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Economic Rape of Europe Nearly Complete, Part I

Articles & Blogs - International Commentary

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I have written frequently (but not recently) about the wave of “economic terrorism” which Wall Street launched against Europe – with the full support/blessing of the U.S. government. With that campaign of terrorism having nearly reached fruition, I will review these events one more time.

Essentially, it began with Goldman Sach’s “rape” of AIG. AIG was the “guinea pig” of this experiment. The banksters had already perfected their terrorist weapons: interest-rate swaps and credit default swaps. Now they needed to determine if they actually “worked” – i.e. if their scam-victims were gullible enough to be fooled by bankster double-talk, and if our legal systems would “tolerate” this massive, systemic fraud.

The interest-rate swaps had already been tested. During the time that “economic genius” Larry Summers was foolishly put in charge of Harvard, this “genius” managed to lose approximately $1 billion in financing merely $2 billion of debt, via interest rate swaps. The reasoning is obvious: if Larry Summers could be conned that easily, then so could the “geniuses” in charge of Europe’s various economies.

The Wall Street banksters (and some European banking Oligarchs) then systematically targeted every city, state, and large public institution foolish enough to listen to the banksters’ con. The “mechanics” of these interest rate swaps (i.e. the contracts) were extremely complex. Naturally if you’re trying to scam someone with such paper-fraud, you make the wording as convoluted as possible, so that it’s impossible for the victim to ever fully understand the contract they are signing.

Conversely, the nature of the scam itself was incredibly simple: getting these cities, states and institutions to make massive “bets” on interest rates against the same group of bankers who controlled those interest rates. One half of the bet was held by the scam-victim, while the other half was held by another multinational bankster. The bankers were able to con all of their victims into believing that they would be the “winners” of all of these bets, with the sophisticated, multinational bankers being the “chumps” who would suffer all of the losses.

Even more incredibly, none of these victims became suspicious even once they had become aware that the banksters were all taking the same side of the bet: that interest rates would go down, with all of the scam-victims making the opposite bet – that interest rates would go up. What actually happened? By incredible “coincidence” shortly after the bankers had finished making all of these bets, U.S. and European interest rates crashed to their lowest level in history – and stayed there.

This resulted in maximum losses for the scam-victims, and maximum profits for the banks – an amazing stroke of “good fortune” for all of these banksters. Though the final “tally” of this scam has yet to be realized, the haul certainly amounts to $100’s of billions – if it hasn’t already exceeded $1 trillion. While both civil and criminal prosecutions have been initiated by several European authorities, as of this date, no bank has been punished in any way for perpetrating this massive fraud.

Similarly, credit default swaps are a scam which is very complex in its execution, while mind-numbingly simple in concept. First, the bankers pour gasoline all over the houses that they wish to “burn down”. Then they find “chumps” who are willing to write-up “fire insurance” policies on all of these homes – with the bankers being the “beneficiaries”, even though they don’t own any of the homes. The bankers then set all of the homes on fire, and then collect their insurance proceeds.

Translating that metaphor to the real world, the “houses” were sovereign European states. The “gasoline” was the massive debts which the banksters had goaded these governments into taking-on, through promising them that the $trillions in credit default swaps which the banksters were writing-up would magically allow all of these countries to all borrow much more money, at lower interest rates than ever before – forever.

To call this a “Trojan Horse” maneuver would be giving the sovereign governments who were duped by this preposterous nonsense too much credit. Rather, it was more like the cliché of the cartoon-villain who hands a “birthday cake” to his target – except that the candles are actually lit sticks of dynamite, and (of course) the victim never notices the suspicious “candles”.

Even this metaphor isn’t entirely accurate, however, as back in the real world, the banksters actually used much more “dynamite” than “cake”. The “notional value” of these credit default swaps climbed above $60 trillion – larger than the entire global economy, and many times in excess of the debts being (supposedly) “insured”.

Returning to the arson/insurance analogy, the banksters were allowed to “insure” these houses for many times their actual value, with themselves as “beneficiaries” (even though they didn’t own the homes) – and still their victims didn’t suspect a thing. More unbelievably, with all of these European houses now fully aflame, even now most of the victims have not begun to suspect “arson”.

Here is how the credit default swap scam actually operates in European (and global) debt markets. The scam-victim is led to believe that placing these massive amounts of “insurance” (i.e bets) on all of the debt they are issuing will magically and permanently lower their borrowing costs forever. It is even less-plausible than believing in a “perpetual motion machine”, but it fooled all of the leaders of Europe, and was instrumental in inducing all of these governments to allow debt-levels to soar (the “gasoline” I spoke of earlier). What a credit default swap actually does is to place a highly-leveraged “bet” against that nation defaulting on its debt.

Note that the banksters were unable to stop themselves from engaging in these bets amongst themselves due to the compulsiveness of their greed and gambling-addiction. When Morgan Stanley refused to honour one of these “bets” which it had placed with Citigroup, Citi was forced to sue. Even after Morgan Stanley was forced to liquidate the so-called collateral which had “backed” this bet, it was facing a pay-out of nearly 300:1. This gives people some idea of the massive leverage in this $60 trillion market – and the “visions of dollar signs” dancing before the eyes of greedy banksters.

Also note the other requirement here: finding a “chump” willing to write-up all of this insurance (i.e. to take the other side of the bet). Enter AIG. As with the fleecing of Harvard, AIG was the “test case”. In this case, the “test” was to see if Goldman Sachs could dupe AIG into insuring (against default) some of the worst mortgage “feces” which Goldman Sachs had been able to find – out of all the massive mortgage-fraud perpetrated by Wall Street. The reasoning was that if they could get AIG to insure these “products” (the world’s largest insurance company), then they could dupe anyone into “insuring” anything.

Not only did AIG perform magnificently as the perfect dupe, but Goldman Sachs was then able to get their “good friend”, former CEO, and then-Treasury Secretary Hank “Bazooka” Paulson to set up a $160 billion “slush fund” within the carcass of AIG. The U.S. government then demanded that AIG pay Goldman Sachs 100 cents on the dollar for every penny of this credit default swap fraud.

With their “test case” a huge success, the banksters were now ready to officially unleash their economic terrorism on Europe.  It has been painful in its simplicity. It begins with the U.S. propaganda-machine (i.e. the mainstream media). They were instructed to all don their “Chicken Little” costumes, and then to run around shrieking (“24/7”) that “the sky was falling” in European (and only European) debt markets. The very same American media pundits who write day-after-day about the “Euro debt crisis” (across an ocean) have found the “U.S. debt crisis” to be totally invisible – despite the fact that the level of insolvency within the U.S. exceeds even the worst of the Euro debt-sinners. This propaganda-campaign began in earnest late in 2009, and has been relentlessly maintained ever since.

This made the actual “terrorist attacks” in the credit default swap market child’s play. Wall Street terrorists began massively “shorting” all of these credit default swaps. The shorting increased the level of risk/leverage on the credit default swaps themselves, while the relentless propaganda increased the perceived level of risk on this debt. The combination of these forces, pushed the “prices” for this “insurance” sky-high.

Because the size of the credit default swap market grossly exceeds the size of the debts themselves, “the tail can now wag the dog”. Driving up the prices on the so-called credit default insurance now directly drives up the interest rates on European sovereign debt.

At best, many of these Euro nations were barely solvent before the Wall Street terrorists began driving up European interest rates with their terrorist attacks. Since that time, they have caused interest rates for Greece, Ireland, and Portugal to roughly triple, while their newer victims/targets (Spain and Italy) have also seen their borrowing costs explode.

This has made the anti-Europe propaganda and the shorting of the credit default swaps the proverbial “self-fulfilling prophesy”. The more they “short and shriek”, the higher interest rates go, making these nations even more insolvent, causing interest rates to go still higher. Wall Street terrorists can now literally drive European interest rates to any level they desire – with one proviso.

What Wall Street’s terrorists don’t want to do is to drive these economies into formal default (i.e. formal bankruptcy). This would force these Euro states to simply repudiate $100’s of billions (if not $trillions) in bond debt – and “detonate” the entire credit default swap market. The ultimate irony (and betrayal) of the credit default swap scam is that this was never “insurance”. Real insurance directly implies that the insurer is capable of indemnifying the insured. Obviously there is no “insurer” standing by to make the extremely leveraged pay-outs on this $60 trillion of supposed “insurance”. This makes credit default swaps a prima facie “fraud”.

Detonating the credit default swap market would kill “the Goose that lays the Golden Eggs”, and Wall Street’s economic terrorists (and the ultra-wealthy bond-holders for whom they “front”) are still planning on harvesting many more “eggs” from these geese. Indeed, as we shall see in Part II, the “golden” metaphor may literally be true.

Comments (2)Add Comment
Jeff Nielson
written by Jeff Nielson, July 22, 2011
Bobbbny, we must never forget the "payoff" for the U.S. government through blowing-up the debt markets of Europe one-by-one: it MASKS the speed at which the USD is moving toward zero.

Even WITH the "Euro debt crisis", these two fiat currencies have CONVENIENTLY stayed in a rough "trading range" between each other. It's the metaphor of the lobster in the boiling pot.

If the fiat currencies move toward zero in a PARALLEL manner (with out governments LYING about inflation the whole time), then the majority of the sheep will remain oblivious to this for the longest possible time.

This is why the "mission" of Canada's "Loonie Assassin" (and Goldman Sachs Stooge) Mark Carney is so important as well: to make sure that CANADA'A currency doesn't get TOO much more valuable than the other Western paper - and make those governments LOOK BAD to their people...
written by bobbbny, July 22, 2011
You are, once again spot on in your analysis of insuring that which there is no insurable interest in, and in doing it many times over.
True to your analogy, it is like insuring your neighbors house & then setting it on fire.
Except the banksters are able to insure it many times over.
This concept of leverage in credit default swaps extends to the physical markets as well.
Thus, 500 times more "paper silver" is traded than physical silver.
Once again, the tail wags the dog.
This is true of multiple markets.
What is true as well, is that the criminal rating agencies have been allowed to avoid prosecution, and to live on in order to continue serving their masters, the banksters.
So Moodys & Standard & Poors are set loose like attack dogs to downgrade the debt of the target nations, and to drive their interest rates to impossible levels, like 40% on a 2 year Greek note.
It is becoming increasingly clear that now that they have carte blanche, as proven by the government ass licking they got in 2008, that their goal of global domination is within reach.
They will not stop in Europe.
The US government is compliciant, and even instrumental in the attack on the European periphery, but the ultimate goal is the US itself.
You know there will be a US downgrade.
It is just a question of time before the US dollar is dethroned as the global reserve currency.
That will be the end game.
Unless they can be blocked, the banksters will win.
They will own all the bonds, swaps, and sovereign debt, and we will have given them the money to do so.
They will lay claim to the wealth of nations.
This is the greatest theft/fraud in the history of mankind.
Tell me Jeff, and friends of BBC; How can they be stopped?

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