Friday, September 30, 2011

VIDEO: Alex Jones - Crazy News 9/30/11

VIDEO: Michael Moore Hearts the Federal Reserve

Kurt Nimmo
September 30, 2011

We Are Change journalist Luke Rudkowski caught up with filmmaker Michael Moore the other day. Luke asked the radical socialist if he has problem with the Federal Reserve. Moore retorted that we have bigger issues and advocated ending capitalism.

He didn’t say what he’d replace it with, but that doesn’t take a lot of imagination – a stale version of the same old legalized thievery radical socialists always demand.

Michael Moore either does not know that the Federal Reserve, the banksters, and their fiat money and fractional reserve banking system are the problem, or he doesn’t care.

Anyway, Peter Schiff put it all into perspective in the second part of Luke’s video.

Kudos, Luke. Another job well done!

VIDEO: Dumb TV Reporter ‘Brings The Stupid’ On Gold

Is it any wonder that distrust in corporate media is at an all time high?

Paul Joseph Watson
Friday, September 30, 2011

Is it really any wonder why distrust in corporate media recently reached an all time high? Watch this TV news clip in which the reporter claims that the U.S. dollar is a safer investment because it is backed by “the American government,” whereas gold is backed by nothing at all.

No, you’re not watching a clip from The Daily Show, this is a real “news” anchor telling her audience that gold has no intrinsic value or backing and that the U.S. dollar is a safer investment because it is backed by “the American government.”

And before you ask, CTV’s markets reporter Bridget Brown is not part of Obama’s new economic advisory team, nor is she speaking as a contestant in Miss Teen USA.

There’s so much wrong with this on so many levels.

For a start, gold is backed by the fact that there is a finite amount of it in the world, that it takes a lot more work to mine that it does to press a button on a printing press, and that other little nugget of information – gold has been used as a store of value and as a means of financial transaction by hundreds of civilizations for thousands of years. Gold is backed by the full weight of human history.

There’s also the huge number of gold reserves – 20 per cent of the total amount of gold on the planet – held by central banks around the world.

On the other hand, the U.S. dollar is not backed by “the American government,” since the Federal Reserve is not part of “the American government,” it is a private entity which “the American government” has to borrow U.S. dollars from in order to pay its bills.

It is not gold but the U.S.dollar that is backed by nothing. The dollar was once backed by gold until the gold standard was abolished by President Nixon. The dollar is a fiat currency and as such is doomed to fail just like all fiat currencies did before it. History is littered with the ashes of countless failed currencies. Those too were backed by “the government,” yet they all crashed and burned. Gold has never failed as a store of wealth or as a commodity of transaction.

This TV news clip actually comes out of Canada, but it underscores why corporate media globally is losing its trust and its viewers to alternative platforms.

A recent Gallup survey found that, “The majority of Americans say they have little or no trust in the mass media to report the news fully, accurately, and fairly.”

The figure of 57% who hold this viewpoint represents a new record high. Another interesting finding is that, “Lower-income Americans and those with less education are generally more likely to trust the media than are those with higher incomes and more education.”

Since gold has more than quadrupled in value over the last 10 years whereas the U.S. dollar has lost at least 30 per cent of its purchasing power over that same time period, lower income Americans who follow the kind financial advice being put out by the corporate media in the clip above are likely to remain in the “lower income” bracket.


Paul Joseph Watson is the editor and writer for Prison He is the author of Order Out Of Chaos. Watson is also a regular fill-in host for The Alex Jones Show.

Is The War On Terror A Hoax?

Paul Craig Roberts
Friday, September 30, 2011

In the past decade, Washington has killed, maimed, dislocated, and made widows and orphans millions of Muslims in six countries, all in the name of the “war on terror.” Washington’s attacks on the countries constitute naked aggression and impact primarily civilian populations and infrastructure and, thereby, constitute war crimes under law. Nazis were executed precisely for what Washington is doing today.

Moreover the wars and military attacks have cost American taxpayers in out-of-pocket and already-incurred future costs at least $4,000 billion dollars–one third of the accumulated public debt–resulting in a US deficit crisis that threatens the social safety net, the value of the US dollar and its reserve currency role, while enriching beyond all previous history the military/security complex and its apologists.

Perhaps the highest cost of Washington’s “war on terror” has been paid by the US Constitution and civil liberties. Any US citizen that Washington accuses is deprived of all legal and constitutional rights. The Bush-Cheney-Obama regimes have overturned humanity’s greatest achievement–the accountability of government to law.

If we look around for the terror that the police state and a decade of war has allegedly protected us from, the terror is hard to find. Except for 9/11 itself, assuming we accept the government’s improbable conspiracy theory explanation, there have been no terror attacks on the US. Indeed, as RT pointed out on August 23, 2011, an investigative program at the University of California discovered that the domestic “terror plots” hyped in the media were plotted by FBI agents.

FBI undercover agents now number 15,000, ten times their number during the protests against the Vietnam war when protesters were suspected of communist sympathies. As there apparently are no real terror plots for this huge workforce to uncover, the FBI justifies its budget, terror alerts, and invasive searches of American citizens by thinking up “terror plots” and finding some deranged individuals to ensnare. For example, the Washington DC Metro bombing plot, the New York city subway plot, the plot to blow up the Sears Tower in Chicago were all FBI brainchilds organized and managed by FBI agents.

RT reports that only three plots might have been independent of the FBI, but as none of the three worked they obviously were not the work of such a professional terror organization as Al Qaeda is purported to be. The Times Square car bomb didn’t blow up, and apparently could not have.

The latest FBI sting ensnared a Boston man, Rezwan Ferdaus, who is accused of planning to attack the Pentagon and US Capitol with model airplanes packed with C-4 explosives. US Attorney Carmen Ortiz assured Americans that they were never in danger, because the FBI’s undercover agents were in control of the plot.

Ferdaus’ FBI-organized plot to blow up the Pentagon and US Capitol with model airplanes has produced charges that he provided “material support to a terrorist organization” and plotted to destroy federal buildings–the most serious charge which carries 20 imprisoned years for each targeted building.

What is the terrorist organization that Ferdaus is serving? Surely not al Qaeda, which allegedly outwitted all 16 US intelligence services, all intelligence services of America’s NATO and Israeli allies, NORAD, the National Security Council, Air Traffic Control, Dick Cheney, and US airport security four times in one hour on the same morning. Such a highly capable terror organization would not be involved in such nonsense as a plot to blow up the Pentagon with a model airplane.

As an American who was in public service for a number of years and who has always stood up for the Constitution, a patriot’s duty, I must hope that the question has already popped into readers’ minds why we are expected to believe that a tiny model airplane is capable of blowing up the Pentagon when a 757 airliner loaded with jet fuel was incapable of doing the job, merely making a hole not big enough for an airliner.

When I observe the gullibility of my fellow citizens at the absurd “terror plots” that the US government manufactures, it causes me to realize that fear is the most powerful weapon any government has for advancing an undeclared agenda. If Ferdaus is brought to trial, no doubt a jury will convict him of a plot to blow up the Pentagon and US Capitol with model airplanes. Most likely he will be tortured or coerced into a plea bargain.

Apparently, Americans, or most of them, are so ruled by fear that they suffer no remorse from “their” government’s murder and dislocation of millions of innocent people. In the American mind, one billion “towel-heads” have been reduced to terrorists who deserve to be exterminated. The US is on its way to a holocaust that makes the terrors Jews faced from National Socialism into a mere precursor.

Think about this: Are not you amazed that after a decade (2.5 times the length of WW II) of killing Muslims and destroying families and their prospects in six countries there are no real terrorist events in the US?

Think for a minute how easy terrorism would be in the US if there were any terrorists. Would an Al Qaeda terrorist from the organization that allegedly pulled off 9/11–the most humiliating defeat ever suffered by a Western power, much less “the world’s only superpower”–still in the face of all the screening be trying to hijack an airliner or to blow one up?

Surely not when there are so many totally soft targets. If America were really infected with a “terrorist threat,” a terrorist would merely get in the massive lines awaiting to clear airport “security” and set off his bomb. It would kill far more people than could be achieved by blowing up an airliner, and it would make it completely clear that “airport security” meant no one was safe.

It would be child’s play for terrorists to blow up electric sub-stations as no one is there, nothing but a chain link fence. It would be easy for terrorists to blow up shopping centers. It would be easy for terrorists to dump boxes of roofing nails on congested streets and freeways during rush hours, tying up main transportation arteries for days. Before, dear reader, you accuse me of giving terrorists ideas, do you really think that these ideas would not already have occurred to terrorists capable of pulling off 9/11?

But nothing happens. So the FBI arrests a guy for planning to blow up America with a model airplane. It is really depressing how many Americans will believe this.

Consider also that American neoconservatives, who have orchestrated the “war on terror,” have no protection whatsoever and that the Secret Service protection of Bush and Cheney is minimal. If America really faced a terrorist threat, especially one so professional to have brought off 9/11, every neoconservative along with Bush and Cheney could be assassinated within one hour on one morning or one evening.

The fact that neoconservatives such as Paul Wolfowitz, Donald Rumsfeld, Condi Rice, Richard Perle, Douglas Feith, John Bolton, William Kristol, Libby, Addington, et. al., live unprotected and free of fear is proof that America faces no terrorist threat.

Think now about the airliner shoe-bomb plot, the shampoo-bottled water plot, and the underwear-bomb plot. Experts, other than the whores hired by the US government, say that these plots are nonsensical. The “shoe bomb” and “underwear bomb” were colored fireworks powders incapable of blowing up a tin can. The liquid bomb, allegedly mixed up in an airliner toilet room, has been dismissed by experts as fantasy.

What is the purpose of these fake plots? And remember, all reports confirm that the “underwear bomber” was walked onto the airliner by an official, despite the fact that the “underwear bomber” had no passport. No investigation was ever conducted by the FBI, CIA, or anyone into why a passenger without a passport was allowed on an international flight.

The purpose of these make-believe plots is to raise the fear level and to create the opportunity for former Homeland Security czar Michael Chertoff to make a fortune selling porno-scanners to the TSA.

The result of these hyped “terrorist plots” is that every American citizen, even those with high government positions and security clearances, cannot board a commercial airline flight without taking off his shoes, his jacket, his belt, submitting to a porno-scanner, or being sexually groped. Nothing could make it plainer that “airport security” cannot tell a Muslim terrorist from a gung-ho American patriot, a US Senator, a US Marine general, or a CIA operative.

If a passenger requires for health or other reasons quantities of liquids and cremes beyond the limits imposed on toothpaste, shampoo, food, or medications, the passenger must obtain prior approval from TSA, which seldom works. One of America’s finest moments is the case, documented on UTube, of a dying woman in a wheelchair, who requires special food, having her food thrown away by the gestapo TSA despite the written approval from the Transportation Safety Administration, her daughter arrested for protesting, and the dying woman in the wheelchair left alone in the airport.

This is Amerika today. These assaults on innocent citizens are justified by the mindless right-wing as “protecting us against terrorism,” a “threat” that all evidence shows is nonexistent.

No American is secure today. I am a former staff associate of the House Defense Appropriations subcommittee. I required high security clearances as I had access to information pertaining to all US weapons programs. As chief economist of the House Budget Committee I had information pertaining to the US military and security budgets. As Assistant Secretary of the US Treasury, I was provided every morning with the CIA’s briefing of the President as well as with endless security information.

When I left the Treasury, President Reagan appointed me to a super-secret committee to investigate the CIA’s assessment of Soviet capability. Afterwords I was a consult to the Pentagon. I had every kind of security clearance.

Despite my record of highest security clearances and US government confidence in me including confirmation by the US Senate in a presidential appointment, the airline police cannot tell me from a terrorist.

If I were into model airplanes or attending anti-war demonstrations, little doubt I, too, would be arrested.

After my public service in the last quarter of the 20th century, I experienced during the first decade of the 21st century all of America’s achievements, despite their blemishes, being erased. In their place was erected a monstrous desire for hegemony and highly concentrated wealth. Most of my friends and my fellow citizens in general are incapable of recognizing America’s transformation into a warmonger police state that has the worst income distribution of any developed country.

It is extraordinary that so many Americans, citizens of the world’s only superpower, actually believe that they are threatened by Muslim peoples who have no unity, no navy, no air force, no nuclear weapons, no missiles capable of reaching across the oceans.

Indeed, large percentages of these “threat populations,” especially among the young, are enamored of the sexual freedom that exists in America. Even the Iranian dupes of the CIA-orchestrated “Green Revolution” have forgotten Washington’s overthrow of their elected government in the 1950s. Despite America’s decade-long abusive military actions against Muslim peoples, many Muslims still look to America for their salvation.

Their “leaders” are simply bought off with large sums of money.

With the “terrorist threat” and Al Qaeda deflated with President Obama’s alleged assassination of its leader, Osama bin Laden, who was left unprotected and unarmed by his “world-wide terrorist organization,” Washington has come up with a new bogyman–the Haqqanis.

According to John Glaser and anonymous CIA officials, US Joint Chiefs of Staff chairman Mike Mullen “exaggerated” the case against the Haqqani insurgent group when he claimed, setting up a US invasion of Pakistan, that the Hagganis were an operating arm of the Pakistan government’s secret service, the ISI. Adm. Mullen is now running from his “exaggeration,” an euphemism for a lie. His aid Captain John Kirby said that Mullen’s “accusations were designed to influence the Pakistanis to crack down on the Haqqani Network.” In other words, the Pakistanis should kill more of their own people to save the Americans the trouble.

If you don’t know what the Haqqani Network is, don’t be surprised. You never heard of Al Qaeda prior to 9/11. The US government creates whatever new bogymen and incidents are necessary to further the neoconservative agenda of world hegemony and higher profits for the armaments industry.

For ten years, the “superpower” American population has sat there, being terrified by the government’s lies. While Americans sit in fear of non-existent “terrorists” sucking their thumbs, millions of people in six countries have had their lives destroyed. As far as any evidence exists, the vast majority of Americans are unperturbed by the wanton murder of others in countries that they are incapable of locating on maps.

Truly, Amerika is a light unto the world, an example for all.

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously an editor for the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

Thursday, September 29, 2011

VIDEO: More German Sucker Money To Pour Into Greek Black Hole Of Debt Bailout Scam

VIDEO: Gerald Celente - The system is rigged and it's going down!

Sept 29, 2011

In 2008 Goldman Sachs was one of two major investment banks that were bailed out. Shortly after, it was reported that they were giving huge bonuses. Now Goldman Sachs is laying off employees and making absurd cost cutting measures. Gerald Celente, a publisher for the Trends Journal, joins RT to talk about this.

VIDEO: Alex Jones - Crazy News 9/29/11

U.S. Banks And Corporations Knowingly Invented And Financed Hitler's War Machine And Soviet Threat
by Kurt Nimmo
Thursday, September 29, 2011

According to former CIA agents and historians participating in a forum held at the John F. Kennedy Library in Boston, in the early 1960s the U.S. government invented the so-called “Missile Gap” and wildly over-estimated the number of ICBMs the Soviet Union had.

How many ICBMs did the Soviets actually have? Four, according to declassified documents.

The Eisenhower administration used aerial reconnaissance and imaging satellites like the Corona Satellite to discover that the Soviets did not have the advanced technology to threaten the U.S.

As a growing number of historians have realized for years, the so-called Cold War was largely an illusion – known as “policy by press release” – invented by the military industrial complex, the same folks who are selling us new wars and conjured-up threats from the likes of al-Qaeda and now the so-called Haqqani network.

“The study of the Missile Gap period is especially relevant because it relates to today’s situation in Iraq, North Korea, and Iran, said historian and author Fred Kaplan and Timothy Naftali, director of the Richard Nixon Presidential Library and Museum and a former Harvard student,” writes Laya Anasu for The Crimson.

The invented Missile Gap – an extension of the supposed Bomber Gap – is part of a larger reality that we never hear about and is not revealed in most history books: the entire Soviet threat was invented by Wall Street and the international bankers.

In Western Technology and Soviet Economic Development 1945 to 1965 written by the late Antony Sutton, we discover that if not for a massive transfer of technology and money to the Bolsheviks in the 1920s and later, Russia would have remained an isolated and backwards rural society. Sutton drew his conclusions after reviewing State Department documents.

Antony Sutton: The Best Enemies Money Can Buy.

“Soviet exports in the late sixties were still those of a backward, underdeveloped country. They consisted chiefly of raw materials and semi-manufactured goods,” Sutton writes in the conclusion of his trilogy. “When manufactured goods were exported they were simple machine tools and vehicles based on Western designs, and they were exported to underdeveloped areas,” he writes.

And yet we were expected to believe at the time that the Soviet Union had developed and manufactured a burgeoning arsenal of sophisticated nuclear weapons.

“In the Bolshevik Revolution we see many of the same old faces that were responsible for creating the Federal Reserve System, initiating the graduated income tax, setting up the tax-free foundations and pushing us into WWI,” writes Gary Allen.

It was “a tiny oligarchical clique at the top” that created the Soviet Union, not because the elite are communists, but because communism is “a method to consolidate and control the wealth” and ultimately build ”an all-powerful world, socialist super-state,” a state we are now beginning to see as the bankers take down the global economy.

We need to keep this in mind as the elite, through their academics and corporate media, try to sell us new threats, for instance the Haqqani terror network recently pushed by the chairman of the joint chiefs of staff, Mike Mullen, as he lectured the Senate Armed Services Committee last week.

The corporate media reports that Haqqani is a veritable arm of Pakistan’s ISI, but what they don’t tell you is that the ISI is a creation of British intelligence – shepherded by Major General Walter Joseph Cawthorn, working for MI-6 – and the terror organizations now supposedly threatening the United States (and subsequently replacing the facile threat of the Soviet Union) were created through a collaboration between the ISI and the CIA, beginning in the early 1980s, a fact admitted by none other than the New York Times and Zbigniew Brzezinski.

The elite invent scary threats and push them off on us, knowing that we will usually take the bait, as the mass hysteria – and curtailment of our liberties – demonstrated after we were sold the fairy tale that a gaggle of Muslim cave dwellers made NORAD stand down and waved a magic wand that suspended the laws of physics of September 11, 2011.

Recent Gold Takedown A Form of Economic Warfare

The International Forecaster
by Bob Chapman
Sept 28, 2011

The takedown of gold and silver markets over the past two weeks signified a new milestone in corruption, brazenness, arrogance and it reveals the level of evil control behind our government. This past week, in just one week, saw gold fall almost $200 and silver about $10.00. We have been involved in gold and silver for 53 years and the only event that comes close to this was October 19, 1987, when we witnessed the Bank of England sell down gold $100.00 under the orders of the Fed and the US Treasury, which borrowed the gold from the IMF. That was illegal, but that means little to the Illuminists who do as they please. Today thanks to Ronald Reagan we have the "President's Working Group on Financial Markets," which has legitimatized corruption to conform to the Keynesian model of corporatist fascism. After the close on Friday we were informed, that the CME, which controls the Comex, had raised margin requirements on gold by 21%, silver 16% and in copper by 18%. In retrospect it is obvious that many banking insiders and traders knew early in the week that this momentous psychological warfare was going to be unleashed on these markets. Your government definitely rigged these markets. Today in America and many other places as well, crime pays. What has been done to investors over this past week is not only a crime, but also a disgrace to all Americans.

Let us now look at the flipside. All is not lost, because there is a limit to the damage that can be done. The paper attack on gold was concentrated and accomplished by using futures, options and derivatives. Thus far there is no evidence of any major sales of gold or silver. This in the past has generated very short terms of suppression. The fundamentals have not changed one bit and if anything they are stronger than ever. The world is in the midst of financial collapse. It could take a few months to fall or several years. We do not have a presence behind the scenes, but we do know history and we know what these criminals are up too and what the end game is and that is world government. We have to back into time sequence. That has thus far been enough to help us to make excellent calls. The call this time is we are approaching another bottom. A bottom that probably won't be seen again. Major buyers of gold and silver have to be waiting with open arms for such a great opportunity to purchase both metals at bargain basement prices. There are sovereigns who are loaded with US dollars, who have been waiting for just such an opportunity to sell them into a strong dollar market to purchase inexpensive gold and silver. Today's market is totally different than the gold and silver markets of just two years ago. Big players are big buyers. Prior to that the opposite was true as sovereigns were sellers year after year, and both were transferred from weak to stronger hands. The monetary and fiscal situations in Europe, the UK and US are in a shambles. The privately owned Federal Reserve, the Bank of England and the European central bank have all lost credibility. Just look at the reception "Operation Twist" received � bonds rose and the stock market was hit by a typhoon. The Fed has lost its credibility in the investment arena worldwide, because of forced compromise to existing problems. The fed simply didn't have the guts to implement a QE 3. If the Fed is not quickly forthcoming with a new plan the Dow could fall thousands of points. The damage to gold and silver is already in the history books and the turn back up is already taking place. No matter what the powers that be do they cannot for any period of time control gold and silver prices. There are too many buyers who want to dump fiat currencies. Under the circumstances the Twist was the wrong choice at the wrong time. Financial professionals worldwide believe it is a joke. They see the lack of proper action, the activation for events for more damaging then those of 2008 and if something doesn't happen this week markets and economies are doomed. The elitists knew this and that is why they attacked gold, silver and commodities. This was so investors would think it was a general overall retreat not a reflection of Fed incompetence. Their fall had nothing to do with reality and everything to do with smoke and mirrors. This should not surprise anyone. It has been used over and over again by the gold and silver suppression cartel.

In reaction to Mr. Bernanke's folly stock markets worldwide fell about 5% in just two days, which was a considerable feat, piling on to previous losses. Friday would have been a loser as well, but for the PPT being assisted by short covering. This poor choice of assistance has slammed the market and it has set the stage for a monster rally in gold and silver and commodities as well. The idea of pegging interest rates on Treasury debt is foolhardy in the current environment. Subsidizing rates leads to imbalance and losses. This and zero interest rate loans to banks, and massive monetization are going to eventually raise havoc with the economy, not to mention climbing inflation. It should also be noted that all these actions encourage more leveraged speculation. The elitist should learn that all their machinations won't work especially these attacking gold silver and commodities. We might add that attacking every world currency won't work either. The elitists in brokerage and banking are making a killing in this slaughter, but on the other hand it gives us cheap prices to buy into.

This latest fiasco gives us two major problems. The other naturally being Europe and Greece. Duress isn't the word for it. Global systemic risk lurks around every corner. In Europe the ESRB has called upon governments to prepare capital injections for banks, which were close to failure, or failed stress tests. The taxpayer is to be the lender of last resort. At this juncture those who do not recognize all of these machinations as a Ponzi scheme just do not get it. As we saw in QE 1 all the effort was put into saving the financial sector, and in Europe presently we are seeing the same thing happen. At the moment at least, and we do not expect any quick recoveries, Europe is weaker and in more serious trouble than the UK and US. The problems of Europe, the US and UK have now as well spread contagiously into Asia, its financial system and into their economies as exports fall. Europe is one step away from losing control. The question is how long will it take? We do not know, but we will have a better idea after September 29th. Then we will have to reassess Europe's public and banking debt and bad debt problems. If you remember we predicted this crisis occurring a year ago. Well, here it is. What Brits and Americans fail to understand is that the worst is ahead for them as well.

Make no mistake Europe is facing another liquidity crisis worse than the Lehman crisis. This crisis is being exacerbated by massive markets manipulation by major US and UK banks and brokerage houses. They will do just about anything to gain an edge. You saw this last week in European, UK and US markets including commodities, gold and silver. These criminal opportunists are going to play this game to the bitter end, because they will not accept a purge of the system.

In the past spring we could see problems arising at banks and in the corporate world. Now we see those conditions manifesting themselves. These were the institutions that paid no heed to prudent lending and now are paying for it dearly. US money market funds and other institutions have pulled 2/3's of their short-term investments out of EU banks, particularly in France. In addition European corporations are withdrawing funds from French banks and lodging the deposits at the ECB. It is not surprising to us that the Rothschilds had to come to the aid of Soc Gen three weeks ago.

The US has its share of shaky banks. We all should be aware of the condition of BofA and the Bank of NY. They are not the only US banks in trouble in the too-big-to fail category. There are a score of them that the media conveniently fails to report on. Many of these banks are finally being sued for fraud. Most of their officers should have been charged criminally long ago. The mortgage securitizations they were involved in were in some of the worst financial scams in history. Even worse yet, were the rating companies that courts have let totally off the hook. The complicity and criminality jumps right out into your face. As you can see in American society some are more equal than others.

Even German banks have not escaped the lack of capital, obviously having lots of bad assets on their books. They could need an infusion of some $200 billion. This is fairly widespread. They all made similar errors. We have always thought there was more to Germany's bank problems than met the eye. We still believe there was a secret deal between these banks and the Fed. Why else would it have taken on 60% of American banks' toxic waste? It is of interest as well that the IMF says European banks could be short capital of $270 billion.

The European crisis is still escalating and Ben Bernanke has chosen the wrong vehicle, operation Twist, for recovery. Mr. Bernanke and the Fed had best have a plan B for this week. For the moment the stock market decline has been arrested by the PPT, but for how long? At the same time this same group expends billions of dollars pushing gold and silver lower? These events go forward as the IMF says the world economy is in trouble. We see the fed's efforts as having a slow effect that will perhaps relieve the 3.8 million house inventory they and lenders are carrying, but it is a losing battle even at 30-year fixed mortgage rates of 3%. The 4-year foreclosure projection is for an inventory of 8 to 11.5 million foreclosed homes as the building industry adds 550,000 new homes annually. We ask what can they be thinking? The Fed has taken the wrong road for its prime vehicle. It doesn't mean they have to abandon operation twist, but they have to have something that will act quickly to move the economy into growth. It is quite evident at the same time that they will have to purchase $850 billion to $1 trillion in Treasuries as well, plus loan more than $1 trillion to European banks and perhaps governments. The downside on the 10-year note could be at 1%. Who would buy such paper with 11.4% inflation? No one of sane mind would make such an investment. They had best do something quickly. It should not be buying mortgage bonds and collateralized mortgage debt. That only shores bank balance sheets. The Fed needs banking to prudently lend out the $2 trillion they are sitting on if small and medium sized business will borrow it and create jobs. The Fed and government have only two choices, inflate or purge the system. They had the same choice in 1990, 2000 and three years ago. We have seen 20 years of lying, manipulation and incompetence and the American public is sick of it. There is no question that lack of confidence is hurting recovery and that could change if Mr. Bernanke was replaced. Reflection of that lack of confidence is the abrupt lack of insider buying of company shares. It could be the Fed, Treasury and the "President's Working Group on Financial Markets" have lost control. If it were not for the terrible problems in Europe the dollar would be much lower versus other currencies, gold and silver. The economy needs inflation and it is up to the Fed to supply it. If chairman Bernanke cannot supply that he will soon be leaving his post.

Part of what happens as a result of Thursday's Bundestag vote will dictate how the ECB handles its problems pertaining to policymaking, its circumvention of rules and the holding of an enormous amount of securities and banks that are weak along with insolvent governments. In addition, they have to find a way to sell these securities. Their only hope is if Germany agrees to participate on Thursday.

In the meantime in case the Bundestag refuses behind the scenes a grand plan is being put together involving massive bank recapitalization, which would give the EFSF more power. This in part would be done by the ECB via leverage and a loss-sharing arrangement to avoid having to further submit to national congresses for approval, effectively relieving them of their sovereignty. The German people do not want this, but the CDU is pushing it in exchange for its support against intervention and a partial Greek default, which the CDU rejected two years ago. Many want the ECB leveraged, but within the legal framework of the EU Treaty and the bailout fund it cannot be leveraged. Just involving the central bank violates the EU Treaty. This past weekend the IMF meeting in Washington produced nothing. The effort to raise $3 trillion would trigger credit downgrades for all participants.

The ECB recently purchased some $55 billion of Italian and Spanish bonds in the open market, which was in breach of rules. We might ask whom will they sell them too?

There is no question bankers and central bankers are trapped and there is no way for them to painlessly extricate themselves. These are the experts that have been responsible for imprudent lending and they demand they be bailed out.

In the US the Fed has to resort to QE 3 and if they do not the system will collapse. They have to assist in creating jobs. There can be no recovery without job creation. The only way to recovery is lavish federal spending, not budget cuts, otherwise the great purge begins; already the hour is late.

What has to be indelibly printed in everyone's minds is the self-interest of banks and bankers. Problems are not dealt with expeditiously because it is all about self-interest and survival. Jobs, the recovery and the economy are secondary. The continuation of the EU and the euro zone has to be saved at all costs by any means to bring about world government. The move toward a super-state has to be done quietly and with stealth, without the people realizing what is being done to them � eventual enslavement. Politicians who have ceased to represent their constituencies are expediting the road to serfdom. That is reflected by 70% of legislation coming from bureaucrats in Brussels. In the US it is done via payoffs.

The crisis is again in control and whether Europe can put its house in order remains to be seen.

Last week the Dow fell 6.4%, S&P 6.5%, Nasdaq fell 4.3% and the Russell 2000 8.7%, as Ben Bernanke performed his most recent magic. Banks only fell 9.5%; and broker dealers 8.8%. Cyclicals fell 11.1%, transports sank 9.6%; consumers 5.1%; utilities 1.4%; high tech 5.8%; simi's 5.8%; Internets 6.4% and biotechs 4.1%. Gold fell $155.00, the HUI gold index fell 11.7% and the USDX rose 2.5% to 78.50.

Two-year T-bills rose 5 bps to 0.21%; 10-year T-notes 22 bps to 1.83% and the 10-year German bund fell 12 bps to a record low of 1.745%.

The Freddie Mac 30-year fixed rate mortgage was unchanged at 4.09%. The 15's were off 1 bps TO 3.29%, one-year ARM'S rose 1 bps to 2.82% and the 3-year fixed rate jumbos fell 4 bps to 4.76%.

Fed credit fell $4.3 billion to $2.849 trillion. The yoy increases is 24.2%. Fed foreign holdings of Treasury, Agency debt fell $7.1 billion to $3.468 trillion. Custody holdings for foreign central banks are up $118 billion ytd and $255 billion yoy or up 7.9%.

M2, narrow, money supply fell $7.5 billion to $9.584 trillion, it is up 11.9% ytd and 10.3% yoy.

Total money market funds fell $11.8 billion to $2.621 trillion.

Commercial paper outstanding fell $13.4 billion to $1.030 trillion. That is a 10-week decline of $207 billion.

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Wednesday, September 28, 2011

Euro TARP - Why It Will Be A Screaming Failure

Street Talk Live
By Lance Roberts
Sept, 27, 2011

Is Dick Fuld running this show?

The Eurozone bailout, now being referred to as Euro TARP, is doomed to fail. While nothing has been officially announced the markets are rallying broadly on the back of a news article published by CNBC on Monday. The details are lacking as to the actual structure but speculation is already running rampant across the financial markets as to what it might look like.

What is presumed is that Euro TARP will follow the proposal originally proffered by Tim Geithner on his European trip recently. That proposal had been widely dismissed by the G20 as they couldn't come to terms on any type of structure. The current idea outlined by CNBC will bypass the G20 entirely and allow the European Investment Bank (EIB), a bank owned by the member states of the European Union, to take money from the European Financial Stability Facility (EFSF) and capitalize a special purpose vehicle (SPV) that it will create.

The SPV will then issue bonds to investors and use the proceeds to purchase sovereign debt of distressed European states, which will hopefully alleviate the pressure on the distressed states (PIIGS) and the European banks that already own their sovereign debt.

If alarm bells aren't already going off they will be in just moment as you get the gist of the rest of this disastrous plan.

The special purpose vehicle could then be used as collateral for borrowing from the European Central Bank (ECB), allowing the central bank to make loans to banks faced with liquidity shortages. Let me be clear on this. The European banks which are already undercapitalized and on the brink of failure will buy bonds issued by the SPV that is full of bonds issued by broke countries. The banks will then used these bonds as collateral to borrow money from the ECB. The ECB winds up with loans to broke banks and holding bonds backed by debt issued by broke countries as collateral. This is worse than circular logic, its circular borrowing akin to the Credit Default Swap (CDS) markets that helped sink Bear Stearns and Lehman Brothers, just with a European flair.

Are you getting the picture yet? It get's better. Let's throw in some leverage.

The EFSF fund has already committed to providing emergency loans to Ireland, Portugal and Greece – the worst bets on the table. It is expected to provide over 100 million euros ($134.9 million) in additional funding for a Greek bailout. According to some estimates after those loans, the fund will be down to about 295 billion euros ($400 billion), So we assume they take roughly $200 billion or so from the European Financial Stability Facility to fund the special purpose vehicle.

$200 billion is not NEARLY enough to solve the problems that Europe faces so the SPV will likely, as suggested by Tim Geithner, be levered up to 9x its capital giving the this vehicle about $1.8 Trillion to work with. The SPV, as stated will take the PIIGS debt in and the banks will get EIB paper which they can then use as collateral to get liquidity from the ECB. Doesn’t this sound a lot like the “good bank/bad bank” solution that Lehman tried to sell?

Yes, the EIB paper is of stronger credit – barely - than the PIIGS paper but you are still left with the fact that broke countries are taking in debt from countries that cannot pay their debts, issuing a SPV to sell to other broke banks so that they can use it as collateral to borrow money after it has been leveraged 9x. 9x times a problem doesn’t make the problem smaller does it? What could possibly go wrong?

There is no doubt that the banks and the financial markets want a solution but the reality of the situation is that this is not really a solution to the problem -- which is the fact that the PIIGS are broke and they need an orderly default process to clear the excesses from the system. However, this leveraged solution will inevitably "kick the can" and shift a massive level of toxic debt to France and Germany which are not in a tremendously strong position to handle it.

The other problem is whether or not the German government can actually get this solution passed. This out of Germany this morning "Andreas Vosskuhle, head of the constitutional court, said politicians do not have the legal authority to sign away the birthright of the German people without their explicit consent. He stated that 'The sovereignty of the German state is inviolate and anchored in perpetuity by basic law. It may not be abandoned by the legislature (even with its powers to amend the constitution),' There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit – which might be politically legitimate and desirable – then Germany must give itself a new constitution. A referendum would be necessary. This cannot be done without the people, he told newspaper Frankfurter Allgemeine."

Therefore, if the expansion of the EFSF, including the SPV, isn't legal from a German perspective without a formal vote of the people, then this deal is most likely dead before it starts. If that is the case then the markets are in for a lot of trouble and most likely soon. Again, this sounds a LOT like what the UK government said to Barclay’s when they wanted to buy Lehmann. Is this sounding more and more familiar? Are you getting as worried as I am?

However, if Europe is going all in with leveraged bets that will water down the credit quality of both France and Germany -- which leaves no strong credits in the Eurozone --then there will be further complications down the road as borrowing costs for Germany and France push higher dropping the Eurozone into a deeper recession.

Of course, SPV's have a dubious and disastrous history to start with and it is highly likely that this whole process will end badly. The reality is that PIIGS need an orderly mechanism to default, figure out what banks to save and which ones can be let go and start the process of clearing the years of bad debt and excesses from the system. The only question is not whether this "clearing process" will occur it is only a function of when and under what terms.

VIDEO: Nigel Farage Lambasts Barroso Over Call For “More Of The Same” In Europe Crisis

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Tuesday, September 27, 2011

Bankers Throwing Monetary Caution To The Wind

The International Forecaster
by Bob Chapman
Sept 26, 2011

The question plays out on three fronts. England quietly is immersed in its own financial problems, churning out their version of quantitative easing, as the US FOMC meeting rises in the distance for two days this time.

Will we get the twist? Of course we will. If we do not the bottom will fall out. That will signify the issuance of more funds plus what is needed to purchase some 80% of Treasury securities, or about another $850 billion. It is no secret that the Fed, Bank of England, Bank of Japan and the Swiss national Banks are going to provide dollars to European banks that are the victims of American lenders who have pulled their funds out of Europe for fear of losing their investments. They are phasing out an orderly fashion. The commitments of these central banks are doing three things putting their citizens at more financial risk; driving inflation higher; aiding in the increase in gold prices and following a path they already know is doomed to failure. The players did not want a replay of the Lehman Affair of just three years ago, or the ongoing immediate consequences. Everyone wanted to look like they were in motion, that they were doing something about the problem. The underlying problem is that banks in Europe cannot issue much more debt or they will look like bigger fools than they already are. Due to the banks poor choices in the past these banks are on the edge of failure and were Greece to default they'd get closer to the edge. If all insolvent nations were to default these banks would all go under. Thus, we see another bank bailout engineered by the Fed and other central banks. As this new crisis unfolds the European and world economies are slowing down, which will compound problems.

Under the best of circumstances the European banks and sovereigns will lose half of their investments in Greek bonds and loans. We stated two years ago the 100% default is the only answer for Greece and the other five problem countries. The losses would then be $4 to $6 trillion. Not only are many European banks already insolvent, but also the future portends a bank wipeout. The banks did everything wrong expecting as always a taxpayer bailout. In addition in this process these banks assumed leverage of about 30% in an attempt to raise profits. If these banks do not go under they will be nationalized and again the public will be allowed to assume again the banker's losses. This crisis already in motion is going to be worse than the one experienced three years ago and its mutating into an ongoing crisis, because no one is willing to purge the system. In the wings we see the ECB, which already has made an illegal foray into the bond market to purchase Italian and Spanish bonds. The big question there is who is going to pay for their purchases? We will find that out on September 29th when the German Bundestag votes on German participation. If they say no the European financial world will go upside down. If they vote yes we could see anarchy in Germany. As we have cited often European countries are a collection of different tribes that do not like to be forced into anything. At this juncture we are told by our sources that the funding bill will be passed. If not passed, we could see military action between Greece, Israel and Turkey, as a deliberate diversion to force European countries to fund Greece and other bailouts. When in doubt have another war.

The US Treasury Secretary Mr. Geithner managed to make a fool of himself in Poland, but did find support among other elitists regarding the regulation and full implementation of banking federalization. This supposedly is needed to mitigate the crisis and prevent future confusion, when in fact it is a move to remove the sovereignty of member states. The Fed, that endless source of swaps, money and credit, would supply recapitalization. Trillions of dollars can easily be conjured up for just about anything and especially to further a European Federal Reserve. The upshot of this move would be to give the ECB or another authority the ability to create money and credit at will, which is totally apposed by the Germans. In total they do not want anyone telling them what to do especially after the mess in part created by the ECB. This is a war the internationalists cannot win, but they will try anyway.

These attempts at centralization and federalization are not what the Germans want. They want something similar to the Bundesbank and they want direct control via representation. What has transpired is another bailout for Europe via the Fed, BoJ, BoE and the SNB. That certainly spells much more inflation as a consequence of this policy, which is something Germany is dead set against. The newest swap facility is for 45 days, so that the ECB would convince US and other money market funds and other large investors to repurchase the banks', notes and bills of EU banks and government, of course with the aid and pressure of the Fed and the US Treasury. There were strong reasons for American lenders to pull out of euro zone short-term paper markets. It is called risk-reward. Higher yields are desperately needed by money managers, but not at the risk of losing capital. Just look at the correction in the US commercial paper market, nine-weeks of rising yields and plunging participation. In fact, such policies are really a QE 3 in motion although concentrated on Europe. The absence of such backdoor financing had to make players realize that funds were needed quickly, because without them there would have been another European banking crisis that would have spread into the UK and US markets. The European economies are slowing down and in the absence of such a move the downside would have accelerated into a large recession or depression. The only way the Fed can operate such a swap would be with freshly minted money, because if they buy dollars in the Forex market they would drive the dollar higher and the euro lower and they do not want that to happen. The Fed is well aware that some European banks and sovereigns are insolvent, as is the US system and by using such policies they keep the whole structure functioning and buying valuable time. Default is on the way and all the players know that. They want to be sure it is an orderly default. The same is true of currencies. They want a big meeting where all currencies are revalued and devalued simultaneously and where multilateral defaults go smoothly. From a liquidity viewpoint European banks have bought 45 days to November 5th. We do not think that is enough time and that the swaps, QE 3, will be extended through the end of the year.

While this goes on the twist will take place in the US that is holding short-term rates static and deliberately lowering long-term rates by manipulating the markets. We are afraid that will cause upward pressure on short-term rates. The resultant lower rates are to encourage economic activity, investment, and revival in the real estate market. On the short end it is not going to happen. Rates will rise and bank leverage will be neutralized. All those months of riskless profits will end at least temporarily. Lower mortgage rates are fine, but suppressing long-term yields is a mistake. These moves are inflationary and we now see that an official CPI of plus 3.8%. Real inflation is 11.4%. They are the highest in two years and we predicted more than a year ago real inflation will match that of three years ago of 14%. We find it astounding that people are dumb enough to buy a 10-year note yielding 1.83% in an 11.4% inflationary environment and deliberately lose 9.4%. In 10-years almost all your purchasing power is gone. It is a small wonder that people are resorting to gold and silver coins, bullion and shares.

The bond market continues to reach ridiculous levels as the twist gets underway. During that process the dollar has rallied and the US 10-year note has begun trading at 1.83% yield. It is obvious that the Fed wants the 10 somewhere near 1%. That would put the 30-year fixed rate mortgage at 3% and perhaps lower. This move should boost official inflation from 3.8% to 5.5%, along with other factors to 5.5%. Unofficially that would put real inflation at 14%.

The higher bond levels have the Chinese all excited and they want to liquidate US Treasuries, but not dollars. That presents quite a problem for the Fed because worse yet they want to use those dollars to gobble up American assets, and securities. This demand has come at a most unfortunate juncture.

There is definitely fear among bankers and central bankers who have no choice but to throw monetary caution to the wind. Leading the pack believe it or not is the Swiss National Bank, that great recent devaluer of currency. Have they ever opened a can of worms? We wonder whether the Japanese will get the go ahead from the Fed, as a reward for supplying dollars to Europe, to further devalue its yen? We will just have to wait and see. Will 45 days be enough for Europe? Of course not, and neither will 90 days suffice. The slide of the European banking system won't happen overnight. It will still take a year or two. The elitists will do everything possible to extend the process. You also have to take note regarding how fast the swap line was set up. Intervention is the name of the game, and everyone in the UK, US and Europe are in on it. All the professionals have to know this is not going to work, but no one is saying anything. A conspiracy of silence. No one wants to say it but fascist Keynesianism is a failure. This is the foundation for future economic life for the New World Order and it is falling apart at the seams. You might say it is the end product of centuries of fraud, deceit and the looting of each successive civilization. The personification of what has been and is the evil within society. The monstrosity the Illuminists have created is in the process of collapsing and rightly so.

Irrespective of how dollars are created they still make up about 60% of world Forex reserves and oil producers are forced to accept the dollar for oil in exchange for protection from the US and Britain. The dollars only challenge in a sea of fiat currencies is gold, which we believe has become again the world's only real currency. What we see in Europe reminds us that the euro is a failed experiment. Trillions more dollars have been and will be created to keep the current system functioning and each time more dollars are created it strengthens the case for gold. Under current circumstances the dollar is not going to crash, although it will eventually. It still is the only viable paper world reserve currency, even though foreign central bank holdings have fallen from 72% to 60% in recent years. The closest competitor, the euro, can't come close to challenging the dollar, only gold can.

In Europe September 29th is a big day. On that day the Bundestag will decide whether to approve another Greek bailout. Our sources say they will approve it, although anything could happen. If this crisis passes over the next three months there will be a rush to pass legislation to allow the ECB to issue bonds. Once accomplished that would give the ECB the money and credit creating powers of the Fed and that would allow the ECB to stretch the problem out over a number of years. These moves might solve the current liquidity crisis, but they won't solve the solvency crisis. It is difficulty to tell how long this sort of bailout will go on and how difficult the problems will be. One thing is for sure inflation will rage and many nations will not want to subsidize others indefinitely. This will be especially true in smaller nations. The goal by the ruling EU in Brussels will be to totally control the entire 27 nations involved. Can this be accomplished? We do not know, but we do know it will be very difficult to accomplish.

While Mrs. Merkel, German Chancellor, sees nothing suggesting a recession in Germany, the government is maneuvering behind the backs of its citizens to give unlimited power to the EFSF, the European Financial Stability Facility, which is not a legitimate entity, to support the hopelessly bankrupt euro system at the expense of German taxpayers and the common good. This facility will strip Germany and all other participants of their sovereignty in its process of handling one facet of euro zone finance. The $500 billion in Swaps and the eventual bond issuance will guarantee much higher inflation. Europe's present problems are going to make the 2008 Lehman episode look like a walk in the park. The pooling of the debt burden and a further easing of monetary policy threatens to weaken the institutional framework of the EU.

German finance minister Wolfgang Schäuble, who resides in the back pocket of the bankers has proposed a doubling of funds to be made available to the bankrupt sovereigns of just over $1 trillion. On September 29th the banker's idea is to have the Bundestag the EFSF carte blanche to carry out measures to save the euro, the insolvent countries and banks. If that were passed, all control passes to the EFSF and the ECB. We believe that most Germans and selective others are finally realizing that Brussels is the enemy.

The passage of legislation by Germany, which in part has already been passed by the Bundesrat (Senate) would leave Germany with no more say on the use or increase in funding just to save the euro, Greece and the other five countries, which is an impossible task at a cost of $4 to $6 trillion. What the Bundestag does on 9/29/11 will dictate the future of Germany as an industrial and social nation far into the futures. Will it be enslavement to the EFSF or freedom to run its own affairs? This amounts to a coup d'état. Coming on the heels of abject failure to solve the economic problems of the insolvent six countries.

What is happening in Europe, and particularly in Germany, is beyond belief - a plan to prop up the hopelessly bankrupt financial states through deregulation of the financial sector. If legislation allows all this to happen you could have revolution in Germany and other countries. It is a frightful situation.

VIDEO: Inside Trader Sounds The Alarm! Says Eurozone Will Crash, Markets Are Toast. Within A Year The Savings Of Millions Will Vanish!!!!

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Monday, September 26, 2011

The Money Masters: Behind the Global Debt Crisis

Adrian Salbuchi
Global Research
Sept 26, 2011

In the US, we see untold millions suffering from the impact of mass foreclosures and unemployment; in Greece, Spain, Portugal, Ireland, and Italy, stringent austerity measures are imposed upon the whole population; all coupled with major banking collapses in Iceland, the UK and the US, and indecent bail-outs of “too-big-to-fail” bankers (Newspeak for too powerful to fail).

No doubt, the bulk of the responsibility for these debacles falls squarely on the shoulders of caretaker governments in these countries that are subordinated to Money Power interests and objectives. In country after country, that comes together with embedded corruption, particularly evident today in the UK, Italy and the US.

As we assess some of the key components of today’s Global Financial, Currency and Banking Model in this article, readers will hopefully get a better understanding as to why we are all in such a crisis, and that it will tend to get much worse in the months and years to come.

Foundations of a Failed and False Model

Hiding behind the mask of false “laws” allegedly governing “globalised markets and economies,” this Financial Model has allowed a small group of people to amass and wield huge and overwhelming power over markets, corporations, industries, governments and the global media. The irresponsible and criminal consequences of their actions are now clear for all to see.

The “Model” we will briefly describe, falls within the framework of a much vaster Global Power System that is grossly unjust and was conceived and designed from the lofty heights of private geopolitical and geo-economic1 planning centres that function to promote the Global Power Elite’s agenda as they prepare their “New World Order” – again, Newspeak for a Coming World Government.2

Specifically, we are talking about key think tanks like the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, and other similar entities such as the Cato Institute (Monetary Issues), American Enterprise Institute and the Project for a New American Century that conform an intricate, solid, tight and very powerful network, engineering and managing New World Order interests, goals and objectives.

Writing from the stance of an Argentine citizen, I admit we have some “advantages” over the citizens of industrialised countries as the US, UK, European Union, Japan or Australia, in that over the last few decades we have had direct experience of successive catastrophic national crises emanating from inflation, hyper-inflation, systemic banking collapse, currency revamps, sovereign debt bond mega-swaps, military coups and lost wars…

Finance vs the Economy

The Financial system (i.e., a basically unreal Virtual, symbolic and parasitic world), increasingly functions in a direction that is contrary to the interest of the Real Economy (i.e., the Real and concrete world of work, production, manufacturing, creativity, toil, effort and sacrifice done by real people). Over the past decades, Finance and the Economy have gone their totally separate and antagonistic ways, and no longer function in a healthy and balanced relationship that prioritises the Common Good of We the People. This huge conflict between the two can be seen, amongst other places, in today’s Financial and Economic System, whose main support lies in the Debt Paradigm, i.e., that nothing can be done unless you first have credit, financing and loans to do it. Thus, the Real Economy becomes dependent on and distorted by the objectives, interests and fluctuations of Virtual Finance.3

Debt-Based System

The Real Economy should be financed with genuine funds; however with time, the Global Banking Elite succeeded in getting one Sovereign Nation-State after another to give up its inalienable function of supplying the correct quantity of National Currency as the primary financial instrument to finance the Real Economy. That requires decided action through Policies centred on promoting the Common Good of We The People in each country, and securing the National Interest against the perils posed by internal and external adversaries.

Thus, we can better understand why the financial “law” that requires central banks to always be totally “independent” of Government and the State has become a veritable dogma. This is just another way of ensuring that central banking should always be fully subordinated to the interests of the private banking over-world – both locally in each country, as well as globally.

We find this to prevail in all countries: Argentina, Brazil, Japan, Mexico, the European Union and in just about every other country that adopts so-called “Western” financial practice. Perhaps the best (or rather, the worst) example of this is the United States where the Federal Reserve System is a privately controlled institution outright, with around 97% of its shares being owned by the member banks themselves (admittedly, it does have a very special stock scheme), even though the bankers running “Fed” do everything they can to make it appear as if it is a “public” entity operated by Government, something that it is definitely not.

One of the Global Banking Over-world’s permanent goals is – and has been – to maintain full control over all central banks in just about every country, in order to be able to control their public currencies.4This, in turn, allows them to impose a fundamental (for them) condition whereby there is never the right quantity of public currency to satisfy the true demand and needs of the Real Economy. That is when those very same private banks that control central banking come on scene to “satisfy the demand for money” of the Real Economy by artificially generating private bank money out of nothing. They call it “credits and loans” and offer to supply it to the Real Economy, but with an “added value” (for them): (a) they will charge interest for them (often at usury levels) and, (b) they will create most of that private bank money out of thin air through the fractional lending system.

At a Geo-economic level, this has also served to generate huge and unnecessary public sovereign debts in country after country all over the world. Argentina is a good example, whose Caretaker Governments are systematically ignorant and unwilling to use one of the sovereign state’s key powers: the issuance ofhigh power non-interest generating Public Money (see below for a more detailed definition). Instead, Argentina has allowed IMF (International Monetary Fund) so-called “recipes” that reflect the global banking cartel’s own interests to be imposed upon it in fundamental matters like what are the proper functions of its Central Bank, sovereign debt, fiscal policy, and other monetary, banking and financial mechanisms, that are thus systematically used against the Common Good of the Argentine People andagainst the National Interest of the country.

This system and its dreadful results, now and in the past, are so similar in so many other countries – Brazil, Mexico, Greece, Ireland, Iceland, UK, Portugal, Spain, Italy, Indonesia, Hungary, Russia, Ukraine… that it can only reflect a well thought-out and engineered plan, emanating from the highest planning echelons of the Global Power Elite.

Fractional Bank Lending

This banking concept is in use throughout the world’s financial markets, and allows private banks to generate “virtual” Money out of thin air (i.e., scriptural annotations and electronic entries into current and savings accounts, and a vast array of lines of credit), in a ratio that is 8, 10, 30, 50 times or more largerthan the actual amount of cash (i.e., public money) held by the bank in its vaults. In exchange for lending this private “money” created out of nothing, bankers collect interest, demand collateral with intrinsic value and if the debtor defaults they can then foreclose on their property or other assets.

The ratio that exists between the amount of Dollars or Pesos in its vaults and the amount of credit private banks generate is determined by the central banking authority which fixes the fractional lending leverage level (which is why controlling the central bank is so vital strategically for private banker cartels). This leverage level is a statistical reserve based on actuarial calculations of the portion of account holders who in normal time go to their banks or ATM machines to withdraw their money in cash (i.e., in public money notes). The key factor here is that this works fine in “normal” times, however “normal” is basically a collective psychology concept intimately linked to what those account holders, and the population at large, perceive regarding the financial system in general and each bank in particular.

So, when for whatever reason, “abnormal” times hit – i.e., every time there are (subtly predictable) periodic crises, bank runs, collapses and panics, which seem to suddenly explode as happened in Argentina in 2001 and as is now happening in the US, UK, Ireland, Greece, Iceland, Portugal, Spain, Italy and a growing number of countries – we see all bank account holders running to their banks to try to get their money out in cash. That’s when they discover that there is not enough cash in their banks to pay, save for a small fraction of account holders (usually insiders “in the know” or “friends of the bankers”).

For the rest of us mortals “there is no more money left,” which means that they must resort to whatever public insurance scheme may or may not be in place (e.g., in the US, the state-owned Federal Deposit Insurance Corporation that “insures” up to US$250,000 per account holder with taxpayer money). In countries like Argentina, however, there is no other option but to go out on the streets banging pots and pans against those ominous, solid and firmly closed bronze bank gates and doors. All thanks to the fraudulent fractional bank lending system.

Investment Banking

In the US, so called “Commercial Banks” are those that have large portfolios of checking, savings and fixed deposit accounts for people and companies (e.g., such main street names as CitiBank, Bank of America, JPMorganChase, etc.; in Argentina, we have Standard Bank, BBVA, Galicia, HSBC and others). Commercial Banks operate with fractional lending leverage levels that allow them to lend out “virtual” dollars or pesos for amounts equal to 6, 8 or 10 times the cash actually held in their vaults; these banks are usually more closely supervised by the local monetary authorities of the country.

A different story, however, we had in the US (and still have elsewhere) with so-called global “Investment Banks” (those that make the mega-loans to corporations, major clients and sovereign states), over which there is much less control, so that their leveraging fractional lending ratios are far, far higher. This greater flexibility is what allowed investment banks in the US to “make loans” by, for example, creating out of thin air 26 “virtual” Dollars for every real Dollar in cash they held in their vaults (i.e., Goldman Sachs), or 30 virtual Dollars (Morgan Stanley), or more than 60 virtual Dollars (Merrill Lynch until just before it folded on 15 Sept 2008), or more than 100 virtual Dollars in the cases of collapsed banks Bear Stearns and Lehman Brothers.5

Private Money vs Public Money

At this point in our review, it is essential to very clearly distinguish between two types of Money or Currency:

Private Money – This is “Virtual” Money created out of thin air by the private banking system. It generates interests on loans, which increases the amount of Private money in (electronic) circulation, and spreads and expands throughout the entire economy. We then perceive this as “inflation.” In actual fact, the main cause of inflation in the economy is structural to the interest-bearing fractional lending banking system,even among industrialised countries. The cause of inflation nowadays is not so much the excessive issuance of Public Money by Government as all so-called banking experts would have us believe but, rather, the combined effect of fractional lending and interest on private banking money.

Public Money – This is the only Real Money there is. It is the actual notes issued by the national currency entity holding a monopoly (i.e., the central bank or some such government agency) and, as Public Money, it does not generate interest, and should not be created by anyone other than the State. Anybody else doing this is a counterfeiter and should end up in jail because counterfeiting Public Money is equivalent to robbing the Real Economy (i.e., “we, the working people”) of their work, toil and production capabilities without contributing anything in return in terms of socially productive work. The same should apply to private bankers under the present fractional lending system: counterfeiting money (i.e., creating it out of thin air as a ledger entry or electronic blip on a computer screen) is equivalent to robbing the Real Economy of its work and production capacity without contributing any counter-value in terms of work.

Why We Have Financial Crises

A fundamental concept that lies at the very heart of the present Financial Model can be found in the wayhuge parasitic profits on the one hand, and catastrophic systemic losses on the other, are effectively transferred to specific sectors of the economy, throughout the entire system, beyond borders and public control.

As with all models, the one we suffer today has its own internal logic which, once properly understood, makes that model predictable. The people who designed it know full well that it is governed by grand cycles having specific expansion and contraction stages, and specific timelines. Thus, they can ensure that in bull market times of growth and gigantic profits (i.e., whilst the system, grows and grows, is relatively stable and generates tons of money out of nothing), all profits are privatised making them flow towards specific institutions, economic sectors, shareholders, speculators, CEO and top management & trader bonuses, “investors”, etc who operate the gears and maintain the whole system properly tuned and working.

However, they also know that – like all roller coaster rides – when you reach the very top, the system turns into a bear market that destabilises, spins out of control, contracts and irremediably collapses, as happened to Argentina in 2001 and to the better part of the world since 2008, then all losses are socialised by making Governments absorb them through the most varied transference mechanisms that dump these huge losses onto the population at large (whether in the form of generalised inflation, catastrophic hyperinflation, banking collapses, bail-outs, tax hikes, debt defaults, forced nationalisations, extreme austerity measures, etc).

The Four-sided Global “Ponzi” Pyramid Scheme

As we know, all good pyramids have four sides, and since the Global Financial System is based on a “Ponzi” Pyramid Scheme, there’s no reason why this particular pyramid should not have four sides as well.

Below is a summary of the Four-side Global “Ponzi” Pyramid Scheme that lies at the core of today’s Financial Model, indicating how these four “sides” function in a coordinated, consistent, and sequential manner.

Side One – Create Public Money Insufficiency. This is achieved, as we explained above, by controlling the National Public entity that issues public money. Its goal is to demonetise the Real Economy so that the latter is forced to seek “alternative funding” for its needs (i.e., so that it has no choice but to resort to private bank loans).

Side Two – Impose Private Banking Fractional Lending Loans. This, as we said, is virtual private money created out of thin air on which bankers charge interest – often at usury levels – thus generating enormous profit for “investors,” creditors and all sorts of entities and individuals who operate as parasites living off other people’s work. This would never have been the case if each local central bank were to flexibly generate the correct quantity of Public Money necessary to satisfy the needs of the Real Economy in each country and region.

Side Three – Promote a Debt-Based Economic System. In fact, the whole Pyramid Model is based on being able to promote this generalised paradigm that falsely states that what really “moves” the private and public economy is not so much work, creativity, toil and effort of workers, but rather “private investors,” “bank loans” and “credit” – i.e., indebtedness. With time, this paradigm has replaced the infinitely wiser, sounder, more balanced and solid concept of corporate profit being reinvested and genuine personal savings being the foundation for future prosperity and security. Pretty much the way Henry Ford, Sr. originally grew his most successful company.

Today, however, Debt reigns supreme and this paradigm has become entrenched and embedded into people’s minds thanks to the mainstream media and specialised journals and publications, combined with Ivy League universities’ Economics Departments that have all succeeded in imposing such “politically correct” thinking with respect to financial matters, especially those relating to the proper nature and function of Public Money.

The facts are that this Model generates unnecessary loans so that banking creditors can receive huge profits, which includes promoting uncontrolled, unwarranted and often pathological consumerism, which goes hand in hand with the increasing abandonment of the traditional value of “saving for a rainy day.”

Such debts having political and strategic goals rather than merely financial ones, are usually given a thin layer of “legality” so that they may be imposed by the creditor on the debtor (i.e., in the case of The Merchant of Venice, the bond entered into between Antonio and Shylock giving the latter the legal right to a pound of the former’s flesh; in the case of chronically indebted countries like Argentina, such “legality” is achieved through a complex public debt laundering6 mechanism carried out by successive formally “democratic” Caretaker Governments to this very day).

Side Four – Privatisation of Profits/Socialisation of Losses. Lastly, and knowing full well that, in the long run, the numbers of the entire Cycle of this Model never add up, and that the whole system will inevitably come crashing down, the Model imposes a highly complex and often subtle financial, legal and media engineering that allows privatising profits and socialising losses. In Argentina, this cycle has become increasingly visible for those who want to see it, because in our country the local “Ponzi” Pyramid Cycle lasts on average 15 to 17 years, i.e., we’ve had successive collapses involving brutal devaluation (1975), hyperinflation (1989) and systemic banking collapse (2001), however in the industrialised world, that cycle was made to last almost 80 years (i.e., three generations spanning from 1929 to 2008).


The fundamental cause of today’s on-going global financial collapse that exerts massive distortions over the Real Economy – and the ensuing social hardship, suffering and violence – is clear: Virtual Finance has usurped a pedestal of supremacy over the Real Economy, which does not legitimately belong to it. Finance must always be subordinated to, and in the service of, the Real Economy just as the Economy must heed the law and social needs of the Political Model executed by a Sovereign Nation-State (as we back-engineer this entire system, we thus understand why it is necessary for the Global Power Elite to first erode the sovereign Nation-State and to eventually do away with it altogether, in order to achieve its monetary, financial and political ends).

In fact, if we look at matters in their proper perspective, we will see that most national economies are pretty much intact, in spite of having been badly bruised by the financial collapse. It is Finance that is in the midst of a massive global collapse, as this Model of “Ponzi” Finance has grown into a sort of malignant “cancerous tumour” that has now “metastasised,” threatening to kill the whole economy and social body politic, in just about every country in the world, and certainly in the industrialised countries.

The above comparison of today’s financial system with a malignant tumour is more than a mere metaphor. If we look at the figures, we will immediately be able to see signs of this financial “metastasis.” For example, The New York Times in their 22 September 2008 edition explains that the main trigger of the financial collapse that had exploded just one week earlier on 15 September was, as we all know, mismanagement and lack of supervision over the “Derivatives” market. The Times then went on to explain that twenty years earlier, in 1988, there was no derivatives market; by 2002 however, Derivatives had grown into a global 102 trillion Dollar market (that’s 50% more than the Gross Domestic Product of all the countries in the world, the US, EU, Japan and BRICS nations included), and by September 2008, Derivatives had ballooned into a global 531 trillion Dollar market. That’s eight times the GDP of the entire planet! “Financial Metastasis” at its very worst. Since then, some have estimated this Derivatives global market figure to be in the region of One-Quadrillion Dollars…

Naturally, when that collapse began, the caretaker governments in the US, European Union and elsewhere, immediately sprang into action and implemented “Operation Bail-out” of all the mega-banks, insurance companies, stock exchanges and speculation markets, and their respective operators, controllers and “friends.” Thus, trillions upon trillions of Dollars, Euros and Pounds were given to Goldman Sachs, Citicorp, Morgan Stanley, AIG, HSBC and other “too big to fail” financial institutions… which is newspeak for “too powerful to fail”, because they hold politicians, political parties and governments in their steel grip.

All of this was paid with taxpayer dollars or, even worse, with uncontrolled and irresponsible issuance of Public Money bank notes and treasury bonds, especially by the Federal Reserve Bank which has, in practice, technically hyper-inflated the US Dollar: “Quantitative Easing” they call it, which is Newspeak forhyperinflation.

So far, however, like the proverbial Naked Emperor, nobody dares to state this openly. At least not until some “uncontrolled” event triggers or unmasks what should by now be obvious to all: Emperor Dollar is totally and completely naked.7 When that happens, we will then see bloody social and civil wars throughout the world and not just in Greece and Argentina.

By then, however, and as always happens, the powerful bankster clique and their well-paid financial and media operators, will be watching the whole hellish spectacle perched in the safety and comfort of their plush boardrooms atop the skyscrapers of New York, London, Frankfurt, Buenos Aires and Sao Paulo…


1. The concept of “Geoeconomics” was coined by the New York-based Council on Foreign Relations, through a studies group honouring Maurice Greenberg, the financier who was for decades CEO of American International Group (AIG) which collapsed in 2008 and had strong conflict-of-interest ties with major insurance and reinsurance broker Marsh Group whose CEO was his son Jeffrey. Both father and son were indicted for fraud by then New York Attorney General Elliot Spitzer. Spitzer would later pay a very heavy price for this after becoming Governor of New York State when someone “discovered” his sex escapades which were quickly blown up into a major scandal by The New York Times…

2. We have described the basic Global Power Elite structure, model and objectives in our e-Book The Coming World Government: Tragedy & Hope?, available through

3. For more information, see the Third Pillar of the Second Republic Project “Reject the Debt-Based Economy” on

4. Some notable exceptions: Today: Libya, Iran, Syria, China; In the past: Peron’s Argentina, Germany and Italy in the 30’s and 40’s…. Are we seeing a pattern here?

5. See The New York Times, 22 September 2008

6. See White Paper comparing Debt Laundering mechanisms to Money Laundering mechanisms, lodged under Pillar No 3 “Reject the Debt-Based Economy” of Second Republic Project

7. This is more fully described in the author’s book The Coming World Government: Tragedy & Hope?, in the chapter “Death & Resurrection of the US Dollar”. Details on Also available upon request by E-mail: