Time for Action

Time for Action

March 22, 2009


Sorry for the delay. I was out of town last weekend.


I think it is time to request volunteers to “get the word out” regarding what you, the readers of this website, now know about how to manage monetary systems — and ultimately, the superiority of a gold-based system in all instances.

Anyone can be a volunteer, but you must be independently functioning. Just go out and do stuff. You don’t even have to tell me about it.

I bring this up because the rumors have now become official: a group of countries led by Russia and China are now overtly calling for a new global currency system.

Moscow Times: Russia to ask for new currency system at next G20

Reuters: UN to recommend ditching the dollar

The other thing that’s happening, of course, is Ben Bernanke has doused everyone with gasoline with his plan to print $1 trillion of new cash out of thin air. It is suspected that this was motivated by a refusal by China and other big Treasury buyers of the past to buy the U.S. government’s paper. So, it looks like the old international currency system might be a goner in any case.

Does this have a whiff of globalist NWO influence? Of course, but that doesn’t mean they are dominant here.

If you can get copies of my book into the hands of various leaders, that would be a help. This is not as hard to do as it sounds. For example, in autumn 2005 there was a big IMF meeting in Washington DC. Taking advantage of this situation, an investment conference was scheduled for the same time, and many central banker types gave speeches. It would have been possible to give a copy of my book to most of the central bankers in the world that afternoon. (Unfortunately, it wasn’t in print yet.) The next G20 meeting might give similar opportunities. It’s in London on April 2.

A Russian edition is not yet available, but there are versions in French, German, Korean and Chinese.

It is much easier to influence small countries. Those of you in places like Yugoslavia, Fiji, Tunisia or Guatemala might find that it is not too hard to get some meetings with government officials.

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“Public/Private Partnership” Another Banker Scam Confirmed: Well, lookee here. Just like I told ya: the plan is for the banks to buy each others’ assets (they didn’t even bother to disguise themselves as independent investors), and use up to 95% government fundng. The obvious plan is to buy assets at way too high prices, take the 5% loss and let the government eat the rest. Why not buy at $1.05? Then, you’ll sell at $1.05, take a $0.05 loss, and in the end the government will eat your crap asset for a $1! I think people are getting wise to these scams. The more important thing, perhaps, is that it shows that Turbo Timmy is just another banker criminal, whose main purpose is to find creative ways of looting the government. Now Turbo Timmy has to be fired, immediately, or the rest of the Obama administration will lose its remaining legitimacy. That would paralyze Treasury for at least a while.

NY Times: The Next Banker Scam

Chris Whalen says Turbo Timmy might be gone by June.


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Debt/equity swap without bankruptcy: Apparently, it is possible to do a capital reorg without bankruptcy. In the case of the banks, that would mean a debt/equity swap without having to actually enter bankruptcy. That could conceivably be a lot less messy, since the main purpose of bankruptcy was to facilitate a debt/equity swap. The other purpose was to make the CDS liabilities disappear, or at least make them manageable in a way that they could be quietly unwound. I suspect that the derivatives books of these organizations may prove to be unresolvable. I’ve thought that the best thing to do would be to put the entire derivatives operations, or at least the CDS operations, into some separate unit, where they can do a managed unwind with no further connection to the original bank/broker. In essense, if the derivatives book was long 100 CDs and short 100 CDS, but out of the 100 short only 60 paid up (and 40 were counterparty defaults), then the CDS longs would get a $0.60 payout, and that would be that. The big CDS mess is still ahead of us. Some debt guys are talking about a 50% default rate for non-investment-grade debt going forward. The default rate in 2008 was 4% I think.

There are other potentially problematic derivatives operations too, including the much larger (by notional value) interest rate swaps market. These don’t necessarily need to be liquidated, but it would be good to separate them, and other broker/dealer business, into a separate operation, in effect re-enacting the Glass-Steagall separation of banking and broker operations.

There is no need to move non-performing loan assets anywhere. They will self-liquidate naturally, with no particular harm done.

I think there will have to be some government oversight of this process. Someone needs to step in and say: “OK, time to stop fooling around. This is what is going to happen.” I think that is what people mean by “nationalization.” However, the government need not actually own the banks, or manage them. If the debt holders were converted into equity in meaningful size, then the debt holders would be the new shareholders, i.e. owners.

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CDS at the front of the line: I was surprised to hear recently that CDS liabilities are senior to debt. This seemed counterintuitive to me. Also, it creates some new problems because you can’t easily get rid of the CDS liabilities in a flash-bankruptcy, without someone (like Treasury, Supreme Court etc.) waving a magic wand over the arrangement, or Congress changing the laws. Apparently this situation has some interesting history:

Josh Marshall: How the Rules Were Rigged

People are just figuring this out, which is maybe one reason corporate bonds are taking a hit. People can’t know everything, and maybe corporate bond holders are just discovering they’re junior to off-balance-sheet nonsense that they don’t know about. Yowza! Bank debt owners are getting particularly nervous, and I would be too as the word is that major smoke is coming out of the big derivative dealers including JPM.