Saturday, October 22, 2011

Financial's Rally on Voodoo=LIARS and CROOKS

The bulls engineered a winning streak of four weeks in a row on the stock market. This weeks earnings in the financial sector highlighted the rally, although one of their biggest guns, Goldman Sachs reported a loss. It didn't matter. The sector led the charge and awaits the news across the pond on the euro bailout. If the Europeans do like our Fed, this rally will continue.
He who pays the Singer, calls the Song
And what does the Fed do, pray tell? It is one of the complaints that I mention in my unpublished book, THE EVOLUTION OF DEMOCRACY: the Book of Multiple Ideas and Predictions(cheap plug). In it I mention that one of the problems with gold even when we were on the gold standard was that gold does not pay any interest. I offered the idea that we should have written a law stating that banks had to accept our gold and pay interest on it in the same relationship as if it was paper money. The concept continues to say that the very same banks could get credit with this gold as a temporary solution if a question were to arise on the banks credit worthiness. They could add the gold deposits to their leverage and buy time to actually purchase their own gold. I also offered the idea that foreign governments should not be allowed to exchange their credits for our gold even though the exchange ability would always exist for our citizens. My thinking is that their economies are fiat and therefore not fair to exchange on a dollar-per-dollar basis. I think that the Chinese have read enough of my articles to gleam this idea and they might use it some day. In any case back to the rally last week. Bank of America reported a big profit and the stock popped, however this is how fiat central bankers play tricks on evaluations. They allowed Bank of America and all the other banks to use an accounting voodoo to balance their books.  Let me give you an example that you all can understand.
Selling Your Home
You paid x amount of dollars, however the financial crisis has lowered the prices for homes in your area. You could be under water or economically just fine, it doesn't matter. What matters is what the market is paying for homes in your area at the moment. You can ask whatever you want, but reality is what someone will pay and that is the bottom line. Now, Bank of America as well as as all the other banks hold mortgages in their books for these very same homes in your area and mine. Many of these homes are delinquent and many more are under water along with the rest of us who are up to date on our mortgage. The government and the Fed allows these banks to self value the asset value of these mortgages. Bank of America said they were worth way more than the market evaluations of the same properties. Where is accountability? This is a lie which corresponds to the same lie of fiat money. It is based on trust and confidence of the American system. It is not backed by some tangible asset like gold to go along with the American system. The government is trying to win the confidence of the stock market which it hopes will sway the public. Yeah, but will it stop the falling values of homes? Will it find you a livable paying job? They write the rules that allow them to control the system, however the same system in Europe tells you that socialist capitalism does not work unless your currency is strong and their currency is a lie.
Speaking of Lies. This weeks Liars and Crooks goes to Citigroup who paid $285 million dollar fine this week in relationship to their dealings with financial assets during the financial crisis. They packaged mortgage securities that they knew were worthless and in fact they made bets against these same securities on the side. I ask this question. If they were found guilty of deceit or failure of fiduciary obligations to which a citizen would lose their license besides the fine, why are they allowed to be still in business? It is not just them. There are countless cases in the books where people died from bad drugs, poisoned water, et al, and yet, these same companies are allowed to continue operations without a civil obligation to the public. These companies don't argue the accusation, they just pay the fine whereas a citizen would be put in jail under a felony and his business closed. They write the rules for themselves and not what is fair and just. Occupy Wall Street here is a focal point for your anger. End the Fed!