SP 500 and NDX Futures Daily Charts - No Reform, No Recovery

The economic data was a bit gloomy this morning.

The real economy does not seem to count for much in this blizzard of paper.

We are papering over quite a few things.

There are some 'green shoots' by way of low paid jobs, often part time.  But the lack of vitality in this economy is palpable to any but the most resolutely deluded.

On the next downturn, we may see a proper panic in pigtown.

Unless we have reform, financial and political, we will see no recovery, and no peace.

Have a pleasant evening.

Taibbi: A Whistleblower's Horror Story

"Crush humanity out of shape once more, under similar hammers, and it will twist itself into the same tortured forms. Sow the same seed of rapacious license and oppression over again, and it will surely yield the same fruit according to its kind."

Charles Dickens, A Tale of Two Cities

"Flagrant evils cure themselves by being flagrant."

John Henry Newman

If a whistleblower reveals benign 'secrets' of government actions to a domestic reporter in the time honored tradition, they may be prosecuted as 'enemies of the state' under the abusive misuse of the Espionage Act.

 

It was Winston's contention that six week's after refusing to lie in his report to Moody's, Angelo Mozilo personally contacted Winston's supervisor and demanded his termination based on a personal website Winston maintained for his work as a motivational speaker and expert in leadership.

What I find particularly odious in the judgement is that not only will Winston NOT be able to obtain the reward from the jury verdict, which is a legal matter which I understand can be contended.  Although it seems that the appeals court took a fairly aggressive stance in this appeal, to the point of nullifying the jury not on the legal process but on their judgment about the evidence itself.  A copy of that first appeal is downloadable here.

 

The subsequent judgement against plaintiff to pay the costs filed by Bank of America seems excessive if not vindictive to say the least, given that the case itself was a 'close call' at worst.  And then there is the matter of his speaking to Frontline, and engaging in behavior in describing the ongoing frauds at Countrywide that were very embarrassing to Bank of America, and the DOJ itself.  It smells of vindictiveness.

I don't think it is this case alone that is so infuriating, but the context of Wall Street friendly judicial policy in the Obama Administration, and the hypocritical and harsh treatment of whistleblowers in general.   And Taibbi does a fairly good job of bringing these things forwards in his article linked below which I suggest that you read.

Deceit and theft by the privileged is excused and protected, while honesty and innocence are severely punished.    And the great mass of official journalists are silent, so we hear the news about this in a rock 'n roll magazine. 

 

Rolling Stone

A Whistleblower's Horror Story

By Matt Taibbi

18 February 2015

Two years ago this month, Winston was being celebrated in the news as a hero. He'd blown the whistle on Countrywide Financial, the bent mortgage lender that one could plausibly argue nearly blew up the global economy in the last decade with its reckless subprime lending practices.

He described Countrywide's crazy plan to give anyone who could breathe a mortgage in a memorable January, 2013 episode of Frontline called "The Untouchables," a show that caught the eyes of several influential politicians in Washington. The documentary inspired Senate hearings and even the crafting of new legislation to combat too-big-to-jail corruption in the financial world.

Winston was later featured in the New York Times as the man who "conquered Countrywide." David Dayen of Salon described Winston as "Wall Street's greatest enemy."

But today, Winston is tasting the sometimes-extreme downside of being a whistleblower in modern America.

He says he's spent over a million dollars fighting Countrywide (and the firm that acquired it, Bank of America) in court. At first, that fight proved a good gamble, as a jury granted him a multi-million-dollar award for retaliation and wrongful termination.

But after Winston won that case, an appellate judge not only wiped out that jury verdict, but allowed Bank of America to counterattack him with a vengeance.

Last summer, the bank vindictively put a lien on Winston's house (one he'd bought, ironically, with a Countrywide mortgage). The bank eventually beat him for nearly $98,000 in court costs.

That single transaction means a good guy in the crisis drama, Winston, had by the end of 2014 paid a larger individual penalty than virtually every wrongdoer connected with the financial collapse of 2008.

When Winston protested his preposterous punishment on the grounds that a trillion-dollar company recouping legal fees from an unemployed whistleblower was unreasonable and unnecessary, a California Superior Court judge denied his argument — get this — on the grounds that Winston failed to prove a disparity in resources between himself and Bank of America!

This is from the court's ruling:

Plaintiff argues that the disparity in the resources between the individual plaintiff and the defendant Bank of America make it unfair to place the cost of the premium on plaintiff. Plaintiff offered no evidence in support of this argument; it is rejected...

Read the entire story in Rolling Stone here.

Pictures From a Currency War, With Narrative

I have noticed lately that the spinmeisters are now latching on to the term 'currency war,' but are trying to deflect it merely to an intensification of the beggar thy neighbor strategy of devaluing your currency to subsidize exports and penalize imports.

This has been going on for a long time, most notably by the Asian Tigers, led by Japan and then perfected by China.  But make no mistake, the real heart of this process is in an Anglo-American banking/industrial cartel that intends to beggar everybody.

The multinational corporations went along with it.  They were its great lobbyists, and their wealthy scions the founders of think tanks to provide it a rationale and respectability. 

 

Walmart wrote a chapter in the new gospel of greed as a means of undermining wages and the American working class by insisting, as far back as the 1990's and the Clinton era, that suppliers start offshoring to China. And servile politicians opened the doors wide, and turned a blind eye to abuses that are still coming home to roost.

Part of the arrangement was a quid pro quo. The multinationals, who successfully staged a financial coup d'état in the States and Western Europe, were to extend the reach of their strong dollar policy and europression via foreign direct investments in resources rich overseas nations and foreign markets in order to consolidate their power into the non-democratic world.

But China and Russia balked at their end of the presumed bargain. They realized that opening their own doors to dollar exploitation, and allowing the economic hitmen to come in and pick up assets on the cheap, would lead to eventual political unrest, encirclement, and their own loss of power.

'Color revolutions' were becoming popular, as one country after another was falling into chaos, the kind that produces fire sales in productive assets and the elimination of inconvenient local rivals to power.  And in Europe, the powers that be created a Eurozone structure that any decent economist would know was unsustainable, and destined to create an unstable situation of few winners and many big losers.

And so a consortium of nations began to resist.  Some called them the BRICS.   They became alarmed, and then convinced, that allowing a single nation or group of multinationals to control the world's reserve currency was like a Ponzi scheme that could only continue on until its acquired the whip hand of power everywhere.

They started to speak up in international monetary organizations, long dominated by the Anglo-American banking and industrial cartels. They demanded the establishment of a new monetary standard for international trade that was broadly based, to replace the failed Bretton Woods Agreement that had continuing on as the ad hoc dollar hegemony known as Bretton Woods II after Nixon arbitrarily broke the formal agreement with the closing of the gold window in 1971.

And so we see a new phenomenon today, in which the long term selling of gold to control its price, resulting in the post-Bretton Woods bear market that lasted over twenty years, has given way to net gold buying by the world's central banks, and in increasing size.  And the creation of a paper gold market in parallel, through which the West seeks to control the price and supply of gold, to maintain their financial operation while they more aggressively pursue nation recycling and repurposing, draconian trade deals that supplant domestic governance, and when that fails, through internal insurgencies and at times, overt military action.

Simultaneously, there are a proliferation of bilateral trade deals in which currency arrangements are being made between countries, and even among small regional groups of nations, to conduct their business outside of the US Dollar system.  They are even building up their own financial networks and infrastructure in response to increasingly aggressive use of sanctions and other forms of economic pressure.

The US and UK, like China and Russia, are not immune to concerns about domestic unrest. A strong dollar policy and the support for a policy of offshoring to increase corporate profits are wreaking havoc on one of the world's greatest popular economic achievements: the US middle class.

 

Increasingly concerned, the governments are cracking down on any sparks of domestic dissent, targeting leaders, vilifying and suppressing minorities, and increasing the surveillance of its own people.  They are weaponizing the domestic police forces, and establishing the 'legal means' by which control can be maintained in the face of increasing misery and discontent at home.

It is not a pretty picture. It is an old story of greed and deceit, of empire and world conquest, of the desolating sacrilege of betraying those who have fought for freedom and civil rights to cash in for their own selfish gains. 

 

Will this end in a new gold standard, as this article A New Gold Standard in the Making, which is the source of these graphs suggests?  I surely do not know, and still do not think so.  

 

If you have been following the thought process here, going back before even the establishment of this blog to 2000, I have felt that the most likely course will be the establishment of a new unit of international currency, similar to but not the same as the SDR, with a far broader composition of currencies and commodities included, so that no single group would be able to control it for their own purposes.

 

Stagflation is no natural phenomenon.  It is the act of man in a policy intervention or policy error par excellence.  Until OPEC was able to trigger a stagflation through their use of an oil embargo and price cartel in the 1970's in the favorable conditions created by economic rot introduced by years of discretionary, aggressive war in Southeast Asia and the ensuing debts, most economists thought it to be impossible, and certainly not a 'natural' outcome.

 

I think that domestic reform will be coming, and this is necessary because no new monetary standard is going to repair a system that has failed from within due to corruption and systemic injustice.  

 

Old systems, even when they finally turn to visible abuse as they decline, can fail for a very long time, seemingly unbeatable, until they finally collapse from within.  This is how it was for the fall of the old Soviet Union, and this is how it may be for the Anglo-American cartel and their attendant nations like Germany and Japan.

 

It is still possible that Russia and China could make a deal with the Anglo-Americans and establish a tri-partite world government, with their own spheres of control and interest.  As you may recall this was the way George Orwell saw it in 1984.  I have been watching for that possible development based on my own research on the growth of international capital markets and flows since 1990 at least. 

 

People bring this up and so I wish to address it now, once and for all.  I am aware of the possible deeper significance of these developments from an eschatological perspective.  But recall that even the great apostle, who was 'lifted up to the third heaven,' was mistaken in his estimation of it, thinking it a phenomenon of his own time.  It is a mistake of vanity to go too far in such arcane and difficult subjects, in pursuit of sick thrills that only serve to distract us from our call to the work of the day, and the practical task of finding sanctity and salvation in the world. 

 

How we will react to this individually is critical for our own long term survival as spiritual beings regardless, since we all face our own ends individually.  Of this we can be sure.   We are told that most will give in, despairing at the increase in wickedness, and seek for power and riches of their own beyond all reason and grace.   And it requires no end time to see this happening through all ages. 

 

Change is coming.  It may be a new arrangement that brings with it the blessing of reform, transparency and justice through peaceful evolution.  It may be delayed and more difficult.  What cannot be sustained will not continue. 

 

This will end.  But perhaps not very well.  To a great extent that is up to us, unless we stand by and do nothing.  "The only thing necessary for the triumph of evil is for good men to do nothing."  But what shall I to do?   Begin with yourself, despising only the fear and the evil in you.  Do as you have been instructed by the two great commandments, which have been implanted as a seed in your heart. 

 

You are called.  You choose the answer.

 

 

NAV Premiums of Certain Precious Metal Trusts and Funds

The cash level on the Sprott Silver Trust is getting mighty thin.