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Keep Calm & Carry On, S&P Could Rise Another 70%

“(Reuters) – Investors fretting about the possibility of a big reversal in global stock markets may just want to borrow a slogan from the British – and just keep calm and carry on.

It won’t be easy given the background noise. Fears of a Russian invasion of Ukraine on top of deepening chaos in the Middle East, and the bailout of a Portuguese bank, are all fueling the pessimism. Add in expectations the U.S. Federal Reserve will raise interest rates next year for the first time since 2006, and concerns that the U.S. stock market has gone too long without a correction, and it isn’t surprising to see the glass half-empty crowd emerging from a long hibernation.

But some top investors and strategists in the U.S. and Europe say that there is little reason for alarm given the U.S. economy is picking up steam, rates are widely seen staying at low levels for several more years, and second-quarter earnings growth in both the U.S. and Europe is looking healthy…..”

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A bronze sculpture of the New York Stock Exchange Bull is seen at the Museum of American Finance in New York


The case for a 70% uptick in the S&P

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Unintended Consequence

“The contributors are many as actors in the American Tragedy, to cause the systemic breakdown failed state. Faulty monetary policy, economic policy, and political policy have caused the resulting failure. The primary perpetrators are the central bankers, led by Greenspan and Bernanke. These two men have done more to destroy the USEconomy, the US financial structure, the US currency, than any two men of prominence. To be sure, the Bush, Clinton, and Rubin gang played a huge role in the collapse. Their supporting cast of destructive actors is very long, like the serial bank criminals residing on Wall Street. To be sure, the system itself has played a key role in the harmful factors. The two most apparent harmful resident factors are the strong US labor unions and the influential environmental movement, which together encouraged the vast outsourcing of US industry at first to the Pacific Rim, and then fanning across the developing world. Both workmen compensation and OSHEA regulations interfered with US cost settings, but not as much as USGovt corporate taxes. The textile industry went to India and Pakistan, even Bangladesh. Call centers went to India, Philippines, even Costa Rica. The culprits are too numerous to cite.

Corporations in general sought out any foreign nation with fewer rules, and weaker unions in which to conduct business at lower cost, with lower taxes and lower fences in regulatory oversight. In the last decade, the destruction of the US system, both financial and economic, has been in a greatly accelerated mode. Almost all actions by the USGovt to defend against defection and defiance have resulted in amplified reaction by the East in opposing the USDollar system and all its many features, devices, weapons, and subterfuge. The motive for actions taken are clearly in defense of the King Dollar Regime. The responses taken are clearly to reinstate the Gold Trade Standard and no longer deal with a toxic USDollar for trade and banking. The unintended consequences are uniform if not universal. The outcome will be to develop the Eastern Gold Trade Standard while the entire Western system crumbles, deteriorates, sinks, and implodes. Review a list of factors, events, and reactions, the common theme in unmistably fashion, is a tragedy extending from the original sin, breaking the Gold Standard. The United States has given the world two choices: war to defend the USDollar, versus work with Eastern Alliance toward the Gold Standard.  

The nations of the world will choose commerce and trade eventually, and turn their backs on the United States. They will return to Gold. The BRICS nations will in the next several months possibly install a gold-backed currency for usage in the Eurasian Trade Zone and elsewhere. The threat of a Returned Gold Trade Standard is cause for war with the United States. Thus the series of wars, in hidden defense of the USDollar, with distractions galore on declared reasons of thin type. The BRICS Development Bank is a cover for a Gold Central Bank. The interference is universal by the USGovt and Wall Street bankers in control. They risk sinking the entire global economy in order to preserve power. Before they chose to prop insolvent banks, instead of liquidating them. Now they choose to wreck the global economy. They want global fascism, a veritable hell on earth.


1. Abandon the Gold Standard, begin clean economy initiative driven by financial engineering. Goal was to prevent gold depletion, while creating a utopia pristine economy. The outcome was a gutted USEconomy, stolen gold reserves, horrendous imbalances, and systemic failure.

– set nation on wrong course with fake money, debt saturation, counterfeit, capital ruin

– it took over a generation, but longest record for paper money currency was 33 years

– encouraged cabal to form deeper roots, undermine financial markets

– resulted in grotesque imbalances, lost manufacturing, reliance upon asset bubbles

– USGovt debt must be covered by caustic unsterilized hyper monetary inflation

– final phase is defense of USDollar with war, bank fraud, and hyper monetary inflation

– astonishing isolation is coming for the United States, as allies choose trade over war

2. Outsource industry starting in 1980 decade, using blinders on long-term effects. The gains were short-term while the damage is long-term. The outcome is a gutted USEconomy, absent legitimate income sources, steady deterioration, and systemic failure.

– at micro level, objective was reduced costs (low cost solution)

– at macro level, result was added dependence on asset bubbles (series bubble & bust)

– Emerging Markets are responsible for 80% of savings and majority of industry

– Eastern nations will lead the eventual disposal of the King Dollar Regime

– USEconomy lacks the critical mass from which to benefit from the 0% stimulus

– the United States urgently requires a new chapter of re-industrialization

– US has run out of activated asset bubbles, housing last, stocks & bonds now

– USTreasury Bond market is largest asset bubble in history, signals US failed state

– USEconomy has indications of being a Ponzi Scheme or debt and QE abuse

3. Chinese lease of Gold to Wall Street permitted the continued fiat paper USDollar game, with additional underpinnings in collateral declarations. The game was kept going another decade. The outcome is a more devastating transfer of US assets, for banks and commercial buildings, even farm property. The United States is on the verge of losing its sovereignty and becoming a vassal state.

– gold lease was hidden part of the Most Favored Nation grant by Clinton-Rubin Admin

– gold lease was reneged upon, due in 2007 probably, an expected default on gold return

– the subprime loan crisis was probably triggered by the gold lease renege

– China dumped many $billions of Fannie Mae bonds, starting the subprime fire

– gold lease had collateral derivative contract behind it, from Wall Street assets

– an IRS secure stream tax bond was very likely put in place, held by Chinese Govt

– the IRS derivative bond acted like a national aggregate mortgage, putting nation at risk

– Wall Street sold out the US population twice, once with MFN, twice with IRS bond

– speculation that IRS default entitled China to begin the collateral property seizures

– China took control of Wall Street properties such as One Chase Plaza (JPMorgan HQ)

– in all likelihood, China has a significant stake in the Federal Reserve ownership

– China is exercising its collateral seizure rights directly and indirectly

– China is fast converting its vast USTBond holdings into various commercial properties

– China is keeping the US propped up, so that it can convert its USTBond reserves

4. Quantitative Easing and rampant bond monetization, which also cover derivatives is the last act of desperation. Absent creditors put full reliance on hyper monetary inflation. Rather than stimulus, the outcome ruins the Body Economic by killing capital.

– QE forced higher cost structure across the entire global economy

– results in a propped USTreasury Bond market with no integrity, fully controlled

– direct bond monetization plus Interest Rate Swap derivatives keep the USTBond propped

– official debauchery of global currency reserve motivates all nations to depart USDollar

– motivates global initiative to develop and use an alternative to USD in trade and banking

– foreign financial entities respond by hedge against inflation, diversify out of USTBonds

– effects hard felt in food prices, initially for most vulnerable nations

– entire economies have higher cost structure, with immediate business income damage

– final demand prices rising, but kept subdued by business liquidations

– profit margins vanishing slowly but surely, including for gold & silver mining firms

– QE undermines value and integrity of USTreasury Bonds reserves held by nations

– nations have begun to diversify out of all FOREX reserves in sovereign bonds

– economic effect of wrecked capital causes a vicious cycle of economic destruction

– undermined value of bank reserves make a powerful motive to seek USDollar alternative

5. Ukraine War, Iran sanctions, with Syrian adventure and Cyprus actions all had hidden motives. The real factors indicate extreme USDollar weakness. The outcome is isolation for the United States, recognition of war to defend the USDollar, and lost allies. The East will band together to formulate a USDollar alternative, based in a Gold Trade Standard.

– Cyprus was attack to obstruct Russian conversion of USTBonds to Gold

– Russia put on notice, their bank function through the Cyprus window was interfered

– Russia motivated to work with China, in further motivation to form USDollar alternative

– entire EU and NATO put at risk, both alliances to break apart, and isolate United States

– European nations will soon choose commerce over endless war

– Iran sanctions developed immediate workarounds with intermediary parties

– India bought Iran oil, used Turkey as intermediary in gold provision, paid Iran in gold

– the Gold for Oil trade was developed as a working prototype, avoiding USD settlement

– Syrian action made clear to Europe that their energy supply is at risk

– USGovt did not wish for European nations to be supplied by Iran natural gas

– Ukraine forces European nations to cut off energy supply to support King Dollar Regime

– Germany and France are the key nations for defection, choosing commerce over war

– Germany is under the microscope right here, right now

– the United States is going to lose NATO Alliance after damage hits Europe

6. Post-Lehman lashing together of big Western banks was the defensive posture to prevent the weaker banks from faltering. The goal is short-term protection, while the long-term risk is systemic. The QE effect results in weaker economies, which assures the impact of bank failures. They have begun. The outcome is systemic failure of the big Western banks from contagion.

– all big Western banks are tied together, using derivatives

– each big bank has several derivative contracts with a bigger bank for safety measure

– lashing is shipping term, tying men with ropes around waist and ship masts during storms

– if any major banks fail, then risk of contagion is enormous and difficult to halt

– QE has many destinations, mortgage bonds obviously too, but also huge derivative supply

– QE is the biggest backdoor banker bailout in modern history, for Wall Street benefit

– harsh effect, QE undermines the economies which must keep the big banks afloat

– derivative costs to sustain payments has wrecked big bank liquidity

– the big Western banks have been insolvent since 2007

– system cannot manage all the risks, like to intermediaries and mid-sized banks

– watch Portugal’s Banco Espirito Santo and several other banks in Europe

– widespread reports that US banks cannot handle transfers when cash is on back end

– massive illiquidity in US banks has finally hit

7. Refusal to Repatriate German gold was a crime out of the gate. The motive was to conceal the appropriation (re-hypothecation) of German official gold accounts. The Germans are on notice of gold thefts by their own allies. Germany will work with the Eastern superpowers to develop a USDollar alternative and a Gold Trade Standard.

– the refusal event put Germany on notice that their gold was stolen

– perhaps the most significant of all indictments by Germany against US Bankers

– hastily produced wars like in Mali have been fashioned to compensate for gold delivery

– Germany motivated to work with Russia & China on alternative trade settlement

– Germany appears to be crafting four critical global indictments against United States

– Gold fraud, NSA espionage, Gazprom supply cutoff, EuroCB bond monetization

– Germany will leave the Euro, leave the EU, leave NATO, already been decided

– implementation is extremely complicated and will cause extreme bank losses

– critics overlook that Germany has two camps (commercial versus bank/politics)

– Germany will play the losing US hand until population and business leaders call halt

– Merkel premature resignation is shrill signal of winds blowing East from Germany

8. NSA espionage has a false motive to protect from terrorism. The actual motive is to control communications, to monitor anti-USDollar activity, to follow Eurasian Trade Zone progress, and to steal corporate trade secrets. The outcome will be profound US isolation, if not quarantine.

– hardly eavesdropping, the surveillance sparked tremendous distrust for USGovt

– has both political side and corporate trade secret side, with terrorism smokescreen

– the US leadership has no allies, and sees only targets to control and exploit

– Fascists attack enemies, defraud allies, gut banks, exploit subjects, kill economies

– motivates acceleration of alternative to USD in trade and banking

– the United States will be isolated in unspeakable manner like a diseased farm

– the difficult decision will be whether to convert it into a productive vassal state

– the difficult decision will be whether to liquidate the nation and its assets

– the difficult decision will be whether to euthanize its entire leadership elite class

9. Banker murders at middle level are hardly concealed anymore. They no longer appear as suicides. They have some common themes. The motive is to keep the rot concealed. The outcome is to reveal the pervasive widespread financial structure rot and systemic breakdown.

– arouses suspicion, attention, and investigation by the population

– when more than one or two cases, a pattern emerges

– hide JPMorgan’s London Whale and $100 billion in Interest Rate Swap losses

– JPMorgan has biggest common thread in murders, both bankers and insurance heads

– London bankers and Swiss insurance executives have been murdered

– executives, directors, board members all protected at higher level

– lowest level workers know little, did little of systemic criminal nature

– midlevel bankers carried out projects with all the dirty details

– midlevel bankers know too much, like accounts, shell corporations, deals, funnels

– eventually formal investigations will come on patterned murders

10. Punitive motivated prosecution of PNB Paribas, Credit Suisse, Deutsche Bank each has hidden motives at work. They are well concealed. The final chapter of D-Bank attacks will reveal duplicity and corrupted financial structures. The outcome will be to anger Germany, to expose hypocrisy, and to act in forcing the split of Germany away from the US camp.

– each action incites immediate backlash by angry nation

– indications of Credit Suisse action to enable further Arab gold thefts

– forced folding of CS under UBS, where thefts are ongoing by US Bankers

– indications of BNP Paribas action to obstruct USTreasury Bond dumping

– forced folding of BNP under Societe Generale, which resides in the banker cabal

– SocGen already participates in FOREX & Gold market corruption

– French central bank head Noyer pledged to hasten efforts to avoid USD trade usage

– Switzerland is a lost cause of deeply rooted fascist banker thieves

– main Swiss value to East is from vast gold refinery business (recast gold bars)

– imminent USGovt legal attack on Deutsche Bank will be a very fatal error

– Deutsche Bank involved in falsified Euro Monetary Union qualifications (Maastricht)

– duplicity for attack of D-Bank for same violations done by Wall Street

– the double standard used against European banks, not used against US banks

– every big bank attack has a hidden motive in protecting the King Dollar Regime


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Will Low Volatility Cause Us to Say “Do Svidaniya”

“Touchy, touchy. A stock market that could once be counted on to absorb any morsel of goodness and repel all the badness with vigor seems to be growing increasingly fussy as we hit the summer’s back stretch. After all, the catalyst for the latest retreat came from Poland.

Not the country you’d expect to bog us down. Investors have been ignoring this kind of thing for months, forging ahead and pushing markets to new highs. Yet this warning of a looming invasion in Ukraine was enough to overshadow the meat of a successful earnings season. Then there’s thedrip-drip of bad economic news out of Europe.

If this unsettling trend keeps up, all the wonderful gains we’ve reaped so far this year will disappear faster than you can say “do svidaniya”.

In fact, by one measure, they already have. With seven months under our belt in 2014, the average U.S. stock is down. Down, as in not up. The median total return of stocks in the Russell 300  RUT -0.29% comes in weirdly at a 1.7% decline this year,according to Charlie Bilello, director of research at Pension Partners.

He says persistent low volatility and the S&P 500′s historic streak of staying above its 200-day moving average for a whopping 426 trading days are the primary factors in soothing any bearish concerns that have picked up recently.

“Investors love nothing more than low volatility as it provides the illusion of safety and stability,” Bilello said. “Until the streak is broken, investors will naively assume U.S. equities are ‘risk-free’ and therefore preferable to all other asset classes.”

Speaking of “risk-free”, our call of the day says U.S. Treasurys are anything but.

Key market gauges: Russia, ugly Europe data, failed mergers are taking a toll on sentiment. Futures on the Dow  YMU4 -0.42% and the S&P  ESU4 -0.47% are in the red. Asia  XX:ADOW -0.29% closed down across all major indexes. Europe XX:SXXP -1.36% got tripled-socked by Russian worries, Italian recession news and disastrous German output data.

The quote of the day: “Better than tossing a coin? I think it may be worse … because….”

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DOW Theory Shows Bulls are Firmly in Control

“CHAPEL HILL, N.C. (MarketWatch) — The Dow Theory—the oldest stock-market timing system in widespread use — remains bullish.

The Dow Theory, for you history buffs, was introduced gradually over the first three decades of the 20th century in editorials in the Wall Street Journal by its then editor, William Peter Hamilton. The three preconditions for a sell signal that he set out are:

  1. •Step #1: Both the Dow Jones Industrial Average and the Dow Jones Transportation Average must undergo a “significant” correction from joint new highs.
  2. •Step #2: In their subsequent “significant” rally attempt following that correction, either one or both of these Dow averages must fail to rise above their pre-correction highs.
  3. •Step #3: Both averages must then drop below their respective correction lows

To be sure, though these steps might appear to be clear enough, they still leave room for interpretation. Among the three Dow Theorists I follow, for example, there is disagreement about whether step #1 has even been satisfied by recent market action.

That’s because it’s not clear whether the stock market’s recent decline qualifies as “significant.” It sure felt significant last week, especially on Thursday when the Dow fell by more than 300 points.

But the rule of thumb that many Dow Theorists employ is that, to be “significant,” the correction needs to last at least three weeks and retrace at least one-third of the previous move.

That would rule out what we’ve seen since the July market highs, of course; that decline so far has lasted just eight trading sessions for the S&P 500 SPX -0.32% and 13 for the Dow Jones Industrial Average DJIA -0.28% — and led to losses of less than 4% for each index.

On that interpretation, therefore, not even the first of this three-step process has been triggered. Richard Moroney, editor of Dow Theory Forecasts, is in this camp, writing that the Dow Theory is “unambiguously bullish.”

Jack Schannep is also bullish, though he does think step #1 has been satisfied. That’s because he believes that, in order for the Dow Theory to be relevant to the 21st century, it must be modified to acknowledge that market movements — even significant ones — occur more quickly than they did when Hamilton introduced his theory a century ago. And Schannep’s modified version of step #1 has been triggered; he is therefore focusing on the second of the three-step process for a sell signal.

Reasons for optimism….”

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S&P Agrees with the IMF, Bifurcation Hurting the Economic Growth Cycle

“Economists have long argued that a rising wealth gap has complicated the U.S. rebound from the Great Recession.

Now, an analysis by the rating agency Standard & Poor’s lends its weight to the argument: The widening gap between the wealthiest Americans and everyone else has made the economy more prone to boom-bust cycles and slowed the 5-year-old recovery from the recession.

Economic disparities appear to be reaching extremes that “need to be watched because they’re damaging to growth,” said Beth Ann Bovino, chief U.S. economist at S&P.

Terri Henderson, 6, center, whose mother is El Salvador, attends a rally with members of Congress at Union Station's Columbus Circle to announce the Restore Opportunity, Strengthen, and Improve the Economy (ROSIE) Act, July 29, 2014. The legislation provides incentives for government contractors to pay a living wage and other benefits that would help low-income workers.

Tom Williams | CQ Roll Call | Getty Images
Terri Henderson, 6, center, whose mother is El Salvador, attends a rally with members of Congress at Union Station’s Columbus Circle to announce the Restore Opportunity, Strengthen, and Improve the Economy (ROSIE) Act, July 29, 2014. The legislation provides incentives for government contractors to pay a living wage and other benefits that would help low-income workers.

The rising concentration of income among the top 1 percent of earners has contributed to S&P’s cutting its growth estimates for the economy. In part because of the disparity, it estimates that the economy will grow at a 2.5 percent annual pace in the next decade, down from a forecast five years ago of a 2.8 percent rate.

The S&P report advises against using the tax code to try to narrow the gap. Instead, it suggests that greater access to education would help ease wealth disparities….”

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Corporate Debt Ballons, Should You Be Concerned ?

“It’s not just the stock market we have to worry about. It’s also the bond market.

For the past five years, U.S. corporations have been living in a financial paradise. Interest rates have been on the floor. Wages have been flat. Companies have been able to lay off workers and slash costs. Profits have skyrocketed to record levels. And they’ve spent almost nothing on new capital equipment, either.

And what effect has this had?

In 2007, at the peak of the last credit mania, U.S. nonfinancial corporations owed $7.2 trillion according to data compiled by the U.S. Federal Reserve.

Today? After years of this bonanza, those debts have tumbled all the way down to… er… $9.6 trillion.

All that talk you hear about how corporate balance sheets are in great shape is a bunch of hooey.

Corporations borrowed $993 billion just in the first quarter of this year. Corporate debts have actually doubled since 1999.

Yes, during this time corporate assets have also gone up. Companies have built up some cash reserves (mostly offshore, to avoid the taxman). But the overall picture is alarming.

Today U.S. non-financial corporations are carrying debts equal to 50% of their actual net worth. That is near record levels, and far above historic averages.

In 1950 companies barely owed 20% of their net worth. In the early 1980s it was a little over 25%. Even in 2007 it was below 40%.

And this, note, is after years of record profits. Companies have used their profits, and their borrowings, to drive up their own stock prices.

The picture isn’t much better when you look at U.S. households. In a nutshell, a lot of households have reduced their debts — often by defaulting on their mortgages. But at the same time households have been ramping up more debts — in student loans, in car loans, and on their credit cards. In the first quarter of this year households actually increased their debts by $267 billion — even after you count an $84 billion reduction in mortgage debt. Total debts, after tumbling in the early years of the recession, stopped falling in 2012, and have actually been rising again since early last year….”

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How Low Do the Markets Go ?

Point wise, today did not feel like a good day.

Volume wise, we seem to have nothing to worry about.

The DOW looks worse than the S&P partly due to the fact we have reached the level where the year began.

sc (1)

The next key level to watch is 1905ish on the S&P. Below that there is a lot of support at 1850ish S&P.

RSI, MACD, & Williams all indicate we have some more room to fall, but i would be surprised if we fall much further. I would bet on a intra day test of S&P 1905 and then some type of reversal.

If we have a stellar jobs report tomorrow then expect the market to fall a bit as the pundits of spin are creating fear over the fed rasing rates sooner than later due to some inflation and improving labor conditions.

Let’s face it, the employment scenario for many, many, many citizens is still terrible.

Also the smart money knows that off balance sheet losses for the big banks is still a major problem; so ZIRP should be in force and there should be no reason to fret about rates moving higher sooner over later.

A worst case scenario would be to see some heavy volume taking the S&P down to the 1815-1830 level. Chances are we do not see this level as the market has that teflon resilience in play.

To be safe, I’m taking half my money off the table hoping the S&P heads lower to give me a good buying opportunity. Luckily, i’m up around 42% for the year so taking some profits would not be a bad thing. If i do not get the buying opportunity i’m looking for then i get to redeploy funds into more issues creating more risk tolerance in a slightly volatile sketchy market.

May the markets be on your side.

[youtube://http://www.youtube.com/watch?v=hzqFmXZ8tOE 450 300]




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Should You Really Be Concerned About Derivatives ?


Apart from numerous background pressures, the system limps along deeply wounded and probably fatally so. When China wanted to exit the long-term USTreasurys, the USFed accommodated them. They launched Operation Twist without much clear explanation of its provisions. We are always led to trust the magic of their machinations. China actually transferred their long-term bond holdings to short-term holdings, in order to make possible their redemption at maturity, and soon, like before the implosion. The USFed accomplished the task by putting on an enormous swath of cleverly devised Int Rate Swaps, which in effect switched from LT bond to ST bond. There are a great many other types of derivatives, such as exotic swaps, and customized contracts.

The entire Euro Monetary Union has its foundation created upon swapped hidden debt into FOREX currencies, an illicit deed that to this day has not been resolved. The Maastricht Treaty was circumvented by means of heavy swap contracts, shifting debt onto currency obligations in the form of these derivative swaps. Many were the big investment banks eager to assist in the deception and illicit qualification process, and thus earn big fees. The nations of Italy and Spain, for instance, were able to qualify for the European Monetary Union by hiding their debt with the FOREX swaps. Prosecutions are laced all through the Deutsche Bank chambers here and now, the legal wheels of justice grinding slowly. Therefore, the Euro Currency has a phony fraudulent foundation, an illicit basis enabled by derivative abuse. The victim of the ongoing prosecution, if the USGovt chooses to impose yet more heavy fines, could be the German alliance. The Germans are ready to jump ship, away from the sinking USS Dollar.

Perhaps the ugliest derivative story is the IRS Tax secure stream contract very likely used by China as collateral, which is suspected by the Jackass to be the backend deal to secure a Gold Lease from China. It is related to the 1999 Most Favored Nation granted by US to China. The Chinese would receive gigantic direct foreign investment, and thus build an industrial base. The Wall Street criminal bankers would receive a vast hoard of gold bullion, leased from the Chinese Mao Era gold reserves. The Chinese distrusted the US bankers, after many past experiences, which might include several rafts of fake gold bars sent to Hong Kong banks by the Clinton-Rubin Admin. In the outcome, the Wall Street masters reneged on the gold lease, while the USEconomy entered a downward spiral of recession which accelerates downward. The Jackass suspects that the powerful recession made impossible the honoring of the IRS secure stream derivative contract held as collateral, forcing a national default. In the last few months, we see China busy securing US commercial property. The Chinese have taken control of the JPMorgan Chase headquarters in South Manhattan, the famed One Chase Plaza. In it is contained the largest private gold vault facility in the world. It has underground tunnels connected to the US Federal Reserve. Many are the rumors and suspicions that with the end of the Federal Reserve Act operational contract, following 100 years of hidden financial tyranny, that the Chinese might have taken over a strong interest in the Fed, maybe a controlling interest.


The Western financial system is operating on fragile tenterhooks, on shaky pylons, on that same vaporous floating spinning illusory foundation. A few big banks have entered failure, like Banco Espirito Santo in Portugal. When big banks begin to fail, the belief has been, the risk of contagion will be the main focus. Since Lehman, the major Western banks have lashed themselves together for safety and security. They have done so with financial derivatives, the rope to connect them together. Thus no repeat of Lehman failure, a big financial firm failure to put the entire system at risk of breakdown. So the next failures will put the entire system at risk of collapse. This is the oft-described nuclear outcome, which has been brought upon by the overusage of derivatives. Their total in usage is somewhere between $700 trillion and $1.4 quadrillion, depending on the definition and the team doing the calculation. Claims of big reductions in derivative overall usage are a lie, since new derivatives are put on quickly. They offer short-term security but long-term systemic risk. The world faces a guaranteed systemic implosion caused by derivatives. Bank failures and contagion will lead to the widespread connected failures, and lost control by both governments and central banks to manage them. Gold will be the secure port during the stormy outcomes.

The derivative cost will be revealed as obscene, in high multiple $trillion suddenly. The public will ask questions like how we could have permitted the situation to go out of control. To be sure, derivatives assure the equivalent of a financial nuclear explosion. The answer to the question posed is that the Rubin Doctrine has been used after the Rubin thefts of the USGovt gold reserves at Fort Knox. The doctrine dictates the sacrifice of tomorrow for a few more todays. Well, tomorrow has arrived. The return to the Gold Standard is the answer, but the clean-up crews will be busy for a long time. The Gold Price will reach incredibly high levels when the derivative implosion occurs, which should occur when the East introduces a legitimate gold-backed new BRICS currency for trade settlement. The fallout will be tremendous, as the USDollar is rejected on the global stage.

A solution must also come for the ancillary devious devices like secret weapons on weather, virus, espionage, and more. Gold will continue to draw capital away from the dying corrupted sinking system. Then finally the Gold Standard will be installed, but by the Eastern nations. It will be led by Russia, China, and Germany. The United States will be indescribably isolated. The US Fascist leaders have attempted to isolate Iran, but Tehran will be integrated into the Eurasian Trade Zone. The US Fascist leaders have attempted to isolate Russia, but Moscow will be integrated into the Eurasian Trade Zone. The US Fascist leaders have attempted to coerce Europe to join a deadend insane war with an absurd basis, but the core powers of the NATO will move away and be integrated into the Eurasian Trade Zone. The United States is a hair away from losing both Germany and France to the Eastern Alliance. They will embrace gold, and walk away from the USDollar, with a certain absorbed cost. Great changes are coming like a fierce new storm……”

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Greenspan: Stocks Will See a Major Correction

“Equity markets will see a decline at some point after rising for the past several years, former Federal Reserve chairman Alan Greenspan said in an interview on Bloomberg TV.

“The stock market has recovered so sharply for so long, you have to assume somewhere along the line we will get a significant correction,” Greenspan said on Wednesday.

Alan Greenspan

Andrew Harrer | Bloomberg | Getty Images
Alan Greenspan

Greenspan’s comments come amid growing concern that interest rates near record lows are creating asset-price bubbles….”

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Morici: Real Unemployment Rate is Runnung at 18%

“The Labor Department on Friday is expected to report the economy added 235,000 jobs in July, and the unemployment rate remained steady at 6.1 percent, but that hardly tells the story.

The jobless rate may be down from its recession peak of 10 percent, but much of this results from adults, discouraged by the lack of decent job openings, have quit altogether. They are neither employed nor looking for work.

Only about half of the drop in the adult participation rate may be attributed to the Baby Boom generation reaching retirement age. Lacking adequate resources to retire, a larger percentage of adults over 65 are working than before the recession.

Many Americans who would like full time jobs are stuck in part-time positions, because businesses can hire desirable part-time workers to supplement a core of permanent, full-time employees, but at lower wages. And Obamacare’s employer health insurance mandates will not apply to workers on the job less than 30 hours a week.

Since 2000, Congress has enhanced the earned income tax credit, and expanded programs that provide direct benefits to low-income workers, including food stamps, Medicaid, Obamacare, and rent and mortgage assistance.

Virtually all phase as family incomes rise, either by securing higher hourly pay or working more hours, and impose an effective marginal tax rate as high as 50 percent. Consequently, these programs discourage work and skills acquisition, and encourage single parents and one partner in two adult households not to work. Often, these motivate single people to work only part-time.

Undocumented immigrants face more difficulties accessing these programs, and lax immigration enforcement permits them to openly take jobs that government benefits discourage low-income Americans from accepting…..”

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El-Erian: Don’t Be Fooled by the Fed’s Placid Facade

“One of the unwritten rules of modern central banking is that, unless compelled by events on the ground, officials should refrain from making big policy changes during the summer. With many traders on holiday, any sudden moves risk destabilizing markets.

Look for the Federal Reserve to abide by this rule when it meets Tuesday and Wednesday — and the European Central Bank to do the same in early August. Janet Yellen and her colleagues on the policy-making Federal Open Market Committee will maintain their well-telegraphed, gradualist approach, reducing monthly bond purchases by another $10 billion, signaling no urgency in raising interest rates, and reminding us of the importance of looking beyond the unemployment rate to understand what’s happening in the job market.

Still, behind this comforting “steady as she goes” facade, Fed officials will be dealing with five complex and inter-related issues, the resolution of which will be months in the making:

To what extent is the central bank’s policy approach increasing the risk of financial instability down the road? This question is preoccupying a growing number of regional Fed presidents…..”

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John Hussman: Reliable Measures Put Today’s Market Bubble Beyond 1929, 1972, 1987, & 2007

“In case someone needs a beyond idiotic op-ed on the state of the market, we urge them to read the following stunner from USA Today (which is simply a syndicated piece from the Motley Fool, complete with Batman style graphics). Beyond idiotic because in addition to quoting the perpetually amusing Stony Brook assistant professor, Noah Smith, who has never held a job outside of academia and is thus a credible source on all things markety (to wit: “The value of a financial asset is the discounted present value of its future payoffs, and when the discount rate — of which the Fed interest rate is a component — goes down, the true fundamental value of risky assets goes up mechanically and automatically. That’s rational price appreciation, not a bubble.” And by that logic under NIRP the value of an asset is… what? +??) it says this: “Stock prices correct all the time. But what’s important to remember is that a correction isn’t a bubble.” Yes, a correction is not a bubble: it is the result of one, and usually transforms into something far worse once the bubble pops.

Entertaining propaganda aside, for some actually astute observations on the state of the market bubble we go to John Hussman, someone whose opinion on such issues does matter.

Selected excerpts from: Yes, This Is An Equity Bubble

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000. The median price/revenue ratio of S&P 500 components is already far above the 2000 level, and the average across S&P 500 components is nearly the same as in 2000. The extent of this bubble is also partially obscured by record high profit margins that make P/E ratios on single-year measures seem less extreme (though the forward operating P/E of the S&P 500 is already beyond its 2007 peak even without accounting for margins)….”

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Chart Chomper Analysis: Is the Market Set to Make a V Shaped Move ?


“The 5+ year stocks bull market continues to tighten its noose around the bears throats, though despite reddening faces and bulging eyes this has not halted the increasingly exasperated calls for the stocks bull markets always imminent end to definitely end this time.

The stocks bull market has confounded, ALL and I mean ALL, that following each economic data release, that following so called ‘expert’ stocks trend analysis, that following escalating wars in Ukraine and the Khazar Empires rampage on the defenseless population of Palestine such as on the Gaza concentration camp now killing over 400 of the closest descendants of the original Jews of the region of 2000 years ago, that following even the Russian Mafia blasting a large passenger plane out of the sky killing near 300 which is the primary focus of U.S. Media as it looks at past air liners shot down whilst convientely forgetting the Iranian Passenger plane that the U.S. Shot down in 1988 killing all 290 on board.

All of which must, mean with near religious End Times fervour that this time the stocks bull market MUST have ended, only to find that the few percentages drop in the stock indices once more reversed towards a trend to NEW ALL TIME HIGHs as illustrated by indices such as the Dow.

The Dow reversed Thursdays price drop on the back of the Putin’s terror henchmen blasting Flight MH17 out of east Ukrainian sky that the perma fanatically stock armageddonists had convinced themselves had heralded an end to the stocks bull market that as usual was regurgitated at length by the mainstream financial media.

Dow Summer Correction Fails to Materialise

My last in-depth look at the stock market concluded in the following trend expectation for a significant correction into the end of June before the Dow marched to new all time highs by early August.

05 Jun 2014 – Stock Market Dow Trend Forecast Summer 2014

Stock Market Forecast Conclusion

The final conclusion for the Stock Market is for the Dow’s rally to shortly terminate just before reaching 17k, probably at around Dow 16,950, then for the Dow to target a swift downtrend in to the range of 16,200 to 16,000 that may even bottom before the end of June. Which would set the scene for the stock market’s next assault on Dow 17k into early August as illustrated by the below forecast graph, a failure of which I imagine would subsequently prompt many perma bears to start screaming DOUBLE TOP at the top of their lungs on the likes of CNBC and regurgitated at length by the blogosfear.

The Dangers of Stock Market Rallying Without Correcting

The stock market trend since my last analysis whilst volatile has nevertheless been bullish and thus failed to unwind bullish sentiment despite the occasional sharp 1 day drops that failed to trigger a meaningful correction which to me implies –

a. A stronger correction is now more probable

b. The probability for an ACTUAL ‘THE TOP’ materialising in the stock market has increased to what percent ? Best guess 25%.

Is the Stocks Bull Market Over?

To reiterate what I have periodically and unequivocally stated for the PAST FIVE YEARS and once more excerpted below, taken from an article when the Dow was significantly LOWER.

03 Oct 2013 – U.S. Government Shutdown Great for Stocks Bull Market, Bears Will be Crucified Again

The bottom line is this the US government shutdown is GREAT NEWS! because for bull markets to persist and continue they NEED BAD NEWS every few months, THEY NEED MOST PEOPLE TO BE SKEPTICAL, TOO AFRAID TO INVEST! And so it continues to be the case for the DURATION OF THIS BULL MARKET, where over 90%, NINTEY PERCENT OF Market commentators have been WRONG and continue to be WRONG, Everyone who has just proclaimed its END IS WRONG and Will BE CRUCIFIED, just as they have been crucified at every market turn for the past FIVE YEARS !…..”

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Greenspan: We Could Face Another False Dawn

“………Greenspan, 88, who was chairman of the U.S. central bank for more than 18 years, from 1987 to 2006, managed to steer the economy through multiple crises, mainly by slashing rates and remaining upbeat. He suffered a remarkable fall from grace after leaving office and has apologized for trusting big banks too much. He has since gone back and re-examined his views on the economy.

Greenspan, now the president of Greenspan Associates LLC, an economic consulting firm, spoke to MarketWatch about the current stance of Fed policy, the economy and what to do about asset bubbles. The economy will do all right in the near term, he said, buoyed by a strong equity market, but he added that he remains worried that we could be facing another false dawn.

The interview has been edited for length and clarity.

MarketWatch: What is the biggest challenge facing the Fed?

Greenspan: How to unwind the huge increase in the size of its balance sheet with minimal impact. It is not going to be easy, and it is not obvious exactly how to do it….”

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Analyst: $AAPL Could Be Obsolete in a Few Years


Apple could be “obsolete” in three years, due to increasing competition and “make-believe” valuations in the technology sector, one analyst told CNBC on Thursday.

The comments came after Apple reported second-quarter net profit of $7.75 billion on Tuesday, up 12 percent from $6.90 billion in the same period last year….”

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State of the Union: A Government of Wolves


” “What the government is good at is collecting taxes, taking away your freedoms and killing people. It’s not good at much else.” —Author Tom Clancy

Call it what you will—taxes, penalties, fees, fines, regulations, tariffs, tickets, permits, surcharges, tolls, asset forfeitures, foreclosures, etc.—but the only word that truly describes the constant bilking of the American taxpayer by the government and its corporate partners is theft.

We’re operating in a topsy-turvy Sherwood Forest where instead of Robin Hood and his merry band of thieves stealing from the rich to feed the poor, you’ve got the government and its merry band of corporate thieves stealing from the poor to fatten the wallets of the rich. In this way, the poor get poorer and the rich get richer. All the while, the American Dream of peace, prosperity, and liberty has turned into a nightmare of endless wars, debilitating debt, and outright tyranny.

What Americans don’t seem to comprehend is that if the government can arbitrarily take away your property, without your having much say about it, you have no true rights. You’re nothing more than a serf or a slave.

In this way, the police state with all of its trappings—from surveillance cameras, militarized police, SWAT team raids, truancy and zero tolerance policies, asset forfeiture laws, privatized prisons and red light cameras to Sting Ray guns, fusion centers, drones, black boxes, hollow-point bullets, detention centers, speed traps and abundance of laws criminalizing otherwise legitimate conduct—is little more than a front for a high-dollar covert operation aimed at laundering as much money as possible through government agencies and into the bank accounts of corporations.

The rationalizations for the American police state are many. There’s the so-called threat of terrorism, the ongoing Drug War, the influx of illegal immigrants, the threat of civil unrest in the face of economic collapse, etc. However, these rationalizations are merely excuses for the growth of a government behemoth, one which works hand in hand with corporations to profit from a society kept under lockdown and in fear at all times.

Indeed, as I point out in my book A Government of Wolves: The Emerging American Police State, the real motivating factor behind erecting a police state is not to protect the people, but to further enrich the powerful. Consider the following costly line items, all part of the government’s so-called quest to keep us safe and fight terrorism while entrenching the police state, enriching the elite, and further shredding our constitutional rights:

$4.2 billion for militarized police. Almost 13,000 agencies in all 50 states and four U.S. territories participate in a military “recycling” program which allows the Defense Department to transfer surplus military hardware to local and state police. In 2012 alone, $546 million worth of military equipment was distributed to law enforcement agencies throughout the country.


$34 billion for police departments to add to their arsenals of weapons and equipment. Since President Obama took office, police departments across the country “have received tens of thousands of machine guns; nearly 200,000 ammunition magazines; thousands of pieces of camouflage and night-vision equipment; and hundreds of silencers, armored cars and aircraft.” While police departments like to frame the acquisition of military surplus as a money-saving method, in a twisted sort of double jeopardy, the taxpayer ends up footing a bigger bill. First, taxpayers are forced to pay millions of dollars for equipment which the Defense Department purchases from megacorporations only to abandon after a few years. Then taxpayers find themselves footing the bill to maintain the costly equipment once it has been acquired by the local police.


$6 billion in assets seized by the federal government in one year alone. Relying on the topsy-turvy legal theory that one’s property can not only be guilty of a crime but is also guilty until proven innocent, government agencies have eagerly cashed in on the civil asset forfeiture revenue scheme, which allows police to seize private property they “suspect” may be connected to criminal activity. Then whether or not any crime is actually proven to have taken place, the cops keeps the citizen’s property. Eighty percent of these asset forfeiture cases result in no charge against the property owner. Some states are actually considering expanding the use of asset forfeiture laws to include petty misdemeanors. This would mean that property could be seized in cases of minor crimes such as harassment, possession of small amounts of marijuana, and trespassing in a public park after dark.


$11,000 per hour for a SWAT team raid on a government dissident. The raid was carried out against Terry Porter, a Maryland resident who runs a welding business, is married with three kids, is outspoken about his views of the government, and has been labeled a prepper because he has an underground bunker and food supplies in case things turn apocalyptic. The raiding team included “150 Maryland State Police, FBI, State Fire Marshal’s bomb squad and County SWAT teams, complete with two police helicopters, two Bearcat ‘special response’ vehicles, mobile command posts, snipers, police dogs, bomb disposal truck, bomb sniffing robots and a huge excavator. They even brought in food trucks.”


$3.8 billion requested by the Obama administration to send more immigration judges to the southern border, build additional detention camps and add border patrol agents. Border Patrol agents are already allowed to search people’s homes, intimately probe their bodies, and rifle through their belongings, all without a warrant. As one journalist put it, “The surveillance apparatus is in your face. The high-powered cameras are pointed at you; the drones are above you; you’re stopped regularly at checkpoints and interrogated.” For example, an American citizen entering the U.S. from Mexico was subjected to a full-body cavity search in which she was subjected to a variety of invasive procedures, including an observed bowel movement and a CT scan, all because a drug dog jumped on her when she was going through border security. Physicians found no drugs hidden in her body……..”

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Jeremy Grantham Rips Yellen on Rates Policy

“Recent comments from Federal Reserve Chair Janet Yellen signal she won’t raise interest rates to fight bubbles in financial markets, and that’s a mistake, asserts Jeremy Grantham, founder of money manager GMO.

“She will not use interest rates to head off or curtail any asset bubbles encouraged by the extremely low rates that might appear,” he writes in the firm’s quarterly commentary.

“History is clear: very low rates absolutely will encourage extreme speculation. But Yellen will, as Greenspan and Bernanke before her, attempt to limit only the damage any breaking bubbles might cause.”

“The evidence against this policy after two of the handful of the most painful burst bubbles in history is impressive,” he writes…..”

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