of many events now going on in the world could be the tipping point to send the US economy...stock market...and US dollar into a tail spin...

This is not bashing...consider it a warning...prepare yourself...a day of reckoning is coming...

I agree with most of your post however every other major global economy is printing even more money, issuing more un-repayable debt and telling worse lies than the US is. When the day of reckoning comes the USD will be the last currency and economy standing, if in ruins itself...

When I see an increase of "The USA is Doomed" articles, I start browsing the most beaten down (US) stocks and pick up some bargains

Many are doing just that. Along with the likes of Warren Buffett. He's increasing his equity stake substantially.

I admire Mr. Buffet for his investment acumen but he could certainly learn a lot from reading the TV Business forum

Oil and banking stocks took a beating and there are some bargains now. In the short term good companies can be punished by irrational hysteria; in the long term Mr. Market sets thing right. Its akin to planting a crop but not harvesting it for several years

Market corrections are where the money is made, especially for young investors, saving for retirement.

Not to worry about dollars marks euro's pounds yen etc I've cornered the market in Cowrie shells. 'I'm alright Jack.''

The Museum of the National Bank is probably not the first thing that crosses your mind when you are talking about shells. And yet, apart from a large number of coins and banknotes it also possesses a nice collection of primitive means of payments. Within this category of traditional money the cowry shell is one the most renowned representatives.

http://www.nbbmuseum.be/2007/01/cowry-shells.htm

Some attribute this quote to John D. Rockefeller, and some to J.P. Morgan, but when asked what the stock market would do, the answer was:

Fluctuate.

When I see an increase of "The USA is Doomed" articles, I start browsing the most beaten down (US) stocks and pick up some bargains

Many are doing just that. Along with the likes of Warren Buffett. He's increasing his equity stake substantially.

I admire Mr. Buffet for his investment acumen but he could certainly learn a lot from reading the TV Business forum

Oil and banking stocks took a beating and there are some bargains now. In the short term good companies can be punished by irrational hysteria; in the long term Mr. Market sets thing right. Its akin to planting a crop but not harvesting it for several years

Market corrections are where the money is made, especially for young investors, saving for retirement.

It's necessary to look farther than one's nose to realize that outside influences can actually make something a bargain.

Oil has been as high as about $110 and surely was at $105, and last I looked a couple of days ago it was $88. So why an I buying oil?

The US and Saudi Arabia are at war with Russia. There's the Ukraine issue and the oil market issue and the Iran issue. Russia sustains its economy with oil and so does Iran, and driving the price down to $88 puts it below where their sales can sustain their economies. It's deliberate. The US is pumping oil like crazy and even allowing exports even though it imports from Canada and Mexico in particular.

Saudi Arabia is pumping "all out" even though they used to slow it down when prices dropped to help drive the price back up.

That's makes oil stocks a bargain when they drop because the real world value of oil is more than $100.

Is the oil crash a secret US war on Russia?

16 October 2014 Last updated at 13:11 ET

"...the US and Saudi Arabia, whether by accident or design, could be pumping Russia and Iran to brink of economic collapse."

BBC NEWS