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: February 2014
Huge banks victimize Main Street on a colossal scale using a perversion of the bailout Rule of Law that can only grow like a cancer. It now appears that the bailout cancer has metastasized with the renunciation of the Rule of Law by the United States Attorney General, without objection or much of a ruckus, before the Senate Judiciary Committee: I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. Eric Holder, March 6, 2013. As an initial observation, is that not a strange way for any law enforcer, much less the top cop in the world's powerful nation, to speakin the passive voice, of being hit, in an effort to rationalize his own failure to enforce the law? And whos issuing indications that make the head of the DOJ shrink in fear of discharging his duties anyhow? Well answer the latter question with a list of names in Part Two. For now, lets be clear about whats on the table when the U.S. Attorney General comes before Congress to testify: it includes the status of the U.S. as a sovereign nation. And thats simply because the enforcement of criminal law falls within the exclusive province of a states authority. Sovereignty is the power of a state to govern itself, such as making, executing, and applying laws; imposing and collecting taxes; making war and peace; and forming treaties or engaging in commerce with foreign nations. Private Citizens cannot bring criminal actions. States bring them, often even when private victims do not wish to press charges, as retribution for harms to the public. That perogative is inherent in a state's sovereign power to protect itself from criminals. In the U.S., executing federal criminal law is the duty of the U.S. Attorney General, the head of the Department of Justice and chief law enforcement officer of the Federal Government. Above him in the executive branch org chart, there is but one entry: President Barack Obama. Execution of the law was squarely in the crosshairs when Eric Holder testified before the Senate. Specifically at issue was the DOJs wholesale failure to prosecute any large banks or any of their executives despite seemingly endless waves of uncontested evidence of criminal behavior (not to mention the disappearance of at least $13 trillion in a financial crisis driven by fraud). Were not talking about a few slip-ups here and there by the DOJ, or a couple of favors done with a nudge and a wink. Were talking about what looks very much like a green light for big banks to commit crimes with wild abandon while pretending that fines levied in lieu of prosecution (a) are something other than a small tax paid by the banks doing business as criminal enterprises, (b) cannot simply be paid for from the fruit of additional crimes in the future, and thus (c) do not guarantee more crime.
: February 2014
Eric Holder did not materialize before the Senate out of the blue. Rather, his testimony followed an unbroken pattern of prosecutorial inaction and deference by the DOJ towards big bailed out banks, a sample of which includes: In April 2010, Richard Bowen, a former Citigroup risk officer, told the Financial Crisis Inquiry Commission, among other things, that Citi sold MBS products despite knowingbased on information that Bowen provided to the top ranks of the company, including ex-CEO Robert Rubinthat huge swaths of mortgages owned by Citi were defective to the tune of between 60 and 80%. Citi continued its multi-billion-dollar sales of defective MBS products that it knew to be falsely rated. The DOJ filed no criminal referrals and prosecuted no one at Citigroup. In June 2010, it emerged that Wells Fargo had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers -- including the cash used to buy four planes that shipped a total of 22 tons of cocaine. The DOJ filed no criminal referrals and prosecuted no one at either Wells Fargo or Wachovia. In September 2012, Lanny Breuer, then the head of criminal enforcement at the DOJ, traveled from Washington, D.C. to give a speech to the New York City Bar Association. Breuer's house call to the corporate defense bar included statements that he would not always be convinced not to prosecute large institutions that made compelling presentations to Breuer, in his conference room, concerning the negative economic ramifications of such prosecutions. In December 2012, Lanny Breuer admitted that HSBC permit[ted] narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries." What is more, senior bank officials were complicit in the illegal activity" and indeed one HSBC executive argued that the bank should continue working with the Saudi Al Rajhi bank, which has supported Al Qaeda." The DOJ filed no criminal referrals and prosecuted no one at HSBCdespite the fact that most of HSBC's senior management has been replaced since the conduct at issue, which stretched from the mid-1990s to 2010. On January 22, 2013, Lanny Breuer appeared in PBS Frontlines The Untouchables, which investigated fraudulent mortgages originated and sold by Bank of America (nee: Countrywide). Breuer stated that for large financial institutions, pursuing justice in any given case meant that he should speak to experts, because if I bring a case against institution A, and as a result of bringing that case, theres some huge economic effect if it creates a ripple effect so that suddenly, counterparties and other financial institutions or other companies that had nothing to do with this are affected badly its a factor we need to know and understand. As a result of the latter, [l]ess than 24 hours after 'The Untouchables' aired on PBS, its main target, Justice Department criminal-division head Lanny Breuer, abruptly resigned. Breuers disclosuremade with no hint of irony or shame, nor with any legal authority for supportthat the DOJ was deferring to unnamed experts whenever large financial institutions were involved was not the only such admission by the Justice Department. In yet another criminal case that saw no prosecutions, namely, Libor manipulation by UBS, a Swiss Bank, Eric Holder used language essentially identical to that which led to Breuers resignation:
: February 2014
We reach out to experts outside of the Justice Department to talk about what are the consequences of actions that we might take, what would be the impact of those actions if we want to make particular prosecutive decisions or determinations with regard to a particular institution. Finally, on January 29 of this year, Congress seemed to connect this untrammeled crime spree with the DOJ's docility when Senators Sherrod Brown (D-OH) and Charles Grassley (R-IA, the ranking member of the Judiciary Committee) fired off a letter to Eric Holder. Among other things, they demanded the names of all outside experts consulted by the Justice Department in making prosecutorial decisions regarding financial institutions with over $1 billion in assets. They also demanded to know how the DOJ ensure[d] that these experts provided unconflicted and unbiased advice to DOJ. The importance of the latter point is impossible to overstate given the DOJ's responsibility for bringing criminal cases at the federal level. By demanding to know what measures the Justice Department was taking to insure against self-dealing by experts, the senators touch on something far deeper than a garden variety conflict of interest. The real question they are posing is whether the DOJs outside experts are in reality the large financial institutions themselves, because if they are, their opinion that prosecution should be foregonewhich the DOJ has followed without exceptionis a bald assertion of sovereign immunity: huge banks are claiming their own exemption from criminal prosecution based on their identities as huge banks, and Eric Holder's DOJ has never disagreed. And here we run up against that word again: sovereign. Before considering the IMPLICATIONS should it turn out that the international cartel of bailed out banks is exempting itself from the reach of the law by "advising" the DOJ on prosecutions of its members, it is worth examining the claim, articulated by Holder, that "negative economic consequences" would attend the criminal prosecution of any cartel members. In different contexts and guises, we have heard that claim of "systemic failure" before, and its public failure on the merits is so impressively robust that to see the DOJ so much as entertain the discredited claim at this point--much less fall for it hook, line, and sinker--is so breathtaking that it begs the question: what's really behind the DOJ's capitulation to the banks? (1) In September 2008, Treasury Secretary Henry Paulson told Congress that the nation would descend into martial law unless TARP was passed. Paulson's urgency was driven by toxic assets on the banks' books. Unless $700 billion of these toxic assets were removed immediately through a massive Treasury purchase, Paulson said, Armageddon would quickly follow. Immediately after Congress passed TARP, however, Paulson changed his mind without batting an eye and used the $700 billion to directly recapitalize the bailed out banking cartel, toxic assets be damned. Whether Paulson intentionally deceived the public when he made his initial claim is beside the point. What matters is that his threat--buy the toxic assets or plunge into Depression--proved toothless as a matter of fact: none of the TARP money was used to purchase toxic assets, and yet the country avoided the cliff dive Paulson had sworn would result. Did Eric Holder simply sleep through this episode? (2) Less than a year later, the cartel floated a miniature version of its Armageddon claim in federal district court.
Copyright 2014 InterAnalyst, LLC 4
: February 2014
In Bloomberg v. the Federal Reserve Board of Governors, the Federal Reserve argued that disclosing, in response to FOIA requests, the names of (and amounts borrowed by) bailed out banks using the Feds Primary Dealer Credit Facility (PDCF) would result in competitive harm to the institutions involved. In support, the Fed submitted a rash of expert affidavits from bankers explaining how competitive harm would come to the banks that used the Fed's PDCF facility if the FOIA disclosures were made. The Chief Judge of the Federal District Court for the Southern District of New York, Loretta Preska, dismissed the bankers' argument: At best, the proffered affidavits suggest that the borrowers' competitors may use the knowledge that a borrower participated in a Federal Reserve lending program in order to determine when the borrower is in a weakened condition" and spread that information to the borrowers' shareholders or the market in general. But the risk of looking weak to competitors and shareholders is an inherent risk of market participation; information tending to increase that risk does not make the information privileged or confidential under Exemption 4. In other words, tough shit: bankers must cope with the real world just like the rest of us no matter how big or important they think they are. Know what happened next? The FOIA disclosures went forward without so much as a ripple in the financial markets. More fundamentally, though, if the cartel's narrow argument that mere competitive harm would afflict a group of banks is legally flawed, then its far broader claim that Armageddon would befall the earth if a single bank (or banker, for that matter) were prosecuted is dead on arrival as a matter of law. So why does Eric Holder accept the absurdly overbroad claim at face value as a legal proposition each and every time it is made? (3) From 2008-11, Neil Barofsky was the Special Inspector General of the Troubled Asset Relief Program (SIGTARP), in charge of ensuring that TARP funds were distributed to the bailed out banks with a minimum of fraud. He wrote about his day-to-day battles with banking apologists, including Treasury Secretary Tim Geithner, in Bailout, published last year. At the end of the book, Barofsky relays a stunning admission by Geithner: the claim that an institution is "systemic" is in all actuality a conclusory label rather than a meaningful analytical tool for assessing what might happen in the future. Says Geithner: You wont be able to make a judgment about whats systemic and whats not until you know the nature of the shock. (See p. 222) If Tim "Bailouter-in-Chief" Geithner, a man with no formal education in either law or economics, is able to see that claims of systemic importance are intellectually bankrupt, why can't the U.S. Attorney General? This brings up another clue about who the anonymous DOJ experts are through the process of elimination: they aren't from the U.S. Treasury, which we know from the Senate Banking Committee hearing in February 2013. There we learned that Treasury told the Department of Justice it was not in a position to assess whether HSBC should be prosecuted. IMPLICATIONS If the DOJ's anonymous experts turn out to be the international cartel of bailed out banks, the implications are grave for at least three reasons.
: February 2014
First, the entire legal doctrine of sovereign immunity is very likely unconstitutional in the first place, premised as it is on the notion that "the King can do no wrong." Duke Law Professor Erwin Chemerinsky, the author of a leading treatise on constitutional law, makes this very point when he demonstrates, in his Stanford Law Review article Against Sovereign Immunity, that sovereign immunity is inconsistent with three fundamental constitutional principles: the supremacy of the Constitution and federal laws; the accountability of government; and due process of law. (p. 1210). Second, the doctrine of systemic importance, even aside from being thoroughly meritless for the reasons explained above, is impossibly vague in scope. That became clear in the HSBC case. There, the bank had "already sacked all the senior staff involved in the scandal, and agreed to stringent monitoring the first time a foreign bank has agreed to such oversight." Thus, even fully crediting the theory that prosecuting HSBC would have posed systemic risk, that same theory does not and cannot explain why prosecuting criminals outside of the bank would have posed any risk at all, much less "systemic" risk. Lanny Breuer must have been grateful for the mainstream media's failure to ask him why systemic immunity extends to exemployees outside the system, or where such immunity ends. It sure looks as if the international bailed out banking cartel claims immunity for individual bankers based on a calculation that extends protection to anyone in a position to name names. Whatever the case, it is the whim of a cartel, and not any Rule of Law, that determines who is prosecuted and who isn't--a system that democracies have sought to avoid since the Magna Carta was signed 800 years ago. How's that for regressive? Third, and most seriously, criminal sovereign immunity is legally limited to the President of the United States. That should tell you something about where the international cartel of bailed out banks stands if it turns out to be the entity asserting governmental immunity from the consequences of its own crimes. While sovereign immunity is considered a civil law doctrine, that's merely a practical reality rather than a legal limitation. Criminal cases are brought in the names of sovereign authorities themselves, either by the United States or by individual states, and sovereign immunity is a doctrine asserted as a defense. A case in which a sovereign asserted a sovereign immunity defense in response to criminal charges brought by a sovereign would be a rarity indeed. Nevertheless, there is legal authority that directly addresses the scope of criminal sovereign immunity. The issue arose and was addressed during Watergate: the Office of Legal Counsel ('OLC') prepared a comprehensive memorandum in the fall of 1973 that analyzed whether all federal civil officers are immune from indictment or criminal prosecution while in office, and, if not, whether the President and Vice President in particular are immune from indictment or criminal prosecution while in office. Criminal immunity was found to extend only to the President: The OLC memorandum concluded that all federal civil officers except the President are subject to indictment and criminal prosecution while still in office; the President is uniquely immune from such process. That same year, in a different case (the grand jury investigation of Vice President Spiro Agnew), Robert Bork, then the Solicitor General of the U.S., reached precisely the same conclusion as the OLC: the President, unlike the Vice President, could not constitutionally be subject to such criminal process while in office." That ought to make the dead seriousness of criminal immunity for the cartel of bailed out banks crystal clear. If these financial institutions and the anonymous experts relied on by the DOJ are one and the same, then
: February 2014
they have arrogated to themselves sovereign legal power that's available under the law to the Chief Executive of the United States and no one else. As things stand now, people who've been fired from a bank in Hong Kong are on the same legal footing as the President of the United States. But let's get down to brass tacks. Since there can't be two kings in a kingdom, its the international criminal banking cartelnot President Obamawhos the real sovereign authority here. Obama's top law enforcer, Eric Holder, admits--fully in practice and nearly so in his own words--to being trumped. Obama's announcement that bailed out banks have not committed any crimes, in the face of overwhelming and undisputed evidence to the contrary, quite accurately summarizes the system of sovereign immunity that is in effect: the real King--banks--can do no wrong. The President is merely their messenger. In Part Two, well present compelling evidence that the anonymous experts are indeed the so-called systemically important financial institutions, and that the U.S. government is functioning not only as the agent of the criminal banking enterprise, but as its weapon. If that sounds like a control fraud after a few hundred steroid-and-bromo-mescaline cocktails, you've got an inkling of what's headed our way if we don't right the ship forthwith. There are two very big and related clues as to the identity of the anonymous experts behind whose opinions U.S. Attorney General Eric Holder hides whenever explaining away his failure to prosecute big banks on the basis of their systemic importance. Here is a list of international banks that parade under the rather obvious label of Globally Systemically Important Financial Institutions, or G-SIFIs. There are 28 banks in total, 9 of them headquartered in the U.S.: Citigroup Deustsche Bank HSBC JP Morgan Chase Barclays BNP Paribas Bank of America Bank of New York Mellon Credit Suisse Goldman Sachs Mitsubishi UFJ FG Morgan Stanley Royal Bank of Scotland UBS Bank of China BBVA Group BPCE Group Credit Agricole ING Bank Mizuho FG Nordea Santander Societe Generale Standard Chartered State Street Sumitomo Mitsui FG Unicredit Group Wells Fargo
This list of cartel members is updated annually by the Financial Stability Board, a collection of international organizations. The FSB is a global meta-body of bankers. But the formal edifice, whether called the FSB or the NWO (hat tip Alex), really doesnt matter, because, as Golem XIV states: Guess which institutions provide the membership for all of the above international bodies? Yes, you got itthe big banks. These are the banks that are above the law in the U.S. In Part One, we mentioned four banksCitigroup, Wells Fargo, HSBC, and UBSwhose massive crimes had been taxed at a de minimis rate by the Department of Justice rather than prosecuted. All four are on the list of G-SIFIs above.
: February 2014
So what, you may ask, thats just a list compiled by some international convention of cokehead bankers, how do they make sure a rogue federal prosecutor doesnt break ranks and haul a cartel member or two off to criminal trial? Enter clue no. 2: Covington & Burling, the law firm from which both the head of the DOJ (Eric Holder) and the DOJs head of criminal enforcement (Lanny Breuer) were recruited. Actually, Breuer is no longer with the DOJ. Following a four-year stint in which the enforcer failed to prosecute a single big bank, Breuer has returned to Covington & Burling, where he will earn be rewarded with $4 million in annual compensation. The significance of Covington & Burling lies in its list of current clients, which looks remarkably like the list of criminally immune cartel members above (particularly the more recognizable names): Citigroup, Deutsche Bank, JP Morgan Chase, Bank of America, Goldman Sachs, Morgan Stanley, UBS, Wells Fargo, and ING Bank. Not to put too fine a point on it, but Eric Holder and Lanny Breuer have the financial motivation not to prosecute their firms clients. In Breuers case, it turned out to be $4 million of motivation. Per year. Under any functioning system of law, of course, both Holder and Breuer would submit to screening procedures at the DOJ to insulate them from prosecutorial decisions involving their former clients. We're sure they did the same thing under our impotent system as well. But so what? When laws against crimes are a dead letter, who in his right mind would put any trust in a conflict screen? As Cheyenne told Jill in . . . Once Upon a Time in the West, when youve killed four, its easy to make it five. Now commentators are starting to point out where the slippery slope of sovereign immunity for criminal banks will lead. Jim Chanos, who detected the fraud at Enron well before it destroyed the company and its shareholders, notes that not only are criminal cartel members now motivated to continue cheating and stealing, they have a fiduciary duty to do so. (Speaking of the Enron-ization of the U.S., Eric Holder is working to release CEO Jeff Skilling from prison early in yet another act of prostrate submission before his real masters, the criminal banks.) Immunity extends not only to criminal behavior, but to assets that a cartel member bank acquires through crime: if by doing those illegal things [the bank] makes out-sized profits for its shareholders and staff, that money, those profits are also above the law. Source: DailyBail
: February 2014
Thus, anyone who thinks account confiscation a la Cyprus cant happen in the U.S. is dreaming of a bygone republic. Not only is account seizure possible in the U.S., or even likely, it is guaranteed. Just ask MF Globals segregated account holders or GM senior bondholders if you have any doubts. In the MF Global case, Jon Corzine "brazenly took liquid assets like Treasuries and warehouse receipts, but not cash which would have been more quickly missed, from customer accounts to post as illegal collateral for emergency funding with a lender who must have known that they were receiving stolen goods." The lender, of course, turned out to be JP Morgan--a prominent international cartel member. Jon Corzine was of course one of Obama's top fundraisers and an alumnus of Goldman Sachs--a cartel member. In the GM bankruptcy, the age-old pecking order of creditor priority was turned upside down, literally "rewriting law," when senior unsubordinated secured creditors' claims were trumped by payouts to junior unsecured creditors in a patently political sop to Obama's perceived union supporters. In both cases, the black letter law that's supposed to gird markets with trust and predictability was trampled in favor of Obama's political allies. Now that Obama has altogether surrendered the DOJ's law enforcement functionality to the criminal international banking cartel, those dangerous precedents turn out to have been short-sighted in the extreme: there is nothing left to stop the plunder of customer accounts in Cyprus from crashing like a tidal wave across U.S. shores. The timing depends only on the restraint that the banking cartel elects to show. There is no remedy in sight, only more financial crime as Americans are robbed deeper into serfdom. The Executive Branch is merely an agent of the criminal banking cartel for the reasons given. That fact, in turn, has cut the Judiciary out of the equation altogether: a court cannot try criminals who are never brought before it to face charges. That leaves Congress, which in theory could initiate impeachment proceedings. But how likely is success when the Senate, which would try any impeachment cases, couldnt even obtain the names of the DOJs socalled experts in the first place? As noted in Part One, Senator Grassley asked the DOJ for the experts names in a letter on January 29, 2013. Eric Holder testified on March 6, more than a month later. The issue of the experts identities was thus as ripe as could be, but rather than obtaining the names, the ranking member of the Judiciary Committee put on a clinic in how to conduct an incompetent examination: Q. On January 29, Senator Sherrod Brown and I requested details on who these so-called 'experts' are. So far we have not received any information. Maybe you're going to but why have we not yet been provided the names of experts the DOJ consults as we requested on January 29? We continue to find out why we aren't having these high-profile cases. A: We will endeavor to answer your letter, Senator. We did not, as I understand it, endeavor to obtain experts outside of the government in making determinations with regard to HSBC.
: February 2014
Just putting that aside for a minute though, the concern that you have raised is one that I, frankly, share. I'm not talking about HSBC here that would be inappropriate. But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute if we do bring a criminal charge it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large. Again, I'm not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate. I think that's something that we you all [Congress] need to consider. The concern that you raised is actually one that I share. Note that Senator Grassley asked one question: why havent you answered our letter? Holder doesnt answer it. Instead, he promises to supply the names later. At that point, Grassley should have put two questions to Holder. First, answer my question by explaining why you ignored our letter. Second, when will you supply the names of the so-called experts? A mediocre first-year litigation associate wouldve gotten this information within seconds. But not Senator Grassley, who earned his masters degree during the Eisenhower Administration. Here is his completely irrelevant follow-up question: Q: Do you believe that the investment bankers that were repackaging bad mortgages that were AAA-rated are guilty of fraud or is it a case of just not being aggressive or effective enough to prove that they did something fraudulent and criminal? Huh? Not surprisingly, Eric Holder has been in no hurry to disclose the names of the experts retained by Covington & Burlings clients since dancing around Grassley like a cigar store Indian. Holder has completely blown off the Senate, which has done nothing to follow up the issue. Frankly this disgusting charade has surprised no one whos paying any attention, coming, as it does, from the same august body that exempted itself from insider trading laws and has failed to pass any meaningful reform legislation since the 2008 meltdown, an even worse repeat of which is on its way. On the contrary, both Congress and the Executive Branch are now just tools of fraud used by the criminal international banking cartel against the people, who for their part are drooling iDope dreams oblivious to their own last act, proving Edward Murrow right, a nation of sheep having begotten a government of wolves. Source: Jesses Crossroads
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: February 2014
Icelanders said the central bankers and their government committed financial and monetary fraud and crimes, without the peoples consent, so Icelanders starved their beast. Icelanders refused to accept fascism, and refused to pay for what the central bankers and their government had done. The banks have done the exact same thing that they did in Iceland in every other country around the world. The governments continue to choose to steal taxpayer money to bailout banks that committed fraud. They do this because the bankers fund their campaigns. The bankers own the governments, including ours. However, the one difference is how Iceland responded to the fraud. They refused to allow it to feed off the people any longer, and now Iceland is in economic recovery, which I have written about numerous times in the past. The Icelandic people stopped the looting and started prosecuting, dissolved their government and started over. Unfortunately, no other country has considered the just and common-sense approach that Iceland took. From Bloomberg: Iceland is betting its decision two years ago to force bondholders to pay for the banking systems collapse may help it rebound faster than Ireland. Icelands taxpayers face a smaller debt burden than their Irish counterparts, where the governments guarantee of the financial system in 2008 backfired this year when the banks came close to insolvency. Icelands budget deficit will be 6.3 percent of gross domestic product this year and will vanish by 2012, compared with the 32 percent shortfall in Ireland, the European Commission estimates. While analysts expect Icelands recession to extend into next year, the nations exporters are benefiting from a 28 percent drop in the krona against the dollar since September 2008. The decline may help the nation of 320,000 people rebalance its economy faster than Ireland, whose euro membership rules out a currency devaluation. With Icelands OMX share index up 16 percent this year, the third-biggest gain in Europe after Denmark and Sweden, Nobel Prize-winning economist Paul Krugman says Iceland may be an example of bankrupting yourself to recovery. The difference is that in Iceland we allowed the banks to fail, Iceland President Olafur R. Grimsson said in a Nov. 26 interview with Bloomberg Televisions Mark Barton. These were private banks and we didnt pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks. That last paragraph is the key. Private institutions that make bad business decisions should FAIL. All this nonsense the banks want everyone to believe that the economy would collapse without them, is just that, a bunch of baloney. Think about it. As opposed to the wonderful, glorious economy we have now?!! The proof that they are lying can be found in Iceland. Instead here in the US and in other countries around the world the avenue being taken is to fleece the taxpayers to print the money to support the insolvent banks and for governments to reign in spending by
: February 2014
cutting any and all programs that actually support citizens (pensions, unemployment, medical care) and raising taxes. At the same time, governments are increasing the spending on their own salaries, benefits, pet projects and of course, lining the bankers pockets with newly minted cash and bending laws, rules and regulations to exclude the bankers, so that the banks will continue to show their gratitude by funding the government officials campaigns for reelection. I think it should be obvious to anyone who has even remotely studied history. Theres a name for this system. Its called communism. Iceland has chosen freedom and so far, the rest of the world has chosen slavery under what now amounts to communist regimes.
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: February 2014
All of this will put the Dow and other indexes onto a volatile roller coaster ride that will end with the Dow Jones losing as much as 80% by 2025. To survive, you must implement the right strategy for this season. So heres your guideline of what to do. . .
: February 2014
10% ETFs
20% ETFs
30% ETFs
ETFs
ETFs
If your pension or retirement accounts do not have index funds, make a phone call and find out which funds hold very similar assets to the indexes represented above. I would not own gold, but if you must, then purchase it via a highly liquid ETF. I would not own bonds yet, but if you must, then make them Treasury or very solid municipal bonds. I would commence growing your Money Market account with any new contributions. I would continue to own Investments until the Wealth Preserver finds Rule 2. Always use ETFs for your diversification vehicles as they are extremely liquid and can be moved swiftly. The table below represents how your stock market diversification should look during this season depending on your personal risk profile; which can be determined here.
ETFs
ETFs
For the final leg of this shakedown change your portfolio allocations again. Continue to stay very close to your Wealth Preserver and Wealth Maximizer subscriptions. It is likely we will be in strong position to sell all equity positions in all sectors globally. Convert it all back to T-bills or money markets.
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: February 2014
Then keeping a close eye on Wealth Maximizer, we will help guide you to selectively buy back into leading sectors like health care, financials, and technology. Absolutely stay away from East Asia ETFs (China, Japan, and South Korea). These markets will correct into the early to mid-2020s.
The value of seeing the economic cycles ahead extends beyond your investment plans. You can also use this knowledge to better position yourself financially for each season. We will alert paid subscribers when the time is right to get into these markets.
Lower returns and higher risks will characterize this shakeout winter season. It will also reduce the cost of living and the future costs of real estate and assets. Do not take any chances. Do not gamble. Do not leverage. If you have the money, pay off your highest interest debt first. If you have the money, pay off your cars and mortgage. Save and become more conservative. Heres what to do with real estate . . . If you want to retire and buy a house in Southern Florida, the Caribbean, Arizona, Idaho, Vermont or British Columbia, wait until 2015 at least. If youre financing a home between 2011 and 2015, lock in at a low 30-year fixed rate. Look to benefit from falling short-term rates in the final slowdown from around mid-2017 into 2023.
Heres what to do with cars . . . If you want to buy a car this year, dont. Rather lease it for the next two years. Buying now will only result in significant depreciation. Instead, let the bank take the risk of falling car prices! The best time to buy a car is in mid-2014. The economy will be weakest then and youll get a low interest rate.
Heres how to maximize your retirement income and the assets you pass on to your children . . . Maximize your 401K and matching contributions because surviving this winter shakeout is about accumulation. Buy variable annuities and variable universal life policies. These are important tools for deferring taxes during your earning years, minimizing taxes during your retirement years, passing down assets to your children and offering some protection against downside risk. You will use the Wealth Preserver signals within both variable policies.
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: February 2014
Implement strategies to defer earned and unearned income, use Roth IRAs where possible, skew investments toward tax-free items such as municipal bonds and minimize your real estate footprint to avoid property tax.
As a starting point, use the guidelines we have given you to position your investment portfolio and financial affairs to sail smoothly through whats ahead.
During the decade ahead, timing will become increasingly important to your success. Thats why you MUST follow our monthly Wealth Preserver and our weekly Wealth Maximizer. In addition, you should read the InsidersPower newsletter in detail. Thats where well tell you whats coming next, and what to do about it. You will also learn how to adjust your financial plans and investment portfolio for maximum benefits and minimum pain. In short . . . keep reading this newsletter and we will keep you up to date.
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: February 2014
In 1986, Livio S. Nespoli wrote is first Investment Book called Invest with History. In it, he revealed how an investor could use historical precedent along with social mood and demographic trends to accurately predict the direction of the markets, sometimes decades in advance. Since then, Livio had delivered countless seminars to thousands of professional and amateur investors teaching them how to accurately identify booms and busts well ahead of the mainstream. He gained international national attention for his warning investors of the 2000 peak and 2008 stock market collapse months before they happened. But this was not the first time he was on the money with his big picture forecast. For example, in February of 2000 Livio accurately forecast the stock market collapse and the multi-decade economic collapse that would begin. In other words, his proprietary indicators, which are now available to all investors, accurately predicted the major economic and stock market events that could have made you substantially richer over the past 18 years. How does he do it? Well, while most economists focus on short-term trends, policy changes, technical indicators, elections, things that are volatile, unstable and can change from day-to-day. Livio has always focused on long-term trends and cycles, not the day trader mentality. Demographics. Business cycles. Socionomic patterns. Things that have demonstrated themselves over hundreds and even thousands of years to be consistent, predictable and measurable. In addition, through over 80 years of research he has found that most of the largest financiers have known of these proven and predictable Socionomic patterns. He has provided devastatingly accurate market entry and exit points by helping you follow those historically proven cycles. He studies the past to forecast the future, an approach that enables subscribers to position themselves with an incredible degree of accuracy. Then he makes minor tweaks and adjustments in response to intermediate term events that occur along the way. And thats what he brings to you on his InterAnalyst subscriptions so youll know whats coming next, where the immediate opportunities are, and where to park your money for the longer term. As an InterAnalyst subscriber, you will know, for example, when its time to start profiting from the rise of specific economies and exactly what investments will hand you the fastest profits. Youll learn when commodities will likely reach their peak in their cycle and how to ride the gains. Youll also learn when theyll turn down and what investments to make to profit from any moves down. And youll learn when the property market will turn up again. Youll learn when, money markets and bonds would be a better investment than equity allocations and when not. Youll be ahead of the markets on every boom and bust and access the tools you can use to prepare yourself to profusion.
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: February 2014