THE FEDERAL RESERVE: MODERN DAY ALCHEMISTS

                      THE FEDERAL RESERVE: MODERN DAY ALCHEMISTS

Back in the Middle Ages something called alchemy was attempted. It was a craft that took something ordinary, plentiful and of little value and tried to miraculously transform it into something rare,
precious and therefore valuable. Of course, we all know that the experiment failed.

But alchemy has returned to the world in the form of the Federal Reserve and its fellow central banks. Their goal is the same as the quacks of the Middle Ages. They are certain that they can create paper and turn it into something very special. Instead of calling it alchemy, since that would not sit well with even the comatose public, they call it quantitative easing, bond buying, inflation and employment targeting etc.. But the Federal Reserve’s alchemy is on steroids. It takes debt and magically turns it into something of value by declaring it an asset. As the governments of the Western developed world sink ever deeper into the debt abyss, these Central Banks "buy" this debt (government IOU's from technically insolvent nations) by the creation of electronic digits in a computer which they then credit to the too-big-to-fail banks. These banks then place this debt as an asset on their balance sheets which they use to make loans and therefore create more debt. Including the unfunded liabilities i.e. Social Security, Medicare and Medicaid, the debt has been estimated to be near $220 trillion.

The insane number of dollars created have to find their way into something. This causes asset bubbles to blow up in stocks, commodities and bonds. (The U.S. Treasury bond bubble is the largest in financial history). Anyone with a functioning brain cell knows that all asset bubbles end badly. But the central banks only know one thing: keep increasing the quantity of paper money until inflation destroys the poor and the Middle Class. In the meantime, the bubbles may continue to expand thanks to the paper money creation and the main stream press which assures everyone not to worry because everything is OK. But it’s not OK. Nothing that caused the financial crisis in 2008 has been fixed or even addressed.

Modern-day alchemists are guaranteed to fail. All you have to do is to keep your eye on the Treasury
bond market and the U.S. dollar. When they start to plunge, head for your bunkers.

 February 9, 2013

THE LIE

When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe.  –Frederic Bastiat

Our culture’s basic foundation is now built on the lie. It starts in schools where cheating has become a way of life. Resumés have become fictions that bear no relation to the facts. Corporations distort their quarterly reports in order to attract gullible investors. The government lies on every economic report it issues in order to keep the American people in the dark about the real economy. It falsifies the reasons for going to war and by doing so wastes both blood and treasure. Presidents of the United States promise the people what they know they cannot deliver upon in order to get re-elected. Congress lies when it claims to represent the people who elected them. The mainstream media lies to protect the liars who own them.

What is it in the American psyche that predisposes the people to believe the lies?

My guess is that Americans have come down with an epidemic of complacency. Their center of the universe consciousness does not allow the vast majority to care about things outside of themselves. Others feel that there is nothing they can do about it and just give up.

When it comes to lying, there has been no example more blatant than the too-big-to-fail banks whose greed, fraud and mendacity brought down the global economy. Yet, the Obama administration has not initiated a single case against anyone on Wall Street.  How is that possible, you ask? Because just like the outrageous Republicans, the Democratic party is bought and paid for by the financial criminals.

Obama, the brilliant candidate, who tells the Middle Class what it wants to hear when he’s running for office, chooses Jacob Lew, a former Wall Street derivatives dealer as his nominee for Secretary of the Treasury. Isn’t it remarkable that Obama has surrounded himself with former Wall Street tycoons throughout his four years as president. His upcoming inauguration will be filled with inspiring rhetoric. But it is imperative to watch what he does, not what he says. Words lend themselves to lies. Executing those words into action is missing in action in the current American culture.

January 12, 2013

THE FISCAL CLIFF IS ANOTHER DIVERSION

THE FISCAL CLIFF IS ANOTHER DIVERSION

                                  “It is well enough that people of the nation do not understand

our banking and monetary system, for if they did, I believe

  there would be a revolution before tomorrow morning.”   
Henry Ford

In my opinion, the so-called “fiscal cliff” is just another diversionary tactic to shift the main stream media and the public’s attention (not that the latter has any) away from  the real problems facing the financial system.

The fiscal cliff, whether the idiots in Washington let it happen or come to some agreement, will have little effect on the nation’s remarkable debt. It will only make a recessionary economy worse.

In any case, the fiscal cliff is irrelevant when compared to the unbelievable number of over-the-counter derivatives held by the four largest American banks, or to the bond market and dollar market asset bubbles.

Of the $230 trillion in derivative exposure, Bank of America, JP Morgan Chase, Citibank and Goldman Sachs hold 95%. These banks used to be commercial banks that took their depositors’ money and loaned it out to businesses and consumers. But the repeal of the Glass-Steagall Act and the deregulation of derivatives by the Clinton administration in cahoots with the Republican party turned honest banks into gambling casinos who bet their own money and that of their depositors on any financial instrument they could leverage. You know what happened in 2008. Today the potential for disaster is many, many times larger.

This is what the Federal Reserve is really worried about. After announcing QE 3, the printing of money to buy U.S. Treasuries and the bad assets of the big banks, the Fed quickly doubled its QE purchases. The salient point to understand is that the Federal Reserve is not printing money to ignite the economy; they are merely continuing the bail outs of the too-big-to-fail banks and the U.S. Treasury.

Because a handful of fools and corrupt public officials deregulated the financial system, the Federal Reserve is forced to print paper currency on a scale never seen before in human history. How long will it be before the U.S. bond and dollar markets implode and inflation turns ugly? When a sovereign’s currency is destroyed, the country goes down with it. Anyone who possesses a brain cell of history knows that is what happened to the Roman Empire and all the other empires ever since.

Therefore, the entire economic policy of the USA is dedicated to saving four banks. By keeping interest rates at ridiculously low  levels, the rest of us in the real economy are deprived of interest income. We, especially our senior citizens, are forced into risky markets where possible disaster waits in ambush. Merry Christmas.

December 19, 2012



A NEW LOW FOR A PRESIDENTIAL CAMPAIGN

A NEW LOW FOR A PRESIDENTIAL CAMPAIGN

So ends the worst presidential campaign in my lifetime. Literally billions of dollars were spent on ads demonizing both candidates. Running for the most important job in the world, neither man even mentioned the essential issues facing this country: the upcoming fiscal cliff that can throw the United States right back into deep recession, the too-big-to- fail banks gambling with over-the-counter derivatives totaling 1.1 quadrillion dollars while valuing their worthless assets at one hundred cents on the dollar and a Federal Reserve that is engaged in counterfeiting zillions of confetti money to prevent the system from collapsing. And then there’s Europe always on the brink. Truth was missing in action.

 The Right Wing crazies plummeted to a new low as they used religion and racism in a desperate attempt to bring down the man they have hated for four years. Their contempt for women was an outright disgrace. I felt I was living in a Third World Country controlled by billionaires who financed the shameful obliteration of a once democratic nation.

Yes, the better man won. He is a remarkable campaigner who only slipped up once when a different Romney showed up at the first debate. In fact, it’s difficult to know which Romney lost the election. How does one go about choosing?

But now the candidate has to become the president again. After all the Progressive speech making on the stomp, I fear he will turn to the Right and push for oil and gas extraction on a scale unimaginable and at the expense of the environment. And in his obsession with bipartisanism, I see him dealing with the opposition with olive branches instead of fight.

Maybe he’ll surprise us and throw some punches when the moment is right. Anything is possible.

November 8, 2012

OBAMA, ROMNEY CLUELESS ON ECONOMY

After gamely sitting through the carefully rehearsed performances that went by the name of debates, it became absolutely clear to me that neither of these guys has the slightest idea what to do about the ongoing economic crisis. In fact, politicians have only one idea, and that’s how to get re-elected. The same is true in Europe where their Union continues to come apart at the seams.

Politicians depend on central banks to print money to keep the global financial system from collapsing. Their counterfeiting debases the various fiat currencies and hurts the Poor and the Middle Class whose purchasing power erodes month after month..

No matter who wins the U.S. presidential election on November 6^th, there is simply no way our country will ever make good on its gargantuan debts and pile of IOUs that now total as much as $212 trillion. The debts will never be repaid.

Flooding the planet with “Monopoly money” will only cause more asset bubbles to blow up and then burst. At some point, even “ Boobus Americanus" will “get it” and lose confidence in the U.S. dollar. When that happens, they will be the last to turn to hard assets in a desperate attempt to preserve what will still be left of their savings.

With the Fiscal Cliff and a new higher debt ceiling looming, and neither party talking to the other, the endgame may be just around the corner. In any case let’s face it, we’re circling the drain. Rich old men protecting their property by sending young men to die in wars of their making.. Elections have become a charade. They give Americans the illusion of choice. The real looting in this country is the transfer of wealth from the poor to the rich. The owners of the country are now out in the open. The rest of us are in the back of the bus.

October 25, 2012



OBAMA WILL NOT FIGHT

                                           In Dry Dock                        Charles Steinhacker

I’ve always stated that Obama was a great candidate and a mediocre president.

He’s good on the stump and can fire up a crowd. But after last night’s debate performance, I can not even consider him a good candidate.

 Romney looked directly at him when speaking, while Obama rarely looked

at Romney. Instead, Obama’s head was down, and he resembled a fighter who
had been repeatedly hit. Still on his feet, but losing each round on points.

 It does not appear that Obama has an ounce of adversarial genes in his DNA.

He let Romney completely off the hook when he knew that Romney was
vulnerable as few debating opponents ever are.

 This is the peacemaker who would not go after the public option on healthcare

and refused to bring a single case against the Wall Street banksters.

Unless he finds a way to become a warrior and bring the fight to Romney,
he will be a one-term president. And we’ll return to the Dark Ages.

Oct. 4, 2012

DAY OF RECKONING IS APPROACHING

 BOAT PULLED UP  CHARLES STEINHACKER

Here are some facts that will bounce off the public's complacency
like rubber balls off of concrete:

1. There has been no economic recovery.

2. All investment markets are now rigged.

3. All economic reports from the government are bogus.

4. 47 million people now have food to eat thanks to food stamps.

5. Five cities just went bankrupt in California alone.

6. 3,000 people went to jail during the Savings & Loan crisis of the 1980's.

7. In the worst financial crisis since the Great Depression, the Obama administration has jailed exactly zero. Oh yes, Madoff went into the slammer because he ripped off the 1%.

8. The power elite of the too-big-to-fail banks continue to control the Administration, the Congress, the main stream media and the world. Their business plan is to transfer money from the people into their greedy pockets. But no one cares.

9. The Federal Reserve and the European Central Bank are between a rock and a hard place. They will resolve their dilemma in the only way they know how: print trillions in confetti money. This is Webster's definition of counterfeiting. But nobody cares.

10. The can gets harder and harder to kick down the road. So each crisis will be worse until there is capitulation which means total financial collapse.

11. So, while the "sheeple" shop and attend to their own self interests, the day of reckoning draws nearer and nearer.

September 2, 2012