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" Remember when Goldman Sachs - dubbed by Matt Taibbi the Vampire Squid - sold derivatives to Greece so the government could conceal its debt, then bet against that debt, driving it up? It seems that the ubiquitous investment bank has also put the squeeze on California and its school districts. Not that Goldman was alone in this; but the unscrupulous practices of the bank once called the undisputed king of the municipal bond business epitomize the culture of greed that has ensnared students and future generations in unrepayable debt."

Incredible theory, which, if true, would indeed end our Constitutional Republic.

Diigo is having problems, I see. Correct link to the article quoted is http://proteinwisdom.com/?p=51354

No doubt the Banksters have a plan, and we're watching it role out before our very eyes. The national debt ceiling crisis is the plan! Whether Congress approves or shoots down an increase in the borrowing limit of the government, the Banksters win.  If the the debt limit is raised, the Banksters win in that they can unload that $16.1 Trillion in free taxpayer money at a minimum of 3.25% interest through new Treasury bond initiatives forced by uncontrolled increases in government spending.  They also win in that their hand maiden credit agencies, having insisted on Congressional spending cuts of $4 Trill that are not going to materialize, WILL downgrade the USA credit rating. This will result in interest rates much higher than 3.25%!!! Cha Ching! If the outcome is no debt increase, there will be a constitutional crisis beyond imagination. Banksters always win in a crisis because panicked citizens will trade their constitutionally guaranteed liberty, freedoms and property rights for security and calm. This perhaps translates into a long term cha ching for th eBanksters that will have them owning America. The one outcome where the Banksters don't gain, would be where the debt ceiling is raised enough to cover the obligations of the continuing resolution, but includes serious and immediate across the board spending cuts, caps on future spending increases, and the end of base line budgeting through a Balanced Budget Amendment. Like the CCB; Cut, Cap and Balanced Budget bill the House of Representatives ahs already passed

Stunning stuff.  No need to bailout the European Banks because the Federal Reserve has already done that!!! The Levi Institute of Economics has published the details of the Federal Reserve's International Bankster bailout from late 2007 to 2009.  It's far more than the $16.2 Trillion the GAO audit uncovered in July of 2010.  It's far more than the $7.77 Trillion Bloomberg discovered in their Freedom of Information action against the Federal Reserve.  Researching the "recipients" of the USA Federal reserve Bankster largess, the Levi Institute documents a whopping $29 Trillion has been distributed to Bankster coffers at near zero percent interest.   Note that no debt, and no loans of any kind has been purchased, retired, restructured or otherwise dealt with.  The bad loans remain on the books, including crushing interest payments that continue to escalate and accrue.  Debtors continue to fall deeper into debt.  Foreclosure and default loom over public, private and sovereign debtors.  So where did the money go?  $29 Trill is more than enough to retire the entire USA national debt, with interest, and, every mortgage both public and private in the USA. abstract: There have been a number of estimates of the total amount of funding provided by the Federal Reserve to bail out the financial system. For example, Bloomberg recently claimed that the cumulative commitment by the Fed (this includes asset purchases plus lending) was $7.77 trillion. As part of the Ford Foundation project "A Research and Policy Dialogue Project on Improving Governance of the Government Safety Net in Financial Crisis," Nicola Matthews and James Felkerson have undertaken an examination of the data on the Fed's bailout of the financial system-the most comprehensive investigation of the raw data to date. This working paper is the first in a series that will report the results of this investigation. The extraordinary scope and magnitude of the recent financial crisis of 2007-09 required an

Comment:  While researching the September 2008 financial collapse, a freind introduced me to Porter Stansberry (thanks Marux!).  I've been following Porter through the Daily Crux Report ever since, and, as extreme as his opinions appear, time and again he has proven to be drop dead right.  This latest presentation summarizes Porter's thinking and is buttressed with facts and quotes.  The first part of the presentation is a fictional press conference dated December 2012.  This about 15 minutes.  Porter then follows that with near 45 minutes of facts and quotes woven into a comprehensive summary of how we got into this mess and what the possible outcomes going forward.   The basics are simple enough: the combination of Government borrowing, spending, printing and regulating is killing the dollar.  Our currency is very special in that it's the world's reserve currency; a good fortune that has unfortunately resulted in our spending and borrowing way more than we produce.  On top of this dilemma, the financial crisis of 2008 resulted in the world's Banksters offloading their $Trillions of debt and losses onto the US Treasury; the taxpayers.  So now we have the taxpayers holding the debt of an out of control socialist government spending, borrowing, and regulating us into the dirt regulating.  And, these same taxpayers picking up all the losses of the World's most greedy and evil criminals - the Banksters.  At the center of it all is the Federal Reserve, a world Bankster cartel in control of our currency, and printing it out like there's no tomorrow.  Porter talks about that tomorrow, and what it might look like if we the people do not take back our government and our currency.   excerpt: THE FOLLOWING IS A FICTIONAL DRAMATIZATION OF A PRESS CONFERENCE BY PRESIDENT BARACK OBAMA, ADDRESSING THE AMERICAN PEOPLE, FROM THE EAST ROOM OF THE WHITE HOUSE Set in December 2012, this speech details what we believe The President might say on the day America's fore

excerpt:  Indeed, it is now clear that governments prevented a full-scale collapse of the financial system in 2008 by transforming toxic private debt into public debt. It worked then, but it cannot work now, in large part because it contributed to the new, looming crisis in financial markets brought on by countries' soaring public-debt burdens. We cannot blame today's emerging crisis solely on our current and recent governments' actions. For more than 20 years, the world's major capitalist economies have been led to borrow heavily and unabashedly, in large by a new rule, adopted worldwide beginning in the 1970's and 1980's, that tied monetary policy to targets for price growth. This dangerous idea - proposed in France by Jacques Rueff in 1958, adopted throughout Europe over the following two decades, and extended to the European Central Bank - was intended to limit the tendency of capitalist economies to aggravate inflation as soon as they hit full employment. But the rule ultimately had the terrifying result of obliging countries to borrow from private banks at market prices to guarantee their treasuries' integrity. This created powerful barriers to public investment, as government spending was siphoned into massive profits for banks and their shareholders.

The established New York credit agencies would play a strategic role in this post-1971 dollar system. During the 1970's the US Government's Securities & Exchange Commission, charged with oversight of bond and stock markets, issued a ruling giving the then-dominant New York credit rating agencies-Moody's and Standard & Poor's (and later Fitch Ratings)-a de facto guaranteed monopoly in an unregulated market, when they ruled that only "Nationally Recognized Statistical Rating Organizations" would be qualified to issue appropriate ratings, i.e. only Moody's and S&P. Corruption was made endemic to the US ratings game and Washington was party to the dirty deal. By the end of the 1970's, using the vast amount of OPEC "petro-dollars" from the two oil price shocks in 1973 and 1979, New York international banks, using London, began to loan to the rest of the world to finance imports of oil and other essentials. The New York credit rating agencies, previously primarily rating US corporate bonds, expanded into the new foreign debt markets as the largest and only established rating agencies in the new phase of dollarization and globalization of capital markets. They set up branches in Germany, France, Japan, Mexico, Argentina and other emerging markets much like the US Big Five accounting firms. During the 1980s the rating agencies played a key role in down-rating the debt of the Latin American debtor countries such as Mexico and Argentina. Their ratings determined if the debtor countries could borrow or not. Financial market insiders in London and New York openly spoke of the "political" rating agencies using their de facto monopoly to advance the agenda of Wall Street and the Dollar System behind it. Then in the 1990's, the New York rating agencies played a decisive role in spreading the "Asia Crisis" of 1997-98. With the precise timing of its downgrades they could worsen the panic because they had been suspiciously silent right up un

OUTRAGE - Microsoft Uses Loopholes To Pay Just 7% Corporate Tax Eric Cantor Is The Hedge Funder's Best Man In Congress - Washinton Post The Road To Hell Directly Before Us - MUST READ Karl Denninger Obamacare Individual Mandate Battle Reaches Supreme Court DETAILS - Geithner To Announce Backup Plans With No Debt Deal In Place Fed Governor Speaks: More QE Won't Help Growth But Would Spur Inflation How The Two-Party Oligarchy Uses Left-Right Charade To Loot The Country Debt Ceiling Fights Going Back To Eisenhower Florida Rep. Demands Records On Ousted Foreclosure Fraud Investigators Publisher That Owns S&P Kills Ritholtz's Bailout Book Critical Of Ratings Agencies Did S&P flip flop on US debt target? - Reuters The "Solution" to America's Debt Ceiling Crisis: Looting What has Already been Looted

In my lifetime, I have encountered only a single trade agreement, the Agreement on Technical Barriers to Trade, that I would have supported had I been given the opportunity, and its mandates have been trashed in their implementation. Beware "trade agreements" in general. They are almost uniformly the tools of banksters seeking greater profits at the expense of non-banksters. 

"Warren Buffett once referred to derivatives as "financial weapons of mass destruction", and it was inevitable that they would begin to wreak havoc on our financial system at some point.  While things may seem somewhat calm on Wall Street at the moment, the truth is that a great deal of trouble is bubbling just under the surface.  As you will see below, something happened in mid-September that required an unprecedented 405 billion dollar surge of Treasury collateral into the repo market.  I know - that sounds very complicated, so I will try to break it down more simply for you.  It appears that some very large institutions have started to get into a significant amount of trouble because of all the reckless betting that they have been doing.  This is something that I have warned would happen over and over again.  In fact, I have written about it so much that my regular readers are probably sick of hearing about it.  But this is what is going to cause the meltdown of our financial system. Many out there get upset when I compare derivatives trading to gambling, and perhaps it would be more accurate to describe most derivatives as a form of insurance.  The big financial institutions assure us that they have passed off most of the risk on these contracts to others and so there is no reason to worry according to them. Well, personally I don't buy their explanations, and a lot of others don't either.  On a very basic, primitive level, derivatives trading is gambling.  This is a point that Jeff Nielson made very eloquently in a piece that he recently published…"

I've been reading John Mauldin's newsletter for some time now.  The guy is so grounded, and his writing style is fluid.  Mostly though i appreciate the depth of background information that surrounds the simplicity of his explanations.  Note his connections to George Friedman, Niall Ferguson David Rosenberg, Lacy Hunt and Gary Shilling.  Quite a murders row of economic thinking.  anyway, John's newsletter has become the bottom line of my economic thinking. excerpt:     "Our immersion in the details of crises that have arisen over the past eight centuries and in data on them has led us to conclude that the most commonly repeated and most expensive investment advice ever given in the boom just before a financial crisis stems from the perception that 'this time is different.' That advice, that the old rules of valuation no longer apply, is usually followed up with vigor. Financial professionals and, all too often, government leaders explain that we are doing things better than before, we are smarter, and we have learned from past mistakes. Each time, society convinces itself that the current boom, unlike the many booms that preceded catastrophic collapses in the past, is built on sound fundamentals, structural reforms, technological innovation, and good policy." - This Time is Different (Carmen M. Reinhart and Kenneth Rogoff) When does a potential crisis become an actual crisis, and how and why does it happen? Why did most everyone believe there were no problems in the US (or Japanese or European or British) economies in 2006? Yet now we are mired in a very difficult situation. "The subprime problem will be contained," said now controversially confirmed Fed Chairman Bernanke, just months before the implosion and significant Fed intervention. I have just returned from Europe, and the discussion often turned to the potential of a crisis in the Eurozone if Greece defaults. Plus, we take a look at the very positive US GDP numbers released this morning. Are we final

Government debt has remained at a relatively consistent percentage of GDP for the past 50 years, but the debt of companies, consumers, and financial businesses has soared.  The problem now is that the value of the assets that serve as collateral for that debt (houses, stocks, cars, etc.) is plummeting.  Thus, the percentage of debt to equity is increasing, and in many areas, the equity is being wiped out.

excerpts:  With a $3.83 trillion budget, a $12.3 trillion federal government debt, a $1.35 trillion 2010 budget deficit and $63 trillion in unfunded liabilities, the fiscal condition of the US has come into question and foreign interest in US Treasuries has declined.  In late March, it was reported that the 10-year US Treasury Note yield had risen 30 basis points and that foreign holders of 10-year Notes were selling in record numbers. It seems unlikely that direct bidders within the US can compensate indefinitely, or to an unlimited extent, for falling foreign demand.  Commenting on the ambitious spending plans of the US federal government, Zhu Min, Deputy Governor of the People's Bank of China said in December 2009 that "the world does not have so much money to buy more US Treasuries." It would certainly be unreasonable for the US federal government and Federal Reserve to assume that ambitious deficit spending and ongoing quantitative easing (QE) would have no cumulative impact on US Treasury auctions.  If there is a limit to foreign appetite for US debt, to foreign capacity to lend to the US, or to international tolerance for US dollar devaluation, the US government and Federal Reserve seem determined to find it. It seems unlikely that direct bidders within the US can compensate indefinitely, or to an unlimited extent, for falling foreign demand.  Commenting on the ambitious spending plans of the US federal government, Zhu Min, Deputy Governor of the People's Bank of China said in December 2009 that "the world does not have so much money to buy more US Treasuries." It would certainly be unreasonable for the US federal government and Federal Reserve to assume that ambitious deficit spending and ongoing quantitative easing (QE) would have no cumulative impact on US Treasury auctions.  If there is a limit to foreign appetite for US debt, to foreign capacity to lend to the US, or to international tolerance for US dollar devaluation, the US government and Feder

As Congressional moron after Congressional moron goes on the usual Sunday talk show circuit and says we must stop home prices from falling, I wonder whether these people took basic math in high school. Are they capable of looking at a chart and understanding a long-term average? The median value of a U.S. home in 2000 was $119,600. It peaked at $221,900 in 2006. Historically, home prices have risen annually in line with CPI. If they had followed the long-term trend, they would have increased by 17% to $140,000. Instead, they skyrocketed by 86% due to Alan Greenspan's irrational lowering of interest rates to 1%, the criminal pushing of loans by lowlife mortgage brokers, the greed and hubris of investment bankers and the foolishness and stupidity of home buyers. It is now 2009 and the median value should be $150,000 based on historical precedent. The median value at the end of 2008 was $180,100. Therefore, home prices are still 20% overvalued. Long-term averages are created by periods of overvaluation followed by periods of undervaluation. Prices need to fall 20% and could fall 30%. Instead of allowing the housing market to correct to its fair value, President Obama and Barney Frank will attempt to "mitigate" foreclosures. Mr. Frank has big plans for your tax dollars, "We may need more than $50 billion for foreclosure [mitigation]". What this means is that you will be making your monthly mortgage payment and in addition you will be making a $100 payment per month for a deadbeat who bought more house than they could afford, is still watching a 52 inch HDTV, still eating in their perfect kitchens with granite countertops and stainless steel appliances. Barney thinks he can reverse the law of supply and demand by throwing your money at the problem. He will succeed in wasting billions of tax dollars and home prices will still fall 20% to 30%. Unsustainably high home prices can not be sustained. I would normally say that even a 3rd grader could understand this conce

the Fed is now engaging in unlegislated, back-door fiscal policy. excerpt:  "The best way to destroy the capitalist system is to debauch the currency." Vladimir Lenin, leader of the 1917 Russian Revolution Last week, while Congress and the nation were preoccupied with the holidays, the Treasury made a Christmas eve announcement that it would be providing Fannie Mae and Freddie Mac unlimited financial support for the next three years. Put simply, in a single, coordinated stroke, the Treasury and the Federal Reserve have encroached on spending powers that are enumerated for the Congress alone. Under the Housing and Economic Recovery Act of 2008 (HERA), the Treasury has no such open-ended authority. Indeed, the applicable portion of the Act explicitly limits the total amount of mortgage principal (not losses, but total principal) as follows: .......... In a sharp break from the past, the issuance of these Treasury securities will not be accompanied by any revenue to the government for Congressionally approved programs. The Treasuries will be issued, the money will be handed over the Fannie Mae and Freddie Mac, and those funds will go largely to the Federal Reserve and other holders of existing mortgage debt simply to replace the bad, but bailed-out agency securities with cash as they mature. The public gets nothing for something - the issuance of the Treasuries is in itself their expenditure.

Without a debt ceiling increase by August 2, the government will wake up August 3 unable to pay approximately 44% of its bills for August. The overwhelming majority of those bills are simply disbursements of funds for government programs, without which this would be a richer, freer country. Interest on the national debt due in August is not a big item. in the weeks and months that follow August 2, something unexpected would happen... something nobody in government wants you to know. You'd find out how much you don't need the government. ......

Unfunded liabilities are the difference between a program's projected costs and its projected revenues, both valued in today's dollars. Medicare and Social Security both have promised benefits that outrace revenue streams. They are the largest components of the government's unfunded liabilities, the hidden debt of the nation. But there are other federal retirement programs with not merely inadequate funding like Medicare and Social Security, but with no revenue streams of their own at all. Among them are retirement programs for military and federal workers. In September 2011, USA Today analyzed dozens of overlapping programs for retired federal workers. It reported that despite the existing debt crisis, Congress continues to add to the promised benefits, so that retirement programs now have a $5.7 trillion unfunded liability. The newspaper sums up its report on the retirement programs this way: Private employers are legally required to put money into pension funds to match retirement promises. Private pensions have $2.3 trillion in stocks, bonds, real estate and other assets. State and local governments have $3 trillion in retirement funds. The federal government has nothing set aside. The total unfunded liabilities of the U.S. government have been calculated with a number of present value and discount models. Results of the shortfall from these methods range from about $70 trillion to $120 trillion dollars. For a family of four this represents a liability between $900,000 and $1.5 million. (You can follow the debt as it adds up at www.USdebt.org.)