August 31, 2012
August 31, 2012
Brilliant analogy 😉 by Mark McHugh of Across The Street,
My Doctor’s an idiot. A few years ago, he started expressing concerns about my weight, pointing at this chart supposedly showing how much a man of my height should weigh. One glance at his stupid chart and it was clear to me that he had completely misdiagnosed my condition. There was nothing wrong with my weight, I just wasn’t tall enough. Clearly I needed to grow my way out of this. So I went home and googled “how to stimulate growth.” Once I got past the all the baldness cures and penis pumps (it’s not my bag, baby), I found hundreds of papers so incredibly boring I knew they had to be true. In no time, I was able to design and implement my own stimulus plan based on the irrefutable scientificky principles of Nobel prize winners and other people so smart they never had to do an honest day’s work in their lives. Despite the difficulty climbing stairs, I was feeling pretty good about things until my last check-up….
“Hi,” he said, examining my file. He looked up, “You’ve put on twenty pounds since the last time I saw you”
“Thanks for noticing,” I beamed.
He frowned. “I remember now. You’re the guy on the diet designed to make you grow. What’s that called again?”
“The Keynesian Plan.”
“Is that the one where you eat bacon and cheese, but not vegetables?”
“No,” I replied, “But I have incorporated some elements of that plan” (I don’t like vegetables).
“And how’s this whole Keynesian thing working out?” he asked.
“I’ll admit I’m a little disappointed. I’ve only grown and inch and a half so far, but..”
“No you haven’t,” he interrupted, pointing, “You’ve just got those stupid elevator wedges in your shoes to make you look taller.”
“They’re to get me acclimated to being taller.”
“Which you’re not,” he declared. “I told you, you’re fully grown. The only thing you’ve succeeded in doing is collapsing you arches and giving yourself Type 2 Diabetes.”
“We Keynesians call things like that “unintended consequences” (I used finger-quotes to let him know it was a technical term). And trust me, Doc, I’m no happier about them than you. Can I see that height-weight chart of yours again?”
He handed me the chart. After a moment, I sighed, “Looks like I’ll have to do more QE.”
“Quantitative eating. It’s how you stimulate growth, Doc. It’s technical.”
“Oh,” he said. “Because it sounds an awful lot like what we in the medical profession call “stuffing your fat face” (giving me finger-quotes, but in a condescending, not-at-all-helpful kind of way).”
I tried to stay calm and empathize. “Doc, it’s not your fault you haven’t been educated about Keynesian principles. They only teach it at top-notch schools like M.I.T. and Harvard. I don’t know about you, Doc, but I feel better knowing that no matter what happens on election day, the White House will be occupied by someone who attended Harvard.”
“As did the Unabomber,” he added.
“Still better than the bumblefuck medical school you went to!” I snapped.
“Johns Hopkins?” he queried, thrusting his eyebrows up.
“John Hopkins.” I corrected (Friggin’ Idiot!)
“Tell me, how are you paying for all this stimulus?”
“Food Stamps…and my ex-wife’s credit card.” (I just knew he wasn’t going to understand this part…)
He looked at me with a curious mixture of confusion and utter disgust. “What….Does she even know?”
“I’m no Dr. Bernanke, but I know one of the most important aspects of Keynesian stimulus is sticking someone else with the bill. It works out better for everyone if the victim, er , stimulus provider is unaware. She’ll be OK. I’m going to make it all up to her.”
“Look at your damn chart, Doc!” I bellowed. “I’m going to be taller than Shaq when all this stimulus kicks in! Can you say NBA contract?“
“No,” he said, unimpressed, “just over-sized casket.”
(I could tell he was about to launch into another one of his “austerity” sermons. You know, “Consume less, do more, stop spending other people’s money, blah-blah-blah.” Pinhead. Obviously Dr. Quackenstein was beyond all hope.)
“No offense Doc, but I need help from people with a better understanding of these things. Any chance you can refer me to the Mayo clinic?”
“Is that where the treat illness with mayonnaise?”
“Yes,” I said.
“No,” he said, and walked out.
As I sat down to rest in the lobby on the way back to my car, I remembered that the key ingredient to the Keynesian system is confidence and realized that what I was feeling, beside the tingling sensation in my left arm, was nothing more than the sting of rejection felt by true visionaries like Jon Corzine and the Octomom.
So if anyone asks, I’m at the grocery store.
August 30, 2012
Egon von Greyerz has issued a few warnings on this topic and again during an interview with King World News issues another warning to investors that their assets are not safe during the coming collapse. His points below make for common sense reading.
“I’m seeing how massive amounts of money are within the system, and people think they are safe, but they are not.” Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also warned, “This is the illusion that people are living under, and it’s very sad. That’s not going to be the case. The banks are going to close if there is a problem, and people are not going to get access to their assets.”
Here is what Greyerz had to say: “Right now the markets are in a waiting game. They are waiting for Bernanke’s Jackson Hole speech tomorrow. They are (also) waiting for the German court decision which is on the 12th of September. This is to decide if they are going to approve the ESM (European Stability Mechanism), which replaces the EFSF.”
“Now, the EFSF is running out of money, they’ve only got about $200 billion left. Spain and Italy, only, will need about $700 billion. We know for a fact that the eurozone and Southern countries are in desperate need of additional funds.
The US is (also) running a deficit of almost $1.5 trillion a year, plus they are increasing the unfunded liabilities by more than $10 trillion a year….
“So the US is running major deficits and money printing today. Will they announce official QE at Jackson Hole or not? It’s totally irrelevant. It’s going to make no difference whatsoever. The world economy will need massive amounts of money to survive. Whatever these guys say or decide in the next few weeks won’t make any difference. It (money printing) is going to come anyway.
Central banks are massively over leveraged.
These central banks are now leveraged to the hilt. The Bank of England is leveraged 100 times. So if they lose 1% (on their bets), they will lose everything. The Fed is leveraged 55 times. So a 2% loss, they’ve lost their capital. The ECB is leveraged 40 times.
So every central bank is massively exposed. On top of that, governments are borrowing massive amounts of money. So worldwide money is being created on a daily basis.”
100 years of creating debt and it will end in the system collapsing.
“What is interesting here is in the last 100 years we have created so much debt. For the first approximately 50 years of the last century, every additional $1 of debt in the US created $4.60 of (additional) GDP. In the last 10 years, every new dollar of debt has created 6 cents of GDP.
And for the last few years we are getting negative returns. It will still end in the same way, sadly, which is a collapse of the system. All of the assets that were financed by the credit bubble will collapse, in real terms, in the next few years. In real terms, that is against gold, they will collapse.
Note in the chart below from ZeroHedge, how the dollar has lost so much of its purchasing power over the last 100 years since the Fed took charge. In the previous 100 years it remained stable. The dotted line shows the periods when gold convertibility was suspended.
What is so remarkable about this chart is that the dollar’s purchasing power was still the same on the eve of the founding of the Fed as it was at the beginning of the 19th century. Clearly the decision to abandon the gold standard has hastened the collapse of the dollar’s value – at the point where the chart ends, 7 cents of the purchasing power of the gold-backed dollar of yore were left. Since then we have actually arrived at a paltry 4 cents.
So much for ‘stable prices’ under the fiat money regime – it has produced a 96% decline in the currency’s purchasing power over the past century, in contrast with the perfect preservation of purchasing power during the century preceding the founding of the Fed.
Gold may not protect you unless you have possession of it.
But even if you have gold you’ve got to worry about the counterparty risk. I was recently speaking to an American investment bank. They buy gold for their very high net worth clients, and they store it with major bullion banks. I asked (them), ‘Well, what about the counterparty risk?’ They responded, ‘There is no problem whatsoever because the gold is segregated, and creditors are totally protected.’
This is the illusion that people are living under, and it’s very sad. That’s not going to be the case. The banks are going to close if there is a problem, and people are not going to get access to their assets. We have seen the cases of Lehman, MF Global and Sentinel.
Sentinel was a company that went bust. There, like in MF Global, segregated assets were used by the bank, or the financial institution, as security for trading with other major banks. So the segregated funds were not segregated at all. Recently there was a court decision saying that the banks have the right to use the assets, i.e. the stocks or the bonds or whatever other assets (customers) have, as security for their credit lines they are granting to these firms.
What I am saying to investors is protect your counterparty risk. You are not safe within the financial system, even if you are told you are. There is only one way to protect yourself, and that is to store your assets, what we are talking about is mainly gold and silver, outside of the banking system.
You have to have direct control of it. I’m seeing how massive amounts of money are within the system, and people think they are safe, but they are not.”
Source: King World News
August 29, 2012
After an extraordinary expansion of US debt, war is inevitable. Below will outline a few reasons why? Of course the politicians do what they are told as always by the banking elites. What better way to deal with a broken monetary system than introduce chaos.
ZeroHedge have outlined the reasons why the US would welcome a war right now.
The old war against terror propaganda is losing ground to alternative news and opinion now available because of the Internet Reformation. Frankly, few people believe anything from either the American government or its establishment propaganda outlets and this is a frightening situation to the power elite that rules America.
Due to the growing economic crisis, the government needs to take strong actions that could be violently resisted by large segments of the US population unless a major financial or military crisis can be used as an excuse and cover for coming dictatorial actions. Simply stated, there are not enough police and military in the US to control the population should an insurrection take place. A major war in the Middle East can provide a casus belli for a direct assault against US private wealth, liberties, benefit programs and opposition by the power elite.
For example, the imposition of a military draft will dramatically cut unemployment rates as well as limit inner-city crime and outrage over cuts in domestic spending and welfare. Remember, austerity is needed and a draconian cut in Social Security and benefit programs must be engineered against the 50 percent of the population who receive some type of government benefits.
In addition, gold will need to be confiscated. Forced retirement investment into collapsing dollar denominated Treasury obligations must be required when foreign investors stop buying US debt. Stronger TSA authority, drones and harsh domestic controls will need to be implemented for the duration of the conflict in order to squelch domestic opposition. Taxes must be raised, penalties and fines must be doubled and tripled at the federal, state and municipal levels and finally, severe limitations on freedom of speech and freedom of assembly will be forced on the American people, along with gun control and limited access to Internet news and communications.
Finally, a major, long-term war in the Middle East will provide an excuse for the deferment and rescheduling of US debt obligations owed to nations and governments that oppose the US/Israel war in the Middle East. For the $1 trillion owed to China and many Middle East nations, this is effectively debt repudiation.
China too would benefit from the US going to war.
China wants to see the US weakened long-term as a world power and a major war in the Middle East will do this. They also need a reason to dump US Treasury debt and an excuse to avoid the blame of the coming broader repudiation of US debt. The Chinese people will be justifiably outraged that the Chinese government and central bank accumulated $1 trillion in US debt, although there were legitimate global trading reasons and domestic economic justification for this over-concentration in US debt and dollar obligations.
A Middle East war would avoid direct military action between the US and China while protecting both US and Chinese politicians from the coming Treasury debt repudiation, Chinese dump and global run on the dollar and Treasuries.
Who is going to be the ultimate winner?
Who is guaranteed to win regardless of the outcome of the war and whether it can be contained? The Anglo-American financial elites and the bankers always win every conflict regardless of the military outcome. This is the history of the 20th century and I see no reason that will change now.
August 29, 2012
U.S 2008, bear sterns, collapse, crash, financial, institute, major, morgan stanley, rumor, U.S, wall st Comments Off on Wall St Rumor: Major Financial Institution To Crash. Could It Be Morgan Stanley?
Its beginning to sound like 2008, with Bear Sterns and Lehman Brothers all over again. The signs all there, and a report from Beacon Equity Research suggests that Morgan Stanley could be the one to watch.
Recently we had the following reports.
Big money flows out of financial stocks by key financiers like George Soros and John Paulson were reported just last week and tens of billions of dollars have been withdrawn from the European banking system since Spring. The government for its part, has taken steps to lock down the banking system so that not only can customers no longer withdraw funds from money market accounts in the middle of a panic, but a recent federal court case set a new precedent that has essentially given the go ahead for banks and investment firms to use segregated customer deposit accounts to engage in highly risky trading strategies without the threat of ever being prosecuted.
..but Beacon Equity Research which analyises Wall Street chatter has pointed the figure at Morgan Stanley as possibly being on the verge of pulling a Bear Sterns.
Now, a report from analysis firm Beacon Equity Research suggests that there is an unusually high amount of chatter on Wall Street surrounding the possibility of another major financial collapse in the making. When the Department of Homeland Security or other intelligence services hear chatter they often raise the terror alert level, deploy federal SWAT teams and go on complete lock-down.
Thus, we should consider this latest piece of intel from those with their fingers on the pulse of Wall Street as a potential game changer:
Here is a piece from Beacon’s report:
With the stock price of Morgan Stanley (NYSE: MS) inches from its Armageddon lows of Oct. 2008, whispers of the imminent overnight collapse of this U.S. broker-dealer begin to surface. Client funds, again, are at risk.
“I’m hearing rumors that another major financial house is going to implode,” says TruNews host Rick Wiles. In fact, the name I’ve been given is Morgan Stanley . . .
“It’s going to be put on the sacrificial alter by the financial elite.”
Beyond the evidence of a teetering stock price—Morgan Stanley’s troubles may never go away—leading to bankruptcy, if traders can glean anything from the financial activities of front-running insider George Soros, the man who warned in Jun. 2010 that the global financial crisis has entered “act II.”
Adding to the speculation of a Morgan Stanley collapse, Bloomberg coincidentally pens an article on Aug. 23—the following day of the TruNews broadcast—in which the author Bradley Keoun recounts the dark days of Morgan Stanley at the height of act I of the financial crisis in 2008.
“At the peak of Morgan Stanley’s Fed borrowings, on Sept. 29, 2008, the firm reported that liquidity was ‘strong,’ without mentioning how dependent its cash stores had become on the government lifeline. . .” states Keoun.
But here’s where strong advice from Trends Research Institute founder Gerald Celente and former commodities broker Ann Barnhardt should be heeded. Both consumer-friendly analysts implore investors and savers, alike, to withdraw from the financial system, warning that allocated brokerage accounts are not truly allocated.
Regulators were asleep at the switch in the cases of MF Global and PFG Best, both filing bankruptcy post 2008, taking customer funds with them to the financial grave. Why not Morgan Stanley?
“They don’t give you the information to be able to decipher whether they have changed anything,” adds Hurwich.
Why an establishment cheerleader such as Michael Bloomberg would allow an article which serves to remind investors of Morgan Stanley’s financial problems at this time may lend some credence to Rick Wile’s sources, who hear chatter about the impending doom of Morgan Stanley.
The timing of the Bloomberg article is no coincidence. Michael Bloomberg is only doing his part for the global banking cartel by tipping off that Morgan Stanley is ready for the “sacrificial alter.” Get your money out.
The following point is well made. Although rumours can be damaging and irresponsible, you also need to protect yourselves as the people you have charged to do this role have constantly disappointed.
We can make predictions or forecasts based on rumors and news, and often times we’ll be berated for acting to protect ourselves based on this information. Often, even rumors and chatter have been responsible for driving a particular stock or market up or down, so the very news itself, whether true or not, may set the ball in motion.
But, the fact of the matter is that neither the SEC nor Ben Bernanke nor Tim Geithner nor the White House nor mainstream financial pundits nor Wall Street insiders will ever tell us ahead of time that billions of dollars of our wealth is about to be wiped out.
We will only find out after the fact.
You’ve now heard the rumor. You’ve been following the news. The decision is in your hands.
August 26, 2012
This week there was a big move to the upside as many moved to cover their short positions. Interestingly Eric Sprott spoke to KingWorldNews of the Central Banks leasing out their gold to bullion banks. Presumably this has been for the purpose of suppressing gold prices to protect fiat currency. But they big question is when the SHTF, will they be able to get it back?
The central banks have been leasing their gold, as Sprott suggests. But what happens when the central banks realize they are not going to get their gold back? The people they leased it to are the bullion houses. The bullion houses then sold it to somebody who wanted physical gold
The bullion houses, of course, were later going to buy the gold back from another source, and return the gold to the central banks. But what happens when the time comes if there is not enough to go around to return the (gold) to the central banks
This is going to be an explosive move to the upside. I just do not want to be out of the gold market at this time.”
Commodity trade, Dan Norcini seems to think that we may be getting closer to that moment faster that you think as the last weeks trading in the gold market showed a lot of shorts were rushing to cover their positions.
“Both of these markets (gold & silver) broke significantly out of those ranges. They did it on good volume, and they did it, surprisingly, when a lot of people really weren’t expecting them to do it. This caught a lot of people napping with the intensity of the move, and the ferocity with which they broke out.
You had a lot of traders in the speculative community, and by that I mean the hedge funds, had taken out some pretty good size short positions in these markets. These guys have been making bearish bets. They’ve been adding shorts.
Those shorts got hit hard this week, and a lot of them ran for the exits, and the rest is history. A lot of the momentum players are now in these markets. That tells us that we should expect, as we move forward, to see dips in price begin to be bought because I think the (computer) algorithms are now in a ‘buy’ mode.
So these guys (shorts) got caught with their pants down, and that’s reflected in this week’s COT report. Even though the COT only goes through Tuesday, we had some pretty big moves the rest of the week, so I expect we had significantly more short covering taking place this week than what’s on that report.
You had a large amount of short covering in gold take place, and new longs come into that market as well. Their net long position has jumped about 28,000 (contracts) in one week’s time. That’s a big jump.
Norcini expects more speculators to come piling in which will cause further damage to anyone with a short position.
They (speculators) are coming back (into gold) with a vengeance. They are coming back in at very low levels of exposure to the long side of the market. There is a lot of room for these guys to come piling into the market. There is potential for a very strong move upward as these funds begin to rebuild their positions on the long side.
If we clear $1,680, you’ll see some short covering above $1,680. But you’ll see a significant amount of short covering, of a panic type nature, if gold goes through $1,700. In other words if gold gets a ‘handle‘ of 17 in front of it, and gold refuses to break back down, the shorts are in trouble and they know it, and you are going to see them come out of there very quickly.”
Source: King World News
August 26, 2012
The Irish Minster for Finance is talking of releasing the letter the ECB sent to Ireland which threatened to remove all ELA assistance unless Ireland agreed to a bailout. So much for euro nations being sovereign when an unelected official has that power. Its quite clear that the banks run the show.
Finance Minister Michael Noonan has said a secret “threatening” letter from the European Central Bank to his predecessor Brian Lenihan, which forced Ireland into the troika bailout in 2010, should now be released.
The letter has to date remained top secret and both the Department of Finance and the ECB have repeatedly refused to make it public.
Now Mr Noonan has said he favours it being made available, putting him on a potential collision course with the ECB, which is adamant that it remain “strictly confidential”.
The controversial letter from the then ECB president Jean Claude Trichet to Mr Lenihan dated November 19, 2010, is said to have threatened the withdrawal of emergency liquidity assistance (ELA) to Ireland if the then government refused to accept the bailout, that included a ban on burning bondholders.
In the past two weeks, there has been growing pressure from within the Government, the opposition and leading economists to have his department release the contents of the letter.
Ireland should have pulled an Iceland and told the banks to cover their own debts but the Irish Finance Minister of the time gave in to the threats. Instead, no bondholders were allowed to be burned and the Irish taxpayer forced to prop up the euro least foreign owned banks have to take a hit or collapse under their losses.
Speaking exclusively to the Sunday Independent yesterday, Mr Noonan said that he had seen the “very direct” letter which left Mr Lenihan with “little or no option” but to admit defeat and lead Ireland into the €85bn troika programme.
It is now beyond doubt that Mr Lenihan was threatened directly by Mr Trichet, and that Ireland was bounced into the troika programme by unelected officials at the ECB.
In another example of how politicians clearly run the country for vested interests, the letter which confirms what a lot of people suspected was covered up for nearly 4 years by politicians.
Mr Noonan said he had no authority to order the release of the letter, given the decision of the Freedom of Information unit in his department to withhold it.
“The FoI unit is totally separate from the political side of the department, and it was decided that this letter was not releasable.”
But Mr Noonan, who returns to his office on Monday from his holidays, has said that the letter should be made available to whatever banking inquiry is established by the Government in the coming months.
Source: Irish Independent