China: Lights Out
The Chinese “superpower” myth will soon be revealed as a fairy tale. The world will know the truth: that China is another 3rd-world shit hole…with 500 million unemployed people…exports that are falling (not rising!)…deeply mired in debt it can never pay back. Their bubble economy is about to blow up in their faces.
Half of China’s factories are closed. Demand for their products has collapsed. Chinese consumers are spending LESS, not more. China’s “miracle” has turned into a nightmare. And we, my friend, might be able to turn that into some juicy profits…
We cover a lot of ground in each issue. Even though the issues are a month apart, the stories are all connected. And they tell one central theme: the idea that “this depression is over” is a myth. A very dangerous fairy tale.
Things are not getting better. They are getting worse by the day. If you fall for the spin, you will get wiped out.
In this issue, I have many things to say, that on the surface seem unconnected. But they link together in a great web of Wall Street deceit.
Before I do that, I want to make sure we’re on the same page. I hold some more highly controversial opinions. (What a shock.) They are far different from what you pick up in the traditional media — and the exact opposite of what the Wall Street whores tell you.
I’m talking about the Asian powerhouse that is supposed to save the world economy. China.
We’ve all heard about the Chinese economic miracle. The 1.3+ billion newly-freed consumers, whose massive spending will lead the world out of global depression. Their buying will bring back jobs and profits to American companies. These companies are tripping all over themselves to get in on the supposed China boom.
What they don’t tell you is any company that invests in China gets systematically screwed to the wall. They must have a partner: the Chinese Communist Party. They find they must make massive, ongoing payoffs to their “partner.” In time, the Communist Party robs them blind.
They have to give China their intellectual property. Their technology. They soon discover China rips it all off. They can’t do squat.
Then insult gets added to injury. The Chinese “super economy,” with its billion plus consumers, turns out to be a lie from the Central Party’s spin machine. I explain all this in this issue.
China’s economy is based on exports. Yet its exports are falling hard. Down 4.3% in June, the most recent month we have stats for.
How could it be otherwise? China’s main export customers are the Euro zone and the US. Europe is deep in a recession, and the U.S. is barely keeping its head above water, with GDP measured in the fractions of one percent.
Yet China magically claims nearly 8% GDP growth, each of the past four years! How does that happen? No exports. No domestic consumers either. Where does their claimed GDP growth come from?
Wall Street tells you it’s the great emerging Chinese underclass. The Chinese masses, who are becoming shop-till-they-drop consumers. At the exact time they are losing their factory jobs, that only paid them $1 an hour (max) to begin with.
China’s poverty line is 11 cents a day. If you make 12 cents a day or more in China, the Commie government there says you are prosperous. You are part of their emerging middle class. You are the people who are supposedly going to buy cars, flat screen TV’s, consumer goods and gold, like all are going out of style.
No one explains the basic paradox. How can Chinese “consumers” do all this on an average income of $50 a month?
We’re told China has massive trade surpluses. Even while Chinese factory output is plunging…prices are collapsing…exports are falling apart…and the world is in its biggest slowdown in generations.
China supposedly has $3 trillion in cold hard cash. I’ll show you a bit later why that is a lie. It supposedly has no debt as a percentage of GDP. I’ll show you why this, too, is total b.s.
We’re told China’s economy will power the world ahead. Even though that economy is only about one-fourth the size of the U.S. economy. Just 5% of global GDP.
After all the hoopla, you would think China is a real player. But with 5% of world business divided between 20% of the world’s population, you see the cold hard truth. China has 100,000 prosperous people and 1.3 billion near starvation.
Still Wall Street insists the Chinese are the world’s emerging consumer. Again I ask. How the hell does that happen? How does a nation whose GDP is a tiny fraction (one-twentieth) of world GDP drive the world forward? Especially when it, too, is in a depression?
China claims it sold 19.3 million cars last year. More than were sold in the U.S. Of course when you look at the GVW (gross vehicle weight) of those vehicles, you find they are not what we call cars. More like motorcycles with side cars on them.
Like they say, inquiring minds want to know.
We hear about China’s great internal consumerism. But consumer spending there has not gone up. It has dropped for ten years in a row.
China’s consumer spending is 30% of their $3 trillion GDP. i.e. only $900 billion. U.S. consumer spending is 70% of our $15 trillion GDP. $10.5 TRILLION. 12 times more.
Kinda hard to see where Chinese consumers become the engine of growth for the world economy. Those Wall Street TV programs are long on hype. Very short on facts.
25 men run China. The Politburo. They are not capitalists. Not entrepreneurs. They are dyed in the wool Communists, with a capital C. As you will see in this report, their attempts to centrally manage their economy work no better than Stalin’s or Kruschev’s did in the Soviet Union. They are as disastrous as Castro was in Cuba, and Chavez in Venezuela.
China is divided into 16 separate provinces. 13 of them have little to no participation in the industrial boom. The Chinese “miracle” is centered around just 3 provinces. Their population totals 100 million people.
The rest of China (made up of 1.2 billion peasants) is deep in economic depression. Unemployment has soared: it’s the highest in the world of any major nation.
And forget the hype. Chinese workers are among the lowest paid in the world. By government design. Which is why riots over pay and job cuts are common, even though the 1982 Chinese Constitution made strikes illegal. Each year, the Central Communist Party admits to 300,000 to 500,000 official labor disputes. The real number is far higher.
The Chinese national government claims virtually no national debt. But the provinces owe over $20 trillion in debt and guarantees.
So right off the bat, we know the “no-debt” claim is a bald-faced lie. We know their export markets are plunging…and the idea that somehow Chinese consumers are reigning supreme is a fantasy. So what do the Chinese do?
No one knows for sure. Government controls information there with an iron fist. That is a big reason Google, e.g., pulled out of China. There are no good statistics out of China’s government.
But we do know this. If you think Dubai went on a building binge of waste, wait till you see what China has recently done.
Their entire GDP growth these last few years is solely based on a mindless building spree. Greater than any the world has seen before.
They have built entire cities no one lives in. They built the world’s biggest, brand-new, high-capacity steel mill. The furnace has never been turned on. They built it knowing they already have twice the steel-making capacity they need.
They constructed massive hotels. No one stays in them. Huge stadiums, to impress the world during the 2008 Olympics. They sit empty. They have the world’s biggest swimming pool complex: no one uses it.
In this report I give you the story people have risked their lives to tell. There is no free press in China. Many who reveal the facts go to jail. Some have been killed. The truth is quite different from the China myth Wall Street and the communist party want to spin.
China’s central committee completely controls its stock and currency markets. They keep wages and the yuan (China’s currency) artificially low. That is essential. It gives them an export edge. It makes their products artificially cheap. The moment they can’t do that, China’s economy crashes and burns. More on this a bit later.
Any company that does business in China must give the government 30% ownership. Government agents sit on the Board of Directors.
Foreign companies that open operations in China, have access to the export markets. (Domestic markets are a horse of a different color. Foreign companies are almost totally excluded.) But even the exporters need a permit to take any profits out of China.
If you want to manufacture in China, you must transfer all your technology information to the Chinese government. Including patents and proprietary manufacturing techniques. That’s before the factory can open its doors.
They also demand you do your research and development in China. The Chinese systematically rip off the technology of all companies located there. They are the biggest technology pirates on the planet.
Often the Chinese government comes back later and “renegotiates” deals. It demands and receives information on technology not involved in the Chinese operation.
This is the greatest transfer of technology ever seen. All free to China’s government. All forced on the companies.
Once the Chinese feel they can make the product themselves, they throw out their foreign partners. By hook or by crook. Foreign executives who do not play ball often end up rotting in a Chinese prison, doing hard labor. Like the foreign executives of Rio Tinto learned.
These four men blocked a Chinese government takeover of their company and its pricing structures. Their reward: 7 to 14 years hard labor in a Chinese prison. A death sentence. Incredibly, the Chinese Communist Party convicted the executives of stealing trade secrets:
“The Shanghai Intermediate People’s Court said Stern Hu, who headed Rio Tinto’s iron ore operations in China, will serve 10 years, with part of the sentences running concurrently, and will also be fined 500,000 yuan ($73,250), and have 500,000 yuan worth of assets confiscated.
“Three other Rio executives, all Chinese nationals, were also sentenced to between 7 and 14 years in prison on bribery and secrets charges.
“The detentions rocked the global steel industry and strained diplomatic relations between China and Australia. Shortly before the detentions, China’s steel industry association had complained about the skyrocketing price of iron ore and criticized Rio Tinto and other foreign suppliers for a breakdown in iron ore contract talks. The detentions also came just after Rio Tinto scrapped plans to accept a $19.5 billion investment from Chinalco, one of China’s biggest state-owned mining groups.”
So this is payback China style. Don’t let them take over your company, and you end up in prison.
The Communist Central Party also strictly controls the stock markets. Foreign ownership of Chinese stocks is strictly limited. Often impossible. The government maintains absolute control, of all managers of each major business. You have to be out of your freaking mind to manufacture there…to get in bed with these globalists who dream of ruling the world.
Chinese debt: 8 times greater than America’s
You’ve heard how various countries have high levels of debt, compared to their GDP? Count China’s real debt. i.e. the debt of China’s provinces…the guarantees made to Chinese banks, that fail over and over…the mounting bad loans on their books, that the government is on the hook for as well.
It turns out the Chinese government owes 10 times its wildly exaggerated GDP. That’s a world record. It is 3 times more debt, by GDP, than the nation considered too deep in debt: Japan. It is 8 times more than the U.S. government owes -– the debt that has everyone in a panic. (And gold bugs in a tizzy fit.)
China is a bureaucratic, central-planned communist nightmare. A totalitarian hellhole. Miles of empty apartments dot the landscape, in cities the Chinese people cannot afford to live in. China’s steel mills, refineries and factories contain far more capacity than anyone needs or can use. They sit there, under-used or abandoned.
The U.S. is in a crisis, because its capacity utilization is a little over 70%. China’s official rate is under 70%. Yet Wall Street says that is not a crisis.
The true figure is under 50%: China’s government is infamous for lying about its economic and production figures. It’s another way they hide the fact that they are in a depression.
Think about it. They admit that in their export-driven economy, exports slumped hard. But somehow their utilization rates stay the same? WHAT BULLSHIT!
They claim Chinese consumer spending is taking up the slack. More b.s. spin. Their retail sales numbers show consumer spending is falling, not rising.
China’s real unemployment rate is over 50%. The world’s highest. 500,000,000 people are looking for jobs. Mostly in the provinces, away from the cities. China admits 200 million of them came to the cities, looking for work.
These hungry (often starving) people desperately need work. They can’t find it. Government keeps them at bay at the point of a gun.
Most people in China still work on sustenance farms. They raise rice, pigs and chickens. Barely enough to feed themselves. They are struggling to survive. Living hand to mouth.
If they want a shot at getting ahead, they must go to the industrial cities and try to find work. That requires a special relocation permit.
To get this work permit, people must bribe the local Communist Party officials. The permit does not guarantee a job. It lets the applicant and his family go to the designated city to look for work. They usually end up empty handed.
They are not eligible for subsidized housing. So they live with 40 people in a cardboard house on the town’s outskirts. This is the real Chinese housing “miracle” they are so desperate to hide.
Their child can only go to grammar school there. When that child reaches high school age, he (or she) must leave and go back to the province he came from. There is no space in the local high schools for the relocated workers’ children.
Take the Chinese government highly inflated income numbers of $6000 per capita (even the lie is pretty pitiful). China ranks 86th in the world. Down there with such economic powerhouses as Angola, Peru and the Maldives.
China has one of the lowest birth rates of any nation on the planet. Fallout from the Mao years, when each couple was allowed just one child. Even today, you must get a permit from the state to have a child. You are still allowed only one child per family.
This policy has stood officially for over 30 years. In practice, it reaches even further back.
For many factory jobs in China, the state forces women to get sterilized. That way there is no maternity leave. Also, Chinese factories are among the most polluted on earth. Sterilization mean fewer horribly deformed babies to deal with.
The Chinese value boys more than girls. So it’s common for women to abort female fetuses and babies. Government sponsors these abortions. Sometimes it forces them on the mothers.
Result is a shocking ratio of men to women. The official figure is around 1.2. i.e. 60 men for every 50 women. But that is for the total Chinese population. The key number is far worse.
I told you that for 30 years China has had an official one-child-only policy. Also that for the past few decades they have aggressively euthanized (murdered) girl babies. But the overall national stats include the women born before this policy started.
Back then the ratio was 51 women for every 49 men. Lots more women were born during that era. Women who are old but still alive today.
Look at Chinese men and women of child-bearing age. The ones born since China started its population control policy. They are China’s future. You find the ratio is a shocking 2 to 1. i.e. 66 men for every 33 women.
The woman shortage is so extreme, most Chinese men born since 1970 will never marry or have children. This will dramatically change the world, in several key ways.
First, the global slave labor factory is running out of slaves. At the same time, Chinese workers are demanding higher wages, to keep up with inflation. Unlike in the U.S., inflation IS a serious problem in China. In the first six months of 2013, the money supply shot up at a 25% annual rate.
Because of this, many Chinese factories are moving to Cambodia, Laos and Vietnam. Walmart, for example, China’s biggest customer by far, announced it is going to source more and more of its goods out of India. Higher quality, better prices.
As Chinese workers retire, the labor force shrinks. China’s working age population (age 15-64) will peak in 2015. From then on, the number of workers steadily falls. Making China’s retirement crisis -– with hundreds of million of older people impoverished -– an even bigger drain on the nation’s finances.
In the next 20 years, they will have to provide housing for 150,000,000 hopelessly poor retired people. By 2050, they will have 330,000,000 poor, unemployed people over 65.
There is a second implication of this severe woman shortage. It is far more important than the first. I cover it later in this report.
How to falsely make your GDP soar:
build cities no one lives in
You thought America went crazy building too much? You thought Dubai and Spain joined the insanity?
You ain’t seen nothing, till you see the empty, vacant homes, ports, buildings, factories and even entire cities in China. It’s like nothing before in world history.
You’ve heard of bridges to nowhere. China has cities to nowhere. It has brand new state-of-the-art factories that produce nothing. They sit there idle.
Why haven’t you been told about this? Partly because it runs directly against Wall Street’s interest. They want to hawk their Chinese investments to the public. To do that they have conspired with the Communist Central Party, to create the illusion of great Chinese prosperity.
Also, not many people are willing to die to tell you the truth. That is the penalty you can pay in China, if you expose what is really going on there.
Once again, you can trust NO statistics the Chinese government releases. They have zero transparency. Just like the old Soviet Union, N. Korea, Cuba, and every other communist state.
China is the world’s biggest bubble. All run by that small Politburo of twenty five men. Tell me. How can twenty five people plan every building? Every factory? Every port? Every job? Every resource and detail of the economy?
It’s impossible. No one is smart enough to do it. That is one of the harsh lessons socialism has taught us.
China’s labor force is made up of many highly skilled people. But they are trained to do one job and one job only. For example, China has the largest number of engineers who specialize in how to design cardboard boxes. Their training was so narrow, so specific, they know nothing else. They can’t transfer their skills to other disciplines.
China’s factories have the worst logistics -– some of the highest costs -– of any country in the world. Let me explain.
China must import most all of the resources it uses to manufacture things. And China is not like us. We are an entrepreneurial economy. We locate our factories next to the raw materials, or along easy-to-use transport links.
China does it differently. They build their factories in centrally-planned industrial centers. Not on economic grounds, but for political/graft reasons. Often where the Communist Party chief has the most influence…where the biggest payoffs have been made…or where restless populations need to be pacified.
So they have a transport nightmare. On top of that, they have proven to be terrible material buyers. So they pay vastly more for their production inputs.
Chinese companies only have one advantage. Their slave labor costs are less. Everything else costs more. Transport. Materials.
Here’s another huge drawback. The Chinese mentality is different from other Asians. Take the Japanese. Japan is a free society, filled with smart entrepreneurs. They establish their brands and market them globally.
Toyota doesn’t make cars for American car companies. It sells Japanese cars direct to America. Made in Japanese-owned factories, with Japanese parts, under Japanese names.
Sony doesn’t private label its consumer electronics. It sells its own products, under its own brand. Japanese manufacturers have developed manufacturing, distribution and marketing sophistication. This gives them fat margins, as they go direct to retail.
Not so in China. They believe in the lunacy of central planning. So Chinese factories typically manufacture as private labelers. i.e., they make it for someone else.
They are clueless on how to market. On how to do business in an open, competitive economy. So they do not go directly to the retail market. Which means they miss out on the thick profit margins you get when you skip the middleman and go straight to retail.
This also puts their margins under constant pressure. They used to make the iPhone for Apple. When they could not compete, Apple went to another slave labor country.
Don’t let China fool you. They are not a democracy. They sure as hell don’t run their economy on the free enterprise system. They have a communist economy.
So they don’t compete on quality. Not on innovation. They only compete on price.
China is the poster child for cheap, shoddy goods. These goods constantly break. Their profit margins are thinner than a sheet of cellophane. Typically just a few percent. Even slight changes in any economic factor can put them into the red.
And that is happening now. Their currency has been rising. That alone makes their products more expensive to the rest of the world.
What’s more, their transportation, labor, material and input costs are going up. They are losing there as well. And because of domestic inflation -– again due to their communist system -– they are under incredible labor cost pressures.
The Chinese miracle has become the Chinese tragedy. Central planning means they make mistakes in every aspect of their businesses. Unlike in a free market economy, there is no way for them to catch their mistakes. By then they have spiraled out of control, and it’s too late.
Major dams leak and create more flooding. Ports are located too far from the sea, with channels that constantly plug up with silt. Factories are at the end of a long, complex, unreliable supply chain.
Just like the Soviets, China works with 5-year economic plans. Just like the Soviets, these plans are a complete, dismal failure. They can’t even keep the lights on.
Bank of China admits it created bubbles
in real estate and stocks
Incredibly, the Bank of China admitted it created bubbles in stocks and real estate, by loaning over a trillion dollars to speculators and financial firms. According to Bank of China Vice President, Zhu Min…
“The potential risk is that a lot of liquidity goes to the commodities market. So you see asset bubbles in commodities, stocks and real estate, not only in China but everywhere.”
Pay attention to that “everywhere.” The alleged global economic recovery is based, in large part, on the Chinese miracle. Yet China’s top economic officials and researchers say that miracle is in fact a bubble. It is about to burst.
“There’s no way for the real economy to absorb so much liquidity,” said Liu Yuhui, a Beijing-based economist at Chinese Academy of Social Science. “Policymakers in China and around the world are well aware of the harm that could do, but they are unwilling to sacrifice short-term growth and wean the economy from addiction to the stimulus policies.”
Chinese leadership, which is clueless in Cleveland, does not understand the bubbles it has created. Chinese Premier Wen Jaibao, said “China will not pull back from policies designed to revive the economy.”
He said, “stimulus measures have yielded the initial result. We have arrested the downturn in economic growth.”
All I can say is, in his dreams.
China Construction Bank Corporation is the nation’s 2nd largest bank. Chairman Guo Shuqing said it will cut new spending by 70%, to prevent a surge in bad debt. He also said excess cash in the banking system has led to asset bubbles.
I told you that China has created ghost towns, with acres of empty facilities, offices, apartments and factories. They added hundreds of billions of dollars to “GDP.” They are completely empty.
And of course there is the incredible, empty Pangu Plaza. A 5-story complex. Spans the length of 7 football fields. Contains a huge office block. Apartment buildings. A shopping center. The 7-star Pangu Hotel.
Only problem is, the complex is almost entirely vacant. The Pangu Plaza shopping center is empty. No one is in the offices. At night, no lights are on in the apartment buildings. Same with the hotel.
The Chinese edition of GQ Magazine threw a lavish launch party at the Pangu Plaza. A New Zealander who attended said, “the hallways in the ground floor are empty. You feel it’s a ghost town, apart from the top floor, where we were. It certainly was not full of activity, beyond the show.”
Yingkou is a port city in Liaon Province. An industrial zone, marina and residences are planned. Government officials give a glowing description of the development zone there: “the scale of this will take your breath away. It is comparable in scale to the Pudong Business Center in Shanghai.”
But Yingkou’s development zone is mostly empty. The administration building is a monstrous monolith. Vacant. Except for the occasional presentation to foreign dignitaries.
The steel mill there, one of the newest and most modern in the world, was completed a year ago. It, too, sits empty. They have never fired the furnaces. There is too much over-capacity in steel production, both in China and the world over. The new mill has no customers.
In Guang Dong, most residential units are empty. Shops have been empty for years there. Supply far exceeds demand, and has so for a long time. Funding was easily available, though. So developers disregarded demand, and went on a building spree. They put up vast unwanted, unused structures.
Every one of China’s provinces has a mega project. All empty. All offering capacity that is not needed or used.
The economic event China’s Politburo can
NEVER get through its skull
One of the hallmarks of the failed communist system is its failed economy. Communists do things in a way that guarantees inflation. They create massive unemployment, waste and improper allocation of resources. Never mind the theft of funds and endless corruption.
But now an event is taking place that few people even in the free world understand: massive deflation in nearly all parts of the world.
Key commodities prices have collapsed. Oil was $150 a barrel. Now it’s barely $100. It will soon head a hell of a lot lower. Aluminum was $1.50 a pound: now it’s $.80 cents. Lead fell from $1.75 a pound to a $1.00. Nickel from $24 a pound to $10. Tin dropped from $12 a pound to $8.00.
A smart businessman, with a keen eye on the bottom line, realizes the critical relationship between input costs and final price. That is what business is all about.
Our friends in the Chinese Communist Party have a basic disconnect here. Take steel. China already has extreme OVER-capacity to make steel. Prices are falling. Yet they kept building and staffing more steel factories.
This puts China in a deadly dilemma. Steel sales are plunging. Even as the factories produce more. Huge stockpiles of finished steel products are sitting idle in factories all over China.
A profit-based business would cut back. But once again, China is not profit-based. It is job-based. So it is not cutting back.
Actually, it’s worse. The official in charge of buying copper sees prices fall. He takes that as a cue to buy more. So they stockpile more and more of the stuff.
In the past two years, over half the materials China has imported have not gone into the production cycle. They sit in warehouses. This is true of chemicals, refined products, iron ore, copper, lead, nickel, zinc and oil, to name a few.
China’s communist party leaders think they are scooping up great bargains. The inflation mindset. They don’t understand the opposite it true. There is less demand. They don’t see that in the rest of world -– where they must sell their products -– the free market is forcing prices lower. We are in a depression.
So in reality they aren’t snapping up bargains. They are paying too much, for commodities that will drop even further in price.
China is already losing its ass. Most of its factories are major money losers. They only stay open because they get major subsidies, and borrow incredible sums of money from state-owned banks. Soon China will collapse in a crash heard around the world. I expect that to take place this year, or next at the latest.
In Yingchuan, the capital of Ningxi Province, 70% of GDP growth was “fixed asset investment.” Yet high-end residential units there are 50% vacant.
Ordos is a city in Mongolia, with 1.55 million people. China’s central government decided the existing buildings were too old. So they built an entirely new city 30 km away. New, expensive (for China) homes. Shopping centers. Factories. Streets, lights, water, bridges, tunnels. This construction gave GDP a huge boost.
But the new Ordos is empty. A ghost city. Virtually no one lives there. They can’t afford to. Ordos’ population density is 17.8 people per square kilometer. Manhattan’s (New York) density is over 27,000 people per square kilometer.
Yun Guangzhong, mayor of Ordos said:
“The speed of development cannot substitute quality and efficiency. GDP alone cannot represent the people’s aspirations for raising their incomes. Fixed asset investment does not mean industrialization, urbanization have improved.”
His next statement nearly knocked me off my chair. Yun admitted the Central Committee’s projects failed miserably:
“We must not continue to undertake prestige projects for the sake of image, and must not fake data. The city’s government contains elements of laziness, falsification, laxness, and shallowness in work ethic that has seriously damaged our efficiency and image.”
China “miracle:” a giant con job
You have been conned. China is no powerhouse. It’s not the world’s 2nd largest economy. To put it bluntly, it is a shit hole of poverty, corruption and runaway debt.
If you have been taken in by this Asian fascination, I suggest you get over it. This idea that they have money — that they are an economic powerhouse — is total b.s.
They run slave labor factories, to keep their vast population in line. But they cannot manage these factories themselves. They must partner with foreigners.
No other country has so many businesses in strategic partnership as China. You might as well call it the “People’s Out-Sourcing Factory of the United States and Europe.”
Their entire centrally-planned economy is based on huge amounts of debt. Sad to say, you financed much of that debt. Derivatives “backed” by your savings paid for the vast excesses China’s rulers are enjoying.
Government owns almost all banks in China. The four largest are China Construction Bank; Bank of China; Industrial and Commercial Bank of China; and Agricultural Bank of China.
After the recession of 1999 to 2002, the state-owned banks were saddled with bad loans. Estimated at about $430 billion. 42% of all loans. In short, the banks were all dead broke.
As part of the IPOs in 2005, the first three banks were recapitalized. The non-performing loans (NPLs) were taken off their books. Many bad loans, about $205 billion, were ‘purchased’ at face value by specially created vehicles, called Asset Management Companies or AMCs. In exchange, the AMCs got bonds.
The bad loans were not worth their face value. No NPL is. The AMCs were supposed to dispose of the loans through collateral sales, workouts or bankruptcies. But they did not.
The bonds that were exchanged for the NPLs were supposed to be paid off by now. But the same old story. The money does not exist to cover these debts from the last Chinese wipeout and default. Never mind the new one they got going no.
As one recent report said…
“During the boom years that followed the bailout in 2003, Chinese banks, like almost every other bank in the world, no doubt made some bad lending decisions. Like the US, China had two asset bubbles, one in its stock market and the other in real estate. Both have declined precipitously.
“A lot of the Chinese growth in recent years has been inefficient, and profitless. As Japan knows (and Belgium), building useless highways, bridges and shipping lifts, does not raise wealth, but raises only government spending. It highlights once more the intransparent nature of the Chinese economic statistics and GDP calculations. More importantly, it shows that the current high level of Chinese GDP growth is not sustainable.
“I do not know, how many ghost towns have been built to sustain growth, and maintain the Chinese 10%-growth illusion. But this resembles one big Ponzi scheme, the biggest bubble in economic history.”
Sure, China has $3 trillion in foreign currency reserves. Over $1 trillion of that is held in U.S. government securities.
But they owe over $20 trillion in debt. Debt that is disguised: i.e. they do not record it on their books. Yes, they learned a lot from Wall Street!
U.S. banks have loaned $3.35 trillion to regional governments in the Middle Kingdom alone. Creditors like Goldman Sachs are owed huge amounts of money. Much of that money has been quietly defaulted on. China has not paid it back.
In reality, China has NO foreign currency reserves. With bookkeeping sleight of hand, they list their national debt as “regional debt.” So it does not show up on their national books. But they owe those trillions nonetheless.
And China is now nullifying the local governments’ financial guarantees on these empty steel mills, apartment buildings and vacant cities built in wastelands. The banks and their international investors that loaned them the money must take the hit.
Here’s how this worked. China’s central planners set up financial entities. These entities financed their great projects. They brought in the bankers from BA, Citi, Goldman Sachs. They put on the dog and pony show. The bankers bought into the b.s. of the Chinese “super economy.”
Similar to how western bankers bought into the hype in Dubai, and loaned trillions to the Arab sheiks. In Dubai, oil supposedly backed the guarantees. (In reality it did not.) In China the guarantees are supposedly backed by local governments, and the huge industrial might of China.
Chinese banks have been raising funds through investment vehicles. That prevents them from borrowing directly. They borrowed an additional $3.5 trillion this way. But as I’ve shown you, the projects are not completed. Not fully funded. Not needed.
The regional banks and governments are stone cold broke. The local financing vehicles cannot repay the loans. They put up land as collateral. Rice paddies worth nothing, have become factories that no one needs, wants or uses. Still worth nothing.
Bank of China Ltd, China’s 3rd largest lender, admitted it has huge exposure to borrowing by local governments. These governments are unable to make payments. Industrial and Commercial Bank of China has huge exposure to loans made the last two years.
Chinese banks loaned 9.959 trillion yuan (that we know about) to the provinces. China’s 3000 local government entities owe $11.429 trillion in outstanding debts. Plus they have drawn down credit lines for 12.767 trillion yuan. So far, 4 trillion yuan of those loans have officially gone bad. Chinese banks publicly admit to 500 billion yuan in non-performing loans, as of December 31. The real number could easily double or triple that.
China’s $3 trillion in reserves are an illusion too. They only cover one seventh of the country’s debt.
China cannot use its cash internally, to support its economy. It must keep the money in reserve, to give itself international credibility. Even though it is starving its own economy.
Also, that $3 trillion equals 5% of global GDP. Only two other times in history have countries racked up that much cash. The United States in 1920. And Japan in the 1980s. Each ended in a depression.
Each month, China buys $30 to $40 billion of mostly U.S. government bonds. This keeps its currency artificially low. It makes Chinese products artificially cheap. This has led to the vast over-investment in factories and industrial capacity. China has over-built by 100% to 200%. Maybe more.
To keep this Ponzi scheme going, China floods the market with dirt-cheap goods. With the ongoing recession, the world cannot keep buying all these products. Yet they keep building more and more empty factories.
Why do it, you may ask. The answer is simple. It’s the jobs. They have to keep the masses working. Otherwise there will be another revolution. The construction projects keep civil unrest (slightly) above the blood-in-the-streets level.
China’s over-capacity in steel alone is more than the entire steel capacity of Europe. At the same time, Chinese banks require $500 billion worth of bailouts. Right now. Never mind what pops out of the woodwork when the next wipeout comes.
China’s local governments are on the debt treadmill to hell. They use funding for new projects, that no one wants or needs, to hide the fact that the old projects are failing. Your basic Ponzi Scheme.
You heard about America’s real estate bubble. China not only has a real estate bubble. It has an industrial bubble. Chinese overcapacity and over-production are flooding the world — with goods no one wants or needs.
The Chinese bubble will burst. Soon. This will put unbearable pressures on the global economy. It will further exaggerate the ongoing recession.
China: the coming Grandaddy
of all Sovereign Debt Defaults
China’s 25 senile members of the Politburo are incapable of guaranteeing prosperity. But prosperity is what they promised the 1.3 billion Chinese masses.
So they are doing what nations used to do in the good old days. They are inflating their money supply like there is no tomorrow.
That means more out-of-control borrowing. Another disaster.
China is monetizing debt like there is no tomorrow. Printing money at rates never before seen. Racking up international debt at levels never conceived of. Even though it has already proven it will renege on loans it does not wish to repay.
And China is supposed to be the conservative, no-debt, huge-foreign-reserve, export powerhouse! The U.S. is urged to model itself after her! Incredible.
The world has bought into the Chinese miracle myth, with eyes wide closed. China really is just a slave labor colony. It is printing money and racking up debt at break-neck speeds. Reminiscent of Brazil in the 1980s.
Derivatives that paid for China’s vast waste: about to blow up
China’s workers make sustenance wages. Nothing more. But the Chinese “miracle” requires the lowest labor costs in the world. Dirt-cheap slave labor is its only advantage. Here is the crisis.
Chinese inflation is running 12% a year. (The official rate, of course, is much less. More b.s. from the Chinese Communist government, that Wall Street is only too happy to lap up.)
Workers are stretched to the max. That is why the apartments they build are empty. The people can’t afford them.
And this is why China so desperately needs to keep its currency cheap. Say the Chinese yuan rises, as it should. Then the prices of Chinese exports rise too.
Chinese factories could not compete. China’s house of cards would come tumbling down. These are the dire straits the country is in.
The Chinese masses have no money. No credit. If they got credit, they couldn’t pay it back. Just like the rest of the country. The idea that they will become great consumers, who lead the world economy forward, is the most absurd proposition in the world.
The Chinese miracle is really the Chinese nightmare. Their factories are marginally competitive. Half of them are shut down. The others are on Chinese government life support. Deeply in debt. They have a labor crisis, like the world has never seen before.
In the not-so-distant future, they will NOT be the world’s factory. They will be unable to supply their domestic needs. Only the Chinese secret police (working with the Red Army)…the world’s most notorious prison system…and the threat of starvation keep its factories manned.
The Chinese Olympics was supposed to be the coming out party for China. Its Sweet 16 party. They staged everything. Similar to what the USSR used to do for its foreign visitors, in the 1920s and 1930s.
No one was allowed near China’s vast slums. Chinese citizens who could reveal the truth were jailed. China put on its fairy tale illusion of great prosperity and growth.
Now the party is over. The great venues are empty. Crumbling apart. The apartment buildings and grand hotels are closed. No one can afford to rent or buy these vast buildings. All constructed on fast easy credit. Think of the USSR and North Korea, but on a much bigger scale.
So you see truth here is the exact opposite of Wall Street’s spin. Truth is the pending blowup of the Chinese economy. Which means the derivatives that financed it will blow up as well.
The Chinese bubble economic blowup and sovereign debt wipeout will throw the world into the next phase of this Great Recession.
Why China must keep buying U.S. debt
About the U.S. debt China holds: I told you some time ago the U.S. dollar would not collapse anytime soon. You are seeing that proven.
Surprise, surprise. Right in the middle of the biggest U.S. debt auctions in history, the dollar is rising. According to previous Wall Street spin, that was not supposed to happen.
The world is not refusing to buy U.S. government debt. They drool for every new issue. That lets them tank up with more money. More dollars. Every other issue sets new records. There are FAR more buyers then debt issued.
China buys $300-to-$400 billion a year in U.S. securities. They can’t stop. For two reasons.
First, by buying U.S. debt, they keep their own currency weak. They keep the dollar strong. That makes their products cheap on the world markets. As I’ve already shown you, without that, they can’t survive. Because the nation is imploding as a manufacturing powerhouse.
Second, the Chinese government has learned an unpleasant reality. Any money it parks in Chinese banks, promptly gets stolen or squandered. Corruption and communism’s infamous inefficiencies are the reasons.
The exact opposite is true when they buy U.S. government debt. They support their currency. They support their banks.
What’s more, every dime of debt the U.S. government has issued, for over 200 years, has been paid back. In full, on time, with interest.
In other words, U.S. government securities are safe for China. They guarantee their money will stay secure and whole.
You don’t need low wages to dominate world trade
Cheap wages don’t necessarily give you an export edge. Take the world’s greatest manufacturing powerhouse. It also is the nation with the highest labor costs in the world: Germany.
German companies control many of their export markets to retail. They cut out the middlemen. Their factories are extremely efficient.
Their supply chain is not the cheapest. But it is a modern miracle of efficiency. And their workers are among the best in the world.
Bottom line, the Germans do not produce shit. They leave that to the Chinese.
Germany has no central planning. Little debt. As much as I hate to admit it, the Germans (more machines than people) really know how to make quality things. They know how to capture markets. Think Mercedes and BMW.
Want a piece of shit that breaks after a month? Buy China. It won’t cost much -– at first. But you’ll have to buy it over and over and over again.
Want quality that lasts a lifetime? Buy German. In the long-run, you end up paying less. And you get a much better product to boot.
The dark, deadly punch line about China’s female crisis
Earlier in this report, I told you how China has a female crisis, unlike any seen. Men greatly outnumber women. All through history, in most cultures the opposite held true.
Men went to war and died. When invading armies raped, pillaged and plundered, they slaughtered the male losers. They didn’t want their enemies coming back to take revenge.
Females of child-bearing age were highly prized, as sex slaves to the victors. So women out-numbered men. To this day if you look at male to female population ratios, countries ravaged by war have the most women to men.
I bring this up because to know what is coming, you must understand the dark side of human nature. Men by nature risk more than women. In societies with more men than women, there are more risk takers. This helps you understand the phenomenon of the Chinese gambler. Also the incredible penchant the Chinese have to build bubbles, both in stocks and real estate.
Another side to this is far more dangerous. Societies with more men, who don’t have families, tend to be more aggressive societies. This imbalance brings invading armies.
One example is the Japanese history of attacking Korea. Japan historically has produced fewer women than men. So for thousands of years of Japanese/Korean history, every century or so, Japan would invade Korea. They would take back home females. This is well documented in WWII.
Kamikaze pilots universally were unmarried males. We see the same thing among suicide bombers.
In Arab cultures, the birth rate runs around 51 to 50, girls to boys. About the world average. But harems are still widespread there. One man can have ten wives. Wealthy men can have 40. So a large number of Arab males never marry. There is just not enough women to go around.
That is why suicide bombers and Jihad members are almost all unattached poor young males. Often virgins. They are part of the social underclass. They have no chance to marry. You see why the promise of 72 virgins appeals to them.
What does this have to do with this report? I’m glad you asked me.
Everything you see out of China is about world domination. Remember, they are communists. Communists believe it is scientifically, historically inevitable that they will take over the world. Their female-starved, male population gives new meaning to “male chauvinist pig.”
Not one female is a senior member of the controlling Chinese communist party. There is a handful of Chinese female millionaires. But they are anomalies. Mostly widows of men who were rich.
You’ve been fed endless bull about the alleged booming Chinese economy. All a lie. But one area of China IS growing at double-digit figures, year over year. Close to 300% in the last decade. The Chinese military.
China’s military is a joke compared to the U.S. and Russia. Compared to Japan, Korea, Singapore and the other wealthy Asian states, it is a dragon.
Other than N. Korea, China is the only Asian nation that has nuclear weapons. China is the only country on earth that can shoot down satellites. Yes, my friend, space is the new frontier. It will be a very important part of the next war. (Surely you don’t think the age of war is over.)
China has the world’s largest standing army. Nearly 20 million men. U.S. has 3 million. One sixth as much. According to a U.S. Army report in 1998, China can quickly mobilize 200 million soldiers. Every day China makes its army more modern, with better equipment.
The Chinese navy is a joke. For now. But their fleet is also the fastest growing in the world.
China is growing two navies. The Blue Navy sails the oceans blue. They have one or two aircraft carrier fleets (carriers travel with a fleet of other ships, including submarines, destroyers, rocket launchers: some 30 other vehicles in all). Nothing compared to America’s fleet.
The Green Navy is another matter. It patrols inland waterways and coastal areas. China is building up her Green Navy in a huge way. All these boats are equipped with modern missile systems. Including very sophisticated sea-to-land and sea-to-air missiles.
This is why Taiwan is shitting all over itself. China could invade Taiwan, take down the government, and install new leaders before Obama got woken up.
Old, tired world empires, like the U.S. and Russia, inherit military traditions from their past wars. Russia’s military is guided by its experiences in the land war of WWII. It puts an emphasis on tanks and land-based artillery.
The U.S. has never had to fight a great land war on its own soil. But we have fought many times across oceans. So our military is heavily invested in ships and the air force.
China is more experienced in guerrilla wars. Vietnam. SE Asia. They are at home in the war in Afghanistan: they secretly fund the Taliban.
China’s army has the most advanced cyber-warfare division in the world. Over one million scientists and software engineers work full time in this area. They are preparing for cyber-war. Against Europe…and especially against the U.S.
By comparison, the U.S. barely funds any kind of cyber-warfare defense. Less than a thousand engineers work in the field. The EU doesn’t have a cyber-warfare defense unit of any kind. They are still trying to figure out how to get the SIM chip in their cell phones to record phone numbers.
China knows it will lose the export markets. It knows that economic erosion has already started. Like I said earlier, it’s not about profits for them. It is about jobs. But not the kind of jobs you might think. For here’s the real punch line.
China is about employment. About jobs for 500 million men who will never have a wife. They will be employed. By the Chinese red army. Their job will be warrior. Raping, pillaging and plundering will be thrown in for good measure.
The greatest threat from China is not economic. That “miracle” has already run its course and will crash. The great China threat is military. We are clueless about that, as we go to Walmart and pick up “bargain” priced Chinese toasters. We are buying our own doom.
Now you should be having your zen moment of elucidation. The reason China is stockpiling commodities, building empty cities, putting on increased manufacturing capacity is not to produce consumer goods. It is part of their preparation for war. War on many fronts.
Here is something for you to think about, next time the network news tries to brainwash you. The bullets US soldiers fire from their guns in Afghanistan and Iraq do not come form US factories. They are made in China.
China is preparing for financial war. So they finance U.S. government debt. They are preparing for economic war. Satellite war. Cyber-war, on our computers and the Internet. Finally, a war will be waged, after they cripple us, and attack with their dream of a 500 million man army.
Faster than you can say “Mao Tse Tung,” all of China’s excess factory capacity can produce military technologies and war materials. All those joint ventures China is doing with America’s biggest and best? For one reason. To acquire technology.
The Google fight was really about technological warfare. This time, our side did not cave in. Don’t be fooled, my friend. They have us by the balls.
Within ten years, China will be at war with us. It will be covert at first. They will collapse our electrical grid. Our water systems. Our Internet and communications systems. Meaning our entire infrastructure crashes. Because it is all based on computers and communications.
Suddenly the same event takes place as in the last Great Depression. A far inferior enemy pops out of nowhere. In a few short years it gets factories going, arms itself and puts the world at war.
Last time it was a MUCH inferior Germany. The Nazis destroyed the English empire. They nearly took over the planet.
This time is China. If we don’t wise up fast, they will bring down modern Europe and America.
The critical stage of the next war will be the modern day blitzkrieg. Cyber-war. We don’t understand cyber-war. We don’t even realize we are in one. We didn’t understand the blitzkreig either, or the V2 rockets, until Europe fell to Hitler.
The cyber-war will be far more deadly. Because our entire nation now runs on computers.
At the flick of a switch, China can turn off your TV. Shut down our Internet. Kill all phone communications, including cell phones. Blind every weather and communications satellites. Put our nuclear reactors into meltdown.
China can close off every airport and ground every flight…turn off the lights in every major city…close every port and highway.
They can shut down 911 services. So the police can’t come. Firemen can’t come. Ambulances can’t come. Close down every hospital. In short, they can bring your life to a screeching halt.
They can do all this without firing a shot. Without anyone knowing what really happened.
With all transportation and communications down, they could launch a full scale nuclear attack. It would blindside us. Without command and control our missiles would be destroyed in their silos. Our fighter planes would go down in their hangers…our ships destroyed at dock.
It happened before, just not on this scale. It is called Pearl Harbor.
Think I’m exaggerating? China already has done test runs on many of these cyber-attack systems. They succeeded with flying colors.
Remember when the ATM machines stopped working, due to “glitches?” (HSBC, among others, has had this problem.) When the air traffic control system grounded flights in the east coast of the U.S., because their computers went down? This took place twice in one week.
Remember when electrical grids have fallen, in surprise blackouts? When the Internet got disrupted four times in one week a few years back, because the underwater Mideast cables inexplicably were cut?
These events, over the past several years, have been systematic tests of the various components of China’s cyber-warfare system.
They were quickly corrected. Supposedly. The truth is once the Chinese knew their tests worked, they called off the attacks.
But imagine if they happened all at once. Suppose this time they were not stopped. There would be no way to mobilize the people to fix the problems.
I’ve watched them for years, as they probe and test our systems. It disgusts me that the authorities are quick to blame it all on computer “glitches.” Experts I’ve talked to, who won’t speak on the record, all tell the same story. “We don’t know what happened. Out of the clear blue sky, our systems crashed. Just as fast, they came back online. We don’t know what happened. But for sure the problem came from the outside.”
China’s leaders now know their attacks work. They are getting ready for the day the war starts. Then they bring down all these systems at once. In the confusion, in the chaos — in the lack of communications and ability to respond — their far inferior armies are no longer inferior.
They enter countries unopposed. Just like Germany walked around the French Maginot line. The French military stood hundreds of miles to the south, doing nothing. They had no enemy to engage. France quickly fell to the German invaders.
Not only is China supporting our enemies in the Middle East, the Taliban. They are supporting our enemies in Latin America. The Colombian/Mexican drug cartels. Every time we buy more of their low-priced junk, we strengthen their armies.
Meanwhile, happy shopping at Walmart.
Some examples of Chinese cyber-attacks
on America and other nations
The threat of Chinese cyber-attacks is not just theoretical. They have already successfully carried out hundreds of these attacks. They have proven, over and over, they have the ability to wage cyber-war against a sleeping America.
Here are a few examples, of attacks that compromise U.S. interests. Including military command and control…banking…trading… cash registers…power grids & water systems…transportation (railroads, aircraft, trucking, shipping)…and communications, including telephone TV, the Internet and everything connected to it…
* China’s cyber army preparing to march on America, says Pentagon
Chinese military hackers have prepared a detailed plan to disable America’s aircraft battle carrier fleet with a devastating cyber attack, according to a Pentagon report obtained by The Times.
The blueprint for such an assault, drawn up by two hackers working for the People’s Liberation Army (PLA), is part of an aggressive push by Beijing to achieve “electronic dominance” over each of its global rivals.
China’s ambitions extend to crippling an enemy’s financial, military and communications capabilities early in a conflict, according to military documents and generals’ speeches that are being analysed by US intelligence officials. Describing what is in effect a new arms race, a Pentagon assessment states that China’s military regards offensive computer operations as “critical to seize the initiative” in the first stage of a war.
* Chinese & Russian Spies ‘infiltrate US power grid’
BBC News, Silicon Valley
US government admits the nation’s power grid is vulnerable to cyber attack, following reports it has been infiltrated by foreign spies.
The Wall Street Journal (WSJ) reported that Chinese and Russian spies were behind this “pervasive” breach.
It said software had been left behind that could shut down the electric grid.
“The vulnerability is something [we] have known about for years,” said US Homeland Security Secretary Janet Napolitano.
“We acknowledge that… in this world, in an increasingly cyber world, these are increasing risks,” Ms Napolitano added.
She refused to comment on the WSJ story that an intrusion had taken place, but security experts said they were not surprised by the claims.
“From a geo-political standpoint, this has created an opening for skilled ‘hostiles’ to obtain a presence in places we would rather they didn’t have one.”
The motives behind these potential attacks are undoubtedly military or political in nature, said Tim Mather, chief security strategist for the RSA Conference, the world’s biggest security event.
He told the BBC: “These countries are not doing this willy-nilly. There is a tactical reason for all of this and no doubt tied to a longer term strategic plan which is gosh if they need to jerk the chain of the US, then this is the way to do it.”
* China attacked Google: Google is releasing information about a “highly sophisticated and targeted attack” on their corporate infrastructure that occurred this year. The attack originated in China and resulted in the “theft of intellectual property from Google.”
Google found that these attacks were not just going after Google’s data, but were also targeting at least twenty other major companies spanning sectors including Internet, finance, chemicals, and more.
* China shot down satellite: The Chinese military used a ground-based missile to hit and destroy one of its aging satellites orbiting more than 500 miles in space — a high-stakes test demonstrating China’s ability to target regions of space that are home to US spy satellites and space-based missile defense systems.
The test of anti-satellite technology is believed to be the first of its kind in two decades by any nation. It raised concerns about the vulnerability of US satellites and a possible arms race in space.
“The US believes China’s development and testing of such weapons is inconsistent with the spirit of cooperation that both countries aspire to in the civil space area,” National Security Council spokesman Gordon Johndroe said yesterday.
* China blamed for two major U.S. power outages: Chinese hackers have been blamed for two sets of cyber attacks that left US homes without electricity in recent years.
Two blackouts, in Florida and the Northeast, were at least partially caused by Chinese crackers, computer security experts told the National Journal Magazine. The blackout that affected New York, Michigan, Ohio and parts of Canada – hit 50 million homes. The blackout in south Florida that left three million homes without electricity was down to a Chinese PLA hacker.
* Widespread Chinese Internet abuses: WASHINGTON, March 24 (Reuters) – Internet domain company GoDaddy.com said it planned to stop registering domain names in China, joining Google Inc in protesting cyber attacks and censorship in that country.
“We believe that many of the current abuses of the Internet originating in China are due to a lack of enforcement against criminal activities by the Chinese government,” Christine Jones, Go Daddy Group Inc general counsel, told a congressional commission hearing on Wednesday.
She said GoDaddy had repelled dozens of extremely serious attacks that appear to have originated in China.
* Congress says China ramping up U.S. cyber-attacks: A Congressional Panel of six Democrats and six Republicans concluded that China has developed a highly sophisticated cyberwarfare program and is ramping up its capacity to penetrate US computer networks.
The Panel’s conclusions, issued late last week, were swiftly rejected by the Chinese government. However the US-China Economic and Security Review Commission has stood by its conclusions.
The Commission claims that China’s current cyberattack systems are sufficiently advanced that the US may be unable to counteract – or even detect – the efforts.
The Commission also claims that China may be actively supporting more than 250 hacker groups who are aiming their unwanted attentions at public and private sector computer servers across the US.
The 393-page report criticized Beijing’s “heavy-handed government control” over its economy and its “continuing arms sales and military support to rogue regimes” such as Sudan, Myanmar (Burma) and Iran.
The cyberwarfare problems seem to stem from the allegation that several of China’s space programs have potential military uses.
* China attacking U.S. government computers: James Mulvenon, a Washington-based specialist on the Chinese military, says China employs a constantly shifting mix of official and civilian or semi-civilian groups (such as so-called patriotic hacker associations) as the foot soldiers — the “proxies” — in its cyberwar armies.
China has long regarded cyberwarfare as a critical component of asymmetrical warfare in any future conflict with the U.S. From China’s perspective, it makes sense to use any means possible to counter America’s huge technological advantage. A current wave of hacking attacks seems to be aimed mainly at collecting information and probing defenses. But in a real cyberwar, a successful attack would target computer-dependent infrastructure, such as banking and power generation.
“Can one nation deliver a crippling blow to another through cyberspace?” asks American Sami Saydjari, head of the private computer-security group Cyber Defense Agency and former president of Professionals for Cyber Defense. “The answer is a definite yes. The Chinese know we are much more dependent on technology, and the more you depend on it, the more vulnerable you are.”
* Hackers (believed Chinese) took control of FAA (U.S. airline) servers: In February, hackers took control of the FAA critical network services. At that time, the FAA domain computer controller for the western region was cracked. More than 40,000 FAA user IDs and passwords were stolen. Though not proved, China is believed to behind the attacks.
FAA officials said “in our opinion, unless effective action is taken quickly, it is likely to be a matter of when, not if ATC systems encounter attacks that do serious harm to ATC operations.”
* Researchers Trace Theft of Key Indian Defense Data to China, NY Times reports: Canadian and United States computer security researchers have monitored a spying operation for the past eight months, observing while the intruders pilfered classified and restricted documents from the highest levels of the Indian Defense Ministry.
The intruders breached the systems of independent analysts, taking reports on several Indian missile systems.
The intruders even stole documents related to the travel of NATO forces in Afghanistan. Illustrating that even though the Indian government was the primary target of the attacks, one chink in computer security can leave many nations exposed.
“It’s not only that you’re only secure as the weakest link in your network,” said Rafal Rohozinski, a member of the Toronto team. “But in an interconnected world, you’re only as secure as the weakest link in the global chain of information.”
Given the sophistication of the intruders and the targets of the operation, the researchers said, it is believed that the Chinese government approved of the spying.
* CIA: cyber-attacks on utilities: In January, the CIA said, “We have information, from multiple regions outside the United States, of cyber intrusions into utilities, followed by extortion demands. In at least one case, the disruption caused a power outage affecting multiple cities. We do not know who executed these attacks or why, but all involved intrusions through the Internet.”
* Huge increase in cyber-attacks on national infrastructure: Over the past year to 18 months, there has been “a huge increase in focused attacks on our national infrastructure networks, . . . and they have been coming from outside the United States,” said Ralph Logan, principal of the Logan Group, a cybersecurity firm.
It is difficult to track the sources of such attacks, because they are usually made by people who have disguised themselves by worming into three or four other computer networks, Logan said. He said he thinks the attacks were launched from computers belonging to foreign governments or militaries, not terrorist groups.
Over the past 10 years, electric utilities, pipelines, railroads and oil companies have used remotely controlled and monitored valves, switches and other mechanisms. This has resulted in substantial savings in man power and other costs.
But to do that, the companies have installed wireless Internet connections to link the devices to central offices. Leaving them open to cyber attack.
* 100′s of successful attacks on Defense Dept Networks: The Defense Department admits to hundreds of successful attacks on its networks in recent years. Brian Murphy, who left the Defense Department’s network security unit last year to work for the security firm Riptech, said “our nation’s critical infrastructure is connected to public networks and vulnerable. It’s open to terrorists, operating from anywhere in the world, with the motivation and skills to wreck havoc.”
* 1000′s of files stolen (apparently by China) on America’s most advanced fighter planes: Thousands of confidential files on the U.S. military’s most technologically advanced fighter aircraft have been compromised by unknown computer hackers over the past two years, according to senior defense officials. The F-35 Joint Strike Fighter’s self-diagnostic system was compromised by hackers, officials say.
The Internet intruders were able to gain access to data related to the design and electronics systems of the Joint Strike Fighter through computers of Pentagon contractors in charge of designing and building the aircraft, according to the officials.
Hackers also gained entry into the Air Force’s air traffic control systems, according to the officials. Once they got in, the Internet hackers were able to see such information as the locations of U.S. military aircraft in flight.
The Joint Striker Fighter plane is the military’s new F-35 Lightning II. It designed to become the aircraft used by all of the branches of service.
Most of the files broken into focused on the design and performance statistics of the fighter, as well as its electronic systems. The information could be used to make the plane easier to fight or defend against.
Former US officials said the attacks appear to have originated in China, but there is scant concrete evidence because it is easy to mask identities online.
Attacks on the Pentagon are common, but are said to have escalated dramatically in the past six months, and coincide with growing speculation about China’s role in cyber espionage.
* Cyber-warfare attacks soaring on U.S. military infrastructure, government and communications systems: Cyber-warfare attacks on military infrastructure, government and communications systems and financial markets pose a rapidly growing but little understood threat to international security. They could become a decisive weapon of choice in future conflicts between states, the London-based International Institute for Strategic Studies warned yesterday.
IISS director-general John Chipman said: “Despite evidence of cyber attacks in recent political conflicts, there is little appreciation internationally of how to assess cyber-conflict. We are now, in relation to the problem of cyber-warfare, at the same stage of intellectual development as we were in the 1950s in relation to possible nuclear war.”
The study highlighted a series of other security threats, including the war in Afghanistan, China’s military diversification, the progress of Iran’s suspect nuclear program, and the impact of terrorist groups in Iraq and elsewhere.
“Cyber-warfare [may be used] to disable a country’s infrastructure, meddle with the integrity of another country’s internal military data, try to confuse its financial transactions or to accomplish any number of other possibly crippling aims,” he said. Yet governments and national defence establishments at present have only limited ability to tell when they were under attack, by whom, and how they might respond.
* U.S. Unprepared for Cyber-Warfare: A simulated cyber attack has shown once again that the US is unprepared for cyberwarfare, a year after the federal government conducted an extensive review of its cyber security stance.
On Tuesday, the Bipartisan Policy Center hosted Cyber ShockWave, a simulation designed to mimic a widescale cyber attack on the US. The wargame, which included a mock White House emergency room, revealed some crucial gaps in US preparedness, according to the BPC.
The scenario, which was unknown to the participants before the event, involved a hypothetical attack on 20 million mobile phones. In the wargame, the phones had been infected months earlier using a widely distributed consumer-focused sports application that contained a trojan.
“When the Cabinet convenes to face this crisis, 20 million of the nation’s smart phones have already stopped working,” the BPC said. “The attack escalates, shutting down an electronic energy trading platform and crippling the power grid on the Eastern seaboard.”
Reports suggest that the source of the attack was difficult to pinpoint during the event. John Negroponte, director of national intelligence, who was masquerading as Secretary of State during the event, is quoted as saying that “attribution was one of the hottest issues to deal with”.
* Increasing Chinese cyber-attacks on U.S.: Dennis Blair, director of national intelligence, testified before the House Intelligence Committee, which was conducting its annual threat assessment hearing.
Blair argued that the US was unprepared to defend itself against the rising threat of cyberattacks. In particular, increasing imports of foreign hardware and software for use in US networks is leaving the country open to potential attacks.
The technological balance favors attackers, rather than those wanting to defend their internet presence, Blair said, adding that the internet had also created a breeding ground for local radicalization.
“The United States continues to be the victim of a disturbing increase in the scope, virulence, and potency of cyber attacks.”
The testimony came just days after security services company Mandiant published a report on advanced persistent threats. “We’ve been able to correlate almost every APT intrusion we’ve investigated to current events within China,” Mandiant said in the document.
* China attacks Internet Explorer: Further evidence has emerged suggesting that the Operation Aurora attack exploiting a zero-day flaw in Internet Explorer came from within the People’s Republic of China.
China has also staged attacks on Firefox, prompting the U.S. military to ban its use until the weakness was patched. In all, China is suspected of conducting dozens of successful attacks on Explorer and Firefox, that have required constant emergency repairs from Microsoft and Mozilla.
China has to be stopped – and you can make it happen
We’re back to the same crisis the English faced in the years leading to World War II. The British government refused to see its enemy, that was preparing for war.
Germany was importing military materials. Making guns, tanks, and airplanes. Expanding their military. Breaking every agreement they made.
A man named Winston Churchill was running around, warning about the coming German invasion. No one listened. England ended up losing its empire. Germany damn near took over the nation. If it hadn’t been for America, they would now call Great Britain “Großbritannien.”
Today we face an even bigger menace. Hitler had no nukes. He could not wipe out his enemies, in one fell swoop, with a cyber-attack that would cripple their infrastructure and communications. If he had, he would have done so in a heartbeat.
China has all that and more. A Chinese sneak attack could wipe out our nation. As I pointed out to you, they could cripple our command and control systems. That would leave us blind and defenseless. We couldn’t respond to their nukes.
But it’s not too late. China can be stopped. You can help do it.
You see, as of today, China is not ready to attack. In its mad dash to build factories and its military — to improve its arms, stockpile weapons and add raw materials for war — it is starving its population. The government faces unrest, and potential uprisings, from the hundreds of millions of impoverished people there.
Two things stop a revolution in China right now. One, the brutality of the Chinese Red Army. The other, slave-labor factory jobs that barely pay the masses enough to live. But those jobs are just enough to keep the restless masses somewhat appeased.
And that is how we can stop the Chinese threat to our nation. We buy no more goods from China. We shut down their slave-labor factories, that are devastating free world economies.
The business we give China -– the money it collects from our trade -– is its lifeline. China’s economy and society are already perched on the edge of a cliff. Without our imports, they collapse. Economically, socially and especially militarily.
Within six months of an effective boycott, China’s trade surplus is gone. Raw materials would lose the vast excess demand from Chinese over-buying. Prices would drop in half.
China’s military expansion would stop dead in its tracks. They would not have the money to procure their military supplies. They couldn’t train more soldiers, or even feed the ones they now have. Modernization and expansion of China’s fleets and weapons systems would end in an instant.
China’s covert aid to North Korea (like its aid to North Vietnam) would stop. The Taliban and Afghan resistances, that are killing US troops, would end. And the technical assistance, money and supplies of critical parts for Iran’s nuclear weapons -– for its long-range rocket program — would come to a screeching halt.
All this depends on cash. When we stop buying from them, they no longer have that.
The military would have its hands full INSIDE China, night and day. It would have to police the streets and put down the riots in every major city across the country. Because if the economy drops, even just a little, hundreds of millions MORE Chinese will lose their jobs. Already we see widespread riots across China. The labor crisis would balloon out of control.
China would realize cyber-attacks are futile: they no longer have the military capacity to follow through. This huge threat to us would end. In fact, China would be desperate to appease America. In this weakened state, the last thing they would want to do is aggravate us.
Right now we are educating our most dangerous enemy. We are transferring our most important, secret technology to her. We are feeding, arming and financing her.
All we have to do is stop buying their shit. Stop buying Chinese. The threat immediately ends.
We get another benefit from this as well. After securing our safety, it is the one thing that could guarantee us a prosperous future.
Let me explain it this way. You’ve heard of the Walmart miracle? I personally knew Sam Walton. I sold millions worth of goods to Walmart, in my hobby enterprises.
I go back with them to my teenage years. When Walton opened one of his first stores, in Harrison AK, I was there. Through the years I sold him cowboy hats, seafood, and a whole host of other products.
In those days a company known as Munsey made the famous Toaster Oven. I knew the owner. Munsey was an odd kind of guy. He liked to butter his bread before he toasted it. That led to the greatest invention in toasting since sliced bread.
Ever try to put buttered bread inside a toaster? The butter drips down to the bottom of the toaster. Out comes greasy smoke.
So Munsey invented the horizontal toaster: the toaster oven. He also invented the temperature-correcting thermostat for his ovens. This adjusted the temperature, to make sure each piece of toast you made came out perfect.
Munsey got patents for these, and other innovations. (Including the convection microwave. It got ripped off by a Chinese firm.) He built a thriving business around them. They were produced in Arkansas, in a small factory. His business prospered, as his products were featured in many retail stores.
Then Munsey made his fatal mistake. The same one many small manufacturers made. He started doing business with Walmart.
They gave him the biggest order of his life. Far more than his little factory could produce.
Walmart was still playing the “made in America” game. They convinced Munsey to greatly expand his production capacity. To offer more types of ovens. And to sell to Walmart at a very low price.
Munsey borrowed a shit-pot of money from his friendly local banker. He built a much bigger factory. All with credit based on his Walmart order.
Munsey was now producing far more ovens than ever before. But with razor thin margins. He was proud to see his toasters prominently featured in Walmart stores around the country. That journey in a fool’s paradise did not last long.
One day he saw something at Walmart that horrified him: an exact copy of the Munsey Toaster Oven. Made in China. Walmart was selling it for $10 less!
Munsey could barely buy the materials at the price they were retailing the China copy. The knock-off could not compare in quality to the Munsey original. But it was half the price.
Munsey took the Chinese toaster oven home and opened it up. He found it violated several of his patents. Including the temperature-correcting thermostat. Munsey was outraged. But he couldn’t do anything about it.
Then he noticed Walmart was featuring this Chinese oven in their advertising. Munsey sales fell to nothing. How could he compete?
Finally, the coup de gras: since the Munsey ovens didn’t sell, Walmart was over-stocked with them. Walmart sent them back, demanding its money back. That was in their contract. Munsey was put out of business.
Let me tell you Walmart’s secret. Their trick. For awhile they gave lip service to “made in America.” But Walmart quickly went to China. It had Chinese factories knock off all its successful products, so it could buy them at a fraction of the old price.
Sam Walton became a billionaire, not because he was clever. He was ruthless. He put American companies out of business left and right, and had their products copied in the slave-labor shops of China.
20 years later, damn near everything we buy is made in China. Walmart is the largest retailer in the world. It sells cheap Chinese shit. These products often don’t work…are made of inferior materials that raise health risks…and quickly fall apart.
With our new movement — NO MORE MADE IN CHINA -– we reverse all that. America enjoys an economic renaissance.
If Americans buy American, our factories will grow. Instead of losing jobs, by the millions, our people will go back to work.
Innovation will expand. The product development cycle will greatly shorten. All kinds of new products will come to market. Commercial real estate will reverse its plunge: factories would open and expand, to fill the gap left by no more Chinese products coming to America.
Up till the 1970s, America was the world’s biggest exporter. We were the world’s biggest manufacturer. We ran big trade surpluses with the rest of the world. We had low taxes. Low unemployment. Even the U.S. government was in surplus.
In a little over a generation, the Chinese put an end to all that. Systematically China stole our technology. Piece by piece it dismantled and bankrupted all its U.S. manufacturing competitors. It targeted industries, pirated our products, and turned the U.S. into the world’s biggest debtor nation.
We can stop that. For the firs time in decades, American businesses could compete with Chinese companies. Folks, Chinese companies don’t know shit about competition. If we start competing with them, with our superior quality products and technology, we would take market share from them overnight.
The power to do all this is in our hands. It’s a matter of educating the public. Of letting them know there is more than price involved in the buying decision… a thing called quality.
China would be forced to float its currency. Just like every other currency in the world. China could no longer get away with stealing patents and pirating goods: it would no longer have the leverage to do that.
Chinese real estate is one of the biggest bubbles in the world. It would crash. So would the fairy tale Chinese stock markets.
U.S. unemployment would quickly fall. We would go back to our manufacturing roots. You would see a complete turnaround in the U.S. economy. Corporations would return to real profitability.
We have a window of opportunity, where we can stop China. It won’t stay open long. We just stop buying their inferior quality crap. Crap that is killing their workers, the environment, and slowly destroying us.
Can this really happen? Of course it can. Grass roots movements have often changed the world. They have altered a nation’s destiny.
One way or another we will revive US manufacturing. It will come from a deep dark depression, where a wounded America struggles to survive…or it could come from an American renaissance.
America made the ages-old mistake. We replaced the factory floor — where real wealth is created — with the trading floors of the bankers and derivative creators. They manufacture poverty. They destroy wealth. You are witnessing this first hand.
Tainted Chinese Imports Common
In Four Months, FDA Refused 298 Shipments
Dried apples preserved with a cancer-causing chemical.
Frozen catfish laden with banned antibiotics.
Scallops and sardines coated with putrefying bacteria.
Mushrooms laced with illegal pesticides.
These were among the 107 food imports from China that the Food and Drug Administration detained at U.S. ports just last month, agency documents reveal, along with more than 1,000 shipments of tainted Chinese dietary supplements, toxic Chinese cosmetics and counterfeit Chinese medicines.
For years, U.S. inspection records show, China has flooded the United States with foods unfit for human consumption. And for years, FDA inspectors have simply returned to Chinese importers the small portion of those products they caught — many of which turned up at U.S. borders again, making a second or third attempt at entry.
Throw away Chinese toothpaste, FDA warns
Products may contain poisonous chemical used in antifreeze
WASHINGTON – The government warned consumers to avoid using toothpaste made in China because it may contain a poisonous chemical used in antifreeze.
The ingredient in question, called DEG, is used as a lower-cost sweetener and thickening agent. The highest concentration of the chemical found in toothpaste so far was between 3 percent and 4 percent of the product’s overall weight.
“It does not belong in toothpaste even in small concentrations,” said the FDA’s Deborah M. Autor.
Chinese-made clothes ‘toxic’
Wellington, New Zealand – New Zealand launched an investigation into Chinese garment imports after children’s clothes from China were found to contain dangerous levels of formaldehyde, officials said.
The government ordered the probe after scientists testing clothes for TV3′s Target consumer watchdog program discovered formaldehyde concentrations up to 900 times above the safe level in woolen and cotton clothes from China
China replaces toxic lead in kids’ toys — with even more toxic cadmium
Monday, January 11th 2010
There’s more trouble in toyland.
Now that lead has been banned from children’s products, some Chinese manufacturers have been substituting the even more dangerous heavy metal cadmium, especially in costume jewelry, an Associated Press investigation reveals.
Cadmium is a known carcinogen that, like lead, can delay brain development in young children, leading to learning disabilities. Research also shows that long-term exposure can cause cancer and kidney problems.
The AP purchased 103 pieces at national and regional store chains in New York, Ohio, Texas and California. A lab analysis revealed that the most contaminated trinket contained 91 percent cadmium by weight, while other objects tested at dangerous levels including 89 percent, 86 percent and 84 percent by weight. Twelve percent of the pieces contained at least 10 percent cadmium.
Even more worrisome, some of the items easily shed their metal, raising additional concerns about children’s exposure to toxins.
Kids don’t have to swallow cadmium to be exposed – simply sucking on or biting costume jewelry with high levels of cadmium can hit them with regular doses of the metal.
“There’s nothing positive that you can say about this metal. It’s a poison,” warns Bruce A. Fowler, a toxicologist and cadmium specialist at the U.S. Centers for Disease Control and Prevention.
Chinese Pet Food Poison May Have Been Intentional
FDA Investigators Say Chinese Companies May Have Added Melamine to Appear to Boost Protein Content
Investigators say the chemical that has sickened and killed pets in the United States may have been intentionally added to pet food ingredients by Chinese producers.
Food and Drug Administration investigators say the Chinese companies may have spiked products with the chemical melamine so that they would appear, in tests, to have more value as protein products.
Officials now suspect this possibility because a second ingredient from China, rice protein concentrate, has tested positive for melamine. So has corn gluten shipped to South Africa. That means there is a possibility for another round of recalls.
The FDA’s top veterinarian, Stephen Sundlof, says finding melamine in so many products “would certainly lend credibility to the theory that it was maybe intentional.”
U.S. Feds: Homes with Chinese drywall
must be gutted
(AP) – Thousands of U.S. homes tainted by Chinese drywall should be completely gutted, according to new guidelines released by the Consumer Product Safety Commission.
The guidelines say electrical wiring, outlets, circuit breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes and drywall need to be removed.
“We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again,” said Inez Tenenbaum, chairwoman of the commission, the federal agency charged with making sure consumer products are safe.
The drywall has been linked to corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects. Tenenbaum said some samples of the Chinese-made product emit 100 times as much hydrogen sulfide as drywall made elsewhere.
The agency continues to investigate possible health effects. But preliminary studies have found a possible link between throat, nose and lung irritation and high levels of hydrogen sulfide gas emitted from the wallboard, coupled with formaldehyde, which is commonly found in new houses.
Southern members of Congress say the U.S. needs to pressure the Chinese government, which allegedly ran some of the companies that made defective drywall.
In Cape Coral, Fla., Joyce Dowdy, 71, and her husband Sonny, 63, plan to move out of their $150,000, 1,600-square-foot home while it is gutted to get rid of tainted Chinese drywall.
Joyce Dowdy said she suffers from nose bleeds and her husband has a persistent cough. They blame the drywall.
“We can’t live like this anymore,” Joyce Dowdy.
They’re borrowing money to do the gutting, which means that instead of a mortgage-free retirement they will be paying monthly bills cover the costs of repair.
“It’s costing us as much as we paid for the house,” Joyce Dowdy said. “But we can’t just walk away … Our house is worth nothing at the moment.”
Seafood imports from China
raised in untreated sewage
Fish products eaten by Americans treated with dangerous drugs, chemicals
WASHINGTON – China, the leading exporter of seafood to the U.S., is raising most of its fish products in water contaminated with raw sewage. It is compensating by using dangerous drugs and chemicals, many of which are banned by the Food and Drug Administration
FDA inspectors report tainted food imports from China are being rejected with increasing frequency. They are found filthy, contaminated with pesticides and tainted with carcinogens, bacteria and banned drugs.
In China, 3.7 billion tons of sewage is discharged into rivers, lakes and coastal water – some of which are used by the industry. Only 45 percent of China has any sewage-treatment facilities, putting the country behind the rest of Asia.
According to a new report by Food & Water Watch, China crams fish and shellfish into facilities to maximize production. This generates large amounts of waste, contaminates water and spreads disease if left untreated. The industry tries to control the spread of bacterial infections, disease and parasites by pumping the food supplies with antibiotics and the waters with fungicides and pesticides.
Many of the products used are banned in the U.S. Traces of these drugs have been showing up increasingly in imports from China.
“In addition to potentially making people sick, overuse of such drugs is contributing to antibiotic resistance,” says Food & Water Watch.
Chinese food companies also are masters at getting around U.S. safety controls. For example, China built its shrimp farms on old cotton fields. Those fields are filled with insecticides, left over from the cotton days. These insecticides contaminate the water the shrimp live in. The fish and shrimp are loaded with chemicals, far above FDA limits. It is one of the great food scandals of our time.
China became the leading exporter of seafood to the U.S. in 2004. Amounts are rising fast. “China’s imports of aquaculture products are increasing despite the country’s history of violations for veterinary drug residues,” says Food & Water Watch.
Every year, one in four Americans is afflicted with a food-borne illness. Seafood is responsible for about 20 percent of those cases – or 15.2 million.
China products choke, burn,
drown, trap Americans
U.S. consumer safety recalls
overwhelmingly hit imports from China
WASHINGTON – It’s not just Chinese food and drug imports that can kill you.
Many of those bargain-priced products you pick up at Wal-Mart, Target or Sam’s Club could do you in, too.
Imports from China were recalled by the U.S. Consumer Product Safety Commission twice as often as products made everywhere else in the world, including the U.S. A few of these include:
- Portable baby swings that entrap youngsters, resulting in cuts, bruises and abrasions;
- Swimming pool ladders that break, resulting in leg lacerations requiring up to 21 stitches, bone fractures, back injuries, torn ligaments and sprained ankles;
- Faulty baby carriers that result in babies falling out and getting bruised, cracked skulls and hospitalizations;
- Easy-Bake Ovens that trap children’s fingers in openings, resulting in burns;
- Oscillating tower fans whose faulty wiring results in fires, burns and smoke inhalation injuries;
- Exploding air pumps that have resulted in lacerations, including facial and eye injuries;
- Bargain-priced oil-filled electric heaters, selling for less than $50, that burn down homes;
- Notebook computer batteries that burn up computers, cause other property damage and burn users;
- Circular saws with faulty blade guards that result in cutting people, not wood.
Electrical products made in China represent a significant percentage of the recalls. The CPSC noted the market is saturated with Chinese counterfeit circuit breaker, power strips, extension cords, batteries and holiday lights that cause fires, explosions, shocks and electrocutions.
“Many counterfeit products are made in China and CPSC is actively working with the Chinese government to reduce the number of unsafe products that are exported to the United States,” said the alert.
Americans see a cheap electrical power strip with a circuit breaker and assume it does what it is supposed to do. That is not the case with many Chinese counterfeits. They are not only counterfeits in the sense of improperly using brand names. They are actually counterfeits in the sense of pretending to do something they were never intended to do.
Big problems occur when an over-taxed power strip doesn’t trip a circuit. Fires can occur. Property can be damaged. People can be killed.
How could one go wrong purchasing an attractive kitchen stool engraved with a rooster on the seat? After all, it was only $30. Well, people found out the stools collapsed, even under the weight of small children.
For years, American crib manufacturers scrupulously lived up to the exacting safety standards imposed by agencies like the CPSC. Not so with Chinese manufacturers.
Some 40,000 cribs had to be recalled when it was discovered directions instruction consumers to assemble them in ways that would result in the baby falling out and becoming entrapped. Additionally, locking pins on the side of the crib could pop off and cause a choking hazard.
About 450,000 infant car seat carriers manufactured in China had to be recalled. It was determined infants were falling out because of a faulty design. The Evenflo Co., which imported the carriers from China, received 679 reports of the handle on the car seat releasing for no reason, resulting in 160 injuries to children, including a skull fracture, two concussions and cuts and bruises.
Even books for young children have been found to contain plastic squeaker toys that have become lodged in babies’ throats and metal clips that break off, potentially injuring kids.
Graco received 137 reports of infants mouthing, chewing and sometimes choking on tiny pieces of its soft blocks tower toys imported from China. At least 32 infants were found gagging on the pieces and 49 choked on the plastic covering. In all, 40,000 had to be recalled.
Chinese ginger latest food scare
In yet another food scare consumers have been warned about ginger imported from China which contains a toxic chemical.
The California Department of Public Health (CDPH) says the toxic chemical called aldicarb sulfoxide was found in fresh ginger from China. Aldicarb sulfoxide is a pesticide that is not approved for use on ginger.
The product is known to have been distributed to Albertson’s stores and Save Mart stores in northern California by the Christopher Ranch Food Company of Gilroy, California. It was shipped to Washington, Oregon, California, Michigan, and Louisiana.
Aldicarb sulfoxide is a potent neurotoxin. Symptoms of aldicarb poisoning usually occur within the first hour following exposure and can include nausea, headache, and blurred vision, which usually disappear within 5 or 6 hours.
Higher levels of ingestion can cause dizziness, salivation, excessive sweating, vomiting, diarrhea, muscle stiffness and twitching, and difficulty in breathing.
China formula scare spreads to ice-cream, yoghurt
20% of Chinese dairy products found contaminated
BEIJING, Sept 18 (Reuters) – Hong Kong has ordered the recall of a Chinese company’s products after milk, ice cream and yoghurt were found to be contaminated with melamine, the compound responsible for killing four children in a China health scandal.
Tainted milk powder produced in China has made thousands ill, and triggered sackings and detentions and rocked public trust already battered by a litany of food safety scares involving tainted eggs, pork and seafood in recent years.
Now the scandal has spread to milk, ice-cream and yoghurt ice-bars. Hong Kong ordered the recall of a Chinese company’s products on Thursday after tests found that eight of 30 of its products, including milk drinks, were tainted with melamine.
The company, Inner Mongolia Yili Industrial Group Co Ltd was a Beijing Olympic Games sponsor and is one of 22 Chinese firms implicated in the scandal.
A regional Chinese health authority said on Thursday a fourth child had died at a hospital in remote northwestern Xinjiang.
Milk tainted with melamine, a compound banned in food, has killed three other babies, two in China’s northwestern Gansu province and one in eastern Zhejiang.
The health scare erupted after Sanlu Group last week revealed it had produced and sold melamine-laced milk, and a subsequent probe found a fifth of 109 Chinese dairy producers were selling products adulterated with the substance.
At the latest count, 6,244 children have become ill with kidney stones after drinking powdered milk laced with melamine, with three deaths and 158 suffering “acute kidney failure”.
“It’s just a terrible situation, it’s really scary,” said a 34-year-old father surnamed Zhou, cradling one of his eight-month twins outside a Beijing children’s hospital.
China Attacks US Satellites With Lasers
China has fired high-power lasers at U.S. spy satellites flying over its territory in what experts see as a test of Chinese ability to blind the spacecraft, according to sources. It remains unclear how many times the ground-based laser was tested against U.S. spacecraft or whether it was successful.
According to top officials, however, China not only has the capability, but has exercised it. It is not clear when China first used lasers to attack American satellites. Sources would only say that there have been several tests over the past several years.
U.S. Army report: China could quickly mobilize 200 million soldiers
(And that was 12 years ago. Since then they have spent at least 300% MORE on their military.)
Colonel Larry M. Wortzel, then Director of the Strategic Studies Institute at the U.S. Army War College, reported in a 1998 study that China has the biggest military force in the world, by far…
“China’s standing armed force of some 2.8 million active soldiers in uniform is the largest military force in the world. Approximately 1 million reservists and some 15 million militia back them up. With a population of over 1.2 billion people, China also has a potential manpower base of another 200 million males fit for military service available at any time. In addition to this wealth of manpower, China is a nuclear power. It has enough megatonnage, missiles, and bombers to hit the United States, Europe, its Asian neighbors, and Russia.”
Chinese government-approved book: China must “sprint” to become world’s most powerful state – “to dominate the world”
A government-approved book by Senior Col. Liu Mingfu urges China to “sprint” toward becoming the world’s most powerful state. Liu (i.e. the Chinese government) says China and the United States are in “competition to be the leading country, a conflict over who rises and falls to dominate the world.”
China to Build 28 More Nuclear Power Reactors by 2020
China approved the construction of 28 more nuclear power reactors by 2020. That is on top of the 13 nuclear reactors they already have.
Nick note: One characteristic of China’s nuclear reactors, the Chinese Central committee forgets to mention. Each one is a “breeder reactor.” That means they don’t just produce power for energy. They also produce enriched uranium and plutonium. These are the key ingredients used in nuclear weapons. So the reactors are adding more nukes to the Red Army’s growing stockpile of nuclear arms.
Over the past 20 years, Russia and the U.S. have reduced their nuclear arsenals. Not the Chinese. They have the fastest-growing arsenal of nukes in the world. They have nuclear attack capacity to annihilate every city on the planet.
The world is raising hell about the Iranian nuclear threat. Rightly so. But they turn a blind eye to the greatest proliferator of nukes in the world. China. Maybe Iran should follow China’s strategy. i.e. stock Walmart stores in America with cheap consumer goods. Then maybe we would let them have nukes too.
Remember, the Red Army’s stated goal is to bring down America. Its generals have repeatedly threatened nuclear attacks on the U.S. For example, Maj. Gen. Zhu Chenghu, at an official briefing, said China should use nuclear weapons against the United States if the American military intervenes in any conflict over Taiwan.
And Xiong Guangkai, now the deputy chief of the general staff of the People’s Liberation Army, said that China would consider using nuclear weapons in a Taiwan conflict. The U.S. Army quoted Xiong as saying that Americans should worry more about Los Angeles than Taipei.
And what is Obama doing, in the face of the biggest nuclear weapons buildup the world has ever seen? He is gutting our nuclear arsenal! He recently announced the United States will not strike back with nuclear weapons, even in defense, if we are attacked with biological, chemical or cyber-warfare weapons by “non-nuclear” nations.
The last time the world made a mistake like this was the 1930s, when it ignored Hitler’s military buildup leading to WWII.
The Times of London:
Death row organ donor scandal exposed in China
Executed prisoners in China are being stripped of their kidneys, livers and hearts in a practice so widespread that two out of three transplant operations rely on organs removed from condemned criminals.
The China Daily newspaper said that 65 per cent of donations came from death row.
Despite a 2007 regulation barring trading in human tissue, demand for new organs far exceeds legitimate supply.
Only about 130 people have signed up to donate organs since 2003, according to research by Professor Chen Zhonghua at the Institute of Organ Transplantation, Tongji Hospital.
About one million Chinese need organ transplants each year but only 1 per cent receive one.
To meet demand an illegal trade in organs has boomed in a country that puts to death more convicted criminals than the rest of the world combined.
There has also been a surge in living donors. About 40 per cent of transplants are carried out with organs from living donors, up from 15 per cent in 2006, according to Professor Chen.
Qian Jianmin, chief transplant surgeon with the Shanghai Huashan Hospital, confirmed that patients were treated with organs from executed prisoners, and acknowledged that the system, which involves multiple government departments, was open to abuse.
Officially, death row prisoners are required to give their written consent for their organs to be removed after death. “Corruption can arise during the process,” Mr Qian told the paper.
Illegal transplants from living donors, and tales of foreigners traveling to China for transplants, are frequently reported by media and the Ministry of Health.
Death row prisoners in China are usually executed by a bullet to the back of the head and ambulances wait at execution grounds for doctors to pronounce a prisoner dead. In some cases it is thought body parts are removed in these vehicles.
Worse than death row organ donors: live organ donors (from Chinese prisoners)
If you think the Soviet Gulag was bad, wait till you hear about the Chinese prison system. In the USSR, prisoners were sent to work the mines of Siberia. But no one has a developed a “pay as you go” prison system like the Chinese.
People who speak out against the growing Chinese threat don’t just work as slave laborers. Many find themselves participants in the world’s most comprehensive organ donor program.
The world’s largest supplier of donated organs is the Chinese prison system. You might say, what a nice thing. Prisoners who have died donate the organs. They make up for their great sins.
But like most things in China, it’s not voluntary. And China ensures the highest quality of donated organs of any system in the world. Because there is one critical difference.
In America and the civilized world, organs are harvested from dead people. Mostly traffic accidents. The organs must be kept alive. Quality is not the highest.
China offers the freshest organs. Because they have developed the living organ donor system. Recipients don’t have to wait for a traffic accident. Their organ donor is alive. He is taken to the operating room. His kidneys or livers (or other organs) are removed. The customer gets a live transplant. The prisoner wakes up in a tub of ice, back in his cell. Waiting for a painful, horrible death, usually just days away.
Notice how no one complains about this system. As long as China provides cheap LED TVs, no one cares.
One eyewitness to this worked in a Chinese hospital. She was aware of prisoners being kept alive in the basement, “After their organs were cut out, some of these people were thrown directly into the crematorium to be burnt,” she said.
An individual veteran military doctor in Shenyang confirmed the claims. He said Sujiatun was just one of up to 36 such sites across China between which practitioners were rapidly transferred by closed freight train on special routes, “handcuffed like rotisserie chickens.”[
On January 7, 2010, French TV presenters Michel Cymes and Marina Carrre d’Encausse reported the issue in their “Health Magazine” program on the popular TV5 station. The following is a transcript of the report:
Program presenter Marina Carrre d’Encausse asks reporter Claire Feinstein: You research Overseas health care for us and have encountered shocking news on the Chinese Communist regime’s organ trade?
Feinstein: Yes. Usually our understanding about the organ trade is like this: some people are very poor. Because of poverty, they have to sell their own organs, such as corneas and kidneys, to get a little income. This is what we call “organ transplant tourism”. These organs are bought at high prices by these rich people who are waiting for organ transplants. This organ transplant tourism is well developed in India, Philippines and Egypt. According to statistics, there were in fact 6,800 cases of kidney transplants last year, about 10% of the total amount of organ transplant tourism.
Programme presenter Michel Cymes: With regards to China, the boundary of terror is pushed much further?
Feinstein: Yes, much much further. A few years ago, the Chinese Communist regime confessed under international pressure that the main source of their organs is death row prisoners. This behaviour doesn’t conform to moral standards. But now they have gone much further.
In 2006, at the request by the non-government organisation CIPFG, two outstanding Canadian lawyers, David Matas and former Canadian Secretary of State for the Asia-Pacific region David Kilgour, carried out an independent investigation. Surprisingly they saw that the number of organs traded in China currently far exceeds the number of executed prisoners. In fact, a bit of research touched on an absolutely alarming and outrageous public health scandal. The victims are Falun Gong practitioners. Falun Gong is a cultivation method in the Buddha school. Therefore they are all peaceful people. There are many Falun Gong practitioners in China. Since 1999, the Chinese Communist regime started its brutal persecution campaign against Falun Gong. The regime illegally imprisoned them in labour camps.
Marina Carrre d’Encausse: Do we have evidence to prove that this is fact?
Feinstein: Yes. The evidence collected by the two lawyers is really terrifying, especially from these doctors and military doctors who regretted their actions. They were sent to various concentration camps to carry out this gloomy duty. Often without anaesthetic, they took the corneas, the lungs, the kidneys and the heart from these detained people.
Marina Carrre d’Encausse: After the corpses were cremated, all evidence disappeared?
Feinstein: Yes. The bodies were burnt to cover up all traces. Their families never heard any news about them. Many of them even didn’t go through the judicial procedure. They just disappeared.
Marina Carrre d’Encausse: It is shocking that these concentration camps also detain other people, but only Falun Gong practitioners are subjected to blood tests.
Feinstein: The non-governmental organisation first sent out the warning that China has over three hundred of these kinds of concentration camps. 300,000 people are detained there, among them 150,000 are Falun Gong practitioners. Only Falun Gong practitioners are subjected to comprehensive blood tests. This action is actually to find matching organs among the detainees for the potential organ customers.
Michel Cymes: The two lawyers you mentioned, they found the evidence?
Feinstein: They actually published their investigation Bloody Harvest. They collected fifty-two pieces of evidence and testimonies. Among them are doctors and victims who miraculously escaped from the concentration camps. They also have investigative telephone records with doctors in the private and public hospitals in China. Doctors explained directly: When they need organs, they can conveniently get the organs. In fact Falun Gong practitioners have become an organ bank.
Michel Cymes: In fact the Chinese Communist regime made a mistake. They invited the renowned surgeon Francis Navarro to demonstrate organ transplants. Francis Navarro is the chief surgeon at the Liver and Digesting system transplant department in the medical centre of Montpelier University.
Feinstein: He was actually invited to train surgeons in China to do organ transplants because the French are very skilled in organ transplant. Then he was very surprised because the Chinese authorities gave him the exact date for organ transplant. This obviously means that the organ donor is live. Thus he thought the donor may be the recipient’s father, mother or sibling. So he demanded to see the donor, the organ recipient’s medical records and the detailed arrangement. But at this time his opposite party replied: “We don’t have any document because we don’t know who the donor is. You will have it the day you come.” He was very surprised. He learned with a bit of investigation that for this operation, in fact someone would be executed.
Marina Carrre d’Encausse: Before discussing the international response to this, it is necessary to mention that Professor Francis Navarro and a reporter wrote a book – he indeed carried out a wide and thorough investigation. This book will come out in several weeks. The response from the international community?
Feinstein: The first investigative report by the two Canadian lawyers came out just before the Beijing Olympics in 2006 and 2007. There are not many real responses from the international community. There are some complaints, but only that.
China executions shrouded in secrecy
By Chris Hogg
BBC News, Beijing
Opponents of the death penalty condemn China’s record on a number of fronts.
Firstly, there is the secrecy surrounding the judicial process that makes it impossible to find out whether the accused has had a fair trial or not.
That means of course that it is uncertain how many criminals are executed here.
Human rights groups based abroad estimate that China executes more people each year than the rest of the world put together – although there is quite a disparity between their figures.
It will be around 5,000 in 2009, down from 6,000 in 2007, according to the US-based Dui Hua Foundation.
Amnesty International’s figure is lower. It estimates the number of executions in 2008 was about 1,700, still a considerable number. The disparity shows just how little is known about the process here.
Reports in the Chinese media suggest about one in 10 executions is for non-violent, economic crimes.
The US government, in its most recent annual report on human rights in China, said there were at least 68 capital offences in China’s criminal code.
Then there are objections to the way the sentence is carried out. In much of China, prisoners are killed with a gunshot to the head.
Gradually, more and more provinces and municipalities are replacing this method with lethal injection, but the facilities to offer this alternative are not available everywhere yet.
The courts here describe themselves as independent, but the reality is the Communist Party controls them.
China’s Three Gorges Dam: An Environmental Catastrophe
Even the Chinese government suspects the massive dam may cause significant environmental damage
SHANGHAI—For over three decades the Chinese government dismissed warnings from scientists and environmentalists that its Three Gorges Dam—the world’s largest—had the potential of becoming one of China’s biggest environmental nightmares.
But last fall, denial suddenly gave way to reluctant acceptance that the naysayers were right. Chinese officials staged a sudden about-face, acknowledging for the first time that the massive hydroelectric dam, sandwiched between breathtaking cliffs on the Yangtze River in central China, may be triggering landslides, altering entire ecosystems and causing other serious environmental problems—and, by extension, endangering the millions who live in its shadow.
In September, the government official in charge of the project admitted that Three Gorges held “hidden dangers” that could breed disaster. “We can’t lower our guard,” Wang Xiaofeng, who oversees the project for China’s State Council, said during a meeting of Chinese scientists and government reps in Chongqing, an independent municipality of around 31 million abutting the dam. “We simply cannot sacrifice the environment in exchange for temporary economic gain.”
Among the damage wrought: “There’s been a lot less rain, a lot more drought, and the potential for increased disease,” says George Davis, a tropical medicine specialist at The George Washington University (G.W.) Medical Center in Washington, D.C., who has worked in the Yangtze River Basin and neighboring provinces for 24 years. “When it comes to environmental change, the implementation of the Three Gorges dam and reservoir is the great granddaddy of all changes.”
Environmentalists Insist Chinese Dams Cause Mekong Drought
Environmentalists and Thai authorities say the record low level of the Mekong River is directly linked to the dams that China has built along the river. Chinese officials have rejected the allegation and refuse to discuss the issue with riparian countries in the Mekong basin.
High ranking officials of Thailand’s Water Resources Department insist that data collected over the past five years show the major cause of the severe drought in the Mekong River is the construction of huge dams along the river in China’s Yunnan province. China has a total of 8 dam projects planned on the Mekong. With four of those projects completed, China has to withhold water from the river to generate power from those dams.
China considers the segment of the Mekong that runs through its country its own. Therefore, its sees no need to hold multilateral talks on this issue, but says it is prepared to discuss the matter bilaterally.
The Chinese embassy in Bangkok issued a statement denying Chinese dams had anything to do with the record low level of the Mekong, saying the drought in the Mekong basin area is caused by last year’s unusually low rainfalls.
Environmentalists, however, say the drought in the Mekong basin is definitely linked to Chinese dams because, they say, most of the water feeding the Mekong River come from the snow melt-down in the Tibetan region of China. With massive dams blocking the river, that water cannot flow down to the lower Mekong region .
The record low level of the Mekong has greatly impacted Laos. Its capital city of Vientiane currently faces severe water shortage because of its inability to pump up enough water for treatment to supply the city.
HALF of Chinese steel fails quality tests –
but U.S. keeps importing more!
Inferior steel imports from China that fall apart easily are making U.S. manufacturers and constructions firms more than a little nervous. Reports of failures during initial fabrication and questions about certification documents are becoming widespread.
The biggest concern is hollow structural sections widely used in construction of skyscrapers, bridges, pipelines, office, commercial and school buildings. This high-strength steel is also commonly used in power lifts, cranes, farm equipment, furniture and car trailer hitches.
Failures of this “tube steel” have already happened in several California schools
Chinese high-strength steel tubes and pipes are also a potential problem. They’re used extensively in power plants and in large industrial boilers. They must withstand enormous pressures and hellish heat around the clock for weeks or months on end. This steel also is used extensively in scaffolding that’s erected on building exteriors during construction or renovation, as well as for interior work.
China is already seeing problems. A Chinese power plant exploded recently when high-strength steel tubing blew out.
The following is from the Shanghai Daily:
HALF the steel material sold at wholesale markets and now being used in construction has failed quality tests. The Shanghai Industrial and Commercial Administrative Bureau inspected 52 batches of steel material at three markets and 15 construction sites in seven districts, including Xuhui, Zhabei and Baoshan, and officials said 27 batches had quality problems. The tested materials were too light to reach the country’s standard – some of the products were five times lighter than the required weight.
About 22 percent of the tested products failed tension tests. Buildings with such steel would not be able to withstand major earthquakes, the bureau said.Forty-eight percent of the tested material had inadequate amounts of carbon. Shortage of carbon can cause steel to break easily, officials explained.
Bear in mind this point: the US is importing a lot of cheap inferior Chinese steel, up from almost nothing a couple of years ago. The importers include the US government!
First it was food, then toys, then medicine, now steel. Greed has taken over, throwing reason and common sense out the window.
New York Times says much pollution over Los Angeles comes from China
Environmental degradation in China is now so severe, with such stark domestic and international repercussions, that pollution poses not only a major long-term burden on the Chinese public. It is polluting other parts of the world. Including the U.S.
Public health is reeling. Pollution has made cancer China’s leading cause of death, the Ministry of Health says. Ambient air pollution alone is blamed for hundreds of thousands of deaths each year. Nearly 500 million people lack access to safe drinking water.
Chinese cities often seem wrapped in a toxic gray shroud. Only 1 percent of the country’s 560 million city dwellers breathe air considered safe by the European Union.
Environmental woes that might be considered catastrophic in some countries can seem commonplace in China: industrial cities where people rarely see the sun; children killed or sickened by lead poisoning or other types of local pollution; a coastline so swamped by algal red tides that large sections of the ocean no longer sustain marine life.
China’s problem has become the world’s problem. Sulfur dioxide and nitrogen oxides spewed by China’s coal-fired power plants fall as acid rain on Seoul, South Korea, and Tokyo. Much of the particulate pollution over Los Angeles originates in China, according to the Journal of Geophysical Research.
A World Bank study done with SEPA, the national environmental agency, concluded that outdoor air pollution was already causing 350,000 to 400,000 premature deaths a year in China. Indoor pollution contributed to the deaths of an additional 300,000 people, while 60,000 died from diarrhea, bladder and stomach cancer and other diseases that can be caused by water-borne pollution.
These are only estimates. The real numbers are likely far worse. Studies of Chinese environmental health mostly use statistical models developed in the United States and Europe and apply them to China, which has done little long-term research on the matter domestically. The results are more like plausible suppositions than conclusive findings.
And Chinese experts say that, if anything, the Western models probably understate the problems.
“China’s pollution is worse, the density of its population is greater and people do not protect themselves as well,” said Jin Yinlong, the director general of the Institute for Environmental Health and Related Product Safety in Beijing. “So the studies are not definitive. My assumption is that they will turn out to be conservative.”
China arming terrorists, Iran, and the Taliban
Inside the Ring
By Bill Gertz
New intelligence reveals China is covertly supplying large quantities of small arms and weapons to insurgents in Iraq and the Taliban militia in Afghanistan, through Iran.
U.S. government appeals to China to check some of the arms shipments in advance were met with stonewalling by Beijing, which insisted it knew nothing about the shipments and asked for additional intelligence on the transfers. The ploy has been used in the past by China to hide its arms-proliferation activities from the United States, according to U.S. officials with access to the intelligence reports.
Some arms were sent by aircraft directly from Chinese factories to Afghanistan and included large-caliber sniper rifles, millions of rounds of ammunition, rocket-propelled grenades and components for roadside bombs, as well as other small arms.
The Washington Times reported that Chinese-made HN-5 anti-aircraft missiles were being used by the Taliban.
the officials, the Iranians, in buying the arms, asked Chinese state-run suppliers to expedite the transfers and to remove serial numbers to prevent tracing their origin. China, for its part, offered to transport the weapons in order to prevent the weapons from being interdicted.The weapons were described as “late-model” arms that have not been seen in the field before and were not left over from Saddam Hussein’s rule in Iraq.
U.S. Army specialists suspect the weapons were transferred within the past three months.
John Tkacik, a former State Department official now with the Heritage Foundation, said the Chinese arms influx “continues 10 years of willful blindness in both Republican and Democrat administrations to China’s contribution to severe instability in the Middle East and South Asia.”
Mr. Tkacik said the administration should be candid with the American people about China’s arms shipments, including Beijing’s provision of man-portable air-defense missiles through Iran and Syria to warring factions in
Lebanon and Gaza.
China controls world supply of the 15 key rare metals essential for U.S. defense. Already cutting supplies to us
While a loss of U.S. domestic ability to manufacture lead azide, butanetriol and others might lead to a future dependence on China, rare-earth elements (REE) are an even more serious threat.
The Chinese have worked for a decade to dominate the world market for REE, which include 15 metals known more technically as lanthanides. They have diverse and exceptional nuclear, metallurgical, chemical, catalytic, electrical, optical and magnetic properties that have led to an ever-increasing variety of applications, both commercial and military.
Worldwide, the industries reliant on REEs, which produce anything from fibre-optic cables to computer chips to missile guidance systems, are estimated to be worth £3 trillion, or 5 per cent of global GDP.
Besides the military applications, REEs are required in flat-screen LED TVs, high-tech lights, high-speed transistors, rectifiers, batteries, electric motors, solar cells, satellites, lasers. All the wonderful technologies we surround ourselves with.
The Rare Earths And Some Of Their End Uses.
China owns 97% of ALL of them
|Name||Symbol||Some End Uses|
|Cerium||Ce||Catalysts, Ceramics, Glasses, Misch Metal*, Phosphors and Polishing Powders|
|Dysprosium‡||Dy||Ceramics, Phosphors and Nuclear Applications|
|Erbium‡||Er||Ceramics, Glass Dyes, Optical Fibers, Lasers and Nuclear Applications|
|Gadolinium‡||Gd||Ceramics, Glasses, Optical and Magnetic Detection and Medical Image Visualization|
|Holmium‡||Ho||Ceramics, Lasers and Nuclear Applications|
|Lanthanum||La||Automotive Catalysts, Ceramics, Glasses, Phosphors and Pigments|
|Lutetium‡||Lu||Single Crystal Scintillators|
|Neodymium||Nd||Catalysts, IR Filters, Lasers, Permanent Magnets and Pigments|
|Praseodymium||Pr||Ceramics, Glasses and Pigments|
|Promethium||Pm||Phosphors and Miniature Nuclear Batteries and Measuring Devices|
|Samarium||Sm||Microwave Filters, Nuclear Applications and Permanent Magnets|
|Scandium||Sc||Aerospace, Baseball Bats, Nuclear Applications, Lighting and Semiconductors|
|Thulium‡||Tm||Electron Beam Tubes and Medical Image Visualization|
|Ytterbium‡||Yb||Chemical Industry and Metallurgy|
|Yttrium‡||Y||Capacitors, Phosphors (CRT and Lamp), Radars and Superconductors|
America used to produce most of the world’s rare earth metals. But now we produce zero. China produces 97% of the world total. It has cornered world production.
And for the last four years, China has cut back its REE exports, by nearly 35%. An internal report by China’s Ministry of Industry and Information Technology says the Communist country intends to ban outright the export of five rare earths and greatly restrict supplies of the remaining metals.
It gets worse. The only equipment to process the rare earths is in China. So we couldn’t process them, even if we could mine them. A separation plant takes 8 years to build. Costs $1 billion.
And now China is forcing American companies that use rare earths to move their manufacturing facilities to China. But companies are terrified to move there. They know China will steal their technology and then throw them out.
World REE Mine Production (Tonnes)
“China will merge and reorganize companies, strengthen and enlarge its rare earth industry, establish a China Rare Earth OPEC, and “form companies with absolute dominating power in the market so that China can be the leader in controlling the international market place,” Terence Stewart told U.S. Congress.
These rare earths are essential to U.S. defense systems. Our smart bombs depend on them. So do our cruise missiles and nuclear submarines. They play essential roles in our nuclear missile launches, and also the computers that run our entire defense system. Thanks to China, we may soon have no more REEs of any kind.
Peter Leitner, who left the Pentagon last year after 21 years as a senior strategic trade advisor and is now president of the Higgins Counterterrorism Research Center in Arlington, Virginia, says an understanding and acknowledgement of the REE situation is essential to U.S. defense strategy.
“It’s a form of economic warfare, and no one is really paying a whole lot of attention to what the Chinese are doing,” he says. “Rare-earths, in general, represent the technologies of tomorrow in terms of metallurgy. They are strategic and critical. The future development of advanced alloys, matrixes and compounds incorporating their unique properties will form many of the breakthrough advances in 21st century military technology.”
Chinese military: space weapons built in secret…used for “shock and awe” attacks against U.S. satellites
Two orbiting U.S. spacecraft were forced to change course to avoid being damaged by the thousands of pieces of space debris produced after China carried out an anti-satellite weapon test.
The maneuvering, ordered by ground controllers and conducted several months after the test, is an example of lingering problems caused by China’s Jan. 11, 2007, missile firing in a bold demonstration of space weaponry against a weather satellite, said Air Force Brig. Gen. Ted Kresge, director of air, space and information operations at the Air Force Space Command in Colorado.
Military officials, including Gen. Kresge and Marine Corps Gen. James E. Cartwright, see Chinese anti-satellite weapons as new threats that could cripple the U.S. militarily and economically in a future conflict.
Chinese military writings have revealed that space weapons should be built in secret and used for “shock and awe” attacks against U.S. satellites, said defense analyst Michael Pillsbury who revealed the plans in a report to a congressional commission.
By some estimates, China could produce enough space weapons to knock out all low-Earth orbit U.S. satellites by the end of this year, 2010.
China buys key U.S. defense contractor…moves ALL operations from U.S…..to China
A little-known Midwest company manufactured high-performance magnets for critical defense applications in America’s most advanced weapons systems—before it shuttered its domestic operations and moved to China in 2004. This provides an instructive study of the head-on collision between Chinese and U.S. national security interests.
Magnequench Corp was launched as a subsidiary of General Motors in the 1980s. It sold neodymium iron boron (Nd-Fe-B), or rare earth, magnets to Department of Defense subcontractors that made components for Joint Direct Attack Munition (JDAM) smart bombs, cruise missiles and submarines.
Today, however, there are no longer any U.S. manufacturers of Nd-Fe-B magnets. Magnequench, was acquired in 1995 by a consortium that included two government-affiliated Chinese companies. It left the United States in 2004. China now controls that technology, thanks in large part to a 10-year quest to dominate the rare-earth marketplace.
“Magnequench is just one example of how critical elements of our industrial base—both the jobs and the products—have been transferred overseas,” says U.S. Sen. Evan Bayh (D-Indiana), who tried and failed to block the Magnequench move to China in 2004.
Magnequench’s winding road to China began in the 1980s, when the company discovered a new alloy—Nd-Fe-B—and developed a process to make powders and magnets from it. Magnequench purchased raw materials from both Mountain Pass, the now-closed U.S. rare-earth mine, and China.
By 1995, the company had become the world’s leading supplier of Nd-Fe-B powders, used to create high-performance magnets. That year, a consortium that included two Chinese companies—Onfem Holdings Ltd., a publicly listed Hong Kong company controlled by China’s State Nonferrous Metals Industry Administration, and San Huan New Materials and Hi-Tech Company, owned by the Chinese Academy of Sciences—bought the company from General Motors. Archibald Cox, Jr., the son of the late Watergate prosecutor, served as the public face of the deal and ran MagnequenchResearch Center in Arlington, Virginia.
In 2003, facing mounting losses from its magnet business, which had become a supplier to Pentagon subcontractors far down the supply chain and out of sight, Magnequench announced it would close its U.S. operations in Indiana and move to China.
Bayh appealed to both the White House and U.S. Treasury Department to block the move on national security grounds. To no avail.
Today, the Magnequench facility in China is the world’s largest producer of rare-earth powders. The company operates a smaller plant in Thailand that produces powders for Japanese hard-drive disk manufacturers. San Huan Hi-Tech, which no longer holds any interest in Magnequench, is now a supplier of Nd-Fe-B magnet technology.
“The situation raises serious concerns,” Bayh says. “At some point in the future, China may decide to halt or disrupt sales of these magnets to the United States, and production of the JDAM could be disrupted. Magnequench’s sale raises critical questions related to our national security and the consequences of leaving our nation dependent on foreign sources, namely China, for the very things we need to protect our citizens and defend our country.”
(Note: China has already drastically cut back sales of these magnets to the U.S.)
Iran’s link to China includes nukes, missiles
KIEV | China is providing Tehran with critical defense technologies and weapons systems, including some that violate stated Chinese policies aimed at preventing nuclear proliferation.
One of the more recent issues is the expected delivery to Iran of state-of-the-art Almaz-Antei S-300 air-defense missiles systems.
A CIA report to Congress made public in 2009 states that assistance from Chinese and Russian entities “has helped Iran move toward self-sufficiency in the production of ballistic missiles.”
China arming Chavez with attack jets
In March 2010, Venezuela received and tested its first shipment of six Chinese K-8 light attack jets. President Hugo Chavez announced the purchase last year, and has said that his government plans to purchase up to forty of the K-8s.
Child Slave Labor in China: “widespread”
Child slave labor is widespread in China. Some of these children work in sweatshops. Sweatshop workers are paid less than their daily expenses, and face dangerous working conditions.
The exact number of child labors working in China is still unknown. China’s repressive political system does not allow this information acquired directly from China, there are no Chinese non-governmental organizations (NGOs) active in this area, and foreign NGOs do not have access.
But experts conclude that child labor is increasing, particularly in areas around Hong Kong. This deduction is based on a high dropout rate from school and the hasty expansion of foreign investment in export-oriented enterprises. Also, an official from the Chinese Ministry of Labor confessed that the employment of children was extremely serious in China. He stated that exploiting child laborers has become a common occurrence. In some coastal areas and particular economic zones, such as Fujian and Guangdong, as well as Zhejiang, Sichuan, and Hubei, there are reported to be approximately four to five million-child laborers under the age of 16. Child laborers under 12 years of age are also found in Whenzhou and in some areas of Guangdong and Hainan. The children usually work 10 to 14 hours a day with half the wages of an adult.
Much of the proof that child labor exists in China is taken from data from the large economic zone of Shenzhen. Children between the ages of 10 to 16 are working up to 14 hours a day in factories in Shenzhen. It was also recorded that girls work in awful conditions for 13 to 14 hours a day from 7 a.m.- 10 p.m. with two one-hour breaks. The China Youth News said that 44 of the 206 foreign-owned companies or joint ventures in Shenzhen employ children less than 16 years of age.
The United States imports of pyrotechnics and explosives from China is approaching $1 billion. Children are working in the fireworks industry. A recent report described an explosion at a fireworks factory in Hebei that killed one child and injured 34 schoolgirls ranging from 11 to 13 years of age.
Investigators found that the school children had been forced by their teachers to work for slave wages making firecrackers. The children were promised 20 fen, 2 cents, for making one long braid of firecrackers, but in reality were paid three fen, 0.3 cents.
In March 2001, 42 people, most of them third and fourth-graders, were killed in an explosion at a school. The school blew up because the Chinese use young students to make fireworks in order to keep the price lower than their competitors. The younger students are required to assemble at least 1,000 fireworks a day while the older children, fifth-graders, are required to make ten times that many (Farah).
Newspaper and journal reports indicate that children are also working in the garment and textile industries of China. Imports of apparel and textiles from China to the U.S. market exceed $30 billion each year. It was reported that China’s number one textile firm at Qingpu employs children aged 12 to 15 years old that were recruited from the neighboring province of Anhui. In Chungsan City, a foreign textile enterprise employed about 160 child laborers and a 14 year old was killed after her hair became tangled in her machine. Journalists also found 12 year-old children sleeping two to three in a bed in dorms and working 15 hours a day for $10 per month (Lindsay).
The International Child Labor Study staff also received numerous claims of the use of child labor in toy, sporting equipment, and game factories. The United States imports approximately $4 billion worth of toys, games, and sporting goods from China every year. A Business Week article reported that, in order to meet the holiday demand for toys, girls at a plant were ordered to work one or two 24-hour shifts each month. The average North American toy maker earns $11 an hour. In China, toy workers earn an average of 30 cents an hour.
The enforcement of child labor laws is sometimes made difficult by counterfeit identification cards. Southeastern China workers reported the use of counterfeit IDs is fairly common. Some workers admitted that they were three or four years younger than the 16 years certified on their ID cards.
The International Labor Organization reports that compulsory education in China is required up to age 16, yet children are reported to be dropping out of school at increasing rates. According to the U.S. State Department, Chinese press reports indicate that dropout rates for lower secondary schools (ages 12 to 15) exceed nine percent in several southern provinces, whereas the national average is 2.2 percent. An increasing group of children leaving school below the legal work age suggests the possibility of a growing child labor problem
Chinese vaccines killing children
Four years ago, Qiang Qiang was a healthy boy. Now, he is epileptic and has trouble keeping up at school — problems that emerged after a vaccination against Japanese encephalitis.
The seven-year-old is one of dozens of youngsters in the northern Chinese province of Shanxi whose parents believe their children may have suffered serious side effects from vaccines in the country’s latest public health scare.
“His teacher at school tells us he is dumb, that he has short memory and cannot follow classes,” his father Gao Changhong told AFP. “We have spent nearly 60,000 yuan ($8,800) to try to cure him, and we really hope the government will take this situation seriously.”
A Chinese state media report last month said four children had died and more than 70 others in Shanxi fell ill after they received shots against illnesses such as hepatitis B and rabies between 2006 and 2008.
The China Economic Times report blamed vaccines that had been exposed to excessive heat and should have been destroyed.
According to the World Health Organisation, vaccines that are exposed to high temperatures can lose their effectiveness and trigger reactions.
The allegations have triggered yet another health scare in a nation regularly plagued by food and medicine-related product safety concerns.
In the past few weeks alone, authorities have ordered inspections of cooking oil nationwide after reports said up to one-tenth of China’s supplies contained cancer-causing agents.
Peddlers in the central province of Hunan have also reportedly been found soaking dry soybeans in green dye and selling them as fresh green beans.
And according to state media, a drug firm in the eastern province of Jiangsu has been accused of using an additive in a rabies vaccine that allowed it to meet inspection standards at a lower cost but compromised its potency.
The State Food and Drug Administration has admitted that “inferior materials” were used in producing the rabies vaccines. It said the firm had been ordered to halt production and some employees were suspected of criminal activity.
The parents of the children in the Shanxi case are convinced their children were harmed by faulty shots. Wang Mingliang lost his baby son after he received a vaccine against hepatitis B. Xiao’er soon began suffering from spasms and breathing difficulties — he died months later.
“We spent more than seven months trying to get him well, from Western medicine to traditional Chinese medicine, and none of it worked,” he told AFP. “None of the hospitals we went to managed to find a cause for his illness, and that’s when we started suspecting the vaccine.”
China has launched a high-profile product-safety blitz in recent years after a string of scares. But scandals have continued, including revelations that the industrial chemical melamine was added to milk supplies in 2008. At least six babies died and 300,000 were sickened as a result, according to the government.
The most evil, fiendish machine of destruction ever created has been turned on. I call it The Beast.
The Beast is not an atomic bomb. It isn’t a missile or a deadly submarine with enough nukes to end life as we know it.
It is a computer. The fastest, most powerful ever made. Goldman Sachs owns and runs it. It is stealing your wealth day and night.
The Beast is so secret only a handful of people have actually seen it. The picture above is an educated guess of what it looks like. I based it on talks I’ve had with people who know some of the components of this market manipulation system from hell.
No one understands everything The Beast does. We do know it is connected, directly or indirectly, to every information system known to man. Every database. It is so fast, it runs circles around every other computer in the world. It has the power to manipulate (for a time) every market in the world.
Soon this system, or one like it, could be used to control most every aspect of your life.
Right now it is most dangerous for you, me and every American investor: because it is tied directly to the New York Stock Exchange computers. In fact, it is connected to every exchange computer in the world, be it stocks, commodities or bonds. It lets Goldman Sachs learn every stock order and commodity order that is placed on the NYSE or any other exchange – BEFORE the exchange executes it – and then jump in front of the market. This is called FRONT RUNNING.
Every time you, your mutual fund or retirement plan buys a stock, bond or commodity, you pay more than you should have. Goldman gets there first. Thanks to the power of The Beast. They bid up the price you paid. They gouge you.
In some cases, The Beast can freeze you out. Or worse, bust you out of your positions, a big loser. Many small investors learned this the hard way, in the May 6th “flash crash” bloodbath.
It’s legalized theft, on a mass scale. It is the reason Goldman made nearly $30 billion in their proprietary trading these past few years — while every one else lost money and the U.S. economy trashed around in the worst depression since the 1930s.
The Beast is located in a steel, nuclear-proof vault. Ten stories below street level. In the same room as the NYSE’s own computers. Wired directly into them, in fact. Most of the time this black box is a license for Goldman to print money. It never lost!
But on Thursday, May 6, the scheme backfired. Goldman’s super-computer – the Beast — turned the regional Greek downturn into a global freefall. The Dow plunged 1000 points in two hours.
It forced an emergency bailout by the U.S. and members of the European Union: $1 trillion for Greece. Something they all said they would never do.
And now Spain, Portugal, Italy and England are all waiting in the wings, panting for their own bailouts. These will be many, many times greater than Greece’s. The fallout will be many times worse, too…
What Really Happened on
Flash Crash Thursday, May 6
Thursday, May 6, an event took place that struck fear and terror in the hearts of everyone who understood what they saw.
U.S. stocks had their biggest one-day meltdown in history. 1000 points in two hours. Never had stocks fallen so far, so fast. Not even during the crash of 2008, which was the worst plunge since the Great Depression.
One major stock, Accenture, fell from $40 a share to 1 cent — in 30 minutes. Unprecedented. But it will not be the last of these meltdowns. This is the first of many crises we will soon see.
As usual, the sold-out Wall Street press went into overdrive. They quickly pooh-pooh’ed the stark warning of what’s to come.
Don’t let them fool you.
The Greek crisis is a relatively minor event, compared to what’s in store. But even little ole Greece sent the stock market into a tailspin. We warned about this, months ahead of time, in our “Dead Meat/PIGIES” special report.
Now the market is starting to catch up to the fact that the financial crisis is wiping out entire countries. Investors and traders saw the rioting in Greek streets. Panic struck the world’s markets.
Just days earlier, the S&P 500 was enjoying an 80% rally-back, from the lows last March. The Dow had soared from 6700 to 11,300. The biggest put-up, fixed market ever.
“Come on in, the water’s fine,” Wall Street promised the masses. “Happy days are here again.” So the suckers bought into another pre-planned, pre-packaged, computer-orchestrated disaster.
Flash Crash Thursday, every major exchange took catastrophic hits. Instantly, the media blamed it on a rookie trader’s typing mistake.
BULL. This was NOT a Fat-Fingers error. It was not an accident. It sure wasn’t a one-time event, either.
You saw Wall Street’s mindless computer programs backfire — and turn a regional downswing into a full-blown global panic.
You saw Wall Street’s biggest “screw-you” scam ever blow up in its face. You saw The Beast rear its ugly head, turn on its makers, and nearly cause a total meltdown in U.S. stocks. One that is still reverberating around the world.
Most of all, you saw a sneak preview of what’s coming. Because tiny Greece is not the only country that needs a bailout. Giants Spain and Italy also need bailouts. Portugal, Ireland and even England will need bailouts.
Imagine the market chaos when Italy and Spain come begging for ten trillion dollars (not a trillion like Greece). When the IMF cuts the pay of every Italian and Spaniard by 25%… slashes their retirements in half… and reduces their beloved cradle-to-grave government handouts overnight.
I’ll tell you what will happen. The riots in Greece will look like two school girls fighting over a Barbie doll. And I promise you, those wipe-outs are coming. Real soon now.
Markets around the world are starting to plunge. Soon they will crash at lightning computer speed. We are on the verge of the first computer-led stock market panic and sell-off.
But here’s something Wall Street doesn’t want you to know. There is a little-known “glitch” in their vast system of computerized thievery. This glitch could let small investors make literally MILLIONS of dollars — when markets tumble like they did on May 6.
And this glitch — this vulnerability — has the potential to make YOU very, very rich.
In effect, this glitch allows small investors to trade like billion-dollar international hedge funds — only with strictly limited risk.
This is a once-in-a-hundred-years opportunity to cash in on the sheer greed of Wall Street. To turn the tables on companies like Goldman, who have been robbing you for so many years.
Let me explain…
Wall Street and the U.S. government
tried to shut me up. They do NOT want
you to learn about this scam
My name is Nick Guarino. I’m the editor of the Wall Street Insiders. WSI is perhaps the most radical and contrarian financial newsletter now publishing. And, forgive me, the most right in predicting the mess we are in.
Perhaps you have heard of me. Wall Street hates my guts. So does the U.S. government.
Since 1992, they’ve done everything in their power to silence me. Including seizing my bank accounts, confiscating computer equipment, and getting a Federal judge to actually order me to stop publishing a financial newsletter. (In flagrant violation of the First Amendment. It has since been lifted.)
The reason they tried to silence me: I tell small investors like you the way Wall Street really works -– and how to use that knowledge to protect yourself and potentially make MILLIONS in profits.
While the regulators at the Securities & Exchange Commission were spending their days watching porn videos on the Internet, I accurately predicted…
… the 2008-2009 stock market wipeout that vaporized 50% or more of Americans’ life savings…
… the ongoing derivatives Ponzi scheme…
… the real estate crash that is still going on…
… the pullback in oil prices from $150 a barrel to below $80 a barrel…
… the 2000-2001 “tech wreck” and dot-com wipeout…
… the skyrocketing surge in gold prices from $260 an ounce to above $1,000 an ounce… and, incredibly,
… the impeachment of President Bill Clinton and the Whitewater fiasco…
… as well as dozens of other events…
After my last tussle with the U.S. government, in 2005, it took me four years and nearly $10 million in legal fees and fines to begin publishing again.
But now I’m back… and I am telling the world about another bombshell that will soon shock the world to its core…
The Beast: of Wall Street’s many crimes,
this one will enrage you the most
You’ve heard how brokers “churn” accounts, and push money-losing trades just for the commissions? Or get their customers to buy loser investments they are desperate to sell?
Well, Wall Street investment banks like Goldman Sachs take that to a whole new level.
In the first quarter of 2010, Goldman did not have a single losing trading day. Not one. This is unprecedented. In fact, it is impossible — if you are really trading. But Goldman is not trading.
They are playing a rigged game. They are the house. They get to see everyone else’s cards, before they bet. There is no way they can lose — until D day comes.
All because of The Beast and HFT (High Frequency or black-box Trading). It should be illegal. Instead, the exchanges have made special deals with Goldman Sachs and a few other mega-bankers, to give them the ultimate trading edge.
These deals are a license for Goldman to print money: by stealing from you and every other investor. i.e. anyone who trades or owns stocks, mutual funds, even futures and options.
You, your pension fund, your IRA — everyone who trades — has to go to the floor of the exchange to buy or sell stocks in the spreads. Not Goldman. They bypass all that. Their computer -– The Beast -– is connected directly to the NYSE computers. In fact, it is located in the same room with the NYSE’s tired, old, slow machine.
That means Goldman can make trades directly with the NYSE computer. Before everyone else. With zero delays. The computer can trade trillions of dollars and billions of positions in micro seconds. All at extreme discounts. Less than a penny a share.
Goldman pays hundreds of millions a year for this privilege. It allows them to make guaranteed billions, as they screw the market.
A few years ago, HFTs only accounted for one-third of trading. Now they make up 70%-to-80% of all trades on the exchanges. They are why the markets have soared these past two years.
Goldman and its billionaire hedge fund buddies say they are “giving liquidity to the market.” Bull!
The market had no liquidity problems back in the 1970s, when it traded 100 million shares a day. It sure doesn’t have liquidity problems now, when 3 billion shares a day are traded.
Can computers predict the future with 100%
accuracy? Goldman says yes. History says no
…and I believe history.
Reality is over two billion shares trade by the HFTs. Every day. They are executed with NO human supervision at all. None.
These super-computers use the same flawed economic models (known as Black-Scholes) that have wiped out everyone who has used them. The problem is simple.
Humans make the mathematical models. People program the computers. They try to think of every economic/financial event under the sun. They try to plan for every possible contingency. They play God with your money.
But they are not God. They can’t conceive of all the variables that enter the global financial equations. It’s impossible. No one can.
They ALWAYS miss the “unknown unknowns.” The freak events that make up real life. Terrorist strikes. Hurricanes. Rioting Greeks. Market downturns. Bank wipeouts. North Korea attacking South Korea. The endless bubbles bursting, in real estate and high tech.
That means their precious computer models go tragically, fatally wrong. They result in colossal wipeouts. They have proved this over and over.
One example: computer models brought on the huge U.S. real estate bubble. They said housing was the ideal long-term investment for the little guy. It would keep making profits for you, forever. WRONG.
They failed to take into account what happens when people can no longer pay their mortgages. Even with two incomes. This led to the housing crash. Trillions worth of derivatives went bust. Trillions more are still going bust.
All because they did not factor in a key fact of life. One I warned about for the last ten years.
They assumed real estate prices could never go down. Not for the entire real estate market. Remember the old cliché: “they aren’t making any more of the stuff.” So real estate will keep going up in price. Their back-dated models told them that.
Sure, they said, we have had real estate downturns. New York City in the 1970s. Texas in the 80s. Colorado and Florida in the 1990s.
But their models showed these wipeouts were regional only. They did not last long. I heard them call them “buying opportunities.” The national market, they said, still went up.
So their solution was simple. Spread the risk over all real estate markets. The rising markets would more than make up for the occasional, local down moves.
This is why institutions kept pouring money into real estate after 911. It’s why U.S. housing values soared, in the biggest bubble ever.
But God is God. People who think they are smarter than everyone are pompous pricks. God wins. Pompous pricks always lose big-time in the end.
The real estate wipeout — the financial collapse we are in — is based on three big mistakes.
One, the mathematical geniuses who think their computer programs perfectly model the future. They don’t.
Two, the greedy handlers who hired the mathematicians to justify their own crooked schemes. The masters of the universe who run Goldman and Wall Street. They play craps with the world’s money.
Three, the masses. Sadly, they are clueless. They trust Wall Street. They do anything the media and their brokers tell them. They risk everything, to chase slightly higher yields. Or get in on the latest bubble Wall Street is blowing.
Well, what do you know? The one thing took place, that Wall Street’s super-computers could never see. It turns out real estate doesn’t always go up. It can go down everywhere, all at the same time, and stay down for decades. Bubbles burst. In new, unexpected ways that catch the computers by surprise.
The models didn’t see any of that. They didn’t see that their trading made too many loans -– pumped too much money — into real estate. More money than the markets could efficiently use.
This created the bubble. People paid way, way too much for their houses. They borrowed far more than the houses were really worth. All because the computer models said real estate values always go up.
The models also said derivatives debt was safe. It would “manage risk.” Keep the economy growing and the bubbles blowing.
100% false. Derivatives collapsed. So did the real estate they financed. Bringing down the entire house of cards.
Everyone who bought into this b.s. is screwed to the wall. The biggest investment they will make in their lives -– their home -– is worth a fraction what it was.
Something even uglier and more diabolical
is at work in today’s stock market
Wall Street’s game is simple. Create off-exchange derivatives, that shift risk to the unknowing…hide losses…and show profits that are not really there. Institutionalized fraud at the highest level.
Derivatives are so complicated, few men alive understand them. Even fewer know how they work. This is not because people are stupid. It’s because by design derivatives are made to be too complicated to understand.
I am a simple man. So complicated things don’t befuddle me. I am befuddled already.
And because I have a simple mind, I reduce things to their simplest level. That’s where my fundamental analysis comes from. That has held me in good stead for 30 years.
Let me tell you what 99.9% of the players in the game don’t understand. And the 0.1% who do, will never tell you.
The Greek crisis is just one of many sovereign debt crises the world over. As our recent Wall Street Insider issues have shown, it will soon hit Italy, Spain, Portugal, England, China…and finally the U.S.
This is not complicated. Governments the world over went on a wild debt spree. For decades. They borrowed untold trillions. All to pay for programs that bought off the voters. That is how they stayed in power.
Now there is no money left to borrow. Their credit cards are maxed out. The bankers can’t scheme any more cash. The countries are broke. And the loan sharks are banging on their doors. It’s really as simple as that.
The U.S. and Europe cannot inflate
their way out of this crisis
This is not an inflationary, print-money crisis, like you have seen in the past. These crises are deflationary. For a simple reason. In modern times, currencies float freely. Markets set their values.
Not so in the past. Back then, currencies were fixed. Governments set the value. And they saw to it that their currencies did NOT lose value.
That let the governments print money and inflate their debts away. Without harming the value of their currency.
Greece used to do that. Today is a different story. Greece is a member (for now) of the EU. It can’t print its problems away. It is BORROWING money, not printing it. Greece is cutting pay, benefits, and retirements. It is DEFLATING.
In fact, it’s far worse. Greece is in a depression. As is most of the world.
Remember, currencies now change value every day. Every minute. And markets are mightier than government’s puny interventions. The days when government could pull its inflation fixes and print money are over.
News flash: the U.S. will not print money. It won’t inflate away its debt crisis. Neither will Europe, Japan or England.
They can’t. The minute they try that, their currencies get trashed. People won’t buy the mountain of debt these nations so desperately need. Worse, the world will dump their currencies. That will destroy their economies.
So how will America solve its debt crisis? Simple. It will get money the old-fashioned way. It will borrow more — and tax the hell out of its citizens!
The U.S. will go even deeper into debt, making whatever devil’s bargains it has to, to stay afloat. Obama has already begun this. He has raised taxes. He has sent the deficit soaring, from $162 billion in 2007 to $1.4 trillion in 2009 and 2010.
Folks, you ain’t seen nothing yet. As Obama likes to say, he is “just getting started.”
The U.S. government will drastically cut public services. It will impoverish the American middle class. Taxes will devastate you.
Other developed nations will do the same thing. They have no choice. They are just as trapped as we are.
Of course, cutting pay, service and benefits has a name. It’s called a depression. A deflation. The opposite of inflation.
The masses do not understand deflation. They have never lived through the ravages of a depression. All they have known, their whole lives, is growth and inflation. That is what they think is coming.
They are dead wrong. Deflation is coming. A deeper, darker depression is coming.
Why do you think the U.S. CPI just fell, year over year, for the first time since World War II?
Why is M3 -– the best gauge of money supply -– plunging at the same rate as during the 1930s depression?
I’ll tell you why: The world is in a deflation. It will wipe out the masses. They will never know what hit them.
And that brings me back to Goldman’s secret wealth-destroying weapon, The Beast…
On Thursday May 6, the markets
caught a glimpse of the future. They
felt the cold chill of what lies ahead
Sooner than anyone thought possible, investors started throwing in the towel. They realized the rally in stocks is just about over. There’s no recovery. The sovereign debt wipeout is beginning.
Before Flash Crash Thursday, the market had dropped 100-to-200 points every day that week. Thursday started as more of the same. Then Goldman Sachs’ high-frequency trading system from hell — The Beast — kicked in.
High-frequency trading is just a polite term for front-running. It lets Wall Street insiders trade before their customers do. Almost no one understands this. Anyone who did would never set foot in the Wall Street casino again, except in very smart, sophisticated ways.
Here’s how it works.
As I told you, Wall Street computers are directly connected to the exchanges’ computers. So firms like Goldman learn all orders that come into the NYSE and NASDAQ — all the exchanges — before they get executed. All buy orders. All sell orders.
That lets them place their own orders, for the same stocks (or options or commodities), ahead of their customers. They get there micro-seconds before everyone else. Which makes all the difference.
Say Goldman’s computer sees an order come in to the exchange, to sell a large block of IBM shares. Goldman rushes in a few micro-seconds ahead of time. Again, it can do this because it is hard wired directly into the exchange computers…and its computer is MUCH faster than anyone else’s.
Goldman sells that same stock first. Its selling takes the market lower. So the original seller gets a lower price. Goldman pockets the difference.
Same thing when Goldman sees buy orders come in. It buys ahead. That forces the market higher, before the legitimate trade is executed. Buyers must pay a higher price.
Each week, Goldman front-runs billions of shares. That is how they made nearly $30 billion in profits the past few years -– even though the U.S. economy is in a deep recession, and normal investment banking activities (IPOs, mergers & acquisitions) have fallen into the crapper.
It’s like playing poker, when you know the cards of all your opponents -– but they don’t know yours. Goldman knows the cards of every retirement fund…mutual fund…institution and individual who trades stocks, commodities and bonds.
Remember, everyone else is not connected to the exchange computers, with their own personal multi-billion dollar super computer. Their trading systems work slower. That puts them at a fatal disadvantage.
Goldman’s computer knows all trades, stops, buy and sell orders people are going to make — BEFORE THEY MAKE THEM. It jumps ahead of them, and “scalps” them. That is Wall Street’s own term.
And this computerized front-running, this “scalping,” led to the chaos on Flash Crash Thursday…
How to turn a Greek riot
into a global stock crash
The Greek riots were broadcast around the world. Investors were scared witless. This is not what Wall Street told them would happen.
People started to figure out there is no recovery. Huge amounts of sell orders hit the exchanges, all at once.
Goldman Sachs’ brilliant computer models saw those sell orders. Its black box computers did their job. Without human knowledge or intervention. In microseconds they jumped in ahead of the market, and put in more sell orders. Goldman was making a killing.
But two problems came up. First, sell orders kept coming in. From all around the world. The sells greatly outweighed the buys.
The NYSE’s slow-moving computer saw this huge imbalance of sell orders. It delayed the processing of all trades. By 90 seconds. That is, every order was held up for 90 seconds.
This supposedly was to give the market makers time to check for errors. (In reality it’s to let insiders cover their asses — by dumping falling shares of stock first.)
The Beast and the other HFT computers could not place trades on the NYSE fast enough. Remember, they make decisions every micro-second. For them, a minute and a half is an eternity.
But even more selling pressure was building up: the sell orders kept pouring in. Goldman’s computer knew about these orders before the NYSE did. It is both connected to the exchange computers and far faster than they are.
So the computer did what it is programmed to do. It started selling on other stock exchanges. It sold on the futures and options markets as well.
These markets did not delay sales. They were deluged with orders to sell. Prices fell even faster than on the NYSE. This started the vicious round of selling world-wide. No exchange, no market, was immune.
A huge backlog of sell orders built up. It accelerated by the micro-second.
You literally saw stock market traders stampede for the burning exchange doors. The whole thing quickly got out of control. Because there were no buyers!
And the computer systems from hell did more of the unthinkable. Seeing prices fall, they kept selling more, bidding the market down. Down, down, down she goes. Where she stops, nobody knows.
Computers led the market meltdown. A meltdown like nothing seen before. But it is only the first. Soon the collapses will be too big to stop. Even temporary, partial reversals will not last.
Please understand. Wall Street has bet all your money -– our entire financial system -– on their computer models. On the bizarre belief that they can correctly predict the future, day in and day out, without error. Do you see how crazy this is?
Stop-loss orders screwed
the little guy even more
On Flash-Crash Thursday, things kept getting worse. Many people trade (foolishly) with stop-loss orders. Stops are supposed to limit losses. But in the new world of The Beast, they only make your losses bigger.
Why? Because The Beast is programmed to find the stops… and then bust the small trader out of the market. With massive losses.
Contrary to popular belief, stop-loss orders do not hold your broker to a set price. All he has to do is get the “best possible” price. That could be far lower than you expect.
In the market chaos, stocks crashed right through the stop prices. The usual Wall Street victims could not get out at their stop-loss prices. The little guy got screwed. Even more than usual.
Many people were forced out at the lows of the day. Yet the market closed well above the original stop price. In some cases, the average guy lost everything. This time by The Beast. Think of the flash crash as The Beast’s coming-out party.
One stock was selling for $42 a share early Thursday. It plunged straight down to $.04. That’s what the average guy, with stops, got. Four cents a share. He lost 99% of his money.
Later that same day, this stock bounced back. It closed over $41. Who do you think bought these shares at the ridiculously cheap price of a few pennies a share? And then watched it shoot back up to over $41? None other than Goldman Sachs’ HFT computer trader, The BEAST.
In essence, Goldman & Co stole these people’s stock. No humans involved in any way.
This is why trading with stops is a suckers’ game. When you need them the most, they will screw you to the wall. It is why you need to use carefully-selected trading instruments that are Beast-proof.
Not surprisingly, the regulators are still scratching their heads, looking for someone to blame. Of course, they are careful not to piss off their future bosses… the people they will work for when they leave government service. Do you know that many key financial/economic positions in government are held by “former” Goldman partners?
By day’s end of the Flash Crash, the market manipulators were able to regroup. They brought the market back up some. The Dow still lost nearly 350 points.
But here’s what you must understand. You just got a tiny, graphic, demonstration of what’s to come.
First, tiny Greece (population: 11.2 million) broke the back of the insane stock market rally. That led to the biggest stock market meltdown ever. And it is just the start. The first run at what will be the worst stock market crash in history.
As I told you, giants Spain and Italy owe hundreds of times more than Greece does. So do England and Portugal. They are too big to bail out. They will be the next to wipe out.
Their sovereign debt is tied to every economy the world over. And they are more broke than GM, Chrysler, AIG, Lehman Brothers and Merrill Lynch were -– all put together.
What’s more, our major banks hold their bad paper. En masse. Their collapses will start a financial chain reaction, that cannot be stopped.
And then there’s the biggest debtor of all. The U.S. We will need more money than anyone. By huge amounts, for years to come.
Printing our way out of this is not an option. We are talking a depression, worse than any of modern times.
People will lose their savings. Their retirements. Their homes, work, and bank deposits. People who manage to hang onto their jobs will see their pay severely cut.
These are all deflationary phenomena. They are taking place in front of your eyes. God help the world.
May 6′s mini-crash demonstrated a second thing. The one good thing to come from all this. The recommendations I made performed beautifully. Like clockwork, in fact.
They proved our trades work in a crash. Just like they were designed to do. They also showed our trades have the potential to make a big pot of money. Even while everyone else is wiping out.
Virtually every trade around the globe fell hard. But ours went straight up, other than a few gold ETF’s. (And they went up a few days later.) We are positioned perfectly for the next phase of this wipeout.
The special instruments I selected are relatively immune from The Beast. From high-frequency trading. You get great leverage, but no margin calls. No expiration dates or time limits. They do not trade like futures or options. Because they are stocks.
Our trades were completely liquid. No one got busted out. Just profits rolling in with every down tick. And it’s been a party nearly every day since flash-crash Thursday, as markets on balance continue to plunge….
We are sitting there now, getting even more moves in our favor. As the global market and sovereign debt wipeout continues. And the best is yet to come…
How Wall Street Rigs the Stock Market Casino
I’ve said this for years, but no one ever believed me until recently.
The stock market is rigged. Crooked to the core. The big trading firms play with loaded dice.
But that does not mean you can’t beat them at their own game. If fact it is moments like these — with panic in the street and Wall Street in desperation, screwing everyone in sight – that the serious money can be made.
The stock market has always been a rigged game. But now a new super-computer has turned a sleazy criminal enterprise into global fraud. This doomsday device will end up destroying its own creators.
High-Frequency-Trading (HFT) super-computers, like the Beast, are able to find out the highest price traders will pay in a millisecond. They then extort that full amount millions of times over, to maximize profits. This has nothing to do with efficiency or innovation. It is about stealing as much of your money as they can.
The way they carry off this scam is beyond belief. The deep-pocket bank/brokerages actually pay the NYSE and the NASDAQ hundreds of millions of dollars each year. In return, the NYSE and NASDAQ connect them to their own computers ON THE FLOOR OF THE EXCHANGES. This lets them shave off critical milliseconds — after they’ve gotten a first peak at incoming trades.
It boils down to this. HFT lets Goldman see other people’s orders ahead of time. Before the NYSE or NASDAQ executes these trades. Goldman’s supercomputers are so fast, they can then trade in front of the rest of the market.
It’s called front-running. It goes on every day right under the nose of SEC head Mary Schapiro. They know it and they let it happen!
“Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed,” said the New York Times. “High-frequency trading is one answer. High-frequency trading systems are so fast they can outsmart or outrun other investors, humans and computers alike.”
“This kind of unfair access seriously compromises the integrity of our markets and creates a two-tiered system where a privileged group of insiders receives preferential treatment, depriving others of a fair price for their transactions,” wrote Sen. Charles Schumer to the SEC.
HFT computers learn every sell order that comes in. Every buy order. Because they are faster than all other computers, they front-run the market.
Goldman Sachs disclosed recently that it had 46 “$100 million trading days” in the second quarter of 2009. A record number. No one has done so well in the history of trading. How is this possible?
The U.S. economy is in its biggest downturn since the Great Depression. Banks and brokers are hiding more losses than ever on their derivatives books. Merger and acquisition volume is way down. So are IPO’s. So it seems bizarre that investment banks like Goldman had record quarters.
Now you know the secret. They are skimming the cream off of U.S. trading activity. Billions of times each day.
Ordinarily, a buyer and a seller show up on the floor. A specialist determines a price that satisfies buyer and seller. That’s the market price. If there are too many sellers and not enough buyers, the specialist lowers the price until buyers and sellers agree.
Goldman throws a fatal monkey wrench into that. Before the market price can be made, Goldman electronically floods the specialist with thousands and thousands of orders. In essence, they commandeer the trade. That lets them siphon off nickels and dimes for themselves.
Until a few years ago, Goldman was just an investment bank. But in 2008 Goldman magically transformed itself into a bank holding company. One of the benefits of having ex-Goldman executives fill nearly every key economic/financial position in government. They wired the game with their own people in key government jobs. Yet Goldman still remained an investment bank.
Now Goldman can borrow massive amounts of money from the Fed -– at virtually 0% interest. The lowest rates in the world. With The Beast, it uses this money to front-run every stock that trades. Simply because it pays the exchanges to let it see everyone’s trades, before they can make them.
So you understand: Goldman gets to speculate with your tax money, and pay nothing for that money. They get to rig the game against you and steal from you. If, or better put when they lose, government will bail them out.
Front running with HFT has become Wall Street’s principal business. The primary force driving most volume on exchanges. They are losing their asses on their derivatives. But The Beast lets Wall Street manipulate markets – both for financial and political gain.
How? Because HFTs operate on a massive scale. They account for 70%-to-80% of all trades. THEY set the overall market direction. Without any fundamental or even technical reason. And they sucker retail investors into a rising market. Even though it has nothing to do with “green shoots” or the false “recovery.”
High-frequency trading explains why activity on the nation’s stock exchanges has exploded. Average daily volume has nearly tripled since 2005, according to data from the NYSE. A handful of high-frequency traders (Goldman Sachs) now account for well more than half of all trades.
“This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”
IMF just trapped the Leopard (Greece)
Soon they will trap the Eagle (Italy)…the Grand Old Lion (England)…
…and finally their biggest prey of all.
The world’s formerly invincible 2-ton gorilla:
The time I always knew was coming is finally upon us. The global depression has just taken its first victim, from among the world’s civilized countries:
Greece, “the Leopard,” only makes up 2.16% of EU GDP. Yet the IMF just gave this tiny economy an emergency bailout of $1 trillion. The biggest bailout of any country in world history.
(Yes, they say the fund is for other nations, too. But who are they kidding? It’s barely enough for Greece this year. The others will need tens of trillions. More on this a bit later.)
To put Greece’s bailout in perspective, the old record was set in 1997, during the Asian crisis. South Korea then had over four times as many people as Greece does now. Nearly triple its GDP.
Yet S. Korea got a bailout of ‘just’ $57 billion. One seventeenth (1/17th) as much as Greece!
S. Korea’s bailout came with no strings attached. No tough terms. The Greek bailout is exactly the opposite.
Greece’s government had to give up all control — all sovereign decision-making — over its economy. Its nation is now run by a consortium of the world’s most powerful bankers.
(No, not the ones you see on TV biz shows. They are the real power-brokers, whose names you will never know, and whose faces you will never see. More on this in just a bit.)
As I’ll show you, that has earth-shattering consequences. Not just for Greece. But for you, me and every American.
Because Greece is not the only nation deep in debt. So is much of Europe… the Asian tigers… Latin America… Australia… and especially the U.S.
You just got a sneak preview of what awaits every big debtor country. Including Spain, that is next in line…and including us.
Yes, America. Our nation -– our lives -– are about to turn upside down. In some very ugly ways.
There are four key things you need to know about the Greek bailout, and what it really means for us…
Greece no longer runs itself. The EU, World
Bank, IMF and power brokers behind them do
To get their emergency bailout, the Greeks were forced to take a 25% cutback. Across the board, in every key economic measure.
Pay. Government services. Health care. Pensions. Vacations. Everything took a huge hit.
Actually, I take that back. One thing did not go down. Taxes. To pay for their new austerity program, Greek taxes will soar. Each person will have to give up to 50% of his pay. (America are you listening? You’re next.)
Big Brother (their socialist government) used to look after the Greeks. From cradle to grave. Overnight they were turned into wage slaves. They will live the rest of their lives in poverty.
Socialism will be replaced by economic totalitarianism. As always. Eventually Greece will be thrown out of the EU.
The Greek people sure aren’t getting any bailouts. They owe as much individually as before.
But now they will make far less money. Their retirements are a pittance. Their home values are crashing. Simply put, they will go from prosperous to poor.
From this moment on, Greece’s elected officials are powerless. Their government rules in name only. The world’s bankers call the shots. They run the show. As they are about to in every debt-ridden economy the world over.
No surprise that rioting has already started in the streets. But you ain’t seen anything yet. Greece is just the opening blow, in a bloodless coup that will soon take place the world over…
Part two: sovereign bailouts/IMF takeovers
will spread around the world
Greece was first. Soon Spain and Italy will come to the table, for their bailouts.
Spain and Italy are in far worse shape than Greece. They don’t just need hundreds of billions. They need many trillions.
They, too, will surrender their national sovereignty to the world’s secret bankers. Through the offices of the IMF.
England will follow shortly, hat in hand. It needs at least ten trillion.
The English will have no choice. The ultimate nanny state is dead broke. They will agree to the same terms Greece did. Their elected leaders will become mere figureheads. Their people, debt slaves.
China is a mess. Its economy is crashing. (Our 58-page April issue -– titled “China Doll” -– shows how the Chinese “miracle” is in fact the Chinese nightmare. We’ll be glad to send it to new subscribers free, with our compliments.) Without more bailouts, China cannot survive.
And then the truly big game will fall in the bankers’ sights. The country that owes vastly more money than any other in history. That has more assets, more wealth, than any other. The United States.
When I talk about “the world’s bankers,” I don’t mean Citigroup. Or Wells Fargo. Or even Goldman Sachs.
I’m talking about the real movers and shakers. The people behind the IMF and World Bank. The power brokers who control organizations like the UN and the EU. They will gain control of the world’s free nations, without firing a shot.
Yes, the EU is one of their key tools. Don’t let the screams about its supposed “breakup” fool you. The EU is in great shape. It has virtually no debt. It is playing this crisis like a fine Stradivarius.
The EU did not directly loan Greece one red cent. Germany loaned Greece money. Britain loaned them money. Even the U.S. loaned them money, through the IMF.
The EU did not put up a thing. Yet it still took control of Greece. Just like it will take control of Spain, Italy, Portugal and England.
The U.S. government and citizens have the biggest debt of any nation on the planet. Hundreds of trillions of dollars. We are the biggest fish on the IMF/EU/UN hook. Even America will have to come to the IMF, begging hat in hand for a massive bailout.
Won’t Americans be surprised. They are counting on government to turn on the printing presses. They expect inflation to bring back their home values. To make their mutual funds bounce back to new record highs, and save their asses.
Unfortunately, the guys who set this trap are much smarter than the average bear. The tune we are dancing to is no longer inflation. It’s the opposite. DEFLATION.
Greece proves it. Falling money supply in major nations around the globe (the U.S., Japan, Germany, England) proves it.
The EU, the World Bank, the IMF come in. They say, “You must bite the bullet. Everyone makes less. Everyone has less and pays more taxes. You can’t inflate. You will DEFLATE.”
Do you see? Americans will not get the inflationary reprieve they are dreaming of and planning for. Instead of the dollar falling, it will become worth more. That is already happening. For the past year, the dollar has soared against most major currencies.
Deflation, the scourge of our time, will plunge stocks to their lowest levels in 25 years. It will drive home prices down to values not seen since the last Great Depression.
It will raise U.S. unemployment to rates suffered by 3rd world countries. It will bring U.S. wages in line with the sweat shops of China and southeast Asia.
Never forget. The debtor is the slave of the creditor. And Americans are the biggest debtors of all. They bought everything on credit. From their SUVs to their swimming pools to their remodeled kitchens.
They thought inflation would let them pay back their debt with ever-cheaper dollars. Now they are learning the hard truth. They can’t pay it back at all. Deflation makes their dollars more dear and harder to come by.
This is the ultimate tragedy for America. Most Americans will end up paying a terrible price for their debt. They are becoming a nation of debt slaves.
For us, knowing the secret of this depression and deflation could mean a fortune. Because we have a way to potentially make a killing -– when and if the events we know are coming, actually do take place.
Which leads me to the next key point…
3rd problem with these bailouts: me
I have a pretty good record of seeing the economic future. But sometimes that is not all it’s cracked up to be.
The problem is timing. There’s no way to know exactly when events you see in the future will unfold.
In the past, that could be a titty twister. The wrecking ball of trading. We could be right. We could get there ahead of time. But time and the dreaded margin call was our enemy.
Not any more, though…
Number 4: the good news
You can turn this economic upheaval to your great benefit -– and you don’t have to worry about timing!
Here’s why. As I’ve shown you, a new world order is taking over. The EU, the IMF and the real power-brokers are running things. They are re-shaping the world into their deflationary vision.
Everyone will earn less. Have less. Pay more taxes, and still owe them more.
Huge financial institutions and corporations in America will be toppled. Nothing can stop that.
Folks, this is no longer a prediction. It’s already started. Think GM. Lehman Brothers. AIG. Merrill Lynch. Chrysler. Greece and now Spain.
All great icons from America’s and the world’s golden era. All wiped out, by the new world order.
The brand-new trading tool we use helps make sure that does NOT happen to you. This tool gives you two things.
One, a way you could protect your wealth. While our biggest companies and financial institutions fall apart -– as the IMF uses debt as a noose to strangle us and take our vast wealth -– you could keep your money safe and sound. You could escape the debt slave trap.
Two, you could make the most spectacular potential profits I have ever seen, or even heard of. Bar none. You have the realistic potential to make 100 for 1 profits. Maybe more.
This is not just wishful thinking. The trades I’m talking about have already done this!
In the last market downturn they proved themselves like no other. In fact, one of them soared to over $1000 a share, on a split-adjusted basis. That’s because these trades make money, as our biggest, dead-broke banks fall in value.
Make no mistake. Our banks are flat broke. Why do you think they have needed trillions in bailouts -– just to keep their doors open? Why have hundreds gone under…leaving the FDIC itself broke…with more than a thousand still on the federal bank problem list?
These banks are losing more money than ever before. But thanks to temporary bailouts -– thanks to the stock market rally-back -– their share prices have soared in value!
They have never been more over-valued. They are overdue for another huge wipeout. Look how much you could potentially make…
Say these special trades I’m telling you about just go back to where they were when the rally-back started. You could turn a thousand dollars into a hundred thousand. Ten thousand into a million.
Now suppose you have a bigger stake to speculate with. Say fifty grand. You could turn that into five million.
And here’s the best part. You never risk a penny of your money, other than your initial investment. You face no margin calls. No expiration dates.
You can wait till the cows come home, for the market to go our way. When it does, you could make the killing of killings. Time is no longer your enemy. It’s your ally.
My friend, I have never been more sure that the market WILL go our way. Of course I could be wrong. But the proof of the ugly new world order is everywhere.
You have seen the first domino fall. We are in a still spreading depression. Real estate is doomed. So are banks and commodities. And that presents some of the greatest trading opportunities we have ever seen.
Watch Greece, then Spain and England, over the coming days, weeks and months. Look at the impoverishment of their masses. The rioting in the streets.
A wild bucking bronco was just broken. It was made into a kids’ pony horse, that must work the rest of its life for food and a bed of hay. Rather than be a stud, running wild and free.
As you ponder the Greek and EU economic/sovereign debt wipeouts, think of America. We owe more debt than all of them put together. We are FAR more vulnerable than the Greeks, or Spaniards, or Italians, were.
Think of the tightening terms that can be forced on us. The impoverishment of the masses. No magic bullet can save us. No inflationary bailout.
We are facing a depression. It will impoverish the masses, who are hopelessly in debt.
Pretty soon now, you will make half what you used to. You will have half what you used to have. Your taxes will be double what they are now. The good life you have known is going bye-bye. Unless you embrace what I am telling you.
Dollars will be harder and harder to come by. Your debt burden will be bigger and harder to pay.
We know how you can avoid all this. We have the right conservative recommendations, that will help you save your wealth. We also have proven speculative trades. They could make you a fortune, as everyone else is losing theirs.
First the raging fire of deflation claimed the U.S. homeowner. Then it spread to the biggest American banks. Then our major corporations.
Now it is claiming entire countries. The depression it brings is changing the map of the earth. Just like every depression in history has.
The rules of making money -– of just keeping your wealth — have changed once again. Learn the new ways, learn the new world order, or get wiped out with everyone else.
Look around you. A whole lot of people have got it wrong. They are paying a terrible price.
That does not have to happen to you. But you must learn the new rules of the game. Before it’s too late.
Want to know who will rule the world? Who will decide what your house is worth? How much you make, and what you can spend it on?
The IMF and the EU will. The hidden bankers behind them will. They already are Greece’s masters. They will soon bring down Spain and Italy.
And the biggest prize of all is in their cross hairs. The USA. Obama is not our savior. He is the man selling us out to the global bankers.
They run every nation that falls into their debt trap. With an iron fist of austerity. I call it abject poverty.
They are doing what Marx, Lenin, Stalin and Mao dreamed of, but failed to achieve. They are taking over the world. And without firing a shot. They are using the world’s massive debt, to turn the world into their debt slaves.
Please don’t buy that b.s. about “making the world a better place.” The World Bank and IMF have run every nation they touch into the ground. Their job is to make sure their secret world banker owners are paid back every last dime. With compound interest.
They give local politicians the perfect excuse. The ideal cover. “You can throw me out of office. It won’t make any difference. We need money. The only place we can get it is the IMF and world bank. To do that, we must meet these conditions.”
Remember, the biggest debt slaves of all — who owe the most money — are Americans. The U.S. government. We dug this hole. Now we must lie in it.
Americans are about to become much poorer. For generations. We will struggle with this epic mountain of debt.
Remember, part of their plan is to use The Beast to cheat you out of your savings. (If you are lucky enough to have any left.) Having a pile of money will do you no good if you don’t know how to keep them away from it.
And they already have stolen a huge amount from you. Think about the value of your house. Your retirement plan. Your stock market investments.
You will not survive by jumping in on the latest fad bubble investments. Wall Street cooks up new ones for you every week. It uses every P.R. trick in the book to entice you into them.
This is your wakeup call. The debt trap has been set. The world’s most powerful people are springing it.
They are trapping your friends and neighbors. They are picking off nations around the world. Odds are they will trap you, too. Unless you understand the new rules of the game.
I only know one way to get out of this. The rest of this report tells you how. Consider it your get-out-of-debtor-prison free card. I hope you are smart enough to take it.
The markets are rigged – duhh!
So the markets are rigged! So the financial system is going to collapse!
What’s new? Why the shock? It’s not a new discovery.
Sooner or later, every financial system devised by man collapses. Usually a lot sooner than most people imagined.
Markets have been rigged since the beginning of time. Romans filled their “gold” coins with lead. They fooled people into believing they were solid gold.
The Dutch cheated the Indians out of Manhattan Island. For $24 worth of beads and cloth.
Then the English turned the tables, and conned the Dutch. They got Manhattan from Holland for some Caribbean sugar plantations -– right before the cane sugar market collapsed, because they started growing sugar beat in Europe. Europeans didn’t need high-priced cane sugar from the distant islands any more.
New Amsterdam was renamed New York by its new owners, the English. It became the world’s trading center. The former Caribbean sugar colonies became ever-loving hell holes. Their biggest deal of the week is when the cruise ships arrive. Talk about payback to the Dutch!
Rigging the stock and commodities markets is legendary. The little guy always trades at a huge disadvantage. That’s why most stock market Internet-Trader wanna-be’s, along with the “secret commodities trading systems” people use, never make money.
You got to change with the times. At one time, we included futures trades among our recommendations. With no buy or sell stops. We had some luck.
Now the world is different. Wall Street has gotten into the futures market big time. The Beast knows your trades. Your stops. It knows how much money you have to trade with.
Goldman and Wall Street have billion-dollar trading accounts. They can run your stops, empty your account, in minutes. If you don’t have millions to trade with, and a ton of staying power, you cannot compete. They will kill you.
But for every weapon made, someone comes up with a counter weapon. The Samurai spent a lifetime turning their bodies into lethal weapons. They were defeated by the black-powder pistol, that an 80-year old woman could fire.
Suits of armor protected brave knights against swords and axes. The cross-bow bolt defeated them. It sliced through their armor like a hot knife through butter. They never knew what hit them.
Castle walls were hundreds of feet high. They took years to build. The cannon turned them into a pile of rubble in minutes.
The low-flying helicopter gunship, a devastating weapon in Vietnam, was defeated by the shoulder-fired rocket. And on and on it goes.
Goldman’s high-frequency trading super computer (The Beast) is a devastating weapon of mass wealth destruction. It decimates day traders and fund holders.
Own or trade stocks, and Goldman will find you. They will blow you out of the market — if you do not have the right counter weapon. They sink unsuspecting traders, like a passenger ship hit by a German U-boat torpedo.
You have to adjust your trading strategies to the new realities. You must intelligently use new weapons.
Our trading strategy is simple, but Beast/HFT-smart. First, we make sure the vast bulk of your wealth -– 90% or more -– is completely safe and sound: in conservative investments designed to survive this depression and debt wipeout.
The Beast can’t touch you, when you invest this way. Neither can Wall Street, or the government, or Obama. You know your wealth will be there, whenever you want or need it. No matter what.
We cover all this in the Wall Street Insiders newsletter. You learn how to make your wealth invincible to real estate downturns. To stock crashes. To bank failures. It’s not hard, once you know how.
At the same time, we teach small investors how to make 30%, 50% or more returns from their conservative investments: with super-safe SPECIAL U.S. government bonds.
For example, in June 2007 I told Wall Street Insiders subscribers to buy a very specific, very special, non-traditional U.S. government bond. Interest rates at the time were 5.25%. I told my subscribers rates were headed lower.
A year or so later, the value of that bond more than doubled. Had you invested $100,000 in those bonds, you could have pocketed an extra $100K. Or you could have turned $500,000 into $1 million.
That’s from a conservative investment, 100% backed by the U.S. government. No matter what, the U.S. government guarantees to pay you back your principal and interest. No, it’s no longer just your grandpa’s sleepy old bond trade.
Of course, you can’t buy just any government security. You have to know exactly which one. There are hundreds of different types. They have different maturities. Different yields and structures.
But the ones I recommend to you are designed for maximum protection. They also give you the opportunity to make 30%, even 50% gains or more. Worst case, you still get all your money back – with interest!
Once you know your wealth is safe — in conservative investments like the ones I told you about above — you take a small portion of your liquid wealth. 10% or less. That 10% is all you need, to potentially make a killing.
Right now I have over 10 trades like this to give you. They exploit the fatal flaw in The Beast. You could make a fortune at the expense of Goldman and Wall Street. i.e. the very people who have been stealing from you all these years.
With our aggressive recommendations, we don’t play for pennies a share. Or dollars a move. We play for the home run, the big one. With the right instruments. That is one key to potential success.
These recommendations are designed to make money for you, as European debt wipes out. As the financial/economic crisis brings down the global economy, in a sea or red ink and debt.
We play for the big moves and let Wall Street have their daily scalps. The ones they use on retirement and fund investors. We do not day trade, like they do everything in their power to get you to do.
We don’t care if we want to buy an aggressive trade at $10, and Goldman floods the market so it costs $10.25. We are looking for that trade to go to $100. So Goldman’s manipulations don’t affect us.
And when (if!) that big day comes… when The Beast is smoking, like on “Beast Thursday” (May 6)… we are there to storm the castle walls and loot the Goldman treasury.
The secret is to hold your positions. That’s what our trades let you do – at no extra cost. Then you simply wait for the fundamentals to return. They always do. Ask the people who paid $400k for their $150k house — that they are now buried in — about market fundamentals. Ask them about bubbles bursting.
Our secret weapon: it lets
us kill The Beast
The economy is already perched on the edge of a cliff. The Beast -– along with more sovereign debt wipeouts -– could push it over the edge.
That’s why I think it’s essential that you subscribe immediately to my Wall Street Insiders monthly newsletter.
In WSI, you learn about special leveraged “niche” Exchange Traded Funds (ETFs). These ETFs let you, the little guy, trade in ways that used to be possible only for big-wallet hedge funds.
Let me tell you: these little-known ETFs are a gift from God for average investors. Especially in times like these.
They can do for you what the stinger missile did for the Afghans. They used that missile to destroy Russian helicopters and low-flying jets. They handed the USSR its grand defeat in Afghanistan.
ETFs let you tailor your investments to a particular market. They give you endless liquidity. Great leverage.
You have no risk of margin calls. No time limits. ETFs trade in the open, on the global stock markets. They are easy to understand. The likes of Goldman hate them like the plague.
Wall Street wants to make you a bubble trader. A day trader. They want you in their put-up markets and buy their bubbles. Then their computers can screw you to the wall.
They can manipulate you. They can blow your positions out of the water. Ask anyone who got killed by sell stops on BEAST Thursday.
We are in a banking/financial crisis. Obviously. Greece got another round of bailouts, that will ultimately fail. They keep telling us everything is fine. Yet the EU members & US have ponied up one trillion dollars to bail out Greece.
They say the bailout is for everyone. But we know better. Right now they barely have enough money to cover Greece. As we speak Portugal, Italy and Spain need trillions each to bail them out. Merry old England will need $10 trillion more. If it’s possible to save them at all.
Know this — know how the markets collapse when the truth comes out — and you can beat The Beast. Which we have every intention of doing.
My friend, please remember. They no longer must “merely” bail out banks or major companies. Now they must bail out sovereign states, entire nations, and their citizens. That is against EU rules. They swore it would never happen.
That should set off a siren in your brain. This global depression, is still with us. The EU weak sisters will be thrown out on their asses. This will make the EU stronger.
The rolling depression is claiming more victims by the day. Despite the sick spin about the “recovery,” that fewer and fewer people believe we are in.
We are about to see the real fundamentals come back, with a vengeance. Real soon now.
I can’t wait!
Suppose Obama’s bailouts don’t work
What happens to you?
For the past two years, two things have held together the global economy. Sweeping messes under the carpet… and government bailouts, paid for by some very pissed-off U.S. taxpayers.
Government spent trillions of your dollars, to give bailouts to our biggest banks. Citigroup, Bank America and Wells Fargo are a few examples.
We bailed out America’s biggest companies. Like AIG, General Motors and Chrysler. Our giant investment banks, like Merrill Lynch. We even bailed out Europe’s major banks and real estate companies. When does it all end?
Our leaders promised us the bailouts would stop the hemorrhaging. They would create jobs and put the economy back on track. They told us we are in a recovery.
Total lies. Today more Americans are out of work than at any time in history. Over 30 million. U.S. auto sales have nearly fallen in half. Foreclosures keep setting new records. And housing prices have dropped 40% or more, with no end in sight.
We were told the bailouts were short-term fixes. They would quickly come to an end. More bull. Now we don’t just bail out companies or banks. We are trying to bail out entire nations.
Welcome to the brave new world. Major countries are impossible to save. Wall Street’s brilliant “solution:” give them trillions more, OF OUR MONEY!
Yes, our money. As of now, America’s share of the Greek bailout is over $50 billion. Before our wonderful officials are done, it will end up much higher.
And that’s not all. America’s biggest states are also stone, cold broke. They too must soon come begging for even more bailouts.
California will need hundreds of billions of dollars. Maybe more. So will a number of other dead-broke states. Like New York, New Jersey, Illinois and Michigan, to name a few.
The spreading derivatives wipeout has bankrupted them. Just like it has bankrupted the overall U.S. economy and nations around the world.
By now it should be obvious to you. Things are getting worse by the day. Certainly not better.
So here’s the question you face. It’s a deal breaker. In fact, this one issue could decide if you die poor -– or live out the rest of your years in wealth and comfort.
Suppose the bailouts don’t work. Suppose the derivatives losses continue. What happens to you then?
Suppose Obama, Congress and Timothy Geithner, despite their superior wisdom, cannot reverse the laws of gravity. Suppose the bailouts fail.
What happens to your wealth?
What happens if the “recovery” fizzles out, and the U.S. and global economies continue their slow-motion train wreck?
Have you considered the possibility that the money in your bank could be lost –- remember, the FDIC also is broke -– or your account frozen for years?
How about your mutual fund, money market and retirement plan? What if your funds not only don’t recover: they begin another plunge to the ground?
What would you do if they wipe out and close down? How would you live? These are questions you have to ask yourself and be prepared for.
We just learned what Goldman Sachs did. Besides stealing from everyone, through The Beast, they blatantly traded AGAINST the so-called recovery. Against their own customers.
They told their clients to invest their future on the real estate “turnaround” -– while Goldman took the opposite side of those trades! They even did this on leverage!
This is how Goldman does business. Back-stabbing its own clients. It wiped out entire countries and governments. All by selling derivatives it knew would blow up in its clients’ faces.
And for its blatant theft of its clients’ assets, Goldman executives now face possible criminal indictments. As the Wall Street Journal reported:
Federal prosecutors are conducting a criminal investigation into whether Goldman Sachs Group Inc. or its employees committed securities fraud in connection with its mortgage trading, people familiar with the probe say.
The investigation from the Manhattan U.S. Attorney’s Office stemmed from a referral from the Securities and Exchange Commission, these people say. The SEC recently filed civil securities-fraud charges against the big Wall Street firm and a trader in its mortgage group. Goldman and the trader say they have done nothing wrong and are fighting the civil charges.
Remember, 70% of the IMF’s money comes from the U.S. So again, when they talk about the IMF bailing out Greece, Spain Italy Portugal and the rest of them in reality Uncle Sam (you) are bailing them out.
Do you really want your money to go to Portugal, Spain, Italy, England and every other nation that has borrowed too much?
And that’s on top of bailing out the U.S. housing market… our biggest banks and companies… the consumer… the states… and every industry from autos to construction to insurance.
The day will soon come when the U.S. cannot beg, borrow, tax or even print enough money to continue the bailouts. What happens then?
What happens when the dead-broke, walking-dead-men banks and corporations are allowed to fail?
Somebody is going to lose one hell of a lot of money. Now guess who that somebody is? Everyone who buys into this recovery b.s.
If we were truly in a recovery, this would NOT be happening. You would see fewer bailouts. You wouldn’t be watching riot police bashing heads in Athens. You would not hear talk of the biggest economies on earth sputtering.
The masses put their faith in Wall Street. In the politicians. These people believe they don’t need to do a thing. Just sit back and wait for the happy days Obama and Nancy Pelosi promise.
But maybe, just maybe, things won’t turn out as they say. If you think that is a possibility, there is something you can do. You can get “wipeout insurance”* for yourself, against what we believe is the next phase of the economic wipeout.
*Let me explain what I mean by “wipeout insurance.” It’s not an insurance policy as such. It’s similar to what Wall Street calls “portfolio insurance.” That is where they buy instruments they hope makes them money, if the trades they hold go bad. In that case, the “portfolio insurance” offsets their losses.
Our “wipeout insurance” is based on the same principle. It’s a group of trades, rolled into several unique instruments. We believe these instruments will go up (make money) — if and when the stock market turns down again.
This special kind of “wipeout insurance” won’t cost you much. A tiny part of your wealth. But it could save you, if the unthinkable happens: another stock market wipeout and economic downturn. I believe with all my heart and soul that will happen.
Say Wall Street is right. Not a chance in hell, but let’s do the mental exercise anyway. Stocks keep marching up forever.
You’re only out a little: the small amount you put into your “wipeout insurance”/offset trades. The great economic boom, which they promise is right around the corner, will more than make up the difference for you. That’s if things go as they say.
Now suppose I have somehow guessed right again. Your “wipeout insurance” -– the specific trades I reveal in my monthly newsletter, the Wall Street Insiders — could well be worth their weight in gold, a thousand times over.
Subscribe to the Wall Street Insiders:
Learn How to Beat Wall Street at Its Own Game
That’s why I urge you to join us. To subscribe to the Wall Street Insiders monthly newsletter.
One thing I can promise you. The Wall Street Insiders is unlike any investment advisory you’ve ever seen, bar none.
A typical monthly issue contains 50-to-60 pages. You get in-depth analysis of crucial parts of the global economic puzzle. Things you NEVER read about in the newspaper, or hear on the TV news, until it’s too late.
For example, one recent issue was entitled China Doll. It revealed how the whole China economic “miracle” storyline peddled by Wall Street is nothing more than a sick sham… and people who believe it could end up losing everything.
(Did you know that only 100 million Chinese participate in the new factory systems… while 1.2 billion are starving to death out in the provinces? That China has the biggest debt in the world -– hidden in the provinces -– and considers the “poverty line” to be only 11 cents a day? And we’re supposed to believe that China is going to end the global recession?)
Another issue, DEAD MEAT, revealed the truth about the sovereign debt crisis. About the spreading wipeout in Europe. This crisis will eventually destroy the global economic system.
Months before the EU crisis was on the news, we told our subscribers about what was really going on there. We showed them how the “PIGIES” were going to bankrupt the EU… and trigger another massive credit crisis. All this is happening as we speak.
I never waste your time with vague theories. My whole goal is to help you protect your core wealth, your life savings, and potentially grow rich.
So in WSI you get detailed recommendations for protecting your assets. You learn specific steps you should take with your bank accounts…your real estate… your retirement accounts…your investments…and your speculative trades.
But it doesn’t stop there. As I mentioned, Wall Street Insiders also shows you the specialized “niche” ETFs: the handful of super-charged trades that could potentially skyrocket in value during the coming computerized wipeout.
For example, one little-known, highly-leveraged investment could go from $15 a share today to over $500 a share, in the next big drop. Would you invest a few thousand on the chance that, if things go badly and there really is another “double dip” recession, you could make hundreds of thousands in a matter of months?
I don’t know about you… but I consider that kind of “portfolio insurance” well worth it.
A one-year subscription to the Wall Street Insiders is $199. That works out to just 54 cents a day. Less than you spend on a cup of coffee. But to sweeten the deal, I have an even better offer for you:
Accept a two-year subscription for just $299. You save 50% on the second year. I’ll also send you not one but SIX valuable bonus reports.
These privately printed special reports are worth an additional $774. But they are yours free, to help you get through the next several years with your wealth intact.
The reports are sort of a condensed version of the advice and recommendations I’ve been giving my subscribers over the past two years. They represent nearly 30 years of successfully trading the markets:
Beast Survival Blueprint #1:
Make a Fortune Selling Gold
Global depressions are actually the best of all times for investors — if you understand them and know what to do. Most people have stuck their heads in the sand. You face little competition: the masses are still in denial.
Gold is a good example of this. The masses believe, because Wall Street tells them to believe, that inflation is coming. So everyone should invest in gold.
The truth is, Wall Street insiders are SELLING, not buying, gold. According to the World Gold Council, identifiable investment in gold has fallen from 609 tons in the first quarter of 2009 to just 186.4 tons in Q1 2010 – a DECLINE of -69% in a year. Gold ETF investment has dropped 99%, from $13.5 billion to just $135 million. You see, the gold insiders know the world is facing a deflationary spiral, that will bring the price of gold back down to below $300 an ounce. As a result, they’re DUMPING gold at record-high prices!
If I am right, do you realize the kind of money that could be made?
This special financial blueprint explains, in detail, how you could pile up obscene profits SELLING gold over the next several months.
You don’t use futures or face ugly margin calls. You never risk more than your modest initial investment. But if gold does what I expect, you could get rich with these investments.
Over the next few years, most people you know will go broke. They put their faith in the lying politicians, the thieving bankers and the Wall Street whores.
But you can turn the tables on them, on the people who want to take everything you own and worked for. Instead of getting wiped out, this is your opportunity to potentially get filthy stinking rich, Rich, RICH! It’s a $129 value, yours FREE!
Beast Survival Blueprint #2:
Protect Your Life Savings from Failing Banks
Most everyone’s hopes (and fears) are still on the stock market. But the real action is still in the banks.
More than $10 trillion of investor savings have been vaporized in the past 24 months. $3 trillion of that since the government passed its $700 billion “bailout” of the banks. That’s because the banks are flat-out broke. Nothing government can do will change that.
As the Head of the IMF, Dominique Strauss-Kahn, told reporters, “intensifying solvency concerns…have pushed the global financial system to the brink of systemic meltdown.”
Why do you think government was forced to give Citibank hundreds of billions of dollars in bailouts? Why does the FDIC shut down hundreds of banks each year now? Why is the FDIC itself broke, in need of a bailout? Why do you think the sovereign states of the European Union are clamoring for a bailout?
In a word, they are broke. No one wants to admit it. But bank after bank, country after country, is stone cold broke.
Fortunately, there are steps you can take right now to protect your savings from the banking meltdown. This vitally important report tells you what to do! It’s a $129 value, yours FREE!
Beast Survival Blueprint #3:
Double Your Money with
U.S. Government Bonds
There is a little-known way you can get a U.S. Government fixed-income security –- 100% guaranteed by the U.S. government — that could earn you a 100% return in a year.
This is the closest thing to a slam-dunk trade I’ve seen in 30 years. You get a locked in return of 3% to 4% annually. You also have the potential to make 100% or more profits -— within the next year or two!
I am begging every man, woman and child I know to make this trade.
You protect your savings: these are fully-guaranteed U.S. Government securities. The safest investment on the planet, other than cash in your mattress.
Plus, you have a realistic shot at making a 100% profit in a year. You can’t lose a penny, no matter what. At worst, you make a decent yield as a return. All GUARANTEED by the US government.
Find out all you need to know about this amazing money-making trade in this bonus report. It’s a $129 value, yours FREE!
Beast Survival Blueprint #4:
Grow Wealthy in the Stock Crash of 2010-2011!
On October 13, 2008, a week before the S&P 500 hit its lowest point in the past six years, I told subscribers to take profits on more than 36 specific ETF recommendations.
But I made it clear then that this was just a temporary lull in the action. The BIG ONE… the real stock market wipeout… was still to come.
I predicted that the phony Fed bailout would spark a short-term but intense bear market rally-back.
Sure enough, Barack Obama and the Democrats in Congress used every resource of the U.S. government — every penny of taxpayer money they can beg, borrow or steal — to get a massive stock market rally going.
That’s what we saw throughout 2009 and into 2010. This has lured millions of trusting investors back into the market casino.
But mark my words. One day soon… when the market least expects it… when the news media are saying the worst is over and the economy will somehow muddle through… POW! The REAL wipeout will hit!
All by itself, this report could save your financial life. It shows you how you could protect your core wealth from what will turn out to be an historic stock market crash… and also grow many times wealthier, when everyone else is losing their shirt! It’s a $129 value, yours FREE!
Beast Survival Blueprint #5:
The Deflation Survival Guide
Few people understand one of the single most important points for your investments today: that we have already entered an historic deflation. The price for almost everything you buy is going down, down, down.
Oil has fallen from $150 a barrel to under $90. The price of wheat has cut in half in the past 12 months. Same with lumber, cattle, orange juice, soybeans, you name the commodity. Prices are HALF what they were a year ago.
The CPI has turned negative — i.e., consumer prices are falling. On May 20, the government announced that inflation is at its lowest point since World War II! PPI (producer prices) are falling even faster. And the M3 money supply is shrinking rapidly: as fast as it did in the last great deflation, during the 1930s depression.
The problem is, almost NO ONE knows how to survive deflation. They have never lived through it before. All they know is inflation and rising prices.
You must use radically different thinking and strategies. This guide alone (valued at $129) is worth many times the cost of a subscription.
Beast Survival Blueprint #6:
How to Make a Killing with
Exchange Traded Funds
I don’t recommend you invest in stocks, mutual funds or commodities. Why? Because now there is something that works much better than any of those.
I’m talking about the new trading vehicles that are a low-cost alternative to mutual funds…and that give you much greater protection: Exchange Traded Funds.
For one thing, some ETFs are designed to make DOUBLE or even TRIPLE the profits of an underlying index or market — even when it’s tanking! Yet your risk is still limited to your initial investment. Not a penny more.
Plus, new ETFs now allow ordinary investors to trade commodities markets — WITHOUT margin calls or futures contracts. This is why average investors could make huge potential profits in oil, precious and industrial metals, and key agricultural commodities. All without taking on the enormous risks of futures.
Find out how you can beat Wall Street at its own game. It’s all in this free bonus gift – valued at $129.
My personal guarantee
I have something in my heart I must tell you.
You’ll find few people more controversial than I am. If you are not familiar with my track record of being right, some of what I tell you may sound crazy. I assure you, it’s not.
What I want you to understand is that economic wipeouts can now occur very quickly. The Beast makes that certain.
We are living in a global economy. It is tied together by a vast network of supercomputers. Trillions of dollars race across continents at the speed of light. Every day.
A hurricane off the Gulf Coast of Louisiana can send oil prices skyrocketing half a world away. Eighteen crazed Muslim fanatics on 9/11 can stop the world economy in its tracks.
Ordinary Americans now know this. For years, many of them enjoyed their half-million dollar houses. Their granite countertops and marble-floored kitchens. Living the good life.
Then one day the boss tapped them on the shoulder and said, “You’re fired.”
These people have no savings. They bought everything on credit. They owe huge amounts of money. All of a sudden, they can’t pay it back.
In 60 days, they went from riches to rags.
I’m here to warn you that this could happen again.
In fact, it’s virtually certain to happen again. The Flash Crash on May 6 demonstrated just how vulnerable the world economy really is.
My advice: position your money now, so you can profit when The Beast triggers another major crash.
First you make sure your wealth is bullet proof. Our conservative recommendations show you how to do that.
Then you put $1k, $5k, $10k, $20k, $50k (ideally 10% of your liquid net worth) into a handful of specialized trades we recommend in the Wall Street Insiders.
These trades could sit there the next two to six months. Maybe even a year. They have no expiration date. They can’t cost you any more than your initial investment.
Say I’m wrong. The economy improves. We all breathe a sigh of relief. Worst case, your wealth is still safe and sound. You can use it to buy mansions for a few pennies on the dollar.
But what if I’m right? What if more European nations see their debt go bad… the Beast strikes again… or stocks take another major downturn? What if the “double dip” recession everyone talks about actually arrives?
Well, then my “crazy” advice could make you literally millions of dollars. That money could save your financial life. Why take chances?
You owe it to yourself, and your family, to hear another point of view. One that tells you what’s really going on in the global economy, and how you can profit from the ongoing crisis we are in.
Call me right now toll-free at 1-866-924-0607 (outside the U.S. call 1-913-871-0701). Or order online by clicking on the button below…
P.S. Call 1-866-924-0607 right now to receive your early reply bonus — a special audio report on my very latest conservative recommendations. (If you live outside of the U.S., call 1-913-871-0701.) These will, I believe, protect you from the financial chaos when the next computer-triggered crash hits. Just call the following toll-free number within the next ten days: Thank you.
I’ve explained all this to you in the past. But bubbles are always surrounded by blizzards of b.s. spin. And contrarian trades, by their nature, are bound to try your patience. So sometimes it’s good for us to review things.
But let’s not get carried away here. 95% of the time, markets are boring. That 5% is when sheer terror strikes. It can be a real titty twister.
You are right. I have been quiet lately. That does not mean I’ve been sleeping. In fact I have two red-hot stories for you. You know, the ones I tell you about first — and then 6 to 12 months later, when the information is worthless, Wall Street finally clues you in.
My job is to lead this hunting party. To see that you get there ahead of time. Don’t let Wall Street turn you into a buzzard, who gets there after the meat is long gone. Their way, all you get is the bones to pick.
The last thing you need from me is a stream of meaningless bullshit. That’s Wall Street and the teleprompter analysts’ job.
I’m here to tell you that I believe this latest round of bubbles will blow up in their sleazy faces. Probably in the next 3, 6 or 9 months. Then these markets will begin their next nose dive to the ground.
There are several reasons why. First, China has created a horrendous bubble. Entire cities there, built to house millions of people, sit abandoned. Brand new mega-factories are idle: there is no demand for their products. China will be the biggest casualty of the next wipeout.
I am finishing a very detailed report about this. In it I explain to you why the Chinese “miracle” is really the Chinese nightmare. A very dangerous nightmare indeed. Look for it on the WSI Insiders website shortly (for subscribers only).
Second, major countries the world over are now withdrawing liquidity. The Fed publicly raised rates at the Discount Window. Meaning there is no more free money for U.S. banks: the Fed privately let it be known to our banker buddies that party is over. And when (not if) the banks go broke this time, they will be liquidated. “Too big to fail” will be “bye bye extinct dinosaur.”
Central banks around the world are going further than the Fed has. They haven’t just stopped adding liquidity. They are slowly draining liquidity.
The central banks know they have been had by the world’s biggest financial institutions. Bailout buck were suppose to have been used to wind down bad loans and liquidating money losing derivatives trades. Instead they have been used for, doubling down on their losing positions, and runaway bonuses for insiders. This has really pissed off those who have not been bought off.
They realize this latest round of bubble blowing was a severe mistake. It has not mitigated the problem. It has made it worse. They know the dead-broke institutions are going to have to be put down. Even the institutions that were supposedly “too-big-to-fail.” This time they will be liquidated, and let the chips fall where they may.
They are setting the stage for this. It’s occurring before your very eyes, whether or not CNN tells you about it.
Once again, I could be wrong. If I am, the trade recos I’ve given you could cost you your investment in them. But I also could be right. In that case, you could make a not-so-small fortune. Our risk/reward ratio here is the best I’ve seen.
I really believe in these trades. When I tell you they are the best I have ever seen, I really mean it.
I am 100% satisfied with our trade recos. Our specific market, carefully chosen ETFs let us hold our positions, at no extra cost, till the markets go our way. We are averaging in very well.
I’m also 100% satisfied with the markets we are trading. We are perfectly positioned, in my opinion, to potentially make a killing in each one — if it turns out we have guessed right once again.
One thing did surprise me a little. From the start of these trades, I have given all of you detailed explanations of what we faced. Of what to expect.
I told you we were going to layer in, that it would take time. I told you endless times this is speculating. Never trade with money you can’t afford to lose.
So I was a little surprised to hear the cries of pain from some subscribers. Both at how much the markets have rallied against us, and the time the trades have taken. It’s critical at times like these to keep your perspective.
Folks, you have lived through the biggest bubble in history. The biggest stock market rally-back now up over 70%. You’ve lived through the biggest b.s. spin job ever contrived. Rat-shit Nazi spin doctors like Goebbels would be proud of the propaganda campaign that has taken in the masses.
From the first, I told you the Dow could go over 11,000. I told you $1200 gold was well within my expectations. So were $100 oil, and a 4% yield on the 10-year bond. If you followed my recommendations you are perfectly positioned to take advantage of these events.
Plus we are getting two damn nice bonuses. The PIGIES are wiping out in Europe. (Portugal, Ireland, Greece, Italy, England and Spain.) And China’s liquidity bubble is bursting again. This gives us several more trades that could do extremely well.
I believe our patience is about to be rewarded. The liquidity given to Goldman Sachs, AIG, GMAC, GE, Citi, BA, and Wells Fargo (to name a few) has dried up. They are close to blowing their wads. And that means it’s my belief another round of bubbles will burst soon. These act of desperate bubble rallies are the only thing that has kept them afloat.
To show you how dirty it’s been: till now major U.S. banks and financial institutions could borrow money from the Fed at 0.25%… and then loan it back to government at 2.25%.
They were making an incredible profit of two percentage points (200 basis points). For doing nothing. That is free money.
But they didn’t bank those profits. They didn’t use them to remove the bad derivatives debts from their balance sheets. Even though they said they would do that.
They took that money and went right back into the derivatives casino. As I told you, they doubled down. These “new” toxic derivatives are biting them in the butt. Same in Europe and China.
The world’s major governments got involved in a mindless, bubble- blowing stimulus campaign. That is why oil — after soaring to $150 a barrel and then wiping out to $40 — is back where we got our last layer of positions. In the mid-$80s.
Every day, I hope they get $95 to $100 oil. We could add another layer of positions. That could make our potential profits even greater, when the market crashes as I expect.
The gold rally has been disappointing. I hoped we could get higher positions on the latest breakout. But the market seems to have stalled. Still, a drop from here to around $250 an ounce (where I believe gold is heading) could make us an incredibly nice chunk of change.
Long bonds have done well. Interest rates got within a smidgeon of 4% on the ten year. Our zero-coupons and long bond ETF’s are close to another average point. I will let you know if we reach it.
As a man who has spent a lifetime profiting from the destruction of bubbles, I can tell you I’ve never been more satisfied with a group of trades. Each one is within the range we expected. Each one looks to me like it’s about to go our way. But as you well know, I could be wrong. That is why you place your bet, spin the wheel, and hope lady luck is with us.
For those of you who are antsy…who want more action…who would like the markets to roll over tomorrow…all I can do is remind you: that is just not how trading works.
I wish it were different. But it’s not. Reality is, bubbles grow bigger and bigger. They burst when they have suckered in the maximum amount of available money. That process can be a royal pain in the ass, as you wait them out.
I think we are very close to that point now. Let me get specific. I believe the Dow is a few hundred points from its top. Oil within 25 bucks. Gold within 200 bucks. And long-term interest rates within one percentage point of their top.
I believe we will see the biggest plunge in these markets EVER, when the fat lady finally sings. I could be wrong!
In 2008 through March 2009, the economy and markets wiped out. Just as we predicted. The banks and financial institutions we told you ahead of time would collapse, did so.
After that I had a brief glimmer of hope. There was a small chance that government really would set up the “bad bank.” That they would use the TARP and bailout funds to clean up the massive, derivatives-magnified bad debt. And they would rein in this uncontrolled irresponsible market manipulations by the worlds biggest financial institutions.
I had a brief flicker of hope that maybe just maybe the mega-financial institutions would take the bad loans off their books. Unwind the trillions in incredibly stupid, highly leveraged bad paper they all held en masse.
At that time when the last bubble burst we closed out our positions. We did quite well. And we stood back and watched. I soon realized the truth: they were trying the most insane “solution” possible to the crisis.
They were not going to liquidate their derivatives. The toxic money-losers that wiped out the world’s biggest financial institutions. Even though that was the specific purpose for the bailout money. So much for their promises.
Instead they turned to the horror of horrors. The institutions would be allowed to hold their mega-money-losing trades. They could even use the bailout funds to make more of the same derivatives trades!
This is known as doubling down. And that is what they did.
I knew this would create even bigger bubbles. Bigger trading opportunities, if we were right.
There was no chance real estate could recover. The damage to that market was too great.
Fannie Mae and Freddie Mac hold 50% of the nation’s mortgages. They are leveraged 100 to 1. They had already gotten hundreds of billions in bailouts. Congress just increased that to over a trillion dollars. Not enough. They are still losing their ass.
So you could forget about the pretty rescue/mortgage-workout tinsel working. The bloodbath in the housing market would continue. That is happening now. It will keep collapsing for some time. Remember, 5 to 10 cents on the dollar will be the bottom.
I also knew the bankers, Wall Streeters and politicians were beyond desperate. They would try to drive up every market they could get their sleazy hands on. I told you bubbles would occur in gold, oil, the dead-broke financial institutions, and the stock market.
I knew as the bubble grew bigger, more people would get fooled. They would buy into the recovery b.s. Stocks, gold, oil and bonds would go against us. So our strategy was clear.
Pick the instruments that would do the worst as the bubbles grew. When the bubbles burst, those instruments should do the best.
I was not about to make the mistake of trying to pick the peak, by buying in all at once. Instead, I recommended you layer in these instruments (i.e. buy positions over time, at different price point) a little at a time. At each purchasing point, you should add 25% of the total amount you want to trade with. That would give you even better bargains as time went on.
This also involved my most difficult job. Gauging how big the bubbles would get. How long they would last. And planning a strategy that would let us accumulate and hold positions that would do the best.
Wall Street, the investment bankers, and their orgy bedfellows the whore politicians, have dreamed up plenty of low-down dirty rotten tricks. But the most deadly of all, that does the most damage, is the liquidity bubble.
It causes loss of wealth for the masses like no other evil trick they have cooked up. And it fools the most people.
In the liquidity bubble, government creates vast amounts of money through its discount window. Wall Street banks and financial institutions borrow that money, at close to zero percent interest rates. Free money.
Then they leverage their free money hundreds of times over, with derivatives. They drive up the price of key financial assets and commodities. They do this through their hedge funds, and off-the-books, special-purpose entities. (Mostly used to commit fraud.)
Based on REAL top-line driven bottom line sustainable profits, the Dow should be at 5000 right now. Heading lower. It sure as shit should not be around 11,000, in its biggest one-year rally ever.
Similarly, gold should be $300 an ounce, not $1100. Oil should be at $10 a barrel, not approaching $90.
These markets have soared against their fundamentals. Strictly due to that massive liquidity creating bubbles in these key markets the wall street and banker whores have chosen to manipulate. Government created that liquidity out of desperation. Out of its misguided attempt to bail out the economy. To try and stop the slide into a depression so big, it will make the last one look like a cub scout jamboree.
These rallies you’ve seen are nothing more then short-term bubbles. They create the false illusion of prosperity. Then they collapse in devastating busts, as the bubbles burst once again.
You have witnessed several of these collapses in the recent past. Oil, stocks, gold, commodities and real estate are a few examples.
The last liquidity bubble (before the one we are living through right now) peaked in late 2007. In 2008-09 that bubble burst, kicking off the Great Depression II. This crisis has impoverished more people than any in history. It has wiped out more wealth than any liquidity-bubble boom/bust cycle the world has seen.
Before you take a bungee jump off a bridge without the cord, let me tell you the extraordinarily good news in this. In the coming weeks, months and years, we could make a fortune.
In principle, it’s not hard to know what to do. We take the opposite side, of the very derivatives that got our economy into this mess to begin with.
Remember, derivatives let the banks leverage their balance sheets to the moon. Now things are falling apart. So that leverage is working the opposite way. It is leveraging their losses.
Which means it has the potential to leverage our profits. This is our key to potentially making a king’s ransom.
I have already given you derivatives reco’s (i.e. ETFs), that let you get at the stock market. At the real estate REITs (real estate investment trusts). At the dead-broke banks. Gold. Oil. At the vast debt markets.
These are great trades,in my opinion. They will take some time to unfold. The way I see it, they are well worth the risk. If they do what I expect, we could make a series of incredible killings from them.
And now we could potentially raise that to a whole new level. We could get at the sovereign states as they go broke. Blood -– the real stuff — has already started flowing in the streets. This is just the start. You ain’t seen shit!
You might say, “wait a minute. I haven’t seen the wipeout.”
Yes you have. We already traded the first phase of this wipeout. Now we are positioning ourselves for the second.
Phase two is the ongoing banking wipeout. It will follow the “fake-them-out/recovery” rally-back. The sovereign debt crisis is your wake-up call for round two. It is starting as we speak.
“I have only seen the stock market go up,” you might say. “Same with oil and gold.”
Really now. Well, you should have been here when we traded the markets that went down so hard last year. And the year before.
Yes, gold and stocks have rallied since last March’s lows. Like we told you they would. Before that, they made historic crashes. Also just like we said they would.
These recent rally-backs give us another chance to whack the bastards again. The rally-back you have witnessed in stocks, gold oil and interest rates are, in my humble dishwasher opinion, a trading gift form GOD.
Ask yourself this question. What is different since last year at this time? What has happened to change the nosedive the world financial system is in?
Is the economy better? Are more people working? Has the hahahah housing market recovered?
Are people suddenly paying their mortgages? Have the alleged “buyers” suddenly come back into the housing market?
What a remarkable time. So many smart people have gotten suckered. They believe the biggest lie of all: that the worst financial crisis in history has played itself out, from start to finish, in less then 18 months. They are sheep headed for the slaughter.
My newest tape in production now is our latest offering in Current Recommendations. I wanted you to see this background information first. Current Recommendations will soon be posted on the Insiders website. It deals with the incredible specific opportunities presenting themselves, due to the sovereign debt wipeout and the ongoing, spreading depression.
Many of these opportunities are brand new. Almost no one understands them. As usual, the financial press is about six months behind the curve. And lying their asses off when they finally do catch up.
These trades let you potentially cash in, as nation after nation wipes out in Europe. As the Asian “miracle” turns into a fiery dragon collapse, straight from the pits of hell. This is especially true of China.
You and I are incredibly fortunate. We are living in an unprecedented time of financial history.
You just don’t get lucky like this that often. You could go through a lifetime of trading, and never see one-tenth the opportunities we have right now.
Of course Wall Street says we are wrong. What a shock. Who the hell is going to admit we are in a depression -– a wipeout of biblical proportions? Especially when they got stocks to sell and mutual fund retirement accounts to strip clean?
Let’s get real. Suppose the masses could figure it out. Would they really be losing their homes en masse? Would their life savings have crashed by half or more?
First they invested in dot.com’s. “For the long haul.” Predictable they lost their asses. Then they moved over to real estate. Wall Street told them to buy that stuff now, because they aren’t making any more of it.
Real estate collapsed, too, to no Insiders surprise. It still has a long, long way to fall. People are getting their asses handed to them.
Since then did the masses all of a sudden take a smart pill? You believe now they suddenly got it right? That buying gold, getting ready for hyper-inflation, is the right play now?
Sorry. I don’t believe that for a minute. The facts say gold is another sucker play, a colossal money loser.
I say we are in a depression. We will be in a depression for the next ten years or more. Anyone who trades for a recovery — that will supposedly create thirty million new jobs, bring on shortages in oil and commodities because of soaring consumer demand -– that will send gold to the stratosphere because of debt monetization and Chinese buying -– is going to wipe out even more.
Just look at the track record of these people. They have been on the wrong side of every major move for decades. I do not believe for a minute they finally got it right this time.
We have incredible opportunities before us. I have never seen more startling proof of the spreading economic wipeout.
I’m Nick, I’m still at your service…. especially in these very difficult times,
Nick DISHWASHER Guarino
Convicted felon, banned trader, and gagged market analyst. But it is a fair fight. Because with my two hands tied behind my back, in the ring with these pompous asses, brains and truth still wins…..
At first blush, all these welfare state benefits appear wonderful. Like money from heaven. Who could say no?
Who could be upset with saving a baby’s life, using the miracles of modern medicine? Making sure our grandmothers have the best health care, convalescent housing, and endless entertainment in their retirement years?
Socialism is seductive. For a while, every day seems like Christmas. You can spend more than you make. Consume more than you produce. Give out more in benefits than you ever paid for in taxes.
Pretty soon people forget they are getting much more in “benefits” than they paid in. They come to expect these benefits as their right.
And that is just the direct government handouts. Never mind the indirect subsidies I pointed out to you earlier. Roads. Water systems. Electricity. Sewage systems. Phones.
Even the damn weather systems — the rings of satellites that give us global communication, TV and internet — are almost COMPLETELY government subsidized.
So much mortgage and consumer debt was issued the past ten years, many people with modest jobs lived in modern-day marble palaces. With a swimming pool. Two-car garages filled with SUVs, jet skies, motorcycles, 4x4s. All the toys.
Every two years, they could buy a new car of their choice. The sky was the limit. They didn’t need to save money. They could get it all on credit. In fact the equity in their home was their own personal ATM machine. That was the new paradigm.
Same with businesses. They, too, seemed to defy the laws of economics and physics. They got something for nothing.
They could build magnificent shopping centers, and stock them with billions of dollars of Chinese (slave-labor-made) inventory. All these shopping centers were government subsidized. All financed by our banker buddies, with municipal bonds that will never be paid back.
Even corporations were on the global welfare system. They became no more efficient or productive. Yet the masses bought their new shares of stock, by the trillions.
So stock prices soared to the moon, as stock market ownership through retirement funds became the “investment” of choice. Even though the companies made no more profits.
This gave public companies trillions of leveraged dollars to play with. And play they did. Corporate pay shot through the roof. Never mind the perks like jets and yachts.
This great windfall was unearned. Nothing real backed it up. It was all a bubble. But with accounting black magic all this borrowed money — all these newly issued shares of stock (in reality, debt) that soared in price –- could be made to look like profits.
That is why corporations bought (and buy) other dead-broke corporations at such sky-high prices. They could make their own losses appear like profits.
Remember again the key thing. This huge orgy was built on the biggest debt creation in history. Debt that cannot be sustained. Debt that will bury the masses for generations to come. They will be strapped with low-paying jobs and taxes that strangle them for the next 100 years.
Junk bonds are debt of the most risky businesses. That is why their debt is rated as junk. Of all debt it has the greatest chance of never being paid.
Yet junk bonds give a yield that is not much higher than the yield of the sovereign debt of the U.S. government — the safest, highest-rated debt in the world…debt that for sure, without a doubt, will be paid in full. Insanity!
How can this be? The answer is simple and sad. Again our banker buddies have convinced the stupid money to go for high yield. So millions of people are taking on the vastly greater risk of junk bonds -– for just slightly higher potential reward. In reality they are buying the debt obligations of dead-broke monster corporations.
I repeat my often-stated refrain to you. In a debt wipeout the debt obligations of other are WORTHLESS. So get out of debt! Don’t invest in it not a penny of it. Because it is not a asset. It will be your undoing.
There is one exception to this: U.S. government debt. That may puzzle you. So let me tell you why you can lay in your bed at night, sure of two things.
One the U.S. government will pay its debt. Two the yield will plunge, in my opinion. Making the zero coupon bonds I recommend to you soar in value.
The reason is simple. The American people will be worked and taxed to death (literally), to make sure our government’s debt is paid. IT WILL NOT BE MONETIZED OR INFLATED AWAY!
Americans will give up their homes. Their cars. Their “benefits.” All to pay back this debt.
It will be UGLY! You’re already seeing this begin, with the record number of people losing their houses.
In the old system (that is coming to a end) endless debt meant the politicians didn’t have to worry. They could finance their great social experiments. They could hand out their endless mass giveaways to get votes. All financed by long-term government debt.
Now government debt is financing losses at banks, instead of government giveaways. That change will turn the world upside down. It is a new world order and not a very nice one. In fact it will usher in another dark age.
So you are clear here, we are at the “party’s over, penniless-debt-slaves” stage of the game now. Isn’t this clear? People are losing their homes, businesses and jobs. At rates never seen before.
You want a growth industry? Try flop houses, homeless shelters, prisons and food pantries. This will last for decades.
Remember that the mindless debt orgy didn’t last just five or ten years. It lasted three generations. Six decades. A hell of a lot of chickens are coming home to roost.
That has changed the world. And not in the way our clueless leaders promised either. Billions of people have been born, who know no better. They expect all these privileges -– the things people used to work, struggle and die for — as their right. And all for free.
To their minds, it all comes with their birth certificate. Life, liberty, pursuit of happiness -– plus education, health care, a home, a car, retirement.
They don’t realize everything around them is so cheap, because it’s so heavily subsidized on massive debt and slave labor.
The good times are now over. I know the politicians and Wall Street promise you otherwise. They say the green shoots party has started again. They want people to go out and borrow even more money. To stimulate the economy.
My friends, that is crazy. The WORST thing you could do is to go into MORE debt. It’s like telling a junkie trying to go cold turkey to take more heroin, so he will not feel so bad. The very solution they propose — spend more on credit — is the heart of the problem to begin with.
The depression is the price we pay for the debt addiction. Nothing can stop it. Kicking and screaming all the way, we will pay off all this senseless debt.
Individual personal debt has soared to levels unimaginable just 10 years ago. It far surpasses the ability of people to pay it back. And that debt keeps going higher.
This is why bankruptcies and foreclosures keep setting record highs. Along with poverty and homelessness. You know what I mean if you have ever been caught on the loan-shark/credit-card-debt- from-hell treadmill.
Corporations are no better. Don’t let their lying balance sheets fool you. They are broke, getting broker by the day. Which is why they can’t bring new stock issues to market. Why they can’t write their corporate bonds. Why they can’t do their IPOs to raise cash like they used to.
The suckers are out of money and credit. The ball of yarn has finally unraveled.
The bankers financed this endless credit orgy. They also are broke, losing more each quarter. Why do you think they needed trillions in bailouts -– and still can’t show real profits?
They use criminal schemes to disguise their vast debt. That’s what derivatives do. They let bankers hide debt and risk — and package it as an asset! Even though they know that debt will never be paid.
Government aids and abets them in this fraud. Why? Because the bankers aid and abet government. They give government the credit it needs , to try and buy off the masses. They were all in bed together, in the great debt lie.
Wall Street convinced over 100 million Americans to chase yield. To buy into the “high-yield, debt-based assets” b.s. They are clueless about the crap they really bought. This stuff gets more worthless by the day. Same with the “assets” that supposedly guarantee the debt. They also are dropping like a rock.
Just ask anyone who is unfortunate enough to hold mortgage paper. After the foreclosure and the final liquidation of the hahahahaha asset, they find they have lost their ass. The mortgage debt they bought as a “high-yielding investment” is only yielding huge losses.
These people did not buy high yield. They bought themselves their very own personal wipeout.
All so Wall Street and the bankers could roll the dice in the derivatives casino, rule the world, and pay themselves billions in bonuses each year.
You know what? All their gamesmanship -– all the phony-baloney accounting, their “pretending it’s a recovery” nonsense — doesn’t matter.
Because even with all their manipulations, the bankers’ incredibly sleazy instruments are still blowing up in their faces. The day comes when the gig is up. The Ponzi scheme is over. That day has come. We are at Judgment Day.
Every week we get more proof of this. One day retail sales drops further. A few days later, new home sales shock economists by falling again. Then consumer confidence crashes to new all-time lows. Unemployment, that was supposedly getting better, suddenly soars.
The bad reports never end. Of course not. It’s a depression. A deflation. Prices are dropping. Economic activity is slowing down. B.S. spin from government can’t change that.
And now for the coup de gras. Governments themselves — the source Perrier for borrowed money — the original unlimited charge cards — are going broke. En masse.
This is true in Greece (where the rioting on the street has already begun) in England. In Spain. In Portugal and Italy. It’s even true in that miracle of modern communism, China. (They do a good job hiding it.) It is spreading around the world.
Banks in these countries have lost tens of trillions of dollars or more. And that’s just for starters. The World Bank says the dead-broke banks have only gotten rid of or dealt with 25% of their bad paper. i.e. the worst is yet to come.
The past two years, governments have taken trillions of these losses off the bankers’ balance sheets. They have moved those losses over to the governments -– to the taxpayers. That is what the bailouts do.
But the losses are too great. Government cannot cover the bankers’ butts any longer. Which is why the “too big to fail” banks will be allowed to fail.
Most people know government is choking on the debt from its vast giveaway programs. This is getting worse. Millions more people are showing up at the welfare windows. These programs have reached the breaking point. Which puts government under even more pressure to come up with even more money. Money it does not have.
And most people do not know (unless they are Insiders) an even more frightening fact: government is also choking on the debt it has taken over from the dead-broke bankers. Its partners in the biggest financial crime ever committed.
So now the world’s biggest private AND public entities are wiping out. Nothing can stop the carnage that is about to spread around the globe.
Maybe the worst thing the banker whores did was to buy, resell and finance government sovereign debt.
That gave birth to the great modern socialist welfare states. It let these states exist and thrive. It made government the biggest single employer in the U.S.
Look at our nation for the past 80 years. People have been given far, far more than they produced. There is no such thing as a free lunch. So how did we do it?
The answer is obvious. Credit. We borrowed the money. So it was not a free lunch. It was a borrowed meal. And eventually you run out of credit. You must pay back ALL that borrowed money you owe.
We dumped all the hard part -– all the repayment — on FUTURE generations. On people not even born yet. Which means those people — the ones unfortunate enough to pay back our free lunches — end up getting less.
That “getting less part” is called a deflation. GOT IT? You better!
With each passing year, government’s socialist giveaway programs have grown bigger and bigger. They have compounded their vast debts for the past 40 years, 60 years or more. That is why they owe hundreds of trillions of dollars.
Over half the world’s population is on government socialistic welfare. From education, to housing, to food, to health care, to retirement. The majority of citizens in our modern democracies receive DIRECT government handouts.
Always financed by out-of-control debt. i.e. other people’s money. It’s going to be an ugly world indeed when their largesse is cut off for lack of money.
Think what the world will look like, when that happens in country after country.
Do you really expect the politicians to tell you this? That we are starting a new dark age? That the masses are about to become impoverished slaves?
Just the opposite. The sharpest minds in the world are working day and night, figuring out how to put you there. As they take your money and your freedoms. That is what Wall Street and its puppets in Washington do.
You may wonder why governments bailed out the banker whores, with trillions of your tax dollars. Why they gave them countless billions in bonuses. With almost no questions asked, and even fewer answered.
These assholes bankrupted our nation. They stole your money. They trashed the value of your home, wiped out your “guaranteed” retirement investments, and threw tens of millions of Americans out of work.
How could they get so much public money –- the greatest sums of taxpayer dollars any government ever gave any special interest group? With little more than a phone call?
Simple. They own our government. Bought and paid for. For shockingly little money, too.
But that’s not all. They also own us. They own our businesses. Our homes. Our cars.
They own anyone who needs their money to survive. Anyone who takes their credit. Which is basically the entire western world.
You and I being debt free isn’t enough. We are still beholden to them for the credit (financing) on our roads. Our sewers. Government, Our electricity. Our water sanitation services. All the basics of life, that we all take for granted.
Not much longer, I hasten to add. You better figure out how to unhook from the water meter. How to supply yourself electricity.
The bankers ‘gave’ the world 30-year mortgages. They gave us our hahaha retirements, annuities and stock market mutual funds. Their insurance companies (also a bunch of dead-broke, whore thieves) supplied our oftentimes rationed health care.
The bankers financed our cars for 48 months. Our motor homes, jet skis and exotic vacations. They let us build our airports and 100 million dollar jet liners. All on credit, that will never be paid back.
Let give you an example. The aviation industry has never made a profit. It’s been a loser since we took up our first paying passenger, Orville Wright, in 1903 at Kitty Hawk, North Carolina.
The masses have been able to fly for only one reason: airlines (and airports) were able to take on vast debt, and then roll that debt over and over. The airlines have lost far more money than they have ever made.
Massive government and banker debt supports the entire industry. Planes. Their maintenance. Airports. Air traffic control systems. All subsidized.
This debt keeps swelling. Both in amounts and terms. The date it must get paid back keeps getting moved further and further into the future. Now it stretches into the 22nd century. In reality, it will never be paid back.
Every major airport in the world is banker/government subsidized. And every one is a money loser. Same thing with the ground transport systems to the airports (roads, parking lots, trains, buses). Same with the air traffic control system, fire rescue, security systems. All government subsidized. NOT reflected in the ticket price.
These are just a few examples of the hidden unpaid debt that subsidizes our modern lifestyle. It’s that way in everything from roads to trucking to shipping. Even manufacturing.
This should help you understand why the bankers got these unbelievable government bailouts. With virtually no questions asked.
By pulling every dirty, illegal trick in the book, bankers managed to keep the whole bubble debt orgy afloat. Now it’s come to an end. The debts have grown too large. The losses from derivatives have gotten out of control. We can no longer finance (borrow) our way out of this. It’s curtains!
The theme for the next 100 years will be a much poorer world. A world where the masses are reduced to virtual slaves. They and their children will work their whole lives, to pay all this debt back.
No, we will not monetize it. We won’t inflate it away or simply default. That is another myth. A lie straight out of the pits of hell, to try and take more of your money.
Say the U.S. tried to do this. The second the world got wind of that shit, they would shut down our society. The fleeting credit we need would be gone. The lights would go out. The Homeland Security guys would not have gas for their helicopters, payroll or bullets.
So don’t kid yourself. Every stinking last dime owed will be paid in full. Including the compound interest.
We would need vastly greater amounts of new debt to support our kingly lifestyle. That money is no longer available. As a society we have borrowed all we can. Now it’s payback time.
That is why you see pay cuts right and left. Service cuts. Less and less of everything.
Even our cities are shrinking. There is not enough money to provide services to all neighborhoods. This will get worse and worse in the coming years.
The crisis the world faces is DEFLATION. You damn well better understand and prepare yourself for it. Everyone gets less.
Look, you have no excuse. You can’t say you weren’t warned. You can’t say you didn’t see it. Everything is deflating (becoming less) all around you.