International Forecaster Weekly

The Key To All Market Analysis

Bonds keep the system working, Inflation a threat when money moves out of bonds again, funny money dealers, bond market like a drug cartel keeping investors addicted, real estate bubble, bonds a threat to the stability of the entire market system.

Bob Chapman | July 5, 2008

The key to all market analysis is the bond market.  It is the lynchpin to the elitists' power.  It is the keystone to their arch of fraud whose stones consist of the various methods, which they use to pauperize the middle class and to extort and control the financial systems around the world.  This market is worth over 45 trillion worldwide with the US share of that market being worth about 25 trillion.  The bond market has five main categories, namely, corporate bonds, government and agency bonds, municipal bonds, bond derivatives such as mortgage-backed securities, asset- backed securities, and collateralized debt obligations and funding bonds.  The bond market is used to keep all business interests in thrall to the Illuminist system of finance.  Therefore, the Fed will act to save the bond market at all costs.  All other markets are secondary, with the exception of the gold and silver markets, the suppression of which is JOB ONE at the Fed.  Any other markets, in particular the stock markets, will be sacrificed in a New York second to save the bond market.  Knowing this provides a certain amount of clarity when predicting what the cartel will do in any given situation.

US treasury bonds, which are a large segment of the bond market, are used to absorb trade deficits caused by free trade, globalization, off-shoring, outsourcing and both legal and illegal immigration and to keep all the inflation we have exported abroad from returning home.  Foreign countries with large forex reserves are told to use their dollars to buy interest-bearing treasuries instead of buying hard assets in the US which would be highly inflationary for our financial system because exported dollars would then reenter our domestic economy and increase our money supply.  In this way, the rampant inflation caused by profligate issuance of money and credit by an out-of-control Fed in its attempt to cover up the destruction of our economy stays safely overseas, having been absorbed by the treasuries.  This profligate issuance of money and credit was created by the Fed to support the free trade-globalization agenda and the transnational conglomerates, which are gutting our economy, especially our manufacturing sector.  This Ponzi-scheme is now unraveling as foreigners shun dollar-denominated treasuries yielding negative real returns as inflation, a falling dollar and increased risk destroy the value of outstanding treasury bonds.  The floodgates are now starting to open as a sea of dollar forex flees in terror from dollar-denominated treasuries into hard assets, the effects of which you are already starting to see in highly elevated commodity prices which are also being driven by banks that are desperate for profits to improve their balance sheets by exploiting the Enron loophole.  Hold on to your hat, because this flow of money back into our domestic economy is just getting started.  That is why the FTC is discontinuing publication of its statistics regarding foreign investment in the US, citing budgetary concerns, just as the Fed did with M3.  Wait until all this money pours back into the US economy.  Inflation will go inter-dimensional and take us through a wormhole back to the days of the Weimar Republic as gold and silver head for the Einstein-DeSitter radius at the outermost bounds of the visible universe.

 Treasury securities are also used to fuel the Fed's repo pool which is used to power the PPT's market manipulations by making tens of billions of dollars available on a moment's notice.  The Fed creates money out of nothing to buy treasuries from the primary dealers, who then use the sales proceeds to fund the operations of the President's Working Group on Financial Markets which assists the elitists in stealing from you on a 24/7 basis.  The dealers offer to buy these securities back from the Fed within a month or less in what are called repurchase agreements.  Thus, this "funny money" is shoveled back and forth from the Fed to the primary dealers and from the primary dealers back to the Fed as needed whenever the Illuminati deign that financial assistance for manipulation of markets is needed.  Treasuries are therefore the engine which drives this fraudulent scheme, a scheme that is completely illegal because the authority granted in Reagan's Executive Order creating the PPT is exceeded beyond all belief in what one day will be exposed as the greatest abuse of financial power by US government officials in the history of our country.  Because of this blatant illegality, Buck-Busting Ben and Hanky Panky Paulson deny that the PPT does anything but meet occasionally to brainstorm pending issues.  Those two are some piece of work.
The bond market also serves as a product pool for the Illuminist financial drug cartel, which sells over-rated crack-credit-derivatives with attractive yields that are used to addict institutional investors in much the same way as drug dealers dupe drug addicts into a life of drug addiction by offering attractively priced samples of their "products."  The bond market is therefore the primordial soup from which the toxic waste products of "financial engineering" issued forth, and is the true birthplace of the credit-crunch debacle.  The bond market was used to manufacture fraudulent toxic waste derivatives of various poisonous flavors by slicing, dicing and re-securitizing various types of assets that were being used to secure existing bonds, lacing these re-securitizations with toxic tranches of risk based on assumptions about performance and default that were patently false, and pawning them off on mainly institutional investors as AAA paper with help from co-conspirators in the ratings agencies.  The creation of this toxic waste was also enabled by fraud from top to bottom that was perpetrated by lenders, underwriters, originators, appraisers and borrowers.  Subprime mortgage derivatives are but one example of this.

The bond market is also the source of funding for all larger business concerns seeking to leverage their growth and income flows and attempting to maximize shareholder equity.  Once a business tastes cheap credit, there is no turning back.  Trade in this credit-crack was fueled and expanded to new heights by none other than Mr. Bubbles himself, Alan Greenspan, by pushing the Fed funds rate down to a ludicrous 1.0% as directed by his Illuminist masters.  Most, if not all, large businesses continue to over-utilize what used to be substantially cheaper money and credit to finance large portions of their operations by selling bond issues.  Without this money and credit, these businesses would wither and die, and the elitists control this money.  Further, much of this bond debt was floated at a variable rate of interest tied to the prime rate, which could soon blast off into outer space in a rocket powered by hyper-stagflation, a rapidly declining dollar and ever-accelerating risk caused by ever-increasing defaults on debt across the board.  The Fed has lost control over interest rates, which will now be what bond investors require them to be.  This rate disaster will eventually destroy corporate profits and propel us into recession and depression.  Gold and silver are your only refuge.

As many poor souls are painfully aware, the bond market was also used to dupe auction rate municipal bond investors out of their money by promising AAA ratings and liquidity as good as cash.  These investors chased after higher yields on what they thought was secure municipal debt in a liquid market backed by AAA rated bond insurers that in reality were leveraged to their eyeballs and should never have had AAA ratings.  The elitist institutions that created this market are now refusing to keep this market going or to make good on their promises to investors.

Quite notoriously, the bond market was used to fund the real estate bubble by providing funds from bond investors chasing higher yields to mortgage lenders who then lent the money to people who should never have bought homes to begin with.   These mortgage lenders then sugar-coated the resulting toxic waste with fraud heaped upon fraud.  These mortgages were then packed into the tranches of various new toxic waste derivatives and were often sold back to the very bond investors who had originally provided the funds to the mortgage lenders to begin with.  The proceeds from the sale were thus recycled back to the mortgage lenders to create more toxic waste, completing the cycle of doom.  This was nothing short of a continual rollover of fraud and deceit, which ended abruptly when Oppenheimer analyst Meredith Whitney exposed the overvaluation of Citigroup's toxic waste.

Note how the elitist financial institutions that run the bond market, in cahoots with the ratings agencies, have used their positions of power and influence to suck in the money of gullible investors while generating enormous profits for Wall Street banks, investment banks, brokers and securities dealers in the form of commissions, fees and spreads.     

The bond market is where the Illuminists park their money when they are not using it in some other scam.  They use the bonds to make greater returns through arbitrage, borrowing cheaply from each other or by floating commercial paper and then investing the proceeds in higher-yielding, longer-term bonds and derivatives.  This was also powered by Mr. Bubble's 1.0% debacle.  This scheme for generating profits has unraveled as the value of the toxic waste bonds and derivatives given as security for the commercial paper have imploded due to defaults and declining real estate values, and as rising short-term interest rates have destroyed yield spreads while eroding the principal value of the bond collateral.  The elitists and other institutional investors borrowed short-term, and invested long term, after which the yield curve became inverted and the toxic waste collateral became overvalued and unmarketable, thereby putting the commercial paper market into a cryogenic state.

And then there is the whole derivatives market of credit default swaps and interest rate swaps, which are simply extensions of the bond market through "financial engineering" to provide a form of insurance for the bond market based on bond performance in terms of repayment of both principal and interest.  As defaults have accelerated, these swaps have multiplied like rabbits and will soon reach about one quadrillion dollars worth of notional principal.  This is the financial version of the China Syndrome waiting to happen.  First there will be trouble with credit default swaps as banks and large corporations fail due to a severe recession, a horrible real estate market that grows worse by the minute, hyper-stagflation, insolvency, negative yields on investment, a collapsing dollar and a complete and utter collapse of consumer spending and confidence which will continue to set all-time lows.  These circumstances will then send real interest rates into double digits, after which the interest rate swaps will implode, taking the entire world financial system down with them.  This quivering, quadrillion dollar caldera of molten death is what distinguishes our current debacle from all previous financial disasters.  When this caldera erupts, it will make what happened in the 1930's look like a picture of prosperity.  Americans have no idea how bad this situation really is.  Unfortunately, they are going to find out very soon, after it is too late.  Do not be like them!  Buy gold and silver, take physical possession of it, and wait for the financial mushroom clouds to appear.  What will be a disaster for the uninformed will be the greatest profit-generating event of all time for the informed.

So as you can see, based on all of the foregoing, the bond market is crucial to the continuation of the elitist power structure and is the starting point for all market analysis.  If the bond market is destroyed, most of the Illuminists themselves will go down with it except for those Illuminists who maintain extremely large gold and silver hoards which consist of many thousands of metric tonnes of bullion, which they keep secretly offshore and in private Swiss vaults as their failsafe.  Basically, this means that the leaders of the Illuminati, who have been hoarding gold and silver for centuries, will survive, and their henchman will be beaten, beggared and left for dead as befits them for siding with the evil reprobates and sociopaths at the top of the Illuminist food chain.  Essentially, the henchmen will be cannibalized by their thieving criminal bosses, who have acquired their gold and silver bullion through theft, fraud, conquest, colonialist raping of assets and fire-sale purchases from despicable scum-bags like Gordon Brown, the King of Fire-Sale Gold, who sold out the British national gold for what now amounts to a 70% or greater discount from current prices.  When gold breaks into five figures, the British people will have been bilked out of 125 billion dollars on the 400 tonnes that Brown sold to people like the Rothschilds at the bottom of the market.

These elitist gold and silver hoards are not only their failsafe against financial disaster, but may well be intended to privately back a new regional currency instead of using governmental reserves for backing.  This would give the elitists absolute control over the supply of money and credit.  According to these reprobates and sociopaths, we will have a gold standard once again, but this time the Illuminati will have most of the gold, having stolen, leased or swapped it out of our Treasury, and will set the standards, not our government, which will abdicate all financial power to the privately owned Fed.  Already, the elitists are seeking, through mouthpiece Hanky Panky Paulson, supreme control over regulation of financial markets through the Fed as well.  According to Hanky Panky, it is only natural that the creators of all the financial plagues we are now suffering should be put in total charge of regulating markets to prevent such debacles from happening again.  Only in America.

The primacy of the bond markets, and the elitist's supreme objective of gold and silver suppression, together explain what is happening in stock markets worldwide.  Their bid to boost stock markets to a blow-off top has failed utterly, and their greed and deceitfulness are the primary cause of this failure.  As a result of the subprime and other derivative fraud, the credit-crunch was engendered, and this has crippled the economy, exposed the overvaluation, overrating and lack of marketability of huge cross sections of the bond and derivative markets and negated the fractional reserve banking multiplier, thereby cremating both balance sheets and income statements alike for banks and other financial institutions in a fiery furnace fueled by false asset valuations and ebbing income flows.  Banks do not trust each other, much less non-banking customers, for purposes of lending money.  No one wants to make a loan to a financial zombie, a walking dead horror of insolvency and bankruptcy.  All confidence has been lost in an unregulated, opaque system where fraud and deceit are part of the banking and corporate culture.  Making loans is now like playing Russian roulette, a game which only the suicidal want to play.  Attempts at resurrecting the system have failed miserably.  As the direct result of these problems and a litany of other present and future problems, the stock market will continue to fall, and, in the words of "the Beaver," it "ain't never comin' back."  If the stock markets are temporarily reinvigorated by the PPT to keep appearances up during an election year, much of the extra liquidity from a weak yen or otherwise that will be provided for such stock support will be plowed into precious metals, which will skyrocket.  It's win-win for gold and silver.