The US and UK are in economic paralysis due to the major changes anticipated
in next week’s elections of House and Senate delegates. The President isn’t
even going to be in Washington to witness the massacre of the Democrats. He
just refuses to deal with it, as a long line of bureaucratic appointees head
back to Harvard, foundations, think tanks, the Council on Foreign Relations
and the Trilateral Commission. This as the Chairman of the Fed unveils plan
two of quantitative easing, the creation of money and credit out of thin
air, which in reality has been going on in the bond market since early June.
Another bit of subterfuge dreamed up on Wall Street.

The Fed is monetizing a stimulus plan that the administration is no longer
capable of assisting, due to an enraged public. On the other hand, large
dollar holders are loudly complaining that the Fed’s policies will cause
major inflation and a falling US dollar. Of course, the flip side is if the
Fed doesn’t act in this manner the US economy will collapse and with it the
world economy. The dumb Chinese, Japanese and oil producers should have long
ago accumulated gold and gotten rid of dollars. That was not to be as they
in fact enslaved to US leadership by yields and exports. The expenditure of
$5 trillion over the next two years by the Fed will only take the US economy
sideways at best, and in turn take the dollar to new lower levels. All the
insiders know the plan won’t work, but it will buy time, perhaps so they can
have another war as a distraction, as they have done many times before in
history. Even the public knows it won’t work having been alerted by
information pouring out of talk radio and the Internet. The US is already in
austerity. Just look at real unemployment of 22-3/4%. This is getting worse
not better and that means a change in control in the House and Senate could
well bring about a constraining of fiscal and monetary policy.

The US is on a path to socio-political chaos as the dollar falls and the
world monetary system comes unglued. Those countries in decent monetary and
fiscal condition will pull away from dealing with the US and that has
already occurred with Brazil that doesn’t want inflationary dollar
investments entering their country, thus, they have implemented a dollar
investment tax. The US cannot return to the past. Its leadership lost that
opportunity in June of 2003 when they decided to go ahead and take down the
economies of the US, UK and Europe in order to force the inhabitants of
these countries to accept world government. A main cog in this plan was the
implementation of free trade, globalization, offshoring and outsourcing,
which has cost the US in just ten years 8.5 million jobs.

There is no chance now of return as countries pull away from US and UK
financial markets. These moves will protect these countries for a time, but
eventually they will feel the sting of economic failure and instability as
trade wars and tariffs become the norm. Washington will cease to be the
world leader. The currency and trade wars have only just begun. They could
not be avoided by either side. There is about to be a convergence of
problems. Things that previously were not connected that will burst forth
without warning. That will eventually lead to the implosion of the system.

These factors will be accompanied by social unrest, which we have just seen
the beginnings of in Europe. This time of social, monetary and fiscal
turmoil will last at least into 2014 before any solutions are put on the
table. An easy solution is multilateral revaluation, devaluation and
default. This would be very painful, but would stop the power by today’s
elites in the US, UK and Europe and the unmasking of their treachery.

Throughout Europe and the US there has and will continue to be a rise in
patriotic movements, which those who control governments already have
labeled terrorists. These are people like us who bring truth and exposure of
facts to the attention of the public.

We are currently facing a new crisis in the US in the mortgage markets and
in their securities, which has been aided and abetted by a disintegrating
legal system. This comes to real estate at a time when it is on life
support. The states cannot be of much assistance because most of them are
broke, which is another distinct problem.

The US has already abdicated its role of world leader. Even leadership from
Wall Street and banking is dreadful. Worse yet there is no one to take its
place, as the world lies adrift in a sea of trouble. The atmosphere is
explosive because no one wants to give up anything. The financial markets
will all eventually fall and the flight to gold and silver as the only real
money will gain acceptance, as we predicted long ago. Americans and others
have failed to see the future and they’ll pay dearly for not paying
attention.

One of the interesting developments of the new currency wars is a concept
that, the nations that will be the most successful, are the nations that
devalue the fastest. One of the things nations miss is that the cheap
currency that propels exports; also raises the costs of imports. Another
fallout is others won’t want to own your currency and if you devalue a
currency enough it becomes worthless, or nearly so. A good example of that
was in the 1930s where only tariffs were successful. As a rule those tariffs
were not steep. The threat, of course, is that nations get mad at one
another and war follows.

What these nations have been doing is similar to quantitative easing, or
simple fiat creation of money and credit. These actions are the antithesis
of sound money.

The Forex, foreign exchange market, trades $4 trillion a day and its
projected to trade $10 trillion daily in the next couple of years. Money
flows are already wild to say the least. Many foreign currencies have been
rising versus the dollar. Some nations such as Brazil have already
instituted capital controls by putting taxes on foreign purchases of local
sovereign debt. Those not into the foreign game are buying US Treasuries,
gold, silver and commodities.

The FOMC and the Fed, even though they know it won’t work, are becoming more
and more accommodative. You will get some idea of their plan next week. The
result will be a falling dollar, which is not really monetary policy, but
grasping at straws in the wind. You will find nothing of sound money here
and as a result markets will ultimately not survive. Remember, we could
return to the circulation of gold and silver. 76 years ago gold coins were
widely circulated and silver was in everyone’s pocket just 47 years ago. It
is not impossible. It could happen again over the next few years.

It was just two weeks ago that the dollar revisited 76.54 on the USDX. It
had rallied over the past four months from 76.88. It is currently about
77.28. Every time it tries to rally it gets knocked down again. That is a
long way from 89 where it was seven months ago. One thing is for sure, as
long as we have ill-fated policies such as QE2 the dollar will continue to
fall.

We also found it of interest that Bill Gross of PIMCO found the Fed has
taken Charles Ponzi one-step further. He says, “Has there ever been a Ponzi
scheme so brazen?” No, there has not, said Bill. When the Fed meets next
Wednesday it could signify the end of a great 30-year bull market in bonds.

What should be noted is that the Fed is intent on generating another asset
bubble to accommodate the sale of Treasury and Agency bonds and to give Wall
Street and banking more funds to speculate with. This will renew the elitist
wealth effect and in the process send the dollar lower, which in turn will
increase inflation, which is already sapping consumer buying. The Wall
Street gang plan to use Fed funds to jack up the market, which is already
overpriced by 20%, is an act of pyromania. In addition, the average increase
in 15 commodities yoy to October is 35%. Food costs are up 48% and energy
23%. Real inflation is up 7%, not the 1.6% the Fed lies about.