Thursday, March 21, 2013

China’s First Debt Default – Harbinger of End of Credit Bubble?

For the first time, a mainland Chinese company has defaulted on its bonds. Shocklingly, it is a high-flier solar panel maker that trades in the US market – Suntech Power. Its stock shot up in a classic parabolic FOMO pattern (FOMO = Fear Of Missing Out), and has now fallen like a broken windmill blade below the parabolic liftoff. The irony is that Chinese solar makers have used easy credit to scale up, and throwing the solar cell market into a huge glut, crushing Western manufacturers; and now it is coming back to bite the Dragon by its own tail.
Chinas First Debt Default   Harbinger of End of Credit Bubble?
(click to enlarge)
Sure, it could be a one-off, but Chnia’s corporate bond market is much larger (adjusted for GDP) than the US equivalent and is highly misallocated due to easy credit and political malinvestment. While unconnected to the Euro crisis, coming so swiftly after Cyprus, it may be another harbinger that the wheels may be slowing coming off the global credit train.

it’s time to collapse the system

For previous articles by the author go to: Gordon Gekko's Blog

First they came for the communists,
and I didn't speak out because I wasn't a communist.
Then they came for the socialists,
and I didn't speak out because I wasn't a socialist.
Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.
Then they came for me,
and there was no one left to speak for me.

-- Martin Niemöller, Nazi camp prisoner             
‘I’m furious with myself,’ he said. ‘I had so many opportunities to move my money abroad but was taken in by all the promises that any attempt to raid my savings was a red line not to be crossed. Experts said it was against the law. Now, I’ve lost several thousand euros. As someone who is retired, the money in my account is all I have to live on for the rest of my life.

 ‘What’s really upset people is that they’ve been lied to. They were told that their money was safe and that they shouldn’t move it and then they announce this. Everyone’s accounts are frozen and the ATMs have no money. Some people are struggling to get enough cash together to buy food and water...[people] just feel that they’ve been robbed by the Government.’

--Chris Drake (Former BBC Middle East correspondent, retired to Cyprus) via

(All emphasis mine)
So what are you going to do? Are you going to place your faith in the "authorities" like Mr. Drake did? Will you wait for them to rape and pillage you? Or are you going to take matters into your own hands. It's time to take responsibility for yourself and your loved ones. The Government and the Banksters ain't gonna save you. And if you think what happened in Cyprus this weekend is a "one-off" and it can't happen to you - even if you're outside the Eurozone - think again. The fact of the matter is that this was THEFT of private property - pure and simple. And just because it was performed by mafia dressed up in Government regalia and bearing authoritative three letter acronyms (ECB, IMF et. al. – all banker fronts) doesn't mean it wasn't one. This shows us that the Government and the bankster mafia who control them are willing to go to any length to have the public reimburse their “losses” and transfer public wealth into their own pockets. And they just declared outright war against the public.
Anybody in Spain or Italy who's watching what's happening in Cyprus and doesn't withdraw their money RIGHT THIS MOMENT from their banks deserves what's coming their way. This is as loud and clear as it gets folks. And it’s not just Spain or Italy or Greece or even the entire Soviet European Union – it’s the whole world. You won't get a personal warning letter from your feudal overlords government. And you can't say you weren't warned.
But it's not just enough to withdraw your money from the banks. That's just the first step. A global financial tsunami has been brewing and the waters have been receding for a while. It is upto you to pay attention to the signs and get as far away from the coast as possible which means you need to withdraw completely from the system to safeguard your hard earned wealth. The global monetary system today is nothing more than a giant global pyramid scheme which is now collapsing (hence all the "crises"). Just as in a Ponzi scheme, those who get out first will suffer the least amount of losses. But before I explain how to get out of the system, we need to understand what “the system” is. Also remember, this system is same in all countries today.

Will you be one of these people?
A Crisis Created by the Banksters
So what is this "crisis" in Europe that we all keep hearing about? That every one of the citizens must sacrifice an arm and a leg if we are to avert Armageddon? What would happen if we don't bail out the banks and let them collapse? Would it really be so bad? The "authorities" in our academia and government would have us believe that "the crisis" is born of "natural" causes i.e. it is simply a fact/force of nature. It's nobody's fault! Greed is simply human nature and these things happen. It's the damned "business cycle". Now we must all come together like the obedient little slaves that we are and engage in shared sacrifice to "solve it" and save everyone, especially the banks.
One word: BULLSHIT.
Well, the cause of "the crisis" goes to the very heart of how our monetary/currency system operates today.

The Money
If we are to understand the crisis, first we must understand money - a topic which the masses have deliberately been kept ignorant about. A complex economy such as ours consists of a multitude of goods and services which can be in varying demands at various points of time. Hence a medium of exchange is required that acts as a proxy for all the goods and services in the market (so as to enable complex exchanges) and in the process provides information about their relative demand and supply in the market via price signals (even interest rates are nothing but price signals - the price of money and since money is a proxy for all the resources in an economy - the price at which excess capital in the economy is available for utilization). Producers and consumers then use this information to decide on the allocation of resources - what to produce, how much to produce, etc. For this allocation process to be efficient (i.e. satisfy the wants and needs of everyone with the least amount of wastage) it must be essentially decentralized, since a single entity CANNOT know what everyone wants. This is why the Soviet Union collapsed.

Money, then, is an information mechanism which lets the producers and consumers perform calculations as to the most efficient allocation of resources at any given point of time (a software, if you will, controlling the hardware of the economy). It must be some good that is universally acceptable - that the market has "elected". And just as you need a standard scale of unvarying length to perform measurements of distance, you need a substance whose supply remains fairly constant over long periods of time to perform calculations of economy. Fortunately, the market discovered such a substance fairly long ago - Gold (as evidence that it is the substance, I present Gold's highest stocks to flow ratio of any "commodity" and the only one whose demand does not vary with supply). Unfortunately, somewhere along the line, it all went horribly wrong.

How It All Went Wrong

Now imagine someone wanting to control the economy for their benefit; wanting to have something for nothing i.e. somebody who wants to STEAL from those who are productive. Enter the mafia banksters. All they would need to do is control the medium of exchange or money and voila! But there's only so much Gold to go around. What if you want to appropriate unlimited resources from the economy for your benefit? You need something you can create at will. Enter paper money. So gradually, over period of time, operating behind the curtains, banksters in cahoots with the politicians replaced paper receipts for Gold (just take a look at the higher denomination US dollars circa late 1920’s) with paper tickets backed by NOTHING. An IOU for Gold became an I-O-U-Nothing. Knowing their worthless paper money wouldn't be a voluntary choice, they enlisted the Government as their enforcer and accomplice using bribes and threats (hence the legal tender laws, and for those of you who don’t know or remember, I present the Executive Order 6102). Hurrah! Now they could print and spend as much as they wanted! But alas, there is a fly in the ointment - if they directly used this paper money, the currency would quickly dilute and the scam would fall apart. What to do? Yup, "lend" the money. Thus began the creation of the biggest Empire of Debt backed by the most powerful mafia the world has ever seen.

A Global Ponzi Scheme
So this is how the scam works. Realize that the bankers need to do two things:
  1. Keep creating new money supply
  2. Keep extracting the already created money
Make no mistake, the second is as essential as the first otherwise the money supply would increase too fast in relation to the goods and services produced, the currency would decline in purchasing power too quickly and the scam would fall apart. They first need to ensure that you do the work and create production for them to appropriate via the extracted money (and maybe some freshly printed money on the side – who’s watching anyway?).
They achieve the first by loaning new money out of thin air (mostly via entries in a computer today). The Banks1 "lend" "money" to both the Government (government bonds) and the citizens (credit card, home loans, etc.). Lending to the government is an important part of the scheme as they have to bribe the enforcer of their scheme. The politicians don’t give a shit, its free money so far as they are concerned - it is the citizens who will pay it back. Plus who doesn’t love unlimited free money? The Government can issue as many bonds as it desires knowing the Central Bank2 stands ready to buy all of them with freshly printed money, if other morons don’t. The banksters also ensure that there will always be a demand for loans as lending means they demand paying back of the principal as well as the interest. But realize this: they NEVER created money for the interest, only the principal. So how will someone – whether government or citizens – ever pay back the interest? They can’t. They’ll have go bowl on hand to – you guessed it – the banksters. This is why debt in all the nations (both government and private) always increases. Increasing debt is a feature of the system, not a bug. The system is operating exactly as was designed -  to trap the people in perpetual debt slavery. And contrary to what you may hear from “experts” and the MSM, the amount of debt in the society will never go down and will never be repaid but - as I will explain below – only end with the collapse of the currency system.
Now this demand for repayment also ties in to the second part of their scheme – extraction. This is how they do it:
  1. A huge portion of the Government taxes you pay go towards paying the interest on the government bonds which the bankers own i.e. indirectly your taxes are being paid to the bankers. No wonder the IRS and the Federal Reserve came into being together.
  2. A huge section of the society is always in debt. This is not hard to fathom – a huge portion of your income is extracted via taxes and loan payments on your personal debt. Now, personal debt is not a choice under such a system as availability of unlimited money (credit) for goods in the economy creates price inflation making them out of reach for most people unless they take on debt. Just ask around – how many of your colleagues, friends, relative are in debt? Yup.
Do you see the sheer evil genius of it? Basically the banksters have created a system where they give money from one hand, take it back from the other – all the while making you run on the treadmill of jobs (slavery) – THEIR slavery. They are free to spend the extracted money-out-of-thin-air as they want but you have to do productive work for it. Make no mistake – this is modern day slavery - earlier they used chains and whips, now they use debt.

But What Does All This Have To Do With “The Crisis”?
Everything. Because there remains yet another fly in the ointment, which even the bankers don’t have a solution for as its genesis lies in the very system they have created – central control of money. This central control of money causes huge misallocations in the economy. What is a misallocation?  There is a lot to this which I can’t cover in this article such as manipulation of interest rates, so I recommend you do a bit of your own research (especially refer to the work of Austrian economists such as Mises), but briefly: Since the money is now centrally controlled for the benefit of the few (government and the banksters), all the price signals go haywire. Money is handed out to connected but incompetent people who produce NOTHING, people who produce are taxed to death and money is transferred to insiders in the money system, investments are made where none are required (e.g. real estate) which results in things being produced which have no demand whereas things that have demand (e.g. food) are not produced. The inefficiencies in the system become huge and vast productive resources are wasted. There is a whole bunch of consumers and spenders (including the banksters) but not a lot of producers. All of which means that over time two things happen in such a system:
  1. Overall money supply increases but the extractions start to decline. This is because loans are being made but not as many of them get paid back.
  2. The amount of goods and services (which people want anyways) available in the economy also start to decline.
An increasing money supply and declining production results in the decimation of the currency’s purchasing power as evidenced in the charts below. These charts are for the USD, but hold true for every currency in the world today:
Unlimited Money...
.... Leads to Unlimited Debt
And the corresponding chart for price of Gold:
Gold price since 1973 (before this it was “fixed” at $35 an ounce after the 1933 robbery). Just to be clear, it is not the gold that is rising, but the USD that is declining.
The Dollar's Purchasing Power Since the Creation of the Federal Reserve in 1913
If you take the limit case for the last chart, you get hyperinflation – the currency becomes worthless (which correspondingly means Gold becomes literally priceless – remember, it is the real money) and the game is over – and as you can see, we are VERY close to it. No more looting. This is what the banksters are so afraid of and this is “the crisis” – their desire to continue pillaging the people. They NEED the extractions to continue, not only because it is their “income” and to prevent “losses” (both these terms mean nothing to someone who owns the money supply as they can always create more) but because otherwise the money supply would increase exponentially (the bad loans already made). This would kill their franchise - the currency. This is also why they can’t just print up and use any amount of currency they need.
But eventually the misallocations become so huge that there is nothing left to extract. The productive citizens have already been bled dry. This need for extractions is what is behind all the demands for “austerity”, the reason for directly robbing the bank accounts of the people. But no matter how much they extract, it doesn’t make a difference because the misallocations will always keep on increasing. The currency is doomed. They might be able to slow the process but hyperinflation is guaranteed in a fiat money system. Eventually, it only matters who gets out first before the currency collapses. So the only question is:
Will you get out in time?
What happened in Cyprus is simply an overt manifestation of what they've been doing all along. It’s just that up until now there were enough productive resources in the economy for them to extract. But as the malinvestments increase and the productive base of the economy keeps on shrinking, as it must for reasons outlined above, they will directly try to appropriate private assets to "cover their losses" (keep the franchise alive). Which means they will need to employ ever more forceful tactics to subdue the populace. Cyprus is just a test run by the global banking oligarchs. Once they are aware of and have prepared for the fallout, they WILL implement this in every nation on earth. How long before you think they will come for you? It’s only a matter of time.

So What to Do?
By now it must be clear that if this looting scheme has to ever end, this fake money system has to end. And whether you like it or not, end it will because as outlined above, the system contains in itself the very seeds of its destruction. Think of it as virus - a parasite - that has infected an otherwise healthy global economy which must be rid of. A forest fire, if you will, that must clear the dead plants (malinvestments) to make way for the new. It is the law of nature. But if the host - YOU - doesn't fight back, the parasite of global banksters will kill the host alongwith itself. If you don’t collapse the system, the system will collapse you. Do you wish to sink with the collapsing system or be one of the survivors to begin a new one?
There are two interdependent objectives at play here. If you choose to take steps for one, the other automatically follows:
  1. Healing the economy: The system must be collapsed for the much needed capital reallocations to productive hands to begin. Sure, collapse is a guaranteed outcome, but the sooner it happens, the lesser the damage to the economy and faster the recovery.
  2. Preservation of wealth: By this I don’t mean preservation of the fiat digits in your account. Wealth is not currency notes but the real resources and people of this world. When the reallocations start you need to be ready either by already owning productive assets (whatever is left of them) such as farmland etc. or claims to them that will be universally honored (Gold).
Yes, the global bankster oligarchy is powerful. It’s David vs. Goliath, I know. But as powerful as the Goliath is, he has a weak spot you can hit:
The Currency
Think of this as guerrilla war. There is no sense in outright confronting a huge and powerful enemy because you will be decimated. But there are peaceful and strategic yet powerful steps you can take, namely: Vote with your feet. Reject the currency. The system cannot survive if you don’t participate. I know you can’t do it overnight but you can start to minimize your participation. And know this: If a majority of you does even one of the below, the system will collapse overnight without so much as a shot fired. Here is what you need to do:
1. Leave as little cash as practically possible inside the banking system. As a rough guide, keep only that much which you are willing to lose (as in 100% loss). Yes the banks will collapse, but that is the desired outcome. Contrary to what the authorities want you to believe, we will survive just fine without the banks. Sure, there will be some short-term hardships involved but think of it as an alcoholic recovering. Longer term it will be healthier. Don’t fear “the contagion”
"Clearly this is a negative development for European assets but in the terms of contagion we think it is quite limited,"
                                                 --Guillermo Felices, Head Euro Asset Allocation, Barclays
What this guy means is that he thinks people aren’t clever enough to realize that the banksters are going to loot everyone. He expects people to bend over and take it. Prove him wrong. Let the damn contagion begin!
2. DO NOT be invested in any paper securities inside the system such as bonds, stocks, derivatives of ANY kind, even though they may be "guaranteed" by the mafia government and/or may carry "AAA" ratings. If you still trust "sovereign guarantees" or rating agencies after all that has happened, I'm sorry but you deserve to lose your money. Dump ALL paper assets. Now.
3. Convert the maximum possible amount of your fiat money into Gold and Silver, but remember to pay cash only and hide them in a secure location which you can access anytime (and as of the great Cypriot robbery, no bank lockers are safe anymore). If you need to understand why it is important to buy Gold and why this will preserve your wealth – especially during a currency collapse - please read this and this. If the country you reside in is making hard for you to buy PM's  - MOVE, for this is an indication of depredations to come. If they are requiring identification/ tracking if you buy over an X amount, just keep buying a little below it as many times as required (guerrilla warfare). But keep it discreet. And, yes, I know the government can confiscate PM’s but nothing’s stopping them from confiscating your fiat digits either. There are no guarantees in life. At least this way you still have a chance.
4. Although precious metals in your own possession is the safest place to park your hard earned savings, if you wish or need to diversify beyond the precious metals, invest only in real assets in safe jurisdictions. By safe I mean which are furthest from the control of feudal lords of western "civilization", although I'm not sure there are many these days. The best real asset I can think of aside from PM's is cultivable farming land, but I’m sure there are many others.
5. Minimize usage of bankster money in daily transactions by using alternative currencies (such as Bitcoin) which they cannot track and tax. Disclaimer: I haven’t done much research on Bitcoin or other such p2p currencies, so do your due diligence. The only guarantees I can make are for Gold. If your circumstances permit, try to start making a living outside the bankster controlled wage-slave economy. The lesser number of slaves there are to exploit, the faster the system will collapse.
6. Wake up as many people as you can. Let's make this shit viral.
So, unless you want a bankster at your doorstep with a gun to your head – like it happened in Cyprus - it’s time to take the fight to them. Rip them banksters a new one! Let this not happen to you:
He who panics first, panics best. Clearly, these people didn’t know it!

And if there ever was a picture worth a thousand words – or 3,835 in this case :-) – this is it:

US Bankers To US Depositors: “Don’t Panic, Nothing To See Here”

While we explained exactly why there is a possibility of a Europe-style wealth tax in the US, it appears the American Banking Association has decided to put out fires early…
While the crisis in Cyprus is a real concern for depositors in Cypriot’s banks, it has no implication for depositors in U.S. institutions. Depositors in U.S. banks are insured up to $250,000 and no insured depositor has ever lost money in a bank failure. The U.S. banking industry has rapidly returned to health with strong earnings, lower losses and significant increases in capital.
The FDIC insurance fund has over $25 billion in reserves and the banking industry – which bears all the financial costs of supporting the FDIC – pays over $12.3 billion each year to assure adequate funding.
Simply put, U.S. insured depositors are safe and their deposits are protected by a strong FDIC fund, a financially secure banking system and the full faith and credit of the U.S.
So, it seems, the basis for not worrying about US deposits is the rule of law and the deposit insurance? Remind us again what Cypriots thought they had?

Casualties of Debt – Selling America’s Students to the Banks

Alex Pietrowski, Staff Writer
Waking Times

In today’s America, debt is a regular part of life. It drives our economy and enables our culture. Due to the expense of higher education, rising cost of living, consumerism, and the ongoing dollar crisis, it is becoming evermore difficult to live in the United States without accruing considerable personal debt. Especially so for college students. 
For our young adults, the American dream of prosperity has regressed to a new tradition of being unemployed or overworked, and buried under a growing mound of debt.
Higher Education Trains Us for Financial Enslavement
America has always prided itself in the quality of its institutions of higher education. Today, however, the college experience is vastly different than it was just a short 50 years ago. Students come to college un-prepared for study and for life, and, are more often than not, unable to cover the cost of a college education without taking financial aid in the form of government, bank, and personal loans. All the while depending on credit cards for the necessities of college life.
Attending college leaves 2/3rds of college graduates in serious debt before they even enter the workforce. In 2011, this debt was to the tune of $26,600 on average, up 5% from 2010, with some of the increase said to have been caused by an increase in the accessibility of financial aid to students. Out of the approximately 37 million outstanding school loan borrowers in mid 2012 (that’s 12% of the US population), over 1/3 of these are under the age of 30 and, stunningly, about 18% are over the age of 50. (Sources: CNN and American Student Assistance)
The status quo for today’s young adult is to go straight into college after graduating from high school, spend huge sums of borrowed money, then graduate having to immediately find a job that pays enough to live and pay down this debt. As it is, a mere 56% of students enrolled in a 4-year program receive a degree within six years of enrollment. (Source: College@Home) The opportunity for self-exploration, travel, and personal growth is difficult to come by in this model, leaving many people unfulfilled before life even really gets going.
Institutions that offer school loans continue to offer more financial aid to a wider demographic of students, under the guise of non-discrimination and opportunity. In other words, there is push by lenders into to new markets for selling the dream of professional success. As a result, 2/3 of graduates begin a life of debt service before they’ve even received their diploma.
This is a recipe for creating a social class of indentured wage slaves, not for developing a nation of capable, creative, and happy people. America’s youth has been sold into an insidious new form of economic slavery.
Life After College
Getting a job out of college has never been more difficult. Once working, many graduates, even the ones with good-paying jobs, aren’t necessarily successful because they are personally unhappy – even depressed – and as a result, some researchers say that Americans will change careers up to 7 times in their lifetime! (Source: Wall Street Journal) Others indicate that more than half of job openings in the US are filled by people starting a new occupation or entering a new industry. (Source: Huffington Post)
A tough job market often means that you go where the jobs are – the trendy and fun metropolitan areas where the money is. Meaning expensive, and as an independent adult, you are faced with the reality of the rising cost of living in most major US cities. In February 2011, the US Department of Labor reported that the cost of living for Americans hit an all-time high, with no sign of relief in sight. Heaven forbid you decide to marry, have a child and take on the expense of daycare.
High living costs, reinforced by a very slow increase in income gains, have resulted in America, once the land of opportunity, becoming the land of stagnant wages and unsustainable debt. By the end of 2011, many two-income American households were at a risk of not being able to afford their basic essentials, such as food, medical care and utilities. (Source: Huffington Post)
Consumer Culture In Search of Fulfillment
This picture of personal financial wreckage, overspending, and living beyond one’s means, is the prevailing under-current of the cultural dynamic in the US. We have totally submitted to our desire for luxury goods, new cars (fixing the old cars is so darn expensive; just lease a new one), the newest electronics (you already have an iPhone…but the new iPhone 5 will make you just SO much cooler around your friends), bigger houses (it is against building codes to build homes below a certain size, with new homes averaging around 2100 square feet), and on, and on.
Where do we get the money for all of these possessions? Credit cards and bank loans! In the name of stimulating the economy, and under the parody of financial freedom, our culture now creates consumers, not citizens. “For everything else, there’s mastercard!”
Citizens are even called consumers in nearly all media reporting… and thus we are further brainwashed to believe that our main purpose of existence on this earth is to consume. As a result, we’ve stimulated the American economy to the tune of:
-          $850.9 billion in credit card debt or $6,920 per household (January 2013)
-          A record $2.795 trillion in consumer debt (including school loans but excluding mortgages) or $22,720 per household (January 2013)
-          $14,517 average credit card debt per indebted household (in March 2012). We can try to mask this by saying that the average dropped about $20,000 since March 2010, but this only happened because in 2010, credit card companies wrote off 10.7% of debt – up 300% from 2006.
-          $16.7 trillion in US national debt and growing (March 2013)
(Sources: Forbes and Federal Reserve)

What is our response to this debt crisis? Lower interest rates and take out more loans – which rose 10% in January 2013!
Haven’t we learned anything from watching the corrupt banking system lie and steal, deflating the value of our currencies and jeopardizing any chance of financial stability? Debt and institutionalize financial thievery is such an integral part of the American tradition nowadays that we even parody ourselves in movies like Inside Job.
Debt is a form of slavery. Encouraging our youth to jump start their lives by piling on debt, and saddling them with an astronomical national debt is unfair to them and dangerous to all of our futures.
About the Author
Alex Pietrowski is an artist and writer concerned with preserving good health and the basic freedom to enjoy a healthy lifestyle. He is a staff writer for and an avid student of Yoga and life.
This article is offered under Creative Commons license. It’s okay to republish it anywhere as long as attribution bio is included and all links remain intact.
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Ron Paul: This is Price Fixing At It's Worst, Pumping Money In To The Economy Didn't Solve Our Problems

Ron Paul: This is Price Fixing At It's Worst, Pumping Money In To The Economy Didn't Solve Our Problems

The Other Thing JPMorgan Was Doing in Its Chief Investment Office: Profiting On the Death of Employees

By Pam Martens: March 19, 2013
Ina Drew, Former Head of the Chief Investment Office at JPMorgan, Testifying at the March 15, 2013 Senate Hearing on the London Whale Trading Losses
Gambling on high-risk synthetic credit derivatives is not the only area of interest at JPMorgan’s  Chief Investment Office (CIO) – the division that has thus far admitted to losing $6.2 billion in the London Whale debacle. According to Exhibit 81 released by the U.S. Senate’s Permanent Subcommittee on Investigations, Ina Drew, the head of the CIO, was also overseeing the investment of funds in the firm’s Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI) plans – a scheme enshrined by the U.S. Congress in 2006 that allows too-big-to-fail banks as well as many other corporations to reap huge tax benefits by taking out life insurance policies on workers – even low wage workers – and naming the corporation the beneficiary of the death benefit.
According to the exhibit, Drew was tasked with “Maximization of tax-advantaged investments of life insurance premiums” for the BOLI/COLI plans. According to a report in the Wall Street Journal in 2009, JPMorgan had $12 billion in BOLI, noting that a JPMorgan spokesperson had confirmed the figure. Other insurance industry experts put the total for both BOLI and COLI at JPMorgan significantly higher.
Most Americans are unaware that for at least 25 years big business and banks have been secretly taking out millions of life insurance policies on their workers and naming the corporation the beneficiary of the death benefit without the knowledge of the employee. The individual policies are frequently in the hundreds of thousands of dollars and sometimes millions. To keep track of employees who have left the company, deaths are routinely tracked through the Social Security Administration. The policies became known as “dead peasant” or “janitor” policies because  corporations took out life insurance on millions of low-wage workers, including janitors, without their knowledge or consent.
The insurance can give a nice boost to bottom-line corporate profits because it provides multiple tax breaks, including: the cash buildup in the policy is reported as income but is tax-exempt because it resides in a tax-sheltered life insurance policy; the cash payment the company receives when the employee dies is also tax-free under existing tax law.
In 2003, the General Accountability Office (GAO) released a study which found that multiple companies held policies on the same individual and that 3,209 banks and thrifts had current cash values in these policies totaling $56.3 billion.
In 2006, Congress passed the Pension Protection Act. Instead of outlawing this dubious practice, Congress grandfathered all of the millions of previously issued policies while imposing a few tax and reporting rules.
A study by Susan Lorde Martin, Professor of Business Law at Hofstra University in Uniondale, New York found that Portland General, at the time a subsidiary of Enron, had created a COLI arrangement where the death of low-wage workers was funding lavish compensation plans for top executives. Martin writes: “About seventy-five percent of an estimated $80 million in benefits from the policies pays for a long-term compensation plan for managers, directors, and other top officers; the other twenty-five percent contributes to a supplemental executive retirement plan. Workers who have had their entire retirement funds of hundreds of thousands of dollars wiped out by Enron’s collapse were shocked to discover that their deaths will support benefit plans for top Enron executives.”
In a presentation made by JPMorgan Asset Management, apparently to sell its own investment services for managing monies in other firms’ COLI or BOLI plans, JPMorgan explains how companies can smooth earnings volatility with these plans:
Under a heading of “GAAP Accounting Treatment,” JPMorgan notes:
“Income Statement: ‘Other Income,’ ‘above the line treatment due for income is recurring in nature.’ Please note that BOLI is accounted for under FASB 85-4 which states that the asset is booked at ‘net realizable value.’ Therefore, all realized and unrealized gains and losses of the contract are booked through the income statement which is similar to how a trading security is treated under FASB 115. Because of this treatment, many financial institutions have found it advantageous to ‘wrap’ their BOLI assets with Stable Value Protection to achieve a book value accounting treatment whereby gains and losses are amortized over a period of time to minimize period to period volatility.”
Last week, on March 15, Senator Carl Levin convened a Senate hearing to take further testimony on the CIO losses at JPMorgan. In his opening remarks, the Senator confirmed that the speculative trades had been made with insured deposits held at the bank – not the firm’s own capital – and that JPMorgan had the lowest ratio of any bank in terms of lending out those insured deposits rather than using them for risky derivative gambles. 
Senator Levin stated: 
“JPMorgan’s Chief Investment Office rapidly amassed a huge portfolio of synthetic credit derivatives, in part using federally insured depositor funds, in a series of risky, short-term trades, disclosing the extent of the portfolio only after intense media exposure… 
“It was recently reported that the eight biggest U.S. banks have hit a five-year low in the percentage of deposits used to make loans. Their collective average loan-to-deposit ratio has fallen to 84 percent in 2012, down from 87 percent a year earlier, and 101 percent in 2007. JPMorgan has the lowest loan-to-deposit ratio of the big banks, lending just 61 percent of its deposits out in loans. Apparently, it was too busy betting on derivatives to issue the loans needed to speed economic recovery.” 
The primary reason banks exist is to make sound business loans that will create jobs and new industries to help the U.S. remain competitive and to enhance the standard of living for all Americans. What we see at JPMorgan is something radically different.

Fed Projects High Unemployment Into 2015 in Sign Rates Will Remain Low

The Federal Reserve foresees unemployment remaining high into 2015, suggesting it will keep short-term interest rates near record lows at least until then.

In its latest economic forecasts released Wednesday, the Fed predicts that the unemployment rate will stay above 6.5 percent for about two more years. Fed policymakers also expect the economy to grow modestly this year and next despite economic gains so far in 2013.

The Fed's updated forecasts are nearly identical to projections it made in December. The Fed has said it plans to keep its benchmark rate near zero as long as unemployment exceeds 6.5 percent and the inflation outlook is tame.

Editor’s Note: Put the World’s Top Financial Minds to Work for You

The policymakers expect the economy to grow as little as 2.3 percent this year — not enough to quickly drive down unemployment — or as high as 2.8 percent. In 2014, growth could range from 2.9 percent to 3.4 percent in 2014, they predict.

The Fed has slightly upgraded its outlook for unemployment. It now sees the rate falling to between 7.3 percent and 7.5 percent by the end of this year. That's down from a previous range of 7.4 percent to 7.7 percent.

The rate fell to 7.7 percent in February, the lowest in four years.

By the end of 2014, the Fed expects the rate to fall between 6.7 percent and 7 percent. That's a narrower range than in December, when it forecast a range of 6.8 percent to 7.3 percent.

Speaking at a news conference, Chairman Ben Bernanke stressed that while the economy has improved, the Fed won't ease its aggressive stimulus policies until it's convinced the economic gains can be sustained. An unemployment rate of 6.5 percent is a threshold, not a "trigger," for a possible rate increase, he said.

Bernanke also said the Fed might vary the size of its monthly bond purchases depending on whether or how much the job market improves. The unemployment rate has fallen to a four-year low of 7.7 percent, among many signs of a healthier economy.

"We are seeing improvement," Bernanke said. "One thing we would need is to see this is not temporary improvement."

Editor’s Note: Put the World’s Top Financial Minds to Work for You

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

CNBC: "There's A Rumor There's No Gold At Fort Knox"

On Germany demanding its gold back from the Fed.
Just found this clip.  Good discussion.
Larry Lindsey and the Squawk Box team discuss why Germany is moving some of its gold out of storage at the New York Federal Reserve.  Broadcast Jan. 16.
Joe Kernen: "There's a rumor there's no gold at Fort Knox."

More Detail
German Gold Storage In The Year 2020
The German central bank is planning a “phased relocation” of 300 tonnes (metric tons) of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020.  The reserves should end up looking like this:
  • Frankfurt (31%, currently) 50% by Dec. 31, 2020
  • New York (45%, currently) 37% by Dec. 31, 2020
  • London 13% no change
  • Paris (11%, currently) 0% by Dec. 31, 2020
Bundesbank -- Official Statement On Gold Repatriation
This is pretty funny:
Fort Knox Receives Just $85 From Cash4Gold
Stuart Varney, the last person to have seen the Fed's foreign gold vaults...


James Turk: "Germany's Gold Is Being Held Hostage"

Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers

by Michael
Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers
Why is the global economy in so much trouble?  How can so many people be so absolutely certain that the world financial system is going to crash?  Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail.  In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.  So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts.  Overall, there is about 190 trillion dollars of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.  The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives.  We are living in the greatest financial bubble in world history, and it isn’t going to take much to topple the entire thing.  And when it falls, it is going to be the largest financial disaster in the history of the planet.
The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed.  As I wrote about yesterday, the entire European banking system is leveraged 26 to 1 at this point.  A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.
We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.
Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about.  Just look at the numbers that I have posted below.
The following is the global financial pyramid scheme by the numbers…
-$9,283,000,000,000 - The total amount of all bank deposits in the United States.  The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to “guarantee” those deposits.  In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.
-$10,012,800,000,000 - The total amount of mortgage debt in the United States.  As you can see, you could take every penny out of every bank account in America and it still would not cover it.
-$10,409,500,000,000 - The M2 money supply in the United States.  This is probably the most commonly used measure of the total amount of money in the U.S. economy.
-$15,094,000,000,000 - U.S. GDP.  It is a measure of all economic activity in the United States for a single year.
-$16,749,269,587,407.53 - The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.
-$32,000,000,000,000 - The total amount of money that the global elite have stashed in offshore banks (that we know about).
-$50,230,844,000,000 - The total amount of government debt in the world.

-$56,280,790,000,000 - The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.
-$61,000,000,000,000 - The combined total assets of the 50 largest banks in the world.
-$70,000,000,000,000 - The approximate size of total world GDP.
-$190,000,000,000,000 - The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.
-$212,525,587,000,000 - According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.
-$600,000,000,000,000 to $1,500,000,000,000,000 - The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.
Are you starting to get the picture?
Every single day, the total amount of debt will continue to grow faster than the total amount of money until the day that this bubble bursts.
What we witnessed back in 2008 was just a little “hiccup” in the system.  It caused the worst economic downturn since the Great Depression, but global financial authorities were able to get things stabilized.
Next time it won’t be so easy.
The next wave of the economic collapse is quickly approaching.  A full-blown economic depression has already started in southern Europe.  Unemployment is at record highs and economic activity is contracting rapidly.
The major offshore banking centers in Cyprus are on the verge of collapsing.  It was just announced that they will now be closed until Tuesday, but nobody really knows for sure when they will be allowed to reopen.  And there is already talk that when they do reopen that there will be strict limits on how much money people can take out.
And now the IMF is warning that the three biggest banks in Slovenia are failing and that a billion euros will be needed to bail them out.
The dominoes are starting to tumble, and the United States won’t be immune.  In fact, the greatest financial problems that the United States has ever seen are on the horizon.
But you can just have faith that Ben Bernanke, Barack Obama and the U.S. Congress know exactly what they are doing and will be able to save us from the coming financial collapse if you want.
The mainstream media will provide you with all of the positive economic news that you could possibly want.  They are giddy about the fact that the Dow keeps hitting all-time highs and they would have us all believe that we are in the midst of a robust economic recovery.  You can listen to them if you want to.
But when you are tempted to believe that everything is going to be “okay” somehow, just go back and look at the numbers there were posted above one more time.
There is no way that the global financial pyramid scheme is going to be able to hold up for too much longer.  At some point it is going to totally collapse.  When that happens, will you be ready?
The New World Order Is Coming

Here’s How Fast The Economy Is Deteriorating In Britain!!! INEVITABLE’ U.K. RATING MOVES BY FITCH, S&P!

Business Insider‏@businessinsider1 h
Here’s How Fast The Economy Is Deteriorating In Britain
UK Chancellor George Osborne is unveiling the government’s budget.
As part of that, the government is also revealing various economic assumptions for growth, employment, borrowing, and so forth.
As you should know by now, things are deteriorating in the UK economy, which has caused the pound to tank.
The remarkable part is the speed.
Back in December, growth for the country was expected to be 1.2%.
Today, just a few months later? Just 0.6%. Oof.
Read more:
zerohedge‏@zerohedge34 min
UK Government will provide an equity loan worth up to 20% of the value of new build home worth up to £600,000 – BBC
Bloomberg TV ‏@BloombergTV43 min
BREAKING: U.K. chancellor to increase country’s bank levy rate to 0.142%
zerohedge‏@zerohedge1 min
UK Discloses Home Purchase Subsidy As Part Of Its Latest 2013 Budget
Today the UK did something the US hasn’t done in years: it disclosed its 2013 budget. Some of the details as per the BBC:

  • Income tax threshold to be raised to £10,000 by next year
  • Public sector net debt will fall by 2017/18, the Office for Budget Responsibility forecasts
  • Beer duty cut by 1p a pint
  • Planned fuel duty rise scrapped
  • The first £2,000 to be taken off all employers’ National Insurance bill
  • Chancellor George Osborne promises £3bn for infrastructure
  • Economic growth is forecast to be 0.6% this year
  • Service personnel to be exempt from public sector 1% pay rise cap
zerohedge‏@zerohedge18 min

The British government said on Wednesday it was sticking to its plan of austerity despite the sluggishness of the economy, adding that it would take longer to start reducing public debt than it predicted just three months ago.


Gold & Silver Trade Lower, Germany “Could Live Without Cyprus in Euro”

London Gold Market Report
from Ben Traynor, BullionVault
Wednesday 20 March 2013, 08:45 EST

Gold & Silver Trade Lower, Germany “Could Live Without Cyprus in Euro”

GOLD dropped below $1610 an ounce Wednesday, as stocks, commodities and the Euro all regained some ground lost since news of the Cyprus bailout negotiations broke over the weekend.

“We still believe that an interim low was made in February and that the precious metal should reach the January low at “1625.77 in the weeks ahead,” says Commerzbank senior technical analyst Axel Rudolph.

Gold in Euros fell back below €1250 an ounce as the Euro rallied from a four-month low against the Dollar, following news that Cypriot lawmakers have rejected plans to impose levies on bank depositors.

Silver prices meantime failed to break above $29 an ounce, drifting down towards $28.80 by lunchtime in London following what Rudolph calls a “sluggish bounce”.

Banks in Cyprus remained closed Wednesday as part of the extended bank holiday that could now last until next week, while press reports suggest Cyprus is discussing the option of capital controls.

Cyprus central bank governor Panicos Demetriades predicted yesterday that depositors could withdraw 10% or more of total deposits when banks reopen.

The Cypriot parliament yesterday rejected revised plans to impose a levy of 6.75% on bank depositors with more than €20,000 and 9.9% on those with more than €100,000. No member of parliament voted for the proposals, which form part of a €10 billion European Union-International Monetary Fund bailout out currently under discussion.

Cypriot president is expected to speak to Russian president Vladimir Putin today, after Cyprus’s finance minister flew to Moscow last night.

“The Cypriot authorities wanted to conduct [Tuesday's] vote so that they could reaffirm the extent of their difficulties to the Europeans…[it] is not the end of the process, but instead kicks off a further round of negotiation with Moscow and Berlin,” says Alexander White, London-based European political analyst at JPMorgan Chase.

“[Germany's] objective in this case is to remove the implied support for the Cypriot banking system, so that it can no longer function as a large offshore financial center whilst receiving a European [Central Bank] backstop… absent such a transformation, Germany appears ready to live with the consequences of Cyprus stepping out of Europe.”

“Germany wants a solution,” said German chancellor Angela Merkel this morning.

“We will continue negotiations, primarily via the troika [of the EU, ECB and IMF].”

“As recently as in January, Cypriot banks offered 4.5% for a 1-year deposit while other peripheral countries, including Italy and Spain, offered about 2.5%, and Germany 0.9%,” points out a note from UniCredit, adding that depositors putting their money in Cypriot banks would have made around €23,000 more since 2008 than those depositing in Germany.
  “Why does the Cypriot parliament (and many commentators) seem to suggest that a 15% tax on such deposits…would be unreasonable now the banks are in trouble, but that German, Italian and other Eurozone taxpayers should rather foot the bill? To me, the Cypriot position is simply un-sellable in the rest of the Eurozone.”

The situation in Cyprus is “a good thing for Russia,” says Sergey Cheremin, head of Moscow’s department for economic and international relations.

“It’s totally changed the perception of Cyprus…it shows those Russians who keep their accounts in Cyprus that it’s not a heaven, it’s a hell. It will encourage a lot of Russian companies to concentrate their resources in Moscow.”

In London meantime, UK chancellor George Osborne unveiled his latest Budget Wednesday, announcing that the official growth forecast for the UK this year is 0.6%, down from its previous forecast of 1.2%.

The Pound fell against the Dollar following the news, reversing gains made earlier in the day following the publication of Bank of England minutes.

BoE governor Mervyn King, who steps down this summer, again voted for an extra £25 billion of quantitative easing at this month’s Monetary Policy Meeting, the minutes show. As in February’s meeting, King was in the minority of a 6-3 vote.

Over in the US, the Federal Reserve makes its latest policy announcement later today, with most analysts predicting no change to the Fed’s $85 billion a month QE purchases.

Gold’s premium over platinum meantime narrowed to around $50 an ounce this morning, having hit $60 yesterday, from a discount of $80 a month earlier.

Ben Traynor

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben can be found on Google+

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Listen Closely: “Tick, Tick … Boom!” Wake up, It’s An “Impending Crisis,” Dead Ahead!

InvestmentNews latest cover is so powerful you can actually hear sirens atop a flashing neon billboard, megawarning in huge bold type: “Tick, Tick … Boom!”
A warning: InvestmentNews wants to make damn sure its readers, the 90,000 professional financial advisers who rely on timeliness and accuracy of every INews forecast: “What will your clients’ portfolios look like when the bond bomb goes off?” Get it? Not if but when it happens.
Yes, they do expect the bond bomb to explode and are publishing “a special report on the impending crisis in the bond market.”
Yes, you heard them. “Tick, Tick … Boom!” Wake up, it’s an “impending crisis,” dead ahead. And to punctuate their message, InvestmentNews added an alarming photo of an alarm clock with huge bells, wired to rolled up bonds looking like a stack of dynamite sticks. “Tick, Tick … Boom!”
InvestmentNews is not staffed by a bunch of not alarmists, quite the opposite — conservative, trustworthy and methodical. They know the 90,000 registered investment advisers that rely on them are in turn responsible for advising millions of Americans and managing trillions of retirement assets. Yes, their audience demands reliable forecasts.
So listen closely, we’ll summarize Andrew Osterland’s lead article “Fear Rising With Rates,” along with an interview with Bond King Bill Gross. And INews editorials on “repositioning client money” with “strategies for rising rates.” And a couple of opposing portfolio suggestions: “The case for, and against, stocks.”
The Bull says we’re on “the verge of an even bigger run-up. The bear warns, if you “goal is to avoid losses, stay out of equities altogether.”
Either way, the INews report reads like a Stephen King horror story, and in the background, you hear the ticking … ticking … louder … louder … Boom!”

Bond bubble, dangerous, big, doubled last four years

Since the crash four years ago investors have been wary of stocks and have been putting their money in bond mutual funds. INew’s interview with Gross noted that “assets in bond mutual funds have more than doubled to over $2 trillion.”
Gross reiterated Pimco’s “New Normal” warning: “The future for bonds is a lower-return future than investors have come to assume. Bond investors should be expecting 2% to 3% returns over the future years … bond returns will be lower than expected, but … still better than cash and will provide positive returns.”
Interesting that Gross also warned while interest rates will go up 10-15 basis points annually, “a big spike in interest rates is certainly a worry for bonds, but it wouldn’t be friendly for stocks, either.”

Latest stock bubble even more deceptive, more deadly

Over at Bloomberg BusinessWeek, Peter Coy also picked up on the “imbalance between the Dow and the economy … Bond yields are so low that savers who used to keep their money in, say, Treasurys are being driven into the stock market in search of positive returns. They have no choice.”
Then he borrows economist Roger Farmer’s metaphor of “two staggering drunks connected by a long rope. Sometimes the stock market and the economy go in the same direction, sometimes not. But … it won’t go on forever.” The party will soon be over.
Why? Coy highlights the no-win scenarios of economist David Rosenberg: “If the economy slips into recession, even the Fed won’t be able to keep the market aloft. On the other hand, if the economy finally catches fire, investors will conclude that the Fed’s extreme unction will eventually be withdrawn. They’ll sell bonds in anticipation, driving up interest rates and possibly pushing down stocks.”
It gets worse. Rosenberg doesn’t like what’s dead ahead: “His worry is simply that no one else is particularly worried — that the stock market’s rise has been so steady, calm, and untroubled” and nobody seems concerned.

Which reminds him that “stock market volatility is back to the lows of 2006 and 2007 (right before, ahem, the biggest crisis since the Depression). Says Rosenberg: “If there’s a bubble right now, it’s in complacency.” Investors are in for a rude awakening.

Warning: ‘Investors have no idea about what’s about to happen’

Why are investors complacent? Why? Because “the public thinks bonds are safe, but they’re not … Bonds are a big problem, and most people don’t understand that yet,” said Harry Clark, chief executive of Clark Capital Management.” Deep inside, the public has a vivid memory of the $10 trillion market cap lost on Wall Street in the 2008 collapse. But after four years of being lulled into feeling safe in bonds, “they have no idea what’s about to happen to them.”
Listen to the warnings. Start planning now. You have no excuse. Something big is “about to happen” and you are not going to like it.
Fortunately for investors, InvestmentNews’ Osterland also couldn’t be more blunt: “Fear among financial advisers of a bond-market crash that could devastate the portfolios of millions of investors is growing amid improving economic news and rising U.S. bond yields,” as he also sees the “imbalance between the Dow and the economy” that BusinessWeek warns “won’t go on forever.”
But what’s really scary is not just rates going up, or bonds down, or stocks hitting a bear patch, or the economy stalling. No, what’s really scary is that investors are complacent, clueless, just don’t get it. As a result, when the ticking time bombs go off (not just the bond bomb and the rate bomb, but the stock bomb and the economy bomb) the volatility will go into a wild ride like a roller coaster that will trigger panic selling, even a full-blown crash, repeating the 2008 disaster.
“Buyer beware. There’s a big yellow sign saying, ‘Caution ahead.’ It’s not going to be pleasant when rates go up,” said David Sherman, president of Cohanzick Management.” In fact, downright insane, if you remember the last crash.

Market’s already turned … even brokers see worst-case scenario

InvestmentNews even added a warning from FINRA, the chief regulator of the brokerage industry: “Last month, the Financial Industry Regulatory Authority Inc. took the unusual step of issuing an investor alert about the vulnerability of bonds and bond funds.”
Many economists believe that interest rates are not likely to get much lower and will eventually rise. If that is true, then outstanding bonds, particularly those with a low interest rate and high duration, may experience significant price drops as interest rates rise along the way.”
Get it? “Significant” interest rate increases … bond price crashing … rippling through the stock market, and the global economy. Investors have been lulled into complacency by Ben Bernanke’s long cheap money policy.
Warning, wake up plan ahead … your complacency, everyone’s complacency will soon end with a shock when rates jump … but by then it may be too late to plan ahead, because it will right here, right now.

Do the ticking math … tick … tick … tick … boom!

Osterland relies on some solid numbers to make his point that the market’s turning has already begun and will spiral down and out of control: “The yield on the 10-year Treasury bond, just under 2%, is up more than 35% from the record low in July. Investors are almost certainly going to see negative real returns on their Treasury portfolios in the first quarter, a rare event that many feel has the potential to trigger a wider selloff in the market.”
And adding to the selloff risk, we’re coming into federal tax season and a couple more debt ceiling cliffs: “With the Federal Reserve keeping short-term rates near zero and long-term rates near historic lows with its bond-buying program, there’s little room for further price appreciation. That means … interest rates have nowhere to go but up.”
And unfortunately, he warns that “a rapid rise in interest rates would bludgeon many existing bond portfolios. Simple bond math holds that a 1-percentage-point rise in interest rates would result in a roughly 1% decline in prices for every year of a bond’s duration.” Yes, “bludgeon” your portfolio once rates start ratcheting up.
InvestmentNews takes its responsibility to America’s 90,000 professional financial advisers seriously and in this “Special Report: Tick, Tick … Boom!” it’s painfully clear it sees enormous danger ahead for a millions of complacent investors who “have no idea what’s about to happen to them. … Tick … Tick … Boom!”

Confidence in Financial System Lost Forever Due to Cyprus Bank Heist

Submitted by Bill Holter:
Confidence is what makes the world go ’round and nothing else.  The saying that “money makes the world go ’round” IS correct and always has been but…“money” today is not really money…it is currencyThe only thing keeping Dollars, Euros and all the rest from becoming fuel for heat in the winter and toilet paper year round IS “confidence”.
Confidence also allows business transactions to evolve and to consummate.  The kid down the street will cut your lawn because he is “confident” that you will pay him when he is done.  You go to work with the confidence that your employer will pay you at the end of the week.  This same confidence exists between producers and consumers, manufacturers and distributors and end users.  It exists between…depositors and bankers (or at least it did).  “Confidence” exists only because we have laws, laws that are followed and enforced from top to bottom and everywhere in between.  Confidence can also exist because one’s “character” is known and respected.  It takes time for this “known and respected” character to be built, it only takes one bad act to destroy it.  The current Cyprus affair is probably the millionth public screwing that the populace has witnessed, but it will surely be the one that they wake up to because bank money “supposed” to be sacrosanct. 
This Cyprus heist negates totally ALL rule of law.

The Cyprus parliament voted down the theft of depositor monies yesterday which means that the odds are the banks (stock market and everything financial) will be closed until at least next week as there was no Plan B.  Vladimir Putin used the term “very dangerous” in his description of what is happening there.  If you break down the term “very dangerous” to its most basic roots and who it’s coming from you should be scared “very scared”!  “Very” is a term used to put emphasis on the following word which in this case is “dangerous”.  “Dangerous”, depending on who uses the term can range anywhere from the “danger” of spilling milk to …life threatening.  In this case it was used by Vladimir Putin…
Let me ask you this, take yourself back (you really don’t need to but follow along here) in time and imagine robbing a bank like Bonnie and Clyde.  You get done with the job (or don’t) only to find out that it was Al Capone’s bank, would you be scared to the point of peeing your pants?  Never mind that you didn’t know it was Al’s bank until after the fact, would you be scared to death?  Let’s make another assumption, assume that you absolutely knew that it was Mr. Capone’s bank, how insane must you have been to target THAT particular bank?  Do you really believe you could ever go out in public and actually “spend” any of that money?  Would you, could you, ever sleep at night again?  Not because you broke one of the 10 Commandments “thou shalt not steal” but because you know that another Commandment will shortly be broken…”thou shalt not kill”!  As a completely side note, do you remember back in 2004 I think it was, a picture of Mr. Putin holding a 400 oz. bar of Gold for a press conference?  Do you think he might have had a clue back then?
So the IMF, World Bank, BIS and Troika made this decision to steal Russian money (not to mention serf and slave Cypriot monies), does anyone believe that Ben Bernanke, Jack Lew, Mr. Obama and all the rest here in the U.S. were not consulted and didn’t approve this?  Do you think that the Russians don’t know how decisions of this magnitude are made?  Would you be a little pissed if your neighbor walked into your house and took some “stuff”?  10% or maybe even 15% of your “stuff” and said to you “don’t worry, it’s a necessary tax otherwise you will lose ALL of your stuff”?
Without going any further, it is safe to say that whoever (all of them collectively) made this decision of “robbing the bank” are completely nuts?  Insane?  OK, so let’s look at this from another standpoint…”confidence”.
Confidence is what makes the world go ’round and nothing else.  The saying that “money makes the world go ’round” IS correct and always has been but…”money” today is not really money…it is currency.  The only thing keeping Dollars, Euros and all the rest from becoming fuel for heat in the winter and toilet paper year round IS “confidence”.  Confidence also allows business transactions to evolve and to consummate.  The kid down the street will cut your lawn because he is “confident” that you will pay him when he is done.  You go to work with the confidence that your employer will pay you at the end of the week.  This same confidence exists between producers and consumers, manufacturers and distributors and end users.  It exists between…depositors and bankers (or at least it did).  ”Confidence” exists only because we have laws, laws that are followed and enforced from top to bottom and everywhere in between.  Confidence can also exist because one’s “character” is known and respected.  It takes time for this “known and respected” character to be built, it only takes one bad act to destroy it.  The current Cyprus affair is probably the millionth public screwing that the populace has witnessed…this will surely be the one that they wake up to because bank money “supposed” to be sacrosanct.
This Cyprus heist negates totally ALL rule of law.  It absolutely “breaks” what was SO important back in 2008-09.  The “confidence” that money in the bank was “safe”.  Do you remember?  TARP and all the other acronyms?  QE1, 2, 3, lite, 4 and so on?  They were all “done” because they HAD to!  If they weren’t “done” the world would end, the banks would close and everyone would lose everything?  Remember?  Confidence?  Hell, I even remember hearing “the only thing to fear is fear itself”.  Does watching your neighbor across the street breaking into your next door neighbor’s house instill confidence?  Or maybe fear?  As I said above…these miscreant elites are crazy!  It’s like they’ve inbred so many times that the “logic” and “right vs. wrong” genes no longer exist!
There is one other minor “dot” that I will connect tomorrow or the next day with this little beach of confidence and that is the “confidence” in the currencies themselves.  It’s a funny thing this “confidence” stuff, once it gets broken it can never be fixed or repaired completely.
Regards,  Bill H.

COCA-COLA To Unveil 'FRUITWATER' ------------- Contains No Fruit

Coca-Cola To Unveil ‘Fruitwater’ Next Month

File photo of Coca-Cola bottles. (credit: Soe Than WIN/AFP/Getty Images)
File photo of Coca-Cola bottles. (credit: Soe Than WIN/AFP/Getty Images)
NEW YORK (AP) — Coca-Cola is taking bottled water and doing what it does best — giving it some bubbles and flavor.
The Atlanta-based company confirmed Monday that it would introduce a line of zero-calorie, carbonated, fruit-flavored waters called “Fruitwater” starting April 1. The drink will be part of Coca-Cola’s Glaceau unit, which makes other pricier bottled waters such as Vitaminwater and Smartwater.
Unlike the zero-calorie version of Vitaminwater, which is made with the natural sweetener stevia, Fruitwater will be sweetened with the artificial sweetener sucralose, best known as Splenda. It will not contain any fruit juice but the bottle notes that the drink is “enhanced with nutrients,” a reference to its B vitamins, magnesium and zinc.
NOTE: Toxic chem slo-deth...wasn't sure whether to post this here or "Agenda 21" group ;)

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Will Russia try to seize a foothold in the Med? Energy giant offers to restructure banks in exchange for gas exploration rights

  • Gazprom submitted plan to Cypriot President Nicos Anastasiades on Sunday
  • It is also rumoured that Kremlin is privately offering to help bail out Cyprus
  • It would be in 'return for use of a naval base in the Greek part of the island'
Russia could use the crisis in Cyprus to secure a military foothold and energy rights in the Mediterranean, it was claimed last night.
President Vladimir Putin called the decision to seize money from savers’ bank accounts as ‘unfair, unprofessional and dangerous’.
But in a move that has raised eyebrows, the Russian energy giant Gazprom offered Cyprus a plan in which the company will undertake the restructuring of the country’s banks in exchange for exploration rights for natural gas on the island.
Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening.
President Vladimir Putin called the decision to seize money from savers' bank accounts as 'unfair, unprofessional and dangerous'
President Vladimir Putin called the decision to seize money from savers' bank accounts as 'unfair, unprofessional and dangerous'. But a Russian energy giant has offered to restructure banks in exchange for gas exploration rights
It is also rumoured that the Kremlin is privately offering to help bail out Cyprus in exchange for the right to use a naval base in the Greek part of the island.
Moscow has already handed over £2billion to prop up the economy of Cyprus and is now in talks to restructure the assistance programme.
Russia currently has the use of only one foreign base at Tartus in Syria and docked warships in the Cypriot port of Limassol last year.
Up to £30billion of Russian money is stashed on the island, in what financial services insiders claim is a massive money-laundering operation for oligarchs and plutocrats attracted by its low tax rates.
Cyprus ranks as the largest source of foreign direct investment into Russia – money that is largely Russian in origin and passes through Cypriot banks before being sent back to Russia.
US commentator David Frum said: ‘The island of Cyprus is home to about 1.1million people.
‘This smallish jurisdiction is home to one of the world’s largest banking industries, holding deposits equal to eight times Cyprus’s GDP.
‘Where’d that money come from? Cyprus has chosen to allows its banks to act as global money launderers.’
Russians have reacted with anger to the tax raid. ‘While assessing the proposed additional levy on bank accounts in Cyprus, Putin said that such a decision, should it be made, would be unfair, unprofessional and dangerous,’ said a Kremlin spokesman.
Russian Prime Minister Dmitry Medvedev said the eurozone decision seemed to be aimed at confiscating someone else’s property.
‘This practice, unfortunately, was well-known and familiar in the Soviet period,’ he said.
Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening.
Representatives of the Russian company submitted the proposal to the office of Cypriot President Nicos Anastasiades on Sunday evening.
Cyprus’s finance minister Michael Sarris will visit Moscow tomorrow for meetings to try to pin down new loan terms, a Russian government source said.
Officials have also said Russian investors are interested in buying a majority stake in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus – the two biggest banks on the Mediterranean island.
British expats in Cyprus blamed the prevalence of dirty Russian money on the island for Germany’s decision to demand the tax raid in exchange for the bailout.
Efy Charalambous, 53, from North London moved to Cyprus ten years ago and runs a fruit and vegetable business with her husband Chris.
She said: ‘The only reason Germany is doing this is because they think rich Russians launder their money through the banks here in Cyprus.
‘But the Russians all carry cash, I know because they come here and buy fruit with 500 euro notes. The only people being hurt are expat Brits and ordinary Cypriot people.’
Russia’s Finance Minister Anton Siluanov also condemned the move and said the eurozone’s decision that Cyprus should introduce a levy on bank deposits was taken without consultations with Moscow.
EU officials now expect Russia to extend its £2bn loan to Cyprus by five years until 2021 and possibly refinance its terms.