The Angel of Financial Death
Part Two

        We are one step away from a market crack and a systemic financial sector and corporate sector collapse. A vicious circle of deleveraging, asset collapses, and margin calls; cascading falls in asset prices is the angel of financial death swooping down having a field day with problems that government officials and corporate officers have willingly created.

        John Rubino says, “It took a few decades longer than it should have, but the world has finally figured out that leveraged speculation is not the path to lasting prosperity. Investment banks and hedge funds are dying, and the concepts upon which they were built--derivatives, gullible pension funds, sycophantic financial media--are being shoveled into the landfill of history.”

State budgets are “moving from
the damaged to the devastated

        “Those harping about prices of consumer goods, food, services, etc., are missing the boat about what deflation is and what one should expect in deflation. Trillions of dollars of debt are being wiped off the books via bankruptcies and foreclosures while inflationistas worry about the price of eggs going up by 35 cents. It is truly mindless, says Mike "Mish" Shedlock.1

The last three trading days have presented
investors with a rally that is either the beginning
of a multi week rally, or a Venus fly trap.
Best Minds

        There have been days when it felt like the sky was falling with the Dow dropping by over 500 points. The U.S. credit-card industry is planning to pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said. The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer analyst noted. "In other words, we expect available consumer liquidity in the form or credit-card lines to decline by 45 percent."

Many people would indignantly say, "Today is not
like 1929."  Bob Prechter: They're right. It's worse.

        One cannot patch a failing dam by adding water. Translated into financial sense, “Liquidity measures cannot and will not work, when the disease is the Fed, reckless Congressional spending, and fractional reserve lending carried to extreme.” “The credit markets are choking on credit, yet Bernanke is attempting to force more credit down everyone's throats. Logic dictates the solution cannot be the same as the problem.”You can give money to a drunk but it’s the same as giving him a whisky. This is our present solution; it certainly is our leaders’ solution, more debt.

http://housingdoom.com/2008/12/03/schiff-the-boom-is-the-problem-the-bust-is-the-solution/
This video is a must. Peter Schiff best statements and images on what is going on.

        “The question in the aftermath of the Madoff calamity is this: Why do we keep ignoring what we learn from the black boxes being retrieved from crash after crash in our economic meltdown?” writes Frank Rich for the NY Times. Perhaps we don’t learn is because we don’t want to learn about our own willing participation in a scam that makes Madoff’s seem small. We have all swallowed hook, line and sinker and international system of banking and money creation that sucks the life blood of humanity and we have not complained.

        Now we are going to see what all this fooling around with credit and debt has in store for us. It already is unpleasant but getting worse. 2008 was just dress rehearsal for the main act that begins just about now. Eminent lawyer Linda Monk writes, “The Crash of 2008, which is now wiping out trillions of dollars of our people's wealth, is, like the Crash of 1929, likely to mark the end of one era and the onset of another.”

        We are in a period of intense monetary inflation which is the response to the heavy deflation that is now in progress. So as the ball went up (inflation) early in the year, it is now going down with the rapid loss of jobs around the world. Prices and employment are dropping but this will be followed inevitably, by a long period of price inflation because of the rabid printing of money. People will be desperate to preserve the buying power of their dollars, euros, etc., and they will turn to the one thing capable of doing just that. Gold! Trust is going out the window, in God we Trust, government we trust, bank we trust. They system is dying a timely death but the ones who control the system are a huge risk to our collective futures. Until we abandon their system they will rule us and our children through the system.

        The world’s hunger for gold will only grow into a future awash in fiat currency because people will turn their trust onto something solid as it gets thrown out the window with everything else.  Gold is the ultimate and, at day’s end, the only safe haven from the kind of currency destruction that is being visited upon the dollar, the euro, even the renminbi, as governments everywhere desperately try to stave off a deflationary depression the only way they know how: by turning on the printing press. Though we are in a deflationary contraction it looks like we are going to be threatened with an inflationary collapse of fiat monetary systems when the dollar and Treasury bill bubbles burst.

        The default remedy is monetary inflation plain and simple. In reality none of us can say what real money is and what it is not anymore. And that is what is at the heart of the uncertainty that is driving the growing fear. Our money, our wealth, our very way of life is being seriously brought into question. We have gotten so used to money growing on trees and inside of our houses and raining down on us from the heavens from plastic cards that we don’t mind much when money is counterfeited and circulated around town as long as it keeps the system functioning. It does not really matter who does the counterfeiting anymore as long as the bucks are created. Counterfeiting is the process of creating money from nothing and there are no counterfeiters in the universe like our banks and central governments.

        Data posted with this chart on the Federal Reserve Bank of St. Louis’s website shows that the nation’s monetary base or M1—the sum total of all domestic bank reserves, deposit accounts, and notes and coins in circulation—expanded by almost 45 percent between September 10th and November 5th of this year. “What happens when a nation consistently expands its monetary base at the rate of five percent per week? Can we keep doing this indefinitely, with no long-term consequences for the value of our currency, our savings, and the continued appeal of our government and agency bonds?”2

        The Fed has already dropped interest rates to the floor and has already dumped buckets of money on the banks and other financial institutions and the economy is still in a tailspin going down hard. Who would ever have considered that the Fed could expand so much and still face a deflationary collapse? “The Federal Reserve has hinted that we are now tipping into the prospect of deflation.  This is very bad from their perspective.  In fact, it is a horrifying prospect for the Federal Reserve since every action they have taken in this decade has had the desired outcome of inflation.  Why would the Fed want inflation?  Inflation would make our structured debts cheaper as time goes by since the price level of most items in the economy would rise and the debt would remain static.”3

As the economy contracts, the relationship of debt to GDP goes in
the wrong direction and, in a period when it would be best to see consumers with cleaner balance sheets, matters deteriorate instead.
Douglas A. McIntyre.

        Congressman Ron Paul says, “As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do. I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.”4

Surviving with Debt

        Its will be hard enough to survive this huge change confronting modern civilization; having to do that with debt for most people and companies is going to be impossible and that’s why the next great depression will be one they will talk about for centuries. It in fact will probably go so far beyond our conception of the last great depression that a new concept will have to be invented, something on the order of civilization breaking collapse. Or the collapse that breaks capitalism’s back. The back that really needs to be broken is that of the bankers and the fractional reserve banking system that sucks the blood out of everything in the end, which is what we are seeing as wealth all over the world vanishes into thin air.

        Where is all this money going? Most are saying it really did not exist being a creation of the imagination not real money or wealth. Many are learning that much of it was wealth created out of thin air (debt) so into thin air it can go. An elite group of people are sucking up billions; criminals and racketeers have taken over Wall Street and even the Federal government but some people empathize with criminals as people who are alone at the edge of existence. Imagine how frightening, how cruel it would be to be in their position, hated and abandoned. We think these kinds of thoughts absurd but we literally let people get away with murder and worse without thinking of dishing out consequences. Madoff is released on bail living home in comfort as long as he wears his security bracelet.

        His motives have not been explained but he himself had turned himself in meaning he is one of a group of elitists playing the same game but he seems to have gotten tired of his crimes to admit them. What’s fifty billion when the government is playing monopoly with trillions? Also not in the controlled press is the story of the governor of Illinois rebellion against the Bank of America just the day before his arrest. He had not 24 hours early stood by workers owed money by the mega bank and had instructed all state agencies to stop their business with the bank. Next day his was in jail and under full scale attack.

        John Whitehead, former Goldman Sachs chairman said, "I think it would be worse than the depression," Whitehead said. "We're talking about reducing the credit of the United States of America, which is the backbone of the economic system. I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America. I just want to get people thinking about this, and to realize this is a road to disaster. I've always been a positive person and optimistic, but I don't see a solution here." Mike Whitney responds, “There is no solution. The first thing to realize is that it is not a matter of "fixing" the economy. The economy is fixing itself by purging the unsustainable debt from the system. That's how markets work.”

Cuts to credit limits will constrain already cautious consumers,
reinforcing a vicious cycle of bank losses and economic decline.
Meredith Whitney

        The whole world will pay for the bankruptcy of the United States who cannot possibly pay back its debts. That's what this is all about fundamentally, a collapse in debt accumulation thus a collapse in money. Money is disappearing for its not being lent and its not being borrowed either, certainly not by the common person who is having credit lines cut or canceled on him. Consumer debt at a staggering 14 trillion is just a part of a huge 700 trillion dollar international total debt picture that has to collapse down to earth. Certainly this total debt load cannot be maintained from a world GNP economy around the 60 trillion level. See this video:   http://www.youtube.com/watch?v=TNj70PiVVak&feature=related And if it cannot be maintained at that level you can imagine how ridiculous it will be at 40 trillion or 30 trillion which is why certain people see deflation as their worst case scenario nightmare

What has happened this fall has eclipsed everything that has gone
before. What will happen next year will eclipse what is now happening
this fall. The crisis is growing as the end-game of capitalism
approaches its end irrespective of what central banks try to do.
Darryl Robert Schoon

        In part one of this series I stuck my neck out predicting that by next July 2009 a third of the world economy will be contracted, defaulted and bankrupted out of existence. Three days later I read this information. “When the largest steel maker in the world announces cuts in production of 35 percent in the US and 30 percent in Europe, it does so for a reason. The reason is that it expects total output in the US and Europe to contract by 35 and 30 percent by around June-July 2009. Any fall in total output of 30-35 percent is great DEPRESSION economic territory. What it shows is that by June-July 2009, about one third of US and European goods producing factories will be standing still,” writes William Buckler.5

This time the bankers overstepped themselves. Markets will
only be free when the virus of bankers' debt-based paper
money is permanently removed from commerce and the
present tyranny of banker-controlled government is ended. 6
Darryl Robert Schoon

        “It’s the speed of the deceleration that scares people,” says Liang Hong, a Goldman Sachs economist who said she recently surveyed companies in China. All over the world this deceleration is being experienced and it is beyond anything economists have theories for. Toyota Motor Corp. reported its first annual operating loss for the fiscal year through March — it’s first such loss since it began reporting results in 1941. "The change that has hit the world economy is of a critical scale that comes once in a hundred years," President Katsuaki Watanabe said at the company's Nagoya office. The drop in vehicle sales over the last month was "far faster, wider and deeper than expected."

        Theodore Andros writes, “Things WILL NEVER return to the way they used to be. The investing, financial and economic landscapes are just in the infancy of what tomorrow will look like. The enormity of what has been done and what is to come is inconceivable to most people. The United States has instituted quantitative easing and now has embarked on the ultimate journey that will turn the G7 into Weimar Republics. People used to call the Federal Reserve chairman "Helicopter Ben" because of his deflation speech years ago. Now he is "B-52 Ben" as heavier ordinance is required in the ATTEMPT to fill the holes in the nation's balance sheets and asset values.”

        Bob Herbert from the Times, who talks of the economy in the US as “flat-lining” speaks about the crucial role of job creation as the cornerstone of a thriving economy. In referring to the lack of infrastructure investment he finds it impossible to understand, “that is, until you realize that bandits don’t waste time repairing a building that they’re looting.” Paul Krugman of the Times said, “Whatever the new administration does, we’re in for months, perhaps even a year, of economic hell.” “The economy is going to need a lot of government help,” Krugman says, but he does not say who is going to help the US federal government. The Times itself says, “The economy is unlikely to turn up until 2010 at the earliest, and even then will probably rebound slowly.”

Banks that are getting taxpayer bailouts awarded their
top executives nearly $1.6 billion in salaries, bonuses, and
other benefits last year, an Associated Press analysis reveals.8

The era of breathtaking irresponsibility and crime must come to an end one way or another. We are seeing civilization threatening destruction in great part because we the people have not had the wherewithal to stop the crime and irresponsibility. Which is why we don’t just need a financial bailout; we need an ethical bailout. We need to re-establish a connection to the earth and to our spirits and to the truth about what we have been doing.

        We have all been busy fighting windmills and secondary causes or have been too busy enjoying the free ride that a debt system in its last stages produces. It was, we all bashfully concede, nice while it lasted. We have never felt so rich but those days will recede quickly exposing the harsh reality that those days we thought were nice were not nice at all. There has been a monstrous ugliness behind it all the time though we like to forget about such things. We have not wanted to confront the dark side so now the dark side will confront us – it’s as simple as that. We have been naïve and in large part nicely socialized and conditioned. Truly amazing how the main stream media is able to shape the modern mind.  

        RolfeWinkler writes, “I fear there is no escaping major wealth destruction even from these levels as investors everywhere rush to exit all their investments.  What do they do with the money?  Much of it may be taken from them involuntarily as banks implode and their deposits disappear.  In the meantime, they’ll try to get as much cash out as possible amidst a global bank run. The run has been on for some time, of course, though primarily at higher levels of the financial food chain.  An attentive reader noted that his mother, a bank employee, explained to him that fractional reserve banking is effectively a pyramid scheme.  New credit must always be available to roll over the loans of prior borrowers. With the disappearance of credit, the pyramid scheme implodes.”8

        “As the United States is in the unfortunate situation of being totally bankrupt, the choking off of foreign capital inflows can be expected to lead to an immediate and severe funding emergency, with the direst of consequences. Holders of US dollars and Treasuries should therefore liquidate all positions immediately, the best possibly destination for the freed funds being physical gold and silver - if you can get it,” writes Eric deCarbonnel.

        Basically the central bank and Treasuries bailout is that of saving the bond holders of the world. Instead of the sheer weight of trillions in losses falling solely on bond holders, who had chosen to invest in mortgage debt, industrial debt and now in US government debt, investors losses are being dispersed among U.S. taxpayers and all holders of U.S. dollars. So when the dollar goes a lot will go with it – an ocean of debt and wealth will simultaneously disappear.

        Since the beginning of September, foreign central bank reserves have not only stopping growing at a mad pace but they in fact are suddenly falling meaning foreign exporting nations are not buying American paper as much meaning they are not financing the federal governments fiscal deficit, which is mushrooming faster than a nuclear bomb. If International Reserves are not growing it means it will be impossible to fund the rapidly growing US deficit. They are already talking about a trillion dollar deficit for the federal government next year and it could go way beyond that to two trillion or more now that we have a president who wants to spend his way back to expanding GNP.

        CNBC reported in November that $4,284,500,000,000 (4.28 trillion) more than what was spent on WW II, if adjusted for inflation, has been spent on the bailout.9 Now in December the media is reporting $8.7 trillion dollars’ worth of potential taxpayer commitments for loans, guarantees and other bailout goodies for businesses and distressed homeowners.10 And the Fed does not want to even come clean about who is getting all this money.

        “As the United States is in the unfortunate situation of being totally bankrupt, the choking off of foreign capital inflows can be expected to lead to an immediate and severe funding emergency, with the direst of consequences. Holders of US dollars and Treasuries should therefore liquidate all positions immediately, the best possibly destination for the freed funds being physical gold and silver - if you can get it,” writes Eric deCarbonnel.

        They will simply print or what is called monetarize the debt. If you cannot understand financial terms this simply means they will print money like there is no tomorrow. Hey why not, it’s legal. It is perfectly legal to commit crimes against humanity no matter what they say. It’s legal for doctors to inject children and adults with methyl mercury. It’s perfectly legal to dump poisons into public water supplies and it’s legal to create vast financial pyramid schemes. It is even perfectly legal for dentist to put toxic waste dumps in peoples’ mouths in the form of dental amalgam. I am sure that there are some people who think the real crime of Madoff was in admitting the crime since no one else seems to think there is anything wrong with the heart of our financial system.

        Humiliation is the final answer to arrogance. It is also the medicine one has to swallow when we finally admit how wrong we have been. Humiliation brings us down close to the earth when we welcome the humility of spirit that it brings. It is when we avoid such things that the real troubles in our lives begin the kind of troubles that can take us six feet under. Or in more current terms, the kind of troubles that will have one losing everything, which is exactly what is happening to millions of people around the world who are losing their jobs.

After Note: Many people believe that every person in the civilized world is enslaved from childhood and that enslavement starts with the childhood vaccine program. Modern man is enslaved in a prison without walls or bars and so few ever even realize it, but all are enslaved nonetheless. This was the essential story of the movie the Matrix. What the people of the world are enslaved to is a system of perpetual self generating debt that is created for them wholly by design by private international banking interests. And the people are taught from an early age to just except this debt, because this is ‘just the way things are’. http://conspiracyrealitytv.com/end-the-new-world-order-with-global-non-compliance-short-documentary-outlines-entire-global-conspiracy/This video is a good sweeping review of issues about the head of the snake, the leaders of the banking cartel and the royal blood families that have been in control of things for centuries.