The International Forecaster: Wealth Protection

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.

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

Excerpts from the latest issue:
Corbett Report Interview 408 – Bob Chapman

http://www.corbettreport.com/interview-408-bob-chapman/

Interview 408 – Bob Chapman

http://www.corbettreport.com/interview-408-bob-chapman/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CorbettReportRSS+%28The+Corbett+Report%29

Bob Chapman - The Financial Survival 11 Nov 2011

http://www.youtube.com/watch?v=8MrnUrbC6go&feature=email

Bob Chapman - HoweStreet.com Radio with host

Phil Mackesy:

http://talkdigitalnetwork.com/2011/11/corzine-cftc-get-it-wrong/

Bob Chapman: The Collapse is Coming!

http://www.youtube.com/watch?v=eCG4hv6Ds2k&feature=email

Bob Chapman: Surviving The Banker Sociopaths 1/2

http://www.youtube.com/watch?list=PLD2DD1CF2245D0675&v=2Ai4cgWzRiw&feature=player_embedded

Bob Chapman - The National Intel Report with John Stadtmiller -08 Nov 2011

http://www.youtube.com/watch?v=o9_96J09r9s&feature=email

Dr Deagle Show 111109 1/3 - BOB CHAPMAN - COMING

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

Dr Deagle Show 111109 2/3 - BOB CHAPMAN - COMING ECONOMIC STORM

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

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

Bob/the Power Hour with Joyce

http://archives2011.gcnlive.com/Archives2011/nov11/PowerHour/1114111.mp3

Bob Chapman w/ Kerry Lutz

http://bit.ly/bob-chapman-11-14-11

Bob Chapman - The Financial Survival 14 Nov 2011

http://www.youtube.com/watch?v=8F1wpjPe7no

US MARKETS

It wasn’t all that long ago that industry estimates were that the issuance of credit default swaps in Europe, CDS, were about $18 billion. At the same time on the street it was estimated that the exposure was $75 billion. We estimate $150 billion - this represented insurance on the holders of bonds issued by Greece, Portugal, Ireland, Spain and Italy. The Bank for International Settlements says that figure is now $518 billion. As we have noted before the big problem is counterparty risk. When CDS, credit default swaps, are triggered to default will the counterparties pay up? Even if writers are buying from one another someone has to get caught holding the bag and loose money. That is where the risk comes in.

We are seeing a change in tactics by Europe’s politicians as they head toward allowing euro zone members to leave the arrangement. The realization is that no matter what, the five weak nations cannot compete with the stronger euro zone countries. They want legislation for their exit and to allow them to remain in the European Union. They obviously know that if they all or in part leave the euro they’ll probably default as well, in whole or in part. The derivative writers contend if the owners of bonds agree to take a 50% loss on bonds then the insurance doesn’t take effect. Fitch, the rating service says yes it is a payable default. We will see who is correct. We agree with Fitch.

At least for the moment bond yields in Europe seem to be finding balance and the euro seems to want to do the same. Pressure is still being applied and yields will probably move up over the next six weeks and we could see the euro at $1.30. the French and Germans are exposing a smaller euro zone finally facing reality, although the euro was all they cared about in the first place. Excepting Germany, most bonds were lower.

At the beginning every sovereign was going to be bailed out if necessary. Germany believed 2 years ago it would cost $1 trillion, we said $4 trillion. When Germany admitted to $3.5 trillion two months ago they knew then they and the other solvent countries couldn’t carry the burden without going under themselves. That was very short sighted of Germany. If they had made these decisions earlier they wouldn’t have had to make them now in a crisis where the problems are spiraling out of control. What poor preparation and planning. This should have been over last summer, but no they had to have their summer vacations. These people live in la la land. This corrupt socialist model does not work as many socialist countries have discovered.

The future of the euro zone is sealed. There will be six less participants a year from now. The European economy will have 1% negative growth next year and lower growth the following year. In Europe several more members will be forced to phase out the euro and return to their own currencies. We see this as the best option Europe’s one-worlders can hope for. What we are seeing is not a liquidity issue. These five countries are broke and all the saviors can do is throw good money after bad.

We hear morbid stories of the terrible results of changing currencies, some of which are true. You know what the problems are. You just avoid them. Everything has to be done ahead of time. You simply trade in each euro for ½ drachma or lira and seven days later there are no more exchanges. There is a 50% devaluation and a total default on debt. The government in question has to either bail out the banks or lets them go under. Either way a new banking system has to be put in place. In order to prepare for such events you simple exchange euros for gold and silver coins and bullion. Only keep enough euros to survive.

The troubles in Europe are not going to go away anytime soon. Expect two years or less before the euro is history. This will cause a rising dollar temporarily, but do not be deceived, it won’t last long.

Just to show you how rapid the deterioration has become, Italian banks borrowed $152 billion at the end of October, up from $144 billion in September. Italy’s $2 trillion plus in liabilities exceeds the four other countries in trouble. The banks holding these bonds as collateral are seeing their value erode, which means they cannot lend as much money as they would like to lend. In addition, banks have also purchased these bonds and as they fall in value it reduces their capital base. They cannot lend as much and may have to raise additional capital. That is in addition to raising funds to meet the BIS requirement of 9% reserves.

Italy’s PM Silvio Berlusconi as of this writing has not stepped down and as a result the yield on the Italian 10-year notes rose. These are killer rates, because Italy has to sell $204.2 billion in notes in 2011 and $231.9 billion in 2012. Italy, like all the other sovereigns that are in austerity programs, has already slipped into recession in addition to a natural slow down in the European Union. That will make all these nations have a difficult time increasing revenues.

Italy is now the key not Greece, and the very fact that France’s Sarkozy and Germany’s Merkel are pushing for legislation to allow sovereigns to exit the euro zone but stay in the EU is very telling. European and US stock markets sold off on the news, but the US’s Working Group on Financial Markets brought the markets right back up. In case you hadn’t noticed there are no longer free markets. Most everyone in the investment community knows the markets are being manipulated but no one says anything. That is because all they have to do is watch what the US is doing and follow suit. These actions, of course, make it much more difficult for the nations to sell their bonds and notes and the yields they must pay go higher. There is now no question the euro zone will change. The weak six countries will soon leave and eventually we see an end to this unnatural union. The healthy nations will concentrate on bailing out their banks, which will cost taxpayers a fortune. The bankrupt nations will have to nationalize banks. Depositors will lose 50% to 90% of their deposits. Those subscribers in Europe get out of those banks now. Take those funds and buy gold and silver shares, coins and bullion. In the healthier countries do the same thing, because we do not know how big the losses will be? No one knows how bad this will get.

Pages

Wednesday, December 7, 2011

IF Issue: Wednesday Dec 7, 2011

Wednesday, November 16, 2011

IF Issue: Wednesday Nov 16, 2011