Saturday, September 20, 2008

Financial Crisis Deepens

Art by David Dees -

We are in historically unprecedented times. The foundation is being laid for a default of USTreasurys in the wake of the greatest regulatory failure in modern history, and the collapse of the US financial system. Anyone who cannot see that suffers from poor vision, chronic nostalgia, low mental wattage, a paycheck from Wall Street, a post in financial press media, or owning an Economics advanced degree. So many changes come with each passing day, not week, that it boggles the mind.

The runs on US banks are in progress. See Washington Mutual, where private email messages have been shared by WaMu bank officers. WaMu alone could deplete the entire Federal Deposit Insurance Corp fund for bank deposit coverage. Eventually the FDIC will compete for USGovt federal money for bailouts and nationalizations. Eventually, bank deposits will not receive 100 cents per dollar, in a compromise. Next the bank runs will push banks into failure, at a time when stock accounts are under raids, without broad public knowledge.

PREPARE IN THE VERY NEAR FUTURE FOR GOLD TO RISE OVER $100 ON SUCCESSIVE DAYS, AND FOR SILVER TO RISE OVER $2 ON SUCCESSIVE DAYS. Inflation is soon to be seen as the remedy to prevent monetary collapse. Gold just hit 900, and silver has reached 12.70 today. The euro has risen 500 basis points just since Friday morning. Gold is not rising sharply due to inflation concerns alone, although plenty of monetary inflation is set to continue flying through the money pipelines. THE REAL REASON WHY GOLD IS RISING IS FOR THREAT OF SYSTEMIC FINANCIAL FAILURE CENTERING IN THE UNTIED STATES.

What factors are key to gold rising? Perhaps because the US financial system is imploding. Perhaps because the USGovt nationalization demands are accelerating. Perhaps because the threat of default for USTreasurys is seen as inevitable, even imminent. Perhaps because nitwits who have highjacked the White House and USMilitary are planning something truly reckless on the military front in Iran. Perhaps because the US Federal Reserve is depleted and secretly insolvent, even as they put word out of an INFINITE BALANCE SHEET. Perhaps because enormous demand has come in physical gold & silver, despite the low price set by corrupt US PaperHangers. Perhaps because fear has entered the room globally.

As simple citizens, people should be concerned that the US Federal Reserve and US Dept of Treasury have begun to take actions far outside their own legal powers. The bailout of AIG was made illegally. The USFed cannot act to aid non-bank entities. Senator Jim Bunning has drafted Congressional legislation to limit the USFed action outside the banking realm. The system is losing control, especially with the law.

The parade of doomed deals continues. Talks have begun for JPMorgan taking over Washington Mutual. Could the JPMorgan ‘Garbage Can’ be inadequate soon? Bank of America has entered talks to take over Merrill Lynch, apparently striking a deal. Could BOA serve as the alternative ‘Garbage Can’ next, whose service would be as squire to JPMorgan? Now Morgan Stanley is in talks to take over Wachovia. The disaster du jour today seems to be State Street, which was down over 50%. The dominos are falling. THE MESSAGE IS CLEAR: THE DEAD ARE MARRYING THE DEAD. It is unclear what music to play at such events. My suggestion is something from “Phantom of the Opera” would be apt.

The US bankers have lost control badly. Even ill-equipped USFed Chairman Bernanke admitted recently as having lost control. He spoke to economist David Hale at a Florida financial conference last week. Bernanke said, “We have lost control. We cannot stabilize the dollar. We cannot control commodity prices.” The age of central bank control, ala Soviet Politburo, is coming to an end.

Even Morgan Stanley has been forced to close down its trading desks at the Platts Window, where they trade crude oil. The USCongress is equally lost. Today, a quote came from Senate Majority Leader Harry Reid. They are unlikely to pass new legislation to overhaul financial regulations this year. He said, “No one knows what to do. We are in new territory, this is a different game. [Neither Federal Reserve Chairman Ben Bernanke nor Treasury Secretary Henry Paulson] know what to do, but they are trying to come up with ideas.” Gee! Maybe the chief architects of this grand failure have a solution? They should be ignored then imprisoned. Perhaps they are seeking final opportunities to steal, raid, and pilfer from the public till during the final months of this Administration.

Abridged Continue reading here=>>

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at . For personal questions about subscriptions, contact him at

Stocks Soar Worldwide on Bank Bailout, Curb on Short Sales

John Bogle, who created the $106 billion Vanguard 500 Index Fund in 1976, said the U.S. government is ``punch drunk'' given its proposals to rescue the financial system.

``We're playing a game of casino capitalism, interfering with the way the market
is working,'' Bogle, 79, said in a telephone interview today from Valley Forge, Pennsylvania. ``The government seems punch drunk. It doesn't seem


Anonymous said...

WTP Brings Federal Lawsuit to Stop AIG Bailout

U.S. Lacks Constitutional Authority for Loan

On the day following the 221st anniversary of the signing of the U.S. Constitution, WTP Chairman and constitutional activist Robert Schulz today filed a federal
lawsuit in United States District Court in Albany seeking to halt the execution
of the emergency bailout of American International Group, Inc. (AIG) by the
United States Government and the Federal Reserve.

The lawsuit asserts that the commitment of public funds and credit for the direct benefit of privately owned AIG is an ultra vires action by the United States Government and Federal Reserve, i.e., beyond the limited legal authority granted
by the Constitution. The lawsuit asks for a “show cause” hearing demanding that
the Government produce evidence of its legal authority to commit public funds for such a purpose, as well as emergency and permanent injunctions halting the
bailout transaction. (continued…)

Anonymous said...

As I write this, in a real sucker punch, the FTSE is up 10% so far today. Hooray, the world is saved!

Or not.

What could be behind this insane, hysterical reaction?

One reason is that late yesterday, the FSA called a halt to short selling of financial stocks in the UK. As a result, many (t)raders have had to get themselves out of short positions. That musta hurt!

The second, much bigger, reason is that the US Treasury Secretary, Hank Paulson, in collusion with the US Congress, is about to commit an act of blatant treason.

Instead of doing the right thing, which would have been to place the system in administratrion (bankruptcy reorganisation), he has decided to make the United States itself bankrupt.

The bankers are laughing up their sleeves.

What Paulson has announced is this: he will establish a Federal agency to buy up what will amount to trillions of dollars of bad debt. The debt will become the liability of the US taxpayer. The bankers will get off scot free. The US will also insure investors in US money-market funds, which have seen significant withdrawals in recent days.

The idea is that, in a reflection of the Resolution Trust Corporation, the debt will be warehoused so that it can get the chance “for much of it to recover a portion of its value.”

But make no mistake, as far as the financial system is concerned, this will achieve nothing, other than delay the inevitable once again.

The real benefit for Paulson’s controllers, is that long held goal of the financial elites - the end of the United States, and that pesky Constitution.

What about us, here in the UK? For us, there’s the small matter of the spectre of hyperinflation which will make Weimar Germany pale into insignificance.

Anonymous said...


Let us be clear here: this is a declaration of war against the United States of America by the international fascist banking cartel.

If this is not resolved politically in the immediate future, this is going all the way into civil war.

We must all pray for the American people that the US Congress acts to reassert sovereignty, or things are going to get very nasty very quickly.

Anonymous said...

9/19/09 (Reuters) The federal government is now bailing out compulsive gamblers in Las Vegas, Reno, Atlantic City, and elsewhere. Anyone who has lost $1000 or more gambling in U.S. casinos may apply for a full refund at taxpayer expense, by writing to:

Treasury Secretary Henry Paulson
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Include a copy of your income tax returns as proof of your gambling losses, and the treasury will issue you equal compensation withing 6-8 weeks. The refund program does not apply to offshore gambling, Internet gambling, and losses at casinos run on Native American reservations. Details are available at the U.S. Treasury web site at

Anonymous said...

the reason the NWO/Illuminati even exists is that the majority of citizens are themselves treasonous. Its the natural rash that comes out when the average man does not give a damn about truth or justice. Just so long as he is comfortable. We tried to warn them about 911, about the NWO, etc etc. Big smirking assholes mock and deny and go back to their football or whatever. . So let them cheer on McCain and Obama. Let the nation and the world fall to hell. its totally deserved.

Anonymous said...

There is NOTHING in the Constitution (in its spirit or in writing) which allows for this perfidy. We are being systematically taken down in every way by the world bankers, assisted by our own ignorant , self-aggrandizing, so-called “representatives.”. The elite cannot and will not tolerate a truly free republic consisting of armed, well informed and intelligent citizens.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

The “insurgent,” Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802) 3rd president of US (1743 - 1826)

Lamp posts and rope are looking pretty good right now.

Anonymous said...

Tom Ness
I got a big laugh tonight from the mainstream media (which I monitor just to see what kind of propaganda the sheeple are being fed) as they sputtered how hugely surprised they all were about this week’s financial crash. Anybody who cruises through the blogosphere financial reporting regularly has known this was coming for years, with increasing accuracy about who, how and when. It makes it truly difficult to be in public these days knowing you are surrounded by sleepwalkers and zombies. It’s going to get ugly if they all wake up at once.

Toronto real estate agent said...

This situation is almost funny. One day all media bring braking news about stock market crash and incoming apocalypse, next day there are articles about the biggest rise on the wall Street in recent 6 years... I think markets have never been so nervous before. And this chaos can make bigger harm than actual economy slowdown ...
Elli Davis