22 August 2010
Jim Willie CB,  “the Golden Jackass”

* Warnings of Systemic Failure
* Economic Cast of Clown Charlatans
* Mutually Assured Destruction (MAD)
* The Biggest Clown of Them All




Special Report #1

"That the history of Rome is ... the history of the world. That, as all roads lead to Rome, so all history ends or begins with Rome." ~ George Haskins (from preface to Death of a Republic, by John Dickinson)

MONETARY ALCHEMISTS: MANY FACES OF RUIN

The climax is within sight. Systemic failure can strike in many ways. Warnings have come from respected corners. Economies operate atop financial structures. When deeply damaged from decades of mismanagement, even engrained corruption among the financial edifices, the momentum toward failure proves to be unstoppable. A major turning point was appointment of Robert Rubin at Treasury Secy in the Clinton Admin in 1992. That represented an invitation for Goldman Sachs and the elite among Wall Street to control the USDept Treasury, to control the USGovt financial apparatus, and to corrupt it for private syndicate gain. That marked the primary chapter of pathogenesis for the advancement of the Fascist Business Model, whose final chapter is playing out with Quantiative Easing Round #2. The merger of Wall Street and the USGovt financial ministry cemented the death of America. The investment bankers gutted the national wealth. They used Fannie Mae as a foundation for the mortgage bubble, known to be the clearinghouse for numerous trillion$ fraud schemes that pre-date Rubin. They leased the entire contents of Fort Knox, sold it for private gain, and gave the nation what they called a Decade of Prosperity. It was instead a decade of theft, gutting, and ruin, followed by a decade when the USEconomy growth was built upon a housing and mortgage double bubble in a calculated manner. In the last few years, the bubbles broke, and the nation began a death spiral. No amount of printed phony money can pull the nation out of the death spiral. Watch in horror the death of American Keynesianism, which by the way is n ot what Keynes advocated. The US version is grotesquely bastardized.

Whatever policy has failed will be repeated with urgency, but worse, with even more power. Therein lies the insanity. A hyper-inflationary depression is assured, or at least fast rising cost structure and diverse asset decline, against a backdrop of economic deterioration. The destruction would not be possible without a diverse cast of clown charlatans practicing experimental economics on the USEconomy as a rat collection in a laboratory. They know next to nothing about MONEY, and less about CAPITAL FORMATION which produces jobs and bears the legitimate fruit of real income. Their concept of progress is putting cash in people's hands and in corporate hands, regardless of where it came from, even the Printing Pre$$. Thus their ignorance of what money or wealth is. The USEconomy must restore a favorable business climate. It must reduce corporate taxes and regulatory burdens. It must use tax accounting like capital equipment expense writeoff immediately. Tax credits should be given for new job creation. It must embark on bold national initiatives like domestic energy production. Even solar panels are mostly made in China for US usage. The Health Care Program is precisely the opposite of what is needed, since it taxes businesses and freezes them fom uncertainty. The nation has lost its entrepreneur spirit, replacing it with government welfare and monetary handout coupons, better known as counterfeit. The nation has lost its concept of both money and wealth, resulting in a poor understanding of what legitimate income means. A generation of asset bubbles has turned the nation stupid.

The greatest clown of them all is USFed Bernanke, who is eclipsed only by the memory of Alan Greenspan, whom the Jackass disparagingly called Greenspasm. Both men confuse monetary production for wealth output. They cannot see the capital destruction. They are blind men at the ship's helm, looking at icebergs, calling them fertile gardens with green shoots. Soon the main industrial output in the land will be of dollar bills bearing ink and dead presidents.

The nation has forfeited or abandoned its industry. Blame high labor costs, or blame the unions, or blame the corporate leaders who took business overseas. Maybe blame the USMilitary emphasis for a war machinery that the nation permitted to run amok withotu controls. Followers of the Fascist Business Models fall in love with war, turn it sacred, fabricate new enemies, and push the nation into aggressive relationships that work against national interests and alliances. The penchant for war, starting with Vietnam, led the USEconomy into an inflationary spiral that lifted wages sharply for many years. When globalization arrived, the US labor was priced out of the global market. The nation is left with endless wars, their crippling costs, and crippled soldiers who struggle to find prosthetics. Witness a systemic failure brought by economists and bankers, whose motive of private gain is overshadowed only by their contempt for the people.

WARNINGS OF SYSTEMIC FAILURE

◄$$$ ELIOT SPITZER ACCUSES THE USFED OF A PONZI SCHEME. DYLAN RATIGAN DISPLAYS STARK EVIDENCE OF BOND FRAUD AND FINANCIAL DECAY. DOUG CASEY PROVIDES SOME FINE DESCRIPTIONS OF DEFAULT. THE TRAGEDY CONTINUES TO UNFOLD, WHILE ALL CRITICS CANNOT BE SILENCED. $$$

Eliot Spitzer was smeared and removed, but he can still make a dent on the image of Wall Street and the US Federal Reserve. His climax comment came when he described the USFed in some level of detail as a giant Ponzi Scheme. The USGovt does what Bernie Madoff did, but with a license and a Goldman Sachs hired executor. Dylan Ratigan spoke out against Wall Street corruption from his CNBC post a year ago, and was fired for his blunt accusations, which were true. Ratigan emerges with his new show on MSNBC, which has become a thorn in the syndicate's side. Hard to believe a CNBC castoff operates without visits by men in black suits who specialize in broken arms and bodies left with holes. He explains with visual aids and images the concepts of toxic assets, failed banks, USFed matters, HR 1207, auditing the USFed, and the US public sold down the river. My preference is never to refer to abused US taxpayers, since they do not pay for much of the USGovt debt anymore. Foreign creditors do. They might be taxed into oblivion, but the debt burden is more a foreign risk than domestic.

Ratigan put to great usage fine props for visual effect. With banker hat, he swaps a bag of trash for $13.9 trillion worth of monopoly money from a fellow wearing a Fed hat. He explains the urgency of the Ron Paul Audit of the Fed (HR 1207 bill). He explains how the people have been screwed by the Fed's bailout of the banks. Main Street is ignored and left wanting, while Wall Street is supplied and catered to. Ratigan said "The Federal Reserve just extended $14 trillion of our money, our children's money, America's future, and now they do not want to talk about what is in the bag. And they did it because the banks created a garbage bag full of bad debts... I feel as if America has suffered the greatest theft and coverup ever, where banks created a pile of garbage, that they paid themselves billions of dollars in personal compensation, and then stuck the trillions of dollars worth of garbage with the American taxpayer. That, to me, is stealing." Ratigan is a brave man, like Keith Olbermann at MSNBC, and Matt Taibbi who opposes Goldman Sachs on the Rolling Stone magazine. America needs heroes, but not dead ones. The website features Spitzer describing the Ponzi Scheme, Paulson hit by a falling tree before the USCongress, a long string of highly visible wrong forecasts by the mediocre USFed Chairman Bernanke, and a spoof by Ratigan on the purchase of credit ratings. See the Daily Bell video site (CLICK HERE).

Doug Casey describes in some detail what unfolds in the path to default. He said "There are two ways they can default. One by saying, 'We don't have the money and we're not going to pay you' and the other by continuing to print up money and giving people [creditors] the number of dollars that they are owed, except the dollars are worthless. The first alternative is by far better, for many reasons we cannot fully explore now. But it is going to be traumatic either way... [The debt situation] does not have to stabilize. To pay interest on the national debt, and to pay for additional spending, all the Federal Reserve has to do is buy bonds from the US government. It does not have to stabilize at all. The government is most unlikely to cut back on its spending, most of which has become part of the social fabric: Medicare, Social Security, unemployment benefits, food stamps, corporate bailouts, continuing foreign wars, domestic security... These people are crazy enough that it could get like Germany in the 1920s or Zimbabwe a few years ago... At the moment we are in an economic twilight zone or, if you wish, the eye of a hurricane. There is apparent stability in the economy. The stock market is high. The bond market is high. Only the real estate market is in visible trouble. Retail prices are level. They are not going up and maybe they are even going down in some cases. This is a temporary situation. We will inevitably, and soon, hit the other side of the storm. At some point those trillions of dollars created by the US government, and many other governments around the world have created trillions of currency units, are going to have an effect. When will that be? The timing is uncertain. But I think it is going to be soon... If these things were perfectly predictable, it would be easier to dodge the bullet. This is an almost unique time in world economic history. I think we are not only going to have economic consequences, but social and political consequences, and very likely military consequences. So hold on to your hat." Well put, well done!! On the mark, boldly stated!! See the Market Oracle entitled "US Heading For Debt Default & Greater Depression" as part of an interview by The Gold Report (CLICK HERE).

◄$$$ WILLIAM PESEK GIVES WARNING THAT THE SYSTEM IS FAILING AND THE PEOPLE ARE LOSING FAITH IN THE MONETARY SYSTEM. WHAT IS DYING IS THE STRUCTURE OF PAPER MONEY, A MAIN PLANK FOR WHICH IS CONFIDENCE. WHEN THAT DISAPPEARS, THE PURSUIT OF GOLD AND VALUABLE COMMODITIES ENTERS A NEW REALM. $$$

William Pesek used to be a regular featured columnist on Barrons magazine. He taught the Jackass much in the 1990 decade. He is recently a syndicated writer. He wrote, "It is hard to decide what is more frightening: that investors are losing confidence in paper money or that the shepherds of the world's major currencies do not get what is going on. Gold's climb of almost 30% in a year reflects fear, not just market concern over inflation or deflation risks. People have lost trust in the global financial system... Thinking back to the darkest days of 2008, few will quibble with government efforts to stave off Armageddon. The promise was that if investors tolerated a surge in debt issuance, capitalism and prosperity would be saved. As fear is returning to the global economy, the worry is that industrialized nations are out of ammunition. Have nations reached a Keynesian Endpoint as exhausted balance sheets leave policy makers with few options to bolster growth? We have known for years that the Group of Seven nations were losing their ability to guide markets. Now, they are losing hope of shielding economies from them... It is not what the Greenspans of the world envisioned 15 years ago. Back then, warehousing gold bars seemed a bit retrograde. Central banks had gotten so good at whipping inflation, that paper money was just fine. Fort Knox was no longer needed. The post-Lehman world is dispelling such notions and we may be on the cusp of history is greatest gold rush. Bernanke and his peers would be wise to contemplate why." See the Bloomberg article from June, still highly relevant (CLICK HERE).

Pesek did not mention does not mention the details of failed financial engineering, the wretched and failed structural designs that helped enormously to bring the system down, and to undermine confidence. The off-load of risk into financial instruments, blessed as good and effective by Greenspan, even a sign of an advanced sophisticated society, almost all resulted in charred ruins. They turned into fast track bankruptcy mechanisms, still impossible to turn off. The effects of credit derivatives and leveraged Interest Rate Swap contracts remain at work, killing capital, decimating banks, enabling counterfeit, and threatening uncontrollable chain reactions to turn the nation dark with explosions. Pesek did not mention diverse engrained Wall Street corruption, trillion$ bond fraud, a co-opted Treasury Dept by Goldman Sachs, or the sacred Pentagon budget for their endless war to control a global narcotics monopoly. So the picture is worse than Pesek paints. The great wide streak of Anglo corruption is a gigantic element to the loss of faith in the primary Western financial sectors dominated by New York City and London. The next big theme will be prosecutions for fraud and lawsuits for restitution. One can only hope. Also, one might hope for bankers to go into exile.

◄$$$ DOUG NOLAND FROM THE PRUDENT BEAR WARNS THAT THE PEOPLE SHOULD BE SCARED, AND HAVE REASON TO BE SCARED. HE IDENTIFIES THE BIGGEST ASSET BUBBLE YET, IN USTREASURY BONDS. WITHOUT THOUGHTFUL ANALYSIS, THE NATION CONTINUES ON ITS ERRONEOUS PERILOUS PATH TOWARD RUIN. $$$

Doug Noland of the Prudent Bear speaks clearly, and allows very little confusion. Noland does not use the term USTreasury Bond bubble, but surrounds the entity. He traces the source of the USTBond bubble to the response from the 1987 Black Monday event. That is when the opportunity was passed up, for the United States to put its house in order. Instead, Greenspan chose to launch an assortment of asset bubbles, from stocks to housing, called the Clean Revolution, then the Macro Economy, then the Asset Based Economy, all heresy, all ending in ruin. The abandonment, forfeit, and dispatch of US industry continued in the 1990 and 2000 decades as Asia accepted the duty, complete with adopted wealth ramifications. Asia then controlled what American chose to discard, legitimate income. America from that point relied unduly upon debt, which replaced its income. Noland warns loudly of the perils the nation faces, as review of past errors is not conducted or permitted. He is frustrated and angry with ideology, yet does not accuse the high priests of economics heresy, as the Jackass does. The nation is locked in heretical destructive policy. Nobody in power cares about a USTreasury Bubble, since it finances the USGovt deficits gone of of control, haywire, amok. Witness the Black Holes under the USGovt aegis. See the Safe Haven article (CLICK HERE). He wrote the following.

"Some argue that the Federal Reserve has a profound duty to balloon its balance sheet by monetizing Treasury debt. They state that the Fed has a profound duty to sacrifice its independence, as it works in concert with extreme fiscal measures to eliminate deflation risk. This is no more than New Age theorizing and experimental policy making that lacks any historical basis of support. It is, at the same time, a skillfully sophisticated version of age-old inflationism propaganda and monetary quackery. Nowhere from this Inflationist camp do we see any recognition of the potentially catastrophic Bubble that, after years of migrating from one market to the next, has finally found its home right in the heart of our monetary system [USTreasurys]. Indeed, the Inflationists have deep disdain for Bubble analysis. They write off the mortgage finance Bubble as a housing boom led astray by one-off failures of underwriting standards and supervision. Such analysis ignores the key policy, monetary, and global market dynamics that only a few years ago were allowed to destroy the credit-worthiness and market confidence in our system's (non-government guaranteed) mortgage Credit, almost bringing down the global financial system.

I have posited that the 2008 bursting of the Mortgage & Wall Street finance Bubble unleashed an even bigger Mother of All Bubble throughout global fixed-income marketplaces [USTreasurys]. I trace today's Bubble back at least to the Greenspan Fed's 1987 post-crash systemic reliquefication. Resulting late-1980's excess led to severe early-1990's banking system impairment; followed by an another aggressive monetary policy response; the 1992/93 bond market Bubble; the 1994 bond bust and Mexican crisis; expanded monetary largess; the South East Asian Bubbles and collapses; additional policy accommodation; the Russian and LTCM fiascos; more extreme monetary stimulus; the resulting technology Bubble; and historic monetary stimulus and reliquefication leading to the Mortgage & Wall Street Bubble. Recent history of monetary disorder fueling serial boom and bust cycles is unequivocal.

From my analytical perspective, we are in the midst of history's greatest and most perilous financial Bubble [USTreasurys]. And I am beside myself that nobody in a position of influence seems to care. We have witnessed momentous analytical and policy errors over the years. These blunders are allowed to repeat themselves without thorough analysis and review. All this talk about fighting deflation and helping Main Street misses the point, and only feeds the Bubble. I am fed up with ideology trumping sound analysis... An increasing weight of evidence supports the global government finance Bubble thesis [USTreasurys]. But, of course, there is nothing like the euphoria associated with rapidly inflating asset prices (in this case bonds) to embolden those dismissive of Bubble analysis. All the more reason that it is imperative that we not IGNORE THIS BUBBLE as we did the Mortgage & Wall Street finance Bubble. The risks and costs today are infinitely greater."

◄$$$ VON GREYERZ DELIVERS A STERN WARNING ABOUT THE END OF DAYS. HE ADAMANTLY PROCLAIMS NO DOUBLE DIP RECESSION WILL TAKE PLACE, BUT RATHER A SLIDE INTO THE ABYSS. MY TERM IS SYSTEMIC FAILURE, MARKED BY GROWING CHAOS. $$$

Egon von Greyerz of Matterhorn Asset Mgmt is bold. He watches the end of an era unfold, and describes it well. He does not anticipate a Double Dip economic recession to the Western world, which sounds harmful to be sure. He expects a galloping decline and ultimately a hyper-inflationary depression, even calls it the end of days. The Jackass concurs, as an end to Anglo Financial Rule is underway, working toward a logical conclusion. With choices of rabid monetary inflation versus painful austerity spending programs, the United States will choose inflation without a blink of the eye, without a hint of hesitation. The entire banking industry and financial markets are fine tuned and geared toward inflation. In fact, financial engineering is designed to function optimally in an inflationary environment, and to kill the system when asset bubbles go bust. Any supposed hesitation by national leaders (the bankers) is bound in words, not actions, which never showed the slightest detour from vast monetary growth ordered behind the curtains and in the basements.

The accelerating debts bear little positive outcomes or rewards, only feeding an identifiable Ponzi Scheme in the USTreasurys. He describes the financial foundation as precarious and lethal. Do not be fooled by the asset deflation scare. He calls the slight deflation in progress a prerequisite for hyper-inflation, a point in full agreement. It conditions the masses and the USCongress. The response to fear of implosion induces the final ingredient, as governments print money with abandon, resulting in a collapse of the major currencies. This collapse, however, will be different since simultaneous across nations. The price of gold and many supplies will rise in concert, or in unison in each currency. The misguided and errant economists call the reckless monetary expansion Quantitative Easing, which sounds harmless. The QE will accelerate in the US and worldwide all together at once, a process never seen before, another point in full agreement. They will ramp up the monetary engines quickly. Asians nations probably stand the best chance to withstand the coming worldwide tsunami of money printing. It destroys capital, which Asian has much in reserves. The alternative of economic collapse will be avoided, by political consensus. They will buy time, but guarantee arsenic in the financial veins.

Conventional wisdom and most experts harp like chattering birds about deflation. Their music is from a chorus of morons. This conventional wisdom has consistently lacked wisdom. They have been wrong about most turns of the crisis for over three years, and they will be wrong again this time. They are largely frontmen, policy cheerleaders, opinion shapers, and ideological priests, not true economists since compromised to the core. They are carnival barkers inducing the people into congame parlors. The Western world views the inflation risk as years away, but the financial foundation rests on shifting sands of asset bubbles in fast erosion, or else a pile of matchsticks, as Von Greyerz describes. A sudden shift in psychology could rapidly crumble the fragile structures that are loosly bound by flimsy confidence and thin trust. Then would come a vicious and fast spinning hyper-inflationary circle. The frailty of the financial system could make this happen like a flash fire, in his view.

Von Greyerz regards the European sovereign debt as extremely serious, but the American situation much worse, a final point in full agreement. Problems in Greece and Spain have served as a diversion from the problems in the USEconomy, which suit well the USGovt custodians and power merchants. He identified suspicious timing. One can claim it a coincidence that US rating agencies downgraded the sovereign debt of Greece and Spain on the same days as USTreasury auctions were held. The collusion is as thick as the protection offered the guilty. He emphasizes how governments will lean on new money creation, since that is all they know. They discarded the excellent German and Austrian economists, like Rothbard, Hayek, Schumpeter, and Von Mises long ago. The Americans knew better, and rudely dismissed their extreme expertise. Von Greyerz wrote the following.

"No, there will be no double dip. It will be a lot worse. The world economy will soon go into an accelerated and precipitous decline which will make the 2007 to early 2009 downturn seem like a walk in the park. The world financial system has temporarily been on life support by trillions of printed dollars that governments call money. But the effect of this massive money printing is ephemeral, since it is not possible to save a world economy built on worthless paper by creating more of the same. Nevertheless, governments will continue to print since this is the only remedy they know. Therefore, we are soon likely to enter a phase of money printing of a magnitude that the world has never experienced.  But his will not save the Western World, which is likely to go in to a decline lasting at least 20 years but most probably a lot longer. The hyper-inflationary depression that many Western countries, including the US and the UK, will experience is likely to mark the end of an era that has lasted over 200 years since the industrial revolution. A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyper-inflation in the West leads to a destruction of real asset values and a debt implosion...

Governments now have two options. 1) continue to spend and print money like the United States or 2) introduce austerity programs like Europe. Whichever way they chose will not matter since they have reached the point of no return. The economy of the West cannot be saved by any means. But governments both in the United States and in Europe will still apply the only method they know, which is to print money. The only reason that the US could build up such a major debt is that the US dollar has been the reserve currency of the world and therefore the US has been able to finance its debts and deficits internationally. The US has now reached a point when debts have to increase dramatically for the country just to stand still. Like all Ponzi Schemes, this one will also come to an end, and very soon. The US dollar will decline dramatically and lose its reserve status, and the US government will be unable to finance its deficit in any market. This process will lead to endless money printing, collapsing Treasury Bonds (substantially higher interest rates), and the dollar becoming worthless in a hyper-inflationary Black Hole."

Von Greyerz identifies three insurmountable problems in the USEconomy that are of a magnitude and gravity which can only be remedied by money printing: federal and state deficits, the unemployment rate at 22%, and a decrepit financial system where bank assets are given phony lofty values. He believes the stress and deterioration from these three areas will result in the biggest money printing program in world history, which simultaneously will lead the US and many other countries into the abyss. See the Zero Hedge article (CLICK HERE) and the European CNBC video (CLICK HERE). My viewpoint is in total synch with his forecast of ruin, and his reasoning, even the planks. But in order to foment greater acceptance of his viewpoint, he should change his name to Mike or Bill or Gary. Somehow Egon or Igor conjures up images of dark Romanian castles, wretched hunchbacks, mad scientists, and creepy assistants to Frankenstein. Think credibility. Just kidding!

◄$$$ GERALD CELENTE OFFERS MORE OF HIS ONGOING NO-HOLDS BARRED APPROACH TO WARNING OF GROWING CHAOS, SHORTAGES, VIOLENCE, AND RUINOUS TIMES IN THE UNITED STATES. HE HAS NOT BEEN WRONG ABOUT MUCH OF ANYTHING IN OVER 20 YEARS. EVEN SELF-STYLED MOTIVATIONAL GURU TONY ROBBINS IS WARNING OF AN ECONOMIC COLLAPSE. $$$

Two contrasting figures are presented for the warnings to the citizens, who seem to be very slowly awakening to the US national tragedy, as systemic failure takes grip step by step. Gerald Celente of the Trends Research Institute correctly forewarned before several turning points in the US that left deep scars, starting with the Black Monday event in 1987. He has been relentless in his warnings of growing chaos and disorder among the population, especially the cities, extended to the supply chain. Shortages will come, resulting in violence. The economic mismanagement and wrongful emphasis by our leaders, even corruption, have set the nation on a course impossible to veer from. Even if good decisions are made, the consequences of three decades of mismanagement and corruption will be extremely painful and disorderly during any remedy, restructure, and rebuilding. See the Max Keiser three-part interview of Gerald Celente from mid-August (CLICK HERE & HERE & HERE).

Tony Robbins is probably the world's best recognized and respected motivational speaker. He is a force behind positive thinking and self-motivation. For years he urged the people "to unleash the power within" and to take charge of our lives. Tony Robbins has not only awakened to the extreme risk inside the United States. He is warning that an economic collapse is coming. One might suggest Robbins now urges the people "to protect from the powers outside" and defend your families with life savings. Going further, he has produced a special video warning of the events he anticipates will happen. Bear in mind his likely prestigious connections at the highest levels of the financial world, enough to add to his credibility. Robbins expects that the coming collapse is going to be a painful process in his words. Given his tendency to be positive and optimistic, his open warnings to the public about a coming economic nightmare should be heeded. See the Economic Collapse weblog (CLICK HERE), and move forward with each few days passed since it updates under the same link.

ECONOMIC CAST OF CLOWN CHARLATANS

◄$$$ THE ECONOMIC ANTI-BRAIN TRUST HAS A LARGE SUPPORTING CAST OF CLOWN CHARLATANS. THEY FAWN OVER THE HIGH PRIESTS, BUT ALSO CHALLENGE THEM. TRAGICALLY, NONE OF THEM UNDERSTAND MONEY OR CAPITALISM. THEY HAVE FALLEN INTO A PAPERY MIRE, A SEA OF TOXIC LIQUIDITY, RENDERED ACIDIC BY DEBT DEFAULT AND ECONOMIC DECAY. THEY ARE FOOLS, HIGHLY DESTRUCTIVE IN THEIR CRAFT. $$$

These people, these poorly trained economists, these charlatans posing as wise counselors to development, they worship the Monetary altar and ignore the Industrial shrines!! The current news climate supplies the characters targeted, although in any other month different characters would be painted as clowns. Consider a clear clown charlatan. Karen Dynan, a former USFed economist, is currently in an economic post at the Brookings Institution. She points to poor retail sales, low consumer confidence, and sluggish and housing starts, all discouraging and in need of a boost. Dynan does not comment on industry sent to China in need of return, nor the lack of motivation for capital formation, nor energy technology directed away from Big Oil, nor elimination of regulatory burden of USGovt rules, nor clarity of USGovt programs related to taxes or health care requirements. No solid economic foundational thought whatsoever, nor solid income sources to nurture. She turns like a child to the money changers and alchemists, not the seeds of industry that grow legitimate income. She said, "Recent indicators suggest a loss of momentum, and suggest that the recovery is not on a firm footing. All of this has increased pressure on the Fed to do more." She makes some asinine comment about highly volatile prices of food and energy, running counter to the desired direction of inflation expectations, given the considerable slack there is in the USEconomy. She must not be aware of the powerful factor pushing up commodity prices, namely the erosion of the currencies and waning confidence in the monetary structure. It is crumbling before the eyes of half-blind economists. These people posing as economists are fools. They are better described as marketing agents for alchemy and front men for corporations specializing in asset bubble production laced with bond fraud. Worse, they are coverup artisans seeking favor from the financial syndicate.

Consider two other clown charlatans. Peter Ireland is a professor of economics at Boston College and a former economist at the Richmond Fed. He referred to the tighter monetary policy and liquidity drain from balance sheet sales, which was the centerpiece of the absurd and illogical Exit Strategy (which the Jackass dismissed for several months). He said, "Now there is a general recognition that that talk was premature. There has to be a discussion about whether asset purchases should be resumed if we move into the late summer, and especially into the fall, and we are seeing a bounce in the unemployment rate and further declines in spending." He concludes it is imperative that the USFed consider additional measures as part of its contingency planning in the face of further economic weakness. No wisdom with Ireland, no concept of what wealth is, no appreciation for industry or capital formation, just reliance upon the reckless monetary engines as some mindless solution without knowledge of their destructive powers. Then take Peter Klenow, a professor of economics at Stanford University (that produced Condaleeza Rice) and a former economist at the Minneapolis Fed. He said, "The unemployment rate is so high, and there is such misallocation of labor in the economy, that the Fed should be willing to experiment with stuff that is pretty risky and untested." He believes that buying longer-term Treasury debt might not have much effect on long-term interest rates, because government securities were very liquid. The urges the USFed to instead consider buying corporate bonds, or assets backed by consumer loans. Doing so could spur the willingness of private investors to lend. He admits that would invite criticism about credit allocation to favor certain sectors. He overlooks the monetization practices, even to the TIPS securities. He never heard that the source of lending is income and savings, drawn from jobs built of capital formation, a foreign concept when the Printing Pre$$ is so handy.

◄$$$ FRED MISHKIN IS BUT ONE MEMBER OF THE INNER CIRCLE OF CLOWNS, THE KNIGHTS OF THE ROUNDTABLE AT THE CENTRAL BANK. HE AND OTHERS ARE SCATTERED ACROSS THE NATION INTO UNIVERSITIES AND THINK TANKS, WHERE THEY INCULCATE THEIR HERETICAL TWISTED IDEOLOGY. MISHKIN IS EXPOSED AS AN ECONOMIC IDIOT, A HARLOT, A CHARLATAN. IN FACT, THE IVY LEAGUE HAS BEEN EXPOSED AS A BREEDING GROUND OF HERETICS, WHO REMAIN IN FULL CHARGE DURING THE AMERICAN MARCH INTO THE THIRD WORLD. THEY ACT LIKE PIED PIPERS. $$$

In March 2006, Frederic Mishkin was paid $124k by the Icelandic Chamber of Commerce for his botched analysis in a report entitled "Financial Stability In Iceland." The report was about as wrong and shoddy as conceived possible. Many people lost big money during the breakdown. The same report has since been changed in title to "Financial Instability In Iceland" by parties wishing to avoid embarrassment. In his whorish work, Mishkin wrote, "The [Icelandic] economy has already adjusted to financial liberalization, which was already completed a long time ago, while prudential supervision and regulation is generally quite strong." In the interview, Mishkin implied he conducted no research into the tiny nation's perilous condition, then admitted supervision was not prudential. He could not defend why he concluded supervision was present in the first place. Perhaps it was the large fee. Mishkin even states as though to be accepted as truth without examination that "You have faith in the central bank." Not here! Not in the Hat Trick Letter. Not in the gold community. Iceland proved to be the first bankrupt European country since the turn of the millennium. Watch the attached video clip to see a former USFed card carrying member go from comfortable, to fidgety, to stuttering, to embarrassed, to thoroughly discredited, to perhaps in need of a diaper change, in under only two minutes. See the Zero Hedge video (CLICK HERE). My contention is that Mishkin has no economic skills, and does not understand what money is.

◄$$$ WITNESS THE HEAD CLOWNS IN ECONOMIST SUITS, THE MAIN MONEY ALCHEMISTS, THE DESTROYERS OF ECONOMIES. A GRAND EXPERIMENT CONTINUES, WITH COMPLETE DESTRUCTION AND RUIN ASSURED. THE IMPORTANT POSTS ARE FILLED WITH LACKEYS WHO FOLLOW ORDERS FROM THE WATCH TOWER. THE FIELD ENGINEERS PRINT AND DISPENSE PHONY MONEY, MAKING SURE TO CHANNEL IT THROUGH WALL STREET. $$$

The main debate should center on the timing of the collapse, not its likelihood. The cast of clueless economists catch themselves, but cannot realize their folly. They admit that generating inflation is not the same thing as producing jobs, a goal that the USFeds monetary toolbox seems less equipped to meet. They note a major theme of Sound Money, without noticing their belief system contains laces of heresy throughout. They were silent when the jobs produced several years ago were in support of the housing construction trade or in support of the mortgage bond trade. Those were good jobs, apparently, even though hatched from inflation engineering sites. Almost to a person, these clowns in the USFed franchise of banks focus like a dog seeking manure nuggets on inflation expectations. They believe any USFed announcement of a big new program of asset purchases could cause inflation expectations to jump, and thus push up nominal interest rates. They have never heard of the monetization process to purchase USTreasurys in the basement, nor have they heard of Interest Rate Swaps managed by JPMorgan. The last QE1 round resulted in the 10-year USTreasury moving from 4% to 3%, a fact they overlook, due to blindness. The next QE2 round will send the same TNX to 2% without a doubt, and kill the USEconomy. See the New York Times article (CLICK HERE). These fools are experimenting with the entire USEconomy, unable to observe the damage that liberal free money off the Printing Pre$$ inflicts. They even call their policy untested medicine, aware in their guts of the risk.

This Bernanke character is an inflation engineer, an alchemist with no knowledge of money, and a destoyer of industry. Yet he serves Wall Street and the banker princes well. Ben serves as a bank industry facilitator, seen in the dozens of liquidity funds that actually has replaced the banking sector itself. Ben serves as a Congressional ombudsman, seen in the endless parade of meetings where he justifies his heresy before representatives and senators. Gone are the days of competent senior bank industry executives serving the post of Treasury Secy or USFed Chairman. The posts require too much face time before the unwashed and meddlesome masses, the time consuming meetings, the objectionable line of questions from barbarians outside the bank fortress, the pressures for independent audits by those who simply do not comprehend the elite supra-national rule of government. Instead, we are given lackeys like Bernanke, fresh from the ivory tower of academia, divorced from the reality of the business world. He is a servant to Wall Street, not a member, definitely an outsider. Instead, we are given lackeys like Geithner, whose resume would not gain him entrance into any legitimately run corporation. He is a flunky from Wall Street and the Intl Monetary Fund, where he botched his apprenticeship. The important dons from Wall Street relegate minions to the crucial posts, where orders are given and followed, and puppet strings are installed upon inauguration. The dons have a syndicate to run, bond fraud to manage, monetization schemes to conceal, narcotics money laundering to disguise, and Congressional committee heads to lead on a bribed leash. Hank Paulson was a special case at Treasury Secy, since the banking system implosion was well signaled in advance. The syndicate needed their point man during the collapse. His greatest resume items are the Bear Stearns murder, the Lehman Brothers sacrifice, the Fannie Mae nationalization, the AIG exploitation, the TARP Funds con, a classic bait & switch. Paulson was a syndicate superstar. Geithner is his shoe shine boy.

If Bernanke only knew that printing money destroyed capital! The above picture belongs on a milk carton, with the USEconomy gone missing for two decades. But if he knew that, he would have to reject all he learned in US universities about American economics! Witness the modern day American production, hard at work. The money was produced at zero cost. He has done more to wreck the image, confidence, and trust in the USDollar than anybody since, well, Alan Greenspan. Some congratulations must be given to the bank policymakers. They have planted seeds in germination whereby the public and large pockets of the investment community openly and actively discusses and worries about deflation. Nobody has noticed rising prices in the items necessary for daily life. The crux of the Hat Trick Letter forecast made two years ago was that the USEconomy will see falling asset prices and rising cost structures for all things required for daily life and survival, a major dichotomy. Rising costs and falling asset prices lay the groundwork for another powerful round of Quantitative Easing, the movement of the inflation engine into second gear. The tipping point of both USEconomic depression and Price Hyper-Inflation is near.

MUTUALLY ASSURED DESTRUCTION (MAD)

◄$$$ THE ELITE UNIVERSITIES PROVIDE THE HIGH PRIESTS IN CHARGE OF INFLATION, ITS PREACHINGS, ITS JUSTIFICATION. THEIR EMPTY REMEDIES ARE EACH FAILING WHEN THE SYSTEM FACES RUIN. THEY WILL NOT LET GO OF POWER. THEY PRESIDE OVER PASSAGE TO THE THIRD WORLD. $$$

Given its close proximity to the Wall Street banks, the Columbia Univ economics department might qualify as the worst in the top tier of American universities. That is not saying much. Most if not all leading US university economics faculty fully endorse the fiat monetary principles, the power of fractional banking, the sanctity of the central bank, and the wonders of credit, without much of any stern warning of the perils of asset bubbles and their inevitable busts, let alone what legitimate income constitutes. Hint: true incom is not from home equity withdrawals or mortgage loan origination fees!! Colombia has a rival in crappy economics work, in Harvard Univ, another compromised institution that hatched Enron as an application concept. Then there is Princeton Univ, which produced the current Secretary of Inflation, Ben Bernanke. The Ivy League is populated by heretics in priestly robes, preaching economic ideology without significant rebuttal or opposition. They are cranks, kooks, idiots, theives, liars, nitwits, and deceivers, whose arrogance and reckless judment have taken the nation from prosperity to ruin. They have justified every conceivable ruinous policy and wasteful practice, starting with wide distribution of debt, ending with financial engineering. They have watched or managed the narcotics money laundering into US banks. The Univ of Chicago is yet another haven of economic heretics, the home of Nobel Prize winners whose theories have failed and been discredited.

The leverage of US economic engineering scaffolds came crashing down, inflicting amplified loss, total constipation within the banking sector, no avenues for remedy, grotesque perverse insolvency, and assured USTreasury default. The cast of clueless supporting clowns, their Round Table of knights, their high priests, their press & media lackeys, have driven the nation from a premier spot to the door of the Third World. The momentum of events and strongarm of control by criminal syndicate elements assure passage through that door. Witness the Mutually Assured Destruction (MAD), a term used in nuclear disarmament treaties. It applies to the failed central bank franchise system.

My firm belief is that certain forces assure national ruin. The secondary immediate force is the continued consensus belief that more debt can cure a debt disease, implying a lack of understanding as to what true money and legitimate income are. The primary immediate force pertains to the banksters in charge of the USGovt. They will not let go. They will preside over passage for the nation into the Third World. For those who doubt, just answer the questions:

  • Will JPMorgan, Citigroup, and Bank of America permit their own liquidation, even though they are insolvent, and whose toxic assets interfere with credit creation?
  • Will they continue to be in charge of the USGovt finance ministries, if bankrupted?
  • Will the US press & media expose the bankers as bankrupt, yet still in power?
  • Will the bankers order an interest rate hike in a return to normalcy, when doing so would triple the USGovt borrowing costs, most assuredly to pop the USTreasury Bond bubble, turn the credit derivative monster into reverse, and deliver a death blow to the big banks?
  • Or will they continue to control the USGovt finance ministries, complete with Printing Pre$$, and let the nation slowly suffer a systemic failure?

THE BIGGEST CLOWN OF THEM ALL

Words fail to describe Alan Greenspan, who presided over the death march of the US financial sector, and received extreme adulation every step of the way. The Congressional panels licked his boots while he set up a banker kingdom turned syndicate. He aided Goldman Sachs to control the banking strings completely, tethered to the syndicate castles. A nation that cannot recognize Mr Magoo when sitting for almost two decades at the US Federal Reserve chairman post, deserves whatever disaster befalls it. These are clowns in economist suits, treated like ideological high priests.