Thread: Bob Chapman: The Fed Behind The Greatest Fraud In History

The Fed Behind The Greatest Fraud In History

An excerpt from Bob Chapman's weekly publication.

May 25 2011: The price of gold a flight to quality, the need for a gold backed dollar, elitists wanting fiat currency, rampant inflation in US and Europe, Greece in default, living with the consequences of the greatest fraud in history,

We believe that for the past 2-1/2 years the price of gold has been mainly driven by a flight to quality, as gold vied with the dollar for supremacy, as the world’s reserve currency. As we have witnessed gold has won that battle. The only way the dollar or any other world reserve currency can compete is by being backed 25% by gold. The elitist’s royalty of Wall Street and the City of London are quite upset with these developments, because they want all currencies to be fiat, so that they would not have to have a gold backed international monetary unit. Over the last six months another historic factor has come into play in evaluating gold versus currencies, and that is the interconnectivity of gold’s relationship with inflation. In the late 1970s this was the underlying factor for the rise in the prices of both gold and silver. At that time they never had the luxury of strength also coming from recognition of being monetary units. We hear the manic claims that gold and silver are bubbles or are manias. That cannot be because gold is and always has been the only real money. Every time the major media makes these bogus claims they always fail to mention that both gold and silver have appreciated in value in excess of 20% annually versus nine major currencies. They refuse to point out gold and silvers’ 11 years track record having risen from $260.00 and $3.80 respectively to more than $1,500 and $50 per ounce. This shows you the massive deception by the major media, which is totally controlled by the elitists from behind the scenes.

When QE3, or something akin to it, is implemented during the summer, it will give the stock and bond markets one last boost. Most of the gains from a future QE3 have already been reflected in the market place. On the other hand such recognition by investors, not as yet discounted, will give a very large boost upward to gold and silver. As this takes place downward pressure will begin to appear in the stocks, bonds and the dollar. Those events will make it even more difficult to sell US Treasury and Agency bonds. Efforts will have to be added by the Fed to cover up the again ongoing losses of banks and brokerage houses – the financial sector – under the concept of too big to fail. The greater the effort needed to save these bankrupt institutions and the government the greater heights gold and silver will rise too. Adding fuel to the fire most other nations will have their own versions of QE3 compounding world inflationary problems. Even if a nation is not causing inflation they are forced to absorb foreign nation inflation whether they like it or not.

You have to look at the terrible fundamentals America is facing. The Fed has a balance sheet close to $3 trillion that could be $5 trillion in a year and one-half. If they purchase 80% of Treasuries and Agencies and bolster the declining economy. There is no end in sight for zero interest rates. Both the increases in money and credit and low interest rates will continue to send inflation into orbit. Monetization is the name of the game and the Fed and other central banks are playing it to the hilt. The ECB raises interest rates ½% and expects miracles. That could happen after they raise them 5% to 6%. Talk about misdirection as they continue to increase money and credit. They must think fellow Europeans and others are dumb and that is not the case. They knew as well as we do that what the Fed and ECB does causes monetization and inflation. Americans are used to inflation and heretofore they have been able to adjust for it. Other nations have not had that luxury in the past. Foreigners are far more sophisticated when it comes to propaganda and do not as easily fall for it as Americans do.

You would have to be stone dumb not to recognize the rampant inflation in the US, England and Europe. Gasoline and petroleum derivative products and food costs have gone up substantially. Not only in the regions but also worldwide. As a result inflation will be 14% in the UK and US by yearend and 8% on the Continent.

It is not only the federal government that is broke, but so are the states and municipalities in the US. Europe and England have the same problems. More than 40 states are struggling to balance their budgets. Most will, some will not and they’ll default on the interest payment on their bonds and probably have to pay vendors with IOU’s. There could be another federal bailout but we doubt it due to the battle over budget cuts in Washington. As these problems stand in the forefront the government’s debt dilemma is not going to go away anytime soon and over the next two years the US could experience a downgrade in its credit rating. Unfunded liabilities are $105 trillion and they are unfunded. Although stretched over years they still have to be paid unless benefits are adjusted.

We address the problems in Europe every week. Greece and its financial problems are still being negotiated. The discussion at hand only carries the shortfall in funding over the next year or two. The demand by banks for collateralization of debt by just about everything Greece owns has been rejected not only by the people, but by most of the politicians as well. Greece cannot pay its debt even over time and should default in part or in total. Again, the loans should have never been made and the bankers knew better. Similar conditions exist in Ireland and Portugal and Belgium, Spain and Italy could and probably will follow. One interest rate could never fit all. The euro zone is in deep trouble and the EU is starting to crumble at the edges. The sovereign lenders, German, France, the Netherlands, Austria and Finland, are very disturbed with the position they find themselves in. The Germans and the Finns have been quite vocal about the situation and recent elections in Germany made it quite clear that they do not want to fund any further loans. As we said a year ago $4 trillion will be needed to solve the problems and producing that kind of funding would certainly break the funding nations. As we said a year ago, the second half of 2011 will be full of dangerous problems. In the midst of all this we have the head of the IMF arrested and charged in what we see as an elitist power struggle with the US faction in the US entrapping a member of the European contingent to remove him from his position. It worked, but the fallout will be felt for many years to come. This intercene warfare is happening at a most unfortunate juncture in the midst of discussion involving Europe and the IMF and Greece and other debtor nations. These events have heightened the pressure on an already unstable situation.

As these events and problems unfold many nations, corporations and investors are reaching for gold and silver investments for safety, as they have many times in the past. The availability of physical metal is acute, as backwardation occurs in paper investments. That is spot markets are trading higher than outside months in a desire by former sellers to take delivery of gold and silver they previously sold. Those who are biding at spot are also offering those who want to take delivery a 25% to 30% bonus not to take delivery. That highlights how difficult it is to get delivery of silver. The same is true with gold, but delivery of physical is not quite as difficult. Control of the paper markets via frauds and manipulation is always present. Regulators, as appendages of the government, are in place to protect certain Wall Street insiders, harass the rest, allow the naked shorts to do as they please and try to put as many small brokers and firms as possible out of business, no matter what the cost. Then there are the frauds of front-running and flash crashes. The big question today is how do you stop fraud when it is institutionalized and Wall Street and banking are run by a crime syndicate in league with Washington? Just look at the trillions the Fed and the Treasury spread all over the US and Europe, which they were forced to divulge after their court appeal failed. The TARP funds episode was another example - $700 billion in free money for Wall Street’s Illuminist friends. That was one of the greatest frauds in history. A new movie is being released depicting Hank Paulson as having saved financial America, when in fact he and his friends were looting the American people.

As these events worsen the situation deterioration continues unabated, wars rage as distraction and for geopolitical positing. The costs of which are totally outrageous with the cost to the American taxpayer in the trillions of dollars.

The derivatives market is totally opaque and unregulated, Wall Street and the government want it that way so credit derivatives can be used to keep interest rates near zero and gold and silver and other items can be controlled by insiders.

We won’t hit the bottom of the residential housing market until 2013 or later. The end is still nowhere in sight, as Fannie Mae and Freddie Mac, Ginnie Mae and FHA make subprime and ALT-A loans. Commercial real estate is being held up and in place by the Fed, otherwise there would have already been a crash. These two shocks keep the economy headed downward with still yet no bottom in sight. Inventory for sale builds exponentially.

http://theinternationalforecaster.com/I ... In_History

Email today on the Audit the Fed....


Abolish the Federal Reserve -- END THE FED

On March 15, Congressman Ron Paul (R-Texas) introduced and sponsored bill H.R. 1094 – the Federal Reserve Board Abolition Act, which calls for the complete abolition of the Federal Reserve System and the Federal Reserve banks, and for the repeal of the Federal Reserve Act of 1913. Later that same day House Resolution 1094 was referred to the House Committee on Financial Services. On April 4 it was referred to the Subcommittee on Domestic Monetary Policy and Technology, chaired by Ron Paul, where it is currently pending and awaiting further action.

Upon introducing H.R. 1094, Rep. Paul offered the following remarks in support of his bill to abolish the Federal Reserve. Paul stated:

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. [emphasis added]
As the Federal Reserve disseminates more information about its secret dealings abroad, giving loans to foreign banks, bailing out industries, printing endless supplies of paper money –- causing inflation and thus high prices for consumer goods, and the artificial depreciation of interest rates (i.e. zero percent federal funds rate), it is clear that the Federal Reserve does more harm than good and that its policies of lowering the federal funds rate in the fall of 2001 was the catalyst for the unsustainable housing bubble that collapsed in late 2007/2008.

History has proven that fiat currency does not work and that such Keynesian schemes, as those practiced by the Fed, only precipitate the very recessions/depressions it claims to oppose, which the Fed then responds to by enacting further measures that only serve to prolong the assured economic calamity.

Article I, Section 8 of the U.S. Constitution gives Congress, and Congress alone, the sole power to determine monetary weights and measurements for the coinage of money and the power to coin gold and silver as the nation’s legal tender. Nowhere is Congress authorized to establish a national or central bank and cede away its Constitutional powers that protect the integrity of sound money and free markets. This wisdom was understood and practiced by Thomas Jefferson, Andrew Jackson and Grover Cleveland. Now, H.R. 1094 lives up to that very same wisdom by calling for the abolition of the Federal Reserve System in its entirety and thus repealing the Federal Reserve Act of 1913.

As pointed out in G. Edward Griffin's classic exposé, The Creature from Jekyll Island, the Federal Reserve System was created, in order to protect the power of the banking cartel and expand its wealth. Since the Fed extends credit to the U.S. government, it profits handsomely from the ever-increasing national debt. As a result, there is every incentive for the Fed to support profligate federal spending.

A series of tsunami-like waves of fiscal and monetary stimulus are being generated by politicians and bureaucrats in Washington who would have naïve Americans believe that such a policy is intended to shorten (with no ulterior motive) the recession by stimulating consumer spending, which makes up around 70% of U.S. economic activity. It does not really matter whether the stimulus comes through tax rebates, increased government spending, or lower interest rates, because the end result is inflation of the money supply by the Federal Reserve System.

The inflationary policies of the federal government and the central bank (Fed) are largely responsible for bringing the world to the brink of financial collapse. A key reason is that the unlimited availability of money created out of thin air distorts the perceptions of economic strength of a nation and the solvency of its government, which leads to the misdirection of investment in ways that would not be justified or tolerated in the absence of monetary inflation. Creating more money (the Keynesian means for economic stimulus and controlling the masses) exacerbates the problem and perpetuates misdirected investment. And yet, that is precisely what is being supported by many, if not most, members of Congress and appointed bureaucrats, and the view most promulgated by the politically correct, elitist controlled media.

A policy of tax cuts, increased government spending, and lower interest rates was implemented during 2001 in response to the economic downturn that began with the bursting of a stock market bubble the year before. However, those stimulus measures only postponed a recession and in turn created the real estate market bubble that has now burst. Allowing the Fed to create more money out of thin air delays the day of reckoning, but ensures that the traumatic consequences will be compounded when such fiscal stimulus fails to work.

Ironically, former Fed Chairman Alan Greenspan once called the idea that the Fed could prevent recessions a "puzzling" notion. As for inflation, Greenspan is on the record as follows:

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value [without gold].... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. ("Gold and Economic Freedom," Alan Greenspan, 1966)
Please support the restoration of financial stability to America's economy through the abolition of the Federal Reserve System. Contact your U.S. Representative and ask him or her to cosponsor and support the passage of H.R. 1094 to "End the Fed" in the 112th Congress.

Thanks.

From Your Friends at The John Birch Society



Kathyet