International Forecaster Weekly

Enron loophole now being used for oil speculation

Sen. Phil Gramm and some of his trite ideas on the economy, his enron loophole law that is still in effect and driving oil speculation, and other blunders and folly of economists in power, credit default swaps, Fed grabs more power, get out of the markets or get ready to experience the consequence, G8 gastronomic orgy served while discussing food crisis, America no longer any kind of model citizen in the world.

Bob Chapman | July 12, 2008


From former Senator Phil Gramm's mouth to God's ears:

As quoted from the Washington Times:
    "You've heard of mental depression; this is a mental recession," Gramm told the Times.  He noted that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices.  "We may have a recession; we haven't had one yet.


    "We have sort of become a nation of whiners," Gramm said.  "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.


    "We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years.


    These quotes from former Senator Gramm, who is one of the most corrupt personalities of Washington politics and who we can only describe as the penultimate example of both a reprobate and a sociopath, will go down as the most false, crass and callous remarks in the history of American politics.  This may well have cost Dumbo Presidential candidate, John McCain, who Gramm advises on economic matters, the presidential election this November.  We are left stunned and speechless at the unmitigated arrogance and gall of this miscreant.  Under what rock, we ask, did the elitists ever find this ball of slime and detritus?


    Now mind you that this is the man who helped push through The Financial Modernization Act of 1999, also known as the "Gramm-Leach-Bliley Act," which effectively repealed the Glass-Steagall Act which was passed during the Depression Era as a measure intended to avoid a repeat of the 1929 Stock Market Crash.  The Glass-Steagall Act prohibited a bank from offering investment, commercial banking and insurance services, or from consolidating with other companies providing such services.  The ill-advised, spurious and egregious repeal of the Glass-Steagall Act is the single most important factor driving the subprime and credit-crunch debacles because it allowed rampant fraud and outrageous conflicts of interest to develop between different financial sectors, resulting in a complete breakdown of confidence and trust in our system of finance which has been destroyed right before your eyes. "Gramm's Blunder" and "Greenspan's Folly" together have powered the fraud and deceit that made the subprime debacle possible. The passage of the Gramm-Leach-Bliley Act, more than any other causal factor, destroyed the due diligence and integrity of the entire financial sector, and paved the way for rampant and outrageous fraud by dismantling the usual system of checks and balances.


    And then there was the Commodity Futures Modernization Act which reprobate Gramm snuck through on an unsuspecting and uncomprehending Congress in the year 2000.  This piece of work allowed the so-called Enron loophole which is currently being exploited by insolvent banks and other large financial institutions to speculate in oil futures.  This speculation is now driving oil prices into the ozone so that these insolvent Illuminist banksters can save their balance sheets while what is left of our hapless economy is destroyed in the process, a process that will ultimately destroy the world economy as well.  Mr. Gramm and his wife, Wendy, a former CFTC Chairwoman who later served on Enron's board of directors, were involved in the infamous Enron scandal up to their eyebrows.  They are the ones who should have been on trial by the US government.


    Even more toxic and mega-destructive than the Enron loophole is this act's deregulation of credit default swaps, which are essentially insurance policies against bond losses.  Normally insurance products are regulated by the states, and this act keeps both the states and federal regulatory agencies such as the SEC and CFTC out of this arena.  These swaps are what powered the subprime debacle by providing insurance to cover what might otherwise have proven to be risky investments and such insurance was used to justify the bogus AAA ratings, which lured in the unsuspecting sucker-dupes.  The notional value of these swaps is in the tens of trillions of dollars and they are currently imploding as failing subprime borrowers, banks and business corporations default on their debts, adding to our current financial woes in spectacular fashion.  Mr. Gramm now works for Illuminist bank UBS, which has become the biggest victim of this toxic legislation.  No matter, performance is not an issue if you are an Illuminist piece of scum.


    Apparently, at least according to Mr. Gramm, the destruction of our economy by profligate financial policies, powered by his toxic legislation, an out-of-control Fed and the elitist free trade-globalization agenda, is all a figment of your imagination.      You're really not experiencing hyper-stagflation and runaway oil and food prices. Never mind all the silly talk about negative GDP and severe recession, which our totally truthful and infallible government statistics prove do not exist.  Never mind the increasing trade deficits and lopsided balance of payments, as it is quite clear we are experiencing an export boom in our virtually nonexistent manufacturing sector. And never mind that minimum wage service job you had to take after your previous lucrative job was off-shored or given to an illegal alien for a fraction of what you were paid, as it is clear that you are now a proud participant in our dynamic service sector whose slave labor now produces 80% of our GDP.  By the way, you know that seemingly real unemployment line you are standing in right now due to off-shoring and outsourcing by Illuminist transnational conglomerates, well, that is just another phantasm.  So stop whining, pop another valium to drive away your thoughts of mental recession, and plug yourself into the electrodes of your Goldilocks Matrix pod.  Don't worry, and be happy that people like Mr. Gramm are in charge of your financial well-being and security.  Oh, and incidentally, on that note, may we strongly suggest that you don't take any Prozac, since you might become suicidal.


    Phil Gramm and Alan Greenspan should be tarred and feathered and put on a boat that is never allowed to return to shore as "men without a country."  Mr. Gramm's wife, Wendy, can man the oars.


    The fact that John McCain uses Grimy Gramm as an economic advisor tells you everything you need to know about John McCain - none of it good.


    This transpires as Benron Bernanke and Hanky Panky Paulson recommend to Congress that the Fed be given sweeping regulatory power over our entire financial sector which the Fed's profligate and ill-advised monetary policies and Grimy Gramm's legislation have completely and utterly destroyed, leaving nothing but burning embers which will later be poured into a funerary urn labeled:  "US Financial System - R. I. P."  You just can't make this stuff up.  It is nothing short of surreal.  We recoil in disgust at the shear arrogance of these slime-balls.


    Well, the meltdown continues.  Men of "Chaos," better quickly get those two dark liquidity bourses, Project Turquoise and Baikal, up and running while you can still get out of the markets behind everyone's backs -while we still have markets, that is.  The Dow on Friday dropped below 11,000 before closing at 11,100.54, the lowest close since August 14, 2006, some 23 months ago.  On August 14, 2006, spot gold closed at 626.60, while this Friday spot gold closed at 958.85.  Dow: Zippo - Gold: +53% - GET THE PICTURE?!


    When the yen was at 96.88 yen per dollar and 152.731 yen per euro on March 17, 2008, Saint Patrick's Day, the Dow closed at 11,972.25.  Now with the yen at 106.14 and 168.741, the Dow has been pile-driven down to 11,100.54, despite a vastly weaker yen and support from the PPT.  What does this tell you?  We'll tell you what this tells you - GET OUT OF THE FREAKING STOCK MARKETS - NOW!!!  The carry trade is no longer relevant to market support.  Worse yet, as the dollar continues its descent, the yen will become ever stronger against the dollar, thus destroying both the carry trade and the stock markets.


    The Night of the Living Dead, meaning dead, bankrupt and insolvent banks, will soon be upon us.  Their deadly losses are going to rise up and destroy us.  It's time to flee in terror!  According to Fortis, a banking, insurance, and investment company, based in Belgium, the zombies could be 6,000 strong.  Try not to scream!  


    Well, since the recent oil takedown barely made gold and silver hiccup, probably due to profits from oil shorts and stock index puts carried by large specs as protection against the cartel's PPT manipulations, the cartel went back to destroying the stock markets, immediately cashing in on recent point gains from the oil takedown.      They do this to chase money out of stocks into bonds and money markets, which supports the dollar and bond principal while reducing bond yields and hopefully interest rates.  Remember, treasuries are a large part of the bond market.  Despite Friday's crash and end-of-day PPT miracle, gold and silver went ballistic anyway, and the dollar plummeted.  The cartel is fighting a losing battle as gold is preferred as a safe-haven when stock markets fall, and as a hedge when increased liquidity from the PPT and support from carry traders takes markets higher, if that is even possible now.


    We love to listen to the rumors they make up to justify manipulations like the recent oil liquidations.  First, we hear about the potential Iranian cooperation with Washington that was jawboned to take oil down and to suppress precious metals.


     After the suppression of gold and silver mainly failed, off went the missiles and the renewed jaw-boning about the never ending story of an Israeli attack on Iran to push oil back up to save the Wall Street bankster fraudsters, who are exploiting the oil markets using Grimy Gramm's despicable Enron loophole.  They managed to set a new high for oil in the process, sending oil to $147.27 before it closed at $145.08.  And never mind the stock markets, which can drop into the depths of hell for all the cartel cares.  The cartel is intent on only two things, namely, the suppression of precious metals and the maintenance of the bond market's viability.  Unfortunately for the cartel, the launch of the ballistic missiles made gold go ballistic also, which had to tick them off to no end.  On Friday, gold blew past $950 like it wasn't even there and went as high as $967.85, resulting in big gains for the week just as we predicted.  Silver went up big also.
    By saving the bond market, the cartel is attempting to give the fraudster banks a temporary reprieve from the complete and utter destruction, which many of them will likely suffer.  They want to keep the system going long enough so they can bail and leave everyone else holding the bag just like they did in 1929.  Just before the Fed pulls the plug, the word will go out to the Illuminist insiders who will bail out through the dark pools of liquidity while pouring the proceeds into commodities and other hard assets, especially precious metals, of which the chiefs of the Illuminati own tens of thousands of metric tons.  Their bullion hoards are kept in Swiss vaults and off-shore locations where they can't be confiscated by angry mobs seeking revenge for the destruction of markets worldwide, or by governments looking for some easy gold to cover their losses.  If there is a confiscation, the ETF's will be first in line, while individual investors in possession of their metals will most likely be left alone, as they would not be worth the bother.  You should invest in gold and silver accordingly.    Don't worry, be happy.  It's all just a bad dream like Grimy Gramm suggested.  Fannie and Freddie, and the 5 trillion worth of heavily toxic-waste-type real estate loans they insure, are too big to fail, we are told.  They will simply be bailed out with more equity injections and life will go on as usual in the real estate markets, which would be totally frozen in a cryogenic state without them.  If you believe this latest fantasy from the cartel's dream weavers, can we simply suggest that you are incredibly naive?  These two bankrupt quasi-governmental agencies will be bailed all right, but at your expense.  No one in their right mind would give either of these losers any more capital to vaporize and blow out of their anal sphincters.  Whether they go into some type of resolution trust company, get bailed out by the Fed ala the Bear Stearns bailout or something like the Term Securities Lending Facility, or are absorbed directly by the government based on the inferred guaranty of bad loans becoming an actual guarantee, you the taxpayer will be screwed.  Someone has to pay for all the losses, and we can assure you that unless you do something about it, that someone will not be the fraudsters who caused the losses in the first place.  Any of these bailouts will result in much higher taxes, even more hyperinflation, or, most likely, both.  Treasury bonds will be created and monetized out of thin air, and will take us on a historical journey to Revolutionary France, Weimar Germany and Zimbabwe.  The higher taxes and monetization of bonds created out of thin air will destroy the economy and the real estate markets will lock up anyway, as real estate losses continue to mount from job losses, from frozen markets caused by double digit interest rates based on higher risk and wildly higher inflation, as well as from the drastic reduction of purchasing power as the whole system collapses.  Gold and silver are the only safe-havens from the total certainty of this coming destruction.  THIS DESTRUCTION IS A LOCK!!!


    After the end of this year, you will never see three figure gold again in your lifetime, and five figure gold is a distinct possibility.


    You are not powerless to prevent the losses you are experiencing.  By staying in the general stock market, or in dollar-denominated bonds, or in any kind of fiat currency-denominated bonds for that matter, you are not in it for the long term as Charles Schwa, Gven to their nominal levels.  When it comes to preeminent disasters, this is the real McCoy.  This is not a drill.  Instead, those who do not prepare are going to get drilled.


    One month gold lease rates and one, two and three month silver lease rates are now all negative, which means they will pay you to lease both their gold and silver short term.  So much for earning a return on non-income producing assets, which is the usual excuse given for leasing.  The leasing of precious metals is really all about gold and silver suppression, and little else.  The longer term rates are ludicrously low as well.  But of course we have free markets.  Yep, just keep pumping money into the ETF's so the bullion banks can lease your gold and silver from the ETF's against you whenever the PPT demands it, AND GET PAID FOR DOING IT!!!  


We don’t normally cover gourmet dining, but with a global food crisis in full swing we thought we would bring the eating habits of the G-8 attendees to your attention.


Over the past few weeks’ politicians have been urging us to stop wasting food and to combat rising prices during the current shortages.


By way of an example world leaders sat down to an 18-course gastronomic extravaganza at the G-8 summit in Japan, where they focused on the food crisis.


At dinner, or a six-course lunch the Illuminists had caviar, milk fed lamb, sea urchin and tuna, with champagne and wines flown in from Europe and the US.


This points out how hypocritical these elitists are. As they wolf down this sumptuous repast they concluded that householders were wasting 4.1 million tons of food.


What this cross action does is betray the hopes of a generation of children. It was just three years since the G-8 meeting in Scotland where these heads of state promised $50 billion a year by 2010 for Africa. They have only supplied 14% of that. They are too busy stuffing themselves with caviar and milk forced fed veal. Just think you suckers get to pay for all this. The good news is that the Japanese are paying for the 40,000 police that have sealed off Toyako, Lake Toya and the Windsor Hotel.


Congressional approval has fallen to 9% for the first time in history; 52% of those surveyed say Congress is doing a terrible job. Congress has not received higher than a 15% rating since January.


Democrats who gave Congress positive ratings fell from 17% to 13% this month. Republicans gave an 8% rating, up from 7% last month; 65% of GOP voters said Congress is doing a poor job.


Of independents, 3% gave Congress a positive rating, down from 6% last month; 63% believe Congress is doing a poor job, up from 57% last month.


Just 12% of voters think Congress has passed any legislation to improve life in America over the past six months.


Seventy-two percent think most members of Congress are more interested in furthering their own political careers and only 14% are genuinely interested in helping people.


Fannie Mae and Freddie Mac, ranked Aaa by the world’s largest credit rating companies, are being treated by derivatives traders as if they were five levels lower.


Credit-default swaps tied to $1.45 trillion of debt sold by the pair imply the bonds should be rated A2.
The MBA says their index of mortgage applications increased 7.5% in the week ended 7/4/08. Refi apps rose 8.7% - the 30-year fixed rate mortgage rose 10 bps from 6.33% to 6.43%.


Dump those dollars. Buy up America cheap. New York’s Chrysler Building, the art deco icon, has been bought by ABU Dhabi Sovereign Wealth Fund. Last month they bought the GM Building for $2.8 billion.

The damning unpublished assessment is based on the most detailed analysis of the crisis so far. The figure emphatically contradicts the US government’s claims that plant derived fuels contribute less than 3% to food prices. This should add pressure on governments in Washington and across Europe to end the process.
The British Gallagher Report on the impact of biofuels will be released soon and it will state that plant fuels have played a significant part in pushing up food prices.


Rising food prices have pushed 100 million people worldwide below the poverty line, estimates the World Bank. The biofuels is the first real economic crisis of globalization. Over the past six years biofuels have been responsible for an increase of 140% in food prices.


The US has 5% of the world’s population and almost 25% of the world’s prisoners. There are 2.3 million criminals behind bars, the most in the world. China with 4 times the population has 1.6 million in prison. If you count only adults you have one in 100 Americans locked up. Russia has .63, England .15, Germany .9 and Japan .6.


Far from serving as a model for the world, contemporary America is viewed with horror. Even though record numbers are in jail the US has relatively low rates of non-violent crimes. The key is drug related crimes. In 1980 there were 40,000 people in American jails for drug crimes. Today, there are about 500,000.


American prison stays are much longer. Burglars in the US serve an average of 16 months in prison versus 5 months in Canada and 7 months in England.


Experts in the US say locking up criminals for longer periods reduces the level of crime. Canada’s crime rates have closely paralleled America’s for 40 years, but its imprisonment rate has remained stable. The bottom line is America has a highly politicized criminal justice system.