A financial system which has almost exclusively benefited the wealthy
Market Review


by Bob Chapman
The International Forecaster
2009-11-11


The American journey that began on 8/15/71 is going to end over the next several years. The problems that have manifested themselves over the past few years signal the final stages of a destructive process that has stifled production and innovation and encouraged fraud in Wall Street and banking. The injection of money and credit into the financial system via the Fed and the Treasury has almost exclusively benefited the wealthy financial sector and has spread only crumbs to American citizens. The residential housing sector is dying, as now is the bubble in commercial real estate. It is now only a matter of time that the stock markets new bubble is broken. Insolvency in insurance, banking and on wall Street has been temporarily papered over. These are the culprits who created our problems along with their mentor the Federal Reserve. These are the same people who created fraudulent CDOs and MBSs, which caused the credit collapse. For that they have been rewarded.

Free trade, globalization, offshoring and outsourcing have ripped the heart out of our industrial base and now are shredding our service sector unabated. At the rate of our present decline we will be a second tier nation in five years. The loss of 8 million jobs over the last nine years is staggering. What has been done to our economy is criminal. Every month we hear of revelations of insider trading scams, Ponzi schemes, front running by 16 major market makers led by Goldman Sachs, naked shorting by major brokerage firms and market manipulation by the Treasury and the Fed and nothing is done to stop it. Billions of dollars are being stolen daily from American investors.

It is now quite obvious that the Elites have decreed that the dollar is to be abandoned as the world reserve currency and it is to be replaced by either a new international trading unit or a one-world currency. The US banking system and the dollar are being taken down slowly so that the public won’t catch on to what is being done to them. Again, we return to 8/15/71. That is when the dollar demise began and the end of the American empire began. We have been delivered into the tentacles of corporatist fascism. Big business, Wall Street, banking and insurance are being merged with government. Both entities are controlled by the same personages. The charade of solvency continues until the designated moment when the elites have decided to pull the plug. The demise of the US is just another episode in the long history of this cabal that has brought us misery for more than 1,000 years, not to mention the continuous wars to cull world population and the greater concentration of wealth and power over the centuries. After the purge the new currency will have gold backing and the process will begin again anew. That is why gold and perhaps silver will be the only refuge from the changes in fiat currencies worldwide. The changes we are witnessing are going to be permanent-short of changes via revolution, which now is the only avenue left open to citizens of our country and many others. The time we see being borrowed is an artifice to fit a well laid out timetable. Remember your only salvation is gold and silver related assets. They are the only way to preserve your assets.

The second stimulus package has been a failure. The third package, as we predicted last January, will go to debate early next year. Our guess is a congressional package of $400 to $800 billion and a bank lending increase of some 14%. That is the amount they cut lending over the past year. More money will be thrown at the system. It won’t work, and in 2010, we should see official inflation back at 5% and unofficial inflation at more than 14%. The housing credit will be extended, as will unemployment benefits and seniors will get another $250 check. Yes, we will also get another clunker Car program. This should send the economy sideways into mid-2011 or perhaps to 2012. Unemployment will reach a real U6 figure of 23% by the end of the year. Give or take two points unemployment should stay at this level for about two years. In 2011 inflation will pass 30%. We will have a better figure later. In other words, a delaying action, but no real recovery. Thousands of financial institutions will fail and that will lead to consolidation and nationalization. The minute stimulus increases in money and credit, monetization and low to zero interest rates end deflationary depression will begin having graduated from hyperinflation. There will be neither reform nor any real recovery, because the elitists are again destroying the system to obtain even greater power over the inhabitants of the world. We are on a difficult journey and you had best prepare yourself for it. This time there is no turning back.

In a victory for President Barack Obama, the Democratic-controlled House narrowly passed landmark health care legislation Saturday night to expand coverage to tens of millions who lack it and place tough new restrictions on the insurance industry. Republican opposition was nearly unanimous.

The 220-215 vote cleared the way for the Senate to begin debate on the issue that has come to overshadow all others in Congress.

Joseph Contorinis, a former money manager for the Jefferies Paragon Fund, was indicted by a federal grand jury on fraud charges in what prosecutors said was a $7.2 million insider-trading ring.

The indictment by the Manhattan grand jury follows Contorinis’s February arrest. Another person charged with him, Nicos Stephanou, who was an associate director of mergers and acquisitions at UBS AG’s London office, pleaded guilty in May to seven felony counts that he passed information about bids for Albertson’s Inc., the Boise, Idaho-based grocery store chain. Stephanou’s friend, George Paparrizos, also pleaded guilty.

“Stephanou had access to and learned material information about merger and acquisition transactions,â€