Monday, April 2, 2012

Huge NYT Exposé Reveals Why The Fiscal Timebomb Will Explode Next Year

New York Times Magazine

Nobody wants much to think about it yet, but it's well understood by everyone in Washington and on Wall Street, that a potentially massive fiscal problem is looming for the economy next year.Trying to figure out how it will shake down is especially difficult since it's an election year.
But in the worst case scenario we could have bracing austerity (tax hikes and spending cuts) coupled with another heart-stopping debt ceiling fight. Or we could have some kind of reversal of the spending cuts and a debt ceiling fight, and perhaps another downgrade from ratings agencies, another potential confidence blast.
Just in terms of the drag on growth, recent analysis by Barclays (according to BW) puts the hit at around 3% of GDP.
Furthermore, whereas in the last debt ceiling fight, Obama was eager to ensure that there would be no cuts in 2012 (an election year), it's not clear that he'd make the same bet this time, as a lame duck (if he wins, or even just in the lame duck session), as he's apparently open to the idea of seeing all the Bush tax cuts expire on everyone.
All this was already known.
You'll probably feel even worse about things after you read the latest cover story by Matt Bai in The New York Times Magazine on the failure of Obama and Boehner to strike a "Grand Bargain" in the summer of 2010..

Economic Collapse : Gloom & Doom or Frightening Reality?

So the facts are there on your face like, 78 trillion in debt, morals and values dead, a majority of Americans hooked on anti depressants and other drugs, an out of control power hungry government, and incredibly corrupt banking system . The dollar collapse will be the single largest event in human history. This will be the first event that will touch every single living person in the world. All human activity is controlled by money. Our wealth,our work,our food,our government,even our relationships are affected by money.Tough times are coming...A complete and total economic collapse worldwide is probably best case scenario. A complete and total global economic, political, social, agricultural and energy collapse leading to global famine, desperation and death on an unprecedented level is worst case, and probably the most likely scenario. preparing for this outcome may be a good idea, folks...! by December 19, 2012 it is likely to be QE5. The USA economy is unravelling pretty quickly, and every USA politician except Ron Paul is more interested in "kicking the can down the road" so the bankster pillaging can continue.

John Williams – Consumers Crushed & Economy Collapsed

Investors have expressed confusion recently because parts of the economy are clearly collapsed, but restaurants remain packed in many areas. John Williams clears up the confusion by demonstrating that real GDP remains collapsed, and that the hype from Wall Street about a recovery is a lie. Williams, who founded ShadowStats, also illustrates, in reality, how the consumer remains “crushed.” Here is what Williams had to say about the situation: “Broad U.S. business activity remains far from being recovered, despite the ongoing GDP-reporting nonsense that shows inflation-adjusted economic activity above the peak levels that preceded the 2007 recession.”


Rate of Mortgage forclosures?

Want answers?

Well then, here they are:

1. Collective government (local and federal) is the #1 investors in the majority of the mortgages. Government does so by being the #1 investor with the banks; mortgage institutions; mortgage security fund pools; etc. We are talking a few trillion-dollars in “collective” totals.

2. Since the bubble burst in 2008, the government investment funds have been creating specialty funds with names like: “Residential Real-estate Opportunity Fund” ; “Residential Real-estate Rollover Fund” ; “Commercial Property Opportunity Fund” ; and so on, so on into ad-nauseous. They have used these investment funds to take over residential and commercial property at pennies on the dollar (10c to 40c on the dollar).

Thousands if not hundreds-of-thousands of properties each year since 2008 which they can now sell at 80c on the dollar or lease / rent out to other parties. These specialty investment funds have been “very” profitable, of which creates the LARGEST conflict of interest per the judicial or administrative cooperating with the financial institutions to kick the late pay home owner out of their houses on to the streets. Boils down to nothing other than systematic theft in a symbiotic relationship to perpetuate theft-by-taking.

[ It is kind of like Foxes bringing a chicken rancher to court being that the rancher objected to the Foxes eating chickens from his coop, and the case will be decided by the fox's extended family (the judges) to determine the only issue to be allowed at the table, with that being: if the rancher is to be fined; jailed; or forfeit his chicken coop to the Foxes. ]

3. It is part of the communist manifesto that all real property is to be owned by the state. The state has mover this along over the last forty-years with the first phase being the implementation of Property-Tax. Any party subject to property-tax is truly but a renter and not a true owner. If they do not pay their rent, their property will be stolen from them.

The housing market bubble burst at the end of 2008 was no accident. It was a staged take-over to the tune of trillions of dollars in less than two-months at the end of 2008. Derivatives were used to pull that one off and the profits were accomplished by and through government institutional accounts positioned “Globally”.

Since that time government institutional investment accounts and funds have focused on buying up the real property at 10cto 40c on the dollar. Trillions of dollars of property in collective totals:

TREASON: “Treason doth never prosper; what’s the reason? For if it prosper, none dare call it treason.” Sir John Harrington, 1561-1612

To view a few of these new government institutional property take-over accounts, Google your local government state pension fund CAFR. The investments broken up into categories both domestic and international are easily seen there being that the pension funds are still required to list every investment held.

As an easy reference to view the New York State retirement fund or CALSTERS, they can be viewed at the following links – and

4. In many local venues when property-tax was implemented, safeguards were put into place to keep the local government from seizing your property if you became six-months or one-year in the arrears. In most venues the local government was restricted from going after your property, and could do so if you became four-years in the arrears.

Local governments got around this time restriction by modifying how mortgages were written. The new mortgages make the lending institution responsible for collecting the property tax in with the monthly mortgage payment. Here if you do not pay the property tax and fall delinquent on your mortgage, the financial institution can in six months move for eviction and the courts put their stamp of approval on it.

The intent and motive for that quick stamp of approval is based on nothing other that self interest to perpetuate their own investment return and move a new body in who will stay current on paying the property-tax assessed.and mortgage payments that government through the back door owns by investment in the first place.

5. How do you get the full and complete cooperation of government on issues that are contrary to the public’s interest?

ANSWER: Give government the largest cut of the profit for doing so.

Again: TREASON: “Treason doth never prosper; what’s the reason? For if it prosper, none dare call it treason.” Sir John Harrington, 1561-1612

Walter Burien –

Could the Gold Standard Save the World Economy ?

When we talk about gold as money, we mean that the paper we circulate, or the credit/debit cards, are actually backed by a commodity. You don't need to carry around those commodities all the time. Today the pieces of paper aren't backed by anything, which is why they keep printing them, and stealing your purchasing power in the process. If you were free to choose (and to compete) you would never stick with that. Today's money is backed by a so-called 'guarantee' from our governments and central banks. Everybody is 'obliged' to accept this fiat money, and banks dissenting from this policy will be visited by armed officials, as happened in the USA.Inflation is a redistribution from people who hold money to people who print money. It's stealing.

Gold is Manipulated (But That's Okay)

The price of gold is being actively managed by central planners and their proxies. The main culprit here appears to be the US authorities, as the manipulation is most apparent in the US open gold market. For the most part, this 'management' has resulted in letting the price of gold rise, but not too much, or too quickly.

The price of gold has always been an object of interest for governments and central bankers. The reason is simple enough to understand: Gold is an objective measure of the degree to which fiat money is being managed well or managed poorly.

As such, whenever paper money is being governed poorly, the price of gold becomes an important barometer. And this is why the actual price of gold is a strong candidate to be 'managed.' Or 'influenced'. Or 'manipulated'. Whichever word you prefer, they all convey the same intent.

Some who are reading this are likely having an eye-rolling moment because they hold a belief that there is no conspiracy to manage the price of gold.

This is an interesting belief to hold because it runs heavily against the odds. It's similar to holding the belief that the house in Vegas does not have a statistical advantage.

We could spend a lot of time discussing how a belief such as 'gold is not being manipulated' gets promoted and inserted into the popular consciousness, but we won't. Instead, we'll simply note that the people who hold this belief -- and you may be among them -- react to the concept at a visceral level, often with strong emotions such as anger or contempt, and even anxiety.

When a strong emotional response surfaces during a conversation of ideas, it usually means that beliefs are in play -- neither facts nor logic. Experience has taught me that when someone becomes dismissive or angry or hostile when the idea of price manipulation is discussed, it's best to simply drop the conversation and move on. No combination of logic or facts is effective against a deeply-held belief. It's better to wait until some new evidence calls that belief into question, opening the door for revisiting the topic.

But for those with an open mind, there is a very interesting trail of dots to connect.

The Logic of Gold Price Management

Unlike beliefs, opinions can be discussed and even modified without first running through an emotional thicket. They rest on data and ideas that can be consciously accessed and are therefore easier to change.

It is my opinion that the price of gold is being actively managed and/or overseen by official parties. On a strictly qualitative level, I hold this opinion because if I ever found myself in charge of a system of money rooted in confidences, as is our current fiat regime, I would consider the active management of the price of gold one of my fiduciary responsibilities.

Gold is an important signaling mechanism, and our entire money system is faith-based. Of course anything and everything that could cast doubt on that system would be controlled if it could be controlled.

To emphasize the point: If gold were suddenly to spike up to $5,000 an ounce, all sorts of troubling questions would emerge for people. Such as, is there something wrong with the dollar? Is the world falling apart? A rapid spike in the price of gold would certainly cause people to question the current state of the world of fiat money, and that is an unpardonable sin when your money is, at root, faith-based.

Instead of asking why do you think the price of gold is controlled? I ask, why do you think the price of gold is NOT controlled?

Managed Prices and Signals

Aside from my opinion that our faith-based fiat money system mandates the management of the price of gold as a matter of fiduciary responsibility for those in power, here are some other facts that we have in our possession:

  • The quantity of money is managed
  • The price of money is managed (via interest rates)
  • Because interest rates are being managed (mangled?) to near zero, it means risk tolerances and preferences are being managed towards taking on higher risk
  • The price of oil is openly managed, with strategic releases from time to time
  • The price of food and energy are managed via subsidies, both direct and hidden
  • Official statistics (e.g., GDP. inflation, employment) are heavily biased, massaged, and managed to tell a rosy story vs. a more realistic version, which means that perceptions are managed

Out of all these efforts, certainly the one with the most dramatic impact is the management of the price of money. That sets the stage for nearly every ill that follows, especially including the encouragement of taking on additional risk and the inevitable malinvestments that result.

Bernanke on the Fed’s Interest in Stocks

In a Wall Street Journal op-ed, Bernanke openly revealed something that was already obvious to many: The Fed has been very carefully following the equity markets because of the importance of rising stock prices in fostering consumer spending. That is, the stock market is a signaling device, and the Fed is, naturally, quite interested that it signal the correct things.

More bluntly, the Fed is interested in seeing the stock market go up instead of down.

Here’s Bernanke in an op-ed placed in the Washington Post back in 2010 discussing the effects of QE2:

This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth.

For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.


Yes, Virginia, the Fed does watch stock prices closely. And it targets their efforts to assure that the ‘virtuous circle’ is in play. No real surprise there.

Given that big list of managed prices and signals, with literally nothing left untouched because of the price-of-money effect, we are again left to wonder how likely it is that anything has escaped the attention and efforts of our well-meaning (but certainly misguided) central planners.

To my view, gold is simply far too important to be left to its own devices. The evidence strongly suggests that it indeed has not been.

Evidence for Price Manipulation

Critics of the idea of price manipulation might scoff and ask, if gold is manipulated, as you say, then how do you account for the 590% price increase over the past 11 years?

The idea here is that if gold were manipulated or controlled, there's no way it would have 'been allowed" to increase by that much.

In the above chart, we can see that gold has been in a remarkably steady run for the past three years. It is almost as if a ruler has been drawn under the price of gold, which has rarely deviated by much from that trajectory.

Certainly some might argue that this is an extremely poor piece of data in support of the idea that the price of gold has been manipulated, unless we want to argue that it has been manipulated upwards to rise nice and steadily (like air being slowly pumped into a balloon).

A fair point, perhaps, yet it is one that not only completely falls apart, but bolsters the case for price suppression when we examine the price action of gold in the daily vs. the overnight markets.

Note in this next chart that if one simply bought gold and held it only during the open and close of the US daily fix, one would have lost 70% of one’s money during the same period of time that gold rose in price by more than 500%.

As the chart above shows, the performance is dismal. For example, take a hypothetical gold investment fund starting with $100m in 2001, use it to buy gold only at the US AM fix and sell at the US PM fix until the present, and it would now be left with just $31 million, almost a 70% loss in just under ten years. Over the same time period, gold prices have risen over 590%. (more)

Gold and Silver prices to explode in the coming months says Charles Nenner

Gold and Silver prices to explode in the next months says economist Charles Nenner,"The cycle was down into April," Nenner says, but reversed at the beginning of this week, a couple weeks early. "People had to be shaken out," he says in reference to last year's run at all-time highs. "It cannot be that everybody makes money on gold." Nenner is looking at a rise to the $2,500 level in the next 12 to 18 months. And his outlook for silver is even brighter."It's almost time to get bullish again," Nenner says, "about two weeks or so." From there, he's looking for a move to all-time highs, and possibly beyond. Silver is going back to $50 but "that doesn't mean $50 has to be the end." "The small investors get in at the end and then the big guys are selling again," Nenner warns. "That has to change. People have to be educated better."

US Weekly Economic Calendar

time (et) report period Actual forecast previous
MONDAY, April 2
10 a.m. ISM manufacturing Mar. 53.3% 52.4%
10 a.m. Construction spending Feb. 0.7% -0.1%
TUESDAY, April 3
10 a.m. Factory orders Feb
1.5% -1%
2 p.m. FOMC minutes
Light-vehicle sales Mar. 14.6 mln 15.1 mln
wednesday, April 4
8:15 a.m. ADP employment report Mar. 216,000
10 a.m. ISM services Mar. 56.8% 57.3%
thursday, April 5
8:30 a.m. Weekly jobless claims 358,000 359,000
friday, April 6
8:30 a.m. Nonfarm payrolls Mar. 200,000 227,000
8:30 a.m. Unemployment rate Mar. 8.3% 8.3%
8:30 a.m. Average hourly earnings Mar. 0.1% 0.1%
3 p.m. Consumer credit Feb. 8.6%