International Forecaster Weekly

Bluffing The Economy, Bluffing Russia

Bernake bluffs coming Weimar economy, US Treasury collecting toxic waste, NATO outmaneuvered by Russia, Homeland Security continues to spy on citizens, Home equity up a thousand fold from a decade ago    

Bob Chapman | August 23, 2008

From Buck-Busting Ben Bernanke's mouth to God's ears (God must be getting an Excedrin Headache from all the Illuminist and neocon propaganda being wafted into His ears lately):  Inflation pressures should moderate this year amid tepid economic growth.  He also added that his inflation forecast remains "highly uncertain."   Inflation will "moderate" all right, when we go into depression in the next two to three years.  Ben is just hedging his bets with the talk about the forecast being "highly uncertain," because he knows darn well that inflation is not going "moderate" any time soon.  Meanwhile, it is bound for the stratosphere and will soon enter outer space where it will run into a hologram emanating from the world line running through the event of the former Weimar Republic during its inflationary "heyday."  Supposedly, this "stunningly good" news from Mr. Bernanke, who is now dumping barrels of moral hazard out of his helicopter on the US public along with bundles of Federal Reserve notes (aka "worthless paper"), together with another oil crash of $6.59 per barrel, was cause for a nearly 200 point Dow rally on Friday.  The drop in oil may have contributed, but the yen was weakened against both the dollar and the euro from the day previous by one and one half yen, a huge and very unnatural drop in yen strength during a single trading day.  The PPT had the Japanese bankers hit the yen, and orchestrated a hit on oil despite Russia's capture of Georgia and its resulting iron grip on European oil and gas supplies.  These PPT manipulations are what boosted the markets, not talk from Mr. Bernanke, who no one believes anymore.  Not a single one of his prognostications has come true.  Rally mystery solved.

The Illuminists have fallen into yet another box they cannot get out of.  We already told you about the box they are in because the Fed's raising of interest rates would lock up the real estate market and destroy the economy, while its lowering of rates would ignite speculation and inflation, which in turn would destroy what is left of our economy in any case.  Now, they have managed to get themselves caught in an "oil trap."  If they run oil down too low, the euro deposits plummet, thus draining gargantuan, system-killing amounts of liquidity from the banking system and bringing the credit-crunch to its final implosion.  On the other hand, if they keep oil prices too high, the added liquidity from the new flow of petrodollars, which are converted mainly to euros thus driving the dollar down, will also drive costs of all goods into the ozone, and this added cost will eventually kill the US and world economies by cutting off all discretionary consumer spending, and by eventually cutting off some necessary consumer spending as well.  They cannot raise or lower oil prices too far in either direction, putting them in a box similar to the interest rate box.  The US consumer will be especially hard-hit by high oil prices, and their weakness will be transferred to the world economy, which will not decouple.  Decoupling is a myth, like the moderation of inflation predicted by Helicopter Ben.  Eventually, the Illuminati will have to lower oil prices to keep mortgages and other consumer loans from going into default and to keep earnings and consumer spending from dropping off a precipice, events which would administer the coup de grace to the fraudsters, which are already technically bankrupt and insolvent.  That will drain huge amounts of liquidity from the system because of the euro effect, and the system, and also the dollar, will totally break down if this is allowed to continue for a period of several months, so Mr. Bernanke will have to make up for those liquidity losses with more direct injections of money and credit.  As the credit-crunch continues to worsen, as Fannie and Freddie are bailed by capital injections from the US Treasury, as the Fed exhausts its general collateral by exchanging it for toxic waste, as foreigners begin to shun treasury and agency paper due to increased risk, a falling dollar and negative real rates of return, and as bonds and derivatives implode from plummeting real estate values and rising foreclosures and loan defaults, treasuries will have to be created out of thin air.  These new treasuries will have to be immediately monetized at an ever-increasing rate, which is highly inflationary, and this will send gold and silver into inter-dimensional space.

Are the system and its fraudsters too big to fail, or are they too big to bail?  US investors and consumers are starting to think more and more that the latter is the case.  They are sick to death of being lied to, and many, including Jimmy Rogers, think Bernanke should resign for sticking it to the US public with "cutesy" financial moves and bailouts that are dripping with moral hazard.  They are sick of paying for OPF - other people's fraud.  How will the abuses ever end if no one is forced to suffer the losses which their greed, deceit, stupidity and fraud have engendered?  In fact, is that not what Bernanke promised us last year, that he would not allow this moral hazard to occur?  The truth is, that is what his Illuminist masters told him to say until the losses mounted up and the fraudsters needed to be bailed out.  That way they could shut the public up until the debacles caused panic and fear over a possible systemic breakdown, at which point Bernanke would swoop in like a savior and save the system, with the public allowing anything that would keep them from losing their precious "spendaholic" world.  The Fed can make all the new rules they want, but if there is no penalty for not following those rules, what the freak good are they?  How will US consumers be able to pay for all this fraudster fallout when one out of three are unemployed and they are faced with double digit interest rates and Weimar-like inflation?  It's not going to happen!  There will be revolution and social unrest.  The Illuminati will be run down and shot like rabid dogs, and we say good riddance to these reprobates and sociopaths when the public finally has their fill of this crap and the trials and recriminations start.  We say let the whole system come down, and let's start from scratch.  No pain, no gain.  Anything is better than what we have now, which is a military-industrial-financial complex run by satanic trillionaires who denude citizens of their earnings with rampant fraud and corruption, who slaughter our children, and what should be our foreign friends, with continual wars for profit and who are trying to make us all into serfs in the ultimate feudal system to be run by the would-be lords of the universe, but not until they wipe out billions of useless eaters with pogroms, plagues, wars, famine and eventually nukes, biochemical warfare and other weapons of mass destruction.  Is this what our brave men and women are fighting for?  Perish the thought!  These miscreants have destroyed themselves and their precious financial and military systems.  Let's keep it that way!  And let's start a new system that delivers the freedom and prosperity to all, and not just to the privileged few, which is what our Founding Fathers intended when they wrote our Constitution and Bill of Rights!!!  Make sure you vote out all incumbents in November, except for Ron Paul.

All of NATO has been totally outmaneuvered by Russia.  It is embarrassing.  It is like watching the genius, Dr. Strangelove (Putin) against the three stooges, (Bush, Cheney and Rice, or if you prefer, Kissinger, Brzezinski and Rockefeller).  Russia controls hundreds of billions in treasuries, agencies and dollar forex, and can dump them at any time, sending the US economy into a tailspin.  If China joins in with their treasuries, agencies and forex, which they might well do considering NATO's arrogance, we are all toast. Russia controls a third of Europe's oil and gas and can cut them off at any time, especially now in the aftermath of the Georgian debacle which showed Russia's resolve in spades, thus sending Europe into immediate recession and a deep freeze, and locking up their economies overnight.  NATO thinks they can bully Russia by surrounding them with new batteries of missiles, but Russia has the clear logistical advantage.  It would be like Russia trying to install missiles in Canada or Mexico.  That's not going to happen, and neither are radar towers and interceptor missiles in Poland and Czechoslovakia.  The US and its NATO allies are in no position to be messing around with a potential World War III (or if you like, IV, since it seems that III has already been ongoing).  Our military has been torn down to puny levels where we are forced to pay for expensive mercenaries and our soldiers and equipment are worn out to a frazzle.  Our economy and our financial system have already been destroyed, with the news of our demise being slowly leaked out by the fane-stream media to prevent panic.  Our military is spread too thin and has reached the breaking point, and are surrounded by hostile nations with enough weapons and equipment to cut off their supply lines and wipe them out.  This is madness, and if it continues, billions are going to die.  Perhaps that is what the Illuminati want.  They apparently haven't figured out yet that they will be the first to go.  You can run, but you can't hide, not even in your mountain bunkers.  If the Russians and Chinese don't get you, we will, and that's a promise!  You can start World War III, but we are the ones who are going to finish it, and you.  The arrogance and gall of these people is beyond belief.     

When all is said and done financial institutions are going to have to raise $10 trillion and they are well aware of that. They won’t tell you that though. That does not include their maturing debt, which is in the billions of dollars. This funding will be more expensive than before and will negatively affect profits. AIG, Morgan and Citigroup have to raise some $20 billion in long-term debt. They and others will be begging for funds at high rates over the next several months, putting even more pressure on cash flow. Combined the ten biggest borrowers have to raise $208 billion by the end of December, which is no mean feat. Unfortunately, they will be joined by other businesses competing for long term financing as well. The US Treasury will be at the trough as well crowding out all borrowers. As we have said the credit crisis is worse after a year of crisis. That readers in time will turn out to be an understatement. The increased cost of money will worsen the world economy. Banks in the first five rating levels are paying 3-3/8% to 4-5/8% over the Treasury rate or about ½% to ¾% more than the last time they financed. Some in the lower part of the upper tier are paying 1-13/16% more because of bad earnings or losses. We see the very top banks paying 8-5/8%. We see this dilemma getting progressively worse and it is going to have a large impact on the US and world economies.

Observers see what is currently transpiring in Georgia. George Bush and the Israeli’s, under the control of Zbig and Mark Brzeninski have initiated the beginnings of WWIII, a plan to destroy Russia and China in order to allow the Illuminati to reign for another century over the world. Barak Obama is Zbig’s latest puppet or Manchurian candidate if you will. A new precedent has been set. We now have two Manchurian candidates for president. The Brzeninski plan is for more ambitions than the neocon plan for Iraq, Afghanistan and the Middle East. The stakes in the current conflict are enormous, because it entails the use of nuclear weapons and the death of half the world’s population. Mankind has never been presented with such a problem.

After the outbursts by Kiev, Ukraine you can expect pressure on the government there. Ukrainian citizens do not want to be invaded by Russia, nor do they want to be part of NATO. In Georgia, Mikheil Saakashvili will have a hard time holding onto power. That is why Congress will appropriate $1 billion to keep him in power.

Although planned long ago, the operations you now see in Eastern Europe are plans of desperation. Diversions to save the Anglo-American Illuminist Empire crafted by Zbig Brzeninski. As Russia withdraws from Georgia you can expect guerrilla warfare in South Ossetia and Abkhazia. You can also expect the same for Iran. If Ukraine wants to act the time would be now by blocking Russian ships from re-entering their base at Sebastopol. If shooting starts there a wider war will commence.

Jefferson Senior High School in Los Angeles has a 58% dropout rate or only 42% of students graduate. It has the worst record in the L. A. Unified School District. It is a school where students frequently disrupt classes and teachers spend most of their time dealing with trouble-makers, about 50% of students nationwide in inner-city schools do not graduate.

Of the school’s 1,977 students, 45% qualified as English learners and more than 90% qualified for free or reduced-price lunches. The school has a 57% transfer rate as opposed to 38% across district high schools. Most children only have a mother in the home who is struggling to feed her family and give emotional support. Just 25 years ago enrollment was 31% Latino, today it is 90%. Blacks are about 10% and there is a sliver of Asians and whites.

Goodyear Tire and Rubber will close 12% or 92 of its company-owned stores and cut 600 jobs. That will cost them $30 million.

The GAO says 2/3’s of American companies did not pay corporate taxes from 1998 to 2005. Individual taxpayers get to make up the difference. In the last five years corporate earnings doubled. During the first six years of the decade, corporate tax collections were just 2.2% of GDP, far below the 3.4% average for industrialized countries.

The MBA mortgage applications index fell 1.5% last week to the lowest level since December 2000. The purchase index fell 0.4% and the refi index fell 3.7%. The 30-year fixed rate loan was 6.47%, down 11 bps. More than 77,000 properties, or 28%, were repossessed by lenders nationwide in July, up from 16% yoy. Nine of 33 major markets saw inventory rise significantly. Sacramento foreclosed inventory was 31,219 units, or more than twice to 14,913 units on the MSL listings. San Francisco saw a 190% increase, while Phoenix rose 130%.

William Tanona, an analyst for Goldman Sachs says Lehman will post a $2.5 billion loss for the third quarter. He also believes that recovery for the troubled industry is still a few quarters away, and that many Wall Street banks will focus on purging their books of risky mortgage securities. He lowered third quarter and full year estimates for Merrill Lynch, JP Morgan Chase and Morgan Stanley.

Those short Fannie Mae at $58.00 should be happy; it closed at $4.40 on Wednesday.

The NAR, National Association of Realtors Commercial Leading Indicator for brokerage activity slowed a 0.9% to 117.9 in the second quarter from 119.1 in the first quarter and was 2.1% lower yoy.

The New York AG is intensifying his probe of ARS fraud at Bank of America, Goldman Sachs and Deutsche Bank.

Goldman Sachs has reaffirmed it – calls for $149.00 oil.

The new housing program faces growing doubts among real estate experts and economists, who point out that government will now be competing with lenders and private homeowners who have been struggling to sell in a depressed market.

California communities with the most foreclosures and therefore likely to be first in line for federal aid, already have a relatively ample supply of affordable housing.

Sacramento County has a high need for affordable housing.

The federal government has been using its system of border check-points to greatly expand a database on travelers entering the country by collecting information on US citizens crossing by land, compiling data that will be stored for 15 years and maybe used in criminal and intelligence investigations.

The DHS in a federal register notice said they were guarding against terrorists. What this data collection is all about is spying on citizens and accumulating data bases on everyone. This will be accomplished by June when all travelers crossing land borders will need to present a machine readable document, such as a passport or a driver’s license with an RFID, a radio frequency identification chip. This system was authorized in the Enhanced Border Security and Visa Reform Act of 2002, the Aviation & Transportation Security Act of 2001, and the Intelligence Reform & Terrorism Prevention Act of 2004.

These laws do not authorize such a database and only authorizes the government to issue travel documents and check immigration status. This database is worse than a watch list. This is a massive fishing expedition in which government wants to know everything everyone does, especially American citizens.

Officials will record name, birth date, gender, date and time of crossing, and a photo, where available, for US travelers returning to the country by land, sea or air. Data on foreigners is held for 75 years.

Mainline analysts now believe Fannie Mae and Freddie Mac will now need $100 billion to survive. That means a taxpayer funded bailout and nationalization of the GSEs. We see losses at over $2 trillion.

Once the auction-rate securities settlements are made securities firms will probably lose 200,000 investors. It is hard to see them keeping these clients that they treated with such distain. This is very typical of Wall Street today. We hope the investors get smart and go into gold and silver related assets and Swiss franc government bonds.

The more we think about it the more we realize that the US and the Bush administration are in real trouble. Brzeninski’s plans for Eastern Europe are already in a state of failure. The imperial American monolith now under the total control of the Illuminati’s black nobility has been shaken to its very foundations. What was supposed to be a distraction to the economic and financial chaos in Washington and Western Europe and what was meant to tie down Russian forces for weeks in south Ossetia, has demonstrated that the US and Israel can no longer run a campaign, and reach their objective. All the Georgians that the US and Israel spent years training ran in terror as soon as Russian soldiers went on the offensive. Just like in Iraq and Afghanistan – it’s the gang that couldn’t shoot straight. We do not blame the grunts and the trainers. We blame the Pentagon, the Department of Defense and the top brass that created another cluster_ _ _ _ _. Are our forces’ leadership capable of winning anything? The Israelis panicked and left the country ASAP. What is next? Will both the US and Israel now leave in disgrace? We are afraid after all the cost in human life and money we will end up in the same position in Iraq and Afghanistan.

Allies of the neocons in Eastern Europe and throughout the world are going to have second thoughts about continuing to host US forces. Is it endangering their population rather than protecting it? Do we Americans really want to continue to fund bases worldwide? Is it not time we stopped being the world’s policeman and having wars for profit for the Illuminists in Washington and on Wall Street? If the US refuses to leave then they become an enemy – an occupying force. Where was the US State Department while this was going on? They obviously were hiding and eventually sent the nitwit Condi Rice into the fray. All the hard work, in an attempt to save the day for the Illuminists was done by France’s President Nicolas Sarkozy. What incompetence and stupidity. Next we will see NATO forces leave Afghanistan. Russia has won the initiative. It has broken out into a world leadership role. The geopolitical results for the US will preempt them from holding further top standing in Europe. From here on out Europe is going to move their political policy independent of the US. It is very important as well that it will now be recognized that US forces are no longer needed in Europe and should be finally withdrawn. NATO will soon be history. It has lost its reason to be. Lastly, the agreement the US has made with Poland on the neocon missile shield is not a NATO deal. The other EU nations wouldn’t go along with the program so the US had to go it alone. We could have in reverse another Cuban missile crisis. This time the US backs down or the world is incinerated.

Twenty-five years ago home equity loans totaled $1 billion and a year ago they amounted to $1 trillion, a 1,000-fold increase, which doesn’t include the first mortgage or credit card debt. Americans have been living large.

The regulators that seized IndyMac last month said they would help thousands of the failed thrift institutions cash-short borrowers repay their mortgages and stay in their homes, a model it hoped other banks and collection companies would adapt to stem the wave of new foreclosures in the nation’s weakened housing market. They will offer lower priced, fixed-rate loans if they can show they are delinquent or in default on their mortgages. This is coming from the FDIC. When they run out of money you will get to pay for these bailouts.