Events
are moving toward climax. The next sequence of events can no longer be
regarded as coming from traditional ‘Inside the Box’ solutions. We
are way beyond that arena, now firmly in the Twilight Zone. My past forecasts
have been verified for bank system collapse, housing market’s unending
decline, nationalization of soon everything under
the US
tainted sun, and finally the New Resolution Trust Corp. The New RTC is being
argued as it takes shape. It is called the Troubled Asset Relief Program
(TARP). That name conjures up images of the roof tarps that are dotted across
the New Orleans
landscape from federal programs to repair roofs after Hurricane Katrina. After
numerous subcontractor steps, the $150 per square foot allotted by the USGovt resulted in cheap flimsy tarps instead of nice
shingled roofs. A better title for the mortgage relief program would be the
Securitized Housing Investment Trust (SHIT), offered by an emailer to CNBC. These bond assets are not troubled
assets, but rather fraudulent assets. The new finance czar
Paulson has asked for a blank check with trust given, laden with low-ball
cost estimates, or else the system will surely fail. Why should
representatives and elders of Congress trust Wall Street executives? They
deserve prosecution, indictment, prison terms, and forced restitution
instead. We are witnessing financial treason. Instead, some executives like
at Fannie Mae and Freddie Mac received huge severance packages, and Lehman
Brothers executives were granted the same. The events are moving toward some
upcoming surprises of historical magnitude. Think default and receivership,
with foreign control. The massive rollover and refunding requirements from
USTreasury Bonds will put monumental strain on the
system, which the monetization US$
printing press cannot alone manage. Unless and until foreign creditors
step in, the US
financial sector will continue to operate like a crime syndicate, since
regulatory bodies and law enforcement officials are all part of the
coordinated congame.
PREFACE
Many of
the overwhelming impressions from the unfolding events are to appear in the
October Hat Trick Letter report. First attention must go to paid subscribers.
Events is in progress in an accelerated pace, enough
to take my breath away on a given day. But rain and cheery faces in Costa Rica
straighten me quickly. For more evidence in backing up my claim that
private brokerage accounts being open for financial parent firm claim, see
the October report also. Numerous (dozens) of emails came in request. The
report will show the best information on this subject, with quotes freshly
hidden within the US Federal Reserve website. No need to make such stuff up,
since the US
financial authorities are better than fiction! By the way, if my analysis and
forecasts have any advantage over others, it is because my thought process
comes from always thinking like a thief. Never think the best thoughts, hope
for the best of human dignity, or expect fair play to emerge when forecasting
the US
financial markets. Their plan seems obviously to gut the system before it
fails. Then they blame foreigners. False flag attacks then seal the deal,
much like cauterizing a wound with a knife made hot in a bivouac fire.
Here is
an outline of topics covered in the next report, due out in the next couple
weeks. The date is not set, but the messages are becoming clear. Pardon the
brevity of important points, but details are difficult to describe with brievity, and are saved for the next Hat Trick Letter. The
ongoing format no longer will be continued as from past issues. Every report
is a report of an emergency nature. We are observing the painful steps from
failure of a system, with 330 million inhabitants, and commercial tentacles
the world over. The four primary features that have pushed the United States into a
certain position in Third World
status are these:
1) globalization with deep
Western investment in China
2) insolvency of four
pillars of federal, trade, housing, banking
3) export of fraud with
mortgage bonds, mainly to China, Europe, Russia, England
4) military aggression and annexation with continuous deceit and propaganda.
The many
points describe a system broken without remedy, inviting default and
receivership. Both are in progress behind the curtains, but on foreign soil. As
Mohamed El-Erian of PIMCO (formerly Harvard Univ) said recently, “The unthinkable is
thinkable.” Little known to the majority of Americans, foreign
disgust grows. Their desire to isolate the United States
is growing, in order to protect themselves from financial collapse and
further spread of fraud. The German economics experts are saying “The
World Shouldn't Have to Bear the Burden for America's
Lapses” in Spiegel Online (click here) in a public article.
Listen
to my interview this week handled by Contrary Investors Cafe Radio (click here), where we covered several of the topics mentioned throughout this
article.
GOLD LAUNCH & USDOLLAR DEMISE
Not
exactly mirror images of each other, the gold price and US$ index are moving in typical opposite directions. A peak in
the USDollar occurred in early September, at the
same time a bottom occurred for gold. The forewarned timing of events turning
sharply around in the week of September 15th happened on schedule. Once
again, the short rule restriction against bank stocks helped to stem the flow
that favored the euro currency rise by 330 basis
points on Monday. The USDollar fundamentals have
begun to resemble those of a Third World. The USGovt
federal deficits are accelerating. The US
trade gap has turned toward a rise again. The housing market continues to
hurtle down in its price decline, that being the
primary force behind the bank collapse. Now finally comes
the climax. USEconomic recession is intensifying,
notwithstanding absurd USGovt statistics to the
contrary. The nationalization movement for Fannie Mae, Freddie Mac, AIG, not
to mention the steady handouts to JPMorgan, have assured of continued heavy
red ink in deficits to the USGovt federal budget. Monetization under the table to firms like JPMorgan are
happening somewhat in the open, but not properly understood by the masses,
trained and untrained. The endless war is a sacred cow of bottomless costs,
largely to support the other syndicate, the US security agency
clandestine trafficking out of Afghanistan.
Foreigners watch the heightened risk having become acute. The USDollar will be sold, and gold will be bought. A COMEX delivery
default in gold is in progress.
Few are
thinking in nonlinear or discontinuous terms. When (not if) the USTreasurys suffer a default, totally assured in my mind,
confirmed by my sources of information, the gold price will launch onward and
upward in huge steps. Even without a default, the strains on the USGovt budget will result in extraordinary risk either on
the USTreasury Bond yield from added supply, OR on the USDollar from
cowardly requisite monetization of debt. My conjecture is the first
couple fundings for USGovt
bailout debt obligations will be done with normal USTreasury
auctions, not to mention some off-budget games. The next fundings
will be done via pure monetization. The entire nationalization will cost
another $1500 to $2000 billion for banks assets and mortgages, on top of
another $1000 billion for an array of US industrial and financial giants
outside the banking world. The failed US
firms like General Motors are already lining up. So foreigners will be expected
to foot the bill??? No way! They will pull the plug, or at least diversify in
a huge way out of the USDollar and US$-based bonds.
NOTES & WHISPERS IN ILL WIND
The list
of breakdown items, evidence, and criminal overtones is vast.
a) Money market funds almost
caused a seizure earlier this week, which means the banking system almost
went into a fatal cardiac arrest episode. The seizures spread across entire
the financial system, even to brokerage funds, and extended to foreign banks.
The commercial paper market was also affected. The Exchange Stabilization
Fund was used, having possible currency implications.
b) Foreign entities were
blocked from participation in both the Lehman Brothers and American Intl
Group (AIG) busts, partly to retain control, but also most likely to limit
opportunity for foreigners to obtain data, documents, and records of extreme
fraud. The Germans pursued the AIG insurance units in a natural acquisition,
far more prudent than inefficient USGovt
conservatorship.
c) The USEconomy
would move toward a centralized Soviet structure, not socialism, if liberties
are curtailed further, especially if martial law is imposed. Rationing is a
very real prospect. Watch freedom of speech, assembly, and more.
d) The nationalization of
Fannie Mae puts the $1500 billion documented fraud since 1988 on the national
tab. The New Jersey burnout
home selling for $230k in a Fannie loan, the micro example,
has played out on a national aggregate scale. The subprime mortgage movement
used to be the visible portion of the mortgage crisis. The Fannie Mae
gigantic fraud has been covered by the greater mortgage crisis, perhaps in a
wildly successful multi-year project. Thanks to the intrepid Aaron Krowne of www.ML-implode.com for his shared ideas.
e) Final banking &
mortgage system bailout by the USGovt might not
occur until issues are addressed regarding prosecution, confessions,
resignations, state’s evidence, and eventually restitution. The concept
of RICO law enforcement against Wall Street would be both unprecedented and
empty, since most assets have been gutted. No, on second thought, despite
objections, the Congress will pass the bailout bill without reading it.
f) The move
to halt home foreclosures is a typical stupid Congressional idea, which might
result in civil disobedience and scoffing at mortgage payment on a broad
scale. Worse, almost all cost estimates are wrong by a factor of 10x from reasonable forecasts. The pattern is to establish
the plan, and deal with cost overruns later. Foreigners are still expected to
pay the bills for American deficits anyway.
g) Watch the Lehman Brothers
liquidation process, kept hidden. The dead are still trying to marry the dead
in farcical ceremonies. The bond cemetery within the New RTC was crafted when
it become clear the Lehman liquidation would kill all of Wall Street. Don’t
expect any consummation of such necro-marriages to
bear offspring. They will not make love with each, but rather EAT EACH OTHER.
h) Wall Street firms are now
almost all aligned in similar fashion. If one fails, they all suffer the same
risk from similar balance sheet of assets. Marking down one firm’s
asset in liquidation would result in the failure of all of them. Any USGovt bank bailout has an unintended consequence of
instant markdowns in market value of assets held widely throughout Wall
Street and bank industry balance sheets. These banks have resisted writedowns in honest accounting, as only a small handful
of financial firms have taken losses in earnest.
i) Any New Resolution Trust Corp for mortgage bailout rescues (a correct
big forecast) would ostensibly be managed by the same Wall Street villains
who are implicated in massive trillion$ fraud. Expect one in three dollars to
be stolen by further fraud, just like the Hurricane Katrina relief efforts. To
question their fraud in unpatriotic.
j) Private
brokerage stock accounts can now be borrowed by financial firms, evidence
produced in Federal Reserve documents. A gigantic final heist might be in the
works, requiring a massive event that provides the cover of confusion like a World Trade Center
attack. The Glass-Steagall Act was not repealed
without a reason and plan! Its removal enables co-mingling of bank,
brokerage, and insurance assets.
k) A
pattern seems evident among failing Wall Street firms. It seems Wall Street
firms without extensive stock brokerage accounts are permitted to fail first,
leaving private accounts vulnerable. It seems Wall Street firms with big
foreign equity ownership are set to fail last, leaving foreigners outside the
loop.
l) The bank
short rule restriction once more has been brought back. That emergency
measure is as corrupt as possible, a horrible black eye to a nation that
claims to be the home of free markets. The re-enacted rule has helped support
the USDollar.
m) Tremendous strong high pressure
zones are building on monetary inflation, while tremendous strong low
pressure zones are building on asset price decline. The combination will
surely make for some of the greatest financial storms in modern history, some
already witnessed, and more sure to come.
n) Much talk has come of
continuing independence of US financial firms, when they are beset by
insolvency and worsening liquidity problems. The same applies to the USGovt, whose liquidity flow depends upon foreign credit
supply. They have been defrauded, treated with hostility in trade and
currency management issues, and in the case of Russia,
subjected to military aggression and NATO treaty violation.
o) The totality of events
has placed enormous concentrated risk on the USDollar,
and consequently on the USTreasury Bond. Expect
sharp decline in the US$
and default of the USTBond. Both fraud and
nationalization has amplified the pressures.
p) The Global Energy War has
opened a new front in the Global Capital War. Aggressive US
actions to secure energy supply have endangered its capital supply. The
backlash is not even on the American radar systems, as arrogance prevails. In
high commerce and banking circles, the US
is being isolated. Many European firms do not return phone calls to US
bankers, on orders. An analogy of ‘glow candles for diesel
engines’ has been stated for upcoming response to US bankers.
q) Reports have come from a London
source that gold futures contracts are being settled in cash only at the
COMEX, rather than with physical gold metal. That leaves would-be buyers
without the metal they wish to take on delivery under contract. IS THAT NOT A
DEFAULT?
r) The
Hurricanes Gustav & Ike have hit the Southeast region hard, resulting in
gasoline rationing. This trend might soon extend nationwide, and broaden to
include more items. Hits to AIG and other insurance firms come at a bad time.
A
solution comes from foreign creditors that does not
require Congressional approval or vote, constituting an event to pull the rug
from under the Americans. The avenue will be via bank channels. A
receivership committee is being formed. More details are a main feature of
the October HTL report. The accumulative debt held by US and foreign entities
is so grand, that every single day interest of almost $1 billion is owed to
them on a daily basis for the USGovt Treasury and
Agency mortgage bonds. If the USGovt were to shut
down all operations and provision of services, including military, the USGovt might achieve a balanced budget. It could balance
its budget from tax revenue against just the interest expense on debt, with
no other official function whatsoever. An interesting concept. Maybe that is
part of the next Receivership Committee plan.
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Jim Willie CB
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Jim
Willie CB
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Jim Willie CB is a statistical analyst in marketing
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