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ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘derivatives fraud

How Global Elites steal resources and technology

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by James Jaeger
Posted originally May 04, 2011

As many of you old-timers know, my colleagues and I have been working to expose the fraud of the Federal Reserve System for many decades, not only in our movie, Fiat Empire featuring Ron Paul, but at places like the MIND-X and The Daily Bell.

When I first invited artificial intelligence enthusiasts at the MIND-X to read The Creature From Jekyll Island by G. Edward Griffin many apologists, who are either naive or who live off the fiat-currency system, fought me and argued for at least ten years. Given that this subject is now in the mainstream every day: I hope these people will now acknowledge that the issue has merit and the Federal Reserve – the FED – is an instrument of unjust enrichment.

As Ron Paul says – and many others now acknowledge – it’s become common knowledge that the Fed “prints money out of thin air” and this activity inflates the money supply, thus causing the hidden tax of “inflation” and a destruction of the dollar’s purchasing power. It is thus the Federal Reserve System that is the CAUSE OF THE CURRENT GREAT RECESSION, THE 2008 FINANCIAL MELTDOWN, THE LINGERING UNEMPLOYMENT and THE MULTI-TRILLION DOLLAR DEFICITS we are now experiencing.

That bit of housekeeping done, allow me to say further: the Federal Reserve’s MONETIZING of debt – now known by the euphemism of QUANTITATIVE EASING – and its practice of FRACTIONAL RESERVE BANKING have allowed an elite class of people to emerge, a class that has exploited the American middle class, if not driven many of them into bankruptcy. This has happened because the major corporations – majority-owned by this class – have sought ever bigger profits provided by exploiting cheap foreign labor and military services. The American Middle Class is justifiably getting REALLY pissed-off.

GLOBAL FRAUD:

The banking class – and the corporations that do business with this class  – have reconfigured U.S. laws to enable them to facilitate massive mergers and acquisitions over the past several decades. This consolidation took massive financing, so where did the money come from? It came from the Federal Reserve Member Banks as loans driven by fiat currency and fractional reserve banking. In other words, the major banks created trillions out of thin air and gave it to their cronies in corporate America in exchange for stock in the consolidated multinational corporations.

These multinational corporations, having driven most of their “free market” competition out of business (as a result of their access to fiat money) were now in a position to fund the campaigns of many congressmen. In exchange for campaign finances, many congressmen were behooved to relax anti-trust laws and provide all manner of special privileges. Such resulted in, for instance, the “financial services” industry whereby banks, stockbrokers and insurance companies were able to commingle their business plans to maximize market share and profits. The conflicts of interest that were created as a result caused the global financial meltdown which started in 2008 and proceeds more covertly to this day.

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Bernanke’s Press Conference: Some Responses

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“We Don’t Control Emerging Markets”

by John Rubino
April 27, 2011

THE FED CHAIRMAN’S FIRST PRESS CONFERENCE generated neither heat nor light, but did include some typically, um, questionable statements. Here are a few, followed by responses in bold:

“Keeping inflation low and boosting the economy are good for the dollar over the medium-term.”

Well, duh. But talking about controlling inflation while interest rates are at record low levels and commodities are soaring is pointless. Eventually energy and food prices will work their way through to restaurant menus and store shelves (see McDonalds and Huggies) and then inflation won’t be low — even by the government’s deceptive accounting. That won’t be good for the dollar.

“There’s not much the Fed can do about gas prices per se. After all the Fed can’t create more oil. We don’t control emerging markets. What we can do is try to keep higher gas prices from passing into other prices, creating a broader inflation. Our view is that gas prices will not continue to rise at the recent pace.”

The Fed might not control emerging markets but it does affect them. We’re exporting our inflation to them by supporting US consumer borrowing and keeping interest rates low, which creates a torrent of hot money flowing into Brazil, China and India. That’s why they’re overheating.

Put another way, they’re paying the price for our lack of self-control. China is raising rates and Brazil is at 12% already, which means they’re looking at a combination of slower growth and continued high prices. This is a huge problem for countries where many workers spend most of their paychecks on food and energy.

“The inflationary expectations we’re concerned about are long-term. Our anticipation is that oil prices will stabilize or come down. If firms aren’t passing on higher costs into broader prices, broader inflation, then we’ll feel more comfortable watching and waiting to see how it evolves… Long-term expectations are still stable. We’re confident they’ll stay down.”

Letting inflation run and hoping it doesn’t persist is extraordinarily dangerous, because by the time people figure out that it is going to persist you won’t be able to quickly change their minds. They’ll be dumping their bonds and buying real assets like gold and silver and farmland, sending the dollar down and interest rates up. Then you’ll have to spend years convincing them that they’re wrong by raising short-term rates and engineering a recession. And that’s the optimistic scenario. A recession with home prices already falling and systemic debt at record levels would risk a return to the mid-1930s, when a brief recovery turned into the Great Depression.

“We’re completing purchases by July. It probably won’t have significant impact on markets or the economy because the market already knows that. It’s not the pace of ongoing purchase that matters, but the size of the portfolio we hold. We’ll continue to reinvest, so our portfolio size will remain constant. Any changes to portfolio size would depend on pace of economic recovery.”

What he’s saying is that the Fed will continue to buy up Treasuries and other kinds of debt with the proceeds of its maturing bonds. This is a massive amount of money, hundreds of billions a year, so in effect QE 2 won’t really end.

“All I can say is, recovery is moderate, but I do think the pace will pick up over time. Over the long run, the US will return to being the most productive and dynamic economy in the world. It hasn’t lost any of its basic characteristics.”

Unfortunately the US has lost one of its most basic characteristics: a solid balance sheet. We’re effectively bankrupt, and the resulting loss of flexibility and access to capital will fundamentally change this country in the future. A few pockets of innovation won’t be able to bail out an insolvent majority.

“We’re using new tools, but nothing we’re doing is fundamentally different from what we normally do. We’re monitoring inflation as well as recovery. The problem is the same one central banks always face — which is tightening at the right time of a recovery. But we have a lot of experience with how to do this, and we’ll tighten as conditions warrant.”

Let’s consider that experience…the junk bond bubble of the 1980s, the tech bubble of the 1990s, the housing bubble, and now this, whatever it is. Not reassuring.

Why Bernanke’s next move doesn’t matter

from Phoenix Capital Research
April 27, 2011

THE FINANCIAL WORLD IS SITTING ON THE EDGE of its seat today to see just what Ben Bernanke has to say about inflation. It’s odd that a man with just a horrific track record, not to mention the fact his policies have resulted in tens of thousands of people starving or being killed in riots, should be the focus of the entire financial system.

After all, why should we listen to a pathological liar and idiot, not to mention a man void of morals or compassion? Regardless or Bernanke’s personal qualities, the fact is that it doesn’t matter what he does next. Whether or not he issues QE 3, raises interest rates, references inflation differently, or what have you is irrelevant. We will see some kind of Crisis in the near future because of his policies.

If he raises interest rates, the debt market and derivative implodes. If he launches QE 3, the Dollar collapses and trade wars erupt. If he doesn’t launch QE 3, the stock market collapses.

The idea of “success” is completely off the table at this point. It’s now simply a matter of which Crisis we will see. Even if Bernanke does become hawkish and defends the Dollar, the US’s debt load is beyond sustainable levels and will result in a debt default.

Again, there is no positive outcome from the current financial situation. The only good thing that will come out of the destruction will be the Fed being dismantled and Bernanke no longer in control (though this may take years before it’s complete). One thing that is now certain however, is that the US Dollar will be collapsing in the future. It might take two months (Bernanke indicates QE 3 is coming) or two years (Bernanke becomes more hawkish), but it will happen.

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Four time bombs that will blow up Wall Street

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by Paul B. Farrell, MarketWatch
Originally posted March 1, 2011

 

 

 

SAN LUIS OBISPO, Calif. (MarketWatch) — Put Goldman Sachs CEO Lloyd Blankfein in jail for six months, and all this will stop, all over Wall Street and America, a former congressional aide tells Matt Taibbi in his latest Rolling Stone attack, “Why Isn’t Wall Street in Jail? Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.”

Taibbi’s right, everyone knows Wall Street’s run by a bunch of dictators who are doing more damage to democracy and capitalism than North Africa’s dictators. But jail the CEOs of Goldman, Citi, B. of A. or my old firm Morgan Stanley? Too late.

Only a revolution will stop Wall Street’s self-destructive capitalism. And watching the people revolt against dictators like Mubarak and Gadhafi reminds us of the spirit that sparked America’s revolution in 1776. But today we need a 1930s-style revolution.

During the S&L crisis two decades ago America had a backbone, indicted 3,800 executives and bankers. Today’s leaders have no backbone. Besides jail time won’t reform the darkness consuming Wall Street’s soul. We’re all asleep, in denial about the moral crisis facing America. Yes, we need a new revolution.

Jail time? We’ve heard that many times before. Journalists have been beating that dead horse for three years. Jailing CEOs made sense in early 2009. But our naïve president missed that opportunity, instead surrounded himself with Wall Street insiders as Bush did with Blankfein’s predecessor. Trojan Horses manipulating a Congress filled with clueless Dems mismanaging tired Keynesian theories.

Taibbi got it right: Washington’s error was in protecting Wall Street’s billion-dollar crooks when they should have been prosecuting CEOs for criminal behavior in getting us into the 2008 mess. So today, the political statute-of-limitations has run. Jail solution is wishful thinking, like praying to the tooth fairy for a miracle. Time for action. Time for a revolution on Wall Street.

Jail Wall Street? Old news. They got away with it. We chickened out

“Jail Bank CEOs” makes a great sound bite in the cable pundits’ echo chamber. Remember Taibbi’s earlier indictment of Goldman Sachs: the “world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

But so what? Just three years after Wall Street’s crooks “brought down the world’s economy” Goldman’s Blankfein and his buddies are paying record bonuses, and laughing at us.

Seriously, think about it folks: Since the 2008 meltdown magazines and newspapers have analyzed the 2008 crash to death. It really is old news, history. Journalists churned out book after book: “Greenspan’s Bubbles,” “House of Cards,” “Trillion Dollar Meltdown,” “13 Bankers,” “Dumb Money,” “Bailout Nation,” “All the Devils Are Here,” “The Big Short,” “Too Big to Fail,” “The Failure of Capitalism,” “This Time is Different,” “And Then the Roof Caved In,” on and on, ad nauseum. All talk, no action, and no effect.

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The Ultimate Cost of Zero Percent Money

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by Jim Willie CB
Posted originally December 29, 2010

home: Golden Jackass website
Jim Willie CB is the editor of the “HAT TRICK LETTER”

Another major article from the inimitable Jim Willie. It seems so long now since we have had a zero interest rate policy in place that it appears to be just part of the normal background, and most of us don’t give it more than a passing thought. But here Jim Willie digs deep into the part that zero percent money plays, and it is not a pretty story… –Aurick

SINCE THE EARLY 1990 DECADE, THE NATION’S MAESTROS HAVE PROMULGATED the notion that cheap money is a beneficial factor for the sustenance of wealth, for economic development, for the standard of living, for the robust industries, in general for the American society. Nothing could be further from the truth, but even today the reckless US economists from the Keynesian Camp and their controllers from Wall Street have convinced the multitudes that cheap money is a good thing.

Cheap money comes with a deadly ultimate cost. The inept professor occupying the US Federal Reserve Chairman post has gone on record claiming the US banking sector has a secret weapon in the Printing Pre$$ that it can use with zero cost, in its electronic form. Nothing could be further from the truth. The Clinton & Rubin team began the distortion of the Consumer Price Index, ostensibly to reduce Social Security and USGovt pension benefits in cost of living raises. They wanted to cause a massive USTreasury Bond bull market, and succeeded in doing so. They wished also to bring down the USTreasury Bond yields.

The infamous Fed Valuation Model dictated that as rates rose, stocks fell. So the scheme to manipulate the bond market began with the venerable craftsmen of rigged markets, ruined engines, and mega-fraud schemes. They taught from their high priest pulpits that cheap money was good for the financial markets. Nothing could be further from the truth.

Many analysts have sought the underlying root cause for the systemic failure of the USEconomy, the US Banks, and the USFed itself. One can start in pursuit of answers by looking at the cause being a sequence of costly wars and the ensuing monetary inflation, followed by lost industry to globalization and price inflation. The Vietnam War had a powerful consequence of inducing Nixon to exit the Gold Standard, a linkage few if any economists or even gold analysts make.

But the true single cause of wreckage is the artificial low forced cost of money, the near zero cost of usury. The subtitle to that billboard is that CAPITAL IS TRASH. Imagine in a nation that developed, promoted, and exploited the fullest riches of capitalism, embarked upon a path to destroy capital without even the recognition by its best brain trusts. Their mental chambers have been totally corrupted by the justification that inflation is a positive force that must be managed. Nothing could be further from the truth. The consequences of artificially cheap money, the wrecked pricing of usury, ultimately is capital destruction and economic failure.

POX ON HUMANITY

My friend and colleague Rob Kirby calls the artificially low cost of money, the cost of usury, to be the pox on humanity. It is actually a pox on the entire economy, in which humanity resides. The Jackass calls it acidic paper mixed in the cauldron to dissolve capital. The points of this article expose the most glaring blind spots of USEconomic and USBanking, a mindboggling failure that has delivered the United States of America to the doorstep of the Third World. The sins committed are almost precisely what Banana Republics have done, and faced ruin. The annual $1.5 trillion USGovt deficits are proof positive of the failure. Those deficits are grossly under-stated when hidden costs of war are factored, and when hidden costs of nationalized acid pits like Fannie Mae and AIG are factored. Leave alone the costs of endless war and its seamy motives. Consider the many sides to free money, the forcibly low cost of usury.

The 0% usury cost has destroyed capital, with the recent destruction seen as in an accelerated phase. The 0% money encouraged asset speculation, not business investment. The steady stream of nonsensical labels to the USEconomy are comical. The Macro Economy ten years ago fizzled. The Asset Economy six years ago fizzled. The bylines of a Jobless Recovery offer insult to one’s intelligence. Nothing could be further from the truth, since no such contraption exists. The 0% money even encouraged drainage of real assets, like gold. The Clinton-Rubin gang altered the gold lease rate toward 0% in an experiment. Almost the entire gold inventory was drained from the USTreasury and its secure storage facility at Fort Knox. It was essentially stolen from the front door using official trucks. In defiance, the USFed and USDept Treasury continue to refuse an independent audit. With artificially low rates come complete destruction of capital formation, as economic laws have all been commandeered.

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Commodity Futures Trading Commission: Profiles in Courage

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by Bix Weir
www.RoadtoRoota.com
Posted originally December 8, 2010

Who is Brooksley Born? The following video gives some background:
“Warning – Brooksley Born’s side of the financial collapse – Part 2”


U.S. Commodity Futures Trading Commission
3 Lafayette Centre
1155 21st St. NW
Washington, DC 20581

RE: CFTC: Profiles In Courage

CFTC Staff and Commissioners:
On August 26, 1996 the Honorable Brooksley Born was sworn in as Chairman of the Commodity Futures Trading Commission. Her mandate then was the same as your mandate today: to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options.

Chairman Born quickly recognized that the large and growing unregulated derivatives markets posed a very real threat to the stability of the global financial system and fought to reign in the size and scope of these markets. She was stonewalled by influential people in the very same positions of power as those who are likely trying to stonewall the CFTC today in your efforts to implement the provisions of the Dodd-Frank Law.

By the late 1990’s Chairman Born had been publicly attacked, her reputation vilified and was ultimately removed from her position at the CFTC by those who “pulled the strings” of the massive global banking system. She was targeted because she understood the terrible consequences that would befall our country if those who “ran the show” were allowed to use our free market system to their own advantage and towards their own agenda. The resulting economic collapse was directly attributed to those financial instruments that Chairman Born attempted to prohibit.

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Driving the News Agenda: Jones and Keiser

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by: Rob Kirby
Posted 25 November, 2010

HOW MANY OF YOU HAVE NOTICED THE CHANGE IN NEWS?
THE FLAVOR OF THE NEWS HAS MARKEDLY “CHANGED” IN THE PAST FOUR OR FIVE MONTHS – HAVE YOU NOTICED IT?
 

Who has picked up on the likes of Fox News’ Glen Beck and his ‘about face’ on many key issues? Over the past number of months personalities like Beck have completely reversed their positions on subjects like the existence of World Government and FEMA CAMPS – going from complete denial to admitting they exist and the fact that they are intended for the American people.

Beck is not alone. In recent weeks we’ve seen a similar reversal in position from none other than Geraldo Rivera – he’s flip-flopped on his public position on 9/11: Geraldo Rivera, who in the past labeled 9/11 truthers as nutcases, seems to have gotten the message. Not only did Rivera give air time to two people on the front lines of the 9/11 Truth movement, he also aired Larry Silverstein telling the world that they had no choice but to “pull it.”

Without a doubt, these are MAJOR recent reversals of position by key mainstream commentators. So what’s behind the change?

The origin of this change dates back to July of this year. Radio talk show host / documentary film producer, Alex Jones, became frustrated with Google blocking the viewing of one of his films [The Obama Deception] on Youtube [Google owns Youtube].

In response to this censorship – Jones began a campaign of having his radio listeners [his syndicated radio show has an audience in the millions] start conducting “google searches” – over and over again – titled, “Google Launches Cover Up”

Meanwhile, Jones simultaneously had his staff of skilled in-house writers prepare stories containing the key search term. The power of a few million listeners – entering the aforementioned google search term “drove” the issue to NUMBER 1 in google search. The “buzz” was driving huge new traffic to Jones’ internet portals, PrisonPlanet.com and InfoWars.com.

If any of you are wondering how effective this tactic really is – you can judge for yourself by clicking on the Obama Deception here. I think you will find that you can now view the film if you choose to do so. It would appear that Google has relented – wanting no part of the negative backlash their censorship was earning them.

The mainstream media – which seems to be losing ground to the internet almost daily – ALWAYS covers and writes their own stories [to give their own ‘slant’] to the number 1 google search terms. They do this because they recognize the number 1 search terms on the internet as being the ‘cutting edge’ of current news and for fear of becoming irrelevant if they don’t cover it.

Jones quickly realized he was on to something BIG.  Using the popularity of his radio show along with a combination of his two primary internet platforms and group of talented writers – he could have direct influence on “what is popular” or effectively, “what is news” on the internet. Jones had now replicated this initial success, over and over again, by introducing new search terms for his audience to ‘plug’ – typically at a rate of two or three per week. Ladies and gentlemen – nowadays, whatever issue is most popular on the internet “IS” or quickly becomes the key issue in the mainstream news.

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The Rot Within: Our Culture of Financial Fraud and the Anger of the Honest

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by Charles Hugh Smith
Posted originally October 15, 2010

Misrepresentation, fraud and gaming the system are all heavily incentivized in the U.S. culture and economy, and honesty is punished. This truth is finally being revealed on a grand scale. The coming implosion of the U.S. economy has been richly earned.

TODAY I AM PUBLISHING A COMMENTARY BY AN ACCOUNTANT with decades of experience in high-level global consulting firms and Fortune 50 U.S. corporations. What he has observed is unknown to the vast majority of Americans.

I have documented the poisoning of the nation’s culture and economy by a “game the system”/exploitation mentality: With accountability effectively lost, cheating, lying, misrepresention, embezzlement and fraud, both petty and monumental, have all been incentivized. Thus the “little people” game the welfare/entitlement system and the Financial Elites game the mortgage market, and everyone gamed whatever piece of the housing bubble they could grab.

Where does that leave the honest citizenry? At an extreme disadvantage. Lying, sins of omission, misrepresentation and doing the bidding of evil organizations gets you bonuses and career advancement, while refusing to game the system as instructed gets your fired.

How does that make honest people feel? How about righteously angry?

I’d like to provide some context for this commentary from the Survival+ critique. Here is how I would summarize an integrated understanding of our plight:

1. Humans are selected to seek windfalls and exploit them. I call this windfall exploitation. It is neither good nor bad, it is simply a profoundly advantageous strategy in a hunter-gatherer-wanderer environment. Individuals can maximize their gain by exploiting windfalls alone, but some windfalls are better exploited by groups. This is the basis of cooperation, which is expressed in both capitalist and socialist systems.

2. The natural resources windfalls have all been exploited. In general, the natural resources are in depletion and there is active competition for them which reduces the windfall.

3. Neoliberal Capitalism developed a solution for this paucity of natural windfalls: the partnership of the Financial Elites and the Central State. The Central State gathered powers of taxation and control which enable it to “enforce” the collection of the national income which can be channeled to its cronies in wealthy (and hence politically powerful) cartels.

The investment banking/mortgage banking industries are the example of this dynamic par excellence. (Please see The Coming Collapse of the Real Estate Market for more.)

4. The last significant windfall available to advanced global Capitalism was the financialization of the global economy. In the U.S., we see this clearly in the financial share of corporate profits; from a pittance in the “real growth” decades of the 1950s and 60s, finance-derived profits came to dominate Corporate America’s profits.

5. This financialization effected a net transfer of public and private income streams and wealth from the citizenry and State to the coffers of the financial Elites. As actual productivity and wealth-creation declined, so did wages and incomes when priced in purchasing power.

To offset that decline, people, companies and governments replaced income with debt: they borrowed to fill the gap between their desires/commitments/spending and their net income.

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