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New Republic Report: "Incredible" -- October 25, 2016

------------- "​Incredible" Republic Update Monday October 24, 2016 ​-------------​ OK, so your much prayed for RV is ti...

Wednesday, April 20, 2016

The Four Horsemen and the Federal Takeover of State Debt

The Federal Takeover of State Debt is About to Begin…

Often people focus on the “loud” items and miss the subtle, important events that really change the world. On the positive side, the 401(k) plan has that obscure name because a financial expert basically “invented” it out of a line in the tax code which enabled tax-deferred savings. And Jack Bogle of Vanguard did the same thing with “passive” investing, which reduced fees and for practical purposes has taken over the investing world (along with ETFs).

One very subtle item that is about to occur is the nationalization of state debt (and likely debts of individual cities) by the federal government. At the highest level, states and cities have made promises (mainly pensions) to their employees that are un-payable without raising taxes to extortionate rates. Detroit cracked first but since it was a city and there was some state framework they were able to use bankruptcy, but many more are to follow, including Puerto Rico (right now) and soon thereafter likely the City of Chicago or its teachers’ pensions as well as the state of Illinois.

A very similar event occurred in Europe when the ECB basically put the debts of Greece and Portugal onto the backs of taxpayers in Germany and Holland. The ECB had a moment (several moments, actually) when they could have fundamentally changed how Greece ran their economy, shutting down statist laws and heavy governmental interference in the economy to open up competition and growth, but they blinked and instead just “wired them money in exchange for promises”. The Greeks, of course, haven’t kept their promises, and why should they, given that the ECB continually blinks when the showdown occurs.

The reason that these states and territories like Puerto Rico are in dire straits is because they

1. Spend more money than they make every year,
2. Rely on borrowing to pay for operating expenses,
3. Have giant, unfunded liabilities on top of this that can never be repaid (pensions, medical bills, etc…).

This situation is enabled by a governing class that views funds as an opportunity to redistribute wealth to favored constituents and relies on “fairness” as a bedrock of their planning. The apex of this sort of planning can be seen in crony capitalist states like Brazil, where large enterprises like the National Oil Company (partially on the stock market, partially owned by the state) are used to fund politicians and social programs and are systematically diverted away from their core mission (to make money) until the enterprises are bled almost totally dry. Then, ironically, the state has to bail out the very companies that were supposed to provide for the socialistic wealth in the first place.

The CORE issue is – if you give these sorts of entities money (bailout) without a “root and branch” cleaning of the issues – you will just get more of the same, indefinitely, as their individually painful debts become part of the larger national (or pan-European) debt, which continues the little game of overspending and wasting money on favored political groups for a little longer (maybe a couple years, maybe longer).

The slippery slope – the trigger – is occurring right now in Puerto Rico. That entire economy is corrupt and ridden with subsidies from electricity to taxes to everything else. For Puerto Rico to thrive, it would need to break down barriers to private enterprise, reduce taxes, levies and bureaucracy, and find some way to bring logical industry into their jurisdiction. However, the more likely course is as follows:

1. Point out the current individuals suffering from a lack of funding (the poor, kids in school, the elderly),
2. Note that the debt which was once owned by individuals was bought up by hedge funds for a fraction of its original value – these funds are in a position to fight (legally and politically) for repayment and although they may be termed “vultures” or something else, they really are the last man standing for individuals who lack the means to fight legally for their rights,
3. Use the political system to “promise” reforms that will never be carried out (because why would you if you can use funds to enable the current system to thrive),
4. Talk about the retirees, and “promises” made to them over the years that cannot be paid, and how they can’t go back to the work force and earn more money so that they have to be made whole,
5. Use political or class warfare to point out the groups that run Washington don’t look like the groups that are broke and make it a fairness issue or tied to some century plus grievance.

It is very likely that these tactics will “work” and that the debts of Puerto Rico will be backstopped by the US government. While this technically isn’t a “bailout”, it absolutely is, because Puerto Rico can’t borrow one dollar on their own anymore (who would lend money to someone who says they won’t pay you back?), and we know that without major reform (which won’t happen) Puerto Rico will just continue to bleed money indefinitely (and fall back on fairness arguments and the above listed tactics to ensure that this keeps happening).

Then soon after this subtle bailout (and likely before Puerto Rico fails AGAIN, which will happen again as it will with Detroit), entities of Illinois or the state itself will drive straight through this loophole and federalize their debt, too. The state and entities will make lavish promises about change that will never occur, because this is the lifeblood of the Democratic Party (patronage workers and the public sector) and all of the clout / featherbedding / etc… will continue on indefinitely, without any of the sorts of laws that enable competition.

Watch the headlines… see this occur… it will be seismic in its long-term nature, because it will fundamentally change the nature of the US government, since the debts of the states and cities will become everyone’s debt and we don’t have any “real” tools to govern their behavior or fix the long-term promises that destroy competitiveness and economic growth.

This is the real story, it is happening under our noses, and instead of paying attention we are following these idiotic presidential campaigns of pure vapor.

The Fed’s “Four Horsemen” Unite

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 them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies…The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

- Thomas Jefferson, 1802

A private (central) bank does control the issue of U.S. currency: the Federal Reserve, as is the case with most of the nations of the world. These bankers do conspire to “first inflate” and “then deflate.” This is what regular readers know as our bubble-and-crash cycles , which now seem to occur in more-or-less fixed eight-year intervals.

The people are relentlessly being deprived of all property. The Middle Class is nearly extinct , having devolved into the Working Poor. Our children are literally “waking up homeless,” with millions of Homeless People now struggling to survive across North America.

Should we regard Thomas Jefferson as a prophet, or simply as a sober individual engaging in logical extrapolation? History strongly suggests the latter interpretation, via a “warning” of an entirely different nature.

Give me control of a nation’s money, and I care not who makes its laws.

- Mayer Amschel Rothschild (1744 – 1812)

That is what the Rothschild patriarch boasted, but this is not what he really meant. Give me control of a nation’s money, and I make its laws. Control the purse strings of any government and you control the government.

Mayer Rothschild was a contemporary of Thomas Jefferson, and Jefferson was a scholar. He knew what this oligarch meant with his boast. He then took that boast and expanded it into the true horror that it represented.

Central banks exist to steal. Indeed, they have a literal “license to steal” via the power of the printing press. In this area, too, we have a famous source to offer us guidance.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.

- Alan Greenspan , 1966

Central banks create inflation; it is virtually their sole function. The central bankers constantly whine that “inflation is too low,” i.e., they aren’t confiscating our savings (stealing our wealth) as fast as they would like. But first they instruct our subservient governments to lie about the rate of inflation so that the People are unaware of the rate at which their wealth is being stolen.

Central bankers steal out of the pockets of the people and funnel that stolen wealth into the vaults of the oligarchs who control these presses – oligarchs like the Rothschilds . In the approximate 100 years since the Federal Reserve was entrusted with managing and “protecting” the U.S. dollar, it has lost roughly 99% of its value through the Fed’s manufactured “inflation.”

This still needs to be translated for the benefit of some readers. In the century in which the Federal Reserve has controlled the U.S. printing press, 99% of all the wealth stored in the U.S. dollar has been stolen from the People and handed to the oligarchs, a financial crime syndicate which readers know as the One Bank .

Adding literal injury to insult, the oligarchs conned (commanded?) our puppet governments to borrow our own currencies from these corrupt central banks. Thus, while all the wealth of the People was being stolen via the paper fraud of central banks, our governments, and thus the People as well, have simultaneously been enslaved with debt .

With one hand, the central banks (and central bankers) steal all our wealth. With their other hand, they attach shackles of debt around our throats, all on behalf of their Masters. These central bankers are guilty of the worst economic crimes against humanity, except for the deeds of the banking oligarchs themselves.

Recently, the four worst Criminals were all trotted out on asingle stage: Paul Volcker, Alan Greenspan, B.S. Bernanke, and Janet Yellen. Greenspan’s and Bernanke’s crimes are obvious. They are the Great Inflators. Undoubtedly, there will be many readers confused as to why Paul Volcker is listed as one of “the four worst Criminals.”

Incredibly, Paul Volcker’s crimes against humanity remain buried beneath ultra-thick layers of propaganda. It is Paul Volcker who now claims personal credit for the assassination of the gold standard. Without that dirty deed, the crimes of the Great Inflators would never have been possible. We know this because another of history’s Great Inflators (and charlatans), John Maynard Keynes, lamented that a gold standard is “the Golden Handcuffs” that prevent central bankers from such crimes of inflation.

Paul Volcker is the (modern) Father of Inflation. Even more incredibly, the central banker who gave birth to inflation is actually lionized by the media for his second crime against humanity: enslaving the Western world in debt. It is Paul Volcker who, at the orders of his true Masters, brought us 20% interest rates. Here readers need to fully comprehend the level of perversity in our Revisionist history.

Volcker is the Father of Inflation. Yet in our pseudo-history books, he’s labeled as the Knight That Slayed Inflation – permanently. He is (incorrectly) credited as having slain the dragon to which he gave birth. Even more absurd, the idea that inflation could be vanquished for any extended period of time, via Volcker’s usurious interest rates, is just more Revisionist nonsense.

Inflation is an inherent, inevitable trait of every fiat-currency printing press. It breeds inflation. The act of printing (unbacked) paper currency is the literal act of inflation: inflating the money supply.

It was never possible that Volcker’s usurious interest rate could vanquish inflation, but it did create something else: Debt Slavery. That crime against humanity has now nearly run its course, as most Western regimes are teetering on outright bankruptcy .

Understanding this second crime against humanity requires nothing more than the capacity to operate a calculator and an understanding of the concept of “compound interest.” To enslave the Western world in debt, it wasn’t necessary to impose Volcker’s usurious interest rate permanently, or even for a long period of time. It only needed to be imposed once for a significant interval, and then the magic of compound interest did the rest.

How did Ronald Reagan manage to triple the U.S. national debt in a mere eight years? He had help: Paul Volcker. How did Brian Mulroney manage to triple Canada’s national debt in a mere eight years (at roughly the same time)? He had help: Paul Volcker.

As Keynes also points out, the Golden Handcuffs also make the crime against humanity of Debt Slavery impossible, since a gold standard is a balance of payments system. Volcker’s first “love child” was inflation. His second was Debt Slavery. Arguably, Volcker is the worst of these Criminals.

Many readers will similarly wonder at Janet Yellen being included as one of the Horsemen. Volcker’s crimes have been described. Greenspan and Bernanke, as “the Great Inflators”, are also the Great Thieves – as explained by Greenspan himself.

Volcker, Greenspan, and Bernanke were the assassins who destroyed and looted the U.S. economy and most of the Western world along with it. Yellen is merely a pallbearer of the corpse. But Yellen’s crime is as the ultimate Silent Partner.

Volcker, Greenspan, and Bernanke navigated the U.S. Titanic to the point where a massive iceberg now looms directly ahead. But Yellen is the skipper commanding the U.S. economy to “stay the course.” It’s too late to avoid the iceberg created by Volcker, Greenspan and Bernanke. But if Yellen was warning of the danger directly ahead – instead of hiding it – there would be far more survivors once the Titanic sinks.

This brings us to the event itself. Why collect the Western world’s four worst economic criminals and four most heinous Liars and then put them on a single stage? Why else: to lie about the present .

One point they all agreed on: The U.S. isn’t in a bubble economy, despite dire warnings from presidential candidates and some pundits.

Put aside the fact that the mainstream propaganda machine is demonstrating the literacy skills of a 12-year-old, and focus instead on the absurdity of this message. Anyone who simply looks at a long-term chart of the S&P 500 or a long-term chart of the U.S. Treasuries market will see that both of those markets have already passed into extreme bubble territory.

The S&P 500 hasn’t merely equalled the insanity of the dot-com bubble and the Crash of ’08 bubble, it has soared well above those previous bubbles. The U.S. Treasuries market represents a bubble market which has been soaring higher, uninterrupted, for 35 years. These bubbles are more than merely obvious, they are absolutely undeniable.

Even more perversely, Alan Greenspan was the architect of the dot-com bubble (while pretending it didn’t exist, at the time). Bernanke is the architect of both the 2008 equities bubble and the current equities bubble – while pretending that neither of those bubbles existed. These are the two Liars who literally have less credibility than anyone else on the planet when it comes to identifying bubbles.

But why not trot them all out on stage? With a docile propaganda machine which never utters a contrary word when a Fed-head speaks, there was never a possibility that the Four Horsemen would be called to account for their crimes, or to have their bald-faced lies contradicted by the facts.

Together, the tenures of the four participants cover more than one-third of the Fed’s 102-year history.

In a sane, legitimate society, that would have been the first line of the indictment of the Four Horsemen for their collective crimes against humanity. Instead, the Corporate media intended it as praise. More perverse still was the headline which accompanied that propaganda:

Yes. A microscope with no lenses.

Pestilence. War. Famine. Death. One could give these Four Horsemen any cute nicknames that they desire. But what the four Fed-heads all have in common is that they are destroyers. Just like all of the West’s other central bankers.

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