Monthly Archives: August 2010

BBC World News: Fallout of Wikileaks Afghan War Diary 1437 13 Aug 2010

Should we keep the Money Hole?

What really happens when the s**t hits the fan?

Michael Panzner is a well regarded financial adviser who seems to have better insights than most financial commentators. I’ve recently finished reading his book, Financial Armageddon, which, written in early 2008, predicted the financial crisis that marked the beginning of the global financial meltdown and our ongoing economic depression. Panzner has written another book, When Giants Fall, which I’ve yet to read. He maintains two websites, Financial Armageddon, and An Economic Roadmap for the End of the American Era. Both are highly recommended.

In a recent post, Panzner cited a book by Fernando Ferfal Aguirre, titled, The Modern Survival Manual: Surviving the Economic Collapse, which is based on the actual experience of Argentina over the past 10 years. It’s not a Mad Max scenario, but it isn’t pretty. You can find a summary at Aguirre’s website.

No TARP funds for Shorebank

Shorebank in Chicago was closed by regulators last Friday. This bank, which has been prominent for its commitment to the needs of local business and low-income clients, was closed “after Wall Street backers failed to rescue the institution.” Over the past 2 years the federal government has lavished hundreds of billions of dollars on major Wall Street institutions while allowing small, local banks to fail. One must wonder why. According to a Reuters report:

“… the [Shorebank] bank, which was put on the ropes when the recession hit its lower-income borrowers especially hard, was unable to secure the funds it was seeking from the government’s Troubled Asset Relief Program, or TARP, it needed to match private-sector pledges.”

Read the full report here.

Google buys virtual currencies startup Jambool

AFP – Tuesday, August 17

SAN FRANCISCO (AFP) – – Virtual currency manager Jambool announced Monday that it has been purchased by Google for an undisclosed sum.

“When the opportunity arose to join forces with Google… we couldn’t pass it up,” Vikas Gupta and Reza Hussein, co-founders of the startup, said in a blog post.

Jambool is the company that launched Social Gold virtual transactions technology that processes virtual currencies — make-believe money for online transactions such as games and social networks, including Facebook and MySpace.

The technology allows makers of online games and social networks to mine “real money from virtual goods” — allowing genuine cash to be converted into virtual currency and vice versa.

The company has reported strong growth due to the popularity of online games.

“Our vision is to build world-class products that help developers manage and monetize their virtual economies across the globe,” the company said in the online post.

Gupta and Hussein said they started Jambool in 2006 as an online collaboration platform, but shifted focus a year later to building applications for social networks.

“Along with success, we found fun and lucrative ways to monetize our apps — specifically virtual currency and goods,” the former Amazon.com employees said.

“That led us to create a platform to help developers create, host, manage and monetize their virtual economies,” they wrote.

China dumping dollars—but slowly

An Associated Press story reported in Forbes magazine indicates that China has for the past two months been  reducing its holdings of  U.S. Treasury debt. ” The $24 billion decline in China’s holdings in June followed a $32.5 billion drop in May. China’s holdings had hit a high for this year of $900.2 billion in April.” And this was down from their record high holdings of $939.9 billion reached in July 2009.

This seem to confirm my expectation that China would be diversifying its foreign reserve holdings away from dollar denominated securities.

The slack is being taken up by Japan and Britain so the immediate impact on the dollar in foreign exchange markets may continue to be minimal– for a while.

Central banks collude to advance their common objectives, but given the astronomical budget deficits and continued monetization of U.S. government debt by the banking system, it is unlikely that they will continue to support the dollar in the future as they have in the past. At some point, they will allow the dollar to slide into the void as they roll out their new plan for a global reserve currency. –t.h.g.

Summer Newsletter and other important stuff

I’ve just posted my summer newsletter to my other blog, Tom’s News and Views. This edition contains a lot of information about my recent activities, much of which is pertinent to the topics of Beyond Money. You’ll also find there some recent posts that relate to security and survival. Please take a few minutes to read these posts. — t.h.g.