I recently read a Washington Post piece by our Treasury Secretary, Tim Geithner. Tim tries to dispel the "myths" about T.A.R.P. You can read the article in it's entirety at http://www.realclearpolitics.com/
I very nearly entitled this blog, "Tim Blows Smoke Up Our Asses."
The first rule of FED bankers is, Never Jeopardize the FED. You see, letting the FED's member banks fail was in fact the right thing to do. You see Tim, those are the same business rules that all of us peons have to play by. When we play fast and loose with the operating capital- leveraging non existent money and making loans to deadbeats- we generally fail.
We don't give a shit whether the banks pay us back or not. That's not the point and you know it. Letting those banks fail and be put into receivership may have exposed the entire FED to scrutiny. The same scrutiny they try very hard to avoid. At that point, the American people may have asked some weird question like, "Just why do we need this FED anyway?"
And somebody might have said, "We don't." We can print our own money, not charge ourselves interest, and we will be just fine.
We can't have that shit, huh Tim? That would ruin the whole FED monopoly. The entire 4th branch of government could have been eliminated. Kaput. Adios.
Tell me Tim. When are you going to force banks to adhere to the same accounting methods employed by rational people? That would mean putting those 9 million, unrepossessed and value chopped in half homes- on the ledger. All that make believe equity. All that shadow inventory could finally get counted and we could see just how healthy your member banks really are.
My favorite part of your piece was blaming Bush and carrying your bosses' water. We understand ass kissing Tim. Especially Obama's willingness to chop the head off anyone that doesn't attend worship services. I think of that Inspector General Walpin dude. I bet you remember that guy, the one who tried to have Obama's buddy, that Sac town Mayor brought to justice? We remember how well that worked out, don't we?
http://online.wsj.com/article/SB124511811033017539.html
Here's the bottom line Tim. We are pissed off. I am not sure the American people are going to buy your bullshit much longer. It's not just you. We understand you are just trying to play by established rules. But we don't like those rules anymore. We are growing weary of a government that operates above the law and rationalizes and changes the rules as it sees fit. A government more than willing to lie to us and sell us out. A government that demands respect but shows its citizens none.
So go find some other drooling idiot and try to convince him or her how their eternal indebtedness and loss of economic freedom is a good thing. Get busy, you may be running out of time.
Saturday, October 9, 2010
Friday, October 8, 2010
This May Be..."As Good As It Gets"
I loved the operative scene in the movie, "As Good As It Gets."
That's the one where Jack Nicholson, a neurotic and obsessive compulsive, steps out of his psychiatrist's office and into the waiting room. There in the waiting room are people waiting to see the shrink. It is as though Nicholson has just realized that he is never going to get well. As he looks around at the room full of mentally ill folks-he tells them this may be, "As good as it gets." He then departs.
A few months back, I wrote a blog about why we can't afford a recovery. We are in the midst of a perfect storm. Any recovery will cause the FED ultimately to raise interest rates. Of the approximately 20 trillion (I do count Fannie and Freddie) we owe, all but 550 billion, must be refinanced within 10 years. Shorter term debt. Therefore we will be in the rather nasty position of having to refinance 19.5 trillion into higher and higher yields at greater interest. At about that same time all of those Social Security obligations are due- thus adding to what must be financed.
The unfortunate demographic problem of the baby boomers.
We can't service that debt load or interest. To top it all off, no country will buy that debt. It is not rocket science, in fact- it is just simple math.
I want to mention two other things. Every thing I say here, I can back up with facts. This is not an opinion piece.
The last thing I want to mention is the stock market. It has no predictive value at this point. It has become a facade of health. A paper tiger. It is the last cookie jar that can be raided. As the FED conducts POMO or permanent open market operations each week, it buys treasuries from banks. Banks then take this money and buy stocks. Think Glass Steagall.
What has happened is that high frequency traders, computer algorithms, banks, and investment funds are all that trade on the exchange. They account for virtually all of the volume. Retail investors are fleeing in droves. So far this year, 75 billion has been withdrawn by small investors. Insiders, generally the officers of public corporations are selling stock at alarming rates. I saw one print put the figure beyond 4000-1. We are talking billions. Last month there were virtually no insider purchases.
You can't even short this market because of the FED's willingness to print money and keep giving it to banks to buy stock with. They have effectively frozen out the shorts out of fear that they will get squeezed. Shorting Apple would be like a swan dive off the Golden Gate.
The economic news is bad and the government continually tries to under report it and massage it. Every figure coming out of the Bureau of Labor Statistics is essentially bullshit.
Here's the good news. Ultimately, I think the FED will eat itself out of existence. The public outcry at future tax rates- an attempt to pay that impossible debt (interest and never principal) will cause drastic changes in America. Sooner or later, the FED is going to get exposed for the fraud that it has become. It will have to go away permanently in order to get our country back.
Until then, don't fall for this market bullshit and false rallies. Re-entry into this market will allow these banks to unload those worthless stocks- into weaker hands. Private investment funds are the last cookie jar. Short selling just enables the algorithms to pile into stocks with large positions to cover. So just stay out. It's a game you can win simply by not participating. Let the banks try to unload equities onto each other. For now, this may be as good as it gets.
That's the one where Jack Nicholson, a neurotic and obsessive compulsive, steps out of his psychiatrist's office and into the waiting room. There in the waiting room are people waiting to see the shrink. It is as though Nicholson has just realized that he is never going to get well. As he looks around at the room full of mentally ill folks-he tells them this may be, "As good as it gets." He then departs.
A few months back, I wrote a blog about why we can't afford a recovery. We are in the midst of a perfect storm. Any recovery will cause the FED ultimately to raise interest rates. Of the approximately 20 trillion (I do count Fannie and Freddie) we owe, all but 550 billion, must be refinanced within 10 years. Shorter term debt. Therefore we will be in the rather nasty position of having to refinance 19.5 trillion into higher and higher yields at greater interest. At about that same time all of those Social Security obligations are due- thus adding to what must be financed.
The unfortunate demographic problem of the baby boomers.
We can't service that debt load or interest. To top it all off, no country will buy that debt. It is not rocket science, in fact- it is just simple math.
I want to mention two other things. Every thing I say here, I can back up with facts. This is not an opinion piece.
The last thing I want to mention is the stock market. It has no predictive value at this point. It has become a facade of health. A paper tiger. It is the last cookie jar that can be raided. As the FED conducts POMO or permanent open market operations each week, it buys treasuries from banks. Banks then take this money and buy stocks. Think Glass Steagall.
What has happened is that high frequency traders, computer algorithms, banks, and investment funds are all that trade on the exchange. They account for virtually all of the volume. Retail investors are fleeing in droves. So far this year, 75 billion has been withdrawn by small investors. Insiders, generally the officers of public corporations are selling stock at alarming rates. I saw one print put the figure beyond 4000-1. We are talking billions. Last month there were virtually no insider purchases.
You can't even short this market because of the FED's willingness to print money and keep giving it to banks to buy stock with. They have effectively frozen out the shorts out of fear that they will get squeezed. Shorting Apple would be like a swan dive off the Golden Gate.
The economic news is bad and the government continually tries to under report it and massage it. Every figure coming out of the Bureau of Labor Statistics is essentially bullshit.
Here's the good news. Ultimately, I think the FED will eat itself out of existence. The public outcry at future tax rates- an attempt to pay that impossible debt (interest and never principal) will cause drastic changes in America. Sooner or later, the FED is going to get exposed for the fraud that it has become. It will have to go away permanently in order to get our country back.
Until then, don't fall for this market bullshit and false rallies. Re-entry into this market will allow these banks to unload those worthless stocks- into weaker hands. Private investment funds are the last cookie jar. Short selling just enables the algorithms to pile into stocks with large positions to cover. So just stay out. It's a game you can win simply by not participating. Let the banks try to unload equities onto each other. For now, this may be as good as it gets.
Wednesday, October 6, 2010
The Perfect Con- The Bank That Masquerades as a Country
On CNBC this morning, they asked viewers- if they thought banks were responsible for the depression we are all experiencing and whether or not banks were getting a bad rap.
I want to explain something here for anyone who thinks banks are getting a bad rap.
Joe and Mary Citizen are marks. They don't know it. They had no control over home prices. They had no control over hybrid mortgages which required essentially nothing down, they had no control over all the cheap money that flooded into the marketplace prior to 2007, they had no control over houses that appreciated 100% in two years. They had no control over loans that were made to people who mis-stated their income. They had no control over the QUANTITY of money (debt) available. It was the QUANTITY of our debt that fueled the feeding frenzy that enabled everything else to happen; and the fractional banking rules that allowed banks to lend 9 times what they actually had on deposit and thus leverage some leverage.
Banks fueled and stoked the fire. Banks were more than willing to let virtually anyone participate. Thus the great Ponzi scheme imploded when it ran out of marks.
It is the QUANTITY of money controlled by the FED that allows this shit to happen. Always.
All Joe and Mary Citizen did was react to a market place gone nuts. They were used quite honestly, by bankers. They were marks. Fleeced.
In the law enforcement world we call this a confidence game. In fact famous movies like the "Flim Flam Man", "The Sting", or "Paper Moon" demonstrate how people are exploited by hustlers. Here is a definition from wikipedia on a confidence game...
A confidence trick or confidence game (also known as a bunko, con, flim flam, gaffle, grift, hustle, scam, scheme, swindle or bamboozle) is an attempt to defraud a person or group by gaining their confidence. The victim is known as the mark, the trickster is called a confidence man, con man, confidence trickster, or con artist, and any accomplices are known as shills. Confidence men or women exploit human characteristics such as greed and dishonesty[dubious ], and have victimized individuals from all walks of life.
When using that definition, I'll let you decide who got swindled. It sure as hell wasn't bankers. In fact bankers were always in control. They were in control of the money and the math. And in the end, when their con game went to hell, government didn't bail out the victims of this con game. They bailed out the con men.
And they hosed us all. Not just the participants. We all lost equity, houses, investment dollars, jobs. Our taxes and inflation are rising as the FED tries to keep the lid on this worldwide mess- bailing out the con men. Their stockholder member banks- are who they work for. The FED doesn't exist to help taxpayers- they exist to fleece taxpayers and provide wealth for the banking system.
I was neither con man nor mark. I wouldn't have particularly cared if all the con men and marks got flushed. But the damage wasn't limited to them. Nobody is giving me a good conduct medal for my decisions, either. But I am damn sure paying for them. I keep wondering if even one of these crooked bastards is ever going to see a jail cell.
The big finish follows.
This boom and bust cycle will continually repeat itself until we accept the following truths as self evident.
1. Currency issuance and control is always a MONOPOLY. Allowing private banks to control this is insanity. Like asking a sex offender to run the daycare.
2. Fiat currency works. It is the QUANTITY of that currency that causes the boom and bust cycles. The gold standard is a myth. All of the world's gold would fit in three olympic sized swimming pools. There is simply no way for all of the world's fiat currencies to get on the "gold standard." Gold would be priced in the stratosphere with no objective price point.
3. Banks almost single handedly caused this crisis. Go ahead and blame the marks if it makes you feel better or if you happen to be a FED supporter.
I can't completely dismiss the individuals who acted and spent recklessly. But their ability to do that was completely governed by a banking system that preyed on the greed and stupidity of the marks to lure them in. That's how confidence men and games work. Go rent a movie and see for yourself.
The perfect con game always occurs when the mark doesn't know what hit him. It is a complete and utter success if the con men can convince the marks that they didn't even exist to begin with.
For a perfect illustration- read this speech delivered days ago by Ben Bernanke of the FED. These are the same guys that engineered the collapse and are now pretending to offer the solution. The perfect con.
http://www.economicpolicyjournal.com/2010/10/bernanke-tells-truth-united-states-is.html
I want to explain something here for anyone who thinks banks are getting a bad rap.
Joe and Mary Citizen are marks. They don't know it. They had no control over home prices. They had no control over hybrid mortgages which required essentially nothing down, they had no control over all the cheap money that flooded into the marketplace prior to 2007, they had no control over houses that appreciated 100% in two years. They had no control over loans that were made to people who mis-stated their income. They had no control over the QUANTITY of money (debt) available. It was the QUANTITY of our debt that fueled the feeding frenzy that enabled everything else to happen; and the fractional banking rules that allowed banks to lend 9 times what they actually had on deposit and thus leverage some leverage.
Banks fueled and stoked the fire. Banks were more than willing to let virtually anyone participate. Thus the great Ponzi scheme imploded when it ran out of marks.
It is the QUANTITY of money controlled by the FED that allows this shit to happen. Always.
All Joe and Mary Citizen did was react to a market place gone nuts. They were used quite honestly, by bankers. They were marks. Fleeced.
In the law enforcement world we call this a confidence game. In fact famous movies like the "Flim Flam Man", "The Sting", or "Paper Moon" demonstrate how people are exploited by hustlers. Here is a definition from wikipedia on a confidence game...
A confidence trick or confidence game (also known as a bunko, con, flim flam, gaffle, grift, hustle, scam, scheme, swindle or bamboozle) is an attempt to defraud a person or group by gaining their confidence. The victim is known as the mark, the trickster is called a confidence man, con man, confidence trickster, or con artist, and any accomplices are known as shills. Confidence men or women exploit human characteristics such as greed and dishonesty[dubious ], and have victimized individuals from all walks of life.
When using that definition, I'll let you decide who got swindled. It sure as hell wasn't bankers. In fact bankers were always in control. They were in control of the money and the math. And in the end, when their con game went to hell, government didn't bail out the victims of this con game. They bailed out the con men.
And they hosed us all. Not just the participants. We all lost equity, houses, investment dollars, jobs. Our taxes and inflation are rising as the FED tries to keep the lid on this worldwide mess- bailing out the con men. Their stockholder member banks- are who they work for. The FED doesn't exist to help taxpayers- they exist to fleece taxpayers and provide wealth for the banking system.
I was neither con man nor mark. I wouldn't have particularly cared if all the con men and marks got flushed. But the damage wasn't limited to them. Nobody is giving me a good conduct medal for my decisions, either. But I am damn sure paying for them. I keep wondering if even one of these crooked bastards is ever going to see a jail cell.
The big finish follows.
This boom and bust cycle will continually repeat itself until we accept the following truths as self evident.
1. Currency issuance and control is always a MONOPOLY. Allowing private banks to control this is insanity. Like asking a sex offender to run the daycare.
2. Fiat currency works. It is the QUANTITY of that currency that causes the boom and bust cycles. The gold standard is a myth. All of the world's gold would fit in three olympic sized swimming pools. There is simply no way for all of the world's fiat currencies to get on the "gold standard." Gold would be priced in the stratosphere with no objective price point.
3. Banks almost single handedly caused this crisis. Go ahead and blame the marks if it makes you feel better or if you happen to be a FED supporter.
I can't completely dismiss the individuals who acted and spent recklessly. But their ability to do that was completely governed by a banking system that preyed on the greed and stupidity of the marks to lure them in. That's how confidence men and games work. Go rent a movie and see for yourself.
The perfect con game always occurs when the mark doesn't know what hit him. It is a complete and utter success if the con men can convince the marks that they didn't even exist to begin with.
For a perfect illustration- read this speech delivered days ago by Ben Bernanke of the FED. These are the same guys that engineered the collapse and are now pretending to offer the solution. The perfect con.
http://www.economicpolicyjournal.com/2010/10/bernanke-tells-truth-united-states-is.html
Tuesday, October 5, 2010
Community Service
One day a florist went to a barber for a haircut. After the cut, he asked about his bill, and the barber replied, 'I cannot accept money from you, I'm doing community service this week.' The florist was pleased and left the shop. When the barber went to open his shop the next morning, there was a 'thank you' card and a dozen roses waiting for him at his door.
Later, a cop comes in for a haircut, and when he tries to pay his bill, the barber again replied, 'I cannot accept money from you , I'm doing community service this week.' The cop was happy and left the shop. The next morning when the barber went to open up, there was a 'thank you' card and a dozen donuts waiting for him at his door.
Then a Congressman came in for a haircut, and when he went to pay his bill, the barber again replied, 'I can not accept money from you. I'm doing community service this week.' The Congressman was very happy and left the shop. The next morning, when the barber went to open up, there were a dozen Congressmen lined up waiting for a free haircut.
Later, a cop comes in for a haircut, and when he tries to pay his bill, the barber again replied, 'I cannot accept money from you , I'm doing community service this week.' The cop was happy and left the shop. The next morning when the barber went to open up, there was a 'thank you' card and a dozen donuts waiting for him at his door.
Then a Congressman came in for a haircut, and when he went to pay his bill, the barber again replied, 'I can not accept money from you. I'm doing community service this week.' The Congressman was very happy and left the shop. The next morning, when the barber went to open up, there were a dozen Congressmen lined up waiting for a free haircut.
Monday, October 4, 2010
Sunday, October 3, 2010
The FED and Money- An Explanation for Dummies Part 4
So if the FED is as bad as we think that it is...what is the alternative, the solution?
A fiat currency produced by the government, issued in ample amounts for commerce to take place. End the practice of fractional banking and leverage. Quit paying interest. Quite simply, get rid of the middleman banker who produces nothing, does nothing.
Fiat currency works. You cannot "back" a currency such as ours with gold. Quite simply it's not possible. All of the gold known to be in existence today would only fill 3 Olympic size swimming pools. If every currency on earth were to be backed by gold, (they are all fiat- almost) gold would get priced in the stratosphere. In fact, countries on the gold standard have suffered mightily. The fall of the Roman empire occurred when Caesar switched to the gold standard. The same is true in the United States.
The reason many people think the gold standard is effective is because it stops the people who control and increase the QUANTITY of money. That's true. Inflating through printing dilutes the value of a currency and that is precisely what the FED is doing now. We can control this ourselves. We don't need an artificial backstop such as gold to prevent this nor do we need to enrich the bank accounts of greedy international bankers such as the Rothchilds'. We can do this ourselves with a little common sense and discipline.
It is important to remember one thing. We only have one currency. Printing and issuing currency, thus controlling the quantity, is a MONOPOLY. You cannot deliver a monopoly to a non competitive private interest. They will pillage you. It is human nature.
So what pisses me off the most? In 2008, Hank Paulson ripped us off. He painted a sky is falling scenario and pillaged the American taxpayer. He took the better part of a trillion bucks and delivered it to banks. Including a huge amount to his previous employer, Goldman Sachs
There was an alternative. Let the banks all go broke. Put them all in receivership like the law prescribes. The solution was to end the FED right there. Re-issue a new currency controlled by the United States government and replace private FEDERAL RESERVE currency. Adios bankers.
Why didn't they? Paulson is part of the problem. He is a banker and a scandalous one. The scheme, and I think it is a de-facto conspiracy, has to end. The American people are angry. They are out of work, they've lost their houses, and their wealth. They were ripped off. And they are getting hosed by the sneaky and insidious practice of inflation- diluting this nations wealth with programs such as quantitative easing. Busily trying to repair the bankrupt balance sheets of the banking system and avoid reporting true losses through some of the most creative accounting methods that no person in their right mind would allow. And we are going to pay mightily for this with inflation. I am seeing it now.
Every time I listen to Ben Bernanke, our latest version of the cartel's head, I want to throw up. It is such a charade. Bernanke doesn't give two shits about public service. His agenda is simple. Protect the FED's way of life and it's shareholder banks. It is that simple. Even if it means stealing every last dime from the American people. Time's "Man of the Year." Like he saved us.
Audit the FED and get rid of it. Print a government owned and controlled national currency. Use that currency without interest to pay off our debts and restore our way of life. As long as the banking cartel can convince us their is no alternative, we are held hostage and captive. There has always been a solution- the existing banking cartel just has no interest in disclosing it.
http://en.wikipedia.org/wiki/Federal_Reserve_Transparency_Act
A fiat currency produced by the government, issued in ample amounts for commerce to take place. End the practice of fractional banking and leverage. Quit paying interest. Quite simply, get rid of the middleman banker who produces nothing, does nothing.
Fiat currency works. You cannot "back" a currency such as ours with gold. Quite simply it's not possible. All of the gold known to be in existence today would only fill 3 Olympic size swimming pools. If every currency on earth were to be backed by gold, (they are all fiat- almost) gold would get priced in the stratosphere. In fact, countries on the gold standard have suffered mightily. The fall of the Roman empire occurred when Caesar switched to the gold standard. The same is true in the United States.
The reason many people think the gold standard is effective is because it stops the people who control and increase the QUANTITY of money. That's true. Inflating through printing dilutes the value of a currency and that is precisely what the FED is doing now. We can control this ourselves. We don't need an artificial backstop such as gold to prevent this nor do we need to enrich the bank accounts of greedy international bankers such as the Rothchilds'. We can do this ourselves with a little common sense and discipline.
It is important to remember one thing. We only have one currency. Printing and issuing currency, thus controlling the quantity, is a MONOPOLY. You cannot deliver a monopoly to a non competitive private interest. They will pillage you. It is human nature.
So what pisses me off the most? In 2008, Hank Paulson ripped us off. He painted a sky is falling scenario and pillaged the American taxpayer. He took the better part of a trillion bucks and delivered it to banks. Including a huge amount to his previous employer, Goldman Sachs
There was an alternative. Let the banks all go broke. Put them all in receivership like the law prescribes. The solution was to end the FED right there. Re-issue a new currency controlled by the United States government and replace private FEDERAL RESERVE currency. Adios bankers.
Why didn't they? Paulson is part of the problem. He is a banker and a scandalous one. The scheme, and I think it is a de-facto conspiracy, has to end. The American people are angry. They are out of work, they've lost their houses, and their wealth. They were ripped off. And they are getting hosed by the sneaky and insidious practice of inflation- diluting this nations wealth with programs such as quantitative easing. Busily trying to repair the bankrupt balance sheets of the banking system and avoid reporting true losses through some of the most creative accounting methods that no person in their right mind would allow. And we are going to pay mightily for this with inflation. I am seeing it now.
Every time I listen to Ben Bernanke, our latest version of the cartel's head, I want to throw up. It is such a charade. Bernanke doesn't give two shits about public service. His agenda is simple. Protect the FED's way of life and it's shareholder banks. It is that simple. Even if it means stealing every last dime from the American people. Time's "Man of the Year." Like he saved us.
Audit the FED and get rid of it. Print a government owned and controlled national currency. Use that currency without interest to pay off our debts and restore our way of life. As long as the banking cartel can convince us their is no alternative, we are held hostage and captive. There has always been a solution- the existing banking cartel just has no interest in disclosing it.
http://en.wikipedia.org/wiki/Federal_Reserve_Transparency_Act
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