The LABVIRUS.COM Blog

EXTREME WARNINGS FOR EXTREME TIMES
http://www.fourwinds10.com/siterun_data/education/public/news.php?q=1260901976

◄$$$ THE WORLD HAS A PLETHORA OF POTENTIAL DISASTERS LOOMING. SO MANY ARE ON THE EDGE OF OCCURRENCE, WITH TRIGGERS AVAILABLE IN NUMEROUS ARENAS. WATCH FOR NUMEROUS POWERFUL EVENTS, WHICH MIGHT NOT WAIT FOR THE NEW YEAR. HERE IS MY LIST OF POTENTIAL DISASTERS, NOT PRESENTED AS FORECASTS, BUT RATHER AS A LIST TO BEWARE OF FOR NASTY ERUPTIONS. $$$

This matter cannot wait for a January issue since too important and seeminly imminent. So many risky-filled situations, more than at any time in my entire memories. A plethora of potential disasters looms. The triggers are of many types, some known with events from gradual lost control by architects, some from developed breakdown that hits a threshold, others from decisions by desperate or frustrated nations to take action, others from the great unknown behind the curtains and in the basements. The list is not entirely of my own making, but rather assembled from a starting point from the Business Insider, augmented by a very well connected enlightened contact, with a few others the result of ongoing conversations with key colleagues. They are not listed in any order of likelihood, since they are all very much at risk of occurrence, and integrally interconnected to a frightening degree. Each would heap tremendous damage, disruption, and devastation, if it occurred. One should note that if one or two events occur, then others might occur with domino effect from the chain reaction of chaos and opportunity. The effect on the gold price from the initial events (unclear which two or three come first) would be uncertain, but then followed by a tremendously powerful upsurge in price. See the Business Insider article for other ideas and forecasts (CLICK HERE).

Bear in mind that my August warning of the Persian Gulf defaults acting as a trigger event occurred. The ripple effects will be felt for a full year, just like Lehman, Fannie Mae, and AIG in the United States, just like Northern Rock, Royal Bank of Scotland, and Lloyds in England. The triggers have been ignited, and constant fallout comes.

>>Saudi Arabian royal family loses it grip over the Islamic Fundamentalists and is replaced. Scores of old royals escape to Spain and Los Angeles, with hundreds of billion$ in assets, dragging up memories of the Shah of Iran and his escape, only the number is greater and the total absconded national wealth is much greater. The Wahabbists make up the font of radical Islam, then in control of the remaining oil fields and new wealth. Disruptions and instability spread across the entire Persian Gulf. A clampdown of fundamentalist groups in other Gulf nations invites a certain backlash, as violence crops up sporadically.

>>China gains full blue water naval capability. Already far more advanced than the general public is aware, and even some military analysts are aware, the Chinese Military attains aircraft carrier force with 3 carrier groups. With this potential, including at least one with long range strike carrier capability, the balance of power in Asia is altered. Both Taiwan and South Korea would be subjected to pressures that result in changed alliance and allegiance. Certain other strategic points gain attention, as focus is trained on the Mallacan Straits, the Panama Canal, the Suez Canal, the Bosporus Straits, the access routes to the Bering Sea, Australia, and South America. The superpowers then adjust to the New Chinese Navy.

>>Russia enters a deep dispute with Eastern European nations, in particular Ukraine, and cuts off the flow of natural gas. Disputes center on return to the Russian fold from the independent factions encouraged by the United States motivated by the many Color Revolutions. The wild card element could be the spread of viruses, which damage economies and the ability of nations to pay for the energy products. Ukraine is the site of the worst global infestation right now. Caught in the middle, at the end of the distribution lines, is Central Europe, whose ties to Russia remain healthy and strong. The alternative routes for energy flow, such as with new North Stream and other Liquified Natural Gas routes, might not be ready to satisfy the demand. Russia then comes forward, announces its intention to act as a guiding light, offers stable priced energy supply, and forges an alliance with Central Europe that results in some stability.

>>Greece defaults on its debt, and causes a major problem for the parent European Union. Germany lets it go, does not cover the debt, and the chain reaction reaches to the other PIGS+F nations. Portugal, Italy, and Spain teeter upon the event, soon to suffer their own defaults, none aided. Even France suffers the ignominy of default, but is aided by Germany in the end, unlike the PIGS nations. The EuroBonds then rise in yields, as a minor panic forces difficult decisions having been planned. The Euro currency then splits into two, the Latin Euro and the Nordic Core Euro. The Latin version suffers a sudden 20% to 30% loss in value. The Nordic Euro suffers a small decline at first, then gains back the loss, later to gain another 20% to 30%, as it becomes a refuge currency among the widely damaged fiat currencies. Chaos enters the sovereign debt world, as precedent is violated. The unknown takes root and causes fear, even riots in response to suddenly higher prices and interest rates. The new Euro calms the population in Central Europe, but the higher valuation would inflict damage to the export trade as time passes.

>>Mexico fails as a state, fully recognized and understood. Two factors are front & center, the rise of the drug cartels in their control of the nation in numerous aspects, and the unexpected net import of crude oil that ruins the nation’s federal finances. The mayhem caused by the drug cartels has been understood and followed, but the loss of oil exports takes the region by total surprise. Hyper-inflation then hits Mexico, which prints money to alleviate the federal budget shortfall. The deficits then grow quickly out of control. The people stop paying all form of taxes. Political and law enforcement assassinations hit epidemic levels, as the drug cartel openly announces their control. Chaos explodes. The basis of this story is an ongoing Hat Trick Letter forecast since 2007.

>>The United States relapses into a second round of bank failures and credit crisis. The USEconomy lapses into a recognized recession, the housing market resumes a powerful decline, home foreclosures accelerate, and the USGovt grapples with the prospect of carrying out a new Fannie Mae nationalization plan. The plan would then call for purchase of several million foreclosed homes in order to relieve the banks of the acidic inventory on their balance sheets, but also to remove and soak up a large chunk of the housing inventory that is responsible for falling home prices. That is, unless the mass purchase of homes had not already been completed. Enter the age of the USGovt as landlord to the Proletariat. The supply chain across the US then becomes interrupted by bank credit challenges, and the commercial paper grinds to a halt. Enter riots and chaos.

>>The actual 911 Story comes out, with the full story of US Security Organizations and USMilitary responsibility, including a significant role for a certain key small nation ally. The story hits the US press networks like a firestorm, and even touches on the highly dangerous private syndicates and their involvement, with blurred lines into the CIA, the Pentagon, Wall Street banks, and Defense Contractors. The US as a nation then becomes deeply divided in reaction, many incredulous, others angry, some totally disaffected enough to emigrate. Riots erupt in major cities in anger over the years of deception, as network news centers are stormed, many damaged, some burned.

>>Israel attacks Iran and its nuclear facilities. Great controversy results from unconfirmed reports that the USMilitary conducted a support role on logistics, supply, and intelligence gathering. Retaliation by Russia and China, long promised, then comes but occurs in obvious ways but also other secretive ways not fully understood. In the response phase, the Sunburn and Onyx missiles provided by Russia then inflict horrendous damage to scattered vulnerable naval vessels for owned by the Israelis and Americans. In the aftermath, the Israeli banks are subjected to great scrutiny during an isolation conducted on a global scale. The Madoff Funds are the proximal cause for the scrunity and investigations, with great focus and forceful queries.

>>Japan suffers from an economic recession that loses control on the downside. The Japanese Govt Bond then jumps to 3% or 4% in bond yield. The rising Yen currency consequently runs up 20% to 30% from the reverse of the Yen Carry Trade, followed by the handoff to the Dollar Carry Trade, which causes further mayhem in global financial markets. Their export trade then grinds to a near halt, and major conglomerate banks announce a shocking insolvency. Talks are formed with China in regional summits to deal with the crisis.

>>The United Kingdom is the first major industrialized nation to lose its high credit rating, as its UKGovt debt teeters on default. The UKGilt bond yields then rise to the 8% to 10% range, and the fast falling British Pound serves as a levitating factor for the damaged USDollar. London banks announce failures, starting with Royal Bank of Scotland and HSBC, even the venerable Lloyds. Shock waves then extend to the Wall Street financial center, which realizes that corrupted markets like USTreasurys, USDollar, and Gold can continue to be corrupted if other sovereign debt loses its high credit rating. However, damage to US banks is averted by rescues from USGovt outlays of unspeakable volume, in pure monetization that hardly disguises the monetization. Later, scrutiny comes to the USTreasury for its own downgrade and default.

>>China enters a bizarre stage of chaos. Armed with a $2500 billion war chest of reserves, it begins to convert assets and spend the proceeds in order to provide bank rescue aid, to buy up idle factories, and to create a welfare program for the jobless. The Chinese crisis then causes a massive global sale of USTreasurys, damaging both the USTBond complex and the USDollar currency. Hyper-inflation then hits the USEconomy alongside the USDollar crisis. China then suffers mass demonstrations from unemployment and sudden asset devaluations. Since China essentially has controlled the Yuan-US$ relationship, it operates even now somewhat as an appendage to the US financial sector, but as a location for storing the employed labor and savings assets. In the chaos, the colonization of America then begins, as China cashes in on its USAgency Mortgage Bonds and cut deal of Eminent Domain conversion of bonds into residential and commercial property. The trade war that many expected does not materialize, since China exerts its influence on the USCongress, even while it sells USTreasurys, threatening to hasten the pace of sale.

CRITICAL INDIVIDUAL ITEMS

◄$$$ CLIMATE-GATE HAS ERUPTED, JUST ANOTHER FRAUD PERPETRATED BY THE POWERZ, TO SCAM MORE BILLION$ IN THE USUAL WAY WITH GOVERNMENT HELP. THE SO-CALLED CAP & TRADE INITIATIVE IS JUST A SCAM TO INSTITUTE TAXES, TO FAVOR CERTAIN CORPORATIONS, AFTER THE MORTGAGE FRAUD CHAPTER RAN ITS FULL COURSE WITH TARP PAYOFFS. $$$

Rex Murphy speaks about Climategate and its exposed fraud. See his YouTube video (CLICK HERE). Glenn Beck of FoxNews speaks out exposing ClimateGate, the man-made global warming climate scam that is fast becoming an proven conspiracy in partial view. The major media in no way exposes the truth on this story, as only the internet news sources do. See his YouTube video (CLICK HERE). The climate change scandal deepens as a British Broadcast Corp expert claims he was sent leaked emails of a seriously undermines the political movement and its integrity. See his Daily Mail article (CLICK HERE). Some overlap might exist, but Alex Jones paints the billboard in his unique style concerning the same emails that expose the scam. In his words, he says “THE E-MAILS ARE REAL!!!” Some hackers hacked into a United Nations database where the main climate global warming analysts and proponents email each other. They discussed how to suppress the truth that the earth is cooling. Jones regards this to be a major scandal exposing the One World Order plan. See the YouTube video (CLICK HERE). The UK Guardian runs with the same story, and puts its own imprint on it, like a seal of approval toward the legitimacy of the story itself in exposing the fraud. Global warming is rigged too? They wrote, “the damning email that confirms that the entire science of global warming is indeed a scam.” See the UK Guardian article (CLICK HERE).

The woman who invented Credit Default Swap contracts supposedly is one of the key architects of Carbon Derivatives movement, the new scam after the last scam. These contracts appear to be at the very CENTER of Cap & Trade fraudulent movement. See the Washington weblog article (CLICK HERE). President Obama and other world leaders will soon gather in Copenhagen to discuss a global treaty on climate change. The exposure in recent weeks of the deceptions, misrepresentations, and outright fraud behind the story has spread across the globe. To be sure, the fraud has been kept under wraps by the major press networks. It will be interesting to observe how world leaders deal with the challenge this time, with some facts thrust into the open. One Hoover Institution scholar with a brilliant computer program to predict the outcome of such events has examined the issue. Bruce Bueno de Mesquita is an elite analyst at the Hoover Institution. He has been analyzing the United Nations Global Climate Change Conference. His predictive accuracy is 90%, based in a software program he developed 30 years ago to study foreign policy and conflicts. It analyzes the short-term and even long-term implications. He predicts failure in Copenhagen this time around, due to what he calls a cameo appearance by President Obama, apart from the exposed fraud. See the ABC Local article (CLICK HERE).

◄$$$ THE CAP & TRADE ACT WILL SOON AFFECT ALL U.S. CITIZENS LIKE A GIANT WET BLANKET. THE MOTIVE MUST BE IN SYNCH WITH GRINDING THE NATION TO A HALT AND CAUSING THE VERY DISRUPTION TO THE USECONOMY THAT LEADERS AND PEOPLE OPENLY WISH TO AVOID. $$$

If people believe they will not be affected by this horrible imposition by Big Govt, think again. Their heavy hand reaches toward houses owned by citizens by means of compliance for its energy equipment. The USCongress awaits passage by the Senate after the House approved HR 2454, otherwise called the Cap & Trade Act. It contains unbelievable hidden taxes and meddlesome strictures! Beginning one year after enactment of the American Clean Energy & Security Act of 2009, a home cannot be sold unless it is retro-fitted to comply with the energy and water efficiency standards described within this Act. The bill calls for the largest tax increase ever experienced. The Congressional Budget Office estimates that in just a few years the average cost to every family of four will be $6800 to retrofit the home toward efficient level compliance, without exclusions. Included are tax refunds for the lower classes, even if they pay no taxes. One year from now, people will NOT be able to sell their houses, unless major upgrades are made to the homes, even pre-fabricated homes (mobile homes). Essentially, sale of a home requires the certification of the Environmental Protection Agency administrator. That sounds like another Czar sitting on the US Politburo. People who cannot see the creeping Communism in the United States are utterly blind.

To obtain certification, the home must be assessed by the USGovt, then given a list of modifications so as to meet energy efficiency requirements. The home must then have installed the modifications under the retrofit provisions of the Cap & Trade Act. Then the home must be measured for its energy efficiency, and display a Label bearing its efficiency rating. In order to sell the home, the rating must be above a certain level determined by the EPA. The EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act. It contains annual required increases in energy efficiency for private and commercial residences and buildings. Within five years, 90% of all residential homes in the United States are mandated to be measured and labeled. The EPA administrator will receive $50 million per year to enforce the labeling program. The USDept Energy will receive an additional $20 million per year to help enforce the labeling program. Think of it like a car inspection program, but for the house, with displayed label and all. Also, every year or two, your home must pass the EPA inspection. It seems the USGovt is attempting to place obstacles for citizens to sell homes, and thus reduce the home inventory supply, so that prices can stabilize. That, or the USGovt is attempting to freeze the entire national economy.

The story grows more bizarre. The rising standards will be really hard and costly to meet in a few years. The Act allows the USGovt to give sizeable grants to comply with the retrofit program requirements if the homes already meet certain energy efficiency levels. But the States can set additional requirements on who qualifies to receive the grants. However, the grant requirements are expected to impose a limit of $50k annual income and a limit of $125k home value. See the USGovt Tracking website article (CLICK HERE). Now that is Change You Can Believe In, courtesy of the Obamanation Admin. This entire lunatic imposition is reason enough for States to exert their Tenth Amendment rights and secede from the Union. This is Communism with a stupidity hatchet wielded with a frozen fist.

◄$$$ QUIETLY A STORM IS BUILDING IN THE SOUTHERN STATE OF GEORGIA, ONE THAT MIGHT BE MORE EFFECTIVE THAN ANY TENTH AMENDMENT RESPONSE TO RESTORE STATE SOVEREIGN POWER. THE MOVEMENT IS DIRECTED AT RESTORING USAGE OF GOLD AS MONEY, AND SUPPLANTING THE CORRUPTED USDOLLAR. THE STATE BANKING LOBBY HAS BEEN WEAKENED BY THE HORRIBLE SKEIN OF FAILED BANKS. $$$

The following is based upon communication with Aaron Krowne in Atlanta, the owner and manager of the Mortgage Lender Implode website (CLICK HERE). He is a self-taught semi-expert on the US Constitution and follows legal battles within the states. He provided a glimpse at what could prove to be an amazing maneuver by Georgia, one that might turn out to be far more effective than Tenth Amendment pronouncements of state sovereignty. Georgia is pursuing the usage of gold in tax payments, by means of special gold-backed savings accounts. The disarray inside the state legislature could actually open a window for an effective grassroots movement with some traction. Here is Krowne’s account.

The Constitutional Tender Act in Georgia is known formally as HB 430. It would require the usage of gold and silver for payment of tax obligations to the state, which is still in effect, as per the US Constitution. In other words, it calls for implementation of a Constitutional decree in place. It would require the establishment of gold/silver accounts at all banks to facilitate the process, surely seen as a major paradigm shift. Imagine how once people have these accounts, they would start to notice that funds left in the gold/silver backed accounts hold their value better than the dollar denominated ones. See the Constitutional Tender website for details on HB 430 (CLICK HERE). The HB 430 has been stalled. But it is still in play, and its prospects were dim until a recent development. The Speaker of the House in Georgia, Glenn Richardson, was just ousted due to corruption (an affair with a lobbyist who received other channeled benefits). This leaves a void in the Republican controlled leadership. A front runner for the post is Barry Loudermilk, who is a strict constitutionalist and true conservative. He happens to be the only co-sponsor so far of HB 430. This is an amazing opportunity to actually force HB 430 forward. As Aaron describes, boots are hitting the ground to rally behind Barry and the movement. See the FaceBook webpage (CLICK HERE). Aaron Krowne has actually been in contact with Loudermilk, whom he claims is for real.

Georgia has some extenuating circumstances, from bank system weakness and the urgent need to instill stability. Regarding the issues surrounding HB 430, Georgia has been leading the nation in bank failures this year. Therefore, the banking lobby has suffered discredit during the course of formal HB 430 opposition. Barry and the other supporters of HB 430 are well aware of the banker vulnerability without lobby support. This helps bolster the legislation. Krowne said, “This will get very interesting. We might have the opportunity for real progress towards breaking the Federally controlled system in the United States. It could be far more effective than toothless 10th Amendment resolutions. Stay tuned.”

◄$$$ THE U.S. POPULATION IS INCREASINGLY FALLING UNDER THE POVERTY LEVEL. AT THIS POINT, 12% RECEIVE FOOD STAMP SUPPLEMENTAL SUPPORT. IN ALL, 37.2 MILLION ARE ON FOOD STAMPS, UP FROM 30 MILLION SIX MONTHS AGO. $$$

The USGovt announced last week that 37.2 million Americans are currently receiving food stamps! That equates to 12% of the population in the United States. If at a mere $5 per day, the cost comes to $186 million per day, equal to $1.3 billion per week, or $67.7 billion per year to feed citizens who cannot feed themselves. The tally is up from 30 million only six months ago, with little immediate prospect of improvement. That is a 24% rise in six months, annualized to 48%. In addition, the USGovt requires a bureaucracy for managing the process, at further costs. The USGovt grows bigger every month, more corrupt every month, more imcompetent every month, more lost every month, and hides behind more regulations every month, as the nation slides into the Third World.

◄$$$ THE UKRAINE STORY CONTAINS AN UPDATE WITH POSSIBLE AMERICAN INVOLVEMENT. THE RAVAGE OF HEMORRHAGIC VIRUS CONTINUES IN UKRAINE. REPORTS COME THAT THE USAIR FORCE WAS SPRAYING THE COUNTRYSIDE IMMEDIATELY BEFORE THE OUTBREAK. $$$

See the following articles for personal research or casual reading about this horror, not at all of natural origin. My view is that Ukraine is special. It turned pro-West during the Color Revolution, with favor shown the West. Then Russia pulled it back into their fold. Battles over natural gas pipelines ensued. Now pockets of the USGovt and USMilitary are resentful of the loss. My belief is genocide is the plan, and Ukraine is a key center in Europe like Mexico was last April in North America, for disseminating the lethal viruses like a vast centrifuge. Each stage involves a more deadly version, the pathogenesis of the pandemic, aided and abetted by the syndicate which includes the World Health Organization. Two South African journals (CLICK HERE or HERE). A US message board (CLICK HERE). A Sentinel Radio article (CLICK HERE). An America Online video (CLICK HERE). A David Icke weblog thread (CLICK HERE). An InfoWars pair of articles about special vaccines for leaders and martial law (CLICK HERE or HERE).

◄$$$ TURKEY WARNS ISRAEL ABOUT VIOLATION OF AIRSPACE. TURKEY THREATENS TO USE FORCE IN VIOLATIONS. INCREASINGLY, TURKEY & IRAN ARE EXERTING INFLUENCE IN THE MIDDLE EAST, EVEN IN MEDIATION. $$$

The strict translation is a warning from Turkey to Israel, that if Israel crosses their airspace on missions to bomb Iran, Turkey will respond with great force. The threat came from Turkish Prime Minister Tayyip Erdogan. Recall the Turks are fearless warriors. In the last half century they have stood as the defender at the portal where the Soviet Union shadow was cast. The Turkish NATO bases have served as vital boundary defenses for aircraft, missiles, and naval bases. During an interview with the Lebanese newspaper Al Safir, Erdogan was asked about accounts that Israel had violated Turkish airspace in the process of gaining information against Iran. Erdogan denied the report, saying that certainly “the information [stating that Israel was using their airspace to spy on Iran] is incorrect, but if Israel did so, they will receive a response equal to that of an earthquake.” He went on to mention that after Israeli actions in the Gaza Strip to cause havoc, they would not be permitted to train with Turkish defense forces and conduct exercises in a new ‘Anatolian Eagle’ operation. He offered some details on claimed aggression, such as usage of white phosphorus against civilians Israeli forces. This by the way has been common by the USMilitary in Iraq. He cited 1500 deaths in Gaza, 5000 wounded, and blockades against million$ for aid. Erdogan offered Turkey to serve in mediation between Israel and Syria. He has, so far, held five rounds of negotiations between the two parties. Israeli Prime Minister Benjamin Netanyahu has made clear that he was no longer assured of the mediation capability of Turkey in this regard, and preferred the mediation of France.

Planned is a Turkish head of state visit to WashingtonDC, which Al Safir inquired about. To which, Edogan said, “It would not be strange to bring up Iran during the trip to Washington. Understanding between Turkey and Iran has come a long way in containing many things surrounding the two countries. The two countries are in a position of great significance in the Middle East, without any direct intervention with either nations internal affairs.” He went on to mention that Turkey & Iran were becoming the most influential nations in the region, whose mutual volume of imports and exports was $10 billion dollars annually. He expressed hope that it will rise to $30 billion within a short period of time. See the Political Theatrics article (CLICK HERE).

◄$$$ MURDER COVERUP DEMANDS AN INVESTIGATION IN ENGLAND. AN OPPONENT WHO EXPOSED UKGOVT FALSIFCATION OF THE IRAQI REPORTS ON WEAPONS OF MASS DESTRUCTION WAS FOUND DEAD. HE ACTUALLY GAVE WARNING OF HIS OWN MURDER. $$$

Dr David Kelly was found dead in the woods near his Oxfordshire home after he went out for a walk. His wrist had been slashed. The incident occurred in 2003, days after he was exposed as the source of a controversial BBC story on the Iraq war. Kelly served as a UN weapons inspector. The story pertained to how the UKGovt under Tony Blair doctored its dossier on Saddam Hussein’s weapons of mass destruction to justify invading Iraq. Six senior doctors have begun legal action to force a new inquest into the death of Kelly. They are convinced that the original verdict of suicide is unsafe and should be overturned. They demand action. In one final phone conversation, Kelly told a caller he would not be surprised “if my body was found in the woods.” A book on the unanswered questions surrounding the case by Liberal Democrat MP Norman Baker concluded that Dr Kelly may have been murdered by Iraqi exiles, but the finger has also been pointed at MI5 and the CIA, the security agencies for the two nations that in my opinion serve as the New Axis of Fascism. See the UK Daily Mail article (CLICK HERE) (CLICK HERE)

CORRUPT WARS WITHOUT END

◄$$$ THE AFGHAN WAR IS BEING RECOGNIZED IN THE MAINSTREAM FRINGE AS A WAR CENTERED UPON NARCOTICS, A WAR CONDUCTED BY THE U.S. SECURITY ORGANIZATION, BUT WITHOUT ANY PRESS FOLLOWUP COVERAGE OF THAT PRINCIPAL ASPECT. COSTS ARE SHARED WITH USGOVT, PROFITS KEPT BY SYNDICATE. ALLIES ARE AWARE OF THE AMERICAN ROLE, EVEN THE ABUSE OF THEIR LANDS IN SHIPPING ROUTES. THIS IS A GRAND BADGE OF SHAME, THAT IN MY VIEW PAINTS THE UNITED STATES AS A ROGUE NATION. $$$

The cat was let out of the bag on this story, hardly new, by Harpers Weekly recently. Almost nowhere in the mainnstream US or UK press has been clear exposure of the narco war with the USGovt and in particular the US security establishment running the narcotics business from crop growth to processing to shipment and delivery. This in my opinion is the biggest mark of shame on the United States in a century, far worse than its war record. Alliances within NATO and elsewhere are under strain due to the narcotics distribution angle. The profits are staggering, and rarely cited, between $360 and $400 billion annually to the syndicate. The propaganda about the war is horribly distorted. The War on Terrorism is a cover for a war to exploit and control a near global monopoly in heroin. Talk about needing more funds since the Afghan poppy output has risen 5-fold is bothersome, since the growth is evidence of the success of the narcotics production under US guidance and leadership. Exposure of the narco angle to the Afghan War was why NFL football player Patrick Tillman was executed, three shots to the forehead in pattern, not friendly fire, but rather execution. Tillman had unwisely let it be known he planned to become a Poster Boy against the war back in the United States after finishing his tour of duty, with total disillusionment and feelings of betrayal. The words by Ford speak for themselves, on Black Agenda Radio, a commentary by Glen Ford. The undercover research is the most dangerous imaginable. See the article from the Journal of African American political thought and action (CLICK HERE).

“If you are looking for the chief kingpin in the Afghanistan heroin trade, it is the United States. The American mission has devolved to a Mafiosi style arrangement that poisons every military and political alliance entered into by the United States and its puppet government in Kabul. It is a gangster occupation, in which US-allied drug dealers are put in charge of the police and border patrol, while their rivals are placed on American hit lists, marked for death or capture. As a result, Afghanistan has been transformed into an opium plantation that supplies 90 percent of the world’s heroin.

An article in the current issue of Harpers Weekly magazine explores the inner workings of the drug infested US occupation, its near total dependence on alliances forged with players in the heroin trade. The story centers on the town of Spin Boldak, on the southeastern border with Pakistan, gateway to the opium fields of Kandahar and Helmand provinces. The chief Afghan drug lord is also the head of the border patrol and the local militia. The author is an undercover US-based journalist who was befriended by the drug lord’s top operatives and met with the US and Canadian officers that collaborate with the drug dealer on a daily basis.

The alliance was forged by American forces during the US invasion of Afghanistan in 2001, and has endured and grown ever since. The drug lord, and others like him throughout the country, is not only immune to serious American interference, he has been empowered through US money and arms to consolidate his drug business at the expense of drug dealing rivals in other tribes, forcing some of them into alliance with the Taliban. On the ground in Pashtun speaking Afghanistan, the war is largely between armies run by heroin merchants, some aligned with the Americans, others with the Taliban. The Taliban appear to be gaining the upper hand in this Mafiosa gang war, the origins of which are directly rooted in US policy.”

My comments follow. A connection exists between the Afghan War and the Iraqi War. Drug money from large transactions are directed through the Bank of Baghdad in Iraq, which is run by JPMorgan. From Baghdad, the money is distributed across key European and London banks, in addtion to Wall Street banks. Diplomatic flights and US defense contractor flights are routinely abused to ship narcotics through the NATO locations among allied nations, in the distribution paths, often with acute resentment by US allies. Shipments are made on USMilitary bases routinely also, usually after lights out, around the midnight hour. The fraudulent theft of Iraqi Reconstruction Funds is routed through these avenues. A source informs that Henry Kissinger was handed $2.3 billion in 2004 from the Iraqi Reconstruction Fund to further the global swine flu and vaccination plan, his pet project of genocide. The objective is to reduce the global population by 20% to 25%, pure genocide. A final note. Research into the narcotics involvement by the US, led by the CIA, aided by other agencies and the defense contractors, often earns a person an early coffin, funeral, and tears by loved ones. Mine has no interest or possession of details, but rather an aerial view connecting dots, realizing motives, acknowledging the actual situation with no further interest on hard evidence. My aim is to debunk the palpable propaganda and to provide a more realistic perspective. The key is to have nothing in possession that implicates people, institutions, and pathways in a court of law or criminal prosecutors office. My office has none and will have none.

◄$$$ THE UZBEK AMBASSADOR FROM BRITAIN OBJECTS TO BOTH TORTURE AND DRUG RUNNING IN A STUNNING OPEN ACCOUNT. THE HEROIN BUSINESS HAS VERTICAL INTEGRATION. DISDAIN GROWS AMONG KEY ELITE PLAYERS REGARDING THE PRIVATE AFGHAN DRUG WAR. $$$

Craig Murray is the former UK ambassador to Uzbekistan. He offered this frank open account of a meeting with British Military brass. Then he offered a glimpse into the operations of the heroin business in Afghanistan, now at an open industrial level. He said the following. “I got called back to London and I expected there to have a sensible talk about the merits or demerits of the intelligence and how much evidence I had that was obtained under torture. I was absolutely stunned, genuinely stunned. It changed my whole worldview in an instant, to be told that (and I knew it was coming from torture) that it was not illegal, because our legal advisers had decided that under the United Nations Convention Against Torture, it is not illegal to obtain or use intelligence gained from torture, as long as we did not do the torture ourselves…

There is a sense in which Afghanistan is the greatest developmental success the West has ever seen, because the GDP of Afghanistan has increased by about 150% since we invaded it. The trouble is all of that increase is in heroin. In 2001, the Taliban had cut the heroin harvest down to virtually nil. Last year it increased by 40% on top of a 60% increase the year before. And nowadays they do not even export opium anymore. As I say, it is a big developmental success. They have gotten into value added. It is all made into heroin before it is exported now. And we know where it is: Dostum’s heroin factories. It is done on an industrial scale. Petrochemical tankers carrying the chemical precursors are sharing the same road as our troops. But it is done by the government we are protecting. There are so many lies about Afghanistan. It’s about money; it’s about oil; it’s about drugs; it’s about the abuse of human rights; it’s about degradation; and it’s about all of us paying, through our taxes, for wars which benefit a tiny clique.” See the Real News video interview (CLICK HERE).

◄$$$ ETHICAL BREAKDOWN IN THE UNITED STATES IS REACHING EPIDEMIC PROPORTIONS. FINANCIAL FRAUD IN FLORIDA IS IDENTIFIED BY THE F.B.I. IN A BROAD ACCUSATION OF CORRUPTION. $$$

At a forum that addressed businessmen in Florida, FBI Miami Division Special Agent John Gillies said failures in ethics and integrity have sown the initial seeds of dangerous corruption in our society. Florida is the site of magnificent real estate bubble, bust, but also financial fraud, where the number of cases skyrocketed by 42% in the last year. Gillies said criminal behavior by public servants and financial institutions sent the signal to young Americans that cheating and stealing were acceptable. Gillies is a 27-year veteran of the FBI. He discussed corruption in all forms, spanning law enforcement, judicial system, tax treatment, and bank/bond fraud, calling these stains ‘our number one criminal threat’ in the United States. Public corruption investigations by the FBI are numerous, having increased by over 20% in the last five years. Financial scams, from securities and hedge fund frauds to Ponzi schemes, had sharply risen by over 25% nationwide in the last year alone. See the Reuters article (CLICK HERE). It seems the people are following the lead of Wall Street, the Big Corporations, and enterprising syndicates operating closely with and within the USGovt.

◄$$$ OSAMA BIN LADEN HAS BEEN DEAD SINCE DECEMBER 2001, SO SAY USMILITARY VETERANS. A SHAM OF FRAUD, DECEIT, BETRAYAL, AND TREASON PERVADES THE NATION. THIS ACCOUNT IS COMPREHENSIVE AND AS EXTREMELY CRITICAL AS IT IS SURPRISING. COULD THE USMILITARY BE IN THE EARLY PHASE OF DEEP DIVISION? $$$

First a preface. My personal source shared his theory that Osama has been dead since in summer 2005. Ahmad was a business colleague of mine, a database software expert from Pakistan, and a nice fellow who shared a lunch with me several times. He speaks fluent English, Arabic, and Urdu, the native language in most of Pakistan and Afghanistan. He followed news stories from his home city Karachi. He lived in Riyadh Saudi Arabia as a teenager. He was non-military, intelligent, and curious. His theory was that since summer 2005, communications supposedly from Osama were spread on an internet website, no longer a tape broadcasted by Al Jazeera. The website content seemed easy for the CIA to fabricate. Also, and more important to Ahmad, up to summer 2005 the message spoken by Osama was Muslim unity against a common enemy in the infidel invaders. But afterwards, in sharp contrast, the message changed to killing the Shiite Muslim brother who betrays and rapes the Muslim daughters. Indeed quite the 180 degree shift. Ahmad pointed out that the popular Osama photographs bore little if any resemblance to photos of him in the Sudan years ago. In my mind, Osama has been dead for many years, but the USMilitary and its obedient US press networks continued the story of searching for the Osama devil, as the war effort required an object to hate and pursue. Every phony war needs a Boogeyman to keep the animal spirits flowing. This war qualifies. In 2007, the Hat Trick Letter revealed reports from retired Italian Prime Minister Francesco Cossiga, who fingered the Milan studios as cooperating with the CIA in producing phony Osama tapes.

What follows is entirely from veteran USMilitary service men, who are unhappy about the entire war. Let them tell the story, as editor and commentator. They headline the story as declaring years of deceit, whereby key leaders have long known Osama Bin Laden to be dead, widely understood. Furthermore in General McChrystal’s report, and in Obama’s speech to justify troop buildups, Osama is never mentioned. The men call the ‘Hunt for Bin Laden’ a national shame. My label is a Scarlet Letter of Shame. The author calls the lies and the extravaganza in war an exercise in treason, calling for justice and prosecutions. They point out the great harm done to US prestige and credibility. The US reputation has been smeared. While they mention the greater cost to rebuild Afghanistan, they miss the exploitation in the heroin business. The military has been dishonored by its leaders, including its civilian leaders. Many good men and women were sent to their deaths in the war. Bear in mind that the authors never mention the narcotics motive for the endless continued war, and how the entire phony story of Bin Laden, the Taliban, and Islamic terrorists was a smokescreen for capturing the global heroin prize in Afghanistan. Maybe these military veterans will discuss that more dangerous topic in the second phase. They might simply be using good judgment on an initial volley.

Veterans Today Senior Editor Gordon Duff is a Marine combat veteran and regular contributor on political and social issues. His story follows. See the Veterans Today article (CLICK HERE).

“Conservative commentator, former Marine Colonel Bob Pappas has been saying for years that bin Laden died at Tora Bora and that Senator Kerry’s claim that bin Laden escaped with Bush help was a lie. Now we know that Pappas was correct. The embarrassment of having Secretary of State Clinton talk about bin Laden in Pakistan was horrific. He has been dead since December 13, 2001 and now finally everyone, Obama, McChrystal, Cheney, everyone who is not nuts is finally saying what they have known for years. However, since we lost a couple of hundred of our top special operations forces hunting for bin Laden after we knew he was dead, is someone going to answer for this with some jail time? Since we spent $200 million on Special Ops looking for someone we knew was dead, who is going to jail for that? Since Bush, Rumsfeld, and Cheney continually talked about a man they knew was dead, now known to be for reasons of political nature, who is going to jail for that? Why were tapes brought out, now known to be forged, as legitimate intelligence to sway the disputed 2004 election in the US? This is a criminal act if there ever was one.

In 66 pages, General Stanley McChrystal never mentions Osama bin Laden. Everything is ‘Mullah Omar’ now. In his talk at West Point, President Obama never mentioned Osama bin Laden. Colonel Pappas makes it clear, Vice President Cheney let it ‘out of the bag’ long ago. Bin Laden was killed by American troops many, many years ago. America knew Osama bin Laden died December 13, 2001. After that, his use was hardly one to unite America but rather one to divide, scam, and play games. With bin Laden gone, we could have started legitimate nation building in Afghanistan instead of the eternal insurgency that we invented ourselves. Without our ill informed policies, we could have had a brought diplomatic solution in 2002 in Afghanistan, the one we are ignoring now, and spent money rebuilding the country, five cents on the dollar compared to what we are spending fighting a war against an enemy we ourselves recruited thru ignorance. The bin Laden scam is one of the most shameful acts ever perpetrated against the American people. We don’t even know if he really was an enemy, certainly he was never the person that Bush and Cheney said. In fact, the Bush and bin Laden families were always close friends and had been for many years.

What kind of man was Osama bin Laden? This one time American ally against Russia, son of a wealthy Saudi family, went to Afghanistan to help them fight for their freedom. America saw him as a great hero then. Transcripts of the real bin Laden show him to be much more moderate than we claim, angry at Israel and the US government, but showing no anger toward Americans and never making the kind of threats claimed. All of this is public record for any with the will to learn. How much of America’s tragedy is tied with these two children of the rich, children of families long joined thru money and friendship, the Bush and bin Laden clans? One son died in remote mountains, another lives in a Dallas suburb hoping nobody is sent after him. One is a combat veteran, one never took a strong stand unless done from safety and comfort. Islam once saw bin Laden as a great leader. Now he is mostly forgotten. What has America decided about Bush? We know this: Bin Laden always denied any ties to 9/11 and, in fact, has never been charged in relation to 9/11. He not only denied involvement, but had done so while alive four times, and had vigorously condemned those who were involved in the attack.

This is on the public record, public in every free country except ours. We instead showed films made by paid actors, made up to look somewhat similar to bin Laden, actors who contradicted bin Ladens very public statements, actors pretending to be bin Laden long after bin Laden’s death. These were done to help justify spending, repressive laws, torture, and simple thievery. For years, we attacked the government of Pakistan for not hunting down someone everyone knew was dead. Bin Laden’s death hit the newspapers in Pakistan on December 15, 2001. How do you think our ally felt when they were continually berated for failing to hunt down and turn over someone who did not exist? What do you think this did for American credibility in Pakistan and thru the Islamic world? Were we seen as criminals, liars or simply fools? Which one is best? This is also treason.

How does the death of bin Laden and the defeat and dismemberment of Al Qaeda impact the intelligence assessments, partially based on, not only bin Laden but Al Qaeda activity in Iraq that not only never happened but was now known to have been unable to happen? How many Pentagon Pundits, the retired officers who sold their honor to send us to war for what is now known to be domestic political dirty tricks and not national security, are culpable in these crimes? I do not always agree with Colonel Pappas on things. I believe his politics overrule his judgment at times. However, we totally agree on bin Laden, but simply disagree with what it means. To me lying and sending men to their deaths based on lies is treason. Falsifying military intelligence and spending billions on unnecessary military operations for political reasons is an abomination. Consider this, giving billions in contracts to GOP friends who fill campaign coffers, and doing so based on falsified intelligence is insane. This was done for years. We spent eight years chasing a dead man, spending billions, sending FBI agents, the CIA, Navy Seals, Marine Force Recon, Special Forces, many to their deaths, as part of a political campaign to justify running America into debt, enriching a pack of political cronies and war profiteers and to puff up a pack of Pentagon peacocks and their Whitehouse draft dodging bosses.

Every time Bush, Cheney, and Rumsfeld stood before troops and talked about hunting down the dead bin Laden, it was a dishonor. Lying to men and women who put their lives on the line is not a joke. Who is going to answer to the families of those who died for the politics and profit tied to the Hunt for Bin Laden?” WOW!!!

US FACES THIRD WORLD PROSPECTS

◄$$$ THE UNITED STATES INCREASINGLY RESEMBLES THIRD WORLD. THE VIEWPOINT HAS BEGUN TO SPREAD. THE TELL-TALE SIGNS ARE GROWING WORSE AND MORE OBVIOUS. $$$

Ximena Ortiz is a former executive editor of The National Interest and bureau chief for the Associated Press & Dow Jones in Santiago Chile. Ortiz wrote a harsh essay on the degradation of the United States and its march toward Third World status. Journalists from Latin America are far more familiar with what the connotations and meaning than those living inside the Dome of American Perception, where distortions and altered viewpoints are made with heavy skew. The tell-tale traits are easily identified, but only when viewed as a mosaic of interwoven conditions can the picture be fully integrated into consciousness. My personal recognition began a couple years ago, when my forecasts painted a picture that evolved from the Mussolini Fascist Business Model into a much more familiar setting that smacked of Third World, after a long deterioration phase following by a climax of credit cutoff and isolation. The pathogenesis offers remains fully consistent with the path. Ortiz wrote the following.

“A militaristic and corrupt America increasingly resembles a Third World state. Despite a change of presidents, America remains mired in economic, institutional, and cultural purgatory, with Obama’s exalted oratory circling the stratosphere like a taunt. Angry nationalism shouts down prudence. Disproportionate military spending threatens economic well-being. Industry has its hand so deep in the government purse that private enterprise is becoming public property. The currency falters, the infrastructure crumbles. And a supine media, once a watchdog of the powerful, happily licks the strongman’s hand. If the picture looks familiar, that is because we have seen it many times before, from Argentina to Chile to Russia. The US is third worlding. That statement may smack of hyperbole. It may also understate the phenomenon, for many of the countries that the United States increasingly resembles are not only Third World, they are authoritarian, even rogue… Do indefinite imprisonments, immunity for favored agents, and rule by executive diktat sound like best democratic practice? Crisis rocked Third World countries eventually move on, setting up truth commissions and holding trials. But the United States remains very much in the grip of a 9/11 emergency mentality… In terms of institutional structure, financial stability, and even national spirit, the US looks little like the country it was a generation ago and more like nations it has long condemned. The turning point came on 9/11. Terrorism is now a weary concern: other issues dominate the headlines, like stimulus, healthcare, climate change. Yet the attacks were a pretext for a host of foreign and domestic policies that promised to secure America against its hell-bent enemies but have instead dragged the country down, eroding the qualities that distinguished it from the rest of the world…

As in so many collapsed countries, an increasingly large portion of American wealth goes toward debt. Infrastructure sags. Only industries favored by the government thrive. The middle class shrinks as it is squeezed to fund programs that keep the wealthy comfortable and the poor from rioting. The only difference is that the US has an ability to continue borrowing, for now. The Third Worlding of America is less cinematic but more serious than empire-in-decline analogies suggest… The patchouli-scented youth, who protest in the streets of WashingtonDC with their towering papier-mâché effigies, may have been correct after all in highlighting the breadth of America’s all-encompassing problems, if not their remedies. Crisis has pushed the US toward Third World policies with alarming swiftness. But the risk is not that Americans will bring out the pitchforks and join the protestors. Rather, citizens seem as disaffected and resigned as their Third World brethren, only occasionally roused from reality TV by their favorite pundit peddling the outrage du jour. The Far Right wallows in paranoia with its dreams of overturning an election by discovering a Kenyan birth certificate. Most on the Left seem too mesmerized by the president to hold him accountable. The media ranges from insipid to hysterical. This country may never see the reasons for, and the parallels to, its disintegration.” See the American Conservative article (CLICK HERE).

◄$$$ MY TRACKING OF THIRD WORLD PROSPECTS HAS BEEN DILIGENT. IT HAS SPANNED AT LEAST THREE YEARS IN TIME. TRAGICALLY, MY LIST OF TRAITS GROWS EACH YEAR. MY DEEP SADNESS GROWS ALSO, AS THE NATIONAL TRAGEDY CONTINUES TO UNFOLD. $$$

Here are my signature traits listed for the US qualifying as a Third World Nation. The nation with each passing year resembles even more a very large Third World nation. Empty foreclosed homes, empty shopping malls, growing ranks of jobless, discouraged business formation, nationalized failed firms, vanishing Middle Class, widespread usage of food stamps, the rise of tent cities for the homeless, trillion$ in federal deficits, monetized debt, reduced liberties, selective elite law enforcement, syndicate strongholds, huge prison population, controlled press networks, dependence upon foreign credit, distrust of leaders, aggressive military, narcotics managed by security forces, crumbling infrastructure, burdensome hostile border procedures, excessive collection of data on citizens, broad contamination of the election process, a string of puppet presidents, and most important the near total disregard of the Constitution by the leadership seen in endless executive orders like dictatorial decrees, these are the characteristics that most people agree are unsavory. But when one takes them as a cornucopeia table display, they are described as Third World. Combine with global power from a still formidable military, and the risk is acute, the stability nowhere.

FDIC INSOLVENT CONDITION

◄$$$ MORE BANKS SHUT DOWN AFTER THE THANKSGIVING HOLIDAY RESPITE FOR THANKSGIVING. THE LEAD VICTIM WAS AMTRUST OF OHIO, WHICH IS REPONSIBLE FOR $2.0 BILLION OF THE TOTAL $2.6 BILLION COST TO THE FEDERAL DEPOSIT INSURANCE FUND. THE TOTAL FOR 2009 IS 130 FAILED BANKS. IF THE F.D.I.C. DID THEIR JOB, THEY WOULD SHUT DOWN 5X MORE DEAD INSOLVENT BANKS. THEY DO NOT SINCE THEIR INSURANCE FUND IS DEPLETED. UPDATE: A TOTAL OF 133 FAILED BANKS SEIZED AFTER THIS WEEKEND, AT $252 MILLION MORE COST. $$$

The Buckhead Community Bank (Atlanta GA) cost the Deposit Insurance Fund (DIF) $241.4 million. First Security Bank (Norcross GA) cost the DIF of $30.1 million. Tattnall Bank (Reidsville GA) cost the DIFund $13.9 million. In all, 24 Georgia banks failed in 2009. Benchmart Bank (Aurora IL) cost the DIF $64 million. Greater Atlantic Bank (Reston VA) cost the DIF $35 million. The big loser that dominates the recent list is AmTrust Bank (Cleveland OH), which cost the DIF $2.0 billion. It is the fourth largest bank or thrift to go bust this year. The total AmTrust in assets of $12.0 billion and deposits of $8.0 million are assumed by New York Community Bank. As part of the transaction, the FDIC will acquire a cash participant instrument. The FDIC also transfered to New York Community all qualified financial contracts to which AmTrust was party.

The overall total loss to the FDIC was $2.6 billion. The Wall Street Journal has chronicled the AmTrust extended demise, including how politicians in Cleveland and WashingtonDC interceded with regulators to grant the thrift more time, which increased the ultimate cost to the FDIC. This is a common theme in the last year, one not fully examined by the analysts. The FDIC drags the process out, hoping for recovery, since fully drained of DIFunds. For whatever reason in delay, the FDIC cost of bank closures is much greater than if responsibly shut down at a much earlier time. For a complete list of failed banks in the year 2009, see the ProPublica tally (CLICK HERE). See the full story in the ProPublica article (CLICK HERE).

Last minute update… Three banks failed Friday night, bringing the annual national tally to 133. This weekend toll took an additional $252.1 million bite out of the Deposit Insurance Fund. The seizures were not concentrated, and no more to Georgia. The Republic Federal Bank (Miami FL) cost the Deposit Insurance Fund (DIF) $122.6 million. The Valley Capital Bank (Mesa AZ) cost the Deposit Insurance Fund (DIF) only $7.4 million. The SolutionsBank (Overland Park KS) cost the Deposit Insurance Fund (DIF) $122.1 million. See the Wall Street Pit article (CLICK HERE). The total bank losses in 2008 and 2009 have totaled $470 billion, much more than most analysts estimated.

◄$$$ THE F.D.I.C. MIGHT BE PHASED OUT BEFORE LONG, DEFUNCT AND BROKEN, ACCORDING TO CHAPMAN SOURCES. AN INTRIGUING AND DEVIOUS PLOY MIGHT BE IN THE OFFING. THE F.D.I.C. MIGHT SHUT DOWN, LEAVING MANY BANKS EXPOSED ON DEPOSITS. MONEY MARKET FUNDS HAVE BEEN LEFT EXPOSED SINCE SEPTEMBER. THEY MIGHT BE THEN COMPELLED TO SWITCH DEPOSITOR FUNDS INTO USTREASURY BONDS SINCE NO LONGER INSURED. THE BANKS WOULD NOT WISH TO OPERATE WITH EXPOSURE. IT IS A COMMUNIST PLAN THAT FITS WITH MY BANK CONSOLIDATION PLAN. THE VALUE OF SMALLER DISTRESSED BANKS IS FAST APPROACHING ZERO. $$$

Bob Chapman wrote: “We believe the Fed will opt for letting the system run into hyper-inflation. The FDIC not only is $8.2 billion in the hole, but they have secretly borrowed an additional $80 billion from the Treasury. We have also been told that the FDIC is lying about the banks in trouble. The number in eminent danger are not 552, but a massive 2035. The cost of bailing these banks out would be $800 billion to $1 trillion. That means 2500 could be closed in year 2010. Now get this, the FDIC is going to be collapsed before the end of 2010, which means no more deposit insurance. This follows the 9/18/2009 end of government guarantees on money market funds. Both will force deposits into US government bonds and agency bonds in an attempt to save the system. This will strip small and medium sized banks and force them into shutting down or being absorbed. This means you have to get your money out of banks, especially Certificates of Deposit. We repeat get your cash values out of life insurance policies and annuities… Major and semi-major banks are being told to obtain secure storage for new currency dollars. They expect official devaluation by the end of the year. We expect three old dollars to be traded for one new dollar. The alternative is gold and silver coins and shares.” These comments come from Bob Chapman of the Intl Forecaster, who posted an article on Market Oracle (CLICK HERE).

The smothered coverage in failed and failing banks is certain to push FDIC losses higher at a time when its insurance fund to shield depositors is in deficit territory for the second time in its history. Kevin Petrasic is a lawyer at Paul, Hastings, Janofsky & Walker LLP. He said FDIC officials might be forced to bundle some small banks together with attractive other larger banks in order to attract potential buyers. The FDIC claims said the agency has no trouble lining up buyers, but that is possible only through federal assumption of losses. About 95% of banks seized by regulators have been sold with FDIC brokering of deals. Two of the nine banks that failed in November were sold without loss sharing agreements written into the deals. In many cases fewer bidders were involved, as participants in the bidding process realized. In response, they lowered their offers, according to Petrasic. Therefore, the future indicates more outright liquidations and more deals with substantially greater losses. This will lead to accelerating losses at the FDIC. See the Wall Street Journal article (CLICK HERE).

◄$$$ CHAPMAN IS ONTO SOMETHING REAL AND POWERFUL. MY PERCEPTIONS ON THE REQUIRED FORCEFUL USGOVT IMPOSITIONS TO MAINTAIN THE USTREASURY BUBBLE GO FURTHER. MY FORECAST IS THAT A PLAN WILL BE HATCHED TO COPY THE JAPAN MODEL AND TO EXTEND IT, GRABBING AT PENSION FUNDS, REQUIRING THEM TO PURCHASE USTREASURYS IN THEIR ASSET PORTFOLIOS. $$$

What follows is my added interpretation. My forecast calls for numerous required forceful measures imposed to sustain the USTreasury bubble along the lines of Chapman but much further. The Federal Deposit Insurance Corp is underwater in the billion$. It cannot access its $500 billion line of credit with the USDept Treasury, because of the federal deficit limit. Obama and Congress are playing ‘chicken’ (as one subscriber puts it) with the USGovt budget deficit as they try to pass their Health Care Reform Bill. My view is that the Chapman story might be true, since it fits with so many stress factors. The big banks want to eliminate competition. They permit the other banks to suffer the consequences of the marketplace without benefit of USGovt aid, as a full embargo as Wall Street takes all the aid. The smaller banks, many of which are not all that small, still operate with loan portfolios and depository assets. The biggest banks already have the majority of their reserves in US Federal Reserve accounts, earning interest in the form of USTreasury Bonds. This is the ignored hint on the future plan. If smaller banks are required to switch from CDs to USTBonds, then the game is over and the Bank Consolidation Plan has been completed, but with a twist. The USFed and USDept Treasury would control the entire US national banking system. The bankruptcy of the FDIC itself would lead to a communism type of deposit system with the USGovt as the only game available, due to guarantees.

The other factor satisfied by a switch of bank deposits to USTreasurys is the sustenance of the USTreasury bubble itself. The voracious appetites of bubbles must be fed, as assets are drawn like to a grand Black Hole in finance. USTBonds are hungry for funds, desperate for funds. The USDept Treasury has worked diligently to maintain the USTreasury bubble, by ordering all big bank TARP recipients to refrain from lending, and instead invest in USTBonds held in the USFed accounts earning interest. These funds are not aiding the USEconomy. Perhaps nothing can. In time, this mammoth USGovt sponsored bubble will require pure outright monetization in full open view. But until then, it will target savings, including pension funds. The USGovt will move to drain the savings from the entire US private sector, perhaps starting with its certificates of deposit. In time, perhaps all 401k and IRA pension funds will be required to purchase USTreasurys in order to win the continued tax deduction. Also, managed pension funds will be forced to maintain a minimal threshold of USTBonds in their portfolios. In Japan, their government forced all state pension funds into near 0% bonds, so as to sustain that bubble. The same could soon happen to the United States, but on a broader basis. The USTreasury Bond is the biggest asset bubble on the planet currently. If not fed, it will bust. My conjecture is the Chapman story has at least a 50-50 chance of occurring, since it fits well in the corrupted broken puzzle.

USTREASURY DEFAULT & DOWNGRADES

◄$$$ USTREASURY DEFAULT COULD OR SHOULD OCCUR, ACCORDING TO THE GREENSPAN-GUIDOTTI RULE. A LITTLE CITED GUIDELINE HAS BEEN RESURRECTED SUDDENLY AS RELEVANT. THE ISSUE IS RESERVES FORMALLY HELD BY THE USGOVT, WHICH ARE IN REALITY LOADED WITH EXAGGERATION. THE USGOVT HAS PRACTICALLY ZERO GOLD RESERVES IN REALITY. PORTER STANSBERRY WOULD NOT BE SURPRISED TO SEE A GOLD PRICE OF $10 THOUSAND PER OUNCE BY YEAR 2012, AS A CONSEQUENCE OF THE POTENTIAL USTREASURY DEFAULT COMES CENTER STAGE. $$$

The world of central bankers puts some significance on the Greenspan-Guidotti Rule, used as a theoretical basis for government debt default. It has been dusted off and put squarely on the center of conference tables. Experience of its application in the past has been with Third World debt. The actual data for the USGovt is astonishing, incredible, fantastic, reckless, even indescribable. Few point to the military costs and foreign weapons aid that account for up to half of the debt. Within the next 12 months, the USTreasury must refinance $2 trillion in short-term debt. Nevermind the total debt being financed, and focus just on the short-term debt, since it usually causes the acute problems and crises. Additional deficit spending will also amount to another $1.5 trillion. The key question is how can the USTreasury borrow $3.5 trillion in the next several months? That sum is almost 30% of our entire Gross Domestic Product for the United States. Major companies often bear debt with short maturity, but manage to roll it over. The recent trap has been to pursue the near 0% interest rates on the short-term side, but doing so requires satisfaction of rollover requirements that grow tougher with time. Homeowners have such trouble, and governments soon will also. A strategy to minimize borrowing costs can backfire.

Creditors are awakening to the prospect of never being repaid, let alone with interest. Funding costs soar when the alarm bells finally go off. The party is suddenly over, and bankruptcy remains as the lone option. That is bankruptcy for a nation. When governments go bankrupt, the credit market calls it a ‘Default.’ Currency analysts and traders determined have worked to accurately forecast when a country would default. Two well-known economists Alan Greenspan and Pablo Guidotti published the formula in a 1999 academic paper that remained a relative secret until recently. The formula is called the Greenspan-Guidotti rule.

The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world’s largest money-management firm, PIMCO, explains the rule this way: “The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support.” It is widely accepted in a textbook sense.

The principle behind the rule can be simply stated. If unable to pay off all foreign debts in the next 12 months, a nation stands as a terrible credit risk. Speculators proceed to target bonds and currency for the nation, forcing a run, thus rendering impossible the refinance of debt in rollover. A default is then assured. For the USGovt, according to the Greenspan-Guidotti criterion, a guaranteed default is highlighted. Next examine the tangible reserves held by the United States Govt. Like most official statistics, they contain a large dose of fiction to conceal the reality of extreme vulnerability and pilferage.

The USGovt holds gold, crude oil, and foreign currency in reserve. It claims 8133.5 metric tonnes of gold, which would rank it as the world’s largest holder if true. But it is a total lie. At current values, the gold reserves would be worth in the neighborhood of $300 billion. The US Strategic Petroleum Reserve is indeed real, and shows a current total of 725 million barrels of crude oil. At current values, that is worth around $58 billion. Lastly, the USGovt holds $136 billion in foreign currency reserves, according to the IMF. In total the USGovt is in possession of $490 to $500 billion of reserves. The total in reserves pales by comparison to short-term foreign debt.

Next consider the short-term debt. According to the USDept Treasury, $2 trillion worth of debt will mature in the next 12 months. Long gone are the days of funding the national debt internally from savings and pension funds. Since 1985, the United States has been a net debtor in global terms. Foreigners own 44% of all USGovt debts. That means the US must produce foreign creditors with $880 billion in the next 12 months, an amount that overwhelms reserves. Furthermore, in complete exacerbation of the debt structure, the USGovt must finance new deficits in the coming year. The Office of Mgmt & Budget forecasts a $1.5 trillion budget deficit in the next fiscal year. Combine to make total funding requirements of $3.5 trillion over the next 12 months. Domestics savings cannot be counted on for such large sums, since only $600 billion annually. Foreign creditors have begun to halt extension of credit supply. Note the Indian and Russian central banks, which have stopped buying USTreasurys. Instead, they have turned to the arch enemy asset in gold, buying enormous amounts of bullion for reserves. The Global Paradigm Shift centers on a revolt against the USDollar (damaged, debased, discredited) and the USTreasury Bond (bloated, monetized, at great risk). According to the Greenspan-Guidotti Rule, the alarm bells for USGovt debt versus reserves went off long ago, and ring louder every day. Russia declares the central bank will double its gold reserves. China declares a planned six-fold increase in its central bank gold reserves in the next few years. The alternatives to USTBonds are gaining momentum.

The printing pre$$ is the logical alternative to finance the USGovt debt, in pure Weimar style. The failed German state from 70-80 years ago is well studied, but hardly brought to the current picture as relevant, a grand error. In fact, that is precisely the dirty secret. Officially, the USFed has been buying both USTBonds and USAgency Mortgage Bonds, pure monetization and debasement of the USDollar. But unofficially, the USFed has been buying new auction bonds from both the primary domestic bond dealers and subsidizing purchase of auction bonds by the foreign central banks. The US Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt, in fact, a staggering sum. So far the monetization process has considerably weakened the value of the USDollar, and devalues the foreign reserves held in USTreasurys. Stansberry expects before long, foreign creditors will face a difficult deadly choice: Hold USTBonds and suffer diminished value, or rush in an escape to gold as their reserves held in USTBonds plummet in value. They have called a halt to further USGovt debt purchase. He cites Brazil, Korea, and Chile as the three largest central banks that own the least amount of gold. None owns gold amounting to even 1% of its total reserves.

A recent New York Times article repeated the same warnings about short-term debt versus reserves held by the USGovt. However, the author happened not to mention the Greenspan-Guidotti Rule, the secret of international speculators. The dynamics of the rule dictate a severe currency crisis within the next two years. The gold price will rise sharply during this anticipated crisis, one reason for its rise, and a main reason never cited by those who pretend to understand the gold market. For certain, the numbers have never been so large and dangerous. Porter Stansberry for one would not be surprised at all to see gold at $10,000 an ounce by 2012. See the Kitco article (CLICK HERE).

Now for a dose of reality. The USGovt has a big hidden problem. The United States might not own even one ounce of gold any longer. The crude oil and foreign currency reserves are very likely real, but not the gold. They usually report gold reserves as being ‘Deep Storage Gold’ which means unmined ore and unrefined gold bars still locked in mineralization form rather than bullion bars. During the Clinton-Rubin Admin, not only was the US-owned gold sold off, but the USGovt borrowed European gold and sold it too. This paid for the Stolen Decade of Prosperity, the 1990 decade whose prosperity few comprehend. So the above default risk rule puts the USGovt as far more at risk than even perceived on the surface due to faulty reserves tally, when official data is believed. Doing so is a grave error. The United States is an empire with piddly reserves (no clothes).

◄$$$ THE ECONOMIST WARNS OF A BROADER CONCERN OF GOVT DEBT ACROSS THE WORLD. THEY CALL IT THE NEXT BIG PROBLEM. KEEP FOCUS ON GREECE, THE WEAKEST LINK IN THE EUROPEAN CHAIN, AND THE CLOSEST TO HOME IN THE WESTERN WORLD. $$$

The Economist magazine calls Dubai a ’small fry’ problem. They expect scares over government default will be the world economy’s next big problem. In the two weeks after the Dubai World announcement of its debt default, or delay, or standstill, the financial panic appears to have disappeared as quickly as a desert squall, in the words of the magazine. Some analysts deny the importance of the entire Persian Gulf region from a financial perspective, with the Dubai events lacking broader significance, but surely inflicting great harm to their credibility as a debtor. Dubai debt signifies much wider uncertainties, as my August warning indicated. Estimates of their credit losses are rising and will continue to escalate, notably in commercial property. The Economist points out the more important repercussion has to do with sovereign risk on a global scale.

At issue is the nature of the Dubai World debt. It was not technically backed by any government guarantee, but it was widely regarded as such by investors, who made scant distinction between the Dubai Govt and a company wholly owned by sheiks in power. The repudiation made by Dubai of the implicit guarantee marks an important milestone in global finance. In an immediate sense, it has prompted a reappraisal of the inherent risk of other Persian Gulf debt, in neighboring countries. The contagion has also spread to increased concerns about overextended emerging economies suc h as Hungary and Latvia. Closer to the Western world, more heightened anxiety has come to the prospect of default in the marginal economies of the EuroZone, in particular Greece. No examination yet seems apparent of Mexican debt, sure to default. An assumption has long been held, now in question, that the European Union would offer firm rescue under formidable pressure, which means Germany. Clear or implicit government debt defaults are coming. See the Economist article (CLICK HERE).

◄$$$ THE LIST OF POTENTIAL GOVERNMENT DEBT DEFAULT CANDIDATES IS LONG AND SPANS THE GLOBE. THE PROCESS HAS ALREADY STARTED, WITH THE GOVERNMENTS OF SPAIN, GREECE, AND PORTUGAL HAVING RECEIVED EITHER DEBT DOWNGRADES OR REDUCTIONS TO NEGATIVE WATCH. THE DOMINOES HAS BEGUN TO TOPPLE. $$$

The ranking is largely irrelevant since they are all interconnected like so many dominoes. A strong banker contact provided a ranking as an exercise, shared for our benefit. He listed the candidates for government debt default as 1) Dubai, 2) Ukraine, 3) United States, 4) Baltic States, 5) Eastern Europe, 6) United Kingdom, 7) PIGS nations with Greece first, 8) France, 9) Rest of the UAE, Kuwait, Qatar, Saudi Arabia, 10) the Stans of East Asia, 11) Argentina, 12) Mexico, 13) Most European Union countries (except Germany, Benelux, Austria, Finland). THINK DOMINOES, WITH THE UNITED STATES PROVIDING THE LOUDEST BANG, EVEN FROM THE THREAT PROSPECT.

The most important government debt default is by far the United States. Its crumbling finances are worsened by the endless war in support of private syndicates. The USGovt deficits are wide and growing wider. The deficits show no sign of stability, despite the urgent talk, loud promises, and empty rhetoric. Note the direction of the USGovt revenue receipts, heading down since 2006 and still heading down. Strains to USTreasury auctions necessary to finance the federal debts in securities would be a monthly crisis topic of discussion if not for the hidden monetization by the USDept Treasury and US Federal Reserve. Press coverage of monetization seems totally forbidden, verboten!! My firm belief is that the Obama Admin is committed secretly to sending USGovt finances over the cliff and forcing a USTreasury default, one that invites a USMilitary coup. Thanks to Casey Research for a fine chart.

◄$$$ MOODY DENIES A DEBT DOWNGRADE FOR THE UNITED STATES OR UNITED KINGDOM IS LIKELY. THEY PROBABLY SHOULD SIMPLY OPENLY ADMIT THEY ARE NOT PERMITTED TO DOWNGRADE. THE KEYWORD ‘RESILIENT’ MEANS FIXED BY DECREE IN MY BOOK. BETWEEN THE LINES THEY DECLARE A DEBT DOWNGRADE IS DESERVED. $$$

A public announcement of default risk denial is a confirmation of heightened risk, or else why make it? Moodys Investor Service all but declared a debt downgrade for the US & the UK Govt debt securities was deserved but forbidden. They did say the US & UK debt might ‘test the Aaa boundaries’ because their public finances are worsening in the wake of the global financial crisis. They further said none of the top rated countries is ‘Vulnerable’ to downgrade. The USGovt debt burden will climb to 97.5% of GDP next year from 87.4% this year, the Organization of Economic Cooperation & Devmt forecast in June. National debt in the US climbed to $7.17 trillion in November. The UKGovt public debt will swell to 89.3% of the economy in 2010 from 75.3% this year, a bigger percentage jump, according to the OECD. Moodys mentioned that all Aaa rated governments are affected by the global financial crisis, with differences in their impact and ability to respond. They must refer to the ability to print money and monetize debt, perhaps even pressure other nations to purchase the debt via their obedient central banks.

Next for their bizarre definitions at Moodys. One should recall less bizarre definitions for Wall Street firms over a year ago. Curiously, the US and UK have ‘Resilient’ Aaa ratings, whereas Canada, Germany, France, New Zealand, and Switzerland earn a ‘Resistant’ top rating. Moodys defines ‘Resistant’ countries as beginning from a more robust position, but will not see debt exceeding levels consistent with their Aaa status. HUH? Moodys defines ‘Resilient’ as “Aaa countries whose public finances are deteriorating considerably and may therefore test Aaa boundaries, but which display, in our opinion, an adequate reaction capacity to rise to the challenging and rebound.” HUH? What a load of crapp!! How would Moodys define ‘Crapp’ in their official lexicon? Pierre Cailleteau is managing director of sovereign risk at Moodys. He said, “The deterioration has been pretty severe. We expect a pretty strong policy response in the next couple of years in order to keep the debt in the Aaa range. We expect them to bend but not to break.” It is unsure what he truly expects, or whether his words are a mere expression of frustration. The UK entered the crisis in a vulnerable position and is now facing an ‘inexorable deterioration of debt affordability’ in their words. The government’s ability to borrow large amounts of money at favorable terms supports its ratings, according to their report. Across the Atlantic, the expansion of the USEconomy will be insufficient for it to make ‘major progress’ in reducing its budget deficit in their terms. Moodys came right out and stated that countries with Aaa ratings are unlikely to be downgraded anytime soon, without mention of political pressure.

Dissent from a corner ruled by reality comes. Mark Schofield is head of interest rate strategy in London at Citigroup. He said, “The UK fundamentals are dismal and do not support the ratings. Only if some pretty draconian fiscal measures are in place will the UK keep hold of its Aaa rating.” David Keeble is head of fixed income strategy in London at Calyon, the investment banking unit of the French Credit Agricole. He said, “There has been a huge increase in debt-to-gross-domestic-product ratios as a result of the crisis. It is right that there should be a lot of attention and pressure on these numbers. It is difficult to drive a big wedge between the US and UK in terms of their fiscal outlook. The flexibility that Moodys spoke about is not obvious. It is all a matter of political willpower.” My interpretation is more like extreme political coercion of the debt rating agencies, precisely like the force used to grant triple-A ratings to Wall Street banks that failed any rational justification in 2008 before the bank sector implosion in the autumn months of 2008.

The cost of protecting US debt from default (a Credit Default Contract) was unchanged as of December 8th at 32 basis points, or $32k per year to protect $10 million of the bonds from default for five years, according to CMA DataVision prices. That compares with a peak of 100 basis points in February and only 20 basis points in October. The cost of protecting UK debt from default was cost 74 basis points, up from 72.5 the previous day, according to CMA. That is equivalent to that of Portugal, each of which is rated Aa2 by Moodys, its third highest grade. The UK CDSwap contracts, which peaked at 175 basis points in February, rose from 44 points on September 30th, CMA prices show. The point few analysts mention is that the CDSwap insurance contract cuts into the already puny bond yield payout, and EXCEEDS the bond yield payout for the short-term USTBills. Institutional investors often insure their holdings. See the Bloomberg article (CLICK HERE).

◄$$$ THE USGOVT HAS BEGUN THE PROCESS TO RAISE ITS DEBT LIMIT BY $1.8 TRILLION. THE DECISION HAS BEEN DELAYED FOR MONTHS. THE AMOUNT IS NOT ENOUGH TO AVOID A SIMILAR DECISION TO RAISE THE LIMIT IN LESS THAN TWO YEARS. OF COURSE, THE MILITARY BUDGET REMAINS SACRED, SINCE THAT IS A WING OF THE SYNDICATE IN CONTROL OF THE NATION. $$$

In a bold yearend tactical maneuver with some political risk, Democrats are prepared to raise the federal debt ceiling by $1.8 trillion before January, and thus avoid facing the issue again before 2010 elections. The amount is double what had been planned last spring in a budget resolution for the 2010 fiscal year. Look for unusual budget resolutions like the Gramm-Rudman deficit reduction bill 25 years ago. With concessions come demands. A bipartisan task force is already being assembled to generate votes in the next Congress toward deficit reduction steps now shunned by lawmakers. Its 18-member task force might possess immense leverage to force change if they can organize. My personal view is that the power of the economic recession will sidetrack any fiscal prudence from such a panel.

The eventual bill that approves a federal limit increase will also provide for the sacred military budget, the pending $636.4 billion Pentagon appropriations bill that includes $128.3 in contingency funds for military operations in Iraq and Afghanistan. War is sacred, and war is good business, especially for the entrenched contractors, not to mention the skimming from the funds. War is what the USEconomy has been all about for many years, whose climax has occurred in the current decade. War has contributed mightily to killing the USEconomy. War is a syndicate moneymaker, never with proper oversight. See the missing $50 billion from the Iraqi Reconstruction Fund, or don’t see it, since nobody is even looking for it after assessing the lost amount. House leader Hoyer stressed how the debt limit will be part of a larger yearend legislative train pulled along by the mandatory military bill demanded by the syndicate, if one properly interprets his words. Leadership staff stressed that nothing was yet final in what has become a negotiation between top Democrats in the House and Senate. The Senate made the first move to put the $1.8 trillion number on the table. See the Politico article (CLICK HERE). After the debt limit is pushed upward, look for an additional flood of spending to be unleashed, whose effect will be negative on the USDollar.