A system can fail many times but it only becomes a failure when its operators blame everyone else for their actions. – A.H.K.
MF Global is a symptom of an economic system on its last legs. Managed by a failed, crooked politician, it typifies our modern society. This is proven by the fact that the entire board of directors has resigned. The way MF’s bankruptcy is being handled is compounding the problem. Why not? After all, the same Ponzigonifs and politicians who created the mess are the overseers. This is no different from the banking and housing fiasco, both of which were also to be solved by foxes guarding the henhouse. The freezing of investors’ segregated accounts is proving difficult for the commodities markets, causing ripples in the entire industry. The complete disappearance of over one billion dollars places this in the scope of Enron. The related loss of 2,800 jobs is but a blip on what will become another American catastrophe as affiliates begin laying off.
The new bailout of European banks and the ECB by American taxpayers can be typified as the largest money-laundering scheme of this century. It is, in fact, institutionalized, systematic wealth transfer from the American people to the banksters of Europe. Considering that they have been prime stockholders on the Federal Reserve System from day one, we are not surprised. We have seen this before with QE 1 and the QE 2 but those, at least, mostly bailed out American banks. We have, through the IMF and BIS, already transferred tens of billions of dollars to Europe and have now made this bailout fixed political policy of the FRS. Let me clarify. The FRS, Federal Reserve System, is a private banking monopoly granted by Congress in 1913, not one cent of which belongs to the American taxpayers. Just to further clarify, the FRS is almost exactly 100 years old and has never in that time been properly audited by any third party.
The Dow leapt over 500 points when news of the bailout was published. Who cares? It’s more worthless paper transactions. By Friday the markets were flat. Let me be clear – all these bailouts are temporary fixes that will undo themselves by summer of 2012. The basic concept of the banksters is that you can borrow or print your way out of a depression. This socialist Keynesian fallacy has been operating on the world stage since 1944 and the Breton Woods conference that turned sound economic policy based on hard assets to fiat worthless paper. Lord Keynes was a British Fabian socialist economist whose theories have now been exposed as total failures.
Unfortunately, most politicians, economists and the board of governors of the FRS strongly believe in Keynesian economics. The reasons are simple. Politicians are able to garner votes by buying them, banksters are able to maximize profits, and most economists live in an academic never-never world that has no relationship to reality. To prove my point, the dollar has lost 97% of its value since 1913. This is called inflation and it is the price of Fabian economics. Inflation, which is in turn caused by the FED printing more and more worthless fiat paper money, is the payout. The bankster concept – that the average man cannot differentiate between printing and counterfeiting – seems relevant here. We all understand that a bunch of Ponzigonifs are ripping us all off.
The reason it will all come crashing down is because Greece, Italy, Spain, Portugal, Ireland and Iceland all have debt exceeding their entire annual market capitalization. The average is debts of over 120% of GDP. No agency, not even BIS, has the wherewithal to produce sufficient wealth to bail all these economies out. All these loans, write-offs, bailouts and transfers simply extend the inevitable failure for a few more months. They have been repeating this for the last five years. It has not worked but they keep at it. The proof of insanity is to repeat a failed process over and over again (Albert Einstein).
If it was just European nations there might be a way, but many American states also have projected outlays, especially in government pensions, that are totally unsustainable. These would be New York, California, Ohio, Illinois and Wisconsin, among many others. Part of this has to do with unionization of government employees (SEIU, AFT, NEA, AFL/CIO) and the cozy relationships between the unions and politicians that produced labor agreements that contractually bankrupt municipalities and states. I call this the Greek-syndrome.
Insiders universally called the actions of the FED, “the coordinated central bank intervention,” a courageous act and a step toward “ending the crisis.” Rubbish. This will not end the crisis; it will prolong it for a few more months – just as the same actions by FDR extended the “Great Depression” – when it will, due to interest costs, have become even larger. The banksters simply remind me of lemmings who aimlessly follow one another over the cliff. They are talking to each other and their worthless economists and would be far better off speaking to some housewives who at least have a grasp on how to balance a budget. The banks that are bailing – the Bank of Canada, the broke bank of Japan, the ECB, the Swiss National Bank and the FRS – will all reap the consequences of their action due to erosion of their currencies’ values.
These facilities agreed to lower existing temporary US dollar liquidity swaps by 50 basis points, which is one-half of one percent. In other words, we will accept Euros in trade for dollars, extending credit on those dollars for an interest rate on one-half of one percent over the duration of the loan. We accomplish this by placing in circulation trillions of dollars backed by absolutely nothing. This will result in massive inflation. They have also agreed to unrestricted currency swaps under the same value terms through February 1, 2013 – an interesting date, being just two months after the American presidential elections. This is the beginning of recognized international currency destruction that will create the climate for a new world currency controlled by the international banking cartel independent of politics, governments, or reality.
In the long run, looking at 2012 and beyond, individual investors have two possibilities – buy gold and buy silver. With the centralization of currency markets and the eventual collapse of the dollar, Swiss franc and the euro, the only remaining safe bet is hard assets. This is especially cogent because China’s economy does not look particularly rosy, either, demonstrating the same problems as Western Europe and America.