Archive for the ‘Legislation’ Category

Bank mania mess continues

HSBC Offshore tax-evasion and crushing entrepreneurs

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Everything old is new again! or not.

When I saw that large funds were ‘buying’ houses, I saw this as a likely result.

Re-hypothecation is all that the banks can do now …

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10 Reasons to OWN physical gold & silver

I agree with others in the arena a basic asset protection, that EVERYONE who wishes to save some of their wealth MUST do so with some of those savings in PRIVATE MONEY.


It must be something that qualifies AS MONEY.

About 2000 years ago Aristotle defined the characteristics of a good form of money. They were as follows:

1.) It must be durable. Meaning it must stand the test of time and the elements. Money is a medium of exchange and a store of wealth so whatever form it takes, it must be able to handle the wear and tear of constant trading and transactions.

2.) It must be portable. Meaning it should be practical in the sense that it holds a high amount of ‘worth’ relative to it’s weight and size. In other words, it’s “worth” must be very dense. Imagine if money was in the form of lead bricks, these bricks would be very dense, but it would be a nightmare and near impossible to constantly exchange large amounts. And you can forget about carrying them around in your pockets.

3.) It must be divisible and consistent. Meaning it should be relatively easy to separate and distribute in smaller forms without affecting it’s fundamental characteristics. This concept also works in reverse in that it should be relatively easy to re-combine several divided pieces of the money into a larger, single piece. This makes houses and paintings and cars unpractical as forms of money because taking them apart would affect their fundamental characteristics. An extension of this idea is that the item should be ‘fungible’. describes fungible as:

“(esp. of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.”

4.) It must have intrinsic value. This characteristic carries a bit of a subjective quality in that everyone views the world through a different lens and what I view as valuable may not necessarily be valuable to my neighbor, but for the sake of argument let’s just say that there is a consensus of value given to a certain material. The basic understanding behind intrinsic value is that the material carries ‘worth’ in and of itself. It does not derive it’s value from anything else. It just sits there and is valuable. This is why paper currencies with no backing will not stand the test of time. Paper currencies only derive their “value” from what is known as legal tender laws, which are in essence a threat of legal prosecution, and or force, if they are not accepted as money for payment.

This fourth point brings up the point of scarcity, which is in essence a matter of intrinsic value. Paper currencies in circulation today, such as the dollar, euro, yen, swiss francs, zimbabwe dollars, etc… they are all now purely fiat instruments. (by fiat, I mean that their use is declared by decree and usually by threat of force. Definition of fiat.) The governments that sponsor them have essentially unlimited power in their ability to create new supplies. Because of technology, it is now simply a matter of typing something into a computer and the amounts are instantly credited somewhere. So in theory the supply of dollars for instance is infinite, and it seems like lately the wizards in Washington are trying to see whether this theoretical limit can be reached. Take Zimbabwe as a practical real world example. It now takes trillions of Zimbabwe dollars to buy a roll of toilet paper.

In this video you will hear the detail about why GOLD & SILVER will increase in VALUE.

#1 Fear will Increase
#2 China
#3 Economy
#4 Weakening Dollar
#5 Overall Demand
#6 Re-flation
#7 Gold is Money
#8 German Repatriation
#9 Product Simplification
#10 Probability of Collapse

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Market Regulation

A quote from Karl Polanyi’s book, “The Great Transformation”

The self-regulating market was a threat to them all, and for essentially similar reasons. And if factory legislation and social laws were required to protect industrial man from the implications of the commodity fiction in regard to labor power, if land laws and agrarian tariffs were called into being by the necessity of protecting natural resources and the culture of the countryside against the implications of the commodity fiction in respect to them, it was equally true that central banking and the management of the monetary system were needed to keep manufactures and other productive enterprises safe from the harm involved in the commodity fiction as applied to money. Paradoxically enough, not human beings and natural resources only but also the organization of capitalistic production itself had to be sheltered from the devastating effects of a self-regulating market.

The markets are in a state of flux right now with the commodity “currency” now coming into disrepute.

One must start to question how much longer this can continue before the ‘real’ commodities such as oil, food, water and gold are put back into a majority position?

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Worthwhile learning and sharing

The creation of ‘currency’ often called ‘money’ is a simple act, sadly it has become trapped in the ultimate ponzi scheme that ties interest to that creation.

All fiat currencies die

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The Greatest Daylight Robbery … ever.

Bloomberg reported on the 18th of October that Bank of America holding corp was getting support from the Federal Reserve to move at least some of the $74 TRILLION (with a T!) derivatives account holdings to an FDIC secured trading unit.Pen is mightier than the sword

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counter-parties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

The FDIC regulators are being overwhelmed by the savvy and strategic positioning of their opponents in the Federal Reserve and Treasury Department.

This action amounts to the largest single ‘heist’ in financial history, done in daylight, and likely to end up being forced into approval via the Treasury, as they work with great diligence to complete the looting of the US public purse.

The neuveau barbarians are not at the gates any more, they are in command of the world economy and moving it towards a planned collapse that leaves the minority IN CHARGE. Bank robbers no longer need guns to effect their shakedowns, though history shows that such events never go quietly.

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Debt Ceiling Debate or Political Theater?

When considering the Debt Ceiling Debate in the USA, keep in mind that the ‘congress’ actually holds the power to print money.

More at The Real News

All they need to do is awaken to this fact again and tell The FED and their ilk where to go and how to get there.

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Convergence and Quality of Life

Dr. Michael Berry, in his morning notes today writes about an issue that has come to my attention in a different way.

He writes:

Today there are two geopolitical / sociological blocs in the world. The Cold War may be over but the Resource Wars are just being joined. These two blocks are not geographically connected but instead are connected by a history their per capita quality of life. They are the West, comprised of Europe, North America, Japan and Korea (which we shall call Advanced) and the Emerging World (which we shall call Emergica).

It has come to my attention that an economic group beyond the BRICS has begun to form, Primarily containing Russian and India with technical support from UK and others in what Dr. Berry calls ‘Advanced’ nations. This block is forming mainly due to financial issues driven by the what must be now viewed as the imminent collapse of the US dollar.

In 1995 Vito Tanzi wrote:

Corruption … is far more widespread and universal than previously thought. Evidence of it is everywhere, in developing countries and, with growing frequency, in industrial countries … Prominent political figures, including presidents of countries and ministers, have been accused of corruption … In a way this represents a privatization of the state in which its power is not shifted to the market, as privatization normally implies, but to government officials and bureaucrats.

These bureaucrats are the ones that are making deals and breaking deals that are pushing the alternative agendas that Russia, China, India and the ‘Emergica’ that Dr. Berry writes are seeking new solutions.

The events of Egypt and Libya and the total difference with which they are being handled by NATO and the UN are clear examples of how this ‘privatization’ is going on and being managed.

Further from Vito Tanzi in 1998:

Corruption reduces public revenue and increases public spending. It thus
contributes to larger fiscal deficits, making it more difficult for the government
to run a sound fiscal policy.

It is this very lack of ‘sound fiscal policy’ that is the root cause of much of the pain felt in the world right now from the fallout of the financial crisis.

The rot has set in and because of its clear detection by many world governments they are taking steps to ensure that their economic futures are not determined by ‘Advanced’ leaders as Tanzi sees them…

I would love to read your views of these issues, please do comment.

If you would like to read more in depth on these and other issues subscribe to my free newsletter in the bar to the left of your screen.

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Canadian Mortgage Changes announced … expect more downside risk.

Canadian Government announces new rules for mortgages in Canada. The headlines all scream “this will keep values up” and “we are doing this to protect Canadian housing”. This double-speak is truly worthy of an Orwellian nightmare.

The Canada Mortgage and Housing Corporation (CMHC) is very much like a combined Fannie Mae and Freddy Mac all in one. This means that the Canadian taxpayers have been on the hook for HUGE downside risks. The Canadian Government is simply pushing more risk to the bankers. The 85% maximum combined with a shorter 30 year amortization maximum will cut out the marginal homeowners and the 5 year qualification requirements will smash the investor speculators.

Expect a price drop now.

Moreover the numbers of people who will examine the situation of paying MORE than their home is worth to the bankers that will happily continue to accept such payments is likely to increase. Why pay for a mortgage that is worth 110% of the homes value? Do you think that the value will return soon? How about ‘in time’ for the refinancing?

The long-term view for house prices is at best ‘stable’, more likely it will drop.

Canadian Residential Home Prices 1988-2010

Canadian Residential Home Prices 1988-2010

This chart shows house prices since the last ‘bubble’ in 1988. Any Canadian investor or home owner that recalls that time period, where it took 7 years to just get back even may want to reconsider getting into any real estate deals right now. The ‘toppiness’ of this market is displaying a classic *Double Top* from a technical analysis point of view. There are some who are saying that this market top, when it drops (not if), will take up to 17 years to recover … I argue if ever!

The demographics are what is at the heart of this fall off a cliff … once the boomers move out from their 3-5 bedroom homes there are at best only 1/2 as many people even in a condition to want to buy those homes. Pretty location, great work opportunities and overall conditions of life will mean FAR MORE in the future than any historical trend line.

So if you discount that argument, simply use technical analysis, the double top indicates the top, the bottom in 1988, this means that a 33% drop is to be expected. However since no market will perform exactly on the line the drop will most likely be 60% or more. With a price drop like that NO, I repeat NO banks will be taking on risk of loans like that. Nor does CMHC want to take on the backstopping of those anticipated losses.

For all those mortgage brokers in Canada that are still shouting “we are different” in Canada, please make a call to your US counterparts and ask them about the lending conditions change in 2008, if you can find any still in the business.

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Mr Wizard, what is the solution?

Far too often we look to those whom we have put into ‘power’ for solutions, which is not what those people have specialized in.

For the past 40 years our ‘leadership’ have come from the same cadre of ‘politicos’ who have only the training, skill-set and desire to ‘continue’ in their positions of power.

Albus Dumbledore

Sir Richard Harris as the Headmaster Wizard Albus Dumbledore

For the longer we have permitted these leaders to continue with their factions in the positions of power that these factions have held for more than three generations then the greater becomes their ability to hypnotize us all.

The curtain hiding these Wizards of power needs to be torn down.

“Every generation needs a new revolution.” -Thomas Jefferson

Sadly there are so few able to see where the curtain is any more that exposing what is behind it may not make any difference…too many hearts and minds are dimmed now to see what would be exposed.

As a first step we must stop turning to the same wizards whom have built the house of cards we are all having to gingerly step around. I have heard a call for “no incumbent re-elected“, I echo such a sentiment and add “vote independent – non party candidates only“.

That we are overdone with banking institutions which have banished the precious metals and substituted a more fluctuating and unsafe medium, that these have withdrawn capital from useful improvements and employments to nourish idleness, that the wars of the world have swollen our commerce beyond the wholesome limits of exchanging our own productions for our own wants, and that, for the emolument of a small proportion of our society who prefer these demoralizing pursuits to labors useful to the whole, the peace of the whole is endangered and all our present difficulties produced, are evils more easily to be deplored than remedied.

* Thomas Jefferson Letter to Abbe Salimankis (1810)

The time for a reformation of our financial system has come, will we take the bitter pill or will we be

Numbing the pain for a while will make it worse when you finally feel it.
~Albus Dumbledore, Harry Potter and the Goblet of Fire

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