Columbus Day International Looting Spree Of US Taxpayers

Click on image to enlarge

October 11, 2008

Elaine Meinel Supkis

The G7 meeting is done and the G7 nations have collectively decided that the only way to get back to the hideous status quo that is destroying the US and drowning us in red ink is to resume drowning the US in red ink! And to do this is to undo all the accounting reforms that were put in place just one year ago due to wild, excessive granting of credit which flooded the world with red ink. So 'liquidity' will return! The cost of all this is already figured to be over $2 trillion on top of US taxpayers. So many schemes today, all of them triggered by the 90% losses in the Lehman auctions yesterday. All these nasty changes are happening on a long US holiday weekened: Columbus day. The celebration of the annihilation, enslavement and looting of the New World by these same peoples.

Fannie, Freddie to Buy $40 Billion a Month of Troubled Assets

(Bloomberg) -- Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds as the Bush administration expands its options to buy troubled financial assets and resuscitate the U.S. economy, according to three people briefed about the plan.

Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury's $700 billion Troubled Asset Relief Program.

They will spend trillions of taxpayer's money to keep that darn Derivatives Beast from eating all the wealth of the rich. Wow. This is, holy hell, another half a trillion a year that we will be sucking down in addition to nearly a trillion that is already being used in insane ways to prop up the biggest investment and lending banks in the US if not the planet earth!

Paulson says U.S. planning to buy bank stocks
Malaysia Sun

U.S. Treasury Secretary Henry Paulson said Friday the government was working on a plan to buy stock in financial institutions.

The plan is to use part of the funds in a $700 billion rescue package signed in to law last Friday after its passing by Congress.

'We are working to develop a standardized program that is open to a broad array of financial institutions,' Paulson said Friday

'Such a program would be designed to encourage the raising of new private capital to complement public capital,' he said.

Any shares purchased by the U.S. government would be non-voting shares except, he said, 'with the respect to the market standard terms to protect our rights as investors.'

Paulson said that developing a standard program is the best way to 'use taxpayer money more efficiently and have it go farther.'

He didn't specify what the government's terms would be for companies that take part in the capital injection program.

'We're working as quickly as possible to unveil the capital plan,' the treasury secretary said. 'We want to do it as soon as possible, but we want it to be right, and we want it to be effective. We're working around the clock.'

Did Congress demand that the person doing this divest himself of all his stocks in these very same banks? Eh? Conflict of huge interest here. Since the founding of the Fed, we have had this huge conflict of interest. Since the Treasury was taken over by gnomes thanks to corrupt Presidents, they have only one thing going: saving their own skins or stuffing their own guts. The American people got exactly one thing out of all this: endless wars and endless debts.

The US loved to lecture the world about the dangers of communism and socialism. Yet the countries with the least debt are those that were communist! The US loved to punish smaller economies and smaller nations when they ran up too much debt. Then we ran up too much debt. When the divine ladies who are the Goddesses in the Cave of Wealth and Death moved to set things to right again in their cruel, harsh ways, instead of balancing our books and correcting our mistakes, we are in the process of choosing the worst possible response to this meltdown of our own economic condition!

Yesterday, as I drove around, dealing with my husband's problems, I couldn't help but notice all the abandoned factories, the houses for sale. Having our government take on $1.5 trillion a year EXTRA debt to deal with this is pure insanity! These factories are closed because the US opened its borders to infinite trade with not taxes on this trade! So we got this vile feed-back loop where the evasion of taxes destroys the government's bottom line in two ways as well as destroying the pay of US workers.

We are seeing our entire auto industry being rapidly reduced to $0 worth. The way this will be fixed is for auto workers to be reduced to the level of Chinese trade rivals or Japanese workers who have to compete with robots and are worked literally to death. Instead of expanding US union labor rights to Asia, we are aping Asia.

In the article above, Paulson praises COLLECTIVE will of the G7 to fix things. And this fool, this evil gnome's idea of 'fix' is to restore the status quo that is killing us. Nothing jerks his little genie in his pants more than the idea that US workers are being crushed like Japanese workers. This is his idea of heaven.

Asia wants us to restart world trade by taking on more debt in the one remaining place it can grow: the US government. Last year, the US went through tremendous agony negotiating with the Japanese for how the costs of moving some of the US bases that protect Japan. Japan wanted us to suck up all the costs via loans. We demanded they pay their share. So they compromised. Instead of the US pulling out our troops entirely and telling Japan to go to China for their defenses, the US paid in full for 2/3rds of the move and the Japanese provided the moving van services on their own costs. This failure of our negotiators is typical. We won't threaten Japan.

This week, Japan certainly threatened US! They snarled that if we didn't restart the one-way trade, they and China would drop their gigantic FOREX reserves onto the heads of world markets and kill the dollar forever.

I saw not ONE article expressing outrage over this! I didn't see any editorials. None of the economics professors who yell about China all the time, said a peep or paid attention. But Paulson jumped. Bush squealed like a stuck pig but only in private. Everyone in DC ran around in frantic circles, seeking a way out. And the way out was the Paulson solution to buy the stocks in our banking system that Asia dumps. And to do other things that undo banking and accounting regulations so we can resume cheating ourselves.

Banks may get accounting break

(AP) -- The standard-setting board for corporate accounting adopted new guidance on Friday for how banks value assets in the distressed market, a move that could boost their balance sheets.

The five-member Financial Accounting Standards Board decided to provide some flexibility in applying "fair value" accounting where there is no market for a security - like the market for banks' mortgage-backed assets that has been dysfunctional for months.

While clarifying an existing rule, the board did not suspend the fair value rule as some had urged, however.

The board expects the new guidance to take effect Saturday.

Thank you, all, dear readers. The flood of information provided by all of you is a tremendous assistance here! I can't keep up with this information flow without a lot of help. This is a typical, back page story. Bloomberg also has put it up on their news crawl. This is INSANITY. Like fixing the Enron mess by killing the accountants and yelling, 'Who gives a hoot if the books are as crooked as a lane in a medieval town?' The US accountants will be replaced with French chefs who will pour sauces all over everything.

Let us review: in alarm at the huge, fast growth of the Derivatives Beast, international accounting organizations like the BIS [Bank for International Settlements], the IMF, etc all came together in Basel to set new accounting rules that would finally tell the truth and thus, stop the madcap growth of areas based on false accounting methods that inflated the value of paper held by the biggest investment and lending banks on earth.

Instead of pulling rabbits out of hats or pisssing beer and calling it wine, the banking gnomes had to put these CDS, CDO, CDX, SIVs, OTC papers up for auction in small batches and use the information from these PUBLIC auctions to determine the true value of the trash they called wealth.

So they launched the MarkIt site. From day one, I have gone there frequently to watch the meltdown. I fully expected these things to plunge in value and they did. In some cases, to .125% in value which is another way of saying, 'DEAD!' With the destructive auction of $400 billion of Lehman holdings in the dark pool realm of these paper products, we now know that the BEST of the lot isn't worth even 40% of its value, it is worth 10%.

The media, ordered to keep us quiet, didn't scream in unison over this. No, they focused on how the G7 would fix this. Without even the slightest examination as to why the G7 banks are collapsing in the first place. Or any examination about the fact that the US has utterly different problems from fellow G7 partners. We should be yelling about trade, not yelling for more debt.

It is obvious that the moving costs for taking this stinking pile of shit will fall on the US. Everyone wants us to shovel this mess out the door so they can REFILL THE STABLES WITH MORE. Hercules himself couldn't clean this banking stable out! Not if he shoveled for all eternity. This leaves the Goddesses who want the stables cleaned only one option: to burn down the barn entirely. With all the livestock inside. And believe me, being goddesses and having access to unlimited destructive abilities, they will nuke these stables if necessary.

This fills me with rage. The goddesses love traditional banking with limits and run by sober, careful guardians. They purr like cats when things run smoothly and people are not greedy or stupid. If we approach them with care and offerings of burnt money, for example, the goddesses will let us take a small amount of free money from them! All fairy tales agree that the good people, when they come to the cave of infinite wealth, take only a very small amount, just enough. And the greedy brother/king/stepmother always runs to the cave and tried to take everything. And is destroyed. This is so common in fairy tales, it also stretches across the entire planet. In Japan, in Russia, in Germany, in Spain, in Africa, in all the Middle East, these stories are always the same!

Indeed, the place these stories came out of is from Pharaonic Egypt, 8,000 years ago, the Indus valley and the city states of Ur and such, thousands and thousands of years ago. We must heed these cautionary tales!

Paulson Says Will Buy Bank Equity `Soon as We Can'

(Bloomberg) -- U.S. Treasury Secretary Henry Paulson said the U.S. will buy equity ``as soon as we can'' in banks and other financial institutions to restore market stability and revive economic growth.

The Treasury is ``working to develop a standardized program that is open to a broad array of financial institutions,'' Paulson said at a press conference after a meeting in Washington of finance ministers and central bankers from Group of Seven countries.

The injection of equity would be aimed at sustaining banks and other financial institutions through the worst credit crisis in seven decades. Paulson declined to give a timetable or details about the purchases, and signaled that markets may be in for turmoil ahead.

This is what the $700+ billion is for. And this is why the entire banking system is now crowding into the Treasury to loot it. They will leave us a pile of IOUs just like Congress left the Social Security fund with a pile of paper IOUs called Treasuries. This is the real 'savings glut' our gnomes keep yapping about. It was sucked up by them and the military.

Text of G-7 plan of action

1. Take decisive action and use all available tools to support systemically important financial institutions and prevent their failure.

2. Take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.

3. Ensure that our banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.

4. Ensure that our respective national deposit insurance and guarantee programs are robust and consistent so that our retail depositors will continue to have confidence in the safety of their deposits.

5. Take action, where appropriate, to restart the secondary markets for mortgages and other securitized assets. Accurate valuation and transparent disclosure of assets and consistent implementation of high quality accounting standards are necessary.

The actions should be taken in ways that protect taxpayers and avoid potentially damaging effects on other countries. We will use macroeconomic policy tools as necessary and appropriate. We strongly support the IMF's critical role in assisting countries affected by this turmoil. We will accelerate full implementation of the Financial Stability Forum recommendations and we are committed to the pressing need for reform of the financial system. We will strengthen further our cooperation and work with others to accomplish this plan.

The Financial Stability Forum should be renamed 'The Financial Status Quo Clique'. For that is its sole function. Not to examine what is wrong and fix it. But to use every cheat, scam and conspiracy to resume the dying status quo that is destroying the United States. And the business about protecting the taxpayers is utter tripe. They are RAPING the tax payers. They are taking the entire burden of the entire banking system and shifting it from the rich to the poor. While destroying unions across the planet. They are enslaving us all in the name of protecting their ill-gotten wealth which they got via lending us money at insane, low rates so they could flood the US with exports!

In the past, I have done cartoons showing the US as the Strassbourgh stuffed goose. The goose that laid those magical golden eggs of yore. Feet nailed to the floor, food is poured down our gullet so others can slice out our livers. This is wrong! And we should stop this. NOW. Instead, our own military is joining the butchery of the poor golden geese.

Pentagon Wants $450 Billion Increase Over Next Five Years

Pentagon officials have prepared a new estimate for defense spending that is $450 billion more over the next five years than previously announced figures.

The new estimate, which the Pentagon plans to release shortly before President Bush leaves office, would serve as a marker for the new president and is meant to place pressure on him to either drastically increase the size of the defense budget or defend any reluctance to do so, according to several former senior budget officials who are close to the discussions.

Experts note that releasing such documents in the twilight of an administration is a well-worn tactic, and that incoming presidents often disregard such guidance in order to pursue their own priorities.

And with the nation’s economy caught up in a global financial meltdown, it remains unclear whether either Sen. John McCain , R-Ariz., Sen. Barack Obama , D-Ill., or a Democratic Congress would support such large increases for defense next year.

“This is a political document,” said one former senior budget official, who spoke on the condition of anonymity. “It sets up the new administration immediately to have to make a decision of how to deal with the perception that they are either cutting defense or adding to it.”

Dov Zakheim, the Pentagon’s top budget official from 2001 to 2004, who is not involved in the current discussions, agreed.

“The thinking behind it is pretty straightforward,” Zakheim said. “They are setting a baseline for a new administration that then will have to defend cutting it.”

Good honking grief. The military is supposed to PROTECT us not loot us! But then, all empires die the same way. Greedy, stupid rulers use the military to try to rule the planet. This costs a lot. So they raise money doing this by going into debt. Even when looting astonishing amounts like the Spanish did when they stole all the gold of the entire New World, this isn't enough when the internal looting of the empire by the military contractors begins. Add losses of wars fighting stubborn people who will not surrender and we see dead empires walking. Every empire has walked down this road. The irresponsible looters running the capital of any empire do the exact same thing. No one can stop them from looting so they drive up the costs of war, the costs of empire until it bankrupts the entire system.

Anyone reading history can see this! Our own Founding Fathers read Gibbon's 'Decline And Fall Of Rome' and acted accordingly: NO STANDING ARMY! And Congress was to prevent any President from running massive foreign wars. This fell apart by 1884, of course. It is human nature. By 1860, we were at war with each other. And paper money began to reign. By 1914, we had the national bank that would bankroll global wars and that very same year, what a shock! It was activated!

So, the Pentagon wants half a trillion. So far, in my story today, we see all these destructive people demanding an extra $2 trillion. Our bankruptcy will be obvious to foresee. The only question is, instead of being at 2020 like the Chinese figured back in 1986, it will be probably more like in 2012.

Germans Stockpiling Gold Amid Market Panic

German gold dealers have stopped taking new orders for the precious metal as demand has skyrocketed. Gold is seen as a safe investment during the market turmoil.
In uncertain economic times, Germans are dumping stocks and shares to take refuge in precious metal, accoring to a Wednesday article in a Berlin newspaper.

German gold dealers report running low on stocks of gold bars and coins.

Heiko Ganss, head of the Berlin branch of gold merchant Pro Aurum, told the Berliner Zeitung newspaper that most gold traders were refusing new orders, as they couldn't meet the current demand.

The price of oil continues to decline and is now at $77 a barrel. But gold has been swinging very wildly between $750 to 950 an ounce. Some of these bounces are $80 a day! An amazing instability when we consider that PHYSICAL gold is increasingly hard to get! Some people speculate that speculators are unwinding gold trades to pay for the Derivatives Beast's rampage. And falling stocks force brokers and hedge funds to pay up and this is draining them out of the gold markets. Good riddance, by the way. Have fun in that volatile market, everyone! The road to riches is exactly where markets are jumping up and down like this. Both bears and bulls have fun.

And oil: the other OPEC nations warned the corrupt, fat Saudis to NOT flood the world with oil to save their investments in the G7 nations. But the Saudis did. Now, the revolutionaries that circle Mecca are sharpening their sabres. They know that declining oil prices will force the king to reduce welfare payments to a host of easily angered families who were the bin Laden supporters before the price of oil shot up and they were silenced by tons of gold flowing into SA.

Now, they will be angrier than before. And I think the Throne will be overthrown. And not in the far future, either. Now, time to visit my own blog exactly a year ago. As usual, I attack both political parties for being party to this rapine going on.

Culture of Life News, exactly one year ago: Reid Stops Tax Haven Bill--'We Are Too Busy' He Claims

Again and again, various international and national organizations and leaders try to curb tax havens and close pirate coves and board up the entrances to hell hound caves and these always FAIL. In the bitter end, the obvious reason for these failures is simple: money. Everyone who ought to do something are beseiged like Bernake was this last month, by mobs of money men and women screaming, 'We are dying! You can't tax us or regulate us!' And while shrieking, they pass over bags of pieces of eight. The latest tax bill is quietly strangled in the Senate yesterday.

And now, a pair of pretty good stories written by smart analysts online [never, god forfend!....in the mainstream media!]:

An excellent analysis at Thomas Paine's Corner By Rowan Wolf

With the current economic crisis which seems to be spreading across the world we are dealing with far more than a “subprime” crisis, or an attempt to “quarantine “toxic debt.” There is a much bigger avalanche waiting to come tumbling down. Namely the derivatives market now estimated to be over $1 quadrillion (that is 1,000 trillion) in global derivatives holdings. That makes the current $700 billion bailout look like less than a drop in a very large bucket.

As the long predicted crash started unfolding, I have been nagged by a long sequence of events that seem to be culminating at the current moment. There have been significant structural changes in the U.S. and elsewhere that have impacted both labor markets, and capital. In terms of labor markets (also known as workers) the transitions have been stark. In the United States we have watched the long term decimation of the manufacturing sector and a transition to a “service” economy. I remember the concerns in the 1980’s about the transformation of the U.S. economy from a production economy to a consumer economy. This trend was accelerated with broad implementation of corporate-driven globalization and formalized by the passage of NAFTA (North American Free Trade Act) and the rewriting of GATT (General Agreement on Tariffs and Trade).

These two international trade agreements were structured along similar philosophies. Namely the removing of “boundaries” to trade, and enhancing the “boundaries” around workforces. Those boundaries were national boundaries and national sovereignty. We saw the exportation of U.S. job (outsourcing and off-shoring) accelerate. We also started seeing the merger mania of the 1980s which have continued to the present. In fact, they are a prominent feature of the current crisis.

Worth the time to read the whole thing! Here is another good read and I thank readers for providing these links! I don't have time to search for them.

Financial Warfare over future of global bank power

F. William Engdahl

As I document in my forthcoming book, Power of Money: The Rise and Decline of the American Century, in every major US financial panic since at least the Panic of 1835, the titans of Wall Street - most especially until 1929, the House of JP Morgan - have deliberately triggered bank panics behind the scenes in order to consolidate their grip on US banking. The private banks used the panics to control Washington policy including the exact definition of the private ownership of the new Federal Reserve in 1913, and to consolidate their control over industry such as US Steel, Caterpillar, Westinghouse and the like. They are, in short, old hands at such financial warfare to increase their power.

Email this post

Culture of Life News Main Page

Comments

[chorddog]

Elaine,
You're hitting on all the right notes of this real-time opera, and cutting through all the noise, as usual.
Thanks
...a little FYI reminder for your readers:

Oct 11, 2008

Dear PennTrader,

Monday is Canada's Thanksgiving Day and the Canadian markets will be closed.

Monday is also Columbus Day in the US.

It`s one of those odd US legal holidays where banks and government offices are closed, mail isn't delivered, the bond market is closed... BUT the US stock markets are open as usual, as are many other businesses.

So on Monday, we'll be open for US trading only.

The Canadian markets will reopen on Tuesday morning.

Enjoy your holiday (if you have one).

Thank you for using PennTrade.

Oct 10, 2008
Ron Nicklas
Penntrade

[Simon]

bloody Wall St is shorting the US Market
trust them to kick the nation further and enrich themselves, all the while asking for rescue
This boggles the mind

[Grok]

Elaine, the half trillion you mention for the military.....are we to assume that this does NOT include the cost of the Iraq/Afghanistan wars?

[Juno Reactor]

It's inflate or die time. But it's going to be a funny inflation where the bond yields will be lagging and the high rates will never be seen in savings accounts or CD's.

Last value in USA is in stocks, which will keep up with the monstrous inflation to come. They will be the last bastion of value.

It will solve US debt problems and foreign dollar accumulation, but absolutely kill savers and bondholders at current yields. They are probably deemed expendable as the savings rate is so low.

Save, but do it in the stock market.

I make no comment about gold, as it's market price will be completely up to manipulation. It can go to $3000 or $300. In the upper end you will see that you will have a hard time getting anyone but the greater fool to buy yours. The professional dealers will certainly decline your business unless they make a hefty commission with a ready pre-deposit buyer available.

Even more ridiculously, dollar will not be going down with this. Quite on the contrary, it will go up for a good time. The rest of the world is seen as being behind US and dollar, not the other way round as could easily be thought.

[whine&cheese]

Japan is buying MS so they have access to the US printing press... don't you see, this whole bubble was about forcing the WORLD to bow to the FED!!!

[Elaine Meinel Supkis]

The dollar will only go up if our trade partners force it upwards a la Japan.

Its natural direction is down to nothing. This is a FAUX FLOATING CURRENCY REGIME and I should use that as the title of my next story.

Gold is a commodity and so is currency. A dual destructive system at both ends: very destabilzing. Will write about that more, in the following article.

First, I have to install two windows in the tenant's apartment in my kid's building in town. So will be chatting later.

[Anthony]

I see two big movements...

1. deleveraging, and the big US based asset managers are liquidating their holding to get cash.

2. The other deleveraging traffic. Asian and middle east money going out of US.

One thing is obvious, money is getting out of equity and all sort of paper investments. people want cash. I don't think Paulson can print cash fast enough to keep up with Japanese housewives withrawing their small investments, or arabs pulling out of market.

What I really worry. within a few weeks, after the first wave of deleveraging is done, these cash flow will start moving massively instead of being parked in local banks.

THAT will be interesting.

[carli]

The article on the meeting of the G7 Finance Ministers, IMF and WB Chairmen at the White House with Jr. was a boring diatribe of rehashed news from the past week. Read, Bush: US will work with partners on credit crisis
http://tinyurl.com/5yhnov

However, there were two snippets that were interesting.

1.) The White House meeting lasted about a half-hour, less than scheduled.

2.) While the G-7 group did not endorse all the plans put forward...

$2 Trillion in the hole just last week and no hors d'oeuvres? No toast? Compared to the AIG boys these guys are chintzy considering they traipse around on other people's money.

My tinfoil hat is twitching.

[carli]

This one is for you Elaine! People are starting to wake up to what you have been saying for so long.

People & Power - Money Geyser- 05 Aug 07 - Part 1
http://www.youtube.com/watch?v=JjglR2KYz5o

[Anthony]

Big Big question...somebody...

Remember LTCM collapse? Those guys thinks they are so smart and ended up with the entire global market betting against them?

----

What if LTCM is Paulson/US government. That Paulson think he is so big, he can go against the global market.

so here is how the scheme work:

1. those failing banks set up to sell failed investment paper to Paulson

2. They put a hedge that those investment paper will fail. (eg. falling stock market, collapsing certian trade, etc)

3. Then they sell the paper to Paulson.

4. Execute the hedge trade.

voila...easy profit.
and all this is paid for using Paulson's own easy Fed lending window!

So basically, Paulson is handing out money so banks can create bad vehicles to be sold back to Paulson! Bank take the profit.

Of course the scheme wouldn't be that obvious. but the basic idea seems plausible. (eg. by more swap, repackage the contract, then sell to Paulson.)

etc.

ultimately the biggest hedge there is:
bankruptcy of US budget. Play the currency.

[DrKrbyLuv]

The most discouraging part of this huge mess is the peaceful acquiescence of the masses as they are being looted and enslaved. Yes, the media is complicit in offering spin instead of truth but history, the internet and old fashioned common sense provide more than enough evidence to understand that this is not merely a financial crisis.

I think the lies have become truth because they are more comfortable for people to believe. For example, I hear many say "I hope they (government and the Fed) know what they are doing" to which I think "yes, they know exactly what they are doing, that is the core problem."

My fear is that when people finally figure things out, it may be too late. This is not to say we shouldn't continue trying to bring the truth as it is our best weapon against tyranny; we have an obligation to resist and to teach.

On a personal level, I constantly try to focus the attention of my friends and family to the rotten core which is simply the federal reserve system. I pass out copies of the Money Masters and provide links to the historical reality. I plan on participating in the 11-22-08 End the Fed move and think we all must contribute to the people who are courageous enough to keep the truth alive via websites, books and political action.

I wish there was a more calculated and concerted move underway as I think our efforts are fragmented. Sorry if I sound discouraged.

[carli]

Anthony, watch:
People & Power - Money Geyser- 05 Aug 07 Part 2
http://www.youtube.com/watch?v=MPRoQ7OxZAQ

It includes a commentary about the LTCM collapse which triggered a the first carry trade unwinding. What you are describing is what Paulson is/has been doing, only he is second tier. The Japanese own him, it's their money that keeps him (and Wall Street) in business while keeping the Yen low so they can flood America with cheap Toyotas.

Only Hanky Panky and his buddies got greedy, oversold their Ponzi scheme, triggered a really serious unwinding of the carry trade, the effects of which (US & European financial collapse) we are now witnessing.

[milo]

you got a reference at housing panic.com yesterday.....that sock puppet club has been on a predictive streek of wins for a while now.. a veritable psychic network.....

[DrKrbyLuv]

Some funny stuff about central banks:

http://tinyurl.com/45py2w

[Jeff Zappa]

"They are RAPING the tax payers. They are taking the entire burden of the entire banking system and shifting it from the rich to the poor. While destroying unions across the planet. They are enslaving us all in the name of protecting their ill-gotten wealth which they got via lending us money at insane, low rates so they could flood the US with exports!"

If the above is true, only their heads rolling Marie Antoinette style will do.

There will be no arrests, when they own the government, the army, the police. At least the won't be arrested by anything other than an angry mob, if the sheople here ever wake up..

It will be up to the public to take care of them, just as the French took care of Louis and Marie.

[Iowan]

So far the doctors have only been treating the symptoms. They can't seem to diagnose the disease. A more extensive diagnosis is here.

Frankly, I think the disease is going to prove fatal.

[DrKrbyLuv]

"IMF in global 'meltdown' warning"

"The world financial system is teetering on the "brink of systemic meltdown", the head of the International Monetary Fund (IMF) has warned in Washington."

"Speaking in the US capital on Saturday, Mr Strauss-Kahn said: "Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown."

Meanwhile, French President Nicolas Sarkozy and German Chancellor Angela Merkel said there would be no joint financial rescue fund for Europe, like the US bail-out of Wall Street.

"The two leaders said a common approach to the financial crisis would emerge from a Paris summit on Sunday of 15 eurozone leaders."

http://tinyurl.com/44zlj3

****************************************

It looks like the IMF and Bush are using more scare tactics to push Germany and France into their crazy scheme.

Could the US Fed be moving for control of the EU banks?

One possible good outcome may be a fractured EU with renewed nationalism among member states. Hopefully they will stand tough for some financial sovereignty rather than to fall under the clutches of the Fed, Golman, JPM and Citibank cabal.

Bush is over reaching his shaky position; you can bet we will see some outrageous solutions in response to the "imminent crisis." More fascism, nationalization and money schemes coming our way.

When will the fatigue factor begin to set in among the people? The US population has been fed one serious threats after the other since 2001? Terrorists, anthrax, snipers, Iraq war, Iran war, Pakistan war, Georgia, a new cold war with Russia, financial crisis after financial crisis - constant worry and crisis.

I hope the EU and the US people tell Bush and his banksters to go to hell.

[Buffalo Ken]

Whenever something really heavy goes too far out on a limb, then the limb breaks and to the ground the heavy item falls. Thank goodness for gravity. On the ground you are vulnerable. Our ancestors knew that.

The banksters pyramid is already falling down - ain't nothing all the queen's and king's men & women can do.....anyhow, the peasants don't give a shit especially while they are shoveling it. The peasants just want something better and the kings plus queens had best come to their senses.

Just my opinion.

Plus if any of these queens and kings happen to have a big ole stash of gold and gems, maybe its time to just let go. Let go of the ugly ego.

Peace,
Ken

[Buffalo Ken]

Why not turn the gold and gems into something really worthwhile. Something that helps more than just a few who hoard. Same goes for the Vatican. Why not release some of the vast wealth.

What good is it doing you now? Seriously.

What would Jesus do? What about Mohammed? What about the Buddha? What about any of the others.....Did they want to keep it all for themselves? I don't think so.

Peace,
Ken

[OC]

DrKrbyLuv,

Elaine is correct. They will try their best to keep the status quo even if it means killing most of their citizens. They will not go for the paradigm shift kind of stuff - too risky for them as they might loose their power. No, history shown us that it will end badly for some because same human instincts are involved and why it repeats itself. My friend, it will end in catastrophic failure on their part and we will all pay the price of their failure (globally). No way out is how I see it.

[PK Scott]

Hello boys and and girls, the people who hold a big fat pile of our crappy IOU's and paper assets aren't going to take them home with them. They are waiting patiently for "real assets" and any actual "means of production" they can get their hands on to go on sale at "fire sale" prices. It is the only way to protect the value of a pile of soon to be worthless IOUs.

Elaine is right, you cannot spend more than you produce and you cannot borrow more than you can possibly repay or you go bankrupt. it is true for individuals and Nations.

Try to wrap you head around the concept of living on only what you can produce on a personal and national scale. No more shiny cheap crap. No more manifest destiny and entitlement. Total economic collapse clobbers EVERYBODY and the bottom end of the food chain gets it the worst. The nation that has "produced" a financial scam of mythic proportions that has sunk the whole damned planet into really nasty depression will not be looked on too favorably by the rest of the world.

[JB]

from John Mauldin's Weekly E-Letter >>

Letters of Credit: Going, Going Gone?

"More than 90% of the world's trade by volume goes by ship.....................
Just as the business world is dependent upon commercial paper as its life blood, the world of global trade depends on letters of credit (LOC). Without LOCs, the world of trade quickly freezes up.

If you are a manufacturer of a product and want to sell to someone outside your borders, you typically require a letter of credit from the buyer before you load any cargo at a port...........................

..An article posted on Naked Capitalist caught my eye. Quoting:
I spoke to another friend of mine this afternoon, whose father has been in the shipping business forever. Pristine credit rating, rock solid balance sheet. He says if he takes his BNP Paribas letter of credit to Citi today for short term funding for his vessels, they won't give it to him. That means he can't ship goods, which means that within the next 2 weeks, physical shortages of commodities begin to show up. THE CENTRAL BANKS CAN'T LET THAT HAPPEN OR WE HAVE NO ECONOMY, LET ALONE A CREDIT SYSTEM."

[Paul S]

Wouldn't it be VERY interesting to be a fly on the wall at the private meetings these banksters are having? I wonder to what degree these bleepers are deluded versus just not giving a rat's tail what happens to anyone--but themselves. My guess is that it's somewhere in the area of an even split. I wonder if the REAL story of all this will ever come out. What are the chances do you suppose some insider--or someone with enough information--will spill the beans on this whole scandal?

[stilldreaming]

"Islamic finance rides the storm" ... article about the islamic no interest approach to banking.

http://tinyurl.com/4knn7o

[nn]

A comment from nakedcapitalism:

Applauding Germany's falling into step with Paulson et al is a serious mistake. I admit that we are in for a rough time but we will survive. What is important is to understand the larger geo-political chess game being played out here.

Paulson is the point man for banksters who have been managing financial panics for 2 centuries. The current crisis is a little bigger than their previous successes but the process is the same - Use Panic to consolidate power.

Thank goodness for those stubborn Germans. They are the only ones who are strong enough to oppose the Empire.

For an analysis of the “... all-out war going on between the United States and the EU to define the future face of European banking.” please read the story below.

Financial Warfare Over Future of Global Banking Power
Politics / Credit Crisis Bailouts Oct 09, 2008 - 08:04 AM

By: F_William_Engdahl

http://marketoracle.co.uk/Article6704.html

[Q]

It looks like the manipulation for dramatically lower oil prices before the election is going to backfire and bite the PTB and gnomes in the rear.

Basically the Time article points to the fact with the drastically fast drop in oil prices the Middle East Princes may not be able to pay for the necessary social programs and bribes to stay in power (This article also points to the same for Iran and Venezuela). If the oil price totally collapse in the OPEC countries so does the social structure and therefore future supply with regime change.

I truly suspect the oil price will eventually be linked to gold, not sure if it is during or after the dollar collapse.

www.time.com/time/business/article/0,8599,1849215,00.html?imw=Y

Every government manipulations has accelerated the time compression of the overall trend along with massive volatility. I wonder if someone truly believes if they fast forward the clock the coming collapse will not be as bad along with other unseen black swan events.

[Elaine Meinel Supkis]

Several things here: the very, very first Italian banks were for papers that helped merchants in overseas trade with Byzantium and China!

Without that, there is NO TRADE. The failure of this today is massively bad....only it is also a tool being used by the goddess I call 'Libra.' She is the Queen who rules our fates now. We can cheat her but in the end, she will balance trade if it KILLS us.

So all the games set into motion to keep the dollar the world's trade monetary system will now collapse because the US isn't solvent. The US has too much a trade deficit to play the role as the world's trade currency guardian!

Everyone wants this to continue but Libra will foil all attempts at keeping a crooked system going.

About oil: OH YES! When oil drops fast and Iran warned the Saudi Kings about this, the funds that fuel the social system of Islam will collapse. Bin Laden is betting on this and hopes that this will create his revolution.

He is correct. It will sweep from power all the despotic rulers of the 'Arab street.'

More: the very people who are the worst oppressed by the super powers will be on top of the world in 50 years. Cuba and Palestine, certainly will be zooming upwards the day the US goes bankrupt. Our dual-draconian crushing of these two people via the cruelest embargoes on earth will end with the death of the US government rule of the Seven Seas.

And out of their prisons will burst some of the most energetic, smart, hard-bitten people on earth. History tells us, the future strong people are those who are severely repressed.

[stilldreaming]

One town’s home grown approach to currency and banking during the 1930's.

http://tinyurl.com/2s6jn7

[Dutch]

http://news.bbc.co.uk/2/hi/asia-pacific/7665206.stm

[Elaine Meinel Supkis]

Dutch, welcome to the world where the Chinese make us do things we don't want to do.

Still Dreaming: a currency that loses 1% each month which is 12% loss per year, to pay loans and taxes...this is a great way to HELL. It is inflation which causes TEMPORARY fast movement of money as everyone passes it off like hot potatoes but also ends badly.

Note that Austria dealt with this the medieval way: looting the Jews.

[stilldreaming]

I must say the notion of currency depreciating seems incongruous. But the two points I find interesting is first; the argument of decentralized currency and banking relationships at the local level to stop the drain of wealth to centralized banking; second the claim that this worked for this community, during the early 1930's finacial crisis, as stated:

“The workers found that all businesses in Worgl accepted the currency in payment and at face value, and the notes returned to the parish treasury as dues and taxes. Economically, there was no inflation, and politically, the money was unanimously acceptable to all the municipal parties.

Because it was a depreciating currency, it circulated with rapidity, boosting the local economy. Also, not only did people merely pay their current taxes in the currency, but also discharged their tax arrears. Further, many paid their taxes in advance because it was financially advantageous.

Apart from the obvious employment benefits, physical assets were created. These included improvements in the main street and its drainage system, street lighting, new road construction, manufacturing of kerb stones and drainage pipes, construction of a ski-jumping platform, and fencing and construction of a new water reservoir."

[Zulu]

Carli linked a video of Max Keiser when he was in Iceland about a year ago. Max is the George Carlin of financial analysts. He definitely gets more emotional than your typical analyst. He calls Paulson and Bernanke psychopaths, terrorists, and fascists among other things.

Give Max a podium and a small mustache and he might lead the disenfranchised masses. Those not economically viable. Keiser is living safely in Paris. Here's some of his latest:

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

http://www.youtube.com/watch?v=PRe0lIbSeaE

Ron Paul for president. EMS for Financial Czar of the U.S.

[blues]

Well I Googled { Worgl Schillings }, and apparently this community currency was ended by court action. See:

|¯¯¯¯¯

http://tinyurl.com/3hxpea

I would offer the thought that Canada is where populist Social Credit governments were elected in two provinces, and in one (Alberta) made a gallant attempt to implement a genuinely alternative currency (the Prosperity Certificate). That, like the Worgl schillings experiment, was ruled unconstitutional by political pressure by the private banks -- "he who pays the piper". But Alberta did at least set up provincially-owned Treasury Branches all over the province, which exist to this day. In other words, Canadians have had some hands-on experience with regional money systems.

|_____

Elaine says of this Worgl Schillings idea "...this is a great way to HELL." Well, maybe, since it sort of looks like inflation. But then, insurance really looks like gambling, except that something "bad for you" must happen before you "win." I have no personal "investment" in this Worgl Schillings notion, but I will say this:

I very often have to check out ideas by way of the touchstone of getting them to work in the real world. This did seem to work very well until the bankers and their bought judges stepped in. I think it's crucial to remember such things.

While I am talking of insurance and gambling, I think my idea of credit default swaps (CDS derivatives) has moved along a bit. The CDS looks like this: You risk money hoping to make more money in, say stocks. But you can buy a "CDS policy" that says if your stocks go down, you get reimbursed. This seems insane. It's just as if the people who sell you lottery tickets also sell you a "policy" that says you get money anyway if the tickets lose! You buy risk here and sell it there. But that cancels the entire premise of what was originally intended (to buy risk)!!!

[blues]

I read somewhere that the "derivatives" policies were initially questioned by some congresspeople as representing a form of outright gambling. One would presume that they might be legally enforceable as contracts because the US Constitution explicitly allows all contracts to be valid.

I know there are a lot of Constitution lovers out there, but the thing has some flaws. In the real world, contracts really need some regulation. Should I be able to enter into a contract to sell myself into slavery. This is at the core of all the problems we face. Sweeping generalities work very well in physics and mathematics. Physics and mathematics are axiomatic systems. Here are two paragraphs from one of my own books:

|¯¯¯¯¯

Human speech is not an axiomatic process. It is not at all like mathematics or physics. In axiomatic systems, everything locks together into a totally coherent process. This has engendered a fallacy that has persisted for 2,500 years. Human speech is a DIALOGICAL system, much like an advanced biological system. It is a system comprised of subsystems that are in fact somewhat incompatible, and which thus require the services of a computational apparatus to mediate mutual interference. DNA and its associated proteins create a computer that arbitrates contentions among otherwise incompatible subsystems.

The biology of your physical being, for example: Your brain requires glucose constantly; it demands 25% of the ATP energy of your cells. But that glucose is pure poison to most every other organ in your body. So the size of your brain is not so important as the size of your liver. Humans have huge livers to keep their blood free of neurologically disruptive chemicals, and to balance the insulin that keeps the brain running without glucose poisoning every other organ. This is not an axiomatic system that runs automatically. This dialogical system is fundamentally unstable, and requires the mediation of many mutually interfering subsystems by a DNA/protein computer that must run constantly to maintain a tenuous dialog.

|_____

Ever since the US Constitution was set up, people have been treating social systems as if they were axiomatic, and they are not. So every "ideology," from Marxism to libertarianism, has tacitly assumed that relations among human beings were axiomatic, and once set up, would just remain stable, if the axioms were followed scrupulously. But that is dead wrong. Human relations are dialogical, not axiomatic. So sweeping generalities simply will not do in human relations.

[Tell]

"The great delusion"...

http://tinyurl.com/3fbtcv

[Elaine Meinel Supkis]

INFLATION always work for about 5 years. Then all hell breaks loose. This is an iron economic rule. Governments love to hand out inflationary funds that will be allowed to circulate back in as an EXCESS which is used for government projects like building roads or waging wars.

After 5 years, money is nearly worthless. Everyone who could pay forwards to pay of debts and taxes will be done doing this and all the people living hand to mouth, which is the vast majority, get to eat the resulting inflation.

This is why it is a bad system. It is not balanced at all. Inflation emergencies always last until it crashes. You can't stop it easily at all.

Local currencies: this is another name for CHAOS. Germany and the US had local currencies during the 19th century. I actually have some samples of this in my little currency collection of museum pieces.

The minute a country stops this local currency stuff, the nation becomes very strong. Those that can't stop it like the US couldn't do until the very bloody Civil War, can't get strong in international trade. The ones who succeed rule the planet.

[blues]

I just find it interesting that the Worgl Schillings seem to have worked well in an extreme situation. A local currency system would not have to be permanent.

I'm not sure that the Worgl Schillings were undergoing inflation in the usual sense. The whole idea looks to me more like a method of taxation, at first glance. I like stuff that works. This might not work optimally, but it's interesting.

Two things that have broken with the past dramatically are the advent of the energy windfall, and the technology it has engendered. Now there are nuclear weapons, and an oncoming oil peak. This confront us with unprecedented challenges. It is all very frightening, really.

If we do rebuild productive systems, we could build in low pollution and sustainable energy features, if we had any common sense — And this is something like a bright side.

[stilldreaming]

It might be interest, here's one assessment of US inflation covering 1800 to current showing a relentless up trend from the 1913 on FED era.

http://mwhodges.home.att.net/inflation.htm

[stilldreaming]

Correction - It might be of interest ...

[stilldreaming]

Blue yes I think that was what was interesting about that story is they turned their situation around when centralized banking was destroying everything. Their starting point was,

“Its burgomaster, Michael Unterguggenberger, faced an empty treasury, because the unemployed citizens could not pay their taxes; roads and bridges needed repair and parks needed maintenance, for which the town could not pay; and idle men and women earned no wages.”

One of the issues of centralization is it can destroy local societies particularly poor ones, as they become irrelevant to it’s ends and they don't get it's 'liquidity', but do get it's inflation. Manfred A. Max-Neef's barefoot economics did a lot on this and focusing on human scale economics.

[Elaine Meinel Supkis]

Easy solutions lead to grave problems.

The problem in Vienna and Berlin in 1930 was not the lack or excess of currency. IT WAS BANKRUPTCY.

The governments went bankrupt. Why?

WARS! And how did they ultimately fix it?

They looted the Jews and then set out to loot all of Europe! How's that for a fix? The little 'let's have a perpetually inflated local currency' was DOOMED. Why?

Because the little statelet that did this needed stuff from OUTSIDE. It was NOT contained like an island or like the Soviet Union contained itself.

Note that the USSR went bankrupt, too. All such systems can't run for long. Or rather, the bridges are built, etc but the CAPITALIST society collapses! There are many 'solutions' out there on the net that usually end up in a long stagnant economy in perpetual depression or are wildly inflationary.

This is why I talk about the two goddesses in the Cave of Wealth and Death: Inflation and Depression. Understanding both is life an death, literally.

[carli]

Zulu, I give more credence to Max Keiser and Jon Stewart than any of the talking heads at CNN or Fox. They speak the truth even if it is unpopular, inconvenient and criticised, which is what 99.9% of the media have forgotten is their job and primary purpose. Kind of like S&P and Moody's in the financial markets.

Did you know that Max was delisted from Wikipedia? What an honor, really. And if "they" are doing that to him you can bet your last dollar he is hitting the mark. And yes he lives in Paris, like Jim Rogers who lives in Singapore. Jim Rogers who was a part of the very system that Max exposes, and who validates everything Max says (of course, without working for Al-Jazeera).

We can safely assume both no longer want to be a party to the rigged game in the US, much like the Pilgrims who left Europe in the early 1600's.

[Noob]

Re the Worgl Schilling: Thanks for posting this, Still Dreaming!

I read a book called "Debt Virus" years ago. This discussed something similar being done off of England, in the Channel Islands. I think the Island of Gurnsey.

Apparently, many years ago, Gurnsey was just a barren rock, very poor. So the town leaders, who must have had some understanding about money, decided they would issue their own currency. And they used this to build infrastructure, and a town market.

I don't know if it was a depreciating currency or not.

Huge success! People wanted to move onto Gurnsey in later years and weren't allowed.

There is an interesting google movie called "Money Masters" that mentions this island, too.

Money Masters also mentions that Lincoln issued greenbacks to fund the Northern army in the Civil War. This would be in-line with the US constitution that says the US can issue its own money. The greenbacks were in circulation until JFK's time.

As I come to a groping understanding of what the hell is going on in finance--because I do not have a background in finance--hence "Noob"--I have to wonder why the heck the US has to pay interest to a private corporation just in order to have a currency. And it seems to me that a currency is a postulate for having some kind of a civilization.

Don't know how well Gurnsey is doing now, though. But I do know for sure that they were successful for much more than 5 years.

I would be honored if you all could tell me any books or references that I could read, so that I can begin educating myself about finance and global finance and money. Something basic, that doesn't leave out definitions and explanations.

[Zulu]

Carli, I've heard Jim Rogers story. He states clearly why he moved to Asia in this video:

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

Noob, the best book I've ever read on Economics is Ludwig Von Mises "Human Action," and I'm no economist either. Here is a link to a PDF online version, but I suggest you get a copy from the library if you can. It's a fairly easy read, but 885 pages long:

http://www.capitalism.net/HA/Human%20Action.pdf

As for local currencies, gold based currencies, and other fixes to the Fed Reserve System, I think we should start at square one and abolish the entire system as unconstitutional and give Congress sole authority to print "debt free" currency, i.e., non-interest bearing instruments. And in my dreams I can fly as well.

[GK]

The Gold standard of Fed books in my opinion:

The Creature from Jekyll Island : A Second Look at the Federal Reserve
by G. Edward Griffin

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

[stilldreaming]

Elaine, Blues, Noob,

Hopefully we can all have our views, I think there is not really enough information in the article on Worgl Schilling nor do I have a particular investment in their experiment beyond that a very poor town made a difference for themselves in dire circumstances. From what is put, I can’t say I think the depreciating money is inflationary as it seemed to me it was cyclic, as in it depreciated from receipt but new money created was at the original value and not only did capital works prosper but real economic production with the rapid exchange of money for stuff and labour so I don’t see it as an attack on capitalism or as socialismand and the article claims it was not inflationary. As they were being productive compared to their idle neighbours I would think they would have at an advantage in exchange outside their community. They also should not be compared to the greater state as it was the state who brought an end to their endeavors.

Noob,

What you say is kind, but I’m not an economic scholar. The trouble is most have some axiom point of view (dogma) as Blues pointed out above, so I try to keep an open mind and stay in the driving seat - the view seems to change daily.

The internet for now is a great place of shared thought, current and vibrant, and where I look most.

There is http://mises.org/ for Ludwig von Mise’s ideas and Mish gives a daily commentary from this view http://globaleconomicanalysis.blogspot.com/ though I question how much a free market is possible or if will it always be gamed, so I like ideas that have a human perspective. This also seems a good blog http://theautomaticearth.blogspot.com/ for global economic commentary. The clips on http://www.addendummovie.com/ might have some insights on money creation and money agendas. I also find notions of cycles and waves in the progression of human and financial history interesting - Kondratieff and Elliot and Gann here and an organic connection to this - Fibonacci numbers as example.

It seems one has to look more and more in the cracks of power, control, and manipulation. Shakespearean tragedy and understanding paradox could be useful. Exploring global power dynamics also as Elaine points out, I think one she mentioned well dog eared was ‘The Rise and Fall of Empires’ though I have not read it.

I could be wrong but “1” seems to have significance in many ways –
one earth for example or one finite economy increasingly consumed by gnome debt creation until it does not exist beyond debt repayments, so fails. The notion of symbiotic relations seems worth considering.

We are unlikely to destroy the world, that was born with the energy of trillions of atomic bombs, it’s just how far we reset the clock.

Anyway, just a few ideas - the more consciousness out there the better, so good luck.

[stilldreaming]

A couple of videos:

Money, Banking and the Federal Reserve
The Unconstitutional Fraud of the Federal Reserve
A Video from Ludwig Von Mises Institute
(has a gold standard view)

http://mises.org:88/Fed

Paul Grignon's 47-minute animated presentation of "Money as Debt"

http://tinyurl.com/27jppm