What a absolutely great video!!!!

I love her singing those words !!

This is only the beginning ! Let`s set some more minds in flames!

 I see a descending Triangle @ the geppy daily chart ->

THOSE ARROWS only show what my mind is painting as the most probable outcome..this is not any plan yet..NOBODY knows what will happen..

and another descending triangle on the 4H Chart ->

The arrow to the upside is more appealing to me because geppy hasn`t finished its upwards movement, to complete the next movement forming the daily triangle..obviously the potential in pips is double then on an downwards movement.

But we`ll never know what the future brings..

We will wait and watch the price action when and if a breakout occurs.

The mark waiting for some input and the Bulls and the Bears have still to fight this battle.

Thank you FreetheMarketMan

by J. L. Bryan

Dedicated to Dr. Ron Paul and R3volutionaries Everywhere

We were not ready.

He offered us an empty hand.
An open and honest hand, concealing nothing.
No blade behind the fingers.
No magic, no artful coin tricks,
To dazzle and distract us.
We were not ready.

His words, plain and spare as Texas flatland.
The one who does not lie
Has no need of honey
To sweeten a viper tongue.
He promised all he could give,
And all that we needed,
Which was nothing.
We were not ready.

He stood amid the crashing towers
Of a falling empire,
And suggested we stand aside
And let them fall.
He told us we have no need
Of playing gods, kings or conquerors.
We are only men and women,
Like all men and women,
And that is enough.
We were not ready.

He would have led us nowhere,
Our nonsavior, our uncrusading anti-emperor,
Freeing us at last from this weary, aimless march.
Emptying the prisons and the battlefields,
Leaving each man to his own life.
We were not ready.

His fight was for peace.
His revolution was for love.
His doctrine was free humanity.
His highest law was liberty.

By following his nature,
He exposed the hordes of liars.
False priests of all factions
Have lost their flocks.

The heart knows the truth,
Though it roils the mind.
Now that we have heard, how could we forget?
How could we accept the old familiar lies?

He awoke a hunger
No illusion can quench.
He did not need us,
But we needed him.

We are not gods or kings or conquerors,
Only men and women, like all men and women.
What has begun cannot be stopped.
The truth, once heard, cannot be unheard.

The newborn Revolution, decentralized and protean,
Shifts form, grows stronger, spreads its wings.
We have played the game their way.
Now, we begin to play it ours.

One day, we will be ready.

J. L. Bryan is a freelance writer.

Copyright © 2008 LewRockwell.com

I recommend watching this 47minute video to get a clear understanding how our monetary system works.

It`s not perfect imho but very easy to understand for anyone. The german subtitles are also not the very best translation but good enough.

This should be shown all our children twice every year in every school ;)

Thx for the BigPicture where i stumbled upon this great video..

By Professor Antal E. Fekete
May 2, 2008

The most powerful of the latter-day pagan gods that have guided the destinies of humanity for the past two-score years is irredeemable debt. Before August 14, 1971, debts were obligations, and the word “bond” was to mean literally what it said: the opposite of freedom. The privilege of issuing debt had a countervailing responsibility: that of repayment.

On that fateful day all that was changed by a stroke of the pen. President Richard Nixon embraced the woolly theory of Milton Friedman and declared the irredeemable dollar a monad, that is, a thing that exists in and of itself.

According to this theory the government has the power to create irredeemable debt - debt that never needs to be repaid yet will not lose its value - subject only to a “quantity rule”, for example, it must not be increased by more than 3% annually. This idea is so preposterously silly that “only very learned men could have thought of it”.

If the thief is thieving modestly, then he will not be detected. It never occurred to the professors of economics and financial journalists that a modest thief is an oxymoron, a contradiction in terms. How did they get to believing in irredeemable debt? The explanation is most likely found in Schiller’s dictum: “Anyone taken as an individual is tolerably sensible and reasonable. But taken as a member of a crowd - he at once becomes a blockhead.” Economics professors and financial journalists are no exception.

For a time it appeared that Friedman was right. The world has become dedicated to the proposition that it is possible, even desirable, to expand irredeemable debt in order to make the economy prosper. Never mind the default of the US government on its bonded debt held by foreigners. Never mind people victimized by theft. Thanks to the quantity rule, they will never notice the difference.

For all its seductive attractiveness, Friedmanite economics is ignoring the effect of irredeemable debt on productivity. It watches debt per GDP and is happy as long as this ratio stays below 100% by a fair amount. However, what should be watched is the ratio of additional debt to additional GDP. By that indicator the patient’s condition could be diagnosed as that of pernicious anemia. It set in immediately after the US dollar debt in the world was converted into irredeemable debt.

The increase in GDP brought about by the addition of $1 of new debt to the economy is called the marginal productivity of debt. That ratio is the only one that matters in judging the quality of debt. After all, the purpose of contracting debt is to increase productivity. If debt volume rises faster than national income, there is big trouble is brewing, but only the marginal productivity of debt is capable of revealing it.

Precipitous decline
Before 1971, the introduction of $1 new debt used to increase the GDP by as much as $3 or more. Since 1971, this ratio started its precipitous decline that has continued to this day without interruption. It went negative in 2006, forecasting the financial crisis that broke a year later. The reason for the decline is that irredeemable debt causes capital destruction. It adds nothing to the per capita quota of capital invested in aid of production. Indeed, it may take away from it. As it displaces real capital, which represents the deployment of more and better tools, productivity declines. The laws of physics, unlike human beings, cannot be conned. Irredeemable debt may only create make-belief capital.

By confusing capital and credit, Friedmanite economics obliterates truth. It makes the cost of running the merry-go-round of debt-breeding disappear. It makes capital destruction invisible. The stock of accumulated capital supporting world production, large as it may be, is not inexhaustible. When it is exhausted, the music stops and the merry-go-round comes to a screechy halt. It does not happen everywhere all at the same time, but it will happen everywhere sooner or later. When it does, Swissair falls out of the sky, Enron goes belly-up, and Bear Stearns caves in.

The marginal productivity of debt is an unimaginative taskmaster. It insists that new debt be justified by a minimum increase in the GDP. Otherwise capital destruction follows, a most vicious process. At first, there are no signs of trouble. If anything the picture looks rosier than ever. But the seeds of destruction inevitably, if invisibly, have sprouted and will at one point paralyze further growth and production. To deny this is tantamount to denying the most fundamental law of the universe: the Law of Conservation of Energy and Matter.

The captains of the banking system in effect deny and defy that basic law. They are leading a blind crowd of mesmerized people to the brink where momentum may sweep most of them into the abyss to their financial destruction. Yet not one university in the world has issued a warning, and not one court of justice allowed indictments to be heard from individuals and institutions charging that the issuance of irredeemable debt is a crude form of fraud, calling for the punishment of the swindlers issuing it, whether they are in the Treasury or in the central bank. The behavior of universities and courts in this regard could not be more reprehensible. Rather than acting to protect the weak, they act to cover up plundering by the mighty.

The inconspicuous beginnings of irredeemable debt have blossomed into a colossal edifice, a fantastic debt tower that is bound to topple upon the prevailing complacency and apathy. Actually “tower” is a misnomer. Rather, what we have is an inverted pyramid, a vast and expanding superstructure precariously balanced on a tiny and ever-shrinking gold foundation - the only asset in existence with power to reduce gross debt.

The construction has no precedent in history, and no place in theory, whether Ricardian, Walrasian, Marxian, Keynesian or Austrian. As a matter of fact, no one is analyzing the process. Research has been placed under taboo by the powers that be, lest diagnosis reveal the presence of cancer caused by irredeemability. There is no known pattern or model that would apply to its mechanism in terms of equilibrium analysis.

Two negative conclusions emerge. One is that the edifice of irredeemable debt must grow at an accelerating pace as markets for derivatives providing “insurance” to holders of debt proliferate. The insurer of debt must also be insured, as must the insurer of the insurers, and so on, ad infinitum. This is due to the fact that the risk of collapsing bond values has been created by man. In contrast, the risk of price changes of agricultural commodities are created by nature, and the futures market provides insurance, with no need to re-insure. The other conclusion is that the unwieldy size of the debt structure excludes the possibility of a normal correction: a major liquidation would dwarf the calamities of the Great Depression.

The debt delusion
It is a delusion to think that the government can splatter debt all over the economic landscape to cover up its warts, and reap everlasting prosperity as a result. The stimulation and leverage of debt has always caused stock markets to boom, so that the impact of debt was aided and magnified by the added paper wealth which, in turn, increased the propensity to spend and borrow still more.

 Businessmen are supposed to be more realistic in contracting debt. Yet the pattern of increase in corporate debt has also changed tremendously. Whereas traditionally corporations used to finance their capital needs in a ratio of $3 in debt for every $1 in stock, in the years leading up to 1971 they issued $20 in debt for every $1 in stock, with the ratio sky-rocketing thereafter.

We hear arguments that economists have by now learned how to control the economy with the so-called built-in stabilizers. Debt has largely lost its sting as a consequence, we are told. For example, bank deposits can now be insured. They couldn’t in the 1930s. But when the government itself is loaded with debt, and runs boom-time deficits, the built-in stabilizers may backfire and destabilize the economy further.

The government has commitments so great that its endeavor to offset a depression in our vast economy can only result in a loss of confidence. Anxious withholding of purchasing power in the private sector could far outweigh anything the government can add. To make matters worse, government income is highly dependent on a prosperous economy. The magnitude of the problem of offsetting a depression is grossly disproportionate to resources available.

One of the marks of great delusions is that nearly everyone tends to share them. It is a sorry tale - any delusion gives rise to a rude awakening in due course. Public attitudes to debt have changed so radically since 1971 that today indebtedness is practically a status symbol, instead of the shameful condition it used to be in a bygone era. The most striking reversal in traditional American attitudes towards debt is the widespread acceptance of perpetual national indebtedness, copied by perpetual personal indebtedness - a never-ending lien on future income.

Perhaps the worst aspect of the regime of irredeemable debt is the lowest level of morals followed by governments in modern history. It is epitomized by an elaborate check-kiting (using a bad check to get money) conspiracy between the US Treasury and the Federal Reserve.

Treasury bonds, contrary to appearances, are no more redeemable than Federal Reserve notes. It’s all very neat: the notes are backed by the bonds, and the bonds are redeemable by the notes. Therefore each is valued in terms of itself, rather than by an independent outside asset. Each is an irredeemable liability of the US government. The whole scheme boils down to a farce. It is check-kiting at the highest level.

At maturity the bonds are replaced by another with a more distant maturity date, or they are ostensibly paid in the form of irredeemable currency. The issuer of either type of debt is usurping a privilege without accepting the countervailing duty. They issue obligations without taking any further responsibility for their fate or for the effect they have on the economy. Moreover, a double standard of justice is involved. Check-kiting is a crime under the Criminal Code. That is, provided that it is perpetrated by private individuals. Practiced at the highest level, check-kiting is the corner-stone of the monetary system.

But our world is still one of crime and punishment, tolerating no double standard. The twilight of irredeemable debt is upon us. The sign is that banks are reluctant to take the promissory notes of one another. Significantly, this also includes overnight drafts. The banks know there is bad debt at large, and they don’t want to be victimized by taking in some inadvertently. What the banks don’t yet know, but will soon learn, is that all irredeemable debt is bad debt, and there is no way to rid the system of poison through administering more.

Redeemability of debt is not a superfluous embellishment. It has a function of fundamental importance: the proper allocation of resources to the different channels of their utilization.

The obligation to redeem debt hangs as the sword of Damocles over the government, just as it does over the head of every economic participant. It compels economy and foresight. It forces balancing of income and expenditures. It adjusts claims and commitments. It limits expansion by shifting resources away from the incompetent, and away from unhealthy projects.

The regime of irredeemable debt creates an escape route from commitments by the promise of eliminating the pressure of solvency. Whether it promises eternal prosperity, or it promises eternal subsidies, it does not matter. The results are the same. They consist in misleading people, enticing them to skate on thin ice, and luring them into financial adventures, private or public, which are not warranted by the ability to pay. The logical consequence is wholesale bankruptcy of individuals as well as that of the political setup. Losses breed more losses, until they become an avalanche. The present crisis is just the first sign of that denouement. More is on the way.

It is still possible to escape the catastrophe which this process would entail. The way out is to open the US Mint to gold and silver, as advocated by presidential candidate Ron Paul. The logic of this remedy is that it would mobilize potentially unlimited resources, presently tied up in idled gold, and re-introduce the indispensable means of debt-retirement into the economy.

Failing to bring gold back, where are we heading? The short answer is: we are marching into the death-valley of collectivism. The alternative to re-introducing redeemable currency is that the debt behemoth will force the imposition of a capital-levy type of taxation - along the lines of Solon, back in the Athens of 594 BC.

—-
Antal E Fekete has since 2001 been consulting professor at Sapientia University, Cluj-Napoca, Romania. He also runs the Gold Standard University, whose next session is to take place in Szombathely, Hungary from July 3-6 on “The Bond Market and the Market Process Determining the Rate of Interest”. For more information see www.professorfekete.com/gsul.asp or contact GSUL@t-online.hu.

(Copyright © 2008 A E Fekete)

A thought provoking analysis of the most dire situation in this generation.

OTC Hockey Stick Problems Of The Derivatives Beast

I let the comments speak for themselves->

“You are by far the most knowledgeable, enjoyable, and informative writer. I love your blog. I work in the derivatives beast, trading ETF’s of no vlaue all day in massive quantity. It truly is amazing how wall st. is “funny money world”. Its a complete disgrace, totally fraudulent, completely surreal, and no one in power ever questions the stupidity of it all. Every “derivative beast” trader I know cannot beleive how the stock market goes up,up,up in the face of massive insolvency,housing crisis,no jobs etc. I try to send them to your blog or lemetropolecafe.com for some doseage of reality. May God bless you and your fantastic blog. Without you we are doomed, with your knowledge, we can at least try and do something to protect ourselves and try and learn to produce “real” wealth instead of destroying it by shuffling paper around day in and day out.”

“Elaine,
I read today that consumer credit expanded sharpley in April (mostly credit cards and auto loans, since home equity loans are a thing of the past). I also read that the average work week dropped by 1.8 hours (that’s 4.5%!!). At first I was stunned: wages are stuck; oil, food, and everything else is inflating drastically; banks are going under; houses are becoming worthless as assets; consumer confidence is in the basement; etc, etc. What the Heck is going on? Why would people (already spending more than they earn) go on a credit-based buying binge at a time like this? I don’t buy the argument that they have to borrow to buy the basic necessities - I know they’ve already got too much crap, plan to take their vacations to Disney World, smoke, drink, gamble and indulge in all their usual vices, and already have at least one TV, auto, etc. A real recession (in terms of unemployment) hasn’t even happened yet, so they haven’t been hammered like 1982. And then I got it. The upsurge in April credit is because the tax rebate checks will be coming out in May (this was announced in April). These idiots are spending their rebate checks before they get them. How are you going to save the people from the credit-insane “financial system” when the people are just as credit-insane as the oligarchs and pirates?”

Here an a Article by the Maoxian

Rewriting the Recent Fed Statement

Read it ;)

Haha i love the Ninjas writings…

They are clear without loosing the facts and lots of links to support his view!

I second this!

Via The Financial Ninja

Slowly Building Shorts

Here some excerpts:

“The Bulltards tagged 1400. The falling 200 day EMA is nearby, ready to provide resistance. The SPX is now overbought on the daily timeframe (Slow STO). Volume has shriveled up, not exactly inspiring much confidence in the the rally to date. A drop to Support around 1370 is highly probable. The 1320 - 1330 area would be the next area of interest.

Volatility (VIX) has fallen to what amounts to COMPLACENCY levels in this credit crisis environment. Although technical analysis isn’t nearly as relevant on the VIX, this 20 area does appear to be an area of support.

Fannie Mae (FNM) has bounced from $18 to $35. Since then FNM has made a series of lower highs, $35, $32, $30, on declining volume. I have been shorting above $30 and have been taking some profits around $25. (I’m using puts to limit my downside risk.) I have my full position again and am looking for a break below $25 this time around. March New Home sales and Case Schiller Home Prices all showed an ACCELERATION of real estate mess.

Same goes for Freddie Mac (FRE). FRE bounced from $16 to about $34. Since then FRE has made a series of lower highs on declining volume. I have been shorting above $27 area using puts. I am now fully short again and looking for a break below the $22 area.

FNM and FRE are pretty much doomed. While they may eventually be bailed out or nationalized, the common shareholder will get ANNIHILATED.”

“Citigroup (C) raised $3 billion yesterday. Common shareholders continue to get diluted. This should come as no surprise to anybody. I recently wrote that things would get worse at ShittyGroup before they could get better in: Citigroup Earnings, Downgrades and LIBOR

Late last week I began nibbling at various short positions. I should be happily short by the end of the week or early next week just in time for the next leg down.

Read these recent headlines. You don’t even have to read the articles to get in the right ‘mood’. This stuff isn’t just a temporary blip. This is real and the long run consequences aren’t going to be pretty.”

“Getting long risky assets, such as equities, now and betting on a ‘second half recovery’ before the recession has really even started is border line retarded.”

Sorry my dear Readers!

The last 3 days had a high stress factor!

I will do all updates on Positions,Quote of the Week and a veeery big News Wrapup in a matter of hours!

Thank you very much for your understanding!

Anyways have a great trading week!