Just Say No To (Debt) Slavery - Universal Monetary Decay

No Magical Elixir Of Hope

Insanity is doing the same thing over and over, and expecting a different result - A. Einstein

In this treacherous environment, it has become quite a tour de force to draft financial analyses reflecting on what is really going since underneath the relative tranquil surface, there is a wild ocean seeking to break through the very thin layer of varnish. Time to press the panic button!

Over the millennia people have depended on their governments to thrive and prosper. They believe that they have chosen their leaders accordingly. And each and every time their hopes failed to materialize, they just picked new politicians to fulfill them, engaging in a back and forth dance from one end to the other of the political spectrum. As a matter of fact breaking this vicious spin has become a vital for the survival of Mankind. How long is this going to last? While this question remains a tough one, Gerald Celente foresees the tipping point in 2012. While not mentioning any time frame, the IMF said early this month that the world depression has already started. BofE confirmed the latter statement by admitting that the banking system looked like South Sea bubble. Here we go again?!

Debts and credit are not going to save us from a global demise, which *The Powers That Be* (TPTB) have delayed - again - to make the matters a lot worse. As of July 07, the EBC was engaged in a sinister policy pushing the weakest states into a debt-compound spiral that can only end in bond crises and/or the disintegration of Europe's monetary union, Pritchard reported. The problem is that there is more money destruction than creation and trying to stabilize the system is impossible since it is a pyramidal scheme. The bailout bubble keeps growing and will engulf us all eventually. ECB declared that governments have reached their borrowing limit.

Trichet said the large injection of funds in an effort to stimulate European economies had been the right response, but said there was a need to get public finances back under control as soon as possible. "There is a moment where you can't spend any more and you can't accumulate any more debt. I think we are at that moment," Trichet told Europe 1 radio.

As America lives the end of the empire Michael Hudson argues, some are finally realizing the truth - Both Obama's 2009 stimulus and President Bush's 2008 tax rebate were 'too small' - and fret about the implications. Do you think they care about a $1Tn interest rate payment yearly? Those are now advocating for more government borrowing and stimulus package. Indeed, its only recession since the Great Depression to wipe out all job growth from the previous expansion, the WSJ recently said. There is actually even a plan 'C' set up as a Doctrine of Preemptive Bailouts which could cost taxpayers an additional $3.5TN. Cynically speaking, Obama turns out being the best President money could buy. Early this month, California was the first state to go under as it started printing its own IOUs. This is simply beyond frightening! Another layer of toxic debts to out it bluntly. The situation is so dire that it is also a place where $100,000 a year will make you go broke due to its Tax System. Martin Weiss writes: This is a day of reckoning for California and, ultimately, for all of America. More and more Baby Boomers must rethink their retirement plans and admit that there won't be much left for their kids who too are sliding down the social ladder. America's middle class is simply vanishing. No matter how one looks at the picture, the evidence leads to Benanke and Co since they are the one in charge of keeping an eye on the flow of credit throughout the system. And obviously 'they' have been lying about the nation's money supply, commonly named M1. Turning a blind eye to their duty also condoned an unprecedented corruption: Bernanke, Paulson, Lewis, Thain should be arrested, Judge Napolitano declared 2 weeks ago. Soon there after, Congresswoman Kaptur compared Federal Reserve to counterfeiters bankrupting the system ! All of this on C-Span, a well known political broadcast!

Movie 'Global Ground Zero' Soon Playing

Countries with European-style growth rates could handle debt obligations of 60% of GDP when interest rates were low. But with debts in many countries rising to 80 per cent or 90 per cent of GDP, and with today's low interest rates clearly a temporary phenomenon, trouble is brewing. Many of the countries that are piling on massive quantities of debt to bail out their banks have only tepid medium-term growth prospects, raising real questions of solvency and sustainability. Italy, for example... Other countries, such as Ireland, Britain and the U.S., started with a much stronger fiscal position but may not be much better off when the smoke clears.

The genius pundits at the B.I.S (the central bank for central banks) released a study, on bloomberg.com, demonstrating that policy makers have a tendency to be late, tightening financial conditions slowly for fear of doing it prematurely or too severely; all of which will sow the seeds of the next financial 'boom-bust cycle'. That is great news isn't it? It merely means that our mega-college degrees in charge of the planetary welfare can assess the mess we are in but cannot do a thing to get us out of it. Why are they paid so much to fail their jobs? If you do not smell a rat, others do. Let's call a spade, a spade: this is a conspiracy! If you have read this far, you ought to take a glance at the revelations of Matt Taibbi on how Goldman Sachs' was involved in every major market manipulation since the Great Depression... this is in Rolling Stones magazine, folks!

The Breakdown Of Semantic Meaning

For example, take the words 'financialization', 'derivatives' and 'quantitative easing', all have something in common since they are meant to deceive. Financialization has been used to massively oversell and repackage loans with the approval of the credit rating agencies that gave them a triple-A rating under the term of 'collateralized debt obligations', which in turn are used to feed the derivatives machine whose purpose is to spread risk of the underlying assets more widely. As for 'quantitative easing' is no more less than the monetization of debts. There you have it, a five lines explanation as why we're threatened with an 'economic event horizon'. Indeed, you should be very afraid when reading that banks capitalizing on 'toxic assets' is the newest ruse in town. As they puff-up profits, they are impoverishing us even further. But the leaders tell us that the worst is over, don't they? The problem is that words like these, are destroying lives and therefore make wonder about the meaning such success, self-determination and education. The entire dictionary could easily be thrown into the toilet or just burned because of the semantic breakdown caused by fake economics.

What most people believe to be the reality is an Ubiquitous Matrix of Lies. Charles Eisentein' s latest essay filled with appalling truths is definitely a must read for anyone willing to ponder the words 'sanity' and 'reality'... (to be continued)

posted by SB Kayser @ 12:55 PM 3 Comments

The Swimming Naked Prophecy

It's only when the tide goes out that you learn who's been swimming naked - Warren Buffet (2007)

It surely kind of prophetic to hear a market guru, like Buffett, embracing such a philosophical approach two years ago as the Berkshire profits plunged 96% in early March amid the dysfunctional world economy. It is even more baffling to hear him blame the derivatives after admitting that the firm' s equity holdings had lost 44% because of them. One has to wonder exactly which game is he playing. In 2003, he was among the very first experts to warn about CDOs calling derivatives *financial weapons of mass destruction* and *time bombs*. This grabbed the media's attention and put on a red alert a myriad of intrigued journalists who directly began to investigate the opacity surrounding these innovative products, all of which led them to the conclusions that Buffett would eventually be proven right. Yes, this was the ultimate CDOs horror story that circulated for many months on the Net. Talk about complacency! But even more troubling: how does it come to be that he was unable to take action in order to prevent his shareholders from dealing with this nasty surprise? And one might ask too: how does it come that Buffett' shareholders didn't do anything to reduce Berkshire's exposure to those exotic financial deals... Of course everybody reaped highly satisfying returns for a while. But that was then, and this is now. As of October 2008, the Size of Derivatives Monster was coming down to $190K per person on the planet! It is not a matter of 'if' but 'when' and when this derivative bubble explodes, we will see who was swimming naked. What a clever man, Buffett, whose private wealth won't most likely suffer too much from the Greatest Depression.

Although Tens of thousands rally at tax day 'tea parties', it is still kind of challenging to explain to the average Joe and Jane that our economic system is legalized 'grand robbery'. As a matter of fact Westerners are largely silent as their nations are systematically destroyed. When profits are privatized and losses socialized, we definitely deal with an undeniable feudal component. And of course taxpayers wouldn't be victimized if taxation and usury didn't exist in the first place: it really is the power to destroy. David M. Walker, former Comptroller General of the United States, forecasts that taxes could easily double, which would amount to $483,000 per American household.

Optimal indebtedness has made money scarce. According to Evans-Pritchard , unless this capital is forthcoming, a clutch of countries will prove unable to roll over their debts at a bearable cost. The 'human calamity' has been announced by the World Bank! Debt is not money, it’s a charge against future money. And making people believe that it has to be considered as an asset is simply fraudulent. This has nothing to do with the 'right' or the 'left' but morality, yet we can see why political parties use the 'anti-tax' sword when they see it fit. But which one is truly 'right' on? , one would ask. Again please follow the money: the lesser the taxes, the lesser government fraud, it is logic applied.

IMF just predicted that the US economy will be worse than the world economy in 2010. But why the heck wasn't this aired on all TV broadcasts several years ago? The answer to that question is just more than appalling. 'Few Americans realize that over the last 94 years they have been enserfed', Paul Craig Roberts wrote. The scheme is obvious. The real crime lies in the 'Radical Redistribution' of wealth, asserted Chuck Collins in a Buzzflash interview. Alas it is only when this process is taking place that we can forecast a full-fledged systemic crisis. But at the very heart of this worldwide financial Greek tragedy, lies the very root of the current crisis is Money itself... It’s charging interest, stupid!

If you do not know Nomi Prins yet, her book titled 'Other People's Money' deserves to be put on your must read list a.s.a.p. Her work is an appalling indictment and it will irate you beyond anything you can imagine. Indeed - Prins argues that the free market system is in the hands of criminal wizards whose machinations have overrun the government while claiming to be its champions - and that there is no way to stop those scandalous doings with the system now in place. Laws are simply inadequate to the task. She also describes at length a whole industry that feeds on unlimited quantities of easy money to fund expansion. The most astonishing is that all the so-called (de)regulations were drafted under Clinton's tenure. The funny thing is that Bill Clinton asked not to be blamed for the economic debacle. The most damning evidence is when Nomi Prins explains why banks don't care about the failures at all: the word 'losses' is not part of their jargon behind closed doors. The name of the game in town is milking the system, using every trick possible to make *some* incredibly rich and leave everyone else holding the bag. According to her knowledge, investment banks have sold up to 30 times every mortgage in America. This brings us back to Buffett's dire CDOs warnings... with a financial structure like this, everything is built on sand. How ready are you and every member of your family to lose the $190K - which you do not have on your bank account? Although these are notional values, the threat remains very real. Think of AIG, which already had approximately $500BN derivatives exposure and then start imaging what would happen if the same toxic instruments engulfed other multinationals.

IMF sees a long and severe slowdown, as of April 14, and warned of 'worrisome parallels' between the current crisis and the Great Depression, despite the drastic measures already taken by central bankers and global leaders. Astonishingly, the international body advises to spend **more** to soften the deep recession. In other words keeping the bubbles inflated no matter what. World citizens are slowly being siphoned by the mother of all financial vacuums while the system has clearly become predatory. Zombie Banks feed off bailout money and ultimately whatever stimulus injections. As if that weren't enough, U.S. 2008 household wealth fell $11.2TN The equity illusion'? With the system we have, massive liquidations are unavoidable, they are bound to occur since every banknote in circulation is a debt (IOU) that must be paid pack. Real money doesn't exist because if we paid all our debts, there wouldn't be any money left in circulation. Period. So it isn't by mistake that the clock ticks towards a Financial Judgement Day. from a year ago and 50% of them are two paychecks away from losing everything. What is going to happen once they realize that they fell for a game called '

The 'Max Keiser' Solution

In the meantime another a massive $410BN spending bill was passed amid the collapse of factories' output tumbling at a rapid pace globally. Even the Chinese begin to question their massive holdings of Treasuries and other U.S. debt - and getting worried as witnessing their exports plunge 25.7% in February and which they plan to address with a $585 billion stimulus. Billions here, trillions there. But how wise is it to pour so much into a scheme that caused to date a $50,000bn wipe out in asset values worldwide? Yet they are still making us believe that 'they are on top of it' while ignoring the Japanese economic lessons of the 1980's Asian meltdown. The end result is a damning evidence: alas February, the Times.uk reported that Japan fell into a spiral of despair and currently is on the brink of implosion according to Roubini's rgemonitor.com. Japan Says Economy Is in ‘Severe’ State, read a Bloomberg headline on April 17. But wait, there is more: on the top of that a major contraction could grip China at any time - unless its economic managers start printing faster their own shadows. To keep the record straight, China experienced double-digit growth between 2003 and 2007 and then recorded 9% growth in 2008... now down to 6.1%!! This horrific news surely explains why China plans to slash new purchases of US debt. Indeed an article ran this month by the American Thinker revealed that in the first quarter of 2008, the Chinese purchased $153.9bn US Treasuries versus a mere $7.7bn in the first quarter 2009. Rest assured, the boomerang effect has been long overdue.

Beyond America, the picture isn't looking better at all. April alone give us a good glimpse of what lies ahead: the G-8 copes with its first bankruptcy, Singapore was foreseeing the worst economic plunge amid a shrinking GDP; that the very survival of the euro will soon be thrown into serious question; that Russia's banking problem is just beginning; that the full blown bust in Dubai is a story that gets uglier by the day, that toxic debts could reach $4tn worldwide; that the Irish's economy is in free fall collapse; that Switzerland is tipping into deflation, that the European bank bailout totals $4 Trillion... etc. But wait, the cherry on the cake is a very disturbing CNBC slideshow about The World's Biggest Debtor Nations. The results will get you to scratch your head for a while, especially if you thought that America would be ranked first... aorry, it is Ireland with an external debt (as % of GDP) amounting to 811%, followed by The UK then Belgium! The Scandinavian countries are also cited as much larger debtors than the U.S. This is freaking unbelievable, isn't it?

Don't listen to the policymakers who obviously have started shooting themselves in the foot - the spin is getting enforced no matter what. We just need to listen to a so-called specialist like Christina Romer, an economic historian at the University of California (and on Obama's payroll), to understand why our fate is sealed. 'We Need Banks to Lend Like Crazy', she interjected on CNN a month or so ago. Talking of madness, the Fed is planning 15-fold increase in US monetary base, contended Eric deCarbonnel. At the end of April, a Federal Reserve press release announced the purchase of up to $1.25Tn of agency mortgage-backed securities. This move clearly is a 'silent bailout', isn't it?. The system is so rigged that insiders can no longer hide their incestuous dealings. What are we to think of the White House selecting the head of mortgage giant - Fannie Mae's president and CEO - as an assistant treasury secretary? The infamous Fannie Mae, which got bailed out last September 2008 (along with Freddie Mac). No, really, we cannot make this stuff up. The combined losses amounted to approximately 80% of the companies' share values and dwarf the savings and loan rescue in the 1980, CBSMarketwatch wrote.

More dramatically, even on the Keynesian side, dissent rages: Stiglitz said that Obama's Wall Street ties had doomed the bank's rescue; and Roubini declared that the spin machine about the banks' stress test has become latest 'fudged' experiment invented by the wizards of finance, which now clash with each other over how to disclose results. You see, this new game has gotten some geniuses concerned at the potential damage to weaker institutions. The word 'reform' is a term meaning 'cover-up' for old regulations firing back and exposing their conflicts of interests? They just cannot hide anymore. The whole situation takes another surreal turn as San Francisco Federal Reserve President Janet Yellen said policymakers need to pop bubbles... does she mean that it is time to pop the world's mega bubbles? Are we going to allow the enablers go away with... murder? Thanks to Max Keiser, a famous European market analyst versed in hard currencies, for reminding us that throughout history, bankers responsible for the impoverishment of the community got the harshest penalty possible: DECAPITATION.

Even Soros, the closet Bilderberger, admitted that Americans have been 'Living in a Fool's Paradise' that's gone forever and blamed Obama for having missed the great opportunity to fix the banks. Talking of banks, this could well be the beginning of a trend as the term 'bonus' is sparking rages among the populace: Bloomberg online was the first to mention that Bank of America may increase salaries by 70% for its investment bankers. They are about to fool us again!

Mike Whitney, an extremely prolific financial journalist agrees that the Economic Meltdown 2009 is worse than the Great Depression. The situation is so dire that last month the FDIC warned it was running out of rescue funds and that it could go broke this year as bank failures mount - claiming that was due to the failure to collect insurance premiums from most of the banks over the last 10 years. Let's see: does it mean that even when times were booming the $harks couldn't care less about the (our) future? When one is aware that 99.9% of the money supply consists of debt to private banks, it is truly about time to look for an exit. Adding leverage extremely dangerous'. won't glue the house of cards: all we can do is trying to stay out of debt and reduce expenses. And, this is what will spontaneously happen down the road when consumers enter the Great Squeeze - everything will grind to a halt. Dissent is brewing: some well respected but misguided Keynesians have stepped ahead and blasted Tim Geithner's economic plan as '

Stormy horizon in sight. The United States will experience a painful readjustment since 50% of Americans are in a collective state of financial depression CBSmarketwatch contended:

A large number of households say that even one missed paycheck would spell financial ruin. And even in households that remain well off, the surveys show a festering fear that financial problems are lurking. "This is flashing so bright red," said Paul Ballew, senior vice president of Nationwide Insurance Co. "Roughly 60% of the population was ill-prepared (financially) before the meltdown." ... More disturbing is that 28% said they could not make ends meet for longer than two weeks without their jobs. (03/20/09)

After having read all this, what would you say if you heard that the real Jobless U.S Rate turned out being 19.8%? Would you believe this double digit to be accurate? Please click on the link if you have any doubt.

Toward A Global (Civil) War And Food Shortages

Does the Pope know something that we don't, when warning of 'a desert of godlessness' in Good Friday address?

"We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom." ... "I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world," Volcker said (Reuters - 02/21/09)

Four weeks after the FDIC warning, the G20 met to discuss a big increase in IMF fund (more or less $1TN) after admitting that it would no longer be able to help the world anymore. Alas we can already assume where the money will be coming from: the so-called rich taxpayers from the West. However, after a quick check, this appears unrealistic. The downturn has sparked unrest across Europe. What is coming is very serious, so serious that it will be remembered as a 'double-whammy' of the worst economic crisis in living memory, the express.uk. declared as it revealed top contingency plans to address possible civil disorder and riots. Not only are the IMF' safes empty, it also asserts that world economy is getting so unpredictable that it could lead to war. So what does this mean: that taxpayers have put their trust into an entity which is completely failing its purposes? Furthermore how to trust, again, our monetary scientists at the International Bank Of Settlements - BIS - who didn't see the global collapse coming but are planning to implement a global currency, a project that can only be made possible if all currencies have failed in the first place? The global economic crisis isn't about money - it's about power. And in order to take over the world, an unprecedented event needs to be create so masses would endorse the Big Brother. It's undoubtledly a collapse by design, there is no doubt about it. Most appalling is that the powers-that-be have become able to predict the irrational manner in which consumers will make economic decisions.

Outrageously, when currencies are destroyed food shortages are nightmares coming true. Last November, the Food and Agriculture Organization predicted that the downturn could trigger a new wave of food riots across the developing world. What the organization didn't say is that they already had broken out in about 20 poor countries due to the biofuel craze which made the price of wheat triple, corn double, and that of rice almost double. Talk of throwing oil onto the fire! If the Greens are really serious about helping humanity, it's about time for them to consider other alternatives than policies encouraging murder under the guise of decreasing the reliance on oil:

Even worse is the bioethanol craze. Politicians in both the United States and the European Union are mandating that vast quantities of food be turned into fuel as they chase the chimera of 'energy independence'. ... The result of these mandates is that about 100 million tons of grain will be transformed this year into fuel, drawing down global grain stocks to their lowest levels in decades. Keep in mind that 100 million tons of grain is enough to feed nearly 450 million people for a year.... ( more)

Although Americans fell asleep at the wheel, they are slowly coming back to their senses, realizing that Wall Street speculations were not under the scrutiny of watchdogs but Madoff-like people. Gerald Celente, a prominent forecaster, believes that a violent Revolution will start soon. He rightfully argues that Americans are not going to accept seeing their taxes raised as they are losing their jobs, homes and retirement savings as they unwittingly fund the merger of state and corprations - which is called fascism.

On a more positive note, if the United States is now pointed at as the main culprit of this unraveling crisis, many of its citizens and bright thinkers are most likely among the very few who understand the spirit of free enterprise as advocated by the Founding Fathers. And if any positive changes are ever bond occur in the destiny of the world, the country may well find itself, as an instigator, at the center of a new era.

posted by SB Kayser @ 7:01 PM 10 Comments

Planetary Bankruptcy

'If all the bank loans were paid up, no one would have a bank deposit, and there would not be a dollar of currency or coin in circulation. This is a staggering thought. We are completely dependent on the commercial banks for our money. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp upon the picture, the tragic absurdity of our hopeless position is almost incredible - but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and the defects remedied very soon.' - Robert H. Hemphill, Federal Reserve Bank of Atlanta

In order to give a full meaning to the quote above, it is essential to mention that it applies to any 'fiat' currency, not just the US Dollar. Fiat money's value is backed by confidence in the economy and covered by the government which decrees it to have value - and more importantly (here comes the devious twist) is also backed by a promise to pay! So, let's stress it again: not only the banknotes remain in our wallets at the condition we pay them back but will retain their value as long as we are able to take on debts. How confident are you in 'a piece of paper' that is worth less that it's printed on, because it is the strict bottom line as Former Fed. Reserve Chairman Paul Volcker puts it in 'The Ascent of Money', a pbs.org video at 17:36 min. Such a concept is repellent to the mind because if we give it a thought, we begin to perceive the illusion we live in - to feel like our spiritual self and our hyper-materialistic driven environment are set for a inevitable collision course.

Since last September, world nations have grasped the importance to prop up the USD and that the failure to do so would have dire consequences. Confidence in the world currency reserve is eroding at a faster pace every day. These grave threats could all vanish overnight if people were able to make the link between the amount of taxes paid since they joined the workforce and the promises made to them during all this time - then asked themselves honestly: what did come true, was it all a dream? If they were doing just that, maybe they would demand the repudiation of their (illegal) *National Debt* to start with. Politicians who want to be elected use the old trick named 'the carrot and the stick'. Their promises will demand raising taxes. Governments have always overspent and it is precisely this pattern which corrupts minds across the board. Passing debt onto further generations is not really a concern because nearly everybody wants it N-O-W! More dramatically, the financial structure is built in a way to preserve itself, nobody wants to lose one's entitlements: so the cure is to inject more cash into failed programs and accept corruption as a fatality. Moral hazards do not go away, they merely become bigger threats as decades pass by. How many layers of fallacies are needed to realize that fiscal straightjacket on a government level is a myth?

Alas without the power to tax, the economic world cannot exist because money wouldn't have any value at all, this is a simple as that. The top 10% depends on this scheme to consolidate wealth. The most appalling is that even the architect of our current system once confessed the awful truth:

'Should government refrain from regulation (taxation), the worthlessness of the money becomes apparent and the fraud can no longer be concealed.' -- John Maynard Keynes, 'Consequences of Peace'

It is precisely taxpayers' money that first enabled the predatory behavior of lobbies and cartels feeding today off bailouts, which are nothing more than the bones of global debt carcass. We are just running on empty and it's only a matter of time before the music stops. This is a very last cancer stage: taxpayers have been unknowingly the engine of their own demise and now must endure a 'die or spend mode' as their insolvent central banks turned them into lenders of the last resort to rescue the ' Davos Golden Boys' way of life. Told that their house value was the safest piggy bank on earth, many worked hard and spent as if there was no tomorrows while not realizing that what was done to them was exactly the same as the economic Hitmen did to the third world countries.

Our World Managers Succumb To Monetary Dementia

Let's consider some eye-popping figures: if a big bank such as 'Bank of America' needed a $131bn bailout, CiTi finds itself on the brink of liquidation, Merrill Lynch clients pulled $10Bn in the fourth quarter, J.P. Morgan profit fell more than 75%, hedge funds lost $350Bn in 2008 and pension funds (worth $15Tn) threaten to implode... we are indeed walking on very thin ice. Interestingly, American taxpayers seem to keep their eyes on the ball better than their lawmakers. Has a stimulus ever been necessary at all? Anti-Bailout coalitions and advocacy groups have begun to mushroom nationwide. A recent poll revealed that 60% of Americans want the bailout of the financial sector to stop; yet the DC Geniuses (who still can't figure why printing our way out of debts will aggravate the liquidity crunch) plot the next step after aid to Citigroup and Bank of America. Unethical premises and remedies multiply moral hazards. One of the unintended consequences to finance those 'has-been businesses' is creating a new menace to the economy: 'Zombie' Debtors that will be feeding off the taxpayers and stockholders — as healthier rivals become increasingly threatened with 'organized competition' put in place by Lawmakers. The price of protection shows its true colors: it allows the government to decide who can live - or die: it is fascism in disguise. The ugly side of intervention is precisely its addictiveness. And that is why institutionalized debtism has a lethal track record.

An 'almost incomprehensible' amount of cash evaporated, this the Global crisis 'has destroyed 40pc of world wealth', Steve Schwarzman admitted. Indeed, where the heck did all the money go? When money is debt it is negative wealth... got it?

Two days before his inauguration, Obama urged to move swiftly to rescue the banks continuing to hemorrhage billions of dollars. As the situation worsens by the day Bernanke skipped Congressional Financial Hearings in favor of a secretive euro bankers confab. According to Ron Paul, the meetings took place in Basel and were chaired by ECB's Jean-Claude Trichet - not so surprisingly the mainstream outlets remained elusive about them. Just like a bad quality varnish peeling under the pressure of a nail, the magic really vanishes when one looks at Obama's billionaire pals' list and who is throwing money into the most lavish Inauguration in history. Guess what? The biggest part of the pie goes to the financial sector. Obama is no savior... and here is why:

The Government Accountability Office (GAO), Congress' investigative watchdog, has found that "a majority of America's largest publicly traded companies and the U.S. government's largest federal contractors use multiple subsidiaries in offshore tax havens to conduct business... The culprits include some corporate giants who are receiving countless millions in bailout money, Leonnig notes. ... (01/16/09) - more

As credit card spending in 'The Rich West' screeched to a halt, China Central Bank, which called Paulson a 'gangster', is trying to prevent a quagmire; and so far the only remedy is the Yuan devaluation. How smart is this really? Doing so is extremely tricky because competitive devaluation (race to the bottom) has limits. If things really go wrong, it may lead to a professional run on banks. So much for our fabulous globalization, heh?! But what if banks do not start lending again (what wouldn't fix the downhill trends if they did either)? Evans-Pritchard leans toward a collapse that could drag the entire planet into a remake of the Great Depression. SocGen warned too that the Chinese economy is imploding and speculates about the possibility of regime change. Flash back: that very dire outcome was forecast in 2004 by Krassimir Petrov. There is practically no doubt that the Chinese will overcome the shock a lot better since they are already accustomed to sweatshop wages. For us, it will be a rude awakening and we could see, in the so-called free world, a suicide epidemic as currently witnessed among young Chinese women.

In Russia, troubles are brewing too. Last November, its stock market is down 70 percent from late spring 2008 and since then anti-Western rhetoric abound. In December alone, the central bank spent $70BN to rescue its currency and avoid the panic of a currency collapse reminiscent of the 1998 crisis. As of January 13, the WSJ reported that the drastic measures didn't prevent the Ruble from nose-diving and massive lay-offs from bringing wages back to earth. The Jungle is surely fairer than our financial environment. Ireland is in the midst of a housing bust and real estate prices are predicted to fall by 80%. Icelanders have to go back fishing to survive the complete demise of their banking system - now seen as the worst economic crash of any country in peacetime, BBC reported. The Japan's jobless are encouraged to accept a government program that focuses on reviving the ageing countryside amid a worsening recession. All this is a mere glimpse of what is coming next: your government will soon turn out being the biggest employer, that's where minimum wage laws start fitting the big picture. How great is this? But wait, the avalanche of bad news isn't over just yet... 40% of Latin America’s financial wealth was wiped out in the first 11 months of 2008. On the old continent, the monetary union has left Eastern Europe trapped in depression. Um-um, wasn't that part of the world too in the midst of a b-o-o-m-i-n-g housing market until early 2008, setting off alarms bells at the IMF? Financial alchemists like Lorenzo Bini-Smaghi, a ECB board member, perfectly knew that the euro pegs would lead to boom and bust cycles. How bad could it really get? Just look at the Zimbabwean hyperinflation (hitting 231 million percent!) that has left the country with more than half the population starving and of course, the United Nations is begging for more aid. Once again, the UN is showing its uselessness!

So now, we can begin to see why Trichet said that 2009 will be ‘substantially’ one million protesters demanded Sarkozy to do better at protecting jobs and consumers during the crisis. When will the masses realize that 'managed economies' do not work but are implemented to protect those in power? Moreover, how smart is it to ask people who couldn't see the bust coming to find appropriate solutions? Our problems cannot be solved by the minds that created them in the first place. Sure, after the bust the economy always comes back, it is not a matter of 'if' but 'when'. Uncharted waters. Guru Trichet even made an esoteric statement in the Dow Jones News as of 01/29, and which amounts to 'another nuclear option': worse than forecast. He blamed 'mispricing of risk' for the downturn and ended his statement by saying that 2010 will be the year of the recovery. On Jan 29, in France,

ECB is already carrying out many 'non-standard' operations, like massive liquidity injections... We are in a non-standard world. So whether or not we will embark on other non-standard operations, I said already that I wasn't excluding that," he said.

And it shouldn't be wise to bet on 2010 at all, as such a leverage needs a lot more than two years to be cleaned up. Think of ten years or more instead. The Euro could be toast for good. Meanwhile Germany forecasts the worst economic growth since WWII and riots spread throughout in Eastern Europe. An article in The Spiegel even describes Great Britain as a second Iceland and Italy as a second Argentina. The European Parliament lamenented that six to eight countries had to reduce their deficits but no receipe as how they might go about doing that. There is no solution other than debt liquidation. On the other side of the North Sea, in Ireland (whose economy will shrink 10% by 2010), a leading economist advised a withdrawal from the euro unless Ireland gets its part of the bailout pie.

(01/19/09) "If we have a single currency there are obligations and responsibilities on both sides. The idea that Germany and France can just hang us out to dry, as has been the talk in the last couple of days should not be taken lying down," he said.... By keeping with the current policy, the state is ensuring that Ireland turns itself into a large debt-repayment machine. Is this the sort of strategy to win wars?", he said. more

Speaking of bailouts, The European Commission approved a French plan to allocate firms affected by the crisis up to EUR500,000 in aid. In America, Bailout money used for lobbying and Obama promises that he will push bankers to lend more, he doesn't want them to sit on the money that they got from taxpayers. Paid by the taxpayers... then borrowed again by them with an interest... doesn't this make sense or perhaps is debt laundering legal? In England, dementia struck a step further as the BofE’ s multibillion-pound scheme will offer credit to new car buyers to rescue the moribund motor industry. And there is more, the government also contemplates an insurance crackdown targeting two million uninsured drivers who, as a result, could get their cars seized and crushed! There is even sillier: US Financial Services Committee Chairman, Barney Frank who declared that companies with corporate jets may forget about the bailout money. Nevertheless, a few days later the press reported that taxpayers were also funding Citibank's jet.

Black clouds are gathering above the horizon. Europeans are waking up to the abrupt demise of democracy as discovering the fine print in all the treaties. The IMF just announced that the world trade collapsed by staggering 45% in the last quarter of last year. Even the euphoria of Obama's inauguration didn't last long. The same day Dow closed below 8,000 as banking fears were gripping the European markets and bringing shockwaves from the United Kingdom too. British Banks got a £1TN injection which didn't prevent RBS shares to plunge 70%. London is faced with a bloodbath. Brown admitted there is not yet a limit on how much risk taxpayers must bear as a result of his rescue plan, but he even promised financial institutions that they will get more cash if they pass it on. Looks like the Brits are too being set up for the mother of all crashes. With the UK government debt alone and future liabilities not included, this means that every new baby is born with £17,000 debt. Checkmate! UK cannot take Iceland's soft option, Evans-Pritchard explains:

The parallels with Iceland are disturbing. The country was ruined by the antics of its three big banks. They built up foreign liabilities equal to 900pc of GDP. Operating as hedge funds, they borrowed in dollars, euros and pounds to speculate....If Britain walked away from UK banks' $4.4TN of foreign liabilities – worth eight times Lehman Brothers – it would destroy the credibility of the City and take the whole world into deeper depression... The sovereign debt of Russia, Ukraine, Greece, Italy, Belgium, Austria, The Netherlands, Ireland, Australia, New Zealand and Korea is all being tested by the markets. The core of countries deemed safe is shrinking by the day to a half dozen. Sadly, Britain is no longer one of them. (01/20/09)

Describing in length the fundamentals of the American economy at this stage is more or less a naughty intellectual exercise. As the bank bailout is expected to cost $4Tn, U.S. financial losses could reach $3.6TN and suggest that the banking system is 'effectively insolvent' contends Nouriel Roubini, New York University Professor and former financial Clinton's adviser. Back to spending orgy. The clock is really ticking; even the legendary investor Jim Rogers predicts a total decline in 2009. We can get a better sense of absolute gloom and doom if we take into account the Asset 3 Level also known as ‘mark to make believe,’ thus whose market prices are based on the banks' 'unobservable inputs' that 'reflect management’s own assumptions'. So now we have phantom asset values which remind of the CDOs' notional values, also called by Warren Buffett WMDs. The Titanic is about to hit the iceberg. Gerald Celente doesn't chew his words when commenting on the ongoing dreadful meltdown. The situation is so dire out there that global banks have joined the clamour for bailouts. Do our demented global elites deserve to be rescued - honestly?

The Demise of Mainstream Economics

“All truth passes through 3 phases: First, it is ridiculed. Second, it is violently opposed, and Third, it is accepted as self-evident.” — Arthur Schopenhauer

Almost every teenager has been warned about the dangers of getting into debts, but they all grew up accepting that a government debt was acceptable and even honorable. As this editorial points out earlier, if the scheme is run by the top managers of a country, the amount of debts can only grow exponentially. One doesn't need to be a rocket scientist to figure what happens when the national debt exceeds the GDP. For the bankers it doesn't really matter, they operate for profits and when money is debt (does not exist) massive liquidations are ineluctable. The (bank) shareholders and the taxpayers are simply left holding the bag. As stipulated in 'Beyond The Age of Usury', today's events are far from being isolated. Luckily, such facts are everywhere on the Internet: we only have to keep an open mind and allow reality to reveal itself. They represent a recurrent pattern that is concealed to preserve a feudal hierarchy. The book titled The Bankers That Broke The World and written by Liaquat Ahamed - here reviewed by the New York Times - tells us about a macabre monetary story that looks much like today. The parallels are uncanny. That book should be on your must read list this year. If your budget is tight, there are plenty of free online books that will do the job and which you can find in the library of the site.... time is running out. As financial illiteracy and corruption are about to engulf the whole planet, some speculate more and more about the meanings of The Mayan 2012 prophecy. One thing is certain though: it is The End Of The World As We Know It - or TEOTWAWKI as an acronym frequently used by the doomsayers.

It is going to take the collapse of the dollar to have a mentality change and address central banking, Congressman Ron Paul conceded recently on MSNBC. Since we cannot escape what is coming toward us, a Biblical debt jubilee and the implementation of 'honest money' are the only long-term answers. The people have to free themselves because the 'powers that be' will never admit to being the rulers by deception. More positively, this battle cannot take place on the streets but in each of us individually; and it can only be won if waged peacefully and spiritually. There is no such a thing as a war to end all wars.

And ultimately, everything is bound to be overcome or disappear eventually. If 'We The People' were able to find our way back to prosperity, we'd no longer be living in a world where destruction is more profitable than peace and with the fear of technology. It would also enhance the smooth transition to the development of a resource based economy as advocated by Jacky Fresco who dedicated is entire life to The Venus Project... (to be continued)

posted by SB Kayser @ 5:35 AM 7 Comments

Beyong The Age Of usury

(ps: the mix-up sentences caused by formatting errors are now corrected, my sincere apologies)

It is generally agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of Stock Exchanges." — John Maynard Keynes

What is particularly fascinating with John Maynard Keynes is that he wrote a theory that only works on paper since it assumes that monetary, political and financial managers will never abuse the power of indebtedness. So, what to think of this worldwide credit squeeze and its implemented cure that is no more less the cause of the disease and could spiral at any moment into a 'Greater Depression'. This week Gregory Mankiw, a professor of economics at Harvard, wrote a piece in the NYTimes asking openly what Keynes would have done to deal with the crisis. Just another nice but failed attempt to praise the Keynesian fairy tales. Mankiw cites the observation which links the root cause of economic downturns to insufficient aggregate demand. What demand when the consumers are completly tapped out in the first place? How can world governments create demand when they are literally bankrupt?

World stability hangs by a thread and this illusion is now being tested, Pritchard concedes. To see what will happen next, we need to look at what is happening to the most peaceful country: Iceland. The political bubble is indeed bursting: in early December, Icelanders stormed their central bank after the realization that their country (viewed as 'The Happiest Place On Earth' - and with 0% unemployment rate) had been brought down by a wave of concealed toxic debts and CDOs coming back home to roost. They demanded the ouster of bankers responsible for the meltdown. The ouster is a very soft alternative to a life sentence in jail, which would be a lot more appropriate. Policy makers and bankers are generally untouchable. Resigning and banishment are often the worst punishments that could happen to them. How fair and impartial is this? How long will it take world citizens to realize that we're free range chickens and act against financial serfdom?

As you read this, the American bailout is reaching epic and fatal proportions of more than 8 trillion and the worst is not over yet. Actually, the current trends are already much worse than depression, though because of some banking toxic tricks and frauds, risks are being constantly shifted down the social ladder deteriorating the consumers purchasing power for ever. There's nothing that can rescue the system as the crisis was built into the system itself. Although this has not be aired on any major TV broadcast, when the world Leaders got together to discuss our fate last October, they admitted to being incapable of doing anything. That we are all scr*w*d. The Australian ministerial statement by Kevin Rudd sums it up pretty well while acknowledging that the global wealth destruction amounts to $27 trillion - and that is far from over. Among many other terrifying recent events, discount window borrowing (from the Fed. Reserve) in the week ended Oct 15 averaged a record $437.5 billion per day, surpassing the $420.2 billion rate in the prior week... please note that it is not included in the cumulative 8 trillion package!

In a debt-based economy, competition translates into a 'great crash enhancer'. Take this housing bubble, its engineers, which couldn't anything to stop the infectious exuberance, figuring that market saturation would eventually have the last word . This didn't prevent them from firmly believing that prices had some room to run up... and everybody competed to get the very last piece of the pie. What is truly outraging is that we boarded onto the Titanic because Credit Rating Agencies sold us a fictive 'star system', which has led us to a triple A junk status. Please watch this PBS.org video. At 9:27 minutes, you will hear:

CDOs complex securities concocted by math geniuses and PhDs... the only problem is that they didn't have any data to rely on... and why did they get a "go" anyway?... because there was the stake$ were too huge... the more triple A debt rating products on the market the more business "they" get (paraphrasing)

Perhaps you remember my editorial - Global Junkification - mentioning that the global leverage is about $400TN or so, and that the world G.D.P less than $70TN. This big picture helps uncover the hidden goal of fractional banking and its ensuing elementary conclusion: that Fiat money, which is backed by confidence only, is designed to eliminate competition, one step at the time. Now the new scheme is the 'global currency', which is going to consolidate the field of banking even further during/after the 'Great Deleveraging'. By the way, 'deleverage' is again one of those convoluted terms invented to mask reality. Deleverage means (partial or complete) destruction of the debt-vortex unfolding with a 'domino effect'.

Intended Massive Failure

These days, capitalism bashing runs high on the agenda of many pundits, and for which they blame in the name of evil deregulation. They deliberately neglected to consider - and report - that lobbies have militated restlessly to bypass them one way or another. This real estate bubble, now bringing the financial system on its knees, was made possible with the intended failure of regulation. It was regulated to be this way.

Yes, this was an original intent and it becomes crystal clear when pondering this Visual Guide to the Financial Crisis. The elites have the habit to design laws for themselves; that is why the people get fooled every time they put faith into a ruling body. Every civilization's collapse precisely occurs because of that; yet people would rather think that what *goes up must go down* theory is beyond their control. The delusion consists in persisting that hope is key for a real change. Indeed, did we really have to wait thousands of years to find ourselves confronted to with the current events - and finally admit why hope did absolutely nothing; that We The People neglected throughout the millennia to teach a generation to the next why 'debts and consumerism' aren't bedfellows. Obviously politicians never made it a specific educational platform for high school students - instead they institutionalize blind speculation and spending when times are good and then implement the bailout of their bankrupt thinking. It thus becomes greatly ironic to listen to Sir Evelyn de Rothschild calling for action since the latter doesn't provide any solutions but altruistic half-truths and rants. For how long will this cynicism continue?

The credo of un-debt.net is 'ignorance always comes with a price tag'. It is because the Wall Streeters viewed themselves smarter that we are in this giga-mess. They banked on gullibility and it worked out as usual. Exactly, as usual. Charles Mackay described in his 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, that what is happening today is nothing new. Rogoff’s Harvard has identified 148 crises since 1870 in which a country experienced a cumulative decline in gross domestic product (G.D.P.) of at least 10 percent, Niall Ferguso contends.

So there have been 148 crises over a 140 year period and people don't still get it? How couldn't this be an incentive to warn populations when bubbles are forming? Should we really believe Greenspan when he says the Fed can only identifies a bubble when it has popped and intervene to clean up the mess? The crowds are just too mesmerized by the 'Golden Boys' way of life to see the trap they keep falling into every now and then - confusing debts with assets and otherwise. Now that it all becomes clearer, who will give charity WHEN 60% of the population becomes poor overnight and another 30% can barely survive? Meanwhile Businessweek praises the 50 Top American Givers without even asking where did charity lead us since the U.S Gov't found out that child hunger rose 50% In 2007 and that we are now staring into the abyss?

World of the Big Rich Collapses... What Nuclear Option?

"The most hated sort of wealth getting and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest. And this term interest, which means the birth of money from money is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth, this is the most unnatural." -- Aristotle (1258b Politics)

From one extreme to the other: in the sweatshop parallel universe, Chinese authorities ready themselves for mass social unrest. In a blunt statement, the chairman of China's largest sovereign wealth said that China won't rescue Western banks. There too, the government has decided to embark on a spending highway with £373bn bail-out package, and this may also imply the eventual dumping of the nefarious US dollar already affecting the rich city of Dubai where speculators are throwing in the towel as a lending drought bursts the 'Desert Bubble'. The most comedic element in this grand scale drama is the story of Donald Trump who sues the banks for $3BN for having failed to foresee the housing collapse that is now damaging his reputation in order to avoid the $40M he owes in banking interests.

In the Vanity Fair December issue, a columnist wrote an extremely well articulated piece, which also reveals the latest estimate of jobs New York is going to lose, both on and off Wall Street, amounting to l60,000 to start with. Michael Shnayerson's intro reads like a hook scene:

... Even many of the wealthiest players are retrenching. Others, like the Lehman Brothers bankers who borrowed against their millions in stock, have lost everything. Hedge-fund managers try to sell their luxury homes, while trophy wives are hocking their jewelry. The pain is being felt on St. Barth’s and at Sotheby’s, on benefit-gala committees and at the East Hampton Airport, as the world of the Big Rich collapses, its culture in shock and its values in question.

Last week Bernanke said that he was not against the possibility to drive interest rates down to near zero if necessary but urged decisive action to protect the economy... the meaning of this can be found in the reason why The BofE contemplates radical plans to inject cash directly into the economy - the nuclear option - to be used only when interest rates approach zero; an action seconded by President Jean-Claude Trichet, hinting in the press conference to announce the ECB's 75 basis point rate cut that it may also consider "nuclear options".

The term **nuclear** ought to be taken literally in this particular case. If a well known market guru such as Marc Farber didn't let himself be duped, it should scare the hell out of you. In a recent CNBC interview, an outraged Farber calmly explained what the stakes were, as concluding that world central bankers were merely imploding the world economy.

Beyond The Age Of Usury

Because the very premise of 'usury' creates endless inflation, which in turn reduces the purchasing power, extreme materialism dismantles the fabric of societies: everybody prioritizes the need for cash to the detriment of communities, neglecting friends and family. This causes the goods and services to multiply endlessly since people are too busy to chase money - but what for in the end? As for the corporations, they do not see any incentives in creating long-term perspectives: when 'loans' are so easily available and knowing that more voracious competitors will borrow to take over whatever natural resources there is no time to lose! Polluting nature, cartelizing the means of production, human exploitation, bribery, collusion to maximize earnings are not diseases but symptoms. This all highlights the gap between people's creativity and their needs.We are truly heading toward a terrifying and inevitable crisis of civilization and this is our very last warning before being plunged into an era where money and food will be scarce for many years to come. Wars may well be the only weapons of unethical governments if civil unrest on a large scale threatens their very existence; they will resort to armed conflicts which will have been financed by their taxpayers. Yes, you got it: usury also allows killings and destruction to be a lot more devastating. Contrary to the popular belief, money is not the root of all evil but usury is.

posted by SB Kayser @ 3:33 PM 4 Comments

The Last Debt Orgy

Former Federal Reserve Chairman, Greenspan: 'We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power' - February 15, 2005

It is very common among 'sound money' believers to entertain some kind of fascination with Greenspan who spoke out against 'irrational exuberance and 'infectious greed' at the end of the dotcom cycle as he now warns that ' the Fed is not a magic piggy bank'. For them, Greenspan will always be remembered as the engineer who has unleashed the Horsemen, calling for America's demise and the world by extension. The Maestro and his cheerleaders from around the planet should be very happy that the 'guillotine' has become an historical relic, because what is happening is, without a doubt, reminiscent of the events that led to the devastating hyperinflation and the bloody French Revolution. Loose monetary policy and decades of faulty interest rates are the absolute main culprits. When interest rates fail to control the amount of debts, the opposite happens: it then increases the burden of debt inexorably. Just like printing too much money inflates prices while provoking currency devaluation. More money is then needed to purchase the same goods and services. This is an insidious process that corrupts many minds, from the top down. The top takes advantage of the bottom. And that is why the gap between the rich and the poor worsens, and the middle-class ends up being destroyed. As The above quote by The Maestro stipulates, the FDIC won't be able to do a thing when the USD will become peanuts - eventually.

While it remains to be seen as to whether chaos and unrest will be witnessed, revolutions also tell us that nothing has changed under the sun and this alone should question us very deeply. Instead of resorting to violence how about starting to put faith in the idea that our neighbors are smart enough to grasp ECON 101, because if we don't, things are only going to become a lot uglier before they get better...

More Of The Same Old Cherished Delusions

To start with, the TV broadcasts have once again done everything they could to hide a backdoor giga-bailout orchestrated by the Fed to keep the economy lubricated: the banks have borrowed a record $437.5 billion per day from Fed, Reuters attested candidly as of October 16. Let's also mention that the Fed announced a few day before that it would to provide broad access to unlimited borrowing. So what happens when one has to borrow $100 to honor $100 loan? So, you can imagine where the irresponsible actions of the monetary elites are going to lead us, can't you? But this is nothing surprising from Helicopter Bernanke who has fervently pursued Greenspan' s task aimed at eradicating the cash-strapped middle-class in favor of foreign banks holding too many dollars, and which they were about to dump if anything was done. Ellen Brown, who monitors the situation closely, sums it up like this: FMae and FMac, along with AIG had to be bailed out to prevent the 1 quadrillion dollar derivatives from detonating - temporarily.

Furthermore and astonishingly, this also means that these $700B dollars were just a part of a political sponsored media circus to create a diversion. For the record, let's consider the Fannie and Freddie debacle: Barney Frank in 2003 said that Fannie Mae and Freddie Mac were not facing any kind of financial crisis... then we have Bill Clinton who asserted that Democrats resisted standards for two institutions... on the top of that we now have Obama who is a top recipient of Freddie and Fannie lobbies pushing for no-doc loans, nothing-down houses, equity-line hustles, phony appraisals, in short gleefully shaking the money tree in every direction they could. By the way, did you know that as economic storm was brewing, Congressional Wealth grew 11% last year? While condoning any bailout is unethical for obvious reasons (it only makes matters worse and prevents from prosecuting the evil doers), we also have a classic case government failure. By now it should be obvious that these two lenders must go. More concretely, the American citizens are being tested and must show how far their resilience toward theft can go. Despite themselves they have become the facilitators of toxic and illiquid loans that have come home to roost. Do not count on the Newspapers facing historic debt burden to tell you the truth.

Our government and its owners appear to be testing how much the American public will tolerate. A few years ago, no one could have imagined that the silent majority would quietly accept thefts of this magnitude from a government that stopped tiny payments to single mothers with poor children in the name of welfare reform because the program's $10 billion cost was breaking the federal budget. This isn't socialism, it's fascism. -- Sean Olender, sfgate.com

Last October 11, the Times.uk asserted that Lehman Brothers demise triggered the hugest corporate debt defaults in history as grave concerns as to whether Washington’s $700B bailout fund will be enough to avert a financial meltdown. It emerged that the Fed Bankers are anxious that if the Treasury is not able to accelerate the speed at which it launches its rescue scheme, it will have no effect. Of course, they know, they are just buying time. It is not without a reason that the IMF Warns of Global Financial Meltdown. As lawmakers and Wall Street Bigwigs are patting each other's backs, it should be useful to mention that Lehman CEO contributed heavily to Democrats - over Republicans nearly 5-to-1!

It is tempting to assume that human beings are a lot more clever nowadays but are they really so? What is left from the 'Industrial Revolution' and its ideology behind that compelled women to join the ranks of the work force, claiming that they would help the family enjoy an unprecedented wealth. Unfortunately this is not what has happened. The reality shows that the average working families are today in debts up to their eye balls and one of the parents often has two jobs. Due to inflation, nearly 30% of US families now subsist on poverty wages. Their children are burdened with student loans that will take 30 years to be repaid. What quality of life may a young couple into medicine expect today with loans topping half-a-million dollars?

The party is over for the borrow-and-spend culture, for an economy based 72% on consumer spending, nothing will never be the same, Peter Schiff concludes. America's $53 trillion debt problem is very real. According to Michael Hudson, writing in the May 2006 issue of Harper’s Magazine, are Americans unwilling to face reality. In the meantime, Wall Street banks in $70bn staff payout, or 10% of US government bail-out package while admitting that the bailout won't work as of Oct 18, 2008. So much for the 'brightest college degrees club' managing the planet - indeed!

It’s clear that the government would like us to use the capital," Mr. Dimon said on a conference call with analysts on Wednesday. "If you are a bank that is filling a hole, you obviously can’t do that.

While Europe blames and curses America for the global credit crunch, it is ironic that European banks have turned out to be deeper in debt than their US counterparts, contends Evans-Pritchard on 10/5/08. Europe put $2.3 trillion on the line to protect the continent's bank. So much for an EU treaty called The Stability Pact as they are staring into the abyss and wondering who's going to bail out the Euro next? Probably not the UK: the Bank Of England unveiled £500B rescue package early this month. On October 16, 2008, ECB went nuclear as EU leaders called for a 'civilized' capitalism. Cynically, World Bank President Mr. Zoellick confesses that the G-7 is not working. Indeed when debts are not kept under control, predictions and estimates are always wrong. Instead of getting back to the basics of ECON 101, Zoellick urged the creation of a new larger Group that would include China, Russia, Saudi Arabia and others to solve the world's economic problems. A New World Order!

Long time viewed as a financial Eden, Iceland too has gotten a taste of the 'kiss of death'. As the Icelandic krona is about to become history, Lawmakers have no other option left than contemplate an IMF bailout. To refresh your memory, the IMF is the same lender of the last resort whose advice plunged Mexico, Argentina, Russia ( which might go bust again) and lately Japan into financial turmoil. We can only wish Icelanders a lot of luck!

As a matter of fact, indebtedness knows no boundaries (classes and cultures): early this month even Pakistan went under and as a result, is being threatened with a currency crisis. Pakistani leaders still hope to be able to borrow $10B from the bankrupt UK and US. Ireland, long time considered a taxation heaven for European firms, is currently undergoing a massive adjustment due to the bust of its housing bubble. To make the matters worse, a columnist from the independent.uk asked if Switzerland could become the next Iceland... Thousands of miles away from Ireland, a bad omen suggests that Russia's Crash looks very similar to that of 1929, a Bloomberg columnist reported. Indeed, Russian equities this year have lost 67% so far. As you read this, the Indonesian President suspended the stock exchange indefinitely 'to prevent deeper panic' Delaying outcomes is absolutely senseless because at some point, we'll end up reaching an exponential threshold where conflicting interests and lies - will collide at once.

With a flawed diagnosis of the causes of the crisis, it is hardly surprising that many policymakers have failed to understand its progression. Today’s failure of confidence is based on three related issues: the solvency of banks, their ability to fund themselves in illiquid markets and the health of the real economy. economist.com

Although (credit induced) financial plagues dot Mankind's history, the financial media often presents debt crises (ie: business cycles) as being facts of life. However, this didn't prevent them from lauding the housing mania at every level they could, as if this time was different. Would they all be suffering from amnesia? Please do your homework and google 'The Bubble That Broke The World' and you will discover the dreaded similarities between the roaring 1920s and today's. .. Flawed diagnosis? are they stupid or do they have a plan?

It shouldn't be assumed that it is in the human nature to live as if there were no tomorrows, to the contrary. To take the appropriate rational measures, they first need to be able to access unbiased information to begin with. The rock bottom line will always remain the transparency of a system itself. Today many have realized that the opacity of the fog was hiding the mother of all black holes. Unfortunately, there aren't that many different ways to define words like 'S.C.A.M', 'P.L.U.N.D.E.R' and 'F.R.A.U.D' without running the risk of sounding redundant. This worldwide debt laundering will have to be paid with a hard landing. In order to do so, the Powers-That-Be (PTB) are readying themselves for the worse case scenarios, such as shutting World's Bourses, creating a single world currency, which has always been 'the end of the game', as Ron Paul warns. Just click here to watch the video released on Oct 17: Worldwide Currency System to be Presented to U.S.A. by EU Leaders. Of course, a one-world-currency will not stabilize anything at all; the Euro has not insulated the continent from external economic dangers, far to the contrary. Until two years ago or so, Eastern Europe was booming like never while heavy-weight economies like Spain, France and Germany were already crushed by their own deficits. Having one single currency will just make it easier for the PTB to create booms and busts where they see fit. It is a conspiracy... and if the word 'conspiracy' disturbs you, please consider the following quote write several centuries ago:

To preserve their [the people's] independence, we must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty, or profusion and servitude - Thomas Jefferson

Ignorance In Action Is Terrifying

The most astonishing story this month in my view was the confession of a manager whose one-year-old fund returned 866% betting against the subprime collapse. While the origin of his wealth rests on unethical premises, he honestly accuses Harvard and Yale Cliques for their utterly deceiving behavior supporting the Aristocracy, which ended up making it easier for him to find idiots to take the other side of his trades. We can understand now why the S.E.C banned short selling, can't we? The only acceptable questions here should be: why did it take so long to take action... and why do such regulations exist in the first place, considering that debt-based economies are mere legalized casinos?

While the average consumer loses purchasing power daily, the rich consolidates and gets richer. This is, without a doubt, the biggest wealth transfer ever. It is very common to come across people who seriously think that the developing world is poor because of its corrupt leaders and a rampant lack of education, that the Western Powers have done everything they could to alleviate poverty. Really?! If so, how to explain that the wheels are coming off the global financial system? Yes, it's quite hard to get the message through among the public spectrum.

The 'Men At The Top' are geniuses. They have all mastered psychoanalysis: all They have is to do is to work along people's greed, phobias, laziness to think for themselves, gluttonous envy, superficial star system values, and fake altruistic claims... then seize opportunities created by the implementation of a century old economic fallacy, using societal inertia to rule as the absolute Masters.

Remorseful Paulson regrets 'mistakes': We're not proud of all the mistakes that were made by many different people, different parties, failures of our regulatory system, failures of market discipline that got us here... - 10/17/08, globeinvestor.com

Leftism in particular has enjoyed the bashing of Ayn Rand's Aristotelian derived philosophy named Objectivism, describing it as the greatest 'evil' on earth. Today Rand's Hymn On Money almost sounds like a prophetic piece:

Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion—when you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors...

Living beyond ones means will never make anybody happy. Because booms depend on the indebtedness of many, a debt based system can only be ruled by deceptions. It is not foolish to assume that 90% of everything we think we know is false. Nobody likes to be taken for a ride but our world debt orgy came with a very nasty string attached and called: 'Inflation Holocaust'.

And you still have some difficulties to adjust your thoughts, just know that it is deja-vu all over again: 650 Years Ago, Venice rigged the first, and worst, global financial collapse... The time of a real Intellectual Revolution is long overdue.

posted by SB Kayser @ 6:30 AM 3 Comments

Systemic Paralysis

Usury, to be clear about it, is rich people taking advantage of poor people by lending them money on terms that are sure to make them fail - William Greid

It is often argued that times were a lot harder in the old days but this statement is far from true. Such an assumption rather tends to reflect on a poor existential knowledge and the superstition that a lack of control over the world events is beyond one's own reach. Like any other species, humans get used to their own (predatory) environment and deal with it accordingly. Many dangers have become so familiar to the point to appear rather harmless. And then there is this infamous cultural thinking that "good will prevail" anyway. While lies always get exposed eventually, truth carries in its wake a series of painful realizations. It has always been a jungle out there and in this time and place, something has radically changed the fabric of society; something so insidious that goes far beyond 'greed' and which is so deeply entrenched that is repellent to the mind to even think of doing something about it. To put it bluntly, if something were done, chaos would occur instantly and of course nobody really wants this to happen. This is the main reason why we'll have to wait until the system auto-destructs completely in order to finally envision the possible end of the tunnel and real solutions.

Although we've heard a lot about predatory lending lately, not enough about predatory borrowing was said and nothing at all about 'predatory rumors' without which the mania could never have existed. The 'buzz' is a major component that glued everything together and mesmerized everybody, even those who couldn't afford a piece of the American Dream. It is only when one realizes this, that the blame game is exposed for what it truly is. Back to reality: a study from the Center for Economic Policy & Research in Washington, DC. projected that the bust will most likely wipe out two decades of family-earned wealth. Who cares to listen now?

Let's not kid ourselves: debt-laden economies allow 'the powers-that-be' (TPTB) to pull the plug whenever they want - either by restricting credit lines or just waiting until the consumer can no longer borrow. So now, the Middle Class is 'On the edge' completely unaware of how it got there. As so far the price tag stands at $100TN!. Alas the long overdue 'triggering event' that will cause a worldwide systemic paralysis is kind of unpredictable because of an esoteric element called 'confidence' delaying the final blow. This raises a very taunting question: as it turns out that the rich countries are the most indebted, with America at the top of the pyramid, we have to wonder what happened since the Truth In Lending Act (passed in 1968) designed to protect against flawed and corrupt lending practices? Considering that every boom is credit induced, we must ponder the efficiency of the laws drafted by our policy makers as 8,500 U.S. banks are threatened today. Ellen Brown, an attorney practicing civil litigation in L.A and who has investigated the deception of 'fractional banking' for many years, sees a tsunami of litigations on the horizon:

The total equity of the top 100 U.S. banks stood at $800 billion at the end of the third quarter of 2007. Banking losses are currently expected to rise by as much as $450 billion, enough to wipe out more than half of the banks’ capital bases and leave many of them insolvent...

Instead of succumbing to capitalism bashing, how about assimilating that financial illiteracy translates into monetary cannibalism? Meredith Whitney, a star bank analyst, warned last year - and still does today - that the 'incestuous' behavior between the banks and the credit-rating agencies during the housing boom will have a prolonged impact. In fact, she predicts a very deep recession.

Signs of distress are everywhere; even countries like Iceland and Ireland, long believed very stable are on the brink. In a short period of time, The Royal Bank of Scotland and Fortis Bank have released grim assessments that have finally done 'gloom and doom contrarians' and 'perma bears' justice. While the stock market's volatility increases daily, two mortgage giants guaranteed by the state (i.e: taxpayers), Fannie Mae and Freddie Mac, would need a (taxpayers) bailout. Both lenders have on their track records nearly 50% of the nation's mortgages. For several decades, many believed in this too good to be true Hollywood Story. Sorry for the hard landing, back to reality: If this is not a housing cartel, what is it? Unfortunately, there isn't any mystery when one knows that deep-pocketed lobbyists have spent $200M to buy influence among all political stripes. For what... a $5 trillion mess?.

(07/16) ... They’ve stacked their payrolls with top Washington power brokers of all political stripes, including Republican John McCain’s presidential campaign manager, Rick Davis; Democrat Barack Obama’s original vice presidential vetter, Jim Johnson; and scores of others now working for the two rivals for the White House.... more

Even though a majority of voters are in favor of interventions, they do not grasp that it makes them accomplices of the same predatory behaviors they're rebelling against. It is the best fashion to keep justice from being implemented and to bury lies under the guise of stopping the housing bubble from deflating further, and thus revealing the ugly truth about the boom. The same holds true for class actions and their so-called settlements. Let's not beat around the bush: bailouts and class actions are among the ultimate cons nowadays. It is important to understand the underlying psychological effects here to comprehend why those 'interventions' will not cease tomorrow unless people start waking up. While 'greed' is the main factor at stake motivating actions, if cases were brought fully to justice, litigations would last so long that investors/taxpayers would lose patience and not even be sure to see some of their money back. Time is money - indeed. But wait a minute: weren't we supposed to fighting greed in the first place?

Rationally speaking, and by colluding more or less openly for a so-called greater good, TPTB are seriously undermining the skills and smartness of everybody. What is your own college degree worth when you're misled to believe that TPTB are doing their jobs while working very consistently on destroying the purchasing power, banking on college tuitions which students cannot afford to repay and implementing global trade policies that eventually come home to roost. As the Globalist agenda machine runs like a freight train to nowhere, the United Nations announces that economic shocks may push an additional 16 million people of the Americas into extreme poverty.

While we're at it, it should be useful to mention that honest reporting has drawn the attention of The FDIC lately and the latter plans on paying closer attention to the blogosphere in the future: blogs are out of control, its chairman Sheila Bair declared. If she is really willing to act against whistleblowers, that task may well reveal itself Herculean. She will have to start with shutting down CNBC whose folks already debunked the brand new bailout bill. Rational Bloggers deal merely with the all data available on the net, have developed a very special ability to read between lines released by the mainstream outlets, such as:

220,000 homes repossessed in the second quarter 08
Nearly 1.5 Million Foreclosure Filings in 2008
U.S. banks borrowing $17BN daily from Fed
How Wall Street Wrecked Your Retirement
Dead Stocks Rallying... etc.

But let's close the chapter about the two mortgage monsters: anyone willing to dig a little will find out that Fannie Mae also runs the 'Fannie Mae Foundation, which contributes to local charities, arts and housing organizations, all of which gives Fannie the needed influence. Well, what we see here with the FM Foundation is widespread. Foundations help funnel large sums of money between lobbies and their cheerleaders. Don't even think of contacting one of them if you don't have serious connections: foundations generally don't accept unsolicited projects. Those not implementing such a policy are the most trustworthy.

It is all about 'networking' and admiring influential people who make 'it' happen. So, it goes without saying that something is deeply flawed in the way we view success and power in the broad sense. This takes another dimension when analyzing firms managed by Richard Branson and George Soros, GE and BP, Ford and Shell, Cargill and the Carlyle Group in their role in the Amazonian deforestation while funding so-called 'green projects' such as biofuels. Another hoax commonly named: The Clean Energy Scam. Actually, and this is appalling, there is a secret World Bank report linking biofuels to the food crisis. What, do you think, would happen if we stopped this insanity overnight? Considering the state of the current global affairs, the answer is utterly simplistic: this would speed up the dreadful domino-effect. As I type this there are signs that the Eurozone is tipping into deeper downturn than America. Talk of an achievement for the single currency, which was created to avoid monetary fluctuations in the first place - remember? An economist at the Royal Bank of Scotland even uses the term 'reverse-decoupling' as Europe sinks harder than the US; led by Spain spiraling into the worst crisis since the Franco dictatorship. Forget about the U.K where it is as bad as in the U.S: this week, a UK study revealed that 36% of citizens would see their cash run out within 11 days. How long would it take in America as the savings rate sank below zero two years ago already?

For how long will we be able to sustain economic fallacies? Well, if you follow the writings of Ambrose Evans- Pritchard, the global economy is at the point of maximum danger and that all its parts may go down together. Will survivalists get the last laugh? The common sense seems to indicate they will, and here is the ultimate proof: since the creation of the Federal Reserve the purchasing power has nose-dived slowly but steadily. Compared to its value in 1913, it is now just a nickel - Welcome to Disney Bank!

Psychiatry vs Sound Money

There are no 'free bubbles'. Manias are fed with a multi-level tacit complicity. Everybody is interested in easy money to start with. While bankers and other financial managers are to blame, it is about time to acknowledge the danger of relying on individuals who are supposed to have the all degrees necessary regarded for their well established experience. In economics, there are no moral hazards besides those caused by man. Usury is the root of all evils and this is something that will never be taught at school, unless there is a radical and interllectual wake-up call. If you need an example illustrating the plague of ignorance, let's consider Japan, where the suicide epidemic is tied to an economy under strain. As a result, after a decade of reforms and weak growth many middle-age and elderly men unemployed chose to end their lives. While the Japanese system allows the beneficiaries to collect life insurances in cases of suicide, we shouldn't jump to any fast conclusions. Throughout India, more and more troubled farmers are killing themselves...

AMY GOODMAN: These descriptions of desperation, up to three farmers a day swallow pesticides, hang themselves from trees, drown themselves in rivers, set themselves on fire, or jump down wells, many of them plagued by debt, poor crops and hopelessness? ... (2006/more)

In the Western Empire, we've got counselors to treat and cure mental conditions. When glancing at the market malaise today, we can easily assume why shrinks still have many sunny days ahead. Last May, the USAToday ran an article related to the dire mental stress of many homeowners as they see the value of their home plummeting or have their home foreclosed:

The American Psychological Association (APA) and other mental-health groups are publishing tips on how to handle the emotional stress triggered by the real estate meltdown... "They're depressed, anxious. It's affected marriages, relationships," says Richard Chaifetz, CEO of ComPsych, a Chicago-based employee-assistance firm that is counseling homeowners over mortgage fears. "People tend to catastrophize, and that leads to depression. Suicide rates go up. We see an increase in drinking, outbursts at work, violence toward kids. Before, their houses were like ATMs," as they rose in value. "Now, they feel trapped like a rat in a corner.... Historically, research shows, rates of depression and suicide tend to climb during times of economic tumult..."

But even the top 10% of society is getting hit. Bankers, CEOs of companies, traders, high-end business guys, use secret clinics and nurses. It is estimated that 40,000 people in the U.K. financial sector will be become jobless over the next three years. For this year alone, the bigger picture shows that from Tokyo to London to New York, financial firms will shed more than 83,000 jobs. Wall Street Exodus is causing fear, panic and anger. Unless the PTB start blowing another mother of all the bubbles, jobs will not come back any time soon. To compare, in the wake of the dotcom crash investment banks and brokerage firms laid off nearly 90,000 people. New York City is bracing for the biggest single-year decline in pay on Wall Street in history as bonuses for employees based could shrink by $10 billion or more. There'll be a number of years before Wall Street pays taxes again, Mayor Bloomberg stated a few days ago. This doesn't bode well to say the least: many people will soon discover that they can no longer afford their luxury condos.

The usury deception goes indeed global: the Bank of Korea confirmed that payments using 'plastic' accounted for 57% of total private spending in the first three months of this year. In South Korea, three years ago, a spike of defaults set off a national crisis. Now industry pundits observe similar dangers in Turkey and China, where there are more than 100 million cards. If you do not hear the alarm bells, and sorry if this hurts your ego, you are probably deaf. In a not so distant past, Turkish people were regarding 'Honor Killings' as the only solution to avoid being labeled a debtor. This did not prevent a fierce outcry, in 2006, prompting the country to crack down on credit card marketers. But there too, it doesn't seem that the new rules have helped avoid the inevitable.

We did not listen to our ancestors’ proverb,” Mr. Kaya said. “ ‘Stretch your leg only as far as your blanket (NYT/08/08/08)

So, the one million dollar question now: will you let Wall street handle your pension plan, do you still trust them enough after the mortgage mess and the ensuing hedge fund blowups, busted buyouts, and credit market gridlock - ??? The nation.com ran an article (How Wall Street Wrecked Your Retirement) which is truly insightful if you are determined to start your own investigation.

Don't get mad, get educated. Debt based economies always end up losing their 'magical' effect and when they do, culprits are countless. But the root cause is 'usury' and it starts at the very beginning with paying an interest on the banknotes in circulation and creating money out of thin air. The central bankers do not have the money in the first place, they invent it electronically. All of which means that they sell an illusion whose price are the boom and bust cycles, inflation, currency crisis and depressions. This fraudulent concept may appear mind boggling to many but understanding the trick is vital to move toward the betterment of Mankind, enhance prosperity and eradicate wars.

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