The worlds reserve currency.
THE USA DOLLAR

Okay, I've seen enough chain letters discussing the cause of our economic woes, and they're all incorrect, so I figured it was time to write one that addressed the real issues. I've written this in plain English and have taken out any technical mumbo-jumbo so people will be able to understand it clearly. So, even though I will be leaving out some details everything in this message will be fundamentally true.

Okay, if you want to understand the problem we have with money in this country, you're going to have to understand 3 things:

1. Who makes our money.
2. How money comes into existence.
3. Inflation is nothing but a tax.

Let's tackle the first part:

PART I - Who Makes Our Money?

Here are 2 different $100 Bills. One has a red seal, the other a green seal.

Notice the top of this bill. It says United States Note. That means it is a note issued by the United States.



Now notice the top of this bill. It says Federal Reserve Note. That means it is a note issued by the Federal Reserve. It is NOT issued by the United States at all.



Well, who is the Federal Reserve? Aren't they part of the government you might ask? The answer to that is no. The Federal Reserve is a private company, just like Federal Express. And it is no more federal than Federal Express is.

Now both of these $100 Bills cost 4 cents to produce. In the old days the govt would simply print up a red seal $100 United States Note for 4 cents and spend the money on something it wanted. Not anymore. Today, the Federal Reserve gets to produce the $100 Bill for 4 cents and then sells the $100 Federal Reserve Note to the US Government for $100 Face Amount.

That bears repeating. The Federal Reserve (a private company) gets to produce slips of paper for 4 cents ($100 Bills) and then sells those pieces of paper to the US Govt for $100 Face Amount.

Now since the government doesn't have any money of its own how does it buy these Federal Reserve Notes? It pays for them with debt: Treasury Bonds, Treasury Notes, & Treasury Bills. If you read the paper or listen to the nightly news you'll hear the media say things like "The Fed injected liquidity into the markets..." or "The Fed is buying government securities..." All this means is that the Federal Reserve is literally creating money out of thin air and then selling this money to our government for its face amount. This is the true source of our National debt, and this is the reason our debt never goes down.

If you read an economics book this will be covered under the term "Monetization of government debt."

Now some of you might be saying, "Why should I care about any of this?" I'll tell you why.

You know all that income tax that comes out of your paycheck every week? Well your money is paying for this. Your income tax dollars do not pay for things like you think. The personal income tax does not pay for the military, roads, schools, or anything like that. It simply pays for the federal reserve notes with the green seal. In fact both the income tax and Federal Reserve were created in the same year - 1913. The income tax was created to finance the federal reserve.

Okay, pretty crazy right? Why in the world would our government pay a private bank for money, and then tax it's own citizens to pay for it, when we could just issue the money ourself practically for free? There is a reason, and we'll touch on it later. Right now we're going to explain the next part.

PART II - How Money Comes Into Existence

This part explains why we have booms and busts in the economy.

We now know that the government buys it's money from the private company called the Federal Reserve. And we know that the government pays for the money by issuing government debt. Because of this, the government doesn't even own it's own money, it only rents it. (A $100 United States Note issued in 1966 only costs America 4 cents. While a $100 Federal Reserve Note issued in 1966 costs America $100 + $5 a year in interest for a total of $315.00)

When the government buys one dollar from the federal reserve



The government automatically owes that dollar PLUS 5 cents in interest.

+

The problem with this is that although the dollar is created, the extra 5 cents in interest is NOT created. This means there is not enough money in the economy for the government to pay back it's debt. After awhile it's not even possible for the government to pay the interest on it's debt unless the money supply is increased.

So out of necessity, the federal reserve & government will start a program of expanding the supply of money. The federal reserve will create more money to push down interest rates and the government will take on more debt to buy more of this money.

This causes malinvestment, which means:

People are encouraged to make wrong decisions because of false signals they are receiving from the marketplace. Businesses will tend to over expand when they shouldn't and over produce certain goods. (build too many houses for example.) Consumers will feel richer and so will wind up buying more cars, homes, etc. when they really cannot afford to.

This is where programs like the Community Reinvestment Act come into play as well as agencies like Fannie Mae, Freddie Mac, etc. Anything that encourages expansion of the money supply (like people borrowing to buy homes) will be done, and it doesn't matter whether the Republicans or Democrats are in power. They know they need to keep the supply of money growing. If they don't then this whole unstable system comes crashing down.

But since this system of money IS unstable it has to come crashing down anyway: Eventually the areas in which this money is put will form a "Bubble". It might be a Stock Market bubble or a real estate bubble, just to name a few. Eventually these bubbles will burst because they have been artificially created and are unsustainable. Inflationary booms are always followed by deflationary busts as a normal cleansing mechanism of the marketplace.

Now while this bubble is happening, the government can step in through taxation and confiscation and grab enough dollars to pay for the interest on its debt. (Income Tax). When the stock market bubble burst, they replaced it with an even bigger real estate bubble. Now that the real estate bubble is bursting they are trying to replace it with an even bigger "bond market/dollar bubble". The dollar bubble being formed now IS inflation, and will result in prices going up for everything. But like all bubbles, the dollar bubble will eventually burst and when it does the value of the dollar will be destroyed.

PART III - Inflation is a Tax (And that's all it is)

Okay, so far we have talked about two types of money, United States Notes and Federal Reserve Notes. But I have to be honest. Neither of those are actually money, they are only currency.

Here's the difference.

In 1950, you could buy 4 gallons of gasoline for ONE DOLLAR.



A paper dollar bought 4 gallons of gasoline.
A silver dollar bought 4 gallons of gasoline

Now let's fast foward to 2009


A paper dollar will NOT buy you 4 gallons of gasoline. You cant even buy ONE gallon of gasoline with it.



But a silver dollar will still buy you 4 gallons of gasoline. (The silver content is always worth the price of 4 gallons of gasoline.)

Here's another example:



In this picture the price of oil is calculated from the year 2000 and priced in Dollars, Euros, and Gold. In dollars, the price of oil went up 350%, in euros it went up 200%, but in terms of gold it didn't go up in price at all.

Question: Why do commodities like gasoline and oil not go up in price when priced in either gold or silver?

Answer: Gold & Silver are real money. They have intrinsic value. Gold and silver cannot be printed out of thin air the way paper dollars can, and so they retain their value.

When the federal reserve prints paper dollars and sells them to our government, the government is able to go out and buy whatever it wants at current market prices. But as that money circulates throughout the economy, the increase in paper dollars causes prices to rise. By the time the money gets to you and me, the price of a loaf of bread or a gallon of milk has already gone up. This is how inflation taxes us. The government who gets to use the newly made money first, steals our purchasing power through inflation. The end result is that we are taxed without even knowing it. But we all know we work harder and harder just to get the same things in life we had before. That is the invisible inflation tax in a nutshell. This tax affects middle class and poor people the most. And it is the reason we hear people say "The rich get richer, while the poor get poorer."

If we used gold or silver money, the gov't would be stopped from stealing our purchasing power through inflation.

Why don't we use gold and silver for money anymore? We're supposed to. It's the law.

The United States Constitution: Article I, Section 10:

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

The founding fathers experienced massive hyperinflation during the Revolutionary War where the only way the country had to raise revenue was by printing paper money. Imagine having a pickup truck filled with paper money, scarcely being able to buy enough groceries to fill up your truck. It's happened before in America.

"A wagon load of money will scarcely purchase a wagon load of provisions". - George Washington, 1779.

Now this doesn't mean we have to walk around with bags of gold and silver. We can still use paper money, checks, debit cards, and electronic banking that is backed by silver and gold.

Let's take a look at how our $100 Bill is supposed to look. Unlike "Notes" which are not real money, "Certificates" are indeed real money because they are redeemable for the actual gold or silver at any time.







PART IV - Why Does Our Government Do This?

Earlier, I told you I would explain why the government does this. And the answer is because it makes it easier for politicians to get re-elected.

Under our Constitution and a sound money system like a gold standard, the government would have to tax the citizens with what's called a direct tax.

Let's say the government wants to spend money on some programs and it's going to cost $300 Billion more than they are going to take in, in revenue. That means they are going to run a deficit of $300 Billion. With roughly 300 million citizens in America that results in a cost of $1,000 per man, woman and child. So now you get a knock on your door from a tax collector and are told that your family of 4 will have to immediately pay the government $4,000 in a direct tax so the government can spend money on these programs. What would you do? You would call up your congressman and bitch. You would tell him that if he doesn't fix the problem he will be out of a job.

You would take an active role in politics, and that's the last thing politicians want. They just want to get re-elected without all the hassle. So instead of taxing you honestly, they purchase money from the federal reserve, make our national debt go up, and devalue our money through inflation. And since the effects of inflation are delayed anywhere from between 6 months to 2 years, by the time gasoline or food prices go up, it can be blamed on war, greedy arabs, or bad weather, and the politician [and federal reserve] can escape the blame, even though they are the ones responsible. So the next time you hear that oil prices are higher because of a hurricane; remember it's not true.

PART V - How Do We Fix The Economy?

We got into this mess because we over spent, over borrowed, and over consumed.

So we need to do the opposite, which is save our money, pay back debt, and not consume as much.

But wait, I hear some of you say consumption is good for the economy. The nightly news tells us that the American economy is 2/3 driven by consumer spending. However, that is just another fallacy.

Production is the true measure of an economy not consumption. Anybody can eat an ear of corn, but before you can eat the corn, somebody had to grow it. Anybody can buy a new pair of jeans, but before you can buy them, somebody had to make the jeans. Somebody always has to produce before some other person can consume. And saving and spending work the same way. You have to earn and save your money before you can buy things. Here are two "fancy" economic terms and my common sense definitions for each. You should make sure you understand these because you will hear them more as the economy worsens:

Keynesian Economics: Economic theory that basically says, "Spend all the money you have. When you run out of money, borrow all you can and spend that too. When nobody will loan you anymore money, just print the money and keep spending." This is the policy our government follows. The gov't spent all our money, borrowed all we can from other countries, so now the final resort is printing even more money (and paying the federal reserve even more)

Austrian Economics: Economic theory that basically says, "If you want to buy something, make sure you have the money first. If you don't have the money then save up your money, and when you have enough, buy what you want. Pay your credit card balances in full every month and only go into debt if it's an emergency.

The Solution:

We need to let the free market function. Let the depression happen. If we let it happen, it will be over in about a year. If we drag it out with spending plan after spending plan the depression will last for 10 years or more. [Everybody has heard of the depression of 1929, but most people never hear about the depression of 1920-1921, which was actually worse. The difference was, in 1920-1921 the government didn't intervene with spending programs. Failed companies were allowed to go bankrupt, and bad debt was eliminated. After a year, the economy took off. The depression of 1929 was met with one government stimulus plan after another. The depression didn't end until after WWII, in 1946.]

Not only do we, as Americans need to cut back, but we need to produce goods and export them to other countries. We need to produce goods in America again. We need to promote jobs here and stop the outsourcing of American jobs overseas.

But in order to do this we need to decrease the size of government and increase personal liberty. We need to completely eradicate the Federal Reserve and Income Tax, and cut government spending by over $1.3 trillion a year. (which is how much the government collects each year from the personal and corporate income taxes). Basically, if we just follow the United States Constitution we can fix our problems.

Imagine the trillion dollars collected each year from the personal income tax no longer in the hands of the government but in everybodys' hands. That's a trillion dollars more people will have and they will spend their money alot more wisely than government does. Most of the time when government spends money it goes for wasteful programs and everytime the government wants to bailout somebody they wind up just bailing out their buddies.

Imagine with no more corporate income tax, how many companies would be coming back to America to open up shop here again. There would be so many companies coming here to open up shop and creating jobs, we would probably need illegal aliens to work them.

We need to bring back personal Liberty. That can be best summed up as you should have the right to keep 100% of the fruit of your labors (no income tax) and spend your money anyway you want. After all, it's your money. But with Liberty comes responsibility. If you get a paycheck on Friday and spend it all foolishly on Saturday, you can't run to the government because you have no money for food for the rest of the week. You instead will have to turn to your family, friends, and religious leaders or charity to help you. Eventually, you will learn to be responsible. In turn society benefits because the more responsible and productive our people are the better off the country will be. And as an added bonus there will be less idiots out there trying to sue McDonalds for making them fat or burning them with "Hot" coffee.

By Mike Mitrosky

Source www.ronpaulforums.com

link to www.silverbearcafe.com

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FRONT LINE

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Denninger UPDATE:

Bernanke Inserts Gun In Mouth

Karl Denninger

Market Ticker

Mar 20, 2009

I'm not at all sure I believed what I read today. (my comments in italics, indented)

Information received since the Federal Open Market Committee met in January indicates that the economy continues to contract. Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. U.S. exports have slumped as a number of major trading partners have also fallen into recession. Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.

The economy is screwed, and although we have made statements for the last year that our actions would solve the problem, we've been wrong. Exponents (that is, compound interest) are a bitch and its unfortunate that you were too stupid to call us on this two years ago.

TO READ FULL ARTICLE CLICK HERE.

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"THE PONZI SEWER"

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A word from Casper the Ghost

Lets see if we understand this GEITHNER PLAN. The PONZI SEWER they constructed paid all involved huge sums from millions at the level of real estate and mortgage brokers to billions at aggregator levels such as Countrywide etc., to hundreds of billions at the bundling levels, Banks/Freddie/Fannie etc, to Trillions at the securitization level, Wall Street, The City, etc. with additional billions to support groups such as appraisers, rating agencies, etc.. Most of these fees, commissions, bonuses, etc was paid out to the individuals moving the ponzi sewage through the pipeline to the next level up. Then, one day the music stops, the pipeline stops flowing because the world snaps to the fact the assets underlying all the financial exotica in the pipeline was worthless in the first place. Suddenly the ponzi sewage is stuck in the pipeline, stops flowing, begins to stink and harden and everything backs up spilling out all over participants who by now are living in their new mansions and looking for tax havens. Nevermind that the financial institutions they work for were themselves badly hurt, everybody got rich especially the financial institutions so who cares about the little bit of public bitching they have to put up with.

There remains however the problem of the stinking sewage in the ponzi pipeline, something must be done otherwise the world economy becomes a giant stopped up financial toilet. What to do ?GEITHNER to the rescue. The FED will print trillions "out of thin air" to finance getting the sewage out of the banks. They will provide the money to their "private friends", Blackstone, Pimco, Buffett, Goldman Sachs, etc etc and provide them 85/95% of the money needed to buy the sewage from the banks at 1 or 2 % interest and make the loans non-recourse, give the "privates" most of the upside and taxpayers 100% of the downside with the banks getting as much as they can reasonably get away with and the only actual exposure being the 1/8th of the purchase price put up by the privates which they will pull out first on the back side of the deals. End result ?

The corrupt banks get paid again using mostly taxpayer money and liability, this also applies to Wall Street as all of them have now become "Commercial Banks" in order to get at public funds, and should the "assets" never recover because they were never "assets" in the first place the taxpayers are saddled with the losses now and for generations to come. Flim Flam, round and round we go with the "players" getting the upside and we the people the downside. Do you think any of this will make the only "asset" (the original mortgage) in the ponzi pipeline once again valuable ?Does the homeowner suddenly have a job so he can pay the mortgage ?Does the upside down homeowner become right side up because the paper changed hands again ?

Is the financial exotica, MBS's, CDO's, etc etc now made valuable because of public/private ownership rather than bank ownership ?NO. Its all about fixing THEIR banks and THEIR banking system, the rest is Flim Flam. Are you impressed that the "privates" are on the tube talking about how great it is ?It is great for them, in fact they are in a can't lose situation. The government funds the deal (you and me), the money is non-recourse, the paper can just "lay there" as long as necessary as the cost of funds is 1% and meanwhile the banks are off to the nearest resort with the champagne and caviar. And all of it is done with funny money from thin air which becomes a loan which generations of taxpayers must repay. And, with no compensation oversight allowed in the deal the same individuals as before once again are free to take all they desire from the deal in salaries, bonuses, management fees, etc..

The money interest is like the casino in Vegas, they will win and the people will never understand the outcome was guaranteed before they ever came to town. The goal here is to unload the sewage from the banks and to heap it on the taxpayers, the rest is Flim Flam.

Please forward this to everyone on your e-mail list or better yet, refer them to Fourwinds. (This is only the beginning).

www.fourwinds10.com

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THEY ARE DEAD YET STILL ALIVE!

"Derivatives have made J.P. Morgan Chase, Bank of America,
Citibank, Wells Fargo, Bank of New York Mellon, Deutsche Bank,
Societe Generale, Barclays, RBS, and money center banks of the
world into Zombie Banks."

Webster Tarpley.

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Freeze The $1.5 Qaudrillion Derivatives Bubble As The First Step To Recovery

Webster Tarpley

WASHINGTON, DC -- On the eve of the long-awaited London conference of the G-20 nations, we are rapidly descending into the chaos of a Second World Economic Depression of catastrophic proportions. In the year since the collapse of Bear Stearns, we have moved toward the disintegration of the entire globalized world financial system, based on the residual status of the US dollar as a reserve currency, and expressed through the banking hegemony of London, New York, and the US-UK controlled international lending institutions like the International Monetary fund and the World Bank. This is a breakdown crisis of world civilization, prepared over decades by the folly of deindustrialization and the illusions of a postindustrial society, further complicated by the deregulation and privatization of the leading economies based on the Washington Consensus, itself a distillation of the economic misconceptions of the Austrian and Chicago monetarist schools. If current policies are maintained, we face the acute danger of a terminal dollar disintegration and world hyperinflation.

The G-20 leaders are must deliberate a new set of policies capable of leading humanity out of the current crisis. We must first identify the immediate cause which has detonated the present unprecedented turbulence. That cause is unquestionably the $1.5 quadrillion derivatives bubble. Derivatives have provoked the downfall of Bear Stearns, Countrywide, Northern Rock, Lehman Brothers, AIG, Merrill Lynch, and Wachovia, and most other institutions which have succumbed. Derivatives have made J.P. Morgan Chase, Bank of America, Citibank, Wells Fargo, Bank of New York Mellon, Deutsche Bank, Société Générale, Barclays, RBS, and money center banks of the world into Zombie Banks.

Derivatives are financial instruments based on other financial instruments ­ paper based on paper. Derivatives are one giant step away from the world of production and consumption, plant and equipment, wages and employment in the production of tangible physical wealth or hard commodities. In the present hysteria of the globalized financial oligarchy, the very term of "derivative" has become taboo: commentators prefer to speak of toxic assets, complex securities, exotic instruments, and counterparty arrangements. At the time of the Bear Stearns bankruptcy, Bernanke warned against "chaotic unwinding." All of these code words are signals that derivatives are being talked about. Derivatives include such exchange traded speculative instruments as options and futures; beyond these are the over-the-counter derivatives, structured notes, and designer derivatives. Derivatives include the credit default swaps so prominent in the fall of AIG, collateralized debt obligations, structured investment vehicles, asset-backed securities, mortgage backed securities, auction rate securities, and a myriad of other toxic variations. These derivatives, in turn, are pyramided one on top of the other, thus creating a house of cards reaching into interplanetary space.

As long as this huge mass of kited derivatives was experiencing positive cash flow and positive leverage, the profits generated at the apex of the pyramid were astronomical. But disturbances at the base of the pyramid turned the cash flow and exponential leverage negative, and the losses at the top of the pyramid became immense and uncontrollable. By 2005-6, the disturbances were visible in the form of a looming crisis of the automobile sector, plus the slowing of the housing bubble cynically and deliberately created by the Federal Reserve in the wake of the collapse of the dot com bubble, the third world debt bubble. and the other asset bubbles favored by Greenspan. Financiers are trying to blame the current depression on poor people who acquired properties with the help of subprime mortgages, and then defaulted, thus ­ it is alleged -- bringing down the entire world banking system! This is a fantastic and reactionary myth. The cause of the depression is derivatives, and this means that the perpetrators to be held responsible are not poor mortgage holders, but rather globalized investment bankers and hedge fund operators, the derivatives merchants. We are now in the throes of a world wide derivatives panic. This panic has been gathering momentum for at least a year, since the fall of Bear Stearns. There is no power on earth which can prevent this panic from destroying most of the current mass of toxic derivatives. It is however possible that the ongoing attempts to bail out, shore up, and otherwise preserve the deadly mass of derivatives will destroy human civilization as we have known it. We must choose between the continued existence of derivatives speculation on the one hand, and the survival of human society worldwide on the other. If this be crude populism, make the most of it.

FREEZE DERIVATIVES FOR THE DURATION OF THE CRISIS

The G-20 must remove the crushing mass of derivatives which is now dragging down the world economy. Derivatives must be banned going forward, but this by itself will not be sufficient. The ultimate goal must be to wipe out and neutralize the existing mass of $1.5 quadrillion in notional values of toxic derivative instruments. Some governments may be able simply to decree that derivatives be shredded, deleted, and otherwise liquidated, and they should do so at once. Virtually all governments should be able to use their emergency economic powers to freeze derivatives and set them aside for at least five years or for the duration of the crisis, whichever lasts longer. Legal issues can be settled over the coming decades in the courts. Humanity is in agony, and we must act against derivatives now. Going forward, we must ban the paper pyramids of derivatives in the same way that the Public Utility Holding Company Act of 1935 banned the pyramiding of holding companies.

Derivatives were illegal in the United States between 1936 and 1983. In 1933, an attempt was made to corner the wheat futures market using options, and the resulting outcry led to a 1936 federal law banning such options on farm commodity markets. This ban was repealed by the Futures Trading Act of 1982, signed by President Reagan in January 1983. During the G.H.W. Bush administration, Wendy Gramm of the Commodity Future Trading Commission went further, promising a "safe harbor" for derivatives. Despite the key role of derivatives in the Orange County disaster during the Clinton years, a valiant attempt by Brooksley Born of the CFTC to make derivatives reportable and subject to regulation was defeated by a united front of Robert Rubin, Larry Summers (today running US economic policy), and Greenspan. Despite the central role of $1 trillion of derivatives in the Long Term Capital Management debacle of 1998, Phil Gramm's Commodity Futures Modernization Act of 2000 guaranteed that derivatives, notably credit default swaps, would remain totally unregulated. These pro-derivatives forces must bear responsibility for the current depression, and those still in power must be ousted

The Bush-Paulson-Obama-Geithner policy pursued by the United States, which amounts to a $10 trillion (Fed and Treasury) effort to bail out the world derivatives bubble on the backs of taxpayers, can only make the depression worse, will never lead to an economic recovery, and must therefore he rejected. Krugman is right: the "zombie ideas" rule Obama's Washington. The Fed's TALF amounts to subsidies for securitization, meaning more derivatives. The derivatives bailout was pioneered by Gordon Brown, Alistair Darling, and Mervyn King in the case of Northern Rock. These efforts are doomed to costly futility. The $1.5 quadrillion derivatives bubble is comparable to the black holes of astrophysics, those artifacts of gravity collapse which will irresistably suck in all matter that comes near them. This compares to a world GDP of a mere $55 trillion, itself a figure inflated by financial speculation. The derivatives are the black holes of financial engineering, and can easily consume all the physical wealth and all the money in the world, and still be bankrupt. Gordon Brown's demand of $500 billion for the IMF is enough to bankrupt several nations, but pitifully inadequate to deal with the derivatives. They can only be dealt with by re-regulation -- a quick freeze, leading to extinction and permanent illegality. We reject Brown's IMF world derivatives dictatorship.

Derivatives pose the question of fictitious capital -- financial instruments created outside of the realm of production, and which destroy production. In 1931-2, fictitious capital appeared as tens of billions of dollars of reparations imposed on Germany, plus the war debts owed by Britain and France to the United States. These debts strangled world production and world trade. Bankers and statesmen tried desperately to maintain these debt structures. But US President Herbert Hoover proposed the Hoover Moratorium of 1931-1932, a temporary freeze on all these payments. The Lausanne Conference of June 1932 was the last chance to wipe out the debt permanently. But the Lausanne Conference failed to act decisively, and passed the buck. By the end of 1932, there was near-universal default on reparations and war debts anyway. And by January 1933, Hitler had seized power. We urge the London G-20 to defend world civilization against derivatives. It is time to lift the crushing weight of derivatives from the backs of humanity before the world economy and the major nations collapse into irreversible chaos and war, as seen during the 1930s.

www.rense.com/general85/freeze.htm

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A WAILING GLOBAL CYCLONE OF TOXIC TRASH.

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"Derivatives, mortgages etc. are no longer assets, they have become liabilities!"

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Bill H:

To all; this week has the potential for being the "great fork in the road". The stock markets have rallied some 20% off of their early March lows leading the masses to believe that a new bull market has started, I think not. A 20% move is considered a bull market by many and this bear market bounce is just begging investors to jump on the train to Hades. I do not believe equities will rally from here unless hyperinflation rears its ugly head. We will get plenty of earnings reports this week, CPI, PPI, etc.. Last week we were told that all 19 banks passed the "stress test", we are hearing that inventories are depleting and thus setting up for a production improvement and a recovery in the economy.

Hogwash! The banks (most prominent recently Wells Fargo) are not marking their so called assets to market so they are reporting income but not writedowns for their past foolishness. This is like the idiot who buys a house for $1 million, can't make the monthly payment on his 100% loan, watches his neighbor sell the exact same house for $500,000 and still runs around spouting "I'm a millionaire!". Real estate, derivatives, mortgages etc. are no longer assets, they have become liabilities on a global scale because they have been purchased with borrowed money, or margin.

The Fed is still refusing to disclose who they have lent (given) money to and the Treasury is mum on its flooding of the banks with capital because they don't want to put a stigma on any one particular bank. Since all these banks passed the stress test, one has to wonder "why" would there ever be a stigma since these banks are in such good shape? We have heard that a bailout was needed immediately, otherwise the whole system will fail. Now we hear that all the banks are just fine! The Fed and Treasury gives away and guarantees $ trillions of our Dollars but they can't say to whom because that might cause a panic. Sounds like a stable system to me.

FDIC is down to their last plug nickels and needs to borrow half a trillion to keep everything "safe". This is "the drunk" deciding to become the designated driver. The "irrelevant IMF" will sell their puny 403 tonnes of Gold and save the entire world! I don't know about you, but I definitely feel relieved! COMEX inventories are being spoken for as deliveries have picked up, but in reality this is also a moot point because the amount of paper needed to clean these whorehouses (sp?) out has been lent, spent, destroyed, and printed hundred's of times over in the past year.

The naked shorts, that have been a complete abomination for years now, took a shot at Jim Sinclair's company Tan Range in Barrons this past weekend, and chopped it's share price some 20% this morning. I'm pretty sure TRE will be around for a while, in fact, I am of the opinion that TRE will not even be "priced" in Dollars within a years time. I wonder who will be laughing then? This is like the condemned prisoner spitting in the executioners face as far as I am concerned.

EVERYTHING is a lie, nothing can be trusted at face value anymore! Earnings, government stats, financial health of the banks and insurers, statements from everyone from top to bottom, nothing can be trusted. "It is all about perception" now, not really but that is what the "governments" believe. The world is being held together by the "chewing gum of lies". I don't know what anything is "really worth" or if anything is even real anymore. I only know one thing, an ounce of Gold today (properly assayed) will still be an ounce of Gold tomorrow. GM, GE, Bank of America, Citi, etc., etc., may all be gone before the sun rises tomorrow, heck, the Treasury could even default, but tomorrow morning Gold will still have value no matter what happens.

Will you be told or "shown" that it is worth less? Maybe. Can "they" ever show you that Gold and Silver are worthless, NEVER. In the world of Dollars where "everything is worth nothing" (you will understand this phrase soon), where everything has a false value placed upon it, Gold and Silver will attract capital because they can never go to ZERO! Once people realize they have been had, and they will, basic human survival instinct will set in. This survival instinct will drive investors to the only thing they know is for real. We will go back to basics to try to piece the world back together again, it will start with the basic consideration "what is money?".

Regards, Bill H.

Source www.lemetropolecafe.com click here to view

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Image Source:www.runtogold.com

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"Lets do the books"

Planet Earth Audit: April 5th 09

Indiana & Optica:Accountants

Hellas city: Mars.

T = $1,000000000000 : A TRILLION dollars

O dear...What to do?...No good selling the assets...They are already in the balance so is the money...This has to be the "Titanic" of all duck eggs (zeros) in the whole history of double entry accountancy...Crikey!

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Bank Stress Test Results

mouse over image

"The Turner Radio Network has obtained the stress test results. They are very bad. The most salient points from the stress tests appear below.

1) Of the top nineteen (19) banks in the nation, sixteen (16) are already technically insolvent. (Based upon the "alternative more adverse" scenario which had a 3.3 percent contraction of the U.S. Economy in 2009, accompanied by 8.9 percent unemployment, followed by 0.5 percent growth of the U.S. Economy but a 10.3 percent jobless in 2010.)

2) Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans. (Without further government injections of cash)

3) If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding.

4) Of the top 19 banks in the nation, the top five (5) largest banks are under capitalized so dangerously, there is serious doubt about their ability to continue as ongoing businesses.

5) Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks.

6) Bank of America's total credit exposure to derivatives was 179 percent of its risk-based capital; Citibank's was 278 percent; JPMorgan Chase's, 382 percent; and HSBC America's, 550 percent. It gets even worse: Goldman Sachs began reporting as a commercial bank, revealing an alarming total credit exposure of 1,056 percent, or more than ten times its capital! (HSBC is NOT in the top 19 banks undergoing a stress test, but is mentioned in the report as an aside because of its risk capital exposure to derivatives)

7) Not only are there serious questions about whether or not JPMorgan Chase, Goldman Sachs,Citibank, Wells Fargo, Sun Trust Bank, HSBC Bank USA, can continue in business, more than 1,800 regional and smaller institutions are at risk of failure despite government bailouts!

The debt crisis is much greater than the government has reported. The FDIC's "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter."

UPDATE 1154 HRS EDT April 20, 2009 --

The United States Treasury has openly and brazenly lied regarding our stress test report and we can prove they have lied about it.

This morning, the United States Treasury issued a statement (HERE) claiming they do not yet have the results of the Stress Tests, rebuking our report

How do we know its a lie?

Because of this from April 10th:

April 10 (Bloomberg) -- The U.S. Federal Reserve has told Goldman Sachs Group Inc., Citigroup Inc. and other banks to keep mum on the results of "stress tests" that will gauge their ability to weather the recession, people familiar with the matter said.

The Fed wants to ensure that the report cards don't leak during earnings conference calls scheduled for this month. Such a scenario might push stock prices lower for banks perceived as weak and interfere with the government's plan to release the results in an orderly fashion later this month.

How can you be ordered not to release something you don't have?

Since that was published on the 10th of April, we therefore know that the results exist and Treasury, the banks involved and The Fed have them, as The Fed was concerned that some banks might try to use them (perhaps in a misleading fashion) during their first quarter conference calls and earnings releases.

Sorry guys, but whether the Turner Radio Network has the real results or not is no longer material. What's material is the claim that Treasury doesn't have them, since they told the banks on the 10th not to release them, and you can't release what you don't have.

The problem with lying is that eventually you forget your previous lies and thus get caught when you contradict yourself.

Posted by HalTurnerShow.com at 10:32 PM

Turner radio network.blogspot.com

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Public announcement GEAB No: 34 (April 15, 200)

Summer 2009: The international monetary system's breakdown is underway.

GEAB No: 34 - Contents

- Published April 16, 2009 -

The perspective of a US default this summer is becoming clearer as public debt is now completely out of control with skyrocketing expenses (+41%) and collapsing tax revenues (-28%), as LEAP/E2020 anticipated more than a year ago. In March 2009 alone, the federal deficit has nearly reached USD 200-billion (way above the most pessimistic forecasts), i.e. a little less than half of the deficit recorded for the entire year 2008 (a record high year).

(11). The same trend can be observed at every level of the country's public organisation: federal state, federated states (12), counties, towns (13), everywhere tax revenues are vanishing, suffocating the whole country with spiraling debts that no one can control anymore (not even Washington).

Source: GEAB No: 34

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Credit Derivatives..."Bankenstein"
This Reality/Movie cost over 1 Quadrillion Dollars to make...Thats over 1000 Trillion..Not cheap eh!
Just count the pallets -O)...All the best...

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While working on an edition of "RHS1 Earthwatch"... Dealing with the present global financial meltdown...Came across this list of 160 books while researching thought I would pass it on and say "Thank you" to whoever compiled it; all books are FREE & downloadable...Help yourselves folks...Regards...Indy

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Gardening, Wild Foraging and Self Sufficiency

The City People's Book Of Raising Food
[link to www.scribd.com]

Encyclopedia of country living Carla Emery
[link to www.scribd.com]

The complete book of self sufficiency by John Seymour
[link to www.scribd.com]

Vegetable Gardening Encyclopedia With Special Herb Section
[link to www.scribd.com]

Gardening Without Irrigation - Dry Farming
[link to www.scribd.com]

Intensive Gardening For Profit And Self Sufficiency
[link to www.scribd.com]

Joy of Gardening
[link to www.scribd.com]

Indoor Gardening Secrets
[link to www.scribd.com]

Wild Edibles - Nutrition & Medicine
[link to www.scribd.com]

Herbal Manual - Herbal Medicine 1936
[link to www.scribd.com]

Culpeper's The Complete Herbal
[link to www.scribd.com]

Edible And Medicinal Plants
[link to www.scribd.com]

survival - how to make herbal preparations
[link to www.scribd.com]

Edible Rooftop Gardening
[link to www.scribd.com]

Handbook of Herbs and Spices, Vol. 1 - K. Peter
[link to www.scribd.com]

Handbook of Herbs and Spices, Vol. 2 - K. Peter
[link to www.scribd.com]

Culinary Herbs: Their Cultivation Harvesting Curing and Uses by Kains, M. G.
[link to www.scribd.com]

How-To Hydroponics - A HowTo Guide to Soilfree Gardening
[link to www.scribd.com]

bill mollison - permaculture design course
[link to www.scribd.com]

Saving Your Own Vegetable Seeds
[link to www.scribd.com]

Organic Gardener's Composting by Steve Solomon
[link to www.scribd.com]

Growing & Curing Tobacco
[link to www.scribd.com]

Organic Tobacco Production
[link to www.scribd.com]

grow organic potatoes
[link to www.scribd.com]

Home Composting Bins
[link to www.scribd.com]

Organic Insecticides For The Garden; Home & Garden
[link to www.scribd.com]

Barrel-ponics
[link to www.fastonline.org]

An Integrated Fish Culture Hydroponic Vegetable Production System
[link to www.fastonline.org]

The One Straw Revolution _excellent (no tilling or plowing) permaculture
[link to ebooks.du.ac.in]


Food Preservation _Cooking, Canning, Curing, etc.

Preserving Food: Drying Fruits And Vegetables - Nutrition
[link to www.scribd.com]

Complete Guide To Home Canning
[link to www.scribd.com]

Canning Meat, Wild Game, Poultry, & Fish Safely
[link to www.scribd.com]

Preparing And Canning Fermented Food And Pickled Vegetables
[link to www.scribd.com]

Every Step in Canning
[link to www.scribd.com]

Small-Scale Food Drying Technologies
[link to www.scribd.com]

Field Care Of Harvested Big Game
[link to www.scribd.com]

How To Build A Wood-Fired Oven & Start A Home Bakery
[link to www.scribd.com]

Solar Cookers - Natural Living
[link to www.scribd.com]

Earth-Friendly Cooking Technologies
[link to www.scribd.com]

Solar Distillation & Water Purification
[link to www.scribd.com]

Rain Water Harvesting
[link to www.scribd.com]

How To Make An Upesi Stove
[link to www.scribd.com]

Wood Conserving Cook Stoves - A Design Guide
[link to www.scribd.com]

How To Make Liquor With Fruit And Berries
[link to www.scribd.com]

Cheese Making Made Easy
[link to www.scribd.com]

Cheese Making
[link to www.scribd.com]

Canning Meat, Wild Game, Poultry, & Fish Safely
[link to www.scribd.com]

Water

Handpumps for Domestic Rainwater Tanks
[link to www.cd3wd.com]

Using Treadle Pumps
[link to www.cd3wd.com]

Treadle Pumps _Non-motorized Irrigation
[link to www.cd3wd.com]

Recommendations for Designing Rainwater Harvesting System Tanks
[link to www.cd3wd.com]

Water Well Manual
[link to www.scribd.com]

Windmill Construction Manual
[link to www.scribd.com]


Heating, Energy and Fuel

Solar Water Heaters
[link to www.scribd.com]

Water as Fuel
[link to www.scribd.com]

Run Car on Water - stanley meyer resonant electrolysis cell system collection
[link to www.scribd.com]

Homemade Batteries [2003, 14 Pages]
[link to www.scribd.com]

Wind Energy Systems
[link to www.scribd.com]

Wood Burning Handbook
[link to www.scribd.com]

Oil Drum Stove For Cooking And Water Heating
[link to www.scribd.com]

Water Power For The Farm
[link to www.scribd.com]

Pumping Water For Irrigation Using Solar Energy
[link to www.scribd.com]

Generator Power For The Homestead
[link to www.scribd.com]

How To Make Biodiesel Fuel
[link to www.scribd.com]

Build Your Own Biogas Generator
[link to www.scribd.com]

Using A Biogas Digester
[link to www.scribd.com]


Livestock

Small-Scale Chicken Production
[link to www.scribd.com]

The Homesteader's Handbook To Raising Small Livestock
[link to www.scribd.com]

A Poultry Mini-Manual
[link to www.scribd.com]

Small-Scale Freshwater Fish Farming
[link to www.scribd.com]

Poultry a Practical Guide _Very old, Very excellent comprehensive guide
[link to www.scribd.com]

Hog trapping
8 documents and trap plans
[link to www.fastonline.org]

Poultry raising gold mine!
nearly 100 documents!
[link to www.fastonline.org]

Raising Rabbits start to finish
[link to www.fastonline.org]

Small Scale Dairy Production
[link to www.cd3wd.com]

Why and How to Keep Dairy Goats
[link to www.cd3wd.com]

Constructing a Simple Wooden Cart
[link to www.cd3wd.com]

Making a Straight Hame Collar
[link to www.cd3wd.com]

Single Donkey Harness for Cart Pulling
[link to www.cd3wd.com]

Medicine

Holistic & Alternative Medicine 101
[link to www.scribd.com]

Herbal/Medical Contraindications_ Using herbal remedies and pharma products: interactions
[link to www.swsbm.com]

Herbal Formulas for Clinic and Home
[link to www.swsbm.com]

First Aid Full Manual FM21-11
[link to www.scribd.com]

Where There is No Dentist - Murray Dickson
[link to www.scribd.com]

Where There Is No Doctor - A Village Health Care Handbook - David Werner
[link to www.scribd.com]

Wilderness Medicine Course
[link to www.scribd.com]

Healing Pets With Alternative Medicine
[link to www.scribd.com]

Physicians Desk Reference: Herbal Medicines
[link to www.scribd.com]

How To Treat and Heal Your Pet at Home?
[link to www.scribd.com]

ONE MINERAL CAN HELP _Potassium Iodide
[link to www.nogw.com]

Ditch Medicine - Advanced Field Procedures For Emergencies (1993)
[link to www.scribd.com]


Survival Manuals and Info

Compact Survival Kits
[link to www.scribd.com]

SAS Survival Guide
[link to www.scribd.com]

Wilderness Survival (FM 21-76)
[link to www.scribd.com]

Nuclear War Survival Skills
[link to www.scribd.com]

USMC Winter Survival Course
[link to www.scribd.com]

US Marine Corps Summer Survival Course
[link to www.scribd.com]

Survival Attitude
[link to www.scribd.com]

NUCLEAR CONTAMINATION AVOIDANCE
[link to www.scribd.com]

Kearny Homemade Fallout Meter
[link to www.scribd.com]

survival - personal wilderness medical kit
[link to www.scribd.com]


Building Related _Survival Shelters and More

Seven Survival Shelters That Could Save your life!
[link to www.scribd.com]

Building With Stone And Earth - Part 1
[link to www.scribd.com]

Building With Stone And Earth - Part 2
[link to www.scribd.com]

Barn Plans And Out-Buildings (1886)
[link to www.scribd.com]

How to build your own underground home
[link to www.scribd.com]

The Complete Book of Underground Houses _How To
[link to www.scribd.com]
the manual of free energy devices and systems
[link to www.scribd.com]

Communication

The Complete Manual Of Pirate Radio
[link to www.scribd.com]

Crystal Radio Project
[link to www.scribd.com]

Field Antenna Handbook
[link to www.scribd.com]

Shortwave Radio _Build Your Own
[link to www.scribd.com]

A Handbook On Shortwave Radio And LEO Sattelite Communication
[link to www.scribd.com]

Shortwave 101 - How To Listen To World Radio
[link to www.scribd.com]

Shortwave Radio Networking When Phones Fail
[link to www.scribd.com]


Other Skills and Useful Info

The Foxfire Books are simply some of the best old time skills books around!
Foxfire One
[link to www.scribd.com]

Foxfire Two
[link to www.scribd.com]

Foxfire Three
[link to www.scribd.com]

Foxfire Four
[link to www.scribd.com]

The Foxfire Five
[link to www.scribd.com]

Sharpening Small Tools
[link to www.scribd.com]

Farm Shop And Equipment
This publication offers suggested assortment of tools, special tools, and how to keep and care for them.
[link to www.scribd.com]

Tools For Agriculture - A Guide To Appropriate Equipment
Appropriate Equipment For Small Farms
[link to www.scribd.com]

Soapmaking - How To Make Soap
[link to www.scribd.com]

Village Technology Handbook
[link to www.scribd.com]

W.F. Vickery, Advanced Gunsmithing, 1940
[link to www.scribd.com]

Manual Of Bicycle Repair
[link to www.scribd.com]

The Formula Manual
Make your own recipes for almost everything other than food.
[link to www.scribd.com]

Land Clearing
[link to www.scribd.com]

Axe Manual of Peter McLaren
[link to www.scribd.com]

Crosscut Saw Manual
[link to www.scribd.com]

Basic Plumbing Skills
[link to www.scribd.com]

Basic Plumbing Course
[link to www.scribd.com]

Hoppe's Guide To Gun Care
[link to www.scribd.com]

Pistol Preventative Maintenance Guide
[link to www.scribd.com]

Emergency Sanitation At Home
Interesting DoD publication from 1958
[link to www.scribd.com]

Spinning With Simple Tools
[link to www.scribd.com]

Introduction To Spinning
[link to www.scribd.com]

Natural Dyeing Of Textiles
[link to www.scribd.com]

Handloom Construction
[link to www.scribd.com]

Blacksmithing Basics
[link to www.scribd.com]

Practical Blacksmithing 1891
[link to www.scribd.com]

Farm Blacksmithing 1921
[link to www.scribd.com]

Alternatives To Portland Cement
[link to www.scribd.com]

How To Make Candles
[link to www.scribd.com]

Candle Making
[link to www.scribd.com]

Hide tanning
4 documents
[link to www.fastonline.org]

Pond Construction and Management
about 50 documents
[link to www.fastonline.org]

Fighting fires
[link to www.cd3wd.com]


This is a great resource site for homesteaders, people interested in sustainability and survival techniques. There is so much here that the site deserves its own listing.
Downloading directly from the site is free, but does require sign up and some information (including info on what you plan on doing with the materials provided). It's worth it!
[link to www.itdg.org]

This is yet another almost incredible information resource for all things homestead. It will take time, but is well worth the dig and everything is available for free download.
[link to www.fastonline.org]

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MARS!

Latest news reports and images from Mars
Published by www.Rockhoundstation1.com Hellas City; Mars

Optica first dog on Mars.

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Back Issues of Earthwatch: Edition1: Edition2 Edition3: Edition4: Edition5: Edition6: Edition7: Edition8: Edition9: Edition10:

Contact Sally RHS1 Webmistress

Page manager...Indiana :

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