Today the Federal Reserve gave the markets exactly what they had been expecting – more money printed out of thin air to purchase US debt (US Treasury and Mortgage Backed Securities).
- Fed to buy $40 Billion in MBS per month
- Fed to continue Operation Twist
- Fed expects interest rates to remain at low levels until at least 2015
- Fed gives no time limit on this easing policy, but will continue indefinitely
Read the complete Fed press release and see the full recording of Ben Bernanke’s press conference. Bloomberg’s wide array of commentators on today’s Fed decision included Ron Paul, who explains how all this money printing is destroying the value of the US dollar.
Eighteen years ago, G. Edward Griffin wrote The Creature from Jekyll Island and exposed the Federal Reserve’s true nature. Since that initial writing, the knowledge of the fact that the Fed is not a government institution, but a privately owned central banking cartel has expanded in public awareness. In this remarkably lucid interview with Casey Research’s Louis James, Griffin discusses:
- The growing size of government
- The decline of the purchasing power of the US dollar
- The two-party political system is really a cover for a one-party system
- The realistic expectations of public awakening prior to a collapse
- The Fed is a cartel. Furthermore, it’s a partnership between the bankers and politicians
- Why we have not seen hyperinflation (yet)
- The system has changed from a free enterprise, competitive system to a politically connected, non-productive system, which will inevitably lead to totalitarianism
- The possibilities for America to reverse course and avoid catastrophe
- Some closure may be coming to the CFTC’s 3-year-plus investigation on silver market manipulation.
- Silver supply shortages are becoming more evident on large orders.
- Potential conflict of interests regarding ETF custodians – HSBC (GLD) and JP Morgan (SLV).
- Allocated gold accounts being surreptitiously stolen from in order to suppress prices.
- Wikileaks uncovering of Chinese awareness of US & European involvement in precious metals price suppression.
- Chinese and Russian interest in GATA’s precious metals price suppression investigations.
- The Plunge Protection Team is managing markets to preserve the illusion of US dollar strength and economic health.
- Oh, and whether or not lap dancing is an art form worthy of tax exemptions.
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An obvious change has come about in the Western world. Zero Hedge points out what should soon be obvious to any casual observer – that corruption now rules the minds of men in power. The example given is the fact that John Corzine will not be facing charges for his company’s billion dollar theft of client funds, while Julian Assange is wanted for his honorable attempts to expose the hypocrisy and deceit practiced by those in power.
Steps should be taken to protect yourself and your hard-earned wealth from being taken over by over-zealous policies of those in power and the governments which they control. Please see our Protect Your Assets series for ways to preserve your freedom.
On this day, 41 years ago, Nixon shocked the world by removing gold convertibility for foreign holders of US dollars – it would be the end of the agreement made at Bretton Woods, where it was decided that the US dollar would be pegged to gold and all other currencies would be pegged to the US dollar. The message was so important that Nixon’s administration decided to preempt the most popular TV series, Bonanza, on Sunday evening prior to the markets opening on Monday.
What’s most aggravating is Nixon’s claim that he must save the dollar from the evil speculators trying to destroy the dollar – something we hear so much, even from modern day politicians. Never do these con men ever mention that there wouldn’t be anything to speculate on if those in charge of the monetary system were honest and abstained from their blatant money-printing, inflationary policies.
A lot of the people within the “99%” recognize that something’s wrong with today’s economy. But pin-pointing exactly what the causes of the problems have been is a bit more challenging. As a result, many find premature targets for their demonstrations. Before casting blame for the ills of society, it’s important to educate one’s self on basic terms, such as capitalism and free markets and how government intervention and bail-outs corrupt the underlying institutions by rewarding a few elites at the expense of the consumer majority. The following (short) video explains, in simple terms with real examples, why being pro-business is not the same thing as being a supporter of free markets.
Casey Research provides a lucid interview with David Stockman, former Reagan administration budget director and author of The Triumph of Crony Capitalism. Stockman explains that in today’s economy, companies are reporting profits today that are “based on a debt-bloated economy that isn’t sustainable.” Furthermore, “This market isn’t real. … the 2% on the 10 year, 90 basis points on the 5 year, 30 basis points on the 1 year – those are medicated, pegged rates created by the Fed, and which fast money traders trade against as long as they’re confident the Fed can keep the whole market rigged. Nobody in their right mind wants to own the ten year bond at a 2% interest rate, but they’re doing it because they can borrow overnight money for free … put it on Repo, collect 190 basis points on the spread and laugh all the way to the bank.”
“The Fed has destroyed the money market, it’s destroyed the capital markets. They have something you can see on a screen called an interest rate – that isn’t a market price of money…. that is an administered price that the Fed has set and that every trader watches by the minute to make sure that he’s still in a positive spread. … You can’t have capitalism if the capital markets are dead, if the capital markets are simply a branch office (a branch casino) of the central bank and that’s essentially what we have today.”
The 12 members of the FOMC are the western world’s Monetary Politbureau – “monetary central planners who are attempting to use the crude instrument of interest rate pegging and yield curve manipulation and essentially buying debt that no one else would buy in order to keep this whole system afloat. It’s Ponzi Economics!!”
CNBC’s European Squawk Box had an interesting interview session with author and economist, Richard Duncan. Looking back over the last 40 prosperous years, ever since the last remaining link between the US dollar and gold was removed, the world has evolved into a form of financial creditism. Duncan notes that the central banks of the world have been able to provide easy credit and the world has greatly benefited. However, there comes a point where borrowers are unable to take on more debt. If the government does not step in and provide QE or some other kind of spending programs, there will be another Great Depression. Duncan even goes on to say that, in fact, a depression is unavoidable and inevitable, but it can be delayed if the government decides to benefit society further by spending on 21st century technologies in the nano science and medical fields, for example.
Another interesting part of this segment that should be noted is where the panel brings up the comparison of the present situation with the past, where central banking policy was to raise interest rates rather abruptly in order to curb reckless borrowing. “When you throw money into the system ….. the good guys out there won’t borrow and spend because they’re too cautious. It’s the bad guys who come in and borrow and spend. … There’s lots of bad guys around, we can see them all over the place – we know they’re there!” Touché.
Is this a matter of sensationalism by all the media outlets? Or is the financial industry really this crooked? Sounding eerily similar to the MF Global scandal, now we have another example of a firm taking its clients’ funds to use for their own gain, or in this case, loss. Peregrine Financial Group Inc. apparently has a $200 million shortfall in its client accounts, according to CFTC regulators, who are now only involved after the National Futures Association brought to light the irregularities at PFG and the attempted suicide of its CEO and founder, Russell Wasendorf Sr. The FBI is also probing into the firm’s activities.
As Lauren Lyster’s Capital Account segment at RT reports, these fraudulent activities affect legitimate businesses, such as Treasure Island Coins Inc. Bullion dealers typically buy physical bullion which they resell to customers. In order to protect themselves from severe price fluctuations in the gold and silver markets, these companies hedge their physical bullion with contracts in the futures markets. As things went sour at PFG, its clients saw their spot-metals futures positions fall into the control of PFG’s primary credit facility – guess who… JP Morgan. Those positions are presumably being liquidated causing further losses to PFG clients, but possibly benefiting JP Morgan, enabling them to profit from the lion’s share of suspected commercial short positions.
The latest example of financial fraud comes from Barclays recent admission that they manipulated the Libor & Euribor benchmark interest rates. To avoid further legal action and bad publicity, the firm will pay $200 million dollars to the CFTC, $160 million to the US Department of Justice, and another $93 million to Britain’s Financial Services Authority. But these fines are insignificant sums when compared to the array of financial instruments derived from just the Libor rate – an estimated $800 trillion of securities, loans and derivatives. The average “Joe” has been unknowingly affected through vehicles like adjustable rate mortgages, stocks and pension funds. Financial firms such as Barclays and others suspected to be involved in this latest scandal – Citigroup, HSBC, Royal Bank of Scotland, UBS, Deutsche Bank, JP Morgan Chase, Lloyds, and Bank of Tokyo Mitsubishi – have a tremendous motive to keep these benchmarks aligned favorably with their more profitable, proprietary derivatives trades.
Just how much more evidence is necessary to convince the public that the bankers of the world are quickly losing control of the financial system? Their legal box of tools are failing them and they must now resort to illegal means like the mobsters we read about in Dick Tracy strips. It’s worse now, though, because the too-big-to-fail Wall Street banks have most of our politicians in their back pocket, which means their criminal activities won’t be considered criminal, but rather normal operating procedures. Hence the minor slap on the wrist for public appeasement. Investors need to be aware of what’s happening and take actions to protect their wealth from being taken over by the mob.
Here’s Max Keiser and Michael Krieger discussing this latest scandal on RT.
Up until a few years ago, Central Banks of the world were selling their gold because they didn’t think they needed the ‘barbaric relic.’ But with all the money printing activities plunging the value of all fiat currencies around the world to their intrinsic value (=0), they’re now buying gold in substantial amounts. Here’s Simon Constable of the Wall Street Journal further explaining why they’re expected to be the buyers of at least 10% of the available gold in the coming years.
Here’s Chris Powell of GATA explaining the motivation for central banks to keep the gold price under control. Powell also notes that potential gold investors should only buy physical gold, which they can actually hold in their hands. He estimates that 70-80% of all the gold people think they own doesn’t really exist! The paper forms of ‘investment gold’ such as ETFs or unallocated accounts likely do not have the physical gold supporting all the paper claims. Through rehypothecation schemes, gold leasing and swaps arrangements, there is simply not enough physical metal to back all the paper claims.
Here’s Jim Rickards explaining the Fed’s intentions behind Operation Twist, expectations on future gold prices, and the logistics behind the Currency Wars of the economic world today. Also, with Jamie Dimon & JPMorgan filling the latest headlines, Rickards gives his take on the parasitic institution of Rent Seeking, which has invaded both parties – Republicans and Democrats. Rent Seekers have taken the form of:
- On the Democratic side, Public Sector Unions, who are inflating their latter years’ pay in order to retire earlier with better benefits than those in the private sector.
- On the Republican side, Wall Street Bankers like JPMorgan and Goldman Sachs have been profiting from their proprietary trading and derivative schemes, while at the same time ensuring losses are covered by the taxpayers.
- On both sides of the isle, though Rickards doesn’t specifically mention them, there are the Crony Capitalists. Solyndra, Enron, Halliburton to name but a few examples. As we slip into the future, the Rent Seekers are even able to manipulate the legal system, making it tougher to actually prosecute the cronies that are caught in the act (see MF Global).
Things are getting bad out there, folks. If you’ve worked hard all your life and have accumulated wealth, please see our Protect Your Assets series to learn how you can protect your wealth from being destroyed by this rigged economic casino.