Saturday, August 18, 2012

HPC Are The US Govt And The Big Banks Quietly Preparing For An Imminent Financial Collapse?

Are The Government And The Big Banks Quietly Preparing For An Imminent Financial Collapse?

August 14, 2012

Something really strange appears to be happening.  All over the globe, governments and big banks are acting as if they are anticipating an imminent financial collapse.  Unfortunately, we are not privy to the quiet conversations that are taking place in corporate boardrooms and in the halls of power in places such as Washington D.C. and London, so all we can do is try to make sense of all the clues that are all around us.  Of course it is completely possible to misinterpret these clues, but sticking our heads in the sand is not going to do any good either.  

Last week, it was revealed that the U.S. government has been secretly directing five of the biggest banks in America "to develop plans for staving off collapse" for the last two years.  By itself, that wouldn't be that big of a deal.  But when you add that piece to the dozens of other clues of imminent financial collapse, a very troubling picture begins to emerge.  Over the past 12 months, hundreds of banking executives have been resigning, corporate insiders have been selling off enormous amounts of stock, and I have been personally told that a significant number of Wall Street bankers have been shopping for "prepper properties" in rural communities this summer.  

Meanwhile, there have been reports that the U.S. government has been stockpiling food and ammunition, and Barack Obama has been signing a whole bunch of executive orders that would potentially be implemented in the event of a major meltdown of society.  So what does all of this mean?  It could mean something or it could mean nothing.  What we do know is that a financial collapse is coming at some point.  Over the past 40 years, the total amount of all debt in the United States has grown from about 2 trillion dollars to nearly 55 trillion dollars.  That is a recipe for financial armageddon, and it is inevitable that this gigantic bubble of debt is going to burst at some point.

In normal times, the U.S. government does not tell major banks to "develop plans for staving off collapse". But according to a recent Reuters article, that is apparently exactly what has been happening….

U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

The two-year-old program, which has been largely secret until now, is in addition to the "living wills" the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.

Does it seem odd to anyone else that only five really big banks got such a warning? And why keep it secret from the American public? Does the federal government actually expect such a collapse to happen? If federal officials do expect a financial collapse to occur, they would not be the only ones.  An increasing number of very respected economists are speaking about the coming financial collapse as if there is a certain inevitability about it.

For example, check out the following quote from a recent Money Morning article….

Richard Duncan, formerly of the World Bank and chief economist at Blackhorse Asset Mgmt., says America's $16 trillion federal debt has escalated    into a "death spiral," as he told CNBC. And it could result in a depression so severe that he doesn't "think our civilization could survive it."

A former World Bank executive is warning that our civilization might not survive what is coming? That is pretty chilling. Economist Nouriel Roubini says that he believes that the coming crisis will be even worse than 2008….

"Worse because like 2008 you will have an economic and financial crisis but unlike 2008, you are running out of policy bullets. In 2008, you could cut rates; do QE1, QE2; you could do fiscal stimulus; you could backstop/ringfence/guarantee banks and everybody else. Today, more QEs are becoming less and less effective because the problems are of solvency not liquidity. Fiscal deficits are already so large and you cannot bail out the banks because 1) there is a political opposition to it; and 2) governments are near-insolvent – they cannot bailout themselves let alone their banks. The problem is that we are running out of policy rabbits to pull out of the hat!"

Across the pond, many European officials are echoing similar sentiments. What Nigel Farage told King World News the other day is very ominous….

Today MEP (Member European Parliament) Nigel Farage spoke with King World News about what he described as the possibility of, "a really dramatic banking collapse."  Farage also warned that central planners want to enslave and imprison people inside of a 'New Order,' and he described the situation as "horrifying."

The situation in Europe continues to get worse and worse.  The authorities in Europe have come out with "solution" after "solution", and yet unemployment continues to skyrocket and economic conditions in the EU have deteriorated very steadily over the past 12 months. If all of that was not bad enough, there are an increasing number of indications that Germany is actually considering leaving the euro. 

Needless to say, that would be a complete and total disaster for the rest of the eurozone. Of course there are any number of ways that the financial crisis in Europe could potentially play out. But all of the realistic scenarios would be very bad for the global economy. Meanwhile, our resources are dwindling, war in the Middle East could erupt at any moment and our planet is becoming increasingly unstable.  The following is from a recent article by Paul B. Farrell on….

Fasten your seat belts, soon we'll all be shocked out of denial. Some unpredictable black swan. A global wake-up call will trigger the Pentagon's prediction in Fortune a decade ago at the launch of the Iraq War: "By 2020 … an ancient pattern of desperate, all-out wars over food, water, and energy supplies is emerging … warfare defining human life."

It is almost as if a "perfect storm" is brewing. Of course the historic drought that is ravaging food production in the United States this summer is not helping matters either.  Another summer or two like this one and we could be looking at a return of Dust Bowl conditions. Anyone that is watching what is going on in the world and is not concerned at all about what is happening is simply being delusional. Recently, a "team of scientists, economists, and geopolitical analysts" examined the current state of the global economic system and the conclusions they reached were absolutely staggering….

One member of this team, Chris Martenson, a pathologist and former VP of a Fortune 300 company, explains their findings:

"We found an identical pattern in our debt, total credit market, and money supply that guarantees they're going to fail. This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible.

"And what's really disturbing about these findings is that the pattern isn't limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well."

According to Martenson: "These systems could all implode at the same time. Food, water, energy, money. Everything."

Hmmmm – it sounds like they have been reading The Economic Collapse Blog. The truth is that a massive worldwide financial collapse is coming. It is inevitable, and it is going to be extremely painful.


Guess who is going to need a bailout right after Spain?  The Italian economy is the 8th largest economy on the entire planet and right now it is being absolutely overwhelmed by a tsunami of debt.  In an attempt to address this problem, Italy is going down the exact same path that Greece, Portugal and Spain have gone.  And so far, we are seeing the exact same results that we have seen in those other countries.  Austerity causes economic growth to slow down, and that causes unemployment to soar.  When unemployment rises, tax revenues go down and you end up missing your original deficit reduction targets so you have to implement even more austerity measures.  It is a vicious cycle that we have seen play out again and again in Greece over the past five years.  But unlike Greece, Italy is way too large to be completely bailed out.  The truth is that there are only 7 economies on the entire globe that are larger than the Italian economy.  Plus, keep in mind that the 12th largest economy in the world, Spain, is also on the verge of formally requesting a bailout.  (Read More....)

A nightmarish global food crisis is coming.  Even though about a billion people around the planet currently live on the edge of starvation, those of us that live in the wealthy western nations still have more than enough food to eat.  But it will not always be that way.  With each passing year, the global population goes up while global supplies of fresh water go down.  And you need lots of water to grow food.  The "breadbaskets" of the world, the United States and Russia, are currently experiencing horrible droughts that scientists tell us are part of a long-term trend.  In fact, some are projecting that the United States will soon see the return of Dust Bowl conditions.  So what will the rest of the world do when the topsoil in the heartland of the biggest food exporter on the globe dries up and blows away?  Just remember what happened back in 2007 and 2008.  Food prices rose rapidly and it sparked massive food riots in more than two dozen different nations.  So what will things look like when there is a very serious shortage of food around the globe?

On Thursday, the price of corn hit another brand new record high of $8.28 a bushel on the Chicago Board of Trade.

Unfortunately, (Read More....)

One economic theory states that we can never have deflation in a long term economy. For prices to deflate would be contrary to the built-in safeguards put forth by the government agencies. The main cause of a deflation would have to be a massive withdrawal of money from the banking system. As long as the money is insured, that is unlikely to happen. I tend to agree with that theory. It is unlikely that prices will go down long term as long as people have confidence in having their money in the banks.

One of the safeguards put into effect in the 30s depended on the negotiation of wages. No one group of wages, but all American Manufacturing was based on Union wages. Inflation and wage increases went hand in hand all through the 50s and to some extent through the 60s. Nonunion people normally could do a "me too" on the backs of Union worker's negotiations. If a Union member negotiated a contract for $10 an hour plus benefits, companies tended to pay the nonunion worker just a little less. But to remain competitive in attracting people, they had to match the wages fairly close.

In that kind of atmosphere it was natural for more and more money to be printed as wages increased at a rate of at least 4.5 percent per year. You can go to almost any book on Finance and Appraisal in the Real Estate Industry for a practical guide (Read More....)

Shahzad Afzal


Tuesday, August 14, 2012

America's first choice - Iran or Pakistan

America's first choice - Iran or Pakistan
Asif Haroon Raja
America and its allies are persecuting and bleeding the Muslims for over a decade. Notwithstanding its imperialistic designs and penchant to harm Muslims interests, the Muslim states themselves are also responsible for the sorry state of affairs within the Muslim world. Notwithstanding all out support of the US and the west to Israel in its creation and build up, Arab states are also responsible for turning tiny sized Israel into most powerful state of the region because of their disunity and submissiveness to USA. Palestinian issue has lingered on for 65 years because of the deplorable state of affairs within the Arab world. Mullah Omar's regime wouldn't have crumbled that easily had Pakistan not ditched its neighbor and sided with the invader. The whole world including the Muslim world backed the invasion. Saddam Hussain's regime was brought down in May 2003 because the Shias and Kurds in Iraq had joined hands with the aggressors and all the Arab neighbors had supported the aggressors while Iran looked the other way.
Uprisings in Tunisia and Egypt named as Arab Spring were instigated by CIA-Mosad and executed by Qatar to reshape Middle East and muster wider acceptance for apartheid Israel. It is a different matter that later events spun out of control of the schemers and Islamic parties took over. Few hundred anti-Qaddafi runaway Libyans residing in USA aided by CIA and NATO airpower ousted Qaddafi from power and killed him in 2011. Syria is currently in the firing line and the opponents of President Assad misled by foreign powers are striving hard to bring down his regime. So far 25000 Syrians have died in the infighting but Assad with 12% Alawite minority is defiant and wants to continue ruling 83% Sunni population. But for Russian and Chinese intervention, by now the US would have obtained UNSC sanction to authorize NATO to step in and assist the opposing forces in Syria and then form a government of its choice.
Two other Muslim countries, Iran and Pakistan in the firing line are awaiting their turn. Lot of groundwork has already been done by USA and its allies to soften up the targeted countries from within through covert war. Reformist Party in Iran is sponsored by USA but despite receiving millions of dollars during the last two elections, it couldn't defeat Ahmadinejad run ruling party which has struck deep roots among the masses because of its anti-US and anti-Israel stance. Although Iran has been sufficiently isolated and put under harsh sanctions and now attempts are being made to block its oil exports so as to force it to abandon its nuclear program perceived to be geared towards making a nuclear bomb, Ahmadinejad is continuing to defy US-EU blackmailing tactics. Oil, geo-strategic location, effective leadership and resilient youth are assets which enable Iran to withstand external pressures. It is in a position to choke Strait of Hormuz through which one-third of oil flows to Europe. It has powerful guided missiles that can hit Israel with ease. 
The situation in Pakistan is not so bright. One of the best ways to break a nation is to install a corrupt and incompetent government. The US has successfully achieved this objective in Pakistan. The present government installed by USA in 2008 is at the beck and call of Washington. The sole interest of the NRO cleansed rulers is to prolong their stay in power and to keep filling their coffers with ill-gotten money. For the attainment of these selfish interests they have sold their souls and put national interests at stake. They are fighting the judiciary tooth and nail to preserve their looted wealth. They have damaged and humiliated Pakistan in a way which neither India nor Israel could do militarily. Their massive corruption, nepotism and lavish lifestyle have devastated the economic, ideological, industrial, social and political structure of Pakistan. Above all, there is no dearth of fifth columnists and snakes in the grass.
Regrettably, the US has found out the solution to destroy a Muslim atomic power through corrupt democracy in Pakistan. Within four years we stand nowhere. The US and India under the garb of friendship have been ruthlessly bashing Pakistan on the media plane and through covert and drone wars but our dishonest leaders continue to appease the bashers. After destabilizing FATA and Balochistan and creating lawlessness in Karachi, and after resorting to water terrorism by building series of dams on our rivers to dry up Pakistan, India with the willing connivance of our rulers is now poised to wage an economic war to cripple our economy. It has opened up her border for Pakistani industrialists who are already depressed because of prolonged load shedding and are shifting to Malaysia, Indonesia and Bangladesh. India will be most convenient place for them to restart business. One can now see and understand why and how cleverly our energy crisis has been used as a weapon against us. It is essentially because of our morally bankrupt leadership that our nuclear deterrence has almost been compromised.
Although both Iran and Pakistan are ripe for foreign intervention, it cannot be predicted at this stage which country the US will choose to strike first. Apparently Iran seems to be priority target because of certain compelling reasons. Israel is becoming itchy and desperate and is putting massive pressure on USA to strike Iran's nuclear sites before it acquires weaponized nuclear capability. It knows that Tehran has speeded up its covert program despite string of sanctions and pressures. The US is reluctant since till recent its forces were heavily involved in Afghanistan and Iraq. It is still in a precarious situation owing to Afghanistan which has gone out of its control. Its economy is not getting stabilized and expenditure on war on terror is too weighty.
The Americans would not like opening of another war front. Rather, they want early termination of war on terror and return of soldiers who are getting killed almost daily. NATO countries are also wary of the war and have announced their intentions of pulling out of Afghanistan much before the cutout date of December 2014. Europe itself is going through serious economic crisis. In case Iran decides to close Hormuz, it will have crippling impact on the economy of Europe. Given the oil stakes of Russia and China in Iran, US-Israeli intrusion may trigger world war. Although conflict is in the interest of USA since it helps in running its war industry, however, after its bitter experience in Vietnam, Afghanistan and Iraq, the US would refrain from employing its combat troops in any future conflict zone. It would prefer to achieve its objectives by using covert means supplemented by drones, airpower, psychological and cyber warfare.
The fight back by resistance forces in Iraq and Afghanistan has not only drained the economy of USA but also upset its grandiose future plans to harness the resources of the Muslim world and micro-manage global affairs in accordance with its own whims. Afghan resistance has proved too costly since few thousand ill-equipped Taliban have rolled the honor and prestige of the sole super power claiming to be invincible in the dust. It is pulling out without defeating the Taliban and without arriving at a political settlement. Its hopes are pinned on India and ANA that the two would be able to keep the Taliban at bay after the departure of ISAF but judging from the ground realities, the assumption seems farfetched. Even the safe withdrawal of ISAF and its heavy baggage has become a big challenge.
These lurking fears and anxieties of USA are proving to be blessing in disguise for Pakistan and may prove helpful since it is the only country that can help a great deal in surmounting these formidable challenges in 2014. Other reasons why Pakistan may not be preferred over Iran is that it acts as the best bridge for Afghanistan and Central Asia and also provides deepwater seaport facility at Gawadar. Unstable Pakistan will hamper the withdrawal of ISAF as well as future commercial activities through the envisaged energy corridor.
Irrespective of the compulsions of USA, it cannot be denied that Pakistan is a target and not an ally of USA and sooner than later its turn will come. No amount of sacrifices rendered by Pakistan will satisfy USA. Nuclear Pakistan and that too having germs of defiance and brimming with anti-Indo-US-Israel extremist forces is unacceptable to the adversarial trio. Hence the apparent thawing of our relations with the US that had reached a breaking point must not mislead us into believing that the US has genuinely become friendly and cancelled its hidden objective to denuclearize Pakistan. Signing of Indo-Afghanistan and US-Afghanistan strategic partnership accords and recent demand by Afghan Parliament asking the US to attack Pakistan are ominous signs. Our western front will certainly get activated in any future Indo-Pak war. India has enhanced the scope of its Cold Start doctrine from eight to sixteen tactical objectives on our eastern front.
Although Gen Shameem Wynne is very confident that our nuclear arsenal is in safe hands and no harm can come to it, however, I am sure he at the inter service level and Gen Ashfaq Kayani at Army level must have worked out contingencies to deal with dangerous twin threat scenario backed by USA and Israel which is no more an illusion but a reality. I suggest this hypothesis should be played up in ongoing war game Azm-e-Nao IV to assess our response actions.   
The writer is a retired Brig, a columnist, a defence analyst and author of several books. Email:         

Shahzad Afzal


Wednesday, August 8, 2012

Drone Attacks Only Create More Enemies for the US

Drone Attacks Only Create More Enemies for the United States.

By Eric Margolis

August 05, 2012 "
Information Clearing House" --  WASHINGTON – I was visiting Pakistan's ambassador to the United States when the phone on his desk rang.

"The hot line," he said. "Sorry I have to take this call."

As he listened, his face grew darker and darker. Finally, he banged down the phone and exploded: "Another US drone attack that killed a score of our people. We were never warned the attack was coming. We are supposed to be US allies!"

This strongly pro-American ambassador was wrong. While the US hails Pakistan as a key non-NATO ally, the US treats it like a militarily occupied country. The government in Islamabad is left to observe increasing drone attacks and CIA ground operation with deepening embarrassment and helplessness.

Average Pakistanis have no doubt about what's happening. Most believe their nation was more or less occupied by the US after the 2001 attacks on the US.

The Pakistani leader who allowed this to happen, Gen. Pervez Musharraf, has admitted that the US put a gun to his head and demanded he allow the US to use Pakistan's army, air bases, ports, intelligence service, logistics, and air space – or face war. Musharraf quickly caved in to the US ultimatum, something a tough predecessor, Gen. Zia ul-Haq, would have surely rejected.

As US drone attacks intensify in Pakistan's tribal belt and inside Afghanistan, the government of President Asif Ali Zardari, which was engineered into power by Washington and sustained by US dollars, keeps imploring the US to halt the attacks that are enraging Pakistanis. Senior Pakistani diplomats have been warning that the drone strikes that have so far killed 2,500-3,000, mostly civilians, are fuelling extremist groups in Pakistan and humiliating its armed forces.

No one in Washington is listening. Islamabad's attempted to show some independence by halting US-NATO truck convoys from Karachi to Afghanistan for seven months after a deadly US air attack last November that killed 25 Pakistani soldiers.

But the blockade was recently lifted after $1 billion of American aid to Islamabad was unfrozen. The dollars are flowing again – many of them right back out into Swiss, Dubai or Singapore bank accounts.

Anti-American feelings in Pakistan have been soaring. Some polls show over 90% of respondents expressing hatred or anger against the US. These public sentiments have been worsened by more loose talk by Republicans in Washington about seizing Pakistan's nuclear weapons, making Pakistan's province of Baluchistan a separate state, or putting Pakistan on America's terrorist list.

There are even rumbles from the far right and pro-Israel neocons about attacking Pakistan. America's failing war in Afghanistan is being blamed on the Pakistan-backed Haqqani group which is also ironical since during my days in Afghanistan in the 1980's, Haqqani was a favorite of CIA.

Washington's not so discreet threats of punishment have abated for the moment thanks to the mess in Syria and rising threat of war against Iran. But Pakistan remains a potent generator for anti-American jihadist sentiment, and for rising anti-Muslim sentiment in America.

Ironically, the US went to war in Afghanistan to supposedly punish anti-American groups, yet now ends up creating ten times more enemies in Pakistan.

Meanwhile, the truck craziness has reared its head again. Supply trucks for US and NATO forces are backed up at Pakistani border crossing points because supposedly because of security threats.

Trucking supplies into northern Afghanistan via the Black Sea, Russia, and Central Asia has been costing the US $100 million monthly at a time when 44 million Americans live below the poverty level. Flying supplies and munitions from the US to Afghanistan costs ten times more than ground transport.

On top of this, Taliban and its allies are annoyed that the truck convoys have stopped. Why? Because they were being paid off millions more of baksheesh by the US to let the convoys pass.

Talks this past week in Washington between CIA chief David Petraeus and Pakistan's new intelligence director, Lt. Gen. Zahir ul-Islam were said to be cordial but not 6discernably productive. Nor were talks between top Pakistani and US generals. Diplomats seem to have dropped out of the picture.

Eric S. Margolis is an award-winning, internationally syndicated columnist. His articles have appeared in the New York Times, the International Herald Tribune the Los Angeles Times, Times of London, the Gulf Times, the Khaleej Times, Nation – Pakistan, Hurriyet, – Turkey, Sun Times Malaysia and other news sites in Asia.
Shahzad Afzal