Posts Tagged Alan Greenspan
By: Eric Sprott
June 22, 2012
Ministry of [Un]Truth
Speaking at a Brussels conference back in April 2011, Eurogroup President Jean Claude Juncker notably stated during a panel discussion that “when it becomes serious, you have to lie.” He was referring to situations where the act of “pre-indicating” decisions on eurozone policy could fuel speculation that could harm the markets and undermine their policies’ effectiveness.1 Everyone understands that the authorities sometimes lie in order to promote calm in the markets, but it was unexpected to hear such a high-level official actually admit to doing so. They’re not supposed to admit that they lie. It is also somewhat disconcerting given the fact that virtually every economic event we have lived through since that time can very easily be described as “serious”. Bank runs in Spain and Greece are indeed “serious”, as is the weak economic data now emanating from Europe, the US and China. Should we assume that the authorities have been lying more frequently than usual over the past year?
When former Fed Chairman Alan Greenspan denied and down-played the US housing bubble back in 2004 and 2005, the market didn’t realize how wrong he was until the bubble burst in 2007-2008. The same applies to the current Fed Chairman, Ben Bernanke, when he famously told US Congress in March of 2007 that “At this juncture… the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.”2 They weren’t necessarily lying, per se, they just underestimated the seriousness of the problem. At this point in the crisis, however, we are hard pressed to believe anything uttered by a central planner or financial authority figure. How many times have we heard that the eurozone crisis has been solved? And how many times have we heard officials flat out lie while the roof is burning over their heads?
Back in March, following the successful €530 billion launch of LTRO II, European Central Bank President Mario Draghi assured Germany’s Bild Newspaper that “The worst is over… the situation is stabilizing.”3 The situation certainly did stabilize… for about a month. And then the bank runs started up again and sovereign bond yields spiked. Draghi has since treaded the awkward plank of promoting calm while slipping out enough bad news to ensure the eurocrats stay on their toes. As ING economist Carsten Brzeski aptly described at an ECB press conference in early June, “Listening to the ECB’s macro-economic assessment was a bit like listening to whistles in the dark… It looks as if they are becoming increasingly worried, but do not want to show it.”4 And the situation has now deteriorated to the point where Draghi can’t possibly show it. Although Draghi does now warn of “serious downside risks” in the eurozone, he maintains that they are, in his words, “mostly to do with heightened uncertainty”.5 Of course they are, Mario. Europe’s issues are simply due to a vague feeling of unease felt among the EU populace. They have nothing to do with fact that the EU banking system is on the verge of collapsing in on itself.
When Prime Minister Mariano Rajoy assured the Spanish press that “There will be no rescue of the Spanish banking sector” on May 28th, the Spanish government announced a $125 billion bailout for its banks a mere two weeks later.6 This apparent deceit was not lost on the Spanish left, who were quick to dub him “Lying Rajoy”. But Mr. Rajoy didn’t seem phased in the least. As the Guardian writes, “Even when the outpouring of outrage forced Rajoy to call a hasty press conference the next day, he still refused to use the word “bailout” – or any other word for that matter – and referred mysteriously to “what happened on Saturday”. He went as far as to say that Spain’s emergency had been “resolved” (“thanks to my pressure”, he said). He then took a plane to Poland to watch the national football team play (“the players deserve my presence”).”7 Sound credible to you?
Then there are the bankers. Back in April, JP Morgan CEO Jamie Dimon blithely dismissed media reports as a “tempest in a teapot” that referred to massively outsized derivative positions held by the bank’s traders in the Chief Investment Office in London. That “tempest” was soon revealed to have resulted in a $2 billion trading loss for the bank roughly four weeks later. In testimony before the Senate Banking Committee this past week, Dimon explained that “This particular synthetic credit portfolio was intended to earn a lot of revenue if there was a crisis. I consider that a hedge.”8 He went on to add that regulators “can’t stop something like this from happening. It was purely a management mistake.”9 That’s just wonderful. Can we expect more ‘mistakes’ of this nature in the coming months given JP Morgan’s estimated $70 trillion in derivatives exposure? And will the US taxpayer willingly bail out JP Morgan when it does? Everyone knows the derivatives position wasn’t a hedge – but what else is Dimon going to say? That JP Morgan is making reckless derivatives bets overseas with other people’s money that’s backstopped by the US government? Credibility is leaving the system.
There is certainly a sense that the authorities can no longer be candid about this ongoing crisis, even if they want to be. On June 11th Austria’s finance minister, Maria Fekter, opined in a television interview that, “Italy has to work its way out of its economic dilemma of very high deficits and debt, but of course it may be that, given the high rates Italy pays to refinance on markets, they too will need support.”10 Her honesty sent Italian bond yields soaring and earned her some harsh criticism from eurozone officials, including Italian Prime Minister Mario Monti. As one eurozone official stated, “The problem is that this is market sensitive… It’s one thing if journalists write this but quite another if a eurozone minister says it. Verbal discipline is very important but she doesn’t seem to get that.”11 See no evil, hear no evil… and speak no evil. That’s the way forward for the eurozone elites.
We have no doubt that everyone is tired of bad news, but we are compelled to review the facts: Europe is currently experiencing severe bank runs, budgets in virtually every western country on the planet are out of control, the banking system is running excessive leverage and risk, the costs of servicing the ever-increasing amounts of government debt are rising rapidly, and the economies of Europe, Asia and the United States are slowing down or are in full contraction. There’s no sugar coating it and we have to stop listening to politicians and central planners who continue to downplay, obfuscate and flat out lie about the current economic reality. Stop listening to them.
NOTHING the central bankers have done up to this point has WORKED. All efforts have simply been aimed at keeping the financial system from imploding. QE I and II haven’t worked. LTRO I and II haven’t worked, and the most recent central bank initiatives are not even producing short-term benefits at this stage of the crisis. Just take Spain, for example. Following Rajoy’s announcement of the $125 billion bailout loan for the Spanish banks on June 10th, Spanish bond yields were trading back over 7% one week later – the same yield level at which other eurozone countries have been forced to ask for further international aid.12 The market still doesn’t even know what entity is going to pay the $125 billion, let alone when the funds will actually be released or whether the Spanish government will have to count it as part of its national debt. Spain is the fourth largest economy in the eurozone and larger than the previously bailedout Greece, Ireland and Portugal combined. At this point, it’s not even clear if the ECB will be allowed to bail out a country of Spain’s size, let alone Italy, which is now asking the ECB to use bailout funds to buy its sovereign bonds.13
The situation in Europe is becoming an exercise in futility. The positive effects of LTRO I and II, which combined pumped in over €1 trillion into European banks back in December 2011 and February 2012, have now been completely erased by the recent bank runs in Spain. Of the €523 billion released in LTRO II, roughly €200 billion was taken by Spanish banks.14 Of that amount, roughly €61 billion was estimated to have been reinvested back into Spanish sovereign bonds, which temporarily helped Spanish bond yields drop back to a sustainable level below 5.5%. Fast forward to today, and despite the LTRO infusions, the Spanish banks are all broke again after their underlying depositors withdrew billions over the past six weeks. The only liquid assets Spanish banks still own that they can sell to raise euros just happen to be government bonds… hence the rise in Spanish yields. So in essence, the entire benefit of the LTRO, which was a clever way of replenishing Spanish bank capital AND helping calm sovereign bond yields, has been completely reversed in roughly 14 weeks. It’s as we’ve said before – it’s not a sovereign problem, it’s a banking problem. This is why Spanish Prime Minister Rajoy is now pleading for help “to break the link between risk in the banking sector and sovereign risk.”15 Without a healthy sovereign bond market, peripheral eurozone countries simply have no way of supporting their bloated and insolvent banks.
The smart money is finally waking up to the dimension of the problem here and realizing that it’s really a banking issue. Deposit flight has revealed the vulnerability of the European banking system: when depositors make withdrawals, the only assets the banks can sell to raise liquidity are sovereign bonds, which creates the vicious downward spiral that up to this point has always resulted in some form of central bank bailout. Many eurozone authorities still have trouble understanding this. As Spanish Economy Minister, Luis de Guindos, recently stated to reporters at the G20 Summit, “We think… that the way markets are penalizing Spain today does not reflect the efforts we have made or the growth potential of the economy… Spain is a solvent country and a country which has a capacity to grow.”16 Every country has the capacity to grow. Not every country has a domestic banking system that has already borrowed €316 billion from the ECB so far this year (pre the most recently announced bailout), and needs to rollover roughly €600 billion in bank debt in 2012.17 That may be why the markets are reacting the way they are.
If you want to know what’s really going on, listen to the executives of companies that actually produce and sell things. On May 24, Tiffany & Co cut its fiscal-year sales and profit forecasts blaming “slowing growth in key markets like China and weakness in the United States as shoppers think twice about spending on high-end jewelry.”18 On June 8th, McDonald’s surprised the market with lower than expected same-store sales growth in May, following a lacklustre April sales report that the company stated was “largely due to underperformance in the United States, where consumers continue to seek out very low-priced food.”19, 20On June 13th, Nucor Corp., the largest U.S. steelmaker by market value warned that its second-quarter profit will miss its previous guidance after a “surge” in imports undermined prices and “political and economic uncertainty affect buyers’ confidence”.21 On June 20th, Proctor and Gamble lowered its fourth quarter guidance and profit forecast for 2012. Factors that drove the company’s challenges included “slow-to-no GDP growth in developed markets”, high unemployment levels, significant commodity cost increases and “highly volatile foreign exchange rates”.22 Other companies that have recently lowered guidance include Danone, Nestle, Unilever, Cisco Systems, Dell, Lowe’s, and Fedex. It’s ugly out there, and many companies are politely warning the market about the type of environment they foresee ahead in both the US and abroad.
To give you a hint of how bad it is in Europe today, the most recent retail sales out of Netherlands showed a decline of 8.7% year-over-year in April.23 In Spain, retail sales fell 9.8% year-on-year in April, which was 6% greater than the revised drop of 3.8% in March.24 Declines of this magnitude are not normal occurrences and signal a significant shift in spending within those countries. We fear this is a sign of things to come within the broader Eurozone, which will only serve to complicate an already dire situation that much more.
The G6 central banks are out of conventional tools to solve this financial crisis. With interest rates at zero, and the thought of further stimulus rendered politically unpalatable for the time being, we cannot see any positive solutions to this problem other than debt repudiation. We continue to note the contrast between the reporting companies who by law cannot lie about their fiscal realities, versus the central planners who admit that they MUST lie to preserve calm and control. We’ll leave it to you to decide whose version of the truth you want to believe.
|1||Forelle, Charles (May 9, 2011) “Luxembourg Lies on Secret Meeting”. Wall Street Journal. Retrieved on June 5, 2012 from:
|2||Bernanke, Ben S. (March 28, 2007) “Economic Outlook before the Joint Economic Committee, U.S. Congress”. Board of Governors of the Federal Reserve System. Retrieved on June 8, 2012 from: http://www.federalreserve.gov/newsevents/testimony/bernanke20070328a.htm|
|3||Evans, Stephen (March 22, 2012) “ECB Chief Mario Draghi says worst of euro crisis over”. BBC News. Retrieved on June 6, 2012 from: http://www.bbc.co.uk/news/business-17471617|
|4|| Russolillo, Steven (June 6, 2012) “Here’s How to Read Mario Draghi’s Poker Face”. Wall Street Journal. Retrieved on June 7, 2012 from:
|5|| AFP (June 16, 2012) “ECB warns ‘serious risks’ for Eurozone, but no inflation”. Associated Foreign Press. Retrieved on June 19, 2012 from:
|6||CBC News (May 28, 2012) “Spain says banks won’t need EU rescue” CBC News. Retrieved on June 6, 2012 from: http://www.cbc.ca/news/business/story/2012/05/28/spain-banks-rajoy.html|
|7|| Murado, Miguel-Anxo (June 12, 2012) “‘Bailout’ seems to be the hardest word for Spain’s prime minister”. The Guardian. Retrieved on June 12, 2012 from:
|8|| AP (June 13, 2012) “‘There was good intent’: JPMorgan’s Jamie Dimon APOLOGIZES while explaining $2B loss to Congress
amid protesting hecklers”. Associated Press. Retrieved on June 13, 2012 from:
|9||Touryalai, Halah (June 13, 2012) “Jamie Dimon’s Testimony: Volcker Rule May Have Prevented Loss”. Forbes. Retrieved on June 16, 2012 from:
|10|| Shields, Michael and Scherer, Steve (June 12, 2012) “Austrian minister says Italy too may need bailout”. Reuters. Retrieved on June 12, 2012 from:
|12|| Day, Paul (June 19, 2012) “Spain’s short-term borrowing costs jump at auction”. Reuters. Retrieved on June 20, 2012 from:
|13|| AP (June 20, 2012) “Europe gropes for crisis fix, bond buys pushed”. Associated Press. Retrieved on June 20, 2012 from:
|14|| Watts, William (April 13, 2012) “Spain data underlines LTRO downside”. Wall Street Journal. Retrieved on June 15, 2012 from:
|15|| Crowe, Darcy (June 18, 2012) “Spain’s Rajoy Calls for Fencing in Banking Risk”. Wall Street Journal. Retrieved on June 19, 2012 from:
|16||Day, Paul and Maltezou, Renee (June 19, 2012) “Spanish short-term debt costs reach alarm levels”. Reuters. Retrieved on June 20, 2012 from:
|17||Smith, Geoffrey (June 12, 2012) “Spain Deal Doesn’t Stop Sovereign-Bank Feedback Loop”. Wall Street Journal. Retrieved on June 15, 2012 from: http://blogs.wsj.com/eurocrisis/2012/06/12/spain-deal-doesnt-stop-sovereign-bank-feedback-loop/|
|18|| Wahba, Phil (May 24, 2012) “Tiffany forecasts disappoint; U.S., Asia slowing”. Reuters. Retrieved on June 19, 2012 from:
|19|| Egan, Matt (June 8, 2012) “McDonald’s May Same-Store Sales Come Up Short”. FOXBusiness. Retrieved on June 18, 2012 from:
|20|| Baertlein, Lisa and Wahba, Phil (May 8, 2012) “Mcdonald’s April U.S. sales miss estimates. Reuters. Retrieved on June 20, 2012 from:
|21|| Elmquist, Sonja (June 13, 2012) “Nucor Says Profit To Miss Guidance As Steel Imports ‘Surge’”. Bloomberg. Retrieved on June 19, 2012 from:
|22|| Pichler, Josh (June 20, 2012) “P&G lowers guidance for fourth quarter”. Cincinnati.com. Retrieved on June 20, 2012 from:
|23|| Van den Oever, Robert. (June 14, 2012) “Dutch Retail Sales Fall 8.7% in April”. Dow Jones. Retrieved on June 20, 2012 from:
|24|| Dowsett, Sonya (May 29, 2012) “Spanish retail sales show record fall in April”. Reuters. Retrieved on June 20, 2012 from:
By Gordon Duff, Senior Editor
February 23, 2012
Below is one of the strangest stories in financial history, one involving the US government lying about hundreds of thousands of tons of imaginary gold, illegal wire transfers and loans totalling $15 trillion.
The video, from the House of Lords, is amazing in itself.
What it doesn’t express is where the money came from though Lord James of Blackheath proves conclusively that an effort was made to say it came from a gold reserve in Brunei that, in fact, never existed.
At surface, it appears we have stumbled upon the largest terrorist organization in the world and have found original documents tracing its funding to the Secretary of the Treasury and the Chairman of the Federal Reserve, two of the top financial officers in the US.
A cursory review of terrorism statues in the US indicate that all transactions we will learn about are, in fact, to be assumed “terrorist money laundering” and that the only thing preventing the immediate arrest of hundreds of top financial officials is their political connections alone.
We will be able to offer an alternative, more insights, some hard intelligence and some very valuable background that we hope will offer insightful and realistic perspectives on this amazing story.
On February 16, 2012, Lord James of Blackheath, member of Britain’s House of Lords presented evidence of an illegal scheme begun, he has thus discovered, in 2009.
His documents including originals signed by Alan Greenspan and Timothy Geithner, show the illegal “off the books” transfer by the Federal Reserve Bank of New York of $15 trillion to, initially, HSBC (Hong Kong Shanghai Banking Corporation) London and then to the Bank of Scotland.
The Bank of Scotland, under royal charter but restricted from involvement in any such transactions, simply “gave” the money to 20 European banks to use in a highly profitable scheme of co-trading “fresh cut” MTN’s (mid-term notes), generating trillions of dollars in profits over 3 years, none of which is shown on books, none has been taxed or has benefitted shareholders in those banks.
As Blackheath outlines, the “deception and cover” for this transfer is the imaginary seizure of 750,000 tons of gold by agents of an unspoken entity (confirmed by the highest official sources as the Bush family and CIA), the listed “source” of the money.
The government of Indonesia confirms this to be an utter fabrication and that the individual named had 700 tons of gold (about half of what Gaddafi was holding), not 750,000. It is noted that only 1,500 tons of gold have ever been traded in world history, as stated in the House of Lords.
The issues that are initially brought out, issues inconsistent with international convention and starting the reader on what is only the surface discovery of two decades of crimes involving dozens of governments are as follows:
- At no time has the Federal Reserve Bank of New York been authorized to hold the funds indicated
- However, documents held by Lord Blackheath prove, conclusively that they did hold such funds and transfer them in a manner as to obscure their origin by using HSBC and the Bank of Scotland. This process, seemingly involving Alan Greenspan, Timothy Geithner and others would appear to be “money laundering” until some other explanation were found. None has been offered.
- The “collateralization” of these funds, being 750,000 tons of gold, is proven to be fantasy. These funds then, in no way or manner, are related to Brunei. The presentation of this false transaction has been conclusively proven to be a “cover and deception” project such as an intelligence organization would use.
- The transfer of these funds, all done without any authorizations, governmental or otherwise, particularly without agreements, payment of interest to the United States and without knowledge and approval of congress makes every aspect of this criminal in nature, a violation of innumerable statues.
- The receipt and use of these funds by the 20 banks, two of which are Wall Street’s largest, and the use of these funds to generate profits while the funds themselves are held “off the books” and the profits hidden and laundered, themselves the earnings of funds received through criminal acts makes any and all involved part of a criminal enterprise.
WHERE DID THE MONEY COME FROM
There is no record of the Federal Reserve being authorized to “create” $15 trillion, equal to the entire national debt of the United States.
There is, however, proof that funds that totalled, at one time, $27 trillion had been earned surreptitiously, disposed of as part of an intelligence operation against the Soviet Union and then later stolen with accusations made against George H. W. Bush as being the perpetrator.
I have spoken with two individuals, one President Reagan’s intelligence coordinator and the other Chief Legal Cousel for the Central Intelligence Agency regarding these funds.
Both have indicated that former President Bush had asked that these funds, totalling $27 trillion, be transferred to his control, that threats were made by Bush and that many involved in this operation suffered, issues including murder, illegal arrest, torture and detention among them.
The individuals I am speaking of repreatedly met with President Bush over these funds, disputed his claim to them, and indicate that the majority of the funds are the property of the people of the United States.
These funds are the mysterious “Wanta” funds, monies earned through years of currency trading aimed at collapsing the Soviet Union, a plan originated by President Ronald Reagan, then White House Intelligence Coordinator Lee Wanta and CIA Director William Casey. I have been told that, while this operation went forward under President Reagan, he had ordered that his successor, George H. W. Bush not be “briefed” out of “mistrust” for Bush.
The funds themselves were earned through a scheme of trading Soviet roubles at enormous profit, a practice that eventually collapsed their government.
A portion of the profits are subject to current litigation in the Federal Court of the Eastern District of Virginia, Judge Lee presiding. I have over 2,000 pages of documents on this case which shows a remainder of the original funds had been transferred to the Federal Reserve Bank of Richmond by the Bank of China, a party to the rouble trading practice, in 2006 and is claimed as totally owned by Ameritrust Corporation.
That amount was $4.5 trillion of which we hold the SWIFT transfer documents.
The other monies, which “likely” make up from the unspent portion of the missing $27 trillion, may well constitute all that is recoverable.
Wanta, sole shareholder in Ameritrust, has offered his companies share, valued by the court now at $7.2 trillion, entirely to the American people as intended by President Reagan.
The origin of the additional funds, issued by the Federal Reserve during the 80s and 90s, totalling nearly $8 trillion is unknown. High ranking sources within the US government indicate that this can only be either the remainder of funds Wanta raised or profits made from them after the majority of funds were stolen.
Stories, some quite good actually, and personal interviews plus my own review of documents would place the theft or conversion of these funds initially with:
- The Bush family
- The “P2,” a Masonic lodge operating out of Switzerland involved in dozens of terror bombings tied to “Operation Gladio”
- People around Wanta himself including the CIA
What is lacking is a source for half of these funds. Technically, they don’t exist as there is no record of them being originated by nor transferred to the Federal Reserve Bank of New York though there are clear and discernible records of them being transferred out of that institution which never possessed them, according to their 2010 audit, in the first place.
The transfer of Wanta funds, they can be assumed to have no other origin as they track into the Federal Reserve banking system while in escrow and are currently awaiting payment based on the orders of President Obama in accordance with findings of the federal court, is complicated by the Scottish transfer.
Either Wanta has claim to the entire amount or it is the property of the US government. That no effort has been made to secure the funds or enforce criminal and civil remedies to recover enough money to pay the entire US national debt and more, as with earnings, we are nearing well over $30 trillion by this time, is an indication that a criminal conspiracy with enough influence to overrule our own government is involved. Whether that “conspiracy is, as noted, the Bush family, rouge sections of the CIA or a secret society such as P2, one we can prove or others we only suspect exist, is another story.
The lack of action, here or as requested by Lord James in Britain, is, in itself, proof of both the seriousness and actuality of these events and the powers that can prevent any inquiry when irrefutable documents such as SWIFT transfers are available.
In fact, Lord James has offered a wealth of documents which, when combined with the 2000 pages of Wanta “discovery” from the Federal Court, constitutes more than prima facia evidence of money laundering, conversion, terrorism or worse.
Thus, the inaction in the face of overwheming and unquestioned proof is inexplicable.
FLOOD OF WANTA LITIGATION AND INDICTMENTS COMING
Currently, Wanta’s legal status is as technical conservator and owner of $7.2 trillion. However, as nearly half that is owed in taxes and the court settlement required Wanta to purchase $1 trillion in treasury bonds, the federal government should show positive interest other than President Obama and a few others.
More are being obstructionist with the payout and exercise of $3 trillion in US debt reduction.
This is, not only illegal but an indication of conspiracy.
In addition, Russian Prime Minister Putin has communicated that he awaits the agreed upon 3% payment of Russian taxes, initially on the $7.2 trillion. Will Putin want to be paid on the entire $15 trillion plus interest and will Russia and/or the US have interest in why the Bank of Scotland transferred these funds to 20 European banks to trade in MTN’s (mid term notes) without any authorization or agreement, any participation or sharing of profits.
As the funds, at least the half which the US government can claim ownership of, combined with the interest and earnings of, would quickly put the US “in the black,” again we look at, not just the press blackout on the Wanta litigation of the last 6 years but the press blackout on Lord James of Blackheath and the wealth of damning documentation he submitted to Parliament.
Nothing has been done since, it is as though the proof submitted was so dangerous that those moments in time have been erased by a mysterious g-dlike power.
What makes Wanta dangerous is that he has begun to distribute funds, some to government entities, counties and states, law enforcement agencies, giving them standing, not just in recovering funds intended for their use but in helping prosecute anyone involved in interfering with or attempting to divert funds.
One grand jury is being formed to investigate diversion of Wanta funds even at this early date. It is likely that Wanta/Ameritrust funds earmarked for border protection could lead to the indictment of high ranking US officials. This is only the beginning.
If the Royal Bank of Scotland doesn’t think it should be expecting the biggest chargeback in the history of the world, they are in for a shock.