Friday, November 19, 2010

Fraudclosure Hearing, Day II

The House will be holding a fraudclosure hearing this morning; effectively the same hearing held by the Senate yesterday.

I am going to focus this morning on the testimony of Adam Levitin, who also provided the "summary statement" that I extracted and posted yesterday in the short video excerpt from the hearing in The Senate.

There is a an entire section of Mr. Levitin's paper that deals with the issues related to the levying of junk fees and other abusive servicer practices. While these harm homeowners in a severe way and in many cases create defaults where they would otherwise not exist, it is not just homeowners who are harmed (and especially not just "deadbeat" homeowners, as is often asserted by the industry. Specifically:

It is important to emphasize that junk fees on homeowners ultimately come out of the pocket of MBS investors. If the homeowner lacks sufficient equity in the property to cover the amount owed on the loan, including junk fees, then there is a deficiency from the foreclosure sale. As many mortgages are legally or functionally non-recourse, this means that the deficiency cannot be collected from the homeowner’s other assets. Mortgage servicers recover their expenses off the top in foreclosure sales, before MBS investors are paid. Therefore, when a servicer lards on illegal fees in a foreclosure, it is stealing from investors such as pension plans and the US government.

So much for "they're deadbeats and deserve it" as an argument.

Then we get to due process concerns - and one of my primary complaints with the Foreclosuregate nonsense - Judges who are violating the very rules of civil procedure that allegedly govern the rule of law. Specifically:

Many foreclosure complaints are facially defective and should be dismissed because they fail to attach the note. I have recently examined a small sample of foreclosure cases filed in Allegheny County, Pennsylvania (Pittsburgh and environs) in May 2010. In over 60% of those foreclosure filings, the complaint failed to include a copy of the note. Failure to attach the note appears to be routine practice for some of the foreclosure mill law firms, including two that handle all of Bank of America’s foreclosures.

If you don't come to court with the necessary elements to establish you have a right to be there, your complaint should be dismissed immediately without need for contest by the other party. Of course that means that Clerks and Judges have to actually do more than sleep behind the bench, and they're clearly not. This sort of literal theft of judicial process is an affront to our Constitution and Due Process protections - no small matter given that such protections are all that stands between a civil society where one settles disputes in a courtroom and a feudal one where disputes are settled with machetes and guns. For examples of the latter one need only look to Mexico's (or our, for that matter) drug gangs who cannot bring their disputes over money and property to court as the subject of their "transactions" is an illegal substance. The danger evident in a devolution of society to the point where the common man discerns that he has no recourse to the law should be facially clear without need for debate.

Next we get to the grand-daddy of the problem - that of whether or not actual transfers took place. This, in point of fact, is the root of the issue underlying all the other frauds and shortcuts - the rather clear assertion that in point of fact there are no mortgages in the so-called "mortgage-backed" securities.

Recently, arguments have been raised in foreclosure litigation about whether the notes and mortgages were in fact properly transferred to the securitization trusts. This is a critical issue because the trust has standing to foreclose if, and only if it is the mortgagee. If the notes and mortgages were not transferred to the trust, then the trust lacks standing to foreclose.

Of particular note is that as far as I can tell there has not yet been one case where a court hearing a foreclosure has forced a claimant to produce actual proof of proper transfer.

However, this is not true in the case of bankruptcies. There are multiple bankuptcy cases now winding their way through the courts, and in at least some of them (where the debtor/homeowner is trying to avoid some of their mortgage indebtness) Judges are demanding strict proof that the claiming party for the debt actually owns the paper, including a proper chain of transfers.

In one pending case there have been four separate attempts to dodge production of the paperwork. One of the arguments raised by certain commentators is that it's "inconvenient" (that is, the document is actually in the custodian's vault, but it would cost something to go get and produce it.) Given that the charge for that service is usually around $30-50, this seems to be a convenient lie when one instead prepares four separate pleadings trying to avoid that production - the legal costs alone of such preparation have to reach well into four figures.

Mr. Levitin continues:

While the chain of title issue has arisen first in foreclosure defense cases, it also has profound implications for MBS investors. If the notes and mortgages were not properly transferred to the trusts, then the mortgage-backed securities that the investors’ purchased were in fact non-mortgage-backed securities. In such a case, investors would have a claim for the rescission of the MBS,79 meaning that the securitization would be unwound, with investors receiving back their original payments at par (possibly with interest at the judgment rate). Rescission would mean that the securitization sponsor would have the notes and mortgages on its books, meaning that the losses on the loans would be the securitization sponsor’s, not the MBS investors, and that the securitization sponsor would have to have risk-weighted capital for the mortgages. If this problem exists on a wide-scale, there is not the capital in the financial system to pay for the rescission claims; the rescission claims would be in the trillions of dollars, making the major banking institutions in the United States would be insolvent.

Ding!

Now we understand why banks would spend thousands of dollars in Bankruptcy courts doing their damndest to avoid having to produce that which they do not have.

The claims that people often make that this is a "nothingburger" and can be fixed retroactively do not hold up. As Mr. Levitin explains:

Trust law creates additional requirements for transfers. RMBS typically involve a transfer of the assets to a New York common law trust. Transfers to New York common law trusts are governed by the common law of gifts. In New York, such a transfer requires actual delivery of the transferred assets in a manner such that no one else could possibly claim ownership.89 This is done to avoid fraudulent transfer concerns. For a transfer to a New York common law trust, the mere recital of a transfer, is insufficient to effectuate a transfer;90 there must be delivery in as perfect a manner as possible.91 Similarly, an endorsement in blank might not be sufficient to effectuate a transfer to a trust because endorsement in blank turns a note into bearer paper to which others could easily lay claim.

This is the problem that I have repeatedly brought up and is, in my opinion, why we're not seeing actual paperwork showing the proper chain of endorsements - it doesn't exist. While there are various assertions that a transfer "by contract" (rather than by actual wet-signature endorsement) might be good enough, NY Trust Law appears to say otherwise. Further, the common practice of endorsement in-blank (thereby creating bearer paper) is especially troublesome because once again Trust Law makes clear that one must actually have good conveyance - and this is almost-certainly not "good enough."

Then we get into the fact that NY Trust Law (along with most other states) provide that when one has a private contract it controls - that is, a Trustee's authority is limited to that provided in the contract. This is a particular problem for mortgage securitizations because the PSA (Pooling and Servicing Agreement) typically provides for not only a requirement of delivery of the actual notes but also contains certifications that delivery was completed, and both REMIC requirements and the PSAs themselves contain deadlines which make retroactive fixes impossible. As Mr. Levitin explains:

Trust law and private contract law combine to make a much more rigid set of transfer requirements that contract law would by itself. New York law provides that a trustee’s authority is limited to that provided in the trust documents.94 New York law also provides that any transfer in contravention of the trust documents is void.95 Therefore, if the PSA—the trust document—says that the transfer must be done in a certain way and the transfer did not comply, the transfer is void, irrespective of whether it would comply with the Uniform Commercial Code or other law. The trust document creates a higher level of conduct to which the transfer must comply.

And if the transfer is void the so-called Mortgage-Backed Securities in fact have no mortgages in them, the entire chain of payments from the homeowner to the servicer was improper from the point of origination, the security can be avoided and unwound and the losses that result from this, along with the foreclosure losses, wind up back on the banks.

Thus, we have banks trying to avoid the possible examination of these issues - with what appear to be rather extreme levels of legal exertion. Certainly preparing four separate responsive petitions in an attempt to prevent a single disclosure in one bankruptcy case rises well beyond the desire to avoid an "inconvenience." Rather, it is clear evidence that transfers simply never happened - and the banks are trying to cover it up.

For systemic risk reasons, we must not allow that course of action to proceed and must instead examine the provenance of these transfers, lest we find out that there are no mortgages in the alleged "Mortgage-Backed Securities"!

That is, should such an examination be conducted and should it discern that these private-label (and maybe GSE-based too!) securities in fact are empty boxes, the ticking nuclear financial device heads straight back to the sponsors (which are major banks) and would detonate there.

The problem is that the losses on these defaulted mortgages are extreme. These days average recovery on a defaulted first mortgage, after fees, rehabilitation expenses and such, is lucky to reach 50% of the original face value. This places losses in the private-label realm alone in the hundreds of billions of dollars and that's before we get into the second line (HELOC, etc) loans that are worthless when behind an underwater first.

It is not an exaggeration to state that the actual loss if only private-label deals are defective in this fashion, when one considers both first and second lines, could reach $500 billion - and essentially all of it will land on the largest banks in the United States, specifically Citibank, Wells Fargo, JP Morgan/Chase and Bank of America.

Treasury and our banking regulators, including The Fed, must determine as a matter of factual outcome whether the apparent systemic failure to comport with these rules is in fact systemic, and must issue public findings on these matters.

If, as I believe (along with many others) these failures are systemic, then the banks involved must be prospectively taken into receivership and resolved, lest we have an uncontrolled meltdown and systemic collapse.

From Tuesday's hearing....

Discussion below (registration required to post)

John F. Kennedy vs The Federal Reserve



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On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.

When President John Fitzgerald Kennedy - the author of Profiles in Courage -signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency -money - without going through the privately owned Federal Reserve Bank. President Kennedy's Executive Order 11110 [the full text is displayed further below] gave the Treasury Department the explicit authority: "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This means that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the United States of America.

"United States Notes" were issued as an interest-free and debt-free currency backed by silver reserves in the U.S. Treasury. We compared a "Federal Reserve Note" issued from the private central bank of the United States (the Federal Reserve Bank a/k/a Federal Reserve System), with a "United States Note" from the U.S. Treasury issued by President Kennedy's Executive Order. They almost look alike, except one says "Federal Reserve Note" on the top while the other says "United States Note". Also, the Federal Reserve Note has a green seal and serial number while the United States Note has a red seal and serial number.

President Kennedy was assassinated on November 22, 1963 and the United States Notes he had issued were immediately taken out of circulation. Federal Reserve Notes continued to serve as the legal currency of the nation. According to the United States Secret Service, 99% of all U.S. paper "currency" circulating in 1999 are Federal Reserve Notes.

Kennedy knew that if the silver-backed United States Notes were widely circulated, they would have eliminated the demand for Federal Reserve Notes. This is a very simple matter of economics. The USN was backed by silver and the FRN was not backed by anything of intrinsic value. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963) if LBJ or any subsequent President were to enforce it. It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new "money". Executive Order 11110 gave the U.S.A. the ability to, once again, create its own money backed by silver and realm value worth something.

Again, according to our own research, just five months after Kennedy was assassinated, no more of the Series 1958 "Silver Certificates" were issued either, and they were subsequently removed from circulation. Perhaps the assassination of JFK was a warning to all future presidents not to interfere with the private Federal Reserve's control over the creation of money. It seems very apparent that President Kennedy challenged the "powers that exist behind U.S. and world finance". With true patriotic courage, JFK boldly faced the two most successful vehicles that have ever been used to drive up debt:

1) war (Viet Nam); and,

2) the creation of money by a privately owned central bank. His efforts to have all U.S. troops out of Vietnam by 1965 combined with Executive Order 11110 would have destroyed the profits and control of the private Federal Reserve Bank.


Executive Order 11110

AMENDMENT OF EXECUTIVE ORDER NO. 10289 AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY. By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

SECTION 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended - (a) By adding at the end of paragraph 1 thereof the following subparagraph (j): "(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821 (b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption," and (b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof. SECTION 2. The amendment made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

JOHN F. KENNEDY THE WHITE HOUSE, June 4, 1963


Once again, Executive Order 11110 is still valid. According to Title 3, United States Code, Section 301 dated January 26, 1998:

Executive Order (EO) 10289 dated Sept. 17, 1951, 16 F.R. 9499, was as amended by:

EO 10583, dated December 18, 1954, 19 F.R. 8725;

EO 10882 dated July 18, 1960, 25 F.R. 6869;

EO 11110 dated June 4, 1963, 28 F.R. 5605;

EO 11825 dated December 31, 1974, 40 F.R. 1003;

EO 12608 dated September 9, 1987, 52 F.R. 34617

The 1974 and 1987 amendments, added after Kennedy's 1963 amendment, did not change or alter any part of Kennedy's EO 11110. A search of Clinton's 1998 and 1999 EO's and Presidential Directives has also shown no reference to any alterations, suspensions, or changes to EO 11110.

The Federal Reserve Bank, a.k.a Federal Reserve System, is a Private Corporation. Black's Law Dictionary defines the "Federal Reserve System" as: "Network of twelve central banks to which most national banks belong and to which state chartered banks may belong. Membership rules require investment of stock and minimum reserves." Privately-owned banks own the stock of the FED. This was explained in more detail in the case of Lewis v. United States, Federal Reporter, 2nd Series, Vol. 680, Pages 1239, 1241 (1982), where the court said: "Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stock-holding commercial banks elect two thirds of each Bank's nine member board of directors".

The Federal Reserve Banks are locally controlled by their member banks. Once again, according to Black's Law Dictionary, we find that these privately owned banks actually issue money:

"Federal Reserve Act. Law which created Federal Reserve banks which act as agents in maintaining money reserves, issuing money in the form of bank notes, lending money to banks, and supervising banks. Administered by Federal Reserve Board (q.v.)".

The privately owned Federal Reserve (FED) banks actually issue (create) the "money" we use. In 1964, the House Committee on Banking and Currency, Subcommittee on Domestic Finance, at the second session of the 88th Congress, put out a study entitled Money Facts which contains a good description of what the FED is: "The Federal Reserve is a total money-making machine. It can issue money or checks. And it never has a problem of making its checks good because it can obtain the $5 and $10 bills necessary to cover its check simply by asking the Treasury Department's Bureau of Engraving to print them".

Any one person or any closely knit group who has a lot of money has a lot of power. Now imagine a group of people who have the power to create money. Imagine the power these people would have. This is exactly what the privately owned FED is!

No man did more to expose the power of the FED than Louis T. McFadden, who was the Chairman of the House Banking Committee back in the 1930s. In describing the FED, he remarked in the Congressional Record, House pages 1295 and 1296 on June 10, 1932:

"Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government Board, has cheated the Government of the United States and he people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the maladministration of that law by which the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it".

Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions, departments, or agencies. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers. Those 12 private credit monopolies were deceitfully placed upon this country by bankers who came here from Europe and who repaid us for our hospitality by undermining our American institutions.

The FED basically works like this: The government granted its power to create money to the FED banks. They create money, then loan it back to the government charging interest. The government levies income taxes to pay the interest on the debt. On this point, it's interesting to note that the Federal Reserve Act and the sixteenth amendment, which gave congress the power to collect income taxes, were both passed in 1913. The incredible power of the FED over the economy is universally admitted. Some people, especially in the banking and academic communities, even support it. On the other hand, there are those, such as President John Fitzgerald Kennedy, that have spoken out against it. His efforts were spoken about in Jim Marrs' 1990 book Crossfire:"

Another overlooked aspect of Kennedy's attempt to reform American society involves money. Kennedy apparently reasoned that by returning to the constitution, which states that only Congress shall coin and regulate money, the soaring national debt could be reduced by not paying interest to the bankers of the Federal Reserve System, who print paper money then loan it to the government at interest. He moved in this area on June 4, 1963, by signing Executive Order 11110 which called for the issuance of $4,292,893,815 in United States Notes through the U.S. Treasury rather than the traditional Federal Reserve System. That same day, Kennedy signed a bill changing the backing of one and two dollar bills from silver to gold, adding strength to the weakened U.S. currency.

Kennedy's comptroller of the currency, James J. Saxon, had been at odds with the powerful Federal Reserve Board for some time, encouraging broader investment and lending powers for banks that were not part of the Federal Reserve system. Saxon also had decided that non-Reserve banks could underwrite state and local general obligation bonds, again weakening the dominant Federal Reserve banks".

In a comment made to a Columbia University class on Nov. 12, 1963,

Ten days before his assassination, President John Fitzgerald Kennedy allegedly said:

"The high office of the President has been used to foment a plot to destroy the American's freedom and before I leave office, I must inform the citizen of this plight."

In this matter, John Fitzgerald Kennedy appears to be the subject of his own book... a true Profile of Courage.

This research report was compiled for Lawgiver. Org. by Anthony Wayne

What is the Federal Reserve Bank?

What is the Federal Reserve Bank (FED) and why do we have it?

by Greg Hobbs November 1, 1999

The FED is a central bank. Central banks are supposed to implement a country's fiscal policies. They monitor commercial banks to ensure that they maintain sufficient assets, like cash, so as to remain solvent and stable. Central banks also do business, such as currency exchanges and gold transactions, with other central banks. In theory, a central bank should be good for a country, and they might be if it wasn't for the fact that they are not owned or controlled by the government of the country they are serving. Private central banks, including our FED, operate not in the interest of the public good but for profit.

There have been three central banks in our nation's history. The first two, while deceptive and fraudulent, pale in comparison to the scope and size of the fraud being perpetrated by our current FED. What they all have in common is an insidious practice known as "fractional banking."

Fractional banking or fractional lending is the ability to create money from nothing, lend it to the government or someone else and charge interest to boot. The practice evolved before banks existed. Goldsmiths rented out space in their vaults to individuals and merchants for storage of their gold or silver. The goldsmiths gave these "depositors" a certificate that showed the amount of gold stored. These certificates were then used to conduct business.

In time the goldsmiths noticed that the gold in their vaults was rarely withdrawn. Small amounts would move in and out but the large majority never moved. Sensing a profit opportunity, the goldsmiths issued double receipts for the gold, in effect creating money (certificates) from nothing and then lending those certificates (creating debt) to depositors and charging them interest as well.

Since the certificates represented more gold than actually existed, the certificates were "fractionally" backed by gold. Eventually some of these vault operations were transformed into banks and the practice of fractional banking continued.

Keep that fractional banking concept in mind as we examine our first central bank, the First Bank of the United States (BUS). It was created, after bitter dissent in the Congress, in 1791 and chartered for 20 years. A scam not unlike the current FED, the BUS used its control of the currency to defraud the public and establish a legal form of usury.

This bank practiced fractional lending at a 10:1 rate, ten dollars of loans for each dollar they had on deposit. This misuse and abuse of their public charter continued for the entire 20 years of their existence. Public outrage over these abuses was such that the charter was not renewed and the bank ceased to exist in 1811.

The war of 1812 left the country in economic chaos, seen by bankers as another opportunity for easy profits. They influenced Congress to charter the second central bank, the Second Bank of the United States (SBUS), in 1816.

The SBUS was more expansive than the BUS. The SBUS sold franchises and literally doubled the number of banks in a short period of time. The country began to boom and move westward, which required money. Using fractional lending at the 10:1 rate, the central bank and their franchisees created the debt/money for the expansion.

Things boomed for a while, then the banks decided to shut off the debt/money, citing the need to control inflation. This action on the part of the SBUS caused bankruptcies and foreclosures. The banks then took control of the assets that were used as security against the loans.

Closely examine how the SBUS engineered this cycle of prosperity and depression. The central bank caused inflation by creating debt/money for loans and credit and making these funds readily available. The economy boomed. Then they used the inflation which they created as an excuse to shut off the loans/credit/money.

The resulting shortage of cash caused the economy to falter or slow dramatically and large numbers of business and personal bankruptcies resulted. The central bank then seized the assets used as security for the loans. The wealth created by the borrowers during the boom was then transferred to the central bank during the bust. And you always wondered how the big guys ended up with all the marbles.

Now, who do you think is responsible for all of the ups and downs in our economy over the last 85 years? Think about the depression of the late '20s and all through the '30s. The FED could have pumped lots of debt/money into the market to stimulate the economy and get the country back on track, but did they? No; in fact, they restricted the money supply quite severely. We all know the results that occurred from that action, don't we?

Why would the FED do this? During that period asset values and stocks were at rock bottom prices. Who do you think was buying everything at 10 cents on the dollar? I believe that it is referred to as consolidating the wealth. How many times have they already done this in the last 85 years?

Do you think they will do it again?

Just as an aside at this point, look at today's economy. Markets are declining. Why? Because the FED has been very liberal with its debt/credit/money. The market was hyper inflated. Who creates inflation? The FED. How does the FED deal with inflation? They restrict the debt/credit/money. What happens when they do that? The market collapses.

Several months back, after certain central banks said they would be selling large quantities of gold, the price of gold fell to a 25-year low of about $260 per ounce. The central banks then bought gold. After buying at the bottom, a group of 15 central banks announced that they would be restricting the amount of gold released into the market for the next five years. The price of gold went up $75.00 per ounce in just a few days. How many hundreds of billions of dollars did the central banks make with those two press releases?

Gold is generally considered to be a hedge against more severe economic conditions. Do you think that the private banking families that own the FED are buying or selling equities at this time? (Remember: buy low, sell high.) How much money do you think these FED owners have made since they restricted the money supply at the top of this last current cycle?

Alan Greenspan has said publicly on several occasions that he thinks the market is overvalued, or words to that effect. Just a hint that he will raise interest rates (restrict the money supply), and equity markets have a negative reaction. Governments and politicians do not rule central banks, central banks rule governments and politicians. President Andrew Jackson won the presidency in 1828 with the promise to end the national debt and eliminate the SBUS. During his second term President Jackson withdrew all government funds from the bank and on January 8, 1835, paid off the national debt. He is the only president in history to have this distinction. The charter of the SBUS expired in 1836.

Without a central bank to manipulate the supply of money, the United States experienced unprecedented growth for 60 or 70 years, and the resulting wealth was too much for bankers to endure. They had to get back into the game. So, in 1910 Senator Nelson Aldrich, then Chairman of the National Monetary Commission, in collusion with representatives of the European central banks, devised a plan to pressure and deceive Congress into enacting legislation that would covertly establish a private central bank.

This bank would assume control over the American economy by controlling the issuance of its money. After a huge public relations campaign, engineered by the foreign central banks, the Federal Reserve Act of 1913 was slipped through Congress during the Christmas recess, with many members of the Congress absent. President Woodrow Wilson, pressured by his political and financial backers, signed it on December 23, 1913.

The act created the Federal Reserve System, a name carefully selected and designed to deceive. "Federal" would lead one to believe that this is a government organization. "Reserve" would lead one to believe that the currency is being backed by gold and silver. "System" was used in lieu of the word "bank" so that one would not conclude that a new central bank had been created.

In reality, the act created a private, for profit, central banking corporation owned by a cartel of private banks. Who owns the FED? The Rothschilds of London and Berlin; Lazard Brothers of Paris; Israel Moses Seif of Italy; Kuhn, Loeb and Warburg of Germany; and the Lehman Brothers, Goldman, Sachs and the Rockefeller families of New York.

Did you know that the FED is the only for-profit corporation in America that is exempt from both federal and state taxes? The FED takes in about one trillion dollars per year tax free! The banking families listed above get all that money.

Almost everyone thinks that the money they pay in taxes goes to the US Treasury to pay for the expenses of the government. Do you want to know where your tax dollars really go? If you look at the back of any check made payable to the IRS you will see that it has been endorsed as "Pay Any F.R.B. Branch or Gen. Depository for Credit U.S. Treas. This is in Payment of U.S. Oblig." Yes, that's right, every dime you pay in income taxes is given to those private banking families, commonly known as the FED, tax free.

Like many of you, I had some difficulty with the concept of creating money from nothing. You may have heard the term "monetizing the debt," which is kind of the same thing. As an example, if the US Government wants to borrow $1 million ó the government does borrow every dollar it spends ó they go to the FED to borrow the money. The FED calls the Treasury and says print 10,000 Federal Reserve Notes (FRN) in units of one hundred dollars.

The Treasury charges the FED 2.3 cents for each note, for a total of $230 for the 10,000 FRNs. The FED then lends the $1 million to the government at face value plus interest. To add insult to injury, the government has to create a bond for $1 million as security for the loan. And the rich get richer. The above was just an example, because in reality the FED does not even print the money; it's just a computer entry in their accounting system. To put this on a more personal level, let's use another example.

Today's banks are members of the Federal Reserve Banking System. This membership makes it legal for them to create money from nothing and lend it to you. Today's banks, like the goldsmiths of old, realize that only a small fraction of the money deposited in their banks is ever actually withdrawn in the form of cash. Only about 4 percent of all the money that exists is in the form of currency. The rest of it is simply a computer entry.

Let's say you're approved to borrow $10,000 to do some home improvements. You know that the bank didn't actually take $10,000 from its pile of cash and put it into your pile? They simply went to their computer and input an entry of $10,000 into your account. They created, from thin air, a debt which you have to secure with an asset and repay with interest. The bank is allowed to create and lend as much debt as they want as long as they do not exceed the 10:1 ratio imposed by the FED.

It sort of puts a new slant on how you view your friendly bank, doesn't it? How about those loan committees that scrutinize you with a microscope before approving the loan they created from thin air. What a hoot! They make it complex for a reason. They don't want you to understand what they are doing. People fear what they do not understand. You are easier to delude and control when you are ignorant and afraid.

Now to put the frosting on this cake. When was the income tax created? If you guessed 1913, the same year that the FED was created, you get a gold star. Coincidence? What are the odds? If you are going to use the FED to create debt, who is going to repay that debt? The income tax was created to complete the illusion that real money had been lent and therefore real money had to be repaid. And you thought Houdini was good.

So, what can be done? My father taught me that you should always stand up for what is right, even if you have to stand up alone.

If "We the People" don't take some action now, there may come a time when "We the People" are no more. You should write a letter or send an email to each of your elected representatives. Many of our elected representatives do not understand the FED. Once informed they will not be able to plead ignorance and remain silent.

Article 1, Section 8 of the US Constitution specifically says that Congress is the only body that can "coin money and regulate the value thereof." The US Constitution has never been amended to allow anyone other than Congress to coin and regulate currency.

Ask your representative, in light of that information, how it is possible for the Federal Reserve Act of 1913, and the Federal Reserve Bank that it created, to be constitutional. Ask them why this private banking cartel is allowed to reap trillions of dollars in profits without paying taxes. Insist on an answer.

Thomas Jefferson said, "If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered."

Jefferson saw it coming 150 years ago. The question is, "Can you now see what is in store for us if we allow the FED to continue controlling our country?"


"The condition upon which God hath given liberty to man is eternal vigilance; which condition if he breaks, servitude is at once the consequence of his crime, and the punishment of his guilt."

John P. Curran

Source: http://www.roc-grp.org/jfk.html

Europe stumbles blindly towards its 1931 moment

It is the European Central Bank that should be printing money on a mass scale to purchase government debt, not the US Federal Reserve.

a bundle of euro bank notes leaning against a savings box infront of the twin towers of the Deutsche Bank in Frankfurt, Germany. Europe stumbles blindly towards its 1931 moment It was a grave error for Germany's Angela Merkel and France's Nicolas Sarkozy to invoke the spectre of sovereign defaults and bondholder 'haircuts' at this delicate juncture


Unless the ECB takes fast and dramatic action, it risks destroying the currency it is paid to manage, and allowing a political catastrophe to unfold in Europe.

If mishandled, Ireland could all too easily become a sovereign version of Credit Anstalt - the Austrian bank that brought down the central European financial system in 1931, sent tremors through London and New York, and set off the second deeper phase of the Great Depression, the phase when politics turned ugly.

“Does the ECB understand the concept of contagion?” asked Jacques Cailloux, chief Europe economist at RBS. Three EMU countries have already been shut out of the capital markets, and footloose foreign creditors hold €2 trillion of debt securities issued by Spain, Portugal, Ireland and Greece.


“If that is not enough to worry about financial contagion, what is? The ECB's lack of action begs the question as to whether it is fulfilling its financial stability mandate,” he said. That is a polite way of putting it.

The eurozone’s fiscal fund (European Financial Stability Facility) is fatally flawed. Like Alpinistas roped together, an ever-reduced core of solvent states are supposed to carry the weight on an ever-widening group of insolvent states dangling beneath them. This lacks political credibility and may be tested to destruction if – as seems likely – Ireland is forced to ask for help. At which moment the chain-reaction begins in earnest, starting with Iberia.

It was a grave error for Germany’s Angela Merkel and France’s Nicolas Sarkozy to invoke the spectre of sovereign defaults and bondholder “haircuts” at this delicate juncture, ignoring warnings from ECB chief Jean-Claude Trichet that such talk would set off investor flight from high-debt states.

EU leaders have since made a clumsy attempt to undo the damage, insisting that the policy shift would have “no impact whatsoever” on existing bonds. It would come into force only after mid-2013 under the new bail-out mechanism. Nobody is fooled by such a distinction.

“This is a breath-taking mixture of suicidal irresponsibility and farcical incoherence,” said Marco Annunziata from Unicredit.

“If by 2013 countries like Greece, Ireland and Portugal are still in a shaky position, any new debt issued will carry exorbitant yields. The EU would then have to choose between a full-fledged, open-ended bail-out, and reneging on the promise that existing debt would not be restructured. Will German voters then accept higher taxes to save their profligate neighbours?” he said.

In May it was enough for the EU to announce a €750bn safety-net with the IMF for eurozone debtors. Bond spreads narrowed. A spike in economic output - led by Germany’s rogue growth of 9pc (annualised) in the second quarter – beguiled EU elites into believing that monetary union had survived its ordeal by fire. It had not, and this time they will have to put up real money.

Sadly for Ireland, events have snowballed out of control. Confidence has collapsed before Irish export industries – pharma, medical devices, IT, and backroom services – have had time to pull the country out of its tailspin.

Premier Brian Cowen – who presides over a budget deficit of 32pc of GDP this year - still insists that no rescue is needed. “We have adequate funding right up until July,” he said. Mr Cowan must know this is not enough. Funding for Irish banks has evaporated, and with it funding for Irish firms.

As we learn from leaks that “technical” talks are under way on the terms of any EU bail-out, it can only be a matter of weeks, or days, before Ireland has to tap EFSF – for €80bn to €85bn, says Barclays Capital.

Portugal is in worse shape than Ireland. Total debt is 330pc of GDP. The current account deficit is near 12pc of GDP (while Ireland is moving into surplus). Portuguese banks rely on foreign wholesale funding to cover 40pc of assets.

The country has been trapped in perma-slump with an over-valued currency for almost a decade. Successive waves of austerity have failed to make a lasting dent on the fiscal deficit, yet have been enough to sap the authority of the ruling socialists and revive the far-Left.

Former ministers are already talking openly of the need for an EU-IMF rescue. It is hard to see how Portugal could avoid being sucked into the vortex alongside Ireland. Europe and the IMF would then face a cumulative bail-out bill of €200bn or so. That stretches the EFSF to its credible limits.

The focus would shift instantly to Spain, where economic growth stalled to zero in the third quarter, car sales fell 38pc in October, a 5pc cut in public wages has yet to bite, and roughly 1m unsold homes are still hanging over the property market. The problem is not the Spanish state as such: the Achilles Heel is corporate debt of 137pc of GDP, and the sums owed to foreign creditors that must be rolled over each quarter.

The risks are obvious. Unless core EMU countries raise fresh funds to boost the collateral of the rescue fund, markets will not believe that the EFSF has the firepower to stand behind Spain. Will Germany’s Bundestag vote more funds? Will the Dutch? Tweede Kamer, where right-wing populist Geert Wilders now holds the political balance, adamantly opposes such help, and might well use such a crisis to launch a bid for power.

It is far from clear what would happen if Italy was forced to provide its share of a triple bail-out for Ireland, Portugal and Spain. Italy’s public debt is already near danger point at 115pc of GDP. It is also the third-largest debt in the world after that of Japan and the US. French banks alone have $476bn of exposure to Italian debt (BIS data).

While Italy has kept a tight rein on spending, it is not in good health. Growth has stalled; industrial output fell 2.1pc in September; and the Berlusconi government is disintegrating. Four ministers are expected to resign on Monday.

It is clear by now that IMF-style austerity and debt-deflation is not a workable policy for the high-debt states of peripheral Europe, since it cannot be offset by the IMF cure of devaluation. The collapse of tax revenues has caused fiscal deficits to remain stubbornly high. The real debt burden has risen further.

The ECB is the last line of defence. It can halt the immediate Irish crisis whenever it wishes by buying Irish bonds. Yet instead of pulling out all the stops to save monetary union, the bank is winding down its emergency operations and draining liquidity. It is repeating the policy error it made by raising rates into the teeth of the crisis in July 2008.

Yes, the ECB is already propping up Ireland and Club Med by unlimited lending to local banks that then rotate into their own government debt in an internal “carry trade”. And yes, the ECB is understandably wary of crossing the fateful line from monetary to fiscal policy by funding treasury debt.

Bundesbank chief Axel Weber might fairly conclude that it is impossible at this stage to reconcile the needs of Germany and the big debtors. If the ECB prints money on the scale required to underpin the South, it would set off German inflation, destroy German faith in monetary union, and perhaps run afoul of Germany’s constitutional court. If EMU must split in two, it might as well be done on Teutonic terms.

All this is understandable, but is Chancellor Merkel really going to let subordinate officials at the ECB destroy Germany’s half-century investment in the post-war order of Europe, and risk Götterdämmerung?

Greek rescue frays as Irish crisis drags on

The eurozone bail-out for Greece has begun to unravel after Austria suspended aid contributions over failure to comply with the rescue terms, and Germany warned Athens that its patience was running out.

The eurozone bail-out for Greece has begun to unravel after Austria suspended aid contributions over failure to comply with the rescue terms, and Germany warned Athens that its patience was running out.
Thousands of Communist Party supporters wave flags during the protest rally in central Athens on November 15 against the IMF-EU troika visit in Athens and the expected new austrity package. Photo: AFP

The clash caught markets off-guard and heightened fears that Europe's debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue.

Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. "I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism."

Swirling rumours hit eurozone bond markets, while bourses tumbled across the world. The FTSE 100 fell 2.4pc to 5681.9, and the Dow dropped over 200 points in early trading. The euro slid two cents to $1.3460 against the dollar as the US currency regained its safe-haven status.

Austria's finance minister Josef Proll said he was "very critical" of Greece's performance, saying Athens had failed to meet the tax revenue targets agreed under the EU Memorandum.

Credit default swaps on Greek debt rocketed 97 basis points to 950 as investors woke up to the awful possibility that the EU could turn its back on Athens, which will run out of money by mid-January without loans. A Greek default would trigger $300bn (£188bn) worth of CDS contracts.

A 'Troika' of EU-IMF inspectors is currently in Greece but has not indicated whether the next €6.5bn (£5.5bn) tranche will be approved. German influence is crucial, yet Greek premier George Papandreou courted fate on Monday when he accused Chancellor Angela Merkel of driving the weaker EMU states into bankruptcy by scaring investors with talk of "haircuts".

Finance minister Wolfgang Schauble expressed deep irritation. "Greece has enjoyed a lot of solidarity from Europe and Germany. But solidarity is not a one-way street: nobody should ever forget that," he said.

In Dublin, premier Brian Cowen said Ireland has "not made any application for external support" and is fully-funded until June. The assurance did little to silence reports that Ireland is in talks with the EU authorities and the International Monetary Fund for a loan package of €80bn to €100bn.

Finance minister Brian Lenihan declined to comment before meeting eurozone counterparts last night. Dublin is hoping a formula that would dress up any aid package as a move to recapitalise banks and stabilise EMU bond markets, rather than a rescue for Ireland.

The political chemistry is volatile because Ireland is being pushed into a pre-emptive bail-out to ensure that contagion does not reach Portugal and Spain. Citigroup said it was "far from clear" whether an Irish bail-out would in fact lift the pressure off others since they share the same problem of excess debt. Markets may simply shift their focus onto the next country.

Ian Stannard from BNP Paribas said the EU's €440bn rescue fund was never designed to be used. "The sheer existence of the fund was supposed to be enough, but that has not happened. It is only a matter of time before the Spanish economy slips back into recession, and that is when the spotlight will turn to Spain," he said.

A Spanish auction of 12-month debt on Tuesday saw rates of 2.36pc, compared to 1.84pc in October, even though markets think an Irish bail-out is a 'done deal'. Analysts say that Portugal and Spain should be careful what they wish for.



Exposed: 200 Israeli army offices suspected of war crimes in Gaza

Redress Information & Analysis publishes the names, photographs and other details of 200 Israeli military commanders of various ranks suspected of war crimes during Operation Cast Lead against the people of Gaza, which resulted in the murder of more than 1,400 people, primarily civilians, including over 340 children. The information was received anonymously, presumably from someone with links to the israeli armed forces.

Following is a list of 200 Israeli army personnel who bear direct responsibility for the death and carnage inflicted on innocent people in the Gaza Strip during Operation Cast Lead of December 2008/January2009.

The officers listed below “held positions of command at the time of the attack” on Gaza and therefore “bear a distinct personal responsibility” for war crimes and crimes against humanity committed against the people of Gaza. They range from low-level field commanders to the highest echelons of the Israeli army. “All took an active and direct role in the offensive.”

By publishing the names of these people, the source wishes to draw attention “to individuals rather than the static structures through which they operate”.

The source states: “We are aligning people with actions. It is to these persons and others, like them, to which we must object and bring our plaints to bear upon.”

Israeli War Criminals


'Food Safety' Bill Reaching Congressional Conclusion

Food World Order

Don't miss our interview w/ barbara peterson of farmwars.info
Urgent: contact your senator now about s510 -
senate debate could extend into the weekend
'food safety' bill  reaching congressional conclusionfrom natural news: Senate Bill 510, the Food Safety Modernization Act, has been called "the most dangerous bill in the history of the United States of America." It would grant the U.S. government new authority over the public's right to grow, trade and transport any foods. This would give Big Brother the power to regulate the tomato plants in your backyard. It would grant them the power to arrest and imprison people selling cucumbers at farmer's markets. It would criminalize the transporting of organic produce if you don't comply with the authoritarian rules of the federal government.

"It will become the most offensive authority against the cultivation, trade and consumption of food and agricultural products of one's choice. It will be unconstitutional and contrary to natural law or, if you like, the will of God." - Dr. Shiv Chopra, Canada Health whistleblower

This tyrannical law puts all food production (yes, even food produced in your own garden) under the authority of the Department of Homeland Security. Yep -- the very same people running the TSA and its naked body scanner / passenger groping programs.

This law would also give the U.S. government the power to arrest any backyard food producer as a felon (a "smuggler") for merely growing lettuce and selling it at a local farmer's market.

It also sells out U.S. sovereignty over our own food supply by ceding to the authority of both the World Trade Organization (WTO) and Codex Alimentarius.

It would criminalize seed saving, turning backyard gardeners who save heirloom seeds into common criminals. This is obviously designed to give corporations like Monsanto a monopoly over seeds.

It would create an unreasonable paperwork burden that would put small food producers out of business, resulting in more power over the food supply shifting to large multinational corporations.

Rates of Scientific Fraud Retractions

ResearchBlogging.orgIvan Oransky on his Retraction Watch blog pointed to a paper by R. Grant Steen looking at numbers of retraction and whether they were due to fraud or error. Ivan pointed to a news item on The Great Beyond by Richard Van Noorden looking at one slightly surprising claim in the paper:"American scientists are significantly more prone to engage in data fabrication or falsification than scientists from other countries". Van Noorden looked at the data in a bit more detail and wasn't convinced, but didn't fully run the numbers. So I thought I would.

Here's the relevant data. The numbers of retractions due to error, fraud, and Unknown are from the original paper (extracted from PubMed for 2000 to 2009, and categorised by Steen). Some of the total publication data is from The Great Beyond: I extracted the missing total publication data (using the same webpage as Van Noorden). I have also combined the "Asia" and "Other" categories, because I wasn't going to go through and get the data for every Asian country.
(sorry for the very large space that follows)


















CountryErrorFraudUnknownTotal Publications
USA1698471819543
China60209185786
Japan41181377976
India2717695718
UK3672350760
S Korea278390052
Germany2230294164
Australia1331131826
Canada1520194777
Italy1160201922
Turkey132072615
France1210181318
Greece100237094
Iran91119696
Others23588332057808


Steen, in the original paper, reported the main country comparisons like this:

The results of this study show unequivocally that scientists in the USA are responsible for more retracted papers than any other country (table 3). These results suggest that American scientists are significantly more prone to engage in data fabrication or falsification than scientists from other countries. There was no evidence to support a contention that papers submitted from China or other Asian nations and indexed in PubMed are more likely to be fraudulent.

We can see that the first sentence is true: the US produced the most retracted papers. But (as Van Noorden noted), they also produce more papers than most countries, so the others may not be. Steen apparently tried to remove this effect by normalising by the number of papers retracted due to error. If scientists produce papers retractable due to error at a constant rate, then this could be a nice correction, as it would (under a few more assumptions) factor out the rate of reporting retractable papers. But there are some big assumptions in there.

Van Noorden calculated the rate of retraction per paper for the top 7 countries, and came to this conclusion:

But this does not mean that any US scientist is more likely to engage in data fraud than a researcher from another country. Indeed, a check on PubMed publications versus retractions for frauds suggests that s/he may be less likely to do so (though the statistical significance of this finding has not yet been tested).

So, time to answer the question of statistical significance. The statistical analysis is fairly simple (here is the R code, if you want it): the next paragraph gives the gory details so if you want, skip it.

Basically, I assume that each paper has a probability of being retracted, and it is constant for every paper from a country. Because the probabilities are so small, it is convenient to treat the number of retractions as a count (i.e. Poisson distributed), with a rate proportional to the total number of papers (technically, this means using the log of the number of papers as an offset). I then use a Poisson regression, which models the rate of retraction on the log scale.

It*s convenient to plot the results in figures. These are the estimates of the log rate of retraction, with standard errors. First for errors:

RetractionErrors.png

The dotted line is the mean rate over all countries. We can see that the US has a comparatively low error rate, indeed the "western" countries (I'm including Japan in this) tend to have lower rates of retraction due to error. The fraud results are different:

RetractionFraud.png

The line for Greece is because it didn't have any errors (the point estimate is -∞ and the estimated standard errors are pretty big too): that can be ignored. We can see that the US has a slightly higher estimated rate of retraction due to fraud, which corresponds to about 30% more fraud per paper than average. But China and India have higher rates of retraction due to fraud than the US (and p-value fans will be happy to know that they are both statistically significance, with lots of stars to make you happy). China has about 3 times as many fraud retractions per paper as average, and India 5 times as many.

What does this mean for fraud and dishonesty? It may not mean that Indian scientists are more dishonest: it may be that they are no more or less honest than anyone else, just they they are caught more often and made to retract. I'll let others debate that: I have weak opinions, but no more data to back these up.

But Richard Van Noorden was right in his conclusions: the US doesn't produce the papers most likely to be retracted because of fraud. More generally, one should normalise by the right thing - and also be careful about what you're actually measuring: it may not be what you want to measure (here it's not the rate of fraud but the rate of retraction because of fraud).

Reference

« MUST SEE HOUSING CHART: Home Sales Meets The Mother Of All Recessions »

Chart has been updated to reflect the most recent data. More charts inside.

More housing chart porn:

* Chart #3 from CR

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Chart archive:

* Obamacare Complicated? Check Out The Flow Chart (MUST SEE)



* CHART PORN: Video Of Economic Collapse Set To Music



* CHART SHOCK: The REAL Unemployment Rate Is 22%



* MUST SEE HOUSING CHART: Home Sales Meets The Mother Of All Recessions



* CHART TRUTH: Holy Tokyo! Check Out How Closely The U.S. Stock Market Has Mirrored Japan



* CHART: FDIC WATCH LIST: 829 problematic banks in Q2



* You Gotta See This -- Map Of U.S. States By World GDP



* Banks That Went Bust: Interactive FDIC Bank Failure Map



* Nationwide Unemployment County By County (Time Lapse '06-'09)



* Tracking The Nation's Bank Failures (Very Cool WSJ Interactive Map)



* Must See Charts -- Housing Cliffdives, U.S. GDP By Decade, History Of World GDP, Deficits With/Without The Iraq War

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BREAKING: UN IPCC Official Admits 'We Redistribute World's Wealth By Climate Policy'

If you needed any more evidence that the entire theory of manmade global warming was a scheme to redistribute wealth you got it Sunday when a leading member of the United Nations Intergovernmental Panel on Climate Change told a German news outlet, "[W]e redistribute de facto the world's wealth by climate policy."

Such was originally published by Germany's NZZ Online Sunday, and reprinted in English by the Global Warming Policy Foundation moments ago:

(NZZ AM SONNTAG): The new thing about your proposal for a Global Deal is the stress on the importance of development policy for climate policy. Until now, many think of aid when they hear development policies.

(OTTMAR EDENHOFER, UN IPCC OFFICIAL): That will change immediately if global emission rights are distributed. If this happens, on a per capita basis, then Africa will be the big winner, and huge amounts of money will flow there. This will have enormous implications for development policy. And it will raise the question if these countries can deal responsibly with so much money at all.

(NZZ): That does not sound anymore like the climate policy that we know.

(EDENHOFER): Basically it's a big mistake to discuss climate policy separately from the major themes of globalization. The climate summit in Cancun at the end of the month is not a climate conference, but one of the largest economic conferences since the Second World War. Why? Because we have 11,000 gigatons of carbon in the coal reserves in the soil under our feet - and we must emit only 400 gigatons in the atmosphere if we want to keep the 2-degree target. 11 000 to 400 - there is no getting around the fact that most of the fossil reserves must remain in the soil.

(NZZ): De facto, this means an expropriation of the countries with natural resources. This leads to a very different development from that which has been triggered by development policy.

(EDENHOFER): First of all, developed countries have basically expropriated the atmosphere of the world community. But one must say clearly that we redistribute de facto the world's wealth by climate policy. Obviously, the owners of coal and oil will not be enthusiastic about this. One has to free oneself from the illusion that international climate policy is environmental policy. This has almost nothing to do with environmental policy anymore, with problems such as deforestation or the ozone hole.

For the record, Edenhofer was co-chair of the IPCC's Working Group III, and was a lead author of the IPCC's Fourth Assessment Report released in 2007 which controversially concluded, "Most of the observed increase in global average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations."

As such, this man is a huge player in advancing this theory, and he has now made it quite clear - as folks on the realist side of this debate have been saying for years - that this is actually an international economic scheme designed to redistribute wealth.


« CHART SHOCK: Consumer Debt To GDP -- 'UGLY' Would Be An Understatement -- Much More Deleveraging Ahead »

One glance at this beauty shows that consumers have barely begun the process of deleveraging. It's going to be several more years before household balance sheets are repaired and ready to assume more debt. Hello, Tokyo.

12 more charts below.

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By Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney, and author of the book Debunking Economics.

The aggregate data is unambiguous: the US economy is delevering in a way that it hasn’t done since the Great Depression, from debt levels that are the highest in its history. The aggregate private debt to GDP ratio is now 267%, versus the peak level of 298% achieved back in February 2009–an absolute fall of 31 points and a percentage fall of 10.3% from the peak.

Read Dr. Keen's full article (more charts and analysis):

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