When the mainstream media told the American people that the Federal Reserve was going to “help” the housing industry by buying up hundreds of billions of dollars worth of toxic mortgage backed securities, very few people probably even stopped to wonder where all of that money was going to come from. Well, the truth is that it did not come from anywhere. It was made up out of thin air. In fact, a total of 1.3 trillion dollars was just “printed into existence” so that the Fed could soak up these problematic securities (and help their buddies down on Wall Street in the process who were desperate to dump them). During a recent Joint Economic Committee hearing on Capital Hill, U.S. Representative Ron Paul directly confronted Federal Reserve Chairman Ben Bernanke about this 1.3 trillion dollars. As Ron Paul described how this 1.3 trillion was just created out of thin air, all Bernanke could do was nod his head. Why? Because it was the truth.
Of course we all know that the Federal Reserve creates money out of thin air all the time, so that is not new, but what is new is the recklessness and openness with which they are going about doing it.
Need to help your buddies down on Wall Street by buying up a tsunami of bad mortgage securities?
Just zap another trillion dollars into existence!
Need to bail out the mortgage giants Fannie Mae and Freddie Mac?
Just get the magic money printing machine ready!
Wouldn’t it be nice if the rest of us could create money out of thin air? It would make life so much easier.
A video clip of the exchange between Ron Paul and Bernanke at this hearing is posted below.
The key moment comes when Ron Paul makes this statement….
“Well, where did you get the money? You created this money. So you did monetize debt, and that went into the banking system.”
As you watch this video, you will notice that at that moment Bernanke nods his head up and down repeatedly….
So who does all of this money printing benefit?
Well, it benefits the Federal Reserve and the big financial institutions on Wall Street that have financial ties to the Federal Reserve.
So while there are lots of smiles going around in Washington D.C. and on Wall Street these days, the same cannot be said for the rest of the good ole U.S.A. as the following video illustrates….
The reality is that the United States is a nation that does not even have control over its own currency. If the United States government wants more money, it has to go ask the Federal Reserve to create it. Unfortunately, the Federal Reserve does not also create the interest that will ultimately be paid on that new money that is being created. So where will the money come from to pay the interest? Well, by creating even more money (debt) in the future. It sounds like insanity, but that is the U.S. financial system. It is a perpetual debt machine that was created to have an ever expanding national debt that is mathematically impossible to pay off.
Just because the folks down on Wall Street do not dress up in gang colors or try to sell drugs to our children does not mean that they are not corrupt or that they are not criminals. In fact, the truth is that the corruption in our financial system is hitting unprecedented levels.
But most Americans have no idea what in the world is going on in the financial system. All most of them know is that things are getting bad and they want somebody to “fix” the problems.
Unfortunately, the folks that the American people are expecting to “fix” things are the very same ones who got us into this mess in the first place.
“Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States.” -Senator Barry Goldwater
“A great industrial nation is controlled by it’s system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world–no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.”
-President Woodrow Wilson
“The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson.”
-Franklin Delano Roosevelt
“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”
-Abraham Lincoln
“Give me control of a nation’s money and I care not who makes it’s laws” -Mayer Amschel Bauer Rothschild
Up to this point, it seems as though most Americans have not really been too concerned about the financial meltdown that is taking place in Greece. But they should be. The truth is that the debt crisis we see playing out in Greece may soon repeat itself in some of the largest nations in the world such as Japan, the U.K. and even the United States. Once upon a time, this kind of thing only happened in third world nations, but now virtually every nation on earth has a debt problem. As the saying goes, the borrower is the servant of the lender, and so when a country like Greece gets in way, way too deep financially, it ends up having to give up a portion of its sovereignty to those controlling the purse strings. In the case of Greece, those controlling the purse strings are the IMF and the EU. But it just isn’t Greece that is in trouble. Dozens of nations are in serious financial trouble and are at the mercy of those who can bail them out. The truth is that global financial institutions like the IMF, the World Bank, the European Central Bank and the Federal Reserve are increasingly gaining power all over the globe as governments around the world continue to accumulate frightening amounts of debt.
This has been quite a week for Greece and for the other nations in Europe teetering on the edge of financial disaster. Standard & Poor’s reduced Greek debt to “junk” status, and Spain and Portugal’s debts were also downgraded substantially. These unprecedented steps by Standard & Poor’s have many concerned that this financial “contagion” could start spreading across all of Europe.
We’ll take a look at the “austerity measures” being forced on Greece in a moment, but first it is important to note that financial panic is already spreading to other nations in the region.
In Portugal, the government has announced that additional “austerity measures”, beyond those in the current three year plan, are expected to be implemented. Perhaps they wouldn’t need to take such drastic steps if they hadn’t spent all of those millions constructing those shiny new soccer stadiums a few years ago. But in any event, many analysts are now forecasting that Portugal will be the next domino to fall.
Officials in Spain are expected to announce this week that unemployment has hit 20%. But of course any nation that implements a hardcore “cap and trade” law like the one in Spain should expect unemployment to soar into the stratosphere. So they are just reaping what they have sown, but the fallout could end up being very painful. Spain’s economy is approximately five times larger than Greece’s so if Spain ends up defaulting it will create a financial nightmare for all of Europe.
There are now rumors that even Italy and Ireland are in a massive amount of trouble financially.
So will the EU and the IMF end up having to bail all of them out?
Well, for now Greece is first in line.
European officials said on Friday that the Greek government, facing a rapidly deteriorating financial situation, is close to completing negotiations for assistance from the International Monetary Fund.
So Greece is going to get the money that it needs – but it comes with strings.
Greece must surrender some of its fiscal sovereignty and adopt a three year program of severe spending cuts and higher taxes.
In fact, one major Greek newspaper says that wage and job cuts for public workers will also be ordered alongside the spending cuts and tax increases to get through what they are calling “three hard years”.
They get paid extremely well, and Greek civil servants also enjoy very generous pension benefits and early retirement.
Needless to say a lot of these Greek civil servants are not happy at all about the changes the IMF is forcing upon them, and they have called a general strike for May 5th.
For his part, the Greek Prime Minister, George Papandreou, is trying to convince the Greek people that these new spending cuts and tax increases are necessary to keep his nation afloat. According to The Associated Press, Mr. Papandreou recently told the Greek Parliament the following….
“The measures we must take, which are economic measures, are necessary for the protection of our country — for our survival, for our future, so we can stand firmly on our feet.”
There are even fears that this sovereign debt crisis could spell the end for the Euro. Back on Wednesday, the leaders of the 16 countries currently using the Euro called an emergency meeting to attempt to avert a Euro meltdown triggered by Greece’s financial collapse.
Of course the Euro is not actually going to collapse, but the fact that they all felt the need to get together and talk about this situation is quite telling.
In fact, the language used by some of the top financial authorities in the world when speaking about the Greek debt crisis is quite alarming….
Angel Gurría, head of the Organization for Economic Cooperation and Development:
“This is like Ebola. It’s threatening the stability of the financial system.”
Colin Ellis, economist at Daiwa Capital Markets:
“The time for horse-trading, prevarication and posturing is over. Arguably, the very future of the euro area is now teetering on a knife edge.”
Dominique Strauss-Kahn, head of the International Monetary Fund:
“If we don’t fix it in Greece, it may have a lot of consequences on the EU.”
But for the people of Greece, getting help with their debt means giving up their ability to determine their own affairs. They have gotten into so much debt that now they are forced to do whatever the IMF and the EU tell them to do. Of course there are many in Greece who are extremely upset by this as evidenced by the recent riots there….
But this is what happens when a nation allows itself to get into way too much debt. In fact, this has been done by design in third world nations for decades. In his extraordinary book, Confessions of an Economic Hitman, John Perkins explained how it was his job to go around the world and get third world governments to accept multibillion-dollar loans that he knew they would never be able to repay. Of course when the time came and they could not repay the loans, the big global institutions would go in and confiscate natural resources and impose “conditions” and implement “austerity measures” similar to the ones they are currently imposing on Greece.
The alarming thing today is that it just isn’t third world nations where this game is being played anymore. Now that they have perfected the blueprint, they are trying it out on nations like Greece.
The reality is that this is all part of the push towards globalization. In fact, Jean-Claude Trichet, the president of the European Central Bank, emphasized the need for global coordination in financial matters during his April 26th address at the Council on Foreign Relations.
“Global coordination” sounds nice, but just like “global governance” and “global cooperation”, it is just another way of saying that we need to transfer more power and more authority to globalist institutions.
You see, whatever problem that pops up (in this instance it is the Greek debt crisis), the solution always seems to be to transfer more power to global institutions.
In fact, as a “solution” to the global financial crisis, the IMF is proposing two new taxes on financial institutions worldwide: a “financial stability contribution” which levies a small charge on financial institution balance sheets, and a “financial activities tax”, which would tax “excess profits” and bonuses.
As the nations of the world continue to get deeper in debt, and as more power and more money is transferred to unelected global institutions, the people of the world may find their lives increasingly being run by heartless bureaucrats on the other side of the globe.
For anyone who loves freedom, that is a very sobering thought.
If you are part of the Wall Street establishment, the economic recovery is moving along quite well. Many of the biggest firms on Wall Street just handed out record-setting bonuses, the Stock Market has been moving up steadily and the DOW is back up to around 11,000. Profits at the top banks have been quite impressive lately. Bank of America, JPMorgan Chase, Citigroup and Wells Fargo combined for first quarter profits of $13.4 billion – the most in almost three years. Yes, life is quite good down on Wall Street these days. People are still buying fast cars, big yachts and homes in the Hamptons. It is almost as if “the greatest financial crisis since the Great Depression” didn’t even happen. Things are quickly getting back to “normal” for the banking elite and to many it seems like there are a lot more smiles down on Wall Street than there have been in a long, long time.
Bank of America’s chief executive officer, Brian T. Moynihan, is being quoted by Reuters as saying that “the worst of the credit cycle is clearly behind us” and that the economic growth we are experiencing is “real”.
JPMorgan CEO Jamie Dimon is quoted as saying that the U.S. economy may be poised for “a strong recovery”.
And why wouldn’t they say these things? Profits are up. Their stock portfolios are up. They are getting record bonuses. They know that if anything does go wrong again that their friends in Washington D.C. will bail them out because they are “too big to fail”.
But for tens of millions of other Americans, the economy seems like it is getting worse than ever. It is hard to explain the gut-wrenching agony that many highly-educated and highly-qualified American workers are going through as they send out hundreds of resumes only to get no response. Or the absolute frustration of only being able to get a very low paying retail job and realizing that it will not even be able to pay the mortgage – much less support an entire family. Or the soul-crushing despair of working two or three jobs and still not being able to pay the bills at the end of the month.
But these are the daily realities that millions of Americans must face now. The truth is that there are not nearly enough jobs for everyone. The number of unemployed Americans per job opening hit 5.5 in February. It is like we are all caught in some bizarre game of musical chairs, and the losers end up destitute and out in the street.
Even many of those who can get jobs find themselves in bad situations. Gallup’s underemployment measure hit 20.0% on March 15th. That was up from 19.7% two weeks earlier and 19.5% at the start of the year. A lot of very educated, very qualified people find themselves slaving away at jobs that high school students are qualified for.
But the ones being hurt the worst by this unemployment epidemic are the poor. Check out the following chart. At the end of 2009, the unemployment rate for those at the top end of the income scale in the United States was about 3%. For those at the bottom of the income scale, the unemployment rate was about 30%….
It isn’t the boys down on Wall Street that are losing their homes and their jobs.
No, they are “too big to fail”.
It is millions of ordinary Americans that are losing their homes and their jobs.
And things keep getting worse.
According to RealtyTrac, foreclosure filings were reported on 367,056 properties in the month of March. This was an increase of almost 19 percent from February, and it was the highest monthly total since RealtyTrac began issuing its report in January 2005.
Not only that, but RealtyTrac projects that there will be a total of 4.5 million home foreclosures by the end 2010. If you figure that there are approximately 4 people per household, that is another 18 million people that will be facing the pain of a foreclosure filing.
For many Americans, losing their home to foreclosure is just too much. For example, one man in Ohio actually decided to bulldoze his own home rather than let the bank take it in foreclosure proceedings.
Because of the extreme economic conditions, millions of Americans are in severe pain and are becoming increasingly desperate. In some of the most depressed areas, crime is absolutely spiralling out of control. So far this year in Detroit, car thefts are up 83%, robberies are up 50%, burglaries are up 20% and property destruction is up 42%.
Adding to all of this economic despair is the fact that food and gas prices are starting to shoot up.
In some areas of the United States, people are already paying as much as $3.50 for a gallon of gasoline, and many experts are now predicting that gasoline could hit $4.00 a gallon by the end of 2010.
So while the economic recovery is buzzing along quite well down on Wall Street, the reality is that for millions of other Americans things are really hard. In fact, not even the smaller banks are experiencing much of a recovery. The FDIC’s list of problem banks just hit a 17-year high.
No, the main beneficiaries of this “economic recovery” are the boys over on Wall Street. They should enjoy it while it lasts, because even harder economic times are on the way, and the reality is that none of us will be able to completely escape the economic pain that is coming.
Today financial power is being concentrated in the hands of fewer and fewer individuals. In fact, the six biggest banks in the United States now possess assets equivalent to 60 percent of America’s gross national product. Back in the 1990s that figure was less than 20 percent. These six banks – Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo – literally dictate what goes on in the U.S. banking industry. These entities are the poster children for “too big to fail”, and they donate massive amounts of cash to the campaigns of both Republicans and Democrats to ensure that they will continue to receive favorable treatment. The vast majority of Americans have had a banking account, a credit card and/or a mortgage with one of these institutions at some point. If they acted in concert, these six banks could literally bring down the U.S. economy overnight if they wanted to. Together with the Federal Reserve, these six banks represent the real financial power in America. They are the 800 pound gorilla in the room that influences nearly every major financial deal that gets done and virtually every major political decision that gets made. As the last couple of years have demonstrated, top politicians from both parties (John McCain and Barack Obama for example) will instantly jump into action and start advocating that the U.S. government spend billions upon billions of dollars when the interests of these behemoths are threatened. The frightening thing is that the power of these megabanks is growing at a frightening pace. As dozens upon dozens of smaller U.S. banks are “allowed to fail”, they either go out of existence or the Feds actually encourage these smaller banks to sell themselves to one of the big sharks. In either event, the banking power in the United States becomes further consolidated in the hands of the megabanks.
Bill Moyers recently interviewed Simon Johnson and James Kwak, the authors of a new book entitled 13 Bankers: The Wall St. Takeover and the Next Financial Meltdown. During that interview Kwak described to Moyers just how explosive the growth of the power of these megabanks has been….
Bill Moyers: And you write that they control 60 percent of our gross national product?
James Kwak: They have assets equivalent to 60 percent of our gross national product. And to put this in perspective, in the mid-1990s, these six banks or their predecessors, since there have been a lot of mergers, had less than 20 percent. Their assets were less than 20 percent of the gross national product.
Does it alarm you that the banking elite have accumulated such a large amount of financial power?
It should. These institutions have the power to wreck entire economies. Just consider what happened in Greece lately. Now, it is being alleged that the megabanks are ripping off American cities with the same kinds of predatory deals that brought down the financial system in Greece.
The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
Unfortunately, they may have actually been understating things a bit.
These megabanks have rigged the game so that the wealth of the nation is slowly transferred from us to themselves and to the international financial interests that control them.
They can make money if the markets are going up, and they can make money if the markets are going down.
For example, in a newly released email from the height of the housing crash, the CEO of Goldman Sachs bragged that his firm “made more than we lost” by betting against the housing market.
Thankfully the SEC is starting to look into the fraud that Goldman Sachs committed during this time period, but the truth is that Goldman is not likely to receive any more than a slap on the wrist for what it has done.
They are way too big, way too powerful and have too many friends in high places for them to get into any real trouble.
For example, it has come out that Barack Obama does not intend to return any of the campaign contributions that he received from Goldman Sachs. And surely they will be glad to continue to pour big money into his political coffers.
So where does that leave the rest of us?
Well, the rest of us can expect higher taxes and a lower standard of living according to the IMF. The IMF (which has deep connections to these megabanks) says that the party is “over” for nations that have been enjoying the good life. In a recent article, the Washington Post summarized the message that the IMF is trying to communicate through their recent policy papers….
To keep the global economy on track, people in the United States and the rest of the developed world need to work longer before retiring, pay higher taxes and expect less from government. And the cheap imports lining the shelves of mega-chains such as Wal-Mart and Target? They need to be more expensive.
So are you ready to work longer, pay higher taxes, expect less from government and have a lower standard of living?
That is what the IMF says we are all going to be facing in the years ahead.
We are all going to financially suffer as the megabanks continue to thrive and consolidate power.
Wow! Just when you think the U.S. government is entirely incompetent and toothless when it comes to controlling the corruption on Wall Street something like this happens. For those who have not heard yet, on Friday the Securities and Exchange Commission filed a civil suit accusing Goldman Sachs of securities fraud. We’ll get into the details below, but first it is important to note how stunning all of this is. Goldman Sachs has had an extremely chummy relationship with the U.S. government over the past couple of decades. A whole host of former Goldman Sachs executives have been appointed to key government positions by both Republicans and Democrats in recent years. In addition, Goldman Sachs was Barack Obama’s number one campaign donor, and its employees gave $981,000 to his campaign. But in spite of all that, the SEC has decided to go after Goldman Sachs.
Someone out there has a lot of guts. Although to be honest it is far too soon to pass final judgment on this while thing. Let’s see how it plays out. It could end up being a “white wash” after all. But at least this is a hopeful sign that justice will be done.
You can see a copy of the official charges filed by the SEC right here.
These charges are a huge blow to the reputation of what is widely regarded as the most powerful firm on Wall Street. Goldman Sachs earned a record $4.79 billion last quarter, and for years it has seemed as if they could do no wrong.
The heart of the charges involves the failure by Goldman Sachs to disclose conflicts in the 2007 sale of a collateralized debt obligation. According to the SEC, investors in the collateralized debt obligation ended up losing approximately 1 billion dollars.
So what did Goldman Sachs do that was so wrong?
Well, it turns out that Goldman Sachs allowed hedge fund Paulson & Co. (run by John Paulson – not related to Henry Paulson) to help select the securities that were to be included in the CDO.
The SEC says Paulson & Co. paid Goldman around 15 million dollars in 2007 to put together a collateralized debt obligation that included mortgage-related securities that Paulson & Co. believed were very likely to decline in value. Then Paulson & Co. placed huge bets against the CDO.
When Goldman Sachs presented the collateralized debt obligation to potential investors, they did not tell them that Paulson & Co. was shorting the CDO.
In essence, what happened is that Paulson & Co. helped select mortgage-related securities for the CDO that they thought would definitely fail and then they bet big money that they would fail. Then Goldman went out and marketed the CDO as a worthy investment to investors and did not tell them that Paulson & Co. were betting big money that the CDO would fail.
When the value of the CDO plunged dramatically just a few months after it was issued, Paulson & Co. walked off with about a billion dollars.
According to the SEC, within 6 months of the issuance of the CDO, 83% of the residential mortgage-backed securities in the portfolio had been downgraded.
Within nine months of the issuance of the CDO, 99% of the residential mortgage-backed securities in the portfolio had been downgraded.
Two major European banks were left holding the bag. ABN Amro, a major Dutch bank, and IKB, a German commercial bank, combined to lose nearly a billion dollars.
The SEC says that it is trying to recoup profits reaped on the deal.
Also being charged by the SEC is a 31 year old Goldman Sachs vice president, Fabrice Tourre. The SEC alleges that he was principally responsible for putting together the deal and marketing the securities.
You see, this is what happens when you let a young kid play around with hundreds of millions of dollars.
In an almost unbelievable email to a friend, Tourre described himself as “the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”
That is the level of maturity that we can apparently expect from Wall Street executives these days.
No wonder our financial system is falling apart.
In a statement, Goldman Sachs responded to the SEC charges by saying the following: “the SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.”
But of course Goldman Sachs never admits that they are wrong.
“Our short positions were not a ‘bet against our clients,”‘ Goldman Sachs said in a recent letter to shareholders that discussed Goldman’s behavior during the recent housing crash. “Rather, they served to offset our long positions. Our goal was, and is, to be in a position to make markets for our clients while managing our risk within prescribed limits.”
But other financial analysts are applauding this action by the SEC….
“This litigation exposes the cynical, savage culture of Wall Street that allows a dealer to commit fraud on one customer to benefit another.”
A brief video news report about these charges against Goldman Sachs is posted below….
So will there be additional charges against Goldman Sachs?
Let’s hope so.
The truth is that the misbehavior documented above is just the tip of the iceberg.
Goldman Sachs helped create the housing collapse by selling mortgage-related securities that were absolute garbage to trusting clients at vastly overinflated prices. Then Goldman Sachs placed huge bets against those same mortgage-related securities and also placed huge bets against the U.S. housing market. When the U.S. economy collapsed in 2008 and 2009 they ended up making huge profits.
“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen,”Sylvain Raynes, an expert in structured finance at R & R Consulting in New York, told The New York Times. “When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”
Even with today’s action by the SEC, it still seems extremely unlikely that Goldman Sachs will ever be held fully accountable for all that they have done. They are just too big and too powerful and they have too many big and powerful friends.
But at least today is a beginning.
For years Goldman has been considered almost untouchable. They have been considered an almost “all-powerful” financial monster that pretty much does whatever it wants.
The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
For a long time many of us have had very serious suspicions that the prices of gold and silver were being highly manipulated. But now, thanks to the mind blowing testimony of one very brave whistle blower, the blatant manipulation of the world gold and silver markets is being blown wide open. What you are about to read below is absolutely staggering. Once the American people learn how incredibly corrupt the world financial system is, it is going to change everything. The government that we are all trusting to guard the integrity of the financial system is failing to do that job. It turns out that the Commodities Futures Trading Commission has been sitting on solid evidence that the elite banking powers have been openly and blatantly manipulating the price of gold and silver. Even though they were basically handed a “smoking gun”, they have done absolutely nothing with it. But now the information has gone public and the CFTC is red-faced.
Back in November 2009, Andrew Maguire, a former Goldman Sachs silver trader in Goldman’s London office, contacted the CFTC’s Enforcement Division and reported the illegal manipulation of the silver market by traders at JPMorgan Chase.
Maguire told the CFTC how silver traders at JPMorgan Chase openly bragged about their exploits – including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes.
Traders would recognize these signals and would make money shorting precious metals alongside JPMorgan Chase. Maguire explained to the CFTC how there would routinely be market manipulations at the time of option expiries, during non-farm payroll data releases, during commodities exchange contract rollovers, as well as at other times if it was deemed necessary.
On February 3rd, Maguire gave the CFTC a two day warning of a market manipulation event by email to Eliud Ramirez, who is a senior investigator for the CFTC’s Enforcement Division.
Maguire warned Ramirez that the price of precious metals would be suppressed upon the release of non-farm payroll data on February 5th. As the manipulation of the precious metals markets was unfolding on February 5th, Maguire sent additional emails to Ramirez explaining exactly what was going on.
And it wasn’t just that Maguire predicted that the price would be forced down. It was the level of precision that he was able to communicate to the CFTC that was the most stunning. He warned the CFTC that the price of silver was to be taken down regardless of what happened to the employment numbers and that the price of silver would end up below $15 per ounce. Over the next couple of days, the price of silver was indeed taken down from $16.17 per ounce down to a low of $14.62 per ounce.
Because of Maguire’s warning, the CFTC was able to watch a crime unfold, right in front of their eyes, in real time.
So what did the CFTC do about it?
Nothing.
Absolutely nothing.
Which is extremely alarming, because the size of this fraud absolutely dwarfs the Madoff or Enron scandals. In fact, this fraud is so gigantic that it is not even worth comparing to any of the other major financial scandals of recent times.
But Maguire did not give up. He sent several more emails to the CFTC detailing the open manipulation of the gold and silver markets.
The CFTC did not reply.
Finally he sent them a final email: “I have honored my commitment to assist you and keep any information we discuss private, however if you are going to ignore my information I will deem that commitment to have expired.”
The reply by the CFTC?
“I have received and reviewed your email communications. Thank you so very much for your observations.”
No action.
No acknowledgement that anything was wrong.
No recognition that a massive crime had been committed.
Fortunately, that was not the end of it.
On March 25th, the CFTC held a hearing on alleged manipulation in the gold market by the major banking powers.
Maguire wanted to testify during that hearing but he was not invited.
But William Murphy, chairman of Gold Anti-Trust Action (GATA), was invited to testify. GATA has been compiling data on the manipulation of the gold and silver markets for quite a long time now.
Murphy was only given five minutes to deliver his testimony. He raced through his presentation so that he could get as much information on the record as possible.
Very curiously, the live television broadcast of the CFTC hearing suffered a technical failure the minute before Murphy began his testimony. The technical failure was corrected the minute after Murphy was finished.
Coincidence?
Well, it turns out that there were are lot of coincidences surrounding this hearing.
But we’ll get to that in a minute.
When Murphy finished his statement, the panel asked him for some hard proof of market manipulation. Murphy shocked the panel by revealing the name of Maguire and explaining how Maguire had informed the CFTC Enforcement Division of the market manipulation that was taking place by JPMorgan Chase. The CFTC panel seemed stunned by the revelation and seemed reluctant to learn any further and asked nothing else about it.
Video of Murphy’s revelation to the panel is posted below….
In another “coincidence”, Maguire and his wife were subsequently injured and hospitalized when their car was struck by a hit-and-run driver in the London suburbs.
When a bystander who saw the “accident” tried to block the other driver from getting away, the other driver accelerated directly towards the witness, forcing him to leap out of the way to avoid being hit. The hit-and-run driver’s car then hit two additional cars as he left the area.
But Maguire and his wife were fortunate.
In the past, other would-be whistle blowers that had evidence regarding the manipulation in the gold and silver markets died in “unusual accidents” before they were able to bring their evidence to light.
But there were even more “coincidences” surrounding this hearing.
A week before the hearing, the CFTC announced that they had had a fire in the room where its gold and silver records are held.
Isn’t that convenient?
In addition, after the hearing was over, Murphy was contacted by a number of major media outlets for interviews.
Within 24 hours, every single interview was cancelled.
Every single one.
Is that a coincidence too?
It appears that some very powerful people do not want this information to get out.
It also shows how corrupt the mainstream media has become.
This is a story that is so much bigger than the Madoff scandal or the Enron scandal that it is not even funny.
And yet the mainstream media is avoiding it like the plague.
But there were additional bombshells that came out during the hearing as well.
During the hearing it was revealed that the gold manipulators have accumulated a huge short position in gold and that these huge short positions are “naked”, which means that these positions are not hedged.
These massive short positions have put some of the largest financial institutions in the world in an extremely vulnerable position.
In addition, it has now come out that most “gold” that is traded is not backed by the actual metal itself. For years, most people have assumed that the London Bullion Market Association (LBMA), the world’s largest gold market, had actual gold to back up the massive “gold deposits” at the major LBMA banks.
But that is not the case.
People are now realizing that there is very little actual gold in the LBMA system.
When people think they are buying “gold”, they are actually just buying pieces of paper that say they own gold.
In fact, during the CFTC hearings, Jeffrey Christian of CPM Group confirmed that the LBMA banks actually have approximately a hundred times more gold deposits than actual gold bullion.
Uh oh.
So what happens if everyone decides that they want actual physical delivery of their gold?
It would be such a mess that it is painful even to think about it.
The truth is that right now most of the trading activities on the London exchange are just paper for paper.
But people get into gold because they want to be in a real commodity.
In fact, there are thousands of clients around the globe who think they own huge deposits of gold bullion, and are being charged large storage fees on that imaginary bullion, but what they really own are a bunch of pieces of paper.
If there comes a time when everyone starts asking for their gold it is going to create a squeeze of unimaginable proportions.
Maguire explains this situation this way: “for 100 customers who show up there is only one guy who is going to get his gold or silver and there’s 99 who will be disappointed, so without any new money coming into the market, just asking for that gold and silver will create a default.”
The truth is that it is absolutely impossible for the LBMA to ever deliver all the gold and silver owed to the owners of contracts.
Yes, it is a gigantic mess.
But this type of things is not entirely unprecedented. For example, Morgan Stanley paid out several million dollars back in 2007 to settle claims that it had charged 22,000 clients storage fees on silver bullion that did not exist.
But the scale of the fraud going on now is absolutely mind blowing. The following video contains footage from the hearing related to these issues….
So what is the bottom line?
The bottom line is that the precious metals markets are cesspools of fraud and manipulation.
The markets have been suppressed by the major financial institutions for years, and this has created the potential for a “squeeze” in the precious metals markets that could send the prices of gold and silver into the stratosphere.
You see, the reality is that there would be no gold left in the entire world if all the Gold ETFs (Exchange Traded Funds) asked for physical delivery.
Are you starting to get the picture?
In fact, Maguire claims that the naked short selling scam by the major financial institutions is well into the trillions of dollars, making it by far the biggest financial fraud in history.
Maguire calls what has been going on “financial terrorism”, and he accuses the financial institutions involved in this fraud of “treason” for putting national security at risk.
And national security is at risk.
Because if the true extent of this fraud comes out, it could collapse the entire financial system.
If you have never heard an interview with Andrew Maguire, we encourage you to listen to the audio interview posted below. It will really open your eyes to what is going on in the precious metals markets….
This is one of the biggest financial stories of the decade. Because it is complex, most Americans will not understand it. But the fraud and manipulation in the gold and silver markets has the potential to cause a massive economic collapse even without all of the other factors talked about on this blog.
Some very powerful people have been doing some really, really bad things. Once people understand the truth, they will never look at the financial markets the same way again. Already, faith in the major financial institutions of this country has been shaken by revelations about what has been going on over at Goldman Sachs. The American people have no more appetite for any more financial scandals or for any more Wall Street bailouts. But if the fraud and manipulation taking place in the precious metal markets ever gets totally exposed it will change the U.S. financial system forever.
Please get this information out to as many people as you can. There are a number of very powerful people who are not going to be pleased that sites like this are attempting to get the truth about this massive scandal out.
Not everyone in America is hurting during this economic downturn. In fact, the wealthiest Americans are doing just fine. At a time when millions of Americans are losing their jobs and their homes, the folks at the top end of the income scale are actually seeing their incomes go up. In 2009, the number of millionaires in the United States rose 16 percent to 7.8 million at a time when tens of millions of other Americans were experiencing gut-wrenching economic despair. The truth is that the statistics and the data do not lie. Wealth and income are increasingly becoming concentrated in the hands of the wealthiest Americans. So just what in the world is going on?
Well, the reality is that the game is rigged to take wealth away from middle class and working class Americans and to give it to the elite. There is a reason why they push credit cards on you so hard. That $6000 balance that you keep carrying will end up costing you over $30,000 to pay off if you are not careful. We were told that owning a home was “the American Dream” and yet predatory mortgages have destroyed the financial lives of millions of Americans. The majority of Americans now live “month to month” and barely save any money at all. In fact, Americans are programmed to be slaves of the system. We are taught that we need to go get a job (“just over broke”) and work ourselves silly all day, and then at night we are taught to collapse in front of the television where we are bombarded with messages telling us to be good consumers and to go out and get into even more debt so that we will have to endlessly work to pay it off.
Today more wealth is in the hands of the wealthiest Americans than at any other time in modern U.S. history. An analysis of income-tax data by the Congressional Budget Office a couple of years ago found that the top 1% of households own nearly twice as much of the corporate wealth in the United States as they did just 15 years ago. While the average income for the poorest Americans has barely grown over the past several decades, the incomes of the wealthiest Americans have absolutely exploded as the following chart demonstrates….
So why is this happening? Well, automation and “offshoring” are typically offered as two key reasons. Millions of hard working American manufacturing workers have been replaced by robots and by outsourcing, and this has enabled many very wealthy Americans to get even more wealthy. But these reasons alone do not explain the increasing disparities.
The truth is that over the past couple of decades, the “rules of the game” have been tilted even more in favor of the rich. Centralization and globalization have been two keys trend which have contributed to this. For example, in the old days you could make a good living by opening up a store in your local town if you worked really, really hard. But today you will be crushed by Wal-Mart and other “big box” stores.
So where do all the big profits that Wal-Mart and the other “big box” stores make go?
They get shipped out of your community to a bunch of rich fat cats.
But apologists for the current system will cry that Wal-Mart and the other “big box” stores create jobs.
Well, yeah, if you like to work for minimum wage.
Have you tried to support a family on minimum wage?
It’s basically impossible.
The entire economy is becoming completely dominated by giant global corporations. These giant corporations are more than happy to put American consumers into debt by selling them substandard junk manufactured in China, India and Mexico.
And it is a great time to be wealthy – especially if you are at the very top. For example, New York state Comptroller Thomas DiNapoli recently announced that Wall Street bonuses for 2009 were up 17 percent when compared with 2008. In fact, incomes for the top 1% of wage earners in the U.S. are shooting into the stratosphere as you can see from the following chart….
Unfortunately, all of this globalization, centralization and greed is fundamentally changing society. The gap between the rich and the poor is growing at an exponential rate. Is it a good thing for a society to have this kind of income inequality?….
Even the current economic collapse is hitting the poor much harder than the rich. Take a moment to examine the chart below. The ten percent of Americans that have the lowest household incomes have an unemployment rate of over 30 percent, while the ten percent of Americans that have the highest household incomes have an unemployment rate of just about 3 percent….
And if the wealthy do get into trouble what happens? Well, they get government bailouts of course.
The U.S. government is more than happy to rush in with billions (and even trillions) of dollars at the drop of a hat when their friends on Wall Street are in trouble.
But if you get into trouble do you think the U.S. government is going to bail you out?
No, the truth is that millions upon millions of Americans are losing their jobs and their homes and the U.S. government seems perfectly fine with that.
We live in a society where individual Americans find themselves with a rapidly diminishing share of the power. Instead, power is concentrated in the hands of massive international corporations and elite power brokers who are more than happy to use globalization to crush anyone who gets in their way.
After all, how can a hard working American compete with someone willing to do the same job for $1.25 an hour in another country?
We have allowed the U.S. economy to become globalized, and so now those who are dependent on a job will increasingly find themselves competing for wages in a global marketplace.
Can someone in China or India do your job?
You better hope not, because there are people there who would be more than happy to do it for a fraction of what you make.
As labor continues to become seen as a globalized commodity, the power and earning ability of the average American worker will continue to decline. The gap between the rich and the poor will continue to expand. The giant international corporations and the elite power brokers of the world will continue to win and the rest of us will continue to lose.
Meanwhile, the vast middle class that once made the United States the envy of the world will continue to rapidly disappear. But instead of doing something to fix the problems, one big group of Americans want to cheer on the wealthy as they plunder the rest of us and another big group of Americans just wants to give everyone a handout.
Wouldn’t it be great if someone actually decided to fix the great economic machine that produced the biggest middle class in the history of the world? Unfortunately, that is not likely to happen. The truth is that the U.S. economy is basically impossible to fix at this point – but that is the subject for another article.
Is taking all of our money out of the big banks part of the solution to America’s financial problems? The truth is that people across the United States are angrier about financial and economic issues than they ever have been in modern history. It did not sit well with millions upon millions of hard working Americans to watch their tax dollars being used to fund multi-million dollar bonuses at big financial institutions that were just bailed out by the U.S. government. It made Americans even angrier when these big banks that got the bailouts actually decreased their lending. It has been the big banks who got the massive government-funded bailouts who have been hoarding their cash, while the local community banks and credit unions that have been serving their customers loyally for generations have been left to die by the feds. Now the banking industry in the United States is more centralized than ever. At the end of 2007, the “Big Four” U.S. banks – Citigroup, JPMorgan Chase, Bank of America and Wells Fargo – held 32 percent of all deposits in FDIC-insured institutions. As of June 30th of last year it was 39 percent.
So are we going to let the big banks swallow the whole pie or are we going to do something about it?
Well, there are some people who are doing something about it. Arianna Huffington and Rob Johnson of the Huffington Post have started “The Move Your Money Campaign” which calls on all Americans to take their money out of these big banks and put it into smaller community banks and credit unions.
So is it working? A recent Zogby Interactive poll found that 9% of all U.S. adults have already taken some of their business away from big banks as a protest.
The reality is that it is impossible to vote the bankers out of their positions. So if we want to change the banking system, perhaps the best way is to take our cash away from the bankers.
But will it work?
Are the big banks simply too big and too powerful to even be bothered by a protest of this nature?
Perhaps, but nothing great was ever accomplished by not trying.
When they began this campaign at the end of last year, Arianna Huffington and Rob Johnson described their reasoning this way….
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo — all of which took billions in taxpayer money — have cut lending to businesses by $100 billion.
Meanwhile, America’s Main Street community banks — the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of — are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.
How else are we going to hold these bankers accountable? They have abused us and have abused the entire financial system, so they do not deserve our business any longer.
To promote The Move Your Money Campaign, filmmaker/author Eugene Jarecki produced the stirring YouTube video posted below. This video makes it exceedingly clear why we all need to start boycotting the big banks immediately…..
Please share this video with all of your friends and family. The reality is that the U.S. government has made it abundantly clear that the big banks are “too big to fail” and will always get bailed out, while all of the small banks and credit unions will be allowed to die and their assets will be divided up by the sharks.
If that does not sound like a good plan to you, then do something about it.
Pull your money out of the big banks.
Encourage your friends and family to do the same.
Otherwise the banking system of the United States will soon be concentrated in the hands of just a few and then we will all pay the price.
There have been very few things more damaging to American consumers over the past couple of decades than credit card debt. Easy credit has enabled many of us to live absolutely fabulous lifestyles, but outrageously high interest rates, ridiculous penalties and predatory fees have sucked the financial life out of millions of American families. It is very easy to blame the rapidly exploding debt of the U.S. government for the economic collapse that we are now experiencing, but the truth is that tens of millions of Americans have created their own personal economic disasters by overusing credit cards. The temptation of easy credit has been too much for millions of Americans to resist, but now all of that easy credit is proving to be incredibly difficult to pay back, and massive debt problems are literally tearing many American families apart.
It is hard to underestimate how devastating credit card debt can be to a family.
According to the credit card repayment calculator, if you owe $6000 on a credit card with a 20 percent interest rate and only pay the minimum payment each time, it will take you 54 years to pay off that credit card.
During that time you will pay $26,168 in interest rate charges in addition to the $6000 in principal that you are required to pay back.
That does not even account for any penalties or fees you may have to pay.
Are you starting to get the picture?
The reality is that credit cards are one of the greatest inventions for sucking the wealth out of middle class American families ever invented.
*At the end of 2008, the total credit card debt piled up by American consumers was over 972 billion dollars. This is an amount that is greater than the GDP of the world’s 122 poorest nations combined.
So is Congress doing anything to protect American consumers?
Well, some of the key provisions of The Credit Card Accountability, Responsibility and Disclosure Act, commonly known as the CARD Act, go into full effect for all credit card providers on February 22nd. In particular, starting on the 22nd limits will be imposed on when credit card issuers can raise rates on existing card balances.
But the truth is that this new law doesn’t really do much to protect us. U.S. credit card companies will continue to be able to engage in highly predatory practices. The following are just three examples….
#1) According to Pamela Banks of Consumers Union, the nonprofit publisher of Consumer Reports, there are no current federal laws that cap credit card interest rates. In fact, CNN is reporting that interest rates on some major bank credit cards are now as high as 36 percent.
#2) New laws only address the existing fees charged by credit card companies. So credit card companies are working hard to invent all kinds of new fees and penalties that will get around the new laws so that they can keep sticking it to American consumers. For example, Citibank is now charging some consumers with a fee if they put less than $2,400 on their card annually.
#3) In anticipation of the CARD Act going into effect, many credit card companies have been aggressively bumping up the minimum payments for many of their customers. Chase, one of the biggest credit card providers, recently increased the mandatory minimum payment for many consumers by 150 percent. MBNA, Citibank and Bank of America have announced that they are doubling minimum monthly payments on credit card balances for many of their customers. These increases have been absolutely devastating for many families who are on a tight budget.
The bottom line is that we all need to get out of debt and we all need to stop using credit cards. It is financial insanity to end up paying two, three, four or five times as much for an item as it cost in the store. We have been making the big banks rich by spending money that we do not have.
So if we are going to accuse the U.S. federal government of horribly wasting our money, we have got to be certain that we are geting our own financial houses in order.
But for many American families it is already too late. It is hard to pay off debt if you don’t have a job and you are about to lose your home. In fact, many American families find themselves literally being torn apart by financial stress.
Unfortunately, economic times are not going to get any easier. If you are able, get out of debt while you still can. Now is the time to tighten our belts and to prepare ourselves and our families for what is ahead.
When the mainstream media told the American people that the Federal Reserve was going to “help” the housing industry by buying up hundreds of billions of dollars worth of toxic mortgage backed securities, very few people probably even stopped to wonder where all of that money was going to come from. Well, the truth is that it did not come from anywhere. It was made up out of thin air. In fact, a total of 1.3 trillion dollars was just “printed into existence” so that the Fed could soak up these problematic securities (and help their buddies down on Wall Street in the process who were desperate to dump them). During a recent Joint Economic Committee hearing on Capital Hill, U.S. Representative Ron Paul directly confronted Federal Reserve Chairman Ben Bernanke about this 1.3 trillion dollars. As Ron Paul described how this 1.3 trillion was just created out of thin air, all Bernanke could do was nod his head. Why? Because it was the truth.
Why You Should Be VERY CONCERNED About The Financial Crisis In Greece
This has been quite a week for Greece and for the other nations in Europe teetering on the edge of financial disaster. Standard & Poor’s reduced Greek debt to “junk” status, and Spain and Portugal’s debts were also downgraded substantially. These unprecedented steps by Standard & Poor’s have many concerned that this financial “contagion” could start spreading across all of Europe.
We’ll take a look at the “austerity measures” being forced on Greece in a moment, but first it is important to note that financial panic is already spreading to other nations in the region.
In Portugal, the government has announced that additional “austerity measures”, beyond those in the current three year plan, are expected to be implemented. Perhaps they wouldn’t need to take such drastic steps if they hadn’t spent all of those millions constructing those shiny new soccer stadiums a few years ago. But in any event, many analysts are now forecasting that Portugal will be the next domino to fall.
Officials in Spain are expected to announce this week that unemployment has hit 20%. But of course any nation that implements a hardcore “cap and trade” law like the one in Spain should expect unemployment to soar into the stratosphere. So they are just reaping what they have sown, but the fallout could end up being very painful. Spain’s economy is approximately five times larger than Greece’s so if Spain ends up defaulting it will create a financial nightmare for all of Europe.
There are now rumors that even Italy and Ireland are in a massive amount of trouble financially.
So will the EU and the IMF end up having to bail all of them out?
Well, for now Greece is first in line.
European officials said on Friday that the Greek government, facing a rapidly deteriorating financial situation, is close to completing negotiations for assistance from the International Monetary Fund.
So Greece is going to get the money that it needs – but it comes with strings.
Greece must surrender some of its fiscal sovereignty and adopt a three year program of severe spending cuts and higher taxes.
In fact, one major Greek newspaper says that wage and job cuts for public workers will also be ordered alongside the spending cuts and tax increases to get through what they are calling “three hard years”.
You see, the truth is that Greece is a highly socialized nation. In a population of just over 11 million people, Greece employs more than a million in the public sector.
Just think about that for a moment.
That is huge.
They get paid extremely well, and Greek civil servants also enjoy very generous pension benefits and early retirement.
Needless to say a lot of these Greek civil servants are not happy at all about the changes the IMF is forcing upon them, and they have called a general strike for May 5th.
For his part, the Greek Prime Minister, George Papandreou, is trying to convince the Greek people that these new spending cuts and tax increases are necessary to keep his nation afloat. According to The Associated Press, Mr. Papandreou recently told the Greek Parliament the following….
“The measures we must take, which are economic measures, are necessary for the protection of our country — for our survival, for our future, so we can stand firmly on our feet.”
There are even fears that this sovereign debt crisis could spell the end for the Euro. Back on Wednesday, the leaders of the 16 countries currently using the Euro called an emergency meeting to attempt to avert a Euro meltdown triggered by Greece’s financial collapse.
Of course the Euro is not actually going to collapse, but the fact that they all felt the need to get together and talk about this situation is quite telling.
In fact, the language used by some of the top financial authorities in the world when speaking about the Greek debt crisis is quite alarming….
Angel Gurría, head of the Organization for Economic Cooperation and Development:
“This is like Ebola. It’s threatening the stability of the financial system.”
Colin Ellis, economist at Daiwa Capital Markets:
“The time for horse-trading, prevarication and posturing is over. Arguably, the very future of the euro area is now teetering on a knife edge.”
Dominique Strauss-Kahn, head of the International Monetary Fund:
“If we don’t fix it in Greece, it may have a lot of consequences on the EU.”
But for the people of Greece, getting help with their debt means giving up their ability to determine their own affairs. They have gotten into so much debt that now they are forced to do whatever the IMF and the EU tell them to do. Of course there are many in Greece who are extremely upset by this as evidenced by the recent riots there….
But this is what happens when a nation allows itself to get into way too much debt. In fact, this has been done by design in third world nations for decades. In his extraordinary book, Confessions of an Economic Hitman, John Perkins explained how it was his job to go around the world and get third world governments to accept multibillion-dollar loans that he knew they would never be able to repay. Of course when the time came and they could not repay the loans, the big global institutions would go in and confiscate natural resources and impose “conditions” and implement “austerity measures” similar to the ones they are currently imposing on Greece.
The alarming thing today is that it just isn’t third world nations where this game is being played anymore. Now that they have perfected the blueprint, they are trying it out on nations like Greece.
The reality is that this is all part of the push towards globalization. In fact, Jean-Claude Trichet, the president of the European Central Bank, emphasized the need for global coordination in financial matters during his April 26th address at the Council on Foreign Relations.
“Global coordination” sounds nice, but just like “global governance” and “global cooperation”, it is just another way of saying that we need to transfer more power and more authority to globalist institutions.
You see, whatever problem that pops up (in this instance it is the Greek debt crisis), the solution always seems to be to transfer more power to global institutions.
In fact, as a “solution” to the global financial crisis, the IMF is proposing two new taxes on financial institutions worldwide: a “financial stability contribution” which levies a small charge on financial institution balance sheets, and a “financial activities tax”, which would tax “excess profits” and bonuses.
As the nations of the world continue to get deeper in debt, and as more power and more money is transferred to unelected global institutions, the people of the world may find their lives increasingly being run by heartless bureaucrats on the other side of the globe.
For anyone who loves freedom, that is a very sobering thought.