10/45. Wikileaks, the Robin Hoods of the 21st Century...

December 10, 2010

Wikileaks, the Robin Hoods of the 21st Century...













10/44. Naked shorting crashed Greece's bonds - and same crooks bought them back for pennies - yields became great!

December 10, 2010

Is it so that when a major financial institutions manipulates the markets that is just normal business? Watch this video clip to see what really happened to Greece.

If market manipulation like naked short selling is not a financial crime then there is no such thing than a financial crime of any kind. People like Bernard Madoff should be instantly released from their wrongful imprisonment and all their losses should be compensated handsomely to them and their families!

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Here is a little more on the financial irregularities from Goldman Sach's (GS) as was reported in FT today:

  1. Senior trader urged colleagues on credit insurance markets to "kill" some investors' positions.
  2. In 2007 GS adopted "short squeeze" (naked short selling) strategy to drive down the prices of the credit derivative swaps (CDS) on US mortgage backed securities (denied by GS of course). This move allowed them to buy these CDS back later at considerably reduced prices. They knew that these US mortgage securities were faulty that deal had no risk in case that the markets would react differently. This was a critical test for the future when they would do the same for the all European governments' bonds. These would yield to enormous profits instantly and would destroy the EU and it's remaining banking system. It also would put the naive European tax payers into slavery as they would likely nationalize their banks and with that the debts of their private banks. With this the the banking empire controlling the US FED would become the absolute ruler of the world as China could not match the combined financial power of the USA and EU.
  3. "We should start killing the shorts on the street" Mr. Swenson said (FT) "This would have people totally demoralized"
  4. In another e-mail Mr.Swenson reportedly (FT) said, Goldman should reduce the prices of CDS's to "cause maximum pain" on existing holders of credit insurance.

Below is the ongoing similar saga from Iceland in case you want more on this topic. If you include Ireland and Kazakhstan, and also Argentina a few years ago an interesting pattern starts surfacing leading only to one conclusion:

We have criminals on the streets and those criminals do not belong there. They all should be rounded up, tried and jailed if proven guilty. The guilty part means that we must be able to figure out how they did it all and how they succeeded in hiding it all. Sooner or later some amongst them will talk even when they likely risk their lives by talking - there is too much money involved!

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Below is then the story of Latin America - how they failed in their effort to tie their multiple currencies to the US dollar. This is exactly what they Europeans have done with Euro. Did any of the decision makers ever check what happened in Latin-America?

One by one all countries in South America failed to keep up with the dollar and had to release the dollar tag and let their currencies to find more suitable exchange rates.

Brazil enjoyed for years of inflation at about 30% to 40% per month and survived that too. They saw from the first row seats how the wealth was accumulating to those who owned manufacturing facilities and especially those that were exporting products. Everything was on autopilot. Wages rose each month and prices rose each month at the same rate. After a while this made no sense at all. Brazil was also a tough cookie for the bankers as the people especially on rural areas just refused to take any loans from any banks.

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10/43. Kazakhstan shows how to solve local banking crisis - stemming from the global financial crisis that is now in the last round in the global chain letter game between the banks!

December 9, 2010

There is no reason that farmers, laborers, engineers doctors, nurses, teachers, shop keepers, and a myriad of other small people pay any of the debts of any private banks anywhere on the planet.

No bank is too big to fail anywhere and the countries of the world (the governments) should not nationalizing them in as "as are" form. Nationalizing any private debt in this process is an absolute NO NO NO!

These banks and their private investors are shouting everywhere and even supported by the global banking empires and IMF that the world as we know will end if these wrecks are not rescued and if the global banking empires including IMF are allowed to fail. THis is total BS. The biggest debtors of these banks are the other banks not the governments nor the small people.

The trade balances of the individual countries are generally speaking in good shape. This means that the countries and the economic activities inside them and between their trading partners are generally speaking in great shape. The financial troubles are and remain in a closed circle that consists mainly of the whole global banking system. These banks started playing games with risky derivatives borrowing money from each others until they refused to lend more and that created the crisis where we are now. This has nothing to do with the people and their everyday activities. Even the housing crisis was created to make collateral for the banks to support even further borrowing.

The mega banks are now trying to collect the debts of the borrowers one country at the time trying to get the host governments to step in as the responsible "guardians" of their countries. These mega banks do not tell the whole story as that would reveal that it is them that have played this whole chain letter game that has reached it's maximum extent and is bound to break open.

If they succeed and the tax payers of the world are brainless emotional sheepish and pay the debts of their failing banks the mega banks have won this chain letter game a big time and can keep the earlier proceeds and will now get also the people of the world to become their interest paying slaves through the rest of their remaining life.

Years ago Argentina was the first country to renegotiate that the loans from IMF and others were given to them with such strings that put the people of the country to slavery. People revolted and Argentina simply stopped all payments out and defaulted with all their foreign currency loans regardless who was the lender. The impasse took some years but after a while the debt holders understood to be reasonable and accept the loan modifications Argentina was offering despite the claims of the lenders that nobody would ever lend money to Argentina - it was the opposite that has happened.

Iceland was close to getting it all done the right way may even kick IMF out from the country. It is still not quite clear how three private banks of Iceland ended up borrowing 5 times the GDP mainly from UK and Netherlands banks. In this context we have to ask also why eight (8) of the perhaps most influential people from Iceland were the members of the notorious Bilderberg group? Initially the government of Iceland was yielding to the IMF and the EU banks demand to refinance all debt at high interest and the same time implement stringent austerity measures under "guardianship" of IMF that would have crippled this small country of 320,000 people. The people revolted and it was now the IMF and EU who had realized that they must yield and these negotiations continue.

Kazakhstan was the first one that told the foreign debtors of the failing Kazakhstan's private banks that they are on their own even if the government of Kazakhstan would nationalize some of these banks, the others would likely disappear. The government saw clearly that it was not the duty of the tax payers to pay these private debts. If the foreign debtors would not agree they would get what would be given to them. All debts must be modified with major haircuts and new service terms the underlying investments can pay without crippling the related businesses. The government was more than sure that sophisticated investors and investment banks knew perfectly well what they were doing and if their plan was actually steal the critical industries from Kazakhstan ownership they were mistaken and they should either lick their wounds or continue cooperation at new rules dictated or negotiated by the government.

Kazakhstan picked the only right way to handle IMF and all foreign sophisticated investors and investment banks. All these investors knew exactly what they were planning or doing and what were the risks they were taking.


Who is behind this all?

The answer is very simple: the descendants of the powers behind the 1933 failed revolution in the USA.

People with money are fully capable of assessing the risks and rewards and here they entered into this chain letter variation willingly as the real reward is the global domination:

  1. The first Step was the financial crisis where the first rewards phase was ignited on September 15th, 2008. This wiped out up to 50% of the wealth of the middle class in the Western world.
  2. The second Step is the banking crisis that has just started in Europe and Asia. Private banks that were encouraged to participate in risky investments by the mega banks. As an example the investment in a developing country is typically evaluated by the IMF consultants to cost 2-4 times of the actual cost of the project and this extra money was reserved for "special" needs. We know that that is not the case as with skilled management these investments can be done at about the same cost as anywhere else.
  3. The risk what they took was the timing and it appears that they miscalculated the impact of internet. Their problem was: If the game was started too early people would be still too poor after WW II; if it was started too late more plebs would realize what was happening and could grew resistance movements and with that nobody can predict what happens. In 1933 - their fathers and grandfathers had to go back to drawing boards.






Unlike Zimbabwe, the U.S. can easily get the currency it needs without being beholden to anyone. But wouldn't that dilute the value of the currency?

December 7, 2010

As the dollar is the reserve currency of the world printing more and exchanging them to treasury bonds has no impact to the value of the dollar. FED is an independent private organization owned by banks but the interest rate it receives for it's bonds is actually transferred back to the US treasury after the expenses of FED and a fixed (8%?) return for FED's capital is paid as per changes made to it's charter in 1960.

The innocent looking interest rate that is added to FED's own capital "A" is not that innocent as it paid in every year - good and bad. Since 1913 the FED's capital base has been growing according to compounding interest formula of A*(1+6%)^(2010-1913) and is now at A*285 or two hundred eighty five times the original investment "A" of the owner banks growing currently at rate of 17 times the original investment "A" per year. What should the US tax payers think here especially when they just lost half or so from their pension income?

We strongly believe that FED should be nationalized as soon as possible to remove the burden of 6% of compounding interest on their invested capital "A" and to simplify the money supply functions of the US Treasury.

Ellen Brown says:

"Although Japan’s relative debt is almost four times as large as ours and its central bank holds enough to equal nearly 100% of its GDP, investors are not fleeing the yen or driving the economy into hyperinflation. In fact Japan still can’t pull itself out of DEFLATION, despite massive quantitative easing. The country still has willing trading partners and is still the third largest economy in the world, an impressive feat for a small island.

If the Fed were to follow the lead of Japan and hold federal debt equal to the country’s gross domestic product, the Fed would be holding $14.75 trillion in federal securities, enough to refinance the ENTIRE U.S. federal debt of $13.8 trillion virtually interest-free.

The federal debt hasn't’t been paid off since the 1830s under President Andrew Jackson. It is just rolled over from year to year. An interest-free debt rolled over indefinitely is the functional equivalent of the government issuing money itself.

Andrew Jackson would have said the government SHOULD be issuing the money itself, rather than borrowing from banks that issue it. If Congress gave itself the right under the Constitution to issue money, he said, “it was conferred to be exercised by themselves, and not to be transferred to a corporation.”

Indeed, that may be why the U.S. dollar has been going UP since QE2 was initiated, while the Euro has been going DOWN. EU governments are doing what the inflation hawks want them to do: cut back on services, privatize their pension money, and otherwise engage in austerity measures to balance their budgets. The effect has been to depress their economies and throw them deeper and deeper into debt, with nowhere to get the extra cash needed to pay the expanding debt and interest burden.

The U.S. and Japan are exploring another model: allowing their currencies to expand to meet the needs of their economies. This was, in fact, the original money system of the American colonists. It was revived by Abraham Lincoln to avoid a crippling war debt, after which it was dubbed the “Greenback solution.”


Today that currency is issued by the Federal Reserve, which is privately owned by a consortium of banks; but the Fed has been at least semi-captive ever since the 1960s, disgorging its profits to the Treasury. Its web site states, “Federal Reserve Banks are not . . . operated for a profit, and each year they return to the U.S. Treasury all earnings in excess of Federal Reserve operating and other expenses.” The Federal Reserve Act provides that it can be modified or rescinded at any time, so Congress retains ultimate control.

Randall Wray, Professor of Economics at the University of Missouri-Kansas City, writes that “involuntary default is, literally, impossible for a sovereign government.”

The U.S. does not have to rely on foreign investors even to buy its bonds. If the investors are not interested, the central bank can buy the bonds. That is, in fact, what the Fed’s second round of quantitative easing is all about: issuing $600 billion for the purchase of long-term government bonds.

Unlike Zimbabwe, which had to have U.S. dollars to pay its debt to the IMF, the U.S. can easily get the currency it needs without being beholden to anyone. It can print the dollars, or borrow from the Fed which prints them.

But wouldn't’t that dilute the value of the currency?

No, says Cullen Roche, because swapping dollars for bonds does not change the size of the money supply. A dollar bill and a dollar bond are essentially the same thing. One bears interest and is a little less liquid than the other, but both are obligations good for a dollar’s worth of goods or services in the economy. If the bondholders had wanted cash, they could have cashed out the bonds themselves. They don’t have any more money to spend, or any more incentive to spend it, when they’ve been cashed out by the government than when they were holding bonds.

Moreover, adding money to the money supply cannot hurt the economy when the money supply is shrinking, as it is now. Most money today consists simply of bank credit, and bank credit is shrinking because banks are deleveraging. Bad debts are wiping out capital, which wipes out lending capacity. QE2 is just an attempt to fill the empty liquidity pitcher back up -- and a rather feeble attempt at that. Financial commentator Charles Hugh Smith estimates that the economy now faces $15 trillion in writedowns in collateral and credit, based on projections from the latest Fed Flow of Funds (September 17, 2010). Based on his projections, it might be argued that the Fed could print enough money to refinance the entire federal debt without creating price inflation. (The current inflation in commodity prices is due to other factors, as was discussed in an earlier article, here.) "








The Best Economic Graph of the Year

December 7, 2010

The below shown macro economic Graph by John McDermott shows the world trade balances including the USA, Japan, Germany, China, and the Oil Exporters.


To get more of it the major currency rates are shown in the graph below. In 1971 President Richard Nixon ended the direct convertibility of the dollar to gold and created to global currency system's breakdown. It took almost 10 years to stabilize the exchange rates between the countries as all wanted to gain something from this sudden change. This is seen in the above Graph as irregularities in trade balances lasting all the way until 1980.



After 1980 the world has been in a fairly good balance with surpluses and deficiencies taking care of each others at reasonable accuracy.

Since then those countries with raw materials or those with good education and strong manufacturing base tend to have maintained a positive trade balances while those on the other side will need to do changes or devalue their currencies to avoid sinking into a steam of recessions. The devaluation is unfortunately only a temporary solution but it will buy time.

Those troubled countries must get their house in order. The only known fail sure remedy is the best possible education covering all citizens in that nation. This will create the suitable work force to innovate and be flexible enough in moving with the fast changing world without any difficulties.

Of course there is also another solution. If the government lets foreign businesses to come in and go out as they please and utilize the available labor force in their businesses as they want. These businesses will educate their work force also but only for the specific tasks that are in demand. When these change as they will they re-educate only those whom they deem to be able to change, etc. This will not solve the problems of the host country at all but instead it keeps the population there occupied almost like slaves giving them no hope of getting out from this slavery. If the government of the host nation does not understand this then it's likely highly corrupted taking bribes and with that it prefers all to remain as it - until the people themselves wake up and remove this government by force.

The USA is a special case as it is currently the most powerful empire in the contemporary world of ours. The growing financial inequality in the country has led to the growth of financial oligarchy that already tried revolution in 1933 during the newly elected President Roosevelt first term. This hardly ever reported event (national archives have material on this) failed at the time and unfortunately the perpetrators that were the owners of the major part of the US industries and banking system were all let to disappear almost without a trace behind the horizon. The descendants of these powers are now the root cause for our current ongoing financial crisis that has yet to culminate.

This has to be analyzed a little more:

  1. Contrary to the common belief the USA is not open to the rest of the world to do business in a totally free manner. It is extremely easy to start a business but when it comes to financial transactions over the borders it all changes. Check it, try to open a foreign currency account.
  2. History of the 17 past empires shows that towards end they use major wars to get rid of the rot and decay inside them.
  3. The military-industrial complex of the USA has a budget that is larger than the combined military budgets of the rest of the world. 
  4. The USA has been outsourcing it's non-essential industries for more than three decades. This has even accelerated after the Congress decided that these industries "helping" other countries to develop needed some financial help to do it.  
  5. The products manufactured now in third countries like China and now imported to the USA contribute greatly to our trade deficit.
  6. The US Congress must be full of hypocrites as they seem not to understand that the jobs that have been outsourced will likely never return, and if some return the technology that was used in a foreign country will remain in their domain.
  7. The further development of anything must be done where the manufacturing facilities are and that is now in foreign countries. A remote management and development of it all was visioned to work by those who have never done anything beyond mastering a persuasive speech close to the skill levels of Adolf Hitler.
  8. It can not be that these people simple so there has to be something else here. As it is obvious soon even to the US Congress that this all has to impact the unemployment at home this must have been clear to the planners from the beginning of this all. As the growing military power will inevitably at one point need more soldiers the unemployed will sooner or later get attracted to the seemingly solid pay that the military will offer and in case there is a conflict those going to solve it will get a major bonus for the time they are there. The problem is that people are optimists and do not expect to get personally hurt in the battle fields.

Wikileaks forms a potential problem to all this all and was instantly recognized as such both by Military and the US Congress

The buzz around Wikileaks just reveals the frustrations of the world.  And by being highly embarrassing to the politicians Facts or fiction, Wikileaks must be "destroyed" as the public at home must be kept unaware of the reality.  As usual sex was used as a lure and the "crime" in this case first withdrawn as nonsense after initial findings, but then suddenly "re-established" as reportedly (reliable?) the accused did not use condom and Aids or even worse may have been transmitted to the two (why two?) "innocent" victims.