A Nasty Twist to the Cartel “End Game”?!
-- Posted Friday, 29 August 2008
“A recent study from the Congressional Budget Office (CBO) has zero credibility. It
pegged likely taxpayer losses in the Fannie Mae and Freddie Mac
bailouts at $25 billion…the real cost of the bailouts will easily
exceed $1.3 trillion. In fact, the real cost is likely to range between $1.3 trillion to $1.6 trillion, and is not unlikely to reach $2.5 trillion…”
“The Real Cost of a Full Bailout,” Don A. Rich, August 22, 2008
In
the Summer, 2006, Deepcaster was among the first to warn of a Massive
Financial and Geopolitical Scheme (“Massive Financial Geopolitical
Scheme Not Reported by Big Media,” August, 2006) with ominously
negative consequences both for investors and citizens in general. Subsequently,
on June 6, 2007, Deepcaster gave further warning in an article entitled
“Profiting From the Push to Denationalize Currencies and Deconstruct
Nations” (both available in the Articles Cache at www.deepcaster.com).
In these Articles we describe this Scheme as The Cartel’s* “End Game.” (Fortunately, there is a Resolution in the U.S. Congress designed to derail this Scheme (H.Res.40, Goode, R-VA). Now
there is increasing evidence that this “End Game” involves a heretofore
hidden “Nasty Twist” which could seriously injure investors and
non-favored (by The Cartel) financial institutions around the world. To understand this Nasty Twist we must provide a bit of background.
A
key component of this multi-faceted Scheme is the replacement of the
U.S. Dollar with the “Amero” as the Council on Foreign Relations (CFR)
consultant Robert Pastor named it. This, of
course, would entail the final destruction of the U.S. Dollar, a demise
of which has already begun – or should we say, is being managed by The
Cartel*. This Scheme appears to be an integral
part of The Cartel’s Interventional Regime which involves manipulation
of many Markets and Statistics.
*We
encourage those who doubt the scope and power of Intervention by a
Fed-led Cartel of Key Central Bankers and favored financial
institutions to read Deepcaster’s July, 2008 Letter containing a
summary overview of Intervention entitled “Market Intervention, Data
Manipulation - - Increasing Risks, The Cartel End Game, and Latest
Forecast” at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.”
Notwithstanding
the recent and continuing (for a while) bounce in the U.S, Dollar which
we earlier Forecast, the long-term trend is “down” for the U.S. Dollar
and will continue so because destruction of the value of the U.S.
Dollar has been “baked into the cake” by The private-for-profit U.S.
Federal Reserve.
It
is ‘baked into the cake’ because The Fed has for years implemented
“easy money” and easy credit policies by, inter alia, dramatically
increasing the money supply. Thus the latest
annualized rate for M3 is 15.4%, and that rate has reached as high as
17% within the last year, per shadowstats.com. That rate virtually guarantees continued Consumer Price Inflation (now already at about 12% a year in the
Three
of the many pernicious effects of the Destruction of the U.S. Dollar (a
key component of The Cartel’s End Game Scheme) are:
1) The veiled destruction of the U.S. Middle Class through the destruction of its purchasing power and
2) The
diminishment and/or outright confiscation of wealth of all economic
classes whose wealth is held in U.S. Dollar-denominated assets and
3) The
likely further enrichment of the private-for-profit U.S. Federal
Reserve and those financial institutions which it favors – clearly Bear
Stearns was not a favored financial institution (see below).
Yes, the U.S. Dollar’s demise is already underway. Though
very recently it has given the appearance of some buoyancy as a result
of bottoming just above 71 on the USDX and then bouncing to above 77,
it has nonetheless been in a sustained downtrend for several years now. Of course, this downtrend can NOT
make the foreign government holders of over $1 trillion of U.S.
Treasury Securities feel much comfort since the actual value (e.g.
purchasing power) of their portfolios of U.S. Treasury paper has
continued to diminish.
Deepcaster has addressed the issue of the demise of the U.S. Dollar on other occasions. But
the consequences of the demise are so significant that one should
consider the possible alternatives to the U.S. Dollar and the
implications of each.
There are two major Alternatives to the U.S. Dollar (and other similarly weakening fiat currencies). One
is re-linking the (presently fiat) currencies to Gold and Silver, an
approach that Deepcaster has long favored as fundamentally sound.
The
other Alternative (doubtless favored by The Cartel of Key Central
Bankers and certain other favored entities involved in international
finance) is to catalyze or force the collapse of major national “fiat”
currencies such as the U.S. Dollar in order to create a regional
currency, such as the Amero, as part of their overall “End Game.”
Thus the battle lines are drawn for the Great Currency War of the next few years: Gold and Silver-based currencies versus the Amero and other Fiat Currencies.
Were
the destruction of National Currencies (e.g. the U.S. Dollar) and the
other nefarious components of The Cartel End Game not a very serious
project of powerful organizations and persons, and had implementation
of the “End Game” Scheme not already begun, the notion of
denationalizing currency - - and specifically dissolving the U.S. and
Canadian Dollars and the Mexican Peso into the Amero - - perhaps would
be dismissed as only a matter of academic interest, or delusion.
However,
in addition to the plans for the demise of the U.S. Dollar and its
replacement with the Amero and other equally damaging aspects of the
End Game (detailed in the aforementioned Deepcaster Articles), it
appears to us that another, heretofore hidden, component of this
nefarious scheme is being implemented.
Specifically,
now it appears (thanks in part to the revelations in the calculations
made by Don Rich above) that we should expect yet another Nasty Twist
to the attempted implementation of The Cartel “End Game” Scheme.
Consider
that as the Equities Markets Takedown trend proceeds, and as the
deepening Hyperinflationary Recession about which we have written much
continues, there will surely be more pain in the financial markets,
including banking and investment house bankruptcies.
Indeed, on August 26, 2008 the FDIC announced that the number of troubled banks on its watch list has increased to 117. Doubtless this increase, and the increase in actual insolvencies, will continue.
And
at the top of the list of potential insolvencies are Fannie Mae and
Freddie Mac which hold $5 trillion worth of Mortgage and
Mortgage-related “Assets.”
Warren Buffet has accurately described Freddie Mac and Fannie Mae as having “no net worth.” Thus, as Don Rich points out, the cost of bailouts of Fannie Mae and Freddie Mac to the U.S. Taxpayer is likely going to be more on the magnitude of trillions of U.S. Dollars rather than billions of Dollars. The
Common characteristic of the Bear Stearns and other Fed actions, and
now apparently of the Fannie Mae and Freddie Mac debacle, is the
reliance, ultimately, on the
Thus the Ominous Trend which appears to be developing as a central feature of The Cartel “End Game” is that:
1) The Toxic Waste of Failed Derivatives and other Failed or Failing “Financial Assets” including Bad Debt is laid off on the
2) But
the Fed-favored banking and other entities are allowed to scarf up the
Performing Assets and/or the underlying collateral at fire sale prices. One wonders who will likely end up with Bear Stearns’ prize office building - - likely not the U.S. Taxpayer!
This
“Nasty Twist” bears a remarkable resemblance to similar developments
before and during the Great Depression in which The Fed then also first
allowed easy credit and massive monetary inflation to drive up the
prices of all assets in the 1920s, and then catalyzed the confiscation
of Gold and Foreclosed Real Estate in the 1930s through bank and
individual financial failures.
In that respect, the first years of the 21st century are quite like the 1920s with its permissive credit and monetary inflation policies. Now
we are seeing the beginnings of massive de-leveraging which, like that
in the 1930s, allows The Cartel and its favored Agents and Allies to
pick up assets at fire sale prices. In effect,
this scenario allows, de facto, a Second Massive Performing Asset
Seizure by The Cartel and its Allies as a result of the Foreclosures as
well as allowing the laying off of Impaired Assets on Taxpayers and
disfavored financial institutions.
Consider
too that this “Nasty Twist” would be occurring against the backdrop of
worsening Financial and Economic Realities catalyzed by The Cartel. The Key Real U.S. Data (contrary to the gimmicked Official Data) are: M3
is increasing in excess of 15%, U.S. Unemployment is over 14%, Consumer
Price Inflation is over 12% and U.S. GDP about a negative 2% (all
annualized) according to the quite credible calculations of
shadowstats.com.
These
Real Statistics paint the picture of a Deepening Hyperinflationary
Recession which brings with it great pain to the average Citizen and
Investor, and the opportunity for Great Profit for The Cartel and its
favored Agents and Allies.
Moreover,
today, The Cartel Market Intervenors and their Allies quite likely know
and understand in advance when and where the additional Takedown of
Paper Assets will be coming. Before such
Takedowns and insolvencies they will be able (and already are able) to
use their access to the huge non-public Dark Liquidity Pools like
“Turquoise” and “Baikal” to dump their Dollar-denominated assets in
advance away from public view (see Deepcaster’s Alert of 4/8/07
entitled “Profiting From Dark Liquidity and Other Systemic Risks” at
www.deepcaster.com). Thus they can begin to buy
into depressed Tangible Assets “on the cheap” when they are near their
bottoms and after their paper dump has been achieved. A Nasty Twist indeed!
In
sum, the likely Nasty Twist to The Cartel’s “End Game” is that The
Cartel and its favored financial institutions will retain the
Performing Assets, whereas the non-performing and devalued assets will
be dumped on the
Deepcaster