Sabbath 6/12/31/120

Dear Friends,

Over the 2008 economic debacle no one seemed to realise what was actually happening. The Wall Street Banksters handed out some 20 billion in bonuses to each other while their entire systems were imploding. Merrill Lynch CEO was redecorating his office for 1.1 million and the forced marriage with the Bank of America saw another $15 billion up a hollow log and the Bank of America may need to be nationalised. What a travesty of self-interest and greed. How far these greedy morons have strayed from the values of those such as the Bank of America’s founder Amadeo Peter Giannini, son of Italian immigrants who has been described as a big man on the side of the little man.

In the few days in December while he was still in charge of Merrill Lynch, Mr Thain reportedly spent nearly $4bn on staff bonuses. From what we understand that is “peanuts” on Wall St. In 2007 Mr Thain himself received $83m while setting up one of the greatest collapses on Wall Street. We are told that these banksters paid out staff bonuses of some $US20 billion and are now under investigation. The people are howling for blood. Thain reportedly spent 1.1 million redecorating his office while he was “cost cutting” in 2008. President Obama last week described their conduct as shameful and reportedly said “how dare they use tax payer funds for such purposes.” We are also told the administration allegedly told Citibank to rethink their purchase of a new executive jet. There is, however, some question about the new finance package and the availability of some billions in that package to be accessed by firms under a legal cloud at present such as Acorn. There is no reality in the minds of these people. The US cannot survive under this mindset. No nation can survive.

The behaviour of these banking people has to be legislated against and the payments of monies such as these has to be legislated as fraud against the bank deposit base and their funds have to be confiscated as proceeds of criminal activity. They have to be imprisoned for substantial periods.

And now we hear that ten of the big banks that got $148 billion from Uncle Sam so they could make loans to get things humming again have actually reduced their loan totals by $46bn. They don’t want things back to normal. They are strangling the US into depression and now they are moving against stable economies overseas.

In an article in the Australian of 31 January 2009 David Uren, their economics correspondent, drew attention to the movement against Australian business corporations by foreign banks. They are withdrawing finance from Australian business significantly since December.

Mr. Redican of Macquarie Bank has said that the fact the Reserve Bank had drawn attention to the role of foreign currency lending - it rarely comments on monthly movements in lending - meant something unusual was taking place.

This comes after a week of controversy over moves by the Government to establish a $4billion fund to replace foreign banks wanting to pull out of syndicated loans to commercial property in Australia. The Coalition opposes the initiative. Its Treasury spokeswoman, Julie Bishop, denied there was any evidence foreign banks were withdrawing from lending.

However, figures released by the Australian Prudential Regulation Authority yesterday provide further evidence of the foreign banks pulling back, with their total lending in Australia dropping $15.1billion in December.

Citigroup joint chief economist Stephen Halmarick said the lending cutback would not have been confined to commercial property, and it was possible the Government might consider extending its fund to other lending as well.

He said the choking of credit to business was likely to force a fall in business investment.

"The pullback in business investment will be the major source of weakness for the economy this year, primarily responsible for the economy entering recession," Mr Halmarick said.

Foreign banks provide about 20per cent of the total lending in Australia. Their customer base is concentrated among the largest corporations.

The APRA figures show Australian banks are also cutting their lending to business. The Commonwealth, ANZ and National Australia banks reduced their business loans by $11.9 billion in December. Westpac increased its lending by $899 million. Westpac was the only one actually seen to be helping business weather the crisis.

The International Monetary Fund warned in its review of the world's financial stability this week that the reluctance of financial markets to meet the need for companies to roll over their debt at a time of weak world growth raised the risk of widespread corporate defaults.

Emerging figures are showing the global economy was much weaker in the final months of last year than was believed.

Japan's monthly industrial production report last week revealed a 9.6 per cent fall in the month of December - the worst on record.

The Reserve Bank of Australia’s credit figures show lending for housing is also getting weaker. Prices are falling in all the high price areas and anything over $AU 300,000 is difficult to move. 2009 will see downward pressure on coastal development properties with greater losses.

Housing lending rose by 0.4per cent in December, with the annual rate of growth down to 6.7 per cent, its slowest in 25 years. That will continue to drop until the Reserve Bank interest rate is cut drastically.

Personal borrowing has been shrinking since June last year, and fell by a further 1.1per cent in December. The level of outstanding personal debt is 5.2 per cent lower than it was a year ago, a fall not seen since the recession of 1990-92.

The credit squeeze will force many businesses to the wall. The banksters will try to benefit from the fire sale they helped create.

This behaviour is beyond economic vandalism. It is economic terrorism and warfare.

The US economy is headed into a depression, not just a recession. The depression is necessary to establish the grounds for the New World Financial Order and the Empire of the Beast.

The relationship between the US and China will depress both. China will be in big trouble this year.

No one really sees the problem for what it is. However, Ed Welsh in an article from Dow Jones Newswires on January 16 2009 made some telling observations and reported on the views of Societe Generale strategist Albert Edwards who was quoted as saying: “The US economy is likely to enter into a depression and the "implosion" of the Chinese economy will cause disastrous consequences for the whole world.”

“Advising investors to ‘bail out’ of their stock investments now, Mr Edwards, whose super-bearish stance on the global economy proved correct last year, predicted another 40 per cent decline in the S&P 500 index caused by dismal profit reports and poor economic data during the first half of this year.” "In 2009 it is not the mounting risk of depression in developed economies that will come as a major surprise," Mr Edwards wrote in a note to clients, "it is economic implosion in China and the global and geopolitical risk thereof." Over a year ago, Mr Edwards had predicted the US would enter into a deep recession because of the excessive amount of debt it had accumulated. This is now being exacerbated by the Bush administration’s legacy to the Obama administration and the Democrat inability to deal with that issue. Ed Welsh quoted him as saying “recent data points to ‘something far worse than deep recession,’ Mr Edwards' forecast for 2009 marked an even more bearish shift in his outlook for the global economy, and a further departure from the mainstream of economic strategists who expect a US economic recovery in the second half of the year. In forecasting a depression in the US, Mr Edwards means that he believes the US will see a peak-to-trough decline in its gross domestic product of more than 10 per cent.” We have not seen the end of it. We are not even at the beginning of the end of it. Mr. Edwards is quoted as saying that in China, he expects the worst domestic upheaval since the Tiananmen Square protests in 1989. That upheaval may cause the Chinese authorities to undertake a "mega-devaluation" of the Chinese currency, the yuan, in an effort to stay in power, as “the very survival of the regime depends on growth”. A devaluation of the yuan would cause the rest of the world's economies to competitively devalue their own currencies in response, Mr Edwards said, sparking a "1930's-style trade war" that "could see a rerun of the Great Depression". We have already seen the collapse of world trade at end 2008 with the Baltic Dry Index (BDI) showing the virtual complete collapse of the BDI to near zero. Few Economists are even talking about it. It is like the elephant in the room that everyone is ignoring.

Mr. Edwards bases his forecast for an implosion of the Chinese economy on several technical factors. These are: 1. Data shows China's electric power output declined over the last three months. The data usually correlates with China's GDP. 2. The sharp decline during recent months in the Organisation for Economic Co-Operation and Development's leading growth indicator for China's economy. 3. Explanations for the decline in China's electric power output, such as the effect of a switch to oil-based power, were belied by sharp declines in industrial production growth and export levels in other Asian economies.

The optimists such as Alan Wood in the Australian (16 Jan 2009) think that the US will lead the way out of the disaster

He says: “Recession is tightening its grip on the advanced economies of the Group of Seven nations: the US, Japan, Germany, Britain, France, Italy and Canada. And the idea that the developing economies, led by China, would decouple from recession in the West is no longer credible, if it ever was.

On Tuesday the Organisation for Economic Co-operation and Development published the latest leading indicators for its member economies and other important countries outside the OECD. Its conclusion was anything but cheerful: ‘OECD composite leading indicators point to deep downturns in the major seven economies and in major non-OECD member economies, particularly China, India and Russia.’"

The economic outlook is worsening for countries, many of which are already in recession.

The contraction in the BDI and in the volume of World trade proves that not only are we in recession but we are also plunging headlong into depression and our banking sector has sent us there through greed and idiocy led on by a deliberate policy thrust by the NWO Globalists.

Alan Woods thinks that: “Despite the changing shape of the international economy, the US remains the most important nation. It has already been in recession for a year, and in a keynote speech last week, president-elect Barack Obama warned it was ‘altogether likely’ things would get worse before they got better.

Obama has allegedly put together a sound team of economic advisers (although his nominee for Treasury secretary, Timothy Geithner, has run into trouble in the US Senate) and they understand the need for urgent action.

The real problem is that the $US 800 billion package is not a relief package it is a disguised spending package. Its impact on future budget deficits will be serious as will be the TARP scheme approved in October 2008.

The first half of Bush’s Troubled Asset Relief Program (TARP) $US700 billion was misused and the second half is being held up in Congress. With $20 billion wasted on Wall Street banksters no wonder. The US system at present is like an asylum that is run by the inmates.

The unease has been exacerbated by the release of figures from the Congressional Budget Office suggesting the US deficit for the current fiscal year will triple to about $US1.2 trillion, even before taking account of Obama's American Recovery and Reinvestment Plan.

Alan Wood says in his article: “Given the collapsing US economy, rapidly rising unemployment and Obama's authority as a popular new president, a big fiscal package will be approved sooner or later but, as Obama warned last week, any delay will be economically costly.

In a recent interview, the International Monetary Fund's economic adviser Olivier Blanchard dismissed concerns that governments' rapidly growing deficits and debt are unwise. Even in the US, more is likely to be needed. Without fiscal stimulus, Blanchard said, the world could see some of the vicious cycles of the past: deflation and liquidity traps, expectations becoming more and more pessimistic and, as a result, an increasingly deeper recession. ‘What is needed is not only a fiscal stimulus now but a commitment by governments that they will follow whatever policies it takes to avoid a repeat of a Great Depression scenario,’ he said.”

The situation has been set up so that we are committed to this “whatever it takes” mantra. That is the way the NWO will be forced through. 2009 is becoming a Depression. To head to a recovery in 2010 the Globalists will argue that fiscal policy alone will not be enough and they will argue for a complete restructure of the system as we saw with the UK. France is in riot already.

Chairman of the US Federal Reserve Ben Bernanke said “fiscal actions were unlikely to promote a lasting US recovery unless they were accompanied by strong measures to further stabilise and strengthen the financial system. History demonstrated conclusively that a modern economy could not grow if its financial system was not operating efficiently.”

It is in fact a disaster designed to create Satan’s last effort at control and destruction before he goes to the pit.

Bernanke argues:

1. Even with US official interest rates effectively at zero, the central bank had a comprehensive set of policy tools it could use to keep credit flowing and fight the economic downturn while the financial system was repaired.

2. The Fed and other key nations' central banks had already prevented a global financial meltdown that would have left the world economy in far worse condition.

3. Monetary policy isn't enough. Bank and other financial institutions' balance sheets are carrying lots of bad assets; therefore, government intervention to provide capital, quarantine bad assets and repair these balance sheets is still necessary.

4. Only governments can guarantee bank lending to credit-constrained businesses against loss (e.g. the British Government this week), or act against mortgage foreclosures.

5. To date, government interventions in the US and Britain, the two advanced economies that acted earliest, have failed to revive bank lending or check the slide in economic growth and the rise in unemployment.

6. Government policy responses across the world would be critical determinants of the speed and vigour of any recovery.

It is argued by the optimists such as Alan Woods that: “Just as the US led the world into recession, it has a crucial role to play in getting it out again, but it can't do it alone, as it once could. Important new players in the global economy, notably China, and old players in Europe and Japan also have to pull their weight. Will they? Collapsing world trade and rising global unemployment, with the attendant danger of protectionism, may adversely affect their behaviour as well as that of the US, prolonging recession.”

To make sure that all of the major economies come into line in the Globalist NWO the economies are being systematically weakened.

The rapid deceleration in consumer demand saw even the computer system demand drop and Intels fourth quarter sales dropped 90%. These drops in figures will continue in all spheres.

The semiconductor giant, which twice issued warnings about the fourth quarter, said it would not provide a forecast for first-quarter revenue because of "economic uncertainty and limited visibility". "The economy and the industry are in the process of resetting to a new baseline from which growth will resume," said chief executive Paul Otellini. "Our new technologies and new products will help us ignite market growth and thrive when the economy recovers." These write-downs are in the billions and are across the market.

Oil demand will decrease also and the US will not be able to engage in protectionism for its motor industry. The deliberate failure of the oil lobby and motor industry cabal will see the system revamp or die. Germany is already making noises about protectionism and Japan and others will follow suit soon enough. Lack of storage will also cause major sell-offs. The February 2009 barrels could not be offloaded at Cushing. March will be even worse.

The Super funds will be faced with serious review and write-down over private equity in 2009. On December 31 2008 firms had to declare to their investors how much or how little their funds were worth. Equity markets are down 40%. Many will be worthless as they overpaid in 2006 and 2007 and with borrowed money. There are more than 30 private equity firms in Australia and most of them are in discussions with their banks over at least one asset that is either in breach or close to breaching its loan covenants, or is in need of refinancing. The situation will be similar or worse all over the world. Much of the withdrawal of foreign investment and financing is blamed on the banking crises in the home country. That will result in a contraction of capital and a virtual nationalisation of the finance sectors. That will in the end force the crisis and then the fire sale of national assets to the banksters. Most of the original private equity deals over 2005-2008 were done with foreign banks who are now withdrawing their capital. It was very easy to set up and destabilise. The local banks don’t seem to want to touch the sector either. The retail chains are struggling with a mountain of debt under private equity ownership. The UK has just seen vast numbers close down. Private equity will be pressured to invest more capital and it won’t be available.

Australian Wesfarmers booked a multimillion-dollar ($150 mIllion profit alert) write-down on its $225 million private equity investments and placed pressure on the Australian $1 trillion Super funds to review its private equity exposure. The write-downs will see problems in all areas including downward price pressure on chains at a fraction of 2005-2007 prices.

Pivate equity funds will not simply accept the situations and some international groups will start to take over boards or place reps on them (e.g. Texas TPG reps placement on Myer’s board). Arguments over the extent of funding and protection of assets will develop. In 2009 heads will roll and private equity funds may well be largely unavailable or the funds themselves insolvent. Wall Street had the worst January on record.

This pressure will be felt all over the world. In the end the pressure will be exerted to collapse the funds to enable the NWO to be in control of the complete system and above national systems and funds. The control cannot be complete unless the funds can be denied to individuals on a universal basis.

Wade Cox

Coordinator General