"The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered."
— Thomas Jefferson, Founding Father, Third President of the United States, and the principal author of the US Declaration of IndependenceBelow is what President Eisenhower said in 3 minutes farewell speech on January 17th, 1961: "...Only a knowledgeable citizen can encounter this military industrial complex...."
Guess what, our primary and secondary education systems have gone down the drain ever since and today they are hardly anything but expensive day care centers. If people cannot read financial papers and poetry, know nothing of the world history, nor understand multiplication, division and percent calculations when they graduate they have learned nothing useful for their life and we have totally failed them!
The below example from 1907 shows how the powers behind the banks play the markets. The elected officials in Congress will not reign these criminals as they have the power to bring up or destroy any election campaign they choose to get "their people" to Washington. This is the cancer devouring our society and the reason why we can not get proper financial reform act established. These criminals were busy at work when we recently dismantled the ban on naked short selling and the up-tick rule. With these rules gone we got instantly the worthless mortgage securities, market crash, financial crisis and seriously threatened by the US$ 615 Trillion derivatives bubble (BIS data). These guys are criminals - and believe or not they are protected by the US Congress! These criminals have this derivatives bubble hanging above our heads as an insurance against the uprising of the populations of the world: "attack us and we will bring this bubble down!" When this derivatives bubble bursts suddenly there is simply no way that WW III can be avoided.
In 1907, J.P. Morgan, a private New York banker, published a rumor that a competing unnamed large bank was about to fail. It was a false charge but customers nonetheless raced to their banks to withdraw their money, in case it was their bank. As they pulled out their funds, the banks lost their cash deposits and were forced to call in their loans. People therefore had to pay back their mortgages to fill the banks with income, going bankrupt in the process. The 1907 panic resulted in a crash that prompted the creation of the Federal Reserve, a private banking cartel with the veneer of an independent government organization. Effectively, it was a coup by elite bankers in order to control the industry. -Tanya Cariina Hsu
With five days left until the debt ceiling is reached, are Americans witnessing first hand a crisis or political showdown? According to investor and author Jim Rogers, it just doesn’t matter anymore.
“It’s a charade. It’s a scam. They’re not going to do anything serious,” Rogers told RT. “They’re going to announce something either the day before, the day of or the day after and they’re going to say everything is okay.” Rogers added, however, that “America is going to be in worse shape than it is now.”
“They are going to continue to spend and drive us deeper into debt,” said Rogers.“I don’t see any chance of turning it around.”
Next is a graph showing how the Big Boys behind these banks play the game. The data has been altered with a "switch" to make any meaningful changes instantly visible. The graph tells that the men in power started shorting the equities in April this year. As long as this "switch" is "on" the markets remain in the bears' territory. With this selling stocks early for cash is the way for those who need money within a few months. For a long term investors with 10 year horizon or more this means nothing. For a short term investors and traders this means that their approach to trading must change while they trade. With wrong approach the short tem traders will keep on losing cash.
To have success in retirement requires that one understands the ongoing megatrends of the world. A clear megatrend today is the need to reduce the use of the fossil fuels. This will have a profound impact in all areas of the societies - all in due time. To get maximum benefits out of this you have to time it all correctly.
Warren Buffet just recently bought a huge US railway company. Here we have two trends benefiting him: 1) the trains are the most energy efficient transportation system for long range shipments of goods, and 2) high speed passenger trains traveling 100 t0 200 mph are coming within the next decade or two also into the USA. Europe has had them already in many of the major traffic corridors and China is also having some in use. The USA is nowhere here to be seen.
The world is full of this kind of opportunities, one has to keep they eyes open and act when the opportunity offers itself. Doing it his has worked for Warren Buffet for decades. He is no more relying on capital gains of his investments. He is looking more and more for dividends and other distributions to the shareholders.
He has concluded that it is better for all to get some dividends and then let the shareholder decide if this company is the "best in the world" instead the one that is just behind the corner.
The small investors could adopt this same tactics but it requires discipline. One can start with very little money and play it safe to learn the ropes. It will take money to earn money and setbacks are there with 100% certainty. The errors teach you if you are willing to accept that you made tan error. If you have done it correctly the retirement does not stop your river from growing, actually nothing except a war can stop it any more.
When the investmenh houses like JP Morgan & Al. recommend a list of stocks or funds for the coming year this means: 1) They already have these stocks and are planning to sell them but want to gain a little more and as in everything that is sold advertising is the key, 2) If the fools follow this "advise campaign" they keep on repeating it until they see diminshing return for their advertising money and at that point they start liquidating their holdings while still advertising the opposite. That is how the fools happily depart from their hard earned money.
To start you can acquire shares in such companies that: 1) pay dividends on monthly or quarterly basis and are well positioned to profit from the megatrends, or 2) the most profitable ones but difficult to find as they are still in the hands of such people like the new "Bill Gates" and new "Steve Jobs" when they were in their early twenties, or 3) are just utilities paying dividends to their shareholders. Albert Einstein told long time ago that the compounding interest is the eight wonder of the world and he was right.
A combination of this types of companies are a good starting point but there is much more into this before you start.
The first fact is: "The economics is not a science but instead a belief system like e.g. a religion". This was stated by a former US Treasury Secretary Paul O'Neill in the book "The Price of Loyalty" during the beginning of the W's presidency.. This is readily understandable there are no rules to predict how the human mind works or to claim that one knows what the people will do with their excess money is just absurd. We all know that big portion of average Joe's money goes into necessities (food, clothing, shelter and daily commuting) and this part can actually be predicted over the whole population spectrum. But where does the excess money remains unpredictable regardless where the media and advertising want it to go. Expand this from local differences to country level and then beyond the borders and you can not predict the outcome any better than you can predict the outcome in throwing a dice. Can you predict the closing of the DOW index next week or even a day?
The second fact is: All recessions are man made by the people who are in control of the real money in pursuit of gaining more at the expense of the "outsiders". A properly managed society will not have inflation at all. The whole civilized world was this way for a period of at least two thousand years when run by the Sumerians and the Egyptians.
The third fact is: In an illuminating dissertation called “Toward a General Theory of Credit and Money” in The Review of Austrian Economics (vol. 14:4, pages 267-317, 2001), Mostafa Moini, Professor of Economics at Oklahoma City University, argues that money has never actually been a “commodity” or “thing.” It has always been merely a “relation,” a legal agreement, a credit/debit arrangement, an acknowledgment of a debt owed and a promise to repay.
The concept of money-as-a-commodity can be traced back to the use of precious metal coins. Gold is widely claimed to be the oldest and most stable currency known, but this is not actually true. The current gold bugs do not understand what they are talking about.
Money began as an accounting system and evolved slowly into the use of precious metal coins. Money as a “unit of account” (a tally of sums paid and owed) predated money as a “store of value” (a “commodity” or “thing”) by two millennia; the Sumerian and Egyptian civilizations using these accounting-entry payment systems lasted not just hundreds of years (as with some civilizations using gold) but thousands of years. Their bank-like ancient payment systems were public systems—operated by the government the way that courts, libraries and post offices are operated as public services today.
In the payment system of ancient Sumeria, goods were given a value in terms of weight and were measured in these units against each other. The unit of weight was the “shekel,” something that was not originally a coin but a standardized measure. She was the word for barley, suggesting the original unit of measure was a weight of grain. This was valued against other commodities by weight: So many shekels of wheat equaled so many cows equaled so many shekels of silver, etc. Prices of major commodities were fixed by the government. Hammurabi, Babylonian king and lawmaker, has detailed tables of these. Interest was also fixed and invariable, making economic life totally predictable.
Grain was stored in granaries, which served as a form of “bank.” But grain was perishable, so silver eventually became the standard tally representing sums owed. A farmer could go to market and exchange his perishable goods for a weight of silver, and come back at his leisure to redeem this market credit in other goods as needed. But it was still simply a tally of a debt owed and a right to make good on it later. Eventually, silver tallies became wooden tallies became paper tallies became electronic tallies.
The fourth fact is: If not earlier then it was the Roman emperors who started devaluing the gold and silver as currencies to pay all the extravaganza they offered for the Roman citizens in Rome. They first reduced them in size making them smaller and then with improved technology they started replacing real gold with brass and copper and then using an outright fraudulent look alike gold and silver coins. It did not take a rocket scientist at time either to notice the difference and people did not accept this new money for payment of anything at all unless the Roman soldiers were close by watching that the the goods were exchanged and commerce continued.
The fifth fact is: When the bankers emerged as the controllers of the money following the battle of Waterloo in 1815 everything started changing rapidly. We can claim that the financial mess where we are today is a direct consequence of these times. The events that led to establishment of the US FED have their basis in this same battle leading to baron Rotchshild and his financial associates of taking over first the British major industries, the whole financial system followed by the takeover of the Bank of England (Churchill nationalized it after the WW II). It was then easy to expand their influence over to Europe and soon enough also to the USA. After almost a century of effort they In 1913 established the Federal Reserve Bank of the USA (FED) as an independent private entity with responsibility to handle to US interest rate policy for the "good" of the country.
The "happy" days of Weimar are coming soon...
Our ruling oligarchs have done a marvelous job in hiding their real target from public discussion. The Sun King of France Louis XIV told one of the heaviest truth ever when he said: "The one with most money will always win the the war."
Nobody is questioning why the banks who own the FED hold up to billions of derivative contracts with combined note value now at $615 trillion (last reading from BIS and counting). Almost nobody including most in the US Congress have any idea how much money is tied here into imaginary commodities and currencies with complicated network of bets and counter bets with real options that all are represent real money and not imaginary money like the underlying derivatives contracts! In comparison the global GDP is only $58 trillion and withy US DP being an bout 25% or $14+ trillion.
What do we mean with imaginary derivatives contracts? The option markets have gone off to the tangent. E.g. if all the call option purchasers of gold would one day actually demand to get the gold by paying the settlement price instead of the cash settlements from the option exchange side the option exchanges might find themselves with empty vaults. What would happen then? A contract is a contract and accordingly gold must de delivered to the option holder that brings the money to the settlement!
It is even more frightening as FED and the bankers all know that the world does not have but a tiny fraction of stuff in all these contractual obligations or derivatives. We have never heard that it was actually margin calls that put Lehman Brothers to bankruptcy on September 15th, 2008. It is the timing of it all that tells this story. FED have told us publicly that they were watching the situation closely online ready to intervene like they then did by opening the "unlimited" cash window to the markets. FED realized quickly that the tidal wave going through was in reality much bigger than anything they had imagined and closed all financial markets in the USA.
The ignition came when oil peaked at $147 per barrel a couple months earlier and then turned around and the price started dropping like a rock. This kind of action starts an inescapable death spiral to all owning related options and any margin accounts. When down limit days prevent at least the small investors from getting out they have two choices, either to hang in there or just to hang themselves as they are simply wiped out. After instant death to those without any protection at all with counter derivatives it all spreads like a wild fire to every field of financial markets on the planet. The increasing margin calls will soon force more and more accounts to be closed. It appears Lehman Brothers was was in the game without sufficient protection and with that not even FED could save them regardless that they were one of the owner banks. They put also the other owner banks of FED banks into instant dander zone and this was the real reason why FED closed the markets. Countless others would follow to the gutters some instantly and some weeks, months and even years later before it all would clear out.
This is where all the money the $3.7 trillion went that we the tax payers authorized. We paid for the gamblers in a local casino to bail them out so that they could play even more. FED pursued the US Congress to pass these laws so that it could buy interest carrying bonds from Treasury. It was not only the lost money that we paid already but also the interest that we must keep on paying for years if not even decades to come.
JPM, BA, Citibank and Goldman Sachs have $200 trillion part of this pie and the rest is in the hands of the remaining largest global banks including all other private banks behind FED. With cash flow from their investment in FED and US$ as the reserve currency of the world these banks have had no difficulties of maintaining the $25 trillion in options to keep on playing. And with FED they could be assured that the US tax payer was there to help.
They loses mounted to trillions of dollars in paper when the oil prices collapsed in summer of 2008 leading to stock market collapse on Monday September 15th, 2008. FED knew what was coming and as said above was watching and working as a guardian Angel. The mounting losses were huge and it was likely at that moment when it was decided that one of the banks had to go. Huge cash injections were suddenly needed to neutralize loss bringing options and it had to be there generally in 3 business days and latest by 2pm of Friday the 19th.
The game of musical chairs is merciless as someone will always be left out. This time it was Lehman Brothers who could not find an empty chair when the music stopped on September 15th 2008.
Unfortunately this game is still not over for the tax payers as money is still needed as QE2 (Quantitative easing 2, whoever invented this term wanted to make sure that people stay confused). And here is the background:
Goldman's latest assertion (October 2010) is now suddenly that QE2 is good for the economy instead of the previous one telling that it was bad.. As recently as September 2010 the chief Goldman economist, Jan Hatzius said it was bad. Goldman is saying that the FED would need to pump $500 billion to $1 trillion via QE. Then they said it would be at least $2 trillion, but really they would probably need $4 trillion. This means that with the previous $3.7 trillion we end up giving our bankers altogether $8 trillion to make their derivatives gambling good again, that together is 1/3 of the money needed to maintain their $615 derivatives note game alive!
This is insane! We would love to have FED to come and instead of giving bail out money to its owners just to pay the retirement money losses for the American people that are actually much less than this soon to be $8 trillion.
Goldman's Hatzius’ outlook improved from a month ago, when he wrote to clients (Oct 6th) that the U.S. economy faced two main scenarios, neither of them good:
“A fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.”
There is now a new game and player in the town and this time it will be of real global domination if we do not defuse the whole game withy an agreement that will satisfy everyone around the globe and not only G2, G6, G8, G20 or any GXX. This is the first real challenge for the Anglo-US oligarchy since they rose to their unchallenged power position in the aftermath of the 1815 battle of Waterloo.
China has now a 2.5 petaflop supercomputer and the US banking elite went instantly to the endangered species list helped by the derivatives they hold. The modern business trading is all done between the computers and China is no more the student. There is almost a certainty that they picked up also the shareware version of the Goldman's "doomsday machine" and it is already installed to their array of supercomputers being fine tuned to the global electronic trading.
Goldman's "doomsday machine" used to steal trades from all others just like you and me until very recently - that was the old glory times for Goldman with staff bonuses rivaling the GDP's of smaller countries..
Here is what our oligarchy and their banking elite must do to survive:
The inflation in the USA has been dormant for decades and as long as our unemployment stays high and the labor cost with our main trading partners are less than1/10...1/100 (China, India, etc...) of ours we simply can not have any inflation.
Then remember that our financial empires picked the previous $3.9 trillion from the FED and Treasury and that money is now in new position - not as loans to the businesses as intended but as a reserve and in foreign currencies.
If our government does not care what happens to the middle-class and the workers we have a very high inflation "risk" as the representatives of these banking empires are telling. If our government believes them more than the facts on ground we of course must increase the interest rates to stop the dollar from going out and strengthening the other currencies by buying foreign currencies and foreign currency denominated bonds. How sweet if the global financial empires would get the whole world doing just this! They would then sell their positions at peak of the stampede and then just sit and wait. The dollar has only one way to go when the reality hits in within a few years.
The US carry trade is already at level of US$ 1.5 Trillion, so we have still US$ 2.7 Trillion to go. With this we know that the trade continues and dollars is buying foreign currency denominated assets. To prevent the dollar from sinking in this environment we must have higher interest rates in this environment we must get at last strong prospect that the interest rates are going up and up.. What does this mean?
The recent story from Japan tells what is happening with the famous "yen carry trade" that worked well until early 2007 like this: a trader borrows 1,000 Japanese yen from a Japanese bank at zero or close to zero interest rate, converts all to U.S. dollars and buys dollar nominated bonds of equivalent amount. Let's assume that the bonds pay 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% as long as the exchange rate between the countries does not change. The gains can become 45% If the trader had used a common leverage factor of 10:1 (minus the cost of the leverage).
The risk in a carry trade is the uncertainty of exchange rates. If the dollar falls in value relative to the Japanese yen the trader would run the risk of losing money. The leverage would increase the risk without hedging against the fall of dollar's relative value. This happened later in 2007 as the yen started strengthening and without the protection the trader would have started losing money. This was the exactly the time when all the news media started telling us how good the yen-dollar carry trade was. Why this? The traders needed to get out from the now loss making positions and needed plenty of suckers!
To stabilize the currencies the world had tried gold standards for a multitude of occasions but always failed. The peak season for these trials was between 1800's and early 1900's. Towards the end of that period a tug of war was going on between the Britain and the USA.
The Federal Reserve Bank of the USA or FED was just established (1913) under the tight control of the European banking empires. This was a major coup for the European banking empires. These had tried to get accomplished already almost a century starting from the coronation of the Queen Victoria whom this Aristocracy saw as by far too liberal minded towards the ordinary people in Britain.
The WW I had just ended to humiliation of Germany. The winners of the war forced Germany to sign a peace treaty with impossible terms. All the signature nations in Versailles, at least the USA and UK, knew perfectly well that it was impossible for Germany to ever pay for the demanded reprisals. The plan of the winners was to destroy the German financial machinery like it did through the hyper Inflation. With this deliberate act and humiliation of the people it simply woke up the forces that led us all directly to the WW II.
The great depression of 1929 was soon to come. To attract gold back from the USA Britain needed to increase the demand for pounds and for that increased the interest rates. With gold flowing now to Britain the US money supply was decreasing and that was a problem of course for the ordinary people. The high interest rates in turn depressed Britain’s own economy to a degree that the British government had to abandon the gold standard in September 21, 1931.
The pound collapsed and speculators attempted to devalue the US dollar too. The FED responded by raising interest rates. The FED was able to defend the gold standard initially but like in Britain it tightened the money supply amid uncertain economic times. The U.S. government, which soon possessed most of the world's gold moved to cushion the effects of the Great Depression by raising the official price of gold from about $20 to $35 per ounce and thereby substantially raising the equilibrium price level in 1933-1934. The 20/20 hine side theorists figured out later that a strict adherence to the gold standard during the Great Depression prevented FED from reducing interest rates that prevented the expansion of money supply. FED did the opposite it increased the interest rates to stimulate demand for the U.S. Dollar. This made it all worse for the US citizens but great for Plutocracy as they were now in position use the dollar and go shopping businesses from Europe. Germany was especially vulnerable after the WW I with hyper inflation of the German Mark. What was happening for the people in the USA was not important for the moment as the Europe was for sale and the Wealthy had the dollars and gold thanks to the banking empires of the Europe who still con troll the FED.
In the real world companies create value to its investors by investing capital to generate future cash flows at rate of return that is greater than the cost of capital. Value is always generated when when real higher cash flows are generated. The company stock market value is changing based on stock market sentiments that do not necessarily have anything to do with the value of the company.
Then we have other factors, like:
Below chart shows on of the most common fraudulent activities exercised in connection of the quarterly reports that public companies must publish.
More to come...HOMENobody can likely prove afterwards without exact fully disclosed data that any fraudulent act was involved but in reality what we see is nothing but a fraud. In an investigation - likely never done as this case is too small - the perpetrators simply tell it all was an, "oops". We just thought that the results would cause the share value to go way down and that is why we sold our position in this company at once as the prices were likely to sink. Just remember that large stake holders are sophisticated investors who know what they are doing and they would not sell any large stake at once as they know the price will jump or drop instantly.
Just let's take the case of Evergreen Solar (ESLR) Nov 2, 2010. Somebody sold suddenly 350,000 shares causing an instant drop of 10% in the share price. When the mom & pap investors see this they get scared and start selling too. and the price may stay down and sink even further long enough that the criminal party has time to buy their stake back at lower price.
And like said guess who started buying immediately after the price dropped the predetermined amount? It was the same entity that sold the 350,000 shares or an entity that draws the money from the same valet elsewhere. Of course that itself is not a fraud as they claim that they just "realized" that they made an error and wanted to recover as much as they could. Sounds good for any investigator and anybody on the street and they all smile happily as a "big valet" just lost some money - but that is not the whole truth, they actually won money, a big time!
If one would study the options markets one should realize that this same valet or closed associates had likely recently shorted 350,000 shares of ESLR. This means they had just another good payday. The money involved in these small cases is insignificant enough that the investigators do not get involved that easily and these fraudsters get it free and clear.
This is done also with large companies. Decades ago the quarterly report caused changes were no more than 2-3%. If there would be a 5% change that was a huge issue. With these large price jumps one is bound to make money even by buying a put and call option just before the report publication indicating even more that fraud is involved.
A company statement that "we do reveal the information simultaneously to all" can be true as well. That is however not enough as major investment houses are by far more connected to the companies and their daily activities than ordinary people ever can be. They can do their accounting equally well than the companies and know the results at surprising accuracy the same time than the company - that is much earlier than the company gives the result out.
