Luke Rudkowski Released just hours ago by NYPD

March 30, 2009 By Leave a Comment

Luke Rudkowski

Luke Rudkowski, founder of the We Are Change movement, was arrested by the NYPD at the Hilton Hotel this Saturday and charged with trespassing. I spoke with an officer from the NYPD’s Central Booking office today and was informed that Luke had been released at 6:00PM this evening (Sunday, March 29th). I’m surprised that this information has not been put out on the Internet yet, so I am posting this short blog in order to get the word out to those who are eager to know.

I should also mention that the officer I spoke with was exceedingly respectful. He was also astounded by the number of people who called in on Luke’s behalf. Thanks to everyone who took action to denounce this wrongful arrest and unconstitutional charging of Mr. Rudkowski, including all those who flooded the call centers at the 18th precinct and then at central booking and the manhattan criminal court.

Filed Under: Civil Liberties

Beware of Pundits Bearing Gifts

March 19, 2009 By 1 Comment

Howard Beal

For those of you who have not heard the news, Glen Beck, Fox News’ biggest acquisition since Chris Wallace, has started a new, interactive, audience-based show called “you are not alone.” It is a kind of Televangelist/Phil Donahue type of performance that eerily resembles the fictional “Howard Beal Show,” from the 1976 movie “Network.” In fact, as I was watching the beginning of the show I couldn’t help but recall that dark and fateful meeting that Howard had with the corporate giant Arthur Jensen, where he called upon Howard to “preach this [the new world order] evangel.” Sure, Glen Beck has a “don’t tread on me” flag behind him instead of a religious, glass mosaic, but the demagoguery was as close to identical as you could get. In the first few minutes of the show Glen even faked tears as he spoke about how much he “loves [his] country.”

When Glen Beck first came to Fox News late last year, he quickly worked to build support amongst that audience of Americans who felt, and still do feel, disenfranchised by both parties. These are the same people who have latched onto a strong sense of belonging within the growing Libertarian movement, led most visibly by Texas Congressman Ron Paul. Glen Beck’s early list of guests included people like Gerald Celente (the self-ascribed political atheist and ardent truth teller), Michael Scheuer (a firm constitutionalist), and Tim Strong. Topics covered early on were the collapse of the dollar, the constitutional right of Americans to forcefully resist the government, and other very controversial issues that you NEVER hear discussed on mainstream TV and talk radio. In fact, Glen Beck even announced one morning on Fox and Friends that he was going to do his show that night on the well-documented fact that the US Government, in conjunction with private military contractors and other invested entities, has been building FEMA Camps all over the country in order to house people in the case of some sort of emergency or civil unrest. Quite mysteriously, however, he decided to pull back on the story later that evening citing “insufficient information.” I guess Murdoch got a hold of him Arthur Jensen style…

Although Glen Beck has toned down the anti-Federal Reserve rhetoric and avoided the FEMA issues, he is still one of the only mainstream pundits, along with Lou Dobbs, to cover some of the more controversial issues that face our society today (including the NWO). Though I am happy to see these issues covered more on such a mainstream network, what concerns me is the motivations of the individuals behind the coverage, including Mr Beck. Those who have followed Glen Beck’s show, going back to his days at Headline News, will remember that he was very much against the Libertarian movement and even called Ron Paul supporters “terrorists” and refered to them as sell-outs on a show (see the clip here: http://bit.ly/Dl5He) with featured guests David Horowitz (GIANT neo-con and former Marxist) and the great grandson of Winston Churchill, Jonathan Sandys.

Now, I am not saying that Glen Beck is not allowed to grow as a human being and evolve his positions on issues, but his positions on the war in Iraq, the prospective bombing of Iran and the greater “War on Terror” have far more in common with the neo-conservative movement in the republican party than the resurgent libertarianism espoused by Ron Paul republicans. I also find it hard to believe that Fox News, the text-book case for fascist propaganda, would employ someone whom they believed represented true libertarian principles and who they believed would espouse these views on prime time television. In fact, I know they wouldn’t; I’m not an idiot.

So where does this leave us? Well, in my opinion, the signing of Glen Beck by Fox News is motivated by two major factors. The first is clearly financial. Rupert Murdoch has shown a knack for identifying trends in society and then exploiting them. The evolution of Fox News Network is a perfect example of this, as Murdoch capitalized on the underrepresentation of traditionally “conservative values” on mainstream TV. Of course, hand-in-hand with this exploitation comes the second motivating factor, which is that Fox News also represents very powerful interests in military industry, banking and commerce at large, and the network aims to serve these interests as part of its larger agenda. Therefore, one cannot expect Murdoch, and his henchman Roger Ailes, to allow someone on the air who actively undermines the elitist agenda. This is why Glen quickly stopped talking about the Federal Reserve, the FEMA camps and the right of americans to revolt against the oppression of the state. To allow such conversations to develop on mainstream television would be like setting a bonfire in the middle of a paper village (the paper village in this case is our carefully constructed, illusory reality).

My point in writing this article is this: beware of pundits bearing gifts. The last thing Americans need is to be lulled back to sleep by another smooth tongued demagogue. Change will not come from the government. It will not come from the church, and it will certainly not come from the mainstream media. Change will only come from within each and every human being that makes up this nation. There is an awakening going on in America, and in order for it to continue we must make sure that we do not fall back on false promises and empty hopes. Change requires sacrifice and the confrontation of longstanding fears head-on. The less time everyone spends paying attention to what talking heads like Glen Beck, are saying, the faster the fire of change will burn until enough people have become enlightened enough to restore faith in this republic. Only then will we really have “change that we can believe in.”

Filed Under: Media Pundits

Dodd will be the First Rat to Jump Ship, not the last

March 19, 2009 By Leave a Comment

Chris Dodd the Rat

In what CNBC calls a “shocking” revelation, Senator Chris Dodd told CNN on Tuesday that Obama officials were the ones who wanted the language (being referred to now in the mainstream media as the  ”Treasury Loophole”) added to an amendment limiting bonuses that could be paid by companies receiving federal bailout money.

“I did not want to make any changes to my original Senate-passed amendment, but I did so at the request of administration officials, who gave us no indication that this was in any way related to AIG,” Dodd said in a statement released by his office.
Really, there is nothing shocking about this revelation. Chris Dodd heads the Senate Banking Committee, and he was a major cheerleader of the financial community during all these years of excess that have now culminated in economic catastrophe (let’s not forget his cheerleading of Fannie Mae and Freddie Mac taking on a more “proactive” role in assuming collateralized mortgage debt). It shouldn’t shock anyone that he played such a pivotal role in crafting this legislation and that now, as the boat appears in danger of sinking, is preparing for the possibility that he may have to jump ship a bit earlier than he would have liked.
Dodd is a smart guy, and he understands finance. I have heard him speak on issues of banking, and he is no dummy when it comes to monetary mechanics. He also knows that, because he is a prominent senator and spearhead for banking legislation, he is on the front line for receiving any populist backlash that is going to come Washington’s way. This is why, during the recent hearings by the banking committee where the vice-chairman Donald Kohn of the Federal Reserve was present, Chris Dodd demanded that a more “satisfactory” answer be provided regarding the distribution of AIG bailout funds. Low and behold, it was not but one week later that we got a list from AIG providing the names of those firms who received the first $75 of the $170 billion in Fed bailout funds.
Dodd is not the only one feeling the heat. Barney Frank (a.k.a. Mr. Tough Guy), has also been upping the rhetoric and demanding more transparency from the banking sector, as well as from the Federal Reserve. If you want to know if a ship is sinking, always scan the faces of politicians for the early warning signs. The bankers will stick this thing out till the bitter end (they don’t have a choice in the matter), but the politicians are recognizable and electorally accountable, and they don’t want to end up before the “firing squad.”
My guess is that this entire scam is starting to unravel far too quickly for even the bankers to control, and that they are not going to be able to execute the rest of their bailouts in the covert fashion that they have become accustomed to. This means that the Federal Reserve, not the Treasury, is going to have to pick up the slack and start openly buying up everything it can in order to keep the major financial institutions that it is sworn to protect from going bankrupt. What this means in economic terms is that everything that was going to happen, is now just going to happen a lot sooner. The US Treasury market is going to start unraveling faster than most predicted, with prices for long-term bonds being the first to drop, mirrored by a rise in domestic inflation. Although the deflationary pressures are still great, and margin call forecasts tell us that more liquidation is on the way, we cannot say with certainty that the downward forces will overwhelm the central bank’s ability to cover the ensuing losses with monetary credits (i.e. by creating money out of thin air).
This, taken in conjunction with the Fed’s recent decision to monetize another trillion plus dollars of US long-term debt paper, should be taken heavily into account by individuals looking to protect their wealth in both the near, as well as the long-term. If you are completely risk-averse, they you should just buy more of gold now, even at these prices. If you are willing to bear a little bit of risk, as I am, you may be willing to wait this out a bit and see if gold can break at least back down to the mid-800′s level before you start buying. Of course, commodities in general are a great play, but my concern with these investments has always been the inability to hoard the tangibles (i.e. unless you are running a farm, owning futures in sugar is not as safe as holding gold in your hands).
Dodd or no Dodd, this ship is sinking, and unless you wanna be a “Dud” and not a Dodd (sorry, that was cheesy humor) I would suggest you take these warning signs seriously. The Dollar is on its last breath and every financial decision you take from here on out becomes increasingly crucial to your long-term wealth preservation. If you are looking for a dollar rally, I can’t promise you that you will get it, but what I can promise you that what you will most certainly get is a collapse in the American bond market before the end of this year.
Filed Under: AIG, Bailout, Dollar Collapse, Federal Reserve, Gold

Fed Promises to Monetize US Public Debt: prepare the wheelbarrows

March 18, 2009 By Leave a Comment

Wheelbarrow Hyperinflation

Hip-hip-Hurrah! The Federal Reserve has come out today and said that they are going to buy up long-term US debt, which basically means that the money we just borrowed for the Obama budget is going to be paid for right now through inflation. Basically, Obama just enacted a flat tax to go along with whatever other tax hikes he plans to implement. Super. There is only one problem: after this is all over, no one is ever going to lend us money in dollars ever again…

Of course, the markets realize this, and after dropping $25 dollars by mid-day, the spot market for Gold had a sixty-five dollar intra-day rally upon news of the Fed’s decision, closing at close to $950 an ounce. I have been waiting for a good opportunity to buy some more gold ($850 was my target) and this certainly puts a wrench in my plans. I still think the price of gold will drop in the interm before it begins its next major wave upwards, but you never know. With this reckless Federal Reserve on the loose none of our dollars are safe…

Meanwhile, in the land of foreign exchange, the dollar got crushed, especially against the Euro and the Swiss Frank, dropping 3.5% on the day. I can’t imagine being a currency trader in this environment – I would be pulling my hair out. There isn’t a single currency out there that I would feel safe in. It is no wonder gold is doing so well, but then again, we knew that didn’t we…

So with the Fed causing the largest deforestation in human history through its massive money printing and Obama getting ready to spend like a drunken sailor on the shores of Honolulu, we can safely assume that the path to hyperinflation is duly upon us. When will this paper tsunami come our way? This, I cannot answer, but believe me, with all these pundits running around saying that “right now deflation is our enemy…we can worry about inflation when it gets here, and that won’t be for a while,” my guess is that it’s a LOT closer than anyone thinks. I’m still sticking to my prediction made in my December 2008 article “The American Bond Bubble and the Future of Gold,” that the collapse in the Treasury market will occur before the end of 2009. If that holds true, it won’t take too long for inflation to turn into runaway inflation, which will runaway right over to hyperinflation. Amero anyone?

Filed Under: Dollar Collapse, Federal Reserve, Hyperinflation

The Golden Ratio or the End of Infinity?

March 18, 2009 By Leave a Comment

Infinity Sign

I’m sure you have all heard about the $165 million in bonuses taken out by AIG executives recently, after all, every major news network is covering it. And why shouldn’t they? After all, it is $165 MILLION, and that’s enough to buy you a sweet vacation home in the Hamptons, a 100 ft yacht with a Microsoft Surface navigation screen, and a few modest commercial properties to live off of for the rest of your life. But what about the $170 billion that AIG as a whole has received since it was bailed out in September of 2008? Doesn’t all that money come from the same place? Isn’t the Federal Reserve just crediting the accounts of AIG’s trading partners who took out insurance on their own derivative debt instruments? What about these firms that are getting this money funneled through AIG? Are they getting bonuses too? Wait…

OK, the mainstream media is so complicit in this scam that it makes me sick to my stomach. There is no left or right. They are all complicit. A few pundits out there do try and make light of this glaring inconsistency, but it gets drummed out by all the noise emanating from talking heads like Wolf Blitzer, Chris Mathews, Bill O’Reilly, etc. The list just goes on and on and on and on and…

But, I should point out that AIG has – after Chris Dodd and Barney consulted with Oracle 2.0 (i.e. Ben S. Bernanke) – released information about where roughly $75 billion of the $170 billion of our money has gone since AIG was bailed out. This number represents less than half of the money we have doled out to the insurance giant, but of this sum, $13 billion has gone to Goldman Sachs (surprise, surprise), another $13 billion has gone to Bank of America ($7 billion of that went to Merrill Lynch), and the list goes on and on and on and on and…

Is anyone sensing a pattern here? Durrr it’s a pattern within a pattern…within a pattern! It’s a fractal!! *GASP* we are being sucked down the black hole of a giant nautilus shell filled with all the paper in the cosmos!!! Ahhhhhhhhh!!!!

Sorry, I just had to do that. Silly, I know, but what else can I do? Maybe one day, years from now, I’ll catch Paulson, or Bernanke or maybe even Barney Frank drinking a caffé macchiato in Piazza San Marco and stop them for a chat. I don’t know what I will say to them, but knowing me it will probably be whatever pops first into my mind. Maybe something like, “don’t you feel like a complete piece of shit?” or “I hate you.” Or better yet, I might try and date one of their daughters! Well, in Barney’s case that won’t work, but can you imagine? Poor kids, they probably have no idea what is going on either. They probably think that daddy goes to work like everybody else and makes his money fair and square. Aw, how cute.

But seriously, can we just get on with the dollar collapse already, because the wait is totally killing me. I just can’t keep watching these accounts get credited with monopoly money. It’s driving me bonkers. Ha, maybe the system won’t collapse as a result of a dollar breakdown, but just from the sheer stress put on excel spreadsheets around the globe! We are going to run out of decimal places!! Maybe my 7th grade math teacher didn’t know what she was talking about after all…

Filed Under: AIG, Ben Bernanke, Dollar Collapse, Federal Reserve

A New Global Currency?

March 17, 2009 By Leave a Comment

Global Currency

According to an article by the London Telegraph, calls are now emanating from members of the US Treasury, as well as the international banking syndicate, to introduce something called “Special Drawing Rights” for IMF members as a way of stemming bankruptcies throughout the world.

The plan, according to Alistair Darling, Chancellor of the Exchequer, would provide badly needed liquidity to both public, as well as private institutions currently battling deflationary headwinds. It is unclear how the IMF would get the capital to fund such a program or if members of the G20 are simply going to agree on allowing the fund to print its own fiat currency and accept the paper as money for all debts, public and private. Such a plan would probably require all the participating central banks to eventually create artificial, flexible exchange rates pegged to this new IMF currency (similar to the process followed in Europe during EMU). How on earth these people believe that they can transition from a world of failing paper currencies to one with a single, fiat one, I can’t quite figure out. Why would anyone be willing to accept this new currency? During the American Civil War Lincoln introduced the Greenback, but the very existence of the nation was at stake so people didn’t have much choice in the matter. Besides, it was assumed that the paper would only be used during the war period, and that if and when the North triumphed over the South that we would return to a gold standard, as we in fact did. From the bits and pieces of information coming out of the media on the G20 meeting and the plans for a “new financial world order” I have heard nothing of this sort. In fact, it sounds to me like these pranksters want to use this crisis as an opportunity to create the architecture of a real, global central bank with an international currency.

This shouldn’t come as a surprise to anyone. After all, those instituting the international financial order at Bretton Woods post-WWII had, as their ultimate aim, the creation of a truly global currency and international banking system. That the protégées of this system would now try and complete this vision is only to be expected. The question that the rest of us, who are not part of these negotiations should ask is, “do we want a global central bank?”

My answer to this question is no, absolutely not. Having a global central bank is worse than having a single, global car manufacturer, or a single, global farm. It is bad enough that international central banks have consolidated their power by forming local cartels capable of issuing their respective nation’s currencies, but at least under this system poor monetary policy by any particular bank is punished in the foreign exchange markets (as we have seen with the Dollar over the past seven years). If these people manage to create a global central bank and a global currency that, by law, all the people of the earth are forced to use for all their transaction and as a store of wealth for their hard work, then there will truly be no place left to hide. We will have set the people of this earth on the path to global serfdom – a new feudal society where the wealthiest banking interests become the planet’s high priests, and the masters of us all.

I’m hoping this plan doesn’t work, and I really don’t think it will. It is my humble opinion, and my deepest hope, that these people have completely overestimated their ability to control the world’s populations. They are trying to force 20th century institutions down a 21st century pipe. This is no longer a vertically integrated society. We do not take our orders from kings, popes, presidents or even bosses. The Internet has created a landscape where the most creative and inquisitive minds can find and disseminate information with the click of a button. Of course, the Internet can be controlled, as we have seen in China, but this is not an easy task and it implies a broad assault on knowledge. One of the reasons why America has been at the forefront of innovation in information technologies is exactly because it has been a pioneer of the Net. When you connect people you create more opportunities for growth. Unless the powers at work want to control a planet of drones, which is certainly possible, then they are going to shoot themselves in the foot if they limit the Web. Let’s hope it doesn’t come to this, because it is the freedom of information brought about by the Internet that has been the catalyst for the greatest flowering of knowledge since the European Enlightenment.

I seem to have gone off on a tangent again, and so I apologize. This was an article meant to focus on the new Global Central Bank, but I guess my passions got the better of me. In any case, it is only a few more weeks before the G20 meet in London to produce their first major proposal on the new international order, and I, like many of you, am curious to see what they come up with…

Filed Under: ECB, EMU, Federal Reserve, G20, IMF

Financial Terror: Made in the USA

March 17, 2009 By Leave a Comment

Fed Shoots the Dollar - Financial Terrorism
We learned this week that American International Group (AIG) has doled out $165 million in bonuses to executives for the hard work they have put in during the AIG bankruptcy. Even the NY Times, the holy grail of intrepid reporting, which incidentally is also nearing bankruptcy, has come out in support of the bonuses, saying that it’s the best option available to us at this time. Of course, the administration and our new National CEO, Barack Obama, are “outraged” by the paying of these bonuses – simply outraged! In fact, Larry Summers, Obama’s “chief economic advisor” has said that the administration will need to get “creative” in order to recover “some” of $165 million in bonuses.

Who are these people kidding? Honestly, just who the hell do they think they are talking to? These “bankers” and “politicians” with the aid of both ignorant, as well as complicit mainstream “reporters” must honestly believe that this nation of dollar earners and savers is composed of absolute morons. I mean, nothing else could possibly explain the absolute arrogance with which they are engaging in BLATANT theft in broad daylight! The only reason these criminals are getting away with this is because they control the issuance of the monetary standard that we are all forced, both by law and by convention, to use in our daily transactions and liquid savings. Economic relationships and transactions have become so complex that even if we wanted to barter or use precious metals in order to conduct our daily business we would be unable to. In short, the American is being held hostage by the banking system, which is looting our economy as we speak, and it is doing it at gunpoint. We are all being financially terrorized – to quote Max Keiser – and the worst is yet to come. Once the terrorists are finished imploding the entire economy they are going to take all those dollars that they got from the printing presses to buy up everything worth anything, leaving the rest of those still holding dollars to fight for scraps at their local FEMA camp.

Filed Under: AIG, Barack Obama, Federal Reserve, Hyperinflation

Favorite Revolutionaries: Thomas Jefferson

March 12, 2009 By Leave a Comment
thomasjefferson
My second favorite member of the American Revolution is Thomas Jefferson. He was a staunch opponent of what has come to be known as the Hamiltonian school of thought, that bigger and stronger federal government is preferable to a more loosely organized but freer republican form of government. Hamilton won a major battle early on in the formation of the republic, establishing the First National Bank of the United States (otherwise known as Hamilton’s Bank). Despite this early defeat, the 3rd President of the United States and his ideals have had an influential role in guiding the course of thought and action in American life. Here are a few of his great quotes – it is amazing how relevant they are to this very day:


On Liberty and Tyranny: 

Educate and inform the whole mass of the people… They are the only sure reliance for the preservation of our liberty.

Enlighten the people generally, and tyranny and oppressions of body and mind will vanish like evil spirits at the dawn of day.

All tyranny needs to gain a foothold is for people of good conscience to remain silent.

I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man.

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.

Timid men prefer the calm of despotism to the tempestuous sea of liberty.

When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

I would rather be exposed to the inconveniences attending too much liberty than those attending too small a degree of it.

All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression.

Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.


On Knowledge: 
Books constitute capital. A library book lasts as long as a house, for hundreds of years. It is not, then, an article of mere consumption but fairly of capital, and often in the case of professional men, setting out in life, it is their only capital.

I do not take a single newspaper, nor read one a month, and I feel myself infinitely the happier for it.

The man who reads nothing at all is better educated than the man who reads nothing but newspapers.

I was bold in the pursuit of knowledge, never fearing to follow truth and reason to whatever results they led, and bearding every authority which stood in their way.


On Self-Sufficiency and the Right to Bear Arms: 
Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.

Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state.

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.

Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories.

Every generation needs a new revolution.


On Power and Monied Interest: 
Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor.

Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.

I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.

We may consider each generation as a distinct nation, with a right, by the will of its majority, to bind themselves, but none to bind the succeeding generation, more than the inhabitants of another country.

Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.

Never spend your money before you have earned it.

Power is not alluring to pure minds.

The earth belongs to the living, not to the dead.

- Thomas Jefferson
Filed Under: Civil Liberties

Favorite Revolutionaries: James Madison

March 12, 2009 By Leave a Comment
james_madison
I’ve always admired James Madison. Of all the Founding Fathers, his words were most aspirant, and yet always grounded in the truth of experience. This is my take anyway – we all need something pure to hold onto. Below are just a few great quotes attributed to this American revolutionary:

Do not separate text from historical background. If you do, you will have perverted and subverted the Constitution, which can only end in a distorted, bastardized form of illegitimate government.

I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations.

If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.

It is a universal truth that the loss of liberty at home is to be charged to the provisions against danger, real or pretended, from abroad.

Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives.

Americans have the right and advantage of being armed – unlike the citizens of other countries whose governments are afraid to trust the people with arms.

The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse.

The people are the only legitimate fountain of power, and it is from them that the constitutional charter, under which the several branches of government hold their power, is derived.

Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions.

- James Madison

Filed Under: Civil Liberties

Our Shovels Stop at Six

March 12, 2009 By Leave a Comment

Dead Bodies at Six

While the going was good, and money was flowing like wine the world over, everyone was happy. The bankers and financial engineers were happy because they charged huge fees and pulled in large bonuses. Government officials were happy because they could rack up debt on the government credit card to pay for all their pork barrel projects and rotten cronyism. Private equity was happy because it could raise the money to buy, rape and resell permanently damaged companies at a profit. And of course, your common, run of the mill crook running a not-too-sophisticated ponzi scheme was happy, because no one needed his money any time soon. Oh, and of course, let’s not forget the average consumer who was at this moment fully leveraged on a cocktail of student loans, car loans, adjustable rate mortgages (ARMs) and a colorful panoply of high interest rate credit card debt.

Well, as we know from history, when credit gets tight, the low-level ponzi schemes are the first to go (unless you also count the consumer in here, who drowns instantly), and make no mistake about it; Bernard Madoff is the tip of the iceberg. Parading him around Manhattan before the national media is a publicity show trial. Not once have I heard anyone in the mainstream media seriously suggest that other people were involved in this scam and demand answers NOW. Anyone with half a brain can figure out that you cannot pull off a ponzi scheme of this size alone. If we actually had real investigative reporters in the financial press instead of loud mouth impersonators like Charlie Gasparino and wanna-be economists like Steve Leesman we would have actually had a few leads by now, but budgets for that sort of “nonsense” were slashed a long time ago (though fortunately, we do have the internet, which has more than filled the gap in my view – for the time being at least).

I once heard someone say, “careful when you start digging…you go down six feet and you find six bodies, you go down twelve and you find fifty.” Why is this quote relevant? Well, it is the SEC that was supposed to be monitoring people like Madoff, so if we really want to get to the bottom of this scam we will need to investigate the SEC? Well, in order to do that we need an independent auditor intent on digging well below six feet. Because this outcome is HIGHLY unlikely, we will instead get some private, well connected and aptly greased firm to give the appearance of due diligence. We will probably get a few more bodies to execute in the public square before it is all over, but that’s about as much as you can hope for.

The real lesson that one needs to draw from what is going on now is that, in the end, blind faith in regulation and in the principles of legal recourse is a prescription for self-impoverishment. Anyone who put his or her money into Madoff’s fund without suspicion that it was a fraud has no one to blame but him/herself. Don’t get me wrong, I believe in morality and think that fraud is on par with high treason, but you have to be a real fool to think that you can trust someone else to do your due diligence for you. Besides, what do you think happened to all your stock market funds? Do you think that this panic in the equity markets that wiped out so much wealth for so many people was a result of a “cyclical downturn?” Of course not. All the looting, thieving and malpractice of financial intermediaries during the past 3 decades has hollowed out the bone marrow of the system to such a degree that structural collapse was INEVITABLE. Does anyone honestly believe that guys taking out hundreds of millions of dollars in bonuses over the course of a few years strengthened the fundamentals of their companies? Do any of you truly believe that structured investment products made up of garbage loans to overleveraged Americans and institutions represented collateral worthy of your hard labor?? Give me a break!

The only solution to this problem can come from INDIVIDUAL RESPONSIBILITY. I, as much as anyone, would love to live in a world where integrity and morality reigned supreme, but unfortunately this is simply not reality. The state and private industry will not protect you from fraud or incursions of privacy. If you want to protect yourself and your livelihood, you need to educate yourself. You can start by doing your own due diligence on the banks that you invest your money in, and for most people, putting your money in community banks whose owners you know and trust is a good start.

But of course, at the core of all this fraud lies our current monetary system, which makes true capitalism impossible. In a truly capitalistic society, workers have the option to SAVE their income in a currency that maintains its value over time. The Founders understood this, and that is why they specifically wrote in Article 1, Section 10 of the constitution:

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

Gold and Silver are commodity monies. Their value does not come from government or legal decree but rather from the marketplace. It requires effort to mine and refine gold, just as it takes effort to mine and refine oil. There is a limited supply and its production requires capital expenditure, unlike bills of credit (i.e. federal reserve notes/dollar bills). As long as the money in our bank accounts is not backed by some type of commodity that limits the expansion of the monetary base and that places the levers of that expansion in the hands of the marketplace, we will NEVER be able to limit the corruption of our current economic system. All we will get is the occasional scapegoat show trial and public execution, while the real criminality goes unpunished since it is organically inseparable from the system of government and commerce that we have allowed to grow unfettered like a bed of weeds in the garden of liberty.

Filed Under: Banks, Credit, Debt, Gold
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