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Saturday, December 3, 2011

Keeping Sane

You are what you read. I believe that.

In 2008, just after our government stole a couple trillion from taxpayers and gave it to banks, (and cronies calling it stimulus) I decided to start paying attention to what these government bastards were up to. If the government could steal that kind of money in broad daylight without a single charge being filed- it was time to pay attention.

In fact- what the government did was illegal. They transferred public money to private coffers. Had I done that as a police chief, used budgeted money to pay off friends in various businesses, I would have been guilty of embezzlement. Had any politician done that on some scale smaller than the USG- they  would have faced prosecution as well. I'd like to say one other thing. Government has no right and is not entitled to break the law for no other reason than there is no authority higher- to charge them with the offense. Interestingly enough- we have the old common law citizen arrest powers.

Citizen arrest powers. Can you imagine strolling in and saying I'd like Congress arrested for grand theft? Who would put them in jail? Who would prosecute? Holder?

We will pay for that theft. We will pay for it with higher taxes and a reduced standard of living. Like most Americans we are going to hope it's not too bad. It's all just a can kicking, musical chairs exercise until one day- when the music stops.

I read almost 100 blogs daily and I scan three or four media sources routinely. The world is a mess. It is worse than it has ever been. That doesn't mean you must run around like chicken little. It also does not mean that you must act like an ostrich or a stooge and pretend everything is hunky dory. This is how I keep my sanity.

I developed a plan several years ago that coincided with the hijacking of our national tax coffers and then our health care system. A personal plan. I developed my plan for two reasons. One is that I currently live on a fixed income and government cost of living increases have no basis in reality since they fudge the numbers. I am unwilling to become a poverty case simply because this government cannot stop spending. The second reason is that decent jobs have all but vanished. Re-educating yourself is possible but only if you have the dough and you are certain you can get a job in your field. That's an iffy proposition for most of us.

What I am going to do is based on my personal circumstances and what our government does. I have a plan. Whatever your circumstances are- you should develop a similar plan. If things turn very bad and you want to stay in the U.S. and let them steal every last dime they can get away with- that's fine. Perhaps you are so wealthy that it doesn't matter.We all have choices to make.

Currently, between city, county, real estate taxes and fees, sales tax and gas tax, state taxes, and federal taxes- I have lost 50% of my income. Losing any more is simply not tolerable. 

On FG, I have tried to educate the people who stop by. Educate yourself as best you can. Don't get emotionally involved with the process- and don't take it personally. The United States is a mess. It ranks around 9th on the economic freedom scale and we are destined to drop further. It is no longer the best place to live- by various measures. In a month or two I am going to visit several central American countries starting with Belize and moving west and south. The cost of living is pretty cheap, the weather is gorgeous, people speak English, health insurance is less than 100 bucks a mo., and the government is not so bankrupt that they must steal every last cent that I have or force feed me some laws for my own good.

I'd like to stay in the U.S. but the reality is- is that we have no leadership and we are bankrupt. I am too old to fight any wars or stretch any number of well deserving political necks. I keep my sanity by staying emotionally and physically sound, reading and working out daily, and sticking to my plan. There are a number of ex-pats already, about 7 million, who have taken that plunge. I can see myself on a beach somewhere ignoring local politics. That seems sane to me.

Six Million People Subjected To "Wite Out" and Now Missing

People are beginning to wake up. They have begun to realize that we are governed by a bunch of fraudulent politicians in charge of fraudulent employees. These are the employees of the Bureau of Labor Statistics or BLS.

The single greatest saying regarding math is that "figures never lie, liars figure." The problem with math is that it is black and white. It is undeniable truth. Therefore, when math doesn't go your way, you simply rearrange the input to get the proper out put. The spin.

Behold the truth. Do not rely on government for anything remotely resembling the truth. The current regime may be the worst ever. Behold the missing 6.2 million American workers.

Thanks to Doug Ross and the people who dig the truth out.

Friday, December 2, 2011

The Great Narcissist Offers More Self Appraisal

I have linked the Chicago Boyz piece here.


Is There Any Integrity Left in Government Produced Statistics? With Additional and Generalized Ranting...

When I saw the giant unemployment drop this morning to 8.6%, my initial thought was the usual and seasonal hiring that occurs in November. After looking at some charts posted on ZeroHedge, I realized Bureau of Labor Statistics or BLS numbers are simply worthless.

The elections are coming. If you want to read some really funny shit- read Dave in Denver. I love this guy and I've made him a must read every day.

You can't count people who are leaving the workforce. I am one of them. I collect my retirement benefits and thumb my nose at the worthless 9 dollar an hour jobs with bad hours and no benefits. Why? Because I can. For that, I am truly grateful.

Let me tell you a little story. I inquired about a a thrift store "asst. manager" job about a year ago. I asked the manager to list the duties. Unload trucks, load trucks, make schedules, price inventory, balance books, etc. How much did that job pay? A whopping 8.25 an hr. with a .50 cent an hour raise after 90 days! Oh happy day! I looked at this gal and I said, "I made that much money 30 years ago throwing freight for Albertson's. Gas was less than a buck a gallon in those days, everyone had insurance, and the cost of living was less than 1/2 of what it is now." She looked at me and said, "We have hundreds of applications for this job."

That is the Idaho Youth Ranch. A charitable organization for everyone donating and doing the work. The directors aren't so charitable.  The directors of the Youth Ranch are making nice cozy 6 figure salaries while exploiting desperate workers and paying chump change.

I simply do not know how people are making it. Many of the people I know have become long term charity cases. We have an absolute health care epidemic on our hands. This sneaky administration passed a bill and put off all of the harmful (taxing) effects until after the 2012 elections. Jobs with health benefits are completely missing. Maybe, and I am being generous here but including part time jobs, one out of ten jobs have health benefits in Boise. Those that do- get swamped with applications.

I can't t trust anything about government anymore. I don't trust the numbers they generate including that fraudulent CPI number minus food and energy. I don't trust big banks and central banks and I certainly don't trust the stock market which is simply owned now by banking interests. Those cowardly politicians we have in DC- cannot even do their jobs. They can't and won't pass a budget.

We have been lied to for four years. When does this country wake up? After eight years of lies? We are going to find out in eleven months just how pissed off this country is. I gotta feeling there are millions of folks like me. I am not sure how bad this economy has to get, or how much longer government can deceive it's citizens, before we have a national melt down. I'm not talking about electing another set of crooked and worthless politicians- I am talking about a Constitutional Convention among states to return the rule of law to this country and end the FED. Anything short of that- is business as usual.

Going Silver

I can't begin to tell you how manipulated the silver market is. Margin requirements are so high that all of the small players have been taken out of the futures game.

Here are the things that I think make silver a strong buy.

Position limits go into effect early in the new year. That means that banks cannot short unlimited quantities of silver and drive the price down. Margin requirements are ridiculously high. I can't see them being increased again in the foreseeable future.

China and India are big time silver and gold buyers. Eric Sprott's fund is looking for 1.5 billion ounces of physical silver.

I see industrial uses as pretty much static. However, I think some silver miners' might take a hint (Eric Sprott) and start storing mined product rather than exchanging it for paper. That should take more supply out of the mainstream.

I don't like the historical valuation comparisons that say gold and silver trade at a 15-1 ratio. There are a lot of people that love to point to that historical avg. and they are calling for 125-150 dollar silver. However, if position limits are actually enforced...this could get real interesting. I can only see silver moving up.

My number one reason for buying more silver is my steadfast belief that the worlds' politicians and central bankers will destroy us by debt accumulation. They simply lack the spine to let banks fail. This is only going to add more debt and delay the inevitable. There is no way out for them or us. Silver and gold is just insurance.

I don't think you can go wrong with silver at these levels. It has been consolidating. I had been waiting for a pullback (market crash/deflation event) but I am going to just try and add small amounts when I can. Ten and twenty ounces at a time. It's not like you can add a lot of gold at these levels. It takes the better part of 2 grand just to buy an ounce.

So I am going to stick with silver for now. I think the chances of silver blasting past 50 are very good. At these levels, that's like making 40% this year. Try making 40% at the bank or in the stock market this year.

Thursday, December 1, 2011

Trevor Eckhart Finds Illegal Eavesdropping Software On Smart Phones...This Means All Your Information Belongs To Me *Sinister Laugh

I stumbled onto this story yesterday. I forgot about it in the midst of my heated exchange with Billy Moonbat. What is Carrier IQ? It is software that is hidden and concealed on your phone. It not only turns your smartphone into a tracking device, but it records the keystrokes you make.

This is really disturbing stuff. It violates the law. But what is really odd is that this software was installed by big companies with shit hot lawyers who are supposed to know about laws like illegal wiretapping. Good story here.

Billy Moonbat and Me

Billy Moonbat is a friend of mine. We became friends long before I knew what his politics were. Had I known his politics early on, I doubt we would be friends. Billy is a central planning statist. He wants everything regulated. He hates freedom. He still bitches about Bush. Lately, he has been mute on Obama. That is a good sign.

Aside from Billy's many intellectual flaws, he tends to be an irritating little bastard as well. That he remains alive today is a testament to my spiritual superiority. Prior to 2007, not only would I have killed Billy by now- but I would have disposed of his body in some untraceable fashion and then patented the process.

I still answer the phone when Billy calls. We have history together. He generally only calls when there is some unexplainable good news that runs contrary to my philosophy or this blog. With the DOW up nearly 500 points on Wednesday, I was not surprised to see Moonbat pop up on my caller ID. Like some demented automaton, I answered.

At first there was the back and forth about how was your Thanksgiving and all that kind of bullshit. Then there was the catching up of gossip about who is screwing who, which I am becoming less interested in with the passage of time. Unless of course, it is me doing the screwing. That I might be interested in. I waited for Moonbat to drop the bomb. Indeed, it was about the huge rally, so predictable. It went something like this:

BM: I see the markets' are taking off today, looks like things are doing just fine.

FG: Yea I saw that this morning. Initially I was thinking that maybe Obama had resigned or something, maybe got hit in the head with a golf ball and sparked a rally. 

BM: Nope. Apparently they have solved the euro crisis and come up with a plan to bail out Europe.

FG: They haven't solved shit, Billy. I wouldn't buy into this rally with your money. They are just going to have to print away or the taxpayers are gonna get out the rope and the guillotines.

BM: Well, I just get tired of all that doom and gloom you write about here on FG, when the truth is that things seem to be going pretty well.

FG (getting pissed) Going well? What the fuck have you been smoking? One up day and you suddenly call Billy? Where the hell were you when the market was getting slaughtered during the past two weeks? Besides gold and silver are up today, so I don't really give a shit.

BM: Can you believe that Cain, screwing that gal for 13 years? He's toast. Romney is a shoe in.

FG: How is it that we never hear about Obama screwing around? Nobody's ever found an old girlfriend anywhere? That's fucking strange. Maybe he sealed up those old girlfriends with an executive order or something. He does shit like that. Maybe he screwed some muslim chick at Columbia, dumped her, and her dad had to perform an honor killing. You think he's gay?

BM: Obama isn't gay! Shit, he's got kids.

FG: That doesn't matter Billy. Look at Hillary. Had sex one time in her life and had a kid. She's a stone cold lesbian and they managed to spawn off Chelsea for chrissakes. I think Obama's gay. I think he is a gay muslim that throws like a girl and rides around on bicycles with a dork helmet on. Probably adopted those girls. We'd have to pay Indonesia to take him back.

BM: You're just pissed that the market is up and all that doom ain't working out for you.

FG: No Billy, I'm just pissed that I didn't kill you years ago and make it look like an accident. I'm mad I answered the fucking phone.

We had a little more small talk which is designed to put a little distance between us before we hang up. That's how guys make up. We don't really admit we're wrong. We just try to say something nice about each other's football teams. Stuff like that. You can bet your ass on one thing. When this market takes the big nose dive sometime before Obama's ass kicking next fall- I'll have Billy on speed dial. He better answer the phone.

Wednesday, November 30, 2011

Bank of America Property Just Listed At 349,000

squatting: it’s not just for shitting in public anymore

More Pepper Spraying Cop

“Here at the University Of Austria we like to have beautiful musical times whilst sitting in the park! Sing along, everybody, and let us rejoice in the wonder of some traditional folk songsAUAUAUHAGAHAGAHAGAHHGHHHHHHHHHHHHHHHHHH”
“Here at the University Of Austria we like to have beautiful musical times whilst sitting in the park! Sing along, everybody, and let us rejoice in the wonder of some traditional folk songsAUAUAUHAGAHAGAHAGAHHGHHHHHHHHHHHHHHHHHH”
“Where the fuck did this Christmas tree ornament come from? I haven’t recognized the holiday since I was a wee child. Wait, who’s reflection is that? Is that Father Christmas come to pay me a visitAAUAUAUUAGAHAGAGGHHHHHHHHHHHHHHH”
“Where the fuck did this Christmas tree ornament come from? I haven’t recognized the holiday since I was a wee child. Wait, who’s reflection is that? Is that Father Christmas come to pay me a visitAAUAUAUUAGAHAGAGGHHHHHHHHHHHHHHH”

That Image of the Cop Hosing Every One With OC Spray, Just Won't Go Away

I think William Banzai at ZeroHedge started this. Wish I could find those pics.

Chris Christie Calls Obama "A Bystander in the Oval Office"

What the hell are we paying you for? Good question. Nobody knows.

The Jon Corzine Affair: When This Administration is Through, President Obama Is Going To Make Richard Nixon Look Like a Piker

Don't you find it interesting that President Obama spent more time publicly on the "beer summit" with a cop and a black guy...than he has with his campaign bundler, Jon Corzine?

Jon Corzine is a former CEO of Goldman Sachs and NJ Governor. He was also CEO of MF Global which declared bankruptcy a month ago.

Bankruptcy in and of itself is not particularly novel nowadays although it seems fairly rare for brokerage houses. What makes this bankruptcy outrageous is that the company, MF Global, didn't just declare bankruptcy on it's own accounts-it is missing in excess of one billion dollars of it's customers' cash. And they can't find it. This latest news tidbit is certainly not comprehensive but gives you an idea of just how baffled everyone is.

Here is the latest find.

Where is Jon Corzine? I haven't seen him, heard from him, in over a month. Like a fucking ghost. The best part is yet to come. Here's some foreshadowing.

If you cannot call Jon Corzine "elite" then the term elite should probably not exist. By all definitions, Corzine represents the elite. Not only that, but Corzine is very close to President Obama. In fact, Corzine bundles millions in campaign contributions for Obama. And like the crony capitalist that Obama is- Corzine very recently was hinting that Obama might give him a high level appointment. Here is a pretty good overview of Corzine's history and connections.

Can you imagine how stupid Obama must feel right about now? Surrounded by crooks who are getting caught and making him look bad? Could that all be one big coincidence? No, of course not.

So investigators cannot muster up enough evidence after a month? Ok, so they've found 500 million. Is it going to take a few more months to find the other half a billion? Do you think maybe Corzine knows where the missing customers' money is? In my old line of work, I didn't really care where the embezzlers hid the dough- I simply proved they took it. However, part of any investigation usually involves asking the most likely suspect (Corzine) what he did with the money. It helps prove the case and gets the victims their money back. Not that this administration or the SEC has ever really concerned itself with making victims' whole again. They are more like meter maids handing out big parking tickets so they can tell us what a wonderful job they are doing.

Is the Obama administration sheltering Mr. Corzine, hoping this goes away? Who knows?

This is precisely why our country is completely fucked up. We have no rule of law. We have a completely corrupt chief executive who is just as criminally complicit as the people he is in charge of investigating. From Kevin Johnson, to Gunwalker, to Solyndra (check the latest on Solyndra out here to MF Global. Obama and this den of thieves is the most reprehensible and crooked administration in the history of the United States. Obama makes Nixon look like a fucking piker.

In the meantime, we get to wait and see what happens to Mr. Corzine. The two tiered criminal justice system will be on full display. Our Attorney General Eric Holder, who is every bit as corrupt as his boss, will look the other way of course. The situation in DC is absolutely overwhelming. Stunning. You thought crooked cops were bad.

Tuesday, November 29, 2011

The Bard of Murdock Bids Barney Adieu

A Delightful Intro

Original verse by Hilaire Belloc
Here, richly, with ridiculous display
The Politician’s corpse was laid away.
While all of his acquaintance sneered and slanged
I wept: for I had longed to see him hanged.
The Bard's Version

Monday, November 28, 2011

Barney Frank Retires, Good Riddance to Bad Rubbish

More good news today. One of the architects of the financial collapse of this country is calling it quits. Barney Frank who was looking at a district full of new, enlightened, and angry voters did what cowards do best. He retired.

Barney Frank embodied every thing that I detest in politicians. He was a bought and paid for banking shill who sat on that committee. He took his bribes campaign contributions from bankers. He literally co-erced banking interests into forcibly relaxing lending standards so that people who should not have been able to buy homes did. Owning a home is not an entitlement. When Fannie and Freddie flamed out, once again there was Frank blaming everyone but himself. Barney Frank couldn't take responsibility for his actions or tell the truth if he had to. He is the epitome of a slimy politician. Morally and ethically bankrupt.

I could cite many instances of the lies and corruption (not to mention the male whorehouse he ran out of his apt.) that Frank engaged in but quite honestly, I don't want his memory to linger any longer than it must. May the last thing anyone ever  remember about you Barney Frank- is this 50 second you tube video that captured the very essence of who and what you are.

A Profile In Courage and Integrity, Judge Rakoff Apparently Believes In the Rule of Law

On the heels of "The God of the Machine" blog which points out the ignored and decaying rule of law in this country, comes this refreshing story today. There are still rays of hope.

United States Federal Judge Jed Rakoff has set aside another one of those cozy arrangements that the SEC loves to engage in. This time, Citibank completely misrepresented an asset class which caused investors to lose 700 million dollars. Not only did Citibank essentially lie, but they SHORTED those same investments and made 160 million.

Innocent investors lose 700 million. Citi makes 160 million. So guess what number the Securities and Exchange Commission landed on? You guessed it. A whopping 285 million was the "settlement." How nice. And the SEC didn't even bother mentioning if they were going to try and restore all those losses to the people who were suckered by Citi. So let me summarize this. Citi lied to investors. I call that fraud. The SEC then cuts Citi a sweetheart fine deal for about 1/3rd of the total loss. Citi doesn't even have to go to court and disclose to the world under oath what a bunch of CROOKED THIEVES they are. The SEC doesn't have to prepare a case. Nor do they have the intention of paying back the poor saps that Citi defrauded.

The SEC could look up the definition of restorative justice although up to this point- Mary Shapiro has shown no proclivity or interest in understanding that the SEC works on behalf of defrauded investors. Taxpayers.

Enter our hero, Judge Rakoff. Not only does Judge Rakoff understand the role of the SEC but he also understands that these nasty little backroom deals mean that the truth never sees the light of day. Truth, justice, and the rule of law are not served when the parties to an agreement such as this- decide it's in everybody's best interest to keep what they have done secret. Thieves like Citibank never get exposed when there are no trials. The people of the United States have a right to know. Investors were ripped off. Agencies such as the SEC are supposed to work on behalf of taxpayers. And we all know how Citibank among others, screwed taxpayers and socialized their losses. So today, Judge Rakoff set aside the "settlement." He also chastised the SEC for using the judicial system like it's some sort of robo-signing mill. In his decision he also chewed the SEC's ass for a prior settlement with Goldman.

I have linked the ZeroHedge story because they have embedded Judge Rakoff's opinion. I read all 14 pages. The real fun reading starts around page 10.

I also read up on Judge Rakoff. A stand up guy who has the right resume'.

People like Judge Rakoff give me hope that we can re-install the rule of law in this country. Currently there is no shortage of thieves, liars, and silently complicit and paid for cowards inhabiting Congress and the White House. If we are ever going to save this country, we need the help of morally correct people like Judge Rakoff.

Sunday, November 27, 2011

The God of the Machine

Today I stumbled onto the answer to a question that I have asked my entire life. I am not sure that I have ever understood the full scope of what I am about to say. But what I read today- makes sense.

Here is the question. Of all of the countries on planet earth, what made the United States so successful? Why were we able to make tremendous advancements in productivity, in engineering, in the medical and pharmaceutical fields? How and why did we become the leaders in technology? Why do we have the most effective fighting force with the most advanced armament of all time? How did our culture crawl to the top of the heap?

Was it luck? Are we smarter than everyone else? How was the United States able to advance so dramatically while other cultures were left far behind? I have always wondered about that until today. Today, I think stumbled on to that answer.

Initially we got lucky. We isolated here on this continent as free men and we were insanely productive without anyone lording over us and stealing our wealth. From that petri dish, we did one other thing right. It would be the key in our separation from all other republics and cultures. It was the underpinning of the greatest period of technological advancement and wealth creation that the world has ever known. Very simply, we had a rule of law. That rule of law was rigid and structured. It was fair and it protected everyone. With the rules in place, people were not afraid to participate. The state was kept at bay. It could not arbitrarily come in and punish people. Competition was fair and protected. Rights, regarding your work and thus your work product, were protected. Copyrights, patents, and trademarks. Innovation, invention, and production- even workers were protected which was facilitated by union or lawyers. It wasn't perfect but we all agreed that perfection was the goal.

With a level playing field, as close to fair as humanly possible, people were willing to participate.

The premise is simple. The foundation of our entire culture and way of life is based on some operating instructions we call the rule of law. And if you abandon the rule of law- chaos results. People withdraw. They no longer have confidence in their government. The government begins to pick and choose which people will get prosecuted and which will not. Government picks and chooses winners and losers. It gets in bed with the winners and prosecutes those who cannot muster a defense. There is no longer any illusion of fairness. The operating instructions are ignored. Society and our culture see the changing rules and they withdraw. They no longer participate, they no longer innovate. Without a level and protected field, the players quit playing. They lose their desire. They quit paying taxes as the government confiscates more and more. The government throws them some scraps. And all the while, our society just can't quite put their finger on what's wrong. Like me. Until today.

Now it is not too difficult to imagine how those other Republics failed.

We abandoned the rule of law in this country. We abandoned it at Chappaquiddick, we abandoned it at Watergate. The government further abandoned the rule of law in the intervening years. It let illegal aliens in by the millions. It created wars and killed our sons and daughters and offered excuses when the truth was- those wars were simply "good business." By 2008, Congress had set the stage for the greatest banking ripoff in the history of mankind. The government turned a blind eye to the suspects in that crime and it continues to turn a blind eye. At no time in the history of this country have we had a Congress as morally bankrupt and as unethical as this one. The Supreme Court is not far behind. They cannot prosecute the guilty because they cannot distinguish the guilty from themselves. Society and our culture are breaking down right in front of our very eyes. We sense it and we feel it... but mostly we can't point to a single cause. That is too simplistic we think. Or not.

The only reason we have not completely broken down as a country and a culture is because we still have some existing rule of law. There are those who are attempting to render the remaining rule of law ineffective. They might succeed. When that happens, you can stick a fork in us. Because I truly believe it was our system and rule of law that set us apart from all others and enabled us to become the greatest country ever. If only for a while.

My thanks to Isabelle Paterson for answering a question she had mulled over prior to 1943. I ordered the book.

The (PS) quote from the book: Most of the harm in the world is done by good people, and not by accident, lapse, or omission. It is the result of their deliberate actions, long persevered in, which they hold to be motivated by high ideals toward virtuous ends… [I]n periods when millions are slaughtered, when torture is practiced, starvation enforced, oppression made a policy, as at present over a large part of the world, and as it has often been in the past, it must be at the behest of very many good people, and even by their direct action, for what they consider a worthy object.

The Boise Bum Barometer

Activity in Boise among the bums is really picking up. I have seen bums in places I have never seen them before. Many are holding gas cans. Gas cans, in addition to the usual cardboard pleas, are the new props.


Just the other day, I saw a hot looking gal (I am not making this up) holding up a cardboard sign at Orchard and Overland. I have never seen a bum on this corner prior to that spotting. Nor have I ever seen such an attractive gal out pan handling. Bizarro world. If I see Ward and June Cleaver and the Beav out pan handling- I will not be surprised.

In fact, I am seeing quite a few women popping up all over town. I have never seen that before. I saw three yesterday.

There is now evidence of shift changes and platooning. On a couple of days, I have had to go back and forth between the Lowe's/WalMart complex on West Overland. This is a popular spot for bums. I now notice that the bums are changing faces but inhabiting the same popular spots.

I have also noticed more and more people giving the bums money. Personally,  I think I will hand out holiday 40's and smokes. Save them a trip back to the store.

I use the BBB to gauge the health of our economy. In fact, I have found the predictive value of the BBB to be an accurate portrait of the state of our economy. Judging from the looks of our bums, things aren't getting any better.

This Has To Be Exhausting Work, Warding Off the Economic Apocalypse

All you can do is laugh. The world is getting a margin call.

What I am going to try and do today, is explain why the world is broke and why it can't fix itself.

I have this picture in my mind of a bunch of stodgy assholes sitting around tables somewhere and everywhere, desperately scheming. Trying to preserve the status quo banking operations that they have used to fleece people for generations. They have two problems.

The bankers have to create the illusion of fiscal wellness. In simple words, they can't let you see them sweat. These guys will go to any lengths to do that and they have. They have even managed to prop up stock markets. A US market that by my estimation should be trading 4000-5000 points lower than it is. Other averages chopped in half.

The bankers need the politicians to comply and help. So far, so good.

The other problem that bankers and politicians have created is far worse. The world is bankrupt. The bankers have used fractional banking and money creation, debt on steroids, to fuel this crisis. Japan has been dead money for over 20 years. Europe is toast. The U.S. is heavily damaged and listing in the bay. There are some insiders in China that will tell you that even China is not a safe haven. The bankers cannot find a way to get economies up and running, to repair the fiscal damage they have caused. This time it is different. This time, unlike all of those other times, there is no rescue helicopter on the horizon.

Years ago, I opened my first margin account for 10k. Put up ten thousand bucks and the bankers will loan you another ten thousand. This is margin, leverage. The ability to buy 20k worth of equities with only 10k. This is a tremendous asset when things are rolling your way. Unfortunately, and this will make sense, when things don't go your way they are doubly worse. If I lose 20k worth of equity or stock, I owe somebody 10 thousand don't I?

So if you are fully invested, 20k, and the market turns against your positions- the bankers call and ask you to put up more money or sell stock. Your equity is being reduced by the market- eroding twice as fast as normal. To satisfy the margin call- you must retain your equity one of those two ways.

Here is a simple rule about trading and leverage. If you have ever received a margin call, you should not be trading on margin. Ever. Margin calls are the real walk of shame. That is why bankers everywhere should be punished. They know better.

There is one tremendous problem with using leverage. The more leverage you are using, the more your losses are magnified. Banks don't just employ the 1-1 margin like they give you. They are much greedier than you. They are allowed to fractionally bank at margin rates of 9-1 or greater. In other words, they are allowed to loan 9 (minimally) times more money than they have on deposit. This is fractional banking. European banks are even worse. The best estimates I have read put their fractional lending rates at 13-1. 

So let's imagine that a bank has 10,000 dollars on deposit. You walk in for a 130,000 dollar loan for a house. You have good credit. The bank makes the loan. Two years later the economy collapses and now the house is only worth 60,000. You quit paying on it. Maybe even damage it a little on the way out. The bank is screwed. The house did not appreciate, you quit paying on the loan and somebody has to pay for that mortgage and now someone's got to fix the house and sell it. Someone has to pay taxes on it.

So somebody has lost 70,000. But wait! There was only 10,000 on deposit to begin with. Where does the bank magically get the other 60,000 it just lost? Answer- it doesn't. Not until the economy rebounds, the losses are absorbed and accounts and balance sheets are refreshed with new money. Then the cycle begins again. Only this time, it can't.

There is a lot of evidence that points to a european monetary collapse. They did the same thing we have done- only worse. There is no way for their bankers to pay for their losses. Italy has to refinance 300 billion in debt in February and they simply can't do it. In fact, I think that will be the tipping point. There is evidence that the FED is already backstopping US banks in preparation for the european run on US banks.

The only tools left for the bankers are electronic zeroes, politicians, rhetoric and bullshit. We have seen plenty of that so far. They have given themselves a margin call- victims of their own greed. So sit back, relax, and enjoy your life. Be happy that you are not a central banker or a politician- trying to ward off the inevitable.