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Bernanke: U.S. Economy Is A Ponzi-Scheme

US Commentary

Having allowed a couple of days for the tidal wave of mainstream, post-“tapering” nonsense to subside; it’s now time to look at the facts, as once again The Boy Who Cried Exit Strategy got in front of microphones to say “just kidding.”

At the time that B.S. Bernanke originally began his musings now known as “tapering”; it had already been observed that the U.S. pseudo-recovery was “longer than average duration” – i.e. it was already past its expiry-date. After stalling for 4 ½ years, and failing to deliver on all his previous promises of an “exit strategy” – while the U.S. economy was relatively “strong”(?) and supposedly growing – no rational government (or central bank) would ever time the withdrawal of stimulus to coincide with the end of a growth-cycle.

Tapering” was always a hoax.

Simply talking about tapering caused interest rates (i.e. borrowing costs) on U.S. ten-year Treasuries to nearly double; and naturally/inevitably those higher borrowing costs filtered through the entire U.S. economy. Thus in simply talking about tapering for seven months; the Banksters created so much economic “drag” on the U.S. economy that if Bernanke had actually, finally delivered on (yet another) “exit strategy” promise, it could have only been interpreted as deliberate economic suicide.

Tapering” was always a hoax.

There is a delicious irony here. The “latest rounds of QE” – the current, $1 trillion per year of totally gratuitous U.S. money-printing – are not actually “new” money-printing at all. These infinite stacks of Bernanke-bills were being conjured into existence just as quickly before these “announcements”, it simply wasn’t being reported/declared.

It was counterfeit money, in every sense of the word. This was explained in a previous commentary. The original problem? No buyers (anywhere) for U.S. Treasuries – at “all-time record prices”. The solution? Counterfeit money.

Secretly print-up $trillions in counterfeit Bernanke-bills, and use that counterfeit money to “buy” U.S. Treasuries in auctions which (conveniently) had just been made totally opaque. Readers have seen or heard my description of the new-and-improved “Treasuries auction” previously.

A stack of Treasuries is placed on a table. The lights go out. (Sounds of paper-shuffling are heard.) The lights come back on. The stack of Treasuries is gone. “Auction” complete.

This cheap ‘magic trick’ was the Perfect Crime, and then Reality ruined everything. With the U.S. pseudo-recovery already beginning to obviously sag (in its old age); the call went out to the Fed for “more stimulus” – given the fact that the U.S. Treasury is totally empty (save for the IOU’s).

So B.S. Bernanke and Co. simply began reporting the “new money” they had already been counterfeiting previously, and presto! One $trillion per year in new, so-called “stimulus.” Now (suddenly) there was an actual “reason” for U.S. Treasuries to be improbably perched at all-time record prices – despite the fact the U.S. economy is obviously bankrupt: the Federal Reserve was openly monetizing all debt.

The Truth shall set you free”? Not if you’re a central banker at the Federal Reserve. Then it’s a nasty ball-and-chain which (you discover to your horror) you can never remove.

 

When The Financial Stealing Ends

Gold Commentary

Tomorrow, outgoing Federal Reserve Chairman B.S. Bernanke will do one of two things (while his “friends and supporters” continue to sharpen their knives). He will either (formally/finally) announce the absurdly-hyped “tapering” he has promised; or he will back-down on yet another Exit Strategy – as he has done again and again for the past 4 ½ years.

My own prediction, expressed in my last commentary is that this time the Boy Who Cried Exit Strategy will actually follow through on a promise – because he has been ordered to detonate the severely-crippled U.S. economy. The “signposts” couldn’t be more obvious: record equity prices; maximum leverage in markets (can you say “bubble”?). The perfect time to Fleece the Sheep.

As was pointed out in that commentary, even the propaganda machine itself has now explicitly stated that this is the worst possible time to begin “tapering” – and they (deliberately) left out the best argument to make that point. The U.S. pseudo-recovery (in historical terms) is already well past its expiry-date.

This detonation is being timed when the government knows that a cyclical downturn must commence in the U.S. economy, compounding all the structural weaknesses which have never been addressed: mass unemployment, Great Depression-wages, saturation insolvency at all levels of government, etc., etc., etc.

Readers have also been warned about the utterly predictable chapter to follow this staged crash: “bail-ins” come to North America. South of the border; the Wall Street Vampires have created assorted asset-bubbles – to entice the “suckers” whom P.T. Barnum assured us are born every day, and create plenty of their own “bad debts”, for which they will (once again) demand indemnification.

North of the border, as has also been previously explained; Stephen Harper has manufactured a fat, juicy housing-bubble – a direct “homage” to the previous U.S. housing-bubble, in that Harper has deliberately duplicated that blueprint of destruction in nearly every respect. Canada’s Conservative government has also been (by far) the most-blatant in declaring its “bail-in” intentions; crafting these rules-for-stealing into its current Budget. A “sense of urgency” perhaps?

As always, the Corporate Media propaganda machine never, ever asks (let alone answers) the question “what comes next?” As we are being marched toward a new, staged “crash”; it behooves us to look back at the last staged-crash – the Crash of ’08 – which the Banksters detonated precisely five years ago.

The promise when the stealing began (five years ago), when suddenly “too big to fail” mega-banks (subsidiaries of the One Bank) began pillaging our public Treasuries via “bail-outs” was simple: this will “fix our economies.” Five years later; we see every aspect of that first phase of stealing was fraudulent.

The mega-banks were never “too big to fail”. Such a term is logically/mathematically/economically perverse and absurd. What these Big Banks demonstrated in the most blatant terms possible (via blackmailing our governments for countless $trillions in extortion demands) is that they had become too big to exist.

We now see that the second half of this paradigm-of-theft was also, utterly fraudulent. The stealing done post-2008 was never/could never be honestly called “bail-outs.” By definition; bail-outs extricate the Debtors from their financial difficulties. Had this first phase of stealing actually been a bail-out; we would never have begun discussions for the second phase of stealing (“bail-ins”), because (obviously) it would never have been necessary.

The reality is that all of the “bail-outs” which took place in Phase One of this stealing were merely a down-payment in the eyes of the One Bank. The only reason that bail-outs are now “out” is because all of our public Treasuries have been emptied.

 

Suicidal Tapering Signals Bernanke’s Demise

Gold Commentary

Approximately one month ago; I wrote a piece entitled U.S. Prepares To Detonate Market Bubbles. The gist of that piece was that after pumping-up several new bubbles in the U.S. economy (and taking the Wall Street fraud-markets to record-highs) that it was time for the Banksters to detonate those bubbles – and cash-in (on the “short” side) on the way down.

Even more specifically, it was suggested in that piece that Federal Reserve Chairman B.S. Bernanke was being set-up as the Scapegoat for the market-crash to follow. Today, Bloomberg substantially bolstered this prediction with a headline of its own:

Fed Message Muddled as Misunderstood Taper Meets Slowing Growth

Here we have one of the most loyal defenders (i.e. pumpers) of Helicopter Ben now throwing him an anchor in his hour-of-need. Truly there is “no honour among Thieves.” The gist of Bloomberg’s article? Not only has Bernanke done a terrible job of “communicating” his proposed “tapering”; but he’s now preparing to ease back on the money-printing at precisely the wrong time.

The hilarious irony here, of course, is that it is media shills like Bloomberg which ultimately assume most of the responsibility for “communicating” the strategies of the various suit-stuffers in government and/or the Fed. Compounding Bloomberg’s hypocrisy; it has religiously supported B.S. Bernanke decisions over the past 4 ½ years to pull-back from any Exit Strategy (previously), and Bloomberg itself has been (had been?) one of the most-zealous cheerleaders in advocating “tapering” at this time.

But when the U.S. economy goes down; there will be only one “captain” remaining on board. All of the (other) Rats will have already deserted the ship which they (first) built and (then) sunk.

So the ending is already clear. The U.S.S. Titanic is about to be intentionally sunk (again), and B.S. Bernanke’s “fingerprints” will be planted all over the crime scene. Let’s take a closer look at the Script – since doing so says more about the Liars in the Corporate Media than it says about the U.S. economy (and Bernanke’s role in destroying it).

Bloomberg makes a good case as to why all of its own “tapering” hype has been absurd (and dishonest) from Day 1:

They [the Federal Reserve talking-heads] will probably lower their estimates for growth this year and next for the third consecutive time…What’s more, annual inflation has been running at least half a point below the Fed’s goal since December. And while the unemployment rate is falling, that’s mainly because some Americans are leaving the labor force.

According to Bloomberg – today – there was never a good reason to begin “tapering” at this time (and the six months of its own relentless hype which preceded it). Talk about Revisionism…of its own propaganda.

As always, Bloomberg’s economic submissions require translation. As has been clearly demonstrated in previous commentaries; there hasn’t been any “economic growth” in the mythical “U.S. recovery”. Among the many reasons this is obvious fantasy is that growing economies require more energy – not less – and energy consumption in the U.S. economy has plummeted during this supposed “recovery.”

While Bloomberg and the other Liars in the Corporate Media claim that U.S. inflation is “too low”; back in the real world soaring inflation is threatening to spin out of control at any minute – due primarily to the grossly excessive money-printing of the U.S. And the statement that “some Americans are leaving the labor force” is (shall we say?) an understatement.


   

Polish Bail-In Changes Everything

International Commentary

Ingesting the daily pablum from the Corporate Media is inevitably a two-stage process. First one reads the lines. Then one reads between the lines. When dealing with serial liars; it is always when one reads between-the-lines that “the news” gets interesting.

Case in point is the bail-in maneuver recently announced by the government of Poland, leading to the immediate question: when is a bail-in not a “bail-in”? The Polish government refused to characterize its taking control of financial assets as a bail-in when it defended this move. The Corporate Media (agents of the One Bank) refused to call it a bail-in in harshly criticizing the government’s actions.

We have the government of Poland refusing to call this act of financial piracy a “bail-in” (despite knowing precisely what it is doing) because it is expedient for it to do so. Conversely, we have the One Bank (via the Corporate Media) also refusing to call this maneuver a “bail-in” (despite understanding exactly what is taking place) because it is also expedient for it to do so. And so we see this pair engaged in this public display of “tap-dancing.”

The critical clue in sifting through the deceptive language of Reuters as it describes this scenario comes in the following excerpt:

Polish officials have tried to reassure investors, saying that the overhaul avoids the more radical options of taking both bond and equity assets away from the private funds outright. [emphasis mine]

Too funny!

In making this statement, we see an unequivocal illustration that the government of Poland fully understands the Golden Rule in the Crime Syndicate financial system of the 21st century which has been imposed on us by the One Bank:

Control is superior to ownership with respect to any asset.

Indeed, this is a point which I made in subtle, implicit terms in a previous commentary, The One Bank – but where I lacked the space to delve into this critical distinction explicitly. When I wrote about this “single, banking monopoly”; it was scrupulously noted that this shadowy entity (or “super-entity” in the words of the Swiss researchers) controlled rather than “owned” 40% of the global economy.

What is the legal (and factual) distinction between “ownership” and “control”? Why is control now superior to (mere) ownership? The answer to the first question has always been simple and apparent. The answer to the second question has become apparent – thanks to the recent crimes of the One Bank, and its Minions.

Ownership (by itself) neither explicitly or implicitly confers anything other than “legal title” of the asset in question. Control, on the other hand, directly implies legal and/or physical possession of the asset(s) in question. Why is control now actually superior to ownership?

In societies which respect and uphold the Rule of Law, ownership (i.e. legal title) reigns supreme. However, several years ago the One Bank assassinated the Rule of Law in most Western regimes – while our Puppet Governments sat back and watched.

It has now demonstrated the reality of that assassination with several blatant financial crimes, which its Stooges in the Corporate Media (and our own governments) have the audacity to call “precedents”. The pattern is as clear and obvious as it is repugnant.

 

The Poor Are Better Off Poor: Bloomberg

US Commentary

The realm of precious metals is a broad and diverse one. Indeed, for those who heed the propaganda of the mainstream media; nearly anything can “cause” the prices of gold and silver to go higher or lower (usually lower).

For investors inside the sector; an important facet of precious metals is economic justice. In societies with “honest money”, not only are workers able to keep their daily wage (rather than have it relentlessly clawed away from them by banker “inflation”) but that wage tends to rise steadily with time – reflecting increasing overall prosperity.

Conversely, the One Bank’s dishonest world of fiat, paper currencies is an entirely opposite regime. Here workers see their wages directly stolen from them at an ever-increasing rate via the Banksters theft-by-currency dilution. The chart below illustrates this serial theft.

According to the Corporate Media and our lying governments; we live in a “low inflation” world (while a “food inflation crisis” ravages the planet). Believe that lie, and we get the blue line; pretending that wages have remained roughly flat over the past 40 years. Move to the Real World, however, and we see an entirely different reality (the green line).

In the Real World; ever-increasing money-printing causes ever-increasing currency dilution (i.e. inflation). And when we discount wages with realistic inflation numbers to express wages in “real dollars”; we see the average wage of the U.S. worker plummeting by more than 50% -- all the way to Great Depression levels (and still falling). The Middle Class have become the Working Poor.

But that still isn’t good enough for the One Bank and its minions in the Corporate Media. Not only do they want to see these slave-wages continue falling lower and lower; they want to hear the Slaves say they like it this way. Hence the September 4th lecture to the Little People from Bloomberg, (maliciously) released right after Labour Day.

The cynical title of this attack on all workers was Can We Pay A Minimum Wage Which Makes Everyone Rich? This sort of straw-man analysis is typical of these Corporate elitists as they “explain” why the Rich should (always) get richer and richer, and the Poor (i.e. everyone else) should (always) get poorer and poorer.

   

The New Gold Myth

Gold Commentary

Actions have consequences. In the market for any physical good (i.e. a commodity), though the laws of supply and demand can be warped, and their corrective dynamics delayed – through brute-force manipulation – they can never be permanently resisted.

For this reason, the Banksters themselves know they are fighting a losing battle with respect to the price-suppression of gold (and silver). They can delay the rise in their prices to fair market value (even to the point of keeping them permanently undervalued), but they cannot eliminate the relentless upward pressure which, one way or another, must result in higher prices.

An important part of permanently keeping prices below any rational valuation is to keep market participants ignorant of the actual fundamentals which are producing this upward pressure. In the jargon of the mainstream propaganda machine; this is known as Controlling The Message. If you cannot prevent market participants from forming the view that “bullion prices should be higher”; ensure that this belief is based upon the wrong reasons.

With respect to precious metals (and nearly every class of “hard asset” except real estate); these assets are ridiculously undervalued for one absolutely predominant reason: the insane over-printing (and relentless currency-dilution) of our fiat paper currencies. The simple fact that all assets are priced/denominated in this paper is, alone, strongly suggestive that this will be the dominant variable in market pricing for any asset.

What elevates this money-printing from merely one of the drivers of precious metals markets to the absolute driver of bullion prices – and the prices of all hard assets – is the sheer magnitude of this money-printing insanity. At the risk of boring regular readers; nothing communicates this point like a picture:

A vertical line. U.S. money-printing going straight up, which in the realm of mathematics can only be expressed one way: infinite money-printing (i.e. infinite currency-dilution). “Infinity” as a multiplier, renders all other variables mathematically irrelevant. The money-printing is going straight up, so hard asset prices should be going straight up with it. All other analysis is mere distraction.

This point was illustrated in a recent commentary, Three Reasons Why The USD Is Already Worthless. There is not merely a single basis for asserting the U.S. dollar is worthless, today. Rather, there are three separate, concrete, fundamental reasons for concluding that the USD should already be priced at zero/near-zero. Naturally infinite money-printing is (and must be) the strongest of those three bases.

 

Bloomberg: Smashing The Big Banks -- For Profit

US Commentary

Four hundred years of economic theory (and economic History) tell us that oligopolies (in any form) are totally parasitic behemoths, which should never be allowed to exist in any legitimate economy. Thus as the (only) Messenger broadcasting the need to whittle-down the corporate monstrosities in the financial sector back within the realm of sanity, my messages have previously been framed in such basic, theoretical terms.

Incidentally, these arguments have observed that (contrary to Corporate Media mythology) these gigantic financial institutions are not even efficient. They have long since passed any economies-of-scale where “bigger is better.” Instead, these Big Banks now exhibit all of the characteristics of clumsiness, inertia, and general inefficiency which all of the Small Government zealots point to – in insisting that “Big Government” needs to be shrunk.

Smashing the Big Banks” does not have to be justified on mere grounds of morality or economic theory alone. It can also be successfully argued that these behemoths need to be scaled-down on grounds of pure economic efficiency. Thus even if all these Big Banks weren’t (in reality) mere cogs of a single Banking Monopoly; there are multiple, sound arguments for dismantling these parasitic predators – and zero arguments justifying their continued existence.

Indeed, Bloomberg itself now reports that “breaking up JPMorgan” would currently produce an instant profit of 30% -- on the asset-value of the components alone – and then its increased profitability as it (once again) operated as a collection of (separate) more-efficient pieces would kick-in:

JPMorgan Chase and Co. (JPM), the biggest U.S. bank by assets, would be worth 30 percent more if broken into its four business segments.

Of course why stop there? Those “four business segments” were each already too big themselves. Why not smash JPM into ten or twelve roughly equal parts – and make this profit/efficiency orgy even greater? The fact that any/all initiatives to splinter these Big Banks produces (cumulative) immediate reductions in overall systemic risk is just icing on the cake.

In writing previously that “too big to fail = too big to exist”; my arguments were always framed in terms of the insanity of creating a financial system which is nothing but a permanently ticking time-bomb. Additionally, the entire mantra of “too big to fail” is nothing but a (very) thin veil for financial extortion:

Give us all your money, or we’ll blow up the economy.”

Clearly in a world which places “profit” ahead of morality and sanity, my smash-the-Big-Banks initiative would generate much greater traction if framed in more appealing terms: a chance for everyone to make (a lot of) money. The alternative paradigms facing us are an illustration of stark simplicity:

1) Continue with our “too big to fail” model, where these financial behemoths are so bloated and inefficient that the only way they can even manage to stay alive is through endless/infinite infusions of Corporate Welfare from our governments (and now us) – which (as a mathematical certainty) is guaranteed to “kill the Host” (i.e. our economies);

2) Break up these Big Banks into (much) smaller, (much) more efficient pieces. Then they will no longer require their $trillions per year in Corporate Welfare – because the competent entities will be profitable, while the incompetent entities will be allowed to wither-and-die, cut off from their too-big-to-fail teat.

That’s called “capitalism”, and once upon a time we practiced something remotely resembling it in our economies: free markets; competition. What a concept!

   

Western Real Estate Bubbles Exposed

International Commentary

It is understandable if many readers choose to view the current financial nightmare concocted by Western bankers as an “economic Hell”, however it would be only a moderately appropriate metaphor. To truly capture the quality and severity of the economic conditions confronting the average person requires adjusting that metaphor to the notion of Twin Hells.

There are clearly two prongs which have been crafted by the banking cabal (via our Puppet Governments) which they use to skewer their victims, what has been described in previous commentaries as simply the Rape of Savers. The “high inflation” caused by wildly excessive money-printing (most-particularly in the U.S.) is obviously one of those Hells.

This theft-by-currency-dilution is as obvious as it is appalling. Currently the One Bank’s “Wall Street division” receives approximately 10% of U.S. GDP each year in literally “free money” - printed by the Federal Reserve and then handed to the Wall Street banks. These Big Banks are then allowed to “leverage” this free money (legally) by up to 30:1 (and illegally even further).

This “leverage” is accomplished by these fraud-factories effectively being allowed to all “print” their own money. Now do the math: 10% (of GDP) X 30 = 300% of GDP (every year). Can anyone see a problem here? In the perverse fantasy-world known as the “U.S. CPI” (and now virtually duplicated by other corrupt Western governments), we’re told that inflation is very low – even “too low”. Meanwhile, back in reality a “food inflation crisis” already ravages the Planet Earth.

Hyperinflation is being delayed through the One Bank simply building a much bigger time-bomb. Most of the mountain of free money handed to it by the U.S. central bank (and the European Central Bank, and the Bank of England, and the Bank of Canada) is used for its own gambling in its private casino: the derivatives market – and is thus (somewhat) sequestered from the so-called “real economy”.

With the Derivatives Bubble already somewhere in excess of twenty times the entire global economy in size; the “fuse” on the Banksters’ hyperinflation time-bomb has already burned critically low. But that’s only one prong.

The other prong, while less overtly malicious is just as insidiously destructive: 0% (and near-zero) interest rates. High inflation by itself is merely an “assault” on savers. In legitimate economies, high inflation is always accompanied by high interest rates; allowing Savers some capacity to fight-off this assault.

But with the One Bank’s fraudulent 0% and near-zero interest rates across the Western world, instantly assault becomes “rape”. With no cushion of interest (on savings) to deflect the savage assault on our wealth via high inflation, theft-by-currency-dilution is maximized – to a level never before seen in human civilization.

With nowhere for the Rape Victims (i.e. savers) to hide, they are forced to run. And where do the Sheep always/inevitably run first, when the “shearing” from high inflation becomes too painful to bear? Real estate.

Any sustained episode of high inflation is guaranteed to eventually manifest itself into a real estate bubble, for reasons previously mentioned. However, with our Twin Hells producing this serial Rape of Savers; the flight into real estate markets becomes a panicked stampede. And what was a mere “shearing” eventually becomes a slaughter.

 

China’s Golden Feast On Western Folly

Gold Commentary

Low prices lead to high prices.

The (latest) two-year price-suppression campaign from the banking cabal targeting the precious metals sector provides a text-book illustration of this economic principle. When you cripple the supply-chain, stimulate demand to record levels, and decimate inventories; much, much higher prices are the only possible result – higher than if there had been no price-suppression in the first place.

This is an inevitable fact of arithmetic. The inventory-destruction which must accompany all price-suppression can only be repaired through (simultaneously) stimulating supply and restricting demand. And the only possible mechanism to accomplish this is higher-than-equilibrium prices. However, this marks only the beginning of the causality-chain set in motion by any/all campaigns of price-manipulation.

Actions have consequences. It is with particular respect to the actions of malevolent Actors that the Law of Unintended Consequences is most-likely to rear its head. In other words, benign actions tend to produce benign consequences (intended or otherwise). It’s only when one intends evil that those Unintended Consequences can be virtually certain to bite one in the ass.

The minions of the One Bank are Poster Boys for this truism. And the precious metals sector provides us with an abundance of empirical examples; with many of those “empirical examples” translating directly into good fortune for China.

When China saw clearly that the Western-based financial system was doomed and heading for a crash – and that it was the best candidate to establish a new, economic order – it immediately made acquiring a massive, national gold reserve an obsessive priority. How have the price-suppression machinations of the Bullion Banks meshed with this national obsession?

The Banksters have been doing everything in their power to make sure that all the bullion that China’s government has been accumulating has cost it the absolute minimum amount of wealth. You’re welcome. But that only begins the largesse of the One Bank toward China, when it comes to “stocking” China (and much of the Eastern world) with bullion.

With the thousands of tons of bullion China has vacuumed-up costing it so little; it finds it still has huge amounts of capital left over – capital with which it has decided to start accumulating gold miners, future supply to the global gold market. Here again the Banksters have gone out of their way to accommodate China’s ambitions.

A little context is in order. Producers of any commodity provide natural leverage with respect to the commodity they produce. This is not some “economic theory”; it is arithmetic, and is explained in simple, unequivocal terms in a previous commentary. Thus in any bull market, commodity-producers will automatically “outperform” the commodity they produce, in terms of the potential for price-appreciation.

As a result of this tautology, rising share prices for commodity-producers are seen as a “bullish indicator” for the sector as a whole. Thus with the psychopath bankers having their own obsession (bullion price-suppression), attacking the miners to sabotage this bullish indicator – through various legal and illegal operations – has been a constant tactic of these market Thugs.

Indeed, it is here (more than anywhere else) where the Banksters demonstrate their psychopathic tendencies. The share prices of the miners haven’t merely been suppressed to an equal degree with bullion itself; rather, the mantra has been simple: Scorched Earth.

What we have seen over the past two years is nothing less than precious metals mining genocide. CEO’s of these companies would regularly report “record profits” while watching their share prices plunge straight down. In a sector in the midst of a 13-year bull market, the miners have experienced two, severe Depressions in just five years.

   

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