- Was the sovereign debt crisis resolved? Can you solve a debt problem with more debt upon debt? I don’t think so. The problem has grown bigger! America, most of Europe and Japan are totally bankrupt. The politician snakes hide the true debt figures behind Enron accounting, off-balance sheet items and sleight of hand. But no amount of lies can put off paying the piper indefinitely.
- This coming global economic, financial and monetary collapse is an Illuminist engineered event. They want to drive the world into chaos and world war. Out of global calamity/chaos, they will introduce their pre-planned solution: One World Currency, Global supra national Central Bank and World Government! This is their Hegelian dialectic: Order Out of Chaos in action!
Political Upheaval Rocks Eurozone Debt Markets!
The simmering crisis on the eurozone fringes has erupted again as the full impact of debt deflation hits home, testing political solaridity and raising fresh doubts about the workability of Europe’s austerity policies.
Hopes of a budget deal in Portugal collapsed after marathon talks between the minority government of socialist premier Jose Socrates and conservative leaders ended in acrimony. Finance minister Fernando Texeira dos Santos said failure to agree on budget cuts will “plunge the country into a very deep financial crisis”.
Meanwhile, Ireland has announced fiscal retrenchement of €15bn over the next four years, twice the original plan. It is already cutting public wages by 13pc. John Fitzgerald from Ireland’s Economic and Social Research Institute said there is a risk that austerity tips the economy into a downward spiral, comparing it to an overdose of “chemotherapy” that does more harm than good.
Finance minister Brian Lenihan said the country had no choice. “The cost of borrowing is high and rising, and if we do not act soon to live within our means, people may stop lending to us. We will not fool the markets for an instant if we seek to defer any longer what evidently needs to be done now. The Irish people will have to accept cuts in public expenditures and higher taxes,” he said.
In Greece, yields on 10-year bonds surged 67 points to 10.26pc, the biggest jump since the turmoil in June. The sell-off came after permier George Papandreou warned that the country was still in danger, and threatened to call early elections. Finance minister George Papaconstaninou refused to rule out a request for an extension of the repayment period for the EU rescue package and confirmed that tax revenues are falling short. “We are deluding ourselves as a country in thinking we have a tax system. We don’t,” he said.
He confirmed leaks that the budget deficit for 2009 would be “above 15pc” of GDP, higher than the last estimate of 13.8pc and five time the original claim of 3pc by the previous government.
Gavan Nolan from Markit said fears of “political instability in sovereign credits” had moved onto the radar screen, with investors now paying closer attention to whether or not governments can actually deliver on austerity plans. It unclear whether Portugal can salvage anything over coming days in what amounts to a game of brinkmanship, with the socialists demanding VAT tax rises and the conservatives demanding spending cuts.
The opposition denied that there was “any possibility” of continuing talks, but hinted that it would abstain on the budget vote. Mr Socrates in turn has said he will resign if there is no accord. Julian Callow from Barclays Capital said politics is intruding in the eurozone fiscal crisis. “It is one thing to promise cuts but it is very different to agree on details and decide where the axe will fall. There are some encouraging signs but Portugal has an awesome undertaking ahead in squeezing fiscal policy by 4pc of GDP over the next year, and the the task may be too great.”
Yields on 10-bonds jumped 25 basis points on Wednesday to 5.77pc, far above the likely rate available from the EU’s bail-out fund and the International Monatery Fund. A string of top economists in Portugual have said the country should call in the IMF to gain breathing time.
As members of the eurozone, Portugal, Ireland, Greece cannot devalue or resort to monetary stimulus offset fiscal tightening. They must each pursue a policy of “internal devaluation”, meaning deflation within the currency bloc to regain lost competitiveness. This is risky for economies with total debt levels above 300pc of GDP, as is the case in Ireland and Portugal. Ireland’s nominal GDP has already contracted by over 20pc of GDP, yet the debt burden has not diminished.
The test will be whether these countries can generate enough exports to trade their way out of crisis over coming years, or remain trapped in slump with rising political tensions.
CFTC Urged To ‘Act Now’ on Silver Price Manipulation! JP Morgan And HSBC Sued For Alleged Silver Conspiracy!
- It looks like the CFTC will have to act or lose all credibility. It seems that many silver investors are taking action to join the class action suit against JP Morgan and HSBC. The bullion banksters hold massive short positions in the silver and gold market. If they are found guilty and forced to unwind these short positions, silver will rocket to the moon with gold not far behind.
Act Now, CFTC Is Urged
A Commodity Futures Trading Commission regulator is putting pressure on the agency to take action in a high-profile, two-year-old investigation of the silver market. At a CFTC hearing Tuesday to consider new rules to strengthen its commodity-enforcement powers, commissioner Bart Chilton said market players have made “repeated” and “fraudulent efforts to persuade and deviously control” silver prices. Mr. Chilton said he believed there have been violations of CFTC rules that should be prosecuted, though he couldn’t publicly disclose trader names.
The call to action on the silver investigation comes as the CFTC faces increasing pressure because of its expanded role overseeing derivatives trading under the new financial-overhaul law. For years, lawmakers have criticized the agency for failing to aggressively police the commodities markets.
In its 36-year history, the CFTC has reached settlements in more than three dozen manipulation-related cases, though it has successfully concluded just one manipulation case from trial through appeal. To win manipulation cases in the past, the CFTC had to prove that a trader intended to manipulate prices. Under the financial overhaul’s new fraud-based manipulation powers, the CFTC’s burden of proof would be lower.
The CFTC’s investigation of silver has heated up in recent weeks. The agency’s enforcement staff has circulated a packet of information to CFTC lawyers and commissioners, outlining some of its findings in the silver probe, including documents that could suggest there have been attempts to manipulate prices. In recent days, the commissioners have been discussing how to proceed in the investigation, but they haven’t made a decision.
JPMorgan, HSBC sued for alleged silver conspiracy
JPMorgan Chase & Co (JPM.N) and HSBC Holdings Plc (HSBA.L) were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices, and reaping an estimated hundreds of millions of dollars of illegal profits. The banks, among the world’s largest, were accused of manipulating the market for COMEX silver futures and options contracts from the first half of 2008 by amassing huge short positions in silver futures contracts that are designed to profit when prices fall.
“Defendants reaped hundreds of millions of dollars, if not billions of dollars in profits” from the conspiracy, one of the complaints said. The respective plaintiffs, Brian Beatty and Peter Laskaris, each said they traded COMEX silver futures and options and contracts, and lost money because of the alleged manipulation.
Beatty lives in Connecticut and Laskaris in New York, court records showed. The lawsuits seek class-action status, damages that may be tripled and other remedies. The defendant banks are major participants in the silver market. JPMorgan declined to comment. An HSBC spokeswoman had no immediate comment.
The lawsuits were filed one day after the Commodity Futures Trading Commission proposed regulations to give it greater power to thwart traders who try to manipulate prices. The CFTC began probing allegations of silver price manipulation in September 2008.
“Going back to the early 1980s, silver has been an extremely volatile market,” said Bill O’Neill, managing partner at Logic Advisors, an Upper Saddle River, New Jersey investment firm specializing in commodities. “I often describe it as a speculative playground. You have to be a big boy to play.”
FRAUD, DEVIOUSNESS ALLEGED
Only once in its 36-year history has the CFTC successfully concluded a manipulation prosecution, in a 1998 proceeding concerning prices for electricity futures. Speaking on Tuesday, Chairman Gary Gensler said the proposed regulations would give the regulator greater power to police “fraud-based manipulation.”
- How do you pay off US$200T in debts? You can’t! At 2% interest rate, the interest alone is US$4T a year. Of course, the Feds can hold back adjustments in social security, Medicare… unfunded liabilities. But mathematically, the debts will never be paid back. People who continue buying treasuries thinking they are safe are insane! QE to infinity is an absolute certainty. The Feds will pay the debts by creating massive amounts of money out of thin air. Do you still doubt that the USD is toast? Gold is your protection against this coming global currency crisis!
Professor Kotlikoff: “The U.S. is Bankrupt!” With Debts of US$200 Trillion!
Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), …. but rather … : $200-trillion … “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”
Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”
This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling. Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.
“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.” He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments. But the CBO calculations assumed that the growth of government programs (including Medicare) would be cut by one-third in the short term and by two-thirds in the long term. This assumption, Prof. Kotlikoff notes, is politically implausible – if not politically impossible.
One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever. Prof. Kotlikoff uses “fiscal gap,” not the accumulation of deficits, to define public debt. The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value). By this measure, the United States is in worse shape than Greece.
Prof. Kotlikoff is a noted economist. He is a research associate at the U.S. National Bureau of Economic Research. He is a former senior economist with then-president Ronald Reagan’s Council of Economic Advisers. He has served as a consultant with governments around the world.
He says the U.S. cannot end its fiscal crisis by increasing taxes. He opposes further stimulus spending because it will simply increase the debt. But he does suggest reforms that would help – most of which would require a significant withering away of the state. He proposes that the government give every person an annual voucher for health care, provided that the total cost not exceed 10 per cent of GDP. (U.S. health care now consumes 16 per cent of GDP.) He suggests the replacement of all current federal taxes with a single consumption tax of 18 per cent. He calls for government-sponsored personal retirement accounts, with the government making contributions only for the poor, the unemployed and people with disabilities.
Without drastic reform, Prof. Kotlikoff says, the only alternative would be a massive printing of money by the U.S. Treasury – and hyperinflation. As former president Bill Clinton once prematurely said, the era of big government is over. In the coming years, the U.S. will almost certainly be compelled to deconstruct its welfare state.
Prof. Kotlikoff doesn’t trust government accounting, or government regulation. The official vocabulary (deficit, debt, transfer payment, tax, borrowing), he says, is vulnerable to official manipulation and off-the-books deceit. He calls it “Enron accounting.” He also calls it a lie.
- My advice to all those paying mortgages: get a lawyer to make sure the bank can prove they own the actual title-deed and not some electronic copy. If they cannot prove it, they do not own the property. You should stop paying the mortgage because even when you have completely paid off the mortgage you do not own the house! The bank cannot transfer the title-deed to you since they don’t own it!
“This is not simply a glitch in paperwork ….. This was an industry wide scheme designed to defraud homeowners”
“This is organized crime by people in suits but it is still organized crime”
Foreclosuregate Explained: Big Banks on the Brink
Scandal is spreading across Wall St. like a very bad case of poison ivy. A rash of fraudulent home foreclosures has exposed some of the nation’s biggest banks to an even worse condition … bankruptcy.
Until late 2007, the money boys on Wall St. made a bundle in the housing market. After the bubble burst, they were just itching to cash in on the down side, calling in all those bad loans they made and selling off millions of repossessed homes. According to RealtyTrac, Inc., which compiles such data, lenders foreclosed on 3.2 million properties in the last three years, 288,000 in the last quarter, the highest number on record.
But evidence came to light, first in New York, then Florida, Maine, Ohio, and other states that lenders were taking shortcuts to speed up foreclosures. Law firms hired so-called “robo-signers,” some of whom have admitted in depositions that they routinely signed off on thousands of foreclosure papers they had never read and sometimes forged signatures of notary publics who were not present.
“Why don’t we have Mickey Mouse sign the thing, instead of having a human being sign it? I mean it becomes meaningless,” New York Supreme Court Judge Arthur Schack told PBS “Newshour.” Legally meaningless maybe, but not without consequence for hundreds of thousands of Americans who have been evicted from their homes, many of whom have no jobs, and who were snookered into sub-prime mortgages in the first place.
In the wake of mounting public outrage, attorneys general of 50 states and the District of Columbia have launched a joint investigation into what financial writers are calling “Foreclosuregate.” Industry spokespersons have downplayed the controversy surrounding foreclosure mills and “robo-signers.” Bank of America and JP Morgan Chase are conducting internal reviews of thousands of foreclosures, but say they believe all the underlying facts in their foreclosures are true and that any potential issues will be quickly addressed.
However, Bank of America and GMAC stopped foreclosures in all 50 states and Chase stopped them in the 23 states where a judge must approve foreclosures. Other lenders like PNC Financial and Litton Loan Savings followed suit in what amounted to a national moratorium on foreclosures. But it only lasted a couple of weeks. Bank of America and GMAC have since started up foreclosure suits again despite the bad press, pressure from bondholders and even the Federal Reserve, which wants big lenders to start buying back the bad mortgages on which they are trying to foreclose.
“The bottom line is not that those properties won’t be repossessed. They simply won’t be repossessed as quickly,” said Rick Sharge, vice president of RealtyTrac. But others predict that if GMAC and Bank of America stick to their guns, they just might go down in smoke. “This is not simply a glitch in paperwork,” wrote Iowa Attorney General Tom Miller, who is heading up the states’ joint investigation into the mortgage paper fraud mess. “This was an industry wide scheme designed to defraud homeowners,” Florida attorney Peter Ticktin told The Associated Press.
Ohio Attorney General Richard Cordray filed a lawsuit against lender GMAC in October that aims to stop sales of all repossessed homes foreclosed with robo-signed documents and to reverse judgments on those foreclosed homes that have not yet been sold. In addition, the suit seeks damages for homeowners and a $25,000 fine for every fraudulently filed court document.
In Kentucky, Heather McKeever filed a class action lawsuit against GMAC on behalf of homeowners there alleging the giant lender, a recipient of $16 billion in federal bailout money, violated the RICO Act. “This is organized crime by people in suits but it is still organized crime,” she said.
If other states file similar lawsuits like those in Ohio, Kentucky and Mississippi, it could mean billions of dollars in damages and fines, criminal perjury prosecutions of “robo-signers” and disbarment for the lawyers who filed the fraudulent papers. Some analysts say the potential liability of major banks is so large, another financial crisis is a real possibility.
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- Hyperinflation is a monetary event. The FedRes is putting in place the fuse for the hyperinflation bomb. QE 2.0 will light this fuse. Watch the gold and silver rocket take off!
John Embry – “I Guarantee Hyperinflation” (KingWorldNews.com)
“I’m another person that worries hugely about hyperinflation, I mean the monetary path that they appear to be following, I guarantee you will lead to hyperinflation.” ….