Proverbs 22:3 NLT

A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.

-- (((Charles Finney, said the following: “If
there is a decay of conscience, the pulpit is responsible for it))) --


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In Defense Of A Nation

Sunday, April 14, 2013

We are now starting a featuring a news letter from Michael Mccune Called the Rant - A former IRS Agent here in Cheyenne, Wy - A news letter from His Prospective - (( to Have MIke send you the Rant to your Email contact Him Here (( )) Here is the Rant from April 1, 2013 ((-- Citigroup Has A Derivative Addiction Relapse--)) April 4-5-13 ((--Was Cyprus A Test By U.S. Government?--)) April 8, 2013 ((- Gold Rush Looms As States Reject Fed Tactics--))

Citigroup Has A Derivative Addiction Relapse

Pay no attention to the red light flashing in your rear view mirror. The real culprit is Wall Street's insane surge in derivatives.

As pointed out during the Rant's review of the Dodd-Frank Act, the only thing worthwhile would have been regulating the insanity known as derivatives. The rest of it was just window dressing so more of your money could be fleeced from the mere act of utilizing a bank's services. Alas, the clause was watered down and watered down until it finally disappeared. Dodd-Frank didn't do anything with derivatives.

And Wall Street smirked.

Now Citigroup has devised a derivative dubbed "the synthetic", proving the bailout's futility and insuring another round of stupidity is about to be dumped in the taxpayer lap.

Citigroup has invested heavily in the shipping market, granting loans to ship builders across the globe with almost the same abandoned disregard for risk that subprime lenders were showing in the early 2000s.

Like those overexuberant home lenders, Citigroup has discovered it has more liability than it can cover in a market that, exactly the same as the housing market, is overbuilt to the extreme. So it is trying to divest itself by bundling derivatives in shipping with promised payouts of 13-15%.

Shipping, as an industry, suffered heavily in the financial recession and ongoing Euro Union crises. It has failed to regain traction because shipbuilding didn't cease but only accelerated due to cheap financing from such stalwarts as the Federal Reserve.

Citigroup was one of the biggest of the "too-big-to-fail" U.S.A. crowd during TARP's initial foray into clipping the wings of the recession but continued risking practices through shipping loans. Another of those big boys relying on shipping was German giant HSH Nordbank. Nordbank was bailed out in 2008 but just recently received a second bailout.

It was that second saving attempt that finally convinced Citigroup it was backing not only a long shot but a nag that had been euthanized the day before the race started. So the bank decided to spread the misery and bundled the shipping liabilities in derivatives.

Why this should concern you is hedge funds, who are desperately trying to return some kind of reasonable to their investors, are seemingly the targets of Citigroup. What is even more problematic is many pension plans who use hedge funds, use hedge funds who favor Citigroup.

It is a recipe for another round of government intervention.

But government is also the root of the problem. The artificially low rates the Federal Reserve has embraced are forcing these hedge funds to follow even a tiny wisp of normal return necessary to sustain their clients.

Bloomberg reported more than $1 billion of these synethitic collateralized debt obligations have been sold in the first three months of the year.

Because of the on-going global economic slowdown, the derivatives continue to lose value simply because they are the last line of defense for a better yield in a low rate period.

But these derivatives are best left in the dark. In the light of day they are ugly creatures indeed. But Citigroup is desperate and the increased regulations and Fed actions have combined with its' own penchant to grab income to back Citigroup into a corner which doesn't seem to have any escape routes, except from benevolent government intervention.

This could trigger a return to the meltdown of 2008 again.

Washington should stay out of this fight and let Citigroup and the financial system wash the cesspools out. But it won't. Instead it will decide to spend more government funds to support a corrupt sector at your expense.

I hear something from behind where the red lights continue to flash. It is whispering "Cyprus is here...Cyprus is here...Cyprus is here."

"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson

April 5, 2013
Was Cyprus A Test By U.S. Government?
As information on the Cyprus situation became more available after the first couple of days of the bank lockout last month, I wondered aloud if the United States government had played a role. To me, it seemed imminently logical for the control freaks in Washington to have set the Cypriots up to test the American public's reaction.
Let's recap the major behind-the-scene players in Cyprus. Cypriot banks have become a haven for illicit Russian KGB funds and President Putin has been trying to resurrect Russia's status on the world stage--his nosse needed tweaking; the Euro Union went to the European Central Bank which had to obtain approval from the International Monetary Fund to go ahead with the bailout plan; the IMF is currently headed by former French Ministry of Finance Christine LeGarde who owes her lofty Washington-based position to then Secretary of Treasury Tim Geithner's unabashed support; and Geithner, Fed Chair Ben Bernanke and President Barack Obama have been plotting ceaselessly on ways to bring down the deficits while expanding government programs and power.
Those are the pieces off the stage. Cyprus was merely the battleground.
For those of you trying to pay attention, the mass media missed the plot completely. It was given in Basel, Switzerland on Dec. 10, 2012. It turns out the plan was explained in a paper co-written by the American banking system's Federal Deposit Insurance Corporation (FDIC) and the Bank of England. The paper centered around "financial stability" where the two entities specifically laid out plans on how American bank accounts can be entirely confiscated by the government.
The system where your deposited funds can become the banks' is already in place. What most of us did not do was read the fine print when we opened our accounts at the FDIC-approved institute(s) we selected to handle our money. The financial institute legally owns the funds as soon as they are deposited, not the account owner.
The assurance you have from the FDIC of $250,000 coverage for your deposits only means you have become an unsecured creditor to the institute should it fail from holding too many unsecured liabilities like derivatives. The banks are obliged to pay the creditor when it presents the demand for what is essentially an IOU.
Under the current plan, laid out in December, banks COULD defer giving actual funds out and instead present the creditor (you) with bank shares. Cypriots found out the bank share is virtually worthless in times of real stress. FDIC's argument in Switzerland was, "even if it took several years, the shares would eventually be worth something of value."
Also the Bank of England-FDIC plan makes "no exception" to the seizure of the depositors' money. There is no minimum amount that can be protected from seizure. All of your liquid asset would be gone--including what is in safe deposit boxes. The mere act of converting the assets to shares absolves the FDIC from any liability as it is no longer a deposit but investment shares--liable to the whims of the marketplace.
Talk about a wolf in sheep's clothing to infiltrate the flock! This is the ultimate nightmare for private citizens. The proposed plan has yet to be voted on by the BIS (Bank of International Settlments) but I can see why Cyrpus happened. The result of the test? America yawned.
Under this plan, the FDIC no longer operates "to protect and insure your bank accounts" it is there to confiscate those accounts.
I can already hear the protests from Rant readers. "But, but the Cyprus deposits were protected up to 100,000 euros. Explain that."
You might have heard funds cannot be removed, in cash, from Cyprus. This is because the Cypriot euro is no longer equal to the euros being held in Spain or Germany or Norway or even Greece. It was devalued by some 30%.
Unfortunately, the government states involved cannot tell a Cypriot euro from a Portugese euro, so the ban on removing money was put in place with lifetime jail terms involved.
We had a real nightmare when alcohol was banned in this country during Prohibition. Can you imagine the demand where I could by 100 euros in Cyprus, transport them to a neighboring country and receive 130 euros in exchange?
But there is another twist to the Cyprus saga. It has been alleged deposits connected the other countries were allowed to remove their assets while the banks were officially closed. If this is true, that's a sub-plot that was not mentioned in the FDIC-BOE paper. Could it have come from the grasping, greedy mind of Baby Ben or No-Shame Obama?
I suggest this because there was an announcement from Homeland Security which should make you even more uneasy. Homeland has informed all banks that in the case of a "national security threat" it can seize all bank lockers without warrants.
What was once unthinkable to many Americans, what was met with a massive yawn when it was merely a tiny island country, is now visible on the horizon. Oops, that storm is already obscuring the horizon.
UN Peacekeepers or Homeland Security thugs will be at the bank doors to stop you from getting what is now theirs. How many are yawning now?
"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson
Hard data for this Rant was first gleaned from a "Moneynews" article, Did the FDIC Orchestrate Cyprus Shutdown?, Wednesday, 4-2-2013. Researching the paper mentioned through Google produced more hard data. The conclusions are the sole result of the Rant. Any and all comments are welcomed. I appreciate your support--Mike
April 4-8-2013
Gold Rush Looms As States Reject Fed Tactics
It used to be a joking sign put up in many small Main Street businesses, "In God We Trust, All Others Pay Cash." The way the dollar is being devalued by Federal Reserve tactics the sign must be updated.
The Rant has been a harsh critic of Ben (BS) Bernanke's handling of the financial crisis. Because of the disconnect between Main Street and Wall Street, the Rant has consistently taken a position you have to look at the "man behind the curtain--(BS)" when evaluating the failure or success of the programs.
Now there is a rising tide of distrust from Main Street for the Fed's unrestricted use of the printing press and the resulting sea of red ink on which the market averages are floating. To be blunt, Main Street is becoming aware the dollar is reaching the worthless point much sooner than anyone expected.
Since JFK's plan to take the U.S. off the gold standard was approved in 1963 and implemented in 1964, the inflation rate has become a staple of anyone trying to figure real economic output increases and decreases.
The buffoons in Washington--from both parties depending on who sits in the White House--eagerly point to the rise and fall of annual GDP to support or attack Administration positions. The problem is, you have to subtract out the inflation rate--a real rate not the phony one our illustrous Federal Reserve figures. In manipulating this number the Reserve has reached its epitome in BS.
BS can really lay his BS out when it comes to inflation. Imagine how galling it must be for BS to receive a flood of complaints from senior citizens who find the 1.7% raise he proudly announced last fall leaves them another 8% short of just last year's average.
Compared to gold, our dollar is worth just 2.2 cents of what it was in 1963. And even that is a comparison that is affected by BS's activity. The Fed is paying its agents to place sell orders against gold. When the market doesn't drop, the Fed is printing money to help those agents defray their expenses. What would the price of gold be if the Fed wasn't playing in the game?
That is anybody's guess but, based on the demand, it is safe to assume the gold price would be in the $3400-3900 range right now. If that were so today's dollar would be worth a tenth of a penny compared to what it was in 1963. It would literally take $1000 of today's dollars to equal a single 1963 Silver Certificate.
Measure this in wages. Back in 1963, from governmental data in the Department of Labor, the average job paid $350 per month. Today the average job pays more than $4000 per month. Much better right?
Not when compared to the price of gold. The 1963 wage was 10 ounces per month on average. Today it has been whittled to less than 3 ounces.
But the United States still has more debt than it can redeem with gold. We found that out when Germany wanted to collect only half of its $600 billion U.S. bonds in gold. The Germans were smart enough to know if they asked for all $300 billion at once, as the terms of the bonds state, the U.S. would go belly up immediately. So the Germans gave us 7 YEARS WARNING!!!
Think about it. A sovereign country giving the world's wealthiest(?) country seven years advance notice it wanted to cash in half the IOUs it was holding. It no longer wanted to roll over those maturing bonds into more bonds but wanted the gold equivalent and it was savvy enough to know without the seven years' warning the U.S. didn't have even $300 billion in gold reserves available.
How many of the bonds have we issued? Try looking at the national debt clock. That $16.7 trillion is items we have already put into bonds. That means we have issued bonds with less than 2% actually covered by metal reserves.
Maybe that is why more than a dozen states are advancing gold as legal tender instead of the dollar. Our government is clueless.
The Fed wishes you to believe, based on the faulty inflation method it prefers, that inflation is just 1.3% this current year. That puts it well below the Fed's target of 2%.
But the economy is not growing. Using this measure the economy is actually contracting and only inflation is giving any semblence of a positive spin to the numbers, even by Washington standards.
Texas, as is usual, is the leading proponent of setting up its own gold reserve and axing the U.S. dollar. Utah was slapped on the wrist for authorized bullion for currency in 2011. Arizona is getting close while Kansas, South Carolina and a host of other states are in the opening phases of this type of federal rejection.
Driving these legislative efforts is the belief the Fed's monetary policy is giving the U.S. indigestion. There is a fear the efforts of BS will lead to the ruin of the dollar.
The biggest obstacle to any political sub-division actually being able to use gold or silver as a payment form is the sliding scale of value. Until that problem can be overcome the efforts are symbolic--right now.
But if a state or states were to follow the example of the Southern states in 1861, it will cause problems. The current Administration fears such a thing and has stated "there is no provision for leaving the Union, only for joining." Malarkey! History has taught us there is a way for leaving particularly when economic well-being is threatened.
All it will take is a few "In God We Trust, All Others Pay Gold" signs along Main Street. Even then I doubt Washington will recognize the witch's brew it is fostering until the signs appear in DC. Then it will be too late.
"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson
- to Have MIke send you the Rant to your Email contact Him Here (( ))

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