The Federal Reserve Cartel: The Roundtable & The Illuminati

by Dean Henderson
June 15, 2011

Part III

According to former British intelligence agent John Coleman’s book, The Committee of 300, the Rothschilds exert political control through the secretive Business Roundtable, which they created in 1909 with the help of Lord Alfred Milner and South African industrialist Cecil Rhodes. The Rhodes Scholarship is granted by Cambridge University, out of which oil industry propagandist Cambridge Energy Research Associates operates. 

Rhodes founded De Beers and Standard Chartered Bank.  According to Gary Allen’s expose, The Rockefeller Files, Milner financed the Russian Bolsheviks on Rothschild’s behalf, with help from Jacob Schiff and Max Warburg.

In 1917 British Foreign Secretary Arthur Balfour penned a letter to Zionist Second Lord Lionel Walter Rothschild in which he expressed support for a Jewish homeland on Palestinian-controlled lands in the Middle East. [1]

The Balfour Declaration justified the brutal seizure of Palestinian lands for the post-WWII establishment of Israel.  Israel would serve, not as some high-minded “Jewish homeland”, but as lynchpin in Rothschild/Eight Families control over the world’s oil supply.  Baron Edmond de Rothschild built the first oil pipeline from the Red Sea to the Mediterranean to bring BP Iranian oil to Israel.  He founded Israeli General Bank and Paz Oil. He is considered by many the father of modern Israel. [2]

Roundtable inner Circle of Initiates included Lord Milner, Cecil Rhodes, Arthur Balfour, Albert Grey and Lord Nathan Rothschild.  The Roundtable takes its name from the legendary knight of King Arthur, whose tale of the Holy Grail is paramount to the Illuminati notion of Sangreal or holy blood.

John Coleman writes in The Committee of 300, “Round Tablers armed with immense wealth from gold, diamond and drug monopolies fanned out throughout the world to take control of fiscal and monetary policies and political leadership in all countries where they operated.”

While Cecil Rhodes and the Oppenheimers went to South Africa, the Kuhn Loebs were off to re-colonize America.  Rudyard Kipling was sent to India. The Schiffs and Warburgs manhandled Russia. The Rothschilds, Lazards and Israel Moses Seifs pushed into the Middle East.  In Princeton, New Jersey the Round Table founded the Institute for Advanced Study (IAS) as partner to its All Souls College at Oxford.  IAS was funded by the Rockefeller’s General Education Board. IAS members Robert Oppenheimer, Neils Bohr and Albert Einstein created the atomic bomb. [3]

In 1919 Rothschild’s Business Roundtable spawned the Royal Institute of International Affairs (RIIA) in London.  The RIIA soon sponsored sister organizations around the globe, including the US Council on Foreign Relations (CFR), the Asian Institute of Pacific Relations, the Canadian Institute of International Affairs, the Brussels-based Institute des Relations Internationales, the Danish Foreign Policy Society, the Indian Council of World Affairs and the Australian Institute of International Affairs. Other affiliates popped up in France, Turkey, Italy, Yugoslavia and Greece. [4]

The RIIA is a registered charity of the Queen and, according to its annual reports, is funded largely by the Four Horsemen.  Former British Foreign Secretary and Kissinger Associates co-founder Lord Carrington was President of both the RIIA and the Bilderbergers.  The inner circle at RIIA is dominated by Knights of St. John Jerusalem, Knights of Malta, Knights Templar and 33rd Degree Scottish Rite Freemasons.  The Knights of St. John were founded in 1070 and answer directly to the British House of Windsor.  Their leading bloodline is the Villiers dynasty, which the Hong Kong Matheson family married into. The Lytton family also married into the Villiers gang. [5]

Colonel Edward Bulwer-Lytton led the English Rosicrucian secret society, which Shakespeare opaquely referred to as Rosencranz, while the Freemasons took the role of Guildenstern.  Lytton was spiritual father of both the RIIA and Nazi fascism.  In 1871 he penned a novel titled, Vril: The Power of the Coming Race.  Seventy years later the Vril Society received ample mention in Adolf Hitler’sMein Kampf.  Lytton’s son became Viceroy to India in 1876 just before opium production spiked in that country.  Lytton’s good friend Rudyard Kipling worked under Lord Beaverbrook as Propaganda Minister, alongside Sir Charles Hambro of the Hambros banking dynasty. [6]

James Bruce, ancestor to Scottish Rite Freemason founder Sir Robert the Bruce, was the 8th Earl of Elgin. He supervised the Caribbean slave trade as Jamaican Governor General from 1842-1846.  He was Britain’s Ambassador to China during the Second Opium War.  His brother Frederick was Colonial Secretary of Hong Kong during both Opium Wars.  Both were prominent Freemasons.  British Lord Palmerston, who ran the Opium Wars, was a blood relative of the Bruce monarchy, as was his Foreign Secretary John Russell, grandfather of Bertrand Russell. [7]

Children of the Roundtable elite are members of a Dionysian cult known as Children of the Sun.  Initiates include Aldous Huxley, T. S. Eliot, D. H. Lawrence and H. G. Wells.  Wells headed British intelligence during WWI. His books speak of a “one-world brain” and “a police of the mind”.  William Butler Yeats, another Sun member, was a pal of Aleister Crowley.  The two formed an Isis Cult based on a Madam Blavatsky manuscript, which called on the British aristocracy to organize itself into an Isis Aryan priesthood. Most prominent writers of English literature came from the ranks of the Roundtable. All promoted Empire expansion, however subtly.  Blavatsky’s Theosophical Society and Bulwer-Lytton’s Rosicrucians joined forces to form the Thule Society out of which the Nazis emerged. [8]

Aleister Crowley formed the British parallel to the Thule Society, the Isis-Urania Hermetic Order of the Golden Dawn.  He tutored LSD guru Aldus Huxley, who arrived in the US in 1952, the same year the CIA launched its MK-ULTRA mind control program with help from the Warburg-owned Swiss Sandoz Laboratories and Rockefeller cousin Allen Dulles- OSS Station Chief in Berne.  Dulles received information from the Muslim Brotherhood House of Saudi regarding the creation of mind-controlled Assassins.  Dulles’ assistant was James Warburg. [9]

The Atlantic Union (AU) was an RIIA affiliate founded by Cecil Rhodes- who dreamed of returning the US to the British Crown.  In 1939 AU set up its first offices in America in space donated by Nelson Rockefeller at 10 E 40th St in New York City.  Every year from 1949-1976 an AU resolution was floored in Congress calling for a repeal of the Declaration of Independence and a “new world order”. Another RIIA affiliate was United World Federalists (UWF)- founded by Norman Cousins and Dulles assistant James P. Warburg.  UWF’s motto was “One world or none”.  Its first president Cord Meyer stepped down to take a key position in Allen Dulles’ CIA.  Meyer articulated UWF’s goal, “Once having joined the One-World Federated Government, no nation could secede or revolt…with the atom bomb in its possession the Federal Government would blow that nation off the face of the earth.” [10]

In 1950 James Warburg, whose elders Max and Paul sat on the board of Nazi business combine IG Farben, testified before the Senate Foreign Relations Committee, “We shall have world government whether or not you like it- by conquest or consent.”  The AU and UAF are close to the CFR and the Trilateral Commission (TC)- founded by David Rockefeller and Zbigniew Brzezinski in 1974. [11]

The TC published The Triangle Papers which extended the “special relationship between the US and Western Europe” to include Japan, which was fast becoming creditor to the rest of the world.  Former Federal Reserve Chairman Paul Volcker was TC Chairman.  TC/CFR insider Harvard Professor  Samuel Huntington, who most recently has argued for a “Clash of Civilizations” between the West and the Muslim world, wrote in the TC publication Crisis in Democracy, “…a government which lacks authority will have little ability short of cataclysmic crisis to impose on its people the sacrifices which may be necessary.” [12]

The Illuminati

The Illuminati serves as ruling council to all secret societies.  Its roots go back to the Guardians of Light in Atlantis, the Brotherhood of the Snake in Sumeria, the Afghan Roshaniya, the Egyptian Mystery Schools and the Genoese families who bankrolled the Roman Empire.  British Prime Minister Benjamin Disraeli, who “handled” mafia-founder and 33rd Degree Mason Guiseppe Mazzini, alluded to the Illuminati in a speech before the House of Commons in 1856 warning, “There is in Italy a power which we seldom mention. I mean the secret societies.  Europe…is covered with a network of secret societies just as the surfaces of the earth are covered with a network of railroads.”[13]

The Illuminati is to these secret societies what the Bank of International Settlements is to the Eight Families central bankers.  And their constituencies are exactly the same.

The forerunners of the Freemasons -the Knights Templar- founded the concept of banking and created a bond market as a means to control European nobles through war debts.  By the 13th century the Templars had used their looted Crusades gold to buy 9,000 castles throughout Europe and ran an empire stretching from Copenhagen to Damascus.  They founded modern banking techniques and legitimized usury via interest payments.  Templars’ bank branches popped up everywhere, backed by their ill-gotten gold.  They charged up to 60% interest on loans, launched the concept of trust accounts and introduced a credit card system for Holy Land pilgrims.  They acted as tax collectors, though themselves exempted by Roman authorities, and built the great cathedrals of Europe, having also found instructions regarding secret building techniques alongside the gold they pilfered beneath Solomon’s Temple.  The stained glass used in the cathedrals resulted from a secret Gothic technique known by few.  One who had perfected this art was Omar Khayvam, a good friend of Assassin founder Hasan bin Sabah. [14]

The Templars controlled a huge fleet of ships and their own naval fleet based at the French Atlantic Port of La Rochelle.  They were especially cozy with the royals of England.  They purchased the island of Cyprus from Richard the Lion Heart, but were later overrun by the Turks.  On Friday October 13, 1307 King Philip IV of France joined forces with Pope Clement V and began rounding up Templars on charges ranging from necromancy to the use of black magic.  Friday the 13th would from that day forward carry negative connotations. “Sion” is believed to be a transliteration of Zion, itself a transliteration for the ancient Hebrew name Jerusalem.  The Priory of Sion came into public view in July 1956.  A 1981 notice in the French press listed 121 dignitaries as Priory members.  All were bankers, royalty or members of the international political jet set.  Pierre Plantard was listed as Grand Master.  Plantard is a direct descendent, through King Dagobert II, of the Merovingan Kings.  Plantard, who owns property in the Rennes-le-Chateau area of southern France where the Priory of Sion is based, has stated that the order has in its possession lost treasure recovered from beneath Solomon’s Temple and that it will be returned to Israel when the time is right.  He also stated that in the near future monarchy would be restored to France and other nations. The Templars claim to possess secret knowledge that Jesus Christ married Mary Magdalene, fathered children to launch the Merovingan bloodline and was the son of Joseph of Arimathea. [15]

Joseph was the son of King Solomon.  Solomon’s Temple is the model for Masonic Temples, which occur without fail in every town of any size in America.  It was a place of ill repute where fornicating, drunkenness and human sacrifice were the norm.  Accorder to British researcher David Icke, it’s location on Jerusalem’s Mount Moriah may have also been an Anunnaki flight control center. The Annunaki are the reptilian/aliens revealed by the Sumerian clay tablets- the oldest written accounts of humankind known. The Crusader Knights Templar looted their huge store of gold and numerous sacred artifacts from beneath the Temple.  King Solomon was the son of King David- who during his 1015 BC reign massacred thousands of people.

Icke calls King David “a butcher” and asserts that the king wrote a good chunk of the Bible.  His son Solomon killed his own brother to become King.  He advised Egyptian Pharaoh Shiskak I, marrying his daughter.  Solomon studied at Akhenaton’s Egyptian Mystery Schools, where mind control was rampant.  The Grand Lodge of Cairo spawned a network of secret societies including Assassins, Cabalists, Freemasons and the Afghan Roshaniya. Those who pass through to the highest levels become Illuminati.

Icke claims the Canaanite Brotherhood was headed by the god/king Melchizedek, who may have been an Annunaki.  The King focused on a Hebrew understanding of the Ancient Mysteries. The Order of Melchizedek became the secret society associated with the Cabala.  King Solomon developed his vast wisdom studying the Sumerian Tables of Destiny which Abraham had possessed.  Abraham may have also been of Anunnaki origin.

Both he and Melchizedek had been tutored by the Sumerian Brotherhood of the Snake, whose name may have something to do with the Biblical creation story, where Adam and Eve are tempted from a bountiful garden of Eden (a hunting and gathering existence?) into a world of “sin and servitude” by a snake.  When the Bible says that the first couple ate the forbidden fruit, could it mean that Eve was impregnated by the snake – an Annunaki serpent (the Nephilim of the Book of Genesis) – thus damning all Adamus to a life of toil under serpent king bloodline control?

The basis of the Sumerian Tables of Destiny which Abraham possessed became known as Ha Qabala, Hebrew for “light and knowledge”.  Those who understood these cryptic secrets, said to be encoded throughout the Old Testament, are referred to deferentially as Ram.  The phrase is used in Celtic, Buddhist and Hindu spiritual circles as well.  The Knights Templar brought Cabbalistic knowledge to Europe when they returned from their Middle East Crusade adventures. [16]

The Knights created the Prieure de Sion on Mt. Zion near Jerusalem in the 11th century to guard such holy relics as the Shroud of Turin, the Ark of the Covenant and the Hapsburg family’s Spear of Destiny- which was used to kill Jesus Christ.  The Priory’s more important purpose was to guard Templar gold and to preserve the alleged bloodline of Jesus – the royal Sangreal – which they believe is carried forth by the French Bourbon Merovingan family and the related Hapsburg monarchs of Spain and Austria. [17]  The French Lorraine dynasty, which descended from the Merovingans, married into the House of Hapsburg to acquire the throne of Austria.

The Hapsburgs ran the Holy Roman Empire until its dissolution in 1806, through King Charles V and others.  The family traces its roots back to a Swiss estate known as Habichtburg, which was built in 1020.  The Hapsburgs are an integral part of the Priory of Sion. Many researchers believe that Spain’s Hapsburg King Philip will be crowned Sangreal World King in Jerusalem.  The Hapsburgs are related to the Rothschilds through Holy Roman Emperor Frederick Barbarossa’s second son Archibald II.

The Rothschilds- leaders in Cabala, Freemasonry and the Knights Templar- sit at the apex of the both the Illuminati and the Eight Families banking cartel.  The family accumulated its vast wealth issuing war bonds to Black Nobility for centuries, including the British Windsors, the French Bourbons, the German von Thurn und Taxis, the Italian Savoys and the Austrian and Spanish Hapsburgs. The Eight Families have also intermarried with these royals.

Author David Icke believes the Rothschilds represent the head of the Anunnaki Serpent Kings, stating, “They (Rothschilds) had the crown heads of Europe in debt to them and this included the Black Nobility dynasty, the Hapsburgs, who ruled the Holy Roman Empire for 600 years.  The Rothschilds also control the Bank of England.  If there was a war, the Rothschilds were behind the scenes, creating conflict and funding both sides.”[18]

The Rothschilds and the Warburgs are main stockholders of the GermanBundesbank.  Rothschilds control Japan’s biggest banking house Nomura Securities via a tie-up between Edmund Rothschild and Tsunao Okumura.  The Rothschilds are the richest and most powerful family in the world.  They are also inbred.  According to several family biographers, over half of the last generation of Rothschild progeny married within the family, presumably to preserve their Sangreal. [19]

The 1782 Great Seal of the United States is loaded with Illuminati symbolism.  So is the reverse side of the US $1 Federal Reserve Note, which was designed by Freemasons.  The pyramid on the left side represents those in Egypt- possibly space beacon/energy source to the Anunnaki- whose Pharaohs oversaw the building of the pyramids using slave labor.

The pyramid is an important symbol for the Illuminati bankers. They employ Triads, Trilaterals and Trinities to create a society ruled by an elite Sangrealfew presiding over the masses- as represented by a pyramid.  The Brotherhood of the Snake worshiped a Trinity of Isis, Osirus and Horus- who may have been Anunnaki offspring.  The Brotherhood spread the concept of Trinity to Christian (Father, Son and Holy Spirit), Hindu (Brahma, Shiva and Krishna) and Buddhist (Buddha, Dharma and Sangha) faiths. [20]

The reptilian eye atop the pyramid depicted on the $1 bill is the all-seeing eye of the Afghan Roshaniya, known alternately as The Order and Order of the Quest- names adopted by Skull & Bones, Germanorden and the JASON Society. [21]  Take a magnifying glass and look at the eye’s pupil. There is an image of an alien inside the pupil. I’m not kidding.

Novus Ordo Seclorum appears beneath the pyramid, while Annuit Coeptis appears above the all-seeing eye.  Annuit Coeptis means “may he smile upon our endeavors (Great Work of Ages)”.  Above the eagle on the right side of the note are the words E Pluribus Unum, Latin for “out of many one”.  The eagle clutches 13 arrows and 13 olive branches, while 13 stars appear above the eagle’s head.  America was founded with 13 colonies.  Templar pirate Jaques deMolay was executed on Friday the 13th.

The numbers 3, 9, 13 and 33 are significant to the secret societies.  33rd-degree Freemasons are said to become Illuminati. According to the late researcher William Cooper, the Bilderberger Group has a powerful Policy Committee of 13 members.  It is one of 3 committees of 13 which answered (until his recent death) to Prince Bernhard- member of the Hapsburg family and leader of the Black Nobility.  The Bilderberg Policy Committee answers to a Rothschild Round Table of 9. [22]

Next Time: The Creature from Jekyl Island

[1] “The Secret Financial Network Behind ‘Wizard’ George Soros”. William Engdahl. Executive Intelligence Review. 11-1-96

[2] Rule by Secrecy: The Hidden History that Connects the Trilateral Commission, the Freemasons and the Great Pyramids. Jim Marrs. HarperCollins Publishers. New York. 2000. p.83

[3] Ibid. p.89

[4] Fourth Reich of the Rich. Des Griffin. Emissary Publications. Pasadena, CA. 1978. p.77

[5] The Robot’s Rebellion: The Story of the Spiritual Renaissance. David Icke. Gateway Books. Bath, UK. 1994. p.195

[6] Ibid

[7] Dope Inc.: The Book that Drove Kissinger Crazy. The Editors of Executive Intelligence Review. Washington, DC. 1992. p.264

[8] Ibid. p.538

[9] Dope Inc.

[10] Ibid

[11] Ibid

[12] Marrs

[13] Icke. p.148

[14] Bloodline of the Holy Grail. Laurence Gardner. Element Books, Inc. Rockport, MA. 1996

[15] Holy Blood, Holy Grail. Michael Bagent, Richard Leigh and Henry Lincoln. Dell Publishing Company New York. 1983

[16] Icke.

[17] Behold a Pale Horse. William Cooper. Light Technology Press. Sedona, AZ. 1991. p.79

[18] Children of the Matrix. David Icke. Bridge of Love Publishing. Scottsdale, AZ. 2000.

[19] Marrs. p.71

[20] Icke. 1994. p.42

[21] Ibid. p.71

[22] Cooper

The Fed Distorts The Economy With Inflation

by Bob Chapman
International Forecaster
March 5, 2011

The Federal Reserve tells us we need inflation to overcome the overhang created by debt and its inflationary aspects. The inflation does not create jobs – it just distorts prices upward. We are told by the head of the Fed, Mr. Bernanke, that he can end inflation when he thinks it is necessary. That is not true, because if inflation ends deflation takes command and the economy collapses. There is no finely honed instrument for turning these two opposite effects on and off; thus, inflationary instruments have to be blunt and overused. That means more often than not that inflation is over implemented. This is the opposite of the Fed’s mandate of promoting price stability, full employment and in fact is used to prop up the banking system. Over the past three plus years the Fed has been attempting to assist the banks in getting rid of bad assets and these efforts may last for another fifty years. These banks hold more bad assets then they have ever held before. These problem assets are the result of excessive lending and speculation between 2003 and 2008, and low interest rates that lasted far too long.

The quality and existence were recognized in the credit crisis that began in 2007. Most of these impaired assets are still on bank books, but the Bank of International Settlements, the FASB, the accounting agency and the government say it’s perfectly fine to keep two sets of books. If you did that in your business you’d end up in jail, but it is perfectly fine for the financial sector and transnational banks to do so. That is what QE1 was all about – bailing out the financial sector and other elitist corporations. These bad assets, that haven’t been sold to the Fed, are frozen on the balance sheets of these institutions, perhaps in perpetuity.

Fed created inflation raises the real value of assets artificially, so that these bad assets appear to be appreciating when in fact they are not. Toxic securities that are being held by banks, brokerage houses and others, that were worth $0.30 on the dollar, are now worth even less. All the inflation in the world won’t change the value of these assets. It may help interim earnings, but it won’t help in the long run. These policies won’t work long term. The interest on debt now and in the immediate future will be greater than revenues generated. At the same time $900 billion is a nonsense figure. When all is said and done the figure will be almost double that at $1.7 billion. QE1 will provide for 14% real inflation in 2011 and QE2 will provide 25% to 30% inflation in 2012. QE3 will give us hyperinflation. Monetization will be king.

The die has been cast and it is disturbing to see Mr. Bernanke lying to Congress. What will he tell them when he has to admit he created $1.7 trillion, which has been monetized into inflation and that he still holds official interest rates at just above zero, but real rates on the 10-year T-note went to 4-1/4 then 5-1/4? The American public is going to be stunned.

Again, the Fed and the US banking system are in a box and they cannot get out. If they were to officially raise interest rates it would lead to financial collapse. If they do not want to raise rates they could curtail QE2 and as a result the economy would collapse, just like Japan did so in 1992 and they have been in depression ever since. Either choice would send unemployment to a U6 level of 37.6% matching that of 1933. Worse yet, if the Fed’s commitments were marked to market you would find the Fed to be insolvent, a condition that has existed for some time. It is not surprising that the Fed and its banker owners don’t want the Fed audited and investigated. Any sale of bonds by the Fed would drive bonds lower and yields higher putting downward pressure on the economy. Much of what the Fed is holding is MBS and CDO’s from QE1, when they bailed out lenders and select transnational conglomerates and insurance companies.

Such actions would render the Fed officially insolvent, which in fact they are already. Just to show you how terse the situation is their capital is about $60 billion and they have about $3 trillion on the balance sheet. Now you can understand why real interest rates have to be held low. The stock and bond markets have to be held up artificially so that the Fed’s balance sheet won’t collapse. What many do not understand is that almost all of what is on the Fed balance sheet has been created out of thin air and monetized. Part of that hot money and credit has offset the deflationary undertow; part is exported in dollar foreign balances and the rest of the inflation pass into the economy. This is the beginning of out of control inflation and the Fed is well aware of it. They quite frankly are not concerned that people lose their life savings. They only care about saving the financial sector, which owns the Fed, the government and transnational conglomerates.

Inflation will not stimulate the economy. It will hinder it and not create jobs, which is already evident. It is all lies, smoke and mirrors and psywar.

QE1 and QE2 have spread across the world exporting part of US inflation. This inflation gets stronger daily enveloping the financial world. Food prices have gone ballistic and in countries where food makes up 75% of income the result has been the overthrow of one government after another. Even the price of your clothes is going to triple. The cause of these problems lies with central banks and banks that control them in Europe and the US. It is just one giant fraud like too big to fail. There will be no recovery only continual efforts to sustain the criminal enterprise.

As inflation climbs, unemployment will grow and wages will remain stagnant so that the anointed can continue to accumulate wealth. The beneficiaries will as usual be the elitist connected corporations, all those crooks who do not go to jail. Soon profits for smaller and medium sized companies will diminish as they are forced to absorb part of price inflation. Needless to say, there will be no hiring.

People worldwide see the dilemma of the US, UK and Europe and that in part is why you are seeing turmoil that has had its beginnings in North Africa and the Middle East, not that the US, UK and Europe were involved in the uprisings, but the catalyst had been in place as well. The reason for change is higher food prices. The world public is tired of tyrants and governments that refuse to answer the needs of the people. Again, part of the reason for change is the discovery that these dictators and those who control governments have to be dispensed with. You might say, as Saudi Arabia goes, so goes the Middle East and North Africa. If the so-called monarchy falls in Saudi Arabia the entire region is up for grabs. That would spell the end of the petro dollar, which would signal the demise of the dollar. That is something to be aware of and to contemplate.

As you know, historically when you have bad episodes such as those we are seeing in North Africa and the Middle East that the dollar has rallied strongly. Not this time. The dollar is falling not only against the six major currencies, but also versus gold and silver. We could be headed toward a test of 71.18 soon on the USDX. That makes US imports more expensive and exports cheaper, which would cause a balance of payments surplus. The downward dollar pressure would continue though, because the $1.6 trillion deficits would continue. We believe as history is evaluated Ben Bernanke as well as Alan Greenspan will be found to be totally incompetent. Today we have price and monetary inflation that are terrible. Eventually as the economy and coming hyperinflation becomes manifest we will then see a fall we have all been anticipating for years into deflationary depression.

After three attempts to rally past 82 the dollar in the USDX has faltered again, this time to 76.48. There is technical support at 76 and fundamental support at 74 and 71.18. Current weakness is systemic, but it is being aided by QE2 and stimulus 2.

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G20: Banks must hold on to Cash for coming Crisis

The International Crime Syndicate, better known as the G20, determined at its last meeting that the collapse and consolidation of the global economy will begin around 2012 and finish in 2016 with the liquidation of all countries who are in debt with the IMF and the World Bank.

By Luis Miranda
The Real Agenda
June 29, 2010

Bankers and G20 members have direct and indirect ways to speak to the public. At the end of the latest G20 meeting in Toronto, both

From right to left: Canadian Prime Minister Stephen Harper, UK Prime Minister David Cameron and U.S. President Barack Hussein Obama.

groups spoke very clearly about what they have in mind for the foreseeable future. First, they are all in the run to help the process of global consolidation. Second, they will extend the current depression by slowly cutting the available cash for lending. Third, they will continue their austerity programs in a country by country basis to slowly kill their economies and consolidate each nation. Fourth, now that they have robbed the people’s taxes through their rescue packages, they plan to rob shareholders by putting the burden of future rescues on them when the next crisis comes. Fifth, they are disingenuous or irresponsible by thinking that putting aside 130 billion pounds will create any security for the economy, given that only the derivative schemed debt ascends into the quadrillion of dollars. And lastly, they intend to seed and water the final implosion, which according to their communique, can come as soon as 2012.

If all these sounds confusing, please let me explain.

Let’s start by remembering that the G20, and mainly the G8 were the ones who caused the current financial crisis. They did it through their front companies e.g. banks, which implemented a series of corrupt schemes to bankrupt economies and whole countries through investment and betting into risky and sometimes nonexistent financial products e.g. derivatives. These schemes were allowed to exist given the fact that for the past two decades most of the regulations put in place to stop financial fraud were eliminated as an excuse to enable “free markets”. What deregulation effectively permitted was the creation of bogus investing plans which the banks later offered to countries, states and municipalities -often times through governments- and used them to acquire all their infrastructure and cash through the issuance of debt or fraudulent investment.

It has become clear that the G8 and the bankers are not interested in improving current economic conditions. They simply want to extend the crisis as long as they need to, in order to execute their final plan of global implosion. That is what emerges from the idea of cutting lending money and asking banks to hoard the cash for the next crisis, as the G20 communique says. Although 130 billion pounds is peanuts in comparison with the debt most G8 countries hold today, the action of keeping the cash in reserve paints a clear picture of what the ‘leaders’ have in mind. What they want is a slowly and painfully grind down the economies in order to cause the greatest damage. Such policy will assure them the consolidation of more resources before the final blow to the global economy is given.

One of the most important tools the bankers have used along the last 100 years is to create an artificial bubble of money abundance -Fiat money- in order to get the countries and the public to trust them. This is what many describe as economic booms. But given the fact that the global economy is based on debt and fractional reserve banking, the only goal the money bubbles had was to hook up the greatest amount of debt on consumers to then pull the cash off the markets. By doing this, the bankers accelerate their consolidation process. Along with the reduction in lending, G8 nations agreed to continue the austerity plans in each individual country. Austerity will be implanted on the working class by cutting services such as police, hospitals, school funding, and social programs. This will in turn cause civil unrest, which is what the bankers want in order to officially freely unleash their military and technological control grid. A preview of what this grid would look like was seen on the streets of Toronto during the last G20 meeting. It was also seen during Argentina’s collapse in 2001.

The infamous rescue packages glorified by the IMF and the World Bank as the best way to avoid a complete collapse of the global economy -which as explained before was caused by the bankers themselves- were the biggest transfer of money and resources in the history of the world. Only the United States gave the bankers around $25 trillion in tax payer money so Goldman Sachs, Iberia Bank, JP Morgan Chase, Bank of America and others could pay their shareholders their chunk of the loot. See a complete list of what banks got the cash here. But those $25 trillion were not enough, of course. Germany for example, voted to give 66% of its annual revenue to the banks. Going by the G20’s communique it is clear they are planning another big collapse, possibly the last one. It is also clear they will have to rob someone else this time and that is what the bankers and the ‘leaders’ have said. They will stick the next rescue package to the banks’ shareholders -not to the big ones, though-. So if you have investments in any bank, it is advised to rescue yourself out of it before the new banking package comes along. Shamelessly, they will obligate the banks to hold billions so when the next crisis comes, taxpayers will not be burdened as if we don’t know those billions are the same they stole last 2009. Now that they consolidated and stabilized their fraudulent financial system, it won’t matter if other banks fail, because they are all covered.

The idea that 130 billion pounds is a safety net for a future crisis, or double dip recession as they like to call it, is preposterous. Derivative-produced debt is, depending who you ask, between $600 trillion and $1 quadrillion. According to Robert Chapman, from the theinternationalforecaster.com, buying derivatives is not investing.  It is gambling, insurance and high stakes bookmaking.  Derivatives create nothing.” According to the Bank of International Settlements, the derivative bubble has grown exponentially to a point where the amounts negotiated under this scheme has long surpassed the world’s GDP. “Derivative trades have grown exponentially, until now they are larger than the entire global economy.”Credit default swaps (CDS) is the most common form of derivatives. CDS are bets between two parties on whether or not a company will default on its bonds. They are indeed illegal insurance policies, with no requirement to hold any asset. CDS are used to increase profits by gambling on market changes.

The WEB of DEBT in which the current economy was built throughout the past 100 years was the tool used in a process to reverse everything humans achieved. It was not unintended however, as this was the mechanism the globalist bankers planned on using from the beginning. Every time the world experienced a financial crisis like in 1929-1933, the grip of control tightened more and more. The measures to avoid a total collapse, as we were told, were not such. They were simply ways to postpone the imminent collapse.  But the measures the bankers implemented cannot be used forever. Sooner rather than later something will give in. The step by step, ad hoc and non-holistic approach of Fed and Treasury to crisis management has been a failure. . . . [P]lugging and filling one hole at [a] time is useless when the entire system of levies is collapsing in the perfect financial storm of the century. A much more radical, holistic and systemic approach to crisis management is now necessary,” says professor Nouriel Roubini. founder of Roubini Global Economics.

After turning the global economy into a service-based system, where no quality products are manufactured; after driving developing countries into massive debt while collapsing the economies of the western world, the bankers are ready for their last move: a one last crisis. According to the G20 communique, its members must cut their deficits by 2013, a process that already started. This process is supposed to end in 2016, when the nations should have stabilized their deficits. Cutting and then stabilizing deficits means that debtor countries will have to find a way to pay their debts in full to the IMF and World Bank according to the conditions imposed by those entities. Every country that does not pay in full will be liquidated and their resources will be automatically transferred to the globalist bankers. Imagine what happened to Argentina, Greece and Iceland in the last decade, but instead of being those countries, the debtors will be the United States, Spain, Portugal, England and Germany.

U.S. asset managers: Obama could confiscate gold

Mineweb.com

Speaking at the FT Silver conference in London yesterday, lead-off speaker John Levin, HSBC Bank’s Managing Director, Global

Is Gold confiscation next to 'save the economy'?

Metals and Trading (HSBC is one of the world’s top precious metals traders and its vaults in the U.S. and Europe hold huge holdings of gold and silver bullion) recounted conversations with some of the U.S.’s top asset managers controlling massive amounts of capital asking if HSBC had the capacity in its vaults to store major gold purchases.  On being told that the bank’s U.S. vaults had sufficient space available he was told that they did not want their gold stored in the U.S.A. but preferably in Europe because they feared that at some stage the U.S. Administration might follow the path set by Franklin D. Roosevelt in 1933 and confiscate all U.S. gold holdings as part of the country’s strategy in dealing with the nation’s economic problems.

While in Mineweb‘s view such a move is unlikely, one needs to bear in mind that President Obama is a keen follower of Roosevelt’s views and policies and that the very fact that some asset managers controlling huge volumes of money feel that such a move is possible is a significant factor – and one that is perhaps heightened by the huge amounts of money flowing into gold at the moment in both ETFs and bullion.

As a reminder to readers – Section 2 of Roosevelt’s Act read as follows: All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

(a) Such amount of gold as may be required for legitimate and customary use in industry, profession or art within a reasonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.

(b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins.

(c) Gold coin and bullion earmarked or held in trust for a recognized foreign government or foreign central bank or the Bank for International Settlements.

(d) Gold coin and bullion licensed for the other proper transactions (not involving hoarding) including gold coin and gold bullion imported for the re-export or held pending action on applications for export license.

At that time of course, the dollar was exchangeable for gold at a set value ($20.67 an ounce) so compensation for such a move would have been easy to calculate.  Roosevelt subsequently revalued gold to the $35 level which stood for over 30 years.   Nowadays that kind of process would be a little more difficult, but perhaps not beyond the means of a government, already versed in printing large sums of money to try and re-stimulate the economy.  Perhaps a figure of the average gold price over a 3 month period at a certain date would meet an initial compensation valuation, but in today’s much more litigious society such a move might well fail anyway.

Indeed current economic analysis of the Roosevelt move suggests that it was not successful in helping drag the U.S. out of depression and indeed may have contributed to a recession within a depression – a pretty dire situation.  It probably took World War II to end the Great Depression.

Levin’s presentation – a trader’s view from the coal-face as he put it – contained much anecdotal material of interest and was a refreshing change from the usual analysts’ viewpoints.  More of that in a subsequent article.

The Cycle of Debt Deflation

Before It’s News

One of the most famous quotations of Austrian economist Ludwig von Mises is that “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.” In fact, the US economy is in a downward spiral of debt deflation despite the bold actions of the federal government and of the US Federal Reserve taken in response to the financial crisis that began in 2008 and the associated recession. Although the vicious circle of debt deflation is not widely recognized, precisely what von Mises described is happening before our eyes.

A variety of positive economic data has been reported in recent months. Retail sales rose 0.4% in April 2010 as consumer spending rose and the US gross domestic product (GDP) grew at a rate of 3%.  In May 2010, home sales rose to a five-month high and consumer confidence rose 17% (from 57.7 to 63.3). Industrial production rose 0.8% and durable goods orders rose 2.9%, more than had been forecast. However, the modest gains reported represent the continuing adaptation of economic activity at dramatically lower levels compared to the pre-recession period and most of the reported gains have been substantially manufactured by massive government deficit spending.

Despite the widely reported green shoots, in May, the unemployment rate rose to 9.9% while paychecks in the private sector shrank to historic lows as a percentage of personal income, and personal bankruptcies rose. Roughly 14% of US mortgages are delinquent or in foreclosure, credit card defaults are rising and consumer spending hit 7 month lows. To make matters worse, the reported increase in consumer credit, in fact, points to a further deterioration because consumers appear to be borrowing to service existing debt. Outside of the federal government, which is borrowing at record levels and expanding as a percentage of GDP, and outside of the bailed out financial sector, debt deflation has continued unabated since 2008.

Money Supply vs. Debt Service

A contraction of the broad money supply is taking place because the influx of money into the US economy, i.e., lending to consumers and non financial businesses, has fallen below the rate at which money is flowing out of general circulation as a function of debt service (interest and principle payments on existing debt), thus a net drain of money from the broad US economy is taking place. As a result, additional borrowing, as consumer spending falls, appears to be servicing existing debt in a pattern that is clearly unsustainable and that signals a further rise in debt defaults in coming months.
M3
The estimate of the broad money supply (the Federal Reserve’s M3 monetary aggregate) is crashing and the Federal Reserve’s M1 Money Multiplier, a measure of how much new money is created through lending activity, fell off of a cliff in 2008, and remains practically flat-lined.
MULT
Chart courtesy of the Federal Reserve Bank of St. Louis
The contraction of the broad money supply points to a potential slowing of economic activity and indicates that consumers and non financial businesses will be less able to service existing debt. Despite easing somewhat in March 2010, credit card losses are expected to remain near 10% over the next year and mortgage delinquencies, are currently at a record highs, and these dismal predictions implicitly assume a stable or growing money supply.

A tsunami of eventual mortgage defaults seems to be building and loan modifications have been a failure thus far. There have been only a small number of permanent loan modifications (295,348) under the Home Affordable Modification Program (HAMP) in 2009, out of 3.3 million eligible (60 days delinquent) loans and more than half of modified loans default.

Mortgage Delinquencies and Foreclosures
Chart courtesy of Calculated Risk
Although it has been reported that American consumers are saving at a rate of 3.4%, the contraction of the broad money supply suggests savings liquidation. Given a contracting money supply, ongoing debt defaults and declining consumer spending, the increase in non-mortgage consumer loans indicates that consumers are borrowing where possible to consolidate debts, cover debt service, or borrowing to continue operating financially as their total debt grows, thus as they approach insolvency.
CONSUMER
Chart courtesy of the Federal Reserve Bank of St. Louis
The increase in non-mortgage consumer loans has not prevented an overall decline in total household debt attributed to ongoing deleveraging by consumers. While deleveraging (paying down debt) has been interpreted as caution on the part of consumers, or as low consumer confidence, the decline in outstanding credit reflects a reduced ability to borrow, i.e., to service additional debt. This suggests that the recovery of the US economy may be illusory and that the economy is likely to contract further in coming months.
CMDEBT
Chart courtesy of the Federal Reserve Bank of St. Louis
Commercial borrowing has declined more sharply than household debt suggesting that the nominal return to growth estimated at 3% has not been matched by debt financed expansion in the private sector.
BUSLOANS
Chart courtesy of the Federal Reserve Bank of St. Louis
The broad US money supply is no longer being maintained or expanded by normal lending activity. If federal government deficit spending ($1.5 trillion annually), debt monetization and emergency actions by the Federal Reserve (totaling an estimated $1.5 trillion since 2008) to recapitalize banks are considered separately, there remains a net drain effect on the broad money supply. The scarcity of money hampers economic activity, i.e., money is less available for investment, and directly exacerbates debt defaults as consumers and businesses experience cash shortfalls, while at the same time being less able to borrow. Since unemployment is a key indicator of recession, then if the US economy were contracting, it would be evident in unemployment statistics.

Structural Unemployment

Unemployment and labor force data suggest that the US labor market is in a structural decline, i.e., millions of jobs have been and are being permanently eliminated, perhaps as a long term consequence of off-shoring, outsourcing to other countries and the ongoing de-industrialization of the United States. However, the immediate meaning of the term “structural” has to with the fact that jobs created or sustained during the unprecedented expansion of debt leading to the financial crisis that began in 2008, e.g., a substantial portion of service sector jobs created in the past two decades now appear not to be viable outside of a credit expansion.

Officially, the US unemployment rate rose to 9.9% in April 2010, which represents the percentage of workers claiming unemployment benefits. However, the total number of unemployed or underemployed persons, including so-called “discouraged workers” (Bureau of Labor Statistics U-6), rose to 17.1%Using the same methods that the BLS had used prior to the Clinton administration, U-6 would be approximately 22%, rather than the official 17.1% statistic.

U-6 Unemployment
With official U-6 unemployment of 17.1% and a workforce of 154.1 million there are roughly 26,197,000 people officially out of work. Using the pre-Clinton U-6 unemployment calculation of approximately 22%, there would be 33.9 million unemployed. If the average US household consists of 2.6 persons and if 33% of the unemployed are sole wage earners, then 55.5 million US citizens currently have no means of financial support (17.9% of the population).
Unemployment by Duration
Chart courtesy of Calculated Risk
While it has been reported that the labor force is shrinking, the characterization of workers permanently exiting the workforce by choice may be inaccurate. While a shrinking workforce could reflect demographic changes, the rate of change suggests that tens of millions of Americans are simply unemployed.
EMRATIO
Chart courtesy of the Federal Reserve Bank of St. Louis
Setting aside the question of whether or not those “not in the workforce” are, in fact, permanently unemployed, the workforce, as a percentage of the total US population, is currently at 1970s levels. Since many more households today depend on two incomes to meet their obligations, compared to the 1970s, a marked drop in the percentage of the population in the workforce points to a decline in the labor market more significant than official unemployment statistics suggest. What is more important, however, is that structural unemployment suggests structural government deficits, e.g., unemployment benefits, welfare, food stamps, etc. Since more than 2/3 of US GDP (roughly 70%) consists of consumer spending, a sustainable recovery from recession seems improbable if unemployment is worsening or if the labor force is in a structural decline, since that would imply unsustainable government deficits, whether or not they are masked by nominal GDP gains thanks to economic stimulus measures.

Government and GDP Growth

The US federal government is a growing portion of GDP, thus reported GDP growth is largely a byproduct of government deficit spending and stimulus measures, i.e., reported GDP growth is unsustainable. Total government spending at the local, state and federal levels accounts for as much as 45% of GDP, thus nominal gains would be expected when government deficit spending increases. According to some measures, reported gains in GDP are a byproduct of relatively new statistical methods and, using earlier methods of calculation, GDP remains negative.
GDP
Government borrowing and spending may have offset declines in the private sector but only to a degree and only temporarily. The resulting growth in US public debt has an eventual mathematical limit: insolvency. Of course, the actual limit to US borrowing remains unknown. The continuing solvency of the US depends on the ability and willingness of governments, banks and investors around the world to lend to the US, which in turn depends on the tolerance of lenders for the US government’s profligacy and money printing by the Federal Reserve, e.g., quantitative easing and exchanging new cash for worthless bank assets. US Treasury bond auctions will fail if lenders conclude that a sufficiently large portion of their investment will be diluted into oblivion by proverbial money printing. In that event, the US dollar will surely plummet, despite deflationary pressures within the domestic US economy, and the cost of foreign goods, e.g., oil, will rise causing high inflation or triggering hyperinflation.
GFDEBTN
Chart courtesy of the Federal Reserve Bank of St. Louis
According to the Bank for International Settlements (BIS), the federal budget deficit increased from 3.1% of GDP in 2007 to 9.2% in 2010.  Rather than being the result of one-time expenses, such as temporary stimulus measures, much of the deficit represents permanent increases in government spending, e.g., due to the growing number of federal employees. If increased government spending is removed, GDP appears to be declining significantly.
GDP Minus Government Deficit Spending
Chart courtesy of Karl Denninger
Of course, sustainability has more to do with total debt than with deficit spending because a deficit assumes that there is an underlying capacity to service additional debt.

Unsustainable Debt

While asset prices have declined, e.g., real estate and equities, debt levels have remained high due to the federal government’s policy of preserving bank balance sheets, which had ballooned prior to the financial crisis to the point that overall debt in the US economy reached unsustainable levels.
Total Debt to GDP
Chart courtesy of Karl Denninger
The absolute debt to GDP ratio of the US economy peaked in 2007 when debt levels exceeded the ability of the economy to service debt from income based on production, even at low interest rates. Although US GDP began to decline prior to the advent of the global financial crisis, debt coverage had been in decline approximately since the 1970s, coincidentally, around the time that the US dollar was decoupled from gold.
Declining Debt Coverage from 1971 on
Chart courtesy of Karl Denninger
Government deficit spending cannot correct the situation because, for every dollar of new borrowing, the gain in GDP is negligible and some have argued that the US economy has passed the point of “debt saturation.”
Debt Saturation
Chart courtesy of Nathan A. Martin
In a growing economy, additional debt can result in a net gain in GDP because the money supply grows and economic activity is stimulated by transactions that flow through the economy as a result. The debt saturation hypothesis is that, as debt levels rise, additional debt has less impact on GDP until a point is reached where new debt causes GDP to decline, i.e., the capacity of the economy to service debt has been exceeded and, not only is it impossible for the economy to grow at a rate sufficient to service existing debt (since interest compounds), but economic activity actually declines further as a function of additional debt.

A Downward Spiral

The process of debt deflation is straightforward. New lending at levels that would maintain or expand the broad money supply is impossible for two reasons: (1) asset values and incomes have fallen and millions remain unemployed; and (2) debt levels remain excessive compared to GDP, i.e., real economic activity (outside of the government and financial services industry) cannot service additional debt. The inability to lend, actually the result of prior excess lending, results in a net drain of money from the economy. The drain effect, in turn, leads to further defaults as cash strapped consumers and businesses fail to service existing debt, and as debt defaults impact bank balance sheets, putting a damper on new lending and completing the cycle of debt deflation.

Keynesian economic policies, i.e., government deficit spending, are irrelevant vis-à-vis excessive debt levels in the economy and bailing out banks is not a solution since it cannot stop the deterioration of their balance sheets. The process is self-perpetuating and cannot be stopped by any government or monetary policy because it is not a matter of policy, but rather one of mathematics.

Since the presence of excess debt (beyond what can be supported by a stable GDP, or by sustainable GDP growth) impacts the broad money supply, efforts to preserve bank balance sheets, i.e., to keep otherwise bad loans on the books of banks at full value, will ultimately cause bank balance sheets to deteriorate more than they would have otherwise. The fact that US banks issued trillions in bad loans cannot be corrected by changing accounting rules, nor can the consequences be avoided by government deficit spending or by unlimited bailouts, and the problem cannot be papered over by dropping freshly printed money from helicopters flying over Wall Street. The major problems facing the US economy today—a tsunami or debt defaults, structural unemployment, massive government budget deficits, a contraction of the broad money supply outside of the federal government and the financial system, and a lack of sustainable growth—cannot be addressed as long as excess debt levels are maintained. As von Mises clearly understood, sound economic conditions cannot be restored unless and until the excess debt, which resulted from a boom brought about by credit expansion, is purged from the system. The alternative, and the current policy of the United States, is a downward spiral into a bottomless economic abyss.