The International Forecaster:

http://day-trading-the-stock-market.blogspot.com/

By: Bob Chapman - Posted Sunday, 13 June 2010

The following are some snippets from the most recent issue of the International Forecaster. For the full 40 page issue, please see subscription information below.

US MARKETS

As we have noted before the rage of 1789 in France cost the heads of 300,000 tormentors out of 30 million Frenchmen. The question that presents itself is will something like this occur again in our times.

We suppose it could, but we won’t know until it begins to happen. The most likely location for such an event is in Greece, which has already experienced major demonstrations and rioting.

There is no question that in many parts of the world people are disgruntled and in many cases enraged with their governments and particularly with the financial sector. Not only has the populace been defrauded, but also the fraud and deceit continue unabated. In Europe almost every country is or will be subjected to austerity programs. In America we have rage pointed at Wall Street, banking, corporate America and government. The Tea Party movement addresses that in a number of ways from a great cross section of Americans. They see the blatant corruption tearing their country, republic and democracy apart. They do not want capitalism torn apart by the Council on Foreign Relations, the Trilateral Commission, the Bilderbergers and the Illuminati. They do not want fascism, socialism and Communism shoved down their throats. They do not want any new world order or a one-world government. In all countries there is a faction of more than 10% of the population that are willing to sacrifice their lives to make sure that doesn’t happen. They have seen the 1980s S&L crisis where billions were stolen and few went to jail. The same was true with the failures of the 1990s and into the new century. We saw LTCM and no one went to jail and then Tyco, Enron, Qwest and WorldCom. Then there was Michael Milken and Drexel, Burnham Lambert. He was charged with almost 100 crimes, pled to six, paid a $2 billion fine, spent two years in jail and got to keep $1 billion for his crimes. Today he basks in luxury as a reward. Then came the biggest scam of all and that was the Madoff caper.

Financial crime by sociopaths is still flourishing. That is because our system of jurisprudence doesn’t work. We have one set of rules for connected Illuminist, another for common white-collar criminals and another set of rules for us. Is it any wonder that the public is outraged at such crime? George Soros, Illuminist, is held up as a shinning example of financial acumen. He was convicted of stock fraud in Paris, appealed and lost and was convicted in Hungry as well. Why is that never mentioned when he appears in interviews and on television? It is because his elitist group controls these venues. The same is true of Warren Buffett whose firm, Berkshire Hathaway, was convicted of a $300 million accounting fraud and paid a $100 million fine. As you can see no one hardly ever goes to jail and those who do are not connected Illuminists do end up in jail. There is essentially never any payback. All the CFTC and SEC want are the fines to cover their expenses and to expand their staffs, and they only act when forced too. There has been very little payback and the public rightly wants revenge. Thus far they have gotten little or nothing from their well compensated representatives and senators, who generally are crooks and malfeasants.

All this doesn’t go down very well with real unemployment of 22-3/8%, soon to be 23-3/4%. As the public stands in these unemployment lines they watch the Fed feed money to financial institutions, which they created out of thin air, and the debt of which these same unemployed are responsible for. The banks, brokerage houses and insurance companies are illegally kept from bankruptcy and with these same funds reap unbelievable profits. At the same time incompetent executives receive outrageous compensation. The public is deeply disturbed and well they should be. Is it any wonder that incumbents have a 27% approval-rating going into next November’s election? That is the lowest number since 1994. It is interesting that those in both major parties share the disappointment. On the other hand unemployment benefits have been extended to two years. We suspect with this gang in the White House, House and Senate, that those benefits could go on forever as our sovereign debt collapses, such as Greece’s did. Voters see no morality, representation and integrity in both houses. Payoffs and fraud flourish and no one seems to care whether they get caught or not. Grab as much as you can as fast as you can and sell your soul if necessary. Of course, the SEC and CFTC are nowhere to be found as they protect the crooks running Wall Street, in banking and in insurance. There is little incompetence - they are all in on it. Remember the connected elite never go to jail. They are fined and the shareholders pay the bill.

The financial industry is loaded with fraud and always has been. Can you imagine a banker making loans to the completely unqualified and using 70 to 1 leverage, when 9 times deposits is acceptable? Can you image rating agencies rating paper as AAA when in fact it is BBB? Then there are the 35% overvaluations of assets that lead to bank failures and no one goes to jail. This is serious crime and these crooks just walk away Scot-free. What a system. The Bernie Madoff’s flourish and have no remorse having stolen from little old ladies. He complains they threw money at me, what was I to do? Refuse it you scumbag.

How can any professional not express dismay when banks such as Goldman Sachs, and JPMorgan Chase never have trading losses. We did that for 25 years and they and we know that is impossible. Worse yet, 80% of their clients lost money. Those trading profits made up 93% of profits at Morgan Stanley as well. As a professional we know the only way that can be accomplished is by screwing your clients.

We can count in as well naked shorting, front running (flash trading), theft, money laundering, fraud and rules that let players neither admit nor deny and pay a fine.

This is what your financial system has come too. You are controlled by a group of criminals.

As a result of this outright criminality we are being led into one of two solutions – either a plunge into deflationary depression or a systemic crisis that is approaching three years in duration. The direction taken by the Federal Reserve, the banksters and Wall Street is yet to be determined. Our guess is the inflationary onslaught has only begun. We are well aware that M3, money and credit, over the past 15 months, has been reduced from growth of 18% to a negative of 5.9%. That and other things were done to head off inflation, which is currently 2% officially, but unofficially is 8%.

We announced that an inflationary depression had begun in February of 2009, some 16 months ago. The US represents about half of world GDP so what happens in America will affect the entire world. In three months America will have experienced three years of recession/depression, the longest and deepest financial and economic contraction since the 1930s. A year ago the economy was headed downward and had it not been for $800 billion in stimulus and an additional $1.5 trillion injection by the Fed, we would currently be far deeper into depression. That means that we are seeing the end of the effect of stimulus and if it is not repeated the economy will falter and slip into deflationary depression. Each time the Fed and in part Congress allows this to happen it takes a much greater amount of money, credit and fiscal stimulus to keep the economy in positive territory and therein lies the seeds of hyperinflation.

In the 1973-75 recession we saw inflation. That was followed by further stimulus provided again by the Fed, which culminated in the economic blow-off of 1981, which in turn was followed by high interest rates and a deflationary recession. These two events tell you recessions/depressions can be either inflationary or deflationary. Compounding the problem is the accumulation of sovereign government debt, which has been and will continue to grow exponentially. That certainly is inflationary, but worse yet is it cannot be paid back no matter how high taxes are raised.

We need not remind you of the real estate collapse that is still in progress and the incumbent bonds many of which are close to worthlessness. These are deflationary events that over the past three years they have been covered up, massive injections of money and credit. Deflation was offset, or more than offset by inflation. As a result many corporations are carrying two sets of books. One set contains the toxic waste the other set the better assets. This has caused terrible problems especially in the banking system. This is the prime reason so many banks have problems. Eighty-one have fallen this year and that figure will more than double before the year ends. This is why the Fed wants to take over the FDIC. Once the FDIC is out of money, if they are regulated by the Fed, all the Fed has to do is create more money out of thin air to guarantee deposits. At the same time the Fed will attempt to monopolize the banking system. They will allow weak banks to fail and others to be absorbed until there are only 5, 10 or 15 banks in the country.

The reason we do not as yet have hyperinflation is that banks that have borrowed $2 trillion are not lending it into the system; they are depositing those funds with the Fed. If banks start to increase lending then inflation will jump because the funds will no longer be sterile, they’ll have been monetized, or if you may, inflationized. Now you can understand part of the reason banks have reduced lending by more than 20%.

In the absence of increased bank lending we also have an M3, the supply of money and credit, which is now negative. In fact, at a record low. That means a deepening recession/depression and a lower stock market. A correction in all probability similar to 1973-75. Whether we will see higher oil prices, as we did then, remains to be seen. A Middle East war could provide that element. In fact, recently we said there would be negative GDP growth in the 3rd and 4th quarters due to the lack of stimulus of one kind or another. States are in a terrible fix and unless the federal government comes forth with aid many states will become insolvent. This would add to the downward spiral. The government will have to come to the aid of the states otherwise the system will collapse. That as well means massive layoffs to add to the already growing unemployment situation. The government will become the lender of last resort and a bankrupt. A latter day version of Atlas Shrugged. All the while the Fed is creating money out of thin air funding these bankrupts, as inflation climbs. Keep in mind that with the assistance of the Fed the nation would already be insolvent, save for its status of the dollar as a reserve currency. The dollar is in the process of being dismantled, so that our elitists can usher in a new world currency eventually. An example is Greece has a very real problem, that probably only default can solve. Greece has 1% of the problem the US has and that will be reflected in the falling value of the dollar not only versus other currencies, but most noticeably versus gold. In fact, for the past four years all currencies have fallen in value versus gold. In time all currencies will be sold in part to purchase gold. Gold is again becoming the currency standard for the world whether the elitists like it or not. The professionals, the markets, and the central bankers know this and cannot control it, as hard as they try. All the taps can be turned on at a moments notice, so hold back on your decisions on which way the central banks are going to go.

http://news.goldseek.com/InternationalForecaster/1276412400.php

Chaos of the Bilderbergers?:

http://www.thedailybell.com/1106/Chaos-of-the-Bilderbergers.html

The Daily Bell - Friday, June 04, 2010 – by Staff Reporter

The Bilderberg group will convene in Sitges, Spain, a resort community 30 km from Barcelona, on June 4-7. ... Intending to prolong the global economic downturn for at least another year, the Bilderberg group hopes to take advantage of the situation to set up a "global ministry of finance" as a part of the UN. ... The debt crisis in Greece that currently puts in jeopardy the entire European financial system provides a pretext for drastic measures, and both the crisis and the measures are vivid illustrations of the strategy that employs chaos to reorder the existing arrangements. The deliberately generated chaos is tightly controlled by financial institutions, major banks, and hedge funds and serves as an efficient mechanism of governance and social restructuring. – Global Research

Dominant Social Theme: All is being decided, so calm down.

Free-Market Analysis: The Bilderberg group is meeting in Spain and unlike other years there has been relatively speaking a good deal of coverage of the meeting. We have already speculated that the reason has to do with the alternative 'Net press's relentless scrutiny. Thus, for the first time, the power elite has responded by placing some articles in the mainstream press as well.

The article, excerpted above, is certainly not "mainstream" but it is written by Olga Chetverikova and has a certain academic flair. The brief author bio at the end of the article describes Chetverikova as having a "Ph.D. in History," and explains she is "Assistant Professor at Moscow State Institute of Intentional Relations of the Foreign Ministry of the Russian Federation." Here's some more from the article:

EU mitigation measures are paving the way for the supranational institutions ... On May 21, the EU finance ministers adopted at a meeting chaired by European Central Bank president Jean-Claude Trichet and European Council President H. Van Rompuy the German plan of much greater budgetary coordination including penalties for states that break the EU budgetary rules. The sanctions will include suspending the voting rights of repeat offenders, withholding the funding for infrastructural development, etc. It was also proposed to subject national budgets to EU screening prior to their being debated in national legislatures. A report will be prepared by June 17 – notably, the date of the EU summit – outlining a common Eurozone policy. Other, yet more ambitious projects like full control over Eurozone national budgets by a triumvirate comprising the European Commission, the European central bank, and the Euro Group are also discussed.

The downsides of the rescue packages are the worst part of the problem. Invoking the threat of financial collapse, the EU countries serially introduced extremely unpopular austerity regimes with salary and pension freezes for state employees, welfare cuts, increased retirement ages, etc. Greece was the first but not the only country affected. The German government plans to cut spending by Euro 10b annually in 2011-2016. France abolished the annual pension for low-income families. Under the IMF pressure, Spain is launching a comprehensive reform including pension indexing freeze, pay reductions and employment cuts in the state sector, the abolition of payments to support families with recently born children, etc. Great Britain, Italy, and others are following the lead.

The consequences of the measures are hard to gauge considering that Europe is already facing serious poverty and unemployment problems (the unemployment has reached 10% of the economically active population and continues to grow, and at least 80 mln people are currently below the poverty line). Most likely, the shadow world government – the Bilderberg group – will administer to the public the dose of social problems carefully calculated to enable the elites "to offload troubled assets", retain control over the situation, and divert protests from the actual sources of problems that trigger them.

We've been grappling ourselves with these suppositions. Hamlet-like we have considered and reconsidered whether the EU crisis was in a sense planned or if it was an inevitable evolution. These things are never clear cut from the outside; perhaps it doesn't matter in terms of our analysis. We are aware that the EU elite did eventually expect the EU to travel to this parlous point. However, we maintain, as we have in the past, that the current downturn and the scrutiny of the internet itself has made it a good deal harder for the elite – the real elite (not merely the political one) – to implement further centralizing measures without a good deal of pushback.

From out point of view the anger is intense and will build over time along with "austerity" measures. Interestingly, Chetverikova seems to agree with us somewhat. She writes, above: "The consequences of the measures are hard to gauge considering that Europe is already facing serious poverty and unemployment problems (the unemployment has reached 10% of the economically active population and continues to grow, and at least 80 mln people are currently below the poverty line)."

This is a crux point. Ordinarily, the economic downturn would be attributed to the failure of capitalism and the usual leftist/populist claptrap would be rolled out. But this time the power elite is making its bid for expanded world governance when awareness of the REAL mechanisms of control is at an all time high. We have not been able to understand the haste with which the elite has acted of late.

The best reasoning we can come up with is that the elite realizes what is obvious – that its control is slipping generally as insight into its manipulations rises. It's still strange. Ramming through centralizing measures at a time of such heightened sensitivity is only going to aggravate the situation in our opinion.

When one looks back on the 20th century these days, one is astonished to find – if one is an active reader of alternative Internet sites – that the history of the 20th century is increasingly to be seen as one of falsehoods and disguises. It was, after all, money power that perhaps created the Soviet Union, generated two world wars and a slew of minor ones and generally inflicted upon the globe waves of socialism, environmentalism and fiat-money disasters.

Because we have been reading Dr. John Coleman lately, we would tend to place a good deal of these events directly at the feet of the Rothschilds who evidently and obviously dominated the 20th century and much of the 19th as well. Even the Bilderberger meeting, itself, strikes us as a conference, to a degree for high-level functionaries. These may be asked for advice but are probably being told what is in store for them in the upcoming 12 months.

Certainly, the elite is an admixture of the specific families and individuals plus a few institutional (religious) power centers. But the Rothschild's money-power has likely grown precipitously to unbelievable of amounts as a result of the fiat-money mechanism. The result is that the real decisions are taken by a tiny handful with their own agenda and motives.

Being human, even the elite can miscalculate. Did the power elite move too fast in the teeth of a great communication revolution? We tend to believe the current downturns in the West are stronger and more intractable than was anticipated – and that the elite will have a harder time controlling them. We think various elite dominant social themes are misfiring and that keeping them running smoothly may be difficult.

Conclusion: Historian Chetverikova writes, "Most likely, the shadow world government – the Bilderberg group – will administer to the public the dose of social problems carefully calculated to enable the elites ... retain control over the situation, and divert protests from the actual sources of problems that trigger them." We are not so sure. We will continue to scrutinize the memes of the elite to see how they are being received and whether any of them are eroding further. By their conversations ye shall know them.