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Economic Article Archive 2012


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Fix the Debt's New Email: Too Cruel to Laugh, Too Ridiculous to Cry
by Richard Eskow
Posted December 26, 2012

trojan horseFix the Debt, a front group for corporations, billionaires, and defense contractors, wants people to call their Representatives and demand that they avoid the "fiscal cliff." The group's latest email is so badly written that it cries out for laughter, but its potential consequences call out for tears.

Here are some scripts that the group's real beneficiaries might want to use:

-- I'm rich as hell -- I mean, I'm not naming figures, but we're talking stinkin' rich -- and I want to cut Social Security and Medicare while lowering my own corporate and personal taxes.

-- I'm a corporate CEO who's been shipping jobs overseas, and we've had record profits while paying record-low amounts to the IRS. But that's not enough. I want to do even less for my country. More..


Fiscal Cliff: Let's Call Their Bluff!
by Ellen Brown
Posted December 22, 2012

fiscal cliiff contrived crisisThe "fiscal cliff" has all the earmarks of a false flag operation, full of sound and fury, intended to extort concessions from opponents. The cliff is really just a trumped-up annual budget discussion. The most likely outcome is a combination of tax increases, spending cuts and kicking the can down the road.

Yet the media coverage has been "panic-inducing, falling somewhere between that given to an approaching hurricane and an alien invasion." In the summer of 2011, this sort of media hype succeeded in causing the Dow Jones Industrial Average to plunge nearly 2000 points. But this time the market is generally ignoring the cliff, either confident a deal will be reached or not caring.

Be Careful What You Wish for: Fiscal Hostage-Taking Could Backfire...Taxpayers and governments that are pushed too far have been known to resort to more radical measures, and there are some on the table that could fix the problem at its core. Here are a few that are receiving media attention. More...


The Fiscal Cliff Is A Diversion: The Derivatives Tsunami and the Dollar Bubble
By Paul Craig Roberts, Assistant Secretary of the US Treasury under Ronald Reagan
Posted December 17, 2012

fiscal cliff diversionThe "fiscal cliff" is another hoax designed to shift the attention of policymakers, the media, and the attentive public, if any, from huge problems to small ones. The fiscal cliff is automatic spending cuts and tax increases in order to reduce the deficit by an insignificant amount over 10 years if Congress takes no action itself to cut spending and to raise taxes. In other words, the "fiscal cliff" is going to happen either way.

The problem from the standpoint of conventional economics with the fiscal cliff is that it amounts to a double-barrel dose of austerity delivered to a faltering and recessionary economy. Ever since John Maynard Keynes, most economists have understood that austerity is not the answer to recession or depression. More...


The Coming Derivatives Panic That Will Destroy Global Financial Markets
by John Rolls
Posted December 14, 2012

impending derivative collapseThere is a reason why Warren Buffett once referred to derivatives as "financial weapons of mass destruction". Nobody really knows the total value of all the derivatives that are floating around out there, but estimates place the notional value of the global derivatives market anywhere from 600 trillion dollars all the way up to 1.5 quadrillion dollars.

Keep in mind that global GDP is somewhere around 70 trillion dollars for an entire year. So we are talking about an amount of money that is absolutely mind blowing. So who is buying and selling all of these derivatives? Well, would it surprise you to learn that it is mostly the biggest banks?

It would be hard to overstate the recklessness of these banks. The numbers that you are about to see are absolutely jaw-dropping. According to the Comptroller of the Currency, four of the largest U.S. banks are walking a tightrope of risk, leverage and debt when it comes to derivatives. More...


Our Collapsing Economy and Currency
by Dr. Paul Craig Roberts (Assistant Secretary of the Treasury, President Reagan's first term)
Posted December 10, 2012

fiscal cliff hoaxIs the "fiscal cliff" real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries–wars that have benefitted only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending. More...


Goldman Sachs Spreads Its Wings
by Andrew McKillop
Posted December 3, 2012

Goldman SachsGS operates as a vulture on steroids, never shrinking from first crippling its victim, before gutting it. This Alpha Male Vulture operating style could be compared with legendary always-winning cycle champion Lance Armstrong. Only years after his always-wins did we find out why: he was just another cheat, just another druggy. Questions such as why US and European national finances are so bad, and get worse, are not only able to be answered by the two letters "GS" but its alumni and partners, sufficiently remunerated, can be said to have operated a global coup d'etat in the world of finance.

Why the working and increasingly unemployed people of Greece, Portugal, Spain, Italy, Ireland and a long list of other countries suffer under austerity, sacrifice their pensions, earn lower wages and pay higher taxes is that spinning out the debt circus to a multi-decade-long web of poverty for most, but riches for GS and its "agents and servants", is the only goal of the vulture firm. More...


CEOs Who Collect Billions In Govt. Money Demand Cuts To Poor, Elderly
by Christina Wilkie and Ryan Grim
Posted November 27, 2012

parasites demand austerityThe corporate CEOs who have made a high-profile foray into deficit negotiations have themselves been substantially responsible for the size of the deficit they now want closed.

The companies represented by executives working with the Campaign To Fix The Debt have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies' tax bills.

During the past few days, CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council -- most visibly, Goldman Sachs' Lloyd Blankfein and Honeywell's David Cote -- have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs -- Medicare, Medicaid, and Social Security -- which would disproportionately impact the poor and the elderly.

As part of their push, they are advocating a "territorial tax system" that would exempt their companies' foreign profits from taxation, netting them about $134 billion in tax savings, according to a new report from the Institute for Policy Studies titled "The CEO Campaign to 'Fix' the Debt: A Trojan Horse for Massive Corporate Tax Breaks" -- money that could help pay off the federal budget deficit. More...


The Trans-Pacific Partnership As A Corporate Coup
by Andrew Gavin Marshall
Posted November 25, 2012

secret deal for the ruling classLuckily for the populations and societies that will be affected by the agreement, there are public research organizations and alternative media outlets campaigning against it – and they've even released several leaks of draft agreement chapters. From these leaks, which are not covered by mainstream corporate-controlled news outlets, we are able to get a better understanding of what the Trans-Pacific Partnership (TPP) actually encompasses.

For example, public interest groups have been warning that the TPP could result in millions of lost jobs. As a letter from Congress to United States Trade Representative Ron Kirk stated, the TPP "will create binding policies on future Congresses in numerous areas," including "those related to labor, patent and copyright, land use, food, agriculture and product standards, natural resources, the environment, professional licensing, state-owned enterprises and government procurement policies, as well as financial, healthcare, energy, telecommunications and other service sector regulations." In other words, as promised, the TPP goes far beyond "trade." More...

To anyone who is not familiar with the TPP, this represents a threat far greater than the Citizens United ruling by the US Supreme Court. If implemented, this agreement will hard code corporate dominance over sovereign governments into international law that will supercede any federal, state, or local laws of any member country. This document alone should set alarm bells ringing, but if one steps back and looks at the larger picture, the future ramifications look even more ominous.


The Fiscal Cliff is a Mole Hill Compared to This
by Shah Gilani
Posted November 15, 2012

over the cliffEveryone is afraid of falling off the "fiscal cliff." But there's another dangerous countdown clock about hit to zero.And no one is talking about it, even though it will spell even more financial problems for us all.

At midnight on December 31, 2012, the Transaction Account Guarantee (TAG) program will expire. The TAG program was initiated at the height of the credit crisis when depositors were fleeing banks for fear they would go under.

To quell what was turning into a run on banks, the FDIC upped regular deposit insurance from $100,000 to $250,000 and under the TAG banner initiated unlimited insurance for all non-interest bearing transaction accounts. It's the second part that's important because that's the piece that will soon come to an end. When the unlimited insurance expires, corporations, businesses and depositors -- whose soon- to- be- uninsured deposits, which total some $1.4 trillion, are likely to flee smaller banks -- will rush into money market funds and seek the safety of short-term U.S. Treasuries.

This will create serious negative repercussions affecting our economic future. More...


Why Occupy's Plan To Cancel Consumer Debts Is Brilliant
by Charles Eisenstein
Posted November 14, 2012

debt slaveA new initiative is re-energising the Occupy movement. Called the Rolling Jubilee, it is a plan to use money from donations to buy distressed consumer debt from lenders at a marked down price, just as debt collection agencies normally would. But instead of hounding debtors for payments, it will simply cancel the debts. The hope is that the liberated debtors will themselves contribute to the fund, "rolling" the jubilee forward.

The Rolling Jubilee is a genius move for several reasons. First, debt relief is a transpartisan message that eludes conventional political categorisation. As such, it returns Occupy to its origins as an advocate for the wellbeing of ordinary people, neither leftwing nor rightwing. The Rolling Jubilee says, non-threateningly, "We just want to help people in this unfair system." More...

For just $5,000 , this movement recently just purchased $100,000 worth of medical debt. They have taken a little piece of humanity back from the hands of the creditors. Within weeks these debtors will be receiving a certified letter informing them that their debts have been abolished. Consider LEVERAGING your donation to help those drowning in debt by visiting http://rollingjubilee.org


Why Bankers Rule the World, It's the Interest Stupid!
by Ellen Brown
Posted November 12, 2012

banker greedIn the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our GDP. That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of "Wall Street greed" but because of the inexorable mathematics of our private banking system.

This hidden tribute to the banks will come as a surprise to most people, who think that if they pay their credit card bills on time and don't take out loans, they aren't paying interest. This, says Dr. Kennedy, is not true. Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills. They must pay for labor and materials before they have a product to sell and before the end buyer pays for the product 90 days later. Each supplier in the chain adds interest to its production costs, which are passed on to the ultimate consumer. Dr. Kennedy cites interest charges ranging from 12% for garbage collection, to 38% for drinking water to, 77% for rent in public housing in her native Germany. More...


What If We Adopted A System Where The Banks Did Not Create Our Money?
by Michael Snyder
Posted November 8, 2012

private banks create moneyWhat if there was a financial system that would eliminate the need for the federal government to go into debt, that would eliminate the need for the Federal Reserve, that would end the practice of fractional reserve banking and that would dethrone the big banks? Would you be in favor of such a system? A surprising new IMF research paper entitled "The Chicago Plan Revisited" by Jaromir Benes and Michael Kumhof is making waves in economic circles all over the globe.

The paper suggests that the world would be much better off if we adopted a system where the banks did not create our money. So instead of a system where more money is only created when more debt is created, we would have a system of debt-free money that is created directly by national governments. More...

Our current "debt based" monetary system is at the very root of most of our problems. Most people do not think about how money comes into existence and who controls its supply. If more people became aware of this and started the push to change it, the nation and even the world would be a much better place.


Central Banks Gold War Begins!
by Jim Willie CB
Posted November 5, 2012

gold war beginningThe bond fraud and gold market fraud and futures brokerage fraud and central bank bond monetizations, and desperate reactions to insolvent broken national banking systems, and continued flow of government red ink in deficits, all these activities have motivated nations to check their gold bank accounts. What they see scares them witless, but it pushes them into action. The demand by Chavez in Venezuela over a year ago served as a stark wakeup call. Imagine mature experienced savvy German bank officials observing a socialist backwater Latino renegade like Chavez leading the way in defense from Western banker corruption and colossal thefts. Finally, the Germans are taking action. They tried in September to view their gold account in the New York Fed, but were turned away with insults and disdain. Word has come that the shun event in the Big Apple was probably the fifth time in the last few years that a German delegation has been turned away. The situation is as complex as it is dicey.

Wealth is under heavy attack. The impact has caused an undercurrent by the US and UK bankers in pursuit of gold supply to satisfy demands, like from Venezuela. The elite are having their gold vaults raided, done as loans to the major central banks and bullion bank centers. Resentment builds.

Alternative supply sources have been urgently needed, thus the project in Libya. Thus the MFGlobal thefts. The list goes on, but the need is rising far faster than the channels can be supplied. Desperation has set in with the major bullion bankers and their clever craftsmen who manage markets with leverage, derivatives, and propaganda. More...


The Global Banking 'Super-Entity' Drug Cartel: The "Free Market" of Finance Capital
by Andrew G Marshall
Posted October 31, 2012

the real mastersI would like to introduce you, the reader, to some realities of our global banking system, resting on the rhetoric of free markets, but functioning, in actuality, as a global cartel, a "super-entity" in which the world's major banks all own each other and own the controlling shares in the world's largest multinational corporations, influence governments and policy with politicians in their back pockets, routinely engaging in fraud and bribery, and launder hundreds of billions of dollars in drug money, not to mention arms dealing and terrorist financing.

These are the "too big to fail" and "too big to jail" banks, the centre of our global economy, what we call a "free market," implying that the global banks – and corporations – have "free reign" to do anything they please, engage in blatantly criminal activities, steal trillions in wealth which is hidden offshore, and never get more than a slap on the wrist. This is the real "free market," a highly profitable global banking cartel, functioning as a worldwide financial Mafia. More...


Voluntary Servitude Begins With Debt
by Richard Mills
Posted October 29, 2012

web of debtSir Josiah Stamp, president of the Rothschild Bank of England and the second richest man in Britain in the 1920s, said the following in 1927 at the University of Texas:

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin. Bankers own the Earth. Take it away from them but leave them the power to create money, and with a flick of a pen, they will create enough money to buy it back again. Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. But if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit." More...


5 Huge Myths About Social Security
by Ilan Moscovitz
Posted October 18, 2012

Social Security is NOT brokeSocial Security has been providing Americans with old age, disability, and widow and orphan insurance for as many as 77 years. But like so many of today's crucial financial topics, it's also shrouded in myth. Here are five big ones.

Myth No. 1: Social Security is going bankrupt
The biggest misunderstanding out there relates to Social Security's financial challenges. (A Google search for "Social Security bankruptcy" turned up 50 million hits.) But the fact is that Social Security isn't going bankrupt, nor is bankruptcy really possible as the system is currently set up.

Here's the source of the confusion: Historically, Social Security has collected more than it paid out. The extra money built up in a trust fund that collects interest. But due to demographic and economic changes (more on that in a minute), it's expected that insurance payments will begin to exceed income in 2021. Around 2033, the fund will run out. But even then, the revenue Social Security collects each year would still be enough to pay out about three-quarters of scheduled benefits as far as the eye can see. More...


How Wall Street Hijacked America and Became Master of the Tradable Universe
by Shah Gilani
Posted October 16, 2012

Dick Fulds homeIn the old days, Wall Street brokers made their (very nice, thank you) living mostly buying and sometimes selling stocks for customers under a fixed-commission umbrella.That umbrella, not surprisingly, was held up by the industry, which (wink, wink) took the term "fixed" to a level that looked like price fixing (because it was).

In the 1970s, new-on-the-scene wannabe discounters (namely Charles Schwab) who weren't part of the old guard made the case for a free-for-all, let commissions fall from competition, federal case… and won. On May 1, 1975 – known in the industry as May Day – negotiated commissions came into being.

All the old "customers' men" were aghast. What was going to happen to their lofty salaries? And worse, if commoners were going to have cheap transaction costs, would they start buying and even selling stocks on their own, without the sage advice of brokers? More...


Big Bank Derivative Bets Nearly Double In Six Years
by Peter G. Miller
Posted October 5, 2012

derivative armegeddonAmerica's major banks now hold derivatives with a notational worth of $225 trillion – about a third of the world total. No kidding. Trillion. And that's up from a mere $120 trillion six years ago. Rather than being weened off derivatives, America's big banks are more deeply entrenched then ever.

Hopefully Wall Street has it figured out just right and there won't be any major losses, say a few billion here or there. After all, when has Wall Street ever been wrong about financial instruments?

While many in Washington would like to limit derivatives trading, make such trades open to public scrutiny or both, Wall Street is vehemently against regulation. In fact, there's a simple way to resolve derivative worries. Allow unlimited derivatives trading — but only by individuals and partnerships willing to personally take the risk of profits and losses. More...


Death Knell For the U.S. Dollar
by Jim Willie CB
Posted Spetember 27, 2012

death of the dollarThe recent decision by the US Federal Reserve to contaminate the financial body until it responds favorably was the last straw in my book. Witness a declaration of permanent QE and hyper monetary inflation of the most virulent strain, unsterilized. The USFed is essentially admitting failure. The signal serves as the loudest death knell for the USDollar among many in a sequence. On a similar parallel note, lighter and more humorous, one might be reminded of the pirate swash buckling style of yelling at the swabbies that the beatings will continue until morale improves. The QE bond monetization of USGovt debt has turned viral and entrenched.

It is sold as stimulus, when in fact it acts like a giant wet blanket on the USEconomy. It is intended as stimulus to businesses, but the effect is felt on the financial speculation and on Asian direct business investment. In the past the emergency lever device had been successful only because it was used on a temporary basis. But now the USFed high priest assures it is a permanent fixture, a sign of their failure. The public is too ignorant to comprehend the ruin. They can only see the threat to their personal ruin. More...


Enlightened Economics: There is an Alternative
by Mark Dempsey
Posted Spetember 25, 2012

out of money?Republicans and Democrats have been explaining that "There Is No Alternative," we need public policies promoting austerity because government is "out of money." The question seems to be not "do we need austerity?" but "will we be austere sooner or austere later?" Meanwhile, the bipartisan consensus is that the government is definitely out of money.

But these assertions are at odds with the common knowledge that the U.S. government literally creates its own money. Unlike the euro, the dollar is a sovereign, fiat currency, unconstrained by exchange rates or treaties. And since Nixon closed the gold window, government can issue dollars without waiting for gold or silver mines to provide any backing for them. So we can't possibly be "out of money," any more than the Bureau of Weights and Measures can be "out of inches." More...


Banks Are Setting Us Up for Another Fall
by Keith Fitz-Gerald
Posted September 20, 2012

your pensions at riskJust five years after they played a primary role in engineering the worst financial crisis since the Great Depression, America's big banks are quietly setting the world up to do it all over again. Only this go-round the costs will be far higher and the damage much worse. This time the fall could be $2.6 trillion or more.

These same banks that have already driven the world to the brink of financial oblivion and been bailed out once may need another $2.6 trillion dollars or more to backstop the unregulated $648 trillion derivatives playground they've created for themselves. And don't think for a minute that your money isn't at risk either...

If you have a retirement fund, a money market fund or are invested in any sort of pension plan whatsoever, you are already involved in this game whether you signed up to play or not. More...


The Short, Miserable Life of American Prosperity
by John Kozy
Posted September 17, 2012

banker greedThe Panic of 1873 was a financial crisis which triggered a severe international economic depression. It was known as the "Great Depression" until the 1930s, but it goes unmentioned today. In the United States, this depression was caused by the collapse of Jay Cooke & Company, a major American banking establishment. Jay Cooke & Company was the Lehman Brothers of the time. The economy was brought down by, yes, bankers.

It happened again in 1893. Deceptive railroad financing set off a series of bank failures. The bankers did it again.

If that weren't enough, it happened again in 1907. The panic, also known as the 1907 Bankers' Panic was triggered by a failed attempt to corner the market on stock of the United Copper Company.

Is that all? No, it happened again in 1929, causing what is known as the Great Depression.

People, these are not isolated events. They are not infrequent. They are not accidental. They always result from bankers trying to acquire greater profits by cheating. More...


TPP - Why So Secret?
Video by End The Illusion
Posted 9/11/2012

This so called free trade agreement represents a threat even greater than the Citizens United ruling. The Trans Pacific Partnership agreement is being negotiated and the details are kept totally secret with not even members of Congress and the Senate having access to the text. If implemented, this agreement will hard code corporate dominance over sovereign governments into international law that will supercede any federal, state, or local laws of any member country. This document should set alarm bells ringing.


Currency Twisters and Firestorms on Central Banks Obvious Failure
by Jim Willie CB
Posted Sept 1, 2012

Morgan Stanley failure eminentMorgan Stanley is going to the slaughterhouse. Its implosion will result from lost control, and the reversion to antiquated systems will only hasten their demise. Wall Street will wish to exploit the failure, like stealing funds, like destroying documents, like concealing derivative positions, like receiving government slush funds for slimy patch projects, their usual Modus Operandi. In criminal parlance, they will create a black hole into which things vanish. They will attempt to add to the confusion, which might itself backfire and deliver more lethal challenges to the entire USDollar & USTreasury complex. This time, the spotlights will shine more brightly to reveal the activity in the shadows and crevices.

The part that many analysts might miss is that Morgan Stanley has perhaps over 300 thousand private stock brokerage accounts, with over 17,500 brokers. The Morgan Stanley failure might feature the first theft of private stock accounts. The critical jump might occur in account thefts from futures brokerage to stock brokerage, which began in November 2011 with MFGlobal, then appeared in July with Peregrine Financial Group (PFG-Best). All private accounts from MFG and PFG have been pilfered, with a blessing of the theft by the courts, seen in the Sentinel Mgmt Group ruling. The federal Appellate court's August ruling (CLICK HERE) sets precedent for future private segregated account thefts, which were once considered sacred and untouchable. No more in the United States, not in the unfolding of criminality that stretches from USGovt offices to top corporate offices, with blessings sprinkled by the courts. More...


Greed and Debt: The True Story of Mitt Romney and Bain Capital
by Matt Taibbi
Posted August 30, 2012

economic vulturesWhen Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt.

Now your troubled firm – let's say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company's bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.

Once all that debt is added, one of two things can happen. The company can fire workers and slash benefits to pay off all its new obligations to Goldman Sachs and Bain, leaving it ripe to be resold by Bain at a huge profit. Or it can go bankrupt – this happens after about seven percent of all private equity buyouts – leaving behind one or more shuttered factory towns. Either way, Bain wins. By power-sucking cash value from even the most rapidly dying firms, private equity raiders like Bain almost always get their cash out before a target goes belly up. More...


If you Like NAFTA, You'll Love TPP
by Rudy Avizius
Posted August 26, 2012

TPP will hurt YOUThe details contained in this TPP agreement will result in total corporate global governance . In this new system the role of elected governments will be to serve as subservient agents for our [corporate] nterests. The institutions under governments such as the armies, police, and courts will also serve our [corporate] interests, while being financed by the taxpayers of that country. The status of the member states will be locked-in, similar to countries once they are inside the Eurozone.

In the future, once this agreement has been ratified, Internet censorship regulations will be passed that are much stronger than the previous ones we tried to pass, such as ACTA, SOPA, and PIPA. This will lock down the Internet so we can use it for our [corporate] purposes. Once this has been accomplished, the public masses will have no alternatives except for our controlled media. More...


Are Preparations Being Made For Worldwide Financial Collapse?
by Michael Snyder
Posted August 22, 2012

preparing for collapse?Unfortunately, we are not privy to the quiet conversations that are taking place in corporate boardrooms and in the halls of power in places such as Washington D.C. and London, so all we can do is try to make sense of all the clues that are all around us.

Last week, it was revealed that the U.S. government has been secretly directing five of the biggest banks in America "to develop plans for staving off collapse" for the last two years. By itself, that wouldn't be that big of a deal but when you add that piece to the dozens of other clues of imminent financial collapse, a very troubling picture begins to emerge. More...


What to Do When Every Market Is Manipulated
by Chris Martenson
Posted August 19, 2012

manipulated marketsIf you don't know who the sucker at the card table is, it's you.
~ old gambler's saying

How are we supposed to make decisions in today's rigged and often fraudulent market environment? Where should you put your money if you don't know where the risks lie? How does one control risk when control fraud runs rampant?

Unfortunately, there are no perfect answers to these questions. Instead, the task is to recognize what sort of world we happen to live in today and adjust one's actions to the realities as they happen to be. The purpose of this report is not to stir up resentment or anger -- although those are perfectly valid responses to the abuses we are forced to live with -- but to simply acknowledge the landscape as it is so that we can make informed decisions. More...


America is Not Broke!
By Scott Baker
Posted August 16, 2012

debt free moneyAmericans of all political beliefs have been told repeatedly that America is broke, that something must be cut and/or taxes raised or we will drown in debt. While the debt is real, it pales in comparison to the 10s of trillions available to us - if we know where to look.

In short, America is Not Broke!

The following multi-trillion dollar economic reforms would completely turn the American economy around to the positive, forever. The first three have all been implemented to some degree in our history. All four are consistent with American values of competition, fair play, economic and ecological sustainability, meritocracy, profiting from one's own labor, and Lincoln's ideal of an America by, for and of the People. More...


Why The Government Is Destroying The U.S. Dollar
by Dan Amerman
Posted August 14, 2012

dollar erosionIn this article we will take a holistic approach to how individual short term, medium and long term pressures all come together to leave the government with effectively no choice but to create a substantial rate of inflation that will steadily destroy the value of the dollar.

If you have savings, if you rely on a pension, if you are a retiree or Boomer with retirement accounts - any one of these five fundamental motivations is by itself a grave peril to your future standard of living. However, it is only when we put all five together and see how the motivations reinforce each other, that we can understand what the government has been and intends to continue doing, and then begin the search for personal solutions. .More...


Goldman Sachs Secretly Believes That An Economic Collapse Is Coming
by Michael T. Snyder
Posted August 11, 2012

Goldman SachsGoldman Sachs is doing it again. Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse. A 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.

It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering. In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse. If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention. More...


Yellow Brick Road: The Fed and A New Path to Debt Freedom
by Ellen Brown
Posted August 9, 2012

In this special underground interview, Rebellious Truths joins Ellen Brown, author of Web of Debt and Chairman of the Public Banking Institute. In this mind-blowing exchange, Ellen Brown exposes buried truths, manipulations, and fallacies about our economy; truths vital to understanding how our money system really works.

She also provides a simple solution to getting rid of our debt now and forever: we the people print the money, not the debt-based and privately owned Federal Reserve.


Are High Frequency Traders Rigging the Stock Market?
by Doug Horning
Posted August 8, 2012

rigged marketDoug Hornig, Casey Research writes: High-frequency traders (HFT) have no interest in any company whose stock they're trading. They don't care about its earnings, what sector it's in, nor who's on the board of directors.

They neither know nor care how it fares in technical analysis, and they don't give a damn about its long-term prospects. Likely as not, they don't even know its name.

At the end of every day, after trading tens of millions of shares, they don't want a single share of stock on their books at all.What attracts them is making a tiny profit on an opportunity that comes and goes in the blink of an eye. More...

These high frequency traders are the ones who would be impacted by a Transaction Tax. Despite their claims, these the people are not "investors", they are gamblers. Real investors would not be affected by such a tax


How to Start Your Own Private Currency
by Derek Thompson
Posted August 2, 2012

Creating a new currencyThe easiest way to start a currency is to draw up an I.O.U. system that allows your friends to trade hours of work. Hundreds of shops in Ithaca, NY, accept "Ithaca HOURs," a local currency backed, not by gold, but by man-hours. I spend an hour mowing an Ithaca lawn and receive a paper note for one HOUR. I walk to the barber's, hand him the piece of paper, and he cuts my hair. Now my neighbor's grass is shorter, my hair is kempt, and my barber is one HOUR richer. And it's all thanks to transactions that might not have happened were it not for a private currency.

The success of Ithaca HOURS shows you don't need to be a conspiracy theorist to see the virtue of private currencies. Maybe you want to create a new revenue stream that stays within your community (see right). Maybe you see a currency shortage and want a new way to grease exchanges. Maybe you want to buy goods in a virtual world like Second Life. Or maybe you want a fast, frictionless currency and you've found thousands of consumers who want the same thing. More...

For another article on the advantages of a local currency, click here.

One key ingredient is missing that would make Ithaca Hours a full success. If Ithaca accepted tax payments in Ithaca Hours, there would be no problem with employees or merchants worrying if they would get "stuck" with too many.

Many people think that the big shock was in 2008. Well that was just the earthquake, the tsunami is still coming. Once the big collapse happens, Places like Ithaca will be able to thrive outside of the corrupt banking and monetary system we now have.


The Gilded Age of Bankers or Banksters
by Richard Mills
Posted July26, 2012

neoFeudalismMark Twain called the late nineteenth century the "Gilded Age" - meaning that the period was golden on the surface but underneath the thin veneer was a cesspool of banksterism, greed and graft, shady business practices, scandal plagued politics and overt displays of upper class consumerism and materialism.

If we stop looking in the rear view mirror right here and fast forward to the future we're struck by the many similarities to today's present conditions.

We have at least equaled or exceeded the extremes of inequality achieved by our late 19th century predecessors. The comparisons between Twain's Gilded Age and our present circumstances are numerous: crony capitalism and government, the mortgage and banking crisis, big business tax breaks, the creation of complex financial instruments, small factories and workshops closing, unemployment exploding, unemployed workers demonstrating, corruption, ostentatious spending, wage depression, massive urbanization and the use of police, armed force, to break up demonstrations. More...


Titanic Banks Hit LIBOR Iceberg
by Ellen Brown
Posted July 22, 2012

web of debtAt one time, calling the large multinational banks a "cartel" branded you as a conspiracy theorist. Today the banking giants are being called that and worse, not just in the major media but in court documents intended to prove the allegations as facts. Charges include racketeering (organized crime under the U.S. Racketeer Influenced and Corrupt Organizations Act or RICO), antitrust violations, wire fraud, bid-rigging, and price-fixing. Damning charges have already been proven, and major damages and penalties assessed. Conspiracy theory has become established fact.

State and local officials across the country are now meeting to determine their damages from interest rate swaps, which are held by about three-fourths of America's major cities. Damages from LIBOR rate-rigging are being investigated by Massachusetts Attorney General Martha Coakley, New York Attorney General Eric Schneiderman, officers at CalPERS (California's public pension fund, the nation's largest), and hundreds of hospitals. More...


The Woes of Regulation
by Shah Gilani
Posted July 19, 2012

regulationsLike most people, I hate to admit it when I'm wrong. But today, I admit it. I have been wrong about regulation. All wrong. I've been calling for more, better regulations to stem the fraud and wicked ways of errant Wall Streeters.

But it's come to light, in a sad and almost tragic way, that this whole regulation thing is wrong from the get-go. After all, it ruined one poor man's near-perfect life. And that's where I draw the line. Thanks to a suicide note, penned before (obviously) his attempted mea culpa exit stage left, which thankfully failed, we know why poor Russell Wasendorf Sr. was so distraught. More...


Extreme Danger Signs
by Jim Willie CB
Posted July 14, 2012

reality checkForget what the political leadership claims on a USEconomic recovery. Reality could not be farther from their claims, as their credibility is strained. Their deception and wishful thinking put to public speeches could not have been more incorrect. The domestic gasoline volume sales from refiners has fallen a ripe 50% since the 2007 peak. Notice that Quantitative Easing, the hyper monetary inflation designed to purchase USTreasury Bonds and USAgency Bonds that almost no global creditor wishes to buy, did not result in stimulus. Instead as my claim has been, it results in capital destruction from rising costs, vanishing profit margins, and retired equipment.

The attorneys and aggrieved victims [of the LIBOR scandal] are lined up, as perhaps over 900 thousand lawsuits will come. That is how many adjustable rate mortgages were arranged from 2005 to 2009, with underwriting banks serving the complaints. The army of US legal beagles is on the job. The lost income to the victims is obvious. The lawsuits will eventually target the central banks. The fraud reaches into the $trillions easily, when all the derivatives are factored in. Think many $trillions in volume times small percentages skimmed illegally. The mainstream press carefully avoids such topics. Do a GOOGLE search of "municipal lawsuits LIBOR" to produce 21.1 million hits. This story will be gathering momentum for several months, and be in the headlines a year from now. More...


America the Beautiful: A Fire Sale for Foreign Corporations
by Dr Brian Moench
Posted July 13, 2012

TPP contry leadersThis may be one of the most important stories ever ignored by the so-called "lame-stream, liberal" media. It's unlikely you're losing sleep over US trade negotiations, but the unfolding business agreement among the US and eight Pacific nations -the Trans-Pacific Partnership (TPP) - should cause every US citizen, from the Sierra Club to the Tea Party to get their pitch forks and torches out of the closet and prepare to "storm the Bastille."

The TPP negotiations have been going on for two years under extreme secrecy, no information has been made available to either the press or Congress about the US position. But on June 12, a document was leaked to the watchdog group, Public Citizen, revealing the current US position and the reason for the secrecy. The contents are surreal, shocking and prima facia evidence for how corporations have become the master puppeteers of our government. More...


The Trans-Pacific Partnership: A Global Attack by the One Percent
by Mark Vorpahl
Posted July 9, 2012

Trans Pacific partnership secrecyDuring the week of July 1st – 7th an international cabal of corporate lobbyists has been meeting behind closed doors in San Diego. Their aim is moving the Trans-Pacific Partnership (TPP) towards completion. For over two years TPP negotiations have been in process, yet the proposals and agreements made so far have been carefully kept from public view, until recently.

A leaked TPP document, published at Public Citizen, has revealed what the 600 corporate advisers involved in the negotiations, including representatives from Verizon, FedEx, and Walmart, have been up to. Considering the contents of this document, it is no wonder why the public and even elected representatives have been kept in the dark. More...


Trans Pacific Partnership: A Trade Deal From Hell
by Stephen Lendman
Posted July 7, 2012

SECRET DEALObama and political Washington support an alphabet soup of repressive police state laws, other freedom destroying measures, and hellish trade deals. SOPA, PIPA, and CISPA threaten online freedom. Free speech and civil protections are endangered species. So are other inviolable rule of law provisions. With bipartisan support, they're heading for the trash bin of history.

Obama officials secretly negotiated and adopted ACTA (the Anti-Counterfeiting Trade Agreement). It established unrestricted supranational global trade rules. Its provisions trample on national sovereignty, privacy and personal freedoms. Power brokers want secretive provisions established with no public knowledge of their destructive harm. TPP aims to rewrite global IP enforcement rules. It also includes numerous other anti-populist mandates. More...


The Tiny Tax That Terrifies Wall St
by Sam Pizzigati
Posted June 25, 2012

tax speculationThe most lavishly paid bank CEO in America, Jamie Dimon of JPMorgan Chase, sashayed back to Capitol Hill last Tuesday for still another congressional hearing on JPMorgan's billions in speculative trading losses this past spring.

Dimon didn't have much trouble fending off the few tough questions that came his way from lawmakers on the House Financial Services Committee. But Dimon and his fellow Wall Streeters may have much more trouble handling a new campaign — for taxing financial speculation — that launched the same day Dimon testified.

In Europe, the Robin Hood campaign has already gained serious political momentum, even support from Angela Merkel, the conservative German chancellor. In the United States, two lawmakers — Rep. Peter DeFazio from Oregon and Senator Tom Harkin from Iowa — have a transaction tax bill pending. More...

For those who think that this tax will "stifle" the small investor, the law could specify that the first 100 transaction in a given year are exempt from the tax. High frequency trading is gambling and speculation, not investment. If the above exemption were made, only the high frequency trading is affected.


Ending of Extend and Pretend Means Capital Flight, Capital Controls and Capital Fear
by Nicole Foss
Posted June 19, 2012

capital controlsThe ending of extend-and-pretend is ushering in a new era of fear and uncertainty which is rapidly evolving into the next phase of the on-going credit crunch.

It is becoming clearer to many that the problems run much deeper than they had perceived, and more people all the time are realizing the systemic nature of the risks we are facing. Fear leads to knee-jerk reactions. In financial markets, it leads to volatility and self-fulfilling prophecies to the downside. It leads to capital flight, and then to capital controls.

There are no no-risk solutions, but different options will suit different people, depending on their circumstances. Some may choose to store assets in another jurisdiction or in another currency if those options are available, but losing control over assets abroad is a distinct possibility, as is difficulty in converting the currency chosen as a store of value back into something that will functions as cash at home. More...


State Budget Shell Game
by Mike Kruass
Posted June 11, 2012

Populist bankFor almost four years, the administration and Congress have showered money, protection and even praise on those who caused an economic catastrophe that still rolls across America like a slow motion tidal wave.

It is crystal clear who Washington represents, and what the American people can expect from the next administration and Congress -– more of the same, rhetoric and excuses. But the needs of the American people can't wait another four years. States and local governments must do the job Washington will not. New leaders and new ideas are urgently needed. One such idea is public banking.

A public bank, such as the hugely successful Bank of North Dakota (BND), is capitalized with public funds, has one shareholder — the people — no outrageous compensation for managers and no incentive to gamble. More...


Bob ChapmanWe regret to inform our readers that Bob Chapman passed away on June 4, 2012. Bob fought hard for truth and to make our country finally became a free Republic once again. It is truly a sad time for us all.


Priceless: How The Federal Reserve Bought The Economics Profession
by Elyse Siegel, Julian Hattem, Jeff Muskus and Jenna Staul
Posted June 5, 2012

Federal Reserve bought economics professionThe Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too. More...


The Instant solution to the new Depression: debt-free money
by Scott Baker
Posted June 4, 2012

only banks create moneyTwo deeper First Principles questions of the world's political leaders must be asked:

1. Are there jobs to be done? If the answer is no, immediately book a plane to whatever country that leader represents, because obviously they are living in Paradise, where no one lives in poverty, no one grows old or sick, the roads are perfectly paved and ridden over by driverless non-polluting cars dropping the kids off at schools where learning is so fun and efficient it only needs to be held 3 days a week -- a good thing, since that's all their parents have to work, though they are doing such interesting jobs they typically take a second job just for the pure enjoyment of it, since they no longer need money!

2. Are there people who want to do the jobs? Don't let the leaders weasel out of this by saying "oh, yes, but there is no money?" That is not the question! The question is, "Are there people who want to do the jobs?" Education too, comes with work experience; no one walks into a new job perfectly trained. That ought to go without saying.

So, what is stopping people from doing jobs they want to do, that must be done? Money. That's all. Little green pieces of paper. Who controls the money supply? Banks. They create money whenever they issue loans. More...


The DISEASE is our Monetary System
by Rudy Avizius
Posted May 28, 2012

Not a Federal Reserve NoteConsider these questions: If you owned a printing press in your basement and could LEGALLY print your own money…

1. would you choose to pay your bills by printing the money you needed?
2. would you choose to pay your bills by going to the bankers for a loan?

Of course you would print your own money. Our government is in exactly this same position. It can legally print its own money as stipulated by the Constitution, and yet we have the spectacle of our the government going to private bankers to borrow money to pay its bills, rather printing its own debt free money. Most people are not aware of this fact, and that is by design.

Can you imagine yourself printing your money, then selling these same bills for the cost of printing to a private bank? Then imagine yourself then going back to the bank and borrowing that same money at face value plus interest. More...


Recovery or Economic Collapse? Bet on Collapse
by Dr. Paul Craig Roberts
Assistant Secretary of the Treasury during President Reagan's first term
Posted May 21, 2012

Collapse coming?Few Americans and no Washington policymakers understand the dire situation. They are too busy hyping a non-existent recovery and the next war. Statistician John Williams reports that when correctly measured as a cost of living indicator, which the CPI no longer is, the current inflation rate in the US is 5 to 7 percentage points higher than the officially reported rate, as every consumer knows. The unemployment rate falls because, and only because, people unable to find jobs drop out of the labor force and are no longer counted as unemployed. Every informed person knows that the official inflation and unemployment rates are fictions; yet, the presstitute media continue to report the rates with a straight face as fact.

Will a dollar bubble become the largest bubble in economic history?

When the dollar goes, interest rates will escalate, and bond prices will collapse. Everyone who sought safety in US Treasuries will be wiped out. We should all be aware that such outcomes are not part of the public debate. More...


Video: The Debt Trap -- So Easy, Even a 12 year old Understands!
by Victoria Grant
Posted May 10, 2012

Victoria, a 12 year old girl gave a presentation in front of 600 people at a Rotary Club and her presentation quickly went viral on YouTube. This young girl understands and gets what only 1 in 10,000 adults understands. It is time to educate yourself on our debt based monetary system and the huge interest burdens it places on you, your children, and your grand children. The bankers do not want you to understand this system, because it enriches them at everyone else's expense. If she can figure this out, you can too!


Video: "Corporate Socialism" alive and well in America
by David Kay Johnson
Posted May 2, 2012


There are companies that have negotiated that they get to keep the state income taxes that their employees pay. The result of this is that all taxpayers in that state are essentially subsidizing that business. This is not free market, this is corporate socialism at its worst.


How States Can Protect Themselves From Financial Collapse
by Brandon Smith
Posted April 18, 2012

Bank of North DakotaThe States of America are, truly, children of the Constitution. The legal framework that is the foundation of State sovereignty and internal administration was unprecedented when the United States won its independence. States were designed to decentralize and keep in check the power of the Federal government. They were meant to be the guardians at the gate, the barrier to the formation of oligarchy or outright dictatorship. This, of course, has changed drastically.The battle over centralized versus decentralized authority and economy has been going on for quite some time. It is undeniably critical in our current climate of crisis, under a government that is bankrupt in every sense and a currency that is on the verge of calamity.

The following is a step-by-step method that States could use to accomplish the task of insulation from financial crisis and Federal control. Much of it hinges on a willingness by State governments to actually pursue independence, which might seem like a naïve dream to most of us. More...


A Doomsday View of 2012
by James Petras
Posted April 17, 2012

Collapse of EuroMany of the major institutions and economic relations which were cause and consequence of world and regional capitalist expansion over the past three decades are in the process of disintegration and disarray. The previous economic engines of global expansion, the U.S. and the European Union, have exhausted their potentialities and are in open decline. The new centers of growth - China, India, Brazil and Russia - have run their course and are de-accelerating rapidly and will continue to do so throughout the year.

The austerity programs imposed in Europe, from England to Latvia to southern Europe will really take hold in 2012. Massive public sector firings and reduced private sector salaries and job opportunities will lead to a year of permanent class warfare and regime challenges. The 'austerity policies' in the South, will be accompanied by debt defaults resulting in bank failures in France and Germany. England's financial ruling class, isolated from Europe, but dominant in England, will insist that the Conservatives 'repress' labor and popular unrest. A new tough neo-Thatcherite style of autocratic rule will emerge; the Labor-trade union opposition will issue empty protests and tighten the leash on the rebellious populace. In a word, the regressive socio-economic policiesput in place in 2011 have set the stage for new police-state regimes and more acute and possibly bloody confrontations with workers and unemployed youth with no future. More...


The Golden Eye of the Debt Hurricane
by Jim Willie CB
Posted April 16, 2012

hurricane eyeWhat an incredibly complex confusing and treacherous month. It can be safely said that 80% of the activity is almost totally kept from the public. The financial system is breaking in an accelerated fashion. The most significant two factors at work are the Iran sanctions and their powerful backfire, and the futile efforts in Europe to stem the banking center collapse. The anti-USDollar federation that spans widely across the globe is gathering strong momentum. Financial aggression is being met by financial alternative development.

As Greece moved off the daily news fabrication factory, the reality of a collapse in Spain and Italy has moved to the front center of observations. Meanwhile, the American nitwits continue to argue over Quantitative Easing when it never stopped, and in fact, went global under their noses. The US news machine, dominated by the syndicate, churns out absurdities after more nonsensical bites on an economic recovery. The subprime loan machinery has ramped up. The retail factor does not tell of strength, but of weakness. Spending on consumption does not indicate strength, but a path to ruin still not well recognized. The gap between reality and reports is diverging. More...


The Banks Win, Again
by Shah Gilani
Posted March 30, 2012

big banks winFinally, some well-deserved help for beleaguered monster banks is on its way. Make that, well on its way.

Those poor big banks accidently and inadvertently got caught up making so many easy loans to deserving, hard-up borrowers, who wanted to buy overpriced dream homes, and a few million other folks who deserved two homes and McMansions to keep up with the Joneses (you know the Joneses… most of them were "friends of Angelo").

But now, at last, the banks are making profits again. After suffering the indignity of insolvency and near collapse for all their hard work, the New Samaritans are still being haunted by their generosity, as regulators hound them into settlement submission, merely for doing God's work. More...


Explaining Central Banking to the Publicly Educated
by Jeff Berwick
Posted March 30, 2012

Trashed the economyDon't understand economics? And the thought of even trying makes your eyes cross?

That's what they want. Government, which is an artificial, unnecessary construct has made a concerted effort to make economics sound as difficult as possible for decades. The reason? They can use your programmed ignorance as the publicly "educated" to confuse you about how they manipulate the economy for their benefit.

Economics is simple. Nearly the full extent of it can be taught in a near pamphlet, as has been done in Henry Hazlitt's "Economics in One Lesson". That is the full extent that any individual needs and should know about economics. More...


The Dallas Fed Weighs In With Report on Size of the Big Banks
by Wallace Turbeville
Posted March 27, 2012

too big to failThe Federal Reserve Board of Dallas released a report from its chief researcher, Harvey Rosenblum, which has caused quite a stir. The report cites Fed statistics showing that the five largest US banks hold a remarkable 52% of all bank assets.

The most dramatic part of the report and the covering letter by Dallas Fed President Richard W. Fisher is that they call for a "downsizing" of these megabanks. Their primary argument is that financial institutions remain "too-big-to-fail," risking another painful and damaging bailout if a large financial crisis is threatened. In their view, the continuing cloud of too-big-to-fail hanging over the economy is simply intolerable and costly. More...


The Parasites of Big Finance
by Ralph Nader
Posted March 23, 2012

illusionary recoveryTraders making speculative money from speculative money, traded in trillions of dollars, now hold hostage the real economy wherein people make money from providing needed or wanted goods and services. The fate of American workers, their pensions and the real businesses that employ them, rests on the globalized dominoes that a teetering Greece could set in motion. This is the craven logic of a global casino economy, driven by split-second computerized algorithms and camouflaged by the phony theory of "free trade" which is really corporate-managed trade.

The U.S. does not need to be shackled by the global corporatists to what may happen in Greece or Spain or Portugal. We should be less dependent on financial economies abroad and more self-reliant and independent of the global economy's dangerously contagious risks. More...


Bernanke Seen Not Knowing Jobless Rate Less Than Fed Predictions
By Caroline Salas Gage and Steve Matthews
Posted March 19, 2012

bernackeDavid Waldrop, 59, says he considers himself retired after searching unsuccessfully for work comparable to the job he lost in July 2007 at the U.S. Department of Energy in Atlanta. "There was certainly nothing in my area at my level," he said. While the right opening might pull him back to employment, for now he sees his exit from the U.S. labor force as permanent. "I don't see it happening," he said. "I don't see anything offering opportunities."

Waldrop is one of millions who have dropped out of the labor market in the aftermath of the deepest recession since the Great Depression, causing the employment-to-population ratio to fall to 58.6 percent from 62.7 percent at the end of 2007. More...


The Relationships Between Wall Street, the Fed, and Politicians Are Crumbling
by Graham Summers
Posted March 17, 2012

banker end gameThe relationships that most matter for stocks are those between the Federal Reserve, Wall Street, and the White House. The policy that matters most is the Fed's ability to convince the market that it can and will keep the markets up without letting inflation get out of control.

Regarding the relationships that matter, I've stated for months now that we are going to see them crumble. This process has already begun in the sense that we've seen:

1) Key Wall Street players hiring famed defense attorneys (Lloyd Blankfein of Goldman Sachs) in preparation for future litigation.

2) The Fed distancing itself from its responsibility for the Crisis by:
a.Suing Goldman Sachs
b.Opening itself to Q&A sessions and townhall meetings
c.Having "pro Fed" editorials written in the Wall Street Journal
d.Putting the blame for the Crisis and the US's financial weakness on Congress's shoulders

3) Various members of Congress (especially Ron Paul) and GOP Presidential candidates taking aim at the Federal Reserve. More...


U.S. Economy Extend and Pretend is Coming To An End
by James Quinn
Posted February 29, 2012

Near the end gameThe real world revolves around cash flow. Families across the land understand this basic concept. Cash flows in from wages, investments and these days from the government. Cash flows out for food, gasoline, utilities, cable, cell phones, real estate taxes, income taxes, payroll taxes, clothing, mortgage payments, car payments, insurance payments, medical bills, auto repairs, home repairs, appliances, electronic gadgets, education, alcohol (necessary in this economy) and a countless other everyday expenses. If the outflow exceeds the inflow a family may be able to fund the deficit with credit cards for awhile, but ultimately running a cash flow deficit will result in debt default and loss of your home and assets. Ask the millions of Americans that have experienced this exact outcome since 2008 if you believe this is only a theoretical exercise. The Federal government, Federal Reserve, Wall Street banks, regulatory agencies and commercial real estate debtors have colluded since 2008 to pretend cash flow doesn't matter. Their plan has been to "extend and pretend", praying for an economic recovery that would save them from their greedy and foolish risk taking during the 2003 – 2007 Caligula-like debauchery. More...


How Greece Could Take Down Wall Street
by Ellen Brown
Posted February 25, 2012

Greece debtCDS are a form of derivative taken out by investors as insurance against default. According to the Comptroller of the Currency, nearly 95% of the banking industry's total exposure to derivatives contracts is held by the nation's five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the "insurer" actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down.

Players who have hedged their bets by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets. The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives "weapons of financial mass destruction." It is also why the banking system cannot let a major derivatives player—such as Bear Stearns or Lehman Brothers—go down. More...


Banking on Failure
by Public Citizen Report
Posted February 11, 2012

House of cardsBetting on the misfortune of others has an unsettling quality to it. It just feels wrong. Under our current financial regulatory regime, speculators freely gamble on businesses failing and countries defaulting. In addition to its unseemliness, betting on others' failure poses a grave risk to our financial system. Because these transactions are not transparent and are poorly regulated, we have little idea who is betting against whom or to what extent. This creates uncertainty in the market and proliferates risk. Additionally, betting on others' failure fundamentally changes the nature and purpose of financial markets. In theory, markets are supposed to allocate capital efficiently, benefiting individuals, businesses, and society as a whole. Banking on failure skews incentives such that investors profit when others fail.

CDS are the destabilizing instruments that facilitated the financial meltdown of 2008. At first glance, CDS look like insurance products. But because speculators can use them to profit from and even enable failure, CDS can also be gambling products. More...


Lessons From MF Global - Is Your Money at Risk?
by Ed Pawelec
Posted January 28, 2012

criminal theft of customer accountsAllegedly, as much as $1.2 billion in customer funds have been "misplaced" which would appear to be clearly against the law. Customer funds are supposedly sacred in the brokerage/bank/etc. business. Should one of these custodians of investor funds go belly up because a proprietary trade (where the firm is supposedly risking its own capital) went wrong, then the customers should not be on the hook.

One of the causes of the MF blow up is related to re-hypothecation. Most brokers and asset managers in the US are allowed to hypothecate and/or re-hypothecate assets held in customer margin accounts. This works similarly to a mortgage. You own your home, but the bank that holds your mortgage has a claim on that asset if you fail to pay. In other words, despite the fact that you are the owner of the asset, the bank has a "hypothetical" claim against that asset through the lien on your house -- thus the term hypothecation. More...

from marketing flyer


Our Next "Lehman Moment" Is Coming Fast
by Shah Gilani
Posted January 19, 2012

next Lehman coming soonIt's musical chairs, and sooner or later the music is going to stop. Greece looks like it will be the first one standing, or in this case, falling down. Portugal could be next, or Spain, or Italy. Greece has more than $1.26 trillion (1 trillion euros) of public sector debt outstanding. Do you think that a real default isn't going to crush a lot of banks? Wake up. And if you think that Greece defaulting (or even forcing a 50% haircut on private investors, that would be banks, folks) wouldn't spill over into other countries and across the globe... wake up.

Ah, then there's that little downgrade thing that happened on Friday after European markets were closed. Just because the downgrade of the U.S. from AAA to AA+ didn't cause our borrowing costs to rise doesn't mean it isn't going to happen in Euroland.

It will happen. Downgrades will trigger new capital calls as margin requirements will increase to offset the lower quality of collateral, we're talking about the same collateral folks, the same sovereign bonds. It's an increasing pile, make that pyre, and it's going to self-ignite. More...


Wall Street's Ratings Agencies Undermine Europe's Attempt at Economic Recovery Acting Like Financial Terrorists
by Danny Schechter
Posted January 17, 2012

financial tyrannyWe live in an increasingly degraded country. Our politics are degraded and a laughing stock to the world. Our military is demoralized and degraded with soldiers urinating on dead civilians and awaiting deployment orders for the next illegal intervention. Our education system has been degraded with standards falling and pervasive defunding. Our transportation system, ditto.

I could go on, but I don't have to. We are all living the decline with downward mobility, jobless and foreclosures, to cite a few trends that make life so miserable for so many.

Now, our godlike financial ratings agencies have decided to degrade nine countries struggling to fix their financial crisis. The decision by Standard and Poors (Best renamed, "It is now Standard to Be Poor") to downgrade credit ratings for France, Italy, Austria and six other European countries signals those nations that Wall Street has them by the cojones. Their costs for borrowing will go up.

They are being warned: We are in Charge. Do as we say! More...


The Mystery and Magic of Money
Marilyn Mehlmann
Posted January 14, 2012

Banks create money our of thin air"Do you know who makes money?" challenges Bernard Lietaer, Belgian professor at Naropa University in Boulder, Colorado. The answer turns out to be simple. The answer is unexpectedly simple, though it does have a chicken-and-egg quality: Whoever is in power in a society, creates its money. If you want to know who is in power, look for the money-maker.

James Robertson, speaking in London in 2000, points out that the banks have been enjoying a free-lunch table for many years. In three decades there have been 97 bank crashes in the world. That's an average of more than three a year. There's surely a lesson here:
Part One of the lesson is that money is made out of nothing but the trust between you and me and the system.
Part Two of the lesson is also very simple; it's "heads I win, tails you lose". If the banks are successful, they keep the profits. If they fail, the public pays. More...

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