The Banker’s guide to owning it all

bankers house always wins

bankers house always wins

It was just a year since we were told that the level of personal debt on multiple credit cards per person and the enormous mortgage debt was totally out of control. Just a year later and we are now in a so-called “recovery.” Can we therefore assume that all this personal debt has been monumental magically paid and that the consumer is ready to rip-roaringly hit the cash register again?

Economic growth means consumption. Consumption means pollution. Pollution means shortages. Shortages equals misery. We must get rid of capitalism and socialism and have it replaced by survivalism. That means no more general robber barons, and no more welfare mothers, either.

Look at it this way: If we do not find a better way, we will be the first species on this planet not to know that we can be destroyed in an instant, either by our own hand, any other type of natural phenomenon (which is highly unlikely), or by a ruling few that own most of the resources and meet in secret like the Bilderberg group has been doing so for the past 60 years. We could also be the first to have been able to modify or prevent it. For those of you who chose to believe that God will save us keep your head firmly buried in the sand. God gave us everything we need to solve our problems, including the option of doing nothing. Will we meet the challenge?

Instead, we put our collective confidence – often willingly, almost none of the people in democracies say really rise up and demand freedom, justice and taxation with representation – in politicians and so – representatives saying that “we know better” because they are “experts.” The funniest part is that all were or are lawyers and controllers of capital – and this can be discussed like any of the rest – have an interest in maintaining the world’s monetary system and keeping people docile as only “consumers.” It is clear there is more to the human race than simply consuming.

The world has seen a market crash leveraged before. We have seen governments step after an accident and, using public funds to build critical infrastructure, revive the economy but at the cost of long term deficits, but eventually shaving them down to something manageable.

What we’re trying this time is something completely new and unproven. World governments are trying to stop — reverse in fact — a crash by throwing pots of money in the market to try to rebalance the market which is severely over-indebted.

We do not build critical infrastructure, we ask not the basis of a new economic model and we do not address the critical flaws in our society and economy (paticularly our dependence on fossil fuels). Instead, we are doing is propping up businesses and failed business models, bailing out reckless players and trying to sustain the unsustainable.

People are blaming the recession on the government and lack of banking regulations. They are in bed together. A strengthening economy looks good for the administration in power, and is good for the portfolio of banksters. Together they have pushed the economy into overdrive and refused to lift his foot on the pedal, even when they were headed toward a brick wall.

To extort the maximum value from a population, when one must have control of the monetary system, leverage the laws of supply and demand. Use [of] deflation, inflation, and hyperinflation all as tools to transfer wealth. All have a place and a purpose.

The banker’s guide to owning it all

  1. Become majority lender in an economy of people with assets you want.
  2. Encourage indebtedness by loaning generously while securing on assets of interest.
  3. Loosen lending standards until the assets you seek to capture are attached. (this makes the economy debt dependent)
  4. Once debts are significant for the bulk of the population, sharply tighten lending standards. <-- Economic shock - Onset of deflation
  5. Backstop losses with public guarantees if possible. This is gravy if one can get it. (Fannie and Freddie guarantees, for example)
  6. Permit default ‘without risk’ on the assets you wish to sieze to maximize wealth transfer. (stall foreclosure, stay repossession orders etc).
  7. Stall the economy to maximize default positions and deplete private liquidity. <-- We are here
  8. Successively ratchet the economy downhill, while bettering secured positions.
  9. In a series of large actions, sieze all security for default. Target the assets of greatest interest first. (This deals a heavy economic blow and can help cause the ratcheting required for step 8.)
  10. Transfer asset ownership, but retain prior owners as renters where possible. (This reduces public lashback and helps maintain the asset for resale)
  11. Once the bulk of assets of transferred, write them down to leverage the public financial backstop.
  12. Buy up as many remaining assets on the cheap as possible. Hide this action.
  13. Hyperinflate to destroy the external claims on wealth. <-- Onset of hyperinflation (This destroys treasuries, gov't bonds, currency. Ensures free title on new assets. May cause war.)
  14. Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.

Hyperinflation is only a risk to the wealthy if the population has the assets.

Make note of that statement. It is key to timing the shift from deflation to hyperinflation. (Source from

The following article is an excerpt from Robert Prechter’s Elliott Wave Theorist.

First they bought into the “stocks for the long run” case and got killed. Then they jumped on the commodity bandwagon and got killed. Many investors are buying back into these very same markets, but others are running to what they perceive as safe “yields” in the municipal bond market. So far this year, individual investors have “poured a record $55 billion” (Bloomberg, 11/12) into muni bond funds, with the pace running $2b. per week in August and September; many other investors are buying munis outright. These must be the people who tell us that they can’t live without “yield” and also cannot imagine their city, county or state government going bust. But as Conquer the Crash warned and as The Elliott Wave Theorist has reiterated, the muni bond market is heading for disaster.

Municipalities have borrowed more than they can repay, they have pension liabilities that they cannot meet (up to a trillion dollars’ worth, according to Moody’s), and tax receipts are falling. The only reason that states haven’t failed yet is the so-called “stimulus package,” which took money from savers, investors and taxpayers—thereby impoverishing the people who live in the various states—and gave it to state governments to spend so they would not have to cease their profligate spending. But political pressures will eventually cut off this gravy train. In the 2010-2017 period, the muni bond market will become awash in defaults. The leap in optimism since March, which has shown up in every financial market, has fueled a retreat in muni bond yields to their lowest level since 1967 and narrowed the spread between muni bond yields and Treasuries.

Recovery may not last, Bernanke warns
‘We still have some way to go,’ top U.S. banker says
Monday, December 7, 2009 | 6:04 PM ET

It’s too soon to declare that the nascent economic recovery will last, Federal Reserve chairman Ben Bernanke warned Monday.

“We still have some way to go before we can be assured that the recovery will be self-sustaining,” Bernanke said a speech to the Economic Club in Washington, D.C.

The Fed chief repeated his belief that the recovery will continue at least into next year. But he warned that “formidable headwinds” such as a weak job market, cautious consumers and still-tight credit threaten an American economy that grew at an annual rate of 2.8 per cent in the third quarter of 2009.

Those forces “seem likely to keep the pace of expansion moderate,” he said. Economists worry that the recovery in the world’s largest economy could fizzle in the latter part of 2010 as government stimulus fades.

The U.S. economy is closely watched in Canada because the latter’s economy is heavily dependent on a healthy American market for its natural resources, services or manufactured goods exports.

Although Canada entered recession several months after the United States and its key financial services and real estate sectors have both held up comparatively well, both countries are dealing with high unemployment and added government spending calculated to soften the blow and restore consumer and business confidence.

A cautiously optimistic Bernanke said he expects “modest” economic growth next year. That should help push down the U.S. unemployment rate – now at 10 per cent – “but at a pace slower than we would like,” he said.

You can read the rest of the story from CBC News

Carney: Don’t be seduced by low interest rates

Debt poses risk to economic recovery

Last Updated: Wednesday, December 16, 2009 | 10:24 PM ET

The governor of the Bank of Canada warned Wednesday that consumers and banks should not be lulled into a false sense of security because of low interest rates.

In a speech in Toronto, Mark Carney, said both parties have a responsibility not to take risks that could derail the recovery.

Consumers are helping Canada’s economic recovery outpace that of its G7 partners, Carney said, but that the recovery remains vulnerable to over-indulgence.

“When risks are still manageable is precisely the best time to act,” Carney told a business audience. “We must be vigilant, and all parties must fulfill their responsibilities.”

The Bank of Canada’s extraordinary low-interest rate policies are making it possible for Canadians to take on more debt, he said, but rates will increase and loans affordable today could prove unaffordable in the future.

Banks should be particularly vigilant against risky loans, Carney said, pointing out that even good loans became a problem during the U.S. subprime mortgage fiasco.

Still, while cautioning against unrestrained borrowing, Carney also said Canada’s recovery may be more dependent on domestic spending because of lagging U.S. demand for Canadian exports, which could mean the rebound will be slower than usual.

The central bank has said it expects to keep its benchmark rate at a record low of 0.25 per cent at least until June. The rate has been that low since April, leading to a rise in the housing market that some economists have warned could become a bubble.

You can read the rest of this story from CBC News.

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