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A Response to: When The Derivatives Market Crashes (And It Will) U.S. Taxpayers Will Be On The Hook
By johnd
Jun 17, 2012 - 4:00:19 AM

A Response to: When The Derivatives Market Crashes (And It Will) U.S. Taxpayers Will Be On The Hook

By johnd

COLOUR REVOLUTION AND THE ECONOMICS OF A THIRD WORLD WAR. CUI BONO?
“You can’t simply parachute Karl Rove into a country and manufacture a revolution.”

In the 90/00s we had the Orange Revolution in Ukraine, the Rose Revolution in Georgia, both of which it is now confirmed were backed and coordinated by NATO/CIA elements straight out of the Albert Einstein institute/Gladio Handbook. Dr Gene Sharp’s protégé Colonel Bob Helvey (1) being in overall command of the recruitment, organization and activation of “Otpor, Kmara and Pora” (OKP) resistance cells tasked with inciting insurrection and non-violent revolt in major urban population centers.

This was all coordinated on the ground from the Marriot and Hilton hotels where OKP apparatchiks got their marching orders from the trickle down tyranny officers tasked to spearhead the timing of the uprisings. It is no different in the Middle East currently except this time Al Qaeda (AQ), who were present as a destabilizing element in Serbia’s subversion are now more prevalent than ever before. It is fitting that AQ, translated as The Database, is an American creation utilized to destabilize Russian occupied Afghanistan in the late 70s and is now being rolled out as the boogeyman/patsy once again. But this time with the added benefit of eroding civil liberties domestically in the US while acting as the meme to affect change geopolitically.

The Elitists main geostrategic goals are: 



- Maintain energy dominance in the Middle East, Gulf, African regions.
- Support NATO’s further advance against perceived Russian protectionism.
- To drive the price of oil upwards aggrandizing Wall St speculation while artificially buoying demand for US treasuries. 

- To further consolidate private Anglo/American central banking control over independent states. Only 3 left. Iran, North Korea and Cuba.
- Continued balkanization of all politically and ideologically nonaligned states to maintain destabilized political environment via proxy. E.g. Afghan Helmand AQ pushed south into Baluchistan, pinch point of the Iran Pakistan China energy corridor, and to destabilize the port of Gwadar, main China Sea link to Middle East oil.
- Continued Global “Harmonization” through policies such as the United Nations policy paper Agenda 21, Codex Alimentarius, Nafta, GATT, SPP, synthesized in tandem with global economic governance through agencies such as the IMF, BIS and The World Bank.
- To get rid of the “strong men” in the Middle East and Africa in order to install democratic (false left/right paradigm) elections through which pro US puppets like Mamdouh Hamza will bring false HOPE AND CHANGE, while they acquiesce to US policies and rubberstamp no bid contracts to US, UK, French corporations while shutting out Russian, Chinese access to Gulf States and African oil. Watch South Sudan as they supply China with 5% of their energy requirements.

The precursors to WW3 are all basically summed up in these objectives with the resultant cause and effect of the major spheres of influence countermoves creating potential flashpoints. We had two world wars last century and anyone who thinks that there is no risk of another ever again is living in Obamesque delusion. Unfortunately, in nuclear proliferation the key element is Rationality, it is the cornerstone upon which all other assessments are derived. We need look no further than the biographies of the Obama White House staff to know that Mutually Assured Destruction is no deterrence to these people and money is no obstacle, for now at least.

Naturally, propping up the dollar is key to the overall implementation of the wider objectives mentioned, although it can be argued that in the ashes of a dollar melt down lays the false imperative for global economic governance. With US debt currently at $57 Trillion and a further $119 Trillion in unfunded liabilities, Social Security, Prescription drug liability, Medicare, Medicaid and federal pensions, we can be assured of a USD Black Swan moment within the decade.

US Treasury bill commitments are predominantly foreign held, China tops the table with +$3.2 trillion. And so rather than having to honor these, the open policy is to deny China et cie easy access to African and Middle Eastern oil reserves, fund and train local destabilizing elements and drive oil to $200 a barrel through high frequency trading and off balance sheet oil reserves accounting to preserve the dollar as the world reserve currency.
As a consequence of this, foreign held US dollar and treasury reserves will go into oil purchases rather than back to the US Treasury, which even now can’t fully sell their Bond auctions without the fed stepping in and purchasing them.

Oil is, for now, traded internationally in Dollars. We recall that they went back to get Saddam when he started selling oil in Euros, wmds and links to AQ being an insult to our intelligence. But even this global monopoly is not enough to sustain the egregious debts of the Military Industrial Complex, TARP, TALF and $75 trillion in Federal Deposit Insurance Company backed derivatives from BoA and Meryl Lynch and a further $79 Trillion from JPMs investment arm to top it all off. Funny how Sheila Bair has time to close hundreds of small regional banks that fail to meet tier 1 capital requirements, but puts the taxpayer in hoc to the tune of 150 Trillion Dollars to save three insolvent firms. Liquidity issues being an affront to our intelligence.
http://www.examiner.com/article/2008-redux-taxpayers-to-help-bailout-merrill-lynch-and-bank-of-america

Special thanks for this should go to Bob Rubin and Larry Summers for the dismantling of the Glass Steagle act in the 90s, which separated investment banking from the commercial side. And the encore goes to Blythe Masters, the creator of the ignominious Credit Default Swap, she is now busy in JPMs metals division denying the ten-ton elephant in the room that is JPMs massive net short position in the Silver futures market.

As a footnote on JPM, 78% of their derivative holdings are in Interest Rate Swaps, forget about CDSs. IRSs are a financial instrument sold to states, municipalities as a hedge against risk exposure to prime interest rate fluctuations sold from the same desks where leaked emails describe the recipients, i.e. clients, as, “dumb motherfuckers.” The munis bought them assuming that they could project their future debt repayments in context of a narrow band of oscillation cushioned by this marvelous product designed with them in mind.

Then along came Zero Interest Rate Policy triggering inbuilt commitments in the IRS where if rates went up then the issuer took the hit. Conversely rates going down to current levels involve the IRS holder to pay out 97.8% of the spread from the initial buy in. For example, Deutsche Bank sold IRSs to Chicago munis who had to sell off their trains, trams, fire brigades, etc to stave off default as a direct result of buying a product designed ostensibly to insure them against the same risk. They now lease their own infrastructure back from the new owners, Deutsche Bank. It must be stressed, this is a pan global phenomenon.

If this wasn’t bad enough, there is the small matter of a massive foreign Dollar reserve overhang, outstanding bond interest obligations, Sarkotrade Long Term Refinancing Operations, the inevitable failed Bond auctions and don’t forget the $763 trillion in soon to be FDIC (ergo Joe Public) backed derivatives debt. Current Trillion+ yearly dollar budgets are being profligately wasted with over 42% blown annually on defense spending alone, and the solution is the Federal Reserve buying up 60% of all US treasuries issued! (i.e. TECHNICAL DEFAULT).

It becomes obvious why China et cie are divesting their US treasury assets back from whence they came. With this in mind, it is my opinion that it is only a matter of months until we see bilateral or multilateral regional agreements between BRIC and or Shanghai alliance and non aligned states to trade oil in their respective currencies to mitigate against the increasingly inherent risk in Americas inability to honor its debt. From this we will see the forging of a newly defined multipolar world.

When this happens en masse, and it is guaranteed at this point, petrol will hit 20 dollars a gallon and pretty soon after that there will be bank holidays followed by martial law in America. As absurd as this sounds, the reality is that America with a regional as opposed to a world reserve dollar will see this scale of adjustment to price levels which are already standard across Europe. As goes the dollar so goes America and its people.

As stated, the PRIVATELY OWNED FOR PROFIT Federal Reserve is buying up US Treasuries at an alarming rate; short-term debt is selling as a hedge against a schismed risk on/ risk off market even though it equates to an inflation adjusted negative interest rate but who wants to hold a 30-year bond at 3%? Current yields don’t reflect anticipated inflationary risks especially as the debt ceiling doesn’t seem to have meaning anymore. And who wants Goldman Sachs or Morgan Stanley Bonds with their balance sheets full of “Risk Free” sovereign bills, bonds and notes waiting to explode into one huge write down. But it’s the insiders who benefit either way while the goyim masses take the hit every time.

However despite their best efforts, America’s protracted economic woes and shifting tides of public opinion will eventually belie the grand deceptions of both the economically and geopolitically contrived realities. That is if the people can cast off the cognitive dissonance and normalcy bias that blinds them from the reality. Economically the US calls China currency manipulators for pegging the Yuan to the Dollar while they concurrently destroy the Dollar through hyperinflationary policies QE 1.2..3…Ad infinitum.

Geopolitically the US through the empty suit Obama and the State Dept Clinton are waxing lyrical, “We need to listen to the people of …“Where ever”, these strongmen in the Middle East must go”. Yet America has been instrumental in installing most of these men, they have openly funded their regimes and supplied them with arms for decades. This is ultimately a CIA/shadow government/foundation funded/ takeyourpickPAC/Private Central Banking Power coup.

Just as Mossadeq was ousted by a CIA/SIS US/UK power coup followed by the installing of the Shah in 1953, which ultimately led to the upheaval that swept Ayatollah Khomeini and the mullahs into power in Iran during the late 70’s. The same geostrategic policies saw Sadat installed in Egypt giving rise to the radical wahabi and jihadist ideologies of Sayyid Kutb and Zawihiri in the Middle East and the neocon Cheney-Wolfowicz-Perle faction in the west.
Considering that the further entrenchment of these policies under the Obama regime continues unabated, the demoralization, destabilization, crisis and normalization game play will continue to be waged on the entire Middle East and everywhere else for that matter for decades to come.

This is, in part, the Zbigniew Brzezinski (Obama’s main foreign policy advisor, he also ran the Carter administration back in the 70′s) methodology of microstates and ministates. His strategy ultimately results in China and Russia starved of Middle East energy going to war over mutual reserves and destroying each other, leaving America to maintain energy dominance for the rest of the century.

Prescribed reading: The Grand Chessboard, Between Two Ages, The Clash of Civilizations, Tragedy and Hope, Confessions of an economic hit man.
The people of the African, Gulf and Middle Eastern states will realize in about 3-5 years that they have been duped into believing that they have won their freedom. Democracy is unfortunately a cruel hoax and the global players are using every weapon in their arsenal to achieve it.

Mubarak was ousted primarily because he stopped price controls on wheat, the staple food in Egypt, no thanks to the SCAF interlopers who now control the country at the behest of the very same masters. Wheat like most of the fundamental elements of life is a securitized commodity in the futures markets. It has been speculatively driven up to nearly double its price in less than a year well above historical highs bar the 2008 peak High Frequency Trading computerized bonanza through Wall st, who cares that it results in starving millions of people. Future expectations are that water will be traded in about twenty years, going long on clouds shouldn’t sit well with the average consumer who will find themselves priced out of a bath.

The price of potatoes on the other hand has remained relatively stable in spite of weather effects on yields, what is important is that potatoes are not traded in the futures markets. Being Irish, I rather enjoy the odd spud; I wouldn’t want to be paying €50 a bag for them though.

Who cares that wheat futures paper derivatives market; CBOT (notwithstanding legitimate hedgers who are among the worst affected) supposedly backed by the Chicago Mercantile Exchange vastly distorts the natural price discovery mechanism of a staple food commodity to the detriment of the world’s poorest people on the verge of acute poverty and the aggrandizement of traders and hedge fund operators.

Who cares that the same CME turns a blind eye to ex Goldman Sachs CEO John Corzine blowing up MF Global due to bad bets on European debt, 40/1 leveraging and comingling of segregated customer accounts whose $1.5 + Billion has vanished in one big margin call yet he walks off scott free.
The very same John Corzine who penned Obama’s economic recovery plan, he gets a pass and walks off with hundreds of millions of dollars as do the Koch bros et cie who got the call to get out before it blew up.

Don’t forget that MF Global had primary dealer status and access to the fed discount window and the Primary Dealers Credit Facility i.e. toxic shit in, US Treasuries out. Where was the SEC or the CFTC? Well the SEC head Schapiro was CEO of Finra and CFTC head is ex Goldman Sachs CEO Gary Gensler. Nuff said. Where was the fiduciary responsibility? Where were the backstops? Where is the justice instead of the Just Us.

That is not my idea of a fair society. It is no different in Libya currently, the people do want a better way of life and believe that democracy is the answer, it is not the answer but it is what will happen. What will they have gained? The selling off of all their state assets to corporate interests through Public Private Partnerships and the introduction of a debt based fractional reserve fiat monetary system. And what have they lost? Well a short list in Libya would be:

1. All newly weds used to receive $50,000 from the state. 

2. A private home was the basic right of every citizen of Libya. 

3. There were no electricity bills in Libya. Electricity was free. 



4. The people of Libya paid 0% interest on all loans according to Law. 

5. Gadhafi increased the literacy rate from 25% to 83%. Education in state universities was free. 


6. Medical expenses in state hospitals were free. 



7. The price of the petrol was 14 cents. 

8. When Libyan citizen bought a car, 50% was paid for by the state. 



9. A large loaf of bread used to cost 15 cents. 



10. A Libyan mother used to receive $5000 just for giving birth.
I’m not saying Libya was perfect but it was not as it was portrayed in western media. The fact that Gadhafi was to receive a UN international award for human rights endorsed by dozens of countries such as Italy, Holland, Denmark, Sweden, Spain, Norway, Germany and Australia could hardly be ignored by accident.

This should be a smoking gun to anyone with the faintest vestige of critical thinking, this obviously doesn’t include mainstream reporters, Sky, Fox, BBC et al who went into turbo spin mode on reality.

The resultant false left/right paradigm that will be foisted on the Libyan, Algerian, Egyptian, Syrian, Yemeni, Iranian and Jordanian peoples will facilitate the cooption, outsourcing, asset stripping and balkanization of these once independent nations and deliver them into the hands of the controlling oligarchies. The stratagems of obfuscation, omission, subversion, distraction and deception being prevalent elements in its implementation.
The same masters fund both sides of the political spectrum, because through control of the central banking system, the international financiers and the myrmidons of finance capital dictate and control the actions of governments imposing budgetary and economic constraints at will.

Back in the 90s Turkey had 40% of the value of its currency, the Lire, wiped out in 4 days through the foreign exchange mechanism in the City of London and a paid off controlling faction of the Turkish general staff to enforce it. This was done because the incoming government threatened to close down the Central Bank of Turkey and create a new system of public credit separate from the Red Shield controlled alternative, a prima facie case of economic terrorism in a modern context.

It comes as no surprise so that the Libyan National Transitional Council set up a new Central Bank of Libya no longer independent of the Bank of International Settlements controlled hegemonic global banking cartel as it had previously been. After all, as John D Rockefeller said, “Competition is a sin.” They even managed to set up a new national oil company and struck an oil deal with Qatar yet Gadhafi was still in power at this time. These guys ran a revolution by day and set up Central Banks and oil companies at night, these guys should think about Management Consultancy because they have talent. This rabble band of Libyan heroes (AQ who blew up Americans in Afghanistan are now on the NTC) achieved this miraculous feat a mere 13 days into their insurrection. 13 I hear the freemasons among you say, just a coincidence I’m sure.
(1) Source: Obama, The Postmodern Coup. By Webster G Tarpley. Page 253.

http://theeconomiccollapseblog.com/archives/when-the-derivatives-market-crashes-and-it-will-u-s-taxpayers-will-be-on-the-hook


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