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Depression
Written into Law, Part I
Black Swans
Crack-up Dead Ahead
As the next leg
down in the unfolding depression and global, financial crisis intensifies we
all sit on a keg of dynamite known as the developed world's economies and
financial systems and wait for some fool in government to light a match. In
April I spoke about black swans taking flight, now they are about to land. An
explosive event is unfolding as we speak. What you are about to read is the
embodiment of the Cloward-Piven strategy -- economic collapse written into
law, on purpose, by radical Marxist Socialist progressives inside the Capital
of the United States: Washington DC.
Bubbles are still
inflating because the printed money has to land somewhere, and capital flees
to where it is treated best. In this case, it is to the emerging world where
capitalism is thriving and governments are focused on ECONOMIC and INCOME
growth, but the bubbles inflating there are enormous from all the hot money
flowing to into them. Only a pinprick waits.
At no
time in memory have the opportunities been as enormous as today. As the
effects of money printing, deficit spending and Marxist legislation unfold in
the developed world all markets (stocks, bonds, currencies, commodities,
natural resources, etc.) are set to zoom up and down to price in the mayhem
being implemented by public serpents, banksters, elites and crony
capitalists. BUY and HOLD is dead. Actively managed, absolute-return
alternative investments which have the potential to make money in up, down
and sideways markets are essential diversification. In addition you must fix
your paper money so you can store the purchasing power in it and insulate it
from the rapid debasement that is unfolding. This is what I do....
To regular
readers I apologize for my absence; I have been producing a video book
entitled "When HOPE Turns to FEAR" -- we are at that junction NOW.
The video is written and narrated by me. The video will be free to direct
subscribers of this newsletter. Subscriptions are free at www.TraderView.com/subscribe
Much debate has
centered on the Bond Market, but the message is clear as you shall see. This
bond, bull market is now almost 30-years old, long in tooth and over owned
and over loved, with fools known as the public at the top that is forming.
Are bonds a bubble? The answer is yes, and the bond bull is enormously
overbought but with room for additional absurdity before the BLOW UP. The
global, financial and economic crisis will not be over until the bond and
credit markets blow up -- up to and including those IOU's/bonds masquerading
as money known as G7 currencies.
First we need
some perspective and for that we will turn to the US ten-year note chart with
a 200-day moving average for perspective, courtesy of Martin Weiss:
In this chart we
see two crashes in interest rates (interest rates lower), one crash is known
and the other I shall identify. The first event, on the left is the failure
of Lehman Brothers and the financial system crash of 2008. On the right we
see another, more orderly collapse, both signaling the same thing: economic
collapse. One fast crash and one crash which is more gradual.
What event
happened on late March 2010? The Patient Protection and Affordable Care
Act was signed into law and as I reported it was a tax bill in disguise,
as the middle class and small businesses are learning to their chagrin. Of
course it was the antithesis of its title, as all legislation is. A cute
cover to fool the useful idiots and sheeple who RELY on the main stream media
for propaganda disguised as NEWS.
As the speaker of
the house, Queen Nancy said: "we need to pass healthcare legislation to
see what's inside". Talk about Benedict Arnolds; legislators who pass
bills they have not read and defy the will of their constituents. Hopefully
someday there will be truth commissions to find the legislators who violated
their oath of office and NULLIFY this legislation they passed.
"The
more corrupt the state, the more it legislates." --Tacitus
The evil rising
out of this Pandora's Box of political corruption is happening daily. 2,500
plus pages of weasel words and unlimited opportunities for politicians to sell
the healthcare industry to the highest bidders among their crony capitalists
for years into the future (think about the US tax code). Meanwhile, every
small business owner I speak to is facing 20 to 30 percent rate hikes
(including me) for their employee's health insurance. The next weasel-word
surprise is the redefinition of income to include the value of benefits which
used to be tax free.
Beginning on
January 1, 2011 the withholding on taxes will be from an amount that includes
healthcare benefits. People at the lower rungs of the ladder will be facing
almost $300 of additional taxes per month. What do you think will happen to
private-sector demand when every household in Amerika has that much less to
spend, save or invest? It will be a knockout blow for small families,
delivered every time they get a paycheck. To the progressive democrats this
is not a tax hike, just an adjustment in the definition of their weasel
words.
What do you think
a 20 to 30% rate increase will do to small business owners who are the
backbone of job and business creation? They will dump the coverage, pay the
8% fine and send everyone into Medicaid. They have to; the alternative is
closing their businesses or MASSIVE layoffs. You can look for BOTH in any
event. Employees will go from the plans they are happy with into "misery
spread widely"; healthcare decided by politically-corrupt bureaucrats;
the definition of the policies of the beltway and the radical Marxists that
control our federal government. Where are the policies of economic and income
growth? NOWHERE.
Now let's look at
the next little bit of fairy tale LEGISLATION disguised as protecting the
public, also known as: "Dodd-Frank Wall Street Reform and Consumer
Protection Act"; of course it is nothing of the sort. It is another
2,400 pages of crony capitalism and political rent-seeking along the lines of
the tax code. Another Pandora's Box of evil is now open. Take a look at this
monstrosity:
Twenty-three
hundred pages of unfolding political and crony capitalist corruption. To put
the enormity into perspective, the Federal Reserve act of 1913 was 31 pages,
the Glass Steagal Act (separating investment banking from deposit
institutions) of 1933 was 37 pages, the Interstate Banking Act of 1994 was 61
pages, the dreaded Sarbanes Oxley Act of 2002 was 66 pages, and Graham Leach
Bliley Act was 145 pages. This is 15 to 50 times the size of those epic laws.
Well, first let's
talk about what the financial reform law does NOT do. The financial reform
bill was supposed to "fix" Wall Street and the financial system,
but it did not do much of anything....
- It does
nothing to address the problems with Fannie Mae and Freddie Mac.
- It does not
eliminate "too big to fail", in fact it expands it and the
price of entry is campaign contributions
- It does
absolutely nothing to eliminate the horrific bubble in the OVER THE COUNTER
derivatives market.
- The ratings
agency's politically-correct bond market ratings are unaddressed.
- It does
nothing to reform the organization most responsible for the recent
financial crisis - the Federal Reserve. In fact, this new law actually
gives the Federal Reserve even more power:
- This will
create the biggest, new wave of financial rule making in history and,
whatever it does, it will not make lending and credit cheaper and more
available.
- It was
rushed into law before the presidential/congressional financial crisis
commission published any of its findings and conclusions,
- This was
done so because they don't care; Finreg is a political exercise, just as
is healthcare reform; practical solutions are not to be found
- There are
not efforts to find practical solutions to the problems, so they will
have political, not practical results required to head off future
crisis. They will cause the next crisis, not prevent it.
- This
monstrosity of political crime right out of the Chicago mold is
unbridled corruption that legislative for which supermajorities are
known.
- It does
nothing its proponents claim; it is a grab bag of vague outlines the
details of which are to be filled in behind closed doors in exchange for
political rents of one sort or another.
- It is to be
defined by bureaucrats with no experience in banking or the private
sectors over the next 18 months with a phase-in period of 12 years. The
bill itself was written in a deliberately vague fashion by legislators
with no experience in the industry as well, was unread by most of them
and passed almost completely along supermajority lines, with only a few
small changes of legislative horse trading to push it into law.
- Of course,
the rule making coincides with the next election cycle, so big money is
heading Washington's way.
- 533 new rule
makings by eleven different agencies, 67 one-time studies and 22
periodic reports. These studies and reports' conclusions will be written
in advance of the studies and reports designed to produce the political
conclusions.
- To put this
in perspective, Sarbanes Oxley - the latest example of Washington
overreach - required only 16 new rules, Dodd Frank is 30 times larger.
- This to me
is the definition of the indefinable, just like the 10 million words and
counting of the tax code.
- This is
called historic red tape and it will rap itself around the
economy like a python squeezes the life out of its prey.
- The economy
and public are the prey to the politicians, elites, banksters and crony
capitalists who spawned this hell.
- Quoting the
wall street journal: "The SEC alone, whose regulatory
failures did so much to contribute to the panic, will write 95 new
rules. The new Bureau of Consumer Financial Protection will write 24,
and the new Financial Stability Oversight Council will issue 56. These
won't be one-page orders. The new rules will run into the hundreds if
not thousands of pages in the Federal Register, laying out in detail
what your neighborhood banker, hedge fund manager or derivatives trader
can and cannot do depending on how much they have contributed.
- The
proverbial fox in the hen house is placing the Consumer Financial
Protection Agency inside the federal reserve; this is the same fed who
allowed the predatory mortgages to be sold, allowed the credit card
industry to charge rates which used to be called usurious when they
actually taught these things, allowed pay day loans companies and
predatory lending of all kinds, naked credit default swaps and
fictitious ratings to be placed on financial products including
sovereign debt. So, nothing will change in the future while they remain
in charge.
- Political
allocation of credit and bailouts are not based upon sound underwriting
standards, business prospects or solvency considerations.
- Remember,
the express job of the Federal Reserve is to run the economy to the
benefit of its shareholders, banks and corporations.
- To put the
public into debt to banks and corporations that own it, creating debt
slaves to the illuminati and their web of business holdings of one sort
or another.
- When
complete, the winners and losers will be defined by those who know the
halls of congress and their campaign committees in the most intimate
ways. Those who don't will be losers by law to those who do.
- The Freedom
of Information Act has been suspended for the Securities Exchange
Commission, so corruption between crony capitalists and regulators
cannot be uncovered.
- Nothing will
be written in the public's best interests except in the most meaningless
ways which can be media sound bites that mislead the useful idiots in
society into believing this is to protect them rather than allow further
depredations which are politically authorized and bought and paid for.
- The
something-for-nothing society lives in fear and desperation, and it is
this type of crisis in which the most damage is done by the people in
whom they have placed their trust.
- Fleece-able
sheeple and this law will allow a lot of wool, known as money, to be
gathered. Borrowing money that the banks print out of thin air, lent to
the public and repaid with their labor and hard work as they work to pay
it back with interest. Selling unsound paper money which the public
believes to be sound. The banksters get something and the public gets
nothing; I don't call it a something-for-nothing society by accident.
- What will
the economy get from this? Years and years of uncertainty, as the
definitions are years away,
- What
business will be formed if they do not know the cost and availability of
credit? VERY FEW
- Small
competitors with superior products only await the new rules which will
regulate them out of business, consigning the public to less financial
services, inferior products and having to pay more for them.
- Look at
401k's, mandating retirement investments which have NO CHANCE of growing
in real terms. NONE. They are legalized and mandated by law FLEECING
machines. Nothing in this law changes that. You are mandated to buy
paper, financial products and stocks which yield nothing from big
investment banks and traditional ones.
- That is the
definition of crony capitalism; the public serpents regulate the
competition out of business, and customers into crummy products not
suited to today's economy and leave the politically connected as the
only game in town at a higher price.
- In a
capitalist economy, this is creative destruction where dinosaur
corporations fall to more-nimble competitors who give more goods and
services for less. This will increasingly end that virtuous process
- This is just
the next nuclear bomb on capitalism, wealth and income generation and
the economy by the terrorists inside the beltway.
- This is on
purpose folks, and the immensity of it is a testament to the size of the
corruption. The victim is you and our economic prospects.
- The
healthcare legislation is more poisonous than what I just outlined, in
every respect, written in a back room, and not by legislators but by
their special-interest and crony capitalist supporters.
- It was
unread by 99% of congress before the torturous process to passage
through budget reconciliation. As Nancy Pelosi said just before passage:
"we have to pass it to see what's inside". This will never
end; it is an open book and law for political benefits.
- Financial
regulation was no different. We still don't know what's in it, as the
writing of it will never end. Sounds like the tax code... in fact, IT IS
"The fat
lady never sings in Washington. No decision is ever final; no word is a bond;
no contract binds a congressman; no bill or resolution has force beyond the
next election. That's the first principle of our government, and the second
is similar: Every dollar of federal spending is pork first." -Thomas
Donlan, Barron's
In Conclusion:
The depression is intensifying due to these pieces of legislation, reflected
in the unbelievable drop in interest rates as they price in the
depression-era laws BEFORE and while they are being implemented. The collapse
in interest rates is testament to this. I will be covering this further in
the next edition of Tedbits, don't miss it, subscribe, it is free at www.TraderView.com/subscribe/
.
"I think
this group does not understand what it takes to create jobs. And I think
they're flummoxed by their experiment in Keynesian economics not working."...
"Every business in America has a list of more variables than I've ever
seen in my career." If variables like capital gains taxes and the
R&D tax credit are resolved correctly, jobs will stay here, but if
politicians make decisions "the wrong way, people will not invest in the
United States. They'll invest elsewhere." - Paul Otellini, CEO Intel
Of course they
will invest somewhere else, count on it. Capital flight is in full bloom, in
the United States and in the European Union. Only 8% of the current corrupt
crew in Washington has worked in the private sector. The bubbles in Asian
asset markets are evidence of this. The purposeful final destruction of the
middle class and the capitalist economy by socialist progressives is at hand.
This is called the Cloward-Piven strategy, look it up on the internet. Their
goal is to make the majority of US citizens DEPENDANT on government, rather
than independent of them by collapsing the economy.
At no
time in memory have the opportunities been as enormous as today. As the
effects of money printing, deficit spending and Marxist legislation unfold in
the developed world, all markets (stocks, bonds, currencies, commodities,
natural resources, etc.) are set to zoom up and down to price in the mayhem
being implemented by public serpents, banksters, elites and crony
capitalists. BUY and HOLD is dead. Actively managed, absolute-return
alternative investments which have the potential to make money in up, down
and sideways markets are essential diversification. In addition, you must fix
your paper money so you can store the purchasing power in it and insulate it
from the rapid debasement that is unfolding. This is what I do....
Unemployment is
about to SKYROCKET as small businesses close and the next group decides not
to open their enterprises. By early next year you can expect monthly
employment figures to reflect the bloodbath we saw in early 2009 of
approximately 700,000 job losses a month, as small businesses flee the vipers
in the beltway, close down, say enough is enough and REFUSE to be their
slaves.
This is a
currency and financial system extinction event and we know the destination;
it is the zigs and zags to that destination that we seek to understand. The
developed-world government and financial systems' MORAL and FISCAL insolvency
is inescapable and inextinguishable, but the illusions of safety still
persist. The moral and fiscal insolvency of public serpents, elites,
banksters and crony capitalists are on plain display. Only the inevitable collapse
will allow the developed world to return to its roots as capitalist,
industrialized societies which produce wealth rather than consume it.
Don't miss the
next edition of Tedbits "Depression Written into LAW" series,
subscribe its free at www.TraderView.com
Thank you for
reading Tedbits. If you enjoyed it...
Theodore
“Ty” Andros
www.traderview.com
Managed Futures & Alternative
Investment Specialists
233 West Jackson Blvd. Ste. 725, Chicago, IL 60606,
PH:. 800.253.7689 // +1.312.338.7800
info@TraderView.com
www.TraderView.com
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Tedbits is authored by
Theodore "Ty" Andros, and is registered with TraderView, a
registered CTA (Commodity Trading Advisor) and Global Asset Advisors
(Introducing Broker). TraderView is a managed futures and alternative investment
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became a managed futures and forex specialist beginning in 1985. Mr. Andros
duties include marketing, sales, and portfolio selection and monitoring,
customer relations and all aspects required in building a successful managed
futures and alternative investment brokerage service. Mr. Andros attended the
University of San Diego, and the University of Miami, majoring in Marketing,
Economics and Business Administration. He began his career as a broker in
1983, and has worked his way to the creation of TraderView. Mr. Andros is
active in Economic analysis and brings this information and analysis to his
clients on a regular basis, creating investment portfolios designed to
capture these unfolding opportunities as the emerge. Ty prides himself on his
personal preparation for the markets as they unfold and his ability to take
this information and build innovative professionally managed portfolios.
Developing a loyal clientele.
This report may include information
obtained from sources believed to be reliable and accurate as of the date of
this publication, but no independent verification has been made to ensure its
accuracy or completeness. Opinions expressed are subject to change without
notice. This report is not a request to engage in any transaction involving
the purchase or sale of futures contracts or options on futures. There is a
substantial risk of loss associated with trading futures and options on
futures.
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