CRISIS COVERAGE REPORT
BAILOUTS, MERGERS, CORRUPTION
EXTENDED BREAKDOWN ANALYSIS


* Crisis Tidbits
* Systemic Breakdown at Hand
* Mexico as Failed State
* Military & Syndicate Salvos


HAT TRICK LETTER
Issue #78
Jim Willie CB, 
“the Golden Jackass”
15 September 2010

"Hitler would never have risen to power if it were not for Wall Street financing. Some research would reveal how deeply they were involved." ~ a Hat Trick Letter subscriber

"The so-called developed world is watching two giant forces race each other to put an end to business as usual for industrial civilization. These two forces are the catastrophe of debt and predicament of oil supplies. They had been running neck & neck for a few years, but now the catastrophe of debt is pulling slightly ahead. But even this is an illusion because these two forces are actually hitched in tandem, with the rickety cart of civilization bouncing perilously behind them. Whatever one of these forces does will affect the other. Bad debt will eventually cripple the global oil industry's ability to perform, and the failures of the oil industry will only amplify the killing force of debt. It is that simple." ~ James Howard Kunstler

"There will be no subsubstantive change to the financial system whatsoever unless we get a full economic collapse in the United States." ~ Edward Harrison (publisher of Credit Writedowns)

"The key to understanding the current situation is to understand that house prices, jobs, wages, and pensions in the United States are all being attacked with original issue debt dollar junk. This will continue until the Middle Class has been completely wiped out... America died two years ago. It is a walking dead zombie country, and those who still live in that country should re-familiarize themselves with cotton picking, because once the Dollar crashes, the only crop that America will be able to export, is cotton. It will be King Cotton again. It will be 1840 again. The only job available will be as a cotton picker working on a Wal-Mart or Goldman Sachs plantation." ~ Max Keiser (he gets carried away)

CRISIS TIDBITS

◄$$$ MAGNETIC SHIFTS IN THE EARTH ARE TAKING PLACE. THEY ARE HIGHLY DISRUPTIVE. A WORTHWHILE PERUSAL OF THE PLANET NIBIRU STORY SEEMS RELEVANT, AT LEAST WORTHY OF INVESTIGATION. EXTREME CHANGES TO THE EARTH SEEM OBVIOUS. THEORIES ARE NUMEROUS. $$$

An extremely intelligent, highly successfully, and well read friend from Ohio sent a message recently. It was unsolicited. He provided an article that attempts to fill in some information about important changes to the earth that involve magnetic shifts and deep activity. The last year has seen an historic increase in major earthquakes in conjunction with extreme weather all over the globe. Scientists remain in a study mode, possibly a bit confused, because of the enormous time periods involved. A recent study has revealed that an enormous geomagnetic anomaly has been developing in the Southern Hemisphere for hundreds of years. The planet Nibiru might be approaching in an eclipse of paths from the south, a possible hypothesized cause. The technical term of Magnetic Excursion is used to cover almost the entire continent of South America. The planet Nibiru is sometimes called a Solar nemesis, although not a star. Some scientists believe that billions of years ago, Nibiru came inside our solar system. One of its largest moons struck a solar planet, creating an asteroid belt of wreckage from the impact. The asteroid belt lies between Mars and Jupiter in a vast gap in the planetary elliptical rings. Something caused the asteroid belt to form. Its existence is often explained in general terms. This story is more specific. It seems Nibiru might be coming back for another solar system visit. Se e the New Scientist article (CLICK HERE) and the pictorial representation (CLICK HERE). My Ohio friend admits a lot more relevant pieces to the puzzle exist. It is difficult to ignore the mounting evidence of a radical increase of dangerous global geo-environmental trends. They might have economic and social consequences. He anticipates some extraordinary extreme events to occur in the next 2 to 3 years, extremes rarely seen in the history of the human race. Thanks to KenK.

◄$$$ OIL FROM THE BRITISH PETROLEUM MAJOR LEAK WAS FOUND AT THE BOTTOM OF THE GULF OF MEXICO. IT IS A GIANT POOL, HARDLY CLEARED AS THE USGOVT CLAIMS. IT IS STILL AN ECOLOGICAL MENACE. THE POOL MUST BE THICKER, CLOSER TO THE OIL RIG SITE. $$$

To date, the crude oil chapter from the major BP oil leak has been a rather successful cover-up. It remains the biggest marine ecological disaster in history. The oil deposit from a giant pool lurks on the gulf seabed. Researcher discovered all 13 core samples show oil from the spill. It endangers marine life, with great implications for the gulf ecosystem. Professor Samantha Joye is from the Dept of Marine Sciences at the Univ Georgia. She is conducting a study on a research vessel just two miles from the spill zone. The crude oil has not disappeared. Instead, it sits quietly and lethally on the sea floor in a layer of scum. Oil from the BP spill has not been completely cleared as the USGovt boasts. Instead, miles of it sit at the bottom of the Gulf of Mexico, according to a study currently underway. In some areas the oily mass is over two inches thick, found in deposits as far as 70 miles away from the BP Deepwater Horizon well. The oil cannot be the result of natural seepage into the gulf, because the tested cores show oil only at the top layer. With natural seepage, the oil would spread from the top to the bottom layers of the core. Joye has been unable to find anything other than bacteria and microorganisms living within. The studies by Joye and other scientists found that what the deceptive USGovt reports indicated was oil still lurking, invisible in the water, or on the seabed floor. The scientists had to find it, since the USGovt teams would not bother, much more devoted to cover-up.

Joye said, "We are finding it everywhere that we have looked. The oil is not gone. It is in places where nobody has looked for it. It looks like you took a strip of very sticky material and just passed it through the water column and all the stuff from the water column got stuck to it, and got transported to the bottom. I know what a natural seep looks like. This is not natural seepage. If we are seeing two and half inches of oil 16 miles away, God knows what we will see close in. I really cannot even guess other than to say it is going to be a whole lot more than two and a half inches. There is nothing living in these cores other than bacteria. I have yet to see a living shrimp, a living worm, nothing. Nobody should be surprised. When you apply large scale dispersants, it goes to the bottom. It sediments out. It gets sticky." The research study cannot access the waters near the BP Deepwater Horizon oil rig site, since patrolled. The data closeby must be multiples worse.

Studies conducted by the Univ Georgia and the Univ South Florida caused controversy in August since they went directly counter to the USGovt claims. The studies found that almost 80% of the oil that leaked from the BP well was still out in the waters of the Gulf. On August 4th, the corrupted compromised clowns from the USGovt declared that 74% of the oil was gone, having broken down or been cleaned up. Maybe it simply vanished by miracle. President Obama said in August, "A report out today by our scientists shows that the vast majority of the spilled oil has been dispersed or removed from the water." No credibility there. No change to believe in either. NOAA Administrator Jane Lubchenco, the top federal ocean scientist buffoon, has acknowledged concerns over the effects of dissolved oil, but believes chemical dispersants had largely done their job. See the ABC News article (CLICK HERE).

◄$$$ THE USFED IS ATTEMPTING TO DELAY DISCLOSURE OF ITS ACTIVITY DURING THE SEPTEMBER 2008 T.A.R.P. FUND DAYS. IT IS REQUIRED BY LAW, BUT TIED UP IN LEGAL MANEUVERS. APPEALS ARE WORKING A PATH TOWARD THE SUPREME COURT. THIS IS NOT EVEN A CASE FOR INDEPENDENT AUDIT YET, ONLY AN EVENT DISCLOSURE. $$$

The attorneys for the US Federal Reserve so far have succeeded in forcing delays for big open looks at their activity centered upon the height of the financial crisis. They resist vigorously any disclosure of details for TARP Fund disbursement or anything else. Using the US Appeals Court, their emergency bid has put implemention on hold that would force the central bank to disclose details of its emergency lending programs to banks during crucial days of the financial crisis in the autumn 2008. The 90-day delay came after the US Second Circuit Court of Appeals on August 20th denied a motion by the USFed to rehear the case. The original lawsuit for disclosure had been brought by Bloomberg LP, the parent of Bloomberg News, and News Corp's Fox News Network. A formal stay ruling would give the USFed and the Clearing House Assn, a group of major US and European banks, until November 18th to appeal the ruling to the US Supreme Court. That is precisely where the Jackass expects it to go. And the Supreme Court, the loyal fascists that they are, will block disclosure attempts and rule in favor of the Syndicate. They have done exactly nothing to preserve the sanctity, relevance, and legitimacy of the United States Constitution, which was trampled by the Patriot Act. Watch national security be invoked in protection of Syndicate criminal activity. The high court now a Goldman Sachs justice onboard, Elena Kagan.

The USFed programs were designed to shore up the financial markets, to purchase bank preferred stock, and to channel funds that were used for executive bonuses. Rumors are strong that other funds changed hands, in matters related to extortion from European sources. Rumors even pertain to murder threats and payoffs, concerning Wall Street executives, who had earned the deep wrath of certain extremely wealthy shadowy figures in Europe. In the process, the USFed doubled its central bank balance sheet to well over $2 trillion. The case has had several chapters written already. In March, the Second Circuit Court ordered the USFed to disclose certain data, including names of bailout recipients and amounts received. The news media coalition made the formal request under the federal Freedom of Information Act. The USFed argued in opposition that such disclosure could stigmatize banks, causing a loss of confidence that could lead to deposit runs, bank failures, and render damage to the USEconomy.

If corrupt banks are exposed, then the free market is justified in opening the door to a bank run, even to bankrupt the corrupt firm. The USFed is relying upon flimsy tactics to protect the system in the event of a later reversal in a decision. Nowhere is there legal precedence for such blatant obstruction. The USFed wrote in a formal statement, "[Denial by the court would] force the government to let the cat out of the bag, without any effective way of recapturing it [upon reversal of the decision.] The public policy interest identified by the government will be irreversibly lost." The Syndicate specializes in reversed decisions. See the Exxon Valdez compensation case. See the Quattrain charges against the Wall Street broker. The USFed has stressed the need for a stay in order to permit the Federal Reserve Board to consult with the USDept Justice regarding an appeal to the Supreme Court. In the court docket, the cases are Bloomberg LP versus Board of Governors of the Federal Reserve System et al, US Court of Appeals for the Second Circuit, Nos. 09-4083, 09-4097.

◄$$$ A CONTROVERSIAL BOOK BURNING EVENT IS PLANNED. THE TARGET IS THE WORKS OF JOHN MAYNARD KEYNES. THE INSTIGATOR IS BRAVE AND BOLD. THE DATE SET IS THE ANNIVERSARY OF THE FEDERAL RESERVE ACT. THE BANKER ELITE ARE ANGRY. $$$

The central banking and political world are up in arms about a planned John Maynard Keynes book burning. The event is organized by Jeff Berwick, chief editor of The Dollar Vigilante journal, scheduled to take place on December 23rd, the anniversary of the Federal Reserve Act of 1913. The Act was passed during a Christmas holiday time with few Congressional members even present, like a midnight assault. The comments by Berwick are controversial, but motivated to raise public awareness. The response by bankers is surprising and indicative of deep anxiety. The main book involved in the work by Keynes entitled "The General Theory of Employment, Interest & Money." The controversy comes at a time when many strident opponents to the system blame the US Federal Reserve Board members and USDept Treasury officials for bankrupting the country by following to adaptations to Keynesian economics.

One unnamed central banker said, "What is most dangerous is if this causes people to even logically think for more than a few moments about economics, then this entire structure we have built could begin to collapse. We have done a great job for a long time telling the average man on the street that economics is too difficult to understand." One central banker at the Jackson Hole Wyoming conference of global bank leaders was quoted as saying, "This is an attack on our religion and we will not stand for it!" US diplomats and members of the USDept Treasury called the planned event disrespectful and dangerous. One must ask dangerous to whom? A high ranking US diplomat choosing to remain anonymous stated, "This could very well bring an end to the American way of life. If the burning of the Keynes book goes forward it very quickly could bring into question all of our basic values including the right for the government to print as much money as is needed to enter into as many wars as is necessary to keep the military industrial complex happy." One sitting US senator said, "In addition to being offensive, the Keynes protest puts at risk those brave Americans who are fighting abroad for the freedoms and values that we believe in as Americans." But those values center on a central bank that manipulates the price of money, which causes asset bubbles to form, and uses inflation as a hidden tax, thus robbing savers of their wealth. The visceral reaction testifies to the knowledge among bankers and their colluders about the deep exploitation engrained within the system, and the chokehold control exerted over wealth.

Jeff Berwick remains brazen and undeterred. Despite the urgent adminitions for a halt to the book burning event, Jeff Berwick remained adamant that he is going to go through with the burning. He shot back, "We must send a clear message to the radical element of Keynesians. Which, basically means, all Keynesians. I think I will burn a copy of the New York Times which contains any article by Paul Krugman too." The flip side is always funny, more an unsult to the bankers in power, for their ignorance of Sound Money principles. Asked if the bankers had their own retaliatory plans to burn the work of Hayek in "The Road to Serfdom" and the work of Ludwig Von Mises in "The Theory of Money & Credit," most confronted central bankers seemed confused. They appeared to be totally unfamiliar with the books. See the Safe Haven article (CLICK HERE). One must wonder if anyone notices the irony of the Krystalnacht Event, a key book burning event in a horrible sequence in Nazi Germany that led to the rise of power of Hitler.

◄$$$ THE 911 COMMEMORATION SHOULD BE CAREFULLY REMEMBERED FOR WHAT IT WAS. THE UNFOLDING OF EVENTS FROM THE COUP D'ETAT ARE STILL IN PROGRESS. INSTEAD OF GLOBAL DOMINATION, THE AGENTS IN ITS ORCHESTRATION MIGHT HAVE EARNED AN IMPLOSION OF THE NATION WITH LOST CONTROL AT THE HELM, SINCE THEY ARE ON THE DEFENSIVE. $$$

Highly disruptive events, actually any subset of these cited in combination, scream of systemic failure in progress, which would never occur without chaos, violence, disruptions, and harsh government rule. The chain reaction would deliver the United States into the Third World. It means deep poverty, vast shortages, empty shelves, and corrupt rule. Be careful of the Anglo leaders in various towers of leadership, since they are reincarnated Nazis, the violent corrupt fascist bankers. In commemoration of the ninth anniversary, bear in mind that the 911 Events were their bloody coup d'etat against both the USGovt and the USMilitary. The perpetrators in my considered opinion were the Central Intelligence Agency, the Narco Wing of the Pentagon, lead Wall Street banks, and one cooperative small ally nation that looks across the Mediterranean Sea to Italy. The motive for each perpetrator could fill several pages, fully revealed in the months following the atrocity event. The attack was successful, and resulted in removal of the US Constitution from its exalted encased perch. But the Jackass digresses.

The big part of the story not told was the multiple bank heist that looted the gold bullion, bearer bonds, and diamonds from vaults in the World Trade Center basement. The basement explosions an hour before the buildings fell had over 200 witnesses, whose testimony was blocked from the 911 Commission report. Fully 80% of the US population comprehend that the 911 events were an Inside Job, but they have little knowledge of the details. Most can point to certain laws of physics and chemistry in contradiction to the offical mickey mouse story. Refer to gravity for freefall timing due to controlled demolition, burning temperature of jet fuel far below the melting temperature of structural steel, evidence months later of thermite explosive residue at the WTC site, the lack of any aircraft crash impact on the third WTC building that fell, and the absent debris on the Pentagon lawn. None of these contradicting factors require a high school education to appreciate. See the World Trade Center photo days after 911, and the shape charge demolition cuts on the giant steel pillars. Numerous scientific professional associations have challenged the whitewash official commission reports, some even subjected to harrassment by the USGov thugs. These are crime syndicates at work, having taken control of governments, commandeering facilities, plundering assets no different from a Mongol Horde. Over 2000 Americans were murdered in the buildings, for a Syndicate cause. Their members are reincarnated revitalized Banker Nazis with Narco calling cards who thrive upon war. The gesture for a Moslem Mosque on the 911 site is a brilliant tactic of distraction and diversion.

◄$$$ THE BANK FOR INTL SETTLEMENTS IS PROBABLY GUILTY OF TRADING WITH THE NAZI ENEMY 60 YEARS AGO. THE CONNECTION TO WALL STREET WAS PRESENT DURING THE ADVANCE OF THE HITLER ERA. ONLY THE NAIVE WOULD BELIEVE THE THEME, MOTIVE, AND IDEOLOGY OF POWERFUL FASCISM HAVING DEPARTED FROM THE USBANKS AND POLITICAL FRAMEWORK. $$$

The truth has never come to the surface about the Swiss Nazi gold controversy, the involvement of large US banks, and the role of the US Federal Reserve during the Second World War. Adolph Hitler had broad financial support. Banks have a deep fascist streak. The Swiss bankers exploited the situation. A personal friend from New York had his grandfather's $5 million wealth from a small factory stolen by the Swiss bankers, who blamed it all on the confusion, all records missing. The central banker relationships from the 1940 decade might constitute a significant conspiracy that dwarfs the modern machinations tied to big oil and even recent invasions of Iraq and Afghanistan. A special report published by The Daily Bell opens up the sordid record of the American financial establishment and our central bankers to put trade before patriotism, profits before our troops during times of war, offering a perspective on how this relates to our nation today in the so-called latest chapter, The War on Terrorism, the fabricated latest conflict. It provides excellent cloud cover for massive military contractor fraud and grand vertical integration of the narcotics monopoly. Although not a stockholder in the BIS, the USFed has been and is still listed as a correspond bank to the BIS, with veto power over decisions affecting the US mainland.

In trading with the enemy, the Bank For Intl Settlements might have been the key player in war-torn Nazi Germany, colluding to store gold bullion. However, at the BIS, this could simply have been business as usual. As banker to the central bankers, they sit in the catbird seat within the nexus, and thus oversee most of the important gold transfers. That they might eschew an opportunity to exploit such position would deny their human tendencies and rooted banker privilege. Nazi Germany cooperated with the Swiss bankers for three main reasons. 1) The Swiss would have fought to the death, using the mountainous terrain to their advantage. 2) The German war machine needed the vital Swiss manufacturing plants, which exported important products. 3) Other transfers of gold from Germany and oil to Switzerland sealed the trade pacts.

This special report published by The Daily Bell links the sordid Swiss activities during World War II with specific evidence suggesting a possible revenue trail from the Nazi gold sales to the Bank for Intl Settlements located in Basel Switzerland, with aid given by the US Federal Reserve and Chase National Bank (think JPMorgan Chase). The BIS was used as a vast repository to hold gold bullion stolen at gunpoint by the Nazi stormtroopers, who plundered the central banks of Austria, Czechoslavakia, and Italy. Never lose sight of the close connection the USFed had with the BIS throughout the war, making the USGovt through its largest banks a conspirator in the whole messy process. The US banks stood in financial opposition to the USMilitary, true to their supra-national allegiance. Many historical analysts believe the USFed profited from these business dealings and gold confiscations.

Historical buff and Hat Trick Letter subscriber DavidA adds to the story. He wrote, "Interesting story on how the US was involved during World War II. A couple of notes: 1) Although not mentioned, Union Bank was found to be a Nazi laundering bank in the United States and was shut down. None other than Prescott Bush (father to Papa Bush) ran the Union Bank. A figure mentioned in the article was Allen Dulles (think Dulles AirForce Base). He was in charge of the CIA right before Kennedy was assassinated. He had been fired the year before by JFK himself for not revealing everything to the president about the Bay of Pigs. Dulles went on to serve as one of the heads of the Warren Commission, the group that produced the whitewash explanation behind the murder, one that fails the smell test to this day. " Kennedy had also in 1963 made decisions to bring back the Silver Certificate, which brought fury to the bankers. Warnings given to him were ignored.

The sedition, treason, fraud, and murder extend back six decades and four decades. The US Ship of State has pervasive scum, rotting seaweed, evil barnacles, and vile vines extended from past eras. And Abraham Lincoln has not even been mentioned, nor the hatred London bankers had for him when he issued Continental Dollars to fund the Civil War instead of borrowing from the London bankers. And Pearl Harbor has not even been mentioned. A Hat Trick Letter subscriber has a father once in USArmy Intelligence who was hunted down for a full decade. The father and his group of four officers resisted the plan to open the Hawaiian naval front with granted invitation to Japan for attack, a dropped guard. Roosevelt could not receive the political support he needed to enter the US into the war with such a devastating attack. Time for the vomit bag!!

◄$$$ CHINA CURTAILS ALL RARE EARTH METAL EXPORTS, AN IMPORTANT ESCALATION OF THE TRADE WAR. IMPACT SHOULD BE FELT WITH MISSILES, RADAR, ELECTRIC CARS, CELL PHONES, AND OTHER UNUSUAL APPLICATIONS. THE TRADE WAR IS TURNING TOWARD NASTY. $$$

China is seizing a trade advantage, and using nonsensical arguments as justification. China is cutting back 72% of its exports of rare earth metals, leaning on environmental issues as the reason. Shipments will be limited to 7976 metric tons, a big step down from 28,417 tons a year ago. Such a severe decline in available supply of any commodity is important, but the rare earth items are linked to unique applications. They often have no substitutes. China controls 97% of production of rare earth elements, giving it great market power over the US, which might be a used in response to extreme USTreasury and USDollar vulnerability. Quotas and export taxes up to 25% restrict Chinese exports of these minerals. Rare earths make up a group of 17 chemically similar metallic elements, including lanthanum, cerium, neodymium, and europium. The United States used to be self-sufficient in the materials until the 1980 decade, when lower labor and regulatory costs helped China to achieve dominance. US mines and refineries were shut down. Japan and the US are protesting the ban. The rest of the world is sure to follow. China is feeding a trade war with full motive. They command the lion's share of global output. Japanese officials harped that lower quotas could have a major effect. The US Trade Representative is preparing for a potential trade case, citing the restrictions. Business groups and labor unions are being asked to provide evidence that China is hoarding these elements to make a case before the World Trade Organization.

Restrictions placed upon the rare earth industry will help protect the environment, the Xinhua News Agency claimed. What a joke! The nation is one of the most polluted on earth. Its waterways are often toxic, located near industrial plants, even causing deformities and public outcry. Its cities are clouded with smog, enough to cause broad respiratory problems, even deep concern for hosting the 2008 Summer Olympics. Leaders in Beijing claim they had no choice but to take such limiting measures. The restriction policy will also have an adverse impact on the Chinese market, where parts for exported final products are assembled. Job cuts are assured at Chinese plants, of which over 1000 plants have already shut down. Liu Aisheng, director of the Chinese Society of Rare Earths, said in a June interview "China's policy to restrict its rare earths mining and exports is out of concern for the environment and to minimize pollution. It also encourages the domestic industry to effectively use its own resources and discourages exports of raw materials, such as ore and mixed ore, without much processing." See the Bloomberg article (CLICK HERE).

It is not China's fault that the US was so blatantly inept and short-sighted, having closed all the US mines and refining facilities years ago. The US restricts and prohibits the export of myriad products and technologies to China, like advanced computer and telecommunication systems. The biggest offender in trade sanctions and tariffs is often the United States. Usually 150 to 200 items contain restrictions or tariffs of some kind imposed by the USGovt, from countless categories. The US is being given some of its own medicine.

SYSTEMIC BREAKDOWN AT HAND

◄$$$ SYSTEMIC BREAKDOWN EVENTS ONLY DAYS OR WEEKS AWAY. A TRIGGER IS COMING THAT WILL OVERLOOKED FOR ITS POTENTIAL TO PRODUCE A POWERFUL IMPACT. EVENTS WILL OCCUR IN A CHAIN REACTION THAT GATHERS TREMENDOUS MOMENTUM, AND THEN GLOBAL IMPACT. THE SEQUENCE WILL USHER IN THE THIRD WORLD STATUS FOR THE UNITED STATES. $$$

Out of the blue, a very important insider contact within the banking world sent an email last week. Its significance stems from its unsolicited nature. He was privy to some critical but sensitive information, and shared the news of its imminence. He was not at liberty to divulge the exact nature of the event in progress, but shared that we are at the doorstep of major events. It could have been as simple as gigantic gold demand to strike. He has significant obscure foreign security agency contacts, including from Britain and Russia. He wrote on September 8th, "It appears to be prudent to fasten your seat belts and batten down the hatches. Watch out for a trigger event incident, like the assassination of Archduke Franz Ferdinand in Sarajevo which led to WWI. It will appear to be insignificant but will trigger an avalanche that will make the entire system collapse onto itself. I have strong indications that this is only a week away from happening, in any case before this year draws to an end. Do not ask me for specifics, since I cannot share them with you. Regarding your list of potential events, any combination thereof is likely." The last line pertained to my immediate query.

The Jackass shot back a message with a list of potential events, all of which appear possible. Here is my laundry list, which given its length and not outrageous likelihood should be alarming unto itself. For example, something like A) a debt default by an EU member nation, or B) a big bank failure within an EU member nation, or C) a big bank failure event by a big US bank, or D) a phony story like a big inventory theft at London Metals Exchange to cover up absent metal, or E) a revealed major fraud from inside the USGovt (like with Fannie Mae), or F) a decision to permit certain markets to find proper equilibrium level (which sets off a giant mudslide), or G) a lawsuit against the SPDR Gold Exchange Traded Fund (GLD) for fraudulent leasing, or H) a credit derivative breakdown centered upon the Interest Rate Swap that manages to hold in place the near 0% official rate, or I) arrests made of some respected US bankers for bond fraud. That is long list of potential deep crisis events to trigger chaos, each highly likely.

◄$$$ MAJOR TIDBITS ON DEADLY BANKING DEVELOPMENTS MUST BE SHARED. THEY ADDRESS THE ABOVE WARNING OF SHOCK WAVE EVENTS. DEVELOPMENTS BEHIND THE CURTAINS AND MARBLED OFFICES ARE IN PROGRESS, SOME IN PREPARATION. EXPECT A BANK OF AMERICA FAILURE SOON, MUCH LIKE LEHMAN BROTHERS. BE CAREFUL OF SWITZERLAND, NO LONGER THE SAFE SECRETIVE HARBOR. $$$

Bank of America had a bank failure on July 24th. It was fixed right away by a massive infusion of USFed money, as they pulled BOA out of the fire at great cost. The banking community heard about the event, but the public did not. A bank run at BOA was averted. Such a failure will most assuredly happen again, since the big bank is both dead and having great difficulty with liquidity demands. Later, either JPMorgan or Goldman Sachs will acquire the entire bank, their entire depository accounts, their wrecked derivative books (like Gold futures and Interest Rate Swaps), including their teetering accounts held by gumbands and baling wire to the USDollar, USTreasurys, Gold, and Silver. Signs of desperation creeping in have come from reports of BOA attempting to sell $billions in assets, the source being analysts and fund managers who recently attended meetings with BOA executives. Deep shareholder concerns over its bloated damaged $2.3 trillion balance sheet have come to the fore. Non-core assets to be divested could exceed $100 billion in value. Indigestion problems have come from its acquisition of mortgage firm Countrywide Financial. See the MarketWatch article (CLICK HERE). Aaron Krowne of the Mortgage Implode website sent word that he has been hearing noises from inside BOA that middle and upper management expects a collapse, just a matter of time. But such noises have persisted for six months. A failure and merger of Bank of America would light the crisis fires again, and even focus attention on the Gold price, which is well understood to be suppressed by BOA as part of the corrupt Big Four Banks.

Swiss Bankers at a level higher than the government structure, passed a secret Force Majeure rule in Switzerland. It is not known to most bankers nor most parliament members. It is known to select individuals with connections to the highest power centers. That includes one Hat Trick Letter contact and deep source. The Force Majeure feature enables the banks to seize bullion accounts. That is the principal reason that $billions in gold bullion are departing Switzerland every single week, in particular accounts held by Arab and Chinese billionaires. The gold bullion accounts will (at a key point in time) be replaced by a 'Trade Account Receipt' linked to a specific vault inventory facility. However, and the critical feature, access will be denied, either to Switzerland or to the bank for the individuals. A great bank theft might be planned in the near future. Precious metal vault accounts should consider a metal transfer to Hong Kong or Dubai. During any highly disruptive event, the Hong Kong accounts will easily be transformed into retail accounts, with overlaid trading facilities easily installed. The Hong Kong region is developing vast new trading vehicles and legitimate Exchange Traded Funds that are honestly managed (unlike the US & London).

Big changes are coming to the bullion banking world. It is actually being turned upside down. The most reliable bullion bank vaults in the world are in Russia, but they lack the structure right now, like bank wire transfer and bullion shipment facilities. The Moscow officials are working fast to develop those facilites, as cited by Putin and Medvedev. They wish to transform Moscow into a major sophisticated financial center. They will succeed, but require time. In a couple years, they will be fully ready. The best and most reliable vault facilities today are located in Hong Kong and Dubai. In a few years, Russia will join this advanced pair.

The Germans demanded their gold bullion back over the last several years from the United States and London. It had been held in custodial accounts like at the US Federal Reserve in New York. Other German bullion had been held as part of a World War II accord. One could regard it as collateral for cooperative behavior as allies, or as ransom to collude with the Anglo financial Syndicate. All 3200 metric tonnes have reportedly been returned to Germany.

◄$$$ ROSENBERG PROVIDES COMPETENT DEPRESSION NOTES, SERVING AS INDISPUTABLE EVIDENCE THAT SOMETHING MUCH MORE WICKED AND PERVERSE IS IN PROGRESS BESIDES A RECESSION. ACKERMAN COMMENTS ON POLITICAL ROT THAT BLOCKS ANY PROGRESS. $$$

David Rosenberg argues forcefully and effectively that the USEconomy is mired in a depression, as has justication is as lengthy as it is compelling. A depression is defined loosely as a prolonged period of economic suffering and malaise. He believes, in baseball parlance, the US is in the third inning of this current debt deleveraging ball game. Financial markets rely very heavily upon intervention, a chronic danger signal. A depression is clear when interest rates go to 0% without a revival in credit sensitive spending. A depression is clear when the banks sit on $1.3 trillion of cash without lending activity within the private sector. A depression is clear when almost half of the unemployed ranks have been looking for a job without success for at least six months. An extended hand of 99 weeks of unemployment aid has been given to over 10 million jobless Americans. Attitudes towards debt, discretionary spending, home ownership, and even education are undergoing great change. No normal economic model can foretell that declining  mortgage rates should lead to lower home sales. A depression is clear when hordes of people spend their retirement accounts and cancel insurance policies. Almost 35 million Americans have no such life insurance coverage, up from 24 million five years ago.

Depressions usually are caused by a bursting of an asset bubble and a contraction in credit, whereas standard recessions are typically caused by inflation and excessive manufacturing inventories. Without a doubt, the latter situation is not at work. More fundamentally, in a recession the economy is revived by government stimulus. In depressions, the economy is sustained by government stimulus. The urgent need for stimulus is at work. The USEconomy should by now have responded to massive monetary, fiscal, and bailout stimulus, but it has not. A confirmation is visible from the decline in long-term USTreasury Bond yields. Witness the trap and morass that occurred in Japan, currently in America. Capital formation and allocation is gradually vanishing, so investment funds retreat to USTreasury Bonds. It is the final bubble before the systemic failure, to be accompanied by a powerful deadly tumultuous USTreasury default. Not only the USGovt debt must be restructured or eliminated, but vast private debt must also. See the Zero Hedge article (CLICK HERE).

For a concise diatribe that hits the mark very well on the distractive, devious, and errant leadership of the United States, check out the article entitled "Pervasive Political Rot Ensures Economic Death Spiral" by Rick Ackerman (CLICK HERE). He usually sticks to the financial story, offers outstanding analysis, except when it comes to his own errant deflation effects on the Gold price. Notice gold is making new highs. He missed the trend toward gold as a reserve asset when other more conventional assets were falling in value. For a more stark and bold assessment, check out Max Keiser, who believes the United States is a dead nation with corrupt leadership that deserves a death sentence by guillotine as punishment. See the Keiser interview (CLICK HERE).

Ed Steer of the Casey Group believes the United States is perilously close to a deadend street with a severe outcome, culminating in a big event. He wrote, "We are very close to a complete collapse of just about everything. As I have mentioned many times in my closing commentaries over the years, there are only three ways out of this: 1) a complete deflationary collapse, 2) a hyper-inflationary depression, 3) a re-pricing of the world's gold reserves to allow the world's central banks to bring the asset side of their respective balance sheets back into line with their liabilities. Whatever happens, we are well down the road to one of these outcomes right now." My view is that option #3 is over-rated and exaggerated for its beneficial effect.

◄$$$ CONRAD BLACK OFFERS AN IMPASSIONED EDITORIAL ABOUT THE NEED FOR THE UNITED STATES TO RADICALLY CHANGE COURSE. UNFORTUNATELY, HE DOES NOT REALIZE IT IS TOO LATE. HE URGES THE NATION TO RETURN TO A SENSIBLE BALANCE BETWEEN PRODUCTION, CONSUMPTION, INVESTMENT, AND DISCRETIONARY SPENDING. $$$

Conrad Black identifies America's Dark Days. He has been recycled through the prison system, emerging with an awakening and newfound awareness. In recollections of the American presidency, images of tranquil unchallenged majesty of the office come to mind from Roosevelt to Eisenhower, even Truman. Replace that sense with dismay and amazement at what has happened to that great office. Black wrote, "It is now clear that era marked the end of a golden age of the US presidency. The United States now is in a shockingly deteriorated condition. It is debt ridden, hobbled by grievous failings in honesty of government, integrity of the justice system, competitiveness of the education system, anomalies in immigration policy, insupportable health care costs, a presidency that has almost no credibility, a foreign policy that has foundered on the appeasement of Iran (as well as absurd nostrums such as the pursuit of a non-nuclear world and the war on global warming) and an economic policy that has been an epochal failure. The second half of the double dip [recession] yawns before us like the Grand Canyon, and it will be deeper and longer than the first, until leadership provides the radical solutions that are required." The nation is obviously in transition. What Black does not realize is that it is too late. The US has fallen partway into the Third World, and cannot stop the process of deterioration, degradation, and destruction. Momentum is too great. The eruption of the monetary system guarantees a thrust into the Third World. A great crime Syndicate has taken control that is killing its host. The presidency is a control room for bank plunder at home and narcotics trafficking abroad.

Black observes a sequence of failed presidencies, the economic apocalypse in progress, squandered opportunities to change the national structure, but he clings to a notion that mere policy errors can be corrected, and the United States can be restored to global leader. Such notions are pure folly, as dies are cast and momentum of the slide is too great. He even denies an imperial overreach or social decay is a primary symptom toward the fall of the nation. He does accurately perceive many seriously sick symptoms, like the lack of savings, absence of investment, and instant gratification on borrowed money. Black makes a call to arms. He wrote, "What is needed is a reorientation of America away from consumerist hedonism and back to a sensible balance between production, consumption, discretionary spending, saving, and investment; an end to current account and budgetary deficits; and a comprehensive plan to reduce debt and not just devalue the currency in which it is denominated. In foreign policy, the country must redefine its national interest in a way that does not have it on both sides of the war on terror. And there must be profound reform of the competing public policy shambles of justice, education, immigration, environment, health care, and the incandescent scandal of corrupt campaign funding and congressional vote buying." But it is too late. He fails to notice. His call to arms would be much more relevant and suitable in 1995, when the nation embraced the medicine by Greenspan for irrational exuberance, followed by Bush imperial over-reach.

Lastly, Black senses the breakdown but not its gravity. He hints at the systemic failure without the full impact of the realization. He cannot detect the pathogenesis toward economic breakdown and USTreasury default that is interlaced with national ruin. He wrote, "Now, after 18 months, the Keynesian spending bolt has been shot, ineffectually. Each new job created by the stimulus bill cost the government about $195 thousand, and the projection is for a decade of trillion dollar money supply increases that would reduce the US dollar to wallpaper by 2015 and toilet paper a few years after that. Income tax increases, as the administration advocates, will aggravate the recession, and so, at this point, would spending reductions, even if the Democratic leadership had the stomach for them. The United States cannot be taken seriously in the world as long as it is an economic stretcher case." He suffers from mild delusion of a road to re-establishment of the greatest country in the history of the world, as the greatest country in the contemporary world. He cannot comprehend that a cancer has befallen the Presidency, the Congress, Wall Street, the Pentagon, even the Supreme Court. Its eradication would send the nation into a dark place for a full decade, a place well described as the Third World. Conrad Black is in for a shock, despite eyes wide open. He describes all the symptoms of ruin without noticing the inevitability of that ruin. See the National Post article (CLICK HERE).

A rebuttal comment came from a global consultant source, a friend of Black himself. He wrote, "What friend Conrad Black does not realize, or what he does not write about, is the hard cold fact that the United States is a failed experiment, broken beyond repair. A great tragedy is unfolding, very dangerous for all of us. Once the United States collapses and undergoes a painful transition, we shall see some unexpected and even more horrific event driven scenarios than most people are ready, able, and willing to accept and comprehend. But then, that is what cataclysmic paradigm change is all about. It real CHANGE. Conrad is someone who fell onto his own sword and survived. From Tycoon to prison and back. He is re-calibrated, now anti-establishment, still a brilliant man."


◄$$$ MICHAEL HUDSON QUESTIONS WHETHER THE USECONOMY AND ITS FINANCIAL STRUCTURE ARE SIMPLY OBJECTS OF MANAGED FRAUD. THE ANSWER IS OBVIOUSLY YES. A CULTURE OF FRAUD SPREAD LIKE A VIRUS, ENCOURAGED BY BOTH WALL STREET FIRMS AND THE NEXUS OF THE SYNDICATE AT THE USFED ITSELF. HUDSON OVERLOOKS THE FASCIST BUSINESS MODEL AT WORK, WITH CORRUPT MERGER OF THE STATE WITH MAJOR CORPORATIONS. $$$

Michael Hudson is a former Wall Street economist. Currently serving as distinguished research Professor at the University of Missouri, Kansas City (UMKC), he is the author of many books, including "Super Imperialism: The Economic Strategy of American Empire" along with "Trade, Development and Foreign Debt: A History of Theories of Polarization v Convergence in the World Economy." Hudson was inspired to write a commentary after observing the post mortem hearings on the causes of Wall Streets autumn 2008 collapse and ensuing bailout. He noted the disagreement two weeks ago at the Financial Crisis Inquiry Commission. They heard lame arguments from USFed economists that the financial sector with Wall Street firms at the core merely suffered from a liquidity problem, whose flash point was the temporary failure to find buyers for its junk mortgages. They heard how Lehman by contrast had a more severe balance sheet problem tied to deep negative equity, and how a taxpayer bailout would have been an utter waste, not recoverable. Reality check shows the same bailout went to the upper echelon Wall Street bankers, and the lower echelon folded or was absorbed. A grand consolidation took place among the banks that control the USGovt. Hudson did not notice the significance of the controlling arms at work. Certainly, the fraud was covered up by the USGovt finance ministries, controlled by Goldman Sachs.

Hudson makes several great points. Money earned by short-term, computer driven financial trades does not qualify as capital formation. Hence do not deserve tax breaks. The $billions in earnings reported by Wall Street speculators should not be taxed at the low 15% capital gains rate, a fraction of the income tax rate that most workers pay. He implies these trading gains, a zero sum activity where one party's gain is by definition anothers loss (usually their own customers), should be taxed more highly than poverty level income of workers. The bankers resist tax change vigorously. Hudson calls it a class war against fraudsters and criminals. He mocks the reference that Wall Street firms doing God's work. He criticizes how religion can be turned on its head, where the Invisible Hand of Wall Street is elevated to a faux-Deist moral philosophy in his words. If  he only knew of the practiced Satanism by the narco cabal. He implies the USDept Justice turns a blind eye to criminal fraud. He believes that economic orthodoxy and formerly progressive tax policy are succumbing, and a grand battle against the Enlightenment ensues, and against Progressive Era tax policy, motivated by fading hopes for USEconomic recovery. Certainly, the fraud kings have attempted to weave their fraud into a new ideology, much like a sick religion. The chief high priests to the fraudulent monetary preachings come from the USGovt finance ministries, controlled by Goldman Sachs.

Hudson turns sights on USFed Chairman Bernanke, who fumbled before the commission. Ben attempted to put perspective on the vast flow of funds, which actually feeds both the USTreasury bubble and the USAgency black holes (see Fannie Mae and AIG). Ben believes the USFed flooded the USEconomy with credit to keep asset prices afloat and thus save the banks from having to declare credit losses, which would have been a gigantic admission that debt creation was not really the same thing as Alan Greenspan euphemized in calling it wealth creation. So foreign financial institutions became a large but overly trusting market for packaged junk mortgages. Bernanke never mentioned fraud during his appearance before the inquiry. Wall Street executives, in particular Hank Paulson of GSax, preferred to emphasize the errors, not fraud. Bernanke placed much blame on the movement to widen the market for home ownership, the need for banks to write more mortgages, and the need for lower lending standards. In the process, the backers of Fannie Mae and Freddy Mac egged them on in Hudson's words.

The great financial engineering congame had come to an end. Certainly, the fraud founded in the heresy of labeling debt as wealth is being unmasked. The engineers in charge colluded with debt rating agencies while they engaged in their own fraud, centered in Wall Street. Mortgage bonds were packaged with wrongful representation, non-existent under-writing standards, dangerous leverage, phony default insurance bandaids, unclear Fannie Mae guarantees, duplicate mortgage revenue streams, and a baseless database MERS for title registry. A culture of fraud spread like a virus, encouraged by both Wall Street firms and the nexus of the Syndicate at the USFed itself. The engineers in charge served to offer blessing to a sophisticated leveraged structure that exploited the engrained managed inflation with all its appartuses. The control center for that management has been the USGovt finance ministries, controlled by Goldman Sachs. See the Hudson article on Counter Punch (CLICK HERE). A more integrated perspective would aid Hudson if he were to include the main tenets of the Fascist Business Model, the merger of government and big business. It explains many aspects and ties elements of the fraud culture together. It is amazing to the Jackass that the structural economic fascism is a blind spot among even the astute analysts.

MEXICO AS FAILED STATE

◄$$$ UNCONFIRMED REPORTS HAVE COME THAT MEXICO IS FINALLY A NET IMPORTER OF CRUDE OIL. IF SO, THEN A CORRECT 2007 FORECAST. THE KEY TO A FAILED STATE IN MEXICO IS CRUDE OIL EXPORTS. IT IS THE NATION'S MOST IMPORTANT ECONOMIC SECTOR. $$$

The breakdown of Mexico continues toward a failed state. PEMEX revenues accounted for 40% of the Mexican Govt income back in 2007. Without the oil export income, the Mexican Govt would implode. The figure has declined steadily. As it does, the influence of the drug cartels has grown dangerously. Recognition has become more broad based that time is up for oil in Mexico, as an important turning point has been passed. The data from the two charts shows a sharp decline in both crude oil output and next exports. It is difficult to extrapolate when chaos enters the picture. A perverse phenomenon is at work. A nation over time leans on organizations that are actually functional enough to provide products & services reliably at reasonable prices. The drug cartel functions well, even if a drug cartel, even if very violent. The Mexican Govt is not functioning effectively, lacks funds, is loaded with corruption, suffers great setbacks from murders, and is the object of deep infiltration by the drug cartels.

 

The Oil Drum offered data back in 2007, when the Hat Trick Letter forecast was made of both net crude oil import to Mexico and a failed state. The key point was a 15% to 20% annual decline in oil output from the Cantarell deposit, their largest and most significant. My basis for the 2010 timing of the forecast was that chaos would lead to greater disruption and an acceleration of breakdown. We are seeing precisely that occurring. Major thefts of PEMEX oil are occurring after work crews are murdered, using stolen trucks, uniforms, equipment, and materials, for instance, to build diversion pipelines toward remote cartel facilities. Murders and gun battles in public, even on highways and busy avenues, are common. The sites of murder events are growing with alarm. See the US Energy Info Admin tables (CLICK HERE) and above chart. Data is provided only to the end of 2009.

◄$$$ THE INROADS THAT HAVE TAKEN DEEP ROOT IN THE POLITICAL AND POLICE SECTORS WITH THE DRUG LORDS WILL MOVE TO THE ECONOMIC FRONT. SYSTEMIC FAILURE AWAITS, AND IS IN PROGRESS. THE DRUG CARTEL HAS ENTERED THE AGRICULTURE AND TRUCKING INDUSTRIES, WITH MUCH MORE LATER TO COME. $$$

While free trade wiped out Mexico's traditional agriculture, the drug cartels moved in. The trucking industry is key to the shipment of goods on a nationwide basis. Flourishing drug demand in the United States and Canada has aided the drug cartel immensely. The rapid deterioration of Mexico's traditional economy has opened the door of opportunity to the Mexican drug cartels. Caught in the crossfire are thousands of citizens, including migrant workers. In a recent event, the massacre of 72 undocumented migrants took place in Northern Mexico. See The Real News interviews (CLICK HERE and HERE) about Mexican bloodshed. My expectation is that in two to three years, the entire Mexican Govt will be a subsidiary of the drug cartels, and understood to be the case by foreign governments. If it happened to the United States Govt, it can happen to Mexico more easily.

The news media, even fringe outfits like The Real News, overlook an important element in the pathogenesis south of the border. A contact with excellent sources in the world of commerce and consulting pitched in this shadowy gem. He wrote, "Interesting interview by Real News. However, they miss a very big point. [Former Florida Governor] Jebb Bush's father-in-law is the largest trucking & logistics company owner and operator in Mexico. His company operates under a special, pre-clearing trucking & border crossing license that allow his trucks to cross into the US and return to Mexico without any inspections being conducted. They keep it in the family." Jebb Bush has a Mexican wife from an elite family.

◄$$$ NEXT THE MEXICAN PESO WILL DROP SIGNIFICANTLY. FOREIGN FLIGHT OF CAPITAL WILL BE MOTIVATED BY BASIC DECLINE, IN ADDITION TO FEAR AND CONCERN OVER VIOLENCE, LIKE MURDER & KIDNAP (SPECIALTY). SOON PRICE INFLATION WILL RAGE HOT, VERY HOT, FROM THE CURRENCY IMPACT. $$$

Mexico was not considered a stable nation even before the great PEMEX oil decline, even before the advent of extreme violence and emergence of the drug cartels. John Taylor, formerly of the USFed and author of the Taylor Rule, is alarmed that so many people can ignore so much history and so many blatant signals of trouble south of the border. Perceived positive actions by the Mexican Govt like internal monetary controls, better federal budget controls, following the accepted but destructive IMF practices, are bearing some fruit. Unit labor costs are down, money supply growth is low, but money multipliers are contracting. The Mexican Economy is slowing down rapidly. The MexPeso currency is 20% cheaper than it was in early 2008, with much bigger exchange rate declines upcoming. Normal historical correlations have broken down as Mexico is underperforming Brazil, Chile, Colombia, and Peru. The usual band of hapless US economists is confused as to why this is the case. Mexico has high yields and foreign mutual funds are accumulating their bonds. Global liquidity is ample and Mexican Govt Bond yields are rising. Danger signals on the finance side echo the danger signals on the violent social side that reach national newspapers routinely. Next comes recognition of extreme breakdowns and accelerated decay. The 50% decline in the MexPeso currency forecasted by Taylor will force skyrocketing price inflation within their economy. The ruin of Mexico will take place in the next two years, just south of the US border. My guess is that in another 12 to 18 months, the level of US disorder will catch up to Mexico. One can say that cocaine is the fastest growing import & export product across the border. See the unique clever map whose border is white powder, basic blow.

Taylor argues that Mexico is lagging because it is a terrible investment versus other nations, all things considered including drug cartel activity. Fully one quarter of their GDP depends on exports to the United States, and in 2008 the Mexican GDP dropped by 10% peak to trough, more than twice that of the US. The recession in the USEconomy expected in 2011 by Taylor will bring about immense pressure to Mexico. Recent retail sales are already falling. The all important tourism business was harmed severely by the swine flu episode last year, as Mexico City and Cancun were focal points of the virus outbreak. The recent drug related violence threatens to cause even worse damage. The deaths of major political figures and bomb events are all over the news. Related murders have extended to 170 US cities and towns.

Taylor wrote, "Just this week, it was announced that PEMEX would begin importing oil for the first time in almost 40 years to keep its refineries running. Although there are technical reasons for this shift, net oil exports are dropping each year and private projections show Mexico as a net oil importer in less than ten years. Although Mexicos future current account prospects look bleak, the external global financial situation will have an even worse impact on the country... The outlook for Mexico is dire. A 50% collapse in the value of the Peso would be an optimistic outcome, and the odds favor a more significant weakening over a five year timeframe." See the Zero Hedge article (CLICK HERE). The view by Taylor of Mexico becoming a net oil importer in ten years is totally absurd. It will occur before 2011 is too far along, by the end of 2011 at the latest. Violence and chaos are rising. The drug cartels are gradually taking contol of PEMEX itself, a concept not entering into standard projections and equations. Watch as oil exports are maintained, but LESS income goes to the Mexican Govt revenue tills. The drug cartel is fully capable of exporting crude oil that it steals.

◄$$$ THE MEXICAN GOVT HAS BANNED LARGE TRANSACTIONS FROM BEING PAID IN CASH. THEY ARE REACTING TO VAST SUMS OF CARTEL MONEY ENTERING THE SYSTEM. THE ORDER WILL SURELY GIVE A BIG PUSH TO THE RECESSION. $$$

President Felipe Calderon ordered sweeping new measures to crack down on $billions of illicit money coming from the drug cartels. They are using tainted money to acquire important assets, and take key positions in the economy. The drug cartels are gradually taking small steps toward the control of both the PEMEX oil industry, but the Mexican Economy as well. Their profits are staggering. If approved by the legislature, the new rule would forbid the purchase of real estate in cash. Other obstacles would be put into place for the cash purchase above 100 thousand MexPesos (=US7700) of vehicles, boats, airplanes, and luxury goods. Violators of the new legislation would face up to 15 years in prison. See the PressTV article (CLICK HERE).

◄$$$ MEXICANA AIRLINES SUSPENDED ALL FLIGHTS. ITS BANKRUPTCY AND DISSOLUTION MIGHT SOON COME, UNLESS THE MEXICAN GOVT NATIONALIZES THE AIRLINE AND COVERS ITS LOSSES. THE DECAY IS SPREADING LIKE GANGRENE. $$$

The Mexicana Airline suspended all flights two weeks ago due to serious financial problems. It is Mexico's second biggest airline. The airline group Nuevo Grupo Aeronautico, which had partially suspended flights after seeking bankruptcy protection at the start of September, failed to reach viable, long-term financing deals. A Mexican consortium said it would take over 95% of the group's capital, with the remaining 5% under control by the national pilot union. New labor deals could not be reached with unions on major cost cutting. Their fleet comprises 65 aircraft from European manufacturer Airbus and two Boeing 767s. The airline used to transport 22 thousand passengers on 220 daily flights. Mexicana, which has been nationalized several times in its 89 year history, was bought in 2005 by hotel group Grupo Posadas. See the Yahoo Business article (CLICK HERE).

MILITARY & SYNDICATE SALVOS

◄$$$ USAGE OF PSYCHIATRIC MEDICATIONS IS SOARING IN THE USMILITARY. NOTE THE CONTRAST TO THE NARCOTICS EMPHASIS IN AFGHANISTAN, WHOSE BANK CLEARING OCCURS IN IRAQ. SOLDIERS ARE DEALING WITH STRESS, FATIGUE, AND HOME PROBLEMS. DRUGS ON ALL FACADES. $$$

The Military Times (along with Navy Times) has issued an alarming report. Usage of psychiatric medications among people ages 18 to 34 years is on a significant rise. The great bulk pertains to active duty troops and their spouses. Anti-depressants like Wellbutrin and Celexa plus anti-obsession Zoloft account for slightly more than half of the prescriptions in this age group. A dangerous trend is evident, as young adults in the military and their spouses must contend with their mental health problems. Contrast the heavy medication with the narcotics theme than runs through important channels of the USMilitary operations. The number of prescriptions filled for psychiatric medications rose 42% from 2005 to 2009 among Tricare beneficiaries. The older age group fares almost as badly. An increase of 24% among Tricare beneficiaries ages 45 to 64 years, mostly retirees. For children 17 years and younger, the increase was 18%. Other types of drugs figured in the data. Prescriptions for stimulants, including amphetamines and drugs to treat attention deficit disorders, more than doubled. Worse, claims for anti-psychotic mediations like Seroquel and Abilify nearly doubled from 2005 to 2009 among beneficiaries ages 18 to 34 years. Seroquel is often used to treat nightmares and sleeping problems related to post-traumatic stress disorder. Military officials and doctors are very aware of the extreme problem. See the Cryptogram article (CLICK HERE).

◄$$$ THE IRAQ TROOP PULLOUT IS A PURE RUSE, A PUBLICITY STUNT. AMIDST CONTROVERSY, PRESIDENT OBAMA ANNOUNCED A MAJOR TROOP REDUCTION. THE PLOY IS INTENDED TO FOOL THE AMERICAN PUBLIC, AN EASY MISSION. PERHAPS FEWER TROOPS WILL OCCUPY IRAQ, BUT MANY ARE SIMPLY RECLASSIFIED, NO LONGER COMBAT IN NOMENCLATURE. $$$

Meet Travis, pictured on the right. He wants to clear up the deception of change coming to the Iraq War. He wrote the following note. "Hey everybody. I just wanted to send a quick update and give yall the real story on what is going on over here with the troop withdrawal. The picture is of my crew and me on a break during a mission. The guy to the far left is my gunner (Burks) and the guy in the middle is my driver (Mizell). They go with me on every mission and are great guys. The reason I am sending this out is because I have had a few people ask if I left Iraq early because all of the combat troops are out of Iraq. I wanted to let everyone know the real deal. It is kind of ridiculous how the news is saying that the last of the 'Combat' troops are out of Iraq because of President Osama (I mean Obama). He says that it was his campaign promise. Take our Brigade for example. We were originally called a HBCT (Heavy Brigade Combat Team). Well since Obama said he would pull all of the Combat troops out by August, all they did was change our name from a HBCT to a AAB (Advise & Assist Brigade). We have the same personnel and equipment layout as before, and we are doing the same missions. The ONLY difference is that they changed our name from a HBCT to an AAB. That is how he is getting away with saying that he has pulled all of the Combat troops out. It is really ridiculous what he is doing. He has ticked a lot of people off. It is funny how the media is buying all of it too. So no, the last combat troops are not out of Iraq. We are still here. There are other Brigades just like ours that are doing the same missions that are still over here. Sorry for going on about it, but we are just sitting over here watching it saying to ourselves 'You have got to be kidding me!' Now you know the REAL story. So that is why I am not coming back early."

Notice the disrespect to the President in his note. The deception brings a few things to mind. First, it reminds a person of economic statistic deception, relabeling what makes for an unemployed worker. The soldiers are mere accounting ledger items. Even gold on the USGovt balance sheets is accounted for as Deep Storage Gold, as per ore mined but not processed in a mountain. More tricks. For those Americans who can read, the novel "1984" is relevant. Second, the soldier death count is at least triple the official number released by the USMilitary. They only count soldiers who died on Iraqi soil, not those who were moved to hospitals outside of Iraq, like other Persian Gulf nations, a ship on the Gulf itself or the Mediterranean Sea, or even Germany.

◄$$$ THE EXCHANGE STABILIZATION FUND HAS A DIRECT FUNDING ROLE FOR C.I.A. OPERATIONS, A FACT WITH COUNTLESS IMPLICATIONS. NEVER OVERLOOK THE MONEY LAUNDERING POTENTIAL OF NARCOTICS FUNDS INTO WALL STREET BANKS TO COMPLETE THE CYCLE FLOW. THE CONTAMINATION OF THE UPPER ECHELON OF THE FINANCE SECTOR IS PERVASIVE, WITH THE INTERLACED SYNDICATE FIBERS. $$$

The Exchange Stabilization Fund is supposed to be used to manage the USDollar and USTreasurys, to ensure stability in financial markets, to prevent foreign attempts to undermine the financial foundation of the nation. Not entirely so!! The fund, run by the New York Fed, actually has control of the black budget for CIA projects. Consider some of the big implications.

1)      Without covert financing provided through the ESF, there is no covert wing of the CIA. The diversity of their actions is enormous, not just to defend liberty.

2)      The worst secrets of the CIA are buried in the ESF, and the fate of covert wing of CIA and ESF are closely linked. Americans would be shocked to learn what the security organizations do on a regular basis to further their Syndicate and engage in violent crimes in foreign lands.

3)      By arranging covert funding and keeping its secrets, the ESF exerts enormous influence on the CIA. The US Federal Reserve therefore can use military tactics to defend the USDollar, a claim of the Jackass for many years.

4)      The resources of the CIA, such as the propaganda networks set up during the cold war, are at the disposal of the ESF. The strategy has many sides in fulfilling the mission.

5)      Turnover for management of the New York Fed cannot simply pass to qualified banking professionals, but rather to Syndicate members and proteges.

One can therefore conclude that the New York Fed, managing the Exchange Stabilization Fund and fringe CIA operations at its command, is an extremely powerful institution. My contention for years has been that the US Federal Reserve is the command center for the entire Syndicate that has seized control of the United States leadership. They are capable of conducting secret missions, working private banker agendas, supporting the narcotics enterprise, manage the money laundering, pressuring other USGovt agencies to provide support (see US Coast Guard), order the elimination of competitors, threaten allies who wish to depart from US$ support (see South Korea in 2005), create diversionary stories, and much more. See the Market Skeptics article (CLICK HERE).

◄$$$ THE TOP USMILITARY GENERAL URGES A STRONGER USECONOMY FOR NATIONAL SECURITY. HE MUST MEAN MILITARY COMPLEX, OIL SUBSIDIARY COLLUSION, SYNDICATE EXTENSION, NARCOTICS BUSINESS, AND CONTRACTOR PROFITEERING. NATIONAL SECURITY HAS LOST ITS MEANING AND ROBUST CALL, OFTEN THE CLOAK FOR CRIMINAL ACTIVITY. THE USMILITARY EXPANSION HAS BECOME SERVANT TO ITS OWN GARGANTUAN APPETITE, NO LONGER SECURITY MOTIVES. $$$

Michael Mullen is the Chairman of the Joint Chiefs of Staff. He recently went public with a surprising statement that might indicate extreme concern and vulnerability. As head of the Joint Chiefs, Mullen stated that the national debt is the biggest threat to national security. That is surely true, as foreign creditors have essentially taken a more dominant position in matters of state. My view for six years has been that when over 50% of new debt is financed by foreign creditors, the United States as a nation gradually forfeits its sovereignty. High level decisions must be made after consulting creditors, while the national US interests are therefore subjugated to less than top priority. According to Mullen, not China, not Russia, not Iran, not even the fabricated terrorists, but the single biggest threat to American national security is the US national debt. That debt is actually difficult to quantify, either $8.85 trillion (public debt), $13.4 trillion (total national debt), $20 trillion (total debt including GSE mortgage debt), or $124 trillion (total debt including unfunded obligations). The site was a meeting of local business leaders and students in Detroit, the most wrecked micro economy in the United States, where the most important industry in transportation has been decimated, and where unemployment runs the highest in the nation. Mullen cited that the USGovt will be paying around $600 billion in annual interest on the national debt by 2012. One should not confuse USGovt costs with taxpayers since foreigners have bankrolled the majority of USGovt operations, including USMilitary activity, for almost a full decade.

Tyler Durden was quick to point out that Mullen focuses on interest payments too much, and not enough on debt rollover finance. The short-term USTreasury debt rollover, like with most bankrupt enterprises, is the typical source of breakdown, and thus a great threat to national security. Fortunately, the USGovt has a Printing Pre$$ that it operates not at zero cost as USFed Chairman Bernanke claims, but at infinite cost. Its usage undermines the confidence of the USDollar and its fiat paper structure. So excessive usage and ultimate dependence is actually an end stage signal of eventual imminent USTreasury default. See the Zero Hedge article (CLICK HERE).

A quick two final points. First is the perspective on the defense industry itself. Expansion of war to secure supplies for the nation might be better explained as the global stretch of the military complex in order to secure supplies for itself. The complex is a vibrant independent enterprise. It might require new wars to secure its own supply chain in order to sustain its own operations, which increasingly depart from the objective of the people, and increasingly conform to the Syndicate objectives. Second is my forecast made in autumn 2008. Expect the pressures to build eventually until the USMilitary complex, including the defense contractors and the military service contractors, are led to splinter off into a private corporation. Its business will be arms dealer and mercenary service provider, with a core narcotics business segment. Those who deny this inevitable path must be blind, must be dumb, or prefer to wear underwear bearing the stars and stripes. Standard white jockeys serve the Jackass well, whose perspective remains independent and clear.

◄$$$ WARTIME SPENDING CONTRIBUTED SIGNIFICANTLY TO 2Q2010 ECONOMIC GROWTH. TO CALL IT DEFENSE IS MISGUIDED AND ERRONEOUS. DEFENSE SPENDING ACCOUNTED FOR HALF THE OFFICIAL GOVERNMENT SECTOR GROWTH AND ONE QUARTER OF OVERALL ECONOMIC GROWTH. $$$

The USMilitary warfare boosted the 2Q2010 official GDP substantially. Break down the components, but keep in mind that most USGovt statistics are pushed upward by great distortions. One must wonder if the hedonic adjustments for technological product improvements apply to weapons. If a new weapon kills twice as effectively, should its price be cut in half by adjustment, like with a battery or television screen? The percentages are less distorted. Over half of the second quarter 1.6% economic growth (measured by GDP) can be explained by government sector spending, which contributed +0.86% to the Q2 figure, according to the Bureau of Economic Analysis. Follow the data further, and make deeper breakdowns. More basic accounting reveals that so-called Defense spending was a massive component, accounting for +0.39% of the total 0.86% government GDP contribution. This is a federal phenomenon, since the states are in retreat on an aggregate basis. The state factor resulted in a 0.10% subtraction from US GDP growth. See the Business Insider article (CLICK HERE). Think wars and general offensive, much narcotics pursuit, some search & destroy for competition, with a modicum of national defense.

◄$$$ SOME PUBLIC ATTENTION HAS COME FOR HEROIN SHIPMENTS. BLAME IS BEING PASSED AROUND, IN MISDIRECTION. THE CONTROVERSY GROWS WITH MORE RECOGNITION. OBSERVE THE DISTRACTIONS, FINGER POINTING, ATTENTION FINALLY. $$$

The British Govt is investigating allegations that British and Canadian soldiers are involved in smuggling heroin out of Afghanistan, according to a British newspaper. Allegations about British and Canadian soldiers are unsubstantiated, the UK defense ministry claims. The London Times reports accusations pertain to the British base in Helmand province and the Canadian base at Kandahar Airfield in Afghanistan. See the CBC Canada article (CLICK HERE).

This story is the first of 15 layers, and highlights how the CIA becomes angry that others tap into narcotics business. Some background is useful. Annually, 15 thousand metric tons of Afghan heroin is directed through the Pristina airbase in Kosovo, banked through Bank of Baghdad, which is operated by JPMorgan. When the Taliban ran the low-tech narcotics trade before the US war participation in Afghanistan, the opium flow was a mere 135 metric tons per year. Today its a high-tech vertically integrated business with 15 thousand metric tons in annual volume, and steadily growing. A main method of transporting the heroin from Afghan locales to the United States is in dead US soldier coffins. So deaths are not a bad thing to the Syndicate. To be sure, standard crates are transported from USMilitary bases as well for higher volume shipments, through NATO bases. European leaders are outraged but quiet on the matter, probably paid off with minor handouts (either cash or narcotics). The joint military appears to be looking for fall guys to put away, thus look vigilant on the job prosecuting the violations.

◄$$$ DEFENSE CONTRACTOR RAYTHEON MAKES POWERFUL DEVICES FOR CROWD CONTROL. THEIR ENERGY PAIN WEAPON WAS DEMONSTRATED ON PRISON INMATES FOR BASIC CONTROL. THE LIVE SUBJECT EXPERIMENT WAS A SUCCESS. LATER PERHAPS IT WILL USED FOR CROWD CONTROL IN PUBLIC AREAS. GRADUALLY THE PEOPLE ARE BEING TREATED AS ENEMIES OF THE STATE, A CLEAR BYPRODUCT IN MY VIEW OF THE FASCIST BUSINESS MODEL AND ITS PATHOGENESIS. $$$

The USGovt along with state and local police have a new weapon. Credit goes to the Los Angeles County Sheriff Dept which tested its latest non-lethal weapon at the Pitchess Detention Center, even on unaware members of the news media. Some reporters nearby a person who shared the experience with an online journal ended up shouting in agony and crumpled over in pain as the laser cannon zapped them. The reporter himself stepped into the firing line. He had a date with the Assault Intervention Device, and can attest that the device is as horrifying as it sounds. The device looks like a robotic laser gun and shoots an invisible 1-mm wave from up to 85 feet (=25 meters) at misbehaving inmates. They soon feel like they are burning within their skin. Its purpose is to break up fighting inmates and prison riots. After a press conference in the North County Correctional Facility, Commander Bob Osborne justified the experiment, saying "Jails are prone to acts of violence. We a have a lot of violent people with anger issues." See the Cryptogram article (CLICK HERE).

Usage to break up crowds prone to riots is obviously next, since the weapon device is so effective. A friend with US security agency experience told me that microwave irritants and unnoticed pepper spray are standard devices to break up crowds, used by police. World Trade Organization, Presidential Party Conventions, G-7 Meetings, and G-20 Meetings are excellent forums to watch the police actions in crowd dispersal. Recall that Bill Clinton labeled elements of the Tea Party as domestic terrorists. Violations of civil rights are routine, even expected. One can see the direction the nation is going, where the people in peaceful demonstrations are considered enemies of the state. Unforunately, many demonstrations turn destructive, and elicit a police response. A addendum note. It is illegal to video record police brutality, like assaulting senseless or beating to death a suspect or anybody in police custody. A citizen who records such a beating, assault, or killing is subject to prosecution for unlawful eavesdropping. The law stipulates that the event cannot be recorded without police permission and approval. No lie, no kidding, no joke!

◄$$$ THE KABUL BANK IN AFGHANISTAN IS PRACTICING AMERICAN METHODS, BASIC FRAUD AND THEFT. A BANK RUN IS IN PROGRESS. THE USGOVT IS COMMITTED TO PROVIDING AID. LIKE WITH THE AMERICANS, IT IS A FAMILY AFFAIR. DEPOSITORS ARE BLOCKED FROM MAKING WITHDRAWALS, AS BANK OFFICERS GUT THE BANK. WITNESS THE NATION BUILDING BY THE USGOVT, WHERE FECAL POOLS FORM. $$$

This story will be impossible to capture from all sides with accuracy. Several aspects will be mentioned, with investigative links for more information. The New York Times and Wall Street Journal reported two weeks ago that Kabul Bank losses could exceed $300 million, a figure greater than the total bank assets. The Washington Post reported that the central bank had ordered the newly resigned chairman to hand over $160 million in real estate holdings in Dubai purchased for relatives and friends of the political elite. The bank has been gutted by executive fraud. See the MSNBC article (CLICK HERE). The brother of Afghan President Hamid Karzai has called for the USGovt to shore up Kabul Bank as withdrawals accelerate. A bank run is in progress. See the Washington Post article (CLICK HERE). This is almost a comedy. What an absurd story line on the tail of a narco war.

Bix Weir pitched in with some pointed commentary. He wrote, "I am not going to get into the Afghanistan issues with drug smuggling and the bad guys, but a bank run is of grand importance to our cause. Do you remember when Northern Rock went down and there were lines around the block for days? The Bad Guys were jumping up and down telling the UK Govt to bail them out before the bank run turned contagious. So what will happen if we start seeing lines around the Kabul Bank. Surely there is no political will to bail out an Afghanistan bank at the same time all the past mistakes are being re-run in the USCongress. The basic business model is FRACTIONAL RESERVE BANKING where banks only keep 8% or so in liquid assets and the rest they play with. No bank can survive a bank run, no bank! Keep an eye on this one."

No USGovt funds are being used to prop up the Kabul Bank, and to recapitalize it, so the American citizens are told. A USDept Treasury statement was made, "No American taxpayer funds will be used to support Kabul Bank." Clear enough! My view is that this statement is a bold lie. Perhaps narcotics funds will be used to aid the bank instead before it is shut down. However, a manager at the central bank and a senior USGovt official confirmed that an intervention would be conducted. Crowds formed as lines at Kabul Bank branches to withdraw USDollar and Afghan currency savings. The depositors screamed they had lost faith in the bank's solvency following a change in leadership and reports that tens of $millions had been shoved to political elites in risky real estate investments. One individual named Mohammad Nawaz, head of an Afghan aid group, had tried for three hours to withdraw the $15k from his account. A bank run is in progress that interferes with the important work by the USGovt in nation building. That phrase has caused deep laughter to the Jackass for several years. Nation building, hmmm. Honest working people like public servants, merchants, soldiers, and police are often unable to withdraw their money, a necessary component for commerce within the economy. Disruption comes from pockets of insurgency, widespread drug trafficking, and the plundering of aid money. See the Huffington Post article (CLICK HERE).

The Kabul Bank literally resorted to beating up depositors during the bank run, as cash reserves fell to low levels. A mob of depositors swarmed Kabul Bank's single open branch in early September, only to be literally beaten back by police. Officers in the Afghan Army and Police were beaten up, and denied their salaries. The mob included more than 500 government employees, including local police officers, Afghan National Army soldiers, local merchants, and teachers, but were kept at bay by armed police from their National Directorate of Security. The guards also threatened to destroy the cameras of journalists attempting to take pictures of the scene. An Associated Press cameraman was punched before jumping into a car and speeding off. The local banking crisis could destabilize Afghanistan. Angry, concerned, scared depositors have pulled almost half of the bank's $500 million in cash. The Afghan Govt has been forced to freeze $100 to 150 million of the remainder in order to cover basic operating expenses. Military and civilian casualties have risen to record levels as a Taliban insurgency escalates leading to parliamentary elections on September 18th. See the Business Insider article (CLICK HERE) and the UK Guardian article (CLICK HERE). Perhaps the Afghan locals should be given pamphlets explaining the wondrous advantages of American fractional banking techniques, even some Friedman and Samuelson brochures about advanced banking practices. Better yet, maybe newspaper clippings on US banker fraud in the mortgage arena.