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

The Biggest Shock of All:

http://day-trading-the-stock-market.blogspot.com/biggest-shock-of-all.html

Weiss Research Group - Martin D. Weiss, Ph.D. - June 07, 2010

Why did the specter of collapse in far-away Hungary help sink the Dow by 323 points on Friday ?

And why did similar scenarios in Greece, Spain, and Portugal trigger the Dow’s 1,000-point Flash Crash one month earlier ?

Is it because those countries are so important to the future of America’s blue-chip corporations ?

Not quite!...



http://www.cnbc.com/id/15840232?play=1&video=1511573004

It’s because investors around the world are finally waking up to some shocking realities:

Shock #1 is that these countries are canaries in the coal mine — the first of many that could suffer the wrath of investors fed up with runaway deficits.

Shock #2 is that, in the UK and the US, federal deficits and total debts, as a percent of GDP, are similar to — or even larger than —those of Greece, Spain, Portugal, or Hungary.

Shock #3 is the recurring revelations of official deceptions. Investors suddenly discover that unemployed were counted as employed … that government debts were disguised as capital … that far bigger federal deficits were camouflaged. And it is these revelations that trigger the biggest selling panics, that are the final nail in the coffin for companies and entire countries.

But Shock #4 is the biggest and most dangerous of all — not just random deceptions by a few companies or a few countries, but a global deception in the credit ratings that investors rely on for nearly ALL companies and countries!

With gathering momentum right now, investors are beginning to realize they can’t trust the ratings issued by established agencies like Moody’s, Standard and Poor’s, and Fitch.

But this is not merely bad news for the agencies themselves. It’s also a powerful force that can drive global stock and bond markets into a nosedive.

When companies are downgraded, their share and bond prices automatically fall.

So think about what it means when the grading system itself, encompassing thousands of ratings on trillions of dollars in securities, crumbles!

It implies, in effect, a collective downgrade of nearly ALL the securities in the world — every rated corporate bond, municipal bond, and even government bond in existence!

Needless to say, this transformation is too massive to happen overnight; it will progress in three phases...

Phase 1: Widespread Loss of Confidence in The Leading Rating Agencies...

In the first phase, regulators, analysts, and investors begin to raise serious questions about the validity of ratings:

Is a bond really triple-A? Or is the rating agency just maintaining the high grade because it wants to protect a good client that’s paying fat fees for its ratings?

Beyond triple-As, what about the hundreds of thousands of corporate, municipal, and sovereign bonds that currently boast other “investment grade” ratings? How many are really speculative grade — junk — in disguise?

Right now, Congress is asking these questions daily, attacking the rating agencies and getting ready to take action against them as part of the upcoming regulatory reform.

And the assaults on the rating agencies by independent commentators are even more strident …

In “Answers on Credit Ratings Long Overdue,” Andrew Sorkin of the New York Times puts it this way:

“Raise your hand if you can explain why anyone still believes in credit ratings. … How could century-old institutions like Moody’s Investor Service give their triple-A blessings to subprime junk? … How can we prevent these institutions and their sometimes cockamamie judgments from endangering our financial system again?”



http://www.cnbc.com/id/15840232?play=1&video=1511573004

In his testimony before Congress on Wednesday, Warren Buffett (a major shareholder in Moody’s) said the agencies ought to be forgiven for their sins — particularly for giving junk mortgages triple-A ratings.

But that same evening, on a Kudlow Report segment, “The Future of the Credit Rating ‘Cartel‘,” both the CNBC host and commentator said flatly that …

The ratings issued by Moody’s and S&P are “garbage.”

CNBC commentator Don Luskin added:

“Shame, shame, shame on Warren Buffett for saying the rating agencies are to be forgiven. … We’ve got the Obama administration talking about bringing criminal charges against BP. Why don’t we bring criminal charges against the rating agencies …?”

On the same CNBC segment, I was asked for my solution, which I’ll get to in a moment. But first, let me tell you my forecast regarding the next phase …

Phase 2: Massive Investor Selling...

Here’s what I see happening …

* Until and unless the rating agencies abandon their conflicted business model, extreme doubts about credit ratings will spread like wild fire.

* Investors will scramble to reassess the risk in the trillions of dollars of rated securities they own.

* They will decide, independently, what the true ratings should be, effectively issuing their own downgrades on thousands of securities.

* And, they will SELL.

This forecast takes no particular foresight. As illustrated by the recent barrage of attacks on the rating agencies, the global risk reassessment has already begun. And as illustrated by recent sharp price declines — in sovereign bonds, corporate bonds, derivatives, and common stocks — the selling has also already begun.

Phase 3: Capitulation by the Rating Agencies...

My next forecast, however, does require looking further ahead:

The day will come when, due to overwhelming pressure from regulators, investors, and even some debt issuers themselves, the leading rating agencies will have no choice but to cave in.

Moody’s, S&P and Fitch will announce downgrades for hundreds of major debt issuers in one fell swoop. Or they will seek to wipe the slate clean by revamping their rating scales, effectively downgrading nearly ALL of the bonds they rate.

I have no doubt this will happen. The only major uncertainty is: when?

* Will it be before millions of investors each make up their own minds about what every rating should be?

* Or will it be after investors make up their own minds — when there is such a sorry state of confusion and panic that the rating agencies are FORCED to act to restore a semblance of credibility for themselves and the companies they rate?

Either way, we can now see the makings of an all-out selling panic — first in corporate bonds, then in the most vulnerable common stocks. It is the natural outcome of the global downgrading of ratings and rating agencies themselves. It’s coming very soon. And it’s going to hit hard.

Too Late for Easy Solutions...

At Weiss Ratings we don’t take a dime from the companies we rate. We’re not even beholden to the companies for the supplemental data we request. If they choose not to give us the information, we rate them based exclusively on publicly available data.

However, we also believe that no one should tell our competitors what business model to use. Rather, as we proposed to the SEC more than seven years ago — and as we proposed again to Congress last week — the U.S. government must cease blessing these conflicted rating agencies and stop requiring investors to rely on them.

If this solution had been implemented years ago, the rating agencies might have had time to adjust, the mortgage ratings fiasco might never have happened, and the market debacle I am forecasting would be far less likely.

Today, however, it’s too late for moderate or easy solutions. If the government does not act as proposed, the markets will. There really is no choice.

The Next Big Question…

If even a company’s supposedly “investment grade” bonds are suspect, how can anyone trust their shares?

The answer to this question is about to come very soon. So if you haven’t done so already, be sure to batten down the hatches.

Heed “Our Sixth Warning: Dow in Danger!” Move swiftly. Do not procrastinate.

http://www.moneyandmarkets.com/the-biggest-shock-of-all-39316?FIELD9

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.

Euro Crisis to Set One World Currency?

http://www.thedailybell.com/1084/Euro-Crisis-to-Set-One-World-Currency.html

Friday, May 28, 2010 – by Staff Report

Is Europe heading for a meltdown?... This financial crisis is worse than the sub-prime crash of 2008 because the sums are so much bigger and it is governments that are in dire straits. Edmund Conway explains the dangers. Mervyn King, the Bank of England Governor, summed it up best: "Dealing with a banking crisis was difficult enough," he said the other week, "but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there's no backstop." In other words, were this a computer game, the politicians would be down to their last life. Any mistake now and it really is Game Over. Or to pick a slightly more traditional game, it is rather like a session of pass-the-parcel which is fast approaching the end of the line. – UK Telegraph

Dominant Social Theme: The wise men of Brussels and the courageous citizens of the EU will muddle through.

Free-Market Analysis: As the money crisis seems to grow worse in Europe, we have begun to wonder if there are parallels to the 1907 financial panic in the United States that gave rise to the Federal Reserve. The dominant social theme way back then (assuming an active power elite, and we do) was along the lines of "The US banking system is too fragmented and a lender of last resort is badly needed." JP Morgan assembled his rich friends in the library of his exquisite New York mansion and bailed out the market, but only six years later, the Federal Reserve was born, the bastard child of false market-insolvency rumors and a knobby-nosed father (Morgan, himself).

There is, in fact, still speculation today that Morgan's camp planted the initial rumors of instability that swept the market and triggered the crash of 1907. Why on earth would he do such a thing? To generate the eventual result: the creation of the Federal Reserve and its passage by the US Congress. This is one perspective, anyway, the "paranoid one" that you will not find in most mainstream history books or college texts.

Back to our larger theme. We have written in the past (see – IMF Plotting Gold Backed SDRs) that we did not see how on earth the power elite was going to get from fairly abstract monetary concepts like SDRs to an actual worldwide consensus for a more globalized currency (and a global warming – "carbon" – currency seems, as well, to be a non-starter, at least currently). In fact, we have speculated that the elite could decide on a gradualist approach, setting up a thesis/antithesis dialectic between global money and regional money to move the conversation gradually in the direction of a worldwide currency. But perhaps there is a faster way. Let us see ...

The European financial crisis started with Greece and, it's true, Greece's problems are moderate ones for the EU given its size and amount of debt. But this crisis has not been resolved despite the supposed US$1 trillion that has been set aside to discourage "wrong way" speculation in Greek debt. We saw yesterday that the larger market was up because of statements from Chinese leaders that they were not going to sell euros and were perhaps to continue to be a net purchaser. So this is what market confidence has come to: China, a rigid, neo-communist state with a raging property inflation problem is seen by "the market" as a lynchpin of the Western capitalist system. What a hoot. You can't make this stuff up.

Anyway, from our perspective, a hypothetical path to a world currency (with some speed) would involve certain very specific elements. It would include, obviously, a very serious sovereign wealth crisis spreading from country to country thoughout at least the Southern half of Europe. This crisis, hypothetically, would be averted by heroic Brussels bureaucrats but not before a significant amount of financial pain was inflicted – good and hard as H. L. Mencken might say. It might even involve the dissolution of the euro and the shrinking of the EU itself. But the pay-off for the power elite would be the ability to float a scenario that proposes a worldwide currency to avert additional difficulties going forward. Here's some more from the article excerpted above:

Strip away the details – the breakdown of the euro, the crumbling of the Spanish banking system to take just two – and what you are left with is the next leg of a global financial crisis. Politicians temporarily "solved" the sub-prime crisis of 2007 and 2008 by nationalising billions of pounds' worth of bank debt. While this helped reinject a little confidence into markets, the real upshot was merely to transfer that debt on to public-sector balance sheets.

This kind of card-shuffle trick has a long-established pedigree: after the dotcom bust, Alan Greenspan slashed US interest rates to (then) unprecedented lows, which helped dull the pain, but only at the cost of generating the housing bubble that fed sub-prime. It is not so different to the Ponzi scheme carried out by Bernard Madoff, except that unlike his hedge fund fraud, this one is being carried out in full public view.

The problem is that this has to stop somewhere, and that gasping noise over the past couple of weeks is the sound of millions of investors realising, all at once, that the music might have stopped. Having leapt back into the market in 2009 and fuelled the biggest stock-market leap since the recovery from the Wall Street Crash in the early 1930s, investors have suddenly deserted. London's FTSE 100 has lost 15 per cent of its value in little more than a month. The mayhem on European bourses is even worse, while on Wall Street the Dow Jones teeters on the brink of the talismanic 10,000 level.

It is obvious that the sovereign crisis can inflict considerable pain. And it seems to have just begun. Yet perhaps our scenario is too simplistic, too conspiratorial. We ourselves have maintained that the problems with the EU and the euro are probably in excess of whatever the elite had expected – and they did expect a crisis of this sort, one that was supposed to drive the EU into a closer political union. The idea, however, that the power elite could engage in cold-blooded manipulations of whole countries is fairly difficult to countenance. On the other hand, there are historical speculations that JP Morgan, at the height of his wealth, controlled in some sense up to half of the profitable enterprises in the United States. Wealth can be concentrated and great wealth begets wealth, especially because the current fiat money system that tends to collapse the middle class.

Assume somehow that the unrolling sovereign crisis is indeed a prelude to a fear-based promotion seeking a worldwide currency (and perhaps some sort of worldwide central bank to go along with it) and one begins to see the outlines of an especially audacious dominant social theme. Perhaps this theme would be buttressed with other fear-based promotions – local and regional wars, even confrontations that utilize small nuclear devices.

We're just speculating here, of course, for our window on power elite activities extends only to a modest comprehension of how elite promotions might operate. Yet even in stating this, we should also point out that these themes are promoted by a vast array of institutions – media properties, think tanks, NGOs and assorted non-profits, not to mention governmental entities. To accept the idea of dominant social themes is to accept that the elite has tremendous influence worldwide and especially in the West. We're past that point of course. We do accept it.

We would also point out that to try to force the issue now of a truly global currency would be audacious in the extreme. Citizens of the Anglo-American axis are up in arms over the poor economy and Europe is smoldering as well. Never has a sociopolitical awakening swept the West as it has now – courtesy of the Internet and its continual truth-telling. There is more and more anger over central banking, the West's serial wars, the over-taxation and the general dysfunction of regulatory democracy.

Does what we have proposed skirt the fringes of reality? If the powers-that-be were ready to tolerate a protracted series of sovereign crises in Europe – and it may be there is not much more to arrange -- alongside perhaps some unsettling wars, it might be possible to traumatize citizens of the West enough to make them amenable to global solution. This solution in our estimation might include the return to some sort of gold standard, but unfortunately not a market-based one. The elite would try to insist on a standard that it could in a sense control and continually manage – at least in our opinion.

Conclusion: All this is no doubt far fetched. But the Panic of 1907 and the subsequent erection of the Federal Reserve – if one accepts the relationship between the two – provides us with a template for the same sort of manipulation on a bigger scale (assuming one believes in the possibility of JP Morgan's market manipulations). However it is also true that this article itself is evidence of the difficulties that the elite would face in implementing the kind of program we have suggested. After all, if we are able to anticipate it, it has occurred to others as well. This is perhaps the elite's biggest challenge in the era of the Internet. It is most difficult to promote an audience, if it comes to that, aware of your intentions and the permutations of your strategies.

The Government as Identity Thieves:

Dr. Ron Paul Tuesday, May 18, 2010

http://www.thedailybell.com/1056/Ron-Paul-The-Government-as-Identity-Thieves.html

The spotlight remains on the Greek sovereign debt crisis as the riots continue. The terms of the Greek bailout from the IMF and Eurozone countries remain contentious with citizens on all sides. Europeans hate having their governments throw public money away as much as Americans do. The Greeks are not happy about having their taxes raised while their pensions and salaries are cut. Meanwhile, it is rumored by the Financial Times, AFP and others that Greece may spend more than it saves from austerity measures on arms deals with Germany, France and the US as a potential condition of receiving bailout funds. If true, it is certainly not unprecedented for the global military industrial complex to benefit from deals made by their friends in the central banking community. After all, war is the health of the state. The last thing big government proponents want is for peace to break out in the world.

This free flow of fiat money from around the globe to Greece will not really save Greece as much as it will grant a temporary reprieve to central bankers from the consequences of their mistakes. Sadly, this will come at the expense of the Greek people and taxpayers in Europe and America. Taxpayers are of no consequence to either European or American central bankers. Even the mere desire for complete information on what they are up to in our name is rebuffed, as we saw last week in the Senate with the failure of Senator Vitter's amendment containing my language to fully audit the fed. The hubris of powerful and secretive central bankers seems to know no bounds.

If someone incurred debts against you as an individual, without your knowledge or consent, you would call it identity theft. You would call your bank for a full accounting of the debts incurred in your name, and after some verification, those debts would be declared invalid and you would not be held responsible for them. Furthermore, if the culprit was found, they would be prosecuted and sent to jail.

Not so with governments and central banks. Governments that are supposed to be of the people and for the people routinely incur debts against the people. Some governments even borrow money to oppress their citizens, and then expect them to pay for their own oppression with interest. With a fiat monetary system, the sky is the limit for how much debt a government can place on the backs of the people.

We have reached the point in the United States where the debt our government has accumulated against us is mathematically impossible to pay off. Harder times, likely due to a wave of hyperinflation, will eventually find its way to our streets and I am fearful of how Americans will react. My hope is that we will come together peacefully and help each other, and that enough of us will be aware that the blame rests securely on the shoulders of the Federal Reserve and the special interests. They should not be looked to for salvation. They should not be given more power. Rather, they should be stripped of the powers that allowed them to create this mess in the first place.

Resistance to public transparency regarding public debts should be denounced in the strongest of terms, and the central bankers that incurred them should be seen as no better than common identity thieves.

Buffett defends Goldman, joins greed Conspiracy:

By Paul B. Farrell, MarketWatch

http://www.marketwatch.com/story/buffett-defends-goldman-joins-greed-conspiracy-2010-05-11

May 11, 2010, 3:33 a.m. EDT

ARROYO GRANDE, Calif. (MarketWatch) -- Warning: Bears taking over. Time to short Buffett's new "Baby Berkshires," short Goldman, short Moody's and other favorites of Uncle Warren.

Why? Behind the façade, the lovable, good ol' Uncle Warren strumming his cute little ukulele, ostensibly supporting reform, there's a dark force that's part of the toxic Goldman Conspiracy fighting to keep alive everything that's wrong with Wall Street, everything that got us into this mess, everything that will trigger another meltdown that even Uncle Warren says: "I can guarantee it."

Buffett belongs to the past while the news screams of a new world order ... Riots in Greece, more coming when the other PIIGS demand EU bailouts ... conservatives regain Britain ... unregulated BP's greed is spilling millions of gallons of oil destroying Gulf states, confirming Foreign Policy magazine warning of the "End of the Age of Oil" ... the Dow's techno-fear-driven irrational 1,000-point plunge as technicians turn bearish, ending the year-long bull rally ... even Hank Paulson's changing his tune, warning the Financial Crisis Commission that we need stronger reforms than Dobb's Senate bill.

Meanwhile, out there, seemingly oblivious of the gathering storm is an aging Woodstock hippy, good Ol' Uncle Warren strumming away on his ukulele, an over-the-hill rock star basking in the adulation of 40,000 adoring shareholders at their annual meeting in Omaha's Qwest Center ... a scene reminding us of Nero fiddling as Rome burns ... of the string quartet playing on the deck of the sinking Titanic ... of a Shakespearean tragedy with a raging, blind King Lear trapped, in denial of his role in America's collapsing empire.

Yes, folks, Uncle Warren has a bad case of denial. Remember, not too long ago Buffett was calling derivatives "weapons of financial mass destruction." And yet, there he was on stage at his love fest last week defending Wall Street's most toxic companies, trapped in denial, defending the greedy culture that got America into its current mess:

Praising Moody's "business mode," and by inference all rating agencies that blindly rubberstamped Wall Street's toxic debt, setting up the last meltdown

Defending Goldman Sachs bad behavior despite the fraud suit and a possible criminal indictment (while hiding his own conflicts of interest as a big investor in both Moody's and Goldman)

Praising Goldman's CEO Lloyd Blankfein ... by far Wall Street's greediest fat-cat banker who paid himself $68 million of his stockholders profits last year

Defending Goldman with a bizarre argument that Goldman is no more guilty than the other Wall Street banks, a tacit approval of the bad behavior of all Wall Street banks in the Goldman Conspiracy

Worse, ol' Uncle Warren also tried deflecting attention from Wall Street's corrupt business model by blaming government regulators for the meltdown, another example of Uncle Warren's blind denial, ignoring the fact that in the past year Wall Street spent over $400 million on lobbyists and campaign cash to make absolutely certain regulators, Congress and the Obama team all played along with Buffett's songs that guarantee Wall Street controls Washington regulators

Ironically, all this comes from a man who once lectured Congress on "Moral Integrity: I want employees to ask themselves whether they are willing to have any contemplated act appear on the front page of their local paper the next day, read by their spouses, children, and friends ... Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless"

Yes, Buffett's in denial ... just like his banker buddies ... so short Buffett, short Baby Berkshire, short Goldman, short Moody's. Why? They are all "shorting America," piling on debt that's pushed our debt-to-GDP ratio to 92%, past the IMF's 90% danger zone.

Main Street's also in denial ... forget hedger John Paulson's crooked subprime deals that made him and Goldman billions ... forget the hedgers in Michael Lewis' new "The Big Short" ... it's not the hedgers shorting America, it's the bosses inside Wall Street banks, their greedy co-conspirators inside Washington and now Uncle Warren, a nice guy who once thought derivatives were evil "weapons of financial mass destruction," but who's now defending every weapon Wall Street will use to stay in "business as usual," beating Main Street's 95 million investors, a corrupt business model destroying from within.

Wall Street's denial is blinding: Buffett and his merry band can no longer see how blind they are. They just keep strumming the same ol' tunes. Well folks, until they stop shorting America, we'll just keep reminding you of the debt their business model is creating.

So here are my best estimates, mostly from reported resources, of the huge debts Wall Street is dumping on America, the big bubble they're already blowing, driving the global economy headlong into another meltdown that will trigger the Great Depression II. And likely, with all this debt, soon you can bet taxpayers will stage a revolution making Main Street American streets far worse than Athens:

1. Federal government debt ... $14.3 trillion

Federal debt limit doubled since 2005 to $14.3 trillion limit. Bush/Cheney wars pushed U.S. deep into a debt hole. Military kills 54% of budget. Expect 4% deficits through 2020.

2. Treasury and Fed cheap-money policies ... $23.7 trillion

The Fed's shadowy printing presses have created an estimated but unaudited $23.7 trillion in credits, grants, loans and guarantees, backed by taxpayers. Pure profit.

3. Social Security's rising debt ... $40 trillion

Soon we must either cut benefits or raise taxes 40%. Delays worsen solutions. By 2035 Social Security and Medicare will eat up the entire federal budget, other than defense.

4. Medicare's unfunded debt ... $60 trillion

Going broke faster than Social Security. Prescription-drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.

5. Annual health-care costs ... $2.5 trillion

Costs rising faster than inflation. Burden increasingly shifted to employees. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.

6. Secretive global derivatives trading ... $604 trillion

Wall Street resists all regulation of their gambling casino that leverages the combined $50 trillion GDP of all nations by a 12:1 ratio. Warning: Less than 2% of Wall Street's derivative bets triggered the last meltdown. Buffett "guarantees" it will happen again.

7. Population growth of 50% vs. Peak Oil demands ... $30 trillion

United Nations says global population is increasing from 6 billion to 9 billion by 2050. China and India need 500 new cities each. Billions more humans want autos, using up limited resources, shifting more costs to America, as commodity price increases and new resource wars.

8. U.S. dollar losing as reserve currency ... $20 trillion

As China's economy rockets past America's, the dollar will be replaced as the chief foreign reserves. The shift will devalue the relative worth of all America's assets.

9. Global real estate losses ... $15 trillion

Commercial real estate is bloating 25% of U.S. bank balance sheets. Dubai Tower, world's tallest, is empty. China collapse will upstage, further depress America's market.

10. Foreign trade and ownership ... $5 trillion

Foreigners own more than $2.5 trillion of America. China holds over $1 trillion Treasury debt. $40 billion new deficits added monthly. Total climbing at $400 billion annually.

11. State and local budget and pension shortfalls ... $3.5 trillion

Shortfalls of $110 billion in 2010, $178 billion in 2011. On top of more than $450 billion in annual shortfalls in local government employee pension funds. L.A.'s near bankruptcy.

12. Corporate pensions plus 401(k) plans ... $3.2 trillion

Only 30% of Americans have enough to retire. There's $2.7 trillion in 401(k) plans. And 92% of corporate pension plans are underfunded, with defaults guaranteed by taxpayers.

13. Consumer card debt ... $2.5 trillion

Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 trillion to $2.5 trillion. Fat Cat Bankers love it, yes, love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.

14. Lobbyists annual costs ... $1.4 trillion

Wall Street bankers, Corporate CEOs and Forbes 400 Richest spend billions to influence elected officials, regulators and bureaucrats with lobbyists and campaign donations to exercise power over government. Voters are easily manipulated, but it takes lots of cash.

The total of all 14 categories of debt is a mind-blowing $825 trillion that includes "apples and oranges," jet fighters, derivatives and insurance fees, credit cards, autos and mortgages. There are more, and of course these are just estimates. Given the lack of transparency on Wall Street and in Washington, our debt is likely over $1,000 trillion.

What must you do? Wake up, drop your denial, get active, demand guys like Uncle Warren, his fat-cat buddies and Obama's team snap out of their denial, fight a return to the old greedy, toxic, destructive culture ... demand that your elected reps in Washington pass 1930's-style financial reforms ... or America will soon trigger a bigger meltdown, a new Great Depression II and no longer be the world's leading superpower.

High Frequency Terrorism: How the Big Banks and Federal Reserve Maintained Their Death Grip Over the United States:

By David DeGraw & Max Keiser, AmpedStatus Report
Posted on Monday, May 10th, 2010 at 1:11 am

http://ampedstatus.com/high-frequency-terrorism-how-the-big-banks-and-federal-reserve-maintained-their-death-grip-over-the-united-states

The following article is the third-part of a six-part report titled: “The Financial Oligarchy Reigns: Democracy’s Death Spiral From Greece to the United States.” The full report is available here:

http://ampedstatus.com/the-financial-oligarchy-reigns-democracys-death-spiral-from-greece-to-the-united-states

III: Financial Terrorism Operations: 9/29/08 & 5/6/10

In the aftermath of Goldman Sachs’ public flogging before the world in Congress, and while under investigation, on the very day that Congress was voting on the “break up the too big to fail banks” amendment and cutting behind the scenes deals to gut the audit of the Federal Reserve, the stock market had its greatest sudden drop in history, plummeting 700 points in ten minutes - shades of September 29, 2008 all over again.

If you recall, back in September ‘08, as Congress was voting down the first bailout, the big banks made the market plunge a record 778 points in one day, fear and panic then led Congress to pass the bailout. Trillions of our tax dollars, the money that we desperately need to keep our society functioning over the long run, then went out the window and into the pockets of the very people who caused the crash.

What happened on September 29, 2008 will go down in history as one of the greatest acts of terrorism ever.

9/29/08 proved that when you have so much power concentrated in the hands of a few, you can manipulate a computer algorithm and make the market and economy go which ever way you want it to go. So on 5/6/10, just as the power of the big banks was threatened again on the floor of the Senate and a deal on auditing the Federal Reserve was being negotiated, in came a sudden and unprecedented ten-minute 700 point market drop. A precision-guided High Frequency Trading (HFT) attack to show Congress who’s boss.

If you think the massive sudden drop happened because one lowly trader hit one wrong button, if you actually believe that the entire stock market can plunge because of one mistaken key stroke by a low level trader, you are stunningly naïve. I hate to burst your bubble, but this was a direct attack.

In a market where 70% of all trades are executed by computer algorithms via High Frequency Trading (HFT), Goldman Sachs has the power to make the market crash or rise at will. In fact, Goldman has a major Weapon of Mass Destruction in its Program Trading monopoly of the New York Stock Exchange, as Tyler Durden described on Zero Hedge:

“Goldman’s dominance of the NYSE’s Program Trading platform, where in addition to recent entrant GETCO, it has been to date an explicit monopolist of the so-called Supplementary Liquidity Provider program, a role which affords the company greater liquidity rebates for, well providing liquidity, and generating who knows what other possible front market-looking, flow-prop integration benefits. Yesterday [5/6/10], Goldman’s SLP function was non-existent. One wonders - was the Goldman SLP team in fact liquidity taking, or to put it bluntly, among the main reasons for the market collapse….

… here is the most recently disclosed NYSE program trading data….

What is notable here is that of the 1.4 billion in principal shares, or shares traded for the firm’s own account, Goldman was the top trader by a margin of over 100% compared to the second biggest program trader.

We have long claimed that Goldman is the de facto monopolist of the NYSE’s program trading platform. As such, it is certainly the case that Goldman was instrumental in either a) precipitating yesterday’s crash or b) not providing the critical liquidity which it is required to do, when the time came. There are no other options.”

For further investigation, I turned to Max Keiser, who has written and authored similar Program Trading and HFT computer algorithms. I asked him if he thought this was an attack, here is what he had to say:

“May 6th was an unequivocal act of domestic financial terrorism in America. A day that will live in infamy.

To scare the lawmakers, themselves large owners of the very banks and stocks that they are supposed to be regulating, a financial Weapon of Mass Destruction was put to their head and they acquiesced.

As the inventor of the continuous double-auction, market-making technology (VST tech. US pat. no. 5950176) that is referenced 132 times by program trading and HFT patents since 1996, I can tell you that Goldman, JP Morgan and the gang simply pulled the ‘buys’ from their computer trading programs and manufactured a crash. And when the coast was clear, and it was clear the politicians were not going to vote for anything that would break up the ‘too big to fail’ banks; all the ’sells’ were pulled from the computers and the market roared back.

This is a Manchurian Candidate market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go - and then hundreds of thousands of day-traders watching Cramer on CNBC jump on the momentum bandwagon and commit the crime for the Wall St. financial terrorists, who then say, ‘It wasn’t us, it was ‘the market!’”

On Friday, the next day, after the “break up the too big to fail banks” amendment was soundly defeated by a 61 to 33 margin in Senate and a deal was struck to eliminate key provisions from the audit of the Federal Reserve bill, Goldman was meeting with the SEC to work out a settlement in their case against them. Once again, Goldman proves that crime pays. Welcome to the New Mafia World Order.

Other than the two major operations carried out on 9/29/08 and 5/6/10, we must also recall a smaller attack on January 21st and 22nd of 2010, when Obama had a press conference and came out in favor of the Volcker Rule, which would have limited these HFT and “proprietary trading” schemes. At that time, the market dropped 430 points. Soon after this attack, all follow up talk on the Volcker Rule faded away and this reform has not been seriously addressed by Obama since then.

The bottom line, the United States has been taken over by a financial terrorism network. Let’s face it, we are all hostages of these financial terrorists and our puppet politicians rather be in on the scam than defend our interests. If these terrorists don’t get their way at all times, they have the power to throw their tremendous weight around and turn millions of lives upside down in a matter of minutes, and as they have shown they have no hesitation in executing that power, no matter how many millions of lives they destroy.

They set off this crisis with a wave of bombings in their initial Economic Shock and Awe campaign two years ago, resulting in massive devastation. Just to name a few of their greatest hits within the U.S.:

* 50 million Americans are now living in poverty, which is the highest poverty rate in the industrialized world;

* 30 million Americans are in need of work;

* Five million American families foreclosed upon, 15 million expected by 2014;

* 50% of US children will now use a food stamp during childhood;

* Soaring budget deficits in states across the country and a record high national debt, with austerity measures on the way;

* Record-breaking profits and bonuses for themselves.

Like other terrorists, they don’t use IEDs, they use CDOs. They don’t use precision laser-guided missiles, they use High Frequency Trading. They don’t have WMDs, they have derivatives. Let’s also not forget that they have toxic assets and dirty debt bombs just waiting to be deployed upon the American public once there is any true growth in the economy. Their nuclear arsenal includes hundreds of Trillions in secretive derivatives and hidden debt bombs, just ticking away, waiting to be set off… at their whim...