September 21st, 2014
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Tag Archives: Federal Reserve

RAND AND RICKARTS: THE FED INSOLVENT

There’s been a strange cluster of articles on the net lately, regarding the usual financial memes: the Fed is insolvent, near bankruptcy, everything’s going to collapse on such-and-such a date, the dollar is doomed, and so on.

This time, however, it’s coming from some unusual sources. One is, of course, Kentucky US Senator Rand Paul (son of US Congressman Ron Paul, for those in our international readership). There’s nothing unusual about that, for the Pauls – both Ron and Rand – have been wanting to audit the Federal Reserve for years (and for that matter, so have most Americans). What is unique about the more recent news, is that now the CIA is weighing in, in the form of financial analyst Jim Rickards:

Senator and CIA Insider Accuse Federal Reserve of Covering Up Secret Bankruptcy

Here’s the crux of the matter, according to the CIA financial analyst :

“Rickards shared an alarming collection of charts in the discussion that proved our country has secretly reached, or exceeded, crisis levels in our stock market, with our dollar, and banking system that are more severe than in 1929.

He examined two charts in particular that specifically place much of the blame for this on the Federal Reserve.

“‘What you can see from this first chart is that for over a decade the Federal Reserve steadily grew its capital reserves. Even after the recession struck, on the surface at least, they kept strengthening their financial backing,’ he explained.

“‘And today they have over $56.2 billion of cash on hand. $56.2 billion sounds like a lot of money, but it’s not the full picture.'”

“‘You have to compare the cash the Federal Reserve has on hand with the debt they’ve taken on since the recession. And when you do the picture becomes a lot scarier, because that figure is $4.3 trillion,’ Rickards continued.

“‘So you have $56.2 billion propping up $4.3 trillion worth of debt. That means the Fed is leveraged 77-1. Prior to our 2008 meltdown that was only 22-1.'”

But there’s another huge fly in the ointment: systems analysis, and cycles:

Here’s Why the Market Could Crash–Not in Two Years, But Now

I hope you caught it, but if you didn’t, here’s the crux of it:

“One ontological feature of complex systems is that they are not entirely predictable. An agricultural monoculture is a good example: we can control all the visible inputs–fertilizer, seeds, water, pesticides, etc.–and conclude that we can completely control the output, but evolution throws a monkey wrench into our carefully controlled system at semi-random times: an insect pest develops immunity to pesticides or the GMO seeds, a drought disrupts the irrigation system, etc.

The irony of assuming that controlling all the visible inputs gives us ultimate control over all outputs is the more we centralize control of each input, the more vulnerability we introduce to the system.”

And thus:

“If the economy and the market are indeed systems, then we can predict that any level of control will fail no matter how extreme, and it will fail in an unpredictable fashion that is unrelated to the power of the control mechanism.

“Indeed, we can posit that the apparent perfection of central-bank engineered stability (i.e. a low VIX and an ever-rising market) sets up a crash that surprises everyone who is confident that central-bank monocultures never crash. In the real world, manipulated stability is so vulnerable to cascading collapses that crashes are probabilistically inevitable.”

Now, factor into all of this two other things, for remember, neither Senator Paul, nor Mr. Rickards, nor Mr. Smith, are dealing with (1) the role of the hidden system of finance and black budget in their analysis, and hence, with the role of factions within both the finance-capital world nor in intelligence, that deal with that system on a daily basis, and (2) none of the men are focused on the extraordinary reliance of international financial clearing, and for that matter, modern securities and commodities markets, on electronic networks and high frequency trading.

What I am suggesting is that these two factors – the first of which is almost never reckoned with in any financial or economic analysis of the makro-system – or rather, the absence of these two factors, will fundamentally skew and flaw any conventional analysis, and that this, in turn, is why the Fed will never permit a genuine audit, for that would reveal the role of these two factors, and their interconnections.

Indeed, Mr. Smith is correct: we are dealing with a complex system, an organism, and like most organisms, the real functions, the real organs, are not what you see, but what you don’t see, the functioning organs beneath the skin, hidden from view.  For contemporary financial analysis to begin to make sense, it will, like the grave-robbing Renaissance anatomists of old, it will have to start looking at the corpses of similar systems in the past.

See you on the flip side.

THE GOLD FLASH CRASH!

On the sixth of this month, there was another market “flash crash”, this time in gold, recalling the May 6, 2010 “Flash crash” on the NYSE and NASDAQ.  On May 6th, 2010, Proctor and Gamble stock began to plummet, driven downward in a reckless spiral by computer-driven trades in a matter of mere minutes, to[More...]

THE PALTRY MISSING $9,000,000,000,000, AND BEARER BONDS SCANDALS (AGAIN!): SPAIN, RUMSFELD AND PROBLEMS

Well, it’s to the point now I just have to laugh. When former US Secretary of Defense Donald Rumsfeld announced – the day before 9/11 in fact – that the Pentagon was missing a mere $2,000,000,000,000, the story was buried by subsequent events.  We now seem to have the Fed admitting that it cannot find[More...]

NEWS AND VIEWS FROM THE NEFARIUM SEPT 26, 2013

Joseph comments on (1) Finland’s recent call to repatriate its gold (2) the theft of gold during and Air France flight from Paris to Zurich, (3) the theft of seven milliseconds from the Federal reserve, and the possible wider context and connections between them: Here’s the articles: Finland Latest to Join Gold Repatriation Movement Gold[More...]

NEWS AND VIEWS FROM THE NEFARIUM AUG 22 2013

Joseph comments about a recent meeting between the BO administration and the weasels of Wall Street, connects some dots to credit unions, and also comments about the spreading of the meme that the NSA electronic eavesdropping ability represents the ultimate insider trading mechanism from Catherine Austin Fitts and our own blogs, to RT and the[More...]

THE GOLD STUFF YET AGAIN

On Friday’s News and Views from the Nefarium (May 3, 2013), and again yesterday, I presented the thesis that the vast hidden system of finance developed after World War Two must be viewed in the larger context of what it was used for, namely, a vast political covert operations slush fund and the creation of a black[More...]

PAUL CRAIG ROBERTS ON THAT GOLD THING

Former advisor to President Ronald Reagan, Paul Craig Roberts has weighed in on the big sell-off in paper-gold and paper-silver last Monday that occurred suspiciously prior to the Boston Marathon Bombing, and this one is worth p0ndering folks: Update to the Update: The Attack on Gold — Paul Craig Roberts Now, I have to doff[More...]

EVEN ALAN GREENSPAN IS CHALLENGING THE RATIONALE FOR THE FED

This article at The Daily Bell is worth pondering closely and carefully, for it might be indicative of further fissures and faultlines within the international banksters’ globaloney “community”, or it might be indicative of what they’re really up to (we’ll get to that after the article), or it might be indicative, in that quintessential Hegelian way,[More...]

GOLD AND THE FUTURE OF THE DOLLAR

This is a very interesting paper from the “Official Monetary and Financial Institutions forum”, if you have the time to read it, because it provides a very different perspective on what may be going on: Gold, the renminbi and the multi-currency reserve system I want to direct your attention, however, to some of the conclusions[More...]

TRILLION DOLLAR COINS?

In case you haven’t heard, and you may not have if you’ve been watching the bloviators on CNN or Faux News, there is a move afoot to mint one trillion dollar coins. You heard me, that’s right, one trillion dollars. (But hey, a trillion dollars is  chump change compared to the quadrillions of dollars in[More...]