(NaturalNews) In 1942, German intelligence officers rounded up skilled Jewish prisoners and launched Operation Bernhardt, a clever scheme designed to counterfeit hundreds of millions of dollars worth of British Pounds and destroy the British economy by flooding it with counterfeit money. Located in the Sachsenhausen concentration camp, Operation Bernhardt was, even by modern standards, a runaway success that resulted in the creation of forged bank notes worth 132 million British Pounds.
This “economic warfare” operation resulted in a devastating economic effect on the British economy. You can read the true history of this operation here: http://en.wikipedia.org/wiki/Operation_…
It is important to note that Operation Bernhardt was an act of war, specifically pursued for the purpose of destroying Britain’s economy by creating so much new money that the value of the money already in circulation would plummet. This was considered a strategic attack, just as effective as carpet-bombing tank factories or mowing down soldiers on the field with German-made MG42 machine guns.
What does all this have to do with the Federal Reserve?
Today, the Federal Reserve is engaged in an eerily similar operation, counterfeiting trillions of dollars in U.S. bank notes and flooding the U.S. money supply with money created from nothing. The result, of course, is the same as was intended by Operation Bernhardt in 1942: The economic destruction of the target nation. Only this time, the target is the United States of America. Read the rest of this entry »
Zeitgeist - Addendum , exploring the Federal Reserve System, IMF, World Bank, debt based finance and more, has just been released and made available at Google video, YouTube, and of course the official Zeigeist website. Considering recent economic events it is sure to be watched by millions of outraged citizens worldwide and feared by the elite few.
Why is the mainstream media –which keeps lecturing Americans that Treasury Secretary Henry Paulson’s Bailout Package Version 2.0 must be passed immediately– ignoring what might be the most earth-shattering provisions in Paulson’s package?
The media needs to start asking hard questions. Here is where they need to start. If you look at page 180 of the 451-page monster bailout bill that easily passed the Senate yesterday (PDF here), you will see that it includes at Section 116 language about the tax treatment of “industrial source carbon dioxide.” It also provides, at Section 117, for a “carbon audit of the tax code.”
What could a provision about the tax treatment of “industrial source carbon dioxide” and another provision about doing a “carbon audit” of the tax code possibly have to do with restoring confidence in Wall Street’s troubled credit markets?
“Sept. 25 (Bloomberg) — Dallas Federal Reserve Bank President Richard Fisher said the proposed $700 billion rescue of financial institutions backed by Fed Chairman Ben S. Bernanke would plunge the U.S. government deeper into a fiscal abyss.
The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions would put “one more straw on the back of the frightfully encumbered camel that is the federal government ledger,” Fisher said today in the text of a speech in New York. “We are deeply submerged in a vast fiscal chasm.”
Now here is how it reads after “Update 1″
“Sept. 25 (Bloomberg) — Dallas Federal Reserve Bank President Richard Fisher said the U.S. Treasury’s proposed $700 billion rescue of financial institutions would be “a critical first step” toward calming markets even while adding to the U.S. government’s fiscal burden.
The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions “is an incremental addition to the federal government ledger,” Fisher said today in a speech in New York. Existing federal obligations in Medicare and Social Security mean “we are deeply submerged in a vast fiscal chasm,” he said. “
Treasury Secretary Paulson’s edict to create a $700 billion fund to buy worthless mortgage securities from agitated wealthy bond investors is nothing short of a final step on the path to the end of the republic. The secretary claims he can only be effective if his decisions are beyond judicial review.
Our government and its owners appear to be testing how much the American public will tolerate. A few years ago, no one could have imagined that the silent majority would quietly accept thefts of this magnitude from a government that stopped tiny payments to single mothers with poor children in the name of welfare reform because the program’s $10 billion cost was breaking the federal budget.
A former senior advisor to the U.S. Treasury and highly-regarded economics professor, Nouriel Roubini, says that Washington’s bail outs are “socialism for the rich, the well connected and Wall Street; it is . . . a corrupt system where profits are privatized and losses are socialized.”
In fact, this is a quintessential characteristic of economies run by fascist regimes.
For example, historian Gaetano Salvemini argued in 1936 that fascism makes taxpayers responsible to private enterprise, because “the State pays for the blunders of private enterprise… Profit is private and individual. Loss is public and social” (page 416).
I can’t help but notice the Next Big Story on America’s financial meltdown isn’t getting much press this morning on the mainstream media, so let me break it to you here:
The FDIC - the iron-clad $100,000-per-person-per-bank insurer that has “never failed” to deliver and has been continually promising during this crisis that your money is safe (read: “please don’t run on the bank”) - is underfunded. Woefully. To the tune of about $150 billion, and it’s going to need a bailout of its own within the next year. Read more here.
The FDIC expects about 100 banks to fail between now and the end of 2009. Is yours among them? Perhaps. But you’re not allowed to know. Ignorance is good for you in a democracy, apparently. And especially good when you’re trying to avoid a total market meltdown.
To the Speaker of the House of Representatives and the President pro tempore of the Senate:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come. Read the rest of this entry »
The Fed has claimed that this is a “liquidity crisis.” | Really Ben? Then perhaps you can explain this?
Note that this is an intentional drain of “slosh”, or liquidity, from the banking system. $125 billion in the last four days drained?
You wouldn’t be trying to intentionally cause a bank failure or two to bolster your call for the $700 billion “bailout” plan, or perhaps intentionally lock the short-term credit markets, would you Ben?
If the market has a liquidity crisis, why would you be intentionally draining reserves from the banking system? Don’t you think you ought to explain that to Congress?
Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike.
The events of the past week are no exception.
The bailout package that is about to be rammed down Congress’ throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. Two weeks ago, financial analyst Jim Rogers said the bailout of Fannie Mae and Freddie Mac made America more communist than China! “This is welfare for the rich,” he said. “This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters.”
That describes the current bailout package to a T. And we’re being told it’s unavoidable.
The claim that the market caused all this is so staggeringly foolish that only politicians and the media could pretend to believe it. But that has become the conventional wisdom, with the desired result that those responsible for the credit bubble and its predictable consequences - predictable, that is, to those who understand sound, Austrian economics - are being let off the hook. The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!
The sort of ban that we saw this morning on shorting - 800 stocks - is both foolish and unprecedented.
There are many, many reasons to short a stock that have nothing to do with trying to drive a stock into the ground.
For example, if you’re concerned about a preferred stock issue, you might short the underlying while being long the preferred. This gives you a 100% safe coupon - that is, dividend - while exactly balancing (or close to it) your risk.
This ability to hedge off that risk just disappeared.
Now has there been manipulative conduct and predatory shorting? Yes.
But you can’t short a company and make money unless the company is overvalued in the first place. If you try it you will lose your shirt as the actual value, as discovered, will cause the price to rise instead of fall, your short sale notwithstanding.
And make no mistake about it - this crisis is not an accident. It is in fact a deliberate act - by our government.
19/09/08 “The Nation” — - Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses–many hundreds of billions, maybe much more. What’s not to like if you are a financial titan threatened with extinction? Read the rest of this entry »
WASHINGTON (AP) — Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.
The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation’s largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.
Treasury has already come to the rescue of several corporate victims of the housing and credit crunches. The government took over mortgage finance companies Fannie Mae and Freddie Mac, and helped finance the sale of investment bank Bear Stearns to J.P. Morgan Chase & Co.
Eleven federally insured banks and thrifts have failed this year, including Pasadena, Calif.-based IndyMac Bank, by far the largest shut down by regulators.
Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC’s insurance fund, said Brian Bethune, U.S. economist at consulting firm Global Insight.
In an unprecedented move, the Fed and the International Swaps and Derivatives Association allowed derivatives trading today, on a Sunday, to “reduce risk associated with a potential Lehman . . . bankruptcy.”
As the very even-keeled and level-headed chief executive of Pimco, the world’s biggest bond fund, said:
“This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today’s highly disrupted financial markets, the unthinkable is thinkable.”
What is the “unthinkable” he’s referring to?
Another great depression. Perhaps even a world-wide depression.
To see why derivatives are the key to the financial crisis in the U.S. and the world, and why the Fed allowed derivatives trading today, read this.
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