GREECE, US@FED, GS & OTHER POSSIBLE FUTURE STORIES
Federal Reserve Chairman Ben S. Bernanke testifies before the Senate Banking Committee about the U.S. economy, central bank monetary policy and the Fed’s review of the derivatives arrangements of Goldman Sachs Group Inc. and other companies with Greece. Bernanke, speaking in Washington on the second day of his semi-annual address to Congress, repeated his statement that the economy is in a “nascent” recovery that still requires low interest rates to encourage demand by consumers and businesses once federal stimulus expires. (This includes the prepared statement and part 1 of the question-and-answer portion of the hearing. Source: Bloomberg)
Is the Federal Reserve going to perform a Greece bailout? Have they done the same with foreign nations in the past? As to Greece, it remains to be seen, despite what Ben Bernanke testimony indicates. The writing may already be on the wall. Here’s the exchange between Ben Bernanke and Ron Paul (at 4.50-5.00 Bernanke turns around to his aides, he seems uninformed….):
Surmounting The Armageddon Scenario & Cartel ‘End Game’
… and “Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.
“Goldman Sachs, Greece Didn’t Disclose Swap Contract”
Elisa Martinuzzi, bloomberg.com, 2/17/10
“Many of the banks that helped Greece create derivatives that concealed its borrowing are betting on default, hoping to make additional profit from the nation’s financial troubles… Banks’ and hedge funds’ purchases of credit default swaps on Greek bonds are driving up the cost of borrowing that Greece needs to roll over its maturing debt…”
“Report: Banks that hid Greece’s debt aim to profit from default”
The New York Times, 02/24/10
“America’s Founding Fathers were afraid of any concentration of power in the republic. They were particularly afraid that banking interests could hijack our fledgling democracy.
And yet today, 234 years later, our Founding Fathers’ worst fears have come true. Wall Street’s stranglehold on the economy threatens our very prosperity, and the future of a truly democratic republic…”
“Wall Street’s Stranglehold on the Economy Is Choking Americans”
Shah Gilani, Money Morning, 1/26/10
“What does not kill me, makes me stronger.”
The inexorable Momentum of Destructive Megatrends is impelling us toward an Economic and Markets Armageddon, about which we and a few other notable commentators have been writing for some time. The Denouement will not be at all pretty or short-lived.
Thus with the foregoing as Context we sketch an all-too-likely, in our view, Scenario of Coming Events and Consequences, and lay out key Guidelines for coping and profiting.
Many of the themes about which we have previously written are now coming to a head, as the foregoing indicates. Thus we reiterate and weave them together in the following Scenario and recapitulate Guidelines for Profit and Protection.
Athens, Greece, Cradle of Western Civilization, awakens on an early Spring Morning in 2010 and is forced to acknowledge that no effective Bailout is coming.
Greece can thus no longer pay interest on its Megaloans, nor can it obtain new loans.
Greece defaults on its Sovereign Debt.
The Unions call a National Strike. Greece, the country, is in chaos, and is de facto expelled from the EU.
If Greece’s relatively small GDP were the only issue, the Sovereign Debt Default would not matter much (from an economic perspective) to the EU, or the world, except that it foreshadows more Sovereign Debt defaults by Italy (worse off than Greece), and, Spain, Portugal, and, finally France and perhaps even some or all “Major Nations” on the von Greyerz list of the de facto bankrupt, above.
Greece is thus a Catalyst. (Other Nations’ Sovereign Debt Defaults could serve equally well.)
Subsequently a Tidal Wave of Sovereign Default Ripple Effects Cascades around the world, affecting most those economies and markets which most allowed themselves to be ensnared by the Lethal Cocktail of Globalism (as opposed to Internationalism) and “Free Trade” (as opposed to Fair Trade). The least self-reliant are shown to be the most vulnerable.
Again, late in 2010, Mega-Financial Institutions which are holders of the increasingly Toxic Sovereign Debt clamor for more bailouts.
But Stark Reality raises the question “Bailouts by whom, with what, and how?”
Consequently Credit Markets freeze, again, by the end of 2010.
The FDIC, which already had a $20.9 billion deficit as of February 23, 2010 is unable to prevent hundreds more U.S. small and medium size banks from failing.
Central Banks respond by printing even more Fiat Currency while simultaneously increasing demands for One Global Currency, de facto, a Major step toward World Government of, by, and for The International Banker Cartel.*
Simultaneously, the Fed-led Cartel* of Central Bankers allies, and Agents direct the full force of their Market Intervention and Manipulation Regime developed over decades toward their ‘End Game’ goals. See “Surmounting The Cartel’s ‘End Game’ Juggernaut” (9/25/09) in the ‘Articles by Deepcaster’ cache at http://www.deepcaster.com for more details.
*We encourage those who doubt the scope and power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster’s December, 2009, Special Alert containing a summary overview of Intervention entitled “Forecasts and December, 2009 Special Alert: Profiting From The Cartel’s Dark Interventions – III” and Deepcaster’s July, 2009 Letter entitled “A Strategy For Profiting From The Cartel’s Dark Interventions & Evolving Techniques – II” in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at http://www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at http://www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at http://www.deepcaster.com have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster’s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.