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  1. TO THE SOLARI ACTION NETWORK http://www.solari.com FROM FINANCIAL SENSE NEWSHOUR November 5, 2005 Are the Markets Rigged? A Financial Sense Newshour roundtable with Bill Murphy, Chairman of GATA and publisher of LeMetropoleCafe.com, Chris Powell, Secretary & Treasury of GATA and James Turk, founder of GoldMoney.com Whether we are citizen, activist or investor, we need to understand how the control of the financial markets really works. If you want to stop an army, you shut off their supply lines. If you want to stop the Tapeworm, we need to understand how and where it gets its financial supplies. Here is a terrific introduction from some of the finest "real money men" on the planet today. Special thanks to Jim Puplava for another sensational Financial Sense internet radio show. http://www.financialsense.com/Experts/roundtable/110505.html
  2. HON. RON PAUL OF TEXAS BEFORE THE US HOUSE OF REPRESENTATIVES September 15, 2005 http://www.house.gov/paul/congrec/congrec2005/cr091505.htm The Coming Category 5 Financial Hurricane. The tragic scenes of abject poverty in New Orleans revealed on national TV by Katrina’s destruction were real eye-openers for many. These scenes prompted two emotional reactions. One side claims Katrina proved there was not enough government welfare, and its distribution was based on race. The other side claims we need to pump billions of new dollars into the very federal agency that failed (FEMA), while giving it extraordinary new police powers. Both sides support more authoritarianism, more centralization, and even the imposition of martial law in times of natural disasters. There is no hint that we will resort to reason now that the failed welfare policies of the past 60 years have been laid bare. Certainly no one has connected the tragedy of poverty in New Orleans to the flawed monetary system that has significantly contributed to the impoverishment of a huge segment of American society. Congress reacted to Katrina in the expected irresponsible manner. It immediately appropriated over $60 billion with little planning or debate. Taxes won’t be raised to pay the bill-- fortunately. There will be no offsets or spending reductions to pay the bill. Welfare and entitlement spending is sacrosanct. Spending for the war in Iraq and the military-industrial complex is sacrosanct. There is no guarantee that gracious foreign lenders will step forward, especially without raising interest rates. This means the Federal Reserve and Treasury will print the money needed to pay the bills. The sad truth is that monetary debasement hurts poor people the most-- the very people we saw on TV after Katrina. Inflating our currency hurts the poor and destroys the middle class, while transferring wealth to the ruling class. This occurs in spite of good intentions and misplaced compassion. We face a coming financial crisis. Our current account deficit is more than $600 billion annually. Our foreign debt is more than $3 trillion. Foreigners now own over $1.4 trillion of our Treasury and mortgage debt. We must borrow $3 billion from foreigners every business day to maintain our extravagant spending. Our national debt now is increasing $600 billion per year, and guess what, we print over $600 billion per year to keep the charade going. But there is a limit and I’m fearful we’re fast approaching it. Runaway inflation is a well-known phenomenon. It leads to political and economic chaos of the kind we witnessed in New Orleans. Hopefully we’ll come to our senses and not allow that to happen. But we’re vulnerable and we have only ourselves to blame. The flawed paper money system in existence since 1971 has allowed for the irresponsible spending of the past 30 years. Without a linkage to gold, Washington politicians and the Federal Reserve have no restraints placed on their power to devalue our money by merely printing more to pay the bills run up by the welfare-warfare state. This system of money is a big contributing factor in the exporting of American jobs, especially in the manufacturing industries. Since the last link to gold was severed in 1971, the dollar has lost 92% of its value relative to gold, with gold going from $35 to $450 per ounce. Major adjustment of the dollar and the current account deficit can come any time, and the longer the delay the greater the distortions will be in terms of a correction. In the meantime we give leverage to our economic competitors and our political adversaries, especially China. The current system is held together by a false confidence in the U.S. dollar that is vulnerable to sudden changes in the economy and political events. My suggestion to my colleagues: Any new expenditures must have offsets greater in amount than the new programs. Foreign military and foreign aid expenditures must be the first target. The Federal Reserve must stop inflating the currency merely for the purpose of artificially lowering interest rates to perpetuate a financial bubble. This policy allows government and consumer debt to grow beyond sustainable levels, while undermining incentives to save. This in turn undermines capital investment while exaggerating consumption. If this policy doesn’t change, the dollar must fall and the current account deficit will play havoc until the house of cards collapses. Our spending habits, in combination with our flawed monetary system, if not changed will bring us a financial whirlwind that will make Katrina look like a minor storm. Loss of confidence in the dollar and the international financial system is a frightening possibility-- but it need not happen if Congress can curb its appetite for buying the people’s support through unrestrained spending. If Congress does not show some sense of financial restraint soon, we can expect the poor to become poorer; the middle class to become smaller; and the government to get bigger and more authoritarian-- while the liberty of the people is diminished. The illusion that deficits, printing money, and expanding the welfare and warfare states serves the people must come to an end. ----------------------------------------------------
  3. Link doesn't work, i found the article. Published September 19, 2005 Collapse of US fund exposes global debt scam Bayou seen caught in fraudsters' trap while trying to recoup losses. By NEIL BEHRMANN IN LONDON COURT records of the US$440 million collapse of Bayou, the Connecticut US based hedge fund, have disclosed an international scam involving high yield debt. In delving into the Bayou fraud, Arizona's Attorney General discovered that US$101 million was transferred from the US to banking accounts in Germany, London and Hong Kong then back to London and the US again. The Arizona authorities, legal firms and traders allege that the founder of Bayou, Samuel Israel 111, and other executives overstated profits and understated losses of the hedge fund. In an attempt to recoup losses, Mr Israel invested in high yield debt and was caught in what is known as 'prime bank instrument fraud', lawyers believe. This type of fraud has trapped investors around the world and has been explained fully in court documents relating to the Bayou scandal. In markets where interest rates have fallen to historically low levels, the court documents show that Singapore and other investors must be wary of promises about so called 'prime' high yield long and short term bonds. 'Prime bank instruments' also known as 'high yield investment' programmes are mythical fraudulent debt or bank instruments. The global fraud has been going on for several years. Fraudsters attract investors because they claim that they give them access to high yield debt that is only traded by large, 'prime' European or other banks. To justify the high yields on so called 'prime' or top quality bonds, the fraudsters claim that the World Bank, IMF and even the Federal Reserve bank back the so called 'prime debt' and claim that the banks trade in such debt at deep discounts to help finance stricken Third World countries and other worthy causes. according to court documents. Common characteristics of a 'prime bank instrument' contract include overly complex language. The fraudsters claim that annual returns could range from 12 per cent to 200 per cent because of high income and potential capital appreciation. Documents display large investor lists of attorneys and accountants that fraudsters claim to be investors. The victims become part of a 'select group' of investors and they must keep their unusual deal secret. The fraudsters tend to operate as a worldwide network of contacts and partners who provide each other with essential services, such as rapid transfer of funds to off-shore accounts. After selling the investor the fraudulent, worthless high yield paper, members of the network shift the investment rapidly from account to account and country to country. Investors wishing to retrieve their investments when they find that their promised profits aren't forthcoming, have to trace their money through many international and secret bank accounts. The labyrinth of offshore accounts and entities makes the chase futile for the original investors. When they try and recover money lost from one of the fraudsters, other members of the fraud network come into play. They claim that the person investors are attempting to hold responsible is also a 'victim'. In any event there are no longer any funds in the account because the money has moved on. Fraudulent operators sometimes encourage investors to sue financial institutions that have handled their funds. In this way, scammers shift the blame on to financial institutions. When the fraud is unravelled the embarrassed bank sometimes settles and doesn't take legal action against the fraudsters because it fears bad publicity, say the court documents. -------------------------------------------
  4. Collapse of US fund exposes global debt scam. http://tinyurl.com/bdfa5
  5. viper

    The P.P.T.

    Another naive coincidence theorist. Gotta love em : )
  6. viper

    The P.P.T.

    Remember Free Markets? Mark M. Rostenko The Sovereign Strategist Forget about market fundamentals: P/E ratios, debt ratios, earnings, blah blah blah. Forget about technicals: Double-tops, support, resistance, who cares? Those concepts were relevant in the good old days, but not in our super-duper never-a-bearmoment, new and improved 21st century government/central bank managed and manipulated market. That's right folks. I'm talking about market manipulation and I'm here to tell you that the idea is no longer the exclusive domain of wackos and nutjobs like me. Market management has become so blatant, so undeniable that even Stephen Roach of ubermainstream Wall Street firm Morgan Stanley recently wrote "I am not a believer in conspiracy theories. But the Fed's behavior since the late 1990s is starting to change my mind." Why talk about manipulation? Why do we care? Because in my estimation, it has become the single, most-dominating force impacting your investments today. I won't delve too deeply into the mechanism or the means as this information is readily available all over the Internet. But a brief history is in order. Prior to 1987, we had relatively free markets in this country. Government, albeit stupid overall, had sense enough to leave this one area relatively free of intervention, aware that while they can screw up just about everything else and get away with it, it's not a good idea to bite the hand that feeds you. But after "the crash", Executive Order 12631 created the "Working Group on Financial Markets", consisting of the Secretary of the Treasury and the chairmen of the Federal Reserve, the SEC and the CFTC (or their designees.) Their goal: to enhance "the integrity, efficiency, orderliness and competitiveness" of our financial markets and to "maintain investor confidence." The means: "The Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions." And what better way to maintain investor confidence than to make sure the stock market doesn't go down by tossing the Treasury's unlimited resources at it? From the WGFM grew what today we nutters and wackjobs refer to as the "Plunge Protection Team." It is surmised that this group was built upon 1989 suggestions from Fed Governor Robert Heller who felt that the Fed should purchase stock index futures during market "emergencies" in order to halt major declines. Do we know that the PPT exists? Official government denials of its existence are our first clue that it almost certainly does. But we needn't resort to cynicism for evidence. If such a creature exists, it must leave footprints in the market. Where there are footprints, there must be creatures. And oh yes, there are footprints. Since the current cyclical bull began the S&P 500 has never suffered so much as a 10% correction. That is "unusual" like Mt. Everest is "a decent chunk of rock." In the two years during which the economy has struggled with the worst "recovery" on record, in the face of stagnant job growth and a host of other problems, the market has been so flooded with bullish investors that it couldn't pull back 10%? Nonsense. In fact, whenever the market appeared ready to reverse its uptrend at key technical levels, (and it tried PLENTY of times), huge buying appeared in the futures pits. These were obvious levels that, if violated, would have triggered much more substantial selling. Some "market player" was willing to throw oodles and gobs of money at the market to prevent it from falling. While there are funds that have that kind of capital, there aren't funds that are stupid enough to step in front of a speeding freight train to take a contrary position when they could make so much more money so much faster by positioning themselves WITH the decline. Sure, every once in a while some of them get crazy and make a huge contrary bet. But not EVERY time and not at EVERY major turning point. None of them have enough capital, cojones nor dim-wittedness to attempt to halt a decline every time. Who DOES have enough capital and dim-wittedness? Someone who has access to the United States Treasury. (And in this case, cojones has nothing to do with it. It doesn't take much cojones to spend other people's money.) This behavior has recently become very obvious. On 20 April, the Dow came within a hair's breadth of the 10,000 level. The market had tanked a few day's prior and technically, it was clear that a major market top was in place. The psychologically critical support level was about to be violated, likely unleashing a torrent of selling. In the wee hours of the following morning the stock index futures markets began to rally sharply. By the time the cash market opened the Dow was already up 100 points. If you watch the futures markets you know that the Dow NEVER climbs anywhere near 100 points overnight, unless in response to a big move overseas or major news. That wasn't the case this time. Major players aren't doing much of anything during those hours. The markets are exceptionally thin. Foreigners and U.S. insomniac traders do not have the means to push the market up 100 points. So why did the market behave so unusually? Because some big, dumb buyer did something that no one else ever would, and did so gladly because "he" was playing with unlimited resources and stood to lose nothing. Hmmm, let me think now: Big, dumb, unlimited resources. Who could it be? It was a perfect opportunity for the PPT. Thin markets, no one around to take the opposite side. Push the market up to a sharply higher opening and the public will almost certainly grab the ball and run with it, wildly bullish and afraid to miss "the next big move." And so they did. The Dow closed up 206 points on a day with mixed economic news, much of it bearish, none of it all that bullish. The same thing happened last Friday following Thursday's downdraft that looked like another inevitable assault on Dow 10,000. Futures rose sharply overnight, the market opened sharply higher and by the end of the day was up 120 points. Another disaster averted at a key technical level. This is not the way the markets used to trade. This is not the way that traders, the public and funds trade. There is no reasonable way to explain it without positing the existence of a major player with a vested interest in keeping the market from falling. And there is no private or public player big enough to do it and consistently get away with it. In light of the Executive Order and Heller's 1989 ideas, one has to conclude that the government is involved. Gold's another fine example. We won't get too deeply into that either as plenty of information can be found at www.gata.org. Suffice it to say that the Gold Anti-Trust Action committee (GATA) was formed in an effort to expose this manipulation, resulting in a lawsuit against Alan Greenspan, several large Wall Street firms and the Secretary of the Treasury. The footprints are all too obvious in this market as well. Commodities are in a huge bull market. The most recent upleg exhibited huge upward momentum. Crude oil surged to record highs. Steel, copper, platinum, aluminum: all at multi-decade highs. Commodities are on fire and inflation is rising even by officially manipulated "feel-good" data. Everything is rising. Except gold. Gold's reputation is that of the ultimate inflation hedge. One of its primary roles in modern times has been to sound the inflation alarm, to let us know that the central bankers are screwing up. Yet in the midst of rising inflation and major Fed screwing-up gold is just sitting there. On days when bad inflation news comes out, gold gets hit with selling. Does this make sense? None. Sure, we can buy the mainstream financial media spin that gold no longer has a monetary role, is no longer an inflation hedge. But tell me how it is that the one thing that has always been known to rise in response to inflation is not rising in price when everything else is? Funny how the one market that should expose the Fed's quackery is the only one that sinks in a "rising tide that lifts all boats." Gold has repeatedly been "whacked" at key technical levels that if penetrated, would have brought in heavier buying. (Thereby alerting the world that the Fed is screwing up.) In most cases gold managed to eventually move higher, but only with great difficulty. And today, with inflation becoming undeniably obvious, the market has stopped rising. Not for legitimate reasons but simply because traders are tired of having their heads handed to them by an unethical, manipulative market opponent. These are just a few of the more obvious examples. If you look at what's going on in the markets with an intelligent and perceptive eye, you can't help but conclude that they are being manipulated by a powerful group, a group that possesses more resources than any fund or individual trader. Does it matter? Is it wrong? Shouldn't the government maintain order in the markets? We could go on for days debating the "morality" of it but it doesn't matter. What does matter is the fact that this IS going on and it's having an increasingly large impact on our investments and market opportunities. In fact, it's eroding the quality of both. Long-term interest rates, stocks, gold and other markets have displayed narrow bands of movement for years. Longs aren't making money. Shorts aren't making money. Worse still, these efforts serve only to destroy the function and integrity of the markets. The longer the market is artificially held higher, the longer a real, sustained bull market is postponed. When the market is managed it ceases to fulfill its most important role: price discovery. Buyers and sellers can no longer come together to determine the real value of a stock or commodity. Prices become a sham that no one can trust. In the end, manipulation will fail as no one is bigger than the market. A market that serves any legitimate, useful function will eventually find its appropriate level. Unfortunately, the failure of that manipulation is likely to cause investors much more headache than a simple secular bear market left to its own devices ever could. Arrogant feds and central bankers will never get it, always seduced by their delusions of grandeur, convinced that they're smarter than the marketplace. The little guy will reap the fallout of their inevitable failures, but you don't have to. Know that this is going on and position yourself accordingly... Mark M. Rostenko Editor The Sovereign Strategist May 5, 2005 Mark M. Rostenko, a veteran of Chicago's commodity exchanges and editor of The Sovereign Strategist, spends far too much of his time enthralled by the never-ending procession of inane prattle emanating from Wall Street. Nonetheless, it hasn't stood in the way of accurately forecasting the dollar's top, the beginning of the gold bull market, and nearly every significant turning point in the stock market since the bear market began. Please visit www.sovereignstrategist.com for a free sample issue and more commentary. And while you're there, feel free to join our international family of well-informed and successful investors.
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