Socio-Economics History Blog

Socio-Economics & History Commentary

Marc Faber: Geithner and Bernanke are 2 Mad Men Running The Economy Towards Hyper-Inflation

  • Marc Faber sees Geithner and Bernanke running the American economy into hyper-inflationary collapse. He also gives his view on the commodity and stock market for the next few months.


June 13, 2009 Posted by | Economics | , , , , , , , | 2 Comments

Reflections And Warnings – An Interview With Aaron Russo

  • Blip.TV :
    Reflections And Warnings – An Interview With Aaron Russo, pays homage to maverick patriot Aaron Russo, who left this mortal coil in August 2007 after a long battle with cancer. The film is a 90 minute full version of Gelgamek Jones’ seminal interview with Russo, which took place months before his death.
    This was Russo’s final videotaped interview before he passed away, but his legacy as the founder of the movement to end the power monopoly of the Federal Reserve makes the documentary more contemporary than ever before in light of how the Federal Reserve has increased its stranglehold over the American economy since the beginning of the financial crisis last year.
    The DVD is interspersed with new footage of Gelgamek highlighting the progression of many things that Russo warned were part of the ultimate agenda for the prison planet before he passed away.
    Russo was perhaps best known for managing star of stage and screen Bette Midler, as well as producing Trading Places starring Eddie Murphy, but his last great work was undoubtedly the most important of his life – Russo’s groundbreaking exposé of the criminal run-for-profit Federal Reserve system, the documentary America: From Freedom to Fascism.
    The interview opens with Russo talking about how he first started to become aware of the fact that something was very wrong in America, when cops set him up and raided his Chicago night club and later demanded protection money, mafia style.
    The conversation on the DVD features many shocking revelations that were divulged by Russo’s one-time close friend Nick Rockefeller about the elite’s agenda for mankind.
    After his popular video Mad As Hell was released and he began his campaign to become Governor of Nevada, Russo was noticed by Rockefeller and introduced to him by a female attorney. Seeing Russo’s passion and ability to affect change, Rockefeller set about on a subtle mission to recruit Russo into the elite.
    During one conversation, Rockefeller asked Russo if he was interested in joining the Council on Foreign Relations (CFR) but Russo rejected the invitation, saying he had no interest in “enslaving the people” to which Rockefeller coldly questioned why he cared about the “serfs.”
    “I used to say to him what’s the point of all this,” said Russo, “you have all the money in the world you need, you have all the power you need, what’s the point, what’s the end goal?” to which Rockefeller replied (paraphrasing), “The end goal is to get everybody chipped, to control the whole society, to have the bankers and the elite people control the world.”
    Rockefeller even assured Russo that if he joined the elite his chip would be specially marked so as to avoid undue inspection by the authorities.
    In another conversation, Russo states that Rockefeller told him, “Eleven months before 9/11 happened there was going to be an event and out of that event we were going to invade Afghanistan to run pipelines through the Caspian sea, we were going to invade Iraq to take over the oil fields and establish a base in the Middle East, and we’d go after Chavez in Venezuela.”
    Rockefeller also told Russo that he would see soldiers looking in caves in Afghanistan and Pakistan for Osama bin Laden and that there would be an “Endless war on terror where there’s no real enemy and the whole thing is a giant hoax,” so that “the government could take over the American people,” according to Russo, who said that Rockefeller was cynically laughing and joking as he made the astounding prediction.
    “Eleven months to a year later that’s what happened….he certainly knew that something was going to happen,” said Russo.
    In a later conversation, Rockefeller asked Russo what he thought women’s liberation was about. Russo’s response that he thought it was about the right to work and receive equal pay as men, just as they had won the right to vote, caused Rockefeller to laughingly retort, “You’re an idiot! Let me tell you what that was about, we the Rockefeller’s funded that, we funded women’s lib, we’re the one’s who got all of the newspapers and television – the Rockefeller Foundation.”
    Rockefeller told Russo of two primary reasons why the elite bankrolled women’s lib, one because before women’s lib the bankers couldn’t tax half the population and two because it allowed them to get children in school at an earlier age, enabling them to be indoctrinated into accepting the state as the primary family, breaking up the traditional family model.
    This revelation dovetails previous admissions on behalf of feminist pioneer Gloria Steinem (pictured) that the CIA bankrolled Ms. Magazine as part of the same agenda of breaking up traditional family models.
    Rockefeller was often keen to stress his idea that “the people have to be ruled” by an elite and that one of the tools of such power was population reduction, that there were “too many people in the world,” and world population numbers should be reduced by at least half.
    Russo talks at length in the interview about how any attempt at taking America back from the criminal elite needs to be focused around dismantling the private criminal enterprise known as the Federal Reserve, by returning America to a system where the government prints its own money backed by gold without having to be in debt and pay interest to a private cabal of elitists.
    At the end of the interview, Russo describes how he had plans to further fight the new world order once he overcame his cancer, which unfortunately was not to be. However, Aaron’s legacy will live on through this interview, through his outstanding documentary America: From Freedom To Fascism and through the countless people in his life who he brought joy to by way of his engaging, warm and above all, innately human personality.


June 13, 2009 Posted by | EndTimes, GeoPolitics, History | , | 5 Comments

FedRes Would Be Shut Down If It Were Audited, Expert Says

Vodpod videos no longer available.

  • Senator Ron Paul’s bill to audit the FedRes is gathering momentum. He has well over 200 signatures for it. Let us hope that it goes through and the FedRes gets audited. It is time the public know the truth about all their shenanigans and lack of accountability. Where did all the taxpayers’ monies goto? They have to answer for it.
  • reports :
    The Federal Reserve’s balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC.
    With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.
    “If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”
    Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed
    . Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank’s target rate should not be around zero.
    “I think zero is the wrong rate for almost any economy,” Grant said, adding the Fed has “embarked on a vast experiment in moral hazard. Interest rates are the traffic signals in a market economy, and everything’s green. … You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank.”
    Amid a disparity between analysts predicting there will be no rate hikes soon and the fed funds futures indicating tightening by the end of the year, Grant said he thinks the Fed indeed will begin raising rates as inflation creeps into the picture. 


June 13, 2009 Posted by | Economics | , , | 2 Comments

John Embry Expects $1,500 Gold and Early Stage Hyperinflation by Year End

  • Although, we still see deflation in the economic statistics at the moment, the real problem is inflation ahead. I still believe the world is heading towards hyper-inflation and with it a global monetary crisis. This bodes well for gold. John Embry is conservative on the US$1500/ounce for the price of gold by year end. The Gold Report :
    John Embry sees both good and bad news in the weeks, months and years ahead. For example, John— Sprott Asset Management’s chief investment strategist—is braced for “an ugly summer,” with “another significant test in the equity market.” Before year-end, he anticipates $1,500 gold—but also the beginning of worldwide hyperinflation that may take many Americans by surprise. And while John is bearish on world economies for the next few years, within that same time he looks toward “numerous 5- and 10-baggers” among small-cap gold producers and junior explorers with solid projects.
    The Gold Report: Quite a bit’s happened since the last time we spoke with you back in September of ’08. Gold was $874 at that point, and then dropped considerably in Q4. It has come back in ’09, trading in the range of $850 to $950. Is gold still tethered to the dollar?
    John Embry:I don’t know that it’s tethered to the dollar per se. Basically, there’s a major problem with the dollar. I believe it is absolutely fated to fall dramatically against everything, but more against real assets than against other currencies. When I look at the other currencies, they don’t look very good either, particularly the Euro and the Japanese yen.
    They’re trying to create the impression that paper currency is still good; so they go out of their way to try to pound gold at every opportunity. A week ago, clearly gold was tethered to the dollar on the downside, but on the other hand, for the prior few weeks when the dollar was under enormous pressure, there was still restraint in the gold price. It went up, but it should have gone up a lot more. They put pressure on to keep it from going up too much, and with an opportunity for a stronger dollar, they knock gold down. It’s been the same format for a long time. But we’re getting close to the end of that.
    TGR:Why’s that? What’s going to push it over?
    JE: There’s no question what’s going to push it—the realization that the U.S. is broke.
    TGR: Who doesn’t realize that already?
    JE: Well, 90% of the people don’t. Ask the average citizen. They don’t have a clue what’s going on.
    TGR: So we need the public to figure this out.
    JE: Absolutely. The U.S. budget deficit is going to be 13% of GDP. That’s unheard of for the world’s reserve currency. There’s no way you get out of that easily.
    TGR: But most people aren’t in the market anyway, so why would their realization affect the price of gold?
    JE: Oh, it’s not them; it’s the people with the money—the people in the Far East and the Middle East. They will just want out of currency and as quickly as possible.
    TGR: Why aren’t they buying gold now?
    JE: They are. They’ve already started.
    TGR: So why hasn’t the price gone up?
    JE: It has gone up. But the fact is that, with the paper gold market, if you look at the short positions that the commercials, that the bullion banks, which are the agents of the U.S. government are running, it’s a complete fraud.
    TGR: How so?
    JE: Because they couldn’t possibly deliver on their paper promises if they were called by the people on the other side of the trade. The gold isn’t there to deliver. They’ve cleaned out most of the western central banks. So we’re real close. I think gold will be $1,500 before the end of the year.
    TGR: When we had the last spike in gold back in 1979 and 1980, was that predominately U.S. individuals or were people buying it globally?

    It was more U.S. then because, at that point, the U.S. was still the richest nation in the world. Now, the money has gone primarily to the East. They’re the ones that own all the dollars and the ones becoming more and more concerned about it. This charade with Geithner over in China, what a joke that was. He spoke to a bunch of students, who broke out laughing when he said the Chinese assets in the U.S. were safe. He couldn’t even fool the kids.
    TGR: But as you point out, so many American people—the clerks at the checkout stands, the butcher, the teachers—don’t know what’s going on.
    JE: They don’t. What will inform them is the inflationary impact that will really start chewing into their standard of living if the dollar falls the way I believe it’s going to. That hasn’t happened yet.
    TGR: But U.S. unemployment hit its highest level in 25 years last month. Isn’t that chewing into their standard of living?
    JE: Yes, for people who have lost their jobs. However, 9 people out of 10 still have their jobs and are pretty much maintaining their standard of living. That will change if the dollar falls to the extent that I expect, which will be fairly precipitous.
    TGR: If you project gold going to $1,500 by the end of the year, are you projecting that the inflationary period will begin before the end of this year too?
    JE: Not in a dramatic way. It will be in the early stages. This obviously presupposes that the dollar will fall in that environment, but yes, as the dollar falls, you’ll start to see more inflationary implications in my opinion. There will still be a lot of people out of work and it will start affecting those who are working. I think that will have a rather negative impact on the overall U.S. economy as well.
    TGR:What are the implications of all of this on investments, be they in gold or whatever else?
    JE: Personally, I have a significant proportion of my own wealth in gold and gold shares. I like most hard assets. What I wouldn’t own are financial assets, such as bonds or bank deposits—and certainly not banks and financial institutions. If what I foresee comes to pass, there will be rewards for being in hard assets. That will protect you.
    TGR: Will any particular catalyst make the populace wake up and realize that the jig’s up?
    JE: It’s more an issue of the confidence of the people who have to buy the dollar to keep everything afloat. That’s the Chinese, the Japanese and various entities around the world. The U.S. budget deficit is so huge that if this plays out, more people are going to start to realize that when the U.S. is forced to monetize the debt, they’re printing money and creating the backdrop for considerable inflation.
    TGR: It’s like the ultimate negative amortization loan. The balance just keeps getting bigger and bigger and bigger.
    JE:I know. I debate with people who are deflationists; we talk about it all the time. I could see the thing going to deflation, if this all fails and the whole thing just kind of collapses. But I am from the school that if you have a total fiat monetary system, which we have today—there’s nothing backing anything anywhere—you can create as much as you want out of thin air. The U.S. has done a pretty good job recently, trying to fight off the financial issues over the last 12 months. The amount of money created is really something.
    TGR: Isn’t that true of practically every other country on the planet?

    Yes. Other countries don’t want their currencies to go up sharply against the dollar, so they’re forced to print their own currency to try and support the dollar a bit. That leads to sort of a global inflation, which I think is the ultimate outcome. That’s why I love gold.
    TGR:Jim Dines’ newsletter recently had a chart of all the global markets, and they’re all up like the Dow and the S&P—everything across the board. And people like Ian McAvity, Rick Rule and others are talking about this as a suckers’ rally, and saying that we’re going to have another big drop.
    JE:I think it is a suckers’ rally. One of the things driving it up is obviously excess liquidity being put into the system. But on the other hand, a lot of people think this rally is for real and that because the market’s up, the economy is going to recover. I think the economy will have a minor recovery, but not nearly enough to support the levels equities have already achieved. So I agree with as Ian McAvity and Rick Rule and that gang that we will see another significant test in the equity market. This could be an ugly summer.
    I don’t see any easy way out of this employment (or unemployment) problem that we’re confronting, either. I think that’s going to be ongoing, and again, more and more people out of work isn’t particularly bullish for the overall economy.
    TGR: What do you see the economies doing globally?
    JE: I see some sort of minor recovery. But if a recovery were to have any robustness, interest rates would rise sharply, and with debt levels still excessive, higher interest rates would put a very quick end to it. Consequently, I don’t think we can have sustainable growth any time soon. Instead, I think we’ll see periodic rallies followed by further downdrafts. So I am not bullish on the economies for the next few years.
    TGR: Not even China?
    JE: They’re pumping it up so badly that they may have an inflation problem sooner rather than later.
    TGR: What will come first—the market braking or the dollar falling? Or will it be simultaneous? Is there any correlation there?
    JE: Well, it’s interesting. Right now, it almost looks like the whole system’s trading on an algorithm because when the dollar goes up, equities go down and bonds go up. In the fullness of time, conceivably the market may brake first, and the dollar may come afterward.
    TGR: When the market brakes again, will it be different from last fall?

    That perfect storm of negativity will not happen again. That was about as bad as it gets. I had an interesting anecdotal experience last week. I saw a wealthy acquaintance for the first time since the depths of the market decline. At that point, he was morose. Now he’s absolutely ebullient, thinking the higher market is just great, nothing but blue skies ahead. I think that’s a bit of a theme out there. Later that same day, I ran into a good friend, one of the better proprietary traders in Canada. He was making the same points that I am. He thinks this summer is going to be extremely ugly and that the public has it all wrong. Before long, we will see who’s right.
    TGR: So it could get ugly but you think not quite as ugly as last fall?

    Not that ugly. In terms of gold and gold shares, particularly, that was the cleanout that got rid of everybody who didn’t really know the reason for owning them in the first place. I’d never seen anything like it, to be quite honest. I was dumbfounded. The fundamentals hadn’t changed much, but perceptions did. And people threw the baby out with the bathwater.
    I actually bought a lot of gold at that point. I bought some shares, too, and already have a couple of five-baggers.
    TGR:Where does that price have to be for it to make economic sense?
    JE: I think at $1,500 you’d get good returns on the capital employed. This is a very risky, hard business; and if you’re in it, you deserve to be rewarded for your efforts. If you look at returns on capital over the last 15 to 20 years, they’re pathetic if there’s any return at all. That’s going to all change one day.
    The thing that people have to realize is that the central banks and the western governments have made a concerted effort to control gold because they see it as the major competition for their fiat money system, which is failing. And when it fails—and it will—that’s when gold comes into its real heyday.
    TGR: And what are you up to?
    JE: I spend most of my time studying the macro. It’s a good time for that because I think it’s going to be the thing that separates the men from the boys. For most of my career you could assume a relatively level playing field, but we’re in a situation now that none of us has ever seen before. People are just throwing stuff at the wall to see what will stick.
    I’m from the school of Austrian economics, and I basically believe that all economic cycles are credit cycles. We had the mother of all credit cycles. It broke, with far too much debt in the system, exacerbated by derivatives. There’s no easy out. You can’t just recreate what we’ve had because we overdid it. The idea that we can print ourselves out of debt is not going to work. It will lead to some sort of hyperinflation if it’s successful, but the economy will be sloppy at best.
    This is not novel thinking on my part. Just last week Angela Merkel, the German Chancellor, did something a German politician has never done before—she criticized central banks. She said what the U.S. and Great Britain and the European Central Bank were doing in terms of ‘quantitative easing,’ which is just money printing, is wrong and won’t work. In fact, it probably will exacerbate problems. I think Ms. Merkel must be a bit of an Austrian economist at heart and I certainly don’t disagree with her.
    But if they don’t keep creating money, we will have some sort of deflationary event, and the one thing people remember clearly is the 1930s. Nobody thinks about hyperinflation very often, because very few have experienced it.


June 13, 2009 Posted by | Economics | , , , , , , | Comments Off on John Embry Expects $1,500 Gold and Early Stage Hyperinflation by Year End