Monthly Archives: June 2011

The remarkable story of Iceland and its battle against the International bankers, has been given virtually no coverage in the mainstream media. The actions of the Icelandic people, is probably, the most important solution yet offered, to resolve the worlds economic crisis. It is for this reason, that there has been no discussion. It demonstrates, quite clearly, our governments, are not looking for a solution. Our governments, are attempting to make use of the crisis, to introduce changes, which would be unacceptable, to the people, in normal circumstances. This is called The Hegellian Dialect, Problem, Reaction, Solution. Just as in recent days in the Middle East, a problem has been created, we are watching the reaction, the agents of the Elite are lining up with the solution.

The Icelanders have been under pressure, from their government, to join the European Union. They consistently refused, voting no, in referenda. They were expected, like the people of Ireland, to continue to vote, until they delivered the desired result. They were however, of the same opinion as their Polar neighbours, Greenland, that the European Union was a trap, for smaller States. Greenland, initially joined the Union, they quickly discovered, that this threatened their National Resources, making them available to the Globalist sharks, who would quickly deplete them, as had happened to the UK fishing stocks. So they left the Union. Greenland is the only country, which has left the European Union voluntarily and yet most people in Europe are not aware that they were ever a member, such is the news black-out imposed on the event by the Media. OUR governments would have us believe that we are prisoners of the Union, because our politicians have signed treaties, this is a lie.

When the engineered financial crisis struck, yet another Hegellian Dialect, the people of Iceland smelled a rat. The government, had with no reference to the people, announced that they were ‘Privatising’ all of the State controlled banks. This was a few months before the ‘Crash’. All of the banks had been earning good profits for some years, there was no problem of any sort, with their accounts. However, the bankers suddenly announced that they owed a debt, to Dutch and English depositors, of billions of dollars. The British and Dutch governments were pressing the Icelandic government to pay. The people objected. They asked the question, how,in just a few short months, could a profitable state bank, descend into bankruptcy? They demonstrated, telling the government not to pay the debt. They quickly discovered that whereas they had thought themselves to be living in a democratic system, they were, in fact, living in an elected Dictatorship. Despite the obvious objection of a vast majority of the people, the government were insisting on paying the debt.

The people forced the government to resign, new elections were held, little of significance changed, demonstrating a form of cartel amongst politicians. The people, decided to hold a referendum, to ask the people, whether the debt should be paid or not. The population of Iceland is in the order of 300,000 people, so to pay a debt of billions of dollars would have involved every family taking the responsibility of paying huge sums of money. 93% per cent of the people, voted against, payment.

They then insisted on auditing the accounts of the banks. They quickly discovered, as had Latin American countries, who had insisted on an audit, that the alleged debt was a fraud. They have started to arrest the bankers involved in the theft, issuing International Arrest Warrants against those bankers who had fled the country. When they realised what was happening, the British and Dutch governments, who had vehemently insisted that the debt be paid in full, suddenly discovered that they had “Miscalculated” the amount of the debt. They started to dramatically reduce the sum, the only thing that mattered now, was to force Iceland to pay something, no amount was too small, just in case the word got out that it was all a fraud and that the people of other countries, who were caught in the same trap, might follow the example of Iceland.

The Icelandic people have now taken on the task of changing the political system. They are writing a new Constitution themselves and are insisting, on a new form of Democracy, that will be under the control of the people. This is the form of Democracy that the whole of Europe should adopt. Direct Democracy, where through the use of referenda, decisions of any importance are voted on by the people and the decision of the people is binding. No more forcing the people, as is happening right now in Switzerland, to vote time after time, until the preferred result is achieved.
These are the reasons why so few people are aware of the events in Iceland. The European Commission has a horror of Democracy. They are in the process of abolishing it. It has been described as too cumbersome. We need a new form of government which would facilitate the decision making. The Debt Crisis, which is being used to bring this about, has been exposed by the Icelanders for what it is, a gigantic fraud, to force the people into submission. The same criminals who engineered the debt, are now after our food. Food has become a financial instrument on the Stock Exchanges of the world, where these people who can only be described as financial vampires, are making a profit out of starvation. With the connivance of our governments. Make no mistake about it, our governments will have us slaughtered, to suit their Masters, The Central Bankers

Reprinted from Enochered’s Blog


(No Googling…I mean cheating!)

He is the 16 term Congressman from Virginia who wields a tremendous amount of juice which he directs by utilizing his abilities to

1. Always put the needs and goals and best interest of the ….wait for it ….USA first, second and last.
2. He is a man who doesn’t appear to back down from a fight and is more comfortable exercising his clout behind the scenes and outside the glare of the media
3. I haven’t read through his entire voting record …and for all I know he could have cast a plethora of votes that would send me spinning …but based upon the record I have looked at I really sort of doubt it.

When his name came to my attention and I started to browse through some of this mans work, I couldn’t help but take a few minutes to reflect upon the embarrassingly wide disparity between:

Rep. Wolf’s record, and the record of my Congressman: David Wu.  It is amazing how much impact one man can have when he enjoys the respect of peers. I am talking about meaningful accomplishments, and not the kind that require a tiger costume, a handful of Oxy’s and a few liters of vodka! The thought of Rep. Wu doing anything that required courage is laughable on it’s own ….but doing something requiring courage that was also pro-USA against Wu’s 2 billion Chinese friends in the CCP makes me laugh so hard I almost pee my pants!

Soooo, how did the people of Virginia get so lucky…while we got Wu-ewed?” (rhymes with (“screwed”)…simple…they elected the best person for the job instead of riding on a decade of gaming the system by giving every congressman a large enough slice of crazy Portland voters to ensure that we wouldn’t see any true statesmen emerging from Oregon until the next census. But I digress.

The reason I bring up Rep. Wolf now Because of the Incredible “Wolf Clause”

What was the ‘Wolf Clause?” …? Only a very gutsy, pro USA, sharp stick in the eye of my favorite people….(The Chinese) but just as importantly, it threw a big monkey wrench into the Obama administrations plans to do a “Bill Clinton” imitation…No not that! … (Ahemmm don’t forget that Barry has a history of having his cigar smoked with his partner in crime “Rahm” at the private gay club they belong too). No, I am talking instead about Obama’s plans to sell, (and transfer) highly classified defense and technology secrets to the Chinese. Specifically, by “cooperating with China in the areas of human space flight”…which would have constituted one of the largest yard sales of critical national secrets since Obama screwed over our oldest and most loyal friend and ally …Great Britain by giving all of their top secret nuclear weapons secrets to Russia…wow (Just the idea of his betrayal still takes my breath away!)

Consider this: Last week 2 Chinese reporters were supposed to be in attendance to watch the Space Shuttle Endeavour take off form Kennedy Space Center….but when they got to the gate to go in they were stopped and turned away! The paper they write for (Xinhua) was livid and indignant….why weren’t they allowed to be in the gallery that day? …”The Wolf Clause” – A clause written and inserted into an appropriations bill back in January of 2011 by Rep. Wolf.

The long and short of this clauses impact is this: … It prevents NASA and the White House’s Office of Science and Technology Policy (OSTP) from being able to access federal funds! Additionally they are not allowed to: develop, design, plan, promulgate, implement, or execute a bilateral policy of any kind to participate, collaborate, or coordinate bilaterally with China, or any Chinese owned company in anyway! (lol). The clause prevents NASA from hosting official Chinese visitors!

POP QUIZ: Do you think the Chinese might have been shocked with being told “No” after 3 years of watching spineless and unprincipled Obama cave in every single time he was given the chance?

Rep. Wolf has not been a fan of China any longer than I have (never). He is also the Chairman of the House Commerce, Justice, and Science appropriations subcommittee. In my anti China blog post earlier this month I was very careful to not bring up any of the obvious reasons I didn’t like/trust them that grace period has expired, and the list of reasons I don’t like China also include:

– State sanctioned human rights abuses
– Technology theft (duh)
– Cyber warfare against the USA…our government and numerous corporations

etc. etc. etc.

If China ever doubted Wolf‘s true feelings about them….chances are his testimony in front of the US-China Commission in May cleared that up when he told the commission that

“The U.S. had no business whatsoever cooperating with the PLA to help develop its space program” (hmmm I wonder where he stands on this?)

And as I stated in my earlier blog post on this topic…the People’s Liberation Army (PLA) is in charge of China’s space program and the only difference between China’s civil and military space programs is …ooops there is no real difference …none! Wolf went on to say that “to engage China increasingly in bilateral areas is not appropriate until we see some serious changes in China”


Needless to say …”O-baby” hates being told no more than any 2 year old you will ever hear of… and when he was told of the content of Rep. Wolf’s ‘clause” being added to the bill, he was reported to have thrown himself down on the floor of the oval office flailing about with arms and his legs screaming: …

”I am the real Captain Kirk …
“He is not the Captain …I am the Captain…You will do as I say!”


Obama took the badge off the now deceased ex sheriff and pinned it on himself and went all around the white house pointing at his badge and saying ..”I am the Sheriff …I am the Sheriff!”

The Federal Reserve today Lowered GDP, Raised Unemployment And Inflation Projections

Specifically, 2011 GDP was lowered from 3.2% to 2.8% even as it raised its average unemployment forecast from 8.6% to 8.8%.

Other than finally breathing some reality into their numbers. If inflation is “transitory” (like we have been told) and yet the projection rises isn’t this also Bernanke admitting the good ship USS Economy has no rudder …I am assuming that people don’t understand what this means or are too stupid to care and it makes me angry. Look up the word ‘Stagflation’ ….and just know that, “Stagflation” will turn out to be a very large understatement.

”Oh Cameron your a doomsday whiner…stagflation so what?”

So what? So what? How many times can you revise these numbers downward before you have zero credibility … but that’s not all. Remember when I said that it’s time to worry when NOTHING MAKES SENSE ANY MORE?

Hang with me here people:

Lower GDP + Higher inflation x Higher unemployment = Market Rally? … sure…why not.

How about this one:

GDP MINUS Government Checks to the Entitlement Class MINUS Transfer Payments (paid for by continuing to mortgage our future) = Barry’s Depression AND Deep Deep Weeds for J6P!

Actually, why not come clean by admitting the higher inflation numbers after all he knows all our pathetic elected leaders need to do is (once again) redefine the components of the CPI so you can all be hypnotized by watching the “new and improved inflation numbers” tick right back down! …”Nothing to see here …everybody go home …whoops!”

Seriously, what is this crap? Who still believes this trash? Who puts any faith in any of the numbers and serial revisions (downward) we keep getting?

Just for a second, forget the Bilderburg and Illuminati and all that “tinfoil” crappola (yeah right). I know it’s hard but stay focused with me for a second.

The Fed and it’s lapdogs in our government want people to stop paying attention because some actual, very real and increasing obvious shit storm is coming over the horizon. Not a damn thing they can do about it except turn off as many people as they can with lies, damned lies, and their shitty shifting statistics. Dazzled with footwork, people will go about their daily routine not noticing that real (not imaginary) shit has hit a real (not statistically neutered) fan.

And what else could they do? “Talk to Americans?” Just tell them what’s on the way, and who did it to them and why, and what it means to their retirements and cost of food and their cost of fuel? Oh yeah that would work out really well. The same drones and sheep who elected Barry as President? Those Americans? The answer should be nobody! But, they’re going to ramp up the markets anyway. Bet on it.

This is the final grab at wealth before the collapse. Be prepared to see seriously messed up stuff now. The last three years has “disaster management” written all over it. The train has left the track; give it until late Q2 but not far into 2012. Election year or not.

The US economy has already been mortally wounded. The only question now that remains is what do the death throes entail? Will it be France 1789? Will we become Soviet Moscow circa 1982 as the push to tyranny and one world gov’t continues unabated? Do we become “The Walton’s” over night? Post apocalyptic world of the Road Warrior? Weimar republic or Zimbabwe? Or do we swing slowly like Saddam Hussein with relatively mild but prolonged inflation and stagflation for the better part of a decade?

When we have QEIII stuffed down out throats you can plant me deeply in the Weimar/Zimbabwe camp (where I already have my lawn chair set up) …we have already monetized too much of our debt and in my opinion the coming crash is going to be biblical.

Rolling Back the Progressive Era

June 14, 2011

By Michael Hudson

How Bankers are using the Debt Crisis to welcome in the Financial Road to Serfdom

Financial strategists do not intend to let today’s debt crisis go to waste. Foreclosure time has arrived. That means revolution – or more accurately, a counter-revolution to roll back the 20th century’s gains made by social democracy: pensions and social security, public health care and other infrastructure providing essential services at subsidized prices or for free. The basic model follows the former Soviet Union’s post-1991 neoliberal reforms: privatization of public enterprises, a high flat tax on labor but only nominal taxes on real estate and finance, and deregulation of the economy’s prices, working conditions and credit terms.

What is to be reversed is the “modern” agenda. The aim a century ago was to mobilize the Industrial Revolution’s soaring productivity and technology to raise living standards and use progressive taxation, public regulation, central banking and financial reform to distribute wealth fairly and make societies more equal. Today’s financial aim is the opposite: to concentrate wealth at the top of the economic pyramid and lower labor’s returns. High finance loves low wages.

The political lever to achieve this program is financial. The European Union (EU) constitution prevents central banks from financing government deficits, leaving this role to commercial banks, paying interest to them for creating credit that central banks monetize for governments in Britain and the United States. Governments are to go into debt to bail out banks for loans gone bad – as do more and more loans as finance impoverishes the economy, stifling its ability to pay. Yet as long as we live in democracies, voters must agree to pay. Governments are sovereign and debt is ultimately a creature of the law and courts.

But first, voters need to understand what is happening. From the bankers’ perspective, the economic surplus is what they themselves end up with. Rising consumption standards and even public investment in infrastructure are seen as deadweight. Bankers and bondholders aim to increase the surplus not so much by tangible capital investment increasing the overall surplus, but by more predatory means, headed by rolling back labor’s gains and stiffening working conditions while gaining public subsidy. Banks “create wealth” by providing more credit (that is, debt leverage) to bid up asset prices for real estate and enterprises already in place – assets that either are being foreclosed on or sold off under debt pressure by private owners or governments. One commentator recently characterized the latter strategy of privatization as “tantamount to selling the family silver only to have to rent it back in order to eat dinner.”[1]

Fought in the name of free markets, this counter-revolution rejects the classical ideal of markets free of unearned income paid to special interests. The financial objective is to squeeze out a surplus by maximizing the margin of prices over costs. Opposing government enterprise and infrastructure as the road to serfdom, high finance is seeking to turn public infrastructure into rent-extracting tollbooths to extract economic rent (the “free lunch economy”), while replacing labor unions with non-union labor so as to work it more intensively.

This road to neoserfdom is an asset grab. But to achieve it, the financial sector needs a political grab to replace democracy with financial technocrats. Their job is to pretend that there is no revolution at all, merely an increase in “efficiency,” “creating wealth” by debt-leveraging the economy to the point where the entire surplus is paid out as interest to the financial managers who are emerging as Western civilization’s new central planners.

Frederick Hayek’s Road to Serfdom portrayed a dystopia of public officials seeking to regulate the economy. In attacking government so one-sidedly, his ideological extremism sought to replace the checks and balances of mixed economies with a private sector “free” of regulation and consumer protection. His vision was of a post-modern economy “free” of the classical reforms to bring market prices into line with cost value. Instead of purifying industrial capitalism from the special rent extraction privileges bequeathed from the feudal epoch, Hayek’s ideology opened the way for unchecked financial power to make a travesty of “free markets.” CONT’D HERE

The First Great Depression: Blow By Blow, From The BIS, And How It Mirrors Our Ongoing Second Great Depression

Tyler Durden's picture

(This is a repost from a year ago. As the events over the past 12 months have progressed very much as the ongoing second great depression would have predicted, we republish this critical history lesson for all readers and remind everyone that history always rhymes. Pay particular attention to the fate of hard assets as the confidence in the entire system evaporated)

After surviving the start of the Second Great Depression, and living in its first great bear market bounce/short squeeze, where now all the attention is focused on a collapsing Europe, many could be wondering how, if at all, it would have been different to have lived through the first Great Depression. Luckily, courtesy of the recent release of the BIS’s full annual reports, history buffs can now replay, year by year, the events in world capital markets from 1931 onward. We have put particular emphasis on the dark days of the 1930s. Below we present the first several such years as seen from the perspective of the BIS. Note the endless similarities – in fact one could say the only difference between then and now is the lack of “liquidity providing” algos (soon, there will be an iPad app for that) to front run slow and stupid retail/pension/mutual fund money. Pay particular attention to the role of gold in the crisis period, the amusing reference to FDR’s confiscation of gold in 1933, and how the mood of insecured optimism shifts to one of endless gloom, and ends, as everyone knows, with World War 2.


The year under review has been one of dramatic occurrences in the whole field of international finance, credit, monetary stability and capital movements, both public and private. The record of this year of unparalleled world-wide disturbance reflects itself in the progress, resources and activities of the Bank, which have been intimately affected by each succeeding episode, in all of which the Bank was promptly called upon to play a rôle, as was but natural for an international institution the statutory object of which is “to promote the cooperation of central banks and to provide additional facilities for international financial operations, and to act as trustee or agent in regard to international financial settlements”, whose “operations for its own account shall only be carried out in currencies which satisfy the practical requirements of the gold or gold exchange standard”.

In the second month of the fiscal year, the collapse of the Oesterreichische Credit-Anstalt, with its ramifications throughout Central Europe, called for immediate aid to the National Bank of Austria. In the third month of the fiscal year, there was announced the so-called “Hoover moratorium”, which materially changed the scope of the operationsof the Bank and the magnitude of the funds at its disposal in its capacity as Trustee for international financial settlements between Governments. In the same month the banking difficulties in Germany, precipitated by wholesale withdrawals of short-term credit, and the pressure upon the Hungarian exchange, necessitated the organization of central bank aid to the Reichsbank and to the National Bank of Hungary.

In the fourth month of the fiscal year, the London International Conference declared that “excessive withdrawals of capital from Germany” had “created an acute financial crisis”, and invited the Bank for International Settlements to set up a Committee to inquire into the credit needs of Germany. In the fifth month, this Committee urged “most earnestly upon all Governments concerned that they lose no time in taking the necessary measures for bringing about such conditions as will allow financial operations to bring to Germany — and thereby to the world — sorely-needed assistance”.

In the sixth month of the fiscal year, the world was shocked by the sudden fall of sterling, which was almost immediately followed by the suspension of the gold or gold exchange standard by six other nations. These occurrences still further shattered what was left of confidence and forthwith caused a strain on the reserves of nearly all central banks of the world, including the Federal Reserve System. The necessity for the employment by central banks of their reserves in turn placed a strain upon the Bank for International Settlements, in its capacity as the depositary for a substantial portion of the reserves of many European banks of issue, but the large withdrawals in September were met without decreasing its high degree of liquidity.

In the ninth month of the fiscal year, there gathered at Basle the Special Advisory Committee, convoked by the Bank because of the declaration of the German Government that it had “come to the conclusion in good faith that Germany’s exchange and economic life may be seriously endangered by the transfer in part or in full of the postponable part of the annuities”. In the succeeding months of the fiscal year the world financial system continued to undergo heavier and heavier pressure and the condition of Central and Eastern Europe and of its central banks, members of the Bank for International Settlements, failed to ameliorate despite a series of “standstill” agreements, currency restrictions, rationing of imports and foreign devisen, and other artificial expedients.


On the whole, 1932 may be styled a year of adaptation to changed conditions prevailing in the economic and monetary situation and one of some definite constructive effort. The most important constructive measures were taken or initiated at two periods — the first in February and the second in the last half of June and beginning of July. It was in February that the Bank of England, after the repayment of more than half of the large currency credits taken up in the previous summer, lowered its discount rate from 6 to 5 per cent, and thereby gave the signal to the downward movement of interest rates which was continued all through the year in most parts of the world. In the same month the German Government put into effect a plan for the thorough reorganisation of the large German banks, which involved a considerable writing off of assets and the supply of new capital with the aid of the Treasury and, indirectly, of the Reichsbank. This reorganisation permitted the re-opening of the German Stock Exchange, which had been closed for seven months. In the United States the Glass-Steagall Bill was adopted on February 27, giving greater freedom to the Federal Reserve Banks and enabling them to alleviate the pressure exerted by internal currency hoarding and withdrawals of gold.

On the basis of the provisions of this new act, the Reserve Banks purchased Government securities in the open market to an amount which in June reached $ 1,100 million, a sum then sufficient not only to counterbalance withdrawals and hoarding, but also to provide member banks with substantial excess reserves. At about the same time two further events of outstanding importance took place. The first was the conversion of more than & 2,000 million of the public debt of Great Britain from a 5 per cent on to a 3% per cent basis, which was announced in the second half of June and met with immediate response; such a measure was welcomed not only because it helped to alleviate the British budget, but also for the downward influence which it exercised on long-term interest rates. Further, the successful outcome of the Lausanne Conference in July, the value of which it is hard to overestimate, revealed willingness by the Reparation creditors — in the first place France — to make very large concessions and it meant the elimination of one of the most serious political hindrances to economic recovery.

These are outstanding measures. But attention must not be concentrated on them alone. A close examination of developments would show that the large volume of international credits was further reduced, that strenuous efforts were made in many branches of public and private economy to balance revenue and expenditure, to establish equilibrium between costs and prices, to render assets more liquid, to reach agreed arrangements for postponing or scaling down debt payments, to overcome the difficulties resulting from the liquidity crisis and to maintain control of the currency position, even when foreign exchange restrictions were, in the interests of trade, gradually relaxed. One marked feature of the period was the unparalleled volume of gold movements.

While the international movement of goods registered an unprecedented decline in 1932, gold movements reached proportions never before experienced.

During the year the total gold production of the world attained the high figure of $ 495 million, or 2,559 million Swiss francs, thereby establishing a new record by surpassing the production of the previous peak year, 1915, by 139 million Swiss francs, and that of 1931 by 184 million. While it is to be expected that gold production should rise in a period of sharply falling prices and plentiful labour supply, the increase has exceeded even the most optimistic forecasts. It has been most marked in the Union of South Africa and Canada, by far the largest percentage increase occurring in the latter country. Production in the United States, after having declined fairly steadily from 1915 to 1929, has risen again and at a progressively greater rate during each of the past three years.

Among the gold producing countries the influence of the new gold was particularly helpful in Canada. Since the departure of sterling from the gold standard, and the simultaneous depreciation of the Canadian dollar, the gold production of the Dominion has been bought by the Government at the prevailing market rate. The large production of 1932, $ 63 million at par, gave to the producing companies approximately $ 70 million in Canadian currency, and greatly aided the Government in meeting its maturing obligations punctually and in supporting the exchange. In the Union of South Africa the production of gold made possible the maintenance of the gold standard until the last weekof 1932 when, however, the large outflow of funds caused by speculation depleted the reserves and forced the country to suspend the gold standard. Under an agreement with the mines the South African Reserve Bank had up to that time purchased the newly produced gold at par, which enabled the Bank within a short space of time to recover the losses it incurred through the depreciation of sterling and to reconstitute its capital and reserves.

Whereas production has increased, the demand for gold by the arts has fallen to a very low level and, even more important, India and China, instead of absorbing a substantial part of the newly-mined gold, have continued to export gold previously hoarded. In the three months of October, November and December 1931, gold to the value of nearly 500 million Swiss francs was exported from India; during 1932, Indian gold exports amounted to a little more than 1,000 million Swiss francs, a sum not greatly inferior to the value of South African production, which was 1,238 million Swiss francs. The great volume of “new” gold which became available during 1932 from the mines and from India had its effect not only upon those countries in which it originated but also upon those to which it passed. The entire Canadian production was exported directly to the United States, but that of South Africa was, as usual, sold in London. In addition, almost 78 per cent of the gold exported from India was sold in London (approximately 19 per cent being shipped directly to the United Statesand about 3 per cent disposed of in the Netherlands and France). The bulk of the South African and Indian gold offered in London was sold against gold currencies, usually dollars or francs, depending on whichever was the stronger. In the case of the South African sales a large part, and in the case of the Indian sales practically all, of the proceeds received in these gold currencies was thereafter sold for sterling.

In the following table an attempt has been made to indicate for each quarter of 1932 the amount of gold derived from production and from India and China, the amount of gold used by the arts, as well as the increase or decrease of gold in the reserves of Central Banks and Governments, in order to obtain a rough estimate of the amounts hoarded and de-hoarded in the different periods:

The total increase in the monetary gold reserves of Central Banks and Governments for 1932 was 3,125 million Swiss francs. This means that, in spite of the hoarding which took place, monetary reserves received new gold during the year in an amount 22 per cent greater than the total gold production of the record year in the history of the world. And although European Central Banks during the first half of 1932 converted more than $ 700 million of their dollar holdings into gold, the gold reserves of the United States were only $ 6 million smaller at the end of the year than they had been at the beginning. But in the first quarter of 1933 the anxiety caused by the banking crisis led to a reduction in American gold reserves, later, however, to be replenished as a result of a series of anti-hoarding measures. [read: executive order 6102]


These twelve months have been striking ones in the financial history of the modern world. They have witnessed the dramatic episodes in the United States of America, culminating first in the abandonment of the gold standard, with its worldwide economic and monetary repercussions, and then, after a series of novel currency experiments, and a profound change in the banking and central banking structure, in the devaluation of the dollar and a qualified return to the standard abandoned. They have witnessed the high hopes aroused on every continent by the convocation of the London Monetary and Economic Conference, which was to find joint solutions for financial ills and economic
difficulties and to prepare the way for a reconstituted international monetary system — hopes which were dashed to the ground when this vast assembly met and promptly discovered that it was either in disaccord on fundamentals (especially as regards early currency stabilisation) or, if in agreement on some fundamentals (for example on the economic side), in disharmony as to the ways and means of reaching the agreed objectives. They have witnessed, as a consequence, the formation, in the monetary field, of the “gold bloc”, determined to preserve the status quo in their monetary system based on the classic gold standard, and in the financial and economic field, a retreat from the direction of internationalism toward a self-reliant, self-contained but ominous nationalism. In international financial and monetary relations the twelve months have seen a series of retrograde developments — more moratoria, more transfer impediments, more artificial clearings, more gold hoarding than during any year on record, more conversion of foreign balances and their repatriation into the home currency, or in gold, by private and central banks, an almost complete cessation of new long-term lending abroad and a further limitation or reduction of the volume of short-term credits.


Soon, four years will have passed since the financial crisis broke out, and still the world suffers without relief from the unrest and the uncertainties caused by moving currencies. The consequent difficulty encountered by the world’s trade is reflected everywhere in the large percentage of unemployment in those branches of national industry which are largely producing for foreign demand. In many countries, national endeavor has given an impetus to domestic affairs, with visible results, but this whole stimulated development threatens to become top-heavy as long as an expansionist policy at home is limited by restrictive policies, internationally. The daily conduct of every business and of every financial transaction which touches more than one currency area is rendered difficult or impossible by the varying exchange values of so many of the world’s currencies, particularly of some of the leading ones. An indication of the surprising extent of these inhibiting variations is contained in Chapter II. Tariff changes, quotas, clearings, exchange restrictions, compensation agreements and the like, all of which tend to throttle the international exchange of goods, of services and of capital, are the inevitable concomitants of the chaotic monetary conditions which prevail. During the past twelve months, the disorder has become intensified through, among other factors, the further fall, measured in gold, of sterling and the currencies responsive thereto, the devaluation of the belga, the silver policy of the United States, and the continuous abnormal attraction of gold to the American market.


Seven years have passed since in the course of 1929 the great depression began which still holds large parts of the world in its grip. It might have been expected that in the period which has elapsed the depressive forces would have spent themselves and general prosperity would have returned. But the depression of these seven lean years has not been merely a slump of the pre-war order. Its background was different — it supervened upon an economic and financial situation still suffering from the dislocation caused by a world war; and, with the volume of world unemployment above 30 millions, it has grown into something vaster than any pre-war depression. In the succession of events it is possible to recognize four major disturbances:

Firstly, there was the ordinary downward trend of business. Conforming to type, this was characterized by reduced sales, accumulation of stocks and decline in output, particularly in branches such as the iron and steel industries which produce capital goods or, in general, provide industrial, agricultural, trade and transport equipment.

Secondly, there was a widespread fall in prices of primary products —both foodstuffs and industrial raw materials. This put a particularly heavy strain on the balances of payments of a number of overseas countries and, within a short time, effectively arrested the flow of capital in their direction, whether in the form of loans or of new investments.

Thirdly, in the late spring and summer of 1931 there came the banking crisis in Austria and Germany. Massive withdrawals of funds were followed by a series of organized attempts to stem the tide through the granting of emergency credits and, when these attempts proved unsuccessful, by the introduction of moratoria, transfer provisions and exchange restrictions, with the result that, not only did foreign credits remaining in the countries affected become frozen but ordinary trade was hampered by new and formidable fetters.

Fourthly, in the autumn of the same year there followed the depreciation of sterling and of a number of other currencies. New elements of uncertainty were thus added to the economic and financial situation and strong downward pressure was exerted on prices quoted on a gold basis in the world markets. A period of monetary changes had begun which within two years was also to involve the United States dollar.


In the year which has passed since the last General Meeting great monetary changes have occurred. In France, a new economic and financial policy was adopted in the spring of 1936, and in the early autumn a decision was taken to readjust the value of the French currency. Ori 25th September 1936 simultaneous declarations were issued by the French, British and United States Governments in which the three governments declared their intention to continue to use appropriate available resources so as to avoid as far as possible any disturbance of the basis of international exchange resulting from the proposed readjustment. During the same week-end a decision was taken in Berne to change the value of the Swiss franc and at The Hague an embargo was placed on the export of gold ; shortly afterwards the Italian authorities readjusted the lira to a new gold basis, while the Chechoslovakian crown was further devalued in relation to gold and the Latvian currency was devalued and attached to sterling.

The technical measures taken in the various countries and the arrangements agreed upon by the different monetary authorities will be referred to later in this report. Here it may be noted that the changes in the values of thé currencies concerned were carried out with a minimum of disturbance to the foreign commodity and capital markets and that no setback was caused to the upward trend of world affairs.

The heavy burden of debts both domestic and foreign was also in other ways an obstacle to economic recovery, especially as the debt structure inherited from the war was augmented by extensive international borrowing in the ‘twenties both on long and short-term account. In some countries the main difficulties were caused by an excessive volume of private indebtedness, e. g. mortgage debts of farming communities, in other countries by internal government- indebtedness weighing heavily on the budgets, and again in others mainly by foreign liabilities which were a charge on balances of payments and “on monetary reserves.

Some progress has been made during the depression in scaling down the debt structure. In addition to the effects of currency depreciations, the burden of domestic debts has been alleviated by conversions, and foreign indebtedness by repayments, repatriations and arrangements of different kinds. The volume of international short-term indebtedness has thus been brought down by about one-third in terms of sterling (a currency in itself depreciated by almost 40 per cent.) and by still more in terms of gold. Long-term indebtedness has not been reduced to the same extent, but there has been a very important movement in the repatriation and redemption of foreign securities, especially from the United States and Great Britain.


It is not difficult to indicate the reasons why business last year passed through periods of great anxiety. In the opening months of 1938 repercussions of the abrupt decline in American industrial activity that had begun in the previousautumn were felt all over the world, particularly in the export trade. This decline proved the more depressing as it came at a time when there were high hopes of more sustained prosperity in the United States. The general weakness in prices of primary products, a consequence of reduced American demand, and the downward tendency of many other prices called for reductions in costs and other adjustments, which generally met with resistance from interested parties. In countries of the sterling area, which had experienced almost uninterrupted expansion since the autumn of 1932, conditions were ripe for a slackening of internal activity.

To this situation were added exceptional events of a political character, which dealt rude shocks to business and left in their wake a level of armaments and military preparation never before witnessed in times of peace. Among the most striking signs of the political uncertainty was the pressure on sterling caused by mass movements of funds which, with other factors, added $1,500 million to the American gold stocks in the five months from August to December 1938. More harmful effects were found in the restraints suffered by ordinary business, as initiative was cramped and the will to make new investment weakened. Filling the gap by government orders for armaments and other purposes for the time being helped to sustain employment but necessarily diverted productive power from the pursuit of normal trade and especially tended to impair the export capacity of the countries most deeply involved.

Under the strain of almost uninterrupted political tension, bringing with it general uncertainty as to the business outlook, continuous capital flight from Europe and growing armament expenditure in all countries, the economic development of the world does not, however, show the picture of colourless gloom that one would expect. It lacks, of course, stability and nowhere inspires confidence in the strength of the more favourable tendencies that are at work. The state of the world is feverish rather than healthy; and whatever recovery may be seen is anything but steadfast, since it is dependent on the use of stimulants on the one hand and interrupted by grave disturbances on the other.

“But Cameron….look at the stock market … stock prices are up …earnings are up …and equities still look cheap!”

Huh? Compared to what? “Despite the superficial health of both profits and cash flow (these a touch less impressive if we adjust for either of the US dollar’s internal or external loss of value, one should constantly remind oneself), it is apparent that the balance sheet is still being strip-mined to salt the income statement and, more particularly, the per share ratios via debt-financed equity buybacks. Even as this increases the overall fragility of the corporate structure, however, the Fed’s egregious obliteration of capital market pricing signals has kept equities looking ‘cheap’ – with dividend yields anomalously above an artificially-depressed LIBOR and equity earnings yields at par with QE-shrunken corporate bond yields for the first time in almost three decades.
This cannot end well.

Here it is …I am now on record with this: The Fed will have no choice but to launch into another round of easing (QEIII) , something which is pretty much a given for everyone else, and would indicate that the US economic depression, which started almost 4 years ago never ended, but was briefly interrupted by bear market rallies inspired by dollar dilution.

This cannot end well.

This will not end well.

Cameron Jordan
Tyler Durden
Sean Corrigan

Fred Dardick …Canada Free Press!

“A few weeks ago I wrote an article From the White House to the Big House: 25 Impeachable Crimes and Counting that detailed 25 illegal acts committed by President Obama and his Democrat cohorts in Washington. It showed a President and political party willing to break the law at will in order to accomplish their political aims. Thanks to reader contributions and conservative writers around the country, here are 25 more for your consideration.

Whether or not any of these troubling examples will lead to Obama’s impeachment and/or imprisonment, only time will tell. Regardless, taken together they paint a picture of an out of control President who lacks basic American values and has little to no respect for the rule of law.

25 More Impeachable Crimes

1. Obama’s term as Board Chair of the Chicago Annenberg Challenge in the mid-1990s where he and his colleague, unrepentant terrorist William Ayers, misused over $300 million in private donations meant to improve the education of minorities. Instead of spending the money on traditional learning programs, Obama and Ayers directed the funds to local community activists who wasted it on trying to “radicalize” the students. An official review of the program found that it was a complete and utter failure.

2. As an Illinois State Senator, Obama directed tens of millions in state money to slumlords Valerie Jarrett and Tony Rezko meant to provide for housing for low income, minority tenants in return for political donations. Due to shoddy construction and nonexistent maintenance, the majority of the units, after less than 10 years of use, have been rendered uninhabitable.

3. Michelle Obama’s politically connected $316,000 VP of Community Affairs job at University of Chicago Hospitals while her husband was serving as US Senator. She was responsible for the design of an illegal “patient dumping” scheme that prevents local African Americans from using the emergency room at one of the nation’s finest hospitals and instead redirects them to community healthcare centers where they often receive substandard and inadequate treatment. The high paying position was eliminated soon after Mrs. Obama’s departure from the university.

4. Millions in illegal contributions accepted by the Obama campaign during his presidential run. Credit card filters designed to screen out foreign money and domestic donors who had maxed out their legally allowable limits, as required by US law, were intentionally switched off.

5. Secretary of State Hillary Clinton’s ongoing effort to create international small arms accords that will subvert the Second Amendment rights of US citizens.

6. The Russian-American START treaty signed by Obama in April 2010 that has no chance of making it through Congress unless passed during the lame duck session. Not only does the treaty hamstring US missile defense development and make it difficult to modernize our rapidly aging nuclear weapons arsenal, it represents unilateral disarmament by the US in return for nothing more than Russian “good will”.

7. Moving control of the Census Bureau from the Commerce Department directly into the White House where it is managed by Chief of Staff Rham Emmanuel.

8. Providing de facto amnesty to illegal immigrants by Immigrations and Customs Enforcement (ICE) Director John Morton, who has prohibited ICE officers from enforcing US immigration laws outside the institutional setting. The ICE union has subsequently taken the unprecedented step of voting “no confidence” in Morton’s leadership.

9. Attorney General Erik Holder’s failure to sue sanctuary cities for violating US immigration law, while at the same time proceeding with a lawsuit against the State of Arizona for enforcing US immigration law.

10. Failure by Obama to treat the takeover of sovereign land in Arizona by the Mexican drug cartel as an Act of War.


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