The use of
direct, often confrontational action, such as a demonstration or strike, in
opposition to or support of a cause.
heard the expression, “this one just fell into my lap”?
Well, this one certainly did just that – and I wasn’t even
looking for it. Just happens to involve every mainstream economist’s
favorite whipping boy these days – CHINA. Just today I found
myself reading part 2 of what is undoubtedly going to be a gem of a trilogy
[my way of saying must read]. Maybe you have heard the plot line
– China is growing so fast, there are no controls and it’s
rumored that regulators have lost control of the situation. Well, I
hate to be the bearer of bad news – but there’s a little more
meat on the bones of those shallow whispers than you might think at first
blush. What I’m referring to is China Aviation Oil Corp’s
550 million derivatives loss uncovered by regulators. In Joe
Duarte’s most recent pen, The China Syndrome, Part 2, Duarte points
out that China Aviation Oil apparently got caught making a rather large one
way bet on the future price of jet fuel. For those of you who
aren’t aware of this incident, I’ll give you a little hint, China
Oil was not betting the price of oil was going up. Now I will admit
that I’m only guessing that China Oil’s paper losses mounted, as
oil prices rose, to the point where responsible regulators forced China Oil
to at bare minimum disclose the extent of their losses – if not make
plans to cover. This timely revelation should serve as foreshadow as to
what might befall institutions that do nothing but short precious metals on
the COMEX exchange - regardless the size of
their short positions? Duarte’s article got me thinking, this
fact is seldom if ever reported. Thank goodness, a writer with
connections to some of the other mainstream financial media outlets, Joe
Duarte, has finally taken up the cause. Duarte aptly points out that
there is mounting international concern, as predicted here 12-2 [assume Dec.
2/04?] citing Bloomberg quoting S & P that,
“Complex corporate structures and unreliable accounting
practices make it difficult to perform substantive analysis on some
China-related companies. On the accounting side, the problem of limited
disclosure is compounded with problems of compliance.''
Now that’s quite a mouthful isn’t it? In the
above quote, the author cites complex corporate structures? He cites
unreliable accounting practices with limited disclosure compounding
everything. I must admit, at first I was confused as I read through all
of this. I mistakenly thought the author was writing about Enron and
Arthur Anderson or Long Term Capital Management and the secretive
circumstances surrounding the Fed’s bail out of the same.
Isn’t it funny how timely reporting can trigger thoughts about similar
issues a whole continent away.
You see, over the past year I’ve been doing a fair amount
of reading and I’ve even written the odd quip as well.
Gotta tell ya, I’ve noticed something really interesting –
perhaps you have, too. What
I’ve noticed is that every time the price of strategic commodities
[like oil, gold, silver and copper to name a few] get a full head of steam
– pundits get concerned that China is going to imminently go
directly into the tank and blow up. Whether or not that comes to pass,
who knows? Others have predicted it and, so far, it hasn’t come
to pass. But that got me thinking about the implications of the
derivatives quagmire that large financial institutions are in today. If
the most recent oil price surge, from roughly 41 and closing in on 50 bucks
just today, can destabilize China – just think what kind of damage five
years worth of annual production short position in gold can do, if prices
rise [which they have], to a company like
Barrick Gold, or worse yet, their banker J.P. Morgan Chase with a 43 Trillion
The timeliness of this article cannot be understated. Duarte has
really hit the mark with his concern for the potential of malfeasance as it
relates to the exponential growth in the use of derivatives. You see, I
think the world needs more “good guys” – ones affiliated
with news outlets like CNN, CNBC and the WSJ, to point out the pitfalls as to
how nasty things can get when derivatives are used unwisely or to excess. So,
by extension, I’m sure it’s only a matter of time before writers
like Joe are all over Fannie Mae, their accounting chicanery and their 5
Trillion in notional derivatives. I’ll bet there are no one way
bets in a book that size eh? Oh, then there’s the small question
of J.P. Morgan Chase’s 43 Trillion notional derivatives book too?
This number I speak of – 43 Trillion – just how big is it
anyway? Well, that’s roughly four times the size of the U.S.
economy [GDP of 11 Trillion]. That’s roughly two times the size
of the total market capitalization of all companies listed on the New York
Stock Exchange. You see folks, a derivatives book this size is akin to a
black hole; we know that it exists but is so immense that even the light of
day cannot escape its grasp nor can regulators get close enough to its event
horizon to fully understand it. I mean, you are all aware that there is
absolutely zero regulatory oversight on these books, aren’t you?
You see, dear reader, where Fannie and J.P. Morgan et al are concerned, it
seems to me it’s always a case of, trust us, we’ll tell you all
if and where it hurts. Well spotted Joe!
n. pl. ef·front·er·ies
fiat we trust. Quite a bold statement isn’t it? The next
time you stand naked in front of the mirror [another thing we all do and
never admit or talk about] ask yourself if you really are a believer?
By most learned accounts, few would argue that the world is facing some
pretty serious challenges right now. In a big picture sense, natural
disasters give rise to homelessness, hunger and famine. Drugs and
substance dependency tear at the fabric of civilization. Lies, fraud,
chicanery and self indulgence are endemic in society today – or am I
being presumptuous? The last time I checked, theft was still a
crime. We, the people, and our currency have been robbed of our purchasing
power to the tune of 95 % over the past 75 years. Stated another way, a
dollar today buys about the same amount of goods and services as 3 cents in
governments or their agents steal in this manner, we call it inflation.
I call this fraudulent – or am I being brazen? The debasement of
fiat money is not an Act of God like an earthquake, volcano or a
tsunami. Debasement of money only occurs when leadership and monetary
officials consciously unleash its insidious clutches on an unsuspecting public.
It amounts to legitimized state sponsored and ensconced theft. To
suggest otherwise is an overt lie – or am I being bold?
currency is a proxy for wealth or what is valued and, used as intended,
allows for an orderly exchange of goods and services. Gold is
wealth. Because it is scarce, indestructible and desirable; it has
honorably performed its role of currency for millennia. Gold is
honest money. It also facilitates trade. Why do you suppose
governments have opted to replace honest money with fiat currency? Do
you really believe their claims that honest money would stymie growth and
prosperity? Shouldn’t we all remember that the 75 year period
prior to the creation of the Federal Reserve were highly productive, typified
by rising real incomes, low unemployment, no federal/national debt, adherence
to a gold standard and ever so slight deflation? The rub here folks, as
I see it, honest money limited the government’s ability to steal our
wealth through stealthy inflation, on top of and in addition to regular
taxation, right in front of our noses with most of us being none the
wiser. Have you ever stopped to consider how similar the word
“wealth” is to “stealth” and
“health”? In particular, take note that the root word of
stealth is “steal”. Isn’t it odd how we, by the good
Grace of God, use our health to create wealth which government then steals
through stealth to relieve us of the fruits of our labor? A classic
“double – dip” I’d call it! What this insidious
process does is it dilutes compensation, trivializes effort, breeds contempt
and amplifies disparities between the haves and have - nots. Do you
remember, there was a time when hundreds of thousands or a million dollars
was a whole lot of money? Then we moved on up, so to speak, where we
spoke in nonchalant terms of billions of new borrowing daily. Lately,
it seems to me that we speak of our debt in term of Trillions, a third
magnitude of increase – without batting an eye? Has compensation
for the average Joe seen increases of three magnitudes? Is anyone
besides me wondering how long it takes before we hear the next magnitude of
measure – quadrillions – quietly creep into the accepted lingo of
our financial consciousness? When we start speaking of the obligations
and debts of the U.S. government in terms of quadrillions – any bets as
to what the price of a home, loaf of bread or GOLD might be then? The
erosion of these meaningful benchmarks has given rise to the next topic:
mor·al [ môrl, mr-]
Conforming to standards of what is right or just in behavior;
To decline from a state of normality, excellence, or prosperity, rot;
has become of our institutions? I would contend that one of the most
important hallmarks of our western society has been freedom of speech and
thought and the ability to express oneself within the bounds of
decency. Revelations like the article cited here, tell me that free speech has a price
tag dangling from it and
pervasive is the practice of pundit payola? First it was black conservative Armstrong Williams found
sucking on the federal teat to
the tune of $240,000 to promote the Bush administration's "No Child Left
Behind" legislation. Armstrong, in his own defense, revealed that there
were plenty of other pundits on
the government dole, and it wasn't long before "pro-family"
columnist and author Maggie Gallagher was outed by
Howard Kurtz in the Washington Post. Gallagher's $21,500 contract was with the
Department of Health and Human Services to push the administration's $300
million "marriage initiative" aimed at persuading the nation's
breeders to tie the knot – while simultaneously (and just as actively)
campaigning against the legalization of gay marriages. In
pushing the initiative in National Review and other venues, Gallagher
neglected to mention that she had rented herself out to the U.S.
decency has no bounds. Should any of us really be
surprised at these revelations? We claim to live in a “just
society” where theft has been consciously and officially sanctioned by
and for the state. Is it such a stretch that these same cads
wouldn’t hijack the media too? Shouldn’t we all have seen
Have we made progress as a society? Oh sure, if you can
call this progress – we’ve
come a long way. With a little luck, we should “progress”
all the way back to the Stone Age within a few years. Funny thing, GOLD
actually meant something back then.
market trading memo revealed
By Päivi Munter
Published: January 31 2005 22:06 | Last updated: February 1 2005 10:17
huge trades in the eurozone government bond market last August - which were
later described as “knuckle-headed” by Chuck Prince, its chief
executive - came shortly after an internal memorandum spelt out how the US
investment bank could “very profitably” destabilise the market.
obtained by the Financial Times, outlines a strategy to shake up the eurozone
market, where trading margins have contracted because of transparency and
dated July 20, two weeks before the trades were conducted says Citigroup
wanted to “turn the European Government bond market into one that more
closely resembles” the less transparent US Treasury bond market, which
is dominated by a much smaller number of investment banks. “Over time,
this may help to kill off some of the smaller dealers,” the memo adds.
Gianluca Garbi, chief executive of EuroMTS, the company that runs electronic
trading in European government bonds, said he was “astonished” in
response to the FT’s report about the memo……”
Unfortunately conspiracies live, dear reader. Silence on these
matters, like the press itself, is usually bought and paid for with the
fruits of our labor.
Many Devils in Doublespeak and Doublethink?
who see through the Smoke
and Mirrors of politics, the
controlled news media, and the shenanigans of central bankers and their
minions [GSEs which operate as second tier central banks themselves being
able to siphon [steal or stealth, perhaps] money from Wall Street through the
process of money market fund intermediation], are generally labeled as
“childish persons who have a major problem.” It seems like
I read a lot of stuff by problem children who have likewise, never been given
the opportunity for a modern day time-out. In my youth back in the 50s,
“time-out” meant the time it took for my behind to go out the
kitchen door to the poplar tree for a switch bringin’ it back to Momma
for a little “constitutional discipline” – which they lock
parents up for today under the doublethink of child abuse.
Franklin said in Poor Richard’s Almanac that a penny saved is a penny
earned. He also said neither a borrower nor a lender be. Ben also
stated that at the signing of the Constitution that the Founding Fathers had
created a Republic – a long as we could keep it. It is absolutely
amazing how intelligent our Founding Fathers really were during the American
Revolution and in the formulation of the Constitutional Republic. All powers
not delegated to the federal authority remained with the individual states
that formulated the Republic. The major weakness in the US Constitution was
the issue of slavery, not being able to deal with the immorality of the
economic as being so capital intensive that it was on the onset, a burdensome
economic. This economic would haunt American politics for over 70 years
before April 12, 1861 when Confederate cannons would open fire on the Boys in
Blue in Fort Sumter in
Charleston harbor – beginning the bloodiest conflict in American
History with 622,511 dead. If the bullets didn’t kill you on the
battlefield [110,000 Blue + 94,000 Gray = 204,000], the disease or starvation
did [418,511]. The War of American Secession as it is known in Dixie began as
an economic war grounded in national politics.
Pundits at CNBC are doublespeaking and doublethinking today, February 2,
2005, with the captions on the bottom part of the Bubble Vision tube
“Waiting on the FED” and “decisions on interest
rates.” The FED Boys have been in secret squirrel FOMC meetings
this week trying figger out what to do next and what kind of obtuse and
obfuscated English words they can construct in a few sentences to keep
everyone in the dark about their Ponzi Legal Tender Funnie Money System
– one of the greatest con games in economic history.
Mr. Lincoln ran out of money, he printed his own under Mr. Salmon P. Chase, the
Secretary of the Treasury. They were called greenbacks, made legal tender,
and became about as worthless as the Continental that the Continental
Congress printed to finance General Washington and his boys. Mr. Chase later
on the Supreme Court judged that the greenbacks were illegal, and by the
mid-1870s they were mostly redeemed in specie. The Confederate paper money,
was never redeemed in specie. That is what happens when you lose. There is a
scene from the movie Gone with the Wind, where Gerald O’Hara,
who’s lost his mind since his wife, Miss Ellen, has died in the war
from disease, tells Scarlet that they have plenty of money to live on and run
Tara, the plantation. Of course Miss Scarlet is thinking real money like gold
and silver, and the expression on her face looking at worthless wallpaper
Confederate paper money when Pandora’s Box is opened, tells a big
story. This is similar to Thomas Andrews’
answering Captain Smith’s question about the 300’ gash below the
waterline in RMS Titanic’s hull…. since the watertight bulkheads
didn’t extend to the upper decks. Realizing the unthinkable was about
to happen, must have been a truly enlightening experience about the faulty
design of the ship – and there was no one else to blame since he
[Andrews] designed the ship.
[better known as heavy metal, or gold and silver, if you prefer], paper money
declared legal tender not redeemable in specie, central banking, the GSEs,
and real estate are all related in my view. A lot of folks are impressed by a
large expensive home in a micro realty market. I am not, if this large
expensive home is financed with long term debt. I am even less impressed if
the large expensive home has a 125% to 150% loan to value ratio home equity
loan placed on top of the mortgage. Knowing that mortgage pools are riddled
with home equity loan torpedoes in our view, gives new meaning to a very
nasty four-letter word – Risk.
bankers and their minions [GSEs] have everyone convinced that real estate is
a store of value and a hedge against their destruction of the paper money
system through the printing press [inflation or stealing by Ponzi Stealth].
The US financial markets and economic survives by the kindness of strangers
in foreign lands, like China and Japan buying our treasury bonds and what
not. I certainly hope that the kindness of strangers will be extended,
however, strangers are generally loyal to themselves when it comes to money,
investment, and their own laundry. One of the pillars of the Communist
Doctrine is a central banking system, which was implemented in the US in 1913
with the Federal Reserve Act. We all know that enslavement of another human
being [slavery] to be morally wrong. Yet in the world of doublespeak and
doublethink, we as a people are unaware of the yokes, chains, and
shackles that bind us all together as a Nation of enslaved people to the
greatest fraud in economic history – the Federal Reserve Note and the
American Central Bank as the 4th unelected branch of the Federal
Bureaucracy of Big Brother and Big Government.
National Socialist government in Germany in the 1930s and 1940s proved beyond
a shadow of doubt, that if it told a big enough lie, and told it often
enough, and convincingly enough, that the people would buy it. This becomes
the elevated art of effrontery. Without activism by the folks the effrontery
is perpetrated against, there will be moral decay.
Jackson knew this.
Wilson did not.
was a traitor to the US Constitution.
was its champion and defender.
the day of Constitutional Discipline finally occurs on our Judgment
many Hells filled with how many Devils will we all have to pay?
articles by Rob Kirby
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