The International Forecaster: 2011

The game goes on, as German leadership tells us the euro is stable, even as it hits yearly lows. We are told the problem is a crisis in several member states. That may be true, but they all are inseparable. The reassurance from politicians and bankers to calm the market place is beginning to fall on deaf ears. No matter what the cause of the debt crisis it exists and leadership as yet cannot find a solution. Even short-term solutions, such as the use of the EFSF are not going to work. All they will do is gain time. In that process, what happens if

France

’s credit rating is cut one or two levels? How can

France

then continue to participate? The present French government has buried the government in losing investments, which we believe in June will force the electorate to choose the Front National to solve national problems. The public, as in most other countries are sick and tired of lies and incompetence from politicians, bankers and bureaucrats possessed with the creation of world government. At this point confidence in the euro is hanging by a thread and Europe’s leadership doesn’t know how to solve the problem. We have seen such crises of confidence often over the past 15 years. It is not unique, but the size of the euro zone is compelling, because the crisis touches so many people. Currency is the vehicle to bring about a solution, but if confidence is lost the currency cannot perform part of its role as monetization continues unabated, confidence continues to fall and inflation as a result flourishes.

It is not that EU leadership doesn’t want a solution; it is that there isn’t a solution, other then to purge the system. In that environment the politicians, bankers and bureaucrats have their power to control the people taken away from them and the citizens take back their countries and their liberty and freedom. The euro has been an unnatural experiment implanted as a nexus for world government. We predicted this in 1992 and nothing has changed. We expected failure and we now have that failure. After years of leveraged profits for the insiders the public is left with unpayable debt.

The debt bomb began with Greece, Ireland and

Portugal

. It has been followed by Belgium and now Italy and

Spain

. We see new commitments for bailouts, but will the funds materialize. We are talking more than $1 trillion and that will entail more bank reorganization that is bailouts. That is governments and the public, bailing out the banks again. The debt loads are enormous for sovereigns as well as bankers. European politicians and economists realize six sovereigns are in serious trouble for at least $6 trillion. $4 trillion will be need for Italy and

Spain

alone, that is just to keep them going sideways. To our way of thinking Greece is a black hole and after elections we believe it will finally default to be followed by Portugal, Ireland and

Belgium

. We can understand why the sovereigns are so concerned with the group of 6 and the stability of the euro. This is why, without fanfare and very discreetly the Bundesbank, loaned the ECB $644 billion. That is a very large sum of money even for

Germany

. This transfer loan has been listed under Target 2. We understand why the funds were needed, but will the German public be happy with the program? Remember, 65% were and are against such further programs.

**************************************************

Saturday, December 17, 2011

IF Issue: Saturday Dec 17, 2011

Excerpts and links from the latest issue:

Bob Chapman - The National Intel Report with John Stadtmiller 2011.12.13

http://www.youtube.com/watch?v=HEOEEFTEABQ&feature=email

Bob Chapman with Kerry Lutz 12/14/11

http://www.youtube.com/watch?v=xHG06mj1ppI

Bob Chapman - Financial Survival - December 14, 2011

http://www.youtube.com/watch?v=jnz9gDiTK5M&feature=email

Bob Chapman on Freedom Files with James Burns

http://freedomfiles.us/

http://youtu.be/waXBkss4xg0

FFw/JB Podcast (12/15/2011): Bob Chapman

http://www.youtube.com/watch?v=waXBkss4xg0&feature=youtu.be

MARKETS

The Fed’s third quarter audit data shows a total system debt of 355% and of GDP, in spite of so-called de-leveraging. It is down from the second quarter’s 375% of GDP, but up from 264% a dozen years ago. Financial sector borrowing fell almost 50% in the quarter but non-financial debt increased while financial debt fell – a push so to speak. Unfortunately most of the debt growth emanated from Washington. That growth was $557 billion, of at a 14.1% annualized rate. Of course, what the federal government is doing is the antithesis of what they should be doing. Will these borrowings and debt continue, of course they will.

In 13 quarters Treasury debt is up $100 trillion an increase of almost $4.9 trillion, or by 92%. In three years Treasury debt rose from 16.2% of non-financial debt to 26.7% and total federal debt has increased from 46% of GDP to 78% of GDP. In 2007 federal non-financial debt grew from 3.3%. In 2010 it was 113%. Year-on-year total compensation rose only 2.8% as real inflation grew 11.6%. During that period corporate earnings set records. For the most part those earnings were achieved via layoffs. From the second thru the third quarters household debt fell 1.2% from a minus 0.6% and mortgage debt fell 1.8%, as consumer credit rose 1.2%.

Funding especially foreign funds of

bank branches has been wild and the Fed has done its best to obscure what they are up too. It looks like these foreign bank balances grew about $2.6 trillion.

The result is that pressure was relieved in Europe and the

went sideways in spite of massive increases in money and credit. Fed issuance is in a bubble and it is only a question of when it pops. It is not surprising that the American public believes we are headed in the wrong direction, some 70%. Only 39% approve of the administration’s financial policies. The GOP frontrunner Gingrich, if he ran against Obama today would lose 50% to 41%. It shows you how dumb Republicans are. Nominating a crook who is a guaranteed loser.

As we pointed out earnings were the highest in four years. Layoffs were part of that, plus a lowering of loan reserves, bank lending and possible losses were virtually unchanged and the to-big-to-fail banks were able to borrow money at no cost, while the public pays up to 35% for funds.

European banks are struggling to raise capital under BIS dictates. In that process they are selling off their best assets. Normally they would sell the worst assets, but presently losses would worsen their balance sheets, so they are forced to sell best assets to bolster the balance sheet to meet the reserve figures demanded by the Bank for International Settlements the banker’s bank. These sales tend to negatively affect markets. The higher the leverage, the worse the effect.

Via the Patriot Act the US government has declared war on

Iran

by invoking sanctions. This is under the guise of Iran supposedly having nuclear weapons, which is a figment of colonial Washington’s imagination. The elitists in Washington want to isolate the Iranian banking system and as a result

Iran

is preparing to shut off 40% of the world’s oil by shutting the Straits of Hormuz. The reason added to these actions by Treasury Secretary Geithner is that

Iran

is a primary money launderer. We see

Iran

’s being cut off from western banking providential, considering the state of western banking today. The Fed and the IMF are again scurrying around trying to save Europe from itself, a place where few are capable of making decisions. We call that contagion and

Iran

could be spared that. The drones are being shot down over Iran and the

keeps sending them. Next it will be air combat where the loss of life and equipment will be high.

In Europe the past few weeks have been disastrous. Confidence continues to erode as the plunge protection team holds up markets and attacks gold and silver.

Greece

continues in a standoff until there are February elections. If there are no elections nothing will ensue in a big way.

Greece

refuses to reduce sovereign debt and take any more austerity cuts. What all these masters of the universe don’t understand, or want to understand, is that Greek debt, in fact almost all debt, is unrepayable. What all governments have done by raising massive amounts of debt has frozen the productive private sector out of the market. The exceptions are AAA rated companies, almost of which just happen to be Illuminist run. Government spending is generally non-productive.

As we have seen recently even the elitists Super Congress Enabling Committee could not come to a conclusion on cutting

government debt. It shows you even under controlled circumstances that the kept Congress will not at all commit themselves to any kind of austerity.

Europe is about austerity and debt. The big question is will the Bundesbank take the easy way out? Will they print their way out now that selling bonds is difficult? Of course either printing or bonds or money is an answer or solution to the problem. Worse yet every currency is fiat and loaded by nothing and they are all unconnected. They call that spreading the misery. Growth is falling into the minus category, as

Germany

shows a third month of falling manufacturing orders.

In response to the economic situation, the European Commissioner for internal markets says, it will crackdown on credit agencies. These agencies are now finally doing their jobs and the commission wants to shoot the messenger. All they want is for the raters to create greater transparency and to explain their ratings. They went so far as to propose that raters be liable for financially punitive action when mistakes occur. What the commission wants is no ratings at all, so that they can operate in darkness. It complains about an S&P monopoly and that European downgrades should stop. These demands reflect the socialist-one-world attitude. If we can’t have things our way they should not exist at all. We know the attitude and culture; we lived there.

***************************************************

Wednesday, December 14, 2011

IF Issue: Wednesday Dec 14, 2011

Excerpts and links from the latest issue:

Corbett Report Radio 029 – Talking History with Bob Chapman

http://www.corbettreport.com/corbett-report-radio-029-talking-history-with-bob-chapman/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CorbettReportRSS+%28The+Corbett+Report%29

Bob Chapman - James Corbett Interview - Dec. 10, 2011

http://www.youtube.com/watch?v=TDTf1c-eb7U&feature=email

Interview 431 – Bob Chapman

http://www.corbettreport.com/interview-431-bob-chapman/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CorbettReportRSS+%28The+Corbett+Report%29

Bob Chapman - Blogtalk Radio - December 9, 2011

http://www.youtube.com/watch?v=ylGGS1eP0ow&feature=email

The Power Hour with Joyce Riley

http://archives2011.gcnlive.com/Archives2011/apr11/PowerHour/0426112.mp3

CHAPMAN: MF GLOBAL & CFTC, The Fall of Europe & THRIVE

http://www.youtube.com/watch?v=SoBe9XJiJK4&feature=email

CHAPMAN: PAPER VS. PHYSICAL, END OF THE NWO & RISE OF RON PAUL

http://www.youtube.com/watch?v=dPfbj4-hnCg

Bob Chapman - The Financial Survival - 12 Dec 2011

http://www.youtube.com/watch?v=OOBbhCjjtmg

Bob Chapman - Radio Liberty 3rd Hour - 12 Dec 2011

http://www.youtube.com/watch?v=3HdaRIDd5hQ&feature=email

US MARKETS

After watching Europe’s performance last week the only thing they really were after was an ESM, European Stabilization Mechanism, to tie down all EU nations to a tighter regional set up. As it turns out England and others did not agree. Britain obviously does not want to become part of a new treaty that deprives them of their sovereignty. This regional government concept appeared in the early 1960s and is now going to be pushed in Europe with the US to follow. Our question, is England just trying to protect the advantages of the “City of London,” or is the disagreement deeper than that? A new treaty will take two years for ratification, but in the meantime an agreement will hold forth on what can be called a handshake. Evidence is still out on whether this is an attempt by Germany to break up the euro zone and the EU or a genuine effort to set up a platform for world government. We know that since WWII that the internationalists have been setting up Europe as the foundation for world government. On the other hand we know that 65% to 70% of the German people want no part of it from any standpoint.

The main players in the end treated the debt crisis as a secondary problem, probably because the Federal Reserve had it covered for them. The only main player that displayed real nervousness was France’s Sarkozy. France had to have its banks bailed out and had to avoid one or two rating downgrades. Not only would those downgrades entail higher costs, but also they would impair France’s ability to help bailout the six unsound economies. The Fed is bailing out French banks short-term. Once the situation is more stable American short-term bond buyers will return and the Fed can concentrate aiding in other areas. That, of course, is if stability returns. Bailouts can only emanate from central banks and governments and any such operations in and of themselves are inflationary and if persistent will lead to hyperinflation.

This means all of the banks in the solvent countries will have to be nationalized, all or in part. At the same time these same banks and countries have to bail out the dreaded six countries. That will be a tall order, as some are not even cooperating. That could mean three or more of these countries could default leaving sound countries and their banks with big holes in their balance sheets. Overall none of this has been solved, because France and Germany were more interested in changing treaty rules than addressing the debt problem. These massive bailouts are on the way for the sound and the unsound, accompanied by higher inflation. Needless to say, all of this solves nothing on the short to intermediate term. It is another temporary respite. All we see is avoidance. Von Mises has told us only purging the system works. The bankers, politicians and bureaucrats do not want to see that happen, because the key to their power lies in the banking system and once purged their power is lost and countries are free to survive on their own. That is why the world has wars to keep the elitist bankers as our overseers. Under such circumstances nations are forced to amalgamate to bring order and to provide for the common defense. None of us are on the inside, so we do not know which avenue will be taken. Both choices mean lots more trouble ahead. The EU and the euro zone structures do not need to be changed, but the debt problem certainly needs to be addressed.

The quest for more power via the ESM is obvious to those in favor of world government. There will be nothing democratic about the ESM and most players will be appointees. Someone should tell these elitists bigger is not better and that more than half of Europe knows what they are up too. Whether it is called the EU, or Soviet Union, National Socialist Bund or the North American Union, they are all the same. They are totalitarian governments within one form of socialism at its core. This is government by appointment and regulation, which has no intention of letting the public participate. Every move or change will require no input from the people, only edicts from above.

That brings us to the position that England has taken. PM David Cameron is an elitist and one directly chosen at the Queen’s request. His position at last week’s meeting was surprising as he wanted guarantees of protection for the “City of London,” which supplies 40% of London’s jobs and 10% of jobs in England. This is the gang that was deeply involved in Bear Stearns, Lehman Bros., AIG and the Madoff scandals.

Among other things, Britain has objected and threatened to veto any kind of tax, even 1%, which on a compound basis would be far higher. Cameron believes this would cause financial sector business to move to Frankfurt. This rebellion within the EU ranks has far reaching implications. Cameron is no conservative and is part of the elitist operatives; obviously few of these characters trust each other. This is why England never committed to the euro. Cameron’s action has finally set Britain apart from the EU, never to join the euro, and cuts England off in part from the attempted consolidation on the Continent. That means it will have difficulty in fronting for American interests, and such interests will become more transparent.

************************************

Saturday, December 10, 2011

IF Issue: Saturday, Dec 10, 2011

Excerpts and links from the latest issue:

Bob Chapman - James Corbett Interview - Dec. 5, 2011

http://www.youtube.com/watch?v=ghVE5RoYaL0

Interview 424 – Bob Chapman

http://www.corbettreport.com/interview-424-bob-chapman/

Bob Chapman - Radio Liberty - 05 Dec 2011

http://www.youtube.com/watch?v=gB_GXPCQTK8
http://www.youtube.com/watch?v=c6hpE2kVHpM
http://www.youtube.com/watch?v=R0qM-WRF49s

Bob Chapman - RealNewsRadio - December 3,2011 http://www.youtube.com/watch?v=DIHgRWzAUKA

Bob Chapman - The National Intel Report 2011.12.06

http://www.youtube.com/watch?v=WC1KblhJvFo&feature=email

FFw/JB Podcast (12/8/2011): Bob Chapman

http://www.youtube.com/watch?v=6IXFvTXjuG0&feature=youtu.be

US MARKETS

As we reach back into modern European history we see the unnatural amalgamation of 27-European countries, all of which are socially and culturally different. From our point of view the union was doomed from its inception. We lived for years in central Europe, spoke their languages and had a powerful outsider’s view of their cultures. Europe’s inhabitants generally were convinced that the union would prevent future wars and bring peace to Europe. Unfortunately, all they did was trade Perfidious Albion, Hitler and Mussolini for the Trilateral Commission, Bilderbergs and Goldman Sachs and JPMorgan Chase. The same gang that financed WWII from both sides. It is important to understand the real history of Europe, not that fed to us in universities, where almost solely the victors write the books. As you know there are two sides to everything.

There are not only 6 sovereign nations that are insolvent, but because of the interconnectivity created by the EU and the euro zone the financial misery has spread to otherwise solvent nations. They bought the debt of 6 sovereigns and it was proper that they do so. For France, as a result, they may face a double downgrade in their debt ratings.

We continue to hear that the ECB purchased all the bad debt of the banks and sovereigns to clear the decks, but under present treaty the ECB is specifically prohibited from doing so. That is why US Treasury Secretary Geithner is in Europe this week. He is to show Europe the error of its ways, change the treaties and model the ECB after the US Fed. The players won’t solve any long-term problems, but it will give Europe and the ECB the leverage to work its way through today’s problems, and as a result create some fierce inflation. The later to them is the less of two evils. The players are now all well aware that existing debt to be neutralized is at least $6 trillion and if austerity is not followed the numbers will be higher. The European economies are now falling into recession and austerity could take Europe into depression. Remember, tax revenues will fall and impair the debtors’ ability to service their debt. It now becomes clear looking at the facts that the US and Europe all have similar problems, they are all broke, along with the major banks and they know full well money and credit creation will not solve their long-term problems. The game is being moved in this direction, because there is no other direction it can be moved into.

That is why European and US leaders are attempting to change the treaties to accommodate the money and credit creation potential of the ECB.

The issuance of new Eurobonds being created to restore long-term solvency is a non-starter, as opposed to changing the rules for the ECB. Both concepts just throw debt into the future, some 50 or 100 years away.

The concept being pushed as hard as the ECB becoming the Fed of Europe is the coordination of economic policies by a committee of 8 bureaucrats and 17 Secretaries of the Treasuries from the euro zone countries. These individuals would make all budgetary and fiscal choices for all 17 countries. In such a process each country would give up its sovereignty to a small group of bureaucrats devoted to the formation of World Government.

The alternative is to abandon the euro and the euro zone, which we believe is the real answer. Write off the bad debt and get on with life. Germany could be headed in this direction. We will know as we publish this weekend if there will be a new direction. The solutions offered are really those of the US and UK. The question is will the Europeans accept them? We do not know, but we do know that Germany and the Bundesbank will not accept any blame, after all those years of sacrifice to make everyone happy. Those days are gone forever. On the other hand is Germany trying to readopt the Deutschemark? We will have a better view after the weekend. Keep in mind 65% of Germans want out of the euro, out of further debt guarantees and many want out of the EU.

************************************************************

Wednesday, December 7, 2011

IF Issue: Wednesday Dec 7, 2011

Excerpts and links from the latest issue:

Bob Chapman - Sovereign Economist - November 30, 2011

http://www.youtube.com/watch?v=obdz4JmM6CE&feature=email

Bob Chapman - Sovereign Economist – November 30, 2011

http://www.youtube.com/watch?v=obdz4JmM6CE&feature=email

Bob Chapman - Financial Survival - December 2, 2011

http://www.youtube.com/watch?v=LYDV0EborkY&feature=email

Bob Chapman on the best places to Expatriate to

http://www.youtube.com/watch?v=YM2kb2D6_SU&feature=email

Bob Chapman/Liberty Radio

http://www.youtube.com/watch?v=vLsVv_EOZVc
http://www.youtube.com/watch?v=4Mqi8bqcyw0
http://www.youtube.com/watch?v=ugJ2CBPQWPQ
http://www.youtube.com/watch?v=MeBUt6_934I

Bob Chapman - RealNewsRadio - December 3, 2011

http://www.youtube.com/watch?v=DIHgRWzAUKA&feature=email

Interview 424 – Bob Chapman

http://www.corbettreport.com/interview-424-bob-chapman/

Bob Chapman - The Financial Survival - 02 Dec 2011

http://www.youtube.com/watch?v=74KD5ThpDGY&feature=email

Bob Chapman - The Financial Survival - 05 Dec 2011

http://www.youtube.com/watch?v=QkptXrNGkQg

US MARKETS

Even the middle of the road journalists are beginning to question Europe’s elected and appointed leadership. This past Monday the plan for the euro zone was laid out for a final capitulation to world government. The financial crisis has been handled from behind the scenes by the Fed, so that Germany’s Chancellor Merkel and France’s President can concentrate on more important matters, namely the final federalization of the euro zone to be followed by the entrapment of the remainder of the European Union.

The calls for major changes to the current treaties have little to do with the debt crisis. What these two emissaries of the world elitists are up to is to tear down the legal strength of monetary and political union of this unnatural association, and replace it with a stricter budgetary discipline known as the ESM, the European Stabilization Mechanism, this ostensibly to support countries in difficulty. Within this major change is a complete shift away from the original Maastricht and Lisbon Treaties, which is being done without the consent of the public in these countries. There is one exception to that in the case of Germany that must approve the changes.

On the 9th the final proposals will be laid out and agreed upon by various heads of state, some elected and some appointed. This “leadership” could care less what the people of these countries think. There are no trappings of democracy here, just the iron fist of Illuminist world ambitions. Any thinking, sophisticated person has to look on in disbelief at what is about to take place.

The plan is to have a committee of 8, assisted by 17 immunized finance ministers control the budgeting and fiscal policies of these 17 nations, which strips them of their sovereignty.

We read writer after writer and they do not have a clue as to what is being done to the people of these nations. They don’t know these appointments are all members of the Trilateral Commission, Bilderbergers and former Goldman Sachs employees. If they do know they are ignoring its significance. This is where Messrs. Draghi, Monti and Papademos all came from appointed to take the euro zone and eventually the EU into world government.

We have studied these characters for more than 50 years and we know exactly what they are up too. It is the job of these 3 Sherpas to continue to advertise the increased risk to financial and economic conditions, if such treaty changes are not made. This is a charade to mislead and misdirect the people offering them the only way out. Unfortunately, as far as we know, our voice is the only one being heard in exposing the real intent of what is being pulled off. There is no question that there is an economic and financial debt crisis, but these treaty changes have little to do with that. Their key phrase is price stability when real EU inflation is running more than 7%.

Since July the ECB has refused to expand money and credit. A month ago control passed from the hands of Trichet to Draghi, who immediately lowered interest rates, which we predicted he would do - no one else made such a call. The ECB still hasn’t printed euros, but the Fed is going so in its stead. The ECB is buying Italian and Spanish bonds, but only about $20 billions worth. The ECB, known to few, has been sterilizing its sovereign debt buying by draining an equivalent amount of euros from the banking system. This is the antithesis what central banks do. The Trichet ECB wanted their actions not to create inflation. This is why inflation has held so well in Europe. That is all about to change as the FED takes over. The funds to purchase bonds and supply liquidity will be available to jump start Europe as inflation climbs.

All of the players knew austerity plans play well and eventually work to tear down an economy, but short term they are a loser. The only thing that works is more and more money and credit. Who wants to stop economic growth. Up until Draghi took over the euro has not been wantonly destroyed. Just be patient Draghi will end all that.

*****************************************************

Saturday, December 3, 2011

IF Issue: Saturday Dec 3, 2011

Excerpts and links from the latest issue:

BOB CHAPMAN/KERRY LUTZ

http://traffic.libsyn.com/kerrylutz/Bob_Chapman_12-1-11.mp3

Bob Chapman - The Financial Survival - 30 Nov 2011

http://www.youtube.com/watch?v=vKQLDyYudis&feature=email

Bob Chapman - The Power Hour - November 28, 2011

http://www.youtube.com/watch?v=6-2dklE4TN8&feature=email

US MARKETS

Do we need central banks at all? It’s a good question. We have had the Federal Reserve since 1913 and their management has been a disaster for Americans and a wealth builder for its owners, the Wall Street banks. It has also allowed the financial sector to control our country. It is the seat of elitist power. The Fed has debauched the US dollar via their monopoly and enriched their owners beyond belief. Any entity that has to resort to the subterfuge of using a cloaking term, such as quantitative easing has to be a scam.

The Federal Reserve and other central banks were created to inflate currencies thereby depreciating them and in that process the owners of the Fed and their colleagues’ reaped enormous profits. Entities like the Fed have been doing this for centuries. You might say such a monopoly leads to currency debauchery. Reflecting on such a track record there is no reason to have central banks. A federal Treasury is all that is needed. Not that it is perfect, it is no worse then having a privately owned central bank. We have suffered under the Fed since 1913 and it is time to terminate the Fed and return our monetary authority to the US Treasury.

In the latest turn of events the Fed has mastermind another rescue in conjunction with the ECB. Europe hurting for cash, particularly US dollars, brought England, Japan, Switzerland and Canada and ECB into their latest money creation scheme. They will lower prices on dollar liquidity swaps on 12/2/11 and extend these swap subsidies until 12/01/13. What has happened as we pointed out previously is that US money market and pension funds dropped participation in short-term bond markets in Europe from 55% of assets to about 20% of assets. That meant European banks couldn’t function. The eventual outcome would be no dollar investments in Europe until their financial house is put in order.

In addition there are on again off again stories that the IMF has been talking with Italy and Spain. Both sides deny it and behind the scenes we are told talks have in fact been going on for weeks.

We can assure you that the dollar swap is really all coming from the Fed. England and Japan are probably window dressing and Switzerland and Canada may participate. This is a Fed operation. What confuses the public is misdirection engendered in utterances by policy makers. There is absolutely no coordination, which belies confusion, which leads to lack of belief in any statements. Again, the problem is not liquidity, but solvency. They are all broke and reorganization would take years to accomplish. They cannot do what they should do, and that is purge the system, because they’ll lose control and that is the key and seat of elitist power. If they do the right thing the public will then discover what they have been up too and they’ll end up where they belong, in jail.

These dollar loans will be run through the ECB, the European Central Bank, giving euro zone banks direct access to dollars. It is all subterfuge in order to continue the force short term. Additional liquidity is a stopgap measure, which not only deceives, but also is injurious in the long run. The result is the Fed will continue to prop up European financial markets with no solution in sight moving from one calamity to another until the systemically insolvent conditions take the system down. These players have many things they can pull yet, so don’t think the system can fail soon. It could take several more years and the result will be inflation, hyperinflation and higher gold and silver prices.

************************************************

Wednesday, November 30, 2011

IF Issue: Wednesday Nov 30, 2011

Excerpts and links from the latest issue:

Bob Chapman - Sovereign Economist - November 23, 2011

http://www.youtube.com/watch?v=s2LWjuX77CI&feature=email

Bob Chapman – Ralph Evans

WORLD FINANCIAL COLLAPSE - WWIII & Bankers Demise

http://www.youtube.com/watch?v=s1i6mVTPgWg&feature=email

Interview 418 – Bob Chapman

http://www.corbettreport.com/interview-418-bob-chapman/

Bob Chapman - The Financial Survival 28 Nov 2011

http://www.youtube.com/watch?v=YPU0G0z1paw&feature=email

Dr. Deagle Show 111123 1/3 - BOB CHAPMAN

http://www.youtube.com/watch?v=iqfIQmUJ1c8
http://www.youtube.com/watch?v=c0GzNM6o1Ck
http://www.youtube.com/watch?v=Ch-ELZ2z6VA

Bob Chapman - Radio Liberty 28 Nov 2011

http://www.youtube.com/watch?v=-144GuRT1h8&feature=email

US MARKETS

Except for the MF Global scandal Europe still stands at the forefront of world debt problems. Up until now little has been accomplished toward solving these problems and the traditional Christmas season is upon us, which stretches from December 7th, to January 10th, a period in which very little will be accomplished.

It is reminiscent of last summer. The only thing that the elitists have accomplished is the placement of Bilderbergs as the head of the ECB and the appointments of two more as PM’s in Italy and Greece.

Over the last ten years we saw all debt grow, but in particular among the southern members of the euro zone. The imbalance was predictable, but the northern countries just ignored the problem. Those in the north blamed the difference on culture and work ethics. Thrown into the mix was government and banking profligacy and growing lack of competitiveness. All of that was true, but it did not alter the fact that great imbalances existed and still exist and that certainly contributed to the underlying non-competitiveness.

Financial mismanagement certainly had a profound effect in the six countries in serious trouble and you can also include France in the group. The problems were also compounded by the wild growth of indebtedness lorded over the banking community. The latter just loved one interest for all. The banks were particularly the blame in Ireland and Spain where unnecessary building went absolutely berserk. Through this period, Germany and the Netherlands, in particular, couldn’t lend money fast enough to those who shouldn’t have been borrowing it. This, as we reflect back, it was malinvestment, a misallocation of capital instituted by the banking community, which was leveraged about 70 to 1. We continue to ask what could they have been thinking of? The performance of the banks was at the very core and heart of what we see today.

Two to three years ago Germany reached the conclusion that this could not continue and they attempted to Germanize Greece and to instill discipline. That ended up being unsuccessful, due to the great cultural differences. That brought about the EFSF, which provided loans to those countries that were unacceptable to the bond market. This, of course, was just another effort in avoiding reality. The northern Euro Zone members want to continue to export to these countries, but they cannot do that and that is why they have no money. They are finding that collectivism doesn’t work. There is no such thing as collective responsibility. These new world order geniuses forget that when you have austerity GDP falls and you have a recession. In addition, it also brings about added inflation, which had and has the ECB very concerned, because their mandate is to keep inflation in check. This then has put the ECB at cross-purposes.

This points out why the ECB does not want to act as lender of last resort to governments. The six nations in trouble have been forced kicking and screaming to accept austerity government changes and to reveal the terrible condition that their banks are in. Greece, as an example, went into the stage one bailout and austerity, which forced revenues lower and the ability to pay interest lower as well. Wages were cut 40%, government wanted to take licensees from taxi drivers and turn their businesses over to a Germany consortium, which forced the largest demonstrations to date. We wrote more than two years ago that Greece should default, return to the Drachma and straighten their economy out. No one wanted to hear that and now the situation is much worse.

We have six countries on the ropes. Contagion has set in. Stress tests are a scam and meaningless. Dexia passed with flying colors and two weeks later went bankrupt.

Due to outright lying by bankers and politicians money is going to be much harder to raise in the future. If Germany’s auction was real last week, and if they could only raise half of what they wanted to raise, how can those in trouble believe they can raise any funds at over 7% on 10-year bonds?

The simple solution is to end the euro, a poorly thought out experiment; which its creators thought would become a one-world currency. If currencies are managed properly, central banks do not need to be a lender of last resort. All the lender does in creating money and credit out of thin air is inflate away excesses by the bank and fiscal policies. A cap of 3% annually in central bank monetary creation will bring only limited inflation and allow for growth.

A break up of the euro zone does not have to be disorderly. Every two months, over a one-year period, one of the six nations can be allowed to leave the euro in full default. The second year the remaining 11 members can decide whether they want to keep the group together, or return to their original currencies. This is essentially what 65% of German citizens want.

Saturday, November 26, 2011

IF Issue: Saturday November 26, 2011

Excerpts and links from the latest issue:

Bob Chapman - Radio Liberty 3rd Hour- 21 Nov 2011

http://www.youtube.com/watch?v=LLs0GFYT58Y&feature=email

Bob Chapman - Financial Survival - November 23, 2011

http://www.youtube.com/watch?v=o3Zxvf5qUpY&feature=email

US MARKETS

In Europe each time a new player is presented we find he is a Goldman Sachs’ alumnus. Recent entries are Mario Monti “appointed” PM of Italy, Lucas Papademas “appointed” PM of Greece and Mario Dragahi “appointed” President of the European Central Bank. The banks blatantly control governments and agencies presenting us with an oligarchy, which controls most of the nations on the planet. In America politicians are bought and paid for. In Europe there is a different mind set, a shared worldview of bureaucrats, technocrats, politicians and the elite bankers of world government and domination. What has happened in this process is that Goldman Sachs, JPMorgan Chase and other mega-banking has retained power for decades. They control all the players in the field, so the outcome is always in their favor. The bankers and others in turn are paid via billions of dollars in bonuses. Banks are now bank holding companies having become that to avoid failure as brokerage firms. That is the case in the US, UK and Europe.

One of our subscribers in Brussels sent us a copy of “A European Mechanism for Financial Stability.” The present danger is seen in sovereigns heavily in debt and the heard effect of hedge funds. They say they won’t allow speculators to govern their societies. If they are serious why don’t they ban them from their markets? A universal ban would be even better and they could throw in derivatives for good measure.

Europe still does not have a longer-term structural solution to their debt crisis and none is in the offering. Germany cannot sell its total tranche of bonds and Mrs. Merkel says that if Germany can only sell 65% of its bonds how can Eurobonds or bonds of the six insolvent nations sell theirs? The debt crisis is burrowing even deeper like a large worm undermining the entire continent. Worse yet, we just found out that the Bundesbank usually holds back bonds for market making operations, thus, they only sold about half of the issue. If the crisis continues to deepen Germany and the other euro zone nations will have to reexamine where they are headed. As we know all currencies and debt rates are increasing, which ties the banks of all the participants, including the solvent ones. Even with the German bunds, who is going to want to hold debt in a country that will have to guarantee one-half or more of the debt of other countries? At the same time the call goes out for strict supervision and enforcement of budget discipline. We have lived in these countries and that is not possible for any sustained period of time.

The Spanish election turned out as well as could be expected Calling for a vote on November 20th, the anniversary of Generalisimo’s death, turned out to be the kiss of death for Socialist PM Joe Luis Zapatero. There are too many people who liked Franco. The PP is a pro business party and already governs 11 of 17 of the country’s autonomous regions. If PP beats the Socialists in their stronghold in March, the PP will be in power for a number of years. Zapater’s legacy to the PP will have its work cut out for it with 22% unemployment and almost 7% yields to contend with. They will have to also try to restore the country’s AAA rating. Many voted for the lesser of two evils.

In France we have another case of government bailing out the banks and other euro zone members. These efforts could cost France its AAA rating. We’ll know in mid-January, but it does not look good.

Funding costs on a 10-year bond level are up and they look like they are going to stay there. Major countries are still paying close to 7%, which is the highest funding cost since the creation of the euro. The spread between French and German rates is about 2%, which is unheard of. The euro continues to be hammered vs. the dollar and the same is happening worldwide in stock markets. Most two-year paper has risen in yield over the past month. France is paying close to 4% versus .40% in Germany and in the US .28%. In Europe these bond markets could not function without the assistance of the ECB and the money and credit creation of sovereign governments, some banks are showing desperate signs. The biggest bank in Italy, Unibank, has to refinance $51 billion of bonds shortly. Their bond yields are now over 10%. Only the ECB can bail them out like the Fed bailed out banks in the US and Europe three years ago.

While this transpires 70% of Americans are unaware of the seriousness of what is taking place in Europe. Wait until 2012. Banks alone have to raise $660 billion of maturing debt, most 10-year paper is selling above 7-1/4%, which is a sign that they all need the help; Greece, Ireland and Portugal has already received. Remember, we are talking $6 trillion just to bail these countries out and to keep their economies going sideways. The solvent countries cannot come up with that kind of money without failing themselves. You have to ask why did the bankers let things go so far? They deliberately impeded the system, because they cannot be that stupid. Then there is the matter of capital flight. This year Greek banks have lost 20% of their deposits. We hope they bought gold and silver. We ask are Italian and Spanish deposits next? Over in Hungary Moody’s has cut their debt to non-investment grade. In the wake of that announcement France’s Sarkozy and Germany’s Merkel tell us that the ECB will act appropriately, whatever that means. These leaders do not know what to say or what to do. The situation is unsustainable, but we wouldn’t be surprised if this phase lasted into late January. Remember, Europe virtually closes down from December 7th until January 10th. This while the future of the European banking system is in dire trouble. While this transpires we wonder how many derivative failures there are and what their consequences could be? At last we heard from the US government, US bank exposure was $670 billion, mostly in credit default swaps. If the six European countries default on their debt, US banks cannot possibly stay solvent. The knack on contagion could take the US banking system down with it. In Europe there is no question that all European banks will have to be recapitalized by the countries in which they do business. In fact, it has already begun, just as it did in the US three years ago. That makes their currencies worth much less and gold and silver worth much more.

This is the greatest risk the EU has ever faced and as yet no one has any solutions. The euro and the entire 27-country union are at risk. This as we predicted has no solution. The weaker states have to be cut loose and the euro has to be phased out. Article 123 of the EU Treaty, prohibiting monetary financing or central bank funding of government, is illegal. That certainly is a stopper. That means the euro zone and the EU are trapped by their treaty and would have to change the treaty and, of course, the outcome would be massive inflation. If they stick to the treaty the euro will collapse. What it comes down to is that desperate violators do not care about the law. All they want is survival. On the other hand, Germans are unwilling to sacrifice their credibility or to abandon the legal path. Crisis or no crisis there is no reason to break the rules for those who have already broken them. Monetary inflation is the direct result of bailout and purging the system is the only solution for the long-term. We do not think Germany will abandon the rules and their principals. That means they are prepared to cut loose the six insolvents and hope the core euro nations can hold together. It is not only inflation, but credibility and trust as well.

********************************

Thursday, November 24, 2011

IF Issue: Wednesday November 23, 2011

Excerpts and links from the latest issue:

Bob Chapman on the MF Global scandal

http://www.youtube.com/watch?v=5ZDJuVqDdp8&feature=email

Bob Chapman - The Financial Survival 18 Nov 2011

http://www.youtube.com/watch?v=NIH9LQOfMxk&feature=email

Interview 413 – Bob Chapman

http://www.corbettreport.com/interview-413-bob-chapman/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CorbettReportRSS+%28The+Corbett+Report%29

Bob Chapman joins Wide Awake Radio 11-21-11

http://www.youtube.com/watch?v=ZNnJ2ZxOT_o&feature=email

Bob Chapman - The Financial Survival 21 Nov 2011

http://www.youtube.com/watch?v=WI82-uY16lE&feature=email

Bob Chapman - The Money & Wealth Show. - 11 Nov 2011

http://www.youtube.com/watch?v=9LtJMc3iCUU

US MARKETS

We continue to write about Europe, because we have too. At the moment and for at least the next several months, it will be the lynchpin and the catalyst that could bring about a financial chain reaction worldwide. In turn Europe poses the biggest risk to the US economy. European direction has changed over the past few weeks to cut loose the six problem nations and any others who cannot stand on their own and reform a core euro zone. Presently Europe is nowhere close to ending its sovereign debt crisis. Germany does not want to use the European Central Bank as a lender of last resort. As riots erupt on the streets of Greece, talks are underway to structure 50% debt write-off that was the heart of the deal structured a month ago. In the meantime lending costs, already astronomical in Greece are relentlessly moving higher in Italy and Spain. The ECB has been active in the bond market as a buyer, but only in a limited way. The French, British and US want the ECB to act like the Federal Reserve overwhelming the market, and monetizing to solve the problems of the moment. The Germans do not want to deal with the inevitable inflation that follows. The extension of the problem, the hallmark of US, UK and French monetary policy obviously doesn’t solve the problem, but eventually compounds it by creating more debt and inflation. This policy has proven over and over again to be a failure in the longer term.

Confusion still reigns in Europe, and as a result the euro has lost 3%. In fact, climbing interest rates have many panicked. Interest rates on the 2-year Italian bills rose 150 bps last week, or ½%, as CDS, Credit Default Swaps, jumped 24%. Yields on Spanish, French and Belgian bonds had the highest divergence in euro history versus the bund this past week as well. As we have pointed out over and over that there is only one safe haven and that is gold and silver related assets. We ask how can the US dollar be perceived as a safe haven as its debt grows exponentially and its credit rating is approaching another downgrading? There has been only one safe haven for 6,000 years and that is gold and if the US government thinks they are going to change that they are mistaken. The money managers and hedge funds continue to chase the same failing currencies and refuses to buy gold, which appreciated more than 20% annually along with silver for the past 12 years. What are these genius money managers thinking about? They are so cowed by the establishment and propaganda they do not dare deviate. That in the face of historically low yields, which when matched against inflation is dreadful. Doesn’t anyone think outside the box?

In America Operation Twist, which has seemed to have faded from memory already has been a failure. How do you solve a debt crisis with more debt? Something the Europeans should take note of. But, they won’t, because that is today’s accepted poison. That in spite of its failure in the past. The end goal of Twist was lower mortgage rates, which really hasn’t happened. Who cares though? There are six million foreclosed homes in sale inventory and that will increase to 8 to 11 million over the next four years. We’d call this an exercise in futility.

***********************************************

Tuesday, November 22, 2011

IF Issue: Saturday November 19, 2011

Excerpts and links from the latest issue:

Dr. Deagle Show 111109 1/3 to 3/3 - BOB CHAPMAN - COMING ECONOMIC STORM

http://www.youtube.com/watch?v=dT9b2mbaLFQ&feature=email

http://www.youtube.com/watch?v=kK5lPTWZj-w

http://www.youtube.com/watch?v=Gi66ivhliQY

Bob Chapman: Surviving The Banker Sociopaths 1/2

http://www.youtube.com/user/thealexjoneschannel/#p/u/11/2Ai4cgWzRiw

Bob Chapman - The National Intel Report with John Stadtmiller -15 Nov 2011

http://www.youtube.com/watch?v=9T6sXOcWC58&feature=email

Silver Update 11/16/11 - Stupor Committee

http://www.youtube.com/watch?v=e7jpMlWebWE

FFw/JB Podcast (11/17/2011): Bob Chapman

http://www.youtube.com/watch?v=O8cBOEpUiXw&feature=youtu.be

US MARKETS

German Chancellor Merkel keeps moving the field of play away from the European Central Bank, and to the people of the euro zone. That is so she can get legislation to remove the sovereignty of EU members. The pitch is, if the new EU is to work all fiscal decisions that will have to be determined in unison by bureaucratic technocrats, all of whom want world government. This way Germany can lead European countries in locked goose step to one-world nirvanas. Incidentally, Britain’s PM David Cameron is going in the exact opposite direction. He sees an opportunity to allow powers to ebb back to national status from Brussels. What Mrs. Merkel is saying is that existing treaties and the ECB does not have a possibility of solving the euro problem.

In the background we find German Finance Minister Wolfgang Schauble is a driving force behind the plans to run towards EU and fiscal and monetary union. This shows you how deliberately out of touch German politicians are and they seem to care less. They say this is the best way to ensure the EU’s survival, not the euro, the EU. Their plan will eventually destroy any possible solution in the quest to control European nations. As the Dir Spiegel put it so aptly, entering into voluntary euthanasia. What Merkel is up to here is massive changes in the German Constitution and the remaining Constitutions of Europe. Germany has one of the best Constitutions in the world, so why change it to abet world government? Herr Schauble and his Illuminist think tank behind the scenes is the one, which is really making all the decisions. An eminence guise, if you may. We wonder if Herr Schäuble has visions of himself as dictator of the EU? Perhaps these are his elitist orders. His quest along with Merkel’s is increase guarantees for the new ESM, which a majority of his own party rejects. Then again he doesn’t let democracy get in his way. Schäuble is the Illuminist’s main man in Germany and one to be watched closely. We knew Greece had to default two years ago, but so did Herr Schäuble and he told that to Mrs. Merkel.

Herr Schäuble finding he could not raise enough funds for the EFSF he then recommended derivatives to extend the funds line from $518 billion, nearly half of which was donated by Germany, to $1.4 trillion. This concept at least for now ha fallen into disfavor.

Supposedly, the only way the euro and the European Union can be saved is by transferring sovereign rights to the EU and amending Germany’s Constitution. As the situation deteriorates, which it is, they expect to use this opportunity to make the changes they want. They expect to turn the next crisis into an opportunity. The first shot would be a German natural referendum on Constitutional changes. The far more conservative Bavarian sister party certainly won’t go along with these ideas and changes. The entire exercise is a loser but Schäuble and the banks will push as hard as possible. In France Mr. Sarkozy is for the plan, but France and its banks are broke and the French government cannot even save them.

If one is to present another Hitlerian concept one must understand cultural social issues stretching back thousands of years and the anthropology that makes them work. Yackey would have called what they are doing cultural distortion. These people. Schauble and Merkel are not idiots. They are the water carriers for world government. They are blinded by their goals and desires. As we have pointed out in earlier issues the six nations and any others in financial trouble will be cut loose to save the banking systems in the other 11 countries, although that may not be possible. They are willing to accept those odds, if for no other reason that they have known for some time that they cannot save the six. The financial sectors have to be saved at all costs, because this is the seat of elitist power. Saving the people and the economies isn’t even on their agenda. This is happening in the UK and US as well. This is what Occupy is protesting about. A defeat in Germany of these grandiose ideas will go a long way to preserving Democracy in Europe. We see the same forces doing the same thing in the UK and US and hopefully we’ll be seeing their defeat as well.

There is turmoil among the European ranks, as to weather the ECB should continue to buy Italian and Spanish bonds. The German’s say no, because they fear inflation, which is understandable. They are fearful as well that the ECB could loose its independence. On the other hand British PM David Cameron says that the ECB should step in and save the day. His comment sounds like it came straight from the Fed.

As we mentioned previously what Germany and France are trying to do is cut loose the financial failures from the euro, consolidate the remaining euro zone and via the ESM remove part of the sovereignty from this probable group of eight by allowing the ESM to make the fiscal domestic decisions of the group. They also want to revise the EU’s Lisbon Treaty that would now include fiscal union. France and Britain want the ECB to guarantee the EFSF. Germany does not. Germany is in a powerful position and has begun to use that power. Mrs. Merkel told Mr. Cameron that if he didn’t agree they’d move on without him. If England ever wanted to leave the EU, this would be the time to do so.

You cannot maintain democratic control of the group with it operating at two speeds. In the 1950s you had this between the EEC and EFTA. That is why they were merged into the EU. If you have one speed it is easier and that is why Germany wants to dump the weak sisters.

Here Europe is in a panic crisis and the politicians are jockeying for power. England and Germany want more export breaks, apparently unaware that if present deterioration continues they may not have a euro zone or a EU.

As Italy and Greece grab the headlines our subscribers right from Slovenia, that their banking system may collapse. There are lots of problems, but the worst we hear is the government’s incompetence.

Unemployment unofficially is about 15% the housing market is dead, prices are falling and most construction companies have shut down. Late payments by these companies to banks are about 25%. In the residential sector about 15% of loans are behind on payments. As with Greece and Italy, Slovenian bonds are now yielding more than 7% - a clear sign that they are probably on the edge of bankruptcy. As you can see there are many problems within the EU that few talk about, that just adds to the European turmoil.

*****************************************

Pages

Thursday, December 29, 2011

Saturday, December 17, 2011

Wednesday, December 14, 2011

Saturday, December 10, 2011

Wednesday, December 7, 2011

Saturday, December 3, 2011

Wednesday, November 30, 2011

Saturday, November 26, 2011

Thursday, November 24, 2011

Tuesday, November 22, 2011