Sabbath Message 7/2/31/120B

Dear Friends

Just how bad is the US debt situation and just how far up the creek are we all? How did they put us all there, and just who is to blame?

On April 11, 2008, the Australian Daily Telegraph published an article by Nick Gardner quoting the billionaire George Soros as saying the worst is yet to come:

 The leader said that

“THE credit crisis is far from over, billionaire financier George Soros has warned, urging regulators to move faster to contain damage from the collapse of the housing finance markets.”

Nick Gardner pointed out that:

“If he is right, then the cost of wholesale funds, which banks from all over the world use to lend to mortgage customers, could get higher before coming back down again.

That will mean more pain for homeowners already reeling from so many rate rises, both from the Reserve Bank and independently levied by their lenders.

‘I think the situation is more serious than the authorities admit or recognise,’ Mr Soros said yesterday.”

It is obvious to anyone with the wit to see that the measures taken so far to slash interest rates and stimulate the US economy were "necessary but not sufficient'', as Soros himself now claims. Using the Reserve Bank, the Australian economy actually drove its own people to the wall by actually increasing interest rates.

He says: "Because of that, I think the situation is going to get worse before it gets better,'' as Nick Gardner reports.

Mr Soros has urged regulators in the US to move more aggressively to curb risks from excessive reliance on debt for financial speculation.

Soros was reported as saying he agreed with the International Monetary Fund's estimate of more than $US1 trillion ($1.08 trillion) in losses linked to the collapse of mortgage-backed securities.

Losses disclosed by financial institutions so far are related only to the decline in value of those financial instruments, Mr Soros is reported as saying.

"They do not reflect in any way a possible decline in the value of the loans held by the banks. We have not yet seen the full effect of the possible recession.''

Now this is a very serious situation when you consider that up to 10% of Cleveland Ohio is boarded up and the houses are being ransacked.

What we don’t know about and what is in fact completely unregulated is the market in what is referred to as Credit Defaut Swaps or CDS.

Mr Soros raised this point in the interview reported by Nick Gardner when pointed to the potential for massive losses from complex investments linked to the US sub-prime mortgage market, such as these credit default swaps, or CDS. These CDS allow investors to put bets on the likelihood that companies will default on bond payments.

What is the outstanding factor in this is the sheer size of these CDS “bets”.

Soros described the $US45 trillion worth of credit swaps as a “Sword of Damocles”. Given the size and relationship to the US GDP and houshold wealth, it certainly is that.

The figure is more than five times the entire government bond market of the United States. Mr Soros said: “It's almost equal to the entire household wealth of the United States.This $US45 trillion market is totally unregulated.''

Earlier, Mr Soros had criticised the authorities for not monitoring the markets closely enough to recognise the problem. The problem comes from the mindset of the US that any regulation is akin to communism and government control. However, they have created their own monster that is destroying the US economy and with it that of the Western world.

Mr Storos’ view was that: “There is an attitude that markets are ‘self-correcting', but that patently isn't the case. When markets fall, the Fed intervenes and cuts interest rates, so clearly, that is not a self-correcting mechanism. We need the authorities to intervene again, and as quickly as possible.''

The problem is that these authorities do not actually want to bear the burden across the board. They set it up so that the middle class, and the young, and the poor homeowners would be wiped out and with them the major banks of the Western World that relied on them and invested in the unethical sub-prime inflated interest loans.

These greedy, criminal little men may well destroy the pensions' funds and they will face a backlash that may well see them placed on trial for treason, and in fact create a de facto revolution in the US and the Commonwealth.

Just think. There is an unregulated market that affects the US economy and financial system and that of the Western World that is the equivalent of the total household wealth of the US, and they not only are not in control of it they haven’t even told the people about it.

Up until 11 April, the media have not even mentioned it. We have to face the fact that there is no responsible journalism in the US, and what is there is under the control of the cartels that run it almost as a private casino.

On the same day the Australian ran an article by Michael Sainsbury under the leader:

“THE nation's financial sector has suffered a fresh blow with administrators appointed to boutique lending group Lift Capital.

The appointment last night follows the $1.3 billion collapse of Melbourne stockbroker Opes Prime and continuing woes of another broking firm, Tricom.

Tony McGrath and Joseph Hayes of corporate recovery and advisory firm McGrath Nicol were appointed as voluntary administrators of Sydney-based Lift Capital Partners [as] well as Lift Capital Nominees No 1.

The scale of the latest collapse is not yet clear. Lift operates as a margin lender, with about 1600 clients owning investments predominantly in listed shares and managed funds.

A secured creditor, understood to be Merrill Lynch, has a fixed charge over the listed shares secured against funds advanced to Lift Capital.

But the administrators said it “is expected that a significant surplus of funds" will be available to Lift Capital once the secured creditor has been repaid.

McGrathNicol said it was too early to speculate on the ultimate return to creditors and investors but the underlying value in the shares was good and it is expected that a reasonable return will be achieved.”

Merrill Lynch again. We don’t really know the extent of it all. Opes Prime’s people will get very little.

The next disaster to follow on to that is the gambling establishments, and in particular the poker machine establishments. Up to 71% of disposable income is being syphoned off from homes in the most vulnerable housing belts where most repossessions took place in 2007. This is particularly so in Australia and, as the credit dries up from this US induced crisis, the recession will tighten its grip on the entire world. The first step is to ban poker machines entirely and that will help ease the situation significantly. Our people are in despair and need hope.

The Beast power is beginning to tighten its grip now and the cartels are about to seize their chance. Satan is giving his power to the Beast and the whole world will come under its power.

Watch now as it happens like a set piece play to enslave us all.

Wade Cox