US Commentary

The U.S. is more fundamentally insolvent than Greece, yet Greek interest rates are fifty times higher than those of the U.S. This is obviously market fraud, and on a scale never before seen in human history. I (and others) have explained the mechanism here on several occasions: the fraudulent manipulation of the credit default swap market. It’s old news.

However, what no one has pointed to yet is how the U.S. has totally squandered its last chance to avoid either debt default, hyperinflation, or both. I’ve mentioned previously what the fate of the U.S. would be if its own interest rates had been fraudulently manipulated to the same levels as that of Greece.

Interest payments alone on the national debt would be more than four times total government revenues. This means the U.S. would have to completely shut down every branch and department of the U.S. government – including its entire military, and even Congress itself – and would have to totally end all government transfer payments. And even after that, taxes would have to be quadrupled merely to pay interest on its debts. This is what the Wall Street terrorists did to Greece.

Conversely, the same fraudulent mechanism which has been used to push-up interest rates all across Europe has been used in reverse, to fraudulently minimize interest rates (and payments) for the world’s biggest deadbeat-debtor. And what has the U.S. government done with these extra years of ultra-light interest payments – courtesy of Wall Street? It has squandered every second of that time and every dollar saved in interest payments, in more of the petty partisan squabbling which has characterized the U.S. government as the world’s most dysfunctional “democracy” (for lack of a better word).

Several years of talking about deficit-fighting has yielded absolutely zero progress. Of course this hasn’t stopped the U.S. from lecturing European leaders about their “fiscal irresponsibility”. Hypocrisy remains the U.S.’s leading export. The latest deficit-fighting gimmick – the ridiculously over-hyped “Super Committee” – not only accomplished nothing, but it pushed the two, juvenile political parties even further apart, as the twelve “sober individuals” appointed to that farcical committee simply intensified the political divide.

What obviously none of the seat-stuffers in the U.S. Congress understand (along with the Obama regime itself) is that the U.S.’s 0% honeymoon cannot be maintained indefinitely – no matter how much it facilitates the serial stealing-by-dilution by the Wall Street crime syndicate. It’s impossible to predict precisely how this fraudulent 0% rate will detonate, so here are a few possibilities.

The most obvious way in which these “bubble” interest rates will end is via hyperinflation. As I already explained in a previous commentary, any currency which can be produced in infinite quantities and at zero cost is worthless – as a simple tautology of arithmetic.

Otherwise, with 0% interest rates, one could simply borrow “infinity” dollars (and with 0% interest there would never be any payments on that money) and then simply “buy” every asset on Earth – and with “infinity” dollars, one could even afford to overpay for everything on the planet. Indeed, buying up all assets is precisely what the Wall Street crime syndicate is doing, except it’s being done in slow-motion – so that the scenario I just outlined doesn’t become obvious to even the clueless stooges in government and the media. As with “Tulip Mania” four hundred years ago in Holland, it is not a question of “if”, only when people will realize that their worthless currency is worthless.

Of course this is only one way in which hyperinflation could hit the U.S. economy. The sheer quantity of paper currency being cranked out by the Federal Reserve and the fractional-reserve fraud-factories of Wall Street could also, easily spark hyperinflation. Even with all of the propaganda lies and market manipulation, commodity prices remain permanently on the verge of spiraling out of control. Indeed, Wall Street’s efforts to hold down commodity prices actually guarantees this.

US Commentary

One of the principal accomplishments (already) of the “Occupy Wall Street” protest movement is that is has correctly focused our attention on the real enemy: “the top-1%”. It is very important that readers remain focused upon that point, because (as usual) the media propaganda machine is not only seeking to twist the facts, but to distort the actual issue itself.

There are two ways in which the media has been distorting this problem. One of these methods is extremely obvious while the other is much more subtle. Beginning with the obvious, we see the media attempting to twist the backlash against the top-1% into a much more muted initiative of “taxing millionaires”.

To understand how this dilutes and undermines the process of reversing the most-egregious wealth inequality in all of history, we first must understand the nature of this inequality. In an interview on the BBC news program “Hard Talk”, a Wall Street insider in the credit default swap market reveals there is more than $200 trillion in debt saturating the global economy.

Let’s put this into perspective. Even with interest rates artificially suppressed for much of the world (most notably the U.S.), annual interest on this debt is somewhere in excess of $10 trillion per year. Given a global economy with a total GDP of close to $60 trillion, this works out to more than one out of every six dollars of global economic activity wasted in paying interest to the bond parasites. It is debt-slavery.

This is such a crippling debt-load that if the global economy was one, single economic entity it would be on the verge of declaring bankruptcy. It has caused some, including Australian economist Steve Keen to call for a “debt jubilee”. Readers not familiar with that term may have less trouble understanding my own previous label for that solution: a “bond-burning party”.

Keen points out that simply “wiping the slate clean” has been history’s one-and-only solution to the serial debt-crises caused every time that bankers acquire too much political/economic power – and then bury the world in debts. This solution becomes more obvious as soon as we identify precisely who are these shadowy bond-parasites.

They are not ordinary people. We are all net-debtors. They are not corporations. Corporations have become huge, net debtors – brainwashed by the banksters into believing that the only way to grow is through piling on more and more debt. They are not sovereign governments. Indeed, our national governments are the largest net debtors on the planet.

The bond-parasites are the top-1%. More specifically, they are the shadowy trillionaires, Oligarchs like the Rothschilds and Rockefellers who are so wealthy they are able to totally conceal their massive wealth-hoards from the rest of the world. Instead, we are regularly subjected to the ludicrous propaganda that mere billionaires like the “Bill Gates” and “Warren Buffets” of the world are the “richest people” on the planet – when they are merely “working class folks” in comparison to the true, idle rich.

In seeking to identify precisely who comprises the "kings” of these bond-parasites, there is no better place to start than with the ground-breaking chronology of Charles Savoie – in a body of research he has titled “The Silver Stealers”. Savoie points to an elitist group known as “The Pilgrims”, and documents much of the activities (and inter-relationships) among these Oligarchs over the past 200 years.

As Savoie and other banking historians like Darryl Schoon have noted, the key to the stealing of all the wealth of a society by the ultra-wealthy has always been via banking – and the worthless paper currencies they have managed to foist upon the world any and every time that bankers acquire too much power.

US Commentary

Regular readers know that when I’m seeking insights into the serial U.S. economic propaganda that I often refer to the mind of the “compulsive liar”. After all, by definition all propagandists are compulsive liars. In the case of U.S. government statisticians, the “compulsion” is wanting to retain their employment.

Undoubtedly we have all met one or more compulsive liars in our own personal lives. Not only is it a common human vice, but by its very nature it is one which is always revealed  by those who possess it. The “evolution” of all compulsive liars is identical and inevitable.

It begins somewhat innocently. An individual is in some sort of personal bind and thus resorts to a lie to extricate himself/herself from that dilemma. The liar is surprised/impressed with how well the lie worked in that situation, and so begins to use this “tool” more and more frequently.

The irony of lying, however, is that the less we do it, the more effective it is; and conversely the more we do it the less effective it becomes. The dynamics are obvious. Someone who rarely/never lies enjoys high credibility as a consequence of their penchant for honesty. Thus when such people lie the lie achieves maximum success – i.e. it deceives people to the greatest degree.

On the other hand, once someone becomes a liar it is an activity which must be less and less effective. To quote the old cliché, “…you cannot fool all of the people, all of the time.” As a result, with each new lie a larger and larger percentage of the population sees through the deceit – until eventually the liar has discredited himself with the majority, and is shunned and ignored.

This evolution is such a familiar pattern within our species that it has been immortalized by one of our most famous parables: “The Boy Who Cried Wolf”. Not only does that allegory precisely mirror the behavior pattern just described, but it also reveals to us why the compulsive liar is doomed to failure. His (her) lies inevitably become less and less plausible in absolute terms.

In the parable, the boy’s lies lose credibility as a matter of probabilities. If a boy sees a wolf once but it disappears before anyone else can see it that is quite plausible. However, if that boy (or even different people) repeatedly “cry wolf” but no one except the original spotter ever sees the “wolf” then the lie becomes less and less plausible.

In the real world, which is a much more complex place than the pastoral setting of the parable, compulsive liars tend to self-destruct in a different manner: through the body of lies becoming increasingly self-contradictory – rather than merely less plausible.

Here there is no better real-life example than the U.S. labour market, and the increasingly absurd serial lies of the Bureau of Labor Statistics (BLS). The supposed (net) “jobs gains” which the BLS has been reporting for over two years now are all obvious fabrications. I have explained how/why these reports are fabrications in various ways in previous commentaries, however perhaps the most straightforward way to do so is simply to look at the weekly lay-off numbers.

Historically (i.e. back in the years when the U.S. economy was strong and healthy), it has never been able to consistently generate net employment gains when weekly layoffs were at an approximate level of 400,000 (as they are today) – high by historical standards. Today, however, the U.S. economy is the opposite of “strong and healthy”.

Interest payments on the staggering levels of personal, corporate, and government debt are a gigantic millstone around the neck of the U.S. economy. The pathetic weakness of this economy which has resulted from being bled-dry with interest payments is unmistakable. Even with the Federal Reserve permanently freezing interest rates at 0% (just like Japan did twenty years ago), it has been totally unable to breathe any life into this corpse.

Yet here we have the statistical charlatans at the BLS claiming that despite the high level of layoffs, and despite the crippling levels of debt that the U.S. economy is still generating net employment gains every month. Understand the arithmetic here. In order for the U.S. to produce net jobs-gains today (while weekly layoffs are consistently averaging over 400,000/week), it would have to be producing more new jobs on a gross basis than at any other time in history.

Adding in the numbers, roughly 1.75 million Americans have been getting “pink slips” every month via these weekly layoffs,  consistently, throughout this entire pseudo-recovery. Obviously to produce positive jobs growth (month after month) the U.S. economy needs to generate more than 1.75 million new jobs that month (and every other month) – something it has never been able to do with layoffs at such high levels.

However, with the U.S. economy weaker than at any time in its entire 200+ year history, we have the liars at the BLS telling us month after month that the U.S. economy is producing more new jobs (on a gross basis) than at any other comparable period in its history. It is not remotely plausible, and on that basis alone the BLS has thoroughly discredited itself.

US Commentary

Some readers may find it annoying seeing me continually characterizing the majority of market participants as “lemmings”. I make no apologies. As the old one-liner goes, “if it walks like a duck and quacks like a duck…”

Contrary to popular mythology, lemmings do not commit “mass suicide” (through a herd simply running off the nearest cliff) – but then again neither do market participants. Rather, both groups are subject to the overwhelming compulsion to “migrate”.

In the case of the lemmings, this compulsion is entirely biological in origin. They receive some cue or stimulus that they are close to exhausting the local food supply and then they scurry-off en masse toward the proverbial “greener pastures”. It is on these frantic “marches” that much/most of the lemming population self-destructs.

In the case of market participants, they are entirely lacking in any instinctive/biological guidance. Rather these “lemmings” charge off in a new direction based entirely on the latest pronouncements from “market experts” and media talking heads. In other words they are basing their decisions on blind faith. There can be no other way to characterize the actions of a “herd” which insists on allowing itself to be led around by a group of people who spend all of one day giving “advice” – and then spend all the next day explaining why they are so “surprised” that their advice went so badly wrong.

And so it is again today. We have market participants engaging in  another “lemming charge” – this time driving markets higher – and all in response to the latest 24-hour band-aid put forth by the bankrupt bankers, and the even more intellectually-bankrupt politicians standing behind them.

Nothing has changed. The “world” is not 2% better off than it was yesterday simply because the Federal Reserve has made its own worthless paper “cheaper” for other banks. While it could always be argued that this lemming-charge was merely intended to offset the (irrational) charge in the opposite direction which preceded it, this doesn’t change the nature of the conduct we are witnessing.

There are only one group of people who are instantly ready to commit their funds to a “new idea”, with nothing but the flimsiest of pretexts to guide them. They are called “gamblers”. Note that it makes little difference conceptually if I substitute the word “gambler” for “lemming” in my analysis. Both groups (as an entire class) are inherently self-destructive.

In the case of the lemmings, their excuse is that they are mindless rodents. Presumably market participants (i.e. gamblers) lack that excuse. With such a large percentage of the (for lack of a better term) “investment community” needing to be protected from themselves, the obvious starting point is the complete abolition of all automated trading algorithms.

US Commentary

U.S. Thanksgiving has become a highly ritualized holiday with a large segment of the American population. Eat turkey. Watch football. Go shopping. And then listen to the media lie about the shopping the next day.

In this respect, Thanksgiving 2011 was a carbon-copy of the last several years. Turkeys have again (briefly) become an “endangered species” in the U.S., and (so-called) “Black Friday” was another crushing economic disappointment. Those who have only heard the hype from the mainstream media may be somewhat confused by this prognosis, so let’s dive into the data.

“Black Friday sales rise 6.6% to record,” gushed Bloomberg. Sounds impressive! Or does it? It seems those tricky little scamps at Bloomberg left out one thing in their calculation: the word “inflation”. Literally left it out. Bloomberg wrote an entire article comparing last year’s shopping with this year’s shopping without even once mentioning the word “inflation”.

This is not some innocent oversight. As I remind readers again and again, comparing dollar-figure numbers without adjusting for inflation is utterly meaningless. It is comparing “apples” to “oranges”. Whether one is reporting retail sales or GDP figures, the only way to engage in credible analysis is to adjust for inflation in order to compare data in constant dollars.

Indeed, GDP data is exclusively reported using (supposedly) inflation-adjusted dollars. It is universally understood that failing to “deflate” GDP figures by the prevailing rate of inflation means that the statistic no longer reports “economic growth”. It merely indicates the rate of inflation. And so it is with Black Friday 2011.

When seeking reliable data for U.S. inflation, regular readers know there is only one place to go: to John Williams of Shadowstats.com. We know this is the most reliable inflation data available for one very simple reason. John Williams calculates his inflation statistics the same way they were calculated a generation ago.

Conversely, the U.S. government has “massaged” its inflation calculation so extremely over the past 25 years that it is no longer even recognizable in relation to older calculations. Again we have a deliberate attempt to deceive. If the U.S. government genuinely believed it had come up with “a better inflation calculation”, then all it had to do was plug the old data into the new formula, and then all the inflation data would be consistent.

In deliberately refusing to provide consistent inflation data, the U.S. government has been doing with its inflation data what Bloomberg just did with its Black Friday reporting: intentionally leaving out a simple calculation in order to produce data which would provide a meaningful comparison.

Since Bloomberg refused to do this, I’ll take the liberty of doing it for them. Shadowstats watchers know that U.S. inflation has been hovering close to 10% all this year. Therefore, to engage in a meaningful comparison of Black Friday 2011 with Black Friday 2010, we simply need to subtract the (approximate) 10% from 6.6%.

We immediately see that the large, positive number which Bloomberg was trumpeting has now turned into a negative number. What does that mean? Simple. It means Americans bought fewer goods than a year ago rather than more goods. By converting the dollar-figures into constant numbers, when we observe that Americans spent more than 3% less than last year (in “real dollars”), this directly translates into more than 3% less goods purchased.

It was at this point that Bloomberg went from merely dishonest to comedic:

“…shoppers paid more for goods and unleashed some pent-up demand.”

Well they certainly paid more for goods, but precisely how does buying 3% less goods “release pent-up demand”, let alone reduce bloated inventories?

International Commentary

In a recent, previous four-part series; I described in detail the “ economic rape” of Europe, via the fraudulent manipulation of its debt markets by Wall Street’s economic terrorists. To date, the primary weapon-of-choice for these terrorists are credit default swaps.

What is critically important as we watch the debt markets of Europe destroyed one-by-one is precisely that: this method of destroying these nations’ debt markets must currently be conducted individually, since they each have their own separate debt market. Apparently the Wall Street terrorists consider this to be too much work, as a few months ago they came up with a “better idea”: the Euro Bond.

The principal here is very simple. If European nations merge their debt markets in this manner, then what Wall Street has done first to Greece, and then Ireland, Portugal, Spain, Italy, and now France; will be done to all Euro nations simultaneously – including Germany. For those who still don’t understand this process, the mechanics are equally simple.

Through fraudulently manipulating the prices of credit default swaps – ‘pretend insurance’ which is fraudulent even on its surface – the Wall Street terrorists can manipulate a nation’s interest rates up (or down) to whatever number they choose. Why do I insist on calling this fraud “economic terrorism”? It is all plain arithmetic.

The wealthiest nation on Earth could have a “national debt”of $1, however at an interest rate of “infinity” that nation would be instantly bankrupted. At one time, critics of my position might have been able to argue that this was hyperbole and/or hypothetical. They can do so no longer – not when the proverbial “smoking gun” is staring us in the face.

Back at the very beginning of the made-in-Wall-Street “Euro debt crisis”, I wrote a commentary detailing how the economic fundamentals of the U.S. were much worse than those of Greece. Since that time, Greek interest rates have been pushed-up to roughly fifty times the level of U.S. interest rates – despite the more rampant insolvency of the U.S.’s economy.

With Greece’s interest rates having been pushed above 100% by these terrorists, it is not mathematically possible for any economic policy to restore solvency to Greece. To illustrate that point to people on this side of the Atlantic, we need only look at what would happen if the more-insolvent U.S. had the same interest rates as Greece.

Interest payments on the U.S. national debt would be more than four times total government revenue. What would that mean in practical terms? Even if the U.S. government eliminated 100% of every single government program/department (including the entire U.S. military), tax revenues would have to be quadrupled – just to pay the annual interest on the debt, with the debt itself never being repaid. That is what the Wall Street psychopaths have done to Greece, and it obviously cannot be described as anything other than “economic terrorism” (and debt-slavery). And they are in the process of doing this to every other nation in Europe.

Finally one of these governments has taken a tentative step in “calling out” the U.S. on this economic terrorism. Today the government of Hungary called the latest “downgrade” of its national debt by Moody’s a “financial attack”. The evidence is overwhelming.

Gold Commentary

One of the most difficult tasks for those of us in the precious metals sector is to explain how and why our paper “fiat currencies” are worthless (or nearly so) to the majority of our populations. The primary reason for this difficulty is the relentless propaganda campaign to attempt to delude us into believing that this fiat-paper has value, or at least to confuse the issue to the point where ordinary people don’t know what to believe.

I have tried various approaches to pierce this veil of propaganda. I have pointed out how not only currency but any “good” which can be created in infinite quantities and at zero cost is by definition worthless. I then noted that U.S. dollars are currently being created in near-infinite amounts – and at zero cost (i.e. 0% interest rates).

Separately, I observed that the U.S. dollar is nothing less than a “leaky bucket” when it comes to storing wealth. In the less-than-100 years since the Federal Reserve was created to “protect” the U.S. dollar it has lost 98% of its value, with its current rate of depreciation greater than at any other time in history. I have explained that because our fiat currencies are worthless (or nearly so), that as a matter of simple arithmetic this directly implies that all bonds are nearly worthless as well – since they are denominated in this worthless paper.

Often, however, the way to convey understanding with respect to an elusive concept is to place it in the context of an analogy. This is especially helpful when attempting to combat the brainwashing-effect of serial propaganda, since the analogy will be outside of that web of propaganda. Thus I will attempt to illustrate the stark differences between gold (and silver) and banker-paper, through comparing orange juice to “Tang” – the orange-flavored beverage.

It is an easy and obvious comparison. On the one hand we have orange juice: a natural substance which is aesthetically pleasing, is “good for us”, and because it is something which occurs in nature, it is only available in finite quantities. Proof of its scarcity is seen by simply looking at its steadily rising price. Here in Canada; orange juice prices have risen by over 30% just in the last year (sound familiar?).

The reason? The supply of orange juice is increasing much more slowly than the paper which we use to pay for it. As a matter of elementary economics (and arithmetic), with the paper supply rising much more quickly than the orange juice supply, orange juice is rapidly becoming relatively more valuable versus our paper currencies.

Then there is “Tang”: an artificial, chemical-laced, sugar-infused imitation of orange juice. Our natural inclination as human beings is to prefer “natural” to “artificial”; and to prefer “the real thing” to mere imitations. On that basis alone, the majority of us would clearly view Tang as vastly inferior to orange juice – despite all of the advertising which proclaimed to us that Tang was “the orange drink of astronauts”.

Then there is supply. Unlike orange juice, Tang can be produced in near-infinite quantities. The chemicals which go into Tang can be manufactured to exceed any possible level of demand, and should we ever run out of sugar there is always “imitation sugar” to replace that as well. Consequently, not only do we view Tang as being obviously inferior to orange juice, but as a matter of basic economics we expect orange juice to continue to become relatively more and more valuable in relation to Tang.

To this point, I have already provided two irrefutable bases for preferring orange juice to Tang, and most importantly those arguments translate precisely into a comparison between gold (and silver) and paper money. However, beyond those reasons, the rapacious bankers have given us an even bigger reason for shunning their fiat-paper: dilution.

US Commentary

In a recent commentary, “Silver: Shorting Consumes, Investing Conserves”, I provided a detailed argument explaining how and why the extreme and chronic manipulation of commodity markets by multinational bankers inevitably does an enormous amount of harm. I then provided overwhelming evidence in support of this principle with respect to the silver market.

This commentary will follow up on that work, except this time I will demonstrate these principles in a broader, more comprehensive manner. The basic dynamics are very straightforward, and have been discussed in considerable detail in many of my previous commentaries.

We start with the bankster game of theft-by-serial-currency-dilution. The bankers relentlessly drive the value of our paper currencies toward zero through over-printing their paper money. There is absolutely no difference between destroying our purchasing power by debasing our money and simply reaching into our wallets and stealing it.

This becomes obvious when we note that the banksters are simultaneously giving all this newly-printed money to themselves – for free. Thus they never lose any purchasing power (i.e. are victimized by theft), because they print-up new money for themselves faster than they are destroying the purchasing power of the rest of society. All those who seek to deny this theft-by-dilution scam are simply ostriches.

Should someone have had the good fortune to be born wealthy and immortal (and had the common sense to store that wealth in gold), he would have discovered that his gold money perfectly preserved/protected his wealth. Whether he wanted to be a well-dressed Roman 2,000 years ago, or a well-dressed banker today; one ounce of gold would have sufficed in either era (or any in between).

However, should that Lucky Man have been foolish enough to convert his gold money into mere paper currency when the Federal Reserve was created back in 1913, then in less than 100 years he would have seen roughly 98% of his fortune ‘evaporate’. More specifically, roughly 75% of that evaporation would have occurred in just the last 40 years, since Nixon assassinated the gold standard – and the bankers have been able to engage in their theft-by-dilution unrestrained. When we understand that the bankers have been able to steal from us more than four times as fast since the gold standard was abolished, we begin to understand why they have such a pathological hatred toward a gold standard and/or “good money”.

Naturally the bankers try to conceal their stealing, which brings us to the other half of their crimes: the relentless manipulation (i.e. suppression) of commodity markets. Destroying the value of our money is exactly the same thing as driving up prices, since when our money is worth less we must use more of it to buy the same quantity of goods.

The bankers call this “inflation”, and try to pretend it is some mystical, and totally incomprehensible phenomenon, when all that inflation represents is the speed at which they are stealing from us. This also explains why our banker-serving governments have spent more time and effort in lying about inflation than any of their other statistical outrages – since they also conspire to hide the bankers’ stealing.

As I demonstrated unequivocally in my previous silver commentary, suppressing a commodity market (generally through serial “shorting”) always destroys that market. The hypothetical example I used then was chocolate bars, however we can now apply that example to the real world – and the total, global food supply.