How do you create a Prison? You Turn the Lights Off

By LUIS MIRANDA | THE REAL AGENDA | MAY 25, 2012

As it is often explained, the success of a control grid relies not on the force it utilizes to impose or manage such control, but on the successful application of measures to gain unlimited control. What happens when you put a live frog in a pot with water that is boiled slowly, under low fire? Nothing. The frog won’t realize it is being cooked for dinner until it’s too late, until its flesh has begun to burn. The heat increases so slowly that the frog is unable to notice. The boiling water is similar to the system that globalists used for the past century to make people comfortable with rather adverse situations. The heat has been accumulating over the decades and we never realized we were that unsuspecting frog.

The desire to control doesn’t always come with rigid rules that violently impose a decision. The use of brute force is a tool of the past. Control is acquired over time, with lots of patience and by using a technique called Incrementalism. In the past, when men where freer no one questioned whether there was a need to keep freedom from being limited or eradicated, so a group of very smart powerful men decided to take advantage of the lack of vigilance and began creating a gigantic cooking pot to put us all into it and turned on the fire. Then, they began implementing a set of policies thought of and perfected many years before, and the passage and acceptance of those policies began raising the fire little by little. Every so often, a new level of control was achieved, which inversely meant less freedom for all of us. But that new level of lesser freedom wasn’t noticed by most people and it rapidly became the ‘new normal’. This scenario repeated itself over decades and brought us where we are today.

The frogs are almost completely boiled and proportionally only a few of them have noticed that their bodies are burning. Many of those awaken frogs chose to do something about it, but most frogs were still asleep. In the last decade, more frogs have waken up and now there are frogs all over the world slapping others on the face to show them that bubbles began to form under the water and those bubbles are already coming up to the surface. The courageous frogs have even dared to show the sleeping frogs the burn marks on their skin. But since the burning feeling has been the ‘new normal’ for a while, the unsuspecting sleepy frogs don’t think it is a problem to have burning marks on the skin. In fact, those frogs think the others who are warning them are crazy, because they complain about the burning, so they just go back to sleep while their skins continue to get redder and redder. For those frogs, perhaps it is too late. Other frogs have already been fully cooked, mentally and physically.

How did the powerful men managed to build those cooking pots around us, turn on the fire and let us cook without any major opposition? They raised the fire very slowly, kept us distracted and believing we were all as free as our ancestors were and even more important, taught us not to think about whether we were still free or not, or if we had lost any freedom, rights or privileges. Today, those cooking pots resemble not only the world, but the country we live in, the city, the neighborhood, the street where we grew up on.

The industrial era brought about development and that development allowed people to achieve a great degree of comfort and progress. But that state of affairs did not occur randomly; it was all calculated. For anyone who read history, it may be easier to understand the analogy of the boiling frog and how it all plays out from now on. Industrialization didn’t only bring progress and comfort, it also brought a lifestyle and that in turn resulted in previously thought out standards of living. People went from been free in their houses and farms, producing their food and enjoying family life and self-sufficiency to getting dragged into highly polluted concrete and steel prisons which became modern and trendy, so everyone wanted to live there. They were then given trinkets and technology, fashion and glamour to make sure they stayed inside the cities, even when that supposed higher standard of living suffered and decayed over the years under pressure because of large agglomerations, traffic and contamination. People thought they came to the cities to be better, because it would open the door to more opportunity. That is where all the trendies lived, wasn’t it? But that was not the plan.

The original plan was to make people like their misery, which at first looked like heaven. People had not come to the cities to live, they had come to work under tightly controlled rules. They arrived to the cities as part of a large experiment that if successful would allow the globalists to not only have people work for them, but to enjoy their slavery. And it worked. Most of the frogs are half-way cooked and they are loving it. A minority of the frogs that managed to wake up are adapting and preparing. The smarter ones already left the cooking pot by jumping out of it. They left the ‘reservation’ to go back to free lawn, the open backyard where they once lived, where their ancestors spent their lives, which is where they were all meant to be. As for the rest of the frogs, they will stay in the ‘reservation’; some of them fighting the boiling water while others continue to cook away.

Meanwhile, the globalist plan to keep us all in the prison cities continues. When people try to wake up and look around for signs of the prison in the highly dense cities, they don’t see it. They are looking for cell bars, barb wire and high fences. When someone says that there are concentration camps being built, people look around again in hopes of noticing the large open spaces with the guard towers, the loud speakers and the train tracks next to them. Again, they failed to see that the prison is their homes, their streets, their neighborhoods and ultimately, their city. The powerful men who decades or centuries ago sought to attract free people into their highly advanced, good looking prison cities achieved their goal to such extent that people can’t even see they live in them. So the system that is in place and the men that are in control of it decided that it is time to turn the clock back, as they had carefully planned. The cities people got used to love are now devolving and becoming what they were supposed to be: PRISONS.

Is it not easier to control people when they are tightly packed in densely populated areas? All you have to do is close the access to those cities in order to get control of who and what comes in and goes out. How does anyone transform New York into a prison? It is as simple as closing the tunnels and bridges. How do the controllers train for that? You take advantage of ’emergencies’ to implement the plans and practice for the closings as it happened on 9/11. How do you close the Washington DC metro area? By doing the same thing. But how about larger cities that due to their landscape or geographic layout are harder to close and control or cities that emerged back in the days of the industrial revolution where big factories and assembly lines attracted and employed countryside folks for decades? Well, you start by destroying their economies by paying the factories and assembly lines to leave. That will cause massive unemployment and people will have to depend on the government to live, feed themselves and have a place to call home. Then, when most people are in that condition, you start packing them up tighter and tighter areas by decreasing or eliminating services until everyone lives in a smaller, more easily controllable section of the once booming metropolis. Then you turn the lights off.

This is where many cities in the United States are right now. Perhaps the most deplorable of all of them is Detroit. A recent article by Bloomberg demonstrates that the globalist plan is well under way. According to the article, 139 squared miles of the city has 60 percent less people than back in 1950. Many areas have turned into decaying slums with no power or life, because many if not all people have left to parts of the city where it is safer to live. Other facts provided by Bloomberg are eye opening as well. For example, 88,000 streetlights are broken and they are not close to being fixed, because the city doesn’t have any money to do so. Residents of Detroit are now afraid to walk outside even during the early hours of the evening. The only solution that gained steam for Detroit was reducing the areas where people live. In other words, concentrating city dwellers in tighter places. Sounds familiar? “You have to identify those neighborhoods where you want to concentrate your population. We’re not going to light distressed areas like we light other areas,” said Chris Brown, Detroit’s Chief Operating Officer. But Detroit isn’t the only city that is turning into a dungeon.

In fact, the problem isn’t about a city or a few cities that are facing economic trouble and as a consequence are boxing their residents into smaller areas. Complete states like Illinois, California and Massachusetts are struggling to keep conventional life going. The lack of funds to finance a city or a state isn’t a casualty of the bad economic times we’re facing though. That part was also planned. Cities and states hide and mal invest taxpayer monies by having a double set of books known as the Comprehensive Annual Financial Reports. One set of books is for public consumption and the other is to manage the real finances, the money that is taken away or that disappears into black wholes, pet projects and nonexistent investments. The consequences of corruption at all levels is bad services, insecurity and poverty, which to many frogs (people) is the only possible option, so they decide to stay in the cooking pot (city). Those who have options leave to other cities or states, but the majority stays. Later, basic services such as police, fire departments, paramedics, water and electricity are made available to only a few areas, because it is too dangerous to send public servants to cesspit looking neighborhoods.

The plan Detroit has, according to Bloomberg is to “rethink the city” in order to reorganize it or reconfigure it with areas defined as residential, business, green spaces and agricultural. Much attention to the last area. Having agriculture in a city is not necessarily good. Food will be closer, but it also means people won’t even need to leave the tight areas they live in to get their food. Is this convenient or perhaps another ‘new normal’? Who will control the flow of food in a mainly government-sponsored prison city? Are dark streets and unsafe neighborhoods the new normal? How is it that globalists manage to destroy countries, their economies, their way of life and they are not called terrorists? Well, they did it incrementally. What will the future bring? Nothing better unfortunately, unless the rest of the frogs wake up immediately.

Detroit’s plan will not work, because it isn’t supposed to work. California’s plan will not work. Illinois’ plan will not work. And ff people in the prison cities open their eyes and feel the burning the globalists also have a plan for it. Police and Army on the streets will comfortably take care of it. They will do whatever it takes maintain control on behalf of their bosses. Mexican, Canadian, Colombian and Ukranian troops will join together to kill and destroy. With California reaching 36 percent unemployment and Washington DC almost 52 percent, it is hard to see how these and other states in similar condition will get any better. Right now, South Carolina’s unemployment is 31.2%, Rhode Island 29.8%, Washington 29.0%, Arizona 29.0%
Nevada 28.8%, Idaho 28.4%, North Carolina 28.2%, Missouri 27.7% and Louisiana 27.6%. Can it get any worse than this. Sure, and it will.

In the meantime, the US government has approved the National Defense Authorization Act, that allows the government to kill anyone it deems a threat to national security. They’ve almost banned free speech and public protest. The TSA are patting people down on major highways. The Army is on the road checking cars illegally. The government uses sound canyons against the public as the police isolates globalist gatherings in the very same cities.

Welcome to 1984.

Banks Get Ready for Greek Currency Come Back

REUTERS | MAY 11, 2012

Banks are quietly readying themselves to start trading a new Greek currency. Some banks never erased the drachma from their systems after Greeceadopted the euro more than a decade ago and would be ready at the flick of a switch if its debt problems forced it to bring back national banknotes and coins.

From the end of the Soviet Union – which spawned currencies such as the Estonian Kroon and the Kazakh Tenge – to the introduction of the euro, they have had plenty of practice in preparing their systems to cope with change.

Planning behind the scenes has been underway since Europe’s debt crisis erupted in Greece in 2009, said U.S.-based Hartmut Grossman of ICS Risk Advisors who works with Wall Street banks.

“A lot of the firms, particularly in Europe and also here, have been looking at that for a long time,” said Grossman, who added that the latest Greek political crisis had brought matters “to a little bit of a head”.

“But there really has been contingency planning at all of the financial institutions for that to happen … Greece leaving the euro zone is not a new idea,” he said.

The EU says it wants Greece to stay in the common currency, and opinion polls show Greeks want to keep it. But they also voted last Sunday for parties opposed to a bailout with the EU and IMF, throwing Greece’s future in the bloc back into doubt.

The elections threw into doubt the EU/IMF aid package that came at the price of harsh austerity measures, and was reached only after much haggling between banks and politicians over a 100 billion euro debt reduction.

While the deal averted financial market catastrophe by allowing Greece to continue repaying its reduced debts, any future problems could be yet more troublesome, even if Athens managed the process in a more or less orderly fashion.

A Greek departure from the euro would create legal and practical problems for the banks which would dwarf the relatively straightforward technical job of dealing in a new currency.

SCENARIOS

Greece would almost certainly impose foreign exchange controls if it were to drop out of the euro, bankers said, but dealing in any new currency would still be possible.

“Forex desks can get ready relatively quickly. It depends on exactly how the exit from the euro happens,” said Lewis O’Donald, the London-based Chief Risk Officer at Japanese investment bank Nomura (9716.T).

Currencies that are not freely tradable, such as the Chinese yuan, are widely mirrored in off-shore foreign exchange markets through the use of derivative instruments, such as non-deliverable forwards, or NDFs.

The problem may be bigger for euro zone banks which need cash for individuals or companies doing business in Greece. They face the problem of what exchange rate to use, depending on the laws Athens might draw up for trade it its currency.

If Greece forced an exchange rate of, say, one euro to one new drachma, this could impose huge losses on foreign banks because such a rate would not hold on the markets.

Controls on the movement of capital could be a nightmare for banks with loans in Greece, potentially making it illegal for companies to repay debt in euros.

Even if it were not illegal, companies might no longer be able to repay foreign creditors because their cash had been converted overnight into drachmas – a currency that would rapidly lose its value due to the dire state of the Greek economy. That would, in turn, make it tough for any lender to get its money back, whatever contract it might have.

“Our assumption is that an exit route somehow has capital controls in place, or an inability for a creditor to enforce (legal rulings) under English law into Greece,” O’Donald said.

SHOUTING ‘FIRE!’

Banks have studied several options to protect themselves as best they can, including switching to U.S. law for new derivative transactions or loans. So far few have taken such steps due to doubts about how effective they would be, and also because they are afraid to add to market concerns.

“Banks are very, very reluctant to start shouting ‘fire!’. They know what happens and what panic looks like,” said one London-based lawyer advising financial firms.

Instead, most are simply checking the governing law of their contracts, hedging against defaults and running through every legal argument a Greek euro exit could throw up.

“There are still areas which will be grey in some respect and which will lead to conflicts of law that may have to be resolved in court,” Nomura’s O’Donald said.

Many banks have been simulating a rupture of the euro in “war games”. But little is known about how an exit would work, and legal departments are poring over financial contracts, raising questions about the very nature of a currency.

“If transactions are denominated in the euro, what is the status of those transactions in the event that there is a change of the make-up of that currency?” said Miles Kennedy, a partner at accountancy firm PricewaterhouseCoopers.

With such questions unanswered, stuffing cash machines with enough drachma banknotes is almost an afterthought.

For Greece itself, it certainly won’t pose a problem. The country’s national bank has its own banknote printing press and mint and has continued to print euro banknotes ever since joining the single currency in 2001.

Central Banking Caused 2008 Financial Debacle

DAILY BELL | MARCH 21, 2012

The meltdown explanation that melts away … Although our understanding of what instigated the 2008 global financial crisis remains at best incomplete, there are a few widely agreed upon contributing factors. One of them is a 2004 rule change by the U.S. Securities and Exchange Commission that allowed investment banks to load up on leverage. This disastrous decision has been cited by a host of prominent economists, including Princeton professor and former Federal Reserve Vice- Chairman Alan Blinder and Nobel laureate Joseph Stiglitz. It has even been immortalized in Hollywood, figuring into the dark financial narrative that propelled the Academy Award-winning film Inside Job. Bethany McLean is a contributing editor at Vanity Fair, and co-author with Joe Nocera of “All the Devils are Here: The Hidden History of the Financial Crisis.” Her first book, “The Smartest Guys in the Room,” co-written with Peter Elkind, became an Academy Award-nominated documentary. – Reuters

Dominant Social Theme: The meltdown was a catastrophe. It was caused by regulations … taxes … leverage … big business … big government … mortgage products … derivatives … greed … Satan … but one thing is for certain, it wasn’t caused by fiat-monopoly central banking. We know that for sure. Central banking had nothing to do with it ….

Free-Market Analysis: Following the 2008 global economic crash on an almost day-to-day basis, as we have, we’ve regularly made the argument that it was caused by central banking monetary inflation and that its result is bound to be the eventual demise of the dollar reserve system.

We believe we’re being proven correct on both points. We’ve also pointed out that the crash itself was predictable and that the top elites that put this global central banking system in place know full well that cyclically it creates crashes, recessions and now depressions.

But, of course, there is plenty of pushback. Seems everybody has an opinion about what caused the 2008 crash. And most of these opinions, played out in the mainstream media, are focused eagerly on causes that have nothing to do with central banking.

In other words, these theories are PROTECTIVE of central banking and the damage that monetary stimulation can do. Inevitably, when we read these theories we tend to notice that those advancing them are apologists for the system as it is. The system of monopoly fiat. The system that crashes regularly and ruins peoples lives as part of its foundering.

This article, a long one (excerpt above), posted at Reuters goes into incredible detail about an obscure rule change that the SEC allowed in 2004. This supposedly allowed big banks to increase leverage that led to the crash. The article sets out to disprove it.

This article is a clever kind of dominant social theme, in our view. Why? Because in debunking a silly argument about why the 2008 crash occurred, it provides readers with the impression that Reuters is a really sophisticated and hard-hitting newswire.

The idea is that Reuters – which is actually a mainstream media mouthpiece for the power elite – would provide us with an article arguing that the removal of regulation was NOT the cause of the meltdown illustrates that top Reuters writers are truth seekers.

The power elite that is trying to set up world government is having a bad go of it. The Internet – what we call the Internet Reformation – is slicing away at its fear-based promotions. Many lucid thinkers that use the Internet for reading and writing don’t believe mainstream media articles anymore.

Read Full Article →

Greece’s Corporate Owners Asphyxiating the People

by Nathalie Savaricas
The Independent
February 8, 2012

That’s enough, we can’t take it anymore.” That was the popular chant coming from protesters in Athens yesterday during the latest 24-hour general strike against the country’s austerity measures. Teachers and doctors joined bank employees to demonstrate against a new round of expected cuts as the cash-strapped country continued to negotiate new reductions in spending to help keep the economy afloat.

Several thousand demonstrators from the public and private-sector unions braved the heavy rainfall, gathering outside Parliament to voice their opposition at the latest proposed measures to secure a €130bn (£108bn) bailout package. Minor clashes broke out when protesters tried to remove a cordon near the parliament building. Police sprayed tear gas and at times clashed with strikers, whose anger intensified overnight when a further 15,000 job cuts were announced.

Since the onset of the crisis, the austerity drive has sent unemployment to a record high of 18.2 per cent and the country’s finances into a spiral of recession. Despite the deepening pain, crowds at protests have increasingly dwindled.

“People are scared and haven’t really realised what’s happening yet,” George Pantsios, an electrician for the country’s public power corporation, said. He has only been receiving half of his €850 monthly wage since August. “But once we all lose our jobs and can’t feed our kids, that’s when it’ll go boom and we’ll turn into Tahrir Square.”

Prime Minister Lucas Papademos was scheduled to wrap up a new reforms package with party leaders that back his unity government last night, which will pave the way for more bailout money.

The conservative daily Kathimerini newspaper’s headline said: “Merkel and Sarkozy’s asphyxiating pressure.” It was a reference to lenders’ demands to axe another 15,000 civil servants by the end of the year and cut the minimum wage by 20 per cent.

The European Union and the International Monetary Fund said the measures are needed to restore Greece’s competitiveness and reduce its mounting €300bn debt.

Many in the crowds yesterday said the talks were being used as an excuse to squeeze extra revenue from the sick man of Europe and they fear additional cuts will only stifle any hopes of growth. “We’re already bankrupt. This new agreement will simply be our tombstone and the meeting will be the final curtain of this play,” said Corinna Panopoulos, a state psychologist who demonstrated outside the parliament building.

Ms Panopoulos, who is single and has two children, said she had seen her salary drop by a third and has moved in with her mother to make ends meet. Her sister, Christina, who works as a supply teacher, will lose her state job in June.

Another woman had been forced to close her business: “I should leave and go abroad for work, but I want to stay and fight because my country needs me now.”

The patience of Greece’s creditors is wearing thin as the financial woes threaten to spill into other countries.

The Next Stage of the European Debt Crisis; Towards Global Financial Collapse?

Bob Chapman
International Forecaster
November 3, 2011

Those who believe the European crisis is over are mistaken. The dislocation will continue as their economies slow and political, social and economic events converge into further crisis. The most glaring problem is the banks only taking a 50% loss on Greek bonds. The loss should have been 75% or even 80%. There is absolutely no way Greece can overcome that burden in a slowing European economy and an enraged population. They are still striking and demonstrating and they will continue even under a new government.

Some of the best economists in the world have been saying for almost as long as we have been saying that the weaker and smaller countries have to leave the euro at least temporarily. In our eyes that really means permanently. If Italy falls out it will take France with it and the euro edifice will fall. Very quickly it will be found that Greece cannot and will not recover. It is one thing to set recovery in motion in good times, but it is another to attempt to do so under austerity. These politicians in Europe have been self-serving. They are quickly going to find what they have done is not going to work. Greece should have never been saved, as we said from the beginning. They will need more and more money just to exist and you cannot have perpetual funding. Then you have the overriding social factor. It is simply impossible and once Greece goes, the other 5 will have to cut loose as well. Again, it will be called temporary, but their exists will be permanent. It simply cannot be any other way. Political hot air is not going to change anything. We have no details and bankers who refuse to face the music, and what is attempted to be achieved is impossible.

The concept of a tighter union with a new constitution won’t work either. We can go back to 1991 when these issues came forth and we stated the Europeans are doing this backwards. You need a strong constitution first, only nations involved that can meet the criteria of public debt of 3% GDP. Smaller nations cannot be allowed to falsify their balance sheets and above all you cannot use one interest rate for all. Just about everything that has been done has been done incorrectly. Unfortunately, the US and world economy hang in the balance as well. This euro, European and UK problem is not going to go away. By February it will again be front page news. There is an 80% chance that Greece will leave the euro in the next six months.

If Ireland and Portugal do not receive equal treatment, followed by Belgium, Spain and Italy, then they will all be forced to leave the euro. If you think for one minute that these nations can stand more than a year or two of austerity you are mistaken. The whole approach is wrong. They should all be allowed to leave the euro. The only reason Greece has been temporarily saved is to keep Greece in the euro. These one-worlders cannot bear to see their dream of world government fail. It has already failed. Do you really think Germans are going to give up their sovereignty? Wait for the next German election. You are going to see a house cleaning in the Bundestag that will be staggering. The German people are outraged at what these politicians have done to them. If anything the move in the EU’s strongest economy will be away from further consolidation, not toward it.

The magic number to keep the euro from collapsing over the next two years is $6 trillion that solvent European countries do not have, and using derivatives in place of cash is a prescription for disaster. Debt may be addressed, but the core economic and financial problems that were responsible for these problems are still not being addressed. That is a glaring lack of economic progress. Where is the capital needed for growth? Countries in the EU are going to have to increase money and credit and suffer the incumbent inflation; that is if they can even raise those funds and rollover old debt. Either that or China will lend $3 to $500 billion and we don’t think they are willing to do that. If China prints the money to lend, the value of the yuan will fall, the Chinese will take more market share and there will be more inflation. Their goods sold to Europe, the US and elsewhere will rise in cost as well. The Chinese will have to use cash euros or sell euro bonds. Such moves could be really upsetting to China. If aid comes it will be in much smaller amounts.

This past week the swaps association said the failure on 50% of Greek debt does not constitute failure, because it was voluntary, so the NYC legacy banks do not have to pay up on their derivative bet. That could all change, because Fitch says it does constitute default. We will now have to await the decisions of S&P and Moody’s.

What Europe has done is pull a page from US bailouts, which reduce debt starting in a few years, which would extend over 10 or 20 years. It reminds us of the two sets of books banks are currently keeping. They intend to write off bad debt over 50 years, like it really didn’t exist. This plan allows further current increases in debt over the short term. That is no solution at all. Again, it only throws the debt and service into a future that could include deflationary depression. Recovery is not a given.

Fitch has really opened a large can of worms in calling a 50% debt default a payable derivative event. We are talking about hundreds of billions of CD’s, credit default swaps OTC derivatives, which just happens to be an unregulated market. Our view is Fitch is correct and the ISDA, the derivatives information agency is wrong. What isn’t made an issue of is that banks have been asked to raise $150 billion they are offside on this issue. We projected this number long ago. The official number is $3.7 billion, which is laughable. About a month ago the players admitted to $75 billion, so we are making progress toward truth and reality. We wonder what the French bankers are saying, who bought the insurance? If NYC banks do not pay off the ECB will have to create the $150 billion and lend it to the banks in France, so they can survive. Could this be a renege? We think so, and that would ultimately allow citizens of the EU to pay the debt. These bankers are crafty buggers they are.

We also question why banks are writing off 50% of their debt and the sovereigns are not. Isn’t this strange? Why are they not writing off 50%? Could it be that if they did they would be insolvent? Could it be to deceive their taxpaying citizens and pop the question several years from now? Could this be they are just trying to extend the timeline into the future? Time has a way of revealing everything. Incidentally, none of that Greek debt will probably ever be paid off. It should also be noted that of the $140 billion lent by the IMF, US taxpayers are on the hook for about 30%, or $42 billion. We are sure that will make Americans very happy.

The difference between $516 billion allocated by EU members, half of which comes from Germany, and $1.4 trillion will come from the sale of bonds by the EFSF, the European Financial Stabilization Fund. The question is who is going to buy this tranche of some $900 billion in bonds? Nations will receive greater taxes from a phantom recovery and buy the bonds. How can this be when those economies barely have even GDP growth? All this in the midst of austerity. We do not get it. We must be missing something. Does Italy really believe that raising the retirement age from 65 to 67 is going to bring any real immediate relief? As you can see the case is terminal.

The whole plan is absurd, stupid and unworkable. These problems are going to last for years as Europe, the UK and US wallow in negative growth and eventually in deflationary depression. Greece will collapse; it is only a question of when. The ECB will continue to create money and credit, just as the US and UK are doing. It won’t take long for investors to figure out they have been bamboozled again. They will flee stock markets probably just after the Fed’s latest QE 3 is announced. Some will buy US Treasuries and lose about 10% of their purchasing power annually. Some will flee to commodities and many will use the flight to quality to purchase gold and silver coins, bullion and shares. Modes of investments are going to change dramatically, so you had best participate, or you may end up losing most of your wealth.

What you are witnessing is financial chicanery at its best. Wait until the citizens of Europe discover they are going to have to pay all these bills, just so they can be enslaved in a one-world government. They are not going to be happy.

We always tend to be ahead of the curve and the crowd. This time the time frame for discovery may be very short, because once investors understand what we have written here they will want to get out. Gold, silver and commodities will rise for different reasons, along with the flight to quality. Incidentally, this time the gold and silver mining shares will soar.

Reflecting back on our comments the second Greek bailout does not solve the EMU’s fundamental problem, which is the 30% competitiveness gap between the northern and southern countries and Germany’s giant-EMU trade surplus at the expense of the south. Unless a way can be found to rectify that there cannot be a recovery. The south has been forced into austerity, which limits their chances of being competitive. As we pointed out over and over again the end product will be a deflationary spiral and eventually deflationary depression. What the IMF and EU members are imposing on the six countries is very destructive.

A fiscal union would perhaps work, but that means the end of individual country sovereignty, which would eventually lead to authoritarianism, which would not like to see. The entire union is unnatural and should be ended. It has been a failure and just leave it at that.

All this program is going to do is buy time. It is not a long-term solution. Current debt holders are going to be incensed, as they will be forced in before sovereigns, but will banks really take a 50% haircut? We don’t really know. Is this really a fig leaf, a wholly inadequate alternative to the ECB, which cannot provide endless liquidity?

This rescue effort is really too dependent on high-risk deals, such as what caused this crisis. Four times leverage is outrageous. In the end the European public could get caught holding the bag.
At the same time we are seeing monetary contraction in Portugal, which mirrors that of Greece as it spiraled out of control. Bank deposits are off 21% over the past six months and that could well be a precursor of a weak economy and monetary trouble.

Another question that arises is due to the treatment accorded to NYC legacy, money center banks. Will those using credit default swaps continue to do so. There is a default and because it was voluntary the derivative writers do not have to pay off. Give us a break. It looks like contract law no longer exists.
In very late breaking news we find something we warned about is happening. The German High Court, the Bundesgerichtshof, has issued an express order that the nine-member committee dealing with dispersing the rescue funds is not allowed to do so. The plug has been pulled on the EU and German politicians on money releases. If the Germans and the EU are lucky they’ll have a constitutional decision by Christmas. We predicted this would happen.

Uncertainty revolves around the deal reached with Greek bondholders to face a 50% haircut on the face value of their bonds. This has not been negotiated as yet.

At the same time France needs to raise $11.2 billion to keep its AAA rating. Sarkozy says 2012 GDP growth will be about 1%, about the same as Germany, but no one mentions it would be -2% with inflation.

Switzerland’s State Secretariat for International Financial Matters said the Swiss were interested in investing in a special investment vehicle proposed by the euro zone bailout fund, but we see a real fight brewing. The Swiss People’s Party, which was against franc devaluation and the sale of Swiss gold, will be after this move by the Swiss government. They do not want closer ties to the EU.

This past summer we warned that European banks would have to increase their reserve position to 9%, because both the BIS and IMF said it was absolutely necessary. You might call the EU’s laxity of not forcing Greece to implement its austerity agreement as part of a socialist mindset. There was no way to move Greece into line. For not living up to their commitment they could have cut Greece off, because then they would default and leave the euro. Thus, they continued to fund Greece. The truth is they have to do so irrespective of what Greece does or doesn’t do.

The heart of the problem was banking incompetence followed by sovereign stupidity. Banks and solvent sovereigns never should have made the loans in the first place. All the greedy bankers, politicians and bureaucrats could think of was the euro zone and the euro being the template for one-world government. The interconnectivity of banks within nations with banks of other nations is the lynchpin that will eventually take all of them down. It’s caused by central control such as that embodied in the European Central Bank. The bottom line is if a state like Greece, partially defaults, then the banks within Greece default as well because these banks are holding large amounts of federal bonds and loans. Thus, the edifice collapses. This relationship exists all over Europe and as we are seeing six countries are in trouble and if the European economy continues to slip into recession or depression other countries will join the six. In addition in many countries supervision is all but non-existent. A perfect example of such a relationship was with France, Belgium, and the Dexia bank, which they created. As a result the taxpayers of Belgium and France have acquired all the bad assets of Dexia.

Adding to such problems is that usually half of the debt of any country is held by foreign banks and sovereigns, which means failure becomes contagion. France’s holding of 8.5% of GDP of debt from these six countries will eventually cause France to lose its AAA rating. If that is the case we venture to ask how can France be party to a commitment to bail out Greece or anyone else? They simply cannot and they are the number 2 player. You would think French citizens would elect someone who was not involved in such stupidities, such as Marine LePen of the National Party. The banks and business interests, such as the Rothschilds, couldn’t have that – could they? If France financially fails we could see 1789 all over again. This sovereign debt is widely held by other nations including the US, UK and Japan. European banks have controlled European society for a long, long time and they are the catalyst for the new world order.

We hear over and over again there will be recovery, we will grow our way out of it. That won’t be possible for Europe, the UK and the US. The number of young people who do the largest part of consumer spending in their 20s and 30s today have a hard time making ends meet, never mind spending. On top of that many are unemployed and may be for some time to come. If you have noticed unemployment has risen or stayed the same in the regions we have spoken of. Accumulation has only occurred among the upper-middle class and the wealthy. This also means borrowing has fallen and the ability to access loans and capital are limited, because so many prime age borrowers do not qualify.

One of the reasons Germany does as well as it does is because they have an abundancy of inexpensive capital available for loans and credit, which allows expansion, creates jobs and brings profits. The cost of labor is low or in the form of growing productivity and people pay their bills.

One interest rate fits all became a disaster. The weak participants borrowed at 4% instead of 8% and the result was an orgy of spending that ended up in today’s insolvencies. We said 12 years ago this would destroy the euro zone and it has. These low rates also allowed a massive influx of imports into the six problem countries, which caused major balance of trade deficits. This also brought about borrowing in foreign currencies, which turned into a nightmare, particularly in Eastern Europe.

European banking and politics are very closely intertwined. In other words the banks overtly run these countries. The same is true in the UK, but in the US it has been subtler due to ignorance of how the banking system works and that has been deliberate. In Europe the stress test used 5% as a guideline, instead of the normal 10%. This shows you the power and control banking has over EU government making the margin for error extremely thin. Considering the exposure cash reserves were increased to 9%. This means capital has to be raised and that is not easy in today’s recessionary environment. Two-thirds of European banks are currently under 9%. The worst exposed are RBS, Deutsche Bank, Unicredit, Bank Paribas, Barclays and Societ General. Hundreds of billions of euros are needed and the question is where will they come from? In addition how many banks are shuffling assets between trading, deposit, and banking sectors, such as Dexia had been doing until they had to be taken over by the French and Belgium governments? The banks need $270 billion that is readily available. If funds are not available then that means governments will have to supply the capital from out of thin air, which is very inflationary.

The EFSF, the European Financial Stability Facility, which was set up to aid Greece, Ireland and Portugal, now aids banks and European governments, such as the Fed does. An EFSF if allowed to dispense $1.4 trillion based on a $900 billion derivative structure would take months to move into action. Then there is the question will the German High court allow leveraging. We do not think so. The Court had already told the Bundestage you cannot do that, but they did it anyway.

As we can say is stay tuned for the next episode in this saga. It could end up taking down the entire world’s financial system.