Bankers' Multi-Trillion-Dollar Crime Scene

Federal Reserve Admits Hiding Gold Swap Arrangements

September 24, 2009

Gold Anti-Trust Action Committee Inc. - The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.

The Fed’s disclosure came this week in a letter to GATA’s Washington-area lawyer, William J. Olson of Vienna, Virginia, denying GATA’s administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund’s treatise on gold swaps.)

The letter, dated September 17 and written by Federal Reserve Board member Kevin M. Warsh, formerly a member of the President’s Working Group on Financial Markets, detailed the Fed’s position that the gold swap records sought by GATA are exempt from disclosure under the U.S. Freedom of Information Act...

Gold, IMF and the G-20

September 21, 2009

Watson's Web - Last week the IMF issued another one of those 'blaring trumpet' announcements that it would be selling gold. They claim that it will be used to loan money to the poor. Yet this announcement came like clockwork just as the price hit above $1000 an ounce.

This is no mystery to this writer and other astute observers of the international monetary regimen as to the timing of such an announcement. You could have set your watch it. These announcements are almost always timed when the price of gold gets too high for the elite to stomach and people begin to lose faith in paper currency of the day.

The public explanations are always perfectly reasonable. But if the past is any example of the future, it is highly unlikely that any gold will actually be sold, if indeed the IMF actually has as much gold as they say they do.

As I wrote last week, the price of gold declined going into the G-20 meeting last Thursday. It has continued to decline since then in large part because the specter of International Monetary Fund gold reserves possibly being sold into the market.

Supposedly, the IMF would be selling 403 tons (just under 13 million troy ounces) of its gold holdings to fund efforts to resolve the global financial crisis. In all likelihood, this gold will never be sold or, if it is, will be completely sold to a single central bank.

To understand why the threat to sell IMF gold is almost certainly a scam to knock down the price of gold, you need to understand more background information than I can provide in this column. But let me give you a few tidbits.

The gold reserves of the IMF were created mostly from pledges from the organization’s initial members. In theory, the gold is supposedly stored in four countries, including the United States and United Kingdom. However, the existence of and title to these gold reserves has never been audited in the organization’s history. - J & T Coins

This was written just before the last G20 meeting (as you know, another one is scheduled for this week). The stated goal of the sales was to “use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries.” Apparently the original purpose of the funds when these sales were first raised months ago (to create an endowment to fund IMF salaries and keep these bureaucrats in high cotton) wasn’t polling well. You can rest assured, though, that the purpose will remain the same, regardless of the new packaging.

In short these sales never really happen. They are deigned primarily to drive the price of the dollar up, to control the price of gold to keep it from gaining too much investment focus, and to detract from the dollar and other fiat currencies.

If there is any truth to the sales this time it will almost certainly not be sales that hit the open market, though the announcement is made just for that effect. The gold will in all realty either be 'loaned' to a Western Central Bank or be actually sold off to China and perhaps India as an inducement to get them (or others) to continue to buy US treasuries. The Chinese want something tangible for their assets and have already shown a remarkable financial acumen and have already begun storing large quantities of gold. The Chinese are holding the cards and are making their demands known and have ways of making sure they are not 'stiffed' by the US and her financial and criminal elite.

I do not use the world criminal lightly. Some very serious crimes have been committed and are being commuted as I write this, but no one has the power to deal with the perpetrators so they continue on to greater and greater scams until we come to the point that we are now at...

Trade and perhaps the future method of payment for global trade will be the topic of discussions for the next several years as the US refuses to reign in spending, runs up huge deficits, and allows the very same criminal elements who put us in this mess to dictate economic policy.

This is why China and others are calling for a new global economic system. It is not just 'anti-Americanism' as so many are saying. This is about self-preservation and the future internal stability of their own nations. This much every knows, even the US though the will never admit it.

The current system is doomed.

They can talk about a recovery all day long and point to a few charts that appear to point to the fact that we are in one. But our deficits and current (not just future) inability to fund our own government except by printing money will bring an end to the current dollar based global system and with it American economic dominance.

China is not going to just 'advise' and 'request' the US take care of its deficits, but is making some real behind the scenes moves to get something for their money. Even now, unbeknownst to Americans our leaders, decisions are being made now as to what key assets inside the US will be sold off to America's foreign creditors. These IMF sales may eventually be a foreshadowing of a massive transfer of Gold to China for the right price, if the US is given assurances that continued support for the dollar can be relied upon. This is speculation, but what is not speculation is that China and the US are working on some kind of arrangement now to allow China to spend her dollars for hard assets/infrastructure inside the US.

If that does not work, China has demonstrated to the US, in ways I cannot post on the net, that she is more than willing to go another far more 'convincing' route to ensure she gets repaid in something other than soon to be worthless Treasury paper; and yes, a very serious unconventional war is very much on the table. Let others scoff and mock if they want -- the Chinese have already fired their opening salvo's in this war to show the US its 'proof of capability.'

Keep your eyes on the price of gold, and other commodities, moves by China, and the real economic stats not carried by Reuters and the AP. Such things as: the serious rise in the use of food stamps, unemployment benefits running out, states having to borrow money to to keep the programs going, the rise in homelessness, the businesses that are still closing up shop in small towns that were once dependent on now bankrupt industries. Or the fact that first time unemployment filers may be declining somewhat (though still are very high), while they omit the fact that a great many of those laid off during this crisis have not found jobs, and that statisticians may be understating the number of long term unemployed by counting people as 'employed' who may be making $10,000 a year as a temp yet who used to be making 70,000 a year at a job that no longer exists. Such statistics may not show up in the BLS's numbers, but they do show up in tax receipts, which have shown a very serious decline.

Some well instructed economists have made a strong case that deflation is more likely what we are to see. For reasons I have already stated, I think we will see both (for the man on the street/working people). Deflation in high-ticket (credit dependent) items and inflation in must-have items -- that is until the system implodes on itself.

CEOs at Bailed Out Banks Got $13.8 Million Apiece Last Year

September 7, 2009

WSWS - Executives at financial firms bailed out by the government received on average $13.8 million in compensation last year, according to a study of bank earning statements released last week.

This figure is 37 percent higher than the average CEO income in the S&P 500, which stood at $10.1 million last year. The study found that CEOs stand to benefit even further after their companies granted them stock options at their low points in early 2009.



The study, published Wednesday by the Institute for Policy Studies, a liberal think tank, gave a comprehensive overview of Wall Street firms’ pay practices based on their proxy earnings statements to the SEC.

The report noted that the average financial CEO’s salary in 2008 was 430 times what an average worker earned during the same time.

The top five executives at the 20 financial firms that got the most money from the federal government collected a total of $3.2 billion in compensation in the past three years. During this time, these 100 people took in an average of $32 million apiece. This group received $1.2 billion in 2006 and 2007, and $0.8 billion last year.

100 US workers would have to work for a thousand years to make as much as this group made in three...

Wall Street Cashes In On Death

September 7, 2009

CBFE Economics - The New York Times published a pretty creepy article on Saturday (September 5th, Wall Street Pursues Profit in Bundles of Life Insurance). The article focuses on Wall Street’s new plan to make money. What’s so bad about Wall Street making money?

Well, their new plan is to buy life insurance plans from elderly and sick people for cash.

The example that the New York Times gives is someone selling a million dollar policy for a $400,000 payout, but the payout amount would all depend on the seller’s life expectancy. These “life settlements” would then be bundled together to form bonds that can be sold to investors. The investors would start paying for the person’s policy from then on. When the person dies, the investors collect on the policy.

Apparently, the faster the person dies, the more money the investors make. However, regardless of whether you die sooner or later, Wall Street firms will profit off of fees collected from creating the bonds and facilitating transactions. You could say that Wall Street is planning to “securitize” people’s lives (or deaths, as it may be) into a kind of CDO. And we all know how great that whole CDO adventure played out for Wall Street, right? What could be dangerous about creating a similar class of financial products with sick people’s life expectancy as the focus?

Apparently, these type of “life settlement” investments aren’t new for banks. They already exist in a lot of portfolios. What's new is the plan to securitize these “life settlements” and market them as a big-time asset class of their own. Keep in mind, this isn’t something banks are just talking about potentially doing. The Times states that Credit Suisse is “building a financial assembly line to buy large numbers of life insurance policies, package and resell them — just as Wall Street firms did with subprime securities.”

Estimates are putting the market for this class of investment product at $500 billion, according to the article. I don’t doubt it one bit. Considering how many people are losing their jobs or facing pay cuts, and how high medical bills are these days, does anyone really doubt that there are a whole lot of elderly and sick people out there who would be eager to sell their life insurance policies for an immediate cash payout? Especially if they foresee a future inability to pay their premiums?
So what’s the upside?

Right now a lot of people just let their life insurance policies lapse. If they’re lucky, they’ll still get a small payout but its usually not much compared to the premiums they’ve payed up to that point. Under this “life settlement” proposal, policy sellers get a bigger payout and eventually investors get their payout too. So insurance companies end up paying out on their policies more often than they do now. But, insurance companies could end up just raising rates and premiums to make up for the difference, which could end up leaving the average policyholder worse off. Wall Street profits. Insurance companies profit. The consumer pays up.

Still, its hard to really get that angry over a proposal like this. As I pointed out, these type of “life settlements” are already held in a lot of investment bank portfolios. And, who am I to say what kind of financial relationships elderly and sick people should or shouldn’t engage in?

But there are so many disturbing ramifications that come out of this proposal that I can’t help but be worried.

The article mentions that investors lost out on these type of investments in the ’80s when people with AIDS ended up living longer thanks to new medications. It also mentions that risk managers are planning on diversifying these bonds based on illness type. If one bond happens to represent too many people who all have one type of illness, then that bond could prove to be unprofitable if a cure for that illness is ever discovered.

Am I the only one who finds it disturbing that it’ll now be in the interest of some Wall Street investors for sick and old people to die faster, and for certain medications or medical procedures to be suppressed or kept inacessible to the public if they’re too successful at actually making people live longer?

I mean, don’t some of these major banks also have large stakes in pharmaceutical and healthcare companies? Couldn’t that present a very serious and disturbing conflict of interest? The article doesn’t address these questions.

Then there’s this:

Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned. The index is similar to tradable stock market indices that allow investors to bet on the overall direction of the market without buying stocks.

So, not only will investors be making money when some people die, but some investors will also be making money by simply placing bets on life expectancy in a kind of virtual market. Great. Thank God we bailed out these banks, otherwise they wouldn’t have been able to come up with these great investment products that will surely work to make America more economically competitive with the rest of the globe.

Seriously, how predatory can Wall Street get? What's the thought process here? “I guess if the American consumer is too tapped out to buy our junk we’ll just reap profit from his death and place secondary bets on the over/under for his life expectancy”?

I mean, people aren’t going to sell their policies for “life settlements” just because. Usually its because they have too much debt, lost their job, or because they simply can’t afford the medical costs of staying alive otherwise. So the American consumer is really being squeezed for every last cent he can cough up here.

All of this almost sounds like a slur a communist would attack American capitalism with (“Wall Street profits off of death!”), but it's reality. I guess that’s how deranged and parasitical some aspects of American so-called “free enterprise” have gotten.

Welcome to the Brave New World, I guess? So let me know, how do you feel about this whole plan?