Babylon's Bankers

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.

19 thoughts on “RAND AND RICKARTS: THE FED INSOLVENT”

  1. I smell the hidden system of finance here, and it seems the Fed is up to it’s ears in financial skullduggery. There is no way the Fed is going to get audited, so sit back and watch the game being played. Maybe also some of the players are not seeing eye to eye and the result is that central banks may not be playing in unison.
    Anyway, we poor people of the world have to have good thoughts, because the metaphor likes love in big doses, and I pity those elites because they don’t dig it.

  2. Robert Barricklow

    FED is changing the “banking rules” in order to:
    DETROIT-IZE Municipal Government across the USA.
    Just like when they began to asset-stripped Greece.

    http://ellenbrown.com/
    “Preparing to asset-strip local governments?
    The FEDs bizarre new rules”.

    1. Yes Robert the USA has not only sunk into a militarism but also become a economic parasite. Not only is Pentagonism rampant in this society but also Economic Vampirism turning in on the society that spawn it.

      1. Robert Barricklow

        You & I are usually on the same frequency when it comes to this particular subject matter.
        Now we just need a critical mass of “us” to explode across the globe.

  3. The 2.0 > 3.0 conversion / pillage may be complete. Where the .Gov has had all the debt and the .Inc has stolen all the equities. Therefore, .Gov has problems. Check out USA WatchDog’s interview with L.Kotlikoff https://www.youtube.com/watch?v=H-jpsVmXCW4#t=274. Kotlikoff sez that the SIPC regs on brokerage firms allows claw back from investors if their brokerages are (accused? / convicted?) of Ponzi style activities. So, the investor is treated like a co-conspirator. Kotlikoff also alleges that they can claw back profits /funds from investors up to 6 years after funds have been withdrawn!! The other allegation made was that there is a Ponzi schemed discovered on Wall St. every four days.. This adds weight to accusations the Fed is broke..

    1. The point is that the Fed isn’t exactly part of the government and the “government” has far from all the debt.

      Paul is mostly a distraction.

      The only thing of any value is organized energy.

      With Kotlikoff’s look for Kotlikoff trying strengthen some position he holds, it’s like GoldLine adverts on Glenn Beck shows.

  4. Now what are these speculators really up gambling with other peoples money. Have the wealth addicts decided to go out with a bang probably not they just don’t have the brains to figure out the mess they’ve created. This looks like stupidity on steroids but then these idiots imagine they know all the angles garbage in garbage out to use a underworld term they are WISEGUYS.

  5. In a fiat world, these arguments are moot. If the Fed is too much in debt, it simply creates more FRNs out of thin air to cover said debt.

    Economics and the business cycle have been co-opted. We now live in a post-economic, post-reality world where everything bad and unseemly is smothered over with bigger lies, more debt, and ever more random aggression.

    1. Well actually some hidden system of finance for central banks like the Fed more than suggests that the Fed is NOT creating out of thin air.

      Such claims about thin air are mostly a distraction.

      1. I was being over-the-top but I think even a hidden system of finance is by now bankrupted as well and we are simply looking at another empire in terminal decline.

        They are now rolling out the domestic police state to quell unrest and cooking up al Ciada 2.0 to keep the MIC relevant. Armored personnel carriers in Des Moines and the goddess Isis in Syria.

        It’s Decline and Fall time soon, folks, and they know it. They’re doing these things to stave off the devil.

  6. Robert Barricklow

    AND of course there is that “other” influence, the astrological one. The one that is DEEP & buried in secrets within secrets, and is literally “Out-There” and/ or “in-there”. A, what you might call, “universal system” that is, in slang terms, “A No Thing”.

        1. RB:

          The point is that the term “Shen” is barely explained in acupuncture texts–but it clearly is talking about some higher reality.

          People writing about Giordano Bruno also ignore, mostly, is points about higher realities’ organization. (No I’ve not read the JPF book.)

          From a different field and very finance related: There was that NYTimes article on the NSA math code writer/breaker physicist who in the last 30 years has made an astounding fortune as an inverting type. After starting as the chairman of a New York State U math department, the university most associated with Brookhaven Labs.. Clearly he’s using very advanced geometry and probably something else.

          JPF linked it at the time, but the now the link isn’t here, and his name escapes me. But it was over this summer–2014.

          1. Robert Barricklow

            In Dr. Farrell’s book, The Vipers of Venice, he goes into extraordinary detail in regards to Giordano Bruno; both in context of his “memory” method, in his spiritual writings, and how it relates to a DEEP financial understanding, has very ancient roots/origins. Quite entrancing, haunting, enlightening, and; when put all together – astonishing in breath & scope. I’m still digesting its richness.

          2. RB:

            I looked at the JPF Venice book in a Barnes and Noble. And it wasn’t speaking to me–seemed speculative, which is fine, and based on other sources, which I’d then have to read great detail–unlike say reading a book like “Critical Mass” by Hydrick.

            I’ve not read the Yates biography of Bruno.

            I can’t find my copy, but I’m going by something Bruno wrote, only slightly in passing. (I note here that Spinoza is rumored to have spent a lot of time reading Bruno.)

            That New York Times on the math professor NSA manager turned investor is an intriguing article.

            Or for a challenge there’s someone a bit more suggestive like Michael Leyton–not a billionaire math professor, but a computer science math philosopher. (Can’t say if he has ties to “security” types.)

          3. Robert Barricklow

            I like your desire to question sources. I do the same. ALL sources are suspect. It is through careful analyses of a variety of sources that one may slowly parse out some truth. And over time, become more adept at it and recognize some tell-tale sign posts along the way.

            Good Hunting, Lost!

  7. Right, there are other things backing the Federal Reserve, the Bank of England, the European Central Bank, the Chinese Central bank, etc, and these other things aren’t Paul’s beloved gold.

    (Part of the reason North Korea remains such an outlier is the North Korean refusal to join an unified central banking system. And China and Russia certainly joined.)

    Then these are complex interlocked systems, and we, the public or even CIA, aren’t really allowed to see the relationships. And even people who think they have a broad overall picture, Paul, don’t.

    From a different field, the practice of acupuncture has invisible interconnected meridians; well many of those can be looked up in a book or online. But what they do is a good bit more complex than a name in a textbook. Or some metered measurement at a point on the skin. Then there are these philosophic concepts which clearly deal with a spirit world–but apprehending a specific meaning for these spirit terms in acupuncture (eg Shen) is far from straight forward.

    Some of these difficulties in acupuncture resemble (but are not the same as) particle physicists having to rely bigger and bigger conventional energy levels for everyday matter to exist. Suggesting that there may indeed be another use for particle accelerators–the bigger ones.

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