…
This site aims to offer a complete accounting of the fraud
perpetrated by the US government over the last several decades years.
THE MEDIA IS FUNDAMENTALLY BROKEN
Before proceed any further, it is essencial to establish
that the US media is broken in the most basic and fundamental way.
I am NOT talking about the media’s "liberal" or
"conservative" bias.
ALL mainstream news outlets have been castrated to the
extent that instead of fulfilling their basic purpose of informing the public, THEY
DO THE OPPOSITE.
MEDIA BLACKOUTS
There are entire subjects of the highest importance
are being systematically ignored. These topics are so toxic that the
media won’t touch them. The reason is that the facts surrounding
these subjects are so damning and irrefutable that no amount of spin can fix
them. In these case, rather than try to defend the indefensible, news
outlets resort to a total media blackout.
Below is first of many examples of such media blackouts.
^^^^^^^^^^^^^
MEDIA BLACKOUT:
The Federal Reserve’s extensive activities in derivative markets.
The Federal Reserve publishes, after a five year delay, the minutes
of the Federal Open Market Committee Meetings. Normally, these
transcripts are censored and the word “unintelligible”
is inserted in the place of any sensitive material. However, during the
middle of 2008 in the middle of the financial crisis, a mistake was made.
The transcript from Minutes of the Federal Open Market Committee Meeting on June
24-25, 2003 contains some of the most damning evidence of government
fraud available anywhere. In this transcript, the Federal Reserve irrefutably
admits extensive activities in derivative markets.
The Federal Reserve reports that Minutes of the Federal Open Market Committee Meeting on June
24-25, 2003.
Source: http://www.FEDERALRESERVE.gov/monetarypolicy/files/FOMC20030625meeting.pdf
(if this link goes dead, I will replace it)
Minutes
of the Federal Open Market Committee Meeting on June 24-25, 2003
…
CHAIRMAN GREENSPAN.
Without objection they are approved. We turn now to Mr. Reinhart and Mr. Kos.
MR. REINHART. Thank you, Mr. Chairman. I’ll be referring to the
material called “Conducting Monetary Policy
at Very Low Short-term Interest Rates” which was on the table when
you came in. It’s the same as the material I sent to you
electronically last week. …
…
The Committee could sanction the use of
various derivative instruments on conventional Desk operations as a way to
influence longer-term yields, which is outlined in exhibit 8.
Options of some form are a possibility, as are
forward operations. For example, we could sell a sequence of options on
term RPs, covering interlocking time segments that collectively extend as far
into the future as desired. In this way,
longer-term yields could be influenced and a visible signal of
the Fed’s desired path of interest rates could be demonstrated. Forward
operations in term RPs could be structured in a similar fashion. Alternatively, we could sell put options on longer-term Treasury
securities at strike prices associated with desired longer-term yields.
…
The sale of any options, or forwards for that matter, would
not affect the domestic portfolio immediately and, in the case
of options, may never do so. Auctioning
derivatives is something we already have experience doing. In
the event that options were ever exercised,
the impact on the portfolio would be profound, …
Of course, a successful program would be one in
which any options sold would never be exercised. … options
… could be structured to correspond directly with a policy commitment on
the path of future short-term rates… For these same reasons,
options on Desk RPs could be structured to correspond directly with a policy
commitment on the path of future short-term rates, and they could be effective
through one of several channels. First, even a
relatively small program would undoubtedly add symbolic weight. Second, they would represent a monetary cost to the Federal
Reserve of deviating from the implied path of future short-term rates, which
might be seen as further binding the Committee to that path. For this effect, the more options sold the better.
Third, a large volume of options sold could
reduce risk premiums embedded in longer-term rates, independent
of the level of credibility about any policy commitment. Here too, the more sold the more effective. …
ultimate success would hinge on the quantity
of options sold—that is, how big a bet the Federal Reserve
were willing to make. The more options sold, the greater the
chance they would have the desired effect on longer-term rates
even if not associated with any policy commitment, either by raising the costs
to the Fed associated with options being exercised, or by lowering risk
premiums on longer-term rates. But of course the risks to the portfolio, to reserve levels, and of
capital losses would rise in equal measure. And an exit strategy for options may
not be as straightforward as it seems, even apart from the possibility of their
being exercised. Of course, the Desk could stop auctioning new options at any
time. But a decision to stop selling more options
or not to issue new contracts with later expiration dates as time passes likely
would be interpreted in the market as a statement about future policy intentions.
The resulting rush to unwind market positions
would likely be very disruptive and send yields sharply higher.
…
The following is a slide used by Reinhart during meeting.
Source: http://www.FEDERALRESERVE.gov/monetarypolicy/files/FOMC20030625material.pdf
(if this link goes dead, I will replace it)
IMPLICATIONS: The
US is selling insurance on its own debt to lower its interest rates! The
Federal Reserve also admits that “Auctioning derivatives is something
we already have experience doing.”
Try searching Google archive news for derivatives
financial crisis, and you wouldn’t find a single article covering
this story!
vvvvvvvvvvvvv
As the list of topics under media blackouts has increased over
the years, the US media has become a total joke, restricted from reporting on
any issue of real importance for the average American. Asking hard
question or investigating is all but dead. Now, the mainstream media
focuses on:
1) Human interest stories (ie: celebrity scandals
and American idol).
2) Non-threatening, long-run issues (global warming), while ignoring far more
pressing, immediate dangers.
3) Political issues of no economic importance
FALSE NARRATIVES
While ignoring obvious fraud is bad enough, equally damaging
are the cases where mainstreams deliberately misinforms the public by re-writing
history.
Instead of correctly portraying the government as the
cause of all our problems, blame is redirected towards innocent
parties. The government is then free to use those same problems
(which it created) as justification for more power, more regulations, and more
control over the economy.
Below is an example of a false narrative at the center of
the current financial crisis.
^^^^^^^^^^^^^
FALSE NARRATIVE:
Credit rating agencies allowed competitive pressures to affect their
ratings, creating and adopting inaccurate rating models.
Below are two example of this false narrative.
The New York Times reports about S.&
P. and Moody’s use of inaccurate rating models.
Documents Show Internal Qualms at Rating Agencies
By SEWELL CHAN
Published: April 22, 2010
WASHINGTON — In 2004, well before the risks embedded in Wall
Street’s bets on subprime mortgages became widely known, employees at
Standard & Poor’s, the credit rating agency, were feeling pressure to
expand the business.
… A Senate panel will release 550 pages of exhibits on Friday —
including these and other internal messages — at a hearing scrutinizing
the role S.& P. and the ratings agency Moody’s Investors Service
played in the 2008 financial crisis. …
The investigation, which began in November 2008, found that S.& P. and Moody’s used
inaccurate rating models in 2004-7 that failed to predict how high-risk
residential mortgages would perform; allowed competitive
pressures to affect their ratings; and failed to reassess past ratings after improving their models in
2006.
The companies failed to assign adequate staff to examine new and exotic
investments, and neglected to take
mortgage fraud, lax underwriting and “unsustainable home price
appreciation” into account in their models, the inquiry found.
By 2007, when the companies, under pressure, admitted
their failures and downgraded the ratings to reflect the true risks, it
was too late.
…
NPR reports about blaming
the credit ratings agencies.
Economy Got You Down? Many Blame Rating Firms
Alex
Blumberg and David
Kestenbaum
June 5, 2009
If you’re looking for someone to blame in
the collapse of the global economy, one popular punching bag is the
credit ratings agencies. Firms
like Moody’s, Fitch and Standard and Poor’s are supposed to let investors know
whether bonds are particularly risky or relatively safe.
Ratings agencies gave their
triple-A rating, the highest
ranking, to many bonds backed
by home mortgages — the same bonds we now call toxic assets. Grouping
those bonds among the safest investments allowed trillions of dollars to flow
into the housing market, which in turn created the housing bubble.
It’s hard to overstate the ratings
agencies’ role in the worldwide financial system. They’ve been around for a century, assigning a letter
grade to everything from railroads to school districts, even entire countries.
…
Those Marvelous Ratings
Jim Finkel also wondered about those
computer models and the ratings they helped produce. He works for a company called Dynamic Credit and helped
put together complex bonds called collateralized debt obligations, which were
made up of mortgages. Finkel profited from the AAA ratings, but he says the ratings agencies’ blessings seemed too good to be
true.
"They should have just said, ‘You know what? We just don’t have enough
information about this stuff to ascribe a rating to it,’ " he says. "There were ratings that we saw that made no sense
to us.. We marveled at the ratings that all of these CDO products
got."
…
THE REALITY:
Up until 1994, Rating agencies were extremely conservative in their
estimates (ie: their estimates were accurate). However,
RTC (created to take over failing thrifts) and FDIC, in an effort to sell
billions in toxic mortgage-backed securities, devised their own overly optimistic
method estimating defaults. Inaccurate rating models came straight
from the federal government, and rating agencies adopted them because
they didn’t have a choice.
The proof of this reality comes directly from the
FDIC’s website.
After the savings and loan crisis, the FDIC conducted a
study on the challenges faced by the FDIC and the RTC in resolving troubled
banks and thrifts during the financial crisis of the 1980s and early
1990s. The result was a two book publication, Managing the Crisis.
Managing the Crisis: The FDIC and RTC Experience
www.FDIC.gov/bank/historical/managing/history1-16.pdf
(if this link goes dead, I will replace it)
Given
the importance of careful auction planning, coupled with the need to accurately
determine risk exposure, the RTC devised a method
to project each transaction termination date and to estimate realized losses. A model was developed to project cash flows for
each transaction using available information on prepayments, delinquencies,
defaults, and losses. It provides an estimate of credit
reserve losses, termination dates, year-by-year cash flows, reserve funds, and
residual values for each securitization. …
At the time of the closing, loss estimates
for each securitization were provided by the RTC-FDIC financial adviser and by
the rating agencies. In 1994, the
RTC began to generate loss estimates using the model. In May 1996, the
FDIC compared actual and expected loss estimates from the various sources. The comparison showed that the rating agencies were
extremely conservative in their estimates, when compared to estimates
by the model and the financial adviser. For example, rating
agency-expected losses on the Multi-Family Securitization Program as a
percentage of unpaid principal balances averaged approximately 29 percent, the
FDIC model loss estimates averaged 12 percent; the financial
adviser estimated losses to be 7 percent, and the actual realized losses were
approximately 7 percent. Overall, the losses
and recovery rates that were initially estimated by the rating agencies were
severely overstated for the RTC-FDIC securitization program,
…
IMPLICATIONS:
The government is in the process of giving itself more power using its own the inaccurate
rating models as justification.
vvvvvvvvvvvvv
As a result of these media blackouts and false narratives,
not only is the American public unaware about massive government fraud, but also
completely misinformed in what it does know. Given the crucial role of free
press in the democratic process, it can be said that democracy is dead in
America.
We have reached the point where virtually nothing of
significance is reported on national media outlets. Watching mainstream
news has become a painful, mind-rotting experience. Take,
for example, CBS Evening News on July 31.
Topics — CBS Evening News — July 31, 2010
Chelsea
Clinton’s Wedding (first 5 minutes)
BP
Scaling Back Clean-Up Ops (2 minutes 39 seconds)
Obama
Talks Tough on Rangel (2 minutes 51 seconds)
Ground
Zero Islamic Center Debate (2 minutes)
Great
White Sharks Close Beaches (1 minutes 54 seconds)
American
Hikers in Iran: One Year Later (1 minutes 39 seconds)
The
Best Horseshoe Pitcher Ever (2 minutes 37 seconds)
What failed to make the news? The fact that Wheat
prices surged up 42% in July, the biggest amount in more than a half century.
Instead of warning people that food prices are about to go up (useful,
relevant, important information), CBS Evening News reported on the The Best Horseshoe
Pitcher Ever.
Again, the media in America is fundamentally broken.
——————————–
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——————————– ——————————–
“Threat of
deflation”
common sense tells us, and this has been pointed
out already, that at some point a determined
expansion of the monetary base has to be effective against deflation at
the zero bound. If that were not the
case, we could eliminate all taxes, and the government could permanently
finance its operations with money creation alone.
——————————–
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Using Google archive news
There are things you can find on Google
archive news that you can’t find on Google’s regular seach.
This site will be making heavy use of Google archive news. The three main
reasons for this are:
1) To provide instant credibility
Some of the things I right about may seem unbelievable, so
being able to provide a links to thousands of articles on the
subject is very useful.
As an example, take the CIA’s
MK-ULTRA program.
MK-ULTRA: In the 1950s to the 1970s, the CIA ran a mind-control
project aimed at finding a "truth serum" to use on communist spies. Test subjects were given LSD and other drugs, often
without consent, and some were tortured. At least one man,
civilian biochemist Frank Olson, who was working for the government, died as a
result of the experiments. The project was finally
exposed after investigations by the Rockefeller Commission.
Click any of these links to see Google archive news results
with thousands of stories about the CIA’s mind-control
project: CIA
LSD experiments and CIA
drug tests and MKULTRA
and CIA
settles victims.
2) To Remind people what common sense sounds like.
Let’s
Get Rich
Why Shouldn’t We Spend?
Ocala Star-Banner – Google News Archive – Jan 19, 1965
R HENRY J. TAYLOR
If President Johnson is right (and we are
safe) in all the spending he’s proposing, what’re we waiting for? Why don’t we just double the national debt and
everybody get rich?
…
Anyone can promise to speed up the printing
presses and build up our debt. This brings happiness and
security?
Governments that overspend face global and
epidemical forces from the outside that no amount of mystic
theory can avoid or kick downstairs into the Deepfreeze. …
Decreased Value
…
The 1939 dollar’s purchasing power has already declined to less than 45
cents. Declining currencies follow the law
of physical bodies, they accelerate as the fall. But even
at the present rate our dollar will be worth less than 25 cents in 10 years.
When Mr. Johnson or anybody proposes cradle-to-the-grave
disbursements by the U. S. Treasury that somehow sounds free, our misinformation becomes complete.
A government is a spender not an earner. Anything
the government says it will give to the people it must first take from the people.
The government is spending more than the entire income of everybody west of the
Mississippi River. …
…
What is folly in the family debt, debt and more debt cannot be wisdom in the
kingdom. The applauded rulers merely come and go
and leave us to clean up the mess. So will President
Johnson on his present course. His good intentions are not pertinent. Next to
wars, nothing has finally caused mankind more
misery than Inflation with its
destruction of working people’s savings and its artificial pay.
——————————–
3) To show when the fraud began
Searching Google archive news is a great way to get a
general timeline of important events.
For example, it is easy to see that the disconnect from
economic reality is Disconnect began in 1980, as shown in the screenshot below of
Google archive news results for "Deficits
don’t matter"
Before 1980, governments that
overspend faced "global and epidemical forces from the outside that no
amount of mystic theory can avoid or kick downstairs into the
Deepfreeze." Anyone claiming that deficits don’t matter would be
laughed at. After 1980, according to the US treasury, deficits stopped
mattering.
——————————–
——————————– ——————————–
——————————–
——————————– ——————————–
THE BASIC ABSURDITY OF IT ALL
Thanks to the broken media, we are
living in an unreal world. Common sense in America appears to be dead.
1) Something for nothing
The government has managed to
convince that government spending is free. Deficits are presented as costless.
“Anything the government says it will give to the people it must first
take from the people” has become “anything the government
says it will give to the people it will produce out of thin air.” Absurdly,
Americans believe it.
So total is this misinformation
that despite 2010 Budget deficit projected
at $1.35T, Americans are afraid deflation.
Some people convince that we won’t have meaningful inflation for the next 15
years.
If deficits are truly so costless,
then “what’re we waiting for?” “Why don’t we just
double the national debt and everybody get rich?” The
government has promised us “cradle-to-the-grave disbursements by the U.
S. Treasury that somehow sounds free,” and Americans believe this promise.
Our misinformation is complete.
Common sense tells us that government deficits must have a
cost. If that were not the case, we could eliminate all taxes, and the
government could permanently finance its operations with money creation alone.
——————————–
2) “IT
GOT BETTER”
In America, long term, intractable problems simply “get
better,” without explanation or costs. Below are two examples:
A) For over twenty, the US government recklessly sold US
gold reserves to finance deficit spending until less than half was left.
Then in 1980, “it got better”. The treasury showed
responsibility by stopping official gold sales and running the largest deficits
the world has ever seen. As soon as the US ceased selling thousands of
tons of gold, the price of gold collapses, beginning a multi decade rout.
Makes perfect sense.
B) In the 1950s to ’70s, the CIA paid a number of
well-known domestic and foreign journalists to publish CIA propaganda ( See
Google archive news results for 400
American journalists ). Then, the Church Committee finally exposed the
activities in 1975, and “it got better.” In January
28th, 1976, George Bush became CIA director and announced a new policy: "Effective
immediately, the CIA will not enter into any paid or contract relationship with
any full-time or part-time news correspondent accredited by any U.S. news
service, newspaper, periodical, radio or television network or station." (Of
course, the names of the 400+ journalist were never published. This means
that every administration since that time has had a list of 400+ journalists
willing to put out their side of the story in exchange for a little cash. What
could go wrong?)
Common sense tells us problems don’t simply “get better”
without any explanation.
3) Magically fixing problems
Somehow Americans have accepted the idea that, by throwing guarantees
at the problem, the government can magically make problems go away.
Common sense tells us that The problems don’t
disappear! Hiding the damage
simply allows it to grow exponentially. Government Guarantees
are like giving a sick person morphine. Just because he can no longer
feel the pain doesn’t mean all is well.
4) Lack of rational
explanations
There is a mountain strange news developments for which no rational
explanation exists. For example, during the last thirty years, long-term interest rates have
steadily fallen in US, as demonstrated by the chart below.
Logically speaking, the chart above makes no sense. The US fundamental
underlying the US economy have grown steadily worse over the last thirty years.
For example, in 2006, the US’s current account deficit nearly hit 9
percent of gdp, and economists usually consider 4% to be unsustainable.
There are also the US’s chronic budget deficits and the massive projected
social security shortfalls. Even more incomprehensible, over the last six
months the yield on long-term treasuries has fallen in the face of a
disintegrating economy and a massive expansion of the supply of
treasuries. This is NOT how the world works: as the
financial health of borrowers decrease, their interest rates are supposed to go
up.
Common sense tells us that the refusal or inability to
explain the suspicious activities suggest fraud.
5) Dozens of Smoking Guns
Fraud isn’t hidden. One example is the
Federal Reserve’s dealing in derivatives provided above. However,
there are dozens of other “smoking guns” of government fraud which
are being ignored. The problem isn’t lack of evidence, but rather
the lack of media coverage and legal action.
TOO GOOD TO BE TRUE
A simple truth is that if something seems too good to be
true, it probably is.
If it looks like a scam, it will be a scam.
IT ONLY MAKES SENSE TAKEN ALL TOGETHER
The world makes sense
The reason the world doesn’t make sense is the same as
the reason why Madoff’s increadible profits didn’t make sense: it
was fraud. The US economy became a ponzi scheme in 1980.
The US ponzi scheme is not a single fraud, but rather a
series of overlapping frauds, one flowing into the other.
As an example of how the frauds flow together, consider the
example of Central bank gold leasing and naked short
selling, two of the most famous US frauds. The chart below shows
the gold lease rate (higher the rate, the more central bank gold
is being sold on the market) and total treasury, MBS, and corporate “failures
to deliver” (basically the amount of naked short selling of US debt, in
trillions).
The overlap between these two frauds is crystal clear (more
on this in section 9).
Driven by Desperation
The bigger the fraud, the more incentive there is to commit
even greater fraud to cover it up. It is this same desperation to cover
up past mistakes which is driving the US ponzi scheme.
This anonymous comment from the web sums up the situation
nicely.
The system is corrupted and corrupting. It is not reasonable, let alone realistic, to expect
saints or martyrs, so to speak, to materialize in sufficient numbers to turn
the tide. The system itself is so degenerate, so perverted, top to bottom, that
it will never reform itself willingly or voluntarily, especially if the money
holds up tolerably well. There is far
too much in the way of vested interests,
both material and psychological, for
the system to face the truth (assuming
it even could) and act accordingly. Lies beget more lies, and fraud begets more fraud. The system, I’m afraid, has gone past the point of no
return. It must keep the game
going at all costs, as it fully
intends to do.
The United States has, after digging itself into a hole, has
continued to dig deeper for years and is finally hitting bedrock.
——————————–
Below are the 21 sections of the major article I am working on.
Section 01: =====INTRO=====
Section 02: =====1980 Disconnect: What really happened=====
Section 03: =====BREAKING THE PSYCHOLOGY OF INFLATION=====
Section 04: =====THE US TREASURY’S WAR ON GOLD=====
Section 05: =====IDEOLOGICAL FRAUD=====
Promises politicians have made which the government can’t deliver.
Creating problems
Section 06: =====FIGHTING THE FREE MARKET (AND LOSING)=====
Section 07: =====FOREBEARANCE: The Lingering Disease=====
Section 08: =====FINANCIAL INNOVATION=====
Virtually every one of the financial "innovations" which have wrecked
the US financial system have been spearheaded by the US treasury (OTC
derivatives, securitization, credit enhancements, etc…). These
"innovations" were driven by the need to "prevent the collapse
of the financial system through any means possible (including fraud)"
Section 09: =====The US Ponzi Scheme=====
Section 10: =====Dismantling the free market=====
Section 11: =====AMERICA BECOMES INTO A GIANT BUCKET SHOP=====
Section 12: =====THE EXCHANGE STABILIZATION FUND AND MARKET MANIPULATION =====
Section 13: =====MANIPULATION=====
Section 14: =====SUICIDAL CHEAP FOOD POLICIES=====
Section 15: ===== BREAKING THE MEDIA=====
Section 16: =====DOLLARIZING THE WORLD===== (the major fraud I
haven’t written about yet)
Section 17: =====A MOCKERY OF DEMOCRACY=====
Section 18: =====SPREADING ECONOMIC AND MORAL DECAY=====
Section 19: =====Looting the Europe===== (the last fraud)
Section 20: =====Reaching the breaking point=====
Section 21: =====US on verge of another disconnect=====
The US economy disconnected from reality back in 1980 when the US economy
became a giant ponzi scheme. The ponzi scheme
——————————–
——————————–
——————————–
——————————–
Consequences of the multi-decade US ponzi scheme
James B. Thomson offers a good explanation about Markets
and Banking System Stability which helps explain what must happen.
In
the simplest terms, one can think of the financial
system as a ball rolling down a path. The first condition for stability
is directed momentum: if there are no outside forces operating on the ball, it
follows its equilibrium path. When an exogenous force, for example, new
information arriving in the market, acts on the ball, it deviates from its
path. How far the ball deviates and how quickly it
returns to the equilibrium path are also factors that affect the stability of
the system. Volatility is related to only one of these conditions: that
is, it is a measurement of how far and how often the ball deviates from some
path. Measures of volatility give us no information on how quickly the ball
returns to the equilibrium path and, indeed, cannot tell us whether the ball
returns to its path at all.
Market systems naturally exhibit more short-run
volatility than regulated ones because market forces continually make
corrective adjustments in order to return their ball to its
equilibrium path. In regulated systems, corrective
actions tend to be deferred (supervisors pretend that the ball
has not really deviated from its path), creating
an environment in which there are substantial periods of nonadjustment,
with substantial adjustments made occasionally. Large-scale
adjustments often delayed at the expense of having the ball deviate farther and
farther from its equilibrium path in the interim.
… Hence, regulated systems exhibit
less short-run volatility than market systems, but conclusions about the
relative stability of the two systems,
based solely on "measured" short-run volatility, may be as
misleading as comparisons of apples and oranges and, in any
case, are subject to the same "flows of funds versus capital stock"
criticism mentioned above.
To the extent that regulated systems achieve
less short-run volatility by suppressing the corrective forces inherent in
markets, the greater is the probability that, over time, a major
adjustment would be needed. This is analogous to the absence of
small earthquakes along a fault line, which allows stress to build up and
thereby increases the probability that a major quake eventually will occur.
Small quakes, like self-correcting market forces, relieve the pressures that
accumulate over time. Suppression of these forces
through regulatory interference allows the pressure to rise and increases
the magnitude and violence of the resulting adjustment. …
In the US, the "ball" has been deviating from equilibrium
since the US economy disconnected from reality back in 1980. Thanks to
serial frauds by the federal government, pressure and damage has been accumulating.
Right now, we have . The magnitude and violence of the adjustment back to
equilibrium will be some.
What should have been a depression back in 1980 will instead
be economic disintegration three decades later.