Thursday, July 18, 2013

Skolnick- The Sucker Traps-Part 3



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Skolnick - The Sucker Traps - Part 3
The Impending Bond Collapse

By Sherman H. Skolnick
skolnick@ameritech.net
skolnicksreport.com
10-3-2

What is it that they do not teach at the most supposedly prestigious business schools, such as at Harvard or Rockefeller's University of Chicago?
 
Not part of the curriculum are the ways in which "the powers that be", the Establishment, the Ultra Rich, the Ruling Class---whatever is labeled as THEM---further enrich themselves on the backs of the common people.
 
How, then, do the sons and daughters of the Aristocracy learn how to do such things? Simple. It rubs off on them just by growing up among their elders. It becomes second nature to them. Since the more ordinary people do not grow up in such an environment, they do not ever understand the mindset of plutocrats..
 
THE UNSPOKEN PRINCIPLES OF FINANCIAL AND GEOPOLITICAL RULE
 
[1] DO NOT FOR A MOMENT HESITATE TO DO WHAT IS NECESSARY TO YOUR AGENDA. CONSIDERATIONS OF MORALITY AND HUMANITY ARE NOT TO BE CONSIDERED. IF YOU CAUSE GREAT RUIN OR BLOODSHED, SO WHAT!
 
The Ultra Rich felt endangered by their creation, the Soviet Union. So the oligarchs in the U.S. and England financed the rise of Adolf Hitler, as a bulwark against the Moscow government.
 
For examples, refer to "Wall Street and the Bolshevik Revolution" by Antony C. Sutton and also his opus, "How the Order Creates War and Revolution"(the Order being such as the Skull & Bones Secret Society) and his book, "Wall Street and the Rise of Hitler".
 
The very wealthy Americans such as the Rockefellers, shared profits with Nazi big business even in the midst of World War 2. "Trading With the Enemy"  by Charles Higham.
 
The British Monarchy, secretly pro-Nazi, through their ownership of Prudential Insurance Company of Newark, New Jersey, controlled and selected what targets, if any, in wartime Germany were bombed by the Allies. Knowing the value and insurance of corporate properties in Nazi Germany, Prudential was in charge of the Strategic Bombing Survey. (A well-equipped library has books on the S.B.S.)
 
So, for example, the Nazi chemical octopus, I.G. Farben, was NOT bombed and was 93 per cent intact at the end of the conflict. (See "I.G. Farben" by Richard Sasuly, a book by a U.S. military officer in charge of the end of the war survey of Farben.).
 
Because of the business tie-in with General Electric of the U.S., their facilities in Nazi Germany were not bombed. [See, Sutton's documented work, "Wall Street and the Rise of Hitler".]
 
[2] PUSH AN IMPENDING FINANCIAL WRECKAGE ON TO THE SUCKERS.
 
The pundits for the super rich pushed the high tech wreckage onto the ordinary people. So, mouth-pieces for the major brokerage houses promoted the telecoms, the computer wonders, and the energy shysters, onto ordinary people, as a "good investment". More and more of those dot.coms are into bankruptcy or soon there.
 
[3] AFTER A FINANCIAL MARKET HAS BEEN PLUNDERED BY THE ULTRA RICH, PUSH THE ORDINARY SO-CALLED "INVESTORS" ONTO SOME OTHER FINANCIAL TRICK, TO CLIP THEM.
 
That is sort of like the crowd rushing from one side to another. An analogy from history might be useful. Early in the 20th Century, a major Chicago-based company arranged an outing for their employees. Over a thousand persons gathered, like for a party, on a boat in the river in Chicago. To watch some other event, all those on the vessel ran to the other side of the ship, which, thus unbalanced, capsized. Nine hundred ordinary employees were drowned. Of course, that was an accident.
 
NOT an accident is the way the suckers fleeced in the equity markets are being shoved into BONDS. Cynics purposely mispronounce it as BOMBS. The innocents are thus made to run from one side of the financial ship to the other. Will  the financial markets vessel capsize?
 
Various types of bonds are vulnerable, so are so-called "money market funds".  By the time you see, if at all, the periodic prospectus of a money market fund, the data is stale. You do NOT find out what the fund is into NOW. Are they trying to temporarily boost the return by hocus-pocus book-keeping, called derivatives? Are they using highly hazardous hedging tricks? Are they invested in commercial paper of companies on the verge of bankruptcy? Brokers pushing clients into "money market" funds are not about to tell you.
 
A typical conversation of a broker to a client. "So, you do not like stocks? Fine. We'll put you into Municipal Bonds". Not identified are the municipal bonds actually issued for private and non-governmental purposes. In a bad recession, will the purposes generate enough funds to pay the municipal bondholders? And get this. Municipal bond GUARANTEE FUNDS are considered by savvy sorts as a bad joke. Do they have enough reserves to make good possible widespread municipal bond defaults?
 
Then there are the so-called "Federal Agency" securities. These are known in the financial trade as GSE, "government-sponsored enterprises". Fannie Mae, Ginnie Mae, Freddie Mac. These securities and mutual funds supposedly investing in them as a go-between for mutual fund holders, are peddled by brokers and others as if they are securities actually guaranteed by the Full Faith and Credit of the U.S. Treasury.
 
Sponsored by Vanguard Funds is Bob Brinker, a long-time pusher on the radio who urges listeners to invest in mutual funds holding Ginnie Mae securities. He tells the listeners that such securities are backed by the U.S. Treasury. Some, however, have substantial doubts.
 
Not much publicized was the Dow Jones wire service item, dated 8/5/02, datelined New Orleans. "Government officials and investment experts worried about the impact on stock prices of alleged corporate accounting fraud are paying too little attention to risks inherent in other securities widely regarded as  being safe, according to William Poole, president of the St. Louis Federal Reserve Bank.
 
"Speaking at the Council of State Governments' Southern Legislative Conference, Poole said that certain government-sponsored private agencies, including Fannie Mae, Freddie Mac and the Federal Home Loan Bank System, are undercapitalized relative to their debt load.
 
"He said if the imbalances of these and other so-called government-sponsored enterprises go undressed, they could lead eventually to a capital crisis that would send a shock through the U.S. housing market."
 
Further referring to Poole, "Similarly, he said, 'no one should underestimate the potential importance of the ambiguity over the financial status of the GSEs.'
 
"A serious problem, he said, is 'the market prices GSE debt as if there is a FEDERAL GUARANTEE, or a high probability of a guarantee, standing behind the debt. YET, THERE IS NO EXPLICIT GUARANTEE IN THE LAW'.
 
"Poole recommended that the federal government act to dispel the notion THAT FANNIE MAE, FREDDIE MAC and some other GSEs ARE FULLY BACKED  BY THE GOVERNMENT." (Emphasis added.)
 
Typical of their method of operation, the Ultra Rich, having taken themselves ouf of so-called "Federal Agency" securities, have pushed them onto the suckers who sooner or later will get clipped.
 
Seldom mentioned is the history of U.S. Treasury securities.
 
Starting about the fall of 1979, was a U.S. Ruling Class liquidity crisis, falsely referred to by the press-fakers as a "U.S. Government" emergency.
 
To try to calm know-nothings, the head of the private central bank, the Federal Reserve, held a rare joint press conference with then President Jimmy Carter. The commotion revolved in part around gold, considered by some as "independent money".
 
Tending to undermine the validity of paper money, gold prices by 1980 peaked temporarily at over 800 dollars per ounce. By 1981, U.S. Treasury securities were priced in the market to yield 16 and one-half per cent. The yield goes up as the price of the bonds go down. Some U.S. Treasury paper was priced near 75 cents to the dollar face value of the bond. The best corporate business risks paid a minimum of 21 and one-half per cent for capital transfusions.
 
In all the commotion, never discussed in the oil-soaked, spy-riddled monopoly press, was the way some foreign investors were protected. Since the fake embargo/oil crisis of 1973, major buyers of U.S. Treasury paper in Japan and Saudi Arabia have had THEIR purchases backed by U.S. Gold. Of course, there is no such guarantee for U.S. residents. And the alternative press in the 1970s forced a partial audit of Fort Knox. The opening of just one vault there showed the supposed depository of U.S. gold did not have it. All that was found was some orangish-looking, poor quality gold-like stuff, apparently melted down gold coins from the 1934 seizure of gold by the Roosevelt White House. Forcing even this partial audit was the Chicago-based tabloid "National Tattler", (now defunct), in which a key role was played by crusading journalist Tom Valentine. According to a published statement of a U.S. General, he led a convoy of trucks taking away most all the gold of Fort Knox about 1968 to New York. It was shipped to London, to try to stem a run on the gold in the Bank of England.
 
Currently, Japan owns about forty per cent of U.S. Treasury Securities. Japan needs to bail-out their greatly insolvent banks, many of which are the largest in the world. On a pre-arrangement with the American aristocracy, the Japanese may suddenly dump their U.S. Treasury paper which may suddenly, like in 1980-81, decline to 75 cents per dollar face value, or even lower. Thus in part renouncing the U.S. debt and impoverishing ordinary folks but further enriching the oligarchs.
 
This would be joined at the same time with an attack or "run" on the so-called "U.S. Dollar", actually hot-air Federal Reserve notes. In simple terms, the Establishment considers ordinary Americans as the enemy, to be plundered. Attention was diverted for many years by the press whores, on behalf of the Ultra Rich, leading ordinary folks to believe the "enemy" was the Moscow government, now becoming more and more a trading partner with U.S. Big Business and Big Oil.
 
Who dares mention an historical truism? That is, that sooner or later, every sovereignty repudiates their debt which they knew all along they could not pay back. A very astute observer on international finance, forty years ago and more, was Franz Pik. He would impart his wisdom to a select, small cricle in closed meetings. Each listener paid one thousand dollars to sit there and hear him, at a time when that amount of money was considered huge.
 
Who dares mention that the watering down of the paper money and the renouncing of the debt, led, in part, to the French Revolution and the chopping off of the heads of the King, Queen, and the French aristocracy. Refer to the book, "Fiat Money Inflation in France" by Andrew Dickson White, written in the 19th Century but still true now.
 
Studying the class structure is not a popular subject in American education. Some contend it is a feel-it-in their-bones known subject in England and elsewhere. So common Americans are generally completely blank on this, when it come to understanding Class.
 
Special note to the naive and poorly-informed: We are NOT shills for some type of investment house or brokerage. Hence, do NOT bombard us with requests as to WHAT we recommend to put your paper money into, to save yourself. Our upcoming follow-up story, about the impending Real Estate Crash might nevertheless be helpful.
 
More coming....
 
Stay tuned.

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