- State Legislatures Ignoring What The
Whole World Can See
By Devvy
9-10-11
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 "Paper is poverty,... it is only
the ghost of money, and not money itself." --Thomas Jefferson to Edward
Carrington, 1788. ME 7:36
On October, 6, 2011, Sir Mervyn King, Governor of the Bank of England, said during a speech following the latest decision
by that bank's Monetary Policy Committee to "put £75 billion
of newly created money into the economy in a desperate effort to stave
off a new credit crisis and a UK recession": "This is the most
serious financial crisis we've seen, at least since the 1930s, if not ever.
We're having to deal with very unusual circumstances, but to act calmly
to this and to do the right thing."
Desperate is an understatement.
In her September 2011 Policy & Markets forecast, Dr. Pippa Malmgren, writes:
"News to expect in the coming days and weeks:
* Greece defaults
* Germany protects German banks but other countries cannot
do the same thus quickly provoking multiple sovereign defaults and or bank
failures, all of which may easily lead to a payments crisis in the global
banking system. Derivatives are particularly at risk in terms of operation
and execution
* The Euro falls in value especially against the US dollar
* The Germans announce they are re-introducing the Deutschmark. * They
have already ordered the new currency and asked that the printers hurry
up
* The Euro falls even more on any news that Germany is withdrawing
from the Euro
* Legal wrangling begins as to the legality of Germany's decision. Resolution
takes years
* Germany insists that the Euro continues to exist even they
do not use it any longer. They emphasize that European unification will
continue and suggest new legal instruments to strengthen European Unification
including new EU Treaties
"The markets are focused on the imminent default by Greece. But, this
is not the most important issue now. The historic development the markets
have not priced in as that Germany is preparing to exit the Euro. The markets
are very likely to have to contend with the re-introduction of Deutsche
Marks in the near future. This is bound to mean a collapse in the value
of the Euro for those countries that will remain in it (devaluation for
the rest of Europe). This step may seem unthinkable but, I believe that
the German government is telling us in multiple ways that there is no other
solution from their point of view. It is also why you will hear various
policy makers at the G7 meeting his weekend echo Christine Lagard's comment
that the world economy is entering a "dangerous new phase."[i]
This was certainly the atmosphere at Jackson Hole where policy makers openly
talked about entering a period of history where we would face challenges
beyond the scope of anything we have seen in our careers. "
And, this:
"The next thing you know Dr. Joseph Ackerman gives a speech on September
5th[ix] that has been described as "terrifying". Business Insider[x]
provides a reasonably comprehensive account in English. He said, "It
is an open secret that numerous European banks would not survive having
to revalue sovereign debt held on the banking book at market levels."
He continued: "Most institutions have a rating of "below the
book value or at best". He then spelled out the choice Germany's politicians
must make: bailout Europe or bailout us, the German Banks. But he tried
to make the case based on a cost analysis (typical financial market guy).
He said, "The costs of supporting weak member states, particularly
from the German perspective, are less than the costs of disintegration....
It is a dangerous illusion to believe that a country could do better should
it reclaim the sovereignty it has delegated to the EU." The issue
for the German politicians is not the cost. The issue is the principal
of sovereignty and protecting the German population from any return to
their horrific experience with inflation."
And So It Begins - The First Major European Bank
Has Been Bailed Out And More Bailouts Are Coming - October 6, 2011
"The fundamental problems that Europe is facing are not being solved
and the financial crisis is getting progressively worse. With each passing
day, more bad financial news comes pouring in. For example, Moody's slashed
Italy's bond ratings by three levels on Tuesday. A reduction of just one
level is very serious business. For Moody's to hit Italy that hard is a
really big deal. Italian banks have also been targeted by the credit rating
agencies. The other day, S&P slashed the credit ratings of seven different
Italian banks. If Italy goes down, it is going to be an absolute nightmare.
The Italian economy absolutely dwarfs the Greek economy. The EU has been
really struggling to bail out Greece, and there is no way in the world
that they would be able to bail out Italy. So if nations such as Italy
or Spain start collapsing, will the U.S. Federal Reserve step in to help
bail them out?"
"..will the U.S. Federal Reserve step in to help bail them out?"
Was that why the unconstitutional "Federal" Reserve Banking System
was set up? To bail out failed foreign banks and socialist governments?
- Here's another sticker shock that not one single incumbent
in the Outlaw Congress has done squat about (nor has one single presidential
candidate even made a peep): stop raping the American people to fund the
IMF:
- Up
to $266 Billion Needed for Europe Banks: IMF
There isn't a shred of authority for the Outlaw Congress to steal the
fruits of your labor to give to the International Monetary Fund to pay
off the debts or make loans to foreign countries. This grand larceny against
we the people is so sickening, I have to wonder why the American people
continue to reelect the same SOBs who refuse to stop it:
- Guess Who's Paying For The Greece Bailout? That's Right
-- YOU
"The bailout outrages never stop. Of the 110-billion Euro Greece
bailout, 30-billion (approx $40 billion) will be paid for by the IMF. The
US supplies almost 20% of the IMF's funding (per quotas). So that means
US taxpayers are providing ~$8 billion of the $145 billion going to kick
the Greek can down the road. That's the first outrage. (Why is this our
problem?)
"The second outrage is that, as in some of the US bailouts, our bailout
money is JUNIOR to Greece's existing debt. That means that, over the next
couple of years, the idiot banks that loaned bankrupt Greece money will
get their money back. And then, when Greece runs out of cash again, we'll
be left holding the bag (along with Germany and the rest of the folks who
bailed Greece out).
"In any normal financing, the lender of last resort would be SENIOR
to all existing debt. It would get its money back first, before the other
idiots got a penny. In the Greece bailout, however, the new money we're
putting in will be going right out the door to pay off existing lenders
who would have lost their shirts. And if the Greece austerity measures
don't work and there's nothing left for us? Tough."
That $8 billion dollar figure from "US taxpayers" - the money
has to be borrowed because the people's purse is over drawn nearly $15
trillion dollars. Translated: More debt heaped on our backs and our children
and grandchildren for foreign banks and governments. That results in higher
federal "income" taxes bleeding an already bleeding nation. Because
president after president and Congress after Congress have sold out American
workers, our three most important job sectors (ag, manufacturing &
industrial) are all but dead as the impostor president and the Outlaw Congress
get ready to sell us out again with more "free" trade treaties;
the middle class is all but dead.
Americans by the millions out of work (roughly 23 million). 48 million
on food stamps. Tens and tens of millions of Americans living hand to mouth
are not putting money into the state economies further reducing tax revenues.
Americans by the millions have lost their homes with more coming:
The Time For The Next "Subprime Trade" Has Come
"Lightning may be about to strike twice as the Subprime implosion
of 2007 becomes the Prime implosion of 2011. Back in December 2009, when
musing on the very interesting topic of the advent of a new ABX-like index,
this time tracking Prime mortgages, we asked, rhetorically as so often
happens, "Will The New ABX Prime Index Be The Reason For The Next
RMBS (And Thus, FHA/GSE) Collapse?" (for more on this index which
MarkIt now markets as PrimeX see here). And while the rest of the world
is fretting about Europe, Morgan Stanley, lack of decisive political decision-making
in a pseudo union of 17 different countries, lack of decisive monetary
intervention, a Chinese hard landing and everything else that makes front
pages these days, slowly our prediction is starting to come true. But you
won't hear about it anywhere else, because if the market understands that
in addition to a global solvency crisis, America has another Subprime contagion
on its hands actually being expressed in the markets as we type, and potentially
costing banks, pension funds and various asset managers billions in losses
behind the scenes, that may well be the last straw."
What does the currency war going on, the stealing of our labor and all
of the above have to do with the states committing financial suicide? Tax
bases continue to shrink because of unemployment. Tax dollars gobbled up
by pension obligations that can't be met. More foreclosures mean less revenues
for the state and more debt trying to keep up with unemployment and Medicaid
burdens. And, don't forget the hundreds of BILLIONS squandered to support
and incarcerate the hordes of illegal aliens. AND - everything tied to
the "Federal" Reserve note passed off as money. Been to the grocery
store lately? Then you know how your "dollar" isn't buying what
it bought six months ago.
Dr. Edwin Vieira, began trying to educate members of the New Hampshire
State Legislatures more than five years ago about sound money and what
must be done if the states are to survive what the whole world can see
- except them. Despite Herculean efforts on his part and members of that
legislature, as well as thousands of Americans in several states, to date
only Utah has passed a watered down version of a sound money bill.
In February 2010, I sent a letter (thanks to donations from my readers)
to just over 1100 state legislators trying to get them to understand what will happen if they
don't pass into law a competing monetary system as a hedge against
the potential collapse of the dollar (not to mention inflation). I also
set up a web page to help educate state legislators understand what this
all means to them and their state; click here. Edwin gave me permission
to scan the couple of pages from his two volume work, Pieces of Eight.
Those two pages are a model piece of legislation for the state legislatures
and still they do nothing!
There's been a lot of hoopla about state banks
being the magic bullet to save us. Really? If those state banks are going
to use nothing but "Federal" Reserve notes, it is just another
foolish band aid. Let me quote from Dr. Vieira's presentation to
the standing committee (State Administration) in the Montana State Legislature,
March 2009:
"This legislation provides the citizens of
Montana with the option of conducting their financial transactions with
their State government on the basis of an alternative currency consisting
of gold and silver, rather than Federal Reserve Notes. It establishes a
mechanism through which-to the degree the State and her citizens deem prudent-the
State can separate her own financial transactions from the Federal Reserve
System; and, eventually, based upon the State's action, Montana's private
economy as a whole can move away from dependence on the Federal Reserve
System, too.
"This proposal is not a partisan issue, because everyone's most vital
interests are equally at stake here.
"The provision of an alternative currency consisting of gold and silver
will engender economic stability. It will return to Montanans the ability
to save real wealth in the form of money that does not systematically depreciate
in purchasing power, and with that the further capability to plan and prepare
rationally for their economic futures.
"The provision of an alternative currency will promote social justice.
It will begin to rectify the wrongs perpetrated against wage earners whose
standards of living cannot keep up with the systematic inflation built
into the Federal Reserve System; against the elderly and infirm who live
on fixed incomes that steadily erode in purchasing power; against those
anxiously approaching retirement while watching the real values of their
pension funds evaporate; against the poor whose only wealth is the small
amount of currency they acquire from week to week; and against all the
recipients of essential public services that the State finds it difficult
or even impossible to provide to the requisite degree because the real
values of tax revenues cannot keep pace with costs. And,"The provision
of an alternative currency will fulfill the State's legal, moral, and political
responsibility to protect the safety, health, and general welfare of her
people against an economic calamity that no one doubts confronts this country
at the present time."
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- That bill in Montana died in committee along party lines
because of outright ignorance. That was 2 1/2 years ago; the situation
has continued to deteriorate:
Sun Tzu 2012: Currency Wars
"Sun Tzu wrote The Art of War 2,500 years ago. Because China declared
war on American and London banks you might want to read the most revered
Chinese writer on military strategies to understand what is coming next.
"All warfare is based on deception. Hence, when able to attack, we
must seem unable; when using our forces, we must seem inactive; when we
are near, we must make the enemy believe we are far away; when far away,
we must make him believe we are near. Hold out baits to entice the enemy.
Feign disorder, and crush him.
"Let's update the above for 2012 and our Currency Wars. The dollar
is dying. There are bank runs in Europe. The Financial Times said the Europeans
had to pull gold out of New York because they needed real collateral. Ben
Bernanke is printing dollars which he will swap by the trillions to keep
the European banks running. As I said previously, Bernanke will continue
printing money until the dollar, the pound and the euro go to zero value.
You will have nothing. The bankers will have everything."
This huge cauldron of greed is getting ready to boil over while the state
legislatures do nothing. Once again, I urge you to contact your state representative
and ask them what they're going to do about the situation? Why can't they
see what the rest of the world can? Why are they doing nothing?
Our legislature (Texas) is out of session until January 2013. By then it
will be too late if it isn't already. However, every state has the ability
to call an emergency session. Folks --- the patient is hemorrhaging on
the operating table. It's do or die time. The states foolishly prostituted
themselves for "federal" funding for everything over the decades,
but the federal teat is going to turn to dust and then where will the states
be - especially as the dollar continues to lose value? If the states don't
act soon, it will be an act of pure insanity.
For those who are worried about what they have left, yes, food storage
and guns are essential, but so is getting worthless paper converted to
gold and some silver. Many people scoff at purchasing precious metals -
what the world's wealthiest own. Well, here's a wake up call: That $50,000
or $100,000 in your 401(k) is at risk. What are you going to do? Spend
it all on butter and ammo? People need to be realistic about asset portfolios
and hedging against inflation.
April 2011: "The University of Texas Investment Management
Co., the second-largest U.S. academic endowment, took delivery of almost
$1 billion in gold bullion and is storing the bars in a New York vault,
according to the fund's board."
As I have since 1998, I recommend you call my good friend, Harvey Gordin
or Jay Reichard and let them help you make important decisions about your
future. Visit their web site, USA Gold Vault. The state legislatures are not going
to save your assets because so far, they can't even save themselves.Do
you think they're stupid? No, but apparently over 6,000 state legislators
still haven't figured it out. It's up to all of us to make this a priority.
Important links:
1- Honest money, the dollar, and South Carolina
2- Sound Money Meetup Groups
3- US Treasury Bonds: The Monster Spleen
4- Investors Have Lost Faith In The Markets
5- China 'faces subprime credit bubble crisis'
6- Hong Kong's slump signals global trouble:
analysts
7- Five Banks Account For 96% Of The $250 Trillion
In Outstanding US Derivative Exposure; Is Morgan Stanley Sitting On
An FX Derivative Time Bomb?
8- Memorandum of Law: The Money Issue
9- Rhode Island city asks retirees to cut their
pensions
10- 9American Cities Going Broke
11- It's Much Worse than 2008
12- Heartbreaking Pictures From New Jersey's
Homeless 'Tent City'
13- 30 Signs That The U.S. Economy Is About To Go Into The
Toilet
"#6 Back in the 1950s, manufacturing accounted for about 28 percent
of U.S. GDP. Last year, it accounted for just 11.7 percent. Meanwhile,
manufacturing now accounts for about 25 percent of GDP in China and they
now actually have more factory production each year than we do. Sadly,
Barack Obama is pushing for even more trade agreements that will send millions
more of our jobs overseas."
There is NO excuse for this in a country rich in human and natural resources.
The "free" traders in the Outlaw Congress (Boehner, Pelosi, et
al) are responsible for turning a propsperous nation into one of beggars
along with the insane monetary and banking policies of the past century:
American Kids Go Hungry - 49% of all babies born
receive federally funded food supplements
- ----
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- http://www.devvy.com. You may also sign up for her free email alerts.
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