I am proud to be an individual. It seems there aren’t many of us left.

I’m beginning to wonder how many people can rightfully call themselves individuals. After all, we live in a society where everyone gets a trophy just for showing up. So how unique are most people?

The answer is “not very”. Why do I think so? Let me tell you about my recent on-line match-making adventure.

Being a life-long bachelor, I’ve been toying with the idea of getting married when I retire. The way I see it, retirement should still have challenges to help keep one’s mind sharp. I’ve seen too many minds wither and die in retirement and I don’t intend to be one of them. And, what could be more challenging than marriage?

As a bachelor, the one thing I really miss in a personal relationship (and I’ve had more than I can remember) is having someone to act as a sounding-board; someone I could bounce ideas off, give me a second opinion and yank me back to earth when one of my ideas gets too preposterous.

So I registered with two on-line match-making services; Match.com which I felt was somewhat pedestrian and eHarmony which I thought had a better class of people. I tried to be brutally honest in setting up my profile because that would determine the kind of responses I’d get and the profiles these services would send me to review. I was very selective in the type of woman I was looking for; age 45 to 65, university degree, no kids, non-religious, a wide geographical area so as not to be limiting, etc.

Between the two services, they sent me an average of about 15 profiles a day to examine. After a couple weeks, I became quite proficient in reading between the lines. After all, people try to show their best side so I learned to see below the surface. Often, what was important was left unsaid.

Example: one said she prefers to dress casual for both work and play. Reality: she’s a slob. Example: her weight is “above average”. Reality: she’s fat. Example: no pictures of her even though both services stress the importance of posting pictures. Reality: she’s a fat, ugly slob. See what I mean about reading between the lines? Hey, I never said it was pretty.

Another example: she says she has no kids. Reality: in one of her pictures, she’s standing between two young men and the caption reads. “My two sons”. Reality: She has two sons but no kids – WTF? So what else is she lying about?

After six months reviewing about 2,700 profiles, I came to several startling conclusions:

1) They were all very articulate (university types) and very capable in describing themselves, their desires, expectations, demands and requirements. However, not one of them – I repeat; NOT ONE said anything about what they would bring to a relationship. It was all gimme, gimme, gimme. Not a single one out of 2,700 even mentioned anything about any sacrifice or compromise they might consider to help make a relationship work. I guess I shouldn’t be surprised by my fellow, self-absorbed, sold-out Baby-Boom generation. Fie on them!

2) They were all the same. They were all very conventional. Sure, they had some personality differences and a few different hobbies and interests but there were no individual characters. There was not one that stood out as being different or eccentric or quirky or kooky or individual or capable of thinking for themselves. Maybe they were hiding it from view but, as I said, I became quite proficient in reading between the lines. I didn’t detect any unique characters between the lines nor in their hobbies and interests or life experiences.

Another fellow I know was also doing the on-line match-making thing. He emailed me a link to the only profile he found that was unusual. She was unabashedly, shamelessly unique and eccentric; what one would call a “real character”. Unfortunately she lived far away. However, she was but one in more than 5,000 in total for both of us. How sad is that?

That I found only one unique individual in 5,000 demonstrates the death of the individual. We have become insects in a hive-mind collective. We are the Borg of Star Trek fame. We don’t have to worry about a Zombie Apocalypse; it’s already here. We have become what John Rappoport calls a “coagulated mass melted down into a cosmic glob of androidal harmony.”

Words can be dangerous. There is no such thing as ‘Society’. It is a word that should be restricted to sociologists for their discussions amongst themselves. It is short-hand for a group of people sharing a common geography, political structure and culture, etc. so they can convey that concept in just one word rather than a whole paragraph.

Words themselves are just symbols. They don’t exist in reality. They’re representations of reality. For instance the word “rock’ represents a hard, dense object. Drop a hard dense object on your toes and it hurts. Drop the word “rock” – well you can’t really do that can you? So, a word is just a short-cut for the real thing. Other words that represent concepts are now two steps or deviations from reality because they are symbols of symbols. That makes them even more dangerous and subject to manipulation and misinterpretation.

The word “society” is a dangerous concept subject to misuse and misinterpretation. It is a symbol of other symbols such as “person” or “individual”. A symbol of a symbol is so far removed from reality that it becomes largely useless and very dangerously misleading. And yet we bandy about these dangerously useless symbols and then wonder why they get us into so much trouble.

The trouble with the word “society” is we begin to believe it. Once we believe nonsense we are on the road to perdition; a road that leads to collectivization, propaganda and brain-washing.

Show me a society and I’ll show you a bunch of individuals. Or, at least, once upon a time society was a bunch of individuals. Now, society is a bunch of like-minded insects. Having lost our individuality, we become just a herd of sheep destined to be fleeced and led to the slaughter.

Granted, humans are social creatures. We may like to go alone for a walk but we hate to stand alone in our opinions. And, therein lies our downfall. The collective is the path of least resistance; the easy way out. Always be leery of the path of least resistance because it’s usually the worst choice in the long run.

There was a time, when we lived in caves, where belonging to a group increased our chances of survival. We are the offspring of ‘social’ ancestors. Those of our forebears who shunned the group, had less chance to survive and pass on their anti-social genes.

However, that was then; this is now. Today, with 7 billion people on this planet, we have the knowledge, technology and history to get beyond group-think to empower and enrich our individual selves. Instead, we have forgotten our history and allowed our monkey brains to use technology to destroy individuality by subsuming individuals into the televised Borg mind.

Today, there are many forces trying to destroy individuality. The most powerful are:
1) religion
2) the military-industrial-financial complex.
3) governments

Religion is a guilt-producing control business. That’s why they invented heaven and hell; to reward those who follow their rules and frighten those who don’t. The Church doesn’t want people to grow up because they can’t control grown-ups. “Ye must be like children to enter the kingdom of god.” That’s why god is called ‘the Father’. That’s why they talk about being ‘reborn’ because it keeps us children. We don’t need to be born again, we need to grow up and accept our responsibilities as individuals.

The problem isn’t that we are born in sin; the problem is we need to figure out how to be fully human and independent individuals in a world that would otherwise turn us into sheep led by some so-called ‘shepherd’ whose livelihood depends on our donations.

The function of the Christ is not to rescue the sinners but to empower us to be more deeply human; to find our individuality as humans, not sheep. Salvation is an enhancement of our humanity and the growth of individuality; it’s NOT a function of any church or dogma.

Why do you think the Church made suicide a mortal sin? The longer you’re alive, the longer they can extract part of your hard-earned pay. Once you’re dead, their cash flow stops. Why do you think the Catholic Church forbids birth control? The more babies you make, the more sheep they can fleece.

The loss of individuality is tragic because the authorities can manipulate herds of sheep more easily than critically thinking individuals. We go to war, not because we want to but because we are manipulated into it.

I weep for today’s younger generations; countless iGadgets plugged into the Unity that demands a share-and-care sacrifice. Don’t they know that those who preach sacrifice, those whose hands are out to receive the sacrifice are the ones who benefit from their giving? Don’t they know that those who preach sacrifice never sacrifice themselves? Don’t they know that those who preach sacrifice are the ones to gain what the sacrificial sheep surrender?

That’s why I loathe Socialism. Although it became intellectually fashionable a little more than a century ago, it is based on a warped tradition going back many millennia that equates morality with self-sacrifice. That’s why we are taught that altruism is good and individuality is bad. John Rappoport says. “the individual is characterized as: lone, outsider, selfish, greedy, inhumane, petty. Turn him into an exile, excommunicated from the great body of humanity.”

He reveals the propaganda; what he calls the ‘psy-op’ and you have to admit it SOUNDS wonderful, “We can no longer afford the luxury of thinking of ourselves as individuals. The stakes are too high. Finally, we must all come together and realize our presence on this planet is a shared experience. The decimation of our resources, through hatred and divisive behavior, the denial of love and community, the cold greed and excessive profit-making, the whole range of social and political injustices—all this can ultimately be laid at the door of the individual who refuses to join the rest of humanity…”

Like I said it sounds wonderful until you realize it advocates the death of the individual and the rise of the hive-mind collective. As John says, “And once that happens, the collective, managed by Globalist princes, will have a clear path to the control of Earth, at the expense of the rest of us. And the cruelties we now witness will pale in comparison to what is in store for us.” That’s also why I hate shallow intellectuals because so many of them have fallen for this shit.

I never realized then, how fortunate I was to pay my own my way through university by working my summers underground in the hard rock mines up north. I realized later I shouldn’t have envied my buddies who spent their summers in the city with cushy but low-paying jobs as life guards or waiting tables, and enjoying their beach parties and rock concerts. Instead, my education was incredibly well balanced. Intellectually, I did 7 ½ months of book learning followed by 4 ½ months of physical labor deep underground.

I graduated after three years while many friends struggled years longer doing part-time jobs during their school year. As I was awarded the gold medal for Political Science, my professors were disappointed that I didn’t go on to graduate school. However, I had had enough of book learning and I was eager to set forth into the real world. If I could drill, load, blast and haul tons of muck every day, I could do anything.

The grim reality of physical labor had shown me the limits of the intellectual life and its pseudo-philosophers. It grounded and balanced me and gave me the fortitude to face the future. It also gave me a tremendous bullshit detector. There’s no bullshit underground. It’s too dangerous for pretense. It’s just too real and anyone who tries to bluff his working partners is sternly dealt with. I learned that it matters not what I say but what I do. Talk is cheap. Only action is real. You could say my individuality was forged in the bowels of the earth.

An independent individual can spot the collective by its actions and either oppose or avoid it. The individual doesn’t try to “harmonize the world”. That’s just another word for globalization: the ultimate collective. Instead, the individual knows there are an infinite number of worlds. He doesn’t believe “we are all in this together” because the individual knows that’s just plugging into the matrix.

What Howard Beale said in the 1976 film, Network about Amerika applies everywhere in the West, “What is finished is the idea that this great country is dedicated to the freedom and flourishing of every individual in it. It’s the individual that’s finished. It’s the single, solitary human being that’s finished. It’s every single one of you out there that’s finished. Because this is no longer a nation of independent individuals. It’s a nation of some two hundred odd million transistorized, deodorized, whiter-than-white, steel-belted bodies, totally unnecessary as human beings and as replaceable as piston rods.”

If you’re an independent individual, the collective hates you because they fear you. Your individuality and ability to stand on your own two feet makes a mockery of their pathetic existence. They know it but they’ll never admit it. And, they’ll try to bring you down to their level of mediocrity and sameness. Harmony, my ass!

It is difficult being an individual when so many people are plugged into the matrix. As individuals, this is our struggle: finding the balance between being true to ourselves and being too “other”. Each one of us has to find and strike our own balance. It is your responsibility as an individual. It’s why I Am an Anarchist It’s also why I’m not surprised so many YouTube videos linked in my posts no longer work; they’ve been pulled or “no longer exist.” Too subversive!

In this complex world, we are encouraged to become specialists. This complex world needs specialists. We all sometimes need specialists. However, that’s no reason to become one. Specialists serve the collective which is why they are well regarded and well paid.

The downside of specialization is the risk of obsolescence. The makers of buggy whips no longer have jobs since automobiles replaced the horse and buggy. Early automakers were craftsmen handcrafting exquisite and expensive works of art for the wealthy. Then Henry Ford used mass production techniques to lower the price and complexity of automobiles. The Model T was affordable and could be had in any color as long as it was black. Specialized craftsmen were soon out of work.

Regarding specialization, Robert Heinlein said, “A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly.

“Specialization is for insects.”

Destroying individuality makes it easier for them to carry out their sinister mission of control, conquest and mental enslavement. They do their insidious worst with a number of tools; the most obvious being the entertainment industry and the public indoctrination education system.

The entertainment industry, is designed to numb and brainwash our minds with propaganda. Even my pet ‘guy flics’, mindless action movies are rife with propaganda. Here’s just one example where IlluminatiWatcher dissects the latest Superman movie, Man of Steel to find some insidious parallels with Christianity.

- Before his father sends the infant Superman off to Earth baby Moses-style, he tells his wife that, like Jesus, “He’ll be a god to them.”

- While not a miraculous birth as such, Superman’s father claims that his son is the first “natural” birth in centuries because all other Krypton children are genetically engineered.

- Superman jumps from General Zod’s ship and hovers in the sky with his arms out-stretched like the crucifix in one of several Christ-like images in the movie.

- Superman says he is 33, “a not-too-subtle reference to the same age as Jesus Christ when he was crucified.”

- He is more than willing to sacrifice himself so he surrenders to save humanity from annihilation.

- “When things get tough, Clark Kent seeks advice from a priest. Visible in the background is a large painting of Jesus so you can see [Superman] and Christ side-by-side.”

- “Superman is a non-violent being … always opting to keep the peace.”

Every movie that comes out of Hollywood is rife with such propaganda.

TV is even worse. Do you still rely on TV for the news? Here’s an example of TV news from one of my previous posts complements of RT’s “Brainwash Update”.

I cringe when someone asks, “Did you watch…(whatever)?” Obviously they’re talking about TV aka the ‘boob tube’ aka the ‘idiot box’. I bite my tongue to avoid replying, “No, I don’t watch. I DO. I’m too busy living my own life that I don’t have the time or inclination to watch someone else’s life”

There are two kinds of people: those who do and those who watch. There are two kinds of people: winners and losers. There are two kinds of people: those who live their lives the way they want; unfettered and unconcerned about anyone else’s opinion and there are those who watch and gossip and tremble in fear of the individual’s “otherness” because it reminds them what cowards they have allowed themselves to become. The first group are individuals. The second group are hive-minded losers. And, unfortunately, they’re taking over by dint of sheer numbers. As Charles Bukowski once said, “Stupidity has the utmost persistence.”

Governments’ most powerful tool for destroying the individual and brainwashing the collective is the public indoctrination education system. It stifles curiosity and destroys our innate love of learning until we are dumbed-down into brainless breeders, cannon fodder for the military’s endless wars and just barely educated enough to run and repair the machinery. I know because I’ve been in both the public and private education systems. I learned as much in one year of private school as ten years of public school.

The so-called education system does its work by encouraging uniformity and discouraging individuality. It aims for a common level of mediocrity. It educates us only enough so we can operate our masters’ computers and machinery, fend for ourselves well enough to breed more insects for the hive and to fight and die in wars whose sole purpose is the amusement and enrichment of the ultra-wealthy.

I used to hate history. Correction: I hated the way it was taught in school especially Canadian history which was dull and lifeless. The texts were designed and vetted by characterless committees to remove any trace of passion or humanity. They were designed to be stored in short-term memory long enough to write the exams and then forgotten.

One day, I came across a Canada history text book commissioned by Labatt’s and written by the humorist Stephen Leacock (a trained historian). I was amazed! I was floored by what I read. Passage after passage of otherwise boring Canadian history came colorfully alive with real people doing exciting things that helped build a country.

Apparently Labatt’s had offered the text to the public education system but they had flatly refused it because it was commissioned by a beer company. Besides, it was so exciting the pansies probably wet their pants.

The authorities hate individuals because dealing with individuals is like herding cats. Individuals who can think for themselves are harder to fool and manipulate and swindle. They ask tough questions. They trust no one. I salute the Gen Xers & Millennials; they give me hope despite their shiny tech gadgets that all is not yet lost. Everything the authorities do is to encourage assimilation and discourage individualism. Their job is made easier with a mindless mass media dragging everything down to a common level of mediocrity with their ‘Bernaysian’ propaganda.

I quote John Rappoport again: “The individual, the Self, isn’t just a little different or moderately different or quite different. The individual is a revolution all his own, a living breathing revolution … He knows freedom is real, and he doesn’t have the slightest interest in interfering with another’s freedom.”

In any case, I haven’t entirely given up on the idea of marriage in retirement. I’m just not holding my breath. It would take one hell of an individual for me to sacrifice my freedom and independence. I will not, however subsume individuality in a dictatorship; immersed in a swamp of cloned, conventional sisterhood. I’m not one to park my balls in my wife’s purse.

Besides, I’m not a joiner. I’m an individual. I’ve learned to think for myself and doubt everything I’m told until I verify it for myself. I’ve learned to stand on my own two feet and look after myself. I cook, I clean, I shop, I do the laundry and I raise my middle finger to the hive-minded collective. Would I give that up? We’ll see.

I’m reminded of the ancient Chinese curse; “may you live in interesting times.” So for all you ladies of Match.com and eHarmony, I fear you’ll get who you deserve and you’ll be sadly disappointed because you demand far more than you’re worth. What you get may be what you deserve, not what you want.

Independent individuals are in a constant war with the collective. Whatever meager benefits there are for joining the collective are greatly outweighed by the excitement, exhilaration and dangers of the singular journey.

When I’m finally overcome by either entropy or the smothering, mindless collective, the world will never know what has passed; the demise of this individual; the one-of-kind; the Omega man.

It will have been one helluva journey! And, no one will know except me and the universe with which I danced my life away.

Gerold
June 16, 2013

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It took me less than 10 minutes to clean my car’s MAFS using CRC SensorKleen and now it’s purring like a kitten. Watch the video for a demonstration.

I didn’t even know what an MAFS was until I read it on a discussion board about K & N air filters which I highly recommend for improving BOTH power & mileage.

I found by research and experience that increasing the efficiency of air flow into the engine throttle improves horsepower AND gives better mileage. It’s the only change you can make that improves both. Everything else you can do for either power or mileage is a trade-off.

Usually, a power increase uses more fuel, hence poorer mileage. On the other hand, an improvement in mileage (i.e. less fuel) results in less horsepower. Only increasing the efficiency of air flow improves both.

Paper air filters and factory air inductions are not efficient. One of the best ways to increase air flow is with a K & N air filter. A further step to increase air flow is using both a K & N air filter and a ‘cold air induction kit’ but an induction kit is fairly expensive.

Note: the downside of K & N air filters is they take a bit more work because, instead of discarding a paper air filter, the re-usable K & N’s must be cleaned, dried and re-oiled. On the other hand they have a lifetime warranty and the fuel savings more than pays for the extra expense of a K & N.

I calculated about a 6% improvement in city mileage and almost 10% on the highway but remember; every vehicle is different.

If you have any suggestions, please leave a comment below.

Gerold
June 9, 2013
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The Fukushima nuclear disaster will be with us forever. Not only did the multiple melt-throughs contaminate the air, seawater and the wind blowing across North America but, radioactive contaminated fish were caught off the California coast. Think twice before eating West coast fish.

Tissue samples from 15 Bluefin Tuna all contained cesium-134 and cesium-137. The Wall Street Journal in U.S. Tuna Has Fukushima Taint quotes Nicholas Fisher at Stony Brook University, a marine biologist who was part of a study group, “We found that absolutely every one of them had comparable concentrations of cesium-134 and cesium-137.” Another biologist from that study said, “There were fish born around the time of the accident, and those are the ones showing up in California right now. Those have been, for the most part, swimming around in those contaminated waters their whole lives.”

It’s not surprising that the ass media downplays this as seen in CNN’s headline Fukushima tuna study finds minuscule health risks.

And, Reuters reports, “that the amount of radioactive material detected was far less than the Japanese safety limit.”

That’s utter bullshit! In the first place, the criminal Japanese government INCREASED the safety limit after the Fukushima disaster to avoid a panicked Japanese population stampeding off the island. The U.S. government did too. See HERE and HERE.

In the second place, there are NO SAFE LEVELS OF RADIATION. Washington’s blog does an excellent job of exposing governments’ criminal attempts to keep us calm while we’re being poisoned. See HERE.

I strongly urge you to click on that link and read a very thorough exposé of governments’ and the nuclear industry’s attempts to make us accept dangerous levels of poisoning.

The ass media continues to conveniently overlook the never-ending incompetence of Tokyo Electric Power Company (TEPCO), the owners and operators of the disastrous Fukushima nuclear power plants. Just in the last three months, the imbeciles at TEPCO have created one disaster after another.

In March, a failure of the cooling of the nuclear fuel was “caused by a problem with temporary electrical distribution boards installed in three of the plant’s four crippled reactors.” For more details see HERE and HERE and HERE.

In April, an underground tank storing radioactive contaminated water leaked. For more details see HERE.

In June, “the operator of Japan’s Fukushima Daiichi nuclear power plant on Wednesday admitted it had found another leak of radioactive water, the latest episode in a growing catalogue of mishaps.” See HERE.

The bungling idiots at TEPCO couldn’t find their butts if they used both hands. They aren’t capable of running a lemonade stand yet they’re still in charge of nuclear power plants as well as trying to clean up the six plant disaster at Fukushima. And, to top it off, the Japanese government reversed course and, instead of keeping all their nuclear plants off-line as originally announced, they are now planning on restarting them again.

Stay tuned. Just when you think it can’t get any stupider or more dangerous …

Gerold
June 9, 2013

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Congratulations to Resolute for having the balls to challenge the Luddites & failed Marxists at Greenpeace for their pseudo-science and partisan politics.

Resolute sues Greenpeace for $7M

Gerold
June 5, 2013

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A long winter dragged into a late spring, so there’s a lot of ground to cover with a gloomy outlook and lots of ugly graphs in the forecast in this global economic collapse update.

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Stock Market Crash Alert

First things first. I’ve been telling you for months not to panic out of the rising stock markets, “don’t fight the Fed” and other central banks whose cash injections to their crony bankster buddies are propelling stock markets to dizzying heights. Actually, priced in gold, stock markets have been crashing since the year 2001 but that’s another subject.

However, I am now issuing a stock market crash alert. There are so many commentators calling for a stock market crash this summer that it may become a self-fulfilling prophecy. Stock markets rarely crash in summer. They usually crash in fall so I may be early.

Warning: I am usually early in my predictions but it’s better to be months too soon than a day too late. I’m not an accredited financial advisor so I cannot give you investing advice but I can tell you what I’m doing. I am lightening up on most of my equities except for some recently purchased, incredibly cheap gold & silver mining stocks. They may get hit during a crash but they’re already so low they won’t go much lower so the risk is minimal. Govern yourself accordingly.

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Bond Market Crash Alert

Never before have I had two crash alerts in the same post. This is certainly a sign of the times!

Bonds (debt) are the largest bubble the world has ever seen. Bubbles burst. The bond bubble has begun to burst.

The price of bonds and bond yield (interest rates) are inverse to one another. If one goes up the other goes down. Yield has been close to zero for a long time. However, interest rates on bonds are starting to climb.

Michael Craig, Portfolio Manager at Sprott Asset Management says, “We are entering a generational bear market for bonds. Investors should reduce allocations to index bond funds. Clients should consider adding positions to ‘go anywhere’ bond funds that have the flexibility to increase their cash levels and potentially short bonds where appropriate.”

The chart above shows the recent rise in interest rates.

This also spells disaster for governments and their enormous debts. If they cannot keep interest rates down, the interest carrying cost on government debt will skyrocket. This means less tax revenue will be available for education, fixing roads, social welfare, etc. as more tax revenue is diverted into paying interest to the extortionist banksters.

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Post-It Note Bubbles & Crises

To illustrate how much global economies have deteriorated, the picture below is a Post-It note I stuck to my computer monitor in 2007. That was so long ago, the glue dried, the note fell off and I now use tape to keep it on as a reminder of where we are and how little has been fixed.

As per that ratty Post-It note, in 2007 we had bubbles in:
- housing
- commodities
- U.S. dollar
- global debt
- stock market (equities)
- derivatives
- government debt

And we had crises in:
- sub-prime mortgage
- credit
- bond insurance [a large part of derivatives]
- confidence

How much has changed? Well, the U.S. and southern Europe housing bubbles have burst, sending economies into a tailspin. Canada and Australia are about to burst. The commodity bubble is less frothy but although commodity prices have declined from their peaks, they are still at historically high levels compared with consumer purchasing power and this contributes to stealth inflation – that’s REAL inflation hidden behind a façade of fictitious government statistics.

And, the U.S. sub-prime crisis has done its dirty work but too late to have prevented over a quadrillion dollars of worthless derivatives that are now propping up shaky banks’ balance sheets and that central banks are buying at face value in exchange for cash so their bankster buddies can speculate in market casinos. If any of this does NOT concern you, please share whatever it is you’re smoking.

However, these problems been replaced with a global currency war that no one officially admits, a slowdown in China as well as other emerging markets that is about to impact resource nations like Canada, Australia, Brazil, Norway and Russia; a trillion dollar U.S. student debt bubble and the largest bubble in history; a bond bubble.

Looming on the horizon are trade wars and the “forever’ war on terror. So that’s three down, four up and two more to go. That’s NOT an improvement; it’s continuation of the collapse I warned about more than 5 years ago.

To make matters worse, both global debt and government debt have increased exponentially, the U.S. dollar bubble has only a few years left, the credit crisis is worse as banks still aren’t lending to small businesses (the real driver of our economies) and we no longer have to worry about confidence because there’s none left.

Never underestimate the importance of confidence because it is the foundation of law, government, finance and our economies. The whole house of cards rests on confidence. We need to be confident that laws will be enforced, that contracts will hold, that currency has value and that financial instruments are more than just worthless pieces of paper.

Unfortunately, law enforcement is becoming the jack-booted thugs of the wealthy and the enemy of ordinary people. Contracts are becoming meaningless as Jon Corzine who robbed the clients of MF Global is still a free man and the Cyprus bank bail-in has become the prototype for similar legislation elsewhere (including Canada). Currencies are being devalued and financial instruments, the life-blood of the world of finance, are turning into toilet paper.

So, if you think that things are better now than six years ago when I pasted that Post-It note, then that’s some really powerful shit you’re smoking!

Here’s a video with 3 minutes of clarity from Ron Paul & Jim Rogers at the recent Sovereign Man conference that sums up what I’ve just covered..

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Bail-ins Coming to a Country Near You

Both the United Kingdom and the U.S.A. are proposing Bail-in legislation (Cyprus-style). This means depositor’s money will be at risk. Get your money out of the matrix or risk losing it by having it turned into worthless financial instruments with fancy names signifying nothing (toilet paper).

According to the Wall Street Journal, in their article, “Deposits Guaranteed Up to $250,000—Maybe: What does it mean to be ‘Backed by the full faith and credit’ of the U.S.?” May 28, 2013

“The International Monetary Fund has tracked 147 banking crises since 1970. Around the world there have been more than 250 defaults on government debt since 1800, an average of about one sovereign default per year.

“The U.S. has had two housing finance disasters in the past three decades alone, the Savings and Loan Crisis of the 1980s and the subprime mortgage crisis that began in 2007.

“Yet one peculiar characteristic of deposit guarantees in the U.S. is not as well known or appreciated as it should be—especially as federal debt reaches stratospheric levels. When Congress created the Federal Deposit Insurance Corporation in 1933, the fathers of the Banking Act assured the public explicitly that the federal government, i.e., taxpayers, were not on the hook for losses to depositors.”

Since total bank risk greatly exceeds both the deposit insurance funds AND the entire government’s ability to guarantee everything, it’s the ultimate “con” game. Deposit insurance is designed to inspire CONfidence. Confidence is a feeling. Feelings can change when impacted by reality. They can change fast.

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Stable Canadian Banks Bullshit

Canadians who think “it can’t happen here” will be in for a nasty surprise when it does. Many Canadians still mistakenly believe that Canadian banks are “solid’. Canadian banks are not solid. They are also on a fractional reserve system like all other banks world-wide. A ‘bank run’ will result in a ‘bank holiday’ as happened many times in many countries throughout history.

There WILL BE a global banking collapse. It has already started with small banks (think Cyprus) and will spread to ever larger ones. The small banks will be “saved” by stealing depositors’ money but the collapse will spread through globalization’s interconnectedness until it hits a bank too large to bail. Then the entire global banking system will collapse in the blink of an eye.

Here’s a video about Canada’s banks being bailed out during the financial crisis

Study Reveals Secret Bailout to Canadian Banks

All five major Canadian banks were bailed out to the tune of $114 billion. That works out to 7% of Canada’s GDP or about $3400 for every Canadian. To put that into perspective, if the same were to happen in the U.S. with ten times Canada’s population, the bailout would have been $1.14 trillion.

Also, if you doubt that the banks don’t own us, consider that the total amount of the last bailout was MORE than enough to have bought all the stock in the banks. In other words, we, the taxpayers could have been the new owners. So why didn’t that happen? Because they own us and the politicians. The banks run the show. Bank CEO’s are the highest paid CEO’s in Canada. Not surprising they still received obscene levels of bonuses for having robbed Canadian taxpayers. As George Carlin would put it, “they own YOU”.

If the banks got into trouble once, they’ll get into trouble again and very soon. Two possible triggers are:
1) housing crash caused by the Canadian real estate bubble bursting
2) the next recession for which we are overdue since they occur every 4 or 5 years

Except, next time they won’t be bailed-out, they’ll be bailed-in with depositor’s money. More on this below.

So where’s your money? If you ain’t got it, then you ain’t got it. I keep only enough in the system to pay bills. So, if you want to donate your hard-earned cash to the black-hearted banksters, then keep it in the system where they’ll steal it. There are few things I’ll guarantee but I guarantee they will steal your money. Otherwise, why would Canada have bail-in legislation?

In case you haven’t seen 12 year old Victoria Grant’s YouTube video explaining Canada’s Corrupt Banking System, here it is:

The US, England, Canada, and New Zealand, have announced similar ‘bail-in’ policies like Cyprus. This is a sign that a collapse is both probable and imminent. By the time you realize you “should have” removed your deposits from the banks and credit unions, it will be too late.

Do you still have money in a Canadian bank or Credit Union? As reported in Bank Run Alert and in Bailout News Misdirected ALL banks worldwide are in trouble. Governments can no longer ‘bailout’ the banks so they are now resorting to ‘bail-ins’ by confiscating depositors money. That means YOUR money if you have money in the bank.

In Back to the Dark Ages I reported that Canada will soon have ‘bail-in’ legislation like Cyprus as outlined in the latest Federal budget Canada Economic Action Plan for 2013.

The top of page 145 (PDF page 155) you’ll see that they’ve legalized bank deposit confiscation in Canada like they did in Cyprus. .

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Amerikan Suicides Increase

Washington’s Blog in a report titled More Americans Committing Suicide than During the Great Depression says, “Higher Numbers of Americans Take Their Lives than During the Depths of the Great Depression.”

The population of the U.S. is higher now than during the Great Depression and the suicide rate (number per 100K) is not yet as high as during the Great Depression but the rate is climbing. The sheer number of suicides, however, is shocking as it has surpassed the Great Depression.

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ShadowStats Real Economic Numbers

The financial ass media spin, distort and censor reports about the real condition or our economies. They use governments’ fictitious and fudged statistics. If more investors saw the real numbers they would run away from depreciating fiat currencies and bubblicious bonds and into real assets like gold, silver, food commodities and farmland.

Central banks have injected tens of trillions of dollars trying to juice economies into real recovery. Of course, the result is inflation which fictitious government statistics try to hide. Don’t forget that the definition of insanity is doing the same thing over and over and expecting a different result.

Not only are the authorities insane, they’re incredibly incompetent. They think this downturn is no different than past post-war recessions and the solution is the same; government borrowing and spending. Except they’ve been doing this longer than any time in history and it still isn’t working.

The reason it’s not working is because this is NOT a typical post-war recession nor is it a typical business cycle down-turn. If it were, we would be well past the recovery stage by now and our economies would be booming.

We are sliding into a Greater Depression caused by a major credit crisis that is exacerbated by a major confidence crisis. We are in the clutches of insane Central Bank serial bubble-blowers whose one-track feeble brains know how to do only one thing; print more and more money.

Consider Shadowstats.com summary of the REAL numbers versus the bullshit “official” statistics for the U.S.. John Williams’ ShadowStats calculates statistics the way they were calculated in the 1980s and 1990s before the government’s bullshit campaign began cooking the numbers. Below are the Bullshit numbers vs Real numbers

Bogus Official Numbers vs. Real Numbers
Annual U.S. Consumer Price Inflation reported March 15, 2013
1.59% / 9.62%

U.S. Unemployment reported April 5th, 2013
7.6% / 22.9%

U.S. GDP Annual Growth/Decline reported March 28, 2013
1.67% / -2.20% (i.e., Negative 2.2%)

Below are more ShadowStats recent summaries

April 24, 2013
- First-Quarter Durable Goods Orders Contracted at 1.6% Annualized Pace
- Home Sales Activity Constrained by Consumer Liquidity Woes
- GDP Revision Games Monetary Base Tops $3 Trillion

May 3rd, 2013
- Employment and Unemployment Data Were Nonsense:
The Economy Remains in Serious Trouble
- April Unemployment: 7.5% (U.3), 13.9% (U.6), 23.0% (ShadowStats)
- Annual M3 Growth Holds at 4.3%, Monetary Base at 14.7%

May 10, 2013
- Federal Debt Ceiling Suspension Only Goes through May 18th
- State-by-State ShadowStats-Alternate Unemployment Measure Ranges from 8.0% in North Dakota to 35.4% in Nevada, California at 30.8%

May 13, 2013
- April Retail Sales Gain Was Statistically-Insignificant, Annual Growth Still Signaled Intensified Economic Downturn
- Dollar Fundamentals Remain Abysmal

May 24, 2013

- Revised Durable Goods Orders Showed a Weaker „Recovery‰
- Home Sales Remained Stagnant

May 30, 2013
- $25 Million Shy of New Debt Ceiling, U.S. Treasury Holds $16.1 Billion, About One Day‘s Worth of Regular Operating Cash
- Since Onset of Expanded QE3, Fed Has Monetized 73% of Net Public Treasury Debt Issuance, Should Hit 100% by Mid-July
- Fed Locked into Quantitative Easing for Foreseeable Future by Economic Woes, Banking System Difficulties and Treasury Borrowing Problems
- Narrowed Budget Deficit Forecasts Reflect One-Time Accelerated Tax Receipts, ‘Dividend‘ Payments and Overly-Optimistic Assumptions, Economic and Otherwise
- Developing Washington Scandals Could Impair U.S. Dollar
- General Outlook Has Not Changed

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Japanese Kamikaze Quantitative Easing

Insanity knows no national boundaries. Japan, the world’s 3rd largest economy has been in a depression since 1990 (23 years!) when they were the world’s 2nd largest economy. They have now embarked on a “Quantitative Easing (QE) money printing scheme that is proportionately twice as large as the Amerikans have attempted.

QE hasn’t worked for the U.S. nor the first nine or eleventeen times it’s been tried in Japan, so now they are going “Banzai” – it didn’t work before but now they are going to do LOTS MORE of the same thing that didn’t work before. I wonder what they’re smoking.

Once again we see the definition of insanity is doing the same thing over and over and expecting a different result. It’s also a sign of desperation. Japan has a very real demographic problem. The bulk of their population is aging and retiring. Until now, much of Japanese government debt (bonds) has been held by its own citizens as savings. Now that many are retiring, they will be cashing in their bonds to finance their retirement.

Japan is doing a Banzai Hail Mary Pass. It’s one last desperate attempt to stimulate the dead corpse of the Japanese economy back to life before bond selling exceeds bond buying. The Western ass media’s eyes are on the travails of Europe but the collapse won’t start in Europe. My money is on Japan. Correction: my money is NOT on Japan if you know what I mean.

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Why QE Does NOT Work as Advertised

The Daily Bell says about neo-Keynesianism that they, “hav[e] shown nowhere in the civilized world that government can create an expansion out of a depression simply by printing money. Given its total failure and the loyalty it enjoys, nonetheless, among top political and business leaders, we are not surprised it is receiving another go round in Japan.”

Jim Sinclair said the Cyprus ‘bail-in’ might be a scare tactic to push money out of the banks and into the economy, stocks and bonds. He said: “So it seems we have a last ditch effort to change the effects of QE, where we have only gotten a sideways movement in economic indicators to some sort of an uptrending line. It’s a huge gamble because if it doesn’t significantly impact the economy, it will clearly weaken the banks which are already weak in the first place… The reason it will weaken the banks is if the banks lose deposits of cash and near cash deposits, the strength in assets of the bank are reduced while the liabilities remain the same. So this is a huge gamble, an attempt to resuscitate the economics around the world with the risk that they are setting up another banking crisis…” So the catastrophic danger here is if the central planners fail they will have totally run out of tools and this thing will implode because they will have inherently weakened the banking system at the most inopportune time. This is one of the most dangerous and potentially fatal gambles in history.”

Remember, we have NEVER been here before. The Elites are desperate and scared shitless. There is no play book for this. They’re winging it. They haven’t a clue what they’re doing and judging by their lack of success since the two Bear Sterns’ hedge funds imploded in 2007, they will fail at this as they have everything else.

It’s not a conspiracy. Never attribute to conspiracy what is, in fact, utter stupidity.

By the time the idiots realize Keynesian tricks don’t work, the global economy will be a smoking ruin.

If the idiots think that by making bank deposits dangerous i.e. bail-ins or QE devaluation that people will spend, spend, spend the economy back to health; it ain’t workin’. I for one am putting my money under the mattress (figuratively speaking, of course) and converting it to real assets that desperate governments can’t get their hands on.

Then too, nothing in politics happens by “accident”. Our Lords & Masters would not hesitate to destroy us in order to save us. I wouldn’t put it past them to engineer a catastrophic collapse to frighten us into giving up more of our sovereignty and freedom (whatever’s left of it) to join the larger collective. This is not conspiracy. This is human greed, avarice, lust for power and stupidity; all the hallmarks of government. This is why government, ANY government is inherently evil. It starts out small and benign, and then grows like a malignant cancer until it destroys its host and itself in the process.

This is why you must protect yourself; keep your assets off the government’s radar; even to the point of using social media sparingly. Text and photos of vacations and new cars, boats and other toys can come back to bite you. Rest assured, the taxman is combing Facebook and other social media for signs of wealth they can accuse you of hiding. Never forget that the taxman has more power than even the police. Your so-called ‘rights and freedoms’ mean nothing to the tax department. By the time you’re lucky enough to win an appeal, you’ll be penniless.

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Great Depression Unemployment Bullshit

For a couple of years I’ve come across oblique references that the unemployment rate during the last Great Depression was actually less than the general consensus of 25%. I haven’t written about it until now as I haven’t been able to substantiate it. I’ve now located that information.

First, there’s a lesson here: never trust general consensus as it’s usually wrong. Second, keep in mind that there were no unemployment statistics kept during the Great Depression so unemployment was estimated long afterwards. And third, the Great Depression lasted about twenty years so the 25% number is suspicious because one would expect unemployment to vary from year to year.

I finally found the Washington’s Blog article called Unemployment During the Great Depression Has Been Overstated and Current Unemployment Understated (We’ve Now Got Depression-Level Unemployment)

When estimating the Great Depression’s unemployment rate, the Bureau of Labor Statistics (BLS) economist Stanley Lebergott INCLUDED government employees (for reasons not explained). As government employed about 6% of the workforce, this means that the revised ‘consensus’ unemployment during the Great Depression would have been 19%, not 25%.

Furthermore, Christina Romer a former Chair of the Council of Economic Advisers as well as others have found flaws in Lebergott’s numbers. Washington Blog states that,” the calculations of economists such as Michael Darby are more accurate.”

Below are Lebergott’s number compared to Darby.

Year Lebergott Darby
1929 3.2% 3.2%
1930 8.7% 8.7%
1931 15.9% 15.3%
1932 23.6% 22.9%
1933 24.9% 20.6%
1934 21.7% 16.0%
1935 20.1% 14.2%
1936 16.9% 9.9%
1937 14.3% 9.1%
1938 19.0% 12.5%
1939 17.2% 11.3%
1940 14.6% 9.5%

Now consider that John Williams of ShadowStats calculates today’s U.S. unemployment at 22.3%. That’s higher than 11 out of 12 years charted by Darby. In other words, today’s U.S. unemployment rate is HIGHER than during the Great Depression.

See the chart below for official (bullshit) U3 (narrow), U6 (broader) and ShadowStats REAL unemployment.

ShadowStats unemployment rate is the blue line on top. The U.S. SUPPOSEDLY recovered in 2009. If so, it’s been a very jobless recovery. It’s not a recovery; it’s a Depression!

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Top 1% Only Half the Problem

Much has been said and written about the top 1% of income earners garnering an increasingly larger share of wealth versus the remaining 99%. While true, it overlooks the other half of the equation.

Since 1999, the wealth gap has also widened between those with college or university degrees and those with only a high school diploma according to a New York Times article
The 1 Percent Are Only Half the Problem.

Since the leftish “Grey Lady”, the New York Times is one of the Power Elite’s mouthpieces, one is tempted to ask what social ‘meme’ is being pushed especially since the article lacks statistics on this income disparity. With U.S. student debt levels exceeding the one trillion dollar mark, this would be a continuation of the push to increase student debt to even higher levels into bubble territory.

One is tempted to as ‘why?’ One reason would be to keep students out of the labour market and that would help fudge the unemployment numbers. Another reason is the old saw: “gold is for kings, silver for commerce and debt for slaves.” Since U.S. student debt is difficult to discharge in bankruptcy, an indebted population is more docile and less likely to revolt. It’s worked so far.

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Mad Max Class

I do not foresee a Mad Max world although there will be more areas (think Detroit) that will sink to Mad Max depths with the elimination of services (street lights, policing, sewers, water, etc.) and increasing lawlessness, gangs and violence. However, what we WILL see in much of the world is a new definition of class.

One of our predominant Western myths is that we have classless societies. I hate to burst your bubble, but we have always had classes and we always will. Most of us simply haven’t been trained to notice yet we are subconsciously aware of it and more so in some areas like Europe.

I remember visiting my uncle, a doctor in Germany. My brother, sisters and cousins were strolling along a farm road with my uncle. I wanted to take a picture of them in front of a combine with a handful of farmworkers. By the time I had adjusted the manual settings on my camera, the farm workers had moved off to the side to remove themselves from the picture of the “good doctor’ and his family. And yet, if I had asked them about class distinctions, I’m sure they would have said there were none.

By ‘class’ I mean more than just the ultra-rich at the top, a huge middle class in the middle and the invisible poor at the bottom.

The middle class has never been a homogenous majority although the era of cheap credit and increasing debt that has now ended gave us that perception. The increasing income disparity between college/university graduates and high school diplomas discussed above is just one of the ‘divides’ that will become more apparent in the future.

Another ‘divide’ will be the working poor. As more manufacturing is off-shored, the demand for and the salaries of ‘knowledge workers’ will increase. The wages of unskilled or semi-skilled workers will continue to decline especially when impacted by the stealth inflation of essentials like groceries and gas.

The chart below shows that labor’s share of the national income is the lowest it’s ever been since statistics began in 1950 – that’s more than 60 years ago.

David Rosenberg who prepared the graph above is wishfully thinking that a trough has been reached. I’m not so optimistic as I foresee a continuing decline.

Demographics (always underestimated), will also make class distinctions more apparent. As more Boomers reach retirement age, some will continue working longer out of necessity but no one lives forever so the eventual demise of this large sector of our population will increase the ‘brain drain’ making knowledge workers in even greater demand.

We have seen this disconnect between required skills and job openings for some time now as shown in the chart below.

Not surprising, the incompetent public indoctrination education system is failing to forecast needed skills.

As a result of continuing economic deterioration, we will see three very distinct classes.

1) The “invisible” ultra-rich hiding behind stone walls shielded from public view

2) The well-to-do technocrats who administer what’s left of the economy

3) The great mass of dumpster-diving, desperately poor that are no longer invisible but will constitute the great mass of humanity.

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Gold & Silver Smack-down

Gold and silver, as I said recently, have been hammered hard. Central banks and their bankster handmaidens are desperate to prop up their failing fiat currencies so they need to attack and discredit their enemy: gold (& silver). This should not be a surprise. It should be a call to action, though. You should be backing up the truck and loading up on these precious metals now that the banksters have put them on sale at a price we may never see again.

Goldman Sachs (the “Vampire Squid’) alerted their investors to short gold. This added to gold’s selling pressure.

George Soros, who single-handedly broke the Bank of England and made billions in the process is also proclaiming the end of the gold bull market. He sold his gold months ago and publicly admitted it. He’s doing to gold what he did to the British pound; short selling it to make money on the way down except with a twist. You can bet that when the price of gold turns around, he will already have backed up HIS truck and bought more gold and at a cheaper price.

They are doing their best to persuade precious metal owners to sell. Why? First, by selling, it drives prices lower thus making their worthless toilet paper money look like it has value. And, second by driving prices down, they can buy gold cheaper.

China and Russia have been increasing their gold reserves for years. They are reducing their U.S. dollar reserves by converting them into gold. They can’t do it all at once. That would drive down the value of the U.S. dollar thus reducing the value of the Chinese and Russian U.S. dollar reserves. It would also increase the price of gold at a time when they want to buy more. So China and Russia are performing a balancing act by slowly converting their dollar reserves into gold.

That conversion is your opportunity to load up on gold and silver. You can’t fight the Big Boyz but you can do what they’re doing. First, do NOT panic and sell your precious metals. Second, buy more now that it’s cheap.

None of the world’s major problems have been solved. This gold smack-down is temporary. Gold & silver will again rise in price. Some day you will look back at this time and wonder why you didn’t see the obvious.

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U.S. Debt Ceiling suspended

RT, in the article Ceiling suspended: US takes on $300bn in new debt after hitting $16.7 trillion says, “America’s ticking debt bomb has been reset. Washington has suspended the debt ceiling, setting a date, and not a concrete dollar sum as a deadline, an unprecedented first in US history.”

“Citing ‘extraordinary measures’, the US Treasury has further delayed tackling America’s debt, and will wait until Labor Day, September 2nd, to revisit the burgeoning crisis. The ceiling has been lifted, and the Treasury has promised it will keep cash pumping into government spending programs beyond the debt limit through a series of emergency cash tools.”

In other words, the lid is now effectively off the debt ceiling. There is no longer any pretense that the money printing (QE) will ever stop. Government debt is now on steroids. Is it any wonder that interest rates are starting to climb, signaling the beginning of the bond bubble burst?

RT reports in Obama: ‘There is no debt crisis’ that the U.S. is $17 trillion in debt, but President Obama says there’s no reason to worry.

After the story above, only a psychopath like President Obama could say with a straight face, “We don’t have an immediate crisis in terms of debt … In fact, for the next 10 years, it’s gonna be in a sustainable place.”

Left unsaid is “sustainable for who?”

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U.S. Money Printing on Steroids Bullish for Gold

There is no doubt that there will eventually be much higher inflation considering how much money is being created out of thin air by ALL the world’s central banks. To see a visual representation of this is startling. The U.S. is a good example although the Japanese, on a proportionate basis are set to overtake the U.S.

In the last seven years as Fed Chairman, Ben Bernanke has printed
more money than the entire history of the U.S.A. over the previous 230 years. Remember, credit and debt are flip sides of the same coin and our fiat currencies are conjured into existence through debt. From 2006 to 2013 the U.S. debt exploded from $8.4 to $14.8 trillion while GDP rose only from $13.4 to $16.4 trillion. This astounding amount of debt vs GDP can be seen in the graph below.

Debt (in red) increased 100% while GDP (in blue) increased only 22% (and that’s if you can believe government’s cooked statistics).

This is all the more reason to hang on to your gold & silver because, as you can see from the chart below, debt and gold rise exponentially notwithstanding volatility in the short term (they’re on sale right now but availability is limited and requires patience).

In the chart above, gold (in yellow) aside from a frothy run-up in 1980 and a following over-correction, tracks the exponential increase in debt (in blue).

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Gold Bugs Just Don’t Get It

I keep reading commentary how certain inevitable events (usually inflation) or central bank actions (QE to infinity) will make gold bugs happy because the price of their favorite shiny yellow metal will increase dramatically. Those commentators just don’t get it. It doesn’t matter how “high” the price of gold (or silver) goes. Whether the “price” of gold goes to $2,000 or $5,000 or $10,000 an ounce, one ounce of gold will still buy the same stuff next year as one ounce buys today as one ounce bought a thousand years ago.

The reason for that is very simple. Gold, as I’ve said many times, is NOT an investment. It is NOT a commodity. It IS money. Can it be any more plain and simple than that? Gold and silver are money.

Price and value are two different things. As Warren Buffet said; price is what you pay. Value is what you get. The value of gold remains fairly constant over time. An ounce of it buys the same thing today that it bought 100 years ago or 200 years ago or 1,000 years ago or 2,000 years ago. The “price” is simply how much paper money it takes to buy an ounce of gold. Since paper money is slowly and constantly devaluing due to inflation, it takes more paper money to buy an ounce of gold. But the value (purchasing power) of gold (aside from short-term “price” fluctuations) remains fairly constant over time.

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Addictive Central Bank Money Printing

There is considerable concern about the effect of the gargantuan size of central bank stimulus. Mike O’Rourke of JonesTrading says that central banks, “created a ridiculous situation where the entire market is just obsessed with every utterance from central bank chiefs, sucking away the oxygen from the real issues that should actually be driving markets.”

Gee, Mike, I’m glad you finally woke up and realized we no longer have markets; we have nothing but manipulation and intervention. He quotes Fed Ben Bernanke ten years ago, “I worry about the effects on the long-run stability and efficiency of our financial system if the Fed attempts to substitute its judgments for those of the market. Such a regime would only increase the unhealthy tendency of investors to pay more attention to rumors about policymakers’ attitudes than to the economic fundamentals that by rights should determine the allocation of capital.”

Gee, Ben, I’m sorry to see your justifiable worries coming true but aren’t you pointing the finger at yourself? We have met the enemy and he is us. Central banks have created the very condition that he worried about ten years ago.

In the 1970’s, Fed Chairman Arthur Burns kept interest rates too low, too long. The result was inflation that his successor Paul Volker fought with painfully high interest rates. Today, Fed Chairman Ben Bernanke has kept interest rates too low and even longer than Arthur Burns. See the chart below.

The most worrisome difference is Paul Volker applied painfully high interest rates at a time the economy was stable and strong, and although his cure caused a short term recession, we quickly recovered once inflation was wrung out of the system. Today, the economy is neither strong and nor stable. It is weak and fragile. Ben Bernanke’s successor will have a stark choice to make.

1) Increasing interest rates will destroy the economy as well as the government with its enormous debt.

2) Avoiding high interest rates will cause hyperinflation.

In other words, we’re damned if they do and damned if they don’t.

In a free market, price controls are not necessary because the market will find the correct price of everything. If a price is too high, substitutes are found which reduces demand for the high priced item thus lowering its price. Or, the high price attracts competition which increases supply thus again lowering the price. Low prices work in the opposite direction.

Central planners CANNOT set proper prices regardless how many PhD’s they have. Centrally planned economies result in distortions and poverty. Think Cuba, Venezuela, Argentina, North Korea and the former Soviet Union.

When central banks set interest rates, they are setting the price of money. Central planning does NOT work. The chart below clearly shows that periods of low interest rate policies have always led to excess, malinvestments and bubbles.

Conspiracy theorists might even claim that it’s all a diversion. Investors are so focused on central bankers’ prognostications and subtle nuances, they fail to see the rapidly approaching cliff. As the exposed Wizard of Oz said, “Pay no attention to that man behind the curtain.”

Yes, boys and girls, what’s left of our economies are so broken and circling ever closer to the drain that our hapless leaders are putting on a blackface minstrel show to divert ADHD investors’ attention from the real matters at hand; namely our collapsing economies, increasing debt, lack of effective leadership, cronyism, corruption – as I endlessly repeat myself.

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U.S. Housing Recovery Bullshit

The Elliott Wave Theorist reports

“Headlines proclaim that the real estate market is recovering. ‘Best market in five years,’ say the statistics. It’s a true statement. But to understand how misleading it is, look at [the chart below]. The latest recovery has taken … one-family home sales back only to the levels of prior recessionary lows. Had these measures fallen straight to current levels from 2006, people would be calling it a deep slump.”

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Poverty is Good for the Planet?

Just when you think you’ve heard it all – how about “poverty is good for the planet”? I don’t know whether to laugh or cry.

Stock Market Advantage asks, Is the Retirement Crisis Really a Crisis?

“However, is this really a crisis?

“Seniors having less is actually good for the environment, as their carbon footprint is on the decline. The bottom 90%, whose economic influence wanes, drive around less, are forced to monitor their electricity consumption, and so forth. The top 10%, whose wealth continues to increase geometrically, can travel a limited amount and consume only so much steak and lobster. Is it not a good thing for the sustainability of planet Earth that wealth gets re-distributed from prospective retirees to the Wall Street elite?

“Also, many seniors short on retirement funds will be forced to continue working, which may actually be good for their physical fitness, well-being and sense of worth. Where is the crisis?”
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Reinhart & Rogoff Scandal

Harvard economists Reinhart & Rogoff published that there was a negative correlation between public debt and economic growth. Some errors were found in some of their work but, the scandal has morphed into a straw man fallacy

Two of the important conclusions they reached.

a) Debt to GDP ratio in excess of 90% causes a 1% drop in GDP
b) No country ever survived long term with the ratio greater than 90%

Their work has shown to be sloppy by excluding New Zealand (hardly a major country) and a formula error on their spreadsheet makes one wonder if anyone with brilliance ever came out of Harvard. In any case, governments are now using this as an excuse to continue expanding their debts as well as imposing austerity

Canada is an instructive example. The Canadian government under the Chretien Liberals Minister of Finance, Paul Martin, successfully cut spending to reduce the deficit. What the ass media usually omit is this was done after the economy had already recovered and GDP was growing at 5% per annum.

So the first conclusion (a) isn’t a hard and fast rule in cases where an economy is on the mend.

However, we shouldn’t overlook the second conclusion. Almost all governments worldwide have ratios in excess of 90%. Furthermore, none of them have economies that are on the mend.

So, as sloppy as Reinhart and Rogoff’s work was, their conclusions are still painfully instructive.

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Are You Still Watching the Ass Media News?

If you answered yes to the question in the title, take a look at this short video.

Mindless Media Parrots | Brainwash Update

I liked the part where economic factors may take some spring out of the Easter Bunny’s step this year.

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U.S. Employment Report Bullshit

Agora Financials’ 5 Min. Forecast says “On the surface, it was a sunny report: 165,000 new jobs in April, a bit more than needed to keep pace with population growth. The U-3 unemployment rate dipped to 7.5%, the lowest since December 2008.”

“Back in the real world, unemployment measured the way it was during the Carter administration — and the way John Williams at Shadow Government Statistics measures it today — ticked up to 23%. That’s an all-time high.

“But even in the official numbers, there’s a fly in the ointment: average workweek. This figure ticked down from 34.6 hours to 34.4.

“I understand there are costs to health care reform,” says Tara Sievers, “but it is surely not the intent of the law for employees to lose hours.”

“Ms. Sievers works part time for the city of Long Beach, Calif. She’s one of 1,600 part-timers whose workweek has been shaved to 27 hours or less… thanks to the law whose name carries an ever-increasing burden of irony — the Affordable Care Act.

“The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more,” explains the Los Angeles Times. “But rather than provide health care to more workers, a growing number of employers are cutting back employee hours instead.”

“Like the city of Long Beach. It’s slashing payroll hours to avoid new benefits costing up to $2 million next year.

“Big restaurant chains, retailers and movie theaters are starting to trim employee hours,” the paper goes on. “Even colleges are reducing courses for part-time professors to keep their hours down and avoid paying for their health premiums.” Research from the University of California shows as many as 2.3 million workers nationwide are at risk of losing hours thanks to the new law — which will do nothing to bring this number down…”

“The City of Long Beach is hardly alone. The Commonwealth of Virginia is doing the same. So is the Regal movie theater chain.

“That will be a widespread strategy,” Dede Kennedy-Simington of Polenzani Benefits tells the Times. “Employers will be making sure their payroll system can flag when part-time workers are getting close to the cap they set.”

Another way to see through the government bullshit unemployment numbers is to look at the number of people who have left the labor force. See the chart below.

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Worse still, the length of unemployment time has increased as the jobless take longer and longer to find new employment in the chart below.

These are all very ugly charts. They do NOT portend a rosy future

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Still More Economic Bullshit

An International Monetary Fund (IMF) study queries whether blanket curbs on banks are worthwhile. But they added that the proposed reforms would not have prevented the crisis at Lehman Brothers in September 2008, the event that brought the global financial system to the brink of collapse

What utter bullshit! The entire global financial system BROKE in 2008 and the whole world saw the giant Ponzi scheme that it had become. The Lehman collapse was simply the trigger that set off a BROKEN global financial system. It’s not the trigger that exploded but the whole global financial powder keg. The global financial system cannot be repaired. It is collapsing before our eyes.

Panic-stricken governments have been printing historically unprecedented amounts of money and keeping interest rates at unprecedented zero levels for an unprecedented length of time. How many times must I repeat the word ‘unprecedented’ to convey the concept of ‘never before in history’ have we ever seen this.

The global financial system has been collapsing for 5 years now although some analysts say the real downturn began as long ago as the year 2000. I foresaw it and warned everyone I knew the year before the so-called ‘financial crisis’ in 2008. So did many other ‘nutcases’. Few listened to them, too.

Here we are five years later and NOTHING has been fixed and we’re about to slide into another recession that’ll be longer and deeper than the last one except we are NOT coming out of this one. The end result will be a lower standard of living for everyone although some people will fare better or worse than others. What happens to you will depend on many variables such as:

• how prepared you are,
• how diversified your investments are,
• how much wealth you’ve hidden from the clutches of governments,
• where you live
• how much real money (gold & silver) you have,
• how much support you have from family and friends and
• how much you’ve unplugged from the matrix.

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Stock Market Bullshit

The DOW, the S & P and other stock markets are supposed to be rallying. That’s more bullshit! The indexes are rallying. The indexes are the scoreboard. The scoreboards are as phoney as a three dollar bill and as open to manipulation as every other economic indicator. They’re “painting the tape”. It’s like holding a match under a thermometer and pretending it’s getting warmer.

MarketWatch, in Lack of growth in the Dow reaches dire stage looks at the real numbers behind the index. For the valuation of the companies that make up the DOW, there have been “two consecutive quarters of no growth in the Dow. Both the fourth quarter of 2012 and, thus far, with 25 companies reporting for the first quarter of 2013, the Dow has had no growth for two consecutive quarters.”

In the most recent reporting season Caterpillar Caterpillar -0.25% and Exxon Mobil -0.59% had the worst revenue growth rates, with declines of 17.3% and 12.3%, respectively. The links above default to daily charts. Click on the ‘3Y’ (3 year) below the charts to see the decline.

Another way to see this is to compare the New York Stock Exchange to the ever-expanding Federal Reserve’s balance sheet in the chart below. All that stimulus and money printing has really done nothing.

The MarketWatch article goes on to say that, “in the fourth quarter of 2012, the Dow Jones Industrial Average had negative earings-per-share (EPS) growth and revenue growth of less than 1%. Thus far in the first quarter of 2013, the Dow Jones Industrial Average has had EPS growth of about 1%, but revenue has declined by 2.65%.”

“One might also suggest that without aggressive share-repurchase programs, the EPS results would be far worse than they are because the actual earnings in real dollars is declining for the companies that comprise the index. In reality, for two consecutive quarters, the Dow has actually been contracting.

“This information may surprise some investors because when earnings are reported, they are always compared to analyst estimates, and investors sometimes forget to look closely at combined year-over-year growth rates.

“For the Dow, year-over-year quarterly growth rates have been steadily declining since 2010. After the credit crisis, the growth rates were phenomenal, but those were compared to horrible results posted during the crisis, comps were easy, and earnings were just recovering from that meltdown.

“In addition, every quarter since 2010 has seen lower and lower year-over-year growth rates for the companies comprising the Dow, and now year-over-year growth rates have reached 0%.”

Then too, consider that these are nominal statistics and when you factor in the REAL inflation rate, or priced in gold, then all Western stock markets are shrinking.

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Inflation Statistics Bullshit

The “Big Mac Index,” has tracked the price of a McDonald’s Big Mac at restaurant chains across the world for several decades. According to Before Its News,

“Because McDonald’s caters to tens of millions of customers yearly and offers food at a fairly low cost compared to others in the food service industry, it is a fairly insightful gauge of consumer activity.

“According to the Big Mac Index, and contrary to the government’s claims of stable prices, since 2003 when the Federal Reserve really began cranking hundreds of billions of dollars into an already troubled financial system, the price of inflation is more than double what is being claimed.

“The Big Mac has gone up by over 6% per year, yet the government claims CPI is only 2.5% per year. So something’s wrong. Either something’s changed at McDonald’s, or something has changed in the way we report inflation. And I trust a hamburger more than I trust the U.S. government.

“That price [of the hamburger] went up in line with the CPI for sixteen years, and then in 2002 they started to diverge.

“What’s the explanation?

“Look at the chart below, and you’ll see that the divergence started taking place when the Federal Reserve started expanding our monetary base after the 2002 crash (with the largest spikes occurring after the 2008 crisis) and when the U.S. government turned to tripling our national debt.”

And, below is Peter Schiff’s take on it.

Big Mac Index Exposes Flawed Inflation Data

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Predictions, Prophecies and Prognostications

- A FaceBook posted sex assault at Canada’s Humber College is only one of a multitude of incidents of social breakdown that are increasing as economies and morals collapse. And this, in Canada; a kinder, gentler, supposedly civilized country.

- Demographics are always overlooked. A huge contingent of Boomers are retiring. They’ll be selling their homes with few young buyers so real estate prices will drop. Retirees on pensions have less income so they’ll spend less and consumer economies will continue to deteriorate.

- US credit rating agency wars will continue undermining other country’s economies. China’s sovereign credit rating is cut from AA- to A+ by Fitch Apr 9, 2013. This is like the psychopath that tries to make himself look better by degrading everyone else. The Amerikan government’s incompetent stooge rating agencies fail to understand that as a rising tide lifts all boats so does a falling tide lower all boats.

- Infrastructure will continue to breakdown for lack of funds for maintenance. There were three oils spills in the U.S. and a train derailment in Canada all in one week, sinkholes swallowing cars in major cities and a glancing blow to a girder by a heavy-haul trucker
collapsed the Skagit River bridge on I-5 in Washington state .

- Cities are broke so there will be more cut-backs, fewer police and more crime. “911 Dispatcher Tells Woman About To Be Sexually Assaulted There Are No Cops To Help Her Due To Budget Cuts.”

- Asset bubbles get larger and larger and burst more spectacularly than the last one. The largest bubble in all history is governments’ bond bubbles. When they burst (they all do) it will destroy global finance. Interest rates are already starting to rise so the collapse has begun.

- More individual banks will collapse until they all collapse. It’s not a matter of ‘IF’, it’s only a question of ‘When?’

- Each new round of QE is less effective at stimulating the economy; it merely increases the size of the debt bubble.

- The Powers-That-Be (PTB) are trying to scare us out of gold and silver. Why? Because they want gold & silver for themselves and they want them cheap. They realize their fiat currency hoax is nearing an end and they’re trying to convert their worthless money into assets of value like gold and silver. Central banks, banksters and the wealthy all want gold and silver but they won’t publicly admit it as it would drive up prices. Do NOT sell your precious metals no matter how low they go. Use price drops as a buying opportunity.

- Quantitative Easing (QE) will continue (perhaps by some other creative name) but, endless money printing will continue to feed inflation so standards of living will keep declining. Jim Sinclair calls it “QE to infinity”. Central banks lie and tell us they’ll stop when economies improve. Economies won’t improve and even if they did, they cannot stop QE to infinity, They will continue conjuring money out of thin air until it all collapses.

- Stock and bond markets will crash;

- There’ll be more bank runs and bank holidays;

- Credit will be unavailable;

- More QE money printing;

- More individual and corporate bankruptcies;

- More cities, states, provinces, hedge and pension funds in trouble;

- Futile but painful wage and price controls will drive trade and barter underground into dangerous black markets;

- Unemployment will increase;

- gold, silver, and commodity prices will skyrocket;

- Increasingly desperate governments will do increasingly desperate things to help themselves and their crony bankster buddies, but will hurt you thus creating more social unrest, rioting, demonstrations, chaos, widespread looting, murder and mayhem unlike anything seen in the West. When you see rioting in Sweden HERE and HERE, the mothership of socialist utopia, then you know that nowhere is safe.

- History doesn’t repeat but it does rhyme. The collapse of past empires foretells our own future. Economic collapse is followed by Great Depressions. Desperate governments then take desperate measures like QE. Then we see currency wars and currency devaluations like we’re already seeing with the U.S., the EU, China and Japan. Trade wars will lead to real wars which we also see in our “Forever Wars” on terror. Currency collapse leads to economic collapse. The continuing decline and disappearance of the middle class will lead to two tier societies; the ultra-rich and the desperate poor.

- David Rosenberg of Gluskin Sheff prepared the slide below that suggests investments to make for the future as we transition from low interest rate policies to high interest rate policies.

He also prepared a slide below showing investment themes to avoid in a future stagflationary environment.

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I’ve been closely tracking this downward trajectory for more than six years now. Depressions last about twenty years. This is no ordinary Depression. This is a very painful collapse and economic re-adjustment. Are you prepared?

Even within the class of the poor there will be gradients. Our standard of living will collapse, but some more than others depending on their individual situations.

Over the last several years of research I’ve uncovered steps you can take to minimize the pain. We cannot stop this slow-motion train wreck but, we can get out of its way.

- Accept and learn to understand this collapse. Denial is your enemy.

- Unplug from the matrix. Don’t just turn off your TV; throw it the hell away. That will encourage you to develop REAL sources of news instead of being led astray, or worse yet, led to the slaughter.

- Get out of debt as much as possible because in future your earnings will decrease but the prices of essentials will increase.

- Convert at least 10% of your assets to a mixture of gold & silver.

- Make a plan and try to cover as many reasonable contingencies as you can imagine. Don’t just think about it; record it, put it in writing and don’t just save it on your computer. Print it. What’ll you do when the electricity goes out?

- Form a team with family and friends to help with the planning. The greater part they play, the more ideas you’ll get and the less stress everyone will suffer when the inevitable happens.

- Don’t expect to convince stubborn people in denial.

- Loose lips sink ships. Keep your preparations a secret.

- Prepare yourself mentally for the unthinkable; you are going to lose some of your loved ones. Unbearable as that seems, you must include that in your planning.

- Work on your attitude. The most important attitude is NEVER GIVE UP.

- Prepare to be adaptable. Nothing ever goes according to plan but with a plan you can change it. Without a plan, you’re flying in the dark by the seat of your pants in panic mode under great stress and it’ll be too late to make a plan.

- The last half of Beware Your Dangerous Normalcy Bias covers these points and many more and in much more detail. The situation is not hopeless and you are not helpless. There is much you can do to get out of the way of this economic slow-motion train wreck. But, YOU have to DO IT. Neither the government nor anyone else will do it for you. And, the more you do, the more you practice, the easier it gets.

Are you prepared?

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Remember the mantra:

We cannot borrow our way out of debt.

We cannot spend our way to prosperity.

We cannot pretend our way out of trouble.

Gerold
June 2, 2013

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Defense Against the Psychopath is a documentary video excerpted from chapter one of Stephan Verstappen’s book; The Art of Urban Survival. It teaches people how to recognize and defend against our society’s most dangerous predators: psychopaths.

Recognising a psychopath is more than an academic exercise. It could be one of the most important skills you ever learn. Although only a small percentage of the population is psychopathic, they are most often found in positions of trust and leadership. In other words they are often in positions where they can cause you and your loved ones great harm.

They know your weaknesses. They know how to push your buttons. If you don’t recognize and defend against them, you won’t know who they are and what they’re doing until it’s too late. They prey on decent people. And, they cannot be cured.

The first line of defense against these people is acknowledging their existence. The second line of defense is learning how to recognize them.

Although many psychopaths attain political and corporate leadership positions because of their ruthlessness and charm, people around you; people you work with and know personally can also be psychopaths. Not all psychopaths are serial killers. Your aunt or husband might be a psychopath who controls, manipulates and leads people to ruin and heartache.

Two words of warning about the video below: First, it’s very disturbing. Second, don’t be put off by the photos of famous people; not all the people pictured may be psychopaths but I’d be willing to bet that many are.

This is a “MUST WATCH” video that shows you how to recognize and defend against our society’s most dangerous predators, psychopaths.

Defense Against the Psychopath (Full length) 37:38

I long ago learned to distrust videos (as well as TV) because it is difficult to engage one’s critical thinking skills. I prefer text for the simple reason I can read at my own speed, stop; think about what I just read and re-read passages. For you fellow skeptics, there is a PDF text version available by clicking HERE.

For further illustration of a psychopath’s thinking and glib justification, here is an essay written by an avowed psychopath.

Notice how cold, cunning, remorseless and self-serving she can be.

Although I’m allergic to most conspiracy theories, I do get very leery when too many coincidences pile up. I’ve long known that there are many people associated with Bill & Hillary Clinton’s past that have met with an untimely death, but I never knew until recently how long that list was. This is WAY more than coincidence.

There’s a total of 80 suspicious deaths (so far) including a James Milam who was decapitated and whose death the coroner ruled was due to natural causes. Try to overlook the poor grammar and spelling mistakes in this article about Arcancide.

By the way; Arkancide is short for “Arkansas suicide” because of the great number of suspicious suicides. This is what happens to people who get too close to psychopaths (Stalin & Hitler were notorious for murdering everyone who knew them). You need to be able to identify them in order to deal with them.

For more of these insightful Social Cost videos click HERE.

Gerold
May 31, 2013

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I read more than 200 articles a month to keep up with our deteriorating global economic situation and summarize pertinent points for my own blog posts. Every so often I find an article so broad-ranging yet concise and hard-hitting that I wouldn’t dare try to summarize it. Below is one. I’ve reprinted Stephen Lendman’s latest commentary in its entirety.

I did not write the article below so all credit belongs to Stephen. I merely recognize his insight.

Gerold
May 26, 2013

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Disconnect: Soaring Markets/Troubled Economies

Stephen Lendman

HoweStreet.com

Sunday, May 19th, 2013

Forget everything you learned about markets, economics and finance. Perhaps Newton, Galileo, Copernicus, Darwin, Freud, Einstein, and other noted figures were wrong.

Central banks run today’s world. Major ones matter most. Money printing madness controls everything. Love doesn’t make the world go round. Liquidity-driven markets reflect the power of bankers to do it.

They’re more powerful than standing armies. They can levitate markets. They can enrich themselves at the same time.

They can do it while economies crater. The power of massive liquidity infusions combined with market manipulation generates huge profits.

What can’t go on forever, won’t. What’s going on now defies reason. Disconnect barely explains it. US equity markets hit record highs. So did Germany’s DAX. Japan’s Nikkei reached a five and a half year high.

One recent headline read “Central banks pop champagne corks as stock markets soar.” Another said “Which European Market Will Hit a Record High Next?”

Turkey’s BIST-100 topped 91,000 for the first time. Switzerland’s SMI has a ways to go. It’s headed in the right direction. Sweden’s OMX Stockholm 30 and the OMX Nordic are closer.

London’s FTSE 100 looks poised for a record high. It could do so in weeks. Who said defying gravity’s impossible? Markets are doing it with ease.

Record valuations bear no relation to economic reality. Today’s disconnect is unprecedented. Paul Craig Roberts expects an eventual triple bubble explosion.

On the one hand, he says “rich elites are stealing everything for themselves.” At the same time, he cites “three of the biggest bubbles in history.”

“The bond market, stock market and the US dollar” are levitating. (S)omething is going to go. This is possibly one of the riskiest years in Western civilization.”

Combined with police state enforcement and imperial wars, it’s menacing.

Australian economist Steve Keen‘s Debtwatch web site “analyses the collapse of the global debt bubble.” He calls America’s stock market a giant one. It’s debt-fueled. Margin debt levels match 2000 and late 2007 highs, he says.

“Nothing can accelerate forever. At some point the acceleration stops, and when it does the market breaks.”

He believes trouble’s coming in one or two years. He thinks America’s stock market will burst the way Japan’s did in the early 1990s.

The key Nikkei Index peaked near 39,000. It did so on 1989′s last trading day. It fell 63% in less than three years. Rolling recessions and recoveries followed. It didn’t bottom until February 2009. It closed at 7,163. On May 17, it closed at 15,138.

According to Keen:

“I think we’re (heading for) a long slow bleed, much longer and slower than the Japanese stock market crash. The dynamics are similar.”

“In 500 years time,” he added, “people will look back and see this as the biggest debt-financed bubble in human history and ask, ‘why didn’t we realize it?’ ”

Bruce Krasting worked on Wall Street for 25 years. He’s no longer there. His blog site discusses financial issues. He calls Bernanke’s policy “reckless endangerment.”

He claims he can cease QE with no ill consequences. “It’s never been done before. Not by the Fed. Not by any Central Bank.”

“To think that such a daunting task can be accomplished without negative consequences is foolish,” said Krasting.

PIMCO’s Bill Gross sees bubbles everywhere. It doesn’t mean they’ll pop immediately.

Speculators assume Fed policy will remain accommodative “over the long-term and under the assumption that the US economy is doing better than most economies.”

Lots of money is chasing lots of risk, says Gross. Central banks are “blowing bubbles. When that stops, there will be repercussions. Not just in the bond market but in the stock market as well and a developing one in the hous(ing) market.”

Gross warned that the multi-decade US bond bull market ended. Higher interest rates will eventually follow.

A 1% rise means over $100 billion in more interest. It’s negative for economic growth. Most developed countries have debt to GDP ratios above 100%.

They’re manageable with record low interest rates. Higher ones risk default in troubled economies. European PIIGS countries are most vulnerable (Portugal, Italy, Ireland, Greece and Spain).

Marc Faber warns that “something will break very badly.”

“In the 40 years I’ve been working as an economist and investor, I have never seen such a disconnect between the asset market and the economic reality.”

“Asset markets are in the sky and the economy of the ordinary people is in the dumps, where their real incomes adjusted for inflation are going down and asset markets are going up.”

Graham Summers warns “It’s official: Stocks are in a bubble.” It’s worse than anything he’s seen in his career.

Stocks rallied every Tuesday for 17 straight weeks. Traders “are now conditioned to play for this move.”

It’s “POMO day.” [Gerold note: POMO is short for Permanent Open Market Operations where the Federal Reserve manipulates the stock market.] The Fed pumps markets with liquidity. Doing so drives stocks higher.

“The market is beyond overstretched. We have not had a 5% correction in six months. Stocks have gone almost straight up for 89 days (we haven’t had a 3+day correction in that long).”

“This is an all time record. The last time stocks rallied without a 3+ day correction was in the buildup to the Crash of 1987.”

“Copper is great at predicting economic growth.” It’s trending lower. Stocks are poor predictors. Major divergences between them will be resolved sharply.

Rampant insider selling continues. Stocks are disconnected from reality. They’re “totally out of control.” Most days hit record highs. It’s unprecedented.

“At this point, no long term investor in their right mind should be buying. This is especially true given that the S&P 500 is now not only totally disconnected from economic reality, but is disconnected from every other asset class.”

Stocks diverged from bonds, gold, copper and oil. They’re last to react. “This bubble will end as all bubbles do: in disaster.”

Main street conditions are worse than during the Great Depression. Europe’s as disconnected as America. More on that below.

Paul Craig Roberts calls offshoring US jobs a greater threat than terrorism. It’s been ongoing for years. It’s most felt when jobs are scarce. Good ones are fast disappearing.

Politicians remain in denial. Millions more jobs remain vulnerable. Displaced employees “left unemployed or in lower paid work have a reduced presence in the consumer market.”

Outsourcing jobs erodes US economic strength. China, India, Brazil and other developing countries gain at America’s expense.

Instead of using the nation’s resources for economic growth, Washington prioritizes militarism, permanent wars, and corporate giants’ interests at the expense of ordinary people.

It’s madness. It’s self-destructive. It sacrifices longterm economic health for short and intermediate term gains.

WW III already started. So far, it’s unlike WW I and II. It’s international, unconventional, asymmetric, disruptive, anti-democratic, lawless, low to higher intensity, political, psychological and financial.

Financial schemes involve:

massive wealth transfers from ordinary people to corporate giants and super-rich elites;

bail in confiscation of assets;

lawless sanctions, embargoes and blockades;

schemes to control natural resources, trade and money;

entrapping nations in unrepayable debt;

manufacturing financial crises, and more.

On May 16, the Global Europe Anticipation Bulletin (GEAB) headlined “Systemic crisis 2013: with record exchange highs, the planet’s imminent plunge into recession.”

Prevailing calm is deceptive. It often precedes the storm. “(S)everal signals show that a reversal in the economic situation is imminent.” Economies never recovered from 2008. Conditions continue to deteriorate. Europe’s in recession. More on that below. China’s growth is slowing. It exports are declining.

Australia’s export dependent economy makes it a good indicator. It’s “struggling. Consumers are also marking time. US wholesale and retail sales are on the decline.”

Most “US benchmark indices are swinging into the red.” Major banks know a storm looms. They’re using “all the means at their disposal (legal and illegal) to shelter themselves.”

BRICS countries are some of the world’s fastest growing. They have their own strategy. They’re gradually moving away from the dollar.

They’re “building a (multipolar) world system where they would have greater representation.” They’re doing so at the expense of America and other Western countries.

America’s economy is troubled. Four years of QE haven’t worked. Pushing on a string defines Fed policy. Money sits on bank balance sheets as excess reserves. Credit expansion’s anemic. Manufacturing’s contracting. Fiscal tightening exacerbates things.

Europe’s in recession. Southern Europe’s in Depression. Eurozone economic data are negative. In Q I, Italy contracted 0.5% from the previous quarter.

Seven straight quarterly declines reflect its troubled economy. It’s been so longterm. From 2000 – 2010, it expanded an anemic 2.5%. The current trend is negative. Protracted decline appears likely.

It’s not alone. ECB policy hasn’t worked. Mario Monti’s no more effective than Bernanke. Markets are disconnected from economic reality.

The Eurozone’s in recession. Nine of its 17 countries have negative growth. They include Italy, France, Greece, Spain, Cyprus, Portugal, Belgium, Finland and the Netherlands.

So do EU members Hungary and the Czech Republic. Expect more to follow.
Slovenia’s deeply troubled. It looks like the next Cyprus. Britain teeters on recession. So does Germany. Monetary madness achieved little. Force-fed austerity is self-defeating.

Confiscating bank deposits is the new normal. It’s a diabolical plot. It’s consolidating financial power. It’s price is economic decline. Equities are the last asset class to react. When it does, watch out.

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Stephen Lendman lives in Chicago. He can be reached at
lendmanstephen@sbcglobal.net

His new book is titled “Banker Occupation: Waging Financial War on Humanity.” http://www.claritypress.com/LendmanII.html

Visit his blog site at WWW.sjlendman.blogspot.com

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Do you still think we are not in a Stealth Depression? Do you believe the ass media’s propaganda that things are getting better?

I’ve been commenting on this continuing financial, economic and social collapse for more that five years now so I’m going to do something different; I’m going to do what Rick Rule recently did on King World News. He asked the following questions [I’ve paraphrased somewhat]:

Is the financial crisis in the Western world over? Has anything been fixed?

Can you name any G20 country, just one, that has a balanced budget?

Do you think that the global banks are solvent? [We’ll discuss Canadian banks’ stealth bailouts in a future article.]

Do you think 6% or 7% equity is enough to run those big bank balance sheets?

Do they think marking bank assets to ‘myth’ rather than marking bank assets to market makes the banks’ assets solvent?

Are interest rates around the world still negative compared to inflation?

In view of recent Japanese actions, do you believe that competitive devaluation of Western world currencies, the yen, Canadian dollar, the US dollar, etc., is ongoing, or do you think that has stopped?

Do you believe that the European periphery, places like Italy, Spain, Portugal, Greece, Malta, Slovenia, and maybe even France, are still challenged, or do you believe those problems are over?

Do you believe that liquidity is a substitute for solvency? In other words, is central bank printing and liquidity in the system a substitute for the fact that the debts are very large relative to those countries ability to service that debt?

Do you believe that the US, Canada and other G-20 federal governments still have budget issues?

Do you believe that US states and Canadian provinces have significant budget issues particularly with regards to unfunded pension liabilities?

Do you believe that cities, towns and local municipalities have budget issues, also with regards to unfunded pension liabilities?

Do you believe the trillions of dollars of derivatives (worthless financial instruments) on bank and insurance company balance sheets still pose structural problems, both to the economy, and to those institutions?

Do you believe the momentum-driven institutional sellers of precious metals have enough money to overcome physical buyers of those precious metals?

Do you believe that the ascendant Asian and South Asian cultures still have an affinity to owning physical precious metals?

And, here’s a few of my own questions: Do you believe that Quantitative Easing (printing an unprecedented amount of money out of thin air) has healed global economies?

Do you believe an historically unprecedented length of time of Zero Interest Rates has healed global economies?

The authorities tell us if they hadn’t done all this, global economies would be in worse shape. Do you believe the very people who caused this mess with fiat currencies, corruption, cronyism and unprecedented debt levels know what they’re doing let alone able to prove that assertion?

Do you believe that the largest bubble in history – bonds, will not burst and destroy savings and pensions?

If you buy groceries and gas do you believe governments’ inflation statistics of less than2% when John Williams Shadow Stats shows it to be 9% in the U.S. (Canada 7%)?

Do you believe that U.S. unemployment is 7.5% when Shadow Stats shows it to be 23%?

With Canada and New Zealand proposing ‘bail-in’ legislation a week after Cyprus’ deposits were confiscated, don’t you think this last, desperate act was planned for a long time and Cyprus was just the litmus test for more to come?

Having exhausted all their ammunition except outright depositor confiscation (bail-ins), do you believe governments and central banks are in a position to fight the next recession which is already overdue, occurring as they do every 4 or 5 years?

2006 – the U.S. housing bubble peaked and began to burst

2007 – two of Bear Sterns’ hedge funds collapsed proving the worthlessness of more than a $1 quadrillion in global derivatives.

2008 – the Great Recession started in the U.S.

2009 – the Great Recession started in Canada and the U.S. supposedly recovered.

2010 – languishing economies cloaked by government propaganda, cooked statistics and ass media complicity.

2011 – languishing economies cloaked by government propaganda, cooked statistics and ass media complicity.

2012 – commodities peaking, a slowdown in mining and languishing economies cloaked by government propaganda, cooked statistics and ass media complicity.

2013 – poised on the brink of the next Greater Recession.

How many years are you going to watch this and deny we are in a Stealth Depression cloaked by government propaganda, cooked statistics and ass media complicity?

How long are you going to watch your buying power dwindle and your standard of living decline before you unplug from the matrix, buy real assets like gold & silver and prepare by stockpiling essentials?

I’m not going to tell you what to do. I’ve been telling you what to do for more than five years. You already know what to do. When are you going to start?

BUY GOLD & SILVER AS SOON AS POSSIBLE

Here’s another reason to hurry up and buy gold & silver that you haven’t been told about by the so-called economic experts. Professor Antal E. Fekete, in the Daily Bell article Gold Backwardation and the Collapse of the Tacoma Bridge says that gold & silver will go into ‘backwardation’

The price of a long term commodities future contract is normally higher than a short term contract (called Contango) given the increased risk of holding a long term contract. In backwardation it’s the opposite. Permanent backwardation means a market is so out of whack it no longer serves a useful purpose.

This will destroy the official price of gold and that, in turn, will destroy the availability of these monetary metals. In other words, there will come a time when you will no longer be able to buy gold and silver but you will still be able to trade or barter. Fekete says, “permanent backwardation would shut down the gold futures markets. Gold could no longer be purchased at any price. Gold would only be available through barter. World trade is facing an avalanche-like transformation flattening out monetary economy into barter economy. Practically all economists, financial writers and market analysts have missed this possible scenario.”

Gold & silver demonstrates the stupidity of central banksters and lamescream economists. Gold and silver are NOT ordinary commodities and they do NOT obey the ordinary laws of economics. For instance, if we look at the Law of Supply and Demand for a commodity such as wheat, a higher wheat price induces farmers to grow fewer carrots and more wheat. The resulting increased supply of wheat then pushes the price of wheat lower to achieve somewhat of an equilibrium. This does NOT happen with gold & silver. Higher gold & silver prices induces people to hang on to their gold & silver and actually reduce available supply.

Conversely, a fall in the price of gold & silver, instead of scaring people into dumping their gold & silver, induces them to get rid of worthless fiat currency and buy MORE gold & silver. This is what we see now. The price of gold & silver got hammered. This increased the demand for gold & silver so much that dealers are sold out and buyers need to wait weeks or months for dealers to get re-supplied.

It is a testament to the stupidity of Fed Chairman, Ben Bernanke, his merry band of stooge banksters and global central banks that they thought dropping the price of gold & silver would scare people out of gold & silver and into dollars. Instead, the opposite happened. As prices got cheaper, more people wanted to buy gold & silver.

In Gold & Silver Restrictions Coming, I warned you that governments will try to shut down many gold & silver dealers and force the remainder to disclose customer’s names and addresses for eventual confiscation. Now I’m warning you that even the remaining dealers will someday have no remaining gold & silver inventory for you to buy so buy it now while you can.

Will this make gold & silver obsolete? No, of course not. As I’ve said repeatedly, gold & silver are NOT investments; they are protection and insurance against the collapse of fiat currency. 2,600 years ago, one ounce of gold could buy 350 loaves of bread. In the future, one ounce of gold will buy the same thing regardless whether the price of bread is $1,000 a loaf with gold at $350,000 or 10¢ a loaf with gold at $35. Everything else will be priced accordingly. And, paper money will be nothing more than kindling and ass wipe.

Is it possible that gold & silver prices will fall further? Yes, it is possible. In fact it is quite likely. Does it matter? No, it doesn’t matter because the “price” is the official paper price. The official paper price is meaningless because no one will sell at a lower price. Dealers will simply say they are “out of stock”. At lower prices, mines will shut down and supply will vanish and gold & silver will start to rise again.

The only meaningful price is the price you pay for physical gold and silver and that price is already 10%, 20% or as much as 30% more than the so-called official price. The price you pay is the REAL price. And if you wait much longer, you won’t be able to buy at ANY price. Govern yourself accordingly.

TACOMA NARROWS BRIDGE COLLAPSE

Professor Fekete uses the the 1940 collapse of the Tacoma Narrows suspension bridge as a comparison to today’s global economies

Elementary forced resonance with sustained 42 mile per hour wind provided an external periodic frequency that matched the bridge’s natural structural frequency causing “Galloping Gertie” to shake itself apart. Engineers have since learned to accommodate bridges’ natural resonance so today’s bridges are safer.

The comparison to today’s economic condition is apt because we are seeing greater and greater volatility in more and more asset bubbles. Rising and falling interest rates make prices rise and fall in a runaway oscillation where the “wind energy” is provided by the ever-increasing idiotic central bank injections of excess credit and endless money printing that kicks the economic system to ever higher levels of volatility. Like the bridge, the economic collapse begins slowly with the closing of the “gold window” in 1971, picks up speed with increasing credit and debt. And then suddenly it collapses.

The mantra:
We cannot spend our way to prosperity.
We cannot borrow our way out of debt.
We cannot pretend our way out of trouble.

Stay tuned. It’ll get worse.

Gerold
May 13, 2013

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The article below is written by Dr. Gary North an American economic historian and publisher who writes on topics including Christian theology, economics and history, and whose website has material open to the public as well as restricted to subscribers. He recently wrote the article below about Connecticut making gold & silver dealers report customer’s names. I’ve copied the article in its entirety including Gary’s links.

I’ve heard rumors (unsubstantiated so far) that Illinois is also planning similar legislation. I’ve been expecting this. Now I’m warning you! This will probably spread to other states and countries as well. This is how the authorities operate. They start small, and if there’s no opposition, it spreads. If there is opposition, they find a way around it. They will pass laws to over-regulate gold and silver dealers and drive most of them out of existence. Those dealers who do remain open must report the names of customers to the authorities.

This is important because, in the future, desperate governments will confiscate your gold and possibly silver as well. Gold & silver coins and bullion are easy to conceal and the authorities do not have the time or manpower to search each and every home in the country. So, by having a list of gold & silver customers’ names and addresses, they will know exactly who to come after. Refusal to cooperate will, of course, be a punishable offence.

In other words, your window of opportunity to acquire gold & silver is closing. Once dealers are required to name names, your precious metals will be at risk of confiscation in the future.

I also urge you to read Jim Sinclair’s latest message, The Elites Frightening Plan To Control The Masses.

Don’t say you weren’t warned.

Gerold
April 27, 2013

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Connecticut: “No Guns, No Gold”

Written by Gary North on April 26, 2013

You probably know about the gun control bill that was voted into law this month. Gun manufacturers are threatening to move out of the state. The story is here.

The state is now about to shut down all coin stores. A bill to require complete record-keeping on all sales, including photos of every coin sold, and recording the ID of every buyer and seller, is about to be passed into law. The cost of complying will shut down the stores. Read about it here.

AN ACT CONCERNING PRECIOUS METALS OR STONES DEALERS.

To require precious metals or stones dealers to provide a periodic statement of transactions in an electronic format to the local licensing authority and retain any goods purchased for at least ten days, and to make the requirements applicable to precious metals or stones dealers similar to those applicable to secondhand dealers.
Introduced by: Public Safety and Security Committee

You may recall that the terror of the French Revolution was run by the Committee on Public Safety.

How bad is this proposed bill? Here are the details, from the state’s website.

Property Description. Under the bill, the record’s property description must include:
1. all distinguishing marks, engravings, and etchings;
2. names of any kind, including brand and model;
3. model and serial numbers;
4. affiliation with any institution or organization;
5. dates;
6. initials;
7. color;
8. vintage; and
9. image represented.

Digital Photographs. The bill requires a digital photograph of property that does not have any identifiable numbers or markings. A number corresponding to the number assigned to the property’s entry in the record-keeping system must be visible in the photograph and remain attached to the property until its disposition or sale.

Bullion and Coins
For bullion and coin sales, in addition to the requirements under current law, the bill requires dealers to keep the record in English, be consecutively numbered, and include the seller’s general description.

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I take no joy in being proved correct once again. Matt Taibbi of Rolling Stone has finally figured out that the banksters own you, your Mom, politicians, governments and the courts. Perhaps next he’ll tell us there’s no Santa Claus.

All kidding aside, I’ve long said that ALL governments and financial systems are manipulated and corrupt. Time and again, I’ve warned you to get your money out of the matrix and into something tangible beyond the reach of governments – no, not real estate; that’s an over-rated, bottomless money pit that can be confiscated and taxed to death. I mean gold, silver, groceries, guns & ammo. Farm land is good if you can find some cheap in a country that’s not corrupt and controlled by the banksters (on Mars, perhaps?).

Matt, in the story below, was shocked, shocked I tell you when, last month, a class-action civil lawsuit against the banks for Libor-related offenses was dismissed by federal judge Naomi Buchwald who said that cities, towns and other investors that lost money should have known better than to believe that banks were competitive. You don’t suppose she was bought and paid for do you? After all, she’s female (there really ought to be a sarcasm font).

I wrote about the Libor Distraction scandal last summer when Matt says the scandal first broke. Not to brag but I covered it four years before in 2008 and others before I did.

By the way, when he writes about the banksters “fixing” he means manipulation, not repairing. In the Rolling Stone article below which I re-print in its entirety complete with their links to related articles, he covers Libor’s recent twin brother, the ISDAfix: a benchmark used to manipulate interest-rate swaps. He’s shocked, shocked I tell you (ok, sarcasm off now).

Anyone who still believes in a so-called recovery and that This Isn’t Your Grandfather’s Great Depression and anyone who still doesn’t admit that ALL our systems are collapsing Back to the Dark Ages in corruption, manipulation and greed is living in a naïve dream world. If you haven’t read it yet, I strongly urge you to Beware Your Dangerous Normalcy Bias.

That is, if you want to survive.

Gerold
April 27, 2013

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Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix

Rolling Stone
By Matt Taibbi
April 25, 2013

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

The Scam Wall Street Learned From the Mafia

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

“It’s a double conspiracy,” says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. “It’s the height of criminality.”

The bad news didn’t stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry,” CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants’ incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

“A farce,” was one antitrust lawyer’s response to the eyebrow-raising dismissal.

“Incredible,” says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation’s GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it’s increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it’s no secret. You can stare right at it, anytime you want.

The banks found a loophole, a basic flaw in the machine. Across the financial system, there are places where prices or official indices are set based upon unverified data sent in by private banks and financial companies. In other words, we gave the players with incentives to game the system institutional roles in the economic infrastructure.

Libor, which measures the prices banks charge one another to borrow money, is a perfect example, not only of this basic flaw in the price-setting system but of the weakness in the regulatory framework supposedly policing it. Couple a voluntary reporting scheme with too-big-to-fail status and a revolving-door legal system, and what you get is unstoppable corruption.

Every morning, 18 of the world’s biggest banks submit data to an office in London about how much they believe they would have to pay to borrow from other banks. The 18 banks together are called the “Libor panel,” and when all of these data from all 18 panelist banks are collected, the numbers are averaged out. What emerges, every morning at 11:30 London time, are the daily Libor figures.

Banks submit numbers about borrowing in 10 different currencies across 15 different time periods, e.g., loans as short as one day and as long as one year. This mountain of bank-submitted data is used every day to create benchmark rates that affect the prices of everything from credit cards to mortgages to currencies to commercial loans (both short- and long-term) to swaps.

Gangster Bankers Broke Every Law in the Book

Dating back perhaps as far as the early Nineties, traders and others inside these banks were sometimes calling up the company geeks responsible for submitting the daily Libor numbers (the “Libor submitters”) and asking them to fudge the numbers. Usually, the gimmick was the trader had made a bet on something – a swap, currencies, something – and he wanted the Libor submitter to make the numbers look lower (or, occasionally, higher) to help his bet pay off.

Famously, one Barclays trader monkeyed with Libor submissions in exchange for a bottle of Bollinger champagne, but in some cases, it was even lamer than that. This is from an exchange between a trader and a Libor submitter at the Royal Bank of Scotland:

SWISS FRANC TRADER: can u put 6m swiss libor in low pls?…
PRIMARY SUBMITTER: Whats it worth
SWSISS FRANC TRADER: ive got some sushi rolls from yesterday?…
PRIMARY SUBMITTER: ok low 6m, just for u
SWISS FRANC TRADER: wooooooohooooooo. . . thatd be awesome

Screwing around with world interest rates that affect billions of people in exchange for day-old sushi – it’s hard to imagine an image that better captures the moral insanity of the modern financial-services sector.

Hundreds of similar exchanges were uncovered when regulators like Britain’s Financial Services Authority and the U.S. Justice Department started burrowing into the befouled entrails of Libor. The documentary evidence of anti-competitive manipulation they found was so overwhelming that, to read it, one almost becomes embarrassed for the banks. “It’s just amazing how Libor fixing can make you that much money,” chirped one yen trader. “Pure manipulation going on,” wrote another.

Yet despite so many instances of at least attempted manipulation, the banks mostly skated. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level flunkies overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution.

Two of America’s top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it’s dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to “collateral consequences” in the economy.

The relatively small sums of money extracted in these settlements did not go toward reparations for the cities, towns and other victims who lost money due to Libor manipulation. Instead, it flowed mindlessly into government coffers. So it was left to towns and cities like Baltimore (which lost money due to fluctuations in their municipal investments caused by Libor movements), pensions like the New Britain, Connecticut, Firefighters’ and Police Benefit Fund, and other foundations – and even individuals (billionaire real-estate developer Sheldon Solow, who filed his own suit in February, claims that his company lost $450 million because of Libor manipulation) – to sue the banks for damages.

One of the biggest Libor suits was proceeding on schedule when, early in March, an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York to argue an extraordinary motion to dismiss. The banks’ legal dream team drew from heavyweight Beltway-connected firms like Boies Schiller (you remember David Boies represented Al Gore), Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer.

The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, “Our goal here is not to destroy a major financial institution.”

In any case, this all-star squad of white-shoe lawyers came before Buchwald and made the mother of all audacious arguments. Robert Wise of Davis Polk, representing Bank of America, told Buchwald that the banks could not possibly be guilty of anti- competitive collusion because nobody ever said that the creation of Libor was competitive. “It is essential to our argument that this is not a competitive process,” he said. “The banks do not compete with one another in the submission of Libor.”

If you squint incredibly hard and look at the issue through a mirror, maybe while standing on your head, you can sort of see what Wise is saying. In a very theoretical, technical sense, the actual process by which banks submit Libor data – 18 geeks sending numbers to the British Bankers’ Association offices in London once every morning – is not competitive per se.

But these numbers are supposed to reflect interbank-loan prices derived in a real, competitive market. Saying the Libor submission process is not competitive is sort of like pointing out that bank robbers obeyed the speed limit on the way to the heist. It’s the silliest kind of legal sophistry.

But Wise eventually outdid even that argument, essentially saying that while the banks may have lied to or cheated their customers, they weren’t guilty of the particular crime of antitrust collusion. This is like the old joke about the lawyer who gets up in court and claims his client had to be innocent, because his client was committing a crime in a different state at the time of the offense.

“The plaintiffs, I believe, are confusing a claim of being perhaps deceived,” he said, “with a claim for harm to competition.”

Judge Buchwald swallowed this lunatic argument whole and dismissed most of the case. Libor, she said, was a “cooperative endeavor” that was “never intended to be competitive.” Her decision “does not reflect the reality of this business, where all of these banks were acting as competitors throughout the process,” said the antitrust lawyer Sokol. Buchwald made this ruling despite the fact that both the U.S. and British governments had already settled with three banks for billions of dollars for improper manipulation, manipulation that these companies admitted to in their settlements.

Michael Hausfeld of Hausfeld LLP, one of the lead lawyers for the plaintiffs in this Libor suit, declined to comment specifically on the dismissal. But he did talk about the significance of the Libor case and other manipulation cases now in the pipeline.

“It’s now evident that there is a ubiquitous culture among the banks to collude and cheat their customers as many times as they can in as many forms as they can conceive,” he said. “And that’s not just surmising. This is just based upon what they’ve been caught at.”

Greenberger says the lack of serious consequences for the Libor scandal has only made other kinds of manipulation more inevitable. “There’s no therapy like sending those who are used to wearing Gucci shoes to jail,” he says. “But when the attorney general says, ‘I don’t want to indict people,’ it’s the Wild West. There’s no law.”

The problem is, a number of markets feature the same infrastructural weakness that failed in the Libor mess. In the case of interest-rate swaps and the ISDAfix benchmark, the system is very similar to Libor, although the investigation into these markets reportedly focuses on some different types of improprieties.

Though interest-rate swaps are not widely understood outside the finance world, the root concept actually isn’t that hard. If you can imagine taking out a variable-rate mortgage and then paying a bank to make your loan payments fixed, you’ve got the basic idea of an interest-rate swap.

In practice, it might be a country like Greece or a regional government like Jefferson County, Alabama, that borrows money at a variable rate of interest, then later goes to a bank to “swap” that loan to a more predictable fixed rate. In its simplest form, the customer in a swap deal is usually paying a premium for the safety and security of fixed interest rates, while the firm selling the swap is usually betting that it knows more about future movements in interest rates than its customers.

Prices for interest-rate swaps are often based on ISDAfix, which, like Libor, is yet another of these privately calculated benchmarks. ISDAfix’s U.S. dollar rates are published every day, at 11:30 a.m. and 3:30 p.m., after a gang of the same usual-suspect megabanks (Bank of America, RBS, Deutsche, JPMorgan Chase, Barclays, etc.) submits information about bids and offers for swaps.

And here’s what we know so far: The CFTC has sent subpoenas to ICAP and to as many as 15 of those member banks, and plans to interview about a dozen ICAP employees from the company’s office in Jersey City, New Jersey. Moreover, the International Swaps and Derivatives Association, or ISDA, which works together with ICAP (for U.S. dollar transactions) and Thomson Reuters to compute the ISDAfix benchmark, has hired the consulting firm Oliver Wyman to review the process by which ISDAfix is calculated. Oliver Wyman is the same company that the British Bankers’ Association hired to review the Libor submission process after that scandal broke last year. The upshot of all of this is that it looks very much like ISDAfix could be Libor all over again.

“It’s obviously reminiscent of the Libor manipulation issue,” Darrell Duffie, a finance professor at Stanford University, told reporters. “People may have been naive that simply reporting these rates was enough to avoid manipulation.”

And just like in Libor, the potential losers in an interest-rate-swap manipulation scandal would be the same sad-sack collection of cities, towns, companies and other nonbank entities that have no way of knowing if they’re paying the real price for swaps or a price being manipulated by bank insiders for profit. Moreover, ISDAfix is not only used to calculate prices for interest-rate swaps, it’s also used to set values for about $550 billion worth of bonds tied to commercial real estate, and also affects the payouts on some state-pension annuities.

So although it’s not quite as widespread as Libor, ISDAfix is sufficiently power-jammed into the world financial infrastructure that any manipulation of the rate would be catastrophic – and a huge class of victims that could include everyone from state pensioners to big cities to wealthy investors in structured notes would have no idea they were being robbed.

“How is some municipality in Cleveland or wherever going to know if it’s getting ripped off?” asks Michael Masters of Masters Capital Management, a fund manager who has long been an advocate of greater transparency in the derivatives world. “The answer is, they won’t know.”

Worse still, the CFTC investigation apparently isn’t limited to possible manipulation of swap prices by monkeying around with ISDAfix. According to reports, the commission is also looking at whether or not employees at ICAP may have intentionally delayed publication of swap prices, which in theory could give someone (bankers, cough, cough) a chance to trade ahead of the information.

Swap prices are published when ICAP employees manually enter the data on a computer screen called “19901.” Some 6,000 customers subscribe to a service that allows them to access the data appearing on the 19901 screen.

The key here is that unlike a more transparent, regulated market like the New York Stock Exchange, where the results of stock trades are computed more or less instantly and everyone in theory can immediately see the impact of trading on the prices of stocks, in the swap market the whole world is dependent upon a handful of brokers quickly and honestly entering data about trades by hand into a computer terminal.

Any delay in entering price data would provide the banks involved in the transactions with a rare opportunity to trade ahead of the information. One way to imagine it would be to picture a racetrack where a giant curtain is pulled over the track as the horses come down the stretch – and the gallery is only told two minutes later which horse actually won. Anyone on the right side of the curtain could make a lot of smart bets before the audience saw the results of the race.

At ICAP, the interest-rate swap desk, and the 19901 screen, were reportedly controlled by a small group of 20 or so brokers, some of whom were making millions of dollars. These brokers made so much money for themselves the unit was nicknamed “Treasure Island.”

Already, there are some reports that brokers of Treasure Island did create such intentional delays. Bloomberg interviewed a former broker who claims that he watched ICAP brokers delay the reporting of swap prices. “That allows dealers to tell the brokers to delay putting trades into the system instead of in real time,” Bloomberg wrote, noting the former broker had “witnessed such activity firsthand.” An ICAP spokesman has no comment on the story, though the company has released a statement saying that it is “cooperating” with the CFTC’s inquiry and that it “maintains policies that prohibit” the improper behavior alleged in news reports.

The idea that prices in a $379 trillion market could be dependent on a desk of about 20 guys in New Jersey should tell you a lot about the absurdity of our financial infrastructure. The whole thing, in fact, has a darkly comic element to it. “It’s almost hilarious in the irony,” says David Frenk, director of research for Better Markets, a financial-reform advocacy group, “that they called it ISDAfix.”

After scandals involving libor and, perhaps, ISDAfix, the question that should have everyone freaked out is this: What other markets out there carry the same potential for manipulation? The answer to that question is far from reassuring, because the potential is almost everywhere. From gold to gas to swaps to interest rates, prices all over the world are dependent upon little private cabals of cigar-chomping insiders we’re forced to trust.

“In all the over-the-counter markets, you don’t really have pricing except by a bunch of guys getting together,” Masters notes glumly.

That includes the markets for gold (where prices are set by five banks in a Libor-ish teleconferencing process that, ironically, was created in part by N M Rothschild & Sons) and silver (whose price is set by just three banks), as well as benchmark rates in numerous other commodities – jet fuel, diesel, electric power, coal, you name it. The problem in each of these markets is the same: We all have to rely upon the honesty of companies like Barclays (already caught and fined $453 million for rigging Libor) or JPMorgan Chase (paid a $228 million settlement for rigging municipal-bond auctions) or UBS (fined a collective $1.66 billion for both muni-bond rigging and Libor manipulation) to faithfully report the real prices of things like interest rates, swaps, currencies and commodities.

All of these benchmarks based on voluntary reporting are now being looked at by regulators around the world, and God knows what they’ll find. The European Federation of Financial Services Users wrote in an official EU survey last summer that all of these systems are ripe targets for manipulation. “In general,” it wrote, “those markets which are based on non-attested, voluntary submission of data from agents whose benefits depend on such benchmarks are especially vulnerable of market abuse and distortion.”

Translation: When prices are set by companies that can profit by manipulating them, we’re fucked.

“You name it,” says Frenk. “Any of these benchmarks is a possibility for corruption.”

The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It’s not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever’s in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing – and it’s only just coming into view.

This story is from the May 9th, 2013 issue of Rolling Stone.
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