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Today is May Day, the international day of workers celebrated by most
communist and deeply socialist nations. To be sure, Obama should come out of
the closet with admission of not only his Muslim roots but his Marxist roots.
By now, he could have easily promoted the holiday and had it moved from its
longstanding September location to the May month. In honor of the holiday,
the Jackass will outline the profound damage to the USEconomy, its recent
destructive pressures, and the newest dynamics which assure a systemic
breakdown. The outcome is being seen in widespread job loss, business
shutdowns, a new war waged each year, and civil disorder prompted by a
strange phenomenon hardly ever discussed. The US police forces have been
given carte blanche to conduct an extremely wide raft of criminal activity
ranging from simple roadside mugging robberies, to commercial hijacks, to
orchestrated public explosion events, to home invasions without warrants, to
killing criminal suspects during raids, to abuse of suspects in custody, and
recently in the open killing suspects in custody. A detail came to the fore
recently, that the US Police Forces killed more of its own civilians in the
year 2014 than the United Kingdom did in the entire 20th Century.
What would George Washington, Thomas Jefferson, and Benjamin Franklin have to
say? My belief is that they would decry the advance of the police state, as
consequence of the banker class domination, which has trampled the
Constitution and ripped the Bill of Rights to shreds. The next phase will be
led by Gold, and force the US nation to comply, even if a wrecked field.
As much as the practice is horrendous and unconscionable, the national
wreckage has helped promote the Obama agenda. He is fast advancing the police
state, with a race war chaser as distraction to the more suitable class war.
Witness the rise of the US Police State. The Occupy Wall Street movement was
largely gutted, subverted, and waylaid. The race war will be easy to promote
and execute, with the end of the road being martial law. The clue is riots
and curfews. The police have almost zero accountability for violence
committed against the public. The agenda contracted by Obama in mid-2008 was
to kill the USDollar, to wreck the USEconomy, and to install martial law with
a lit race war. Mission Accomplished, but the Jackass digresses. One week
after inauguration, Barry was the beneficiary of a $1 billion Vatican bank
account, as promised when he was selected, not elected. If the Kenyan
squatter is not a victim of a renege or bail-in, he will be fortunate. He is
by far the most expendable president in US history.
Before diving into the newest economic wrecking balls, let us share a
reminder on the destructive wrong-footed monetary policy which serves the
financial elite and prevents national debt default, however with huge
consequences. It really has not prevented any debt default, since behind
closed doors some important events have occurred. The citizen vassals are
not worthy of being informed about the US corporate structure, its finances,
its fealty, its contracts, its dealings, its failures, its pilferage, its
homage to distant elite families, and its defaults. The Jackass has been
extremely vocal on the destructive influence of US monetary policy. The
effect has been utterly devastating, as the American nation has been reduced
to a retail parlor, a half empty shopping mall, a socialist dole queue, and
vast crime scene. The promoted consumer economy ate its capital beyond the
critical mass point of no return, without adequate capital formation.
Many are the new powerful pressures to tear the nation asunder. The
systemic failure discussed for seven years in Jackass analysis has finally
come to the fore in ugly glory. The upcoming Currency Reset will knock the
nation on its keister. After the tumult, a fair and equitable system will be
installed, forced upon a nation which abhors fair and equitable systems since
doing so removes the gross opportunity for fraud and thefts at the national
level, in addition to debt securities fraud, and debt control levers exerted
upon citizens. The monetary policy damage has a flanking factor which is
equally devastating. The destructive factors are extending into fallout from
dismantled Petro-Dollar and rising USDollar.
As footnote, the pernicious nature of the controls and demolition can be
seen in personal savings accounts held in banks. They are last in line during
liquidation failures, treated as unsecure debt. Ordinary people do not own
their savings held in banks, either in passbook accounts or certificates of
deposit. Personal savings, according to the Bush 2007 Bankruptcy Reform
Act, are treated like donations to banks, then structured as unsecured debt.
The bank derivatives are treated as secure debt. In the event of bank
failure, the derivatives will be honored first. In so doing, the entire
national savings held in banks will be wiped out, since the derivative debt
is in the hundreds of $trillions, far outweighing the volume of national
savings in the low $trillions. A vassal state will be created. The clock is
running to put the rascals out of office, to install the Gold Standard, and
to restore justice. However, in the process of removing the scabs on the helm
control center, the nation will lose wealth and fall into the Third World. As
a sassy colleague quick with a quip commented a couple months ago, every
Third World nation should have an African president. America does, true to
form, following a string of narco presidents, much like Mexico.
ZIRP & QE DESTRUCTIVE INFLUENCE
The monetary policy has been adequately covered in Jackass scribbles since
2009 for its highly destructive effect, the annals found in public writings
and public interviews. Official policy has solved nothing, and only put a
patch on the gaping wound of insolvency. The Zero Interest Rate Policy became
necessary in order to give the big broken dead banks an opportunity to make
money the lazy gauche way, in carry trades. The bond issuance business has
vanished, as has their stock issuance business. The concept of capital
formation is not in the Wall Street lexicon or boardrooms anymore, only carry
trade. They must have free money from which to invest in rigged arbitrage
gaming. So they borrow at 0% and invest in long maturity USTreasury Bonds,
also with added leverage in futures contracts. Despite the absence of foreign
investors, demand for bonds has been found to be strong, due to the arbitrage
on rates better labeled as carry trade. In addition, the zero bound money
fountain source was urgently needed to provide the feeder mechanism for the
Interest Rate Swap derivative contracts. It makes the multi-$billion
purchases as the prevailing current in bond rivers. The bond demand is all
phony baloney, fabricated from financial machinery, as all astute observers
know. Sir Alan Greenspan beams with pride on its sophistication, even if
destructive.
The effect of ZIRP has been powerful in its wrecking balls and jack
hammers. The misallocation of assets is a hidden effect, much like
transposing the dinner table elements. Nobody knows what to eat or where to
find it, as wrong food finds spots on the table out of disorder. It is GMO
crappola anyway. Capital formation is all messed up. But such damage is hard
to pinpoint on specifics, and besides, the public does not care. To explain
asset misallocation to the public, or even to educated people (outside
economics fields) is much akin to teaching monkeys calculus and orangutans
higher order mathematics. The practical damage from ZIRP has been low
interest yield to savers and savings institutions., thus the reward to
debtors and penalty to savers. Citizens do not earn any income of substance,
and professional funds do not earn income either. The effect has been
powerfully felt by pension funds and insurance firms. They each sit on vast
manure hills and termite mounds of paper assets, not earning a yield. Both
sector niches are eating their nut, much like the homeowners in the 2000
decade at their home equity capital. Destruction is rampant, as capitalism
has been turned on its ear in a lost colony. Gold will soon enter the room
and rule the roost, served by Silver as squire.
The pension funds just won a victory in the USCongress, which passed a law
to permit pension funds to pay out 35% less on contract benefits. So pension
payouts will be reduced legally. Insurance firms are caught in the squeeze
also. They will resort to the other methods, by hiking policy premium costs.
They cannot pay reduced awards on covered policy payouts. Hence, expect lower
pension income and higher insurance costs, in a basic economic squeeze. The
pathetic result to the USEconomy has been seen in a 50% reduction in Money
Velocity, the big wet blanket. In no way is ZIRP a policy success, this
ZIRP Forever. It can never be removed, since Wall Street needs the free money
to gamble on carry trades, the USDept Treasury needs the free money in its
feeder system for Interest Rate Swap contracts to fabricate the artificial
bond demand, and the USGovt will not permit higher borrowing costs to lift
the deficit. When the ZIRP goes away with the Great Reset, Gold & Silver
will be released like wild yellow and white horses rampaging through the
wheat fields and corn fields.
The Quantitative Easing became necessary in order to enable the USGovt to
cover its monthly deficits, to cover the foreign creditor dumping, and to
bring order to the adjustments made from long-term to short-term portfolio
shifts. Almost no creditor nations (except Japan and England) wished to
continue the travesty of investing in USTreasurys when the USFed was busy
acting in true Zimbabwe form with hyper monetary inflation. To monetize
annual deficits is pure Third World, now with a fascist twist. To call QE
stimulus is like calling suicide a liberating experience, or calling sexual
rape an act of social discourse, or calling disembowelment of a child a rite
of passage. The direct damage from QE has been outlined by the Jackass for
three full years, and with surprising little economist company on the stump.
No more than two other analysts have identified the profound damage to
capital from a rising cost structure, thus producing a wiped out profit
margin. Hence the retirement of equipment, the warehouse of productive
machinery, the removal of capital from businesses operation, followed by its
liquidation and sale, or recycling of parts. It is called capital destruction
by any other name. QE actually kills capital, which the Reich Finance experts
(of fascist origin) prefer to call stimulus. That QE aids the Wall Street
firms is obvious, as they dump their toxic bond assets on the USFed, which
itself is wrecked. QE is nothing more than an emergency Third World monetary
measure installed in emergency conditions, to avoid default, and to enable a
backdoor bailout of the big banks desperate to unload their toxic assets. It
would be hilarious to learn in a few years that principle creditor China
ordered the USFed to conduct endless QE so that Beijing could busily convert
its toxic 3W debt paper from Washington into tangible assets around the
world. Beijing is rumored to own controlling interest in the US Federal
Reserve.
The pathetic result ofQE has been a USEconomy (and Western Global Economy)
which cannot find traction to recover and an Eastern Global Economy severely
hampered. The US GDP is stuck in a minus 2% to minus 4% annual recession,
painted over by cooked books and basic lies on the inflation rate and jobless
rate. The business shutdowns, the retail outlet closures, the new job cut
pink slips, the poor forward guidance by corporations, the lousy Fed Beige Book
outlooks, the horrible USGovt economic reports (once the veneer of wax is
removed), these all makes lies out of the official USGovt stat rat drum beat
of a sluggish recovery. It is Fascist Business Model bitter fruit, a failed
crop, this year, last year, every year. The fascist clowns managing the Reich
Economics buggy have run the show over the cliff. Few have noticed. In no
way is QE a policy success this QE to Infinity. It can never be removed,
since the USGovt cannot finance its deficits and war costs. The creditor
nations are no longer in the room. The maverick Fed Governors admit it must
continue forever. The rise of the BRICS financial platforms (like New
Development Fund and Asian Infrastructure Investment Bank) ensure vast
dumping of USTreasurys in favor of Gold bullion, which the USGovt and USFed
masters must soak up. When the QE goes away with the Great Reset, Gold &
Silver will be released like wild yellow and white horses rampaging through
the wheat fields and corn fields.
As nasty and ugly and full of wreckage that ZIRP & QE have been and
continue to be, another new pair of powerful factors has entered the economic
equation. It acts like a vise, while monetary policy acts like a fire hose to
erode capital within the two contracting walls.
HIGH USDOLLAR VALUATION SLAM
The high USDollar exchange rate is not a sign of strength, but rather of
wreckage of the Global Economy. It cannot survive the ZIRP & QE delivered
as left and right hand policy punches to capital structures. Four and five
years of such monetary policy assures a global systemic breakdown. Despite
pronouncements by the midget Jacob Lew as Secy Treasury, the high USDollar
has caused enormous problems. Foreign investors did not want the USTBond
asset before, but now with a price premium added on the USD side, they want
it even less of these toxic bonds. The foreign investors are no longer
interested in over-priced bubbly US Stocks either, especially with the USD
premium. They are much less interested in US property due to high cost, except
for the Chinese. The Middle Kingdom masters are still motivated to dump
boatloads of USTBonds before they go worthless, so a purchase at exaggerated
price is no big deal. It works out for Beijing to be equivalent to a discount
rendered to the USTBond asset generally. Use it or lose it, and factor in
a writedown on value applied within the hard asset conversion process. Think
of the high USD factor much like a wall around the nation, kind of like an
international quarantine for trade.
In addition to the financial sector impact, an economic impact is felt. US
industry has been beset with burdensome problems. Now they have the high USD
exchange rate to contend with. They must find export destinations, while the
foreign customers seek equal quality at lower price from an ample list of
competitors in the Emerging Market arena. Furthermore, the foreign customers
have grown increasingly weary with the endless red tape from USGovt dealings.
The forms and procedures are onerous, in compliance with anti-money laundering
objectives and anti-terrorism objectives. The banking transactions are a pain
in the ribs as well. Hence the legion of foreign customers are abandoning the
US industries, which have fewer technological advantages as the years pass. The
outcome is an economic vise squeeze which removes foreign clients from the
USEconomic equation. America is pricing itself out of the game. The US GDP
growth will slow (recession will gain more momentum), just like its Money
Velocity. The trade deficit will rise. The national insolvency will erode
further, far past the systemic breakdown point. The United States has
become of victim of its own derivative devices, as the USDollar rise has put
a clamp on the national economy. It is no longer competitive.
The Jackass is impertinent always. Consider a metaphor that illuminates
and elucidates. The King Dollar is dead, the Petro-Dollar harness is
dismantled. As the once powerful reigning king lies prone on the global
stage, industry having been gutted for three full decades from outsourcing,
his body has entered the putrefaction stage following the 2000 decade of
magnificent fraud. The immune system is long gone, except for exported
foreign wars, which have a much bigger predator role for syndicate profit
than defense of the dollar any longer. As the body fills with gas from the
unchecked bacterial growth at work during the rotting process, the chest
cavity expands. As time passes, we see the King Dollar lifting, not from
strength, but instead from the death process and the massive buildup of gas.
The pathogenesis is not seen by more than 5% of the population, of which the
Hat Trick Letter followers dominate.
LOW OIL PRICE SLAM EFFECT
The deeply depressed oil price is no advantage at all. To be sure, the
lower price at the gasoline pump is appreciated. But consumers cannot unleash
their disposable income stream, since job security is nowhere, since company
cutbacks are universal, since threats to savings are being integrated into
bank account policies, since wages have fallen by 20% on a real basis in the
last 10-15 years, and because citizens are scared. There is no extra
disposable income. The harsh fact of business model life is that the lower
oil price has whacked the corporate profit model in the crucial energy
sector, much like in parallel to the QE capital wreckage. The profit
margins are nowhere. The parade of bond defaults and commercial loan covenant
failures has begun in earnest. The list of defaults and failures is already
of critical mass, most assured to worsen badly. Negative momentum grows on a
weekly basis, as investors and bankers pull the plug. The victims initially
are workers on projects, each abandoned since no longer viable. The next
victims will be the many investment firms and even banks. They have already
begun the process of asset seizure, part of the shutdown aftermath. The moron
at the White Horse marbled office Jacob Lew must explain to the ravaged
energy industry what the actual advantage really is, where it is seen, how it
is manifested. To the workers in the field, those rugged roughnecks, they are
angry and feel betrayed. Lew is a moron and stooge.
The entire US-based shale sector will be shut down. The active rig count
was cited in the April Hat Trick Letter. The drill rig count has fallen off a
cliff in a vertical dive never seen in US history. The low oil price might be
a benefit for those businesses which must pay for the feeder cost, but the
overall aggregate macro effect overwhelms the collective local micro effect.
The national ISM reports show the pervasive decline. The recent Dallas Fed
business summary report was devastating. The region is major league oil
country. The damage is massive. Jacob Lew should review the idle fields and
failed financial investments, like Obama does the hurricane zones, shirt
sleeves rolled up. The dismantled Petro-Dollar is to blame. The vast
apparatus of FOREX contacts linked to the oil price are being undone, piece
by piece, much like the dismantling of the oil field derricks and platforms,
piece by piece.
The Saudis are behind the falling oil price. The Jackass suspects
vengeance by the sandy crusty angry royals. They clearly collude with China
to bring more output to market, to depress price, to kill off the US marginal
shale output (their competition), and to reek havoc in the USEconomy. The
American landscape has become a veritable killing field. The outcome is an
economic vise squeeze which tears apart the USEconomy. The wreckage is once
again seen in the USEconomic equation. America is seeing itself priced out of
the great global game, in a role reversal. Economic fascism has resulted in
ruin and isolation. The US GDP growth will slow (recession will gain more
momentum), just like its Money Velocity. The trade deficit will rise. The
national solvency will erode further, far past the systemic breakdown point.
The metaphors come quickly to mind, almost a fun exercise. The demise of the
Petro-Dollar has effectively resulted in the fracking of the entire energy
sector, one of its most vital sectors. The holes perforating into the
economic table are vast. Its capital pools are on fire. The injection of
contaminants has been ordered by means of insolvency rendered via QE itself.
The idle drill rigs testify to the misallocated capital.
CONCLUSION
Time is running out on both the USEconomy and the US nation. Its very
social fabric is finally being stretched and torn, as the Jackass forecast
for the last three years. The triple threat will be price inflation, supply
shortage, and social disorder. It is happening before your very eyes, no
surprise here from Ferguson to Baltimore. The USDollar is soon to fade into
oblivion. Its rise signals its demise. The hidden dismantle of the
Petro-Dollar mechanism has been full of intrigue. The Gold Standard will
return, but through the trade window. The many crucial new Gold platforms are
being assembled, one by one. The most recent platform in view is the
Asian Infrastructure Investment Bank, which will render obsolete both the
Intl Monetary Fund and the World Bank. Actually, the IMF will be useful for
China to seed the global banking system with a few types of RMB-based bonds.
These Chinese Yuan denominated bonds will have a few flavors, like in
addition to the Chinese Govt Bonds, there might be some other sovereign bonds
(like UKGovt bonds) held in RMB denomination. The Chinese took control of the
IMF, not just to shut it down, but to exploit it. They have an agenda. As
the global banks place more RMB bonds in their reserves shelves, they will
find the USTreasurys of no use. They will be converted conveniently to Gold
bullion during the restoration phase. The Chinese hand moving the IMF
part is a brilliant stroke, like an answer to the Monsanto GMO seeds. China
will seed the global financial system with RMB seeds with the only genetic
modification being of a golden strain and hue.
The solution to the untreated Global Financial Crisis is the gold
device. The Eurasian Trade Zone will be built upon the gold route. Next soon
comes the heralded Gold Trade Note used as Letter of Credit in facilitated trade.
The movement cannot be stopped, not by war, not by sanctions, not by
toxic monetary spew. The global rejection of the USDollar continues, far
above the din of Washington and Wall Street propaganda. The nascent Eurasian
Trade Zone will soon include Germany and whatever nation follows its prudent
lead. The Teutonic shift is more clear with each passing month, in a sequence
replete with intrigue and betrayal.Events of early 2015 proceed in the nasty
sequence to isolate the US and its monopolist money mavens. The King Dollar
is dying a horrible death, as Gold will return to its rightful throne. The
toxic USD will be chucked into the dustbin of history. Bond fraud, asset
bubble devotion, and QE will be the captions read in the annals of this
chapter of ruin. The rise of the USDollar precedes its vanishing act.
The New Scheiss Dollar will be launched in order to guarantee import
supply to the beleaguered nation. However, the New Dollar will not pass
muster. It will quickly fail, due to final phase fraud. The palette full
of new Gold & Silver backed currencies will include the Chinese Yuan, the
Russian Ruble, the Gulf Dinar, the New Nordic Euro, possibly the New Mexican
Peso (silver backed), possibly the Central American Dollar (if Panama can
elude Langley murder obstacles). The requirement for sustained usage will be
independent audit, which the New Scheiss Dollar will not pass. Its deep
storage gold fraud will be exposed for all the world to see. Next stop is the
New American Third World. It is a lock, followed by colonization by China.
Expect the Chinese industrial park concept to flourish, executed by force,
paved by USGovt policy. In five years, the biggest new marginal employer and
lender inside the USEconomy will be Chinese firms. They will tap the idle US
talent, but with lower wages than expected, and absent the hefty fringe
benefit packages the workers have grown accustomed to.
Gold & Silver will be at the core of the new monetary system.
Following the Global Currency Reset, better named the Return of the Gold
Trade Standard, precious metals will prevail once again. For over 40
years, the FOREX tail has wagged the trade dog. The Petro-Dollar system
enabled the paper currency regime to dictate terms on trade norms and banking
reserves management. A reversal is soon to take place. The trade corridors
will take control, since the Petro-Dollar is dead, in fact dying a horrible
death. With Emerging Market strength, and with vast warehouses of Eastern
family Gold, the trade dog will wag its own golden currency tail properly at
long last. Justice will be meted out, as the most magnificent vanishing of
wealth in human history is undertaken. The majority put their trust in paper,
and lost. They trusted the system after a generation of indoctrination, and
were betrayed. The people were deceived on matters of money and capital, and
lost both life savings and family fortunes. The American public knows very
little about concepts of money and capital, and therefore will be treated to
devastation. Let history judge whether it was a meretricious swing of
justice. Only precious metals and certain physical assets will survive the
storm.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
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Jim Willie CB, editor of the "HAT TRICK LETTER"
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