This is textbook (being written as we speak) global financial coup – say bye bye to the world middle class and ‘expendable’ world population and hello to two tier ruler and ruled world with a new law enforcement overseer.

We all need to listen more to people that have tested the system (illusion) and had their life changing ‘catalytic’ events. Catherine Austin Fitts is such a person;

Excerpt;

“February 2, 2009 at 11:02 pm
Financial Coup d’Etat

In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.

The presentation documented my experience with a Washington-Wall Street partnership that had:

* Engineered a fraudulent housing and debt bubble;
* Illegally shifted vast amounts of capital out of the U.S.;
* Used “privitization” as form or piracy – a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder.”

Take the time to read the pdf entitled; “The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.”

http://solari.com/blog/?p=2058

Deception is the strongest political force on the planet.

i on the ball patriot

There are two camps on this board, one that thinks the Fed can keep up the balancing act for the “foreseeable future” (read as at least six more months) and those who believe inflating treasury prices will lead to imminent doom. I am of the former, and challenge any of the latter (Peter Schiff minions especially) to put together a roadmap to the end of the cliff that we are about to fall off. I think if you walk through all the things the Fed can do over the first half of 2008, I think you will join the “Fed will control the yield curve for the foreseeable future camp”

Also, it was said previously that the 30 year does not matter in mortage rates. That is absolutely false. Option ARMs may be tied to LIBOR and the like, but the refinancing binge has happened and who is selling those now? What is most important is how 30 year fixed mortgages are prices and that is altogether linked to the 30 yield treasury. A fixed mortgage is probably the goal of any modification plan worth it’s weight in salt anyway.

http://www.federalreserve.gov/pubs/ifdp/2002/729/ifdp729.pdf (p. 54)

It’s really starting to look like the dollar is toast in the long term. One of the reasons I’m keeping close eye on gold (I’m using the widget ExactPrice)

Silver is another hedge that I think will perform well and is doing so right now.

I see a lot of others like Schiff and Grandrich who are looking to juniors in the metal markets as a place to invest. Schiff’s even suggesting to get out of the dollar as much as one can.

You forget the intentional manipulation of treasury yields in Q4 08 by the powers that be.

Bernanke kicked the can on Dec 1 when he made declaration of intent to buy 30 year treasuries. Then the President dragged his feet for the next few weeks on the automaker crisis. These actions caused a safe haven bid in treasuries into year end. This served to intentionally (though I can’t prove it, I just know it)help the zombie banks holding treasuries on their balance sheets.

Note the sell-off began immediately at the onset of the new year. These zombie banks have no desire to hold that crappy paper with no yield attached to it.

Bernanke has been talking about buying treasuries since Nov 2002 as far as I know, so you would think there was substance in his words. But with some fancy footwork, and rewording of the FOMC statement, he was able to back out of supporting treasuries anytime soon.

Now, the 30 year is collapsing to a point below where it was on Dec 1 when Bernanke first made that statement of intent. In short the market has round-tripped.

Guess what this allows to happen. The banks get to do the whole 4th qtr trade over again at some point in 2009 (I suspect the re-run will begin in second half of Feb). And I do believe that Ben will buy some treasuries along with the agencies he is currently buying.

Yes, you are right, the Fed knows its omnipotence has been reduced in recent years. In fact, all close mkt observers know this. That is why we reference the Fed as just another trader in the marketplace.

Yes, I noted the story that the BOJ is buying equities last week. An interesting story that one can imagine was helpful in propping up equity mkts last week as investors try to front run BOJ orders.

And finally, I have to agree entirely with Evans Pritchard that “there is no hope at all of stabilizing the world economy on current policies.”

Great tagline from Pritchard, we ought to help promote it. In fact I think I will do just that on my blog later this week when I get it up and running again.

The one year constant maturity treasury index (my ARM rate, yippee!) this January is at 0.44%, down from 2.71% in January 2008.

Now, the 1-year LIBOR and 11th district COFI are hanging up there in the low-to-mid 2% range, but are still coming down and NOT going up in sympathy with 30-year or 10-year treasuries.

The statement does appear to typical Ambrose-Evans hyperbole, but then consider:

If you think the coming wave of Option Arms and Alt-A resets this summer is going to be devastating unless we get a massive wave of refinances….

And when you consider that in this latest refi “boom”, when Treasuries were at 2pc there was a lot of activity, but with the increase, the refis just are not happening…

Ambrose-Evans claim is not that ridiculous.

We need A LOT more refinances before these mortgages reset, and they just aren’t happening to the level needed. A combination of a loss of jobs, poor appraisals and the increase in rates over the last month have left this refi wave underwhelming to say the least.

I understand that Ambrose-Evans was referring to the economy as a whole (for some reason, “economy as a hole” seems more appropriate), and not just the real estate market, but nevertheless his statement is not that absurd.

This Debt Monster that is our Government-Economy is like that big blood-sucking venus fly trap in Little Shop of Horrors: When it’s not spewing bullshit in order to get its thorny clamps on our unsuspecting jugulars, it is frantically waving its limbs, crying “Feed me Taxpayers! Feed me!”

You’ve been quite prolific! Thanks . . .