Geopolitix - Connecting Some Dots

Ok, this has got to be at least a little eye opening for at least a few zombie weenies that still think Obama is a great guy and that the Federal Reserve bank is here to help you.

This week may very well go down as ‘connect the dots’ week. Submitted to Zerohedge.com by Simon Black of Sovereign Man Blog,

Things have been moving so quickly, so let’s step back briefly and review the big picture from the week’s events:

1) After weeks… months… even years of posturing and denial, Spain and Cyprus became the fourth and fifth countries to formally request aid from Europe’s bailout funds on Monday.

In doing so, these governments have officially confessed to their own insolvency and the insolvency of their respective banking systems.

Meanwhile, Slovenia’s prime minister said that his country may soon ask for a bailout. (Humorously, Slovenia’s Finance Minister denied any such plans.)

Spain’s 10-year bond yield jumped to over 7% again in response, and many Spanish banks were downgraded to junk status by Moodys.

2) Over in the US, the city of Stockton, California filed for bankruptcy this week… the largest so far, but certainly a mere drop in the proverbial bucket.

3) JP Morgan, considered to be among the few ‘good’ banks remaining in the US, conceded that the $2 billion loss they announced several weeks ago might actually be more like $9 billion.

4) The Federal Reserve reported yesterday that foreigners are reducing their holdings of US Treasuries.

5) Countries from Ukraine to Kazakstan to Turkey announced that they have purchased gold in recent months to bolster their growing reserves.

6) Chile has joined a growing list of countries that has agreed to bypass the US dollar and settle all of its trade with China in renminbi.

7) China has further announced plans to create a special zone in Shenzhen, one of its wealthiest cities, to allow full exchange and convertibility of the renminbi.

8) World banking regulators from the Bank of International Settlements to the FDIC are proposing that gold bullion be treated as a risk-free cash equivalent by commercial banks.

My additions:


Brent Futures Spiked to Settle Near $98 on EU Deal, Published: Friday, 29 Jun 2012 on Reuters

"Brent crude futures jumped more than 7 percent on Friday, the biggest one-day percentage gain since April 2, 2009, after European leaders acted to aid troubled euro zone banks and preserve the single currency."

And yet, on the same day we learn:


Iran Oil Embargo Goes Into Effect: Crude Up 8% on Zerohedge on 06/29/2012 

Following a 3-sigma fall yesterday, WTI crude has rebounded exuberantly amid the European ecstacy and the Iran Oil Embargo. Up almost 9% from late yesterday's lows (a 6-sigma jump), it appears yet another squeeze is in play (perhaps from demand-pull on the back of Hillary's unyielding national policy - oh yeah apart from China and Singapore). While the WSJ notes: "There's no material price premium from the Iran issue", it seems the potential for an epic short-squeeze - as Iran's largest importer of Oil (cough China cough) is now exempt (and continuing to hoard) leaving refiners potentially tight on supply - as macro tail-risk is seemingly removed from the downside by the 'nothing' summit we just experienced.

Previously we learned


SocGen Lays It Out: "EU Iran Embargo: Brent $125-150. Straits Of Hormuz Shut: $150-200"

Previously we heard Pimco's thoughts on the matter of an Iranian escalation with "Pimco's 4 "Iran Invasion" Oil Price Scenarios: From $140 To "Doomsday"", now it is the turn of SocGen's Michael Wittner to take a more nuanced approach adapting to the times, with an analysis of what happens under two scenarios - 1) a full blown EU embargo (which contrary to what some may think is coming far sooner than generally expected), and the logical aftermath: 2) a complete closure of the Straits. The forecast is as follows: 1) "Scenario 1: EU enacts a full ban on 0.6 Mb/d of imports of Iranian crude. In this scenario, we would expect Brent crude prices to surge into the $125-150 range." 2) "Scenario 2: Iran shuts down the Straits of Hormuz, disrupting 15 Mb/d of crude flows. In this scenario, we would expect Brent prices to spike into the $150-200 range for a limited time period." The consequences of even just scenario 1 is rather dramatic: while the adverse impact on the US economy will be substantial, it would be the debt-funded wealth transfer out of Europe into Saudi Arabia that would be the most notable aftermath. And if there is one thing an already austere Europe will be crippled by, is the price of a gallon of gas entering the double digits. And then there are the considerations of who benefits from an Iranian supply deterioration: because Europe's loss is someone else's gain. And with 1.5 million of the 2.4 Mb/d in output already going to Asia (China, India, Japan and South Korea) it is pretty clear that China will be more than glad to take away all the production that Europe decides it does not need (which would amount to just 0.8 Mb/d anyway).

Just 9 days ago we learned that the Fed was going to print again:


Fed Expands Operation Twist By $267 Billion Through 2012 on Bloomberg - Jun 20, 2012



The Federal Reserve will expand its Operation Twist program to extend the maturities of assets on its balance sheet and said it stands ready to take further action to put unemployed Americans back to work.
 
Policy makers led by Chairman Ben S. Bernanke are taking steps to shore up the world’s largest economy as faltering growth leaves it vulnerable to fallout from the European debt crisis and looming fiscal tightening in the U.S. Photographer: Andrew Harrer/Bloomberg

Ben S. Bernanke, chairman of the Federal Reserve, at a Joint Economic Committee hearing in Washington. Photographer: Andrew Harrer/Bloomberg
The central bank will prolong the program through the end of the year, selling $267 billion of shorter-term securities and buying the same amount of longer-term debt in a bid to reduce borrowing costs and spur the economy.



So, in summary, what we can see from the last 2 week’s events is:

• Tightening Oil Supply increases prices and negatively affects already stretched economies
• European governments are insolvent
• European banks are insolvent
• US governments are heading in that direction
• Even the best US banks are not as strong as believed
• Foreigners are abandoning the US dollar and seeking alternatives
• Gold is money

These events are all connected, and the trend is becoming so clear that even the most casual observers are starting to wake up.

When you connect the dots, the next steps lead to what may soon be regarded as an obvious conclusion: the system, as it exists right now, is crumbling.

No amount of self-delusion can make this go away.

Rational thinking and measured action, on the other hand, can make the consequences go away… turning people from victims into spectators of the greatest bubble burst in modern times.

Bank Runs, Bank Holidays, and Other Financial Stall Tactics

Bank Holidays Disguised as Computer Glitches in the UK.

NatWest glitch goes on: Bank to open on Sunday as millions of customers are still unable to get access to money

• NatWest have resolved the 'underlying problem'
• They are opening banks on Sunday and they will stay open until 7pm tonight
• Problems are expected to continue into NEXT WEEK as they deal with the backlog of payments
• House buyers unable to complete purchases because of glitch
• Customers STILL reporting that salaries are not being paid in and payments are not being made
• Up to 12MILLION customers are being affected by the problem
• NatWest say the problem was NOT caused by hacking
• Banks under obligation to put customer in the position they would have been if the problem had not happened

Read more: http://www.dailymail.co.uk/news/article-2162630/NatWest-problems-Online-banking-glitch-goes-affecting-millions-customers.html#ixzz1yXkpGy4Z

IRS Stalls Tax Refunds with System Upgrade Project

Federal tax refunds delayed by IRS system upgrade

Some people who filed their 2011 tax returns electronically between Jan. 17 and 25 will get their federal tax refunds about a week later than initial projections because of an Internal Revenue Service computer-system upgrade.

In a statement, the IRS said the delay “relates to fine-tuning IRS systems to adjust for new safeguards put in place this tax season to provide stronger protection against refund fraud.”

Tax preparers tell me they were originally notified the refund delay would only affect people who filed electronically on Jan. 17 or 18 and chose to have a refund deposited into a bank account.

But news reports quoted IRS officials saying the problem affected returns e-filed before Jan. 26. IRS spokesman Jesse Weller would only say that “Taxpayers who file on or after January 26 should not experience a delay.”

One tax preparer said her clients who filed Jan. 17 (the first day the IRS accepted e-filed returns) were originally told to expect a refund Jan. 25. Now they are being told it should come Feb. 8.
She notes that many people who file their returns on the earliest dates possible have simple returns and are desperate for their refund.

The IRS would not say how many returns filed before Jan. 26 will be affected. It said, “When the IRS announced the opening of the 2012 filing season, it advised taxpayers who electronically file and select direct deposit that they could see their refunds in as few as 10 days and 90 percent of refunds are provided within 21 days. Some taxpayers are getting refunds much faster, but at this time taxpayers should expect refunds to be issued as indicated in the original IRS guidelines.”

It also apologized “for any inconvenience caused by the revised refund dates.”

Taxpayers can track the status of their refund here.

Bank Runs in Greece Resemble 1929 Black Thursday

Police Urging Greeks To Stop Stuffing Mattresses

We have spent a considerable amount of time in the last week or two explaining just why depositor withdrawals (or bank runs) are the death knell for the Euro experiment. We first described the 'run on banks and governments' on the basis of the potential for overnight loss of 'fungibility'back in December but the escalation last week in Greece (and the contagion to Spain's Bankia) signals things are shifting to 11 on the amplifier of Euro-Fail. This evening brings new information from The Guardian that 'Police are urging Greeks to keep their money in bank accounts rather than putting it at risk of theft, amid further uncertainty about whether the austerity-struck country will remain in the eurozone.'

Greece's national police spokesman, Thanassis Kokkalakis, told Reuters:

"Many people have withdrawn their money from the banks fearing a financial crash, and they either carry it on them, find a hideout at home or in storage rooms. We urge people to trust the banking system, leave their money there, or at least in a safe place, not hide it at home."  

Uhm, does anyone remember Cramer and his 'Bear Stearns' call? Or are we just "being silly?"

Speculation of a Euro-wide deposit guarantee scheme was quashed somewhat by yesterday's dismally predictable non-event summit - especially given the only three-week span to the next elections. That leaves Greek citizens juggling the possibility of having their home robbed against the probability that the government, via GEURO-isation, will do it for them in the bank.

More on the Boom Bust Cycle and the 1929 Stock Market Crash

Wall Street Crash of 1929

From Wikipedia, the free encyclopedia

"Black Tuesday" redirects here. For other uses, see Black Tuesday (disambiguation).

Crowd gathering on Wall Street after the 1929 crash.

The Wall Street Crash of 1929, also known as the Great Crash and the Stock Market Crash of 1929, began in late October 1929 and was the most devastating stock market crash in thehistory of the United States when taking into consideration the full extent and duration of its fallout.^[1] The crash signaled the beginning of the 10-year Great Depression that affected all Western industrialized countries^[2] and did not end in the United States until the onset of American mobilization for World War II at the end of 1941.

Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.

—Richard M. Salsman^[3]

Contents   [hide]  1 Timeline 2 Economic fundamentals 2.1 Subsequent actions 3 Effects and academic debate 4 See also 5 Notes 6 Further reading 7 External links

[edit]Timeline

The Dow Jones Industrial, 1928–1930.

The Roaring Twenties, the decade that led up to the Crash,^[4] was a time of wealth and excess. Despite the dangers of speculation, many believed that the stock market would continue to rise indefinitely. The market had been on a six-year run that saw the Dow Jones Industrial Average increase in value fivefold, peaking at 381.17 on September 3, 1929.^[5] Shortly before the crash, economist Irving Fisher famously proclaimed, "Stock prices have reached what looks like a permanently high plateau."^[6] The optimism and financial gains of the great bull market were shaken on "Black Thursday", October 24, 1929, when share prices on the New York Stock Exchange (NYSE) abruptly fell.

In the days leading up to the crash, the market was severely unstable. Periods of selling and high volumes of trading were interspersed with brief periods of rising prices and recovery. Economist and author Jude Wanniski later correlated these swings with the prospects for passage of the Smoot–Hawley Tariff Act, which was then being debated in Congress.^[7]

On October 24 ("Black Thursday"), the market lost 11% of its value at the opening bell on very heavy trading. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor.^[8] The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.

Britain stops Russian ship carrying attack helicopters for Syria

A Russian ship believed to be carrying helicopters and missiles for Syria has been effectively stopped in its tracks off the coast of Scotland after its insurance was cancelled at the behest of the British government.

The British marine insurer Standard Club said it had withdrawn cover from all the ships owned by Femco, a Russian cargo line, including the MV Alaed.

"We were made aware of the allegations that the Alaed was carrying munitions destined for Syria," the company said in a statement. "We have already informed the ship owner that their insurance cover ceased automatically in view of the nature of the voyage."

British security officials confirmed they had told Standard Club that providing insurance to the shipment was likely to be a breach of European Union sanctions against the Syrian regime.

Original Story: Britain stops Russian ship carrying attack helicopters for Syria - Telegraph - http://goo.gl/FUbEC

Video Here: http://security.blogs.cnn.com/2012/06/18/syria-bound-russian-cargo-ship-loses-insurance/

Did they have P&I War Risks Coverage: http://www.standard-club.com/ProductsAndServices/page.aspx?p=79

-          Nope, that is for British ships only.

This is important because incidents like this can get a little hairy.  USA got into WWI because a so-called “merchant ship” carrying ammunitions got sunk by a German U-boat.   The Atlantean Conspiracy: The Lusitania & World War I - http://goo.gl/OglGl

Why Democrats, Independents, Republicans Can All Get Behind Mitt Romney in 2012

(This is still a draft and several revisions will be made over the next few days so come back!)

This is the interview that convinced me to vote for Mitt Romney, even though I am a HUGE Ron Paul fan, and voted for Obama in 2008.

This is my list of reasons for begrudgingly supporting Mitt Romney in 2012.

Rand Paul endorsed Mitt Romney and he and his father the Most Honorable Dr. Ron Paul is behind some VERY IMPORTANT issues.

• Legalizing industrial hemp.  Ron Paul submitted legislation in May 2011 called the Industrial Hemp Farming Act (HR1831) that would legalize non-narcotic industrial hemp.  Hemp is a HUGE part of the solution to the energy crisis, national security crisis, climate change (drought), the trade deficit, the ailing auto industry, the national debt, and more.
• Audit and End the Federal Reserve.  Ron Paul has spoken endlessly on this topic and recently Rand Paul submitted legislation to audit the Federal Reserve.  For EXCELLENT research on the twisted history of the Federal Reserve, watch Money Masters by Bill Stills.  This is actually MORE important than hemp but not as personal to me since I want to build cars our of American hemp - (see Wikispeed).
• Sound Monetary Policy - Ron Paul and Rand Paul are gaining support across the country for sound monetary policy that reduces the Federal Reserves ability to monopolize our currency and perpetuate poverty with their pump and dump falsely created economic cycles.  Economic variances will always exist.  Panics will happen, but we should not allow CENTRAL PLANNERS to manage our entire economy.  This is a form of Communism.  Yes, the Federal Reserve and all its puppet central banks around the world are GREATLY responsible for war, debt, and the destruction of the social progress that has been made by our founding fathers.  Gold and silver should be part of the global monetary supply officially to curtail central bank printing fiat money.
• Ending the IRS and the Federal Income Tax.  Who wouldn't be behind this.  How else can you starve the beast that has build a military empire around the world? Between the CIA, the US Military, and the Federal Reserve, backed by our tax dollars illegally stolen by the IRS, the USA has been in so many wars, I doubt any American could name all the countries and all the invasions, all the tackled leaders, all the death and destruction.  Rape, pillage, and plunder in the name of "liberty" and "democracy".  BS.

Obama and Romney Are the SAME! so I can vote my for Mitt Romney with social conscience still intact.  Let's face it, Romney doesn't look like a bad guy.  It's his party I am not so fond of because the GOP includes in its umbrella Neo Cons who are responsible for stripping social benefits in order to make room for militarism.  That is FASCISM.  

Why NOT Obama?

Yes, I voted for Obama in 2008.  I read both of his books, did extensive research and finally decided that the GOP was the greater of 2 evils.  Little did I know then that The Republican and the Democrat presidential candidates are guided by the same puppetmasters.  They are the ones who REALLY deserve our WRATH!

• Erosion of Civil Liberties - Obama has made continuous efforts to STRIP THE UNITED STATES OF OUR SOVEREIGNTY, grounding his ability to remove democratically elected leaders with NATO forces and suggesting that the UN and NATO give him the right to declare war, without Congress.  He should have been impeached for Libya.  Sound radical and conspiratorial? Do the research.  SOPA, NDAA, indefinite detention, Nation Defense Resource Preparedness (NDRP), and most recently the Transnationl Pacific Partnership Pact (or whatever name it has now) that would allow corporations in 8 other nations to completely circumvent our national laws.  This guy was a constitutional law professor and head of the Harvard Law Review?
• Bank Bailouts - He did nothing to counter the rising power of the Big Banks that manipulate our policy, steal wealth from the middle class, cause financial havoc, all the while taking bailouts.  Privatized gains and socialized losses.  What is that but SOCIALISM.  It is NOT capitalism.  Free markets would have allowed the Big 4 banks to collapse years ago.  Instead they are protected by government, at our expense.

What has Obama done well?

I will give him credit where credit is due.  Obama came into office on the hopes and dreams of those who were completely disillusioned by the damage that George Bush did with his wars in Iraq and Afghanistan, and massive deficits, scandals, and treason.  It wasn't hard for ANYONE to look better than Bush.  That was probably part of an elaborate plan to deceive us, but I will save that for later.

• Healthcare Reform - I am a social liberal progressive, I think.  I am not sure what the proper label is for my positions.  I think there should be competitive private healthcare for all, insured by the US Federal government or State governments.  This could be in the form of a public option or universal healthcare.  I am not caught up on the label.  Healthcare should be a natural right of every American citizen, regardless of race, state of residence, financial wherewithal, or current health condition.  Obama did manage to get more Americans covered, but did nothing to address the rise of healthcare costs.  This was a big failure, but let's give him points for trying.
• Energy policy - Obama has done quite a bit to support renewable energy.  This is the WISE business choice.  We need to be talking about efficiency, conservation, alternative sources, balanced usage, and ending the wars.  Something closer to the Carter Doctrine but without the part about "protecting our national interests abroad at all costs".  That part was written by Zbigniew Brzezinski, the creator of the Mujahidin, National Security Advisor to Carter, and father of the 2 sons who were advisors to BOTH McCain and Obama in the 2008 elections.  Again, we have had puppetmasters controlling our government for generations and very few of us recognize that.  Ron Paul gets it.
• The BP oil spill - By forcing BP to put aside $20B, Obama avoided the catastrophic financial damage that could have been inflicted on the region like Exxon did with the Valdez in Alaska nearly 30 years ago.  Very few people have been paid for the damage in that case.  The oil companies get away with murder all the time.  A more balanced energy policy and hard nosed investigative journalism may put the Four Horsemen back in their proper place - to serve the greater good of society.
• Bank Subsidies in the Form of Educational Loan Origination and Servicing - I am pretty sure that Obama led the effort to remove the middleman banks from educational loans that cost borrowers about $6B in fees each year.

Last But Not Least

This is where a little bit of twisted logic comes into play.  It is