Thursday, March 13, 2014
At the onset of the derivatives collapse in 2007/2008 it would have been easy to assume that most of America was receiving a valuable education in normalcy bias.
In 2006, the amount of ego on display surrounding mortgage investment was so disturbingly grotesque anyone with any true understanding of the situation felt like projectile vomiting. To watch the smug righteousness of MSNBC and FOX economic pundits as they predicted the infinite rise of American property markets despite all evidence to the contrary was truly mind blowing. When the whole system imploded, it was difficult to know whether one should laugh, or cry.
The saddest aspect of the credit crisis of 2008 was not the massive chain reaction of bankruptcies or the threat of institutional insolvency. Rather, it was the delusional assumptions of the public that the grand mortgage casino was going to go on forever. There is nothing worse than witnessing the victim of a Ponzi scheme defend the lie which has ultimately destroyed him. As much as I am for people waking up to the nature of the crisis, there comes a point when those who are going to figure it out will figure it out, and the rest are essentially hopeless.
The cultism surrounding the U.S. economy and the U.S. dollar is truly mind boggling, and by “cultism” I mean a blind faith in the fiat currency mechanism that goes beyond all logic, reason and evidence.
In recent weeks it has become more visible as global financiers play both sides of the Ukrainian conflict, luring Americans into a frenzy of false patriotism and an anti-Russo-sports-team-mentality. My personal distaste for Vladimir Putin revolves around my understanding that he is just as much a puppet of the International Monetary Fund and international banks as Barack Obama, but many Americans hate him simply because the mainstream media has designated him the next villain in the fantasy tale of U.S. foreign policy.
Open threats from Russia that they will dump U.S. treasury bond holdings and the dollar’s world reserve status if NATO interferes in the Ukraine have been met with wildly naive chest beating from dollar cultists. I am beginning to see the talking points everywhere.
“Let them dump the dollar, Russia’s holdings are minimal!” Or, “Let them throw out Treasuries, they’ll just be shooting themselves in the foot!” are the battle cries heard across the web. I wish I could convey how insane this viewpoint is, especially in light of the fact that many alternative economic analysts, including myself, have been predicting just such a scenario for years.
Despite the childish boastings of the dollar devout, there is an extraordinarily good possibility that the life of the greenback will be snuffed out in the near term. Here are the facts…
1) Russia will not be alone in its decouple from the dollar system. China, our largest foreign creditor, and India (a supposed ally) have clearly sided with Russia on the Ukranian issue. China has stated that it will back Russia’s play in the event that sanctions are brought to bear by NATO, or if a shooting conflict erupts.
2) China has already been slowly dumping the dollar as a world reserve currency using bilateral trade agreements with numerous countries, including Russia, India, Australia, Brazil, Germany, Japan, etc. These agreements allow FOREX currency swaps and export/import purchases to be made with China without the use of the dollar. China has been preparing itself for a divorce from U.S. economic dependence for at least a decade. The idea that they would actually follow through over political tensions should NOT surprise anyone if they have been paying attention.
3) A total drop of the dollar or U.S. treasury bonds by Russia and China would send shock waves through global markets. Russia is a major energy supplier for most of Europe. China is the largest export/import nation in the world. If they refuse to accept dollars as a trade mechanism, numerous countries will fall in line to abandon the greenback as well. The fact that so many Americans refuse to acknowledge this reality is a recipe for disaster.
The only advantage the U.S. has traditionally offered in terms of international trade has been the American consumer, whose unchecked debt spending partly fueled the rise of the industrialized East, not to mention the biggest credit bubble in history. The role of America as a consumer market is collapsing today, however. The mainstream media and the Federal Reserve can blame the steady decline in retail sales on the “weather” all they want, but negative indicators in global manufacturing often take many months to register in the statistics, meaning, this destabilization began long before the days turned cold.
4) China has been shifting away from export dependency since at least 2008, calling for a larger consumer based market at home. This process of enriching the Chinese consumer has almost been completed. The lie that China “needs the U.S.” in order to survive economically needs to be thrown out like the utter propaganda it is.
5) China (and most of the world) has ended new dollar purchases for their FOREX reserves, and has no plans to make new purchases in the future.
6) China executed the second largest dump of U.S. Treasury bonds in history in the past month.
7) Russia, China, and numerous other countries, including U.S. “allies”, have been calling for the end of the dollar’s world reserve status and the institution of a new global basket currency using the IMF’s Special Drawing Rights (SDR). Even Putin has suggested that the IMF take over administration of the global economy and issue the SDR as a world currency system. This flies in the face of those who argue that the IMF is somehow “American run”. The truth is, the IMF is run by global banks and no more answers to the U.S. government than the Federal Reserve answers to the U.S. government.
8) The Federal Reserve has been creating trillions of dollars in fiat just to prop up U.S. markets since 2008, and we are still seeing a considerable decline in global manufacturing, retail, personal home sales, and a general malaise in consumer demand. Without a full audit, there is no way to know exactly how much currency has been generated or how much is floating around in foreign markets. Any loss of world reserve status would send that flood of dollars back into the U.S., most likely ending in a hyperinflationary environment.
9) Another rather dubious argument I see often is the claim that the Federal Reserve and the U.S. Treasury could simply “negate” a Treasury dump by refusing to acknowledge creditor liabilities. Or, that they could simply print what they need to snap up the bonds, much like the German government tried to do during the Weimar collapse. Unfortunately, this plan did not work out so well for the Germans, nor has it worked for any other nation in history, so I’m not sure why people think the U.S. could pull it off. However, this is the kind of cultism we are surrounded by. These folks think the U.S. economy and the dollar are untouchable.
Yes, the Fed and the Treasury could hypothetically erase existing liabilities, but what dollar cultists do not seem to grasp is that the dollar’s value is not built on Treasury purchases. The dollar’s value is built on faith and reputation. If a nation refuses to pay out on its debts, this is called default. A default by the U.S. would immediately damage the reputation of bonds and dollars as a good investment. Global markets will refuse to purchase or hold any mechanism that they think will not earn them a profit. How many investors today are anxious to jump into Greek treasury bonds, for instance?
Finally, it is unwise to operate on the assumption that foreign creditors will accept dollars as payment on U.S. Treasury bonds if they believe the Federal Reserve is monetizing the debt. When Weimar imploded under the weight of currency devaluation, many foreign governments refused to accept the German mark as payment. Instead, they demanded payment in raw commodities, like coal, lumber and ore. Expect that China and other debt holders will demand payment in U.S. goods, infrastructure, or perhaps even land.
10) Most treasury holdings in foreign coffers are not long term bonds. Rather, they are short term bonds which mature in weeks or months, instead of years. Dollar proponents constantly cite the continued accumulation of treasury bonds by other governments as a sign that the dollar is still desirable as ever. Unfortunately, they have failed to look at the nature of these bond purchases. When China rolls over millions in short term bonds and replaces them with other short term bonds, this does not suggest they have much faith in America’s long term ability to service its debt. It would also make sense that if China had plans to remove itself from the dollar system, they would move into short term bonds which can be liquidated quickly.
11) China is on the fast track to becoming the largest holder of physical gold in the world. Russia has also greatly expanded its gold purchases. Whatever losses they might suffer from a dump of their Treasury bond investments; it will be more than made up in the incredible explosion in precious metals prices that would follow.
12) The most common argument against the dollar losing world reserve status has been that such a shift would be “impossible” because no other currency in the world has the adequate liquidity needed to replace the dollar in global trade. These people have apparently not been paying attention to the Chinese yuan. China has been quietly issuing trillions in yuan denominated bonds, securities and currency around the world. Current estimates calculate around $24 trillion created by the PBOC and the banks under its control.
Mainstream talking heads are calling this a “debt bubble.” However, this debt creation makes perfect sense if China’s plan is to create enough liquidity in its currency in order to offer a viable alternative to the U.S. dollar. Linking the yuan to the IMF’s basket currency would complete the picture, forming a perfect dollar replacement while dollar cheerleading-economists stand dumbstruck.
13) China’s retreat away from dollar denominated investments has left a hole in the U.S. bond market. Recently, that negative space was filled by an unexpected source; namely Belgium. A country whose GDP represents less than 1% of total global GDP buying more U.S. bonds than China? The whole concept sounds bizarre. Here is the capital coming from?
Think about it this way – Belgium is the political center of the European Union and a haven for international financiers. There are more corporate cronies, lobbyists, bureaucrats, and foreign dignitaries in Belgium than in all of Washington D.C. But more importantly, Belgium struck a deal with the IMF in 2012 to begin pumping SDR denominated funds into “low income economies”. I would suggest that this funding flows both ways, and that now, the IMF is feeding capital into Belgium in order to buy U.S. Treasury Bonds. That is to say, the IMF is going to start using smaller member countries with limited savings as proxies to purchase U.S. debt using IMF money.
The ultimate danger of the IMF (run by internationalists, not the U.S. government) pre-positioning itself as the primary buyer of U.S. debt is that when the U.S. finally defaults (and it will), the IMF is likely to become the “guardian angel” of the U.S. economy, offering aid in exchange for total administrative control of our financial system, and the institution of the SDR as a world reserve replacement for the dollar.
14) The serious prospect of regional conflict or world war over tensions between the Ukraine and Russia, Japan and China, the U.S. and Syria, the U.S. and Iran, the U.S. and North Korea, etc., could make the effort of exposing the plan to shift economic power into a one world system centralized under the IMF almost meaningless. How many people will truly care about the financial power grab by banking elites if it drifts under the surface of catastrophic engineered wars? They’ll be too busy hating and fighting artificially created boogeymen to pay attention to the real globalist culprits.
I have been pointing out for quite a long time that globalists need a “cover event”; a disaster, an economic war or a shooting war, in order to provide a smokescreen for the collapse of the dollar. Alternative analysts have been consistently correct in predicting the trend towards the dump of the dollar. Years ago, we were laughed at for suggesting China would shift towards a consumer based economy and away from U.S. dependence. Today, it is mainstream news. We were laughed at for suggesting that nations like Russia and China would drop the dollar as a reserve currency. Today, they are already in the process of doing it. And, we were laughed at for suggesting that Russia or China would use their debt holdings as leverage against the U.S. in the event of a geopolitical conflict. Today, they are openly making threats.
I have to say, I’ve grown tired of the dollar cultists. How many times can a group of people be wrong and still argue with those who have been consistently right? The answer is that zealots never actually escape their own delusions, even when their delusions lead them and those around them to ruin. I suspect that in the face of complete dollar collapse, they will still be rationalizing the chaos and pontificating on our “lack of understanding” while the theater burns down around them.
Delivered by The Daily Sheeple
Contributed by Brandon Smith of Alt Market.- See more at: http://www.thedailysheeple.com/deluded-currency-cultists-believe-the-dollar-is-invincible_032014#sthash.JgkqgbsO.dpuf
Was flight MH370 lost in an aeronautical black hole or did catastrophic power failure prevent air traffic control plotting its every move?
- Boeing 777's transponder should provide information to traffic controllers
- But at 1.20am on Saturday, transponder on flight MH370 stopped working
- Experts baffled by loss of communication and subsequent lack of debris
- One theory links 20 defence tech experts on board to electronic warfare
- Another suggests a bomb went off while plane flew over Malaysian jungle
- There are also 'aeronautical black holes' in the region that could mean the plane is hundreds - or even thousands - of miles away from searches
- Nuclear experts are now using a 'infrasound' to find out if an explosion took place at the altitude of the plane
With technology tracking our every move, it seems incredible that a plane carrying 239 passengers could vanish into thin air.
Yet despite flight data recorders, location transponders and radio communication, the Malaysia Airlines Boeing 777 disappeared on a midnight flight out of Kuala Lumpur on Friday.
Experts are baffled by the loss of communication, with some putting forward theories of mid-air bomb explosions, disappearance into an 'aeronautical black hole' and an attempt at electronic warfare.
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Despite flight data recorders, location transponders and radio communication, the Malaysia Airlines Boeing 777 disappeared on a midnight flight out of Kuala Lumpur on Friday
The mystery has deepened after reports emerged that relatives have been able to call the mobiles of their missing loved ones.
Professor William Webb, a fellow of the Royal Academy of Engineering, told MailOnline: ‘The phones definitely won't be working. They'll be underwater, out of coverage and by this time out of battery.
‘So there's absolutely no way they could be used for triangulation.
‘As to why they are "ringing" it'll be the same as if they were out of coverage - in some cases it may ring before going to voicemail.’
Some reports claim the phones are just ringing and ringing however.
Telecoms expert Alan Spencer told MailOnline that if the phones are really ringing, they can categorically not be under the sea.
He added that the phones will only be ringing if they are ‘switched on, not in water, the battery is charged, and [they are] near a mobile cell site.’
This means that if the phones are genuinely ringing, the plane needs to have landed on land – not in the sea – and be in a location where there is cell service, rather than in the middle of a jungle, for example.
Meanwhile, the disappearance of the aircraft may be explained by a deliberate cutting of power to the plane’s communication instruments.
Dr Martyn Thomas from the Institution of Engineering and Technology, told MailOnline that he thinks a sudden decompression of the plane may have taken place and effectively knocked out the pilot and passengers – as well as the communication equipment.
In this scenario, the plane could have flown on using its autopilot without any human influence and ‘could be anywhere within about 2,000 miles’.
Another possibility is that the plane fell into an 'aeronautical black hole' in the region, according to Stewart John, an aeronautical expert and Fellow of the Royal Academy of Engineering.
Radar is used to track planes over land in inhabited areas but when planes venture over remote lands, such as the inner part of Russia or over the jungles of Malaysia, the only way of tracking them is the aircraft sending back information at regular intervals, he explained.
The search for the missing aircraft has widened considerably after previous prediction of its whereabouts proved fruitless. It remains a mystery how a Boeing 777 could have disappeared without a trace in such relatively shallow seas
WHAT COULD HAVE HAPPENED TO THE BLACK BOX?
If the aircraft remained airborne after the last check-in it could still be hundreds of miles away from where people are searching.
Dr John thinks it is more likely that the aircraft was destroyed by an ‘explosive decompression’ – likely be a bomb on-board the plane.
He said that if a door or window was blown out, a pilot would be able to manage the situation. He explained that the catastrophe ‘had to be explosive [for the aircraft] to fall down from the sky…it would be more than just a panel blowing out’.
He added: ‘If they lost both engines, the pilot would have around 20 minutes - roughly equivalent to 70 to 80miles - to glide down from an altitude of 30,000 feet.’
However, Dr Martyn Thomas from the Institution of Engineering and Technology (IET) believes that a civil or military tracking device must have clocked the aircraft’s location.
Aircraft are mostly tracked by secondary radar over land.
Over large distances planes automatically transmit a four digit ‘squawk’ code showing its identification and altitude.
A system called Automatic Dependent Surveillance Broadcast (ADS-B) is used for when aircraft are out of normal radar range, such as over remote regions or oceans.
‘Aircraft ping out their location speed, heading and altitude, which are broadcast and logged. You can track any flight,’ Dr Thomas said.
Airplanes also send information to an airline about their performance and emergency warning data. ‘But appears none was received’ for the flight in question, he said.
‘It seems as if it took off, climbed to 30,000ft and maintained a level heading, then in the last few seconds started to turn right,’ Dr Thomas added.
The interior of the cockpit of a Boeing 777, similar to the one that disappeared early Saturday morning
‘It is known where the aircraft was within tens of metres when it lost contact,’ he explained, so it seems that there was ‘either a deliberate cutting of power to communications instruments such as radios and transponders, or a catastrophic event.’
HOW ARE FLIGHTS TRACKED?
‘Something stopped communication instruments in the cockpit or there was a catastrophic failure – but it is very hard to understand,’ he added.
In a more radical theory, the possibility of electronic warfare has also been raised following confirmation that there were at least 20 passengers onboard from Texas-based Freescale Semiconductor. Each of these passengers had specialist knowledge of electronic technology for defence applications.
This could include ‘cloaking’ technology that uses a hexagonal array of glasslike panels to bend light around an object, such as plane, according to a report in Beforeitsnews.com.
Other techniques may have been used to jam signals, allowing the plane to vanish from radar detection without its security systems being activated.
‘It is conceivable that the Malaysia Airlines Flight MH370 plane is “cloaked,” hiding with hi-tech electronic warfare weaponry that exists and is used,’ Beforeitsnews.com wrote.
‘In fact, this type of technology is precisely the expertise of Freescale that has 20 employees on board the missing flight.’
‘These were people with a lot of experience and technical background and they were very important people,’ Mr Mitch Haws, Global communications officer for the tech company, said.
The company recently launched a major initiative dedicated to serving radio frequency power needs of U.S. aerospace and defence sector.
The plane would also have been fitted with an indestructible black box recorder and a beacon to continue transmitting its location should it land in water
The mystery of why no debris has been found at sea or over land is also leaving experts baffled, but there is a theory that if the plane crashed in the jungle, tall rubber trees, which are common in the region, could cover the crash site easily.
Dr John said: ‘If it came down in a controlled way, it would carve a path through the trees – you would see a kind of runway – so it’s got to be a catastrophe and something out of the normal.’
On Monday, the head of the organisation that monitors the nuclear test ban treaty said he has asked its experts to see if they detected an explosion at the altitude of the missing plane.
Lassina Zerbo, executive director of the Comprehensive Nuclear Test Ban Treaty Organisation (CTBTO) explained to a news conference that experts can use 'infrasound; - or infrasonic sensors - to monitor the planet for atmospheric nuclear explosions.
'There's a possibility, it's not absolute, that the technology like the Infrazone could be able to detect an explosion,' he said in response to a question by CBS News.
Infrasound are acoustic waves with very low frequencies that are inaudible to the human ear are called infrasound.
'Infrasound is produced by a variety of natural and man-made sources: exploding volcanoes, earthquakes, meteors, storms and auroras in the natural world; nuclear, mining and large chemical explosions, as well as aircraft and rocket launches in the man-made arena,' the CTBTO said.
WHY ARE THE PHONES STILL RINGING?
Malaysia's Department Civil Aviation Director General, Azharuddin Abdul Rahman, pictured left, with Malaysian Airlines CEO Group Ahmad Jauhari Yahya, pictured right, during a press conference on the new search area
The Malaysia Airlines Boeing 777 disappeared along with 239 people on a midnight flight out of Kuala Lumpur on Friday.
On board were cockpit voice and flight data recorders – the ‘black boxes’ – which each include a ‘pinger’ that sends a transmission up to 30 days after submersion.
It was with an ASD-B flight transponder which, unlike the GPS in a car, broadcasts its location by sending information back to air traffic controllers every second.
Crews are also able to speak to their airline through 'discrete radio channels', according to aviation expert John Goglia, writing on the Forbes website.
A cabin crew of Division 918 of the Vietnam Air Force is onboard a flying Soviet-made AN-26 during the search operations
'A complete electrical failure is extremely unlikely because of redundancies in the system’ he said.
THE UNANSWERED QUESTIONS
‘Especially the ram air turbine which uses the power of the wind generated by the aircraft’s motion in flight to generate electricity which would power critical navigation and communication systems, as well as flight controls.
'But even if the aircraft had a complete electrical failure, the aircraft could have continued to fly.'
He goes on to argue the plane could have eventually flown to an area where it would have been picked up again by radar, suggesting it was 'too early to speculate' on what has caused the disappearance.
Currently all that is known is the missing flight underwent ‘a steep and sudden descent’ and changed its heading.