The Con [ Part 1]

[Zngland]

The Con of the Decade Part I

The con of the decade (Part I) involves the transfer of private debt to the public (the marks), who then pays interest forever to the con artists.

I've laid out the Con of the Decade (Part I) in outline form:

1. Enable trillions of dollars in mortgages guaranteed to default by packaging unlimited quantities of them into mortgage-backed securities (MBS), creating umlimited demand for fraudulently originated loans.

2. Sell these MBS as "safe" to credulous investors, institutions, town councils in Norway, etc., i.e. "the bezzle" on a global scale.

3. Make huge "side bets" against these doomed mortgages so when they default then the short-side bets generate billions in profits.

4. Leverage each $1 of actual capital into $100 of high-risk bets.

5. Hide the utterly fraudulent bets offshore and/or off-balance sheet (not that the regulators you had muzzled would have noticed anyway).

6. When the longside bets go bad, transfer hundreds of billions of dollars in Federal guarantees, bailouts and backstops into the private hands which made the risky bets, either via direct payments or via proxies like AIG. Enable these private Power Elites to borrow hundreds of billions more from the Treasury/Fed at zero interest.

7. Deposit these funds at the Federal Reserve, where they earn 3-4%. Reap billions in guaranteed income by borrowing Federal money for free and getting paid interest by the Fed.

8. As profits pile up, start buying boatloads of short-term U.S. Treasuries. Now the taxpayers who absorbed the trillions in private losses and who transferred trillions in subsidies, backstops, guarantees, bailouts and loans to private banks and corporations, are now paying interest on the Treasuries their own money purchased for the banks/corporations.

9. Slowly acquire trillions of dollars in Treasuries--not difficult to do as the Federal government is borrowing $1.5 trillion a year.

10. Stop buying Treasuries and dump a boatload onto the market, forcing interest rates to rise as supply of new T-Bills exceeds demand (at least temporarily). Repeat as necessary to double and then triple interest rates paid on Treasuries.

11. Buy hundreds of billions in long-term Treasuries at high rates of interest. As interest rates rise, interest payments dwarf all other Federal spending, forcing extreme cuts in all other government spending.

12. Enjoy the hundreds of billions of dollars in interest payments being paid by taxpayers on Treasuries that were purchased with their money but which are safely in private hands.

Since the Federal government could potentially inflate away these trillions in Treasuries, buy enough elected officials to force austerity so inflation remains tame. In essence, these private banks and corporations now own the revenue stream of the Federal government and its taxpayers. Neat con, and the marks will never understand how "saving our financial system" led to their servitude to the very interests they bailed out.

The circle is now complete: in "saving our financial system," the public borrowed trillions and transferred the money to private Power Elites, who then buy the public debt with the money swindled out of the taxpayer. Then the taxpayers transfer more wealth every year to the Power Elites/Plutocracy in the form of interest on the Treasury debt. The Power Elites will own the debt that was taken on to bail them out of bad private bets: this is the culmination of privatized gains, socialized risk.

In effect, it's a Third World/colonial scam on a gigantic scale: plunder the public treasury, then buy the debt which was borrowed and transferred to your pockets. You are buying the country with money you borrowed from its taxpayers. No despot could do better.

By Charles Hugh Smith

oftwominds.com

Gets interesting after [9],

I say the soured word " default" takes on a whole new meaning when applied to the Banking Plutocracy.

[PropertyGuru]

great post.

[erranta]

The Con of the Decade Part I

The con of the decade (Part I) involves the transfer of private debt to the public (the marks), who then pays interest forever to the con artists.

I've laid out the Con of the Decade (Part I) in outline form:

Gets interesting after [9],

I say the soured word " default" takes on a whole new meaning when applied to the Banking Plutocracy.

I keep reminding you since it was revealed >>>

- ONE THIRD of the World's elect_RON money, passes thru the cariBBean (Pirate Booty!) off-shore tax havens!

[matroskin]

11. Buy hundreds of billions in long-term Treasuries at high rates of interest. As interest rates rise, interest payments dwarf all other Federal spending, forcing extreme cuts in all other government spending.

12. Enjoy the hundreds of billions of dollars in interest payments being paid by taxpayers on Treasuries that were purchased with their money but which are safely in private hands.

This would be a trade of a one's lifetime. Good thing is ordinary people could buy UST/guilts as well

There was a couple of year period where you could have bought 30 year Treasury instruments at yields from 13-15%. Some people looked at that as a sucker's game, as the United States was about to implode in a hyperinflationary disaster.

To the contrary; buying those bonds was literally the trade of a lifetime - zero risk and over the life of the bond it returned that nice safe 13% for the entire 30 years. Indeed, some are maturing just now.

Original KD missive

Bring it on!

[@contradevian]

Won't work. The elites are going to get shot/hung or whatever it takes to overthrow them.

Edited July 10, 2010 by SirStirlingSlumlord

[Zngland]

Won't work. The elites are going to get shot/hung or whatever it takes to overthrow them.

I expect that too, the people won't pay taxes and see nothing in return.

The unfairness of it all will out via internet etc.

Defaulting on on govt debt has implications such as no loans from " burnt" lenders, higher rates etc.

A partial default if its possible ie default on bondholders that exploited/caused / benefitted from "deceitful lending etc etc.

The solution to the overwhelming debt is writedown or defaul or combination. Default has the disadvantage of the " leper syndrome", but

a selective default could "catch " the so called " rulers " of the world .

Either that or printing or planned devaluation and significant wipeout of str fund., oh yes gold ...

Anyways all views appreciated

[DeepLurker]

I expect that too, the people won't pay taxes and see nothing in return.

The unfairness of it all will out via internet etc.

Defaulting on on govt debt has implications such as no loans from " burnt" lenders, higher rates etc.

A partial default if its possible ie default on bondholders that exploited/caused / benefitted from "deceitful lending etc etc.

The solution to the overwhelming debt is writedown or defaul or combination. Default has the disadvantage of the " leper syndrome", but

a selective default could "catch " the so called " rulers " of the world .

Either that or printing or planned devaluation and significant wipeout of str fund., oh yes gold ...

Anyways all views appreciated

Ok, I am just a young padawan, but I cannot see any problems in governments no longer being able to borrow money?

On the contrary, public debt is the cause of so many problems, getting rid of it would surely be a good thing?

[matroskin]

I expect that too, the people won't pay taxes and see nothing in return.

As if one currently gets something in return if s/he becomes unemployed _and_ without children, see many other threads on this subject

The unfairness of it all will out via internet etc.

Unless You qualify "etc" I have no doubts that internet can be shut down once and for all. This is purely a technical problem and has its solutions.

Defaulting on on govt debt has implications such as no loans from " burnt" lenders, higher rates etc.

A partial default if its possible ie default on bondholders that exploited/caused / benefitted from "deceitful lending etc etc.

US Wells Fargo is a well-known such lender. But it has been bailed out once and will be bailed out again as many times as necessary.

[200p]

If you consider banks are another player in a video game. You are also a player. But the game is unfair - the banks, and governments have unlimited lives, better weapons, better communications and are entrenched behind many layer of defences. It won't ever be a fair "game". Your only hope is not to play. If enough people "wake up" and not play, the illusion, the video game, falls apart.

You can't beat the system

[winkie]

If you consider banks are another player in a video game. You are also a player. But the game is unfair - the banks, and governments have unlimited lives, better weapons, better communications and are entrenched behind many layer of defences. It won't ever be a fair "game". Your only hope is not to play. If enough people "wake up" and not play, the illusion, the video game, falls apart.

You can't beat the system

When you think about it, is it not better that there are people that have more than others, better than everyone having very little.........talking materialistically only, there will never be a time when we all have the same....but what they may have in money, they probably lack in even better things that are far more important and satisfying.

[Guest spp]

Good Post.

Central banking at its finest. If you want to learn more follow Bob Chapmans http://theinternationalforecaster.com/ and his youtube channel.

[Britney's Piers]

Your only hope is not to play. If enough people "wake up" and not play, the illusion, the video game, falls apart.

OK...you go first.

[200p]

Don't be a consumer whore, avoid using credit cards for dodads, keeping up with the jones etc. Refuse to conform, and take the easy path by following the crowd. We can avoid participating in the elite's game in our own little ways.

[lowrentyieldmakessense(honest!)]

Don't be a consumer whore, avoid using credit cards for dodads, keeping up with the jones etc. Refuse to conform, and take the easy path by following the crowd. We can avoid participating in the elite's game in our own little ways.

yep

stop giving them food

link

Tapeworm Economy

Catherine Austin Fitts of Solari explains how the "tapeworm" economy bleeds us of our wealth.

This is an eye-opening interview with the remarkable Ms. Fitts by the gentleman who runs the Moneychanger website:

MONEYCHANGER What is the American Tapeworm" or the "negative return on investment economy"?

FITTS That's an economy with two classes of players, the insiders & the outsiders. The insiders are constantly subsidized at the expense of the outsiders, like a tapeworm, a parasite that eats through the body. The parasites engineer the economy to drain it for their benefit, consolidating wealth & economic power by liquidating wealth, people, environment, & economic productivity, all to fatten the Tapeworm.

MONEYCHANGER "Liquidate & transfer to others" isn't exactly "transferring assets," although that can happen as a privatization.

FITTS The thousands of recipes in the Joy of Cooking cookbook are all still recipes. The "Tapeworm" doesn't drain us by one recipe alone.

[Zngland]

If you consider banks are another player in a video game. You are also a player. But the game is unfair - the banks, and governments have unlimited lives, better weapons, better communications and are entrenched behind many layer of defences. It won't ever be a fair "game". Your only hope is not to play. If enough people "wake up" and not play, the illusion, the video game, falls apart.

You can't beat the system

don't they become our friendlies, and replicants of our wives take over

[erranta]

If you consider banks are another player in a video game. You are also a player. But the game is unfair - the banks, and governments have unlimited lives, better weapons, better communications and are entrenched behind many layer of defences. It won't ever be a fair "game". Your only hope is not to play. If enough people "wake up" and not play, the illusion, the video game, falls apart.

You can't beat the system

Arnie (son of nasti party member) is @ present oversEEing the termination of California!

Look in your BIBLE and SEE who is described as "his eyes were as a flame of fire"

[Zngland]

Arnie (son of nasti party member) is @ present oversEEing the termination of California!

Look in your BIBLE and SEE who is described as "his eyes were as a flame of fire"

I ain't got a bible but the screw ups lately make you think there's more to it don't they?

They [ banking fraternity ] cause the disaster, con our govts ,to pay em whatever, loads us our "beloved democratically "elected govt with debt by being bailed out,buy our own paper and then by buy /sell ,to influence the yield and the interest we taxpayers pay.

Is that a reasonable deduction i'm not sure, maybe Freetrader should enlighten us, personally i'm tired of this endless can kicking,realism avoiding crap, talking and not walking by all the players in this so called meritocratic economic shitstem. Would you let this blatant "carvery "happen in the playground, fxxk no,House prices fxxxem. I no longer give a shit, "fairness" a "fair shake" bothers me, I ain't protested/marched in my life i'm gonna though, if it kicks off ,these "guys" make me sick.

These fxxxers want our children born into slavery ,the hubris in attemption alone justifies xxxtx.

I hope this is just internet over information paranoia and the big G steps in....

[Panda]

The Con............................................exactly.

Load up people with personal debt. load up public debt, get all debt on a social balance sheet, get the sheep to pay it back while the elite mop up the profits.

Hyperinflation of wages no chance, and wage inflation will be offset by an incremental increase in debt servicing cost, public and private debt. This debt will never be paid back, nor will it be inflated away by over the top wage settlements. Why would the elite want to do that? No this debt is here to linger, just like Japan, and linger it will.

If you are in debt, tough, because any wage increment you get, anywhere near cost inflation will be offset by an increase in debt servicing costs, by way of interest rates going up and up to offset the fact that you have the ability to earn more. So as you earn that little bit more, you are taxed more directly and indirectly.

There is no way out of this debt based mess, well not for the indebted.

You earn £30k a year, you have a £100k mortgage. You get a 1% pay increase above inflation, RPI, so a £300.00 a year pay increase. Merv put rates up 1 basis point so from 0.5% to 1.5%, to offset this fact that you have gotten a pay rise which will inflate the cost of services. So your mortgage goes up 1% a year in interest payments, so your mortgage goes up by £1000.00 a year.

You are £700.00 a year worse off through getting a pay rise?

P

[erranta]

I ain't got a bible but the screw ups lately make you think there's more to it don't they?

They [ banking fraternity ] cause the disaster, con our govts ,to pay em whatever, loads us our "beloved democratically "elected govt with debt by being bailed out,buy our own paper and then by buy /sell ,to influence the yield and the interest we taxpayers pay.

Is that a reasonable deduction i'm not sure, maybe Freetrader should enlighten us, personally i'm tired of this endless can kicking,realism avoiding crap, talking and not walking by all the players in this so called meritocratic economic shitstem. Would you let this blatant "carvery "happen in the playground, fxxk no,House prices fxxxem. I no longer give a shit, "fairness" a "fair shake" bothers me, I ain't protested/marched in my life i'm gonna though, if it kicks off ,these "guys" make me sick.

These fxxxers want our children born into slavery ,the hubris in attemption alone justifies xxxtx.

I hope this is just internet over information paranoia and the big G steps in....

If you want to suss out the word "FAIR_NESS" and WHY 'they' keep (occultly) mentioning it - research the book 'A Pilgims Progress' by John Bunyun - then tell me who is in charge of the fair_ground "distractions"

Then equate, what we are offered verbally and what 'happens' in reality (by our elites/govts)

The "fairness" of it all?