The Ongoing Jefferson Dialogues

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” -Thomas Jefferson

“All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” -Arthur Schopenhauer.

These two quotes seem alarming on the money (no pun intended) to today’s situation. As you know I did a piece earlier about my dream visit from Mr. Jefferson and I will confess up front that I am doing this article to show Mr. Jefferson that indeed I will act.

The point is made better by Mr. Jefferson than by me or quite frankly, all the current pundits combined.  Banks are more dangerous to us than any army!  That is revolutionary speech even by today’s standards.  “Ever allow private banks to control their currency” translates to the current day Fed, a privately owned corporation that issues the currency of the US.  Whoops, we kinda screwed that one up.

jefferson

They would control our currency by inflation and deflation.  Huh? Yep!  Banks will deprive people of their private property until their children wake-up homeless!  We are experiencing the highest rate for foreclosures in US history and at the same time the values of our private properties has been deflated on average 34 % in the last eighteen months!

I ask you two questions, Mr. Jefferson.  First, how the hell could you know all this 234 years ago?  Secondly, if you knew this, you should also know the solution to correct this problem.  Come back and visit me with an answer.  After all, it is about action, not words, right?

More Green Shoots? Only 180 Days Left Before The Banking Holidays!

The FDIC announced the closure of another 5 banks this week, bringing the total to 69 this year so far.  See the chart below to put this in perspective.  Given that the FDIC said there are still another 305 banks in “troubled waters”, we can kind of present a scenario and a theory of things to come.  Being insane as I am, I can then estimate when the banking holiday begins!!  Looks right now like late January 2010.  Well you judge my logic.

bank failures

The chart above represents 3 failures in 2007, 25 in 2008, 69 so far in 2009, 120 projected total for 2009, and finally 215 failures are projected for 2010. So in this period, 358 banks will fail.  When comparing to 1929-1933, 4,000 banks had failed.  But unlike today, banks then didn’t have branches.  So when you look at this in today’s number and you use an average of 10 branches per bank of today, we can expect 3580 1929 adjusted numbers. We assume that of the existing FDIC indentified 305 troubled banks, 70% will fail, if consistent with current trends.

OK, now let’s again look at historical facts and compare them with the facts of today. On March 3, 1933, FDR declared a banking holiday.  You gotta love those holidays where everybody gets screwed.  The reason he closed the banks were that the existing banks (-4000) were getting clogged with commercial real estate foreclosures creating unsalable assets.  Ok let’s fast forward. MSM is leading stories that warn of the new crisis is what??? Commercial and Construction loans.  De J’Vue?

Today the FDIC announced it only has $13 Billion left in the FDIC Insurance Account.  Given the rate of bank failures and that the average bank closure is costing the FDIC about $250 Million that gives us a cross over the line date of the last week in January 2010.  Secondly, in the same release, the FDIC says it expects about $10 Billion in future costs.  However, when I do the calculations, the number is more like $89.5 Billion.  So the FDIC is not only light by January 2010, it is missing the correct planning number by at least 8 times!

So given all these FACTS, and being insane as I am, I will now say look for the banking holidays from January 15th to February 15th 2010.  Gee, I wonder if Hallmark will come up with a card?

Bailout My Ass, Better Get Ready for a Tough Summer & Fall

There is a joke floating around on the internet that explains how the “stimulus” program works.  It goes like this:

A Stimulus Story

It is the month of August; a resort town sits next to the shores of a lake. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit. Suddenly, a rich tourist comes to town. He enters the only hotel, lays a 100 dollar bill on the reception counter, and goes to inspect the rooms upstairs in order to pick one. The hotel proprietor takes the 100 dollar bill and runs to pay his debt to the butcher. The Butcher takes the 100 dollar bill, and runs to pay his debt to the pig raiser.
The pig raiser takes the 100 dollar bill, and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 dollar bill and runs to pay his debt to the town’s prostitute that in these hard times, gave her “services” on credit. The hooker runs to the hotel, and pays off her debt with the 100 dollar bill to the hotel proprietor to pay for the rooms that she rented when she brought her clients there. The hotel proprietor then lays the 100 dollar bill back on the counter so that the rich tourist will not suspect anything. At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 dollar bill, after saying that he did not like any of the rooms, and leaves town. No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism. And that, ladies and gentlemen, is how the United States Government is doing business today and Canada as well.

Kinda funny and cute, huh?  Well it would be if it weren’t so damn true.  Remember, in the end of the story the rich guy leaves with his $100.  Worldwide, over $13 Trillion so far in “stimulus” money.  OK let’s see where that $13 Trillion has gone.  In the US it has primarily gone to banksters who have given it to their largest customers to do what??  Expand production, buy new equipment, hire more people?  NO.  It was given to them so they could pay back the loans they owe to the BANKSTERS.  Are you getting this.  Joe Schmuck who has lost his job, is losing his home and can’t feed his kids got zero zip natha.  What he got was a foreclosure notice, a notice from his credit card company that his limits have been lowered and his interest raised.  Then he got a notice from the unemployment office that his benefits have expired so they can conveniently remove him from the unemployment roles.  If this wasn’t real life, it would be hilarious.

G8 governments are also touting how they are investing in underdeveloped countries.  So let’s look at that.  World Bank, IMF is investing in those countries, but there is a catch, those countries can only use the money to repay their previous debt to guess who?  The BANKSTERS.  None of the money is flowing into the local economy, businesses, or infrastructure.  It’s a damn joke folks, but with the most serious of consequences.

By mid August, because there has been no real stimulation to the economy, we will see the second leg down on the markets, maybe as low as 4400 on the Dow.  The repercussions from this will be devastating.  So here is what a whack job like me sees for the summer schedule.

1). States will continue to shut down (Alaska, New York, and Nevada are in the worst shape, but 13 other states are in the boat in front that is sinking). This will mean the most exposed people (elderly, disabled, and poorest amoung us) will be totally cut off.  This will be really apparent in late August and September.  I think the Bankster have forgotten a little detail though.  Deperate people do desparate things, especially hungry people.  I think Somalia might be a case study they should examine.

2).  Then we have the situation related to food supply.  The number one thing that flips a “recession” into a “depression” is drought.  and sure enough guess what is happening worldwide.  Droughts everywhere.  India is being impacted the most, but most of the plain states and the SE of the US is also in that boat.  This will drive prices at the grocery store up at least by 30%.  Now I don’t think I have to explain how that is going to impact more than half the population that is barely making it now.  Look for your local national guard at the grocery store this fall.

3). By say October, the PTB will have no choice but to fall back to their number one move to “stimulate” the economy. WAR.  Israel has pulled the short straw on this one and gets to lead off with a Shock and Awe move on Iran.

4). This time, however, everyone is too hungry or broke to be feeling too patriotic.  By November, the banks will declare a “month long holiday” which really means “no you can’t get or have your money”.

OK, I have gone on record with what I think is going to happen.  So let’s see how nuts and paranoid I am.  But just in case I am even close to being on the money (no pun intended) I would recommend you have at least a month’s worth of cash on hand, enough food for three months at least, and it might not be a bad idea to stock up on some vegetable seeds for next spring.

Better be prepared for a tough summer

The predictive linguistics doesn’t look good folks.  I am not an alarmist or a doomsdayer, but things are not stacking up well out in the bot world.  Mostly the summer seems to be focusing on the economy, weather, and rumors of war.  Not surprising really, as historically these events seem to parallel.

The “second shoe” is about to drop in the financial arena.  MSM has placed the blame on the current situation to bad mortgage debt,  mostly generated in the US.  But the facts are that “bad debt” was spread worldwide.  The derivatives created the problem.  For those who don’t understand that term, it simply means little banks and mortgage companies make loans and then sell those loans to bigger guys for a discount and take the money.  The problem was this cycle repeated and repeated until the big guys had all the paper, but it was worthless.  Granted, that is a simplistic explanation but it gives you the general idea.  Those actions created about $7.6 trillion of bad debt world wide. Not chump change.

What hasn’t been spoken about in MSM is the derivatives that are associated with commercial and construction loans. These are going to come home to roost in the July-September time frame and I have heard rumors this steaming pile could be as large as $23 trillion!  Here’s the problem though.  With all the bailout money already spent, the banks are not well covered in cash to handle this hit (US banks about 34% covered and EU banks only about 14% covered), the proverbial you know what is going to hit the fan.

There is now serious talk of a long bank holiday in October or November.  What does that mean to me you ask?  It means that banks will close their doors and no you can’t have YOUR money.  No way No how.  Can they really do that?  Yes they can and probably will.  That means your ATM and credit card too.  My recommendation to everyone is to have at least 1 month’s cold hard cash in hand now.  Then if I’m right about this, you still can buy food, gas, etc. to weather the storm.  If I’m wrong, what’s the harm in having your money in your possession?  Watch closely and pay attention.  MSM will help the banksters keep this on the down and low till the last minute.

With the events in Iran, the economy, and politics in the ME converging, it is almost certain now that the “containment” efforts (read bomb Iran) is certain for October, probably in the last few weeks.  The problem with this is that those planning the effort have really not thought this thing through very thoroughly and haven’t considered a number of the repercussions.  You know simple things like what is going to happen to all of that vaporized plutonium?

Finally, things are already starting to heat up on the weird weather front.  The main issues here is going to be the impact to the growing season world wide.  That is going to translate to real food shortages and specificially to you, everything is going to cost about 30% more in September at the grocery store.  My advice is to stock up a little now, and it is not to late to start your own “Victory Garden”, if you can.

I would love to say Recovery is just around the corner, I see “green shoots”, and Obama can talk to Iran, but the facts and events just aren’t supporting those feel good sentiments.  It is just the opposite.  So simply, as I have said so many times in the past, pay attention, and be prepared as much as possible.  We are in the end going to survive these times.  It just some will do better at that than others.  Those that plan ahead will get ahead.  I would like to see everyone be in that category.