Banking Collapse Is Not Over Yet At All

July 20, 2008

Elaine Meinel Supkis

The present banking crisis began in ernest last summer right about now. So I have been including older articles I wrote because they show clearly how important it is to understand INTERNATIONAL finance when talking about money in all ways. 99% of American commentary either never mentions international finance or they look only at China or OPEC and ignore Japan and Europe. We also look yet again at the Federal Reserve's own graphs and charts and analyze what is going on here. 'Liquidity' is pure red ink and it is drying up across the planet even as international bankers struggle to keep it flowing. Bankruptcies are spreading in even the strongest economies. This is classic and has happened repeatedly in history. Oil is down so the DOW is happy. But the mess isn't finished, it has barely begun.

My article from 7/20/2007: $100 Billion In Housing Losses And $100 Billion In Stock Buy-Ups

Going through the M1 data from the Bank of Japan, I discovered one of the well-springs of the ‘liquidity’ that is sloshing around the world: Japan increased its money making significantly and suddenly starting at the end of 2002 and ending in 2006. This flood of ‘free’ money is now slowing down because it is finally showing up in Japan itself. The rising stock market is an afterlight of this firestorm. Japanese investors refused to use this money in Japan but instead, used it here in America causing the ‘liquidity’ tsunami we are now seeing the last eddies.
*snip*
The uncertainties of the rates set by the Federal Reserve creates a gold rush/run for the exits mind frame.

CD rates: 1965-March 1968, rates fluctuated between 4% to 6%
1969-1970, 6%-8%
Oct. 1970-March 1973, the rates offered returned to 3-6% range
April, 1973-Jan 1975, the rates shot up from 7-12%
Feb. 1975 to May, 1978 , 4-6%
June, 1978- March, 1986, 7-18%
Sept 1987-1991, rates were between 6-10%
March 1992, rates fall below 4% until April 1994 and are 4-6% until June, 2001.
June, 2001-Oct. 2005, rates fall to rock bottom, 3-1% range.
From Dec 2001- October 2004 the rates are at 1%--a historic low, for 3 years!
Oct. 2005 rates rise to the 4-6% range again.

In the last 40 years, the CD rates have fluctuated wildly and I would suggest, carelessly. Ever since the Federal Reserve decided its main function is to control inflation, the rates have whipsawed wildly because the real function of the Fed is to feed inflation as much as possible without it showing up in the consumer price data. Since the financial games of Wall Street are bottomless and since the entire function of Wall Street is to make as much money as fast as possible and since our Treasury and the Federal Reserve is often full of people who come from Wall Street or whose social circle is heavily invested in Wall Street, we see these endless bubbles.

When the bubbles cause inflation at large, this has to be controlled. It is simple: if one is making a 8% profit and inflation is 2%, all is well. 8% profit while inflation is running at 18% is pure hell. Low interest rates makes Wall Street happy because they can use cheap loans to invest in stocks and then 'make a killing.' Cheap loans are happy days for everyone except people trying to save money. If the money is hammered by inflation and cheap interest rates, you get a total economic collapse.

Rates rose now for two years and then a panicked Bernanke and the Fed officials all dropped the rates like crazy. It is now at 2%, a very dangerous number. They are sorely tempted to drop it even further. Back when they dropped it to only 1%, it was obvious that this was far below the fake rate of inflation, and even further below the actual rate of inflation. Yet they did it to 'save' the economy after Bin Laden's tiny group successfully attacked thanks to Bush maliciously ignoring the 9/11 conspirators or even perhaps actively enabling the attacks. After all, the bin Laden family is very close to the Bush clan.

We developed a new, upside-down banking system during the last 35 Floating Currency years. The banks only want to lend. They don't want reserves at all. Debtors want sub-inflation level debts because of two things, they get to pay the debts back with increasingly worthless dollars and they get the money cheap so the payments are lower than they should be if inflation were accurately accounted for.

Like all nifty schemes that can't work, this system is now collapsing because inflation is a very dire Goddess and can outrun all schemes to make wealth while cheating on the currency being used to determine wealth. Seriously, we should change the 'In God We Trust' to 'In The Inflation Goddess, We Fear' on our bills. When we notice She is stirring, we know that we have made too much 'liquidity' and the red ink will now destroy the wealth as it has to be sopped up somehow. This is why charts and graphs are so useful. It let's us track all this if we put in the correct data. This is why I want everyone involved in designing and using the fake inflation statistics arrested. They committed fraud and in extension, treason. By rigging the data, they hid the activities of this dangerous, foul and temperamental Goddess.

This week, the Fed released their biannual report that tracks credit markets.

Flow of Funds Accounts of the United States

Flows and Outstandings
First Quarter 2008

Debt of the domestic nonfinancial sectors is estimated to have expanded at a seasonally adjusted annual rate of 6½ percent in the first quarter of 2008, one percentage point slower than in the previous quarter. The deceleration was widespread across sectors.

Household debt expanded at an annual rate of 3½ percent in the first quarter, 2½ percentage points below the pace in the previous quarter. In the first quarter, growth of home mortgage debt decreased to an annual rate of 3 percent, less than half of the pace in
2007. Consumer credit rose at an annual rate of 5¾ percent in the first quarter, the same as the 2007 pace.

Nonfinancial business debt rose at an annual rate of 9¼ percent in the first quarter, 1½ percentage points less than in the previous quarter. The slowdown was evident in net bond issuance, commercial and industrial loans, and commercial mortgage lending.

State and local government debt increased at an annual rate of 6½ percent last quarter, 1¼ percentage points less than in the previous quarter. Federal government debt expanded at an annual rate of 9½ percent in the first quarter.

At the end of the first quarter of 2008, the level of domestic nonfinancial debt outstanding was $31.8 trillion; household debt was $14.0 trillion, nonfinancial business debt was $10.3 trillion, and total government debt was $7.5 trillion.

Household net worth—the difference between the value of assets and liabilities—was an estimated $56.0 trillion at the end of the first quarter of 2008, $1.7 trillion dollars less than in the preceding quarter.

This PDF file has pages and pages of details concerning the national addiction to debt. The above summary shows that the US is still pelting along the EZ Finance Road to Hell. All debts grew at over 6%? And this is the slow down! Household debt is still growing but at a slower pace. Credit card use continues unabated at nearly 6% a year. I am puzzled by some figures here. Government debt is $3 trillion less than we know it is? How is that?

Here is where a very big lie is being made: this figure of $7.5 trillion is FAKE. It pretends that Social Security payments which the government persuaded voters to double under Reagan, these payments which were supposed to be for future savings for the baby boomers has been used since 1982 to subsidize government overspending and tax cuts to the rich! So the $3 trillion is part of our government's debts. Which they will not repay! Bush Jr even went to the vault where the government puts these IOUs. He said in essence, we don't need to balance the budget because the SS papers were just paper and could be ignored! He wasn't arrested for treason or mobbed when he said this. He was re-elected and continued to destroy the SS value by overspending in wars and other stupid things.

Notice which entity in this list of debtors is growing, by far, the fastest: The US government debts! Nearly 10% a year! This is certainly an 'OH MY GOD!' moment. We are staring right in the dark, glittering eyes of the Goddess of Inflation here. She grins as she informs us that this is going to cause 10% inflation every year. The biggest 'business' in America and indeed, on this planet, is the US government. If it continues to grow its debts by 10% a year, this means hyperinflation. Nothing can grow by 10% every year. Even the Derivatives Beast has to beware of this dynamic. Indeed, it is directly connected to the massive, swift growth of US government debts which are translated into Treasuries which is the underlying 'assets' that keeps our Floating Currency going....UNDER! This is why the dollar is a crippled currency.

From Page 9 of the Federal Reserve Current Flow Of Funds Accounts: Total Net Borrowing and Lending in Credit Markets, Billions of dollars; quarterly figures are seasonally adjusted annual rates

As usual, I colored in everything so we can see trends. The red sections are when debt growth shrank from previous highs. The green sections are when debts were rising. The yellow boxes are when the debt growth reached their apex before declining. Click on images to enlarge. From 2002-2007, debt reached yearly new records. The top line shows the total debt apex to be in the third quarter of 2007. This is when we had simultaneously a record stock market right smack dab in the middle of an obvious banking collapse! The rate of debt creation has slowed down since then. In 4 areas, the debt apex is the first quarter of 2008 during which the government struggled to prop up the entire system and the Federal Reserve opened their miracle windows that accepted wretched previous loan instruments in exchange for Treasuries which are based on a vast, growing Federal debt.

Interestingly, the farm lending sector took off this year due to inflation fueling huge jumps in farm prices. Global debt ballooned greatly this recent quarter, too. Due entirely to trying to cope with this sudden inflation in all commodity markets. By far and away, dwarfing international debts is the US government debt growth: It shot up $277 billion! This was the bank rescues, I might suggest. Interestingly, broker and dealer debts rose to their apex in 2008. These are the same guys who were madly bidding up commodities. This is yet another facet of the Goddess of Inflation and how She operates. These gnomes were using massive debts almost equal to the rest of the world's debt growth to bid up the value of commodities!

This is why it pays to not just read summaries or listen to reporters summarizing the news. One has to look directly at boring lists of numbers to tease out the truth! I color these in order to sit back and see shapes and forms and from this, I notice details that would be hidden in the jumble of numbers.

Now for the lending charts:

It is a sort of mirror image of the debt charts. Namely, lending has of course, shrunk from its earlier records it set between 2006 and 2007. The total apex is, of course, the third quarter of 2007. Look at how it collapsed! To minus $1 trillion by March, 2008. 90% of this is in the household sector in the US. The rest of the world still had nearly a trillion in lending during this same quarter. But it dropped from its 1st quarter apex in 2007. Financial sectors which are, of course, the banks and hedge funds, etc, reached its nearly $4 trillion apex in the third quarter of 2007 and has now dropped to $3 trillion.

The biggest losses were in 'monetary authority' whoever that is, eh, Bernake? I am rather puzzled about this as we shall see later. I wish the Fed could explain this number better. HAHAHA.

Then there are the lenders of last resort: the US government. The only three things to hit their apexes in this lending chart are...Federal retirement funds and the two other markets, the trillion dollar money mutual funds and 'funding corporations' whatever they are. Anyone can clue me in exactly what they are? Thanks in advance!

That final one is very odd. At the end of the 2000 recession, in 2002, this mystery funding source was NEGATIVE by a trillion dollars! Wow! It then went positive to $47 billion, dropped to negative $97 billion, six months later, shot up to plus $156 billion, went in the third quarter of 2007 to minus $2.5 billion then dropped like a rock to minus $528 billion! That is half a trillion less in lending in one quarter!??!!

Then hit it's apex by March, 2008? What the hell is going on here? I am immensely curious. The report doesn't explain this business. When I see something yo-yo like this, I am very suspicious. Especially since the rise in lending is totally against the grain of all other entities except for the very reckless, insane government of the USA.

From a reader who sent me this You Tube of Ron Paul: Congressman Ron Paul talks about his confrontation with Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke at the Financial Services Hearing, July 10, 2008.

Originally posted at Dr. Paul's congressional website:

http://www.house.gov/paul

Note the empty chambers. We are in the middle of a vast, ugly, insane banking crisis. Everyone is on the edge about this and worried to death about the future because the fearful Goddess of Debts, the Goddess of Inflation, the Goddess of Hubris, the three deadly sisters are now wiping out wealth with ruthless efficiency. This is terrible. We roused them and they are now going to do their work no matter what. We would imagine that Congress would be flipping out and anxious and working hard to figure out what went wrong. But 90% of them are not even in the House. As Americans go homeless, these spoiled brats are out seeking hand outs so they can run for office and do nothing useful.

Barney Frank can barely conceal his yawns as he permits Ron Paul to make his speeches. Bernanke pulls back into his shell like a turtle and Paulson toys with his new iPhone. No one wants to listen. There should be a very lively debate going on with charts and graphs like we enjoy on so many web sites online! Everyone should be focused on figuring out how things work! Instead, there is a desire only for the unsustainable status quo.

The TAF window is still open:

On July 14, 2008, the Federal Reserve conducted an auction of $75 billion in 28-day credit through its Term Auction Facility. Following are the results of the auction:

Stop-out rate: 2.300 percent

Total propositions submitted: $93.344 billion
Total propositions accepted: $75.000 billion
Bid/cover ratio: 1.24

Number of bidders: 82
Bids at the stop-out rate were prorated at 10.77% and resulting awards were rounded to the nearest $10,000 (except that all awards below $10,000 are rounded up to $10,000).

The awarded loans will settle on July 17, 2008, and will mature on August 14, 2008. The stop-out rate shown above will apply to all awarded loans.

The Fed is still propping up the banking system. This 'auction' is a cover for frantic buddies of the guys running our banking system to unload garbage and get short term loans so they don't have to declare bankruptcy. This is a fraud. We can't clean up the system if no one thinks there is anything wrong. Here is the most recent graph from the Federal Reserve showing both the official, fake interest rate and the interest rates paid for certificates of deposit in our banking system.

The pink circles are when the CD rates fall below the inflation rate which is the blue line. I put in the Green Arrow to show the real rate of inflation. Whenever the rate of return on CDs fall below the rate of inflation, we get bubbles. Note the very brief period when the CD rate was above the rate of official inflation. The bubbles popped. But the peculiarity of this present bubble mess is unusual: the real rate of inflation is continuously above the rate of return from CDs. And CDs are the basis of all banking reserves! This is why speculation has taken off! There is no alternative. The return on CDs is wretched. And worsening, not getting better.

The bankers tried to goose this with stiff arming the muni markets last winter. Forcibly driving up rates to the true levels which is more than 7%. This was crushed by the politicians who suddenly saw government finances take a nosedive. Now the artificial rates are back but everyone is very surly. I see no good ending. If CDs continue to fall behind the rate of inflation, there is serious trouble ahead, obviously.

Foreclosure Apocalpse:

Okay. "Black Monday" already happened, in the 80’s and then also back in the 20’s according to some slang-artists, but one of the attorneys I work with gave this last Monday (July 14 2008) the name, and it seems to have stuck. You could also call it "Screw Everybody We’re Foreclosing On You All" Monday, if you’re so inclined.

Here’s what happened, and pardon me if I sound a little frantic, but I feel a bit like Cassandra here; I’m freaking out about this but by and large, most people don’t seem to realize it happened. Most people only know one or two people involved in mortgage negotiations, so they didn’t see the coordinated collapse that I saw.

In a nutshell, what happened is that Monday morning, all the major mortgage banks in the U.S. issued some kind of order or decree, that they would cease conducting any kind of workouts or negotiations with borrowers, and instead foreclose on every home they could.

Several people sent me this web page. People are scared. I am rather annoyed. The bankers are obviously blackmailing the government. But there is additional information here: 90% of the people who reset their debts via negotiations still went bankrupt anyway. I say, why waste the time and money doing this? It is obviously pointless. Why have foreclosure?

Very simple: if there isn't the fear of death here, no one would bother paying mortgages! If the banks don't bite the bullet and terrorize debtors, debtors always let things slide. The more things are made easier, the debtor will expand debt, string out payments and avoid paying past debts due! So there has to be some sort of hammer here. As soon as smart home owners saw that they could renegotiate their reckless loans, they said, 'Ah, ha! I won't pay for three months and they will HAVE to renegotiate a better deal for me!'

Trust me, people do this. For example, the City of NY charged a penalty of only 5% a year on back taxes. If you fell 2 years behind, they took the property. But if you gamed the system right, you could get off paying taxes for most of that time and then pay all at once. This was a 'free loan' since banks were charging well over 9% interest on loans! We used this scheme to fix rentals, for example.

KeyCorp Swoons on Loan Losses Outside Its Market

(Bloomberg) -- Three months ago, analysts were speculating KeyCorp would help rescue National City Corp. after its bigger Cleveland-based neighbor set aside $1.4 billion to cover bad loans and reported a $171 million first-quarter loss.

Since then, KeyCorp has fallen more than 60 percent in New York trading and analysts now estimate Ohio's third-biggest bank by assets will post a record second-quarter loss of about $800 million because of unprofitable real estate projects in Florida and California.

``The loss rates are just astronomical,'' said Jeff Davis, an analyst at FTN Midwest Securities in Nashville, Tennessee.

All the banks are in the same leaky boat. And can't be fixed by denying the reality of inflation or by offering really crummy CD returns. End of story. They want to be bailed out, not resume realistic banking policies that work over time.

Second Liens Still Lurking at Wells Fargo

Despite second quarter results that were better overall than analysts had expected, Wells Fargo & Co. (WFC: 27.83 0.00%) remains under growing pressure from a deteriorating $84 billion home equity portfolio, bank executives said Wednesday morning.

Second quarter profit slipped 23 percent to $1.75 billion, or $.53 per share, compared to $2.28 billion, or $.67 per share one year earlier — but the bank saw its revenues rise, and boosted its dividend by 10 percent to boot. Analysts had expected earnings of $.50 per share, according to published reports.
*snip*
In the second lien portfolio set up for liquidation, the percent of loans that saw borrowers miss two or more payments rose during Q2 to 3.6 percent, up from 2.79 percent one quarter earlier. The $73 billion “core” home equity portfolio saw a similar rise to 1.88 percent in 60 day delinquencies, compared with 1.71 percent in Q1.

So delinquencies continued to rise during Q2; net credit losses, however, did not. Charge-offs on second liens were actually down $104 million compared with first quarter 2008 — but don’t let that fool you. The improvement was primarily due to a change in how the bank handles its home equity portfolio charge-offs; earlier in Q2, the bank extended its charge-off policy from 120 days to 180 days, in an effort to give troubled borrowers more time to reach a loan workout (or to protect earnings, take your pick).

This is like the scheme about not paying taxes I just mentioned. This is tricky book keeping and is done to defraud. It should stop. The City of NY stopped landlords from abusing the system by simply raising the interest rate penalties to be above the inflation rate. By extending the length of delinquencies before entering them on the books is a trick and won't put off the day of reckoning. But eventually this will hit them hard. Already, investors are highly suspicious and this sort of scam will simply drive them further away. Indeed, savers are very anxious now and shifting away from bank CDs for fear of losing everything in a collapse.

Blackstone Risks Hedge Funds' Return as LBO Lending Evaporates

(Bloomberg) -- When Blackstone Group LP, the world's biggest buyout firm, was pursuing the takeover of the Weather Channel cable network earlier this month with General Electric Co. and Bain Capital LLC, Wall Street balked at providing financing.

So the New York-based company turned to GSO Capital Partners LP, the hedge-fund manager it acquired in March, to pull off the largest U.S. leveraged buyout this year.

Blackstone can't wait for banks, stuck with almost $100 billion of debt from earlier LBOs, to start lending again. Instead, it's pushing deeper into deal financing with GSO. The strategy may hurt the hedge-fund unit's returns -- some approaching 40 percent -- if slowing economies lead companies taken private by Blackstone to default on their debt.

``The question is: Do you lose your objectivity when you do something so close to home?'' said Paul Schaye, managing director of New York-based Chestnut Hill Partners, which helps LBO funds identify investments. ``The lines get blurred in terms of who's doing what and it raises questions as to what is truly arms-length.''

Another desperate scheme that should be illegal. This is so...ENRON! HAHAHA. Creative bookkeeping. And is the Weather Channel so important an asset? HAHAHA. The process of creating debt and then dumping this on everything on earth continues, if crippled.

Spain drops reassuring gloss as crisis deepens

Spain's finance minister Pedro Solbes has stunned the markets with an admission that his country faces the worst economic crisis in its history as the full effects of the property crash spread through the economy.

"This crisis is the most complex we have ever lived through given the plethora of factors on the table at the same time," he told Punto Radio in Madrid, breaking with past efforts to put a reassuring gloss on events.

Mr Solbes said the Madrid bourse had suffered an "earthquake", crashing 27pc since the start of June. He blamed the toxic cocktail of high oil prices, the global credit crisis and the sharp slowdown in the key export markets of North America and Germany.

The strong euro is killing Europe. It shouldn't but this is the reality of global trade: the US and Japan both have a malicious weak currency game going and Europe was tricked into being the fall guy here. Europe will lead the way into global trade collapse, not the US. The US is STILL cheerfully running up epic trade deficits. We have no fear of debt. We still are accumulating it like crazy. Lending is harder in Europe due to higher interest rates. So there is slowing economic growth compared to the debt deadbeats in the US.

European recession looms as Spain crumbles

The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency.

No longer safe as houses: Buildings under construction near Barcelona
Industrial production for the EMU bloc fell 1.9pc in May, according to fresh Eurostat data. It is the sharpest one-month decline for the region since the exchange rate crisis in 1992. Officials in Berlin have warned that Germany's economy could contract by as much as 1.5pc in the second quarter as export orders crumble.

Industrial output in both Italy and Greece has slumped 6.6pc over the past year. Portugal is off 6.2pc. "It is a very ugly picture: we're on maximum alert," said Emma Marcegaglia, head of Italy's business federation Confindustria.

The world price of oil is falling due to the hell hounds running off from oil markets. And the US has stopped teasing Iran Kitty, so the hazard of oil is dropping as well as consumption in the West. I see far fewer cars on the road this summer. It is eerily quiet out here on my farm, the distant roar of vehicles has nearly vanished.

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Comments

[Buffalo Ken]

I have to finish reading this but some of the early text reminded of some goddess I once read about. She reaped havoc upon humanity and there was much blood and mayhem - she was going to go on forever, but if I remember correctly, she was only stopped when she was coerced to drink some beer! Maybe I'm thinking of Hathor. I don't know.

Maybe this is the goddess of INflation....

Anyhow, I need to read the rest of this.

Peace,
Ken

[Buffalo Ken]

http://www.touregypt.net/godsofegypt/hathor2.htm

[Elaine Meinel Supkis]

Yes, a get her DRUNK! A good idea.

[Buffalo Ken]

only after she kicks some ass...

[Buffalo Ken]

and to keep her from kicking EVERYBODY's ass...

you know - to calm her down a bit...

[Buffalo Ken]

I should know. I like both the "devilish beer" and the "divine wine" (plus a few other things...). They calm me me down especially when I'm feeling furious!

Anyhow, sorry for all the rambling. I read the rest of the article and I agree. There is a long way to go.

Peace,
Ken

[Fetung]

Ron Paul's interview on Alex Jone's: I hope Ron Paul is kidding. According to Paul the Congress has already approved budget for Iran war and is expecting it to start either before or after the Presidential Election:

http://www.youtube.com/watch?v=ZmtcjPXerJo&feature=related
=Ei3TF3GEyJk&feature=related

Paul also said they plan to embargo the entire Iran nation:

=7354M1QmGYQ

HJ Res 362 basically would close Iran down when the world is in oil shortages.

I canno believe any sane or even insane person would want to attack Iran when Russia is backing them up. Russia is really annoyed with our missile system in Europe recently.

http://www.efluxmedia.com/news_Russia_Irans_Rockets_Show_US_Anti_Missile_Shield_Unnecessary_20208.html

Then interest rates will skyrocket after the election, wipe the excess (gold/oil/commodity price/Dow) off the board.

http://www.youtube.com/watch?v=r9_vpQEX5Z0

So this is what is going to happen. Banking crisis --> People move money into inflation hedge gold/oil --> Iran War (I hope not! Please please no!) --> Oil shot up and more people move into gold/oil --> raise the rates and crash the DOW/SP/NASDAQ, include people who tried to hedge inflation (gold and oil included).

Few Americans save now, bailed out mortgage lenders and foreigners will buy out what is left

[Reimund from Berlin]

What you say (The bankers are obviously blackmailing the government) and what puredoxyk says in Foreclosure Apocalypse (all the major mortgage banks in the U.S. issued some kind of order ... that they would ... foreclose on every home they could) sounds like the American Bankers Association in 1891 (we will demand our money. We will foreclose and become mortgages in possession. We can take two-thirds of the farms west of the Mississippi, and thousands of them east of the Mississippi as well, at our own price ... Then the farmers will become tenants as in England).

I do not get it.

[Paul Jenkins]

27 years old.....listen to the lyrics.

http://www.youtube.com/watch?v=80JoQY3Oelk

[Elaine Meinel Supkis]

More about Iran tomorrow. Am too tired to post a long story about that today. Suffice to say that Bloomberg News spilled the beans when they published an article the other day saying outright, the high price of oil is due to the Iran embargo.

[Michael]

Elaine,

Collapse not over? It hasn't even begun yet. The short-term-thinking crisis managers on Wall Street and at the Fed and government offices are just trying to respond to each fire that starts to get too hot for them personally while the whole world is aflame.

We are if fact on a razor's edge with BOTH rapid credit contraction (hyperdepression) and exploding prices and currency devaluation (hyperinflation) pulling us down onto the blade at the same time. Trying to preserve the self-serving Rube Goldberg financial wealth-through-debt empire that the Masters of the Universe have constructed for themselves is, of course, our financio-political elite's top priority at all times.

Picture the Roman Empire coming apart at today's speed of transaction; we've covered the first hundred years (Roman time) worth of imperial collapse during the last 18 months (our time); so we've got several more years (perhaps a decade) of increasing chaos and destruction ahead of us before we hit bottom. Then we'll stabilize at a much less complex, gaudy, and self-aggrandizing level before the next big empire building plunge (probably by the Chinese).

The collapse could come sooner, of course, whenever our international creditors start dumping our Treasuries, or Isreal decides it can get away with bombimg Iran like it did Iraq and Syria. No pretty way out of this one.

[Elaine Meinel Supkis]

My headline is sarcasm.

[Richard]

Thanks Elaine, another great article.

You mention: "He was re-elected and continued to destroy the SS value by overspending in wars and other stupid things".

Well, yes and no. He won the election but it was by fraudulent means as documented by much evidence like in the Michael Collins link provided.

[Q]

People and businesses should take advantage of the brief respite in energy and food prices to hedge or hoard any supplies for the upcoming winter. The hell hounds will be piling right back into commodities when they finish riding the current bounce up to DOW 12,000 if they are lucky. The treasury and the fed will continue their policy low interest rates and a weak dollar, screw the savers since there aren't really any significant ones left in the US. Plus high oil prices were putting a major crimp on the refining profits of the majors.

As for Iran, reminds me of the following saying taken to a new level of cynicism:
"Qui desiderat pacem praeparet bellum (Let him who desires peace prepare for war)". Israel would attack Iran tomorrow if it thought America was truly seeking peace with Iran.

As long as interest rates are well below the rate of inflation and war preparations continue in earnes, any respite in energy and food is only a brief window of opportunity to prepare for the inevitable future.

[Reimund from Berlin]

I am sure bombing Iran will cause no collapse just as bombing Syria caused no collapse.

[Greg]

Palm Beach County Foreclosure Report

http://www.pbcountyclerk.com/courtservices/tdfc/fsr/fsr.pdf

"KG" just sent me a link to the Palm Beach County Foreclosure Report. It is updated every few days to include the next three or four dates where the gavel falls on the average homeowner.

I did a quick search and found

21 Wells Fargo properties
5 Wachovia properties
45 Deutche Bank properties
7 Bank of New York properties

Your results will vary as the report is continually changing. This is just one county in one state out of 50. The REOs keep piling up week after week, month after month.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Palm Beach County Foreclosure Report
Posted by Michael Shedlock at 3:33 AM Print

[henni]

elaine, check out
http://www.deepcapturethemovie.com/

[Elaine Meinel Supkis]

Yes, Bush stole the first election and the second election, his Skull and Bones bunk mate, Kerry, threw the election. I was very deeply involved in both elections, trying to show clearly that Bush went AWOL during the Vietnam War and especially in the infamous Geronimo's skull business. It was all very ugly and McCain promised me he would demand Bush release all his military records and return Geronimo's skull to the Apaches. He then chickened out at the last minute right before the big press conference we arranged in DC.

I was furious. Gads.....the Bushes are all secret coven satanists.

[CK]

A McCain promise? Akin to his wedding vows? akin to his promise to give only name rank and serial number?
Here is McCain as he should be seen:
http://blorts.cutaia.net/2008/the-new-
yorker-does-john-mccain/

[Paul S]

Elaine: What makes you say "Dubaya's" elections were stolen? Just because his brother is Governor of Florida,fraudulent vote certifier Kathleen Harris is now a member of Congress and--for the first time ever, the vote counting in Florida was handled by a contractor with an admitted 15% error rate, you think that proves anything? (Bush won Florida by something on the order of 537 votes.) Or just because all of the media repeatedly said--falsely--that the polls in the Florida panhandle were closed, you think that proves something? You must be a conspiracy nut. Wait 'til Dubaya cancels the upcoming election. It could happen. These guys are so supremely arrogant I don't doubt they may try it.

[Elaine Meinel Supkis]

The clue is simple: the Supreme Court prevented Florida from carefully examining the ballots and said we basically have no right to vote for President, it was a courtesy rather than a right.

[rockpaperscizzors]

"Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country?"
Senator Carter Glass, Author of the Banking Act of 1933

Paulson & Bernanke's soul(less) purpose is to guarantee the survival of the moneyed Nobility. Capitalism/Free markets with no regulation or restraints are designed to impoverish the populace. Communism/taxpayer bailouts are what the politicians, banks, and industry believe to be their inherent right. In fact, IMHO, capitalism has never flourished without the some form of slavery and indentured servitude of human beings. What we are witnessing is the Capitalism "dead cat" bounce.

[GK]

Have a look at Paulson's pinky finger here. Looks like someone had a 'discussion' with him before he came to 'power'.

http://blog.cleveland.com/business/2008/03/large_paulson.jpg

[Buffalo Ken]

rockpaperscizzors - I agree.

And the good news is - there are better ideas out there.

This is not a riddle: What is faster than light?

Answer: An idea!

(of course, it all depends upon the definition of "fast" and I think propagation matters in this definition)

An idea can propagate so rapidly. An idea can be exponential.

Does any of this make sesne to you?

[Buffalo Ken]

plus an idea never ends...

ideas are infinite or at least they can be

[Elaine Meinel Supkis]

Ken, I fear that the hardest thing to get moving is also...an idea. The act of thinking many things through and judging ideas is very, very difficult. Most people end up becoming mobs.

This is also a problem: many ideas that are bad for us appeal to 'the inner child'. This, in turn, renders people more likely to go for Santa Claus solutions, just for example.

Frankly, right now, most people in America want MORE debt and they want it to be as cheap as possible. Until we grow up, this is going to be a severe problem blocking out any 'ideas' that aren't attempts at getting some sort of free funny money.

[Karmaisking]

Elaine,

I note in an earlier post you chided Ron Paul for not being more forceful in his attack on the current corrupt system.

This perhaps implied that he talks the talk and doesn't walk the walk.

Did you know his closest advisor, Kent Snyder, died of pneumonia a few months ago. At 49.

It's been kept very quiet.

It coincided with Ron Paul's withdrawal from the Presidential race.

I wonder why.

[RobG]

Nice quote over at Why no Outrage?:

Once upon a time, economists taught that a currency draws its strength from the balance sheet of the central bank that issues it. I expect that this doctrine, which went out with the gold standard, will have its day again.

[Elaine Meinel Supkis]

Yes, I knew about the terrible, early death of his good friend and political helpmate. But Paul withdrew before his aide got sick. He couldn't take the 'revolution' bull by the horns which isn't so surprising.

Revolutions are, by definition, a young person's affair. Older people can inspire but not lead for the simple reason, these things are battles to the death.

Kucinich, by the way, was very forceful about the whole FISA business when Congress went into secret meetings for only the third time in history.

He is younger than Paul and had more endurance for that night meeting set up to destroy the Constitution further.

[rockpaperscizzors]

Thanks RobG for the link. IMHO, the populace is gang-chained to credit card debt. The credit card was surreptitiously handed to the populace to replace increased living wages. As wages decreased, all members of the household became forced labor and infants/children warehoused. Revolving debt=lifetime slavery.

I live in a large city and the smart people who pay as you go are the immigrants from Poland. Everything is cash, even purchasing houses. And they've built a labor bartering community.

Wall Street, casinos, racetracks, and lottery commonalities; 1) the tables are weighted for the majority to lose, 2) they exist for the mere thrill of gambling (exercise is a much healthier way to raise dopamine and serotonin brain levels). Just maybe, the Rip Van Winkle's are waking up.

Wall Street and the banks have rung the death knell and it's reverberating around the world. Goodbye Wall Street.

[rockpaperscizzors]

Great video: Financial Crisis Protest - New York, April 25, 2008
http://www.youtube.com/watch?v=EUpQ_EJMdGs

The First Revolution was the Monarchy's taxation of the Colonies Without Representation. The bailout of Wall Street and the banks(nobility) is once again, Taxation without Representation.

"Single acts of tyranny may be ascribed to the accidental opinion of a day; but a series of oppressions, begun at a distinguished period and pursued unalterably through every change of ministers, too plainly prove a deliberate, systematic plan of reducing [a people] to slavery." --Thomas Jefferson: Rights of British America, 1774. (*) ME 1:193, Papers 1:125

[Paul S]

Tim Ryan (D-Ohio) may be a good candidate to carry the torch. He's young and hopefully he has a safe House seat. I don't think one can be too harsh re Ron Paul. You try battling special interests as powerful as Paul does and you will understand the frustration. There comes a point when you are so outnumbered and outgunned that you start to wonder, "What is the point?" It's time for US to do the spade work and give people like Ron Paul the support they need. Of course, if you look at how badly the system is tilted in the bad guys favor, it makes one wonder why ANYBODY even tries. The US Congress has been too corrupt for too long.

[DeVaul]

Did you know that the man who came up with the idea of a "minimum monthly payment" on credit cards moved to an undisclosed island in the Pacific many years ago and lives incognito to avoid assassination?

As for Ron Paul, it is no surprise that people yawn at him now. I do not read anything he writes now because he failed to do the right thing in the end. His failure was collossal.

It was not necessary for him to lead a revolution, but it was absolutely essential that he resign from the gang of criminals known as the Rupublican Party as a matter of honor and declare his allegiance to someone who would lead the country away from the catastrophe that awaits us.

I always felt deep-down he would take the four million he got from donors and then "retire".

[Elaine Meinel Supkis]

Ron is old. It is a sad fact of life that fighting is a young person's game. Old people can be generals who give guidance but the 'stand up and FIGHT' part is strictly a youthful exercise. I am immensely pleased to see many young people struggling to do this very thing.

When Ron's delegates were shut out of the Texas Republican Convention this year, Ron should have left the party. This would have encouraged them in their battle with the guys who use Ron as a tool. It would have flipped them the hell out if Ron backed his own rebels!

But he did not. This is a significant tactical failure on his part. My heart goes out to everyone to took the time to try to force their way onstage.

But then the left 'Netsroots Nation' had ITS convention where the ruling Democrats screwed them and defanged them pretty completely. Even after a big dust-up online about the FISA bill, the Netroots people were puppies when Pelosi showed up and wrung all of their tails. Hard.

So we are far, far from revolutionary status. When the US truckers, pipe fitters, farmers and other rough and tumble people get pissed, then it will happen. Not before then.

[southerniowa gal]

Hi Elaine and all at this blog,

This blog has become one of my favorites to read, but this is the first time I've posted. I must admit that some of what you're saying is still going over my head, but what I catch is definately fitting in with my mindset and things I've read the last couple of years.

I'm not young anymore and I can't believe how totally clueless I've been, even about the history of the US and definately about the rest of the world, and definately about politics, corruption, and world finances. I've always been very conservative with personal finances and I guess instinctively knew something was very, very wrong with all this, but didn't know exactly what. I think alot of good hardworking 'normal' people just except things because that is not their field of expertise, and think others know better or more. Although most of us believe there is corruption in our government, I for one totally underestimated it.

My kids (now grown and on their own) actually think this is a hoot because they never heard me talk politics so much, or history, or finance other than personal finances when they were at home (or reading so much). I quess I thought I was 'too busy'. BIG MISTAKE! Nobody can be to busy. I just hope it's not too late.

Anyway I'm awake now and learning! Thanks Elaine for all your hard work. I love your writing style. And thanks to the other posters. I'm not only learning I'm talking to others as well.

[Paul S]

I agree. Ron Paul should have gone the third party route, but he didn't. He could have had his name on the ballot this election and probably influenced the outcome a la Perot. I think it will be a tight race this year--in election result--between Obama and McCain. What does everyone else think? (Safe bet: McCain will win Florida.)

[Elaine Meinel Supkis]

Who will be the next Hoover? Who? Who? hahaha. Alas.

Southerniowa gal: hi! Welcome! Happy to hear from you! The arcane business of money is this way deliberately because if the players said, 'this is MAGIC' everyone would hoot and holler.

But it is 'magic'.

[Michael]

Paul,

Sad to say, I no longer think it matters who wins the Presidential (or Congressional)elections. Domestically and internationally both candidates and both parties will do the same thing:

1) jigger with various spending/tax cut scenarios that increase government debt while giving the financial elite unlimited funds they seek to (try to) maintain their luxurious status quo (in the name of helping "ordinary Americans", of course).

2) continue to expand U.S military "presence" around the world (that pesky endless War on Terror), and letting Israel drag us into war with Iran should they so choose.

The only difference between McCain and Obama at this point is which set of cronies will profit most from the victory and which rah-rah rhetoric will be used to continue the status quo.

Whoever gets into office is facing a shitstorm of economic trouble which our typical "squeaky wheel gets the grease" official crisis management will only make worse, yet both candidates want to spend most of their time talking about Iraq, Afganistan and Iran, and the Next Big Threat. The last time this kind of scenario unfolded (1930-1932) the world went straight to economic hell while gearing up for the biggest war ever.

[Elaine Meinel Supkis]

Sad to say, you are probably correct.

[Paul S]

Michael and Elaine: you two may be right, but I want to remain optimistic. I think Bush and Cheney are two of the slimiest to hold their respective offices. I hope a Democrat-controlled Congress and with Obama in the White House, things can only get better. On the negative side, it's all relative; ANYBODY will be better than those two nazis Bush and Cheney. And I don't throw the term 'nazi' around lightly.

[Elaine Meinel Supkis]

Well, if everyone decides to pull Obama's strings to force him along the exact same path we are now on, then all is lost. They still think the present path is the best one of all. I write here to dissuade everyone about this. No, the US cannot go into infinite debt. It is totally impossible.

[moncler jackets shop]

I like ANMJ on FB & just subscribed to the email feed! :)