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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.


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
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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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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Conversations with God… about Gold and Silver!

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by Bix Weir

*The following interview was conducted in a similar manner as was conducted in the best selling book series “Conversations With God” by Neale Donald Walsch. Although I do not possess the same intimate knowledge of spirituality as Mr. Walsch, my ten year journey following precious metal markets has connected me to some very powerful spiritual monetary beings…and they have something to say. So let’s begin…

Me: Is anybody there?

God: Yes, I am here.

Me: Hi God! How do I do this? I read the books but I don’t want to sound like I’m anyone special because I can talk to God.

God: But you are special… we all are. You just ask your questions and the answers will be provided by your thoughts. Don’t stop to edit your thoughts. Just trust your answers and we will both provide the answers we need.

Me: Ok. I’ll start with an easy one. Are gold and silver markets manipulated?

God: Of course they are… Duh!

Me: Wait, is God supposed to say duh?

God: Don’t waste my time. What’s your next question?

Me: Who is doing it and why?

God: There are many groups of people who manipulate all markets and they all have different reasons. Some are driven by money, some by power but the largest group is driven by fear.

Me: Fear?! These people control the world…what could they be afraid of.

God: They are afraid of you and people like you. They are afraid they will be found out and the world as they know it will come crashing down. They are afraid that the people of the world will begin to understand the fiat money fraud and will be angry.

Me: Well don’t the ones with the money, the rich and powerful, make the rules? Why would this ever end?

God: The “rich and the powerful” are only rich with their monetary illusion. Without fiat currency they are not rich and their power crumbles. The rules will be changed very soon.

Me: How soon? I thought this would be over years ago. What will stop them from running this scam FOREVER?

God: You are stopping them…and people like you. There is also a group of people who have been working on taking these people down much longer than most know. They have been hoarding physical gold for many years and are preparing to go on a gold standard. They have been VERY secretive but they are ready to end the fiat money system.

Me: When?

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It’s officially the Beginning of the End

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by Graham Summers
Phoenix Capital Research
Posted originally November 6, 2010

MORE THAN TWO YEARS AGO, THE DAY AFTER WE NATIONALIZED Fannie and Freddie, I penned an article in which I forecast the end of the US as an empire and the end of the US Dollar standard. Despite the fact that others had been calling for a collapse of the US for years, my piece still received a great deal of hostility and condemnation. The comments ranged from, “you’re out of your mind, the US will always be number one” to “I don’t like the bailouts either, but you’re taking it too far.”

Here we are, two years later, and to be honest, the stuff that has come to pass is simply mind-blowing. In plain terms, the US is now a country in which…

• EVERYONE knows that the Wall Street banks KNOWINGLY engaged in fraud (Citibank executives confirmed this under oath), predatory lending, and other felonies and NOT ONE executive has been charged with a criminal act.

• There is clear evidence that elements of the Financial Crisis were INTENTIONALLY induced by key players in order to wipe out their competitors (you know who I’m talking about).

• The head of our central bank has LIED under oath about monetizing the debt (among other things)… and walks free.

• Our Secretary of the Treasury KNOWINGLY chose to hand out as much public money to Wall Street in exchange for what he and everyone else knew were worthless garbage assets. Again, no charges

• Our President increased troop levels for wars EVERYONE knows were started under false pretences (and continued policies of torture!?!?!) and WON the Nobel Peace Prize

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HSBC and J.P. Morgan face lawsuits for precious metals manipulations

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from The Daily Bell
Posted originally Monday, November 01, 2010

Could this be it? … Two guys on our Christmas card list this year will be Ted Butler and Bill Murphy. Butler has been chasing the silver manipulation story since 1990; Murphy’s Gold Anti-Trust Action Committee (GATA) has been chasing the gold side of the manipulation story for just about as long. It only took two decades, guys, but finally a regulator returned a phone call. Last week, CFTC Commissioner Bart Chilton described “repeated” and “fraudulent efforts to persuade and deviously control” silver prices, according to the Wall Street Journal. “I believe that there have been repeated attempts to influence prices in the silver markets,” Chilton, a Bush appointee reappointed by Obama, said. – The Wallace Street Journal

Dominant Social Theme:
Don’t look at the man behind the drawn curtain. There. The one looking miserable. He’s just been served…

Free-Market Analysis:
Hard-money writer David Bond has composed a short but cogent update (excerpted above) that spells out what could be going on with the gold and silver markets now and in the near future. It’s his impression (and the impression of some Bell feedbackers, as we noticed yesterday) that the metals markets have arrived at an imminent turning point. The CFTC itself is beginning to acknowledge that there has been significant manipulations of the metals markets and several lawsuits have now been filed. Here’s more from the article:

Two traders, in separate lawsuits, alleged that HSBC and J.P. Morgan-Chase were the culprits. According to Forbes, quoting Murphy, who was citing CFTC reports, the two banksters together controlled 43 percent of the net short commercial position in gold and a staggering 68 percent of the short interest in silver last November. It’s difficult not to infer a conspiracy here.

One of the traders filing suit alleges that the banksters colluded on the silver futures market and let each other know about large trades, placing “spoof” trading orders in order to suppress the price. At this point these are allegations, but they should be taken seriously, considering their sources. Murphy and Butler were ridiculed for two decades for figuring out what, finally, regulators are waking up to: Something is rotten in Denmark.

More important even than the attention of regulators is that now the Wall Street media can no longer ignore the story. Quipped Murphy: “We’ve been quoted in Forbes. What’s next? Field and Stream?” You won’t hear about Chilton or the traders’ lawsuits on CNBC or Bloomberg, just yet, but the fuse has been lit. This is a story that’s just become too big to be busted …

The last week of October, 2010, may well be the watershed event for precious metals, and for the U.S. Federal Reserve Dollar. Should the short-side manipulation of silver and gold ever become understood by Joe Sixpack, the Fednote is toast and there will be no upside limit to genuine, precious metal money.

Bond is too careful a journalist to draw definitive conclusions, though, at the same time, he is pointing out a potential market event. He is correct to do so, though Bond knows – as do we all – that timing a market is good bit more difficult than predicting a trend. Here at the Bell, we have never much doubted a massive conspiracy to keep down the price of gold and silver.

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Extend and Pretend: It’s either RICO Act or Control Fraud

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by Gordon T. Long of Tipping Points
Posted originally May 27, 2010


WE ARE ENTERING THE AGE OF RAGE. It is presently most visible in Europe as austerity programs that potentially could shred a half century of social entitlement advances are met with increasingly violent street demonstrations.  It is seen in the US Tea Party rallies with their fury that the very fabric which the US capitalist system is based on is being destroyed and discarded. Unfortunately these demonstrations of rage are focusing on the effects and not the cause. The cause is a systemic plaque of unenforced financial control fraud.

Americans witnessed CEOs arrested during the nightly news coverage of the S&L Crisis of the early 90’s. They were placated as they heard the details of over 1000 indictments of the perpetrators of fraud. In the aftermath of the tech bubble implosion ten years later, injured investors once again witnessed the most senior executives at Enron, WorldCom, Tyco, Qwest and others being led off in handcuffs and disgrace to waiting police cruisers. Retirees with decimated retirement plans felt that some level of restitution had been made when 25 year sentences were meted out to these formerly high-flying felons.

After nearly two years since the greatest financial malfeasants in history and ten years since the last public example of financial crime, the public haven’t seen a single CEO sentenced to hard time for the financial meltdown. They have not had their thirst for revenge quenched by a single high level court case. Instead, the public infuriatingly witnesses politically crafted theater in congressional hearings that go nowhere, read watered down legislation that is replete with even richer lobbyist-authored loopholes and only occasionally see small headlines of quiet settlements with insulting token amends payments. Why? Were there no crimes committed? No laws broken?

The public is forced to accept excuses that we have enforcement agencies not enforcing, regulators not regulating and legislators not equipped to legislate properly in our modern fast moving financial world.  The public is left with the gnawing concern of whether it is incompetence or something much deeper, more troubling, and more sinister.  Confidence and trust in government and our democratically elected politicians continue to worsen from already pathetic levels.

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