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Another day, another microscope on the
financial world.
Today has started out calm, as once
again the world (aided by the omnipresent PPT) is focused on “Will it?,
Won’t it?” regarding the Greek bailout, and “Is it?,
Isn’t it?”a “credit event” as pertains to the CDS
market.
Yesterday’s market decline was
attributed to Greek politicians insisting on a referendum to decide whether
to accept the proposed bailout plan, throwing a monkey-wrench into the
formerly “controlled” situation. Obviously, if Greece votes
against accepting the severe austerity terms involved, it will exit the EU,
default on its debt, and create a “credit event” sparking a chain
of bank destruction across the Western world, PARTICULARLY in the U.S., where
97% of all derivative contracts are written (can you say JP Morgan?).
http://www.zerohedge.com/news/past-midnight-headlines-greece
We’ll soon see which path to
disaster is ultimately taken, but something tells me the markets already
know…
http://www.zerohedge.com/news/1-year-greek-yields-pass-200-first-time-ever
I only have about 15 “horrible
headlines” listed below, which constitutes a “great day” in
the current environment. And the Fed will make another
“statement” this afternoon, which is always “great
news” because their judgment is so valued by the world, not to mention
when coupled with PPT stock buying and Cartel PAPER gold and silver naked
shorting.
I CANNOT EMPHASIZE ENOUGH how utterly
futile this bailout plan will be if implemented, and how utterly catastrophic
if it isn’t. In the former scenario, the world buys a few weeks,
or possibly months, before the END GAME commences, and in the latter, it
starts NOW.
For the millionth time, the problem is
NOT a lack of liquidity in the PIFIGS economies, it is utter, incurable
insolvency across the ENTIRE Western world. We are WAY past the point
of no return for essentially every nation in Europe, as well as the United
States, the UK, and many Eastern nations intrinsically tied to the
West. NOTHING will save these countries from default, whether they take
the route of the “Austerity Default” (refusal to pay), the
“Market Driven Default” (public markets refuse to buy sovereign
bonds), or the “Hyperinflation Default” (ALL debt monetized).
Moreover, we have reached SATURATION of
every “extend and pretend” tactic imaginable, such as PROPAGANDA
SATURATION (the world is starting to ignore TPTB’s lies), DEBT
SATURATION (‘nuf said), and MANIPULATION SATURATION (the
“half-life” of new rigging programs is rapidly shrinking).
Per the latter, just ask the Japanese how well their currency intervention to
weaken the yen is doing…
http://www.zerohedge.com/news/jpy-intervention-512bn-losses-well-spent
…even as the nation continues to
melt down, both literally and figuratively…
http://www.zerohedge.com/news/remember-fukushima-its-back
As holder of the “world’s
reserve currency”, the U.S. government can still avoid the
“Hyperinflation Default” scenario, but at some point soon the
bond vigilantes will overwhelm them, forcing the world to no longer PRETEND there
is real, LEGITIMATE demand for U.S. Treasury bonds. The PUBLISHED U.S.
debt level is about to pierce $15 trillion, up nearly $700 billion since the
debt ceiling debacle in August, and likely will rise by more than $1.5
trillion in 2012 alone. Jim Willie, one of my top sources in the
business, is currently forecasting a 2012 deficit of more than $2 trillion!
http://www.usdebtclock.org/
Moreover, per the below announcement,
U.S. Treasury issuance is set to SOAR in the coming months, and continue
rocketing higher until the aforementioned “bond vigilante moment”
sets in, likely sometime in 2012.
http://www.zerohedge.com/news/us-plans-issue-846-billion-treasurys-next-6-months-35-more-previous-year
Despite the blatant LIES published by
its government (2.5% GDP growth – LOL), the U.S. economy is in free
fall. The only reason the Fed is unlikely to announce an OFFICIAL QE3
program today is its fear of GOLD, the inflation barometer poised to rocket
above $2,000/oz, sparking HYPERINFLATION fears. Don’t worry, the
Fed will still execute “Operation Twist”, as well as all sorts of
“unofficial” QE MONEY PRINTING that they never report, and
eventually will be FORCED to announced OFFICIAL QE, as the economy continues
its collapse into the abyss.
“QE to Infinity” will be an
American fact until the dollar collapses, as stopping for even ONE DAY would
expose the nation to MASSIVE social unrest. Just ask the 45.8 million
Americans on food stamps, a number that seemingly rises each month…
http://www.zerohedge.com/news/us-food-stamp-usage-hits-new-record
Oh boy, here we go. I got through
just a few paragraphs before the next wave of horrible European news hit the
tape. The situation is as flammable as a gas can in a boiler room, and
sparks are flying everywhere. It looks like the €5 billion
“trial balloon” EFSF bond issue, to be utilized to supplement the
$1.4 trillion bailout fund, was PULLED off the market due to a lack of
demand, per below.
Not only that, but the latest
“rumor” that China will invest heavily in the fund has been
deflated as well. Talk about the world not understanding that “NO
means NO.”
http://www.zerohedge.com/news/latest-china-bailout-rumor-crumbles-efsf-pulls-bond-due-market-conditions-france-bund-spread-re
Consequently, French bond spreads just
EXPLODED to an ALL-TIME HIGH on rumors of a potential default (on the heels
of yesterday’s Italian bond spread explosion), which I ASSURE you WILL
occur in the not too distant future. Unlike the U.S., which has an
unfettered printing press at its disposal and holds hostage 61% of the
world’s currency reserves, France and Italy, the second and third economies
in the EU, are helpless. They cannot print Euros to monetize their
debts, as such action requires agreement of the ECB, which happens to be
controlled by Germany, Europe’s largest creditor, and a nation steeped
in hyperinflation FEARS.
Thus, it is only a matter of time
before an “Austerity Default” or “Market Driven
Default” is forced on Europe, in my view highly likely by the end of
the first quarter of 2012. I believe the Germans, Dutch, and other
stronger nations will bolt from the Euro like scalded cats once the END GAME
commences, leaving the PIFIGS and other weaker nations to default via one, or
both, of the above scenarios. Once this occurs, these lesser nations
will be forced back to their former currencies – such as the franc,
lira, punt, drachma, peseta, and escudo – resulting in hyperinflation
across most of Europe, which will rapidly rise up the totem pole of INSOLVENT
nations until it reaches the TOP, the aforementioned “license to
print” nations such as the UK and U.S..
http://www.zerohedge.com/news/france-downgrade-rumor-france-bund-spread-explodes
The topic of today’s RANT is one
that nearly all my comrades-in-gold -blog-arms are focusing on this morning,
DERIVATIVES. Following the 1999 repeal of Glass-Steagall, financial
Derivatives have become the “invisible hand” behind the global
economic collapse, tying the fates of banks, municipalities, and sovereign
nations together, the equivalent of creating a Borg “hive mind”,
for all you Trekkies out there. Unfortunately, as occurred in
“Next Generation – Episode 123″, inserting a VIRUS into
just a single Borg DESTROYS the entire hive, EXACTLY what derivatives such as
Credit Default Swaps effectuate.
According to my IDOL Jim Sinclair, who
not only is “Mr. Gold” but “Mr. Derivative” as well,
97% of all credit default swaps written are carried by the major US banks,
and just four banks hold nearly ALL such contracts – JP Morgan, Bank of
America, Citibank, and Goldman Sachs. Think those four CRIMINAL
operations will survive what’s coming?
Sinclair was talking about the upcoming
derivatives contagion before I had even HEARD of these balance sheet-seeking
missiles, and I would bet everything I own (actually, I already am) that he
will be right.
http://www.zerohedge.com/news/five-banks-account-96-250-trillion-outstanding-derivative-exposure-morgan-stanley-sitting-fx-de
The reason for the attention on
derivatives this week is the collapse of MF Global, a vile organization few
had ever heard of (including myself), operating in the “shadow
world” where only thieves, racketeers, and other forms of vampire squid
exist. MF’s “party line” is it was done in by
exposure to European sovereign debt, but that makes little sense given the
nature of their business as a DERIVATIVES BROKER. More likely, it was
destroyed by exposure to CREDIT DEFAULT SWAPS gone awry, such as Greek
CDS’ when the ISDA decided a “voluntary 50% debt haircut”
does not constitute a “credit event.”
The article below, published on
ZeroHedge in September, debunks the ridiculous “common knowledge”
that true derivatives exposure is much less than published due to
“bilateral netting.” Bilateral netting is a misleading,
Wall Street-created fantasy espousing if you are long $100 billion of CDS
contracts and simultaneously short $100 billion contracts, you thus have ZERO
exposure because you are “hedged.”
Let’s ignore the fact that the
actual MATH doesn’t tell the same story, particularly when one is long
certain contracts, and short others. Nor that COUNTERPARTY risk is
completely ignored by such shallow analysis. All one really needs to do
is look at what happened to AIG (remember them?) when they were massively
exposed, on BOTH the long AND short side of CDS contracts, just three years
ago. Or, for that matter, “derivatives broker” MF Global!
Yes, JP Morgan et al ARE in fact fully
exposed to HUNDREDS OF TRILLIONS worth of CDS contracts, and I ASSURE you
once the European contagion commences you will see the all-encompassing
desructive force of this “fully armed and operational battle station”
(sorry, another Star Wars reference).
http://www.zerohedge.com/news/how-us-banks-are-lying-about-their-european-exposure-or-how-bilateral-netting-ends-bang-not-whi
Yes, MF Global, one of the
world’s largest derivative brokers, vanished into thin air just moments
after emerging from the primordial ooze, and only time will tell if its
bankruptcy proves to be the inevitable “Lehman moment” sparking
commencement of the END GAME. The Dow fell nearly 600 points in the two
days since this announcement, with sovereign yields, swap spreads, and market
volatility soaring through the roof (although, as always, the media and Wall
Street blame Greece).
http://www.zerohedge.com/news/desperate-demand-short-term-crash-protection-pushes-implied-correlation-above-100
http://www.zerohedge.com/news/liquidity-scramble-begins-mf-commingling-aftermath
As for MF Global itself, apparently its
EVIL CEO John Corzine yesterday ADMITTED MF embezzled roughly $700 million of
client funds to cover its OWN LOSSES, a shocking turn of events for a
supposedly “tier one” firm. Gee, if a John Corzine-led firm
is operating in this illicitly criminal manner, I wonder if anything else
like that is going on around Wall Street…or in “the
City”…or Washington…
http://www.zerohedge.com/news/jon-corzine-meet-bubba
And speaking of Washington, it looks
like John Corzine, formerly CEO of Goldman Sachs, the most villainous,
corrupt firm in history, and governor of New Jersey, one of the most
tax-ridden, debt-infested municipalities on earth, has been secretly working
with his “old pal” Barrack Obama on getting him re-elected,
presumably eyeing the Treasury Secretary position which will shortly be
vacated by Tim Geithner, by hook or crook. Seriously readers, you
simply CANNOT make this stuff up!
http://mobile.gothamist.com/2011/07/05/corzine_to_obama_if_i_raise_enough_1.php
While enjoying today’s Fed
announcement PPT/Cartel lovefest, remember that things will get WORSE each
and every day until the Western banking and currency system collapses, coming
soon to a nation near you.
Despite plummeting stock markets and
blindingly blatant Cartel attacks on PAPER gold and silver, I’m happy
to say bullion demand picked up significantly during the past two days.
As a whole, the global population is slowly but surely catching on to the
difference between PAPER and PHYSICAL gold, and it won’t be too long
until the CRACKS IN THE DYKE turn into a full-out DAM BREAK, especially now
that there are SEVEN BILLION PEOPLE in the world.
http://www.foxnews.com/scitech/2011/10/31/7-billionth-person-born-or-maybe-more-or-less-who-knows/
PROTECT YOURSELF, and do it NOW!
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