Friday, April 02, 2010

Economic 2012 In The Cards

April 2010

When a government is dependent upon bankers for money, theyand not the leaders of the government control the situation, since the hand that gives is above the hand that takes...Money has no motherland; financiers are without patriotism and withoutdecency; their soleobject is gain." - Napoleon Bonaparte, 1815

Many of you surely remember that in 2008, the world elites urged a coordinated action to tackle the threatening down turn, plunging their respective countries deeper into debt to give the bankers an unlimited amount of blank checks, while convincing taxpayers to foot the bill under the guise of acting to save their jobs. Now that the bailouts' side effects are spreading like wild-fire and have obviously become global, the odds are setting us up for a day of reckoning the like of which has never been seen. Liquidation of the Western middle class is unavoidable; let alone the developing countries: for them it will be a lot worse as they have borrowed (from now bankrupt empires) since the end of the colonies. They earned not their independence but a colonization of another kind. If there is no major wake-up call, the entire planet will be left in the hands of a few fascist banks and corporations at the head of a World Government. The wolves in sheep clothing have worked on this for more than 300 years. Money doesn't mean anything to them, but power. This said, it is useful to mention that the system we now have was invented by the Chinese, and began with the Song (960-1279) dynasty. In fifty years from 1260 to 1309 Yuan's paper money was depreciated by 1000 percent!

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

Back to present: even the so-called rich Arab emirates, Kuwait and particularly Duba, won't be spared either as they have sold out their oil in exchange of usurious loans for more they can endure and caved in favor of the Military Industrial Complex. Dubai is a good example: it is a city born out of the sands in less than one generation and today features architectural marvels. Then came the housing crash without any warning. Last year bad debtors, Western real estate flippers for the most part, were fleeing at the speed of light, a jail time sentence awaiting those who cannot repay.

Bubbles have dotted human history and the latest world bailout bubble marks the beginning of the end. It is about time to acknowledge that globalization will never bring forth anything worthy. Since frameworks are corrupt to begin with, the financial top bodies have always been designed for a monumental takeover: economic hegemony worked its way through insidiously. Those who issue the loans are ruling currencies and thus our lives. They sold us an illusion of democracy while proclaiming our rights to Freedom using "focus groups" to study humans' unconscious desires and exploit them. The Century of The Self offered a twisted version the 'pursuit of happiness'. The nature of the trap is now blatant: the IMF austerity packages are about to become the norm to address this economic decadence. Early March, IMF Dominique Strauss-Kahn has called for new power and expects the Fund to become the world Federal Reserve. But they have more rabbits coming out of their hats such as implementing the global warming bill designed to squeeze $45 trillion out of taxpayers' wallets and other population control agendas under the pretense of mass vaccinations and other subterfuges. Though for anyone wiling to analyze the root causes, there is no egg-chicken dilemma whatsoever. Before we can even assess that there're way too many of us on earth, we ought to consider fraudulent monetary policies that give the impression that we can no longer feed people. It is the crippling inflation, which has put us in this giant mess. Of course, overpopulation theorists will never question this. The stakes are definitely too high, power is addictive and fear is needed to obtain citizens' consent under the guise of saving the job market.

CBS Market Watch columnist Paul Farrell' s assessment is pretty dire to say the least, as it cites 20 reasons that will detonate the Global Debt Time Bomb. His very article was inspired by a Forbes story explaining how this plot of Global Asset Bubble threat could wreck our lives when massive debts come due. Indeed, the dreaded idea of sinking into Depression Part II has become conventional wisdom. As of Mach 26, there were almost 80% Americans said that U.S. economy could collapse. Keeping the bubble afloat no matter what. No April Fool this time that needs to be reported in the news. Reality is beyond fiction: Obama urged Congress to come to its senses, alluding that the country would face bankruptcy if the healthcare makeover was rejected.

Additionally - the Euro Block fearing a contagion was still debating whether to rescue Greece while Hedge funds' bets against the euro has risen amid growing apprehension of a backlash against their trading positions. Luckily for the hedge funds,on the Bloomberg site at the end of March, it was announced that Europe would provide more than half the loans and the Washington-based IMF the rest if needed. Of course by IMF, they mean the American taxpayers. If this measure is planned, it will be implemented. Ambrose Evans-Pritchard, from the, alluding to the Uruguay-INF controlled 2003 default, reported that the deputy-governor of China's central bank regards Greece as the 'tip of the iceberg'. And there is more, the Block recommended to hedge existing investments with insurances against default of a debt instrument. Among those huge Hedge Funds, we find that of George Soros who parades as a gold bug. Right, amid all this turmoil gold and silver prices have room to move a lot higher. However, selling more derivatives products cannot be the answer as the whole financial structure comes down to a mega debt-laden-Ponzi scheme. Doing so will delay the Great Reckoning, while making it a lot worse. Interestingly, as of March 2, the Wall Street Journal reported that the US Justice Dept. has launched a probe into whether hedge funds might have acted together to doom the euro. What a circus! Anyone knowledgeable enough to grasp the flaws of our system, the pump and dump cycles more precisely, will just use a hedge fund at his advantage. A probe is even more ludicrous since regulators allowed Hedge Funds to come into existence; they are the ones who didn't foresee anything wrong with betting on failure in the first place. It is thus hard to believe that derivative traders, selling insurance against risk, have never seen any danger coming either; their exotic instruments are today responsible for more than a quadrillion dollars in notional value. Soon, we'll read how fictive this value was since global indebtedness is at least ten times bigger than the planetary GDP. This is the theater of the absurd: this very quadrillion is a mere virtual amount and represents a bet on doomsday with notes backed by a promise to pay. Ironically, the architects of such a framework are individuals who ask us to trust them. Yet many will find hard to believe in a 'conspiracy', alas there is no way around. S&P, Fitch and Moody were totally co-conspirators of Fat Cat Bankers, misleading investors and consumers before the meltdown. Think of what those rating agencies will do to people's credit rating after the demise. If one still disagrees with this, then one has to admit that the heads at the rating agencies, again the same behind the invention of 'credit scores', are just plain stupid. Whatever your take on it, our fate is either in the hands of a bunch of criminal idiots or intentional financial terrorists. Many Keynesian columnists don't get it or just go along with the system because they are paid richly. Germany must save less and consume more, a headline in the concludes. The spend and die (read: spend and die anyway) mode now is encouraged.

As a global geopolitical dislocation is taking root, fractional banking has begun to be under attack, and it is not without reason. Usury is the root of all evil. Because every banknote is an IOU, the financial system demands the creation of more debts to be able to pay the interests: that is why the major big banks, Goldman Sachs leading the pack, have engaged in a plot to raise the debt limits throughout in the World. Now their 'meme schemes' is unraveling, we find ourselves drawn in a cesspool of fraudulent monetary policies. Wasn't the Euro currency supposed to bring equilibrium? Brussels is caught in a bind and will eventually reveal its true colors as countries like Portugal, Italy, Spain, Ireland (whose banks need a $43bn injection for appalling lending) and the British Kingdom are on the same trajectory of that of Iceland before it went belly up. Here they are, awaiting an IMF review as they already have received a $2BN rescue package from the fincnial body, a Reuters headline recently read. Greece will have to default ‘at some point,’ UBS’s Donovan said on March 24, 2010. EU is on the brink of a Debt War. The most appalling came from the German parliament in Chancellor Angela Merkel who suggested that Greece should consider selling some of its islands as one option to reduce debt! Selling to whom, the European Central Bank?

Analogies to Greece abound these days. Even The New York Times doesn't hesitate to refer to it when pointing at the debt load of California and New York. The Max Keiser website recently reported that the Wall Street bonuses were up 17% last year, over 9 billion, it is what occurs when a few at the top monetizes debt at the expenses of an ignorant population. The rumor grows: the insightful CBS show, 60 Minutes , revealed that Goldman Sachs was behind the Wall Street collapse. It would be child-like to even imagime some of those Goldman Sacks executives being sued since the Bush-Obama bailouts have made sure to address the issues behind close doors. Meanwhile let's prepare for a redux: half of commercial mortgages are underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel as of March 30. That bank woes are on the increase shouldn't come as a surprise as the population had begun to live on the edge: the confidence index is too plunging everywhere. To put it bluntly, four of the biggest banks account for 90% of the lending retreat, as they are the ones, who receive most of the bailout package. On February 23, the FDIC assessed that bank lending had the biggest retreat in more than 6 decades, and that there were 702 troubled banks out there, up 27% on 4Q 2009. Everything can be traced back to the Federal Reserve however. The successful bill of Congressman Ron Paul to audit the Money Printers last summer was mainly blocked by several senators inside the Banking Committee, and Bernanke himself claimed that an audit would weaken the trust in some financial institutions. Earlier this year, a new twist revealed the true motivation behind the Federal Reserve audit opponents as it came out that AIG, with the help of Goldman Sachs, had engaged in hiding highly toxic CDOs. The greatest heist ever, assessed Ellen Brown. Now that anger is mounting, last February, Bernanke finally softened his tone and said that he would support an investigation. Timing is everything... Although The Court Of Appeals in Manhattan ruled that the Fed must release records of the unprecedented $2 trillion, we may be almost sure that the results will never be released in a timely fashion, simply because we'll have been sent to Monetary Oblivion before then. The blame game goes on: Europe is the culprit!, Greenspan told The .

A collapse may come much more suddenly than many historians imagine. The Onion, a satirical online paper, couldn't help itself when writing that U.S. Economy had grinded to a halt as the Nation realizes that money is just a symbolic, mutually shared illusion. Last month, and not so surprisingly, a CNN Poll found that a majority views government a threat to citizens' rights. The Obama administration is for sure planning another massive bailout and more jobless benefit extensions as 20 percent of the Americans work force is without a job or underemployed according a Gallup poll published two months or so ago. The Universal Healthcare bill is just another nail into the coffin. Washington has set itself up a confrontation with Bernanke who warned that the United States could face a debt crisis like the one in Greece. The latter adamantly declared that the central bank won't support legislators by printing money to pay for the ballooning federal debt. As Max Keiser states it: they can only resort to launch a wholesale widespread liquidation in most of the economies in the world. There is no reserve in the banks but a series of black holes created by high-risk loans. It is all electronic funny money anyway. Citibank has already warned its clients that it may deny bank withdrawals but then quickly added that it won't feel like that action will never be necessary. If so, why this measure?

This brings us back to an editorial published by the Foreign Affairs in 2007, and entitled 'The End Of National Currency' and which regards globalization and monetary nationalism as engines to get closer to Armageddon; and argues in favor or a world currency while blaming also antiglobalization economists for spreading the fear of losing economic sovereignty. Economics shapes our way of thinking. Because the large majority doesn't grasp the inner workings of our web of debts, riots will be soon a common fact of life. While violent protests are not the solution, they are inevitable at this stage. Eventually Westerners will discover that that there is not much difference between their continents and China, where in some provinces billboards are aimed at intimidating dissenters and noisy petitioners, and threaten them with imprisonment and 'reeducation through labor camps'. If what you just read seems exaggerated, please consider that the Defense Secretary Robert M. Gates contended that Europe Anti-War Mood is a danger to peace.

Eternal war for eternal peace is what we have earned for letting the web of debt mesmerize us all. It's the fear of losing possessions guided by senseless consumerism that led us there. Just ask Argentineans how they fell after Wall Street pushed them over the edge ten years or so ago. The same outcome awaits Japanese who have seen their life savings steadily vanish as their government enforced bailouts after bailouts during the Asian Meltdown of the 90s, and now find themselves enslaved to a national debt twice bigger than its GDP. The land of the 'Rising Sun' is no longer. It is no better in China whose economic growth has depended on Westerners' buying frenzy for years. What if the latter end up being strapped to the point that spending grinds to a halt? The odds for a crash-and-burn demise were up to 30 percent according to Marc Farber as of February 25. China's official daily newspaper seems to endorse Farber when saying that "The country will probably see a "record trade deficit" in March. China on ‘Treadmill to Hell’ amid an housing bubble because up to 60 percent of its gross domestic product relies on construction. No wonder that China has begun to shut US businesses out of country. To be continued...

While preventing people to borrow at their own risks is senseless, institutionalzing usury can only lead to extreme debt monetization and is responsible for environmental mismanagement, widespread corruption, monopolies, diminishing returns and ultimately wars over resources. Letting financial institutions take part in the profits or losses will make them think twice before authorizing commercial and private loans. Demanding an interest regardless of what happens to the borrower is utterly amoral. As for government borrowing, giving blank checks to politicians has been proven lethal, as they can never hold their promises. If they could, national deficits wouldn't exist, that's a simple as that. And as long as we have taxation, the matters won't be addressed. If history is any indication, collecting taxes encourages spending follies. Socrates and Aristotle called democracies the root of despotism. Maybe is it about time to learn from our mistakes?

The only way to extricate us from the impasse is through thinking, rethinking our societal models from scratch. The salvation through a period of chaos is necessary to get back onto our feet. If many smile at the dreaded Mayan cosmic predictions that could result in dramatic earth changes, one thing is certain though: there is an economic 2012 in the making.