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The US government is a crazed criminal enterprise that is pushing the world to nuclear war
Dr. Paul Craig Roberts sent this article around prefaced with the title above yesterday. I didn’t pull it up until today but, coincidentally, a good friend/colleague of mine and I were having a discussion about the various ways in which the neocons and their defense company crony CEOs are using militarism to skim billions in taxpayer money. People don’t connect the fact that the first Gulf War was fought under George H. Bush and the second attempted Gulf War was conducted under George Herbert’s mildly retarded son.
Dick Cheney played a prominent role in both wars. He was George Herbert’s Secretary of Defense during the first military money-skimming excursion was executed and, obviously, the de facto Commander in Chief during the Iraq War. Billions were skimmed off the fat defense contracts handed out to Cheney and his cronies. Does everyone remember Haliburton charging extortionate prices for supplies and fuel to the military? Not only were there no adverse consequences, the contracts to Haliburton continued to flow.
There’s an entire of web of “technology and equipment” supply companies littered around DC’s beltway that are controlled by guys like Cheney and Rumsfeld and their cronies who run the Department of Defense and the big defense contractor companies. Most of them are private, which makes even easier to hide the cash flows.
Dr. Roberts is right, DC is one big criminal enterprise. What’s frightening is that these people will go to any lengths to continue stealing money and amassing power. Currently Russia and China pose a grave threat – not to the citizens of the U.S. but to the hegemonic power enjoyed by U.S. elitists since Bretton Woods.
While the narrative gobbled up in fear by the couch potato arm-chair tank drivers watching Fox News and CNN all day long is that Russia is provoking the U.S., the truth is the exact opposite:
Russia has not seen such a major military buildup close to its borders since 1941 when the Third Reich sent the Wehrmacht to conquer the Soviet Union, Professor Stephen F. Cohen said in his recent interview on The John Batchelor Show, referring to NATO’s increasingly assertive strategy in Eastern Europe and the Baltics.
“We have been watching for nearly a month a steady buildup of American and NATO forces along near Russia’s borders – on land, on sea and in the air,” he said. “There has been nothing like this on Russia’s borders, such an amassing of hostile military force, since the German invasion of the Soviet Union in 1941.”
Here’s the link to the article: The U.S. NATO Amasses Hostile Military Forces On Russia’s Borders.
SoT Market Update: Anti-Gold Propaganda
It comes as no surprise that a report on counterfeit gold coins hits the media right about the same time that several Fed officials are once again threatening the world with a gargantuan one-quarter of one percent nudge up in the Fed funds rate. Both are targeted at throwing cold water on investor demand for gold and assisting the Fed with pushing the price of gold lower. The entire U.S. propaganda apparatus has become Orwell on steroids.
Comex options expiration for June gold – the current “front-month” gold contract – is Wednesday. Typically this is a signal that the metals are going to be boomeranged lower temporarily. In scanning the put/call open interest ladder, interestingly there’s a sizeable imbalance in which the there’s at least twice as many open puts are there are calls. I can’t recall seeing that (although I’m sure it’s occurred), as typically it’s the other way around. It will be interesting to see how this plays out.
Rory Hall (The Daily Coin) and I discussed the alleged “flood of fake gold/silver coins” hitting the market and where the stock market may be headed in our current Shadow of Truth Market Update:
Billions Are Being Transferred From The Taxpayers To Wall Street
I stated in 2003 that the insider elitists would hold up the system with printed money long enough to wipe every last crumb of middle class wealth off the “table” and into their pockets. If you don’t have enough cash laying around to buy your own Federal-level “elected” official, you are middle class.
It’s easy for Wall Street to get their share of the crumbs being swept off the table because it’s managed to infiltrate and control every nook and cranny of Capitol Hill. Hillary Clinton is a Democrat? Really? Then how come she and Bill greedily take millions from Goldman Sachs alone in “speaking” fees. Quite frankly, ex-Presidents OR potential Presidential candidates should be barred from accepting paid appearances from any corporate or corporate-sponsored entity, but especially from Wall Street.
I want to call your attention to an investigative article by Wall Street On Parade titled “The U.S. Government [really, The Taxpayer] Is Quietly Paying Billions To Wall St. Banks.” In the past for years, 2011 – 2015, Freddie Mac alone paid out nearly $12 billion in derivatives counter-party payouts. These payouts resulted from losses interest rate swaps, 90% of which are owned by Wall Street banks. That money from Freddie Mac is actually Taxpayer money because the Government still owns FRE and FNM. LINK
But it’s even more profound than the WSOP lays out.
Interest rates are held artificially low by the Fed/Treasury, which enable FNM/FRE to underwrite mortgages for people who otherwise would not be able to afford the mortgage. The Too Big To Fail banks make money off of this is several ways. They source the mortgages and take a fee, they flip the mortgage to FNM/FRE and take a fee, they securitize the FNM/FRE mortgages and sell the mortgage pools to institutional investors and take a fee and they sell interest rate swaps to FNM/FRE and take a fee. When interest rates don’t go up because the Fed is holding them down, FNM/FRE lose money on the swaps and…Wall Street gets the money from the loss.
A close friend of mine was curious about how the housing market might play out, because – after I described what’s happening and why the mid-price homes in Denver are hot right now (while the over $800k housing inventory piles up like trash at the local dump) – I explained that the same mortgage bubble that fueled the big housing bubble has been reinflated. The only difference is that FNM/FRE are now the underwriters of sub-prime mortgages that are disguised to look like conventional mortgages. But they’re far from “conventional.” If someone puts down 3% – or, more likely borrows the 3% – they are underwater on the value of their home after all closing costs are factored in. These de facto LTV mortgages well in excess of 100%. That’s what Countrywide and Wash Mutual were underwriting, only this time it’s well-disguised and backed by YOU, the Taxpayer.
The same dynamic has already occurred with auto loans and student debt. Auto loans are starting to blow up, as are student loans. These 3% (FHA) and 3.5% (FNM/FRE) and 0% (USDA and VHA) down payment mortgages are next. We’re already seeing this occur in energy-heavy areas like Houston. What’s going to happen to the Central States Teamster pension beneficiaries who need their pension payout to make a mortgage payment after their payout is cut 60%? That’s close to half a million people, many of whom use that payout to fund monthly mortgage payments.
There’s another gigantic bail-out coming. And Wall Street will get to keep all the $10’s of billions in Taxpayer money that was funneled to it while it was underwriting the current housing, auto sales and student loan bubble.
My friend then asked me what I thought be would be the event that collapses the U.S. house of cards. The fact is, no one knows but it will likely be derivatives-related just like in 2008. No one saw the de facto AIG/Goldman collapse. Note: the Martins reference AIG blowing up but Goldman Sachs blew up too. The only difference between AIG and Goldman was that Henry Paulson, ex-Goldman CEO who was Treasury Secretary, was in a position to direct Taxpayer money toward a bail-out Goldman, while AIG and Lehman were left for dead. Note also: AIG was taken over by the Government because it enabled the Government to “dis-arm” – with the help of the Fed – all of the derivative bombs that would have completely incinerated Goldman Sachs.
The only way to protect yourself from what’s coming is to get your money out of the banking system. The Fed’s inexorable suppression of the price of gold/silver is openly giving everyone a chance to convert as much paper monopoly money as possible into physical gold and silver at artificially low prices.
A Mining Stock Journal subscriber told me over the weekend that he was contemplating a 100% cash-out refi on on his house, which has a lot of equity in it, and buying gold and silver. He asked me if I thought it was a good idea. I said that as long as he was okay sending the keys to the bank and walking away when this thing blows – because I know of a lot of people who are going to do just that – that he would be an idiot if he didn’t do it.
This is exactly what Wall Street is doing with the Government’s blessing. If you can’t beat ’em, join ’em…
The Daily Coin Guest Appearance: Junior Mining Stocks
Rory Hall, my co-host and producer of the Shadow of Truth series invited me onto his Daily Coin interview show last week:
I sat down with Dave Kranzler, Investment Research Dynamics, to discuss the miners and investing in mining stocks. Over the past couple of months I have interviewed CEO’s and other executives with some of the best junior mining companies on the market. Before you turn away answer this one question – how much free gold and silver would you like to add to your stack? That’s right, free physical gold and/or silver…The Daily Coin – Mining the Miners…
SoT Market Update: Federal Reserve Intervention In Full Force
The Fed is in full market intervention mode right now. It is desperate to keep the S&P 500 above 2,000 and gold below $1300. Despite the intensified threats to hike interest rates at the June FOMC meeting, the stock market continues to spike up and gold is being pushed down. It’s blatant manipulation. Interestingly, research shows – LINK – that Fed interest rate hike cycles are bullish for gold.
Futhermore, the non-seasonally adjusted, non-manipulated economic data continues to 
show the economy has slipped into an “unofficial recession.” Certainly a rate hike accelerate the problem reflected in this graph (click to enlarge) to the right, which shows the year over year rate of change in the number of delinquencies for commercial and industrial banks.
In other words, we can expect the rate business bankruptcies and liquidations to accelerate going forward. I guess if Yellen wants to get tagged with that legacy then the Fed should go ahead an push up rates another 25 basis points in June.
Fed Funds Rate Hike: Another Empty Threat?
What are these Fed officials doing? They’re putting into question the credibility of the institution because they sound like idiots. – a good friend/colleague of Investment Research Dynamics
It’s becoming a farce of epic proportions, especially when there’s an entire month between FOMC meetings. Starting this past Tuesday the typical Fed officials began their monthly cyclical cant of rate hike threats. For some reason the stock and paper derivative 
precious metals markets always take a beating when the “threat” of a rate hike at the next meeting is floated.
On Tuesday one official stated that June was a meeting at which action could be taken but that it was too early based on Q2 data “to draw a conclusion.” Another official, SF Fed Prez, John Williams, threatened that “June was a live meeting.” Both officials gave themselves an “out” by saying that a rate hike depends on the data.
Today Bill Dudley, the ex-Goldman Sachs criminal who’s in charge of the NY Fed, also used the phrase, “June is a live meeting.” Can anyone tell me what this means? Does this mean that all the other FOMC meetings prior to June’s were fake? Is the term “live” going to become “Fed-speak” for “a rate hike will be discussed at the next meeting but we may or may not raise rates?….I’m telling you, people, this next meeting is going to be a live one so you better watch out…”
Here’s an interesting question that no one has thought of to ask: The Fed has 
implemented interest rate changes between meetings. It’s rare but it’s happened. If these Fed officials are serious about raising rates, why not do it now? Why torture the market with series of empty threats? If unemployment is really only 5% and inflation is at the Fed’s target rate – see this speech Stanley Fisher today: LINK – then raise rates now. At 25 basis points per hike, it would take 13 rate hikes to raise the Fed Funds up to China’s overnight bank lending rate.
If the Fed raises rates even just 25 basis points, it risks derailing the smoldering level of economic activity that remains from the QE/money printing program. Currently there’s still a pool of renters out there who can buy a low-priced home or apartment with a monthly mortgage nut including real estate taxes that is about the same as their rent payments.
What’s not being fully disclosed by the banks/Fannie Mae/Freddie Mac etc is that many of the mortgages these people receive are being underwritten with no cash-out-pocket down payment. True debt to income ratios are exploding and the ratio of the monthly mortgage payment to monthly after-tax income is well over 50%. These are extreme sub-prime mortgages with a heavy application of cosmetics on the facade. Even a 25 basis point increase in the Fed funds rate would translate into an increase in mortgage rates that would disrupt this portion of the current housing bubble.
While the Fed might be able to prevent the stock market from plummeting, if it follows through on its rate hike threats, it would be unable to prevent the plunge in economic activity that is dependent on near-zero bank funding rates.
“Gold Thrives On Rate-Hike Cycles”
Several of my Mining Stock Journal subscribers have asked what I think will happen if the Fed raises rates. It may seem counter-intuitive, but there have been several periods in which gold moved higher during rate-hike cycles by the Fed. Rather than spend time re-inventing the wheel of evidence, I found a detailed statistical analysis by Adam Hamilton (Zeal Speculation and Investment Newsletter) which proves this point. Hamilton tends to be quite verbose, so here’s the Cliff Notes to his findings:
On average during the exact spans of all 11 of the Fed’s rate-hike cycles of the modern era, gold rallied 26.9% higher! That’s a serious gain during events that are supposed to slaughter gold. If I was a futures speculator heavily short gold with extreme leverage, this would terrify me.
Digging deeper, the hard historical data proves Fed-rate-hike cycles are even more bullish for gold. The majority 6 of these 11 cycles have seen gold gains averaging a staggering 61.0%! Gold is more likely to rally big during a Fed-rate-hike cycle than fall, contrary to speculators’ self-fueled delusion today. You can read the entire here: Gold Thrives On Rate Hike Cycles.
The bottom line for me is, if the Fed wants to raise interest rates, I say “Bring It On.”
Obama’s Presidency: Probably The Worst In U.S. History
I vividly recall stating to friends and colleagues in the summer of 2008 that W was the worst President in history. At that point I was welcoming the idea of Obama: a guy who seemed completely detached from Washington’s inside mafia and Wall Street’s never-arraigned felons. I was ecstatic over his promise to clean up the fraud and corruption that had been engulfing Wall Street and Capitol Hill over the past couple of Presidents.
About a year into his first term, I had Obama figured out. His campaign slogans were empty billows of mendacious smoke billowing from his mouth. He has not followed through on one plank in his campaign platform. The only people who can’t see it are his slavishly blind devotees, many of whom are afraid to say anything negative about a black man out of fear of being labelled a racist. It was brilliant exercise in psychology by the insiders who selected Obama over Hillary in 2008. At that point I told friends and colleagues that Obama will possibly go down as the worst President in history.
Part of the catalyst was the high expectations for which we were set up. He seemed like he really wanted to make a difference. A close friend argued with me the other day that it’s not Obama’s fault – that Congress has prevented Obama from fulfilling his promises. But that is thoroughly untrue. Obama has actively employed the act of Executive Order routinely and systematically to override Congress, as a threat to override Congress and as a device to circumvent the Constitution. This is the very same act of Executive Order he promised to eliminate from the Oval Office tool chest. Everyone remember him making that promise? Because I recall it distinctly
The author of Washington’s Blog wrote a must-read commentary which details why Obama’s Presidency has been a complete failure – possibly the greatest failed Presidency in history: “Bush was a horrible president. At the time, I thought he was the worst president in American history…”
…But Obama has made a lot of firsts himself:
- Prosecuted fewer financial crimes than President Reagan, Clinton or either of the Bush presidents. (As bad as the Bush administration was, they at least prosecuted the heads of Enron, Worldcom and some other white collar crooks. In contrast, Obama hasn’t prosecuted even one high-level Wall Street executive.)
- Is the most secretive president ever
- Is more hostile to the press than any president in history
- Claims the power to strip Americans’ liberty in a way that no other president has ever tried to claim … and that even King George of England didn’t claim. Indeed, Obama has rolled back some of our liberties to the time of the enactment of the Magna Carta in 1215.
That’s a partial list. I highly recommend reading the rest of the article: Washington’s Blog.
Now Obamacare, doomed from the beginning, is collapsing as big insurance companies successively drop out of the Obamacare network and the quality of healthcare in this country continues to deteriorate. I can’t wait to see what happens to retail sales when the next round of health insurance premiums hits the system shortly before the November election…
The Audit The Fed Movement In Congress Is A Joke
CNBC announced yesterday that “The ‘audit the Fed’ movement is taking a big step in Congress this week.” Only here’s the problem:
The bill seeks not a financial exam of the U.S. central bank but rather a peek behind the curtain of how monetary decision-making happens. LINK
The first time I read that, it me left somewhat stunned. “A peek behind the curtain” of how monetary decisions happen? Seriously? I think we get to see this in action every day between FOMC meetings, when the various Federal Reserve retards step up to the podium to drool all over themselves as they as mumble incoherently about raising interest rates at the next meeting. In fact, just today some chode from the Atlanta Fed named Lockhart stated that:
June certainly could be a meeting at which action could be taken. I think it is a little early at second-quarter data to draw a conclusion, so I am at this stage inconclusive about how I am going to be thinking about June, but I wouldn’t take it off the table.
Here’s SF Fed Head John Williams – this is just priceless: “I think the incoming data have actually been quite good and reassuring in terms of policy decisions, so, in my view, June is a live meeting.”
Really John, June is going to a “live” meeting? Does that mean that the rest of them have been fake? From where are you getting your data- the toy chest at your dentist’s office?
I hope that guy didn’t actually have to pay for his education because it was a colossal waste of money if he did. Do we really need Congress wasting time passing legislation to mandate a “peek” at that?
I just don’t understand how these Fed officials can threaten to raise rates predicated on the economic “data” that’s being released. It’s childish. Everyone knows the Fed can’t raise rates without collapsing the house of cards it has created. The sharp sell-off in the 
stock market today was attributed to the turret’s syndrome outbursts by these two idiots. But nothing could be further from the truth. The market sold off today in a reversal of the manipulated spike higher yesterday. The momentum-chasing computer algos began dumping the historically overvalued shares they gobbled up yesterday.
One of the big banks issued a study a couple weeks ago which showed that the only entities buying stocks right now are pension funds. “Smart” money is dumping shares at an unprecedented rate and really smart money is getting extremely net short and/or loading up on gold (it was revealed yesterday in an SEC filing that Soros Funds made gold its largest holding).
I said 12 years ago that the last asset remaining after housing for the elitists to loot would be the retirement assets. It’s starting: severely underfunded pension funds loading up on the overvalued stocks being dumped by insiders and “smart” money. “Underfunded” is a socially polite way to say “the pension fund has a big debt obligation to future beneficiaries.” An underfunded pension fund buying stocks on margin is no different than someone buying stocks in a IRA on margin, only the latter is not allowed by law.
An audit of the Fed will NEVER happen. This country will collapse before any kind of reform or change is ever possible. I knew the possibility of an audit of any substance died the very first time Ron Paul tried to pull a proposal through the House Financial Services Committee. Chairman Barney Frank sat on it before deciding to use it as toilet paper.
What do we need an audit for anyway? Everyone knows the Fed does not have the gold that it claims to be “safekeeping” on behalf of the U.S. Treasury. The Fed knows everyone knows. But as long as no one forces the Fed to open up its “deep storage” vaults, everyone can keep pretending that the gold is there.
A reader asked this question today: “if naked shorts are allowed to be dumped on the Gold and Silver exchanges without any regard for reality, how can the companies that are shorting be stopped from shorting? It seems to me they control the deck and the rules on the Comex and CFTC have been tailored to allow them to manipulate the market and if that is the case what can stop them?”
My answer is that the physical market will eventually cause a massive default by the naked shorts. But my view for the last 15 years has been that the U.S. will start a world war before it is forced by the physical market to reveal the truth. I stand by that call. A non-audit of the Fed is likely deferring the inevitable…
Silver Remains The Cheapest Investment On Earth
As discussed earlier, today’s price-action in the paper Comex gold market is nothing that a reflection of the Fed’s desperate attempt to keep the price of gold from breaking out above $1300. The reason for this is that a break-out above $1300 would trigger a lot of computer-generated buying and likely catapult gold in the $1500’s rather quickly. If you notice, since the end of April the Fed has slammed gold as it traded above $1290. $1300 was rejected on May 2nd and 3rd. It’s similar to when gold was punching on the ceilings set at $400, $500, $600 etc back in the mid-2000’s.
Silver is a much smaller market and is used for more than just a currency and wealth preservation asset. Depending on the relative strength of the economy, up 70% of all silver is used for industrial applications. At the margin, a small incremental shift in the demand curve for investment silver has the potential to bury the issuers of uncovered paper silver (Comex futures, OTC derivatives, LBMA forwards, etc).
When the Fed/ECB/BOE/BIS loses control of the precious metals derivatives markets – an event which could easily occur this year – silver’s rate of appreciation will stun most observers/commentators. The SGT Report invited me on its podcast show to discuss the precious metals market and the insidious corruption that has engulfed the U.S. system.
You can subscribe to the Mining Stock Journal using this link – new subscribers will receive all of the back-issues (March 4, 2016 debut): MINING STOCK JOURNAL
The Fed Is Desperate To Keep Gold From Exploding Higher
The Federal Reserve’s “invisible hand” in the markets is no longer “invisible.” It’s become obvious to most market participants that the Fed is working hard to keep the stock market from collapsing and the price of gold below $1300. But why?
The price of gold moved up $15 overnight from the time the Asian markets opened until the Comex gold pit opened. Shortly after the Comex paper gold market trading was underway, an avalanche of paper contracts was dumped onto the Comex – both the electronic trading system and the floor. This is what it looked like (click to enlarge):
Gold’s path looks like Niagra Falls in the graph above because shortly after the Comex opened this morning because “someone” decided to dump over 55,000 contracts onto the Comex. 55k contracts translates into 5.5 million ounce of theoretical gold.
“Theoretical” because it’s only in theory that the Comex has 5.5 million ounces of gold to deliver. Currently the Comex is reporting a little over 697k ounces that are available to be delivered into the paper gold contracts that the banks print up and dump on the market. The Comex vaults are showing a little over 7 million ounces in total in the vaults. This is highly theoretical because most of the gold is accounted for the big bullion banks. I use “accounted for” loosely because there is no mechanism in place to hold the banks accountable for what they are reporting.
In other words, the amount of “physical” gold reported by the Comex is likely nothing more than a “suggestion.”
In the graph to the left (click to enlarge) there’s been a definitive trading pattern that doesn’t take Einstein’s eyes and brain to see. For the last three trading days, gold has moved higher prior to the opening of the Comex floor in NYC only to be price-smashed with a deluge of paper contracts representing little more that theoretical gold.
But I prefer the real thing. I actually welcome these price hits because it enables me to move theoretical electronic currency from my bank account into a bona fide gold currency in a BITGOLD account. When gold moves higher, my net worth will be the beneficiary of the Fed’s market interventions. I look at it as grabbing my share of the 
wealth being transferred by the Fed/Government from the besotted middle class to those who know what’s going on.
Of course, the more interesting question begs to know the real reasons the Fed is compelled to make its market intervention activities so blatant. One look at the economic reports being released from non-Government sources and the condition of the U.S. Government’s balance sheet readily answers that question…