Conspiracy theories.......

There is a certain monotony developing re people who, because they don't like, disapprove of, or fear a certain scenario - deal with that problem by declaring it a "conspiracy theory" without any proof of this assertion (a reverse conspiracy theory if you like).

Here is an accurate definition of a Conspiracy Theory:

Conspiracy theory was originally a neutral descriptor for any claim of civil, criminal, or political conspiracy.^[1] However, it has become largely pejorative and used almost exclusively to refer to any fringe theory which explains a historical or current event as the result of a secret plot by conspirators of almost superhuman power and cunning.

This is a Conspiracy theory:

The Fed is secretly owned and controlled by either the Rockefellers, Rothchilds, the Illuminati or a hybrid of all three. (possibly true but no proof)

This is a fact:

Most people believe the Fed is a US government department, it is not. The Federal Reserve is privately owned but has some government representation on the board to "control" policy. According to Wikipedia "In the current system, private banks are for-profit businesses but government regulation places restrictions on what they can do."
If you believe that you need your bumps read. the fact is, control is the other way around. the banks now control and regulate the government. That isn't a conspiracy - it's a fact. The administration isn't called "government sachs" for nothing.

Goldman Sachs is "a political organization masquerading as an investment bank, and they're sitting at the table with the top people in government," says Goldman critic Christopher Whalen, the managing director of Institutional Risk Analytics, which rates banks and provides customer analytics. He calls Goldman "the most political firm on Wall Street."


To many this may not seem to affect us, however whatever happens to the USA affects the whole planet.
The complete loss of control of the US financial system to the owners of the system is the major contributor to the instability and unrest around the planet. It is weakening the US dollar which most markets are priced in. This is driving up all commodity prices, (particularly food) as speculators use the flood of QE money to drive prices ever upwards. (QE money was never intended to do anything other than maintain confidence in the "market", an entity that has taken on religious qualities apparently.

For the majority, incomes are not remotely keeping pace and for those countries (Egypt, Yemen, Libya, Syria etc) where a most of that income is needed to feed a family we are seeing the direct results.


This is not a muslim/al quaeda uprising as some fear mongers (conspiracy nutters????) would try and make it out to be. People only rebel when the are starving. If they appear to be following radical islamics, it is only because those groups are there to fill the void left behind by the previous abberant rulers. There are many examples of this through history.

We are witnessing something that has happened on a regular basis throughout history, the decline of a dominant system. The current USA system has many parallels with the decline of the Roman Empire. Bread and circuses (reality TV), garrisons around the world (Afghanistan, Iraq, Germany, Japan etc etc), corrupt senators...........

Unless the financial system is shredded and rebuilt the inevitable will happen inside 10 years and quite possibly inside 5. I loathe the phrase "income redistribution", it smacks of the negativity of Marx and the failed communist fairy story, but unless that happens to some extent then the peasants truly will be revolting and that won't be good for any of us.

Star Woes

Book 1: A New Creed

by Anne Belsey

http://www.moneyreformparty.org.uk

How to save the galaxy with just a knowledge of basic accountancy and an understanding of the money supply system!

"It's like a financial black-hole," he gasped.

"That is a very good way of looking at it, colonel. It is a debt that will eventually consume all credit, even that which it has created."

"It's criminal," decided the colonel.

"No, it's all perfectly legal."

"Well, it should be criminal; it's immoral; it's unethical. It is the most venal sleight of hand that ever was conceived! And when you think what the Debt Star cost, and what it did... It crippled the U-Sector government financially. Their taxes were so high that they forced the creation of the Galactic Empire, at the point of the Debt Star's neutron-laser, to spread the cost of the debt over other planets and federations. But, you know, I never realised that the money that was borrowed to build it never existed in the first place!"

"You understand our mission now, colonel?"

Next: Chapter 1

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Global Cooling and the New World Order – Telegraph Blogs

Global Cooling and the New World Order – Telegraph Blogs

Government meddling

From the Daily Reckoning's Bill Bonner.

In the reign of Emperor Zhao, in 81 BC, 60 Confucian scholars were asked to consider the effect of government meddling in the economy. The Middle Kingdom was in a fix. Mongol raiders were pressing it from the East; the government was going broke. Taking the advice of Sang Hongyang, the feds of that era had put in place various state monopolies and price controls. The result?

"People live in houses with badly-made beams and shoddy thatched roofs. They wear clothes of rough fabric and eat out of bowls made of dirt," the sages explained. "We waste our time on vain efforts...and lack the essentials, food and clothing."

The scholars gave their advice in moral terms: "Above all, emphasize virtue and suppress get-rich-quick speculations." Too bad they didn't have The Financial Times or The New York Times to guide them! These journals offer a world without wickedness or moral lessons. Economy in a funk? Forget the real cause. Stimulate it! We can worry about the real problem "after the economy has recovered," writes Paul Krugman in The New York Times. "Only those who believe the economy is a morality play," would want to suffer the pain of a correction, adds Martin Wolf at the FT.

Readers are urged to focus on the hilarity of the scene rather than on its gravity. It is as if a fat man were bending over. The further over he goes, the more his seams split. First to go was the subprime seam in the back...then the Greek seam on the side. But no one wants to say the obvious thing: that he should stand up straight and lose weight. Instead, the FT and the NYT want the government to buy him a larger pair of pants.

You have read a number of unpopular views in our Daily Reckonings...

That this was not a typical post-war recession; it is a Great Correction. Over-indebted American and British economies need to de- leverage.

..That no recovery is possible, because the preceding model of debt- fueled consumption was unsustainable.

..That 'stimulus' efforts were not only a waste of time and money, but also harmful; people who made bad bets should take their losses with dignity instead of trying to get others to pay.

In the 10 million or so years since our ancestors have walked on two feet, many were the challenges that arose. We learned to hunt and gather...to build shelter...to clothe our bodies and to kill each other. We made tools and were able even to split atoms and remove body tattoos. We evolved into a practical, problem-solving race. But never could we solve the problem of an economic downturn.

Why? Because the Confucian scholars were right. A properly functioning market economy gives people neither what they want nor what they expect, but what they deserve. In that sense it is 'moral' not mechanical. You can't pull levers nor turn screws to stop a correction. Like old age, the best you can do is to endure it with good grace; the alternative is worse.

Central planners don't create wealth. They can only move it around, robbing Peter to pay Paul. This only 'stimulates' an economy if Paul uses the resources better than Peter. Don't make us laugh. In most cases, Paul is the same clown who made the bad bets in the first place.

In the present instance, instead of robbing Peter to pay Paul, the feds judged it prudent to borrow from Peter. But Peter is no dope. First, he turned his eyes on Greece. Then, he noticed all the other peripheral players in the Eurozone... Then, he put his wallet back in his pocket. It became obvious that the jig was up. As Nouriel Roubini put it, we reached the point where "austerity is not optional."

Stoicism went out of style in the economics profession 100 years ago. Activism paid. Stoicism did not. Since then, busybodies have advised presidents, headed central banks, run multi-national agencies, appeared on covers of TIME magazine, won the Legion d'Honneur and the Enron Prize...and run billion-dollar hedge funds. And now, after 18 months...and approximately $12 trillion worth of stimulus, bailouts and debt guarantees...we see the results of a live test. Have our modern economists done better than Sang Hongyang?

The latest evidence came in last week, from the US. The biggest source of employment lately is the US government itself, which has hired hundreds of thousands of census takers. Obviously, if you could make people better off by having them count things, why not hire more of them and have them count the hairs on our heads? Employment in the private sector is still going down. One in ten Americans is officially unemployed...one is six is working at less than capacity. Twice as many people have been out of work for more than 27 weeks this year than the year before. Not surprisingly, real incomes are going down too. Meanwhile, one of every 8 houses is delinquent or in default on its mortgage. Statistically, 7.2 million of them will be foreclosed, most likely leading to another drop in housing prices...and a drop in household wealth.

Prices are falling too. M3 fell at a 5% rate in May. Consumer prices, officially, are increasing at the slowest pace since 1966. Unofficially, adjusting for the real cost of housing, the actual cost of living is in outright deflation.

In short, the 'recovery' is a flop.

Bill Bonner

Think the recession is over? Think again.

From the Daily Reckoning..............

“While the Illinois Constitution protects vested pension benefits, that promise, like all the state’s obligations, is only as good as its ability to pay.”

-Crain’s Chicago Business

“Illinois Enters a State of Insolvency” cried a January 18, 2010 headline from Crain’s Chicago Business: “As Illinois’ fiscal crisis deepens, the word ‘bankruptcy’ is creeping more and more into the public discourse.”

Illinois’ lack of discipline is no surprise; it is in the vanguard of the spendthrift states. Revenues are falling and expenses are rising.

The Land of Lincoln, without authority to print greenbacks, is in arrears. Over $5 billion of state bills were unpaid at the end of 2009. Over $1.4 billion in Medicaid claims have not been processed. More than $2.25 billion in short-term financing is coming due. Crain’s continued: “State employees, even legislators, are forced to pay their medical bills upfront because some doctors are tired of waiting to be paid by the state.”

There is a good chance several states will face a similar predicament in 2010. On January 15, CNNMoney quoted a college professor: “It is surprising that political leaders don’t seem to take seriously the magnitude of the problems.”

Maybe it is not surprising. Most states are required to balance their budgets each year, but this is often accomplished with a good deal of hokum. For instance, states borrow in the bond market to tide themselves over, then ignore bond covenants and slip funds raised to build highways into the operating budget.

The Obama administration’s fiscal stimulus is an additional means to delay the inevitable. Illinois received a 22% pay raise from the federal government as a beneficiary of the stimulus bill. Legislators probably assume, if worse comes to worse, they can go back to the Federal government.

A good part of the country makes this assumption, including too-big-to-fail banks, retired municipal workers and municipal bondholders. Most experts will discount warnings of financial forfeiture. Experts are recognized as such because they say what their audience wants to hear. Americans should discount the experts.

On January 13, the U.S. Treasury Department released an updated Monthly Treasury Statement for December 2009. Scrolling down to Table 3, estimated revenues for the fiscal year (which ends September 30, 2010) are $2.2 trillion. Budget outlays are expected to be $3.7 trillion. This is the type of financial rectitude practiced by President Mugabe in Zimbabwe.

The $1.5 trillion deficit for the current fiscal year needs to be funded, but the market for Treasury securities has a limit, certainly if it expects to sell securities at 3.7% (the current yield on a 10-year Treasury bond). If the U.S. dollar is to avoid Zimbabwe’s predicament, where the annual inflation rate passed 200-million-percent some time ago, the negligent states will be told to solve their own troubles.

This will leave many people in a fix, including public sector retirees. It has long been assumed by most government workers, particularly those in unions, that their pensions are guaranteed. This is not true. Every state has legal recourse. (See page 9 of “The Coming Collapse of the Municipal Bond Market” on my website, AuContrarian.com).

Crain’s may be one of the first to contemplate the fragility of these benefits: “The sharp rise in pension payments is the biggest factor pushing Illinois toward what a legislative task force last November called “a ‘tipping point’ beyond which it will be impossible to reverse the fiscal slide into bankruptcy.”

Crain’s quotes a “little-noticed report” produced by a legislative task force that addressed the state’s pension problems. The report-that-nobody-wanted-to-read claimed: “the radical cost-cutting and huge tax increases necessary to pay all the deferred costs from the past would become so large that many businesses and individuals would be driven out of Illinois, thereby magnifying the vicious cycle of contracting state services, increasing taxes, and loss of the state’s tax base.”

Crain’s goes on to explain the problem of a destitute state, legal claims not withstanding: “While the Illinois Constitution protects vested pension benefits, that promise, like all the state’s obligations, is only as good as its ability to pay.” [My italics.]

Americans are not used to limits. There is always a solution to a problem. Most often, ignoring it, then borrowing and spending more has worked. (Illinois has borrowed to meet contributions for worker pensions. Other states have done the same.) Today, dollars to pay the legally binding benefits are growing scarce. Crain’s quotes a Chicago research organization: “All the obligations of the state, whether vested or not, will be competing for funding with the other essential responsibilities of state government. Even vested pension rights are jeopardized when a government is insolvent.” [My italics.]

Bondholders, high-school teachers, university professors (and students), day-care directors and building contractors should take precautions now to ensure their last dollar is not negotiated in a court room.

Municipal Meltdown: Teacher Pensions, Bondholder Coupons, Go to Court originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

Predictions from Trends Institute

The Collapse of 2010


In November of 2007, we predicted the "Panic of ’08." There was a panic. In November of 2008, we forecast the "Collapse of ’09." In March ‘09, the global equity markets collapsed. But before they could crash all the way to the ground, a scaffold of emergency props was erected. An unparalleled array of government cash infusions, rescue packages, bailouts and incentives papered over the crisis.

Today, even as government spokesmen and the major media proclaim that the world is emerging from its near-cataclysmic recession, we predict the "Crash of 2010." The rising equity markets, on which claims of recovery are based, are worlds away from the hard reality of the streets....


Terrorism 2010


While we can’t predict precise dates or the magnitude of terror attacks, we can be fairly certain they are on the way. The “Fort Hood Gunman” is being recognized by the intelligence community as the poster boy for an alarming new terror phenomenon termed “lone-wolf, self-radicalized gunmen.”

Years of war in Afghanistan and Iraq – and now Pakistan – have intensified anti-American sentiment and increased the number of individuals seeking revenge. NATO allies contributing troops to the wars will also be targeted......


Not Welcome Here


In 2010, the anti-immigration movement, long building, will arrive and stay in the US and abroad. America and Europe, with their immigrant populations close to double digits, are experiencing an identity crisis.

In Europe, fear and resentment of Muslims has led to huge gains for anti-immigrant political parties. In the US, with mid-term elections coming up, what to do about the “illegals” will be a hot- button issue that will top the political agenda and serve as a galvanizing force for a new party.....


Mothers of Invention


The ongoing shock to the economic system is rebooting “Yankee ingenuity.” The need to overcome the effects of reduced individual buying power will lead to the invention of a new class of product which will be a major trend of 2010 and into the future: “Technology for The Poor.”

Growing with the same speed as the Internet Revolution, the trend will be recognized, explored and exploited by legions of skilled but jobless geeks, innovators and inventors who will design and launch a new class of products and services affordable by millions of newly downscaled Western consumers......


Depression Uplift


As times get tougher and money gets scarcer, one of the hottest new money-making, mood-changing, influence-shaping trends of the century will soon be born. We forecast that this will be “Elegance” in its many manifestations.

The trend will begin with fashion and spread through all the creative arts, as the need for beauty trumps the thrill of the thuggish. A strong, do-it-yourself aspect will make up for reduced discretionary income, as personal effort provides the means for affordable sophistication.....


Neo-Survivalism


In 2010, survivalism will go mainstream. Unemployed or fearing it, foreclosed or nearing it, pensions lost and savings gone, all sorts of folk who once believed in the system have lost their faith.

Motivated not by worst-case scenario fears but by do-or-die necessity, the new non-believers, unwilling to go under or live on the streets, will devise ingenious stratagems to beat the system, get off the grid (as much as possible), and stay under the radar......


TB or not TB


About two-thirds of Americans are Too Big (TB) for their own good and everyone else’s. We forecast a massed revulsion for TB in all its manifestations – obesity is only the most obvious.

Everything in America is TB . Houses, cars, debt loads, deficits, state budgets, the states themselves, foreign aid, military budgets, bureaucracies local, state, federal and “too big to fail” businesses – they’re all Too Big.

Apart from government action, the “Shape Up” trend will provide a wide array of business opportunities.....


Not Made in China


A “Buy Local/My Country First” backlash will be the first sign of what we forecast will become a massive, “circle-the-wagons” movement. We forecast a “Not Made in China” consumer crusade that will spread among developed nations, leading to trade wars and protectionism.

Craftspeople and small manufacturers that can establish a reputation for quality products will be able to build thriving micro-brands, while marketers who can amalgamate micro-cooperatives into true local commerce organizations will carve a solid niche for themselves......

Predictions from Trends Research Institute

The Collapse of 2010 In November of 2007, we predicted the "Panic of ’08." There was a panic. In November of 2008, we forecast the "Collapse of ’09." In March ‘09, the global equity markets collapsed. But before they could crash all the way to the ground, a scaffold of emergency props was erected. An unparalleled array of government cash infusions, rescue packages, bailouts and incentives papered over the crisis. Today, even as government spokesmen and the major media proclaim that the world is emerging from its near-cataclysmic recession, we predict the "Crash of 2010." The rising equity markets, on which claims of recovery are based, are worlds away from the hard reality of the streets.... Terrorism 2010 While we can’t predict precise dates or the magnitude of terror attacks, we can be fairly certain they are on the way. The “Fort Hood Gunman” is being recognized by the intelligence community as the poster boy for an alarming new terror phenomenon termed “lone-wolf, self-radicalized gunmen.” Years of war in Afghanistan and Iraq – and now Pakistan – have intensified anti-American sentiment and increased the number of individuals seeking revenge. NATO allies contributing troops to the wars will also be targeted...... Not Welcome Here In 2010, the anti-immigration movement, long building, will arrive and stay in the US and abroad. America and Europe, with their immigrant populations close to double digits, are experiencing an identity crisis. In Europe, fear and resentment of Muslims has led to huge gains for anti-immigrant political parties. In the US, with mid-term elections coming up, what to do about the “illegals” will be a hot- button issue that will top the political agenda and serve as a galvanizing force for a new party..... Mothers of Invention The ongoing shock to the economic system is rebooting “Yankee ingenuity.” The need to overcome the effects of reduced individual buying power will lead to the invention of a new class of product which will be a major trend of 2010 and into the future: “Technology for The Poor.” Growing with the same speed as the Internet Revolution, the trend will be recognized, explored and exploited by legions of skilled but jobless geeks, innovators and inventors who will design and launch a new class of products and services affordable by millions of newly downscaled Western consumers...... Depression Uplift As times get tougher and money gets scarcer, one of the hottest new money-making, mood-changing, influence-shaping trends of the century will soon be born. We forecast that this will be “Elegance” in its many manifestations. The trend will begin with fashion and spread through all the creative arts, as the need for beauty trumps the thrill of the thuggish. A strong, do-it-yourself aspect will make up for reduced discretionary income, as personal effort provides the means for affordable sophistication..... Neo-Survivalism In 2010, survivalism will go mainstream. Unemployed or fearing it, foreclosed or nearing it, pensions lost and savings gone, all sorts of folk who once believed in the system have lost their faith. Motivated not by worst-case scenario fears but by do-or-die necessity, the new non-believers, unwilling to go under or live on the streets, will devise ingenious stratagems to beat the system, get off the grid (as much as possible), and stay under the radar...... TB or not TB About two-thirds of Americans are Too Big (TB) for their own good and everyone else’s. We forecast a massed revulsion for TB in all its manifestations – obesity is only the most obvious. Everything in America is TB . Houses, cars, debt loads, deficits, state budgets, the states themselves, foreign aid, military budgets, bureaucracies local, state, federal and “too big to fail” businesses – they’re all Too Big. Apart from government action, the “Shape Up” trend will provide a wide array of business opportunities..... Not Made in China A “Buy Local/My Country First” backlash will be the first sign of what we forecast will become a massive, “circle-the-wagons” movement. We forecast a “Not Made in China” consumer crusade that will spread among developed nations, leading to trade wars and protectionism. Craftspeople and small manufacturers that can establish a reputation for quality products will be able to build thriving micro-brands, while marketers who can amalgamate micro-cooperatives into true local commerce organizations will carve a solid niche for themselves......