Keiser Report №17: Markets! Finance! Scandal!
We've been at financial war with China for many, many years. No one talks about the Chinese only letting us go through the kindness of their communist heart. At some point China is going start selling their worthless dollars, which will show just how little they are actually worth.
It's amazing that Goldman Sacks PROFITED from the hiding the Greek debt through derivatives and manipulating market prices. This only shows that derivatives really should be regulated. How exactly I don't know but maybe putting a cap on a derivative at $100 million would be a good idea. If banks move off shore to do this business so be it, would that put enough distance to be safe should the speculation hysteria burst?
I couldn't agree more with Keiser. The sooner and faster, the better. The more we delay the harder it will be. And there are some significant changes needed. Fiat money needs to go which is going to change a lot of things. But this is the only way to actually fix things.
If we don't fix this problem, then the banks will take everything because we all are using their future money which we need to pay back. The system is designed to make people fall off because not enough value has been, or ever could be, created to pay off their debt money with interest.
This is not a system of stable value. More money must be created to support the base of money in existence, with interest. This is an ever growing problem because the value represented by the dollar, the economy, needs to keep pace in order to stabilize the value. For decades they've created a little more money than created in the economy but now the economy has no more steam and cannot continue growing except through the shadow banking economy to which we are not allowed access. There has been extraordinary market distortions since the creation of the Federal Reserve and fiat money. That whole big mess needs to unwind before we get back on a sustainable track. This means a lot of changes which could be a complete mess if not actually planned by the government.
Not only that, but let me remind you that fiat money in the USA is actually unconstitutional.
Debt is everywhere because it is what we use as money! If you have money, it is really possessing other people's debts which they have to get back from you because, ultimately, it must go back to the bank with interest. We are literally slaves to our money system. Wasn't slavery made unconstitutional at some point?
The odd thing is that the money you do have usually lives at the bank. If you read the fine print of a new account document you'll see that it is really a loan to the bank. In exchange you get numbers in an account and the ability to (hopefully) get it back at some point in the future. Alas, they use this money as reserves to create new money and perpetuate the system.
Keiser Report №15: Markets! Finance! Scandal!
Remarkable that we let the government, the corporations, and these people do what they do.
The Greatest Recession
I pulled this image from the National Inflation Association- Charts
This is a wild chart. I super imposed my best guestimate fitting curve. As you can see, i tried to be conservative and deal with the bumps along the way. It's most certainly not perfect but it will do to demonstrate the ideas.
That red area is the area of the recession. There are a few notable things about this chart. The decline we've had in the recreated M3 over the last year has never happened in the last 40 years. Given the charts I've seen, this has never happened in the last century.
In order to be as prosperous as we were before the recession we need about $2.5 trillion more dollars in the system RIGHT NOW. Not some bailout for the banks or tax refund bull crap. The banks need to be loaning that amount within the next few months for us to really recover the way economists (at least were) talking about.
The dollars where the green line ends and the black line hitting 2010, is about $13.7 and $16.2 trillion dollars. The difference is about $2.5 trillion.
This is about the same amount the government has spent in budget deficits over the last 2 years. This is significant because as you can see that $2.5 trillion didn't move us up to where we "should" be. It shows either 1) just how ineffective government spending is in replacing economic output; or 2) The recreated M3 would be at $11.2 trillion if we are to believe that government spending was 100% effective at producing economic growth. I'd like to thank both the Federal Government and the banking industry for this monster.
My sense is that excessive government spending doesn't produce real sustainable economic growth. This includes the huge budget for the military. Funding technology in the military is important but only when it has real civilian use. Research, yada, yada. Agreed. Though it most certainly could and probably should be sliced in half if not more. That would be value being directly injected into the economy through lower inflation and lower taxes in the long run. This is getting at least closer to a more sustainable future.
By January 2011, this estimate shows the M3 needing to be ~$18 trillion. Obama just submitted his budget. It's enormous. The deficit is estimated to be $1.6 trillion. $18 trillion minus $16.2 is $1.8 trillion. That's damn close.... and that won't do a damn thing except cause more inflation. They need to get that value some how. (Stealing it from you is socially acceptable, no?)
Our single party system, the Corporate Republicrats, have no idea what they are doing to secure America. Removing our freedoms "for security" is giving the terrorists exactly what they want. As soon as we started the wars in Iraq and Afghanistan the "enemy" shipped out. Better to live to fight another day. The got us bogged down and now have the Military Industrial Complex stuck in a growing feedback loop which is sucking down our national value. More military is not the correct answer... A smarter, leaner, more efficient, and productive military is. Until our "leaders" realize that terrorism is the application of "We will fight them there so we don't have to fight them here" we won't get anywhere and we won't be all that much more secure either. If they take a page from our playbook, which a smart terrorist would do, they will attack US HERE... not our military there. The former is much scarier. Duh. I'm not going to get into how terrorism is likely a false flag operation especially given all the shady circumstances.
Obama! Yo! Fix it! Also, can we put Bush on trial as a War Criminal? Congress didn't even declare war. They put a face on terrorism and then funded its destruction without actually consenting to explicitly to kill it. Then the Republicans declare the Democrats as being soft? That's a load of bull crap. If you want something to happen, do it the way the Constitution defines it be done. It's not legitimate if you don't. You can't make claims that anybody is "soft on terror" because they believe in the constitution. In fact, making these claim only makes you "soft on democracy."
Ah yes, how is this for communist/facsist?
If you don't follow the corporate party line (on either side), you are ostracized and made not important by the corporate mega-phone media.
Wait a minute... Isn't this reminiscent of Communist Russia?
Better Off Deadbeat: Craig Cunningham Has a Simple Solution for Getting Bill Collectors Off His Back. He Sues Them.
Cunningham armed himself with this knowledge, and the next time a debt collector called, the trap was set.
It didn't take long. Cunningham had canceled a home alarm service with ADT Security after two months, and the company had billed him a $450 early termination fee, which he disputed. ADT sent his account to Equinox Financial Management Solutions, a third-party debt collector. The collection agency sent him a letter asking that he call back immediately. He dialed, armed with a voice recorder.
"Can you garnish my wages if I don't pay?" he asked.
"Yes," the voice on the other end of the line said.
"Can you put a lien on my house?"
"Yes."
Wrong answers. Turns out, Texas consumer rights laws are some of the most consumer-friendly in the country. And according to a federal consumer protection law, the Fair Debt Collection Practices Act (FDCPA), debt collectors are prohibited from threatening legal action that would violate state laws. In this case, garnishing wages or putting a lien on Cunningham's house would violate the Texas Debt Collection Act.
Cunningham knew he had a good enough case to file a lawsuit against the debt collection agency, and for his first lawsuit, he decided to enlist the help of a lawyer. Two months later, he had a check in his hand for $1,000.
"It's like discovering fire," says Cunningham, thumbing through the stack of lawsuit papers on his table.
....
Like Cunningham, Smith now armed himself with voice recorders and began keeping meticulous financial files. His file cabinet grew quickly. "I mean there's nothing I don't document now and that's probably the best thing a consumer can do."
Find out the laws in your state and take action. This is not a bad idea.
How the banks make the big bucks (by taking it from you)
Does Obama know this is going on? If he does, why doesn't he stop it?
Obama is a really smart guy. How could he not know this is going on?
Two things:
1- if he doesn't know, then he's incompetent.
2- if he does know and isn't doing anything about it, he's implicitly authorizing theft of government coffers at a biblical scale.
Lastly, why isn't the FBI investigating this kind of fraud?
Elizabeth Warren On The Daily Show: If We Don’t Act ‘The Game Really Is Over’
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Elizabeth Warren | ||||
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I've always liked Elizabeth Warren because she is right.
Just as I posted earlier, people are waking up to the fact that politics is theatre and that politicians do not represent us (at least most of them). It's angering but it's important to get a third party or more going in America.
My solution to making third parties real is laws stating that all elections are to be instant run-off. Instead of voting for one candidate, you prioritize them. If the one you chose first doesn't have enough votes your next in line is thus counted as your choice. So, you could have voted in the last Presidential Election like this
- Ron Paul
- Cynthia McKinney
- Ralph Nader
- Dennis Kucinich
- Barack Obama
How sweet would that be? If none of your other choices had a chance, you still could have helped to defend against McCain (or visa versa). You could actually vote based on your principles instead of the lesser of two evils. If course it must be said that our political party election system is more like voting for the one evil as they really are the same party with different faces. I ask you, what would McCain have done substantially different from Obama? And how is Obama any different than Bush?
What if Obama declared the Fractional Reserve System bankrupt?
Right now would be a perfect time for Obama to wake up and declare the fractional reserve system a primary systemic cause of the economic problems we are having. Steady inflation is by far not steady value. This was one principle the Federal Reserve was founded upon. Congress is the only body capable of regulating the value of money, according to the Constitution of the United States.
Inflation is actually theft of value from everyone else. The value represented by a dollar reduces ever so slightly for the new dollars being created to have their value. This can also be seen as a tax to keep inflation going. This is incredibly idiotic that we should pay the banks value like this. This is so that they can lend the value back to us with interest? In return for the banks stealing/taxing us, we become more in debt. This debt is what we call money. We are really trading each others debt to the banks.
What's a bit nutty is that we all try to amass as much bank issued debt as possible. Our bank account is just the money a bank issued for a loan.
Inflation is a special tax though. This is a tax without representation. Yeah, so the Federal Reserve Chairperson is confirmed by the President and Congress. You don't see any of them yelling for change to the fractional reserve system. Ron Paul, Alan Grayson, and Dennis Kucinich seem to be the only ones with the faintest clue what's going on. All the traditional party lines on both sides support this unrepresented tax.
It's also not like you can just stop paying the tax... they take it without your control or knowledge. It's best to hide things in plain day-light. If you say "well, but that's the way it's always been!" then you're rationalizing being screwed your entire life. This all started with the Federal Reserve Act in 1913.
So, Obama, if you're listening, now is the right time to declare the Federal Reserve System a fraud, Fractional Reserve Banking as morally bankrupt, accuse Congress of unconstitutionally giving their money powers away. Here's the kicker. You can't lose to the truth. It would be very, very, slick to get FBI, CIA, or some other agency to get in there to collect evidence. The Federal Attorney General could sue the Federal Reserve or Congress for their unconstitutional ways. Of course, the problem is that there are wackos in the conservative wing that might just "read the constitution" in some novel, uninformed way. Any judge that supports the Fractional Reserve System should be impeached. The Constitution clearly states that the Congress should be doing this.
One can dream... How about locking the lot of the robber-barrons in jail with Madoff?
Fractional Reserve, Banks, and Foreclosures
I've been thinking a lot recently about the banking system in the USA and how banks create money out of thin air (if they have the reserves).
Under the fractional reserve system, banks are allowed to create money through a multiple of their reserves. When they create the money, it becomes the reserves for the next bank and so on and so forth. The reason why this is corrupt is because the banks don't create value. They only create money. They only create money through loans, meaning they own the real value until you pay them back with their fake, newly minted, money
As this crisis continues they have stopped lending.... This has an important side effect. When a bank lends, they create new money. This is the only way a bank will lend because it's virtually risk free for them. They now see money creation as too risky.
The problem we are running into now is that the banks aren't creating new money, ahem, they aren't lending. This can be seen here in the recreated M3:
As banks continue to go bankrupt, their creation of new money dwindles. The effects of which can be seen in the decreasing M3 over the last few months.
This is why the banks continue to get preferential treatment over average citizens. They create the money. New money is ESSENTIAL to the functioning of our economy.
The reason is quite simple actually. When the bank system loans new money, they don't lend out the interest payment. Meaning, a new loan must be taken out by the economy in general to pay the interest of that person (or company). Thus, new money is essential to keeping the race going.
Without new money, more and more people won't be able to pay back their loans. We are already seeing this happen with the never ending "foreclosure crisis."
Until new money is being created by the banks then there is less and less money to be able to pay the banks their interest.
What's really cool about this is that the government has been doing EVERYTHING they can to buoy the balance sheets of banks and they still aren't creating new money. In fact, the banks don't want government money because they can't give themselves billions in bonuses.
The decreasing M3 is due to people paying off their loans. This has an amazing effect of causing less money to be in the system. In essence, if all loans were paid off, there would be no money anywhere.
So in the mean time, more foreclosures will occur both in residential and now commercial real estate. The banks will continue to be in bad shape regardless of how much they legally or illegally manipulate their books. This will cause no new money to be issued thus making the problems worse.
All those people talking about a "recovery" have no idea what's really going on. A company's balance sheet may look good but until the banks start issuing new money, the public will stay in a world of hurt. Foreclosures will remain high and jobless numbers will keep being massaged downwards.
So what are we to do? Well, the government has been trying to fund projects to inject money into the system. The problem here is that the government is getting the money... from the banks! Our government must pay back the interest on that... meaning.... you, me, our children, grandchildren, and, well, generations will be paying back that money.
If the government actual did the constitutional thing, and took the money creation powers back from the banks and reinstalled it with Congress, we may actually have a chance to make it. As it is, I am very pessimistic about the economy due to the fraudulent ponzi scheme run by the Federal Reserve.
Last note, the Federal Reserve has a mission to have a stable currency and try to maintain high employment. They have failed on both account horribly. They have debased the dollar by 95% over the last century, and unemployment is now 20%+ using actual numbers and not the fudged ones produced by the government. A stable currency would mean 0% inflation/deflation over 100 years. A target of 2% inflation per year is NOT stable. It's exponential growth.
Detroit, Criminalizing Poverty, and our Sad State of Affairs
If you thought this was bad:
SLUMS OF DETROIT: A LOOK AT THE HEART OF AMERICA’S 2ND MOST DESERTED CITY
Then check out this:
Criminalizing Poverty For Profit: Local Government's New Debtors Prisons
In other words, we are starting to lock away by criminalizing their situation. The Nazi's locked away Jewish people. This time it's going to be the poor. I'm not saying that being in poverty means you can do anything against the law but many of the laws we have here in the United States are aimed at a thriving economy with a solid middle class. This balance is starting to change. Our society is starting to reduce away from such standard. We don't have the money to criminalize petty actions any more. Locking these people away is costing much more than the value they add to the society by being free, abet irresponsible.
The banks and government are making us poor through inflation (and bail-outs). They continue to suck out our wealth to fund impossible ideals whether through taxes or inflation, they are the same. We need to stop this idea that both parties have of big government whether for the people or the corporations. Big is just not possible right now. Not with the Federal Reserve and Banking system stealing the wealth of the citizens by inflation and bailouts. We cannot afford to keep this up. Not with us, nor on the international scene.
This is some serious shit people. Every day America is looking more like Collapsing Fascist State: from the corporate control that we can CLEARLY see in the Health System Reform Bill changes, to criminalizing the poor, to perpetual war started on false pretenses, to the over-funding of the military industrial complex, to collapsing states, the commitment and preferential treatment for corporation and especially banks.
This whole system stinks. It smells to high hell of control, rigging, "cronyism," trickle up economics, and, well, fascism. Even the markets seem (in a few cases, are known) to be rigged.
The banking crisis: Till debt us do part
Some governments are borrowing so much that markets are becoming wary and may stop lending to them. Could this be the next leg of the crisis?
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The big fear is that, if economies such as America and Britain were downgraded by the agencies and their borrowing costs rose, the effect would be felt throughout the credit markets, making it more expensive for businesses and emerging-market economies to borrow. It could set back the global economic recovery.It is not all one-way traffic. Some economies in Asia and Latin America have received upgrades or are about to get them. So far, however, they are outnumbered by countries facing downgrades.
If we get down graded, will the Chinese stop taking our fake dollars? What will happen to 95% of all products in Walmart?
Is Sovereign Debt the New Subprime?
To varying degrees, Greece, Spain, Ukraine, Austria, Latvia, Mexico are just a handful of the nations viewed at risk of defaulting. Meanwhile, Dubai only just avoided a similar fate thanks to a $10 billion bailout from their oil-rich neighbor Abu Dhabi.
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Few investors seriously worry about an imminent default by the U.S. or the U.K. But with worries about Dubai's ability to pay its debts shaking markets across the globe in recent weeks, investors are on guard about which other countries might be in dire financial straights.
Who ever wrote this article was a moron. What happens in the future when the U.S or U.K. are imminently going to default? It may not be soon but we have $50-$60 Trillion in obligations coming due and that money isn't going to be from taxes or foreign governments or banks. The U.S. is too big to fail... This time we don't have anyone to bail us out.