Posted on March 22, 2013 by Jean
This article, comprised of the
answers to 32 questions, seems to come close to what aware people think
is going on. There are also other things happening of which those
living totally in 3-D are unaware. There are other things going on about
which I am not yet free to speak. If you been following the financial
situation, you will begin to see for yourself the inherent fallacies in
that which is sometimes described as fact or thought to be common
Because this article is long and complex, I’ve highlighted some of the questions that I think might be of general interest.
Stock-Markets / Financial Markets
Feb 27, 2013 – 06:45 PM GMT
Thanks to L
The typical articles over the last many
years have featured a particular theme. In the last few months, the
central theme in Jackass articles has been the isolation and demise of
the USDollar, how it is happening, why it must happen, and its
importance in the restoration of the global financial structure. But
this week, a sudden urge has come to address an overwhelming list of
critical gritty questions. They crop up with clients, colleagues, and
friends. More than a crisis, it is more accurately described as a
collapse of a corrupt inequitable monetary system, and a desperate
defense by the major Western bankers to preserve their power over
nations and their governments, alongside a vile vicious violent attempt
by the United States to maintain its privilege as owner of the vast
USDollar counterfeit machinery, as controller of vast banking pillars of
paper columns, and as commander of a vast military. The
current monetary system has a debt foundation, which is collapsing in
lockstep with the rapid breakdown in the sovereign bond market. The last
four years have seen a long drawn-out unstoppable process, where the
collapse cannot be avoided and must happen. The pathogenesis is obvious
to those in the Sound Money camp. The blossom of corruption and complete
banker criminal immunity has only hastened the urgent need for the
collapse. The cadaver in Intensive Care cannot be revived with more
intravenous applications of contaminated money, the body dead since
September 2008. Insolvent systems rush to the crash zone, where efforts
can only delay the outcome.
The central banks are finally in
crosshairs of focus, for not producing a solution, more recently for
worsening the problem. They have confused their function from providing
liquidity, in the belief that they are creating wealth. They have
destroyed the system as costs rise relentlessly. Perversely, their
efforts to dampen demand so as to reduce price inflation has added to
the economic destruction. The outcome will be shocking in its power
shift to the East, shocking in its evaporation of paper wealth, and
shocking in the simplicity of the new financial structure that rises
from the ashes based in barter and gold payments. However, the United
States will be left behind, due to its basic ownership of the global
reserve currency being scrapped. The extreme corruption cannot be
reformed. The US financial system must be extinguished, and with it
extreme damage to the USEconomy, which has been hopelessly dependent
upon asset bubbles for two decades. No single theme in this article,
just an attempt to answer in a straightforward manner some extremely
difficult and appropriate questions for this ongoing crisis. Some effort
is made for the topics to be presented in a logical flow, with answers
not lengthy. For much more detailed analysis, look to the Hat Trick
Letter paid reports with a subscription, offered each month.
1) CAN WE BE CERTAIN A COLLAPSE WILL COME AND WHY ??
To be sure, a collapse is not only
coming. It is happening before our eyes in what used to be ultra-slow
motion. Each year the pace quickens. Two years ago, the MFGlobal client
account theft episode was preceded by another red-line event a few
months before, and followed by another a few months after. But nowadays,
the crisis events occur every month or every week. With $1.2 trillion
doled out by the USFed to European banks in January, the Germans
demanding repatriation of their official gold account, the Italians
electing a comedian to halt the property tax hikes that bail out banks,
the British sponsoring a Chinese Yuan Swap Facility, the attack on Mali
to wrest its gold for German repayment, the move to shut down the
Mongolian copper & gold mine by Rio Tinto, the raids larger and
bolder of the GLD inventory, the USFed preparing for QE5 (or rather
QE187), the US facing a fiscal cliff, the Japanese ratcheting up the
competitive currency devaluations, the Swiss managing their Euro-Franc
peg, the Russians hosting a G-20 Meeting of finance ministers to
coordinate the alternative to US$-based trade, the Iranian sanctions
coming to a conclusion in US acquiescence, and a gathering of five
aircraft carriers in the Chesapeake (against all rules, angering the
Pentagon), to be sure, the pace of extreme events is quickening. All
these have occurred just since the new year began less than two months
ago. Extreme events have become the norm. A series of climax events is
coming very soon. The changes will be rapid and breath-taking.
2) WHAT WILL THE FUSE BE THAT TRIGGERS THE FINANCIAL COLLAPSE ??
Some mid-sized seemingly minor bank will
fail. It will have linkage to another big bank in a corresponding role.
The obligations will not be possible to cover. The contagion will
spread to numerous large banks across Europe to London and New York. The
derivatives could be involved, very unmanageable. If not a mid-sized
bank, then a major bank will fail from the inability to contain the
profound insolvency and massive bleeding during capital flight. The
Greek zone has been contained, where disaster runs its course. But
larger Italy, Spain, and France are rapidly breaking down, each in its
own unique important way. A great many fuses lie, each waiting to be
3) WHY HAS NO SOLUTION BEEN PUT IN PLACE AFTER OVER FOUR YEARS ??
Because the big banks that hold the power are insolvent, and they
choose not to shut down their helm of power. Any valid solution must
begin with liquidation of the insolvent broken structures, starting with
the biggest banks, which happen to be the protected sites (if not
headquarters) of the corruption. The power centers are the central banks
and the big attendant banks. They are responsible for the bond fraud,
the bond counterfeit, the dispensation of $trillions in secret deals,
the narcotics money laundering, and the financial market interventions.
They are protected entities with large private police forces. They will
not be reformed or prosecuted or liquidated. Thus no solution from
internal forces. The solution will be imposed from the outside.
4) WHAT IS THE SIGNIFICANCE OF THE USGOVT-LED IRANIAN SANCTIONS ??
The real objection to Iran is that they
sharply increased their non-US$ energy transactions over a year ago.
That is regarded as financial terrorism, which entered the propaganda
mill only to come out as some daft baseless story on nuclear
development. Iran has thus followed the Iraq pathway to depart from the
USDollar market, but Iran cannot be attacked like its neighbor since it
has allies in China and Russia. They work to undermine the USDollar
dominance. To brush the USDollar aside is to snuff the American Empire
and to remove its full spectrum dominance by stripping the free money
credit card. The significance of the Iranian sanctions by the USGovt can
be described in chapters of volume, but described in simple terms. The
sanctions have galvanized the efforts of Eastern nations to seek a
non-US$ alternative in trade settlement that avoids the banks under
Anglo-American control. By working to settle trade outside the reach of
SWIFT bank rules, the Eastern nations led by China and the many Iranian
trade partners have hastened their efforts to settle trade in
unconventional ways that center on Gold as a means of payment, either
directly or indirectly through hidden intermediaries. The United States
did not shoot itself in the foot. The US shot itself in the face where
the USDollar is imprinted, and in the chest where the USTBond is held in
favor. The US acted to accelerate the rejection of the USDollar in
global usage, and thus to quicken the pace of its lost global currency
reserve status. The US has pushed itself down the path to the Third
5) WHAT EFFECT WILL THE NEW ITALIAN ELECTIONS HAVE ??
The creation of a three-way coalition of
Berlusconi, Bersani, and Grillo will shake Europe to its core. The
Italians rejected the property tax hikes imposed by appointed leader
Monti in very efficient timely grandiose style. The consequent risk is
for the big banks to lose their guardian in Monti, the Goldman Sachs
preppie. With attention and priority taken away from serving the needs
of the big banks, complete with filling the channels to bigger European
banks, the risk has risen ten-fold for an accident in Southern Europe.
The insolvent (broke, illiquid, desperate) big Euro banks will be
vulnerable to default events which could quickly spread across Europe to
London and New York. The control room managed by Monti will be at great
risk of being shut down. The risk of a great accident is acute.
6) OF ITALY, SPAIN, AND FRANCE, WHICH IS IN THE WORST CONDITION ??
All of them are in dreadful atrocious
condition, none worse than the others. The bigger issue is which will
ignite the explosion in the financial platform. Spain has a blossom of
corruption exposed during a skein of financial firm failures. The
scandals involve both politics and security laced with finance. France
has capital flight in response to the self-mutilation common to
socialism. An absurd tax rate directed against the wealthy might as well
be 100%. Socialism will soon be equated with confiscation and tyranny.
Italy has a comedian to join two political leaders, where the message is
a counter-attack in response to higher capital gains to finance the
banker aid. Their political system is far more responsive to the
people’s will than any Western government, no exception. The distinction
in these three nations is their size. Their populations range from 47
to 65 million, together 17 times the size of Greece. None can be bailed
out, referring to their government deficits and their banking system.
Any or all of the trio of broken nations could collapse, with triple the
fuses exposed. If any of the trio falls, the other two will follow
quickly. Germany cannot bail out any of the three, and certainly not all
three. The duty of bail out would fall on the Euro Central Bank
doorstep, which would reveal the monetization schemes as a grand paper
mache sham game. As the trio in Southern Europe collapses, the titan
Germany will depart the common Euro club. It will then embrace Russia
and China, and help the establishment of the great Eurasian trade zone.
7) WHAT THREE COMMON THREADS CONTRIBUTED MOST TO THE COLLAPSE ??
A) The dispersion of phony money throughout the economic and banking
system, which in the process contaminated and undermined capital. B) The
plethora of bond fraud, bond counterfeit, huge bailouts for the big
banks, and hidden banker loans totaling $23 trillion (still counting),
which created a banker syndicate and banker welfare system together. C)
The spread of predatory war sponsored by the USMilitary and USGovt
security agencies, for the advancement of banker seizures, resource
grabs, and attacks on civilians. Aside from the costs to the USGovt
deficit, the global impact has been horrendous concerning US prestige
and good will toward the United States. With bad money, corrupt banks,
and aggression through war, the world has been brought to its knees as
it wishes to bring the US leadership to heel.
8) WHAT HAVE BEEN THE OBJECTIVES FOR THE ARAB SPRING ??
Multiple motives appear at work. The
goal has been to loosen the grip of power by Moslem autocrats, which
would permit the replacement of more suitable pro-West leaders
(puppets). The goal has been to loosen the lines to official government
accounts, like the 144 tons of Libyan gold that still sits in London
banks, which is much more integrated into their bank management schemes.
The goal has been to destabilize the national fabrics, an old favorite
game of the USGovt security agencies, since it tends to permit a climate
conducive to their ploys. Imagine pitting your neighboring husband and
wife against each other with false sexual dalliances, while setting fire
to other neighboring houses, then robbing the neighborhood homes. But a
backfire is in progress on three fronts. Egypt is on the verge of a
banking breakdown which might expose the USTreasury Bond is unwanted in
the global financial market, outside the big US bank control. Syria is
leaning more heavily toward a Russian alliance. Their naval port will
not be yielded. The presence of HezBollah is clear, with the Saudi
assassination of Prince Bandar in September, in response to other Assad
family hit squad actions. The big impact crater is likely to be the
House of Saud itself, which is in great danger of falling. King Abdullah
is teetering in health, if not comatose. With the fall of the Saudi
regime will come the fall of the Petro-Dollar, thus the USDollar itself
as global reserve.
9) ARE THE OFFICIAL GOVERNMENT GOLD RESERVES DATA ACCURATE ??
Not a single nation reports accurate gold reserves data. Doing so
would reveal the absence of their gold from domestic raids and the
consequent bankruptcy. Doing so would reveal the accumulation of gold
toward new plans for the next financial chapter. Either weakness or
strength would be publicized in a true accurate statement of the gold
accounts. Not even foreign official accounts are accurate. In fact, no
gold accounting is accurate the world over. The national treasure and
jewels are well concealed, as the global monetary war runs white hot.
10) HOW MUCH GOLD DO CHINA AND RUSSIA REALLY HAVE ??
At least five times as much, and possibly ten times as much gold as
reported, which would mean more than Fort Knox before it was pillaged in
the 1990 decade. Both superpower nations purchase all their domestic
gold mining output, with nothing exported. The Russians have gold
accumulated over the centuries dating back to Peter the Great, Catherine
the Great, and the Czars. (Tidbit: Russian word Czar is for Caesar, and
German word Kaiser is for Caesar.) The Kremlin contains a vast system
of tunnels under its main buildings, stretching for kilometers, filled
with gold bars and gold artifacts (think chalices, necklaces, inlaid
gemstones). The Kremlin is a veritable Eastern Orthodox version of the
Vatican itself, in wealth under control, but surely not religious
political power. Over the last decade or more, Russia has been
converting its vast oil wealth into gold bars. Since the Soviet debt
default, a new strategy has been put to work in the conversion. On the
other hand, China has two gold accounts. Their official sovereign wealth
accounts and central bank reserves have been accumulating gold at a
much more rapid pace than revealed. They see no need to reveal any
strategic plans. The fast accumulation of reserves from trade surplus
has served as easy flow to gather gold, mostly through the Hong Kong
window. The public statement of their Gold reserves data brought
laughter to my best gold source of information, since he personally has
brokered great volumes of Chinese gold purchases.
11) WHY DOES GERMANY DEMAND A RETURN OF ITS GOLD ACCOUNT ??
An important camp within Germany is no
longer part of the Anglo-American financial team of syndicate bankers.
When Deutsche Bank CEO Ackerman was pushed out, fell out, or was dropped
into the hot seat of interrogation, the German role changed more
visibly. The nation is of two camps, one still beholden to the
Anglo-American bankers and the satellite offices at the Intl Monetary
Fund and the World Bank. Their past cooperation and allegiance had been
firm and loyal. The other camp has been building ties with Russia and
China, even the Persian Gulf. It has been working diligently and
vigorously for over four years in establishing the framework for a new
trade system founded in barter, to be transacted in gold. Germany offers
the engineering, project management, and coordination, like from the
Finns on connecting the electronics from commodity to monetary markets.
The other camp has been busy in heavy railroad construction directly
with Russia for resource and mineral delivery. It has been busy in trade
with China, centered on construction equipment. Germany no longer
trusts the bankers to the West, having suffered a fraud from both London
and New York. The fraud involved runs far deeper than reported, since
it includes a substantial amount of fake gold bars made of tungsten. The
British Brown Bottom in 2001 involved Deutsche Bank in gold delivery to
cover massive short positions. The Mali excursion in yet more
USMilitary (NATO cover) adventure involves an attempt to secure more
gold in order to repay the German gold account. Germany has changed
teams in the true playbook, the new adversary to the Anglo-American
bankers who will find themselves increasingly isolated. Germany has been
defrauded, and they are angry. The Germans make for a strident
determined potent adversary. In the Jackass view, Germany is the swing
nation, the brain trust, the key member of the newly formed Eastern
Alliance. It has aligned with Russia, China, and the Persian Gulf.
12) HOW WILL THE COMEX SUFFER A FINAL SHUTDOWN ??
The COMEX will be drained eventually of its Gold & Silver
inventory. They had to resort to stealing 140 thousand accounts at
MFGlobal in November 2011 in order to preserve its inventory. Do not be
surprised if the Libyan 144 tons of liberated gold found its way to the
LBMA and then COMEX. The two crime events should indicate the final
stages of desperation. The COMEX has resorted to regular raids of the
GLD & SLV exchange traded funds over the last two to three years, in
greater recent volumes. They short the ETF shares, a privilege granted
only to the big banks, then arrive to cart off bullion bars in overnight
shipments. Also, vast supply routes have been established between the
LBMA and COMEX, with help from the Swiss castles situated at the Bank
For Intl Settlements, and from the Roman Catacombs, where decades of
cooperation have been afforded. The armored shuttles have been at a
frenetic pace to avoid defaults, especially in Silver. The most recent
element has been the solicited aid of Scotia Mocatta, the Canadian
pillar which appears to have joined the big US banks in naked shorting.
The COMEX will shut down from a vicious combination of absent inventory
and thin ranks of brokerage accounts. The players have left the COMEX,
after the MFGlobal thefts which were endorsed by the corrupted US court
system beholden to Wall Street objectives. All across the United States,
compliance departments have banned usage of the COMEX by futures risk
management teams. Empty shelves and no traffic.
13) CAN THE INELASTIC SUPPLY IN THE GOLD MARKET BE EXPLAINED ??
The inelastic demand for Gold is well known. Demand rises with a
rising Gold price, called Gold Fever. But inelastic supply is less
understood and mentioned. As forward sales schemes unravel, they drain
large mining firms of scarce cash. Operations suffer and big projects
are not funded like in the past when a lower Gold price was the case.
Two new ravaging effects have taken root. As the major central banks
debase the currencies worldwide, they lift the cost structure for
businesses and the cost of living for workers. So mining firm profit
margins are reduced and worker household stress increases for feeding
families. The pinch from reduced profitability combines with the nasty
pinch of labor strikes to hinder mining output. Also, the new wave of
resource nationalism has struck in several nations. The poorer nations
that host mining projects have turned hostile. They are suffering from
slower economies and wider deficits. The response has been for their
governments to renegotiate royalty agreements, to confiscate properties,
and to manage a much tougher line against the foreign mining firms.
They have imposed harsher strictures on environmental contamination,
often as a ploy to gain more revenue from royalty or penalties. The end
result is lower mining output in association with a higher price for
Gold & Silver, which defines inelasticity. It is the opposite of
what clownish conventional economists predicted, and exactly what the
Jackass predicted over the last seven years.
14) WHAT CRITICAL DAMAGE HAS THE CHINESE YUAN SWAP FACILITY DONE ??
The Yuan Swap practice has created a
broad platform and precedent for non-US$ trade. The list of nations with
such swap deals include Brazil, Australia, Russia, Japan, South Korea,
Belarus, Malaysia, and Indonesia. Add England to the long and growing
list of nations making bilateral currency agreements with China, which
should instill fear in New York. The swaps have established a virtual
barter system that is divorced from the banking settlement for trade.
Instead, a bilateral account is set up with credits and debits,
depending upon delivery and receipt. Regard the swap system as a
foundation for global trade settlement in Gold, as the Chinese Yuan
makes the rough transition to a gold-backed currency. In the Jackass
view, the shift to a gold trade settlement system will coincide with the
gradual Yuan currency backed by gold. They will become interchangeable
when procuring Gold Trade Notes, my theory, all in time. The Chinese
Yuan Swap Facility has undermined the USDollar dominant role in trade.
Following trade practices will come bank reserve management practices,
which means the removal of the USTreasury Bond from global banking. The
numerous Yuan Swap Facilities have essentially worked to dethrone the
USDollar as global reserve currency.
15) WHAT IS THE CRITICAL PIECE IN THE GOLD TRADE FINANCE CONCEPT ??
Actually three pieces. The absent usage
of the USDollar itself, and the bypass of the Western banking system
with its community of SWIFT members, and the sidestepping of the FOREX
currency market. If trade is to be settled in Gold, or using vehicles
such as the Gold Trade Note, then the USDollar, the big Western banks,
the SWIFT codes, and the FOREX are all rendered suddenly obsolete. The
banks must adapt to become utility firms. A few gold-backed currencies
might spring up with unique distinctions. The gold trade finance concept
ushers in a new alternative system long sought in order to create a
more viable equitable sustainable financial structure. The banking
system should serve trade, not the reverse. Hence the USTBond will
slowly vanish from the global banking system, and the USDollar will lose
its global reserve status. The end result is a unavoidable slide by the
United States into the Third World.
16) WHAT WILL BE THE NEXT FINANCIAL CENTERS ??
Whatever nations begin to dominate as
intermediary functions for gold trade as it serves trade settlement
between nations, they will grow into the next financial centers. The
current attention is on Turkey and India. The Ankara banks are under
scrutiny. New attempted controls by the USGovt have been announced by
the pretender lords, under the guise of consequence for aiding trade
with Iran. The US efforts will not succeed in stopping the progress in
gold intermediary development. The Near East has a long history, much
longer than the American history. Iran has numerous trade partners, and
an extensive system of intermediaries that include the United Arab
Emirates, which is undergoing a transformation. Iran’s partners include
Turkey, India, China, Japan, and South Korea. These are major nations
which will refuse to comply with pressured US tactics. The emergence of
alternative trade payment methods in order to keep Iran moving will
create the next financial centers. They will be centered upon Gold
flows, Gold management, Gold purchases as intermediary, Gold in
payments, as well as Gold in smuggling. The recent decision to relax
Gold rules within India, to permit corporations to form banks, to ease
the pathways for integrating the vast household gold wealth in India,
will work to thrust India as a potential gold finance center. Both
Turkey and India will realize a benefit in economic growth, which has
been nonexistent in the last five years under the fiat paper currency
regimes that fast approaches the dust bin. The Near East is a logical
center for gold finance, since it links the East with the West in a
natural intermediary role. They have been developing the non-standard
currencies that have served for five thousand years, namely Gold,
Silver, and Platinum. By pushing Gold into the periphery, the financial
centers of the West have pushed themselves into an awkward position
where they will fall off the stage. In doing so, they have promoted new
centers to crop up and mushroom in growth.
17) WHERE ARE THE SAFEST PLACES TO STORE GOLD BARS & COINS ??
Hong Kong for a number of reasons will remain the safest place for
Gold storage. It has a long history of professionalism, independence,
and integrity. Following the independence in 1997, the city state nation
has pursued a unique role and direction. It is under the Chinese wing,
but has its own regional charter toward continuity and some measure of
autonomy. The Mainland China rulers prefer to use Hong Kong as a port to
the West, but also to copy it internally. The British roots helped to
establish HK bankers as top notch, but they are no longer subservient to
London whims. The HK banking hub is the foremost in all of Asia, with a
new rival Shanghai having emerged. The HK airport has greatly expanded
its vaulted services. My source indicates that the HK vault service
capacity is three to five times greater than reported. It has
associations with all the major vault firms in an impressive list. Their
integrity is as great as their disdain for the US bankers, with whom
they show zero cooperation, as confirmed by an Interpol source. The
claimed advantages of Singapore are spurious and illusory. Don’t bother,
since it does not even have a Depository Bond agreement for the bullion
18) WHAT HAS GONE SO HORRIBLY WRONG WITH GOLD MINING STOCKS ??
Several serious flaws and shortcomings to mining stocks exist. The
big hedge funds short them heavily with Wall Street help like credit
lines. Other hedge funds short the smaller mining stocks and go long the
majors, a spread trade. The majors are working with Wall Street on
hedged forward sale programs, a grand collusion. The Goldman Sachs GDX
fund shorts the entire group, just to keep them suppressed. The
brokerage house Canaccord is involved in naked shorting of mining
stocks. After acting as partner to raise cash in a very large number of
finance deals for Canadian junior mining firms, they keep selling shares
with the collusion of the Alpha Group, far more than they own. The
mining firms themselves are in deep trouble, with rising costs, a
shortage of engineers, hostile foreign governments, and difficult
projects. The mining firms are printing new shares in heavy dilution
(like the USGovt on USDollars), which is inflation. Under pressure, the
mining firms will soon begin to renege on their covenants, as some will
be forced to sell their properties to the banks. Eventually the USGovt
and other Western governments might force sale of mining companies for
pathetic low prices under law in order to replenish their Gold reserves
in the central banks. The recent extreme challenges for the mining firms
relates to hostile labor unions and resource nationalism that prompts
confiscations. Distress for mining firms will result in continually
lower metal output, resulting in supply shortages which favor owners of
physical metal, not the mining stocks. The global assault on paper
wealth includes mining stocks. The Gold & Silver metal prices have
vastly outperformed mining stocks since 2008, when the Hat Trick Letter
subscribers were urged to dump the paper and to buy the metal. Expect
the trend to persist.
19) WHY ARE BOND YIELDS SO LOW, GIVEN HUGE SUPPLY AND NO BUYERS ??
The JPMorgan war room controls the Interest Rate Swap derivative
machinery. The contract is a complex device that matches short-term
spreads versus long-term spreads in order to fabricate fresh USTreasury
Bond demand for the long maturities. In essence the IRSwap creates
artificial demand for USTBonds, and thus creates the illusion of a
flight to safety in the USGovt sovereign debt securities. Since 2011,
the buyers for the USTBonds have largely been confined to the US Federal
Reserve. Since 2011, the supply of USGovt debt sold in securitized
bonds has remained at a frenetic $1.0 to $1.3 trillion pace. With huge
supply and almost no buyers, the bond yield should have zoomed higher
than bonds from Spain and Italy, maybe even Greece. But instead, thanks
to the JPMorgan derivative room, the vast USTBond tower is maintained
from a brisk demand of totally artificial type from flying IRSwap
buttresses. They will all experience seizures. The USTBond yield might
be zero when the USGovt debt default occurs. The Weimar replicas of fake
toxic money will not halt until the end.
20) DO LOW INTEREST RATES REALLY STIMULATE THE USECONOMY ??
No, low interest rates smother the USEconomy for several reasons.
They also create conditions for the banks to convert into speculative
houses even more than a decade ago. They are playing the USTBond carry
trade, borrowing cheap short-term money and investing in long-term
bonds. They cannot earn much profit with low rates in the commercial
sector. But the important negatives for low rates work to dampen
commercial activity. To begin with, the vast armada of savers, the
retirees holding CDs from banks, and the big pension funds, all earn
very little on their capital. It is unjust and a perversion. Twice as
much savings earn interest as consumer loans pay interest, a net
negative that Wall Street harlots prefer to ignore in their promotional
harangues to shrinking audiences. The banking sector is suffering for
many reasons, one of which is the poor income on their bond portfolios.
As much as the mavens and official barkers recite the benefits of low
rates and its stimulus, the exact opposite is the case. Worse, the low
rates signify low value for capital. They therefore distort the
financial markets on valuation of a broad assortment of assets. But the
worst effect that renders deep damage to the USEconomy from low interest
rates is the encouraged diversion of assets toward investment in
commodities in defense, as a hedge for inflation. The migration toward
commodities lifts the entire cost structure, and reduces the profit
margins for business. The effect is deadly as it forces capital in the
form of equipment and machinery into retirement. Business segments shut
down. The low rate environment kills capital, reduces the capital base,
and smothers the USEconomy. Not one in ten economists comprehends this
21) WHY HAS THE USDOLLAR NOT BEEN REFORMED IN RECENT YEARS ??
Because the USGovt has no jurisdiction over foreign nations and
international contracts. Although the USDollar is widely used in foreign
commerce, the USGovt cannot dictate changes and important alterations
to past contracts in place. About five years ago, a plan was afoot to
replace the USDollar with a newer better version. But all efforts hit an
obstacle since the USGovt has no jurisdiction to alter past contracts
that involve the USDollar within them. To be sure, the USGovt can
control flows of money as a grand gatekeeper and toll taker, but it
cannot dictate over external contracts. As the global financial and
monetary collapse has continued, the United States has found itself
unable to extricate itself from the tightening noose around its own
neck. In time, the USDollar will experience a global shun, at which time
great new problems will befall the nation.
22) HOW WILL THE USDOLLAR BE ELIMINATED ??
The USDollar will not be reformed replaced or repaired by bankers,
since they are too committed and entrenched in fraud and corruption. The
USDollar will be eliminated in a series of steps that begins with its
isolation. The movement toward trade settlement outside the USDollar,
not necessarily in Gold, works to isolate the USDollar turned toxic.
Once isolated, the many nations not so firmly aligned to the West will
thrive, while the Western core nations continue to crumble and collapse.
When the USDollar is no longer in favor in a majority of trade
settlement, it will begin to see wholesale dumping of the USTBond as a
reserve asset. Then the US-led axis of fascism will be revealed in the
United Kingdom, Canada, and most of Western Europe. They will continue
to use the USDollar in both trade and banking, but they will ingest
toxic paper during their continued unabated collapse. As the stage
shrinks and the lights dim, the USDollar will be dealt with by the
USGovt itself in brutal fashion. The US will devalue its own currency to
survive, just like Third World nations.
23) HOW DOES THE CURRENCY WAR AFFECT THE USDOLLAR POSITION ??
Nations around the world are locked into policies to debase their
currencies in a series of competitive devaluations in order to protect
their export trades. A lower domestic currency exchange rate protects
the trade by keeping the prices down for their exported products. Other
nations are affected as they lose trade to the competitor which
devalues. Actually all nations lose, since global trade shrinks in
aggregate. The USDollar is artificially propped as a result. But pain
comes from the devaluations since they increase import costs like crude
oil, such as in the case in Japan. Also, nasty effects occur like with
Switzerland, whose central bank collected a pile of Japanese Govt Bonds
in a diversification program. In competing currency wars, everybody
loses in a race to the bottom. Nations are slowly coming to the
realization that if they simultaneously rid themselves of the entire
batch of fiat paper currencies, and adopt a gold trade finance system,
even if they suffer a writedown of USTBonds in the process, they will be
better off with a future, after being freed from the toxic tentacles.
The USDollar and USTBond are agents of ruin during the ongoing
unstoppable collapse of paper assets, paper wealth, and paper money. The
next stop is the Gold Standard, which the participants in the currency
war are gradually moving to adopt, as they follow the Chinese lead.
24) HOW WILL THE UNITED STATES FALL INTO THE THIRD WORLD ??
The global isolation and rejection of the USDollar will force the
USEconomic participants to bid up the currency required for the many
supply routes leading into the nation’s factories, offices, stores, and
homes. The USDollar will be forced to bid up Chinese Yuan and Gold
ultimately. They will be forced to bid for whatever currency is required
for the assorted supplies like crude oil, metals, and foodstuffs, as
well as for finished products like cars, hardware, home electronics, and
clothing. The process will see some shocking events like 30%
devaluations, just like seen in Venezuela. My estimate is that the
USDollar will eventually see a 50% to 60% devaluation in total over the
next few years. That will cut US personal wealth in half. That will open
the door to 25% to 30% price inflation suddenly. The process will cause
grand shortages, civil disorder, and perhaps chaos. Violence will erupt
at the gasoline stations and food supermarkets. The USEconomy will lose
its credit line, and become a credit risk. For decades, the USEconomy
has been running up deficits, with no enforcement or discipline or
controls, in essence shoving the debt paper on foreign nations in lieu
of legitimate savings. They resent it. Foreigners will demand hard
currency at a time when the USDollar loses its global reserve status and
premier position. A sense of retribution will emerge. As the gold trade
finance chapter opens, the USDollar severe devaluation will coincide.
25) WHY ARE AMERICANS SO ILL-INFORMED ??
The United States is the home of a vast
syndicate that has been in firm control for decades, but only since 911
has it exerted stronger controls. In the process, much greater banker
welfare has become the norm, as have tight reins to control the
USCongress while integrating and enriching the military contractors, and
more quietly the pharmaceutical giants with at times deadly vaccines.
In order to maintain the charade of a national directive toward
security, complete with all the earmarks of national socialism, the
network news has been under very firm control. Dan Rather and Keith
Olbermann can attest. Since the 1980 decade, the entire news
conglomerates that include television, radio, newspapers, and journals
has been subject to strict oversight by the USGovt security agencies.
Since 911, the Homeland Security apparatus has exerted its controls. The
ownership of the major network conglomerates is a short list, which in
the 1970s consisted of 25 firms. Now it consists of a mere five firms.
They have been totally woven into the security fold. A branch of
Hollywood has also been grown from the security fold. The bias is
evident in domestic political stories, international geopolitical
stories, bank related stories, money related stories, economics stories,
and financial market stories. The US citizens remain the worst informed
people of any industrialized nation, and the most subjected to
propaganda. The British are a close rival. The Goebbels methods are
actively at work in propaganda widely disseminated.
26) WHAT HAS KEPT THE BIG US BANKS AFLOAT FOR THE LAST FOUR YEARS ??
Two flows of funds have kept the big US banks going. The first is the
financial derivative trades that grew out of control in the 1990 decade
and became vogue. They are totally unregulated, and therefore subject
to grand fraud. For instance a big financial firm might have credit
default swap contracts against its bond bust that total 200 times the
value of the corporate bonds themselves. It like the entire neighborhood
owning a fire insurance policy on a single home. To lite the home
ablaze can be profitable for some participating investors. The banks
have an extremely large volume of both credit default swaps and the more
important interest rate swap contracts. In fact, JPMorgan owns $82
trillion in interest rate derivatives, which exceeds the size of the
global economy. No regulation in oversight means the big US and London
banks can rig the prices, even counterfeit some of the contracts held.
Notice the LIBOR banker scandal that emerged in 2012 to shock the world.
It will spread, not shrink, as all major financial markets are
corrupted. The second very important source of funds is basic narcotics
money laundering, the biggest beneficiaries being the New York banks.
Few realize that JPMorgan runs the Iraqi Export Bank in Baghdad Iraq,
which serves as the clearing house for Afghan narcotics. A ripe 85% of
all heroin in the world comes from Afghanistan. Terrorists pale by
comparison in importance in the war mission. The United Nations has
issued several drug related finance reports that have identified the big
US banks as primary centers for money laundering of narcotics funds.
Some like Wachovia have pled guilty. In recent months, the Queen of
England has been implicated, as have the Vatican bankers. Without the
derivatives and money laundering, the big US banks would have folded and
gone bust years ago.
27) DOES THE USFED REALLY HAVE AN EXIT PLAN ??
The USFed has no Exit Strategy. It ran a
blatantly obvious fake plan in 2009 that the Jackass dismissed
immediately and correctly. The Zero Percent Interest Rate Policy will
remain in place until the USGovt debt default occurs. Any rate hike
would cause a balloon in USGovt borrowing costs and much greater
deficits. Any rate hike would cause a sudden implosion of the entire
derivative structure, the so-called nuclear event. Any rate hike would
break the big US bank carry trade locked into USTBonds, and thus cause
bond yields to rise twice as fast as the USFed could control them in a
great unwind. Any rate hike would crush the already comatose housing
market. Any rate hike would harm badly the USEconomy from higher cost of
loans. The Quantitative Easing policy will remain in place until the
USGovt debt default occurs. No buyers of any critical mass exist to
purchase USTreasury Bonds. The USFed has been purchasing at least 80% of
USTBonds in new issuance and rollover supply. Foreign buyers are long
gone, aghast at the hyper monetary inflation and toxic effect on their
banking reserves. They also possess smaller trade surpluses. If the
USFed were to halt the purchases of USTBonds, the pressures on the
Interest Rate Swap machinery would break it quickly in a matter of one
to two months. The result would be long-term bond yields rising to the
7% to 8% or 9% range. The USFed has no Exit Strategy, never had any Exit
Strategy, and will not be granted an Exit Strategy. It is stuck in the
monetary corner, totally reliant upon its Weimar printing press,
gradually isolated in its USDollar self-fellatio activity.
28) HOW WILL THE USGOVT BUDGET DEFICIT BE FINANCED AND COVERED ??
The only exit ramp that might be seen is with the USGovt and its
deficit finance. The likelihood grows every month for a major oppressive
event, where private US pension funds (IRA, 401k, Keough, managed
pension, etc) are forced to cover the USGovt deficit in the form of
special USTreasury Bonds which also cover a portion of the USAgency
Mortgage Bonds. The US citizenry is captive to the desperate whims of
the USGovt and its bankrupt condition, sure to dole out desperate policy
29) ON THE FISCAL CLIFF, ARE SEQUESTERED BUDGET CUTS ALL THAT BAD ??
The Jackass loves the automatic budget cuts, even if across the board
in nature. Whatever it takes to reduce the vast USGovt bureaucracy and
vast military establishment is wonderful and welcome. The fear tactics
have already reached a fever pitch, with recited calls for long airline
delays and cuts to the welfare morass that includes Social Security and
Medicare. The point must be made that even the first round of cuts will
be only $85 billion for the fiscal year ending September 30th. That is
minor compared to the overall $3.8 trillion bloated budget, as in $3800
billion. It is a trifling amount in proposed cuts from the sequestered
route, only 2.2% of the total bloated budget. The pain comes from the
budget cuts arriving at a time of chronic recession that dogs the
USEconomy. The marginal effects will be certain, but the movement to
reduce the size of the USGovt is in a good direction.
30) WHY ARE AMERICANS SHUNNED ACROSS THE WORLD ??
The USGovt regularly puts out volumes of
requirements and onerous rules for foreign entities to follow and abide
by, at their own cost. The USGovt has in the past few years forced a
burden on the foreign firms. As a result, the foreign firms have decided
on an increasing basis not to incur the cost, not to support the staff,
and not to deal with the nuisance. They do not hate the US citizen.
They despise the USGovt and its sprawling imperial over-reach.
31) WHY DID THE POPE REALLY RESIGN ??
This is difficult to answer with any
measure of certainty. But indications have been made by credible parties
that the Vatican is soon to be exposed for some truly devious
pernicious scummy banking relationships that involve big banks like
JPMorgan and various central banks. The big corrupt US bank has managed
the Vatican gold account for decades. Imagine the cross traffic from the
brisk Afghan narcotics money laundering activity. More clearly, the
Vatican is embroiled in narcotics money laundering at its primary bank.
It is difficult to confirm, but the Jackass doubts that God approves of
any activity on usage or finance related to heroine and cocaine. The
Vatican apparently is soon to be subjected to a new financial audit. The
recently appointed German lawyer Ernst von Freyberg will be the new
president of its bank, filling a post left vacant since May when a
financial scandal involving narcotics money laundering with Roman banks
tainted the institution for the umpteenth time. The appointment was made
by a commission of Cardinals and approved by Pope Benedict before his
departure was announced, now final. The bank’s formal name is a total
joke, the Institute for Works of Religion. Plenty of other reports swirl
about an intolerance for certain sexual rituals by the Vatican bankers
that the current pope has no more patience for. Benedict has laid a
trap. There are two chambers to the Vatican, the College of Cardinals
and the Jesuit Bankers. The former pledges fealty and devotion to the
Prince of Light with active ceremonies. The latter pledges fealty and
devotion to the Prince of Darkness with active rituals.
32) ARE THE ANGLO AMERICAN BANKERS STILL IN CONTROL ??
In no way are the London and New York
bankers in control. They are reacting to events. Their many structures
are fast crumbling. Their bond markets are held up by paper emissions in
ever increasing volumes. Their currencies are at war with each other,
not simply competition. Their banks are grotesquely insolvent, kept
afloat by direct monetary inflation, open state welfare, and oppressive
taxes. The central banks are stuck in the ZIRP corner with only QE as an
option, otherwise known as dead money and hyper monetary inflation.
Weimar is alive and vigorous on its destructive rampage. The global
trade settlement system is making steady progress in a non-USDollar
alternative, which will strip the United States of the global currency
reserve privilege, abused to the hilt. The trade finance structure will
gradually revert to the Gold Standard, and from that firm position,
dictate banking policy. The bankers of the future will be those who own
Gold & Silver, which will rise to $5000 per ounce and $250 per ounce
respectively, probably more suddenly than even the gold community
comprehends or anticipates.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.