pana Loc: are we there yet?

Submitted by James Howard Kunstler of Kunstler.com,

Team Obama pulled a cute one last week nominating Blythe Masters, JP Morgan’s commodity chief, to an advisory committee of the Commodity Futures Trading Commission (CFTC) which supposedly regulates activities on the paper trades in corn, pork bellies, cocoa, coffee, wheat, corn — oh, and gold, too, by the way, in which JP Morgan has been suspected of massive gold (and silver) market manipulations and other misconduct lately. That would include the 2011 MF Global Fiasco in which nearly a billion dollars from “segregated” customer accounts somehow ended up parked over at JP Morgan as a result of bad derivative bets on tanking Eurozone bonds. MF Global, primarily a commodities trading brokerage, was liquidated in 2011. The CFTC never issued referrals for prosecution to the Department of Justice in the matter and, of course, MF Global’s notorious CEO, Jon Corzine remains at large, enjoying caramel flan lattes in the Hamptons to this day. Such are the Teflon t***sactions of the Obama years: nothing sticks.

There was such a Twitter storm over Blythe Masters that she withdrew from consideration for the committee before the day was out.

JP Morgan is one of the specially privileged “primary dealer” banks said to be systemically indispensible to world finance. Supposedly, if one of them is allowed to flop, the whole global matrix of global debt obligations — and, hence, global money — would dissolve in a misty cloud of broken promises. They are primary dealers to their shadow partner, the Federal Reserve, and their main job in that relationship is buying treasury bonds, bills, and notes from the US government and then “selling” them to the Fed (earning commissions on the sales, of course). The Fed, in turn, “lends” billions of dollars at zero interest back to the primary dealers who then park the “borrowed” money in accounts at the Fed at a higher interest rate. This is, of course, money for nothing, and even small interest rate differentials add up to tidy profits when the volumes on deposit are so massive.

This “carry trade” was started because the primary dealer banks were functionally insolvent after 2008 and needed to build “reserves” up to some level that would putatively render them sound. But that was a sketchy concept anyway since accounting standards had been officially abandoned in 2009 when the Financial Accounting Standards Board (FAS declared that banks could report the stuff on their books at any value they felt like. In short, the soundness of the biggest banks in the USA could no longer be determined, period. They were beyond accounting as they were beyond the law. At the same time, the banks began the operations of shifting all the janky debt paper, mostly mortgages and derivative instruments (i.e. made-up s**t like “CDOs squared”), value unknown, from their vaults to the a vaults of the Federal Reserve, where it resides to this day, rotting away like so much forgotten ground round in the sub-basement of an abandoned warehouse of a bankrupt burger chain.

All of these nearly incomprehensible shenanigans have been going on because debt all over the world can’t be repaid. The world’s economy, as constructed emergently over the decades, can’t function without repayable debt, which is the essence of “credit” — the fundamental trust implicit in banking. You have “credit” because other persons or parties believe in your ability to repay. After a while, this becomes a mere convention in millions of t***sactions. What’s happened is that the conventions remain in place but the trust is gone. It’s gone in particular among the parties deemed too big to fail.

Everybody knows this now and everybody is trying desperately to work around it, led by the Federal Reserve. Trust is gone and credit is going and debt is sitting between a rock and a hard place with its grubby hands pressed together, praying that it will be forgiven, forgotten, or overlooked a little while longer. By the way, the reason trust and credit are gone is because oil is no longer cheap and world economies can’t grow anymore. They can’t afford to run the day-to-day operations of a techno-industrial society. They can only pretend to afford it. The stock markets are mere scorecards for players who can only lie and c***t now to keep the game going. Somewhere beyond all the legerdemain and fraud, however, there remains a real world that is not going away. We just don’t know what it will look like when the smog of fraud clears.

lpnmajor Loc: Arkansas

That's all very true. When paper is substituted for tangible wealth and there is not enough wealth to cover all the paper sold, there is a huge deficit, that CANNOT be paid. Our actual wealth is already committed far into the future but people are still selling large amounts of paper, taking profit on wealth NOT YET CREATED.

Banks are not really banks anymore. They are "virtual wealth" creators. Taking peoples money on the promise that there will be substance "down the road", knowing the whole time that there will never be enough to satisfy all the paper sold. The congress is helpless to stop this train wreck, as they are in cahoots with it's engineers.

Blue Flu Loc: HHI

It all could hit the fan overnight:
The dollar loses its reserve currency status
The Yuan backed by gold is the winner by default
The stock market bubble, kept inflated by the Fed, bursts
Savings evaporate
Gold soars
Massive job layoffs
Millions of angry people take to the streets
Violence followed by l**ting

I know others have forecasted the above scenario from time to time but this time there really is a wolf....it's dressed as the Fed.

lpnmajor Loc: Arkansas

Maybe it'll blow the White House down!

pana Loc: are we there yet?

I read an interesting perspective this morning.
http://www.silverdoctors.com/the-big-reset-part-3-why-china-bought-jpmorgans-gold-vault/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Silverdoctors+%28SilverDoctors%29

Blue Flu Loc: HHI

The attached video makes the point I so poorly made.
The coming chaos will blow houses of all colors down.
A Canadian billionaire gives a short informative speech about the coming deluge.

http://www.youtube.com/watch?v=nX7J8-VTG08

pana Loc: are we there yet?

:thumbup:
If you would like a good news website that addresses global occurances instead of the Kardashians.
This is a great site.
http://thebricspost.com/category/brics-news/#.UvpE5rmYbIV

Blue Flu Loc: HHI

Got it!

:thumbup: