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Avery Goodman  

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  • The Fed Makes Sure U.S. Dollar Collapses With The Eurozone [View article]
    The gold specie standard has never been "discredited". The gold exchange standard, whereby the Federal Reserve backed only 40% of the dollars with gold has been discredited. That system began in 1914, with the opening of the Federal Reserve, and collapsed in 1933 when too many Americans wanted to exchange their dollars for gold. The Fed panicked, because it was running out of gold, and it began withdrawing previously over-printed liquidity from the financial markets, precipitating the Great Depression of the 1930s.

    Had the Fed never been able to over-print dollars, and been forced to obey the discipline of a strict 1 for 1 gold specie standard, the vast credit expansion of the "Roaring 20's" could not have happened, and the subsequent Great Depression could also not have occurred.

    The gold specie standard, when adhered to, and not departed from for the convenience of governments and bankers, insures stability and quality growth, as was seen between 1870 and 1893. There are frequent small upturns and downturns, but people's faith in gold keeps the system running smoothly over the long run.

    The same cannot be said of fiat money systems, like the current regime. Under the current system, money-printing is used to levy stealth taxes, raid the bank deposits and bond holdings of the innocent, and to reward well connected speculators with unjust enrichment at the expense of the productive members of society. Debt-based money is being discredited very quickly, right before our eyes, as the structurally corrupt financial system collapses. But, it has been discredited since 1914, when the Federal Reserve opened its doors, as evidenced by the 98.6% decline in value of the US dollar against the price of gold.
    Dec 3, 2011. 03:41 AM | 10 Likes Like |Link to Comment
  • The Fed Makes Sure U.S. Dollar Collapses With The Eurozone [View article]
    I do not suggest a zero rate target. I suggest closure of the Federal Reserve. I suggest return to the 1 to 1 gold specie standard. I suggest that the market should determine interest rates and risk/reward ratios, not an American Politburo-like organization such as the Federal Reserve.

    A return to the strict gold standard will cause frequent small boomlets and bustlets. But, it would prevent the type of infrequent credit driven complete collapses that the Federal Reserve has caused over and over again, starting with the Great Depression. I suggest a return to liberty and to what our ancestors fought for. I suggest that the welfare of working men and woman would be far better served with the type of money that is called for under the US Constitution, to wit, money backed by gold or silver coin.
    Dec 2, 2011. 10:41 PM | 4 Likes Like |Link to Comment
  • The Fed Makes Sure U.S. Dollar Collapses With The Eurozone [View article]
    Mr. Kramer,

    Unlike real bankers on Main Street, the mega-bankers that control the Federal Reserve are NOT creditors. They are debtors. They are using OPM (other people's money). They are, in fact, by far, the biggest debtors that this world has ever seen in all its history.

    Even without consideration of the derivatives they've issued, the American ones are running on 22 to 1 leverage. The European casino bankers are still up near 45-50 to 1 leverage. Add the derivatives, especially the OTC ones, and you are looking at 2,000 to 1 leverage in some cases. That's the real reason they cannot allow the Greece to default, for example, or interest rates in America to rise substantially.
    Dec 2, 2011. 09:56 PM | 7 Likes Like |Link to Comment
  • The Fed Makes Sure U.S. Dollar Collapses With The Eurozone [View article]
    Mr. Kramer, actually, history teaches just the opposite. During the 1870s so-called "depression", for example, there were a lot of bank failures and deflation, because we were on the strict 1 for 1 banknote to gold specie standard. Yet, the American standard of living, between 1870 and 1893 increased at a fastest rate in history. Mark Twain coined the term "the gilded age".

    During the "gilded age" real wages, wealth, GDP, and capital formation all increased by leaps and bounds. Between 1865 and 1898, the output of wheat increased by 256%, corn by 222%, coal by 800% and miles of railway track by 567%. Protein intake, home sizes, life span, as well as the possession of goods indicate that the American standard of living was increasing very fast during that deflationary period in which people actually did, literally, kept their money in bags of gold, and "in the mattress".

    The reason for the increased wealth was that money only left mattresses for good reason. If there was a valuable business opportunity, people invested in it. They didn't invest in every stupid scheme concocted by a broker or brokerage house, as they do today. There was no Federal Reserve to redirect wealth from productive hard working people in real trades and industry, to financial speculators.

    Beyond that, fundamental issues of liberty are implicated when you imply that a central bank should be allowed to force people into releasing money they want to "hide" in "mattresses". If that is what they choose to do, our Constitution requires that they be allowed to do it, without an unlawful seizure by the government. The intentional seizure of "mattress money" by an unelected Federal Reserve is taxation without representation. That is what the American Revolution was all about, and the reason this nation broke away from the British King. If there is to be a tax on idle funds, it must be passed by the People's elected representatives in Congress, not by an unelected American equivalent of the Soviet Politburo.

    In reality, few if any Americans still stuff mattresses full of money. That is a third-world and former Communist nation phenomenon. In America, ultra-prudent people tend to deposit their money in FDIC insured bank savings, and into corporate and government bonds. With the exception of the money put into government bonds (which is often wasted by excessive entitlement programs and pork projects) this money is NOT idle. It fuels loans to American business and industry. By debasing the dollar, and transferring its value to financial speculators, the Federal Reserve is stealing under color of law.
    Dec 2, 2011. 07:23 PM | 14 Likes Like |Link to Comment
  • The Fed Makes Sure U.S. Dollar Collapses With The Eurozone [View article]
    There was a debasement of the dollar in relation to buying power. Have you not noticed the dramatically increased cost of food, when purchased in dollars? Have you not noticed that the huge increase in oil prices that temporarily halted in 2008, has now been converted into a permanently elevated price?

    The dollar has not yet experienced the full impact of the 2009 debasement although, by the 1980 government formula, the CPI is rising at 11.2% annually now (see Nevertheless, most of the eventual inflation we are going to see is still latent. This is because of the current depression. As soon as the depression mentality lifts, things are going to hit the fan.

    The fact that the dollar has increased so modestly against the Euro is also proof of permanent debasement, given how high the probability of a Euroland collapse really is, at this point. The Euro is also being subjected to monetary debasement. In spite of the ECB's claim that it "does not do QE", in reality, it has released over 1 trillion new Euros into the system through supposed temporary "tenders". There has been considerable dollar decline against currencies such as the Canadian dollar. Brazilian real, etc.
    Dec 2, 2011. 11:06 AM | 6 Likes Like |Link to Comment
  • The Fed Makes Sure U.S. Dollar Collapses With The Eurozone [View article]
    It occurs to me, after rereading my own article, that I have made a fundamental logical error in the following paragraph:

    "In the event of a Euro collapse, it may take years for the Federal Reserve to collect. It may be forced to forgive loans. That means the American people, who ultimately "fund" the Fed, with their work and assets, will suffer deep losses. Writing off hundreds of billions or trillions of dollars would usher in an era of heavy deflation... "

    The error is that non-forgiveness of loans creates deflation. Forgiveness of loans creates inflation. The money that will never be paid back remains in the system even though the counter-party recipients no longer have possession of it. Sorry, readers, for the error. I wrote this too early in the morning, perhaps...

    If the Fed is eventually forced to forgive these loans, it will be an unquestionably inflationary act. If the collective banks of Europe need several trillion worth of dollar funding, as some claim, this is potentially hyper-inflationary, depending on how big the swap lines become. It is consistent with what the casino-bank masters of the Federal Reserve need for their business model. What we see here is yet another stealthy "taxation without representation" episode. Money is again going to be stolen from dollar denominated savers and bond holders and given to financial speculators.
    Dec 2, 2011. 09:58 AM | 5 Likes Like |Link to Comment
  • How Big Derivatives Dealers Caused 'Contagion' In The Eurozone [View article]
    Your answer is already in the article:

    "While the derivative is now discredited as a hedging tool for smart investors, especially those who actually own the underlying bonds, foolish speculators will still fork over their money to the derivatives dealers..."

    Also, keep in mind that demand, alone, never determines prices. Supply has dried up. Derivatives dealers were caught "with their pants down", having never expected Germany and the ECB to take such a strong stance against unlimited printing money. They have used up political favors. The ECB is printing rapidly, but not at the rate needed to avoid defaults, as required by the derivatives dealers. They are undoubtedly not very eager to sell CDS, now, except at very high fees.

    There is still a small chance that the Greek agreement will fall apart, and/or a tiny chance that the ISDA determinations committee will be reversed by a European court of law. So, writing CDS now is not without some tiny risk to the dealers, in spite of their successful machinations.
    Nov 21, 2011. 10:49 PM | Likes Like |Link to Comment
  • Europe's Failing Bailout Fund May Torpedo Worldwide Stock Prices [View article]
    It should be noted that the other big losers will be owners of bonds of European companies, including those of northern Europe. Currently, those bonds are denominated in Euros. If the Euro is allowed to remain as a technical "legal tender" currency of all the current Euro-zone, as my plan requires, northern European governments will not be able to force companies to re-denominate their debt in the new national currencies. Obviously, it will be cheaper for companies to service Euro debt, regardless of where the companies are located. With the Euro debased, companies are unlikely to volunteer to increase their cost of doing business.

    The transition to national currencies will happen almost overnight. There will be an announcement with no advance warning (except, perhaps, by corrupt officials to certain connected folks). There will be an offer to convert the denomination of northern national bonds into new currencies, within a set time period, at a set rate of exchange. Owners of private Euro denominated bonds, issued by companies throughout Europe, therefore, will have no time to sell their holdings. Therefore, they are well-advised to transfer holdings, now, into tangible assets, before it is too late.

    I don't see any other course of action, by northern nations worried about unlimited ECB printing, but reintroduction of national currencies. The idea that profligate nations can be thrown out of the Euro-zone is a fantasy. Trying that will open up a Pandora's box of litigation, cross accusations, and judicial rulings that will plunge the world into economic uncertainty for years.

    There will be a worldwide implosion of all banking systems if the Euro is simply ended abruptly. Allowing it to continue to circulate as technical "legal tender" everywhere it now circulates is the only answer. Re-introduction of national currencies are the only answer for nations worried about runaway inflation.

    But, private bond holders will lose big when the Euro is debased by the ECB. That is a very unjust outcome and the most important weakness of the plan I've outlined. There is probably no way around it. It seems to be the least worst outcome, given the mess that is the Euro-zone, but other ideas are welcome.
    Nov 18, 2011. 03:50 AM | 1 Like Like |Link to Comment
  • Bank Of America Dumps $75 Trillion In Derivatives On U.S. Taxpayers With Federal Approval [View article]
    The point is not that the FDIC is on the hook for $75 trillion. The point is that $75 trillion in derivatives are now being held inside Bank of America's FDIC insured division, while hundreds of trillions more worth of notional derivatives are being held inside the FDIC insured divisions of other mega-banks, like JPM and C.

    There are actually two points that are most important, and, maybe, the article was not clear enough on these points First, putting $75 trillion of notional derivatives into an FDIC institution can cause it to fail because the net exposure is potentially several trillion dollars. If any major triggering event happens that causes even a few tens of billions worth of the derivatives to trigger, the bank will fail or need to be bailed out, in order to pay off on the contracts.

    The net result will be either a bailout paid for by taxpayers, or an FDIC insured event, neither of which otherwise would have happened. Second, if there is an FDIC insured event, derivatives counter-party priority, enshrined in law, over collateral assets, will deprive the FDIC of the assets needed to reimburse taxpayers.

    The FDIC insured divisions of mega-banks have higher credit ratings than the rest of the institution. Piling on exposure into such divisions allows bank executives to earn higher profits, while socializing potential losses to the taxpayers and/or to dollar denominated savers who will see the value of their money diminished when the government prints up more to pay off depositors in mega banks.
    Nov 12, 2011. 05:03 AM | Likes Like |Link to Comment
  • CME Is Legally Liable For MF Global Customer Losses [View article]
    Legal liability never arises out of what someone decides his own liability will be. The law determines whether or not the clearing house is liable, not CME. Liability is based upon a reasonable person's interpretation of the defendant's actions, statements, and assurances.

    In this case, the legal basis for non-negligence based liability of CME is a legal doctrine known as "action in reliance". If CME did not want customers to believe it would stand behind defaulting clearing members, it should have made that clear, rather than attempting to do just the opposite. CME distributed a lot of misleading and ambiguous propaganda pamphlets. I have quoted from just one of them in the article.

    Most customers read, and reasonably believed (though, possibly not all) that CME Group stood behind MF Global as well as its other clearing brokers. CME's ambiguous huffing and puffing about client safeguards is what caused that belief. Those customers who relied upon the quoted pamphlet, as well as a myriad of other statements, direct and indirect, have the legal right to recover based upon "action in reliance" doctrine.

    Others, who did not rely on the ambiguous language, may have the right to recover from CME based upon its grossly negligent supervision of MF Global. There do appear to be a number of possible complications, however, in recovering based solely on negligence doctrine. Any of the lawyers who sue CME, and I am sure there will be plenty, are going to hope their clients read one of the pamphlets. They are going to hope that their client relied on the pamphlet to make the choice to continue trading with MF Global as opposed to switching to trading securities with, perhaps, multiply insured accounts, or switching to one of the too-big-to-fail Fed connected banks.
    Nov 10, 2011. 10:42 AM | 1 Like Like |Link to Comment
  • Bank Of England Essentially Admits Intervening In Gold Market [View article]
    Although it has been a little over 100 years since the meeting of bankers that conceived the Federal Reserve, I am not aware of any section of the Federal Reserve Act that requires the bank to end in 100 years. The nation would, of course, have been infinitely better off sticking to a precious metals specie standard. We should never have entered the age of debt-based money. The Federal Reserve should be closed, along with all other central banks, including the Bank of England.

    The world economy needs only official Mints to guarantee the purity of coinage, vaults to store coinage, auditors to insure that the promised number of ounces are actually stored there, and a limited number of printing presses to create paper notes, representing gold, silver and platinum in storage. The paper notes are only needed to facilitate commerce by avoiding the need to constantly transport specie.
    Nov 9, 2011. 12:45 AM | 1 Like Like |Link to Comment
  • Bank Of England Essentially Admits Intervening In Gold Market [View article]
    The Federal Reserve seems to copy whatever the Bank of England does, with a month to a few months, at least in monetary policy. So, it would not surprise me if the Fed is also active in the gold market. So far, however, no response to information requests, by the Fed, has provided "admissions against interest" nearly as open and obvious as this.
    Nov 9, 2011. 12:36 AM | 2 Likes Like |Link to Comment
  • Bank Of England Essentially Admits Intervening In Gold Market [View article]
    The article is about the Bank of England because we've just gotten some fantastically interesting "admissions against interest" from that entity. When and if someone writes to the Fed and gets a similar response, so long as I know about it before the event has already been written about a myriad of times, by other writers, I hope I will have the time to write about that as well!
    Nov 9, 2011. 12:30 AM | 3 Likes Like |Link to Comment
  • CME Is Legally Liable For MF Global Customer Losses [View article]
    Unfortunately, it will take a very long time if customers are forced to resort to lawsuits. However, maybe, CME executives and the Fed connected casino bankers, who seem to call the shots over there, will see the "light" and reimburse customers.

    It is actually in CME Group's long-term business interest to reimburse MF Global customers. If they don't, folks are going to finally recognize that their money is not safe in futures markets, regardless of the propaganda machine.

    That means the number of casino-goers will fall, and the profitability of CME and casino-banker operations, will fall with them. It is bad business, and that is why I am still hopeful that the CME will step up to the plate voluntarily.
    Nov 9, 2011. 12:13 AM | 3 Likes Like |Link to Comment
  • Who Just Took $83.3 Billion From The Federal Reserve And Why? [View article]

    It is abundantly obvious that you don't understand finance, or what you are talking about. You appear to have an agenda, and will continue to troll about spouting nonsense, no matter how many times your errors are pointed out.

    If you do not have an agenda, and you really believe what you are saying, if you act upon your ideas, the market will be your judge, not I. You will lose your money. There is no more to be said.

    Good luck.
    Nov 8, 2011. 05:31 PM | 3 Likes Like |Link to Comment