subject: Surmounting The Confiscation Or Collapse Scenario [print this page] "It is absurd that the United States has a central bank that is more accountable to the financial industry than it is to the public."
"The Rally against Obamacare for the Banks"
Dean Baker, The Guardian, 9/23/09
"...Only liquidation of the biggest banks can enable a recovery, period!! Of course, the process is complicated, especially politically. Actually, it is more than political, since the big banks control the USGovt. The response reaction from gold & silver will give loud messages to systemic failure, as money is wasted, invested in failure, and directed to the elite troughs...
The major 100 banks in the US are almost without exception insolvent, and thus do not lend. Sure, they boast a positive book value, but only after given permission to use phony FASB accounting rules. They can declare their assets at any value they wish. In fact, on many debt securities, they actually declare unrealized losses as gains... The FDIC came out this week to announce the Q2 list of problem banks went from 775 in number to 829... The main thrust of the limp activity is monetary creation, banker welfare, absurd programs, and war spending...
The American Intl Group episode was disguised from its true nature as a Goldman Sachs bailout. In fact, the record has been somewhat clearly told that the AIG nationalization enabled GSax to be first in line for credit default contract redemptions, at full price. They saved $11 billion in the nationalization and butting in line. There are advantages to acting as the USDept Treasury administrator. Many other big banks had favorable redemptions on similar insurance contracts. The wreckage of the entire US banking sector was thus covered up from the insurance perspective, preventing a credit derivative blowup...
The Fannie Mae episode was one best described as averting either a mortgage bond default or a severe jump in mortgage rates emanating from the sewage treatment plant. In pulling off the nationalization of the wretch, the Wall Street controllers thus placated a crucial angry mortgage creditor. China
For vivid indications of failure, notice the slide into recession even after 20 months of near 0% official interest rate. The USFed has no more weapons except the Printing Pre$$... The ultimate problem is insolvency laced like cancer throughout the entire system, from housing, to households, to banks, to government fiscal situation, even to industry (long gone). The USFed cannot treat insolvency. Only liquidation can... The US bankers who have run the land for two decades have run out of asset bubbles to blow. Each growth period of 5 to 7 years has been driven by the next asset bubble in sequence, not industrial development or output...
Plain language works best at this point. The USGovt, as demonstrated by its nationalizations, big bank rescues, grand aid packages (car industry), and support of extreme measures, has invested heavily in failure, fraud, and banker elite welfare otherwise called pillage. They also have invested in sacred wars at great cost. The USGovt has not invested much at all in business, jobs, family, and life. The flimsy shallow vacant home loan programs exemplify the lack of support and aid for the public...
The failure pertains to the US financial sector in its entirety, from banking system to credit market. The failure is exacerbated by wasted expenditures toward what are called rescues and stimulus, but is actually banker welfare payouts... We are witnessing a syndicate in survival mode, in a desperate quest to save the system they exploit so thoroughly...
The extreme usage of the Printing Pre$$ in the next round of Quantitative Easing, dubbed QE2, will set up crippling explosions...
The worldwide recession will keep the crude oil price subdued until the USTreasury bubble pops. Then, at that time, several major commodity hedges will jump in price... An inflationary depression lies dead ahead!...
The secret to a legitimate solution is easy. The big banks must write down their credit portfolios, and accept deep losses. If that results in liquidation, so be it!!... The Zombie Big Banks threaten the entire system. If truth be told, they control the leadership of the USGovt itself. Dead entities control the USGovt, lodged in a stranglehold!!...
However, they control the USGovt, its finance ministry in the USDept Treasury, and the USDollar Printing Pre$$ itself. The big banks will NOT order their own death warrant, and face the financial gallows... Capitalism demands their plowing under to unleash hidden potential...
The ball & chain dragging down and keeping down the big banks is the housing market. The downward force of gravity is visible in the falling home prices... Other commodities will be sacrificed in wholesale form in order to purchase energy and precious metals. Energy is needed for commercial survival, while gold is needed as bonafide safe haven for money...
The new debt, delivered as fresh paper, acts like acid on the capital base of the entire USEconomy...
A river of hyper-inflation is lodged in the USTBond dam, whose walls are nothing more than paper reeds held together by bad verbal glue, uttered by bank leaders who increasingly lack credibility..."
"Gold & Investment in Failure"
Jim Willie CB, GoldenJackass.com, 9/1/10
"Are we witnessing the slow but certain death of cash in this generation? Is a truly cashless society on the horizon? Legislation currently pending in the Mexican legislature would ban a vast array of large cash transactions, but the truth is that Mexico is far from alone in trying to restrict cash. All over the world, governments are either placing stringent reporting requirements on large cash transactions or they are banning them altogether. We are being told that such measures are needed to battle illegal drug traffic, to catch tax evaders and to fight the war on terror. But are we rapidly getting to the point where we will have no financial privacy left whatsoever? Should we just accept that we have entered a time when the government will watch, track and trace all financial transactions? Is it inevitable that at some point in the near future ALL transactions will go through the banking system in one form or another (check, credit card, debit card, etc.)?"
"The Death Of Cash? All Over The World Governments Are Banning Large Cash Transactions"
Economic Collapse Blog, 8/30/10
The claim that several international Mega-Banks are insolvent but for Mark-to-Model (more accurately, Mark-to-Myth) Accounting, may well be true.
And it certainly is true that several would have been Insolvent were it not for Taxpayer -- funded multi-hundred billion dollar Bailouts.
Indeed, generally speaking, the taxpayers of the U.S. and Eurozone have ultimately been saddled with the bulk of the Toxic Assets (in the U.S. Courtesy of the private-for-profit Fed), while the Mega-Banks are left with a combination of Toxic Assets and Performing Assets, such as they are.
This much is history. But the Main and Present Problem which we address here is The Issue of how Excessive, and probably unpayable multi-Trillion Dollar (Pound, Euro, etc.), Public and many Private Debts finally gets resolved and how investors can prepare to protect, and profit, NOW, before more Crises and their Toxic Fallout.
The Reality is that much Public (and Private) Debt is unpayable without currency Devaluation or Default. For example, an estimate of U.S. Public Obligations reveals that the one year U.S. Budget Deficit alone is $13 Trillion and to that must be added downstream unfunded liabilities which range from $100 to $200 Trillion depending on whose estimates one believes. Given this range, does the exact amount matter? It is unpayable.
Worse still, Major Sovereign Nations are still leveraging up by piling on more and more debt. In the U.S., the private for-profit Fed prints money for free and lends it to the U.S. Taxpayers with interest.
And while the Private Sector is deleveraging, it is not healthy, Unemployment is not abating and the housing market is not recovering!
And to whom is most of this Public and Private Debt owed? Answer: Mainly to the International Mega-Banks (the same ones who got us into this Financial fix via their pro-bubble credit policies). Hold that important thought. We shall return to it.
For most Major Sovereign Nations Default is not a likely option (though some like Greece may be forced into it). Much more likely is Currency Devaluation of e.g. the Purchasing Power of the U.S. Dollar and Euro and British Pound e.g. via the printing press.
Of course this works a huge hardship on Savers and Retirees and Investors, as it is a de facto Confiscation of their hard-earned assets.
And there is another Confiscation brewing. The "U.S. Depts. Of Labor and Treasury Schedule Hearing on Confiscation of Private Retirement Accounts" P.A. Heller's recent headline on coinupdate.com reads.
Indeed the $6 Trillion or so in IRA's and 401(k's) is a juicy target indeed for the overly indebted U.S. This Confiscation would be effected by requiring Assets of IRA's and 401k's to be invested in U.S. Treasury Bond "Backed" Annuities.
Thus would the Confiscation be veiled.
But with Massive Ongoing Monetary Creation likely to result in dramatic devaluation of (U.S. for example) Treasury Securities' value over the next few years, such Mandatory Conversion is a de facto Wealth Confiscation.
So with U.S. Dollar and Euro and Pound Devaluation (in terms of Purchasing Power) likely coming along with de facto Wealth Confiscation, what should an Investor do?
Investors-Citizens can either submit and allow their Financial future to be determined by the Mega-Bankers (and all the while suffering degradation of the Value of their Assets). OR
They can work to create Political and Financial Structures and Conditions which make a Real Recovery Possible.
Indeed, Jim Willie argues (above) that "Only liquidation of the biggest banks can enable a Recovery, Period." Perhaps so.
In other words, Willie's point appears to be that if the very biggest banks were allowed/forced to collapse (by e.g. requiring Mark-to-Market Accounting), the public and private debt owed to them would be eliminated... sort of.
Voila! A Fresh Start for Major Nations and Citizens.
The Course of standing supinely by while the purchasing Power of the U.S. Dollar (and other Major Fiat Currencies) is dramatically degraded, has many negative consequences addition to lost Retirement Assets and Savings. (But there is yet a Way to Profit and Protect which we sketch below.)
This "Option" of facilitating the U.S. Dollar (Pound, Euro, etc.) Degradation is, we have long maintained, a component of The Cartel's* End Game for which, evidence increasingly indicates, they have long been planning (see Deepcaster's articles cited below).
Indeed, The Fed-led Cartel's* 'End Game' Juggernaut is Rallying Profitably Along -- "profitably" to the Tune, for example, of a $11.8 Trillion gain for certain Mega-Financial Institutions in the last 6 months of 2008, when Equities Investors worldwide were losing Trillions in the Equities Markets Crash. (See The Central Banker's Bank's (The Bank for International Settlements) website www.bis.org (Path: Statistics>Derivatives>Table 19) and "Opportunities & Threats in Derivatives Shocker" (05/29/2009) in the 'Articles by Deepcaster' cache at Deepcaster's website.)
These Massive Gains were doubtless "facilitated" by The Fed-led Cartel's Interventional Regime which we describe in detail in the articles noted below. Indeed, there is clear and convincing evidence that The Federal Reserve leads a Cartel of key Central Bankers and favored Mega-Financial Institutions in an ongoing Regime of Overt and Covert Manipulation of the Precious Metals Equities, Strategic Commodities and other Markets, as we also demonstrate in the articles noted below.
*We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster's December, 2009, Special Alert containing a summary overview of Intervention entitled "Forecasts and December, 2009 Special Alert: Profiting From The Cartel's Dark Interventions - III" and Deepcaster's July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds" in the 'Alerts Cache' and 'Latest Letter' Cache at Deepcaster's website. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster's profitable recommendations displayed at Deepcaster's website have been facilitated by attention to these "Interventionals." Attention to The Interventionals facilitated Deepcaster's recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.
Fortunately there are Steps which Investors worldwide can take to derail the Juggernaut, and Profit and Protect along the way.
Why derail the juggernaut, one may ask.
One answer is that the Fed-led Cartel's policies appear to have resulted and to be resulting in a massive Wealth Transfer from Investors/Taxpayers around the world to the Fed-led Cartel and their favored financial institutions.
Of course, a key component of this Wealth Transfer involves debasing the value of the U.S. Dollar which, which HSBC has correctly noted primarily results from "the ultra-loose monetary policy of The Federal Reserve". Since The Fed was established in 1913 the U.S. Dollar has lost over 95% of its purchasing power, as reported by Rep. Ron Paul and others.
One of several negative consequences is that Investors who have saved (they thought) wealth in Dollars over a lifetime have seen the purchasing power of those dollars dramatically eroded by, for example, over 35% in the last 8 years alone, and the erosion continues.
Unfortunately, there is considerable evidence that "ultra-loose monetary" and credit policies, and the consequent housing credit crises and Market Crash were the result of the conscious policy of the Fed-led Cartel.
Consider the following observation by Harry Schultz:
"...what is the reason for this "seemingly random monetary mess that multiplies its momentum every day? The answer, in one word, control. The elite/insiders already have control of the financial system, but they wanted more, much more...and it was not random, it was planned." (emphasis added)
"How will all the above manifest itself in your life? The answer: "All you own will shrink...your income, assets, net worth, will shrink year after year in real terms inflation adjusted and possibly also nominally.""
HS Letter, April 27, 2008
Harry Schultz, Eminence Grise of the Newsletter writing Fraternity sees the Threat to Profits and Wealth posed by the Fed-led Cartel* quite clearly.
The Cartel* 'End Game', as Deepcaster has named it, apparently involves Stealthily transferring ever more Wealth and Power to The Cartel at the expense of Investors/Citizens around the world. (For more details, see "Coping with the Superpower Cartel Threat" (1/30/09) in the 'Articles by Deepcaster' cache at Deepcaster's website.)
In this connection we must consider F. William Engdahl's contention that the 2008 Credit Crunch and Market Crash were planned: "...in every major U.S. financial panic...the titans of Wall Street...have deliberately triggered bank panics behind the scenes to consolidate their grip on U.S. Banking..."
As background to understanding the ongoing implementation of the Cartel's Interventional Regime and "End Game" consider Engdahl's position:
"...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.
Now they must do something similar on a global scale to be able to continue to dominate global finance, the heart of the power of the American Century.
That process of using panics to centralize their private power created an extremely powerful concentration of financial and economic power in a few private hands, the same hands which created the influential US foreign policy think-tank, the New York Council on Foreign Relations in 1919..."
"Behind the panic: financial warfare over future of global bank power"
F. William Engdahl, October 10, 2008
Consider the implications of the F. William Engdahl quote regarding "global bank power." As Engdahl points out, the evidence is increasing that the recent financial panic and economic distress is and has been pre-planned as a part of Cartel Strategy to increase power and, in our view, to implement its "End Game".
In light of these considerations it is not surprising that the Mega-Banks were the first to be Saved in the 2008 financial crisis. That is, a Major Negative Consequence of the Fall, 2008 Market Crash was a Taxpayer Funded Financial bailout of several Key Mega-Banks. Yet the Bailouts allowed them to move on to subsequent great profitability.
Consider the case of Goldman-Sachs. Not only did Goldman receive billions in TARP funds (subsequently repaid) but they also received $11.9 billion via the AIG bailout, without having to take any 'Haircut' on their debased Assets.
One result was that Goldman survived and reportedly has paid an average of $500,000 plus to each employee in compensation.
Meanwhile, the U.S. Consumer/Taxpayer and often Investors/Mortgage Holder who is 70% of the U.S. Economy is left with Greater Debt (to fund the Bailouts) and interest payments on that debt to the private for-profit U.S. Federal Reserve. Goldman et.al, but for the bailouts, would have collapsed. But the U.S. Consumers-Taxpayer and Small Business Owners, however, have not been "saved" at all.
To understand the Cartel's likely "End Game" we must understand the Root Cause.
To read the full article, go to www.deepcaster.com and click on the 'Articles by Deepcaster' Cache.
