Chance Didn’t Create The Current Economic Crisis

Bob Chapman
International Forecaster
June 23, 2011

What the world is experiencing today did not happen by chance, it was planned that way.

What Congressman Louis McFadden said of the “Great Depression” is as true today as it was in the 1930s. As Chairman of the House Banking Committee he said, “It was no accident; it was a carefully contrived occurrence. The international bankers sought to bring about a condition of despair here so they might emerge as rulers of us all.”

What you are experiencing economically and financially today is nothing new. Just study history all the precedence is there. The bankers and their willing helpers do the same thing over and over again. As we have said often what these banks represent is corporatist fascism and monopoly. Through their great wealth they control most governments and their court systems. That is why your elected representatives do not listen to you. They have already been purchased by Wall Street and banking. These are the same people who have financed most wars on both sides for centuries. Through their banks, and the Bank for International Settlements, and the BIS, they control money laundering and the worldwide drug trade, which is the most lucrative of all enterprises. The centerpiece of all the financial powers of the Illuminists come from the control of the drug trade for centuries.

These bankers and denizens of Wall Street and the City of London control our societies and in particular, business, finance and economics – almost every event within society is controlled by these elitists; as we saw in the stock market dotcom bubble of the late 1990s and the real estate bubble that began in 2003 and ended in 2006. We exited the stock market in the second week of April of 2000 and then again at 14,000, calling for a Dow 6,600 bottom. We believe we have been in a secular bear market in stocks since 2000 and we haven’t as yet seen the bottom by any means. Markets are no longer free and are under constant manipulation by elitists behind government.

The media is filled with one fraud after another. The residential real estate market continues to fall trying to find a bottom. Banks throughout the US, UK and Europe are temporarily saved from insolvency by central banks printing money. In country after country we see runaway deficits. Economic progress is frozen. Inflation grows with each passing day as gold and silver move relentlessly higher. At the same time the poor get poorer and the middle-class is being destroyed. We are witnessing the deliberate destruction of an empire.

Never do we hear a comment pertaining to free trade, globalization, offshoring and outsourcing. It is like it didn’t exist. America has lost 11.7 million jobs and 440,000 businesses over the past 11 years, but Congress evidently is ignorant of the fact that keeping jobs at home is easier than creating new ones. The jobs lost are high paying and the replacement jobs are at the bottom rung. All that has to be done is for Congress to pass legislation implementing tariffs on goods and services and to rescind corporate tax breaks for transnational corporations. It is just that simple. Unfortunately, 95% of Congress is bought and paid for by the very interests that perpetuate this stripping of America. We as well hear nothing from economists or market commentators regarding what passes for free trade. We learned as a nation in the late 1700s that British mercantilism does not work. We then found, on our way to greatness as a nation, fair and equitable tariffs work very well. Not what we have seen for the past 30 years; the deliberate destruction of our nation and our jobs.

Every answer to the job’s problem or meeting competition is a subsidy of one form or another. We know such socialist solutions do not work, but government uses them and business welcomes them. Very simply, nothing has been fixed and the palliatives haven’t worked and that is why we are about to enter credit crisis II, with assistance from Greece and the rest of Europe. The US, UK and Europe are headed for default and nothing can be done to stop the inevitable crack up, all America now specializes in is financial fraud and corruption. We have a country run by a crime syndicate and even when caught the companies are merely fined and among the connected, no one ever goes to jail.


Our system has deliberately been programmed to fail. It has taken $4.3 trillion just to keep the system afloat until the characters behind the curtain decide to pull the plug. Greece could be the catalyst along with warfare spreading throughout the Middle East. Is this the diversion? The war that we predicted? It could be and we’ll shortly find out. The Bilderberg planners in Europe have been stunned by Greece’s refusal to commit national financial and economic suicide.

While the drama in Europe plays itself out the Fed creates money and credit to gobble up 80% of US Treasuries. This causes inflation to continue its relentless climb just as it has in other countries. The money and credit creation by central banks exposes the US, UK and Europe eventually to hyperinflation. We are now also entering the war phase as insolvency becomes more visible. This is as we have predicted over the last 11 years. Most major banks in the US, UK and Europe are insolvent, and are made to look solvent by keeping two sets of books and via accounting ledgermain. Their situations are going to become worse as time goes on as real estate heads for the bottom and stays on the bottom for some time to come.

Unbeknownst to most the bank nightmare of commercial real estate is being financed by the Fed. When and if that stops the banks will have a new set of insurmountable problems. The banks are trapped in a dilemma of their own making and there is no way out. That is in spite of government, the BIS and the FASB allowing them to keep two sets of books. If you do that you will go to jail. Almost 30% of Americans have negative home equity and in Las Vegas it is 84%. By the end of 2011 those figures will be lots worse. Those who have home equity loans are close to 40% upside down. In another two years we envision dreadful conditions for both homeowners and banks. Making matters worse these banks have to hold more funds in reserve because the BIS believes speculation has to be reduced, because these funds may be needed to absorb more bad debts.

As we mentioned in previous issues the federal government is using federal pension funds to fund government operations until August 2nd, when presumably Congress will pass a new short-term debt limit. If we remember correctly government will need $250 to $300 billion by that date. We mentioned last week that government might use this opportunity to commandeer 401Ks and IRAs, and replace them with government guaranteed annuities. This threat is very real and if you do not cash in now you may not get the chance to later. Pay the tax and possible penalty and get out. Most workers are trapped in IRA’s and the only way they can get funds out is to borrow against them. Some 30% have already done so to live on having been laid off or to invest in gold and silver related assets.

There is no political will in America to cut spending and any cuts will be in budget increases over the next ten years. In addition, the President has been given marching orders for war by those who control him to cover up what they have done to the country and to make ever more profits for the connected Illuminists. There has been no way back for America since June of 2003. The debt is beyond payable. The problems are all still there and they are not going to go away. Even if by some miracle a solution to the financial crisis was found, the system is still yet to be purged, so that the banking system could be allowed to go bankrupt, along with many others that have engaged in malinvestment. Then there would be the end of market manipulation, the prosecution of the common criminals on Wall Street and in banking. The end of the Fed, lobbying, campaign contributions, Patriot Acts I and II, Homeland Security, the TSA and many other government agencies. We also have to find out if we really have any gold. The list is copious if not endless. With all of this comes devaluation and default and probably a BBB debt rating. This is why all investments should be in gold and silver related assets. In addition, probably at the top of the list is the criminal prosecution of those on Wall Street, in banking and government who have committed fraud and treason. They should be tried, sentenced and their families relieved of all of their wealth. That should also be applied to those who committed treason and they should forfeit their lives.

There is no question that the recent antics of Fed Chairman Bernanke is leading to the conditioning of the public to higher inflation. He knows inflation is more than 10% not the 3.6% the US government admits too. He and his controllers know full well inflation is headed ever higher because deficit spending cannot be stopped and neither can the Fed’s creation of money and credit.

The Fed has been forced to purchase about 80% of US Treasury debt issues because not only are foreigners not interested in such overrated debt, but also no longer are American households and hedge funds. These unusual discussions, which are precedent setting by the Fed is a form of psy-op conditioning for both the professional sector as well as the public that chooses to listen and can understand. The players all know the economy is weak. Mr. Bernanke verifies that. This is all leading to a major international conference where all currencies will be devalued and revalued and all debt will be multilaterally defaulted upon. A new international trading unit, or currency, perhaps the dollar again, will be put into service as the world reserve currency and it will be backed by 25% in gold. That is what these sessions by the Fed is all about, devaluation and the default of the US dollar. It is not surprising as a result of this, that these speeches and press conferences bring a lower dollar and higher gold and silver prices. The writing is on the wall, as we have pointed out for the past two years. As long as QE3, or something similar, is instituted to prolong the fall into collapse, we can project inflation out for the next few years. The level will depend on what is needed to keep the economy afloat. For QE1 and 2 and stimulus 1 and 2, we see 25% to 30% inflation by the end of 2012. If the Fed injects $1.7 to $2.4 trillion into the economy under QE3 then we will get close to 50% inflation, which to us is hyperinflation in 2013 and 2014. The minute stimulus stops deflationary depression begins. That said, we see that conference we spoke of happening in 2012, 2013 and 2014. At this point the timing is very difficult to call. We know one thing for sure there will be a QE3 or something similar to it.

Many nations are pumping money and credit into their financial systems and economies notably the US, UK and Europe. The financial problems in the euro zone are as problematic as they are in the UK and US, as Greece prepares to default. It will do so unless Europe’s bankers give Greece what we would call at this stage, a sweetheart deal and there will be little or no sales of Greek national assets. The European financial sector has to make a deal, because if they don’t Ireland and Portugal will follow Greece and Europe’s banks will go out of business. Like in the US and UK, subscribers get your money out of European banks and into gold and silver. If you do not, you may lose it all. Once the European-Greece situation is clarified the dollar will again tend lower and the prices of gold and silver higher.

The present state of financial affairs is a sad commentary on the international system of credit and currencies. In Greece the fate of the European financial system hangs by a thread and all those too big to fail European banks, that were subsidized secretly 2-1/2 years ago by the Fed, could go under soon. If central banks were capable of being so dumb as to let Lehman Brothers go under, we are sure they are capable of letting Greece go under. Remember, they really believe they are the masters of the universe. No one in the interconnected international financial system wants to see a Greek failure, but so far the way the banks have handled the situation, so brazen and arrogantly, you would think their game of poker with the Greeks included massive European bank failures. Like it or not Greece is catalyst number 2, Lehman being catalyst one. Bankers do not seem to understand that their Ponzi scheme has become common knowledge via talk radio and the Internet. Their controlled media can no longer bamboozle the world public. Those two sets of books bankers now use to hide nearly worthless debt are becoming known to the public and professionals. People are beginning to understand that Greece, Ireland and Portugal are Lehman all over again. Policymakers main job now is to assist Greece, not to rob and loot it, to save their own corrupt system. Greece, Ireland and Portugal didn’t cause the trillions of unsound debt, the bankers did. They are the experts. They made the loans that should have never been made in the first place. Needless to say the bankers are at least 80% at fault. Banks have to be held responsible. Both France and Germany fail to see it that way and are more than willing to let the bankers off the hook, because the bankers own them.

Worldwide liquidity is drying up because players are afraid to play and the Greek crisis has yet to be contained. These international bankers wanted world banking to be interconnected. They got their wish and it is going to bring them terrible trouble that could destroy them. There are global market forces and they have underestimated how much the world public has been educated by talk radio and the Internet.


We never give into a lie no matter who is perpetrating it. There is no recovery and there never has been a recovery. Thus, we won’t waste our breath discussing such a non-event. About $1.8 trillion, or perhaps more, has been squandered and the only thing QE2 and stimulus 2 have accomplished is slight growth and they have guaranteed 25% inflation next year. The market does not want to purchase marginal debt such as that of the PIIGS, but there will soon come a time when the market will no longer bid for anything but the best paper with real truthful ratings. That time will come soon enough. The painful process of facing reality for Greece and the other PIIGS is still in the formation stages. Mrs. Merkel, German Chancellor and Nicolas Sarkozy, PM of France had their mentors recently show them the light. Their decisions will cost them their next elections and there is no reason to believe working with the Illuminists will save them. These elitists were from the same cabal that terrified and made an early exit from the Bilderberg hive in St. Moritz. A group of gutless wonders who slinked away in the night. These people are vulnerable and they can be beaten.

World markets this year and last were very profitable for speculators due to giant loose money policies perpetrated by the Fed, the Bank of England and the European Central Bank. The latter quite illegally. Governments, and central banks never solve debt or economic problems by throwing money at it. CDS, credit default swaps, are not the answer because those on the other side of the trade are losers. CDS writers in the US are going to disappear over night. In fact it will go on for years if not defaulted upon. There is no easy way – or perhaps no way – out of this financial morass. The con game will find an end over the next few years and we would not like to be in the bankers’ shoes.

Last week the Dow rose 0.4%, S&P was little changed, the Nasdaq 100 fell 1.3% and the Russell 2000 rose 0.3%. Banks rallied 1.5% as broker/dealers fell 0.1%. Cyclicals rose 0.1%; transports 1.9%; consumers 0.8%; utilities 1.1%, as high tech fell 2.6%. Semis fell 3.6%; Internets 2.8% and biotechs 1.4%. Gold bullion gained $8.00, the HUI fell 2.3% and the USDX rose 0.3% to 75.99, down 5.1% year-to-date.

Two year T-bills fell 2 bps to 0.37%, the 10-year T-notes fell 3 bps to 2.94% and the 10-year German bunds were unchanged at 2.96%.

The Freddie Mac 30-year fixed rate mortgages rose 11 points to 4.50%.

Federal Reserve credit rose $25.5 billion to a record $2.810 trillion, up 21% year-on-year.

Fed foreign holdings of Treasury and Agency bonds rose $3.5 billion to $3.447 trillion.

Custody holdings for foreign central banks rose $96 billion year-to-date and $367 billion from a year ago.

M2, narrow, money supply rose $7.9 billion to a record $9.0 trillion.

Total money fund assets fell $34 billion to $2.708 trillion.

Total commercial paper outstanding fell $14.7 billion to $1.206 trillion.

Libya all about oil, or central banking?

Editor's NOTE:

For more information on this topic, please listen to the excellent interview that Jim Fetzer did with Adrian Salbuchi of Argentina on Fetzer's The Real Deal radio program. You will find it to be extremely enlightening.

--Dr. J. P. Hubert

By: Ellen Brown
Asia Times Online
April 14, 2011

Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank - this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal:

I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.

Alex Newman wrote in the New American:

In a statement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the "[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi."

Newman quoted CNBC senior editor John Carney, who asked,

"Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era."

Another anomaly involves the official justification for taking up arms against Libya. Supposedly it's about human rights violations, but the evidence is contradictory. According to an article on the Fox News website on February 28:

As the United Nations works feverishly to condemn Libyan leader Muammar al-Qaddafi for cracking down on protesters, the body's Human Rights Council is poised to adopt a report chock-full of praise for Libya's human rights record.

The review commends Libya for improving educational opportunities, for making human rights a "priority" and for bettering its "constitutional" framework. Several countries, including Iran, Venezuela, North Korea, and Saudi Arabia but also Canada, give Libya positive marks for the legal protections afforded to its citizens - who are now revolting against the regime and facing bloody reprisal.

Whatever might be said of Gaddafi's personal crimes, the Libyan people seem to be thriving. A delegation of medical professionals from Russia, Ukraine and Belarus wrote in an appeal to Russian President Dmitry Medvedev and Prime Minister Vladimir Putin that after becoming acquainted with Libyan life, it was their view that in few nations did people live in such comfort:

[Libyans] are entitled to free treatment, and their hospitals provide the best in the world of medical equipment. Education in Libya is free, capable young people have the opportunity to study abroad at government expense. When marrying, young couples receive 60,000 Libyan dinars (about 50,000 US dollars) of financial assistance. Non-interest state loans, and as practice shows, undated. Due to government subsidies the price of cars is much lower than in Europe, and they are affordable for every family. Gasoline and bread cost a penny, no taxes for those who are engaged in agriculture. The Libyan people are quiet and peaceful, are not inclined to drink, and are very religious.

They maintained that the international community had been misinformed about the struggle against the regime. "Tell us," they said, "who would not like such a regime?"

Even if that is just propaganda, there is no denying at least one very popular achievement of the Libyan government: it brought water to the desert by building the largest and most expensive irrigation project in history, the US $33 billion GMMR (Great Man-Made River) project. Even more than oil, water is crucial to life in Libya.

The GMMR provides 70% of the population with water for drinking and irrigation, pumping it from Libya's vast underground Nubian Sandstone Aquifer System in the south to populated coastal areas 4,000 kilometers to the north. The Libyan government has done at least some things right.

Another explanation for the assault on Libya is that it is "all about oil", but that theory too is problematic. As noted in the National Journal, the country produces only about 2% of the world's oil. Saudi Arabia alone has enough spare capacity to make up for any lost production if Libyan oil were to disappear from the market. And if it's all about oil, why the rush to set up a new central bank?

Another provocative bit of data circulating on the Net is a 2007 "Democracy Now" interview of US General Wesley Clark (Ret). In it he says that about 10 days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq. Clark was surprised and asked why. "I don't know!" was the response. "I guess they don't know what else to do!" Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers' central bank in Switzerland.

The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that "[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar."

According to a Russian article titled "Bombing of Libya - Punishment for Ghaddafi for His Attempt to Refuse US Dollar", Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.

During the past year, the idea was approved by many Arab countries and most African countries. The only opponents were the Republic of South Africa and the head of the League of Arab States. The initiative was viewed negatively by the USA and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi was not swayed and continued his push for the creation of a united Africa.

And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned ... Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.


Libya not only has oil. According to the International Monetary Fund (IMF), its central bank has nearly 144 tonnes of gold in its vaults. With that sort of asset base, who needs the BIS, the IMF and their rules?

All of which prompts a closer look at the BIS rules and their effect on local economies. An article on the BIS website states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective "to preserve price stability".

They are to be kept independent from government to make sure that political considerations don't interfere with this mandate. "Price stability" means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts. Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans.

In a 2002 article in Asia Times Online titled "The BIS vs national banks" Henry Liu maintained:

BIS regulations serve only the single purpose of strengthening the international private banking system, even at the peril of national economies. The BIS does to national banking systems what the IMF has done to national monetary regimes. National economies under financial globalization no longer serve national interests.

... FDI [foreign direct investment] denominated in foreign currencies, mostly dollars, has condemned many national economies into unbalanced development toward export, merely to make dollar-denominated interest payments to FDI, with little net benefit to the domestic economies.

He added, "Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation." The "state theory of money" refers to money created by governments rather than private banks.

The presumption of the rule against borrowing from the government's own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not. But all banks actually create the money they lend on their books, whether publicly owned or privately owned. Most new money today comes from bank loans. Borrowing it from the government's own central bank has the advantage that the loan is effectively interest-free.

Eliminating interest has been shown to reduce the cost of public projects by an average of 50%.

And that appears to be how the Libyan system works. According to Wikipedia, the functions of the Central Bank of Libya include "issuing and regulating banknotes and coins in Libya" and "managing and issuing all state loans". Libya's wholly state-owned bank can and does issue the national currency and lend it for state purposes.

That would explain where Libya gets the money to provide free education and medical care, and to issue each young couple $50,000 in interest-free state loans. It would also explain where the country found the $33 billion to build the Great Man-Made River project. Libyans are worried that North Atlantic Treaty Organization-led air strikes are coming perilously close to this pipeline, threatening another humanitarian disaster.

So is this new war all about oil or all about banking? Maybe both - and water as well. With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible. (editor's bold emphasis throughout)

Most countries don't have oil, but new technologies are being developed that could make non-oil-producing nations energy-independent, particularly if infrastructure costs are halved by borrowing from the nation's own publicly owned bank. Energy independence would free governments from the web of the international bankers, and of the need to shift production from domestic to foreign markets to service the loans.

If the Gaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors, and whether education and healthcare continue to be free.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://webofdebt.com and http://ellenbrown.com/.