Courtesy Jim Willies Hat Trick Letter..

THREATS OF HYPER-INFLATION

◄$$$ OPPOSING FORCES OF INFLATION VERSUS DEFLATION REVEAL THE UNITED STATES AT A TIPPING POINT. ONE SIDE WILL PREVAIL. RICKARDS BELIEVES IF INFLATION IS TO OCCUR, IT CANNOT BE MILD. MY BELIEF IS POWERFUL INFLATION COMES, ONE LEVEL GREATER THAN BEFORE, SINCE REACTION AGAINST DEFLATION WILL BE CONSTANT AND LADEN WITH FEAR. $$$

The US Federal Reserve has overseen vast money printing for years, and a continuous climax in the past two years. A crescendo comes. Neither big banks nor financial markets are functioning properly, since interventions are the norm and accounting rules are suspended. Remedy and reform are not permitted, thus recovery is an impossibility. The USFed desperately pursues mild inflation, but they cannot possibly achieve it. All their efforts to date have seriously weakened the USDollar. The velocity of money has declined, a factor ignored by the policy makers. These are important points made by Jim Rickards at Market Intelligence at Omnis. When he mentions market bottom, he must refer to stocks and housing together. He declares, "Either the slide resumes and we finally arrive at the market bottom that we never hit in 2009, or they keep printing money to paper it over, eventually destroying the dollar and undermining the entire economy. Those are the choices. What the Fed wants is the one thing they are not going to get: Mild inflation. They are desperately trying to get some inflation going because they are scared to death of deflation. All of their Quantitative Easing [debt purchase with newly printed money] and special programs with the Treasury and the fiscal stimulus are designed to weaken the dollar. They are basically trying to scare the markets into spending money. But right now, all Americans want to do, naturally, is save money, de-lever, pay down debt. All very sensible things to do on an individual basis. But when you do that, in a world where consumption is 70% of GDP, your GDP is going to collapse. That is reflected in the velocity of money. The whole notion that you can dial up nominal GDP by increasing the money supply rests on another false assumption, which is that velocity is fairly constant. Velocity has dropped through the floor." Rickards is a superstar analyst, featured in past Hat Trick Letter reports, like with his arguments for a 50% USDollar devaluation. Beware the tipping point.

Imagine a car with a very inefficient engine that cannot process gasoline well, an engine that leaks fluids, an engine with a gearbox that slips, an engine whose differential is stripped, and wheels with missing ball bearings. That is the USEconomy. Its new money production line is disconnected to the tangible economy. The bankers actually are thrilled by this development, since they can tap federal liquidity facilities and ignore their loan customers. The banking authorities are resisting the solution, for the clear reason that many from their sector would be destroyed and their power eradicated. They are seriously insolvent, vulnerable to liquidations. A tipping point comes, when all the USGovt deficits, all the USTreasury Bond issuance, all the US bank failures lead to a change in international sentiment toward the USDollar. A psychological turning point approaches. Creditors will someday exit, since the US markets are not permitted to clear, to liquidate, to enjoy the fresh breeze inherent to capitalism. Financial markets throughout the entire USEconomy are essentially frozen. A huge waiting game has emerged between the expectant beneficiaries of USFed efforts to stimulate inflation and economic participants. In the process, the USEconomy deteriorates further, as credit is denied sound businesses. Lastly, if the USFed balance sheet is ever to enjoy repair with significant lift in asset values, asset inflation with housing must be the initial basis. The bank leaders must therefore push for more powerful inflation progressively. Watch soon a QE2 be announced, the next round of official Quantitative Easing, the exact opposite of what Bernanke talks about in his tightening and normalcy themes. The USFed is on a toxic diet!!

◄$$$ THE BATTLE OF INFLATION VERSUS DEFLATION IS FAR MORE COMPLEX THAN PRESENTED TO THE PUBLIC. THE DESTINATIONS OF MOST MONETARY CREATION ARE THE ELITE SANCTUARIES. THE OBSTRUCTIONS TO MOST NEW MONEY PREVENT THE MAIN ECONOMY FROM BENEFIT. THE PLAN IS A SERIES OF SLAVE STATES LED BY THE MONOLITHIC STRUCTURES BEING BUILT BY THE ELITE. $$$

A preface. Catherine Austen Fitts served as auditor for USDept Housing & Urban Development in the 1990 decade. She uncovered $1.5 trillion stolen by the Papa Bush and Clinton Admins from HUD between 1988 and 2000. The thefts took place from the Houston office from 1988 to 1992 (home district of Bush) and from the Oklahoma City office from 1992 to 2000 (home district of Clinton). She attempted to bring the thefts and discovered slush fund to the USCongress, but was obstructed. For her efforts, she was removed from office, stripped of her professional license, and survived three murder attempts. The Black Bag funds have proliferated since then, along with projects. They fund the Plunge Protection Team on stock market rescues. So she is credible as a source of syndicate information. Data like that convinces me that Democrats and Republicans differ not at all, since but two chambers from the same narcotics and financial crime syndicates. The HUD thefts by US Presidents have been cited many times in my analysis, as a point to demonstrate syndicate control of the presidency itself for at least 25 years. The start in my opinion was October 1981, when President Reagan was shot but not killed. He was debilitated, at which time VP Papa Bush took control. Reports amply describe how Reagan was kept in a substandard mental state from steady microwave barrages, possibly resulting in Alzheimers that ended his life a few years ago. Bear in mind that Reagan was coerced into choosing Bush as his Vice Presidential running mate. It would be a shock to the Jackass to learn Bush was not responsible for the hired murder attempt, since it installed the CIA into the White House oval office. Fitts has argued that Fannie Mae (formerly under HUD aegis) is the central clearinghouse for several different $trillion fraud programs, a convenient nexus since the beneficiary of such gargantuan cash flow. Anyway, Catherine sent me and a few other colleagues a note yesterday. She responded to the news story of how the Bank of Japan has decided to shore up the liquidity in Japan, by doubling the liquidity flow to lenders. BOJ Governor Masaaki Shirakawa announced an increase to the primary loan facility to 20 trillion yen (=US$222 billion). They held the overnight lending rate at 0.1%, extending the near zero rate for close to 20 years. So Japan is actively attempting to prevent the deflation plague to spread in their struggling economy. See the Bloomberg article (CLICK HERE).

My interpretation is that the Japanese central bank is slowly moving away from direct control by the United States, and more toward China. The sun has set on the Japanese from US-directed sunshine. Perhaps Tokyo is trying to buy more time to aid the US-UK bankers losing control. Perhaps Tokyo is working closely with Beijing to perpetuate the inflation strategy they are committed to, since Chinese reserves are very much committed to the USDollar base. Fitts is convinced that the Western world is in the middle of a planned shutdown, a strangle to granted credit that forces economic suffocation. My view is parallel. Credit and federal aid has been dominated by the Elite, led by Wall Street financial firms and the Pentagon, led by the defense contractors and service contractors. The USEconomy has been subjected to extreme duplicity by the US Federal Reserve, which talks a good game about aiding the credit flow, provided the destination is a giant bank, but at the same time orders the big banks not to lend. Instead, the big banks send their reserves to the USFed itself for safe keeping, an action that prevents the USFed from imploding due to $trillion insolvency.

A plan for global totalitariarnism is underway in my view, the outcome and timing uncertain. A plan is clear to those who can put aside their idealism and personal psychological frameworks enough to look at the facts of the last decade. The flies in the ointment are China & Russia, the two new superpowers. China brings its vast industrial base and deep war chest of funds. Russia brings its vast commodity supply and military technology. Neither is under control by the Western syndicates governed by the United States and United Kingdom. The plan is to enrich the Elite and severely weaken the Western Economy, thus installing a series of slave states in a new totalitarian system. Fitts has described their tactic as stealing, defrauding, and pillaging the Western Economies, leading to impoverishment, in order to cause the economic conditions for the big broad Fascist regime to take root across many nations. The rapacious ruin is the method to cause the placement of the Fascist state, not the side effect of the totalitarian movement. This is all very scary stuff. Factor in the news last month that came from a tipoff not from Catherine Fitts, but rather a different source. The very high level murders of US-UK bankers has begun by competing billionaires, in league to combat the Western corruption that has total control of governments, monetary operations, military apparatus, security establishments, and law enforcement. The competing billionaires have enlisted the aid & cooperation of the Triad syndicate for the murders. A secret war has begun for global control. The anti-US-UK wing does not want global Fascism, but rather capitalism, dominated by the East but with key Western cooperation.

Catherine Fitts provided the following summary. She wrote, "If the goal is to combat inflation, then credit would be flowing to the small players here. It is not. Every effort is being made to shut down the economy on Main Street [arteries of USEconomy]. It is not an accident; it is not a coincidence; it is a plan. So providing liquidity to insiders [Big Banks, the Elite] while trying to choke everyone and everything else indicates a different dynamic from fighting deflation. Note that we are promoting deflation throughout the economy and have been for a long time. It is called demand destruction and it offsets the monetary inflation being pumped into insiders." She paints a picture of enrichment to the Elite as the landscape is sufficiently destroyed in order to enable installation of global Fascism in a powerful monolith of totalitarianism. See the Patriot Act which shredded the US Constitution. The War on Terrorism in the United States is the pretense smokescreen for bringing down the USEconomy and building up the Elite through the financial syndicate and military sector. The important turns enable a shift of power. The Elite want total power. They have lusted for internet control, the free gateway for information flow.