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Deficits Funded With Monetization And Hyperinflation
International
Forecaster
Thursday, Nov 5th, 2009
Almost all the excessive hedge fund de-leveraging
is over. Banks have continued to hold 40 to 1 leveraged positions,
because they cannot exit them without a major economic recovery
without going bankrupt. Our government remains trapped in the
same old bubble mentality in its activist control banking and
policymaking having issued $1.9 trillion in additional debt
over the past year. Banks and government still do not see the
warning signals. Any sane businessman who views the continued
leverage being used by Fannie, Freddie, Ginnie and the FHA has
to cringe in horror, as leverage increases daily without end.
We predicted six years ago that the government would end up
owning all the mortgages in a bankrupt nationalization process
and that is exactly what is happening. Mind you this has been
going on worldwide in order to deter financial collapse. Papering
over the problem is not a solution. We are starting to see governments
worldwide begin to raise interest rates and begin to withdraw
loans in order to bring back financial normality. Wait until
they discover such well-intentioned moves will cause a relapse
in economic and financial activity and they begin to slip back
into the morass from which they thought they were ascending.
If rates are raised and funds withdrawn from the system the
world financial system will fall into depression. They know
that, but they are hoping hope against hope they are wrong and
that it will work. They do not want it discovered that they
created this monstrous problem deliberately.
Already we are seeing global leveraged speculation growing.
They believe the problems are over and they are wrong, it isn’t
over, nor will it be for a long time to come.
They are even moving headlong to destroy the US dollar as the
world’s reserve, certainly a reversal of fortune. Since
8/15/71 this same group has been destroying the dollar in their
greed for money and power by abandoning the gold standard. They
knew exactly what they were doing. It is now official worldwide.
The Illuminists have decreed officially that the US dollar is
being phased out after they managed to destroy the manufacturing
and service base of our economy via free trade, globalization,
offshoring and outsourcing. A deliberate attempt to destroy
our country and for transnational conglomerates to hide their
ill-gotten profits in offshore entities, which pay no taxation
to our government.
There is still nothing constrained about what banks and brokerage
houses are doing. They are still leveraged and the credit crisis
is not over. We may get a respite over the next nine months,
but if $2 trillion in stimulus and increased bank loans are
not forthcoming, it won’t work. If the money and credit
is put into the system they’ll extend another year and
if not the house will come tumbling down. Even if they expand
that will be negatively affected by selective higher interest
rates, withdrawal of government loans and a cutback in money
and credit, which is already in process.
All of the foregoing will lead to even more volatility in markets.
Economies will not improve for any lasting period of time,.
All of this will also be negatively affected by the deliberate
attempt by elitists to end the reign of the US and European
economies. Get ready for ever lower wages in Western economies
and permanent unemployment of 15% to 25%, while the transnational
conglomerates and the third world prosper. This pandemonium
of change will drive investors away from stock and bond markets
and into commodities and gold and silver. Wealth preservation
and safety will become the watchword by investing. This in part
will be caused by falling stock markets, financial crisis and
continued monetary disorder. Making matters worse re-flation
has been underway since May. The inflation will manifest itself
this coming year, as official inflation numbers hit 5% and real
inflation rises above 14%. This game is not for everyone, but
like it or not we are all in the game.
In America governmental policy has been dreadful, but more
importantly those policies are formulated, paid for and executed,
by forces behind the scenes. Elected representatives have done
a terrible job, but banking and Wall Street are what have brought
us to our present state of affairs. There has been nothing well
intentioned that has expired.
Americans are deeply in debt and it will be a long time before
those who still have jobs to extricate themselves. Savings at
the last look were increasing at a 4% rate, which is certainly
much better than minus ½%, two years ago. At this stage
the problem of saving means less consumption at a time when
buying is badly needed. The country needs double that amount
of savings and it would have to be put into government debt,
which loses buying power almost every day as the dollar falls
in value. A lose, lose proposition for the saver. This is why
the government stopped guaranteeing money market funds a month
ago, they need the savings to fund government debt. The public
sees that and thus government debt is not adequately being funded.
As a result the Fed is having to buy that debt with money created
out of thin air, which is monetization, which is inflationary.
As a result before next year is history real interest rates
will rise. Real inflation rates based on the 1980 formula are
currently 6-1/8% and have nowhere to go but up. First led by
oil prices and then by food prices. Worse yet, the administration
has no plans to reduce the growing deficit. In Detroit money
was being given away. When asked where it came from one of the
recipients said, from Obana’s stash. This is a perfect
example of American thinking. What Americans and even professionals
do not understand is that those deficits will be over $2 trillion
a year as far as the eye can see. The only way to fund such
deficits would be by monetization and higher inflation. The
stealth tax would essentially fund the deficit and we might
add send gold and silver considerably higher. Americans do not
understand inflation, but politicians, elitists and the Fed
does. The dollar has been the safe haven for more then 100 years.
That is no longer true. Proof of that is the difficulty of buying
gold and silver coins in Latin America, which has had a long
history of inflation. They understand the havoc inflation and
hyperinflation brings. There is not a chance that the administration
will get its fiscal house in order. That means the Fed will
not only continue to buy government debt, but debt consisting
of mortgage securities, commercial paper and credit card debt
as they are now doing. Such action by the Fed actually encourages
government debt. The thought process is, as in the last two
administrations; let the next administration deal with it. Both
the administration and the Fed will eventually take down the
financial system. Even if proposed legislation is passed to
give Treasury some power over the Fed it will mean little. Both
entities are controlled by Illuminists. In order to save their
skins we will be the recipients of crisis probably at first
along the lines of what transpired in Argentina in the early
2000s, then eventually into a Zimbabwe or Weimar situation.
The future is all there for one to see, especially for those
who have studied history.
The recovery that is supposedly underway is nothing more than
a parallel movement born of false stimulus, that will last several
months and will become a beacon for another such plan in 2010
funded by Congress and increased bank lending. In all, the plans
could buy an extension of economic peace of perhaps two years,
six-months of which have already passed.
World trade is not going to increase in any meaningful way
and the dollar will not experience a snapback in value. World
trade has been growing for three or four months and no dollar
rally has materialized. Foreigners are obviously sellers, not
buyers. They obviously do not as yet buy the recovery scenario.
How can we have recovery with unemployment rising from 21.4%
and real disposable personal income falling 3.4%. One-time stimulus
or inventory items represented 92% of quarterly growth.
Does that sound like recovery to you? Of course not. The only
people who believe this ridiculous lie are academics, banking,
Wall Street and government. The man on the street sees it quite
differently, because he sees the unemployment. He knows his
income is buying less in spite of government lies. Fifty-eight
percent believe the recession/depression has a long way to go.
Less than 20% believe we are on some sort of a bottom. Sixty-four
percent believe we are still in a bear market rally and more
and more believe that government is intervening in the market.
The government is issuing about $250 billion a month in Treasury
bills and notes and bonds and that figure increases each month.
They tell us the bid to cover is 3 to 1; 2 to 1 is normal, but
forget to tell you a good part of that participation is from
foreign central banks that are buying Treasuries with swap funds
or from primary dealers who assume no risk because the Fed guarantees
their risk and profit. In order to assure a smooth auction both
silver and gold are taken down, and they rally the dollar. These
are temporary actions, which in this case included a lower gold
price to help gold commercials on the Comex extricate themselves
from in the money options. These are the deceitful actions that
even most professionals do not understand. As we predicted gold
and silver flattened out and have now resumed their upward movement
to $1,200 or $1,250 an ounce where the elitists will make their
next stand. After having tested $1,030 this past Wednesday,
on Tuesday it’s trading at $1,061 as we predicted. It
will now break above $1,070, as silver moves toward $20.00.
It is currently $16.41. As usual the CFTC stands by and does
nothing as our government rigs the market. Between the CFTC
and the SEC there is regulation, except for those who are connected
or are elitists. The Fed now shows a balance sheet approaching
$3 trillion and that could be $5 to $6 trillion by the end of
2010. That should be enough to take the dollar to 50 or lower
on the USDX. At all costs be out of the dollar. Without the
existence of the “Working Group on Financial Markets,”
gold would already be $2,500 to $3,000; silver at $50 or more
and the dollar at 50 to 60. It will all come to pass, just be
patient. Let’s see what they pull out of the hat in January
when the FASB decrees no more mark-to-model and no more two
sets of books. It will be very interesting. Then there is a
well Basil II and III to deal with. 2010 will be a nightmare
year for financial institutions if their edicts have to be followed.
The stock market will truly get slammed. Front-running, naked
shorting and black box trading are the order of the day as condoned
by our SEC, an elitist appendage. We wonder how investors will
view 2010 as some 1,000 banks go under. That is not very reassuring.
The intent from its very inception is the nationalization of
the US banking system. The Fed busted these banks deliberately
to bring us closer to a one-world banking system run by the
incompetent IMF, or World Bank. Not only does the investor not
understand what is going on but neither do the professionals.
It is the socialization of losses for the giant financial houses
– banks, brokerage houses and insurance companies. Worse
yet they are all broke. It’s like real estate, both residential
and commercial, an act of planned destruction to destroy the
savings of average Americans and to take down more lenders in
a planned demolition of the lending and banking industry. This
didn’t just happen; it was planned that way. These moves
were planned to deliberately take the US and Europe to its knees
financially and economically to force them to accept world government.
That is what the coming Copenhagen conference is all about.
Those who would sound the bell of truth have been compromised
- our economists, analysts and the media almost all who are
controlled by the Illuminati. They are all afraid to speak out,
because they will lose their jobs and perhaps be banned forever
from employment in their chosen fields. This is how the system
works, by coercion and intimidation. This silence brings us
to the doorstep of great inflation similar to those of Argentina,
Zimbabwe and Weimar Germany. It as well includes the abandonment
of the dollar as world reserve currency and the introduction
of a world trading currency to be followed by a one-world currency.
According to the Financial times interview with George Soros
last week China has been chosen by the elitists as the successor
to America. Including its communist government. You didn’t
think that that abandonment of the gold backed dollar on 7/15/71
was an errant event did you? It was the beginning of the planning
for the future death of the dollar and the beginning of a complete
fiat world of money, whose value was guaranteed by the worst
bunch of thieves in history.
"When the people find they can vote themselves
money, that will herald the end of the republic."
- Fall Of The Republic - Buy
the DVD here
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INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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