The ‘Occupy Wall Street’ movement has arrived in Kona, Hawaii complete with ‘tax the rich’ posters, and when asked by the demonstrators which side of the fight I was on, I had to reply that I have been a libertarian for decades and a Ron Paul supporter – neither nanny-state left nor corporate big government right. I understand what these folks are trying to accomplish, but I do see them as doing the Fed’s and Soros’ dirty work of taking out the competition without said elitists getting their hands dirty. Better to take the head of the beast off by abolishing the Federal Reserve System (and thereby the IRS) then to be a ‘useful idiot’ for the very people enslaving you.
I did try to explain to some of the demonstrators that the top 1% of Americans is still too big a number to describe those that are actually directing the global economy.
The answer to where the American dream went can be found in this (absolute, must see) 30 minute video. The liberal left has the right idea about bankers being the problem; they just don’t understand the depth, scope, and time-length of this problem. Nor do they understand what it is going to take to get all of us out from under the crushing debt we have been saddled with, who the real agents of collapse are, and what type of society actually can survive.
THE AMERICAN DREAM:
For those Hawaii liberals that stumble upon this post; please read the following article and check out the related links…open your minds and understand that you are once again being used as foot soldiers in a war that if you truly understood it, you would not even be participating in. (Though I must applaud you for bringing even more attention to the Federal Reserve System.)
Here is a piece from ZeroHedge.com that hopefully will make you all understand, once and for all, that this ain’t the 1930′s, and that there is absolutely no way in hell that this Republic is going to make it to November 2012.
Summary: The five largest banks in the U.S. (JP Morgan Chase, Citibank, Bank of America, Goldman Sachs and HSBC) are carrying $238 TRILLION dollars in derivative exposure. JP Morgan alone is carrying $78 TRILLION in derivative exposure BY ITSELF.
Okay, what the hell is derivative exposure? What this is referring to are over-the-counter non-exchange traded forward delivery (or “futures”) contracts of various kinds. I am a futures broker, but I only execute futures contracts on the futures exchanges, namely the Chicago Mercantile Exchange and the New York Mercantile Exchange. About ten years ago a new “novelty” emerged in the futures business – the so-called “over-the-counter” contracts. There was a kid in the office I worked in who got wind of this and had all kinds of stars in his eyes about making a killing off of these “OTC” contracts because the brokers’ commissions were not a flat fee but a percent of the contract value. Here’s the problem with OTC contracts: there is no exchange standing between the buyer and seller as a guarantor.
In my business, when a customer executes a trade on a futures or options contract, it makes no difference who the other guy is on the other side of the trade, be it executed electronically or in the pit. None of us have to worry for a second about the counterparty on our executions because the EXCHANGE ITSELF stands between ALL transactions as the ultimate guarantor. The exchange then enforces the financial requirement rules with the Clearing Houses, the Clearing Houses enforce the financial requirement rules with the brokers, and the brokers enforce the financial requirement rules with the customers. That is the chain of financial responsibility. So, even if a customer bugs out and fails to financially perform on a contract, the contract WILL BE MADE GOOD by extracting the money from the broker, then the Clearing House and finally the Exchange. This massive enforcement buffering is what gives the system integrity.
OTC contracts have no exchange. They are a flipping free-for-all. If someone bugs out on a contract, the poop hits the fan. The counterparty has their pants around their ankles and the broker is caught in the middle. That’s why when that kid in my office years ago got all starry-eyed, I thought to myself, “I wouldn’t do that OTC crap if you put a gun to my head – no matter what the commissions were. It would be Russian Roulette. Eventually someone would default and it would financially destroy the broker instantly, and perhaps the counterparty as well.”
Let’s take my business – cattle futures. One contract is 40,000 pounds of live cattle. The spot contract settled at $119.725 per hundred pounds today. So, 40,000 pounds X $1.19725 (shift the decimal) = $47,890 total value of the contract. Since this is an exchange traded instrument, the customer doesn’t really don’t have to worry about default and can go ahead and book that $47,890 today, and it will be offset at a later time, and the net of the entry and exit will be the P&L. The contract isn’t going to default, so the derivative exposure is limited.
Okay. These banks are carrying these OTC futures contracts with NO exchange to guarantee anything. And they are carrying these contracts largely WITH EACH OTHER. So JP Morgan might be the long and Goldman Sachs, or some insolvent bank in Europe is the short on the other side. If these banks default, which is now a mathematical certainty because they are not only insolvent, but insolvent multiple times over and there isn’t enough money in the world to bail them out, there is going to be a cascading default on all of these OTC contracts.
Now look at the value and exposure of these OTC derivatives again: the top 5 banks in the US alone have exposure of $238 TRILLION dollars.
The total GDP of the United States is $14.5 Trillion.
The total GDP of China is $6 Trillion.
The total land mass on earth is 36.8 billion acres. If every acre of land on earth was “sold” for $6467 per acre, that would total $238 Trillion.
JP Morgan BY ITSELF has derivative exposure equal to over FIVE TIMES the value of the entire US GDP.
And no, there will not be a 1:1 offsetting in a collapse, because the collapse will be asymmetrical, and the bankrupt party will first pursue FULL payment on its “longs” (think of these as accounts receivables) while its “shorts” (accounts payable) will only pay out 20 cents on the dollar OR LESS. In other words, these entities will tear each other apart in a mad dogfight and this dogfight will take the entire world down with it.
TWO HUNDRED AND THIRTY-EIGHT TRILLION DOLLARS.
AND THAT IS JUST FIVE BANKS.
AND THE MASSIVELY CORRUPT AND INCOMPETENT SECURITIES REGULATORS, BOTH GOVERNMENTAL AND PRIVATE, SAT BY AND WATCHED THIS HAPPEN. That is what happens when you let a group of criminals run a bureaucracy of affirmative action hires to “audit” the financial industry. Scroll down and read my post titled “There Must Be A Reckoning.”
It’s over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.
Our entire global economy is a giant Ponzi Scheme. Makes Social Security look like a rounding error. This also gives one a better perspective on the stock market movements. (Yeah, 400 point Dow Jones Industrial ranges in a day is a ‘stable market’.) What the market is now is merely the TBTF banks chasing government cheese. Where is the next bailout coming from? Wherever they THINK it is (and since they push for it, they have a good idea), they front run it and pile in, using HFT to try to position better than the next TBTF. Who is going to get the next ‘exemption from the law’? Wherever they think THAT is coming next, again, they go ‘all-in’ – thus providing the massive swings in the market with both bonds (treasuries and corporate debt) and stocks. Any idea that there is ANYTHING left of a ‘free-market’ is a LIE. Wake up and smell the Ponzi conservatives, and stop defending the criminals with your cries of ‘it’s anti-capitalist to protest against Wall Street.’ It’s not about your neighbor getting a free house, it’s about massive, global, legalized financial rape.
The “Buffett tax rule” being promoted by Occupy Wall Street protesters is exactly what the Wall Street-owned Obama administration wants.
Paul Joseph Watson
Monday, October 3, 2011
There’s no better way of deciding an outcome than owning both sides of the debate. That’s why the Wall Street-owned Obama administration must be licking its lips at the fact that ‘Occupy Wall Street’ protesters have been conned into advocating new tax policies backed by billionaires like Warren Buffett and Bill Gates that will do nothing to touch Wall Street, but everything to sink what’s left of the American middle class.
The Occupy Wall Street protesters are campaigning for the Obama administration to “Pass the Buffett Rule on fair taxation, so the rich pay their fair share.” This demand isposted on their own website. The campaigners are demanding that the US Congress pass a bill backed by the Obama administration, which is comprised of Wall Street operatives and is a creature of Wall Street.
Do you see the dichotomy here?
The protesters are pushing for a new tax rule which is supported by the Wall Street-owned Obama administration, therefore the demonstrators are unwittingly doing the bidding of Wall Street itself.
The “Buffett tax rule” will do virtually nothing to make the ‘filthy rich pay their share’ – it will only raise taxes for middle class Americans and middle class businesses.
As the Wall Street Journal reports, “Roughly 90% of the tax filers who would pay more under Mr. Obama’s plan aren’t millionaires, and 99.99% aren’t billionaires.” It is the middle class – not Warren Buffett or Wall Street corporations – who will be most hurt by the very policies the ‘Occupy Wall Street’ crowd are calling for.
Warren Buffett’s Berkshire Hathaway still owes taxes from 10 years ago. Buffet is the ultimate Wall Street insider – he is the third wealthiest person on the planet. Buffet avoids billions in taxes because most of his interests are based offshore. Indeed, most top corporations pay virtually no income tax, not because of any law that isn’t in place, but because they have parked most of their wealth in offshore tax havens.
Buffett, aided by the Occupy Wall Street protesters who amplify his message, is volunteering the middle class, not himself, for a tax increase, that’s why the Wall Street-owned Obama administration is fully on board with the idea.
“No differences exist between the Obama administration and billionaire investor Warren Buffett on the principles of a White House tax proposal that bears his name, Jay Carney, President Barack Obama’s spokesman,” told Bloomberg.
The Buffett tax plan is also being backed by multi-billionaire Microsoft honcho Bill Gates, who like Buffett advocates a proposal that would hit the middle class with tax hikes while his own company avoids paying billions in taxes through its offshore subsidiaries.
The protesters are also demanding the passage of the Tobin Tax, which is a tax on all financial transactions. Again, this will simply be passed on to consumers by large corporations, it will not touch Wall Street. The Tobin Tax will only hurt the poor and middle class and will do nothing to reign in the multinationals.
Bearing all this in mind is it any wonder that MoveOn.org, the Democratic front organization thataggressively lobbied in support of the Obama campaign in 2008 and went on to become a primary advocate for his administration’s policies, is now moving to steer the Occupy Wall Street movement?
How do we reconcile the fact that an organization which vehemently backed a Wall Street creation, the Obama campaign, which was aided with almost $2 million dollars in campaign contributions from Goldman Sachs and JP Morgan Chase, is now posturing as an advocate for anti-Wall Street protests?
None of this is to say that the thousands of Occupy Wall Street protesters aren’t genuine activists who are trying to be a force for positive change. The problem is that their self-appointed leaders are completely in league with the very Wall Street interests the protesters are supposedly there to oppose.
Paul Joseph Watson is the editor and writer for Prison Planet.com. He is the author of Order Out Of Chaos. Watson is also a regular fill-in host for The Alex Jones Show.