Dear Friends,

Further to the New Moon Message of the Fifth Month we now move to deal with a specific element of the financial crisis facing the US. That is the effect of the Oil price speculation on the Airline industry.

The US has some 173 airline operations. It has no effective passenger rail systems and there are no fast trains systems. All the US effort went into the airlines. They built no significant passenger infrastructure and the buses killed the railways many years ago. The railways carry freight. All business activity moves via short haul air. The majority of US passenger air haul is under 500 miles. This reduces the cost effectiveness of US airlines. The other world airlines are on slightly longer hauls except in short European hauls. They are faced with the same burden but they have effective passenger rail infrastructure, which the US does not have.

The deliberately engineered oil price spike has taken US airline operation costs above it final peak costing. It is a fact that US airlines cannot operate commercially at current rates at oil prices over $100 a barrel. The increased costs will hit all commercial traffic. The increase in prices will reduce air traffic considerably. Some of the airlines that took action to reduce costs and overheads now have a distinct advantage. Those who did not now face a serious crisis and almost certain bankruptcy even with ticket repricing. Ticket repricing will force some airlines to the wall as the more cost efficient are able to withstand the inevitable price war as others are forced to raise prices.

Capitalism outlasted the Leninist form internationalist socialism by a matter of a decade. Globalist Socialism will use capitalist tools to destroy national corporate structures and allow corporate conquests via the capitalist mechanisms. As part of the Globalisation of Industry the collapse of the US economic systems has to be engineered. That has been accomplished and the IMF is now about to be engineered into control of the US economy and take its central role in the emerging Globalist “Beast Power.”

One of the largest US mortgage lenders, the California-based IndyMac Bank, has collapsed amid a growing credit crisis. Federal regulators seized the bank's assets, fearing it might not be able to meet withdrawals by depositors. It is the second-largest financial institution to fail in US history, regulators say.

IndyMac marks the largest bank collapse since 1984, when Continental Illinois, which had $40 billion in assets, failed, according to FDIC records. Two other expensive failures were in 1988: American Savings and Loan Association in California ($5.4 billion) and involved First Republic Bank in Texas ($4 billion).

IndyMac specialized in loans it had long argued were of minimal risk: low documentation loans to residential mortgage borrowers. The problem is that people are no longer accepting corporate assurances and some interference from Senators is actually being counter-productive and forcing closures of what are argued to be sound structures. The problem is that no one believes them any more.

IndyMac had been struggling to raise funds and stay in business in one of the States worst hit by the US housing market slump.

The bank's primary regulator, the Office of Thrift Supervision (OTS), said depositors had withdrawn more than $1.3bn in the past 11 days inducing a liquidity crisis.

The OTS believed IndyMac was unlikely to meet its depositors' demands and transferred its operations to the Federal Deposit Insurance Corporation, which will seek a buyer. The regulators no longer considered it “well capitalised.” Therefore, from the Tuesday, the bank wasn't able to accept brokered deposits, or short-term investments in large dollar amounts from brokers seeking the highest return on certificates of deposit. Its CEO had argued that it was unfairly treated given its insignificant exposure to the sub-prime mortgages. The problem is that the crisis has escalated beyond the sub-prime level

IndyMac lost $184.2 million in the first quarter and announced on Monday that it was expecting a wider loss for the second quarter. It lost $614 million last year stemming from its focus on the Alt-A mortgage sector, where it originates loans to borrowers who fall between prime (or conforming) and sub-prime on the credit spectrum.

Rising Alt-A and prime mortgage delinquencies were considered by investors to be enough indication for investors that the housing crisis had moved beyond the weakest borrowers.

With the securitization markets in collapse, IndyMac had no way to get new loans off its books. It transpired that, IndyMac was a leader in loans requiring little income and asset documentation. This category has had disastrous levels of delinquencies at other troubled lenders.

What loans the bank had made recently were to borrowers with well-documented assets and income, but those are sharply less profitable with respect to fees and interest income. It is the fifth US financial institution this year to succumb amid a credit crunch, falling house prices and rising foreclosures.

Recently, IndyMac announced that it was firing 53% of its workforce and exiting its retail and wholesale lending units of which there are 33 branches. Last year, the lender was ranked 11th in residential mortgage origination, according to trade publication Inside Mortgage Finance.

Over the past two years, IndyMac dropped over 95% in stock price, or about $3.5 billion in market capitalization. Shares traded down nearly 10% on Friday to close at 28 cents.

The failure came on a day when shares in the two biggest US home loan institutions – Freddie Mac and Fannie Mae – fell at one stage by almost 50%. They play an important role in the financial markets in providing funding for home loans by buying up mortgages and packaging them as investments.

As mortgage backers, the companies have had to pay out when homeowners have defaulted on their loans.

Both firms defended their finances, saying they had enough capital to weather the housing slump. The shares rallied when US Treasury Secretary Henry Paulson signalled he was not on the verge of taking Fannie Mae and Freddie Mac into public hands.

President George W. Bush was briefed on Fannie Mae and Freddie Mac earlier on Friday.

Mr Bush said Mr Paulson assured him that he and Federal Reserve Chairman Ben Bernanke "will be working this issue very hard".

Freddie Mac shares closed down 3.1% at $7.75. Shares of Fannie Mae ended the day down 22.4% at $10.25 after sliding as much as 49% to a 19-year low of $6.68.

US Senator Christopher Dodd said the Federal Reserve was considering allowing Fannie Mae and Freddie Mac to borrow directly from the central bank, which also helped the shares to recover. This unusual step appears to be a privilege accorded to banks and signal of further troubles ahead.

David Hirst published an article (Australian) on June 30 2008 under the title IMF finally knocks on Uncle Sam's door. David is a journalist, documentary maker, financial consultant and investor. His column, Planet Wall Street, is syndicated by News Bites, a Melbourne-based share-market and business news publisher.

He pointed out what the world is coming to realise: that the US financial supremacy is over. He said:

“IMAGINE the Reserve Bank of Australia, concerned that its friends in the city of Sydney (but perhaps Melbourne) who, having wallowed in wealth all their adult lives, were no longer gainfully employable and their wildly extravagant lifestyles were in danger, and, having the powers to intervene in the market, decided to do just that on their behalf.

Imagine them offering to enter the market and buy shares that would prop up the foolish gambles of the bankers, gambles they had encouraged them, until recently, to take by providing them with cheap money.

On top of that, they told this group they would provide hundreds of billions of dollars in credits to these same profiteers on the grounds they were so big and important to the economy they were indeed too big to fail.

Then, imagine, despite pouring untold taxpayers money into stocks and allowing their cronies access to vast sums, the system continued to fail. So they announced they would need greater power and with it more secrecy.

For its growing band of critics has, perhaps unwittingly and in the interest of public good, this has become the principal function of the US Federal Reserve.

If this was to happen in Australia the International Monetary Fund would be hammering at the door of the Reserve Bank. But Australia does not have a President's Working Group on Financial Markets, commonly known as the Plunge Protection Team, that allows the US Government to prop up the markets by buying shares. But to imagine the IMF investigating the US financial system is unthinkable, or was. But, at the weekend, Der Spiegel reported that the IMF would conduct a full investigation into virtually every aspect of it.

Der Spiegel wrote that the IMF had "informed" Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.

This, Der Spiegel wrote, "is nothing less than an X-ray of the entire US financial system", adding that "no Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing".

The fact that the IMF is knocking on the very doors of its parents and waving legal papers about who lost the house, the car and the kids will, if the past is anything to go by, be buried in the US by pom-pom waving on CNBC telling all what a great time it is to buy.

But the news that the US Fed has now lost its last vestige of credibility did not end with the German report.

The Telegraph from London weighed in, following the Royal Bank of Scotland's statement last week (also lost on the US public) that it was time to head for the crags, and reported Barclays Capital's closely watched Global Outlook analysis that said US headline inflation would hit 5.5% by August and the Fed would have to raise interest rates six times by the end of next year to prevent a wage spiral.

If the Fed hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it," the report found. "They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility."

Der Spiegel reports that the IMF is threatening to seriously study the accounts of America, something President George Bush is determined to prevent at least while he is in the White House, informing the IMF that it can begin its investigation but cannot complete it until he leaves office.

But the reckoning will come and it will shine a light in places where light has been desperately wanted for all too long.

"As part of the assessment," Der Spiegel said, "the Fed, the Securities and Exchange Commission, the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests — worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar."

Under its by-laws, the IMF is charged with the supervision of the international monetary system. About two-thirds of IMF members — but never the US — have already endured this painful procedure.

Australian banks have been buffeted by the storms generated in the US, but strict standards enforced by a Reserve Bank that is independent of private banking interests has prevented such excesses, as vouched by their performance as compared with the broker-trader banks and the retail banks of the US. Shares in once-massive banks and brokerage firms have been stripped by as much as 70%, 80% and even almost 100%.

We are taking a trim while US banks are getting a full haircut and shave.

Part of the problem is the US media, which has for so long pretended that all is or soon will be well, a bottom is near, a recovery awaits in the second half of the financial year that will sweep away all problems, sown over decades, in a new expansion, a cycle that is ordained to come. The latest fantasy is that with the quarter's end, new profit figures will invigorate the bull, which will seed fertility.

The next President will be handed at least two wars gone horribly wrong and, by then, an economy in similar shape. The bull will have to be a particularly fertile beast.

Der Spiegel reports: ‘When the final report on the risks of the US financial system is released in 2010 — and it is likely to cause a stir internationally — only one of the people in positions of responsibility today will still be in office: Ben Bernanke.’

While Der Spiegel claims that IMF intervention (my expression) is a humiliation for the US, the real significance may be that this is another blow to American exceptionism.

While the examination is far-reaching, and deeply intrusive, Canada, Britain, Italy, indeed two-thirds of IMF members, have participated in the program. The new President will soon discover the age of US exceptionism is over.

Meanwhile the US markets have entered bear territory, the economy has done likewise and we are at the beginning of a long and tortuous process before rebuilding can even commence.”

This is the beginning of the New World Order with the submission of the US economy to the IMF. The role of the central banks will be taken over by the World Bank and the IMF.

The Federal Reserve will be an irrelevance in the financial circles completely tied and controlled by the Globalist system. It will be too late to do anything about it.

The next administration will continue on into the global system of the Beast Power.

The question is will the US people sit still for it?

The answer is that the administration passed the relevant acts and statues to deal with the backlash which is coming like a locomotive.

The administration has to derail it to prevent the coming move for impeachment of this administration.

Note that the true state of affairs will not be known until 2010 and the true facts will stun the world.

The aim is to make the World Systems beg for the NWO to be set up in control of the financial system to stop the complete collapse of the world’s financial system into irretrievable chaos.

Satan has done his work well. The system will beg to come under the control of the Beast even before Satan is placed in the pit of Tartaros for the Millennial system.

The details are in the papers The Witnesses (No 135) and also the New Moon Message The Hour of the Beast.

The time is getting shorter and shorter.

Religion is being coerced into a union because the secular state has developed into a religion itself.

Only the US with its Sunday Trinitarianism still avows a religious basis but it follows a heretical system tied to Early Catholicism. Europe and the US will seek to unify this false religious system and will destroy the Witnesses and march against Christ when he arrives labelling him as an antichrist following the Laws of God in the OT and NT together.

As the system collapses we must turn to God and prepare for the Messiah.

Pray that we are able to be ready for it.

Wade Cox

Coordinator General.