Why 308,127,404 Americans Are Going To Get Hosed

Last week, the US government’s Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department, published its 2011 annual report. There are a few numbers that are pretty startling. We’ve discussed before that FinCEN is the executive agency tasked with ensuring that every US banker is an unpaid government spy through Suspicious Activity Reports. A Suspicious Activity Report, or SAR, includes details of any transaction that may be deemed ‘suspicious’. Naturally, there’s no clear guidance on what is/is not considered suspicious. Banks, brokerages, money service businesses, precious metals dealers… even casinos are required by law to fill them out. If you withdraw an unusual amount of cash from your bank account, that could be deemed suspicious. If you set up a new payee in your billpay service, that could be deemed suspicious. Anything and everything is fair game. Banks and other businesses who do not fill out SARs face hefty penalties, including imprisonment. If they disclose to a customer that s/he is the subject of a SAR, they have hefty penalties, including imprisonment. When push comes to shove and they have to choose between a nasty penalty, or submitting a SAR about your unusual cash withdrawal, which option do you think they’ll pick? Unsurprisingly, nearly 1.5 million ‘suspicious activity reports’ were filed across the US banking system in 2011, well over twice the number reported in 2004. On top of this, there were an additional -14.8 million- ‘currency transaction reports’ filed in 2011, a 6% jump over last year. It’s an unfortunate trend which highlights not only the end of financial privacy, but also the massive amount of data being collected by the government to keep tabs on its citizens.

It’s All Been Done Before

One of the downsides of having government education camps (the school system) “educate” most of us slaves is that most of us have no clue what occured prior to our own lifetimes. And what we think we know is incorrect or never happened.
Everything that is currently going on in the US… government “stimulus”, massive deficits, pending bankruptcy and the use of the crisis to institute more government controls and blame the “free market” has already happened twice in the last century in the US. The following cartoon with the outline of the grand plan was printed in the Chicago Tribune in 1934, just after the first bankruptcy of the US Government in 1933.
Sound like a familiar plan?
The US Government, after installing the communist-fashioned Federal Reserve system in 1913, and the subsequent war it enabled, World War I, just a few months later, had already bankrupted itself by 1933. That was when the US Government had to confiscate gold and then devalue the US dollar in order to survive. That was US bankruptcy #1.
Read More @ DollarVigilante.com

Silver, Gold, Oil And Stocks About To Make a HUGE Move

 

 

"The Bernank" Doubles Down on Fed Mortgage Bet

"The Bernank" is signaling his willingness to double down on a three-year bet that’s failed to revive housing, showing the extent of the Federal Reserve chairman’s effort to wrest a recovery from the deepest recession.
Since the Fed started buying $1.25 trillion of mortgage bonds in January 2009, the value of U.S. housing has fallen 4.1 percent, and is down 32 percent from its 2006 peak, according to an S&P/Case-Shiller index. The central bank is poised to buy about $200 billion this year, or more than 20 percent of new loans, as it reinvests debt that’s being paid off. Some Fed officials have said they may support additional purchases that Barclays Capital estimates could total as much as $750 billion.
Even as "The Bernank" and fellow U.S. central bankers consider expanding their efforts, they are acknowledging their inability to turn around the housing market without help from the rest of the government. "The Bernank" underscored the importance of residential real estate, which represents 15 percent of the economy, in a study he sent to Congress last week that said ending the slump is necessary for a broader recovery.
Read More @ Bloomberg.com

US Breaches Debt Ceiling Even More; Issues 10 Year Debt At Record Low Yield, Directs Surge

America may have breached its debt ceiling, but that is certainly not preventing it from issuing debt, placing another $21 billion in 10 Year bonds in a reopening, which priced 1.5 bps through the WI tail of 1.915% or at 1.90%. This is merely the latest record low yield in the history of the auction. The Bid To Cover came at 3.29: not a record, but certainly one of the top 5 highest. Oddly enough, while the Directs disappeared from yesterday's 3 Year auction, today they surged, coming at double last month's 8.4% at 17.4%, the highest since the August post-downgrade auction. Primary Dealers accounted for 44.3% with Indirects coming in at a very weak 38.3%. Still, the take home is that in the past two days, the US has raised over $50 billion in debt with no capacity, and instead is plundering from government retirement accounts, just like it did back in July 2011 at the first, but not last, debt ceiling theater. SSDD.At least we know what it takes to get new record low yields: just keep breaching the debt ceiling - guaranteed way to raise 30 Year debt at 0.00% in a few months.

The Coercive Greek Restructuring Is Now Imminent: UBS Explains What It Means For Europe (Hint: Nothing Good)

Over the weekend, and before it became a popular topic in the mainstream media and an issue of political debate, UBS first among the "non-fringers" discussed the topic of not only a coercive Greek restructuring (i.e., one in which there is no "agreement" of the bondholders) but that it is, in fact, imminent. Since then, the din over this issue has escalate with reports over the past two days, that Greece may enforce collective action contracts as well as force bondholders into a deal, since various hedge fund hold-outs have been holding Europe hostage, a development foreseen here in mid-2011. Unfortunately for Europe, which apparently has no idea what is going on, and whoever is advising it financially is certifiably an idiot, the coercive path is precisely what the end outcome may end up being. Naturally, while this is preciseley what should have happened long ago (and saved taxpayers everywhere hundreds of billions in Greek bailout funds), the fact is that it goes contrary to everything the imploding status quo and collapsing ponzi house of cards is doing to prevent an all out catastrophe, as a coercive transaction actually will have unpredictable and adverse spill over effects in virtually every aspect of European financial markets, which in turn will migrate to the US. The good news is that CDS, despite the constant attempts of the crony and corrupt ISDA otherwise, will once again become an instrument of hedging, which ironically in the long run will be stabilizing. But not before some serious short-term fireworks. UBS explains.

Nearly one-third of middle class suffer downward mobility

Eric De Groot at Eric De Groot - 58 minutes ago

Why do you think Ben Bernanke was chosen to run the Fed after 2001? As student of the Great Depression, he knew that while currency devaluation - infinite liquidity would not reverse downward mobility created by the massive debt overhang it would be needed to prevent the Great Recession from turning into the Greater Depression. Headline: Nearly one-third of middle class suffer downward... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

January 8: Andrew Jackson Day Remembered
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Europe Closes Weak After Hopeful Start

Following yesterday's extravaganza in European credit markets, which saw XOver (European high-yield credit) surge to highs year-to-date (wiping out a week's worth of leaking wider in one fell swoop), today's open suggested some follow-through but as macro data combined with France downgrade rumors (denied rapidly) sovereign and corporate credit markets sold off quite rapidly into the close. Interestingly, financials (senior and sub debt) managed to hold gains from yesterday's close as XOver and Main (Europe's investment grade credit index) along with the broad stock market lost ground to close near their lows (though well off yesterday's open still). EURUSD (holding under 1.27 at the EUR close) weakened fairly consistently after Spanish industrial output and German GDP did nothing to inspire and while sovereign spreads (Spanish and Italian mostly) were outperforming, as the French rumors hit, they sold off rapidly (France and Italy back to unchanged). As usual into the close there was a modest risk rally and sovereign spreads leaked modestly tighter (by around 6-9bps) with France underperforming but we did not see that bounce in corporate credit. The weakness in 'cheap-hedge' investment grade credit suggests risk appetite is not returning and decompression trades are back in vogue after yesterday's snap and perhaps a growing realization that no PSI agreement is looming anytime soon.

China's Debt Maturity Problem Has Arrived

We have discussed the seemingly irrepressible demand to lend companies money (for the implicit FX trade) in Dim Sum bond format a number of times and in the last few weeks yields on these bonds have risen further as the reality of a notable contraction in mainland credit conditions (along with a rationalization of the lax restrictions within the bonds themselves) starts to hit investors. Overnight, Bloomberg reports that Shandong Helon, a Chinese fiber maker and the first to lose its investment-grade rating (fallen angel), missed a 397mm Yuan loan payment, only serving to further stoke fears of the knock-on effects of a slowing Chinese economy dragged lower by global growth fears (except for the US which is off in faerie land), as ratings downgrades surged last year. Incredibly, no Chinese company has defaulted on its domestic debt since the country's central bank started regulating the market in 1997, according to Moody's but as Bloomberg notes, there is some 2 trillion yuan of bank facilities set to mature in 2012, compared to 33 billion yuan of bonds - leaving a very crowded-out market of shorter-dated debt rolls soaking up what little credit is willingly available. With Dim-Sum bond yields (based on our index of sizable issues) up over 30% (80bps) from early September and European-based USD strength slowing any CNY-FX decay these holders hoped for, we agree with Gao Zhanjan (of Citic Securities), via Bloomberg, that "there will slowly be more substantive defaults in the future".

Any North Koreans Found Not To Have Cried Hystrically At Kim Jong-Il's Passing May Spend 6 Months In A Labor Camp

Well, it is a slow news day, so we focus on the patently absurd, such as this news out of Interfax confirming that TheOnion can now close up shop as reality is far, far better. From Interfax: "North Korean citizens, who did not take part in the mourning ceremonies for the country’s late Leader Kim Jong-il, are facing up to six months in labor camps, Interfax reported January 11. According to the South Korean media sources, “People’s Courts” took place all over the country starting December 29 to condemn those who did not show enough emotion after the death of “the great leader” Kim Jong-il. The People’s Court hearings were reportedly over by January 8. The behavior of those people, who criticized the three-generation principle of ruling the country, was also a matter of discussion during the court meetings.  It was reported earlier that 2012 calendars were fully taken out of stores because the date of death of the late Leader Kim Jong-il was not marked in them." That said, we doubt anyone will punish the capital markets for crying hysterically should Bernanke's printer finally kicks the ghost.

(Ed note)...The only body fluid I would have supplied... would have been yellow...

ECB Must Do More To Avert Euro Collapse: Fitch

(Reuters) – The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a “cataclysmic” collapse of the euro, David Riley, the head of sovereign ratings for Fitch, said on Wednesday.
Speaking to investors as part of a European roadshow, Riley said a collapse of the euro would be disastrous for the global economy, and while it is not Fitch’s baseline scenario, it could happen if Italy did not find a way out of its debt problems.
“The end of the euro would be cataclysmic. The euro is a reserve currency,” Riley said. “What would that do in terms of financial and political stability?”
“It is hard to believe the euro will survive if Italy does not make it through,” he said, adding that while many saw Italy as too politically and economically important to be allowed to fail, “one might also argue that it is too big to rescue.”
Read More @ Reuters.com

 

Precious Metals Market Most Oversold Since 2008

by Chris Puplava, FinancialSense.com:
In September of last year we saw gold jump two standard deviations above our gold intermediate-term risk indicator’s average, a feat only seen on three prior occasions (2006, 2008, 2009). Since then, gold has significantly worked off its overbought condition and fallen by over 20% to its recent low on December 29th. Now, the recent decline has been sufficient enough in both time and magnitude to drop our gold indicator to a very oversold reading of more than 1 standard deviation below its historical average. The last time gold was this oversold was back in 2008 and represents the second most oversold reading since gold’s secular bull market began, and likely represents a major buying opportunity as the long term fundamentals (negative real interest rates, global currency debasement) remain.
Read More @ FinancialSense.com

 

 

Post Admits Austerity ‘Killing’ Greece

In Greece, fears that austerity is killing the economy … Deeply indebted and nearly bankrupt, this Mediterranean nation was forced to adopt tough austerity measures to slash its deficit and secure an international bailout. But as Greece’s economy slides into free fall, critics are scanning the devastated landscape here and asking a probing question: Does austerity really work? Unemployment has surged to 18.8 percent from 13.3 percent only a year ago. Overburdened public hospitals are facing acute shortages of everything from syringes to bandages because of budget cuts, with hiring freezes forcing the mothballing of operating rooms even as more unemployed are relying on the public health system. Rates of homelessness, suicide, crime and HIV cases from intravenous drug use are jumping. “Conditions have deteriorated so dramatically that doctors in this country now believe that the Greek crisis is no longer just a financial crisis but a humanitarian crisis,” said Dimitris Varnavas, the president of the Federation of Greek Hospital Doctors’ Unions. – Washington Post
Dominant Social Theme: Greece needs to “get its act together.” But will the pain be too much to bear?
Free-Market Analysis: The almost genocidal nature of modern “austerity” as interpreted by the current crop of European one-world technocrats has come in for some mild criticism in the pages of the Washington Post.
Read More @ TheDailyBell.com

 

 

International Forecaster January 2012 (#3)

by Bob Chapman, The International Forecaster via GoldSeek.com:
The hand of the US elitists shows more each day in the decisions being made in Europe. Mario Draghi, ex-Goldman Sachs, Trilateralist and Bilderberg, is putting everything in place just the way the US elitists want. We are about to see full scale quantitative easing. One trillion in loans times fractional lending of 3 to 9 to whatever will give Europe the funds it needs indefinitely. Europe is going to be a rerun of what we have seen in the UK and US. In behalf of German voters who are 65% against such funding, Chancellor Merkel has refused to allow issuance of Eurobonds or an expansion of the EFSF. Draghi at the head of the ECB is now putting pressure on Mrs. Merkel to drop back to a more defensive position. The intrigue is at its height. If Frau Merkel gives into Draghi she and her party will not score well in the next election and may even lose political control. That could cause Germany to consider leaving the euro, which would destroy the euro zone. There are major dangers here and all the players are well aware of it. Agreement will take time and if it is not reached everything could short circuit, other than the fact that the Fed has put the funds in place. The other objective of getting Germany to whole-heartedly accept the bailout and stimulation is another matter. Confusion reigns even among the participants. The US, UK, France and their front men, Draghi, Monti and Papademos are all moving forward. The price will be very high from an inflationary standpoint, but to the elitists that isn’t even a consideration. They could care less. That is why you want to have your assets invested in gold and silver related assets. We could be headed toward another Weimer episode.
Read More @ GoldSeek.com

 

 

James Turk: “There’s Physical Gold and Paper Gold–The Closer You Are to Physical the Higher the Price”

from Tekoa Da Silva’s Bull Market Thinking:
Yesterday I had the chance to share an outstanding conversation and interview with James Turk, founder and chairman of GoldMoney.com.
James is one of the leading voices of the global gold community, and his background and network information is second to none. The topics we discussed in the interview ranged from where GoldMoney.com sources it’s bullion, to the Middle Eastern & Asian perceptions of gold, the coming “PAGE” gold exchange, plus James’ expectations for gold, silver, and mining shares in 2012.
Starting out the discussion, I asked James to comment on the ongoing misunderstandings of the “lack of supply” in the metals markets. James said, “If you’re really looking for large amounts of metal, it’s very difficult and it’s not something that can be filled overnight [the order]…it’s something that’s going to take weeks perhaps to fill depending on the size of the order.”
Read More @ BullMarketThinking.com

 

 

The Corrupt State

from EconomicNoise.com:
Slowly and incessantly, recognition regarding the true nature of government is seeping into the consciousness of the public. The internet is certainly an important factor in this change in beliefs, as is the economic devastation that has plagued the nation.
Whether this recognition is coming quickly enough to offset the totalitarian trends is moot. The recognition is beginning after government has taken control of much of the economy and society. As a betting man, I believe the move toward totalitarianism will continue — for awhile. Longer term, probably defined in decades rather than years, the American people will become aroused enough to take back their country and individualism. Freedom is a part of our genetic make-up. When it is apparent to enough people what is happening, Atlas will shrug, or punch back.
Read More @ EconomicNoise.com

 

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