It has been quite a week for revelations on that front.  GATA finally was vindicated when a whistle blowing gold trader showed the world that the gold market is not only being manipulated but is short 100:1 on the amount of gold sold vis a vis the amount of gold on hand.  Price tag on that one is estimated to be in excess of $1.2T.

On Thursday,  there was a story from RT (Russia Today) about a lawsuit against certain members of the SEC.  Those market cops who are supposed to protect the average investor had set up a sting operation to catch people selling naked shorts.   Short selling is a time honoured market strategy where you borrow stocks to sell at a high price in the hopes the price falls and then,  after a given time,  buy them back,  return the stock to the original owner (plus a fee) and pocket the hoped for  difference.   Naked shorts is where the person forgets that first and last step and just sells the stock.  It is easy to do in modern markets if you are correctly positioned  because there are so few people who actually take delivery of their certificates.  Clearly this is fraudulent activity and when abused,  it can force viable and profitable companies out of business.

Well it seems the SEC’s sting operation was so successful that they pulled all of the perps together and rather than arresting them and stopping the naked short selling,  the SEC cops demanded a cut of the action reportedly to create a fund to reimburse retail investors who were on the other side of these fraudulent trades.  Party on Wayne.  Party on Garth.  Estimated losses?  $2T+

Then there is the story out of London this weekend from the Bank of International Settlements explaining how the sovereign debt crisis is about ready to spiral out of control with compounding debt and interest outstripping every sovereign nation’s ability to ever repay the debt.  Both the US and Great Britain are included.  The end result of this is penury for us all as we struggle to pay these debts back to the international bankers. How do you put a price tag on this one?

And then there is always the burgeoning MERS scandal which threatens to undermine the very basis of the entire debt structure of the US because of an intrinsic flaw in the system.  MERS,  who has fought tooth and nail in various courts throughout the land to demand the right to have absolutely no actionable interest in title,   finds themselves in the unenviable position of being unable to deliver clear title to any and every home owner who is in their system.  With over 50MM mortgages under its control and an average mortgage value of $250K that puts MERS at the head of a $12T+ scandal.  Not bad and second only to the sovereign debt crisis.

Clearly,  unless there is a radical change in the way the world is turning,  we are headed to a destroyed worldwide society,  all because of debt.  How do we fix it?  How do we get out of it?

First of all,  we need to understand who it is we owe the money to,  where it all came from and how it is we came to this pickle.  It seems we owe all of this debt to the international banking cartel through the central banking system and specifically the BIS.  The money came from their imagination and we are in this pickle because we allow our leaders to be deluded by their imagination.  It is the sovereign’s duty to provide the coin of the realm.  Right now,  the sovereign has delegated this duty to self serving bankers who are interested only in their profit.  That drive for every single penny of profit has set the world aflame.  It is now totally engulfed.

So what does all of that have to do with fixing dinner tonight?  Well,  I was cubing a lamb roast when the knife slipped out of my hands and fell towards the floor.  I don’t know about you,  but my mama told me a long time ago that when the knife starts to fall,  you don’t try to catch it.  You wait for it to hit the floor,  finish bouncing around and then you pick it up,  clean it off and start all over.   So I did this little dance in the kitchen trying to get my stocking feet out of the way of both the blade and the point.  Good thing I did too for it went point first into the linoleum and stuck,  waving back and forth as the energy of the fall dissipated.  That would have made a mess of my foot had it hit.

As I plucked the knife out of the floor and cleaned it up to start over it struck me.  What a perfect metaphor for this mess “the brilliant ones” have thrust upon us.  These economic and monetary problems we have are the falling knife.  We have to wait for it to hit the floor and come to a complete stop.  Then we can pick it up,  clean it up,  and start all over.  Anything we do between now and then is like trying to catch the falling knife and clearly,  unless one is extremely lucky,  Trying to catch a falling knife will only exacerbate the problem.  In addition to having to clean up the knife,  there is liable to be blood everywhere and a trip to the minor emergency clinic to boot.

The knife is falling;  get out of the way,  try not to get hurt.  It doesn’t matter that the world is engulfed in flames.  The world will not go away any more than Russia and her territories disappeared when the Soviet Union was destroyed.  The Communist government is gone but Russia is still there,  her people are still there,  and their lives continue.  To complete the mixed metaphor,  though the economic world is engulfed in flames,  let it crash,  let it burn,  a Phoenix shall arise from the ashes.  Don’t try to catch the falling knife.  Let it fall where it may.  We can pick things up,  we can clean things up,  we can start all over again.  The world shall continue.  And when we start over,  hopefully,  this time,  we will have learned what it is that made it so terribly wrong.\\blog.chinkinthearmor.net/wordpress/

April 19, 2010