Some
extremely powerful differentials in power are setting themselves up, in
a manner never seen before in modern history. Those who dismiss the
uniqueness of the situation are those who continually are surprised by
events as they unfold. The pressure features the managers of the system,
complete with corruption and fraud with official coverups in a
never-ending sequence of crime scenes, pitted against the forces of
justice and fair markets. Not a single fair market exists in USDollar
terms. In pure Orwellian style, every single market has a US-based or
London-based financial engineer at a control panel doing duty in price
intervention. The Western defenders of the syndicate do not wish for the
price structure to reflect the reality of physical shortage or the
bounty of paper-based surplus, for the currencies to reflect true toxic
value, and for the discovery price systems to reflect the raids of
private accounts. The system is broken, and the pressure is building.
When
young in school, the principles of entropy and enthalpy were introduced
in chemistry classes. The ENTROPY was taught as the thermodynamic
property toward equilibrium and dissipation. In layman’s terms it was
the tendency for a system to seek greater randomness. Sometimes the
dissipation comes from the scattered heat, but often the spread of
physical items. Like smoke from a fireplace to spread about the
neighborhood, like for the odor of nail polish remover to dissipate
about the house or porch, like for the toys from a children’s playbox to
relocate in every corner of the house, like for pet mice to scatter
from a shoebox in a bedroom closet, like for the heat from a car engine
to spread across the driveway and around the yard. Extend toward
information to spread on grapevines about the office building.
The
ENTHALPY was taught as a measure of the total energy of a thermodynamic
system. It includes the internal energy, and the amount of energy
required to contain a system by displacing its environment when
establishing its volume and pressure. Enthalpy is a thermodynamic
potential, which is layman’s terms can be thought of as the tendency for
an object or system to seek its lowest potential energy. Like a tree
toppling in the wind, like a group of items moving from the top of the
stairwell to the bottom, like tattered roof parts falling to the ground,
like wall ornaments hitting the floor during a storm or tremor. Extend
toward a market removing its props, where all channels of data enter the
room to effect change toward an equilibrium. Transfer the concept the
the financial system. The lower potential energy comes from the
extraordinary coils and loaded springs that hold the artificial price
structure in place, even the information devices that distort truth.
Enthalpy is more recently defined as the amount of heat content used or
released in a system at constant pressure. Notice the rising heat
within the current distorted financial system. Enthalpy is usually
expressed as the change in enthalpy. The pressure in the financial
markets is building. Heat is soon to be released in great volumes. The
victim will be the USDollar, the USEconomy, the USTreasury Bond, and the
price structures all held with great artificial forces. The system
seeks the familiar randomness of fair equilibrium-based structures, not
the 8am daily whack to the gold price from the London fix, not the
regular 10am or 3pm rescue to the S&P500 stock index, not the
regular ceiling placed on a 1% upleg in the gold price from capping
efforts. The most prominent energy relief valve is the USTBond 10-year
yield, which had moved below the 1.5% mark comfortably, as the Jackass
forecasted. Its move toward 1.0% would signal systemic failure, as
capital needs would give way to the vortex of the Black Hole of USTBonds
described in May.
Consider
in brief terms the many extreme conflicts and pressure points. None of
these existed five or ten or fifteen years ago, yet all are somehow
considered part of the New Normal landscape. Give credit to Mohamed
El-Erian for his contribution to Orwellian logic, the new spokesman for
established normality and revisionist equilibriumn stasis. Nothing
normal here, even if declared by the Harvard escapee. The conflicts and
pressures come from every conceivable financial arena and marbled
office, every nook and cranny.
EURO CENTRAL BANK VS MARGIN CALLS
The
European Central Bank is in a pickle. The opened their windows to
accept all manner of toxic paper as collateral for newer fresher toxic
paper. Market forces reduce the value of the sovereign bonds. The stream
of debt downgrades is making life difficult within their chambers. The
pressure rises for acquiring cash funds, as the resistance grows toward
fair pricing of garbage paper bearing ink and signatures adorned in
fancy calligraphy. The debt downgrades force many borrowers at the
EuroCB window into a corner. They must deal with margin calls in the
same way speculators do at the COMEX on futures positions. Thus the
natural tendency toward lower potential energy. So conclude the ECB is
nothing more than a purveyor of leveraged toilet paper with ornate trim,
whose officers have dropped their pants, yet few notice. What holds
constant is the utterly ghastly odor emanating from the window, where
greater dispersion is underway of fecal effluence. It will end ugly, as
the ECB will simply dispense paper currency to hold the system upright
and to avoid collapse. They long ago became a Weimar apprentice. The
conflict and pressure will grow until the pressure spills over.
EU TROIKA BANKERS VS PIIGS PEOPLE
The
battle between bankers and people has been clear for over two years.
The Greek Model is stark and clear. The bankers wish to redeem their
toxic sovereign bonds by whatever means. The European Commission of
babblers from Brussels has not shown any restraint, despite their forum
being discredited as an empty chamber of voices. The finance ministers
continue to talk a good game but with nothing under their belts to
impress eager hands from the private sector in search of satisfaction,
even a cheap thrill from a quick redemption. The Euro Central Bank has
conspired to accumulate a mountain of worthless bonds in its basement,
sure to disappoint their masters in the castles. Their balance sheets
are running negative in the $trillions. On the other side is the people,
the depositors at banks, the taxpayers to fund the government offices,
even if their disheveled outposts resemble a tsunami on the day after in
Athens. The stock investors and bond investors have been ravaged by
the Troika who pay homage to the bankers with one vacant bailout after
another. My forecast 12 to 18 months ago was that the bailouts would
continue until the streets witnessed protest and violence. That has
come. The pressures build for public release of anger. The dissipation
is of people to the streets, out of their confined offices which no
longer seem to harbor the function of added value in production terms.
Random violence has grown common. The conflict and pressure will grow
until the pressure spills over.
LIBOR BIG BANKS VS LILLIPUTIAN VICTIMS
The
LIBOR scandal is best described as an assault on the center of Western
banking, where the discovery process as part of justice will pry open
every conceivable filing cabinet, computer hard drive, email box, and
contract in a drawer. Permission is granted to search. The process will
relieve the pressures upon distorted markets and inherent collusion. The
brush fires will extend from the basic LIBOR forest to the narco money
laundering fields to the Allocated Gold account basements to the raided
GLD fund vaults. The extended brush fires will be enabled by the dispersion forces known to the crowbar.
As the light is directed to the scummy basements and putrid laundry
fields, the potential exists for serious systemic change as the pillars
of syndicate controls are slowly removed. That process will come by
means of erosion, faltering, and dismantlement. The other side is
chockfull of victims, the lists becoming gradually clear. Any recipient
of a swap contract is a loser. Any underwriter to an adjustable rate
mortgage is a loser. Any financial engineer who re-geared complex
machinery via swaps is a loser. They will all line up in lawsuits, sure
to capture attention. The gaggle of class action cases will be just as
important as the collection of high profile cases.
The
armada of smaller victims will form like Lilliputians to tie down the
oversized Too Big To Fail banks. Oh, how the Jackass despises that
moniker! It means too big to control, too big to enforce the law, too
big to succeed, standing as the billboard of failure on the flipside to
the Fascist Business Model. Pressure will be relieved and lower
potential energy will be realized as the big banks suffer massive
lawsuit awards as pent-up grievances are addressed. Their control of the
system cannot continue under such circumstances. The greater de-centralization of bank power will be the manifestation of much higher randomness.
Systems might seek some concentration of power, but not like what the
West has formed. The banks will eventually serve a noble but boring
cause, of acting like utilities in bill payments, cash dispersal, and
currency conversion. They will also manage credit dispensation. The age
of the investment banker will revert to regional offices. The conflict
and pressure will grow until the pressure spills over.
US BANKS VS LONDON BANKS VS EURO BANKS
The
first real evidence of bankers from one region attacking the bankers
from another came not from the LIBOR scandal, but from inside word about
Deutsche Bank. My banker source from Central Europe informed that in
the wake of Josef Ackerman being deposed as CEO without ceremony, the
once venerable bank has turned state’s evidence and is working closely
with the Intl Court of Hague, the Interpol special fraud division, and
other key investigators. The DBank officials wish to avoid prison time
as they assist in attacks on London bankers and New York bankers for
multi-$billion criminal activity. The new sheriff from the East is busy
at work and has lined up some formidable snitches. The same source
mentioned how Diamond of Barclays would cooperate in London to avoid
prosecution, but he would be eaten by US wolves. He mentioned how DBank
in Germany would avoid prosecution in the homeland but would be devoured
by the US wolves. The stage is set for vast attacks, retaliation, and
exposures. The result will be the bankers from all three camps
decimated, discredited, and scattered to the wolves and their thirst for
justice. They will tear each other apart with grand gestures laden in
attack, appearing as self-preservation.
Back
in May, the Jackass wrote about how the Wall Street bankers would
undermine Europe in order to deflect blame, as they would accelerate the
sovereign bond bust in Europe in order to redirect attention from the
USTBond bubble and wecked machinery to support it. That process is
moving along as scheduled. What follows will be a grand amplification
though, as each camp betrays the others in a battle for survival. Irony
will win, as each will deliver mortal blows to the others, leaving all
three camps in ruin. The public will not be aware of the source of
informational grenades and computer file howitzers. The pressures
between camps cannot be ameliorated by subsidiaries of foreign origin.
The loyalties will be tested. Immunity offered by one group of
authorities will not count for anything as the other authorities will
ignore such deals and proceed with deeply damaging assaults. The jurisdiction lines will become battle lines in a banker war already begun.
Defensive maneuvers will deliver deep wounds across the oceans. All
camps will lose their banker helm positions of strength. The conflict
and pressure will grow until the pressure spills over.
EASTERN TRADE PARTNERS VS USDEPT TREASURY
A
battle for trade standards has been building for five years. The
dominant industrial producers in the East, the developing nations, have
been gaining numbers and building strength. They oppose the USDollar
standard, which funnels all flow through the mighty swift gates of US
control. A recent important event saw the Chinese offer their $3
trillion in reserves, mostly held in USTBonds, as a core to a trade fund
for usage by the many partners in global trade. The US is left
handcuffed, unable to respond. The bank bond fraud, the unbridled USFed
hyper monetary inflation, the heavy handed usage of banks as weapons
(see SWIFT bank code tactic), the favored treatment by the inflitrated
IMF and World Bank, these all invite retaliation. The pressure builds
to conform to the USDollar reserve standard or face isolation if not
military rebuke. The East rallies in response around the new global
leader in China. They are developing a new trade settlement system.
It is ready for prime time usage. They await the collapse of the
USDollar flagship running aground in the troubled bubbly USTBond waters,
contaminated by the acidic sovereign bonds, weighed down by arrogance. A
vast differential in potential energy has set up a very dangerous
global situation. The US$-based system is on its last legs, yet half the
Western population cannot see the clear message.
The
billboards are too dominated by the corrupted press, which spews a
banker message of resolve, recovery, and solutions. The chief negotiator
and medical administrator remains Jack Daniels with his staff from
Southern Comfort. They solve nothing. As the de-centralization of trade
settlement becomes the norm, the dispersion of power centers will exert
its powerful opposing forces. It will be a remarkable sight. The US
might actually be left out almost completely from the process, and
suffer walking through the doorway into the Third World. The Fascist
Business Model has a portal to the Third World which is not well
understood, as inefficiency and corruption push elements on the pathway.
The USGovt officials will be powerless to stop the movement. The
Chinese will be unfettered in pursuing the non-US$ solution. It is only
natural to seek water from many alternate storage centers, to channel
from the most available local supply locations, not just the USFed and
the US big banks. The relief of vast differential forces is near. The
Jackass has called it a Paradigm Shift in past work. Few comprehend it.
The conflict and pressure will grow until the pressure spills over.
USFED QE3 VS FINANCIAL MARKET BEGGERS
Since
2008, a queer pathetic phenomenon has shown itself. The broken
financial markets and their captains of futility seek constant and
regular aid (if not sustenance) from the official offices. The call for
more Quantitative Easing with its attendant destructive bond purchases
in direct monetization initiative are heard more frequently. No calls
for the system to remedy itself through proper pricing and seeking
equlibrium due to supply versus demand, during a vast liquidation
process. The desperation is evident and thick. Whenever the S&P500
stock index falters too much, the calls are heard louder for more
intervention. Heaven forbid the move to proper pricing of assets, or
even of the USDollar arbiter. The fund managers, the big investors,
even the Wall Street office managers appear in regular pop-up interviews
calling for urgent USFed bond monetization, to feed the badly needed
liquidity infusions. Two or three years ago the conversation
centered upon the many alphabet soup facilities devised by the USFed to
accommodate the liquidity needs. Nowadays the facilities have folded
like tributaries into the primary channel of QE. Little does the
investment community realize that QE was followed by QE2, and Operation
Twist was actually QE3, which morphed into QE4, while the entire nest of
central bankers engaged in Global QE. In fact, the pathetic fact of
financial life is that QE to Infinity is the working theme. That or
collapse.
In
my view, QE to Infinity assures the destruction. It is an implicit
admission of central bank failure brought about by debt saturation. The
group of major central bankers has failed in full view and in front of
governmental panels. Chairman Bernanke is a bagholder. The modern
nobility of economists is unspeakably incompetent, having lost their
chapters on capital formation, having replaced them with chapters on
controls and hidden intervention tools, with an appendix of banking
system diagrams that appears like a perpetual motion machine (or vast
money laundering system). The pressures are building for the hidden
tools to work their way to the surface, much like pus does from a giant
boil on the skin. The toxic condition of the banking system has proved
to be prevalent acne on the body economic. The system strives toward
more equilibrium in market price structures. In my view the stock market
and bond market and currency market for the United States should be
priced 50% lower across the board. Panic is nigh it seems. The lower
potential energy from a lower priced asset structure is sought. The
conflict and pressure will grow until the pressure spills over.
JPM INTEREST RATE SWAPS VS USTBOND CAVE-IN
In
May the vast Interest Rate Swap structures were given attention in
Jackass analysis. The USTBond tower cannot grow to the sky anymore than
the Tower of Babel could in ancient times. Some irony must be pointed
out, as the London Summer Olympic games chose to embrace some ancient
Mesapotamian symbols in the music and hill props for the opening
ceremonies. It was the established bankers issuing a FU flipped bird to
the public. They are under assault, yet defiant and apparently in
control. The Interest Rate Swaps permit the JPMorgan shop of horrors
to apply props to the USTBond tower. Each month the USGovt debt grows
higher. Each month the pressure on the IRSwap machinery grows,
eventually to the point of breakdown. Imagine a crane operator who
must climb to his cabin in the sky, where every six months the height of
the cabin increases. Whereas one year ago the cabin was 150 stories
high, six months ago it was 180 stories high, and today it is 210
stories high. If the dizzying altitude does not inhibit the crane, it is
the difficulty is twisting its cantilevered arms to drop the materials.
High winds are the new normal. So are collapses the new normal. Notice
the increasing attention given to the IRSwaps.
The
scrutiny of Morgan Stanley financial books and strategic positions is
the untold story. The army of 900 highly paid financial accountants and
analysts will soon reveal their verdict on health. Word will leak out,
seeking greater dispersion along the information laws of thermodynamics.
The pressure mounts, as the reality of actual solvent condition bounces
off the strained leveraged machinery to keep it all in place, and to
maintain a front of strength. The machinery cannot win. The tower will
fall. The cracks are showing in the props. As my excellent banker source
said in early June, a wrench was tossed in the JPMorgan machinery, and
the assured collapse of the derivative mechanisms will proceed until its
natural conclusion. The quarterly statements from the big US banks read
more and more like an obituary, but their stocks trade against the
painted expectations without mention of the word failure. The gears are
breaking, but only those with ears can hear. The cables are snapping,
ubt only those with eyes can see. The conflict and pressure will grow
until the pressure spills over.
JPM GOLD SHORT GAME VS COMEX RIG & GLD RAIDS
JPMorgan
serves as a symbol for the heavy controls, the corrupted devices, and
the rigged game. They do not act alone, but rather serve as the visible
syndicate fortress, replete with obnoxious arrogance. The gold market is
the center of the corrupted control mechanisms. If the gold price were
permitted to sit at a more accurate, more justified, more equitable
price of $2500 per ounce right here, right now, it is an absolute
guarantee that the USDollar would sink in shame below the 70 level in
the DX index. It is an absolute guarantee that the USTBond would be
offered above the 5% yield level amidst hue and cry. It is an absolute
guarantee that the US-based price inflation index would be above the 5%
level also, complete with screams of pain. What JPMorgan does in
order to maintain the price structures, much like a master maestro, is
to raid Allocated Gold accounts while at the same time raid the GLD
exchange traded fund gold inventories. Their routine naked shorting
in the COMEX arena is inadequate, as their strategy requires some
physical metal even if stolen or seized or captured. They repeat the
process in the silver market for Allocated Silver accounts and the SLV
exchange traded fund inventories for silver.
A source for Bill Murphy of the GATA organization has told him that the
powerful move in precious metals prices that took place between August
2010 and April 2011 was a direct result of certain restraints placed
upon JPMorgan and their interference with the Gold & Silver markets.
The story was never told properly. My view at the time was of colossal
Chinese purchases overwhelming the system. The system has had the
capability to put on a seeming infinite load of naked shorts. The
JPMorgan machinery has actually doubled its naked short position in the
last two years. Nothing stops them, surely not regulators in their
pocket. Well, except the natural forces toward greater randomness and
lower potential energy. A great deal of attention has come to the bar
inventory of GLD and SLV funds, in addition to the rules that guide the
raids from their back door via stock share shorting practices. It will
be interesting to see if Eric Sprott will acquire as source for new
silver bullion for his Silver Trust the actual inventory from the SLV
fund itself. What a coup that would be!
Internal word from the Monaco source who spoke with Murphy indicates that a
repeat of August 2010 is soon to occur. JPMorgan is out of time, and
their illegal devices will be halted. The event for release of the Gold
& Silver prices could occur again in August. The actual
enforcement is not clear. But be assured that forces pitted against evil
are involved. The JPMorgan machinery might be stalled in ways unclear
even to those informed within the gold community. Confirmation of the
Murphy source has come from a highly reliable Jackass source. An
exciting move is coming for the precious metals markets. Any delay to
the revelations of criminal action in the gold market by JPMorgan will
be a result of threats and intimidation by the big bank against the
whistle blowers. My main hope is that as the price rises, the exposure
of corrupt controls is also made more available for public view. The
people must see what has occurred to both the gold market and the
currency market. The potential energy is growing to incredible levels,
as a corrupt lid has been placed on the true money of the world for
seveal millenia, gold. The conflict and pressure will grow until the
pressure spills over.
USECONOMIC RECOVERY VS PROPAGANDA REALITY CHECK
The
final example of cumulative strain concerns the USEconomy. At the start
of the new year, it seemed a political propaganda plank was trotted
out. Obviously, it was laughable on its face. The supposed recovery is
not occurring. The constant deterioration of the economy is the constant
of reality, much as described without hesitation or restraint by the
Jackass. No amount of political need for continuation of an incumbent
administration can compensation for the pressures of reality and
exposure to the altered markets, even to the vastly deteriorating
USEconomy. The national economy is approaching a freefall that later
will produce a collapse. The many indexes like the Philly Fed, other
regional indexes, the Institute for Supply Management, retail sales, and
capital investment all look dismal. The sources of the problem are too
numerous to cite, but they include a broken investment bank system, an
insolvent banking system, a ruined bond market for all sovereigns, and
debt beyond saturation levels. The true refuge is Gold & Silver,
the constant over the ages, which will return to the core center of
banking and trade. The justice meted out will be trade systems dictating
to banking reserve systems, or else face obsolescence. The
pressures of reality for citizens living their lives, raising their
families, and managing their households, will continue. They know of the
mess facing the nation, and tolerate on a reduced level the propaganda.
The sitting administration has not bothered with the story of recovery
anymore, but Wall Street does in laughable fashion. The conflict and
pressure will grow until the pressure spills over.
SYSTEMIC UPHEAVAL
Such
upheaval is known by many names. The system is turned upside down.
Those in office face the nasty consequence of the more universal legal
system at work. Some will seek asylum in foreign nations, including the
old refuge of Paraguay. History from the 1940 era repeats itself, since
the evildoers merely found rooted sanctuary in New York, WashingtonDC,
and London, if truth be known. About five years ago, a remarkable fact
came to light, about fractures within most agencies, departments, and
ruling bodies within the United States. Deep divisions grew as cracks
spread across the power structure. My best description has been of
Loyalists versus Constitutionalists in the layout of the struggle. The
Loyalists had devotion and showed fealty to the Syndicate in charge,
with the power of men prevailing over the rule of law. Their calling
card has been the endless wars and the ample flows of ill-gotten gains
where the underworld dominates, the cancerous banking system replete
with bond fraud and contract fraud perpetrated with impunity and
official protection, the vast monopoly of contraband and its flows into
financial structures, the extensive application of control mechanisms to
protect the system and to sustain it. The deep divisions are not
resolvable without tumult and upheaval. The hope and prayer is for an
orderly transition without the loss of live by innocent masses, nor the
undue loss of wealth by the ignorant masses.
The
locations of the divisions include the USDept Treasury, the Federal
Bureau of Investigation, the Central Intelligence Agency, the Pentagon
Chiefs of Staff, the USDept Justice, the Securities & Exchange
Commission, the Commodity Futures Trading Commission, the Congressional
finance committees, and more. Many of the divisions extend from
conflicts between elected officials and appointed officials. Refer to
elected representatives versus the embedded syndicate. The USDept
Treasury for instance does not have significant turnover from one
election to the next. In fact, when a new Treasury Secretary is to be
appointed and approved, the syndicate message is to have in place
someone with experience, to avoid on-the-job training. Translate to mean
a syndicate henchman to continue the nefarious inner works. Numerous
scattered reports have come from deep within the power centers of the
United States. A reaction has come against the steady stream of
executive decrees. The new sheriff in town from the East is taking
charge with a team of international cops. Too many violations at the top
have occurred. The claim that the United States is a beacon of freedom
is much like Vladimir Lenin proclaiming a paradise for the proletariat
in Russia. The US leadership is in the process of being exposed. The
ugly rancid underbelly will be in view soon on the global stage.
Many
quiet leaders are apalled at the course of events, who sit in offices
that never receive much spotlight, but which harbor much power. The
forces toward greater randomness go hand in hand with the movement
toward free spirits. The forces toward reduced potential energy go hand
in hand with the direction toward de-centralization of power. The entire
broken system revolves around a toxic USDollar and its fierce defense
by dark powers. Their failure is evident in the 0% official interest
rate managed by force by the USFed central bank, together with the bust
of sovereign European bonds. The USTreasury Bond ultra-low rates serve
as a mockery to the asset pricing system. The strain with wars and press
support add pressures from deep within the system. The conflict and
pressure will grow until the pressure spills over. When it does, a new
global system will be in effect, based upon Gold. The shiny inert yellow
metal is the fair arbiter of trade, the true store of value, the
timeless object of money. Gold has often showed its value during times
of upheaval and radical systemic change. These are dangerous times,
especially for those who refuse to heed the warnings. Gold is the refuge
and core of stability, as the thermodynamic forces show themselves.
Jim
Willie CB is a statistical analyst in marketing research and retail
forecasting. He holds a PhD in Statistics. His career has stretched over
25 years. He aspires to thrive in the financial editor world,
unencumbered by the limitations of economic credentials.
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