The “Fiscal Cliff” Is A Diversion: The Derivatives Tsunami and the Dollar Bubble

The fiscal cliff requires that the federal government cut spending by $1.3 trillion over ten years. The Guardian reports that means the federal deficit has to be reduced about $109 billion per year or 3 percent of the current budget.  More simply, just divide $1.3 trillion by ten and it comes to $130 billion per year. This can be done by simply taking a three month vacation each year from Washington’s wars.

The Derivatives Tsunami and the bond and dollar bubbles are of a different magnitude.

Last June 5 in “Collapse At Hand”   I pointed out that according to the Office of the Comptroller of the Currency’s fourth quarter report for 2011, about 95% of the $230 trillion in US derivative exposure was held by four US financial institutions: JP Morgan Chase Bank, Bank of America, Citibank, and Goldman Sachs. …

The Derivatives Tsunami is the result of the handful of fools and corrupt public officials who deregulated the US financial system. Today merely four US banks have derivative exposure equal to 3.3 times world Gross Domestic Product.  When I was a US Treasury official, such a possibility would have been considered beyond science fiction.

Hopefully, much of the derivative exposure somehow nets out so that the net exposure, while still larger than many countries’ GDPs, is not in the hundreds of trillions of dollars. Still, the situation is so worrying to the Federal Reserve that after announcing a third round of quantitative easing, that is, printing money to buy bonds–both US Treasuries and the banks’ bad assets–the Fed has just announced that it is doubling its QE 3 purchases.

In other words, the entire economic policy of the United States is dedicated to saving four banks that are too large to fail. The banks are too large to fail only because deregulation permitted financial concentration, as if the Anti-Trust Act did not exist.

The purpose of QE is to keep the prices of debt, which supports the banks’ bets, high. The Federal Reserve claims that the purpose of its massive monetization of debt is to help the economy with low interest rates and increased home sales.  But the Fed’s policy is hurting the economy by depriving savers, especially the retired, of interest income, forcing them to draw down their savings.  Real interest rates paid on CDs, money market funds, and bonds are lower than the rate of inflation.

Moreover, the money that the Fed is creating in order to bail out the four banks is making holders of dollars, both at home and abroad, nervous.  If investors desert the dollar and its exchange value falls, the price of the financial instruments that the Fed’s purchases are supporting will also fall, and interest rates will rise. The only way the Fed could support the dollar would be to raise interest rates. In that event, bond holders would be wiped out, and the interest charges on the government’s debt would explode.

With such a catastrophe following the previous stock and real estate collapses, the remains of people’s wealth would be wiped out. Investors have been deserting equities for “safe” US Treasuries.  This is why the Fed can keep bond prices so high that the real interest rate is negative.

The hyped threat of the fiscal cliff is immaterial compared to the threat of the derivatives overhang and the threat to the US dollar and bond market of the Federal Reserve’s commitment to save four US banks. …

http://www.globalresearch.ca/the-fiscal-cliff-is-a-diversion-the-derivatives-tsunami-and-the-dollar-bubble/5316082

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Down Another Rabbit Hole: Interview with IRS Whistleblower

Joe Banister is the first and thus far only IRS Criminal Investigation Division Special Agent ever to conduct, while serving as a special agent, an investigation into allegations that the IRS illegally administers and enforces the federal income tax. He respectfully reported the results of his investigation to his IRS superiors, up to and including the IRS Commissioner. Rather than address the legitimate concerns raised by one of their own distinguished investigators, his IRS superiors suspiciously refused to address the chilling evidence of IRS wrongdoing raised in his report and instead encouraged him to resign from his position. Observing that IRS management intended to cover up the deceit and illegal conduct alleged in his report, Banister chose to resign from his position so that he could report his findings to the American public. In effect, Banister had to resign from his position in order to abide by his oath to support and defend the U.S. Constitution.

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Medical predators call to keep mercury in vaccines

A mercury-containing preservative rarely used in the United States should not be banned as an ingredient in vaccines, U.S. pediatricians said Monday, in a move that may be controversial.

In its statement, the American Academy of Pediatrics (AAP) endorsed calls from a World Health Organization (WHO) committee that the preservative, thimerosal, should not be considered a hazardous source of mercury that could be banned by the United Nations.

The AAP in 1999 asked for its removal from vaccines in the United States because of a concern that youngsters receiving multiple shots containing thimerosal might get too much mercury – and develop autism or other neurodevelopmental problems, despite the lack of hard evidence at the time.

“It was absolutely a matter of precaution because of the absence of more information,” said Dr. Louis Cooper, from Columbia University in New York, who was on the organization’s board of directors at the time.

“Subsequently an awful lot of effort has been put into trying to sort out whether thimerosal causes any harm to kids, and the bottom line is basically, it doesn’t look as if it does,” he said. …

http://www.reuters.com/article/2012/12/17/us-pediatricians-vaccines-idUSBRE8BG0QM20121217

Rarely used?  Flu vaccines are given every year, and multidose vials still have mercury.

http://www.vaccinesafety.edu/thi-table.htm

In a study done in 2004, 100% (75) of late-onset autistic children had an antioxidant deficiency which made them vulnerable to heavy metal exposure.  None of the “normal” kids (75) had this trait, which can be easily screened for.  Still medicine insists on exposing all kids to yearly doses of mercury.

http://www.phschool.com/science/science_news/articles/blood_hints_autism.html

Something tells me these “experts” don’t expose their own kids to these shots.

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